PART TWO: The Law on Patents, Utility Models and Industrial Designs

I. Patentability

Patentable Inventions
Any technical solution of a problem in any field of human activity which is new, involves an inventive
step and is industrially applicable shall be Patentable. It may be, or may relate to, a product, or
process, or an improvement of any of the foregoing. (Sec. 21, IPC)-memorize

- May relate to:

Product
Process (even if the resulting product is already existent, as long as the process is new.)
(Improvement of a product or a process)
- Filed before the Bureau of Patents
Elements:
1. New
2. Inventive Step
3. Industrially Applicable

PATENT - 2 SENSES
1. It is a right granted by the state (not an inherent right; all requirements of patentable inventions must be
complied with)
2. Document evidencing the right. (More known as letters patent)

Patent could refer to 3 things

1. Inventions 20 years (from the date of the filing for application)
2. Utility Models 7 years
3. Industrial Designs 5 years
** these differ only in term of protection

PRIMARY PURPOSE: To diffuse knowledge

**If it allows for a longer term of protection, that would result to monopoly

The term of protection is there to inspire the inventor to invent and disclose (disclosure is also for promotion of
the primary purpose.)

CHARACTERISTICS of A SOUND PATENT SYSTEM

1. Must afford exclusive right for a limited period
2. Affords full disclosure of the invention
3. Requires strict observance of registration requirement
These 3 are universally accepted.

***Registration Is very relevant because only at that time is protection afforded.

STAGES (the 3rd Characteristic of a Sound Patent System)

1. Formality Examination Stage (The applicant publicizes his work before the grant in this stage)
2. Substantive Examination Stage
3. Grant and Publication

The extent of the patent protection is only within the Philippines.

- The elements of patentability are as follows:

(A) it must be new (novel) - An invention shall not be considered new if it forms part of a prior art. (Sec. 23,
IPC) definition of Novel

What is prior art? Prior art shall consist of:

1. Everything which has been made available to the public anywhere in the world, before the filing
date (actual date of filing here) or the priority date (foreign application but seeking to register
patent here in the Phils) of the application claiming the invention ( 24.1) ; and
2. The whole contents of an application for a patent, utility model, or industrial design registration,
published in accordance with this Act, filed or effective in the Philippines, with a filing or priority
date that is earlier than the filing or priority date of the application: Provided, That the application
which has validly claimed the filing date of an earlier application under Section 31 of this Act, shall
be prior art with effect as of the filing date of such earlier application: Provided further, That the
applicant or the inventor identified in both applications are not one and the same. (Sec. 24, IPC)

Examples:

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 1. Patents
2. Technical Publications
3. Conference papers
4. Marketing brochures
5. Textbooks
6. Newspapers
7. Lectures
8. Demonstrations and exhibitions

Refer to International patent Classification under the WIPO site

Prior use use which is not present in the Phils, even if wiedespread in a foreign country, cannot form part of the prior art
if such use is not disclosed in printed documents or in any tangible form

-may be constituted by producing, offering, marketing, or otherwise exploiting a product, or by offering or marketing a
process or its application or by applying the process.

EXAMPLE:

-the details of demonstration of manufacturing process in a factory

-the delivery and sale of a product may well provide information as regards the possubulity of the subject matter having
made available to the public.

Use on Non-Public Property

Example: use of an object in factories or barracks

PUBLIC AVAILABLIITY of SUBJECT MATTER

>> A written description ie a doc should be made available to the public

Example:

An undergraduate thesis sometimes cannot be considered as a printed publication because usually the same cannot be
catalogued, indexed or saved.

NON-DISCLOSURE AGREEMENTS

The information has not been made available..

OBJECT- If an object is sold unconditionally to a member of the public, the buyer thereby acquires unlimited possession
of any knowledge which may be obtained from the object thus, the object is said to have been made available to the
public

Example laser pointer

ENABLING DISCLOSURE A patent application for the invention may still be validly obtained if the disclosure is not
enabling

Example- Sci fi Novel

>>The prior art communication must enable an ordinary mechanic, without the exercise of any ingenuity and special skill
on his part, to construct the product and put the improvement in successful operation. Communication of a complete
conception must be sufficient to enable one of ordinary skill in the art to construct and successfully operate the invention.

What is Non-prejudicial disclosure? The type of disclosure to the public that will not affect or
prejudice the novelty requirement of a particular invention. The law states that the disclosure of
information contained in the application during the twelve (12) months preceding the filing date or the

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 priority date of the application shall not prejudice the applicant on the ground of lack of novelty if such
disclosure was made by:

1.The inventor;

2. A patent office and the information was contained (a) in another application filed by the inventor
and should not have been disclosed by the office, or (b) in an application filed without the
knowledge or consent of the inventor by a third party which obtained the information directly or
indirectly from the inventor (published by mistake); or
3. A third party which obtained the information directly or indirectly from the inventor. (Sec. 25, IPC)

PRIOR ART SEARCH

Importance of conducting a search:

>> To determine WON to file a patent application and how best to write the application

>>To avoid wasting time and money in further developing or trying to patent the invention

>> To speed up patent prosecution by allowing claims to be tailored to avoud the prior art before the examiners own
search

PRIORITY DATE

-an application for patent by a person who has previously applied for the same invention inanother country which by
treaty, convention, or law affords similar privileges to Filipino citizens, shall be considered as filed as of the date of filing
the foreign applications provided

a. The local application expressly claims priority

b. It is filed within 12 months from date of foreign application

c. Cerified copy of the foreign application filed within 6 months from Phil application.

This is relevant because the earliest filing date application has the exclusive right.

(B) involves an inventive step - An invention involves an inventive step if, having regard to prior art, it is not
obvious to a person skilled in the art at the time of the filing date or priority date of the application
claiming the invention. (Sec. 26, IPC)

A person skilled in the art an ordinary practitioner aware of what was common general knowledge in
the art at the relevant date. He is presumed to have knowledge of all references that are sufficiently
related to one another and to the pertinent art and to have knowledge of all arts reasonably pertinent
to the particular problems with which the inventor was involved.

Thus, one who merely draws obvious conclusions from already existing inventions and then
actualizes them does not make any significant contribution to the state of the art and is not eligible for
patent protection.

(C) industrially applicable - An invention that can be produced and used in any industry shall be industrially
applicable. (Sec. 27, IPC)

An invention is industrially applicable when it can be produced and used in any industry.

Thus, under the law, the applicant of a patent shall disclose the invention in a manner sufficiently
clear and complete for it to be carried out by a person skilled in the art.

Invention cannot be purely theoretical

It must be an invention that can be carried out

(D)Technical Character

- Of the contribution to the art

1. Must relate to a technical field
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 2. Must be concerned with a technical problem
3. Must have technical features in terms of which the matter for
which protection is sought CAN BE DEFINED in the claim.

***Not purely aesthetic creations but gives a technical solution to a problem.

- Still a patentable invention
- E.g. tire with nice grooves, binding/pasting of books

These criteria may apply to:

(a) products
(b) processes
(c) improvements of either products and processes

Non-patentable inventions

The following shall be excluded from patent protection:

(a) Discoveries (there is no creation involved), scientific theories and mathematical methods;
(b) Schemes, rules and methods of performing mental acts, playing games or doing business, and
programs for computers;

-these are purely theoretical matters

-computer programs are excluded because they are covered under copyright

-however, the apprataus applying the mathematical theory (calculator) is patentable

(c) Methods for treatment of the human or animal body by surgery or therapy and diagnostic
methods practiced on the human or animal body. > QUALIFICATION: This provision shall not
apply to products and composition for use in any of these methods; - these are still patentable

>If the method is purposely for treatment even if for cosmetic surgery, that is not patentable

(d) Plant varieties or animal breeds or essentially biological process for the production of
plants or animals. This provision shall not apply to micro-organisms and non-biological and
microbiological processes (thse are patentable).
i. Provisions under this subsection shall not preclude Congress to consider the
enactment of a law providing sui generis protection of plant varieties and animal
breeds and a system of community intellectual rights protection:

- As long as there is a high degree of human ingenuity and skill

(e) Aesthetic creations; and

(f) Anything which is contrary to public order or morality. (Sec. 22, IPC)

Law on patent: registration is very relevant and is require for protection

- The element of novelty is an essential requisite of the patentability of an invention or discovery. If a device or
process has been known or used by others prior to its application or discovery by the applicant, an application
for a patent therefore should be denied, and if the application has been granted, the court, in a judicial
proceeding in which the validity of the patent is drawn in question, will hold it void and ineffective. It has been
repeatedly held that an invention must possess the essential elements of novelty, originality and precedence,
and for the patentee to be entitled to the protection the invention must be new to the world. (Manzano vs. CA,
G.R. No. 113388, September 5, 1997)

- It has been repeatedly held that an invention must possess the essential elements of novelty , originality and
precedence and for the patentee to be entitled to protection, the invention must be new to the world.
Accordingly, a single instance of public use of the invention by a patentee for more than two years (now for
more than one year only under Sec. 9 of the Patent Law) before the date of his application for his patent, will
be fatal to, the validity of the patent when issued. (Maguan vs. CA, 146 SCRA 107 [1986])

II. Right to Patent

The right to patent belongs to the inventor, his heirs or assigns. (Sec. 28, IPC).

The First-to-file Rule - In case two or more inventors of the same invention, the patent shall belong to
the person who first filed an application. If there are two or more applications, the patent shall belong
to the applicant who has the earliest filing date or the earliest priority date. (Sec. 29, IPC)

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 Filing Date - The filing date of a patent application shall be the date of receipt by the Office of at least
the following elements:

(a) An express or implicit indication that a Philippine patent is sought;

(b) Information identifying the applicant; and
(c) Description of the invention and one (1) or more claims in Filipino or English.

If any of these elements is not submitted within the period set by the Regulations, the application shall
be considered withdrawn. (Sec. 40, IPC)

The Priority right - An application for patent filed by any person who has previously applied for the
same invention in another country which by treaty, convention, or law affords similar privileges to
Filipino citizens, shall be considered as filed as of the date of filing the foreign application: Provided,
That: (a) the local application expressly claims priority; (b) it is filed within twelve (12) months from the
date the earliest foreign application was filed; and (c) a certified copy of the foreign application
together with an English translation is filed within six (6) months from the date of filing in the
Philippines. (Sec. 31, IPC)

Commissioned invention The person who commissions the work shall own the patent unless
otherwise provided in the contract. (Sec. 30.1) NOTE that in copyright, in the case of a work
commissioned by a person other than an employer of the author and who pays for it, the copyright
remains with the creator unless there is written stipulation to the contrary. (Sec. 178.4, IPC)

Inventions in the course of employment - In case the employee made the invention in the course of
his employment contract, the patent shall belong to:

(a) The employee, if the inventive activity is not a part of his regular duties even if the
employee uses the time, facilities and materials of the employer.
(b) The employer, if the invention is the result of the performance of his regularly-assigned
duties, unless there is an agreement, express or implied, to the contrary. (Sec.30.2, IPC)

III. Patent Application

The Application - The patent application shall be in Filipino or English and shall contain the following:

(a) A request for the grant of a patent; (Sec. 34)

(b) A description of the invention; (Sec. 35)
(c) Drawings necessary for the understanding of the invention;
(d) One or more claims; (Sec. 36) and
(e) An abstract. (Sec. 37)

Unity of invention - The application shall relate to one invention only or to a group of inventions
forming a single general inventive concept. (Sec. 38.1,IPC) The fact that a patent has been granted
on an application that did not comply with the requirement of unity of invention shall not be a ground
to cancel the patent. (Sec. 38.3)

IV. Procedure for Grant of Patent

1. Where to File

The application for registration of a Philippine Patent is filed with the Bureau of Patents (BOP) of the Intellectual
Property Office (IPO) through the Receiving Section/Counter of the Administrative, Financial and Human Resource
Development Services Bureau (AFHRDSB) located at the ground floor of the IPO Building.

2. What to File

To obtain a filing date, a Request Form for a Grant of Philippine Patent must be filed, containing the name, address
and signature of the applicant. If the applicant is a non-resident, the name and address of its resident agent must
also be indicated. A description of the invention and one or more claims must accompany the application, including
any drawings explaining the invention. THE SUBMISSION OF THE FOREGOING REQUIREMENTS ALREADY
ENTITLES THE APPLICANT TO OBTAIN A FILING DATE.

However, there are still additional formal requirements for the application, such as the payment of the filing fee
which may be paid during application filing or within one month from the date of filing. Filing fees shall be P1,380 for
Small Entities and P2,760 for Big Entities Although the payment of filing fees is not necessary to obtain a filing date,
the application shall be deemed automatically cancelled/withdrawn in case it is not paid on time. The abstract of the
invention must also be submitted and, in case the priority of an earlier filed application is being claimed, the filing
date, file number and country of origin of the claim must also be indicated.

3. Examination Process

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 (a) Formal Examination
The purpose of this examination is to determine if the application satisfies the formal requirements for the
grant of a filing date. During examination, the examiner shall check if proper fees have been paid and shall
proceed to classify the invention as to the field of technology it belongs. A search is conducted to determine
prior art and identify similar or identical inventions pending with the IPO.

(b) Publication of Application

The application is published in the IPO Gazette after 18 months from the filing or priority date, in order to allow
the public to inspect the application documents and submit their written observations and comments regarding
the patentability of the invention. The applicant is given the opportunity to defend the patentability of his
against these comments and objections. A patent application, which has not yet been published, and all
related documents, shall not be made available for inspection without the consent of the applicant. (Sec. 46,
IPC) The applicant shall have all the rights of a patentee under Section 76 against any person who, without
his authorization, exercised any of the rights conferred under Section 71 of this Act in relation to the invention
claimed in the published patent application, as if a patent had been granted for that inventionThe applicant
shall have all the rights of a patentee under Section 76 against any person who, without his authorization,
exercised any of the rights conferred under Section 71 of this Act in relation to the invention claimed in the
published patent application, as if a patent had been granted for that invention. (Sec. 46)

(c) Substantive Examination

The applicant should request for a substantive examination within six (6) months from the date of publication,
otherwise the application shall be deemed withdrawn and all fees shall be forfeited. During the substantive
examination, the examiner determines if the application meets the requirements of Sections 21 - 27 and
Sections 32 39 of the Intellectual Property Code. The right to substantial examination is only available for
inventions and NOT for application for utility model and industrial design.

(d) Amendment of Application

Based on the findings of the examiner, the applicant is allowed to amend his application in order to comply
with requirements of, or clarify patentability issues with, the examiner.

(e) Grant of Patent

If the application meets all the requirements and there is no reason for the examiner to deny the application,
the examiner issues a decision to grant the patent registration.

(f) Publication of Patent

The grant of a patent including related information shall be published in the IPO Gazette within six (6) months.
Any interested party may inspect the complete description, claims, and drawings of the patent on file with the
Office.

4. Contents of Patent

The patent is issued in the name of the Republic of the Philippines under the seal of the IPO and shall be signed by
the Director and registered together with the description, claims and drawings in the records of the IPO.

5. Annual Fees

An annual fee shall be paid upon expiration of four (4) years from the date the application was published and on
each subsequent anniversary of such date, otherwise the patent application or the patent, as the case may be, shall
be deemed withdrawn or cancelled, respectively. (Sec. 55.1; 55.2)

6. Patent Term

The term of a patent shall be twenty (20) years from the filing date of the application. (Sec. 54)

7. Appeals

Appeals may be directed to the Director of Patents within two (2) months from the mailing date of the final refusal by
the examiner to grant the patent. The decision or order of the Director shall become final and executory fifteen (15)
days after receipt of a copy by the appellant unless within the same period, a motion for reconsideration is filed with
the Director or an appeal to the Director General is filed. The decision of the Director General may be appealed to
the Court of Appeals and finally to the Supreme Court.

V. Cancellation of Patents; Substitution of Patentee

Grounds for cancellation - Any interested person may, upon payment of the required fee, petition to
cancel the patent or any claim thereof, or parts of the claim, on any of the following grounds:
(a) That what is claimed as the invention is not new or Patentable;
(b) That the patent does not disclose the invention in a manner sufficiently clear and complete for it
to be carried out by any person skilled in the art; or
(c) That the patent is contrary to public order or morality. (Sec. 61, IPC)
(d) In the case provided under Sec. 67 & 68 of IPC
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 Where the grounds for cancellation relate to some of the claims or parts of the claim, cancellation
may be effected to such extent only. (Sec. 61.2, IPC)

Petition for cancellation must be filed with the IPO particularly with the Bureau of Legal Affairs. (Sec.
10.1, IPC)

The rights conferred by the patent or any specified claim or claims cancelled shall terminate. Notice of
the cancellation shall be published in the IPO Gazette. Unless restrained by the Director General, the
decision or order to cancel by Director of Legal Affairs shall be immediately executory even pending
appeal. (Sec. 66,IPC)

Cancellation of Patent in an Infringement Action - In an action for infringement, if the court shall find
the patent or any claim to be invalid, it shall cancel the same, and the Director of Legal Affairs upon
receipt of the final judgment of cancellation by the court, shall record that fact in the register of the
Office and shall publish a notice to that effect in the IPO Gazette. (Sec. 82, IPC)

V I. Rights of Patentees and Infringement of Patents

Rights conferred by Patent - A patent shall confer on its owner the following exclusive rights:

(a) Where the subject matter of a patent is a product, to restrain, prohibit and prevent any
unauthorized person or entity from making, using, offering for sale, selling or importing that
product;
(b) Where the subject matter of a patent is a process, to restrain, prevent or prohibit any
unauthorized person or entity from using the process, and from manufacturing, dealing in, using,
selling or offering for sale, or importing any product obtained directly or indirectly from such
process. (Sec. 71, IPC)

A person or entity who has not been granted patent over an invention and has not acquired any right
or title thereto either as assignee or as licensee, has no cause of action for infringement which
depends on the existence of the patent. (Creser Precision Systems vs. CA, 286 SCRA 13 [1998]).

When a patent is sought to be enforced, "the questions of invention, novelty, or prior use, and each of
them, are open to judicial examination." The burden of proof to substantiate a charge of infringement
is with the plaintiff. Where, however, the plaintiff introduces the patent in evidence, if it is the due
form, it affords a prima facie presumption of its correctness and validity. The decision of the
Commissioner of Patents in granting the patent is always presumed to be correct. The burden then
shifts to the defendant to overcome by competent evidence this legal presumption. With all due
respects, therefore, for the critical and expert examination of the invention by the United States
Patent Office, the question of the validity of the patent is one for judicial determination, and since a
patent has been submitted, the exact question is whether the defendant has assumed the burden of
proof as to anyone of his defenses. (Vargas vs. Chua, G.R. No. L-36650, January 27, 1933).

Patents or applications for patents and invention to which they relate, shall be protected in the same
way as the rights of other property under the Civil Code. (Sec. 103.1, IPC)

Patent owners shall also have the right to assign, or transfer by succession the patent, and to
conclude licensing contracts for the same. (Sec. 71.2, IPC)

Assignment of inventions or any rights and interests pertaining must be in writing and must be
properly recorded with the IPO in order to be binding to third persons. (Sec. 105, IPC)

Joint-owners - If two (2) or more persons jointly own a patent and the invention covered thereby,
either by the issuance of the patent in their joint favor or by reason of the assignment of an undivided
share in the patent and invention or by reason of the succession in title to such share, each of the
joint owners shall be entitled to personally make, use, sell, or import the invention for his own profit:
Provided, however, That neither of the joint owners shall be entitled to grant licenses or to assign his
right, title or interest or part thereof without the consent of the other owner or owners, or without
proportionally dividing the proceeds with such other owner or owners. (Sec. 107, IPC)

Limitations of Patent Rights - The owner of a patent has no right to prevent third parties from
performing, without his authorization, the acts referred to in Section 71 hereof in the following
circumstances:

(a) Using a patented product which has been put on the market in the Philippines by the owner of the
product, or with his express consent, insofar as such use is performed after that product has been
so put on the said market;

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 (b) Where the act is done privately and on a non-commercial scale or for a non-commercial purpose:
Provided, That it does not significantly prejudice the economic interests of the owner of the
patent;
(c) Where the act consists of making or using exclusively for the purpose of experiments that relate
to the subject matter of the patented invention;
(d) Where the act consists of the preparation for individual cases, in a pharmacy or by a medical
professional, of a medicine in accordance with a medical prescription or acts concerning the
medicine so prepared;
(e) Where the invention is used in any ship, vessel, aircraft, or land vehicle of any other country
entering the territory of the Philippines temporarily or accidentally: Provided, That such invention
is used exclusively for the needs of the ship, vessel, aircraft, or land vehicle and not used for the
manufacturing of anything to be sold within the Philippines. (Sec. 72, IPC)
(f) Prior user - any prior user, who, in good faith was using the invention or has undertaken serious
preparations to use the invention in his enterprise or business, before the filing date or priority
date of the application on which a patent is granted, shall have the right to continue the use
thereof as envisaged in such preparations within the territory where the patent produces its effect.
(Sec. 73, IPC)
(g) Use of invention by Government - A Government agency or third person authorized by the
Government may exploit the invention even without agreement of the patent owner where:
1. The public interest, in particular, national security, nutrition, health or the development of
other sectors, as determined by the appropriate agency of the government, so requires;
or
2. A judicial or administrative body has determined that the manner of exploitation, by the
owner of the patent or his licensee is anti-competitive. (Sec. 74, IPC)

VII. Remedies of Person with Patent

Application by persons not having right to patent If a person referred to in Sec. 29 other than the
applicant, is declared by final court order or decision as having the right to the patent, such person
may, within three months after the decision has become final:

(a) prosecute application as his own in place of applicant;

(b) file new patent application in respect of the same invention;
(c) request that application be refused; or
(d) seek cancellation of patent, if already been issued. (Sec. 67, IPC)

Remedies of True and Actual Inventor When true and actual inventor is deprived of patent without
his consent or through fraud, and so declared by final court order, court shall order for his substitution
as patentee, or at the option of the true inventor, cancel the patent, and award actual and other
damages in his favor as warranted. (Sec. 68, IPC)

The actions indicated in Secs. 67 and 68 shall be filed within one year from date of publication. (Sec.
70, IPC)

VIII. Infringement of Patent

What constitutes Patent Infringement? The making, using, offering for sale, selling, or importing a
patented product or a product obtained directly or indirectly from a patented process, or the use of a
patented process without the authorization of the patentee constitutes patent infringement. (Sec.
76.1, IPC)

Protection against infringement - The law will protect a patentee against imitation of his patent by
other forms and proportions. If two devices do the same work in substantially the same way, and
accomplish substantially the same result, they are the same, even though they differ in name, form,
or shape. (Godines vs. CA, 226 SCRA 338)

Proof of Infringement - To establish an infringement, it is not essential to show that the defendant
adopted the device or process in every particular; Proof of an adoption of the substance of the thing
will be sufficient. (Godines vs. CA, 226 SCRA 338).

Civil Action for Infringement - Any patentee, or anyone possessing any right, title or interest in and to
the patented invention, whose rights have been infringed, may bring a civil action before a court of
competent jurisdiction, to recover from the infringer such damages sustained thereby, plus attorney's
fees and other expenses of litigation, and to secure an injunction for the protection of his rights. (Sec.
76.2, IPC)

Damages - If the damages are inadequate or cannot be readily ascertained with reasonable
certainty, the court may award by way of damages a sum equivalent to reasonable royalty. (Sec.
76.3, IPC) The court may, according to the circumstances of the case, award damages in a sum
above the amount found as actual damages sustained: Provided, That the award does not exceed
three (3) times the amount of such actual damages. (Sec. 76.4, IPC) Limitation on Damages - No
damages can be recovered for acts of infringement committed more than four (4) years before the
institution of the action for infringement. (Sec. 79, IPC). Requirement of Notice - Damages cannot be
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 recovered for acts of infringement committed before the infringer had known, or had reasonable
grounds to know of the patent. It is presumed that the infringer had known of the patent if on the
patented product, or on the container or package in which the article is supplied to the public, or on
the advertising material relating to the patented product or process, are placed the words "Philippine
Patent" with the number of the patent. (Sec. 80, IPC)

Other relief - The court may, in its discretion, order that the infringing goods, materials and
implements predominantly used in the infringement be disposed of outside the channels of commerce
or destroyed, without compensation. (Sec. 76.5, IPC)

Contributory Infringer - Anyone who actively induces the infringement of a patent or provides the
infringer with a component of a patented product or of a product produced because of a patented
process knowing it to be especially adopted for infringing the patented invention and not suitable for
substantial non-infringing use shall be liable as a contributory infringer and shall be jointly and
severally liable with the infringer. (Sec. 76.6, IPC)

Infringement Action by Foreign National - Any foreign national or juridical entity who meets the
requirements of Section 3 and not engaged in business in the Philippines, to which a patent has been
granted or assigned under this Act, may bring an action for infringement of patent, whether or not it is
licensed to do business in the Philippines under existing law. (Sec. 77, IPC)

Defenses in Action for Infringement - In an action for infringement, the defendant, in addition to other
defenses available to him, may show the invalidity of the patent, or any claim thereof, on any of the
grounds on which a petition of cancellation can be brought under Section 61 hereof. (Sec. 81, IPC)

Patent Found Invalid for Infringement - In an action for infringement, if the court shall find the patent
or any claim to be invalid, it shall cancel the same, and the Director of Legal Affairs upon receipt of
the final judgment of cancellation by the court, shall record that fact in the register of the Office and
shall publish a notice to that effect in the IPO Gazette. (Sec. 82, IPC)

Criminal Action for Repetition of Infringement. - If infringement is repeated by the infringer or by

anyone in connivance with him after finality of the judgment of the court against the infringer, the
offenders shall, without prejudice to the institution of a civil action for damages, be criminally liable
therefor and, upon conviction, shall suffer imprisonment for the period of not less than six (6) months
but not more than three (3) years and/or a fine of not less than One hundred thousand pesos
(P100,000) but not more than Three hundred thousand pesos (P300,000), at the discretion of the
court. The criminal action herein provided shall prescribe in three (3) years from date of the
commission of the crime. (Sec. 84, IPC)

What is the doctrine of patent exhaustion? - The patentee, having in the act of sale received all the
royalty or consideration which he claims for the use of his invention in that particular machine or
instrument, it is open to the use of the purchaser without further restriction on account of the
monopoly of the patentee.

What is the doctrine of equivalents? It provides that an alteration in a patented combination which
merely substitutes another old ingredient for one of the ingredients in the patented combination is an
infringement of the patent if the substitute performs the same function as well known at the date of
the patent as a proper substitute for the omitted ingredient. (Godines vs. CA, 226 SCRA 338).

Burden of proof on Process Patents - If the subject matter of a patent is a process for obtaining a
product, any identical product shall be presumed to have been obtained through the use of the
patented process if the product is new or there is substantial likelihood that the identical product was
made by the process and the owner of the patent has been unable despite reasonable efforts, to
determine the process actually used. In ordering the defendant to prove that the process to obtain the
identical product is different from the patented process, the court shall adopt measures to protect, as
far as practicable, his manufacturing and business secrets. (Sec. 78, IPC)

Administrative action for Infringement Before the Bureau of Legal Affairs (Sec. 10.2, IPC)

IX. Voluntary Licensing

Voluntary licensing is the grant by the patent owner to a third person of the right to exploit the
patented invention. (Sec. 85,IPC)

The law requires certain provisions to be stated in voluntary license contracts, as follows:

(a) That Philippine law shall govern the interpretation of the contract.
(b) That in the event of litigation, the venue shall be the proper court in the place where the licensee
has it principal office;
(c) That continued access to improvements in the licensed technology shall be made available to the
licensee during the term of the contract;

9
 (d) That arbitration, if stipulated, shall be conducted in accordance with the procedure provided in the
Arbitration law of the Philippines, or the rules of the United Nations Commission on International
Trade Law (UNCITRAL), or the rules of conciliation and arbitration of the International Chamber
of Commerce (ICC);
(e) That the place of arbitration shall be the Philippines or any neutral country; and
(f) That Philippine taxes due on all payments under the contract shall be borne by the licensor.
(Sec. 88, IPC)

Certain clauses are also prohibited in voluntary license because they are deemed prima facie to have
an adverse effect on competition and trade. Examples are:

(a) Obliging the licensee to acquire goods, materials and other technology only from a specific
source;
(b) Obliging the licensee to permanently employ personnel indicated by the licensor;
(c) Where the right to fix the selling prices of the licensed products is reserved by the licensor;
(d) Where the volume and structure of production of the licensed products are restricted. (Sec. 87,
IPC)

Effect of non-conformity of the provisions of Secs. 87 & 88 It will automatically render the
technology transfer arrangement unenforceable, unless the same is approved and registered with the
Documentation, Information and Technology Transfer Bureau as an exceptional or meritorious case
under Section 91 (when substantial benefits will accrue to the economy).

Voluntary license contracts are not required to be registered with DITT unless they do not conform
with Secs. 87 & 88.

In the absence of any provision to the contrary in the technology transfer arrangement, the grant of a
license shall not prevent the licensor from granting further licenses to third person nor from exploiting
the subject matter of the technology transfer arrangement himself. (Sec. 89, IPC)

The licensee shall be entitled to exploit the subject matter of the technology transfer arrangement
during the whole term of the technology transfer arrangement. (Sec. 90, IPC)

X. Compulsory Licensing

Compulsory Licensing is the grant by the Director of Legal Affairs of a license to exploit a patented
invention, even without the agreement of the patent owner, in favor of any person who has shown his
capability to exploit the invention, under any of the following circumstances:

(a) When there is a national emergency or other circumstances of extreme urgency; or

(b) Where the public interest, in particular, national security, nutrition, health or the development of
other vital sectors of the national economy as determined by the appropriate agency of the
Government, so requires; or
(c) Where a judicial or administrative body has determined that the manner of exploitation by the
owner of the patent or his licensee is anti-competitive; or
(d) In case of public non-commercial use of the patent by the patentee, without satisfactory reason;
(e) If the patented invention is not being worked in the Philippines on a commercial scale, although
capable of being worked, without satisfactory reason: Provided, That the importation of the
patented article shall constitute working or using the patent. Or
(f) Grounds of compulsory license based on interdependence of patents - If the invention protected
by a patent within the country (the second patent) cannot be worked without infringing another
patent (the first patent) granted on a prior application or benefiting from an earlier priority,
subject to certain conditions. (Sec. 93 and 97, IPC)

The legislative intent in the grant of a compulsory license was not only to afford others an opportunity
to provide the public with the quantity of the patented product, but also to prevent the growth of
monopolies. (Smith Kline vs. CA, G.R. No. 12167, October 23, 2001)

Compulsory license is not tantamount to deprivation of property without just compensation - Even if
other entities like private respondent are subsequently allowed to manufacture, use and sell the
patented invention by virtue of a compulsory license, petitioner as owner of the patent would still
receive remuneration for the use of such product in the form of royalties. (Smith Kline vs. CA, G.R.
No. 12167, October 23, 2001)

Requirement to Obtain a License on Reasonable Commercial Terms. - The license will only be
granted after the petitioner has made efforts to obtain authorization from the patent owner on
reasonable commercial terms and conditions but such efforts have not been successful within a
reasonable period of time. (Sec. 95.1, IPC). However, this requirement shall not apply in the
following cases:

10
 (a) Where the petition for compulsory license seeks to remedy a practice determined after judicial or
administrative process to be anti-competitive;
(b) In situations of national emergency or other circumstances of extreme urgency;
(c) In cases of public non-commercial use. (Sec. 95.2, IPC)

Licensees Exemption from Liability Any person who works a patented product, substance and/or
process under a compulsory license, shall be free from any liability for infringement; Provided: That in
case of voluntary licensing, no collusion with licensor is proven. This is without prejudice to rightful
patent owner to recover from licensor whatever he may receive as royalties under the license. (Sec.
102, IPC

XI. Registration of Utility Models

An invention qualifies for registration as a utility model if it is new and industrially applicable. (Sec.
109.1, IPC)

The element of inventiveness with respect to inventions is not a requirement in registration with utility
models.

Sec. 43 to 49 pertaining to application for invention is also not applicable

Term - A utility model registration shall expire, without any possibility of renewal, at the end of the
seventh year after the date of the filing of the application. (Sec. 109.3, IPC)

Prohibition against Filing of Parallel Applications. - An applicant may not file two (2) applications for
the same subject, one for utility model registration and the other for the grant of a patent whether
simultaneously or consecutively. (Sec. 111, IPC)

XII. Industrial Designs

An industrial design is any composition of lines or colors or any three-dimensional form, whether or
not associated-with lines or colors: Provided, That such composition or form gives a special
appearance to and can serve as pattern for an industrial product or handicraft. (Sec. 112, IPC)

Only industrial designs that are new or original shall benefit from protection under this Act. (Sec. 113,
IPC)

Term The registration of an industrial design shall be for a period of five (5) years from the filing
date of the application. The registration of an industrial design may be renewed for not more than two
(2) consecutive periods of five (5) years each, by paying the renewal fee.

PART FOUR: The Law on Trademarks, Service Marks and Trade Names

I. Definitions; Principles

Mark is any visible sign capable of distinguishing the goods (trademark) or services (service mark)
of an enterprise and shall include a stamped or marked container of goods. (Sec. 121.1, IPC)

Mark could be a word mark (the use of the name of a person, or any fanciful or arbitrary word),
composite mark (consisting of a combination of a word or letter and a device), device mark (which
may be a geometrical figure, a stylized rendering of the alphabet or a representation of any object).

Marks may be creatively designed or coined.

Collective mark - means any visible sign designated as such in the application for registration and
capable of distinguishing the origin or any other common characteristic, including the quality of goods
or services of different enterprises which use the sign under the control of the registered owner of the
collective mark. (Sec.121.2,IPC)

Trade name is the name or designation identifying or distinguishing an enterprise. (Sec. 121.333,
IPC) A trade name refers to the business and its goodwill; a trademark refers to the goods. (Canon
Kabushiki Kaisha vs. CA, G.R. No. 120900, July 20, 2000)

Old definition of Marks - A trademark has been generally defined as "any word, name, symbol or
device adopted and used by a manufacturer or merchant to identify his goods and distinguish them
from those manufactured and sold by others. (Societe des Produits vs. CA, G.R. No. 112012, April 4,
2001)

11
 Functions of a trademark - (1) they indicate origin or ownership of the articles to which they are
attached; (2) they guarantee that those articles come up to a certain standard of quality; and (3) they
advertise the articles they symbolize. (Mirpuri vs. CA, G.R. No. 114508, Nov. 19, 1999).

The rights in a mark shall be acquired through registration made validly in accordance with the
provisions of the law. (Sec. 122, IPC)

The right to register trademarks, tradenames and service marks by any person, corporation,
partnership or association domiciled in the Philippines or in any foreign country, is based on
ownership, and the burden is upon the applicant to prove such ownership. (Marvex Commercial Co.,
Inc. v. Petra Hawpia & Co., et al., L-16297, Dec. 22, 1926) Where the applicant was not the owner of
the trademark being applied for, he had no right to apply for registration of the same. The right to
register trademarks, tradenames and service marks is based on ownership. (Operators Inc. vs.
Director of Patenst, L-17901, Oct. 29, 1965)

However, registration is not a mode of acquiring ownership. When the applicant is not the owner of
the trademark being applied for, he has no right to apply for registration of the same. Registration
merely creates a prima facie presumption of the validity of the registration, of the registrant's
ownership of the trademark and of the exclusive right to the use thereof. Such presumption, just like
the presumptive regularity in the performance of official functions, is rebuttable and must give way to
evidence to the contrary. (Shangri-la Intl Hotel vs. DGC, G.R. No. 159938, March 31, 2006) Such
that, a certificate of registration of a mark shall be prima facie evidence of the validity of the
registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the
same in connection with the goods or services and those that are related thereto specified in the
certificate. (Sec. 138, IPC)

Ownership of a mark or trade name may be acquired not necessarily by registration but by adoption
and use in trade or commerce. As between actual use of a mark without registration, and registration
of the mark without actual use thereof, the former prevails over the latter. For a rule widely accepted
and firmly entrenched, because it has come down through the years, is that actual use in commerce
or business is a pre-requisite to the acquisition of the right of ownership. (Emerald Garments Mfg.
Corp. v. Court of Appeals, G.R. No. 100098, December 29, 1995, 251 SCRA 600; Sterling Products
International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft, G.R. No. L-19906, April 30, 1969, 27
SCRA 1214)

Thus, the right to register trademark is based on ownership and a mere distributor of a product
bearing a trademark, even if permitted to use said trademark, has no right to and cannot register the
said trademark. (Gabriel vs. Perez, G.R. No. L-24075, Jan. 31, 1974) The term owner does not
include the importer of the goods bearing the trademark, trade name, service mark, or other mark of
ownership, unless such importer is actually the owner thereof in the country from which the goods are
imported. A local importer, however, may make application for the registration of a foreign trademark,
trade name or service mark if he is duly authorized by the actual owner of the name or other mark of
ownership. (Unno vs. General Milling, G.R. No. L-28554, Feb. 28, 1983)

Trademark vs. tradename Marks are protected upon registration while trade name may be
protected even without registration. (Sec. 165, IPC) Thus, any subsequent use of the trade name by
a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade
name or mark, likely to mislead the public, shall be deemed unlawful. (Sec. 165.2, IPC)

It is a property right - The ownership of a trademark or tradename is a property right which the owner
is entitled to protect "since there is damage to him from confusion or reputation or goodwill in the
mind of the public as well as from confusion of goods. The modern trend is to give emphasis to the
unfairness of the acts and to classify and treat the issue as fraud. (Converse Rubber vs. Universal
Rubber, G.R. No. L-27906, Jan. 8, 1987)

The protection of trademarks is the laws recognition of the psychological function of symbols. If it is
true that we live by symbols, it is no less true that we purchase goods by them. A trade-mark is a
merchandising short-cut which induces a purchaser to select what he wants, or what he has been led
to believe what he wants. The owner of a mark exploits this human propensity by making every effort
to impregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever
the means employed, the aim is the same - to convey through the mark, in the minds of potential
customers, the desirability of the commodity upon which it appears. Once this is attained, the trade-
mark owner has something of value. If another poaches upon the commercial magnetism of the
symbol he has created, the owner can obtain legal redress. (Philip Morris Inc. vs. Fortune Tobacco
Corp., G.R. No. 158589, June 27, 2006)

Is prior use a requirement for registration? No, prior use is no longer a condition for filing or
registration. However, the applicant or registrant shall file a declaration of actual use of the mark,
with evidence to that effect, within 3 years from the filing of the application; otherwise the application
shall be refused or the mark shall be removed from the Register. (Sec. 124.2, IPC)

II. Registrability of a Mark

12
 Who may apply for registration? Any person may apply for registration who is domiciled or has a real
and effective industrial establishment in a country (a) which is a party to any convention, treaty or
agreement relating to intellectual property rights or the repression of unfair competition, to which the
Philippines is also a party, or (b) extends reciprocal rights to nationals of the Philippines by law. (Sec.
3, IPC)

Which marks can be registered? Any mark can be registered except those that:

(a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely
suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring
them into contempt or disrepute;

(b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its political
subdivisions, or of any foreign nation, or any simulation thereof;

(c) Consists of a name, portrait or signature identifying a particular living individual except by his
written consent, or the name, signature, or portrait of a deceased President of the Philippines, during
the life of his widow, if any, except by written consent of the widow;

(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing
or priority date, in respect of:

(i) The same goods or services, or

(ii) Closely related goods or services, or

(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;

(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered
by the competent authority of the Philippines to be well-known internationally and in the Philippines,
whether or not it is registered here, as being already the mark of a person other than the applicant for
registration, and used for identical or similar goods or services: Provided, That in determining whether
a mark is well-known, account shall be taken of the knowledge of the relevant sector of the public,
rather than of the public at large, including knowledge in the Philippines which has been obtained as
a result of the promotion of the mark;

(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-
known in accordance with the preceding paragraph, which is registered in the Philippines with respect
to goods or services which are not similar to those with respect to which registration is applied for:
Provided, That use of the mark in relation to those goods or services would indicate a connection
between those goods or services, and the owner of the registered mark: Provided further, That the
interests of the owner of the registered mark are likely to be damaged by such use;

(g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical
origin of the goods or services;

(h) Consists exclusively of signs that are generic for the goods or services that they seek to identify;

(i) Consists exclusively of signs or of indications that have become customary or usual to designate
the goods or services in everyday language or in bona fide and established trade practice;

(j) Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality,
quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of
the services, or other characteristics of the goods or services;

(k) Consists of shapes that may be necessitated by technical factors or by the nature of the goods
themselves or factors that affect their intrinsic value;

(l) Consists of color alone, unless defined by a given form; or

(m) Is contrary to public order or morality. (Sec. 123.1, IPC) NOTE: The nature of the goods to
which the mark is applied will not constitute an obstacle to registration. (Sec. 123.3, IPC)

Identical with prior marks - When one applies for the registration of a trademark or label which is
almost the same or very closely resembles one already used and registered by another, the
application should be rejected and dismissed outright, even without any opposition on the part of the
owner and user of a previously registered label or trademark, this not only to avoid confusion on the
part of the public, but also to protect an already used and registered trademark and an established
goodwill. (Chuanchow Soy & Canning Co. vs. Director of Patents, 108 Phil 833, 836)
13
 colorable imitation - The phrase "colorable imitation" denotes such a "close or ingenious imitation as
to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an
ordinary purchaser giving such attention as a purchaser usually gives, and to cause him to purchase
the one supposing it to be the other. (Etepha vs. Director of Patents, L-20635, March 31, 1966)
Generic terms and descriptive terms defined - Generic terms are those which constitute "the common
descriptive name of an article or substance," or comprise the "genus of which the particular product is
a species," or are "commonly used as the name or description of a kind of goods," or "imply reference
to every member of a genus and the exclusion of individuating characters," or "refer to the basic
nature of the wares or services provided rather than to the more idiosyncratic characteristics of a
particular product," and are not legally protectable. On the other hand, a term is descriptive and
therefore invalid as a trademark if, as understood in its normal and natural sense, it "forthwith
conveys the characteristics, functions, qualities or ingredients of a product to one who has never seen
it and does not know what it is," or "if it forthwith conveys an immediate idea of the ingredients,
qualities or characteristics of the goods," or if it clearly denotes what goods or services are provided
in such a way that the consumer does not have to exercise powers of perception or imagination.
(Societe des Produits vs. CA, G.R. No. 112012, April 4, 2001)
Why are generic and descriptive terms not registrable? These types of marks cannot be susceptible
for exclusive appropriation as it is open to the public for their use. Words and phrases in common
use and which merely indicate the character, kind, quality and composition of the thing, may not be
appropriated by anyone to his exclusive use; nor those which are deceptively misdescriptive of the
product. (East Pacific Merchandising Corp. vs. Director of Patents, G.R. No. L-14377, Dec. 29, 1960)
A dealer in shoes cannot register "Leather Shoes" as his trademark because that would be merely
descriptive and it would be unjust to deprive other dealers in leather shoes of the right to use the
same words with reference to their merchandise. No one may appropriate generic or descriptive
words. They belong to the public domain. (Masso Hermanos vs. Director of Patents, G.R. No. L-
3952, Dec. 29, 1953)
It is evident that "CAMIA" as a trademark is far from being distinctive. By itself, it does not identify
petitioner as the manufacturer or producer of the goods upon which said mark s used, as contra-
distinguished to trademarks derived from coined words such as "Rolex," "Kodak" or Kotex." It has
been held that "if a mark is so commonplace that it cannot be readily distinguished from others, then it
is apparent that it cannot identify a particular business; and he who first adopted it cannot be injured
by any subsequent appropriation or imitation by others, and the public will not be deceived. (Phil.
Refining Co. vs. Ng Sam, G.R. No. L-26676, July 30, 1982)
The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are part of
its registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive words as
"evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be
appropriated by any single manufacturer of these food products, for no other reason than that he was
the first to use them in his registered trademark. (Asia Brewery Inc. vs. CA, G.R. No. 103543, July 5,
1993)
Although a combination of words may be registered as a trade-name, it is no justification for not
applying the principle that the use of a descriptive or generic term in a trade-name is always subject
to the limitation that the registrant can not acquire the exclusive right to the descriptive or generic
term or word. (Ong Ai Gui vs. Director of Patents, G.R. No. L-6235, March 28, 1955)
Suggestive terms on the other hand can be registered - Suggestive terms are those which, in the
phraseology of one court, require "imagination, thought and perception to reach a conclusion as to
the nature of the goods." Such terms, "which subtly connote something about the product," are
eligible for protection in the absence of secondary meaning. While suggestive marks are capable of
shedding "some light" upon certain characteristics of the goods or services in dispute, they
nevertheless involve "an element of incongruity," "figurativeness," or " imaginative effort on the part of
the observer." (Societe des Produits vs. CA, G.R. No. 112012, April 4, 2001)
Doctrine of Secondary meaning - As regards signs or devices mentioned in paragraphs (j), (k), and (l)
of Sec. 123.1, nothing shall prevent the registration of any such sign or device which has become
distinctive in relation to the goods for which registration is requested as a result of the use that have
been made of it in commerce in the Philippines. (Sec. 123.2, IPC) The doctrine of secondary
meaning was elaborated in the following terms: " . . . a word or phrase originally incapable of
exclusive appropriation with reference to an article on the market, because geographically or
otherwise descriptive, might nevertheless have been used so long and so exclusively by one
producer with reference to his article that, in that trade and to that branch of the purchasing public,
the word or phrase has come to mean that the article was his product." (Phil. Nut Industry vs.
Standard, L-23055, July 31, 1975)
Thus, even if "Ang Tibay," therefore, were not capable of exclusive appropriation as a trade-mark, the
application of the doctrine of secondary meaning could nevertheless be fully sustained because, in
any event, by respondent's long and exclusive use of said phrase with reference to his products and
his business, it has acquired a proprietary connotation. This doctrine is to the effect that a word or
phrase originally incapable of exclusive appropriation with reference to an article on the market,
because geographically or otherwise descriptive, might nevertheless have been used so long and so
exclusively by one producer with reference to his article that, in that trade and to that branch of the
purchasing public, the word or phrase has come to mean that the article was his product. (Ang vs.
Teodoro, 74 Phil 50 [1942]).
Although the word "SELECTA" may be an ordinary or common word in the sense that it may be used
or employed by any one in promoting his business or enterprise, once adopted or coined in
connection with one's business as an emblem, sign or device to characterize its products, or as a
badge or authenticity, it may acquire a secondary meaning as to be exclusively associated with its
14
 products and business. In this sense, its use by another may lead to confusion in trade and cause
damage to its business. (Arce Sons and Co. vs. Selects Biscuits, 1 SCRA 253 [1961])
Doctrine of Secondary Meaning applicable to trade names - The doctrine of secondary meaning
originated in the field of trademark law. Its application has, however, been extended to corporate
names sine the right to use a corporate name to the exclusion of others is based upon the same
principle which underlies the right to use a particular trademark or tradename. However, while the
appellant may have proved that it had been using the word 'Lyceum' for a long period of time, this fact
alone did not amount to mean that the said word had acquired secondary meaning in its favor
because the appellant failed to prove that it had been using the same word all by itself to the
exclusion of others (Lyceum of the Philippines vs. Court of Appeals, G.R. 101897, March 5, 1993)
Confusing Similarity - The similarity must be such as is likely to mislead purchasers of ordinary
caution and prudence into the belief that the articles are those of another producer or manufacturer.
Whether the mark or label of one competitor resembles another is to be determined by an inspection
of the points of difference and resemblance, as a whole, and not merely the points of resemblance.
(American Cyanimid vs. Director of Patents, G.R. 23954, April 29, 1977)
Test of confusing similarity of marks

(a) phonetic similarity - The following random list of confusingly similar sounds in the matter of
trademarks, culled from Nims, Unfair Competition and Trade Marks, 1947, Vol. 1, will reinforce
our view that "SALONPAS" and "LIONPAS" are confusingly similar in sound: "Gold Dust" and
"Gold Drop"; "Jantzen" and "Jass-Sea"; "Silver Flash" and "Supper Flash"; "Cascarete" and
"Celborite"; "Celluloid" and "Cellonite"; "Chartreuse" and "Charseurs"; "Cutex" and "Cuticlean";
"Hebe" and "Meje"; "Kotex" and "Femetex"; "Zuso" and "Hoo Hoo". Leon Amdur, in his book
"Trade-Mark Law and Practice", pp. 419-421, cities, as coming within the purview of the idem
sonans rule, "Yusea" and "U-C-A", "Steinway Pianos" and "Steinberg Pianos", and "Seven-Up"
and "Lemon-Up". In Co Tiong vs. Director of Patents, this Court unequivocally said that "Celdura"
and "Cordura" are confusingly similar in sound; this Court held in Sapolin Co. vs. Balmaceda, 67
Phil. 795 that the name "Lusolin" is an infringement of the trademark "Sapolin", as the sound of
the two names is almost the same. (Marvex Commercial Co., Inc. v. Petra Hawpia & Co., et al.,
L-16297, Dec. 22, 1926)
(b) Holistic Test - the person who infringes a trade mark does not normally copy out but only makes
colorable changes, employing enough points of similarity to confuse the public with enough points
of differences to confuse the courts. What is undeniable is the fact that when a manufacturer
prepares to package his product, he has before him a boundless choice of words, phrases, colors
and symbols sufficient to distinguish his product from the others. When as in this case, Sunshine
chose, without a reasonable explanation, to use the same colors and letters as those used by Del
Monte though the field of its selection was so broad, the inevitable conclusion is that it was done
deliberately to deceive. (Del Monte Corp. vs. CA, G.R. No. L-78352, Jan. 25, 1990)
(c) Dominancy Test - It has been consistently held that the question of infringement of a trademark is
to be determined by the test of dominancy. Similarity in size, form and color, while relevant, is not
conclusive. If the competing trademark contains the main or essential or dominant features of
another, and confusion and deception is likely to result, infringement takes place. Duplication or
imitation is not necessary; not it is necessary that the infringing label should suggest an effort to
imitate. The dominant feature of SMC's trademark is the name of the product: SAN MIGUEL
PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and end of the
letters "S" and "M" on an amber background across the upper portion of the rectangular design.
On the other hand, the dominant feature of ABI's trademark is the name: BEER PALE PILSEN,
with the word "Beer" written in large amber letters, larger than any of the letters found in the SMC
label. The trial court perceptively observed that the word "BEER" does not appear in SMC's
trademark, just as the words "SAM MIGUEL" do not appear in ABI's trademark. Hence, there is
absolutely no similarity in the dominant features of both trademarks. Neither in sound, spelling or
appearance can BEER PALE PILSEN be said to be confusingly similar to SAN MIGUEL PALE
PILSEN. No one who purchases BEER PALE PILSEN can possibly be deceived that it is SAN
MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC proving otherwise.
(Asia Brewery Inc. vs. CA, G.R. No. 103543, July 5, 1993)

Inexplicable use - Respondent's witness had no idea why respondent chose "UNIVERSAL
CONVERSE" as trademark and the record discloses no reasonable explanation for respondent's use
of the word "CONVERSE" in its trademark. Such unexplained use by respondent of the dominant
word of petitioner's corporate name lends itself open to the suspicion of fraudulent motive to trade
upon petitioner's reputation, thus: A boundless choice of words, phrases and symbols is available to
one who wishes a trademark sufficient unto itself to distinguish his product from those of others.
When, however, there is no reasonable explanation for the defendant's choice of such a mark though
the field for his selection was so broad, the inference is inevitable that it was chosen deliberately to
deceive. (Converse Rubber vs. Universal Rubber, G.R. No. L-27906, Jan. 8, 1987) We do not see
why applicant could not have stretched his imagination even a little and extended his choice to other
members of the animal kingdom, as a brand to differentiate his product from similar products in the
market. In a similar case decided by this Tribunal wherein, although one brand consisting of the
representation of a rooster was already being used by one party, another party wanted to register a
similar brand, consisting of two roosters on a similar product. (Lim Hoa vs. Director of Patents, G.R.
No. L-6235, March 28, 1955)

15
 Ordinary purchaser - In order that there may be deception of the buying public in the sense necessary
to constitute unfair competition, it is necessary to suppose a public accustomed to buy, and therefore
to some extent familiar with, the goods in question. The test of fraudulent simulation is to be found in
the likelihood of the deception of persons in some measure acquainted with an established design
and desirous of purchasing the commodity with which that design has been associated. The test is
not found in the deception, or possibility of the deception, of the person who knows nothing about the
design which has been counterfeited, and who must be indifferent as between that and the other. The
simulation, in order to be objectionable, must be such as appears likely to mislead the ordinarily
intelligent buyer who has a need to supply and is familiar with the article that he seeks to purchase.
(Asia Brewery Inc. vs. CA, G.R. No. 103543, July 5, 1993) Accordingly, taken as they will appear to a
prospective customer, the trademarks in question are not apt to confuse. Furthermore, the product of
the applicant is expressly stated as dispensable only upon doctor's prescription, while that of
oppositor does not require the same. The chances of being confused into purchasing one for the
other are therefore all the more rendered negligible. Although oppositor avers that some drugstores
sell "BIOFERIN: without asking for a doctor's prescription, the same if true would be an irregularity not
attributable to the applicant, who has already clearly stated the requirement of a doctor's prescription
upon the face of the label of its product. (Bristol Myers vs. Director of Patents, 17 SCRA 128 [1966])

The related goods principle Goods are related when they belong to the same class or have the
same descriptive properties or physical attributes, or they serve the same purpose or flow through the
same channel of trade. The registrant of the mark Esso for petroleum products may not validly
prevent others from using Esso for cigarettes because there is a marked difference between oil and
tobacco, the respective goods flow through different channels of trade, and the business of one is
beyond the zone of potential or natural and logical expansion of the other. (Esso Standard Eastern
Inc. vs. CA, G.R. No. L-29971, Aug. 31, 1982) The use of identical marks on non-competing but
related goods may likely cause confusion. Thus, the trademark Ang Tibay for shoes and slippers
was not allowed to be used for shirts and pants because they belong to the same general class of
goods. (Ang vs. Teodoro, 74 Phil 50 [1942])

III. Registration of a Mark

Formal requirement for application of registration - The application for the registration of the mark
shall be in Filipino or in English and shall contain the following:

(a) A request for registration;

(b) The name and address of the applicant;

(c) The name of a State of which the applicant is a national or where he has domicile; and the name
of a State in which the applicant has a real and effective industrial or commercial establishment, if
any;

(d) Where the applicant is a juridical entity, the law under which it is organized and existing;

(e) The appointment of an agent or representative, if the applicant is not domiciled in the Philippines;

(f) Where the applicant claims the priority of an earlier application, an indication of:

i) The name of the State with whose national office the earlier application was filed or if filed with an
office other than a national office, the name of that office,

ii) The date on which the earlier application was filed, and

iii) Where available, the application number of the earlier application;

(g) Where the applicant claims color as a distinctive feature of the mark, a statement to that effect as
well as the name or names of the color or colors claimed and an indication, in respect of each color,
of the principal parts of the mark which are in that color;

(h) Where the mark is a three-dimensional mark, a statement to that effect;

(i) One or more reproductions of the mark, as prescribed in the Regulations;

(j) A transliteration or translation of the mark or of some parts of the mark, as prescribed in the
Regulations;

(k) The names of the goods or services for which the registration is sought, grouped according to the
classes of the Nice Classification, together with the number of the class of the said Classification to
which each group of goods or services belongs; and

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 (l) A signature by, or other self-identification of, the applicant or his representative. (Sec. 124, IPC)

Filing date - The filing date of an application shall be the date on which the Office received the
following indications and elements in English or Filipino:

(a) An express or implicit indication that the registration of a mark is sought;

(b) The identity of the applicant;

(c) Indications sufficient to contact the applicant or his representative, if any;

(d) A reproduction of the mark whose registration is sought; and

(e) The list of the goods or services for which the registration is sought. (Sec. 127, IPC)

Note: No filing date shall be accorded until the required fee is paid. (Sec. 127.2, IPC)

Priority right - An application for registration of a mark filed in the Philippines by a person referred to
in Section 3, and who previously duly filed an application for registration of the same mark in one of
those countries, shall be considered as filed as of the day the application was first filed in the foreign
country. (Sec. 131.1, IPC) However, no registration of a mark in the Philippines by a person
described in this section shall be granted until such mark has been registered in the country of origin
of the applicant. (Sec. 131.2, IPC) This right does not entitle the owner of a registration granted
under this section to sue for acts committed prior to the date on which his mark was registered in this
country except for well-known marks. (Sec. 131.3, IPC)
Procedure for registration

(a) Examination to determine whether the application satisfies the requirements for the grant of a
filing date under Section 127. (Sec. 132, IPC)
(b) Examination to determine whether the application meets the requirements of Section 124 and the
mark is registrable under Section 123. (Sec. 133, IPC)
(c) Denial of the application or amendment thereof or publication of the application. (Sec. 133.2 and
Sec. 133.3, IPC)
(d) Opposition to the application; notice; hearing; decision by examiner; appeal to the Director of the
Bureau of Trademarks; appeal to the IPO Director General; appeal to the Court of Appeals;
(e) Issuance of certificate of registration. (Sec. 136, IPC)
(f) Publication in the IPO Gazette of the fact of registration. (Sec. 136, IPC)

Duration of registration - The duration of a trademark registration is 10 years, renewable for periods
of 10 years each renewal. The request for renewal must be made within 6 months before or after the
expiration of the registration. (Sec. 145, IPC)
Post-registration requirement The registrant is required to file a declaration of actual use, and
evidence to that effect, within 1 year from the fifth anniversary of the date of registration of the mark;
otherwise the mark shall be removed from the Register. (Sec. 145, IPC) BUT, non-use of a mark
may be excused if caused by circumstance arising independently of the will of the trademark owner.
Lack of funds is not an acceptable excuse. (Sec. 152, IPC)
Cancellation of registration A petition to cancel a registration of a mark under this Act may be filed
with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the
registration of a mark under this Act as follows:

(a) Within five (5) years from the date of the registration of the mark under this Act.
(b) At any time, if the registered mark becomes the generic name for the goods or services, or a
portion thereof, for which it is registered, or has been abandoned, or its registration was obtained
fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by, or
with the permission of, the registrant so as to misrepresent the source of the goods or services on
or in connection with which the mark is used. If the registered mark becomes the generic name
for less than all of the goods or services for which it is registered, a petition to cancel the
registration for only those goods or services may be filed. A registered mark shall not be deemed
to be the generic name of goods or services solely because such mark is also used as a name of
or to identify a unique product or service. The primary significance of the registered mark to the
relevant public rather than purchaser motivation shall be the test for determining whether the
registered mark has become the generic name of goods or services on or in connection with
which it has been used.
(c) At any time, if the registered owner of the mark without legitimate reason fails to use the mark
within the Philippines, or to cause it to be used in the Philippines by virtue of a license during an
uninterrupted period of three (3) years or longer. (Sec. 151, IPC)

There, being no evidence of use of the mark by others before 1932, or that appellee abandoned use
thereof, the registration of the mark was made in accordance with the Trademark Law. Granting that
appellant used the mark when appellee stopped using it during the period of time that the
Government imposed restrictions on importation of respondent's brassiere bearing the trademark,
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 such temporary non-use did not affect the rights of appellee because it was occasioned by
government restrictions and was not permanent, intentional, and voluntary. To work an
abandonment, the disuse must be permanent and not ephemeral; it must be intentional and
voluntary, and not involuntary or even compulsory. There must be a thoroughgoing discontinuance of
any trade-mark use of the mark in question" (Callman, Unfair Competition and Trademark, 2nd Ed., p.
1341). The use of the trademark by other manufacturers did not indicate an intention on the part of
appellee to abandon it. (Romero vs. Maiden Form, G.R. No. L-18289, March 31, 1964 )
The non-use of a trademark or an article of merchandise due to legal restrictions or circumstances
beyond one's control is not to be considered as an abandonment. Said rule was correctly applied to
the case at bar where the use of the trademark was interrupted during the Japanese occupation and
in fact was discontinued when the importation of the product covered by the trademark was prohibited
by the Central Bank Regulations. (Phil. Nut Industry vs. Standard, L-23055, July 31, 1975)
Assignment and Transfer of Application and Registration An application for registration or its
registration may be assigned or transferred with or without the transfer of the business using the
mark. However, it will be null and void if it would mislead the public especially as regards the nature,
source, manufacturing process, characteristics or suitability for their purpose, of the goods or services
to which the mark is applied. Such assignment or transfer shall be in writing and with the signatures
of the contracting parties. It shall be recorded with the IPO otherwise it shall have no effect against
third parties. (Sec. 149, IPC)
License contracts Any license contract concerning the application of a mark or its registration shall
provide for effective control by the licensor of the quality of the goods or services of the licensee in
connection with which the mark is used. If the contract shall not provide the foregoing, it shall not be
valid. Said contracts must be recorded with the IPO, otherwise, it shall not bind third parties. (Sec.
150.1, IPC)

IV. Well-known Marks

A well-known mark is one which a competent authority of the Philippines has designated to be well-
known internationally and in the Philippines. In determining whether a mark is well-known, account
shall be taken of the knowledge of the relevant sector of the public, rather than the public at large,
including knowledge in the Philippines which has been obtained as a result of the promotion of the
mark. (Sec. 123.1[e] and [f],IPC)
Additional right of owner The exclusive right of the owner of a well-known mark which is registered
in the Philippines shall extend to goods and services which are not similar to those in respect of which
the mark is registered; provided that (i) the use of the mark in relation to those goods or services
would indicate a connection between those goods or services and the owner of the registered mark,
and (ii) the interests of the owner of the registered mark are likely to be damaged by such use. (Sec.
147.2, IPC)

V. Infringement of Trademark; Unfair Competition

Rights conferred on trademark (a) The owner of a registered mark shall have the exclusive right to
prevent all third parties not having the owner's consent from using in the course of trade identical or
similar signs or containers for goods or services which are identical or similar to those in respect of
which the trademark is registered where such use would result in a likelihood of confusion. In case of
the use of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed.

(b) The exclusive right of the owner of a well-known mark defined in Subsection 123.1(e) which is
registered in the Philippines, shall extend to goods and services which are not similar to those in
respect of which the mark is registered: Provided, That use of that mark in relation to those goods or
services would indicate a connection between those goods or services and the owner of the
registered mark: Provided further, That the interests of the owner of the registered mark are likely to
be damaged by such use

Limitations on such right Duration of registration (10 years) and Territorial limitations (rights can be
enforced within the territory of registration except well-known marks)
When is there infringement? There is infringement if a registered mark is used in commerce by a
person without the consent of the registered owner thereof. Such infringement may involve:

(a) Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark
or the same container or a dominant feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to
cause confusion, or to cause mistake, or to deceive; or
(b) Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof
and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive,
shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set
forth. (Sec. 155, IPC)
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 In order to bring a civil action for infringement, it is not required that there be an actual sale of the
goods or services using the infringing material. Infringement takes place upon the mere use or
reproduction of the registered mark. (Sec. 155, IPC)
Remedies available to the owner whose registered mark was infringed

(a) Sue for damages (Sec. 156.1)

(b) Have the infringing goods impounded (Sec. 156.2)
(c) Ask for double damages (Sec. 156.3)
(d) Ask for injunction. (Sec. 156.4)
(e) Have the infringing goods disposed of outside the channels of commerce (Sec. 157.1)
(f) Have the infringing goods destroyed (Sec. 157.1)
(g) File criminal action (Sec. 170)
(h) Administrative sanctions.

Owners of a registered mark is required to give notice of the fact that his mark is registered in order
to recover profits or damages in case of infringement. However, knowledge of the fact of registration
is presumed if the words Registered Mark or the symbol (Registered) is displayed together with the
mark.
Limitations to actions for infringement

(a) No action for infringement could be taken against a person who, in good faith and before the filing
date or priority date, was using the mark for the purposes of his business or enterprise. Note,
however, that such person may assign or transfer his right to use the registered mark only
together with his business or enterprise.
(b) Only an injunction against future printing may be imposed upon an innocent infringing printer.
(c) Similarly, only an injunction against the presentation of infringing advertising matter in future
issues may be imposed on innocent infringing newspapers and magazines. (Sec. 159, IPC)

Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement Action - Any foreign
national or juridical person who meets the requirements of Section 3 of this Act and does not engage
in business in the Philippines may bring a civil or administrative action hereunder for opposition,
cancellation, infringement, unfair competition, or false designation of origin and false description,
whether or not it is licensed to do business in the Philippines under existing laws. (Sec. 160, IPC)
A foreign corporation which has never done any business in the Philippines and which is unlicensed
and unregistered to do business here, but is widely and favorably known in the Philippines through
the use therein of its products bearing its corporate and tradename, has a legal right to maintain an
action in the Philippines to restrain the residents and inhabitants thereof from organizing a corporation
therein bearing the same name as the foreign corporation, when it appears that they have personal
knowledge of the existence of such a foreign corporation, and it is apparent that the purpose of the
proposed domestic corporation is to deal and trade in the same goods as those of the foreign
corporation. (La Chemise Lacoste vs. Fernandez, G.R. No. 65659, May 21, 1984)
Unfair competition is the use by a person of deception or other means contrary to good faith by
which he passes off the goods manufactured by him or in which he deals, or his business or services,
for those of another person who has established goodwill in the goods such person manufactures or
deals in, or his business or services, or who shall commit any acts calculated to produce said result.
Some acts of unfair competition are as follows:

(a) Giving ones goods the general appearance of goods of another manufacturer;
(b) Inducing the false belief that one is offering the services of another who has identified such
services in the minds of the public;
(c) Making any false statement calculated to discredit the goods, business or services of another.

Infringement of trademark vs. unfair competition

(a) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is
the passing off of one's goods as those of another.
(b) In infringement of trademark fraudulent intent is unnecessary whereas in unfair competition
fraudulent intent is essential.
(c) In infringement of trademark the prior registration of the trademark is a prerequisite to the action,
whereas in unfair competition registration is not necessary. (Del Monte Corp. vs. CA, G.R. No. L-
78352, Jan. 25, 1990)

Criminal Penalties Independent of the civil and administrative sanctions imposed by law, a criminal
penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand
pesos (P50,000) to Two hundred thousand pesos(P200,000), shall be imposed on any person who is
found guilty of committing any of the acts mentioned in Section 155, Section 168 and Subsection
169.1. (Sec. 170, IPC)

-End-
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