PATENT

GENERAL PRINCIPLES

The primary purpose of the patent system is not the reward of the
individual but the advancement of the arts and sciences. The function
of a patent is to add to the sum of useful knowledge and one of the
purposes of the patent system is to encourage dissemination of
information concerning discoveries and inventions (Manzano vs.
Court of Appeals, G.R. No. 113388, September 5, 1997).

The patent law has a threefold purpose:

1. Patent law seeks to foster and reward invention;
2. It promotes disclosures of inventions to stimulate further innovation
and to permit the public to practice the invention once the patent
expires; and
3. The stringent requirements for patent protection seek to ensure
that ideas in the public domain remain there for the free use of the
public (Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,
G.R. No. 148222, August 15, 2003).

Coverage of patents

1. Invention – any technical solution of a problem in any field of

human activity that is new, involves an inventive step and is
industrially applicable. It may be, or may relate to, a product, or
process, or an improvement of any of the foregoing (Sec. 21, IPC).

2. Utility Model – An invention qualifies for registration as a utility

model if it is new and industrially applicable (Sec. 109, IPC).

3. Industrial Design – 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. It must be new or ornamental (Sec. 112, 113 IPC).

Generally speaking, an industrial design is the ornamental or

aesthetic aspect of a useful article (Amador, 2007).

An industrial design is not considered new if it differs from prior

designs only in minor respects that can be mistaken as such prior
designs by an ordinary observe (World Intellectual Property
Organization, 2004).

Term or duration of a patent

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

Right to a patent
The right to a patent belongs to the inventor, his heirs, or assigns.
When two (2) or more persons have jointly made an invention, the
right to a patent shall belong to them jointly. (IPC, Sec. 28)

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Q: May patent rights be assigned or transferred?

A: YES. For a valid assignment of patent rights, the assignment must

be in writing and must be duly notarized. (IPC, Sec. 105)

PATENTABLE INVENTIONS

Patentable inventions
Any technical solution of a problem in any field of human activity
which is:
a. new;
b. involves an inventive step;
c. and is industrially applicable.

It may be, or may relate to, a product, or process, or an improvement

of any of the foregoing (IPC, Sec. 21).

Product patent vs. Process Patent

Product Patent - The right to make, use, sell, and import the
product. E.g. machine, a device, a microorganism.
Process Patent - The right 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. (IPC, Sec. 71) e.g. a method of use, a method of
manufacturing, a non-biological process, a microbiological process.
Improvement – enhancement or modification of any of the foregoing
subject to patentability criteria.

A process pertaining to an improvement of the old process of

tile-making is patentable

An improvement in the tile-making process is indeed inventive and

goes beyond the exercise of mechanical skill. The applicant has
introduced a new kind of tile for a new purpose. He has improved the
old method of making tiles and pre-cast articles that were not
satisfactory because of an intolerable number of breakages, especially
if deep engravings are made on the tile. He has overcome the problem
of producing decorative tiles with deep engraving, but with sufficient
durability. (Aguas v. De Leon, G.R. No. L-32160, January 30, 1982)

Criteria for Patentability

1. Novelty – An invention shall not be considered new if it forms part
of a prior art (Sec. 23, IPC).

2. 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.

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3. Industrially Applicable – An invention that can be produced and
used in any industry (IPC, Sec. 27).

The burden of proving want of novelty of an invention is on the person

who avers it and the burden is a heavy one which is met only by clear
and satisfactory proof which overcomes every reasonable doubt
(Manzano v. CA, G.R. No. 113388, Sept. 5, 1997).

1. NOVELTY

Prior Art

a. Everything which has been made available to the public anywhere

in the world, before the filing date or the priority date of the
application claiming the invention; and
b. The whole contents of an earlier published Philippine application or
application with earlier priority date of a different inventor.

Only prior art made available to the public before the filing date or
priority date is considered in assessing inventive step (Revised IRR
for RA 8293, Rule 206).

PUBLIC DISCLOSURE

The ultimate goal of a patent system is to bring new designs and

technologies into the public through disclosure; hence ideas, once
disclosed to the public without protection of a valid patent, are
subject to appropriation without significant restraint (Pearl & Dean
vs. Shoemart Inc., G.R. No. 148222, August 15, 2003).

GR: When a work has already been made available to the public, it
shall be non-patentable for absence of novelty.

XPNs: Non-prejudicial disclosure – the disclosure of information

contained in the application during the 12-month period before the
filing date or the priority date of the application 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 have 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;

3. A third party who obtained the information directly or indirectly

from the inventor (IPC, Sec. 25).

If the designer in the case of industrial design made the disclosure,

the period is 6 months. In other words, the application must be filed
within 6 months after disclosure for it to be non-prejudicial.

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DOCTRINE OF PREJUDICIAL DISCLOSURE

The right to patent arises from application date. If the inventor

voluntarily discloses his creation, such as by offering it for sale, the
world is free to copy and use it with impunity. Ideas, once disclosed to
the public without the protection of a valid patent, are subject to
appropriation without significant restraint. (Pearl & Dean {Phil.|,
Incorporated v. Shoemart, Incorporated, 409 SCRA 231, August 15,
2003).

DOCTRINE OF NON-PREJUDICIAL DISCLOSURE

The disclosure of information contained in the application during the

twelve (12) months preceding the filing date or the priority date of the
application shall not prejudice the applicant on the ground of lack of
novelty if such disclosure was made by:

a. The inventor;

b. A patent officer and the information was contained (a) in another

publication 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 who obtained the information
directly or indirectly from the inventor; or

c. A third party who obtained the information directly or indirectly

from the inventor. (IPC, Sec. 25)

2. INVENTIVE STEP

GR: 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
(IPC Sec. 26).

XPN: In the case of drugs and medicines, there is no inventive step if

the invention results from the mere discovery of a new form or new
property of a known substance, which does not result in the
enhancement of the known efficacy of that substance (IPC, as
amended by R.A. 9502, Sec. 26.2).

Test of Non-Obviousness
If any person possessing ordinary skill in the art was able to draw the
inferences and he constructs that the supposed inventor drew from
prior art, then the latter did not really invent it.

Person skilled in the art

A person skilled in the art is a person with ordinary skills in a certain
art or field who is aware of what is a common general knowledge in
the field at the time of the application. “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. He is presumed also to have had at his disposal

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the normal means and capacity for routine work and experimentation”
(Revised IRR for R.A. No. 8293, Rule 207).

3. INDUSTRIAL APPLICABILITY

An invention that can be produced and used in any industry meets the
industrial application requirement of patent registrability. This means
an invention is not merely theoretical, but also has a practical
purpose. If the invention is a product, it should be able to produce a
product and if the invention is a process, it should be able to lay out a
process (WIPO, IP Handbook 2nd Edition, Chapter 2: “Fields of
Intellectual Property Protection” Publication No. 489 (E), p. 18.)

UTILITY MODEL

A name given to inventions in the mechanical field.

Utility models differ from inventions for which patents for invention
are available mainly in two respects. First, the technological progress
required is smaller than the technological progress (“inventive step”)
required in the case of an invention for which a patent for invention is
available. Second, the maximum term of protection provided in the
law for a utility model is generally much shorter than the maximum
term of protection provided in the law for an invention for which a
patent for invention is available. (WIPO Handbook, Chapter 2, “Fields
of Intellectual Property Protection”, WIPO Publication No. 489 (E),
2nd Edition, p. 40.)

The provisions regarding non-patentable subject matter, industrial

applicability, novelty and sufficiency of disclosure under invention
patent will apply, mutatis mutandis, to utility models. (Revised
Implementing Rules & Regulations for RA 8293, pp. 36-38.)

Requisites for an invention to be considered as a utility model

If it is new and industrially applicable. A model of implement or tools
of any industrial product even if not possessed of the quality of
invention but which is of practical utility (IPC, Sec. 109.1).

Term of a utility model

Seven (7) years from date of filing of the application (IPC, Sec. 109.3).
Other forms of patentable inventions

1. Integrated circuit – A product, in its final form, or an intermediate

form, in which the elements, at least one of which is an active
elements and some of all of the interconnections are integrally formed
in and or on a piece of material, and in which is intended to perform
an electronic function.

2. Layout design/topography – The three dimensional disposition,

however expressed, of the elements, at least one of which is an active
element, and of some or all of the interconnections of an integrated
circuit, or such a three-dimensional disposition prepared for an
integrated circuit intended for manufacture. Registration is valid for
10 years without renewal counted from date of commencement of
protection.

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NON-PATENTABLE INVENTIONS

Non-patentable inventions

1. Plant varieties, 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;
2. Aesthetic creations;
3. Discoveries, scientific theories and mathematical methods;
4. Schemes, rules and methods of performing mental acts, playing
games or doing business, and programs for computers;
5. Anything which is contrary to public order or morality (IPC as
amended by R.A. 9502, Sec. 22);
6. Methods for treatment of the human or animal body; and
7. In the case of drugs and medicines, mere discovery of a new
form or new property of a known substance which does not
result in the enhancement of the efficacy of that substance

Patentability of computer programs

GR: Computer programs are not patentable but are copyrightable.

XPN: They can be patentable if they are part of a process

(e.g. business process with a step involving the use of a computer
program).

Q: Supposing Albert Einstein were alive today and he filed with

the Intellectual Property Office (IPO) an application for patent
for his theory of relativity expressed in the formula E=mc2. The
IPO disapproved Einstein's application on the ground that his
theory of relativity is not patentable. Is the IPO's action
correct? (2006 Bar)

A: YES, the IPO is correct because under the Intellectual Property

Code, discoveries, scientific theories and mathematical methods are
classified to be as "non-patentable inventions". Einstein's theory of
relativity falls within the category of being a non-patentable "scientific
theory".

Q: X invented a bogus coin detector, which can be used

exclusively on self-operating gambling devices otherwise known
as one-armed bandits. Can X apply for a patent?

A: NO. The law provides that any invention that is contrary to public
order or morality may not be extended patent protection. The bogus
coin detector appears to be a device used to cheat in gambling.
Therefore, it may not be patented.

OWNERSHIP OF A PATENT

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RIGHT TO A PATENT

Persons entitled to a patent

1. Inventor, his heirs, or assigns (IPC, Sec 28);
2. Joint invention – Jointly by the inventors (IPC, Sec. 28);
3. Two or more persons invented separately and independently of
each other – To the person who filed an application;
4. Two or more applications are filed – the applicant who has the
earliest filing date or, the earliest priority date. First to file rule
(IPC, Sec. 29).

FIRST-TO-FILE RULE

1. If two (2) or more persons have made the invention separately

and independently of each other, the right to the patent shall
belong to the person who filed an application for such invention,
or

2. Where two or more applications are filed for the same invention,
to the applicant that has the earliest filing date (IPC, Sec. 29).

INVENTIONS CREATED PURSUANT TO A COMMISSION

Pursuant to a commission: The person who commissions the work

shall own the patent, unless otherwise provided in the contract.

Pursuant to 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 inventive activity is the result of the

performance of his regularly-assigned duties, unless there is an
agreement, express or implied, to the contrary (IPC, Sec. 30).

Q: As between the inventor and the person who commissioned

the inventor to create a new work, who owns the patent?
A: The person who commissions the work shall own the patent, unless
otherwise provided in the contract. (IPC, Sec. 30)

RIGHT OF PRIORITY

Priority date
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(IPC, Sec. 31).

Filing Date is accorded only when all the requirements provided

under Section 40 are present. Priority Date comes into play when

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there is an application for patent for the same invention that was filed
in another country (Salao, 2012).

Conditions in availing of priority date

1. The local application expressly claims priority;
2. It is filed within 12 months from the date the earliest foreign
application was filed; and
3. A certified copy of the foreign application together with an
English translation is filed within 6 months from the date of
filing in the Philippines. (Sec. 31, IPC)
RIGHT TO A PATENT

Who has a right to a patent?

 The right to a patent belongs to the inventor, his heirs, or
assigns. When two or more persons have jointly made an
invention, the right to a patent belongs to the inventors jointly.
 If two or more persons have made the invention separately and
independently of each other, the right to the patent belongs to
the person who filed an application for such invention, or where
two more applications are filed for the same invention, the
applicant who has the earliest filing date, or the earliest priority
date.
 The person who commissions the work has the right to the
patent, unless otherwise provided in the contract. If an
employee creates the invention in the course of his employment,
the right to patent belongs to:
1. The employee, if the inventive activity is not part of his
regular duties even if the employee uses the time,
facilities, and materials of the employer; or
2. The employer, if the invention is the result of the
performance of the employee’s regularly assigned
duties, unless there is an agreement, express or
implied, to the contrary.

CASES:
2005 Bar Exam
Cesar works in a car manufacturing company owned by Joab.
Cesar is quite innovative and loves to tinker with things. With the
materials and parts of the car, he was able to invent a gas-saving
device that will enable cars to consume less gas. Francis, a co-worker,
saw how Cesar created the device and likewise, came up with a
similar gadget, also using scrap materials and spare parts of the
company. Thereafter, Francis filed an application for registration of
his device with the Bureau of Patents. Eighteen months later, Cesar
filed his application for the registration of his device with the Bureau
of Patents.
a) Is the gas-saving device patentable?
b) Assuming that it is patentable, who is entitled to the patent?
What, if any, is the remedy of the losing party?

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 c) Supposing Joab got wind of the inventions of his employees and
also laid claim to the patents, asserting that Cesar and Francis
were using his company time and materials in making the
devices, will his claim prevail over those of his employees?
Explain.

Suggested Answers:
a) It is patentable because it is new, it involves an inventive step,
and is industrially applicable.
b) Francis is entitled to the patent because he has earlier filing
date. The remedy of Cesar is to file a petition for cancellation of
the patent of Francis on the ground that he is the true and
actual inventor and ask for substitution of patentee.
c) Joab’s claim will not prevail over those of his employees even if
they used his materials and company time in making the gas-
saving device. The invention of the gas-saving device is not part
of their regular duties as employees.

2012 Bar Exams (MCQ)

X works as a research computer engineer with the Institute of
Computer Technology, a government agency. When not busy with his
work, but during office hours, he developed a software program for
law firms that will allow efficient monitoring of the cases, which
software program is not at all related to his work. Assuming the
program is patented, who has the right over the patent?
A. X
B. Institute of Computer Technology
C. Neither X nor the Institute of Computer Technology can claim
patent right over the invention.
D. X and the employer of X will jointly have the rights over the
patent.

Suggested Answer:
X

Who may file a patent application in the Philippines?

 A natural person; or
 A juridical person; or
 A body of persons, or corporation, a partnership, or other legal
entity recognized by law.

Who may represent a patent application before the Bureau of

Patents?
 If the patent applicant is a resident of the Philippines, he
himself may file and execute a patent application with the
Bureau of Patents. He may also appoint a representative.

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  If the applicant is not a resident of the Philippines, then he must
appoint a resident agent or representative in the Philippines.
Can anyone claim priority in a Philippine patent application?
 Affirmative.
 A patent application 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 citizens of
the Philippines, shall be considered as filed as the date of filing
the foreign application provided, that:
1. The local application expressly claims priority;
2. The Philippine application is filed within twelve (12)
months from the date when the earliest application was
filed; and
3. 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.

II. PROCEDURE FOR THE GRANT OF PATENT

Procedure Outline:
1. Filing of the application
2. Accordance of the filing date
3. Formality examination
4. Classifications and Search
5. Publication of the application
6. Substantive examination
7. Grant of the patent
8. Publication upon grant
9. Issuance of the certificate

How does an applicant obtain a filing date on a Patent

Application?
 The applicant must submit to the Bureau of Patents the
following:
a) Request for patent
b) Applicants’ name, address, and signature. If applicant is a
non-resident, indicate the name and address of the
resident agent; and
c) Description of the invention, one or more claims, and
drawings (if any).
 If the priority of an earlier filed application is claimed, the
details of the claim, i.e., the date, file number, and country of
origin, must be submitted.

What are the filing fees for Invention Patents?

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  The filing fees may be paid at the time of filing or within one (1)
month from the filing date.
1. Small Entities:
a) P 1,800.00 – filing fee
b) P 150.00 – fee for each claim in excess of five (5)
c) P 15.00 – fee for each paper sheet in excess of thirty
(30)

To be considered a small entity, the patent applicant must

meet the following requirements:

a) Any natural or juridical person whose assets are worth

One Hundred Million Pesos (P100 M) or less; or

b) Any entity, agency, office, bureau or unit of the

Philippine government including government-owned or
controlled corporations, state, universities and
colleges, and government-owned or government-run
schools.

2. Big Entities:
a) P 3,600.00 – filing fee
b) P 150.00 – fee for each claim in excess of five (5)
c) P 15.00 – fee for each paper sheet in excess of thirty
(30)
1. A big entity is any natural or juridical person other than a
small entity.
2. Any natural or juridical person is presumed to be a big entity
unless such natural person or the duly authorized
representative of such juridical person to the contrary
submits a written statement.

What must be included in a Philippine patent application?

 A patent application must contain the following:
a) Request for the grant of a patent;
b) Description of the invention;
c) Drawings necessary for the understanding of the invention
(if any);
d) One or more claims; and
e) Abstract
 No patent maybe granted unless the application identifies the
inventor. If the applicant is not the inventor, the Intellectual
Property Office of the Philippines may require the applicant to
submit authority to file the patent application.

In what language must the Philippine Patent application be

presented?

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  The application for Philippine patent must be presented in
either the Filipino or English language.

How does one disclose the invention in a Philippine patent

application?
 The Philippine patent application shall disclose the invention in
a manner sufficiently clear and complete for it to be carried out
by a person skilled in the art.
 Where the application concerns a microbiological process or the
product thereof, and involves the use of a microorganism which
cannot be sufficiently disclosed in the application in such a way
as to enable the invention to be carried out by a person skilled
in the art, and such material is not available to the public, the
application shall be supplemented by a deposit of such material
with an international depository institution.
 The application shall contain one or more claims which shall
define the matter for which protection is sought. Each claim
shall be clear and concise, and shall be supported by the
description.
 The abstract shall consist of a concise summary of the
disclosure of the invention as contained in the description,
claims and drawings in preferably not more than 150 words. It
must be drafted in a way which allows the clear understanding
of the technical problem, the gist of the solution of that problem
through the invention, and the principal use or uses of the
invention. The abstract shall merely serve for technical
information.

Prohibited Matter
 The application shall not contain:
1. A statement or other matter contrary to public order or
morality.
2. A statement disparaging the products or processes of any
particular person other than the applicant, or the merits
or validity of applications or patents of any such person.
Mere comparison with the prior art shall not be
considered disparaging.
3. Any statement or other matter obviously irrelevant or
unnecessary under the circumstances.

Can one patent application cover several different inventions?

 The Philippine patent application shall cover one invention only,
or a group of inventions forming a single general inventive
concept.
 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.

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Is it possible for an invention that has been previously
disclosed to the public to be patented?
 Yes. Under the IP Code of the Philippines (Sec. 25), the
disclosure of information contained in the patent application
during the twelve (12) months preceding the filing date r the
priority date of such patent 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 in the
following:
- In another application filed by the inventor and
should not have been disclosed by the office, or
- 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.
3. A third party who obtained the information directly or
indirectly from the inventor.

Formality Examination
 After the patent application has been accorded a filing date and
the required fees have been paid on time, the applicant shall
comply with the formal requirements of the law and such other
requirements of the implementing rules and regulations within
the prescribed period.
Such other requirements may relate to the following:
a) Contents of the request for grant of a Philippine patent
b) Priority documents if with claim of convention priority
c) Proof of authority, if the applicant is not the inventor
d) Deed of assignment
e) Payment of all fees
f) Signatures of the applicants
g) Identification of the inventor
h) Formal drawings
 If the drawings were filed after the filing date of the application,
the application shall be granted a new filing date which is the
date on which the drawings were filed.
If no drawings were filed, or if they are not filed in due time, any
reference to them in the application shall be deemed deleted.
Classification and Search
 An application that has complied with the formal requirements
shall be classified and a search conducted to determine the
prior art. The requirement of novelty is determined at this point.
 The International Patent Classification is used to classify the
application.

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  The Intellectual Property Search Report is drawn up on the
basis of the claims, description, and the drawings, if there is
any.
a) The search report shall mention those documents
available at the Office at the time of drawing up the
report, which may be taken into consideration in assessing
novelty and inventive step of invention.
b) The search report shall distinguish between cited
documents published before the date of priority claimed,
between such date of priority and the date of filing, and on
or after the date of filing.
c) The search report shall contain the classification of the
subject matter of the application in accordance with the
International Patent Classification.
d) The search report may include documents cited in a
search established in the corresponding foreign
application.

Publication of Patent Application

 The application shall be published in the IPO Gazette together
with a search document established by or on behalf of the Office
citing any document or documents that reflect prior art, after
the expiration of eighteen (18) months from the filing date or
priority date.
 The Director General, subject to the approval of the Secretary of
Trade and Industry, may prohibit or restrict the publication of
an application, if in his opinion, to do so would be prejudicial to
the national security and interests of the Republic of the
Philippines

Is the invention protected prior to publication of the patent

application in the Intellectual Property Office Gazette?
 No, the invention is not protected prior to publication of the
patent application in the IPO Gazette. However, the Bureau of
Patents is obligated to keep the patent application confidential.
An unpublished patent application, and all related documents,
cannot be made available for inspection without the consent of
the applicant.

What protection is granted to the invention after the

publication of the patent application in the IPO Gazette and
before the Grant of a patent?
 Section 46 of the Intellectual Property Code of the Philippines
provides that the applicant shall have all the rights of a patent
against any person who uses the invention without the
applicant’s authorization, provided that such person has actual
knowledge that the invention he is using is the subject matter of
a published application. However, the action may not be filed

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 until after the grant of the patent and not beyond four (4) years
from the commission of the acts complained of.

Can one file an opposition proceeding against a Philippine

patent application?
 No. After the publication of the patent application in the IPO
Gazette, third parties may only file observations to the Bureau
of Patents as to the patentability of the invention that is the
subject of the application. The Bureau of Patents will then
communicate the observations to the applicant, who may submit
his/her comments. The patent examiner will then take note of
the third parties’ observations and the applicant’s comments in
deciding whether to grant the patent registration.

After publication, is there an automatic substantive

examination of the patent application?
 There is no automatic process for substantive examination of a
patent application. The applicant must make a written request
for substantive examination within six (6) months from the date
of the publication of the application. The application shall be
deemed withdrawn if such request is not made and the requisite
fees are not timely paid.

Grant of Patent
 The Grant of Patent is the ultimate objective of a patent
application, which is granted only if the application meets the
requirements of both the law and the implementing rules and
regulations, including timely payment of fees.
A patent shall take effect on the date of the publication of the
grant of the patent in the IPO Gazette.

Does the applicant have any remedy if the examiner rejects the
patent application?
 Yes. If the examiner rejects the patent application then the
decision may be appealed to the Director of the Bureau of
Patents.
Thereafter, if the Director of the Bureau of Patents affirms he
decision of the examiner, that decision may be appealed to the
Director General of the Intellectual Property Office. The
decision of the Director General to reject the application may
then be appealed to the Court of Appeals, and ultimately to the
Supreme Court of the Philippines.
 An application is prosecuted ex parte by the applicant; the
proceedings are like a lawsuit in which there is a plaintiff but no

15
 defendant, and the court acting as the adverse party. The
Bureau, represented by the examiner, is not supposed to look
after the interests of an applicant. The examiners are charged
with the protection of the interests of the public, and hence
must be vigilant to see that no patent issues for subject matter
which is not patentable, and is already disclosed in prior
inventions.

Amendment of Application
 An application may amend the patent application during the
examination provided that such amendment will not include new
matter outside the scope of the disclosure contained in the
application as filed.
 After final rejection or action, amendments may be made
cancelling claims or complying with ay requirements of form
which has been made, and amendments presenting rejected
claims in better form for consideration on appeal may be
admitted; but any proceedings relative thereto shall not operate
to relieve the application from is condition as subject to appeal
or to save it from being considered withdrawn.
Publication of Grant of Patent
 The grant of the patent together with other related information
shall be published in the IPO Gazette within the time prescribed
by the Regulations.
Any interested parties may inspect the complete descriptions,
claims, and drawings of the patent on file with the Office.
Issuance of the Certificate or Letters Patent
 The patent shall be issued in the name of the Republic of the
Philippines under the seal of the Intellectual Property Office and
shall be signed by the Director.
The patent shall be registered together with the description,
claims, and drawings, if any, in the books and records of the
Office.

TERM OF PATENT
 Twenty (20) years from the filing date of the application.

ANNUAL FEES
 PAYMENT OF ANNUAL FEE

16
  Payable on the expiration of 4 years from date the application is
published and subsequent payment on anniversary of such date.

 NON-PAYMENT OF ANNUAL FEE ON THE PRESCRIBED

DATE
The application is deemed withdrawn or patent considered
as lapsed.
 GRACE PERIOD
Six (6) months from due date.

SURRENDER OF PATENT
 WHO MAY SURRENDER PATENT?
The owner of the patent with the consent of persons
having grants or licenses, other right, title or interest to
the patent or invention covered thereby.
 OPPOSITION TO THE SURRENDER
A person may give notice of his opposition and the Bureau
shall notify the proprietor of the patent.
 ACCEPTANCE
If the Office is satisfied that the patent may be properly
surrendered, it shall accept the offer. The acceptance is
published in the IPO Gazette.
 EFFECT OF SURRENDER
The patent shall cease to have effect and no action
for infringement and no right of compensation shall
accrue for the use of the patented invention from
that day notice of acceptance is published.

CORRECTION OF MISTAKES
MISTAKE OF THE MISTAKE IN THE
OFFICE APPLICATION
By the Director himself Upon request of any
interested person
The Director have the The Director is authorized
power
Without fee With payment of prescribed
fee
Any mistake through fault Mistake is formal or clerical
of the Office nature
CHANGES IN PATENT
 The owner have the right to make changes in the patent to:

a. Limit the extent of protection conferred to it;

b. Correct obvious mistakes or to correct clerical errors;

17
 c. Correct mistakes other than those obvious mistakes or to
correct clerical errors, made in good faith, provided that
where the change would result in the broadening of the
extent of protection conferred to the patent, no request may
be made after the expiration of 2 years from the grant of a
patent and the change shall not affect the rights of any third
party which has relied on the patent, as published.

 No change is permitted if it would result in the disclosure

beyond what is contained in the application.

CANCELLATION OF PATENT
 GROUNDS:

a. The invention is not new or patentable. (IPC, Sec. 61.1)

b. 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. (IPC, Sec. 61.1)
c. Contrary to public order or morality (IPC, Sec. 61.1)
d. Failure to make payments of annual fees or dues. (IPC, Sec.
55.1)
e. That the patent is invalid. ( IPC, Sec. 81 & 82)

 WHO MAY FILE?

a. any person
b. IPO motu propio

 WHERE TO FILE?
a. BLA – if in violation of IPC (administrative)
b. RTC – otherwise

 REQUIREMENT OF THE PETITION

The petition for cancellation shall be:
a. In writing;
b. Verified by the petitioner or by any person in his behalf who
knows the facts;
c. Specify the grounds upon which it is based
d. Include a statement of the facts to be relied upon;
e. Filed with the Office.

 NOTICE OF HEARING

The Director shall serve notice of the filing of the petition and
the date of hearing upon the patentee and all persons having
grants, licenses, other right, title, or interest to the patent or
invention covered thereby. The notice is published in the IPO
Gazette.

18
REMEDIES OF PERSONS DEPRIVED OF PATENT OWNERSHIP
 PERSON DECLARED BY COURT AS HAVING RIGHT TO
THE PATENT
Within 3 months after the final court order or decision has
become final, a person other than the applicant who was
declared as having the right to patent may:
a. Prosecute the application as his own application in place
of the applicant;
b. File a new patent application in respect of the same
invention;
c. Request that the application be refused;
d. Seek the cancellation of the patent, if one has already
been issued.

 PERSON DECLARED BY COURT AS THE TRUE AND

ACTUAL INVENTOR
If a person was deprived of the patent without his consent or
through fraud and he was declared by final court order or
decision as the true
Or actual inventor:
a. The court shall order for his substitution as patentee.
b. Cancel the patent at the option of the true inventor;
c. The court shall order award of actual and other damages
if warranted by the circumstances.

 PUBLICATION OF COURT ORDER

A final court order or decision declaring the person as
having right to the patent or declaring a person as the true
or actual inventor shall be published in the IPO Gazette
and recorded in the register of the Office.
 FILING OF ACTION IN COURT
A person declared as having right to the patent or a person
declared as the true or actual inventor should file an action
within 1 year from the date of publication of patent
application (Section 44) and from the date of the final order
of refusal to grant the patent (Section 51).

CASE DIGEST: TERM OF PATENT

PHARMAWEALTH, INC. v. PFIZER, INC. AND PFIZER
(PHIL.), INC.,
GR. NO. 167715, November 17, 2010

19
FACTS:
Pfizer is the registered owner of Patent No. 211116 registered
on July 16, 1987 and valid until July 16, 2004. Patent No. 21116
covers ampicillin sodium/sulbactam sodium (Sulbactam
Ampicilin). Pfizer discovered on January and February 2003 that
Pharmawealth submitted bids to several hospitals to supply
Sulbactam Ampicilin without its consent. It demanded that the
hospitals cease and desist from accepting bids for the supply of
Sulbactam Ampicilin or awarding the same to other companies
and demanded Pharmawealth to withdraw its bids to supply
Sulbactam Ampicilin. Pharmawealth continued to infringe the
Patent. The case reached the Court of Appeals until April 11,
2005.

ISSUE:
Whether Pfizer still holds monopoly over the substance by virtue
of its Patent.

RULING:
No. section 37 of RA 165 which was the governing law at the
time of issuance of Pfizer’s Patent, provides:

Section 37. Rights of patentees. A patentee shall have the

exclusive right to make, use and sell the patented machine,
article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of
the Philippines for the term of the patent; and such making,
using, or selling by any person without the authorization of the
patentee constitutes infringement of the patent.
In this case, Pfizer admitted that the validity of the Patent is
until July 16, 2004. There is no dispute that it expired on that
date and Pfizer no longer possess the exclusive right to make,
use, and sell the articles or products covered by its patent.

REMEDIES AGAINST INFRINGEMENT

Patent shall confer to the owner the following exclusive rights

a. Where patent covers product- to restrain, prohibit and

prevent any unauthorized person or entity from making, using,
offering for sale, selling or importing that product;
b. Where patent is a process -the patent owner have exclusive
right 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.

CIVIL ACTION FOR INFRINGEMENT

Patent Infringement constitutes:

20
a. The making, using, offering for sale, selling, or importing a
patented product or a product obtained directly or indirectly from
a patented process, or
b. The use of a patented process without the authorization of the
patentee constitutes patent infringement

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.

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.

INFRINGEMENT ACTION BY A 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

PRESCRIPTION OF ACTION FOR INFRINGEMENT

No damages can be recovered for acts of infringement committed

more than four (4) years before the institution of the action for
infringement.

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

LIMITATIONS OF PATENT RIGHTS

Patent owner has no right to prevent third parties from performing, 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;

21
 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.

Roma Drug vs The Regional Trial Court of Guagua, Pampanga

On 14 August 2000, NBI operatives and inspectors of BFAD

conducted a raid on petitioner Roma Drug pursuant to a search
warrant. The seized medicines, which were manufactured by
SmithKline, were imported directly from abroad and not
purchased through the local SmithKline, the authorized
Philippine distributor of these products. The NBI subsequently
filed a complaint against Rodriguez for violation of Section 4 (in
relation to Sections 3 and 5) of Republic Act No. 8203, also
known as the Special Law on Counterfeit Drugs (SLCD. The
section prohibits the sale of counterfeit drugs, which under
Section 3(b)(3), includes an unregistered imported drug
product. There is no claim that they were adulterated in any
way or mislabeled at least. Their classification as counterfeit is
based solely on the fact that they were imported from abroad
and not purchased from the Philippine-registered owner of the
patent or trademark of the drugs.

ISSUE: Whether or not R.A. No. 8203 violates equal protection.

HELD:
Yes. the law makes a criminal of any person who imports an
unregistered drug regardless of the purpose, even if the
medicine can spell life or death for someone in the Philippines.
It does not accommodate the situation where the drug is out of
stock in the Philippines, beyond the reach of a patient who
urgently depends on it. It does not allow husbands, wives,
children, siblings, parents to import the drug in behalf of their
loved ones too physically ill to travel and avail of the meager
personal use exemption allotted by the law. It discriminates, at
the expense of health, against poor Filipinos without means to
travel abroad to purchase less expensive medicines in favor of
their wealthier brethren able to do so. Less urgently perhaps,
but still within the range of constitutionally protected behavior,
it deprives Filipinos to choose a less expensive regime for their
health care by denying them a plausible and safe means of
purchasing medicines at a cheaper cost.

22
 Even worse is the fact that the law is not content with simply
banning, at civil costs, the importation of unregistered drugs. It
equates the importers of such drugs, many of whom motivated
to do so out of altruism or basic human love, with the
malevolent who would alter or counterfeit pharmaceutical drugs
for reasons of profit at the expense of public safety. Note that
the SLCD is a special law, and the traditional treatment of penal
provisions of special laws is that of malum prohibitum or
punishable regardless of motive or criminal intent. For a law
that is intended to help save lives, the SLCD has revealed itself
as a heartless, soulless legislative piece.

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, but this right may only be transferred
or assigned together with his enterprise or business, or with
that part of his enterprise or business in which the use or
preparations for use have been made. (Sec. 73)

 Bar Question:
Q: X invented a device which, through the use of noise, can
recharge a cellphone battery. He applied for and was
granted a patent on his device, effective within the
Philippines. As it turns out, a year before the grant of X's
patent, Y, also an inventor, invented a similar device
which he used in his cellphone business in Manila. But X
files an injunctive suit against Y to stop him from using the
device on the ground of patent infringement. Will the suit
prosper? (2011 Bar)
(A) No, since the correct remedy for X is a civil action for
damages.
(B) No, since Y is a prior user in good faith.
(C) Yes, since X is the first to register his device for
patent registration.
(D) Yes, since Y unwittingly used X’s patented invention.

USE BY GOVERNMENT
 A Government agency or third person authorized by the
Government may exploit the invention even without
agreement of the patent owner where:
a. The public interest, in particular, national security,
nutrition, health or the development of other sectors, as

23
 determined by the appropriate agency of the government,
so requires; or
b. A judicial or administrative body has determined that
the manner of exploitation, by the owner of the patent or
his licensee, is anticompetitive; or
c. In the case of drugs and medicines, there is a
national emergency or other circumstance of extreme
urgency requiring the use of the invention; or
d. In the case of drugs and medicines, there is a public
non-commercial use of the patent by the patentee, without
satisfactory reason; or
e. In the case of drugs and medicines, the demand for the
patented article in the Philippines is not being met to an
adequate extent and on reasonable terms, as
determined by the Secretary of the Department of
Health.

 The use by the Government, or third person authorized

by the Government, shall be subject, where applicable, to
the following provisions:
a. In situations of national emergency or other
circumstances of extreme urgency, the right holder
shall be notified as soon as reasonably practicable;
b. In the case of public non-commercial use of the patent by
the patentee, without satisfactory reason, the right
holder shall be informed promptly;
c. If the demand for the patented article in the
Philippines is not being met to an adequate extent and
on reasonable terms as determined by the Secretary of
Health, the right holder shall be informed promptly;
d. The scope and duration of such use shall be limited
to the purpose for which it was authorized;
e. Such use shall be non-exclusive;
f. The right holder shall be paid adequate remuneration
in the circumstances of each case, taking into account
the economic value of the authorization; and
g. The existence of national emergency or other
circumstances of extreme urgency, in the case of drugs
and medicines shall be subject to the determination of
the President of the Philippines for the purpose of
determining the need for such use or other exploitation,
which shall be immediately executory.

 All cases arising from the implementation of this provision

shall be cognizable by courts with appropriate jurisdiction
provided by law.

 No court, except the Supreme Court of the Philippines, shall

issue any temporary restraining order or preliminary

24
 injunction or such other provisional remedies that will
prevent its immediate execution.

EXTENT OF PROTECTION AND INTERPRETATION OF CLAIMS.

 The extent of protection conferred by the patent shall be

determined by the claims, which are to be interpreted in the
light of the description and drawings.
 For the purpose of determining the extent of protection
conferred by the patent, due account shall be taken of
elements which are equivalent to the elements expressed in
the claims, so that a claim shall be considered to cover not
only all the elements as expressed therein, but also
equivalents. (Sec. 75)

DOCTRINE OF EQUIVALENTS
 It provides that an infringement also occurs when a device
appropriates a prior invention by incorporating its innovative
concept and, despite some modification and change,
performs substantially the same function in substantially
the same way to achieve substantially the same result.
 The doctrine of equivalents thus requires satisfaction of
the function-means- and-result test, the patentee having
the burden to show that all three components of such
equivalency test are met. (Smithkline Beckman Corporation
v. CA, G.R. No. 126627, August 14, 2003)
 Meaning of “equivalent device”
It is such as a mechanic of ordinary skill in construction
of similar machinery, having the forms, specifications and
machine before him, could substitute in the place of the
mechanism described without the exercise of the inventive
faculty.

SMITH KLINE BECKMAN CORPORATION vs. THE HONORABLE

COURT OF APPEALS and TRYCO PHARMA CORPORATION
G.R. No. 126627 August 14, 2003

Facts:
Smith Kline Beckman Corporation is a US corporation licensed
to do business in the Philippines. In 1981, a patent was issued to
it for its invention entitled “Methods and Compositions for
Producing Biphasic Parasiticide Activity Using Methyl 5
Propylthio-2-Benzimidazole Carbamate.” The invention is a
means to fight off gastrointestinal parasites from various
animals such as swine, sheep, cattle, goats, horses, and even pet
animals.
Tryco Pharma is a domestic corporation engaged in the same
business as Smith Kline.
Smith Kline sued Tryco Pharma for infringement of patent and
unfair competition because the latter was selling a veterinary

25
 product called Impregon which contains a drug called
Albendazole which fights off gastro-intestinal roundworms,
lungworms, tapeworms and fluke infestation in carabaos, cattle
and goats.
Smith Kline is claiming that Albendazole is covered in their
patent because it is substantially the same as methyl 5
propylthio-2-benzimidazole carbamate covered by its patent
since both of them are meant to combat worm or parasite
infestation in animals. And that Albendazole is actually patented
under Smith Kline in the US.
Tryco Pharma averred that nowhere in Smith Kline’s
patent does it mention that Albendazole is present but even if it
were, the same is “unpatentable”.
Smith Kline thus invoked the doctrine of equivalents, which
implies that the two substances substantially do the same
function in substantially the same way to achieve the same
results, thereby making them truly identical for in spite of the
fact that the word Albendazole does not appear in Tryco
Paharma’s letters of patent, it has ably shown by evidence its
sameness with methyl 5 propylthio-2-benzimidazole carbamate.

ISSUE: 1) Whether or not there is patent infringement in this case

2) Whether or not the doctrine of equivalents is applicable
in this case

HELD:
1) NO. There is no patent infringement.
The compound Albendazole was not claimed in the patent of the
petitioner. Nowhere in the patent is the word Albendazole
found. When the language of its claims is clear and distinct, the
patentee is bound thereby and may not claim anything beyond
them. And so are the courts bound which may not add to or
detract from the claims matters not expressed or necessarily
implied, nor may they enlarge the patent beyond the scope of
that which the inventor claimed and the patent office allowed,
even if the patentee may have been entitled to something more
than the words it had chosen would include.
Further, there was a separate patent for Albendazole given by
the US which implies that Albendazole is indeed separate and
distinct from the patented compound here.
2) NO. The doctrine of equivalents is not applicable in this case.

The doctrine of equivalents provides that an infringement also

takes place when a device appropriates a prior invention by
incorporating its innovative concept and, although with some
modification and change, performs substantially the same
function in substantially the same way to achieve substantially
the same result. Yet again, a scrutiny of petitioner’s evidence
fails to convince this Court of the substantial sameness of
petitioner’s patented compound and Albendazole. While both

26
 compounds have the effect of neutralizing parasites in
animals, identity of result does not amount to infringement of
patent unless Albendazole operates in substantially the same
way or by substantially the same means as the patented
compound, even though it performs the same function and
achieves the same result. In other words, the principle or mode
of operation must be the same or substantially the same.

The doctrine of equivalents thus requires satisfaction of the

function-means-and-result test, the patentee having the burden
to show that all three components of such equivalency test are
met.

VOLUNTARY LICENSE CONTRACT

 One of the ways by which an inventor may reap economic
benefits from the invention is by granting authority to
enterprises that can commercially exploit the invention, by
either manufacturing, distribution or retail selling.
 Transfer of technology will result should the inventor opts to
grant licenses to other enterprises. Considering the State
recognition of the role of effective intellectual property system
in facilitating transfer of technology as well as the social
function the use of intellectual property bears, the law dedicate
special provisions that seek to regulate contracts entered into
by the inventor as the licensor and the licensee.
Section 85 thus provides: “To encourage the transfer and
dissemination of technology, prevent or control practices and
conditions that may in particular cases constitute an abuse of
intellectual property rights having an adverse effect on
competition and trade, all technology transfer arrangements
shall comply with the provisions of this chapter.”
There are two objectives of the law:
1. To encourage transfer and dissemination of technology
2. To prevent practices that may have an adverse effect on
competition and trade.
In order to achieve these objectives, the law imposes certain
restrictions on the contracts and the stipulations thereto that
will be entered into by the licensor and licensee.

PROHIBITED CLAUSES
 one of the restrictions that law imposed is to prohibit certain
stipulations in the licensing contract.
 The following provisions are prohibited since they are deemed
prima facie to have an adverse effect on competition and trade:
1. those which impose upon the licensee the obligation to
acquire from a specific source capital goods, intermediate

27
 products, raw materials, and other technologies, or of
permanently employing personnel indicated by the licensor;
2. those pursuant to which the licensor reserves the right to fix
the sale or resale prices of the products manufactured on the
basis of the license;
3. those that contain restrictions regarding the volume and
structure of production;
4. those that prohibit the use of competitive technologies in a
non- exclusive technology transfer arrangement;
5. those that establish a full or partial purchase option in favor
of the licensor;
6. those that obligate the licensee to transfer for free to the
licensor the inventions or improvements that may be
obtained through the use of the licensed technology;
7. those that require payment of royalties to the owners of
patents for patents which are not used;
8. those that prohibit the licensee to export the licensed
product unless justified for the protection of the legitimate
interest of the licensor such as exports to countries where
exclusive licenses to manufacture and/or distribute the
licensed product(s) have already been granted;
9. those which restrict the use of the technology supplied after
the expiration of the technology transfer arrangement,
except in cases of early termination of the technology
transfer arrangement due to reasons attributable to the
licensee;
10. those which require payments for patents and other
industrial property rights after their expiration, termination
arrangement;
11. those which require that the technology recipient shall not
contest the validity of any of the patents of the technology
supplier;
12. those which restrict the research and development
activities of the licensee designed to absorb and adapt the
transferred technology to local conditions or to indicate
research and development programs in connection with new
products, processes or equipment;
13. those which prevent the licensee from adapting the
imported technology to local conditions, or introducing
innovation to it, as long as it does not impair the quality
standards prescribed by the licensor;
14. those which exempt the licensor for liability for non-
fulfilment of his responsibilities under the technology
transfer arrangement and/or liability arising from third party
suits brought about by the use of the licensed product or the
licensed technology; and
15. other clauses with equivalent effects.(SEC 87)

GR: these provisions are prohibited because they are deemed adverse
to trade and competition.
XPN: in cases under Section 91, this provision on prohibited clauses
may be dispensed with.

28
 Sec 91. Exceptional cases- in exceptional or meritorious cases
where substantial benefits will accrue to the economy, such as
high technology content, increase in foreign exchange earnings,
employment generation, regional dispersal of industries and/or
substitution with or use of local raw materials, or in the case of
Board of investment, registered companies with pioneer status,
exemption from any of the above requirements may be allowed
by the DITTB after evaluation thereof on a case by case basis.

MANDATORY PROVISIONS
 the law prescribes that the following provisions shall be
included in voluntary license contracts:

1. that the laws of the Philippines shall govern the

interpretation of the same and in the event of litigation, the
venue shall be the proper court in the place where the
licensee has its principal office,
2. continued access to improvements in techniques and
processes related to the technology shall be made available
during the period of the technology transfer arrangement;
3. in the event the technology transfer arrangement shall
provide for arbitration, the procedure of arbitration of the
arbitration law of the Philippines or the arbitration rules of
the UNCITRAL or the rules of Conciliation and Arbitration of
the International Chamber of Commerce shall apply and the
venue of arbitration shall be the Philippines or any neutral
country; and
4. the Philippine taxes on all payments relating to the
technology transfer arrangement shall be borne by the
licensor (SEC 88)

BAR EXAM 2010: What contractual stipulations are required in all

technology transfer agreements? Enumerate three stipulations that
are prohibited in technology transfer agreements.
SUGGESTED ANSWER:
1. The laws of the Philippines shall govern the interpretation of the
same and in the event of litigation, the venue shall be the proper
court in the place where the licensee has its principal office,
2. Continued access to improvements in techniques and processes
related to the technology shall be made available during the
period of the technology transfer arrangement;
3. In the event the technology transfer arrangement shall provide
for arbitration, the procedure of arbitration of the arbitration
law of the Philippines or the arbitration rules of the UNCITRAL
or the rules of Conciliation and Arbitration of the International
Chamber of Commerce shall apply and the venue of arbitration
shall be the Philippines or any neutral country; and
4. The Philippine taxes on all payments relating to the technology
transfer arrangement shall be borne by the licensor (SEC 88)

29
 1. Those that contain restrictions regarding the volume and
structure of production;
2. Those that prohibit the use of competitive technologies in a non-
exclusive technology transfer arrangement;
3. Those that establish a full or partial purchase option in favor of
the licensor;

RIGHT RESERVED TO LICENSOR AND LICENSEE

 The grant of 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)
 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)
REGISTRATION OF LICENSE CONTRACT
 Technology transfer arrangements that conform with the
provisions of Sections 86 and 87 on prohibited and mandatory
clauses need not be registered with the DITTB. Non-
conformance with any of the provisions of Sections 87 and 88,
shall automatically render the technology transfer arrangement
unenforceable, unless said technology transfer arrangement is
approved and registered with the DITTB.
COMPULSORY LICENSING
 Situations where licenses are awarded ahainst the will of the
patent owner.

JURISDICTION
 The Director of Legal Affairs has original jurisdiction over
petitions for compulsory licensing of patents. (Sec. 10.1)
Republic Act No. 9502 otherwise known as “Universally
Accessible Cheaper and Quality Medicines Act of 2008” however
amended Section 93 providing that it is the Director General
of the Intellectual Property Office who may grant a license
to exploit patented invention under the following grounds:
a. National emergency or other circumstances of extreme
urgency;
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 paten
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

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 the importation of the patented article shall constitute
working or using the patent; and
f. Where the demand for patented drugs and medicines is
not being met to an adequate extent and on reasonable
terms, as determined by the Secretary of the Department
of Health. (Rep. Act No. 8293, Sec. 93 as amended by Rep.
Act No. 9502 otherwise known as the “Universally
Accessible Cheaper and Quality Medicines Act of 2008.”)

FORM AND CONTENTS OF PETITION

The petition for compulsory licensing must be in writing,

verified by the petitioner and accompanied by payment of the
required filing fee. It shall contain the name and address of the
petitioner as well as those of the respondents, the number and
date of issue of the patent in connection with which compulsory
license is sought, the name of the patentee, the title of the
invention, the statutory ground upon which compulsory license
is sought, the ultimate facts constituting the petitioner’s cause
of action, and the relief prayed for.

The Director of Legal Affairs shall forthwith serve notice of the

filing thereof upon the patent owner and all persons having
grants or licenses covered thereby as appears of record, and of
notice of the date of hearing thereon. In every case, the notice
shall be published by the said Office in a newspaper of general
circulation, once a week for three consecutive weeks and once
in the IPO Gazette at applicant’s expense.

PERIOD FOR FILING A PETITION FOR A COMPULSORY

LICENSE

The period depends on the ground for the petition.

A compulsory license may not be applied for on the ground that

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
before the expiration of a period of four years from the date of
filing of the application or three years from the date of the
patent whichever period expires last. However, a compulsory
license which is applied for on any of the grounds stated in
Subsections 93.2, 93.3, 93.4, and 93.6 and Section 97 of Rep.
Act No. 8293 may be applied for at any thime after the grant of
the patent. a. (Rep. Act No. 8293, Sec. 93 as amended by
Rep. Act No. 9502 otherwise known as the “Universally
Accessible Cheaper and Quality Medicines Act of 2008.”)

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

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 reasonable commercial terms and conditions but such efforts
have not been successful within a reasonable period of time.

This requirement shall not apply in the following cases:

1. Where the petition for compulsory license seeks to remedy a

practice determined after judicial or administrative process
to be anti-competitive;
2. In situations of national emergency or other circumstances of
extreme urgency;
3. In cases of public non-commercial use; and
4. In cases where the demand for the patented drugs and
medicines in the Philippines is not being met to an adequate
extent and on reasonable terms, as determined by the
Secretary of the Department of Health.

In situations of national emergency or other circumstances of

extreme urgency, the right holder shall be notified as soon as
reasonably practicable.

COMPULSORY LICENSE BASED ON INTERDEPENDENCE OF

PATENTS

If the invention is protected by a patent, hereafter referred to as

the “second patent,” within the country cannot be worked
without infringing another patent, hereafter referred to as the
“first patent,” granted on a prior application or benefiting from
an earlier priority, a compulsory license may be granted to the
owner of the second patent to the extent necessary for the
working of his invention, subject to the following conditions:

1. The invention claimed in the second patent involves an

important technical advance of considerable economic
significance in relation to the first patent;
2. The owner of the first patent shall be entitled to a cross-
license on reasonable terms to use the invention claimed in
the second patent;
3. The use authorized in respect of the first patent shall be non-
assignable except with the assignment of the second patent;
and
4. The terms and conditions of Sections 95, 96 and 98 to 10o.
(Sec. 97)

TERMS AND CONDITIONS OF COMPULSORY LICENSE

The basic terms and conditions including the rate of royalties of

a compulsory license shall be fixed by the Director of Legal
Affairs subject to the following conditions:

1. The scope and duration of such license shall be limited to

the purpose for which it was authorized;
2. The license shall be non-exclusive;
3. The license shall be non-assignable, except with that part
of the enterprise or business with which the invention is
being exploited;

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 4. Use of the subject matter of the license shall be devoted
predominantly for te supply of the Philippine market
provided that this limitation shall not apply where the
grant of the licensee is based on the ground that the
patentee’s manner of exploiting the patent is determined
by judicial or administrative process, to be anti-
competitive;
5. The license may be terminated upon proper showing that
circumstances which led to its grant have ceased to exist
and are unlikely to recur provided that adequate
protection shall be afforded to the legitimate interest of
the licensee; and
6. The patentee shall be paid adequate remuneration taking
into account the economic value of the grant or
authorization, except that in cases where the license was
granted to remedy a practice which was determined after
judicial or administrative process, to be anti-competitive
the need to correct the anti-competitive practice may be
taken into account in fixing the amount of remuneration.

AMENDMENT, CANCELLATION, SURRENDER OF

COMPULSORY LICENSE

Upon the request of the patentee or the licensee, the Director of

Legal Affairs may amend the decision granting the compulsory
license.
The licensee may surrender the license by a written declaration
submitted to the office.
Upon the request of the patentee, the compulsory license may
be cancelled:

1. If the ground for the grant of the compulsory license no

longer exists and is unlikely to recur;
2. If the licensee has neither begun to supply the domestic
market nor made serious preparation therefore;
3. If the licensee has not complied with the prescribed terms
of the license.

2012 Bar Exams:

Compulsory Licensing of Inventions which are duly patented

may be dispensed with or will be allowed exploitation even
without agreement of the patent owner under certain
circumstances, like national emergency, for reason of public
interest, like national security, etc. The person who can grant
such authority is—

a. The Director General of the Intellectual Property Office;

b. The Director of Legal Affairs of the Intellectual Property
Office;
c. The owner of the Patent right;
d. Any agent of the owner of the Patent right.

Answer:

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 b) The Director of Legal Affairs of the Intellectual Property
Office. (BAR 2012)

ASSIGNMENT OF RIGHTS
Assignment of Patents

Inventions and any right, title or interest in and to patents and

inventions covered thereby, may be assigned or transmitted by
inheritance or bequest or may be the subject of a license contract
(Sec. 103). An assignment may be of the entire right, title or interest
in and to the patent and the invention covered thereby, or of an
undivided share of the entire patent and invention, in which event the
parties become joint owners thereof. An assignment may be limited to
a specified territory (Sec. 104).

Form of Assignment

The assignment must be:

a. in writing
b. acknowledged before a notary public or other officer authorized
to administer oath or perform notarial acts
c. and certified under the hand and official seal of the notary or
such other officer(Sec. 105).

Recording

 The Office shall record assignments, licenses and other

instruments relating to the transmission of any right, title or
interest in and to inventions, and patents or application for
patents or inventions to which they relate, which are presented
in due form to the Office for registration, in books and records
kept for the purpose.

 The original documents together with a signed duplicate

thereof shall be filed, and the contents thereof should be kept
confidential. If the original is not available, an authenticated
copy thereof in duplicate may be filed.

 Upon recording, the Office shall retain the duplicate, return the
original or the authenticated copy to the party who filed the
same and notice of the recording shall be published in the IPO
Gazette.

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  Such instruments shall be void as against any subsequent
purchaser or mortgagee for valuable consideration and without
notice, unless, it is so recorded in the Office, within three (3)
months from the date of said instrument, or prior to the
subsequent purchase or mortgage (Sec. 106).

Right of Joint Owners

 Each of the joint owners shall be entitled to personally make,

use, sell, or import the invention for his own profit.

 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).

UTILITY MODELS

Utility Models

Definitions:

 Utility Models are models of implement or tools of any industrial

product even if not possessed of the quality of invention but
which is of “practical utility”.

 Utility Model is a “petty” patent for new and industrially

applicable technical solution of a problem. A new and useful, but
obvious improvement may be protected as utility model.

 Utility Model is a statutory monopoly granted for a limited time

in exchange for an inventor providing sufficient teaching of his
or her invention to permit a person of ordinary skill in the
relevant art to perform the invention.

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  A utility model is a technical solution to a problem in any field of
human activity which is new and industrially applicable. It may
be, or may relate to, a product, or process, or an improvement
of any of the aforesaid. Essentially, a utility model refers to an
invention in the mechanical field. This is the reason why its
object is sometimes described as a device or useful object”
(Ching v. Salinas, G.R. No. 161295, June 29, 2005).

Distinguish Utility Models from Patentable Inventions

Patentable
Utility Models
Inventions

Subject to Section 109, the provisions governing

patents shall apply, mutatis mutandis, to the
registration of utility models.

Any technical solution

An invention qualifies of a problem in any
for registration as a field of human activity
utility model if it is new which is new, involves
and industrially an inventive step and is
Requirement applicable. industrially applicable
for patentability shall be Patentable. It
(The reference to may be, or may relate
inventive step as a to, a product, or
condition of protection process, or an
shall not be applicable.) improvement of any of
the foregoing.

Procedure from Section Procedure from

43 (Classification and Section 43
As to procedure Search) to Section 49 (Classification and
for registration (Amendment of Search) to Section 49
Application) does not (Amendment of
appliy. Application) applies.

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 A utility model The term of a patent
registration shall expire, shall be twenty (20)
As to expiration without any possibility years from the filing
of the of renewal, at the end of date of the application.
registration the seventh year after (Section 54)
the date of the filing of
the application.

As to grounds
for cancellation
of registration The utility model Any interested person
registration shall be may, upon payment of
cancelled in the the required fee,
following grounds: petition to cancel the
patent or any claim
(a) That the claimed thereof, or parts of the
invention does not claim, on any of the
qualify for following grounds:
registration as a
utility model and (a) That what is
does not meet the claimed as the
requirement of invention is not
registrability, in new or
particular having Patentable;
regard to Section
109.1 and Section (b) That the patent
22. 23. 24 and 27; does not disclose
the invention in a
manner
sufficiently clear
(b)That the and complete for
description and it to be carried
the claims do not out by any
comply with the person skilled in
prescribed the art; or
requirements;
(c) That the patent is
contrary to public
order or morality.
(c) That any drawing
which is necessary
for the
understanding of
the invention has
not been
furnished;

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 (d)That the owner of
the utility model
registration is not
the inventor or
successor in title.

Conversion of Patent Applications or Applications for Utility Model

Registration

At any time before the grant or refusal of a patent, an applicant for a

patent may, upon payment of the prescribed fee, convert his
application into an application for registration of a utility model,
which shall be accorded the filing date of the initial application. An
application may be converted only once.

At any time before the grant or refusal of a utility model registration,

an applicant for a utility model registration may, upon payment of the
prescribed fee, convert his application into a patent application, which
shall be accorded the filing date of the initial application (Sec. 110).
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).

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INDUSTRIAL DESIGN

This is covered by RA No. 9150. Under this law, the following are its
subject matter:

1. Industrial design
2. Integrated circuit
3. Lay-out design

WHAT IS INDUSTRIAL DESIGN?

- 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.

WHAT IS INTEGRATED CIRCUIT?

- It means a product, it its final form, or an intermediate form, in
which the elements, at least one of which is an active element
and some or all of the interconnections are integrally formed in
and /or on a piece of material, and which is intended to perform
an electronic function.

WHAT IS A LAYOUT DESIGN?

- It is synonymous to Topography.
- It means the three-dimensional disposition, however expressed,
or the elements, at least one of which is an active element, and
of some or all of the interconnections of an integrated circuit, or
such a three-dimensional disposition prepared for an integrated
circuit intended for manufacture.

CONDITIONS FOR PROTECTION

A. Industrial Design
1. It must be new
2. It must be ornamental

Note: Those dictated essentially by technical or functional

considerations to obtain a technical result or those that are contrary
to public order, health or morals are not protected.

B. Integrated Circuit
1. It must be an original lay-out design of integrated circuit.

Note: It is considered original if it is the result of its creator’s own

intellectual effort and is not commonplace among creators of layout-
out designs and manufacturers of integrated circuits at the time of its
creation.

C. Lay-out Designs
1. It must consists of a combination of elements
2. And interconnections that are common place.
3. The combination, taken as a whole, is original.

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CONTENTS OF THE APPLICATION FOR REGISTRATION

1. Request for registration of the industrial design or layout-

design;
2. Information identifying the applicant;
3. Indication of the kind of article of manufacture or handicraft to
which the industrial design or layout-design shall be applied;
4. A representation of the article of manufacture or handicraft by
way of drawings, photographs or adequate graphic
representation of the industrial design or of the layout-design as
applied to the article of manufacture or handicraft which clearly
and fully discloses those features for which protection is
claimed; and
5. The name and address of the creator, or where the applicant is
not the creator, a statement indicating the origin of the right to
the industrial design or layout-design registration.

Note: Some of those provisions relating to patents registration is also

applicable in industrial design registration.

May a several industrial designs be the subject of one

application?
-Yes, provided that they relate to the same sub-class of the
international classification or to the same set or composition of
articles.

EXAMINATION OF APPLICATION
- There should be an examination whether the industrial design
or layout-design complies with requirements provided by law.

REGISTRATION OF INDUSTRIAL DESIGN

- If all conditions required in the application of industrial designs,
the registration of industrial design or layout-design shall be
ordered to be effected. The Certificate of Registration shall also
be issued.

TERM OF REGISTRATION
1. Industrial design
- Five years from the filing date of application. This can be
renewed for two consecutive period of 5 years.

2. Layout- Design
- 10 years, without renewal from the date of
commencement of the protection accorded to the layout
design.

CANCELLATION OF DESIGN REGISTRATION

A. Grounds for cancellation of industrial design registration

1. The subject matter of the industrial design is not registrable.
2. The subject matter is not new

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 3. The subject matter extends beyond the content of the
application as originally filed.

B. Grounds for cancellation of Layout-design of integrated

circuits
1. The layout-design is not protectable under the law

2. The right holder is not entitled to protection under the law

3. Where the application for registration of the layout-design. Was
not filed within two years from its first commercial exploitation
anywhere in the world.

RIGHTS CONFERRED OF LAYOUT-DESIGN REGISTRATION

1. To reproduce, whether by incorporation in an integrated circuit
or otherwise, the registered layout-design in its entirety or any
part thereof, except the act of reproducing any part that does
not comply with the requirement of originality; and
2. To sell or otherwise distribute for commercial purposes the
registered layout design, an article or an integrated circuit in
which the registered layout-design is incorporated.

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