INTRODUCTION TO LAW AND

ADVERTISING

A) What is advertising?
Paid form of communication
To turn (turning)
Public medium - promote sales
sell product/service/value/ideas
Drawing attention of people
Object: interest people - advocacy or product/service
Inform People
Send Messages
Builds Brand Image
Knowing Your Audience
need mass media
*Advertiser -> Paid communication -> Consumer
*Advertising - a communication tool used to influence
* "Communication is part of freedom of speech which is a concern of the law"
* Sender -> Content -> Recipient -> Mass Media
* Balance - freedom of speech, the state has the right to restrain the freedom of speech

B) History of Advertising
Advertising, not prostitution, is the oldest profession
Since time of Cleopatra (Egypt)
Gladiators (Rome)
Handbills (USA)
o like flyers in 1800s
o became display ads
Industrial Revolution
o mass production
o mass advertising
o manufacturers -> consumers
With advertising, everything becomes a necessity

C) Constitution
- supreme law of the land to which all other forms of law must conform
- approved by a majority voted of the registered voters in a plebiscite
- Dominican Republic: all authority emanate from the people
basic
fundamental
supreme
municipal law in PH (applies only here)
governs the ad industry

C.1) History of Constitution
1898 - Malolos Constitution
1935 American Constitution
1973 - Martial Law
1981 - Martial Law
1986 - Freedom Constitution
1987 Constitution (current)
*1946 - Official Independence

D) Elements of a state
1. People
2. Territory
3. Government
4. Sovereignty

D.3) Government

D.3.1) Two main functions of the Government
1. Constituent - essential function of the state ex. peace & order
2. Ministrant - not essential but the government can engage in ex. partner with other states

D.3.2) 3 Main Branches of Government
1. Legislative (Congress) - MAKES LAWS
(12) senate: upper body
House of representatives: lower body
o district representatives
o sectoral reps (party list)
"National Laws"
o Republic Act No.
o Presidential Decree
o Letters of Instruction
o Act
City/Municipal Law
o Ordinance

2. Judiciary(Judicial Dept) - INTERPRETS LAWS, system of the courts
Metropolital/Municipal Trial Court -> Regional Trial Court ->
Court of Appeals: sandigang bayan-> Supreme Court: 15 justices
Chief Justice + 14 Assoc. Justices
Interprets the law

3. Executive - EXECUTE LAWS
Chief Executive - President - Ninoy Aquino
Vice Executive - Vice President Binay
President (6 years)

executes rules, directs rules
Cabinet (Secretaries - alter egos)

D.3.3) Separation of Powers
- all powers of branches are co-equal
- they can't meddle with other powers

D.3.4) Check of Balance
- veto the bill (unconstitutional)
- when president appoints

D.3.5) Form of Government: Presidential vs. Parliamentary
Presidential Parliamentary
Three Branches Two Branches
Executive, Judicial, Legislative Executive and Legislative (together) plus Judiciary

D.3.6) Powers of the Government
1. Power to Tax
- inherent, intrinsic nature
- life blood of the government

2. Police Power
- regulates private property for general welfare, safety, and health
- Parameters of the process of Police Power is correct if:
1. Due Process - Procedural, Substantive Due Process (reasonable and not arbitrary)
a.) sustantive due process - "reasonable"
b.) procedural due process - "a law that hears before it condemns"; Notice & Hearing
2. Equal Protection - no exception (no classification)
3. Legislative is the only one who can exercise the police power

3. Power of Eminent Domain
- taking of private property for public use with just compensation*

* Just compensation
assessed value
zonal value
fair market value (FMV)
**POLICE POWER vs. EMINENT DOMAIN
Police power Eminent Domain
1. regulate 1. takes away (taking)
2. no compensation 2. with just compensation
3. tax 3. no tax
4. general welfare 4. public use
5. "private property" 5. "private property"

6. no change in ownership 6. change in ownership
Chapter1 Constitutional Issues
*Advertising is treated differently from mass media based on the argument that advertising is not
mass media but uses mass madia
*mass media occupies a critical role in nation-building
*foreigners are welcomed in advertising because it is less intrusive than mass media

A) Some Articles
A.1) Laws Governing Mass Media and Advertising (A16, S11)
1. Ownership and Management of Mass Media (TV, Radio, Print)
-shall be limited to Filipinos, and corporations, cooperatives, associations
-wholly owned by Filipinos.
-Stockholders, Directors, and officers should be Filipino
- Mass media/ Retail Trade ownership - 100% Filipino
2. Monopolies in commercial Mass Media is prohibited as to avoid unfair competition
3.At least 70% ownership/management in the advertising industry must be by Filipino citizens or
corporations or associations
4. Participation of foreigners in the advertising is industry shall be limited to their proportionate
capital share (Participation).
*Foreigners - may be hired to do clerical or staff work in a mass media company
5. All executive and managing officers in the advertising industry must be Filipinos
*Executive Officer - one who assumes comment os control and directs the course of business
*Managing Officer - refers to those vert with powers or prerogatives to lay down and excite
management policies and does not include rank-and-file employees
6. Ad industry - regulated by law for
a. protection of consumers
b. promote general welfare

*Due to difference in societal norms what may be accepted advertising in foreign countries is not
accepted in the Philippines
*"The allegiance and loyalty to country is the primary reason for the Filipinization policy. We
must also espouse Filipino values"

A.2) A3, S1
no person shall be deprived of LIFE, LIBERTY, PROPERTY without due process of law
equal protection of laws
ad industry is a right to property; right to enter business, gainful employment, income
A.3) A3, S9
Private property can only be taken if:
o for public use
o w/ just compensation
A.4) A3, S4
freedom of speech, expression, press, assemble, grievance
Ads - form of expression/speech


B) Some Cases
B.1) Churchill and Tait vs. Rafferty (BIR)
STORY: Churchill placed a billboard that covers the view of nature and compels attention
because of it's location. Churchill's billboard is placed in his private party. Government
characterised it as offensive to the sight
ISSUE: Whether the billboard may be removed without just compensation to the owners
RULING: The billboard was removed without just compensation through police power although
it is a private property the government's main concern is the general welfare of the people and
the billboard was a distraction and obstructive

B.2) People vs. Fajardo
STORY: Fajardo old house was destroyed due to a typhoon. He owns this parcel of land and on
the process of requesting a permit he was denied because the building will destroy the view of
the public plaza. He still preceded with the building of his house in his parcel of land. The
governments wants the house destroyed because of the ordinance
ISSUE: Whether the ordinance is valid?
RULING: The ordinance is deemed invalid due to the reason that Fajardo's land is useless
because of the ordinance passed. He cannot use his private property therefor the government is
exercising the power of eminent domain and should be given just compensation.

B.3) National Press Club vs. Comelec
- It is not allowed to give free of charge print space or air time for candidates. All candidates
should depend on comelec for air time. If candidate is a contributor, columnist, commentator or
announcer on board he/she should take a leave of absence during candidacy period

B.4) Telecommunications & Broadcast Attorneys of the Phils Inc. vs. Comelec
Laws Concerned:
1. Comelec time for radio and TV shall be given to the government without just compensation so
that they may allocated equally and impartially among the candidates within the area of coverage
2. Comelec space for print (newspaper/magazines) shall be given to the government with just
compensation. Said space is allocated free of charge equally and impartially to the candidates.
*Radio and TV broadcasting companies which are given franchises do not own the airwaves and
frequencies which they transmit broadcast and images therefor it is a public party and police
power can be exercised while Print is a private property and power of eminent domain should be
exercised.

*Political Advertisement - may take the form of spots, guestings, in TV shows and radio
programs, love or taped announcements, teasers, and other forms of advertising messages or
anoucments used by commercial advertisers
*"Election period commences 90 days before the day of election date and 30 days thereafter.
Campaign period is variable but within the 90 days before the election date"
*"Candidates are only considered candidates during the start of campaign period"

B.4.1) Adiong vs. Comelec

STORY: Adiong challenge the comelec resolution that it is not allowed to use campaign
decals and stickers on mobile units
ISSUE: Where the prohibition as applying to private motor vehicles is a valid regulation
RULING: Adiong was granted to the right to distribute campaign decals and stickers. For
her mobile units is a private property and prohibiting it is a depriving them with free
speech. People who agree to put the stickers in their mobile units is merely is an
expression or a statement.

B.4.2) Mutuc vs. Comelec
STORY: Comelec issued a ruling that the use of a taped jingle on mobile units equipped
with sound systems and loud speakers for campaign purposes is not allowed
ISSUE: Whether the prohibition amen e use of a taped jingle is valid?
RULING: Mutuc was granted the right to express his views as a political candidate
because it is hard to repeat his views over and over again in different places that is why it
is only appropriate to record it in a jingle or something.

C) Two Types Of Unprotected Speech
1. Libel - a public and malicious imputation (accusation) of a crime or of a vide or defect, real or
imaginary, or any act, omission, condition, status, or circumstances tending to cause the
dishonour or discredit, or contempt of a natural or juridical person or to blacken the memory of
someone who is dead

Elements of Libel:
a. public
b. malice - intended bad faith, intentional lie
c. imputation - crime, vice, defect
d. real or imaginary
e. dishonor or discredit
f. natural or juridical person - corporation, individual, association, organisation
g. blacken memory - dead or alive

2. Obscenity - the elements that must concur to establish and obscenity case are laid down by the
US supreme court in Miller vs. California

a. whether the average person, applying contemporary community standard would find that
the work, taken as a whole appeals to the prurient interest
b. whether the work depicts or describe in a patently offensive way, sexual conduct
specifically defined by the applicable state law
c. whether the work taken as a while lacks serious literary, artistic, political, or scientific
value

ex. in Philippines drinking liquor is not allowed in commercials

D)Freedom Of Speech
* Law applies to all/equally
exception: when there's clear distinction made by the law

ex: poor, Subic investors

D.1) Speeches
1. Protected speech
- core speech
- commercial speech
- indecent speech if it has some value
2.unprotected speech - libel, obscenity

*Advertising - form of commercial speech (has less protection than core speech)

D.2) Prohibitions:
1. Prior Restraint
- general rule
- before publication/dissemination
Exception: (a) during war the government can restrain you from giving speech
(b) Classification or censorship (MTCRB)
*these are some allowable prior restraints

2. Subsequent Punishment - when you allow publication and immediately penalize it
Test or standards when is it allowed
(a) dangerous tendency rule (speech will cause evil)
(b) clear and present danger (occurring, degree, and proximity)
(c) balancing of interest (speech - public interest)

Chapter 2 - Sources of Obligation

Five Sources of Obligations
A) Law
B) Contracts
C) Quasi-Contracts
D) Delicts (Crime)
E) Quasi-Delicts (Torts)

"Ignorance of the law excuses no one."
DURA LEX SED LEX - "The law is harsh but it is the law."


A) Law - whatever is provided by that law should be adhered to: otherwise liability for such
violation will arise, expressly stated
constitution - fundamental law
statutes - legislated by congress
ordinances - legislated by local legislative bodies

orders - by executive department

A.1) Advertising under the law:
1. RA 7658
permits are needed for children to appear on advertisements
children below 15 shall not be employed except when essential
must have parents' permission/ legal guardian's
agreement of the child
agreement of DOLE & DSWD
2. Animal Welfare Act of 1998
unlawful to torture animals/neglect to provide care, sustenance, or shelter, or maltreat
them
3. Omnibus election code
registration with COMELEC for ads for endorsing/opposing candidacy of any person
before implementation
on publications: newspapers, magazine, periodical
signed by candidate/party concerned
4. Resolution 7858
"specifically allows the posting of internet ads through a software provided by a local
technology company."
"digital media advertising" - a new election propaganda
5. Section 64 of MORPHE
for school ads/announcement of degree programs which are offered under permit status
requires the inclusion of the words, "As per Commission on Higher Education Permit
Number..."
Permit first!
6. EO 51 (Milk Code of 1986)
nutrition and health claims will not be permitted for breastmilk substitute
IRR Sec 4(f) and Sec 11 - bans advertising and promotion or sponsorship of breastmilk
substitutes for children 2 yrs below


B). Contract
- meeting of the minds, involving a valid object. It is perfect by an offer duly accepted.
- a contract is always an obligation but an obligation is not always a contract
- must be 18 years old and above
- must be of sound mind

B.1) Elements:
(a) consent - voluntary
(b) object - subject matter/obligation
- should be within commerce of man, valid, doable, not impossible, certain
(c) cause - reason for the contract, "why" of the contract

B.2) Characteristics:
(a) liberty/freedom to enter into a contract - exception against general welfare

(b) obligatory - law between the parties
(c) mutuality - binding between parties
(d) consensual - there has to be consent for both parties

*The law will prevail in a contract

B.3) Characteristics of contract
1. Liberal
you can stipulate (on any matter) any agreement - AS A GENERAL RULE
EXCEPTION: unlawful, contrary to public good
2. Obligatory
even verbally
must be complied with
has force of law
law between two of you
3. Mutuality
binding as between the parties
not ONLY ONE will decide
both can stipulate
4. Consensual
require consent of parties
5. Relativity
binding as between only the two parties
relative to the parties ALONE
others can't participate
*LAW is deemed part of agreement
*you can't enter contract ALONE

B.4) Background on OBLIGATION AND CONTRACTS
- Obligation - juridical necessity to give, to do, or not to
- 2 parties:
1. passive subject / obligor / debtor - executes
2. active subject / obligee / creditor demands
- Elements of obligation:
1. Parties
2. Object
3. Juridical Tie


C) Quasi-Contract - a juridical relation which arises from certain lawful, voluntary, and
unilateral acts, to the ned that no one may be unjustly enriched or benefited at the expense of
another

Quasi = "seeming"
= Law, natural equity


C.1) Two main principles
(a) Negotiorum gestio - management of another's business (negotiation-gestio:
compensation)
(b) Solutio indebiti - no unjust enrichment at the expense of another
o doing what is required when nothing is being asked
o "unjust enrichment"
o payment by mistake

D) Crime/Delicts - a source of obligation consists of any violation of the provisions of the
revised penal code and special laws that especially provides sanctions penal in character
action/omission
damage to another party
(a) criminal liability - imprisonment/fine
(b) civil liability
o restoration (return what you stole)
o reparation (pay for original condition of what you stole)
o indemnification (pay for the damages for all forms of injury)

*mala prohibita - intention to commit the offence is unimportant because mere violation of the
special law sill suffice

E). Quasi Delicts - whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence. if there is a no pre
existing contractual relation between the parties is called a quasi-delict.
like delict but due to fault/negligence
no pre-existing contractual relation

E.1) Requisites:
(a) an act or omission constituting fault or negligence
(b) damage caused by the said act or omission
(c) causal relation bet the damage and the act of omission
(d) private person - right of privacy
(e) public official - limited right of privacy not if publicity is to earn

E.2) Damages
1. actual or compensatory - express of victim caused by injury of another party, unrealised
profit, what was really spent, pecuniary loss
2. moral - very hard to quantify, refers to emotion, feelings, anxiety
3. nominal - right has been abused or violated
4. temperate or moderate damages
can't be proven theres certainty
little lower than compensatory
higher than nominal damages
there's damage but can't estimate the exact figure
5. liquidated - parties agreed upon amount of damages fixed and stipulated in contract

6. exemplary or corrective - granted if there's already an award of moral damages, to
conduct what guilty party has done.

Limitations Of Copyright
A) Limitations on Copyright
When copyright ends
Situations when it appears that there's copyright violation but they are not violations, they
are exceptions.
1. Private performance, free of charge/religious/charitable
2. Quotations if done properly
3. Reporting, reproduction for broadcasting
4. Reporting, current events
5. fd
6. For educational purposes
7. Ephemeral recordings (not intentionally)
8. Use of government/national library/educational/scientific institutions
9. same to a
10. public display of original work if sold/given away/transferred
11. legal purposes
as long as owners right of earning is not undermined

B) Fair use doctrine
your defense, best defense
4 acts considered fair use:
1. for criticism/comment
2. news reporting
3. teaching
4. scholarship/research
no specifics rules on fair use, only guidelines:
1. nature of copyrighted work
2. purpose and character of use (for profit/charity)
3. amount/substantiality of work (gaano kalaki ang kinopya: in volume)
4. effect of the use
C) Copyright
1. economic rights
2. moral
3. special right - droil de suite (right to proceeds from subsequent transfers)
4. special right - works of architecture
D) Works of architecture
Copyright on:
design
structure (right to control on setting up the construction of the building, following your
design)
o exception: reconstruction/rehabilitation on the same location only


E) Reproduction of Published Work
exceptions:
works of architecture
entire book
compilation of data
computer programs (only one, as back up)

F) Principles of Copyright
1. Original
2. Idea =/= expression
3. Moment of creation
4. Copyright =/= material object
5. mere fact of creation, regardless of form
6. "tangible" form (can be seen/heard, etc)
7. Use of work is NOT necessary
8. Length of protection is longer
9. Protection is CHEAP
10. "creativity" (at least some value of creativity)

Neighboring Rights
A) Neighboring Rights
1. Performers
Performance
Rights: Broadcasting & Distribution
2. Producers of Sound Recording
Sound Recording
Rights: Reproduction & Distribution
3. Broadcasting organizations
Broadcasting/Broadcast
Rights: Rebroadcasting, recording, copying
*Limitations on right:
Can record if for personal use

Trademark
A) Trademark
Paris Convention/Trips Agreement
B) Copyright
Berne Convention/Trips Agreement
8293 derived from RA166

C) Mark
1. Visible

2. Distinctive
3. Stamped or marked container of goods (container itself)
C.1) Functions of a mark
1. Product-identifier
2. Source-identifier
3. Marketing tool (basis of developing a brand)
4. Source of income
5. Valuable Asset
6. Intellectual Property Collateral Financing
Trademarks -- need to be registered
Slogans - registrable trademarks

C.2) Types of Marks (Strongest to Weakest)
C2.1) STRONG (From Strongest)
1. Inherently distinctive mark (coined mark) ex.: Kodak, Xerox
2. Arbitrary
3. Suggestive
4.
o is a generic mark; you need to make use of imagination to make mark to be
considered your mark
o ex. Close-up Toothpaste
C2.2) WEAK (From Weakest)
1. Immoral/Deceptive/Scandalous
2. Insignia, Coat of Arms Philippines
3. Descriptive marks - describe characteristics of product. Ex. Fast
4. Common marks - customary marks. Ex. Elevator, Cellophane, Aspirin, Xerox
5. Generic - describes the types of goods.

C3) Rules
C3.1) Sec 123.1 d: First to File Rule
Prior filing = Priority
o Same products
o closely related ie. Shoes & Socks
o resembles mark to likely deceive or cause confusion
Must be in good faith
If in bad faith, you need to prove it
C3.2) Sec 123.1 e&f: Internationally Well-known mark
a mark is territorial
exception: if internationally well-known mark, no need for registration
1. determined by competent authority: IPO, Courts
2. knowledge of the relevant sector of the public
3. in the Philippines & internationally
JORDACHE (denim brand) and LANVIN - well-known marks before, but not today.
not permanent
ok if not similar goods
C3.3) Can't be registered:

logo is shaped like the product being sold
consist of color alone Except: unless defined by a given form. ie. Nescafe Red Mug

C3.4)123.2 Exception for Generic marks
Principle of "Secondary Meaning"
1. if you have been using the mark for a long period of time
2. people are used to using your goods
ex.: Pancake House, Ang TIbay (Jarman)

C3.5) Procedure in Registering a Mark (at IPOPHL)
1. name of good
2. types of goods (NICE CLASSIFICATION OF GOODS)
3. logo design
4. color claim
5. filing date
6. trademark attorney
7. IPO -> FORMALITY EXAM -> SUBSTANTIVE EXAM -> PUBLICATION
(OFFICIAL GAZETTE)
C3.6) Sec. 138 & 147: Registration Certificate and Rights
1. Registration is valid
2. Ownership
3. Exclusive right to use the mark, goods, and related goods
4. Right to prevent ALL 3rd parties from using mark

C4) Validity of Registration
10 years and renewable
Declaration of Actual Use (DAU)
o needed before registration and for renewal
o within 3 years from filing date (registration)
o within 1 year from the 5th anniversary

C5) Remedies when your mark is infringed
1. Infringement (S155) - "Infringer"
1. No consent from owner
2. Owner of Registered Mark
3. used in commerce
4. RCCCi/Dominant Feature - Reproduction, Copyright, Copy, Colorable Imitation)
5. confusion
o Damages
o Injunction

C6) Registered Mark Sign
o R with a Circle
o or in words
o required for your defense

Mcdonalds' Corp & Mcgeorge Vs. L.C.
Big Mak

A)Definition
1. Big Mac
Burger only
Phil reg. 1985
2.Big Mak
Burger and other products
not registered
B)Distinction
appearance
different products
different market
different origin
C)Two tests
1. Dominancy Test - dominant feature
2. Holistic Test - entirety of the mark
D)Confusion
not actual confusion required
likelihood of confusion (possibility of confusion)
o in goods
o in business
E)To establish infringement of mark, plaintiff should show
Validity of mark
Ownership of mark
Use of mark by infringer, colorable imitations
"Normal Expansion of Business" (if business is possible to expand to related goods.)

Fredco Vs. Harvard University
1. You can only register a mark if you own the mark.
2. Well-known mark
1. registered in 50 other countries
2. history/tradition
3. falsely suggesting a connection (Fredco)
4. Prior decision already that Harvard is a well known mark

A) Trademark remedies of unfair competition
1. infringement S155
- would only be referring to a mark
- the mark is violated
2. unfair competition S168 (bigger scope)

- general appearance; entire presentation
- no registration is needed in order for you to file for
- passing off (FRAUD; making use of good will; i'm making my product appear to be like the
other product)

Consumer Act + Labeling
A) 2 Main types of prohibited sales act/practice
1.) Deceptive (A51) - misinterpretation -> inducement
2.) Unfair/Unconscionable - "situations" -> inducement; Bad faith

*AOWA
engaged in electronics sales
"gift"

B) Labeling and Fair Packaging (A77)
B.1) Minimum requirements:
1. trademark/service mark
2. produced for/manufactured for
3. Distributed by
4. Under license - get the authority of the real owner
5. Address
6. Ingredients
7. Weight/Volume
8. Warning:
for toxic, alcoholic
on conspicuous locations
9. Additional Requirements:
ICC number / PS Mark
for motorcycle helmets
B.2) Packaging
functional slack filled package
o ie. air in chips, softdrinks, perfume
durable packaging for toys
B.3) Price Tag
mandatory for items for retail
or have barcode
no price tag/barcode, at least a PRICE LIST
B.4) Medical Manufacturers
"OTC" - over the counter
"no therapeutic claim" - food supplements; doesn't cure
generic products (Paracetamol) - cheaper
branded products (Alaxan, Medicol)
branded generic (Ritemed) - more expensive than paracetamol but cheaper than branded
products

herbal medicines can cure (Lagundi)
B.4) Cigarette Manufacturers
cigarettes - there's a warning that if you smoke you are reducing your life term
cigarette ads are banned
cigarette companies can't sponsor health events because that would be an irony
sari-sari stores are allowed to put posters
very strict when it comes to cigarette labeling requirements

C) Advertising and Sales promotion
is a regulated activity
ruling: fair and honest advertising, you have to be factual
protection of the consumers from misleading advertisements
unsafe use of any product or service
it's a requirement that if you're making an advertisement, make sure that you are not
depicting dangerous act, except: add precautionary warnings
provide indication (children can fly) - nuisance
not absolute, there are prohibitions (advertisements creating undue panic or fear)
o ie. vampires: make it fun
o self-inflicting injuries
o aggressiveness
o violence
o exceptions: advocacy advertising - if there is a cause
you need to have proof, statistics for absolute claims

ADBOARD
Promotes self regulation
Members
o PANA
o 4A's
o UPMG
A) Consumers
Advertiser
Ad Agency
Suppliers
Media

B) Ad Standard Council (ASC)
formed by PANA and KBP
screens the content of all advertising and marketing
using the Code of Ethics

C) Code of Ethics
Bible of Ad Agencies