MIGHTY CORPORATION and LA CAMPANA FABRICA DE TABACO, INC. vs.

E.J. GALLO WINERY and THE ANDRESONS GROUP, INC.

FACTS:
On March 12, 1993, respondents sued petitioners in the RTC-Makati for
trademark and trade name infringement and unfair competition, with a prayer
for damages and preliminary injunction.
They claimed that petitioners adopted the Gallo trademark to ride on
Gallo Winerys and Gallo and Ernest & Julio Gallo trademarks established
reputation and popularity, thus causing confusion, deception and mistake on the
part of the purchasing public who had always associated Gallo and Ernest and
Julio & Gallo trademarks with Gallo Winerys wines.

1.
2.
3.

4.

In their answer, petitioners alleged, among other affirmative defenses

that: petitioners Gallo cigarettes and Gallo Winerys wine were totally unrelated
products. To wit:
Gallo Winerys GALLO trademark registration certificates covered wines only,
and not cigarettes;
GALLO cigarettes and GALLO wines were sold through different channels of
trade;
the target market of Gallo Winerys wines was the middle or high-income
bracket while Gallo cigarette buyers were farmers, fishermen, laborers and other
low-income workers;
the dominant feature of the Gallo cigarette was the rooster device with the
manufacturers name clearly indicated as MIGHTY CORPORATION, while in the
case of Gallo Winerys wines, it was the full names of the founders-owners
ERNEST & JULIO GALLO or just their surname GALLO;
On April 21, 1993, the Makati RTC denied, for lack of merit, respondents
prayer for the issuance of a writ of preliminary injunction.
On August 19, 1993, respondents motion for reconsideration was denied.
On February 20, 1995, the CA likewise dismissed respondents petition for
review on certiorari.
After the trial on the merits, however, the Makati RTC, on November 26,
1998, held petitioners liable for, permanently enjoined from committing
trademark infringement and unfair competition with respect to the GALLO
trademark.
On appeal, the CA affirmed the Makati RTCs decision and subsequently
denied petitioners motion for reconsideration.
ISSUE:

Whether GALLO cigarettes and GALLO wines were identical, similar or

related goods for the reason alone that they were purportedly forms of vice.
HELD:
Wines and cigarettes are not identical, similar, competing or related
goods.

In resolving whether goods are related, several factors come into play:
the business (and its location) to which the goods belong
the class of product to which the good belong
the products quality, quantity, or size, including the nature of the
package, wrapper or container
the nature and cost of the articles
the descriptive properties, physical attributes or essential characteristics
with reference to their form, composition, texture or quality
the purpose of the goods
whether the article is bought for immediate consumption, that is, day-today household items
the field of manufacture
the conditions under which the article is usually purchased and
the articles of the trade through which the goods flow, how they are
distributed, marketed, displayed and sold.

The test of fraudulent simulation is to the likelihood of the deception of

some persons in some measure acquainted with an established design and
desirous of purchasing the commodity with which that design has been
associated. The simulation, in order to be objectionable, must be as appears
likely to mislead the ordinary intelligent buyer who has a need to supply and is
familiar with the article that he seeks to purchase.
The petitioners are not liable for trademark infringement, unfair
competition or damages.

WHEREFORE, petition is granted.Sasot vs. People

G.R. No. 143193 (June 29, 2005)

FACTS:

The National Bureau of Investigation (NBI) conducted an investigation

pursuant to a complaint by the NBA Properties, Inc., against petitioners for
possible violation of Article 189 of the Revised Penal Code on unfair competition.
The Report stated that petitioners are engaged in the manufacture, printing,
sale, and distribution of counterfeit "NBA" garment products.
Before arraignment, petitioners filed a Motion to Quash the Information on the
following grounds:

I. THAT THE FACTS CHARGED DO NOT CONSTITUTE AN OFFENSE

II. AND THIS HONORABLE COURT HAD NO JURISDICTION OVER THE OFFENSE
CHARGED OR THE PERSON OF THE ACCUSED

Petitioners contend that complainant is a foreign corporation not doing

business in the Philippines, and cannot be protected by Philippine patent laws
since it is not a registered patentee. Petitioners aver that they have been using
the business name "ALLANDALE SPORTSLINE, INC." since 1972, and their designs
are original and do not appear to be similar to complainants, and they do not
use complainants logo or design.10
The trial prosecutor filed his Comment/Opposition to the motion to quash, stating
that the State is entitled to prosecute the offense even without the participation
of the private offended party, as the crime charged is a public crime.

The trial court sustained the prosecutions arguments and denied

petitioners motion to quash in its Order dated March 5, 1999.

Petitioners filed a special civil action for certiorari with the Court of
Appeals (CA) which was dismissed. According to the CA, the petition is not the
proper remedy in assailing a denial of a motion to quash, and that the grounds
raised therein should be raised during the trial of the case on the merits.

Petitioners sought reconsideration of the Decision but this was denied by

the CA.

ISSUE:

WON A FOREIGN CORPORATION NOT ENGAGED AND LICENSED TO DO

BUSINESS IN THE PHILIPPINES MAY MAINTAIN A CAUSE OF ACTION FOR UNFAIR
COMPETITION

HELD:

The petition must be denied.

*** the crime of Unfair Competition punishable under Article 189 of the Revised
Penal Code is a public crime. It is essentially an act against the State and it is the
latter which principally stands as the
injured party. The complainants capacity to sue in such case becomes
immaterial.
In La Chemise Lacoste, S.A. vs. Fernandez,35 ***, the Court succinctly ruled that:
More important is the nature of the case which led to this petition.
What preceded this petition for certiorari was a letter-complaint
filed before the NBI charging Hemandas with a criminal offense, i.e.,
violation of Article 189 of the Revised Penal Code. If prosecution
follows after the completion of the preliminary investigation being
conducted by the Special Prosecutor the information shall be in the
name of the People of the Philippines and no longer the petitioner
which is only an aggrieved party since a criminal offense is
essentially an act against the State. It is the latter which is
principally the injured party although there is a private right
violated. Petitioner's capacity to sue would become, therefore, of

not much significance in the main case. We cannot allow a possible

violator of our criminal statutes to escape prosecution upon a farfetched contention that the aggrieved party or victim of a crime has
no standing to sue.

In upholding the right of the petitioner to maintain the present suit before
our courts for unfair competition or infringement of trademarks of a foreign
corporation, we are moreover recognizing our duties and the rights of foreign
states under the Paris Convention for the Protection of Industrial Property to
which the Philippines and France are parties. We are simply interpreting and
enforcing a solemn international commitment of the Philippines embodied in a
multilateral treaty to which we are a party and which we entered into because it
is in our national interest to do so.36 (Emphasis supplied)

Elidad Kho v Court of Appeals and Summerville General Merchandising

G.R. No. 115758. March 19, 2002
Facts:
Petitioner is doing business under the name of KEC Cosmetics Laboratory and is
the registered owner of copyright Chin Chun Su and Oval Facial Cream Container
with a patent right on Chin Chun Su & Device and Chin Chun Su for medicated
cream after purchasing the same from Quintin Cheng, a registered owner in
Supplemental Register of the Philippine Patent Office. It alleges that respondent
Summerville advertised and sold the petitioners cream products under the
brand name Chin Chun Su using similar container that the petitioner used
thereby misleading the public and depriving the petitioner of business sales and
income. It enjoins the respondent from allegedly infringing its copyright and
patent right over the same product. In defense respondent claims to be the
exclusive and authorized importer, re-packer and distributor of the Chin Chun Su
product manufactured by Shun Yi Factory in Taiwan authorizing Summerville to
register its trade name Chin Chun Su Medicated Cream with the Philippine Patent
Office. It also points out that the assignee of the patent registration certification
in the Philippines, Quintin Cheng, has already been terminated by the said
Taiwanese Manufacturing Company. Trial court granted the injunction in favor of
the petitioner. On appeal, respondent prays for the nullification of the writ of
preliminary injunction which was set aside by the Court of Appeals on the
account that the registration of the trademark Chin Chun Su by KEC with the
supplemental register of the Bureau of Patents, Trademarks and Technology
Transfer cannot be equated with registration in the principal register duly
protected by the Trademark law.

Issue:
Whether or not petitioners copyright and patent over the name Chin Chun Su
and its container entitle her to the use and ownership over the same to the
exclusion of others?
Ruling:
The Supreme Court points out that trademark, copyright and patents are
different intellectual property rights. A trademark is any visible sign capable of
distinguishing the goods (trademark) or services (service mark) of an enterprise
and shall include a stamped or marked container of goods. The scope of a
copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their
creation. Patentable inventions, on the other hand, refer to any technical solution
of a problem in any field of human activity which is new, involves an inventive
step and is industrially applicable. To be entitled for the exclusive use of the

name and container of the cream product, which are proper subjects of a
trademark, the user has to sufficiently prove that she registered or used it before
anybody did. The petitioners patent and copyright registration does not
guarantee the right to exclusive use of the product because they are not the
proper subject of the said intellectual right (trademark). Hence the preliminary
injunction cannot be issued since the petitioner has not registered the trademark
of the product Chin Chin Su in their name.
Pearl and Dean Inc. v Shoemart Inc. GR No. 148222, August 15, 2003
Facts:
Plaintiff P and D is engaged in manufacturing advertising display units called as
light boxes. These are specialty printed posters with plastic sheets and
illuminated back lights that are mainly used as stationeries. They secure
copyright registration over these advertising light boxes and marketed using the
trademark poster ads. They applied for the registration of trademark before
the Bureau of Patents, Trademark and Technology Transfer which was approved
on September 12, 1988. P and D negotiated with the defendant Shoemart for the
lease and installation of the light boxes in SM City North Edsa but was given an
alternative to have them leased to SM Makati and SM Cubao while the said
branch was under construction. Only the contract with SM Makati was returned
with signature. In 1986 the counsel of Shoemart informed P and D that it is
rescinding its contract for SM Makati due to non-performance of the terms
thereof. Two years later, the Metro Industrial Services, the same company
contracted by the plaintiff to fabricate their display units offered to construct
light boxes for the Shoemart chain of stores wherein 10 light boxes were created
for them. Upon the termination of contract with Metro Industrial Service, SM
hired EYD Rainbow Advertising Co. to make light boxes. When P and D knew
about the exact copies of its light boxes installed at SM City branches in 1989, it
investigated and found out that North Edsa Marketing Inc (NEMI), sister company
of SM was primarily selling ad space in lighted display units. P and D sent letter
to both NEMI and SM enjoining them to cease from using the subject light boxes
and remove them from SM establishments. It also demanded to discontinue the
use of its trademark poster ads with compensatory damages of 20M. SM
suspended the lease of light boxes in its branches while NEMI took down its
advertisement for poster ads. Claiming both failed to meet its demand P and D
filed a case for infringement of trademark, copyright, unfair competition and
damages.
SM denied the charges against it and noted that the registration of mark poster
ads is limited to stationeries like letterhead and envelope. It further stresses
that it independently develop its own poster panels using techniques and
available technology without notice to P and D copyright. It further contends that
poster ads is a generic name that cannot be appropriated for a trademark and
that P and Ds advertising display units contained no copyright notice in violation
of Section 27 of P.D. 49. NEMI likewise repleaded the averments of SM and

denied to have manufactured, installed or advertised the display units. The RTC
decided in favor of P and D but on appeal the Court of Appeals reversed its
decision. In its judgment its stand is that the copyright of the plaintiff is limited to
its technical drawings only and not the light boxes itself. When a drawing is
technical, the copyright over the drawing does not extend to actual object. Thus
the CA is constrained to adopt the view of the respondents that the poster ads
is a generic poster term ads and in the absence of convincing proof that such
wording acquired secondary meaning, the P and Ds exclusive right to use
poster ads is limited to what is written on its certificate of registration which is
stationaries.
Issue:
Whether or not there is patent infringement

Ruling:
It held that the petitioner never secured patent for the light boxes. Without any
acquired rights to protect its invention it cannot legally prevent anyone from
manufacturing the same. There can be no infringement of a patent until a patent
has been issued, since whatever right one has to the invention covered by the
patent arises alone from the grant of patent. Inventors have no common law
right to monopoly of his work. He has the right to invent but once he voluntarily
discloses it the world is free to copy and use it. A patent gives the inventor the
exclusive right to make, sell, use and exclude others from using his invention.
Assuming the petitioners ad units were patentable, he made them public by
submitting its engineering drawings to the National Library. To legally preclude
others from copying and profiting from ones invention, patent is a primary
requirement. The ultimate goal of a patent system is to bring new designs and
technologies into the public domain through disclosure. Ideas, once disclosed to
the public without the protection of a valid patent, are subject to appropriation
without significant restraint. Therefore, without any patent secured to protect
ones work, there is no protection against its use by the public. Petitioner mainly
secured copyright in which its design is classified as class O limited to box
wraps, pictorial illustration, labels and tags. Thus its copyright is covered only the
works falling within this category. Moreover, the term poster ads is generic and
incapable to be used as trademark thus the respondents are not held guilty of
the charges against them.

Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer (Phil.), Inc.

G.R. No. 167715, 17 November 2010

Facts: Pfizer is the registered owner of a patent pertaining to Sulbactam

Ampicillin. It is marketed under the brand name Unasyn. Sometime in January
and February 2003, Pfizer discovered that Pharmawealth submitted bids for the
supply of Sulbactam Ampicillin to several hospitals without the Pfizers consent.
Pfizer then demanded that the hospitals cease and desist from accepting such
bids. Pfizer also demanded that Pharmawealth immediately withdraw its bids to
supply Sulbactam Ampicillin. Pharmawealth and the hospitals ignored the
demands.
Pfizer then filed a complaint for patent infringement with a prayer for permanent
injunction and forfeiture of the infringing products. A preliminary injunction
effective for 90 days was granted by the IPOs Bureau of Legal Affairs (IPO-BLA).
Upon expiration, a motion for extension filed by Pfizer was denied. Pfizer filed a
Special Civil Action for Certiorari in the Court of Appeals (CA) assailing the denial.

While the case was pending in the CA, Pfizer filed with the Regional Trial Court of
Makati (RTC) a complaint for infringement and unfair competition, with a prayer
for injunction. The RTC issued a temporary restraining order, and then a
preliminary injunction.

Pharmawealth filed a motion to dismiss the case in the CA, on the ground of
forum shopping. Nevertheless, the CA issued a temporary restraining order.
Pharmawealth again filed a motion to dismiss, alleging that the patent, the main
basis of the case, had already lapsed, thus making the case moot, and that the
CA had no jurisdiction to review the order of the IPO-BLA because this was
granted to the Director General. The CA denied all the motions. Pharmawealth
filed a petition for review on Certiorari with the Supreme Court.

Issues:
a) Can an injunctive relief be issued based on an action of patent infringement
when the patent allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal
Affairs of the Intellectual Property Office?

Held:
a) No. The provision of R.A. 165, from which the Pfizers patent was based,

clearly states that "[the] 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."

Clearly, the patentees exclusive rights exist only during the term of the patent.
Since the patent was registered on 16 July 1987, it expired, in accordance with
the provisions of R.A. 165, after 17 years, or 16 July 2004. Thus, after 16 July
2004, Pfizer no longer possessed the exclusive right to make, use, and sell the
products covered by their patent. The CA was wrong in issuing a temporary
restraining order after the cut-off date.

b) According to IP Code, the Director General of the IPO exercises exclusive

jurisdiction over decisions of the IPO-BLA. The question in the CA concerns an
interlocutory order, and not a decision. Since the IP Code and the Rules and
Regulations are bereft of any remedy regarding interlocutory orders of the IPOBLA, the only remedy available to Pfizer is to apply the Rules and Regulations
suppletorily. Under the Rules, a petition for certiorari to the CA is the proper
remedy. This is consistent with the Rules of Court. Thus, the CA had jurisdiction.
c) Yes. Forum shopping is defined as the act of a party against whom an adverse
judgment has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum (other than by appeal or the special civil
action of certiorari), or the institution of two (2) or more actions or proceedings
grounded on the same cause on the supposition that one or the other court
would make a favorable disposition.

The elements of forum shopping are: (a) identity of parties, or at least such
parties that represent the same interests in both actions; (b) identity of rights
asserted and reliefs prayed for, the reliefs being founded on the same facts; (c)
identity of the two preceding particulars, such that any judgment rendered in the
other action will, regardless of which party is successful, amount to res judicata
in the action under consideration. This instance meets these elements.

The parties are clearly identical. In both the complaints in the BLA-IPO and RTC,
the rights allegedly violated and the acts allegedly violative of such rights are
identical, regardless of whether the patents on which the complaints were based
are different. In both cases, the ultimate objective of Pfizer was to ask for
damages and to permanently prevent Pharmawealth from selling the contested
products. Relevantly, the Supreme Court has decided that the filing of two
actions with the same objective, as in this instance, constitutes forum shopping.

Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC
cases, a decision in one case will necessarily amount to res judicata in the other
action.

In-N-Out Burger, Inc. vs. Sehwani Inc., et. al

Facts:
Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated under the
laws of California. It is a signatory to the Convention of Paris on Protection of
Industrial Property and the TRIPS Agreement. It is engaged mainly in the
restaurant business, but it has never engaged in business in the Philippines.
Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations
organized in the Philippines. Sometime in 1991, Sehwani filed with the BPTTT an
application for the registration of the mark IN N OUT (the inside of the letter O
formed like a star). Its application was approved and a certificate of registration
was issued in its name on 1993. In 2000, Sehwani, Incorporated and Benita
Frites, Inc. entered into a Licensing Agreement, wherein the former entitled the
latter to use its registered mark, IN N OUT.
Sometime in 1997, In-N-Out Burger filed trademark and service mark
applications with the Bureau of Trademarks for the IN-N-OUT and IN-N-OUT
Burger & Arrow Design. In 2000, In-N-Out Burger found out that Sehwani,
Incorporated had already obtained Trademark Registration for the mark IN N
OUT (the inside of the letter O formed like a star). Also in 2000, In-N-Out
Burger sent a demand letter directing Sehwani, Inc. to cease and desist from
claiming ownership of the mark IN-N-OUT and to voluntarily cancel its
trademark registration. Sehwani Inc. did not accede to In-N-Out Burgers demand
but it expressed its willingness to surrender its registration for a consideration.
In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative
complaint against the Sehwani, Inc. and Benita Frites, Inc. for unfair competition
and cancellation of trademark registration.
Issues:
Whether or not the Intellectual Property Office (an administrative body)
have jurisdiction of cases involving provisions of the IPC (e.g. unfair
competition).[1]
Whether or not there was unfair competition.
Held:
FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in cases
involving provisions of the IPC (e.g. unfair competition) due to the following
reasons:
Section 10 of the Intellectual Property Code specifically identifies
the functions of the Bureau of Legal Affairs, thus:
Section 10. The Bureau of Legal Affairs.The Bureau of Legal Affairs shall have
the following functions:
10.1 Hear and decide opposition to the application for registration of marks;
cancellation of trademarks; subject to the provisions of Section 64,
cancellation of patents and utility models, and industrial designs; and petitions
for compulsory licensing of patents;
10.2 (a) Exercise original jurisdiction in administrative complaints for
violations of laws involving intellectual property rights; Provided, That
its jurisdiction is limited to complaints where the total damages claimed
are not less than Two hundred thousand pesos (P200,000): Provided,

futher, That availment of the provisional remedies may be granted in

accordance with the Rules of Court. Xxx
Xxx
(vi) The cancellation of any permit, license, authority, or registration
which may have been granted by the Office, or the suspension of the
validity thereof for such period of time as the Director of Legal Affairs may deem
reasonable which shall not exceed one (1) year;
Xxx
(viii) The assessment of damages;
Unquestionably, petitioners complaint, which seeks the cancellation of
the disputed mark in the name of respondent Sehwani, Incorporated,
and damages for violation of petitioners intellectual property rights,
falls within the jurisdiction of the IPO Director of Legal Affairs.
While Section 163 thereof vests in civil courts jurisdiction over
cases of unfair competition, nothing in the said section states
that the regular courts have sole jurisdiction over unfair
competition cases, to the exclusion of administrative bodies.
Sections 160 and 170, which are also found under Part III of the
Intellectual Property Code, recognize the concurrent jurisdiction
of civil courts and the IPO over unfair competition cases.
These two provisions read:
Section 160. Right of Foreign Corporation to Sue in Trademark or
Service Mark Enforcement Action. Any foreign national or juridical person
who meets the requirements of Section 3 of this Act and does not engage in
business in the Philippines may bring a civil or administrative action
hereunder for opposition, cancellation, infringement, unfair competition, or false
designation of origin and false description, whether or not it is licensed to do
business in the Philippines under existing laws.
Section 170. Penalties. Independent of the civil and administrative
sanctions imposed by law, a criminal penalty of imprisonment from two (2)
years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000) to
Two hundred thousand pesos (P200,000), shall be imposed on any person who is
found guilty of committing any of the acts mentioned in Section 155, Section168,
and Subsection169.1.
Based on the foregoing discussion, the IPO Director of Legal Affairs had
jurisdiction to decide the petitioners administrative case against
respondents and the IPO Director General had exclusive jurisdiction
over the appeal of the judgment of the IPO Director of Legal Affairs.

SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. and
Benita Frites were not using their registered trademark but that of In-n-Out
Burger. Sehwani and Benita Frites are also giving their products the general
appearance that would likely influence the purchasers to believe that their
products are that of In-N-Out Burger. The intention to deceive may be inferred
from the similarity of the goods as packed and offered for sale, and, thus, an
action will lie to restrain unfair competition. The respondents frauduulent

intention to deceive purchasers is also apparent in their use of the In-N-Out

Burger in business signages.
The essential elements of an action for unfair competition are (1) confusing
similarity in the general appearance of the goods and (2) intent to deceive the
public and defraud a competitor. The confusing similarity may or may not result
from similarity in the marks, but may result from other external factors in the
packaging or presentation of the goods. The intent to deceive and defraud may
be inferred from the similarity of the appearance of the goods as offered for sale
to the public. Actual fraudulent intent need not be shown.

IPO Director of Legal Affairs decision

In-N-Out Burger has legal capacity to sue in the Philippines because the
latter is a signatory of the Convention of Paris on Protection of Industrial
Property.
IN-N-OUT Burger, Inc. right to use its tradename and mark to the
exclusion of the others
Respondents use of the petitioners mark was made in good faith and
therefore they are not guilty of unfair competition.
IPO Director Generals Decision
Respondents are guilty of unfair competition.
The following are ordered to be paid to In-N-Out Burger, inc.
Damages in the amount of PHP 212, 574.28
Exemplary damages in the amount of PHP 500,000
Attorneys fees and expenses of litigation in the amount of PHP 500,000
CA Decision
Regular courts, and not the BLA-IPO, have sole jurisdiction to hear and
decide cases involving provisions of the IPC.

THE INTELLECTUAL PROPERTY OFFICE

Section 1.Title. - This Act shall be known as the "Intellectual Property Code of the
Philippines."
Sec. 2. Declaration of State Policy. - The State recognizes that an effective intellectual
and industrial property system is vital to the development of domestic and creative
activity, facilitates transfer of technology, attracts foreign investments, and ensures
market access for our products. It shall protect and secure the exclusive rights of
scientists, inventors, artists and other gifted citizens to their intellectual property and
creations, particularly when beneficial to the people, for such periods as provided in this
Act.
The use of intellectual property bears a social function. To this end, the State shall
promote the diffusion of knowledge and information for the promotion of national
development and progress and the common good.
It is also the policy of the State to streamline administrative procedures of registering
patents, trademarks and copyright, to liberalize the registration on the transfer of
technology, and to enhance the enforcement of intellectual property rights in the
Philippines. (n)
Sec. 3. International Conventions and Reciprocity. - Any person who is a national or who
is domiciled or has a real and effective industrial establishment in a country which is a
party to any convention, treaty or agreement relating to intellectual property rights or
the repression of unfair competition, to which the Philippines is also a party, or extends
reciprocal rights to nationals of the Philippines by law, shall be entitled to benefits to the
extent necessary to give effect to any provision of such convention, treaty or reciprocal
law, in addition to the rights to which any owner of an intellectual property right is
otherwise entitled by this Act. (n)
Sec. 4. Definitions.4.1. The term "intellectual property rights" consists of:
[a] Copyright and Related Rights;
[b] Trademarks and Service Marks;
[c] Geographic Indications;
[d] Industrial Designs;
[e] Patents;
[f] Layout-Designs (Topographies) of Integrated Circuits; and
[g] Protection of Undisclosed Information

(n) [TRIPS].

4.2. The term "technology transfer arrangements" refers to contracts or

agreements involving the transfer of systematic knowledge for the manufacture of
a product, the application of a process, or rendering of a service including
management contracts; and the transfer, assignment or licensing of all forms of

intellectual property rights, including licensing of computer software except

computer software developed for mass market.
4.3. The term "Office" refers to the Intellectual Property Office created by this
Act.
4.4 The term "IPO Gazette" refers to the gazette published by the Office under
this Act. (n)
Sec. 5. Functions of the Intellectual Property Office (IPO). 5.1. To administer and implement the State policies declared in this Act, there is
hereby created the Intellectual Property Office (IPO) which shall have the
following functions:
[a] Examine applications for grant of letters patent for inventions and
register utility models and industrial designs;
[b] Examine applications for the registration of marks, geographic
indication, integrated circuits;
[c] Register technology transfer arrangements and settle disputes
involving technology transfer payments covered by the provisions of Part
II, Chapter IX on Voluntary Licensing and develop and implement
strategies to promote and facilitate technology transfer;
[d] Promote the use of patent information as a tool for technology
development;
[e] Publish regularly in its own publication the patents, marks, utility
models and industrial designs, issued and approved, and the technology
transfer arrangements registered;
[f] Administratively adjudicate contested proceedings affecting intellectual
property rights; and
[g] Coordinate with other government agencies and the private sector
efforts to formulate and implement plans and policies to strengthen the
protection of intellectual property rights in the country.
5.2. The Office shall have custody of all records, books, drawings, specifications,
documents, and other papers and things relating to intellectual property rights
applications filed with the Office. (n)
Sec. 6. The Organizational Structure of the IPO. - 6.1. The Office shall be headed by a
Director General who shall be assisted by two (2) Deputies Director General.
6.2. The Office shall be divided into six (6) Bureaus, each of which shall be
headed by a Director and assisted by an Assistant Director. These Bureaus are:
[a] The Bureau of Patents;
[b] The Bureau of Trademarks;
[c] The Bureau of Legal Affairs;

[d] The Documentation, Information and Technology Transfer Bureau;

[e] The Management Information System and EDP Bureau; and
[f] The Administrative, Financial and Personnel Services Bureau.
6.3. The Director General, Deputies Director General, Directors and Assistant
Directors shall be appointed by the President, and the other officers and
employees of the Office by the Secretary of Trade and Industry, conformably with
and under the Civil Service Law. (n)
Sec. 7. The Director General and Deputies Director General. 7.1. Functions. - The Director General shall exercise the following powers and
functions:
[a] Manage and direct all functions and activities of the Office, including
the promulgation of rules and regulations to implement the objectives,
policies, plans, programs and projects of the Office: Provided, That in the
exercise of the authority to propose policies and standards in relation to
the following: (1) the effective, efficient, and economical operations of the
Office requiring statutory enactment; (2) coordination with other agencies
of government in relation to the enforcement of intellectual property
rights; (3) the recognition of attorneys, agents, or other persons
representing applicants or other parties before the Office; and (4) the
establishment of fees for the filing and processing of an application for a
patent, utility model or industrial design or mark or a collective mark,
geographic indication and other marks of ownership, and for all other
services performed and materials furnished by the Office, the Director
General shall be subject to the supervision of the Secretary of Trade and
Industry;
[b] Exercise exclusive appellate jurisdiction over all decisions rendered by
the Director of Legal Affairs, the Director of Patents, the Director of
Trademarks, and the Director of the Documentation, Information and
Technology Transfer Bureau. The decisions of the Director General in the
exercise of his appellate jurisdiction in respect of the decisions of the
Director of Patents, and the Director of Trademarks shall be appealable to
the Court of Appeals in accordance with the Rules of Court; and those in
respect of the decisions of the Director of Documentation, Information and
Technology Transfer Bureau shall be appealable to the Secretary of Trade
and Industry; and
[c] Exercise original jurisdiction to resolve disputes relating to the terms of
a license involving the authors right to public performance or other
communication of his work. The decisions of the Director General in these
cases shall be appealable to the Secretary of Trade and Industry.
7.2. Qualifications.- The Director General and the Deputies Director General must
be natural born citizens of the Philippines, at least thirty-five (35) years of age on
the day of their appointment, holders of a college degree, and of proven
competence, integrity, probity and independence: Provided, That the Director
General and at least one (1) Deputy Director General shall be members of the
Philippine Bar who have engaged in the practice of law for at least ten (10) years:
Provided further, That in the selection of the Director General and the Deputies
Director General, consideration shall be given to such qualifications as would

result, as far as practicable, in the balanced representation in the Directorate

General of the various fields of intellectual property.
7.3. Term of Office. - The Director General and the Deputies Director General
shall be appointed by the President for a term of five (5) years and shall be
eligible for reappointment only once: Provided, That the first Director General
shall have a first term of seven (7) years. Appointment to any vacancy shall be
only for the unexpired term of the predecessor.
7.4. The Office of the Director General. - The Office of the Director General shall
consist of the Director General and the Deputies Director General, their
immediate staff and such Offices and Services that the Director General will set
up to support directly the Office of the Director General. (n)
Sec. 8. The Bureau of Patents. - The Bureau of Patents shall have the following
functions:
8.1

Search and examination of patent applications and the grant of patents;

8.2

Registration of utility models, industrial designs, and integrated circuits; and

8.3 Conduct studies and researches in the field of patents in order to assist the
Director General in formulating policies on the administration and examination of
patents. (n)
Sec. 9. The Bureau of Trademarks. - The Bureau of Trademarks shall have the following
functions:
9.1 Search and examination of the applications for the registration of marks,
geographic indications and other marks of ownership and the issuance of the
certificates of registration; and
9.2 Conduct studies and researches in the field of trademarks in order to assist
the Director General in formulating policies on the administration and examination
of trademarks. (n)
Sec. 10. The Bureau of Legal Affairs. - The Bureau of Legal Affairs shall have the
following functions:
10.1. Hear and decide opposition to the application for registration of marks;
cancellation of trademarks; subject to the provisions of Section 64, cancellation of
patents, utility models, and industrial designs; and petitions for compulsory
licensing of patents;
10.2. (a) Exercise original jurisdiction in administrative complaints for violations
of laws involving intellectual property rights: Provided, That its jurisdiction is
limited to complaints where the total damages claimed are not less than Two
hundred thousand pesos (P200,000): Provided, further, That availment of the
provisional remedies may be granted in accordance with the Rules of Court. The
Director of Legal Affairs shall have the power to hold and punish for contempt all
those who disregard orders or writs issued in the course of the proceedings. (n)
(b) After formal investigation, the Director for Legal Affairs may impose one (1)
or
more
of
the
following
administrative
penalties:

(i) The issuance of a cease and desist order which shall specify the acts
that the respondent shall cease and desist from and shall require him to
submit a compliance report within a reasonable time which shall be fixed
in the order;
(ii) The acceptance of a voluntary assurance of compliance or
discontinuance as may be imposed. Such voluntary assurance may include
one or more of the following:
(1) An assurance to comply with the provisions of the intellectual
property law violated;
(2) An assurance to refrain from engaging in unlawful and unfair
acts and practices subject of the formal investigation;
(3) An assurance to recall, replace, repair, or refund the money
value of defective goods distributed in commerce; and
(4) An assurance to reimburse the complainant the expenses and
costs incurred in prosecuting the case in the Bureau of Legal
Affairs.
The Director of Legal Affairs may also require the respondent to
submit periodic compliance reports and file a bond to guarantee
compliance of his undertaking;
(iii) The condemnation or seizure of products which are subject of the
offense. The goods seized hereunder shall be disposed of in such manner
as may be deemed appropriate by the Director of Legal Affairs, such as by
sale, donation to distressed local governments or to charitable or relief
institutions, exportation, recycling into other goods, or any combination
thereof, under such guidelines as he may provide;
(iv) The forfeiture of paraphernalia and all real and personal properties
which have been used in the commission of the offense;
(v) The imposition of administrative fines in such amount as deemed
reasonable by the Director of Legal Affairs, which shall in no case be less
than Five thousand pesos (P5,000) nor more than One hundred fifty
thousand pesos (P150,000). In addition, an additional fine of not more
than One thousand pesos (P1,000) shall be imposed for each day of
continuing violation;
(vi) The cancellation of any permit, license, authority, or registration which
may have been granted by the Office, or the suspension of the validity
thereof for such period of time as the Director of Legal Affairs may deem
reasonable which shall not exceed one (1) year;
(vii) The withholding of any permit, license, authority, or registration which
is being secured by the respondent from the Office;
(viii) The assessment of damages;
(ix) Censure; and
(x) Other analogous penalties or sanctions. (Secs. 6, 7, 8, and 9,
Executive Order No. 913 [1983]a)

10.3. The Director General may by Regulations establish the procedure to govern
the implementation of this Section. (n)
Sec. 11. The Documentation, Information and Technology Transfer Bureau. - The
Documentation, Information and Technology Transfer Bureau shall have the following
functions:
11.1. Support the search and examination activities of the Office through the
following activities:
(a) Maintain and upkeep classification systems whether they be national or
international such as the International Patent Classification (IPC) system;
(b) Provide advisory services for the determination of search patterns;
(c) Maintain search files and search rooms and reference libraries; and
(d) Adapt and package industrial property information.
11.2. Establish networks or intermediaries or regional representatives;
11.3. Educate the public and build awareness on intellectual property through the
conduct of seminars and lectures, and other similar activities;
11.4. Establish working relations with research and development institutions as
well as with local and international intellectual property professional groups and
the like;
11.5 Perform state-of-the-art searches;
11.6 Promote the use of patent information as an effective tool to facilitate the
development of technology in the country;
11.7. Provide technical, advisory, and other services relating to the licensing and
promotion of technology, and carry out an efficient and effective program for
technology transfer; and
11.8. Register technology transfer arrangements, and settle disputes involving
technology transfer payments. (n)
Sec. 12. The Management Information Services and EDP Bureau. - The Management
Information Services and EDP Bureau shall:
12.1. Conduct automation planning, research and development, testing of
systems, contracts with firms, contracting, purchase and maintenance of
equipment, design and maintenance of systems, user consultation, and the like;
and
12.2. Provide management information support and service to the Office.

(n)

Sec. 13. The Administrative, Financial and Human Resource Development Service
Bureau. 13.1. The Administrative Service shall:
(a) Provide services relative to procurement and allocation of supplies and
equipment, transportation, messengerial work, cashiering, payment of

salaries and other Office's obligations, office maintenance, proper safety

and security, and other utility services; and comply with government
regulatory requirements in the areas of performance appraisal,
compensation and benefits, employment records and reports;
(b) Receive all applications filed with the Office and collect fees therefor;
and
(c) Publish patent applications and grants, trademark applications, and
registration of marks, industrial designs, utility models, geographic
indication, and lay-out designs of integrated circuits registrations.
13.2. The Patent and Trademark Administration Services shall perform the
following functions among others:
(a) Maintain registers of assignments,
bibliographic on patents and trademarks;

mergings,

licenses,

and

(b) Collect maintenance fees, issue certified copies of documents in its

custody and perform similar other activities; and
(c) Hold in custody all the applications filed with the office, and all patent
grants, certificate of registrations issued by the office, and the like.
13.3. The Financial Service shall formulate and manage a financial program to
ensure availability and proper utilization of funds; provide for an effective
monitoring system of the financial operations of the Office; and
13.4. The Human Resource Development Service shall design and implement
human resource development plans and programs for the personnel of the Office;
provide for present and future manpower needs of the organization; maintain
high morale and favorable employee attitudes towards the organization through
the continuing design and implementation of employee development programs. (n)
Sec. 14. Use of Intellectual Property Rights Fees by the IPO. 14.1. For a more effective and expeditious implementation of this Act, the
Director General shall be authorized to retain, without need of a separate
approval from any government agency, and subject only to the existing
accounting and auditing rules and regulations, all the fees, fines, royalties and
other charges, collected by the Office under this Act and the other laws that the
Office will be mandated to administer, for use in its operations, like upgrading of
its facilities, equipment outlay, human resource development, and the acquisition
of the appropriate office space, among others, to improve the delivery of its
services to the public. This amount, which shall be in addition to the Office's
annual budget, shall be deposited and maintained in a separate account or fund,
which may be used or disbursed directly by the Director General.
14.2. After five (5) years from the coming into force of this Act, the Director
General shall, subject to the approval of the Secretary of Trade and Industry,
determine if the fees and charges mentioned in Subsection 14.1 hereof that the
Office shall collect are sufficient to meet its budgetary requirements. If so, it shall
retain all the fees and charges it shall collect under the same conditions indicated
in said Subsection 14.1 but shall forthwith, cease to receive any funds from the
annual budget of the National Government; if not, the provisions of said
Subsection 14.1 shall continue to apply until such time when the Director
General, subject to the approval of the Secretary of Trade and Industry, certifies

that the above-stated fees and charges the Office shall collect are enough to fund
its operations. (n)
Sec. 15. Special Technical and Scientific Assistance. - The Director General is empowered
to obtain the assistance of technical, scientific or other qualified officers and employees
of other departments, bureaus, offices, agencies and instrumentalities of the
Government, including corporations owned, controlled or operated by the Government,
when deemed necessary in the consideration of any matter submitted to the Office
relative to the enforcement of the provisions of this Act. (Sec. 3, R. A. No. 165a)
Sec. 16. Seal of Office. - The Office shall have a seal, the form and design of which shall
be approved by the Director General. (Sec. 4, R. A. No. 165a)
Sec. 17. Publication of Laws and Regulations. - The Director General shall cause to be
printed and make available for distribution, pamphlet copies of this Act, other pertinent
laws, executive orders and information circulars relating to matters within the jurisdiction
of the Office. (Sec. 5, R. A. No. 165a)
Sec. 18. The IPO Gazette. - All matters required to be published under this Act shall be
published in the Office's own publication to be known as the IPO Gazette. (n)
Sec. 19. Disqualification of Officers and Employees of the Office. - All officers and
employees of the Office shall not apply or act as an attorney or patent agent of an
application for a grant of patent, for the registration of a utility model, industrial design
or mark nor acquire, except by hereditary succession, any patent or utility model, design
registration, or mark or any right, title or interest therein during their employment and
for one (1) year thereafter. (Sec. 77, R. A. No. 165a)