Trade Secrets 2024 Comparisons

There is no specific law protecting trade secrets (also known as undisclosed information) in the Philippines, though there are different Philippine statutes that apply to the protection of trade secrets and that penalise the revelation of such trade secrets.

Article 4(g) of the Republic Act 8293 as well as the Intellectual Property Code of the Philippines includes “protection of undisclosed information” or trade secrets under the term “intellectual property rights”. 

Article 40(f) of the Republic Act 7394 as well as the Consumer Act of the Philippines prohibit “the using by any person to his own advantage, or revealing, other than to the Department or to the courts when relevant in any judicial proceeding under this Act, any information concerning any method or process which as a trade secret is entitled to protection”.

Article 292 of the Revised Penal Code penalises the revelation of industrial secrets, as follows: “The penalty of prision correccional in its minimum and medium periods and a fine not exceeding 500 pesos shall be imposed upon the person in charge, employee or workman of any manufacturing or industrial establishment who, to the prejudice of the owner thereof, shall reveal the secrets of the industry of the latter.”

Under Rule 27 of the Rules of Court, a court, upon motion, may order the production or inspection of documents or things which are not privileged, and which constitute evidence material to any matter involved in the action.

In the case of Air Philippines Corp v Pennswell (GR No 172835, 13 December 2007), the Supreme Court had occasion to define what a trade secret is: a plan or process, tool, mechanism or compound known only to its owner and those of their employees with whom it is necessary to confide.

The definition also extends to a secret formula or process not patented but known only to certain individuals using it in compounding some article of trade having a commercial value. A trade secret may consist of any formula, pattern, device or compilation of information that:

-is used in one’s business; and

-gives the employer an opportunity to obtain an advantage over competitors who do not possess the information.

Generally, a trade secret is a process or device intended for continuous use in the operation of the business – for example, a machine or formula – but can be a price list or catalogue, or a specialised customer list.

In another case, the Supreme Court upheld the validity of the policy of a pharmaceuticals company prohibiting its employees from marrying employees of any competitor company, on the rationalisation that the company had a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programmes and information from competitors (Duncan Association of Detailman-PTGWO v Glaxo Wellcome Philippines, Inc, GR No 162994, 17 September 2004).

Based on existing Philippine laws and jurisprudence, any information that can fall within the definition of a trade secret can be protected. In Air Philippines v Pennswell, the Supreme Court adopted the following factors to determine whether information is a trade secret:

• the extent to which the information is known outside the employer’s business;
• the extent to which the information is known by employees and others involved in the business;
• the extent of measures taken by the employer and competitors;
• the value of the information to the employer and competitors;
• the amount of effort or money expended by the company in developing the information; and
• the extent to which the information could be easily or readily obtained through an independent source.

There is very little case law in the Philippines involving trade secrets. The following are some examples, including applicable statutes.

Air Philippines v Pennswell (GR No 172835, 13 December 2007): in this case, the composition, formulation and ingredients of the subject lubricant were declared by the Supreme Court as a trade secret and therefore as privileged against compulsory disclosure.

Universal Food Corporation (UFC) v Court of Appeals, Magdalo Victoriano Francisco Sr (GR L-29155, 13 May 1970): in this case, the Supreme Court ordered UFC to return and restore to the plaintiff (Magdalo Victoriano Francisco, Sr) the right to the use of his Mafran sauce trade mark and formula. UFC and all its assignees and successors were permanently enjoined, effective immediately, from using in any manner said Mafran sauce trade mark and formula.

Tiu v Platinum Plans Phils (GR No 163512, 28 February 2007). The petitioner Tiu was re-hired by the respondent Platinum (which was engaged in the pre-need business) as senior assistant vice-president. The employment contract carried a non-involvement clause which prevented her from being employed or engaged in the pre-need business, whether directly or indirectly, for a period of two years from separation of employment, and breaching this rendered the employee liable for PHP100,000 (about USD1,800).

In 1995, Tiu stopped reporting for work, and it turned out that she had become vice-president of a corporation that was also in the pre-need industry. Platinum sued Tiu for damages for violating the non-involvement clause. Tiu countered that the non-involvement clause was unenforceable as being against public order or public policy. Platinum argued that the inclusion of the two-year non-involvement clause in the contract of employment was reasonable and necessary since her job gave her access to the company’s confidential marketing strategies.

The Supreme Court held that a non-involvement clause is not necessarily void for being in restraint of trade, as long as there are reasonable limitations as to time, trade and place. In this case, the non-involvement clause had a time limit (two years from the time employment ended) and was also limiting as to trade since it only prohibited the petitioner from engaging in any pre-need business similar to Platinum.

More significantly, since Tiu was the senior asstistant vice-president and territorial operations head in charge of Platinum’s Hong Kong and ASEAN operations, she had been privy to confidential and highly sensitive marketing strategies of the respondent’s business. To allow her to engage in a rival business soon after she left would make Platinum’s trade secrets vulnerable, especially in a highly competitive marketing environment. In summary, the authors find the non-involvement clause to be not contrary to public welfare and not greater than affordably necessary.

As mentioned previously, in Duncan Association of Detailman-PTGWO v Glaxo Wellcome Philippines, Inc, GR No 162994, 17 September 2004, the Supreme Court upheld the validity of the policy of a pharmaceuticals company prohibiting its employees from marrying employees of any competitor company, on the rationalisation that the company had a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programmes and information from competitors.

Section 12 of the Republic Act No 6969 and the Toxic Substances and Hazardous and Nuclear Waste Control Act of 1990 provide for the following as confidential subject matter: “production or sales figures or methods, production or processes unique to such manufacturer, processor or distributor, or [that] would otherwise tend to adversely affect the competitive position of such manufacturer, processor or distributor.”

The Securities Regulations Code Rule 66.3.2 – Amended Implementing Rules and Regulations states that confidential information includes:

• trade secrets;
• commercial or financial information prepared by analysts within or outside a company for strategic purposes; and
• similar information that raises concerns regarding business confidentiality.

See 1.2 What Is Protectable as a Trade Secret.

As stated previously, in Duncan v Glaxo (GR No 162994, 17 September 2004), the Supreme Court upheld the validity of the policy of a pharmaceuticals company prohibiting its employees from marrying employees of any competitor company, on the rationalisation that the company had a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programmes and information from competitors. In its decision, the Court held the following:

“The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognises the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth. Indeed, while our laws endeavour to give life to the constitutional policy on social justice and the protection of labour, it does not mean that every labour dispute will be decided in favour of the workers. The law also recognises that management has rights which are also entitled to respect and enforcement in the interest of fair play.”

The availability of protection for trade secrets is not affected if the information was disclosed to the employee in the course of their employment, and if the employee was made aware that it was a trade secret and needed to be protected. Article 292 of the Revised Penal Code penalises the revelation of the employee to other persons of the secrets of their employer.

In Cocoland v National Labour Relations Commission (GR No 98458, 17 July 1996), the Supreme Court disregarded the claim of the employer Cocoland that its technology was a trade secret. Here, it was actually the dismissed employee who established in the course of the proceedings that the purported secret propagation technique was no longer a secret, as it had attained wide currency via government publications and leaflets. As such, the Court declared that the employee’s termination on the grounds of unauthorised disclosure of trade secrets was unfounded and without valid cause.

No specific law in the Philippines provides protection for trade secrets unique to computer software and/or technology. However, offences against the confidentiality, integrity and availability of computer data and systems may be penalised under the Republic Act 10175 or the Cybercrime Prevention Act of 2012.

Trade secrets may be protected through non-disclosure agreements (NDAs) or confidentiality agreements. These are basically contractual in nature, and as such, the period of validity or protection will depend on the period stated in the NDA. Such NDA may also indicate that the confidentiality be maintained even after the termination of an employee.

In the Philippines, trade secrets do not require registration or licensing. An owner that granted a licence to use such trade secret may utilise an NDA or a confidentiality agreement to maintain or protect its trade secret.

Certain types of intellectual property (IP) rights, such as patents and trade marks, may be protected through registration with the Intellectual Property Office of the Philippines (IPOPHL). However, trade secrets cannot be registered.

Complaints concerning violation of IP rights may be filed either with the IPOPHL or the regional trial court. Conversely, breach of an NDA covering trade secrets may result in claims for damages, monetary claims, termination from employment or even criminal complaints, which should be filed with the regular courts. 

It is possible for a plaintiff to assert their rights over trade secrets along with other IP rights – for example, regarding patent or copyright infringement.

A claim for damages for breach of fiduciary duty or tortious interference may be filed against the obligor if such acts resulted in pecuniary loss to the obligee (Article 2199 of the Civil Code). If there is no proof of pecuniary loss, a claim for other types of damages such as moral (Article 2217 of the Civil Code) or nominal (Article 2221 of the Civil Code) damages may be filed against the obligor.

Revelation of industrial secrets is penalised under Article 292 of the Revised Penal Code, which states as follows:

“The penalty of prision correccional (six months and one day to six years) in its minimum and medium periods and a fine not exceeding 500 pesos shall be imposed upon the person in charge, employee or workman of any manufacturing or industrial establishment who, to the prejudice of the owner thereof, shall reveal the secrets of the industry of the latter.” 

Since every person criminally liable for a felony is also civilly liable (Article 100, Revised Penal Code), a trade secret owner may pursue both civil and criminal claims.

Violation of Article 40(f) of the Consumer Act (revelation of trade secrets) is penalised as follows:

”Any person who violates any of the provisions of Article 40 hereof shall, upon conviction, be subject to imprisonment of not less than one year but not more than five years, or a fine of not less than five thousand pesos but not more than ten thousand pesos, or both such imprisonment and fine, in the discretion of the court.”

If the trade secret owner can prove pecuniary loss due to misappropriation that happened in another country, they can still file a claim for damages here as long as they can prove that they have a juridical personality for filing a case in the Philippines (eg, a natural person – a Filipino citizen, or a corporation with Philippine nationality).

Although there is no available jurisprudence or statutes which cover trade secret misappropriation in the Philippines, the required elements can be based on the elements of claims for damages and the crime of revelation of industrial secrets.

The elements for a claim of actual damages are:

• the fact of the injury or loss; and
• the actual amount of loss, with a reasonable degree of certainty premised on competent proof and the best evidence available.

The elements of Article 292 on revelation of industrial secrets include that:

• the offender is an employee or officer in charge of the industrial establishment;
• the industrial establishment has a secret which the offender has learned;
• the offender reveals the secret; and
• prejudice was caused to the owner.

It is important to prove that there was loss, injury or prejudice caused to the owner of the trade secret.

If the trade secret misappropriation involves an employee of the owner, provisions of the Labour Code may also apply, such as regards:

• termination of an employee on the grounds of serious misconduct;
• wilful disobedience with the lawful orders of the employer (Article 297(a)); or
• fraud or wilful breach by the employee of the trust reposed in them by the employer (Article 297(c)).

There is no particular obligation owed by the employee to the employer in such case, aside from the damages that may be caused to the employer/trade secret owner.

A joint venture was defined by the Supreme Court (see Valdes v La Colina Development, GR No 208140, 12 July 2021) as akin to a partnership – the essential elements of which are as follows:

• an agreement to contribute money, property or industry to a common fund; and
• an intention to divide the profits among the contracting parties.

Thus, the laws on partnerships will apply to joint ventures. Although there is no specific reference to trade secrets in laws governing partnerships or joint ventures, or in jurisprudence, it can be assumed that laws governing obligations and property involving joint ventures/partnerships will also govern obligations between joint venturers with respect to trade secrets. 

There is no specific statue that covers industrial espionage involving trade secrets in the Philippines. Thus, any damages incurred from such espionage may be filed under claims for damages or criminal complaints such as theft, and may be filed with the regular courts.

There are currently no recognised best practices in the Philippines for safeguarding trade secrets.

Employees usually sign a non-compete or confidentiality agreement during the onboarding process. It is not common for them to sign such confidentiality agreement during an exit process. Many employers would also enquire as to the nature of the new position that the departing employee will undertake.

Courts may or may not recognise the doctrine of “inevitable disclosure” (more commonly known as the “non-compete clause” in the Philippines) in employment contracts, depending on the reasonableness of such clause. This issue was discussed by the Supreme Court in Rivera v Solidbank (GR No 163269, 19 April 2006 ), where the Court explained that, in determining whether the contract is reasonable or not, the trial court should consider the following factors:

• whether the covenant protects a legitimate business interest of the employer;
• whether the covenant creates an undue burden on the employee;
• whether the covenant is injurious to the public welfare;
• whether the time and territorial limitations contained in the covenant are reasonable; and
• whether the restraint is reasonable from the standpoint of public policy. 

In the Philippines, there is currently no recognised best practice for onboarding programmes that involve minimising trade secret misappropriation. An approach taken by some employers is to ask the potential employee whether they have signed any NDA, and if so whether it is still in force.

Since theft is a crime in the Philippines, civil liability arising from such crime is deemed as instituted with the criminal action for the theft (Rule 111, Rules of Court). As such, to initiate a criminal/civil action for theft of trade secrets, a formal complaint with the police is necessary. The blotter issued by the police, along with other pieces of evidence related to the theft, must be gathered and preserved.

A complaint should thereafter be filed with the prosecutor’s office which has jurisdiction over the area where the theft took place. The prosecutor will then conduct a preliminary investigation. If the prosecutor finds sufficient merits, it shall then issue a resolution and file information with the proper court.

If the trade secret claim is based on claims of damages, the prescription period for filing a claim for damages is four years (Article 1146, Civil Code).

The owner should gather all their evidence and prepare a complaint with the assistance of a counsel. The complaint for damages should then be filed with the special commercial court (if available) within the territory of the owner, or with the proper courts, depending on the amount being claimed by the owner.

Some regional trial courts exist that are designated as special commercial courts, and which are empowered to hear and decide on IP rights violations.

Trade secrets claims are not common in the Philippines. Like any other claim, there must be concrete evidence of the loss or injury caused to the owner by the misappropriation of the trade secret before such a claim may be filed.

Special commercial courts in Quezon City, Maila, Makati and Pasig have the authority to act on applications for the issuance of writs of search and seizure in civil actions regarding violations of the IP Code, which will be enforceable nationwide (Rule 2, Section 2, AM No 10-3-10-SC, Rules of Procedure for Intellectual Property Rights Cases).

Modes of discovery – such as interrogatories, requests for admission, and production or inspection of documents or things – may be availed of not later than 30 days from the joinder of the issues of the case (Rule 5, AM No 10-3-10-SC, Rules of Procedure for Intellectual Property Rights Cases).

Requests for closed-door hearings in cases involving trade secrets or undisclosed information may be set forth by the parties in their pretrial brief (Rule 6, Section 1, AM No 10-3-10-SC, Rules of Procedure for Intellectual Property Rights Cases).

Although there are no specific defences for trade secret litigation, in one case the Supreme Court held that the widespread knowledge of a supposedly secret technology rendered the claim of the petitioner without basis. See 1.7 Independent Discovery.

Dispositive motion is not available in the Philippines. However, parties will need to undergo mediation proceedings prior to the trial. If the parties come to an amicable settlement during mediation, they do not need to go through with the trial.

Contingent fee arrangement are valid in the Philippines (see Taganas v National Labour Relations Commission, GR No 118746, 7 September 1995). Aside from the professional fees of lawyers, the filing fee for the complaint will also need to be paid by the complainant. Such filing fees vary depending on the amount of damages being claimed.

All actions filed before Philippine courts are decided by a judge. Administrative actions filed before administrative agencies performing quasi-judicial functions (such as the IPOPHL for instance) are decided by an adjudication or hearing officer at the first level.

Civil Cases Before the Special Commercial Courts

The Rules of Procedure for Intellectual Property Rights Cases are observed by the regional trial courts designated by the Supreme Court as special commercial courts. Said courts have jurisdiction over commercial cases, including IP violation cases, such as unfair competition.

Actions are initiated by the filing of a verified complaint, which must contain a concise statement of the ultimate facts constituting the complainant’s cause or causes of action, and must specify the relief(s) sought. Judicial affidavits submitted with the complaint should state only facts of direct personal knowledge of the affiants which are admissible in evidence, and should also show the competence of the affiants to testify to the matters stated therein.

The defendant must file their answer to the complaint within 15 days from service of summons.

A party can avail of any of the modes of discovery not later than 30 days from the joinder of issues. Any mode of discovery may be objected to on the ground that the matter requested is undisclosed information or privileged information, among other grounds provided by the law.

The case will then be set for pretrial and the parties will be directed to submit their respective pretrial briefs. In their pretrial briefs, the parties may set forth requests for closed-door hearings in cases involving trade secrets, undisclosed information and patents, among other matters.

Upon the parties’ appearance at the pretrial, the court shall order them to appear before the Philippine Mediation Center in accordance with mediation rules of the Supreme Court. If the parties fail to settle the case after mediation, the pairing court shall conduct judicial dispute resolution (JDR) conferences upon request of the court handling the case. If either mediation or JDR fails, the case will be returned to the court for the pretrial.

Where the case is submitted for decision immediately after pretrial, the court shall render judgment within 45 days.

If the court deems it necessary to hold trial, the court shall include in the pretrial order the schedule of hearings to be conducted expeditiously and completed not later than 60 days from the date of the initial trial. The judicial affidavits shall serve as the direct testimonies of the witnesses during trial, subject to cross-examination by the adverse party.

Immediately after an oral ruling on the last offer of evidence, the court shall order the parties to simultaneously submit their respective draft decisions within 30 days.

Within 60 days after receipt of the draft decision of the parties, the court shall render judgment.

Unless restrained by a higher court, the judgment of the court shall be executory, even pending appeal, under such terms and conditions as the court may prescribe.

Administrative Actions Before the IPOPHL’s Bureau of Legal Affairs (BLA)

Administrative actions for unfair competition before the BLA follow a similar trial procedure. However, since IP violation actions before the BLA are administrative in nature, they are not strictly governed by technical rules of procedure and evidence.

Any party may present the testimony of an expert witness. According to the Revised Rules on Evidence, as amended by AM No 19-08-15 SC, the opinion of a witness may be received in evidence when on a matter requiring special knowledge, skill, experience, training or education, which they are shown to possess.

The testimony of an expert witness is presented by the submission of said witness’s judicial affidavit as forming part of the verified complaint or the defendant’s verified answer. The affidavit must be in a question-and-answer format numbered consecutively, and must show the competence of the witness to testify to the matters stated therein. The judicial affidavit shall serve as the direct testimony of the expert witness during trial, subject to cross-examination by the adverse party.

According to Rule 133, Section 5 of AM No 19-08-15 SC, in any case where the opinion of an expert witness is received in evidence, the court has a wide discretion in determining the weight to be given to such opinion, and for that purpose may consider the following:

• whether the opinion is based upon sufficient facts or data;
• whether it is the product of reliable principles and methods;
• whether the witness has applied the principles and methods reliably to the facts of the case; and
• such other factors as the court may deem helpful for making the determination.

A preliminary injunction may be granted by the courts and the BLA of the IPOPHL at any stage of an action or proceeding, prior to the judgment or final order, requiring a party, court, agency or person to refrain from a particular act or acts. It may also require the performance of a particular act or acts, in which case it shall be known as a preliminary mandatory injunction. It persists until it is dissolved or until the termination of the action without the court issuing a final injunction.

A preliminary injunction may be granted when it is established that:

• the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually;
• the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or
• a party or any person is doing or threatening, is attempting to do, or is procuring or suffering to be done some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.

Unless exempted by the court, a preliminary injunction or temporary restraining order may be granted only when the applicant files with the court (where the action or proceeding is pending) a bond executed to the party or person enjoined, in an amount to be fixed by the court, to the effect that the applicant will pay to such party or person all damages which they may sustain by reason of the injunction or temporary restraining order if the court should finally decide that the applicant was not entitled thereto. Upon approval of the requisite bond, a writ of preliminary injunction shall be issued.

See Rule 58, 2019 Amendments to the 1997 Rules of Civil Procedure; Rule 5, IPOPHL Rules and Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property Rights.

Although the IP Code includes the protection of undisclosed information as an IP right, it does not provide for a relief or remedy in the case of infringement of a trade secret or undisclosed information. In the IP Code, civil actions for infringement are available to:

• patentees;
• anyone possessing any right, title or interest in and to the patented invention; and
• owners of a registered trade mark.

However, the unlawful use of trade secrets or undisclosed information may fall within unfair competition, which the IP Code defines as being committed by any person who employs deception or any other means contrary to good faith by which they pass off the goods manufactured by them or in which they deal, or their business or services, for those of the one having established such goodwill, or who commits any acts calculated to produce said result.

Since trade secrets are commonly protected by contract, a party whose trade secrets have been unlawfully disclosed in violation of contractual stipulations may file a civil action for breach of contract and damages. Damages may be:

• actual or compensatory;
• moral;
• nominal;
• temperate or moderate;
• liquidated; or
• exemplary or corrective.

Since actual damages are awarded to compensate for a pecuniary loss, the injured party is required to prove two things:

• the fact of the injury or loss; and
• the actual amount of loss with a reasonable degree of certainty premised upon competent proof and on the best evidence available (see Yamauchi v Suñiga, GR No 199513, 18 April 2018).

Nominal damages are recoverable where a legal right is technically violated, and must be vindicated against an invasion that has produced no actual present loss of any kind or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. See Seven Brothers Shipping Corporation v DMC-Constructions Resources, Inc, GR No 193914, 26 November 2014.

Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be provided with certainty. Temperate damages must be reasonable under the circumstances.

Liquidated damages are those agreed upon by the parties to a contract, to be paid in the case of breach thereof. When the breach of the contract committed by the defendant is not the one contemplated by the parties when agreeing upon the liquidated damages, the law shall determine the measure of damages, and not the stipulation.

Moral damages are recoverable for breach of contract where the breach was wanton, reckless, malicious or in bad faith, oppressive or abusive. However, moral damages are improperly awarded in the absence of a specific finding and pronouncement from the trial court that a party acted in such manner. See FAJ Construction and Development Corp v Saulog, GR No 200759, 25 March 2015.

Exemplary or corrective damages are imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.

A successful trade secret claimant may be granted an injunction.

The Supreme Court has held that the inventor, discoverer or possessor of a trade secret or similar innovation has rights therein which may be treated as property, and ordinarily an injunction will be granted to prevent the disclosure of the trade secret by one who obtained the information “in confidence” or through a “confidential relationship”. See Air Philippines Corporation v Pennswell, Inc, GR No 172835, 13 December 2007.

To be entitled to the injunctive writ, the petitioner must show that:

• there exists a clear and unmistakable right to be protected;
• this right is directly threatened by the act sought to be enjoined;
• the invasion of the right is material and substantial; and
• there is an urgent and paramount necessity for the writ to prevent serious and irreparable damage.

See AMA Land, Inc v Wack Wack Residents’ Association, Inc, GR No 202342, 19 July 2017.

As a general rule, the parties may stipulate the recovery of attorneys’ fees. In the absence on such stipulation, Article 2208 enumerates the instances when attorneys’ fees and litigation expenses (other than judicial costs) may be recovered – ie:

• when exemplary damages are awarded;
• when the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect their interest;
• in criminal cases of malicious prosecution against the plaintiff;
• in the case of a clearly unfounded civil action or proceeding against the plaintiff;
• where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;
• in actions for legal support;
• in actions for the recovery of wages of household helpers, labourers and skilled workers;
• in actions for indemnity under workmen’s compensation and employer’s liability laws;
• in a separate civil action to recover civil liability arising from a crime;
• when at least double judicial costs are awarded; and
• in any other case where the court deems it just and equitable that attorneys’ fees and litigation expenses should be recovered.

In all cases, the attorneys’ fees and litigation expenses must be reasonable.

The Supreme Court has held that an award of attorneys’ fees demands factual, legal and equitable justification to avoid speculation and conjecture surrounding the granting thereof. Owing to the special nature of the awarding of attorneys’ fees, a rigid standard is imposed on the courts before these fees can be granted. As such, it is imperative that the court’s decisions clearly and distinctly set forth the basis for the awarding thereof, and it is not enough that they merely state the amount of the grant in the dispositive portion of their decisions.

Since the award of attorneys’ fees is an exception rather than the general rule, there must be compelling legal reasons for bringing the case within the exceptions provided under Article 2208 of the Civil Code to justify the award. See Philippine National Construction Corporation v APAC Marketing Corporation, GR No 190957, 5 June 2013.

As described in 7.4 Attorneys’ Fees and similar thereto, in the absence of stipulation, litigation expenses cannot be recovered except under the circumstances enumerated in Section 2208 of the Civil Code. In all cases, litigation expenses must be reasonable.

Any party may appeal a judgment or final order of the courts and of the BLA.

Actions With the BLA

Decisions or final orders rendered by the Director of the BLA may be appealed to the Director General, and this is effected by filing an appeal memorandum within 30 days from notice of an appealed decision or final order. The appeal shall be perfected by:

• filing the appeal memorandum in the ODG;
• proof of service of a copy on the appellee and the BLA’s Director; and
• proof of payment of the appeal fee and other applicable fees.

Interlocutory orders shall not be appealable to the Director General.

The Director General’s decision or order shall be final and executory 15 days after receipt of a copy thereof by the parties, unless appealed to the Court of Appeals in the case of appeals of BLA decisions or final orders. No motion for consideration of the decision or order of the Director General shall be allowed.

Actions With the Special Commercial Court

All decisions and final ordersrendered by the special commercial court shall be appealable to the Court of Appeals through a petition for review under Rule 43 of the Rules of Court. The petition for review shall be taken within 15 calendar days from notice of the decision or final order of the regional trial court designated by the Supreme Court as a special commercial court.

Upon proper motion and the payment of the full amount of the legal fees prescribed, and before the expiry of the reglementary period, the Court of Appeals may grant an additional period of 15 calendar days within which to file the petition for review. No further extension shall be granted except for the most compelling reasons, and shall in no case exceed 15 calendar days.

No appeal may be taken from an interlocutory order. In such an instance, the aggrieved party may file an appropriate special civil action under Rule 65 (certiorari, prohibition and mandamus). For example, when any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of their jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and when there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition for certiorari (under Rule 65) in the proper court.

The petition should be filed not later than 60 days from notice of the judgment, order or resolution. If a motion for reconsideration or new trial is filed timely, whether such motion is required or not, the petition should be filed not later than 60 days counting from the notice of denial of the motion.

Appealing a Judgment, Final Order or Resolution of the Court of Appeals

A party desiring to appeal a judgment, final order or resolution of the Court of Appeals, the regional trial court or other courts, may file a verified petition for review on certiorari under Rule 45 with the Supreme Court. The petition may include an application for a writ of preliminary injunction or other provisional remedies, and should raise only questions of law, which must be distinctly set forth.

The petition should be filed within 15 days from notice of the appealed judgment, final order or resolution, or of the denial of the petitioner’s motion for new trial or reconsideration filed in due time after notice of the judgment. Following a motion duly filed and served, with full payment of the docket and other lawful fees and the deposit for costs before the expiry of the reglementary period, the Supreme Court may, for justifiable reasons, grant an extension of 30 days only within which to file the petition.

Court of Appeals

The Court of Appeals has the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings.

The Court of Appeals, acting as an appellate court, is still a trier of facts. Parties can raise questions of fact before the Court of Appeals, and it will have jurisdiction to rule on these matters. Otherwise, if only questions of law are raised, the appeal should be filed directly before the Supreme Court. This is not to say that the trial court’s findings of fact are of little weight. It is a time-honoured rule that the trial court’s findings of fact are given much weight because of the trial court judges’ first-hand knowledge and familiarity with the disposition of the witnesses who testified before them, and this is important in certain cases. However, this doctrine does not diminish the Court of Appeals’ jurisdiction in reviewing the factual findings of the trial court. See Pascual v Burgos et al, GR No 171722, 11 January 2016.

Supreme Court

Appeal by certiorari

In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.

Certiorari, prohibition and mandamus under Rule 65

See 8.1 Appellate Procedure.

The law does not provide for criminal prosecution of trade secret theft. However, the following provisions in the Revised Penal Code (RPC) and National Internal Revenue Code provide protection to trade secrets.

Revised Penal Code

Revealing secrets with abuse of office – Article 291 of the RPC imposes the penalty of arresto mayor and a fine not exceeding PHP500 on any manager, employee or servant who, in such capacity, learns the secrets of their principal or master and reveals such secrets.

Revelation of industrial secrets – Article 292 of the RPC imposes the penalty of prision correccional in its minimum and medium periods and a fine not exceeding PHP500 on the person in charge, employee or workman of any manufacturing or industrial establishment who, to the prejudice of the owner thereof, reveals the secrets of the industry of the latter.

National Internal Revenue Code (NIRC)

Section 278 of the NIRC imposes the penalty of imprisonment of not less than six months and not more than five years, or a fine of not more than PHP2,000, or both, on any person who causes or procures an officer or employee of the Bureau of Internal Revenue to divulge any confidential information regarding the business, income or inheritance of any taxpayer, knowledge of which was acquired by them in the discharging of their official duties and which it is unlawful for them to reveal. The penalty also applies to any person who publishes or prints, in any manner whatsoever not provided by law, any income, profit, loss or expenditure appearing in any income tax return.

Mediation as a mode of alternative dispute resolution (ADR) is mandatory at the IPOPHL and at the regular trial courts, including the special commercial courts.

While there are no considerations that are unique to the use of ADR for trade secrets, the Alternative Dispute Resolution Act of 2004 (RA No 9285) protects the confidentiality of information obtained through mediation proceedings by setting forth the following guidelines, subject to certain exceptions.

• Information obtained through mediation shall be privileged and confidential.
• A party, mediator or non-party participant may refuse to disclose and may prevent any other person from disclosing a mediation communication.
• Confidential information shall not be subject to discovery and shall be inadmissible in any adversarial proceeding, whether judicial or quasi-judicial. However, evidence or information that is otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely by reason of its use in a mediation.
• In such an adversarial proceeding, the following persons involved or previously involved in a mediation may not be compelled to disclose confidential information obtained during the mediation:
1. the parties to the dispute;
2. the mediator or mediators;
3. the counsel for the parties;
4. the non-party participants;
5. any persons hired or engaged in connection with the mediation as secretary, stenographer, clerk or assistant; and
6. any other person who obtains or possesses confidential information by reason of their profession.
• The protections of this Act shall continue to apply even if a mediator is found to have failed to act impartially.
• A mediator may not be called to testify to provide information gathered in mediation. A mediator who is wrongfully subpoenaed shall be reimbursed the full cost of their attorney’s fees and related expenses.

Administrative Actions With the IPOPHL

All administrative complaints for violation of IP rights and/or unfair competition undergo mandatory mediation, which is carried out by the Alternative Dispute Resolution Services (ADRS) under the BLA. A case filed with the BLA is submitted to the BLA-ADRS for mediation immediately after filing of the answer.

Each party must pay a non-refundable fee of PHP4,000, which entitles the parties to four sessions at a maximum of one hour per session. Additional sessions may be held subject to payment of an extension fee of PHP2,000 for each party, which entitles the parties to two one-hour sessions. These fees cover the mediator’s compensation, administrative costs and other related expenses.

The failure or refusal of the party who initiated the case to participate in the mediation and/or to pay the fees shall be grounds for the dismissal of the case. However, if the respondent fails or refuses to participate and/or to pay the fees, the respondent shall be declared in default.

If parties are unable to settle their dispute within 60 days from submission of the case to mediation, the mediation shall terminate the proceedings and issue a Notice of Non-settlement of Dispute. This period may be extended for another 30 days upon joint written request of the parties. If mediation fails and/or is terminated, the BLA-ADRS will again inform the parties of their option to submit the dispute to arbitration in accordance with the existing IPOPHL arbitration rules and guidelines. Otherwise, the BLA-ADRS shall furnish the BLA with a copy of the Notice of Non-settlement of Dispute, and the adjudication proceedings will immediately resume.

If the mediation is successful, the BLA-ADRS shall, within five days from the parties’ submission of their compromise agreement, refer the agreement to the BLA, which shall, within three days from receipt of the draft decision based on the compromise agreement, approve the agreement – unless the terms or parts thereof are contrary to law, public policy, morals or good customs, in which case the agreement shall be sent back to the parties, through the ADRS, for revision or modification.

Upon the parties’ revision or amendment of the agreement, it shall again be returned to the BLA. An approved compromise agreement shall have the effect of a decision or judgment on the merits, and shall be immediately executory and enforced in accordance with the pertinent rules of the IPOPHL and the Rules of Court.

Civil Actions Filed With the Special Commercial Courts

As previously described, on the day of termination of the pretrial, the court shall refer the parties for mandatory court-annexed mediation, which shall not exceed 30 calendar days and is non-extendible.

If the court-annexed mediation fails, and if the judge is convinced that settlement is possible, the case may be referred to another court for judicial dispute resolution (JDR). JDR shall be conducted within a non-extendible period of 15 calendar days.

If JDR fails, the trial before the original court shall proceed on the dates agreed upon.

All proceedings during the court-annexed mediation and the JDR shall be confidential.

Alternative Dispute Resolution Act of 2004 (RA No 9285)

An agreement to submit a dispute to mediation by an institution must include an agreement to be bound by the internal mediation and administrative policies of such institution. Further, an agreement to submit a dispute to mediation under institutional mediation rules shall be deemed to include an agreement to have such rules govern the mediation of the dispute, and for the mediator, the parties, their respective counsel and non-party participants to abide by such rules. In the case of conflict between the institutional mediation rules and the provisions of the Alternative Dispute Resolution Act, the latter shall prevail.

The parties may agree to refer one or more (or all) issues arising in a dispute or during its pendency to other forms of ADR, such as (but not limited to):

• the evaluation of a third person;
• a mini-trial;
• mediation-arbitration; or
• a combination thereof.