Contributed By Angara Abello Concepcion Regala & Cruz (ACCRALAW)
The law on patents protects inventions and utility models. The protection is primarily based on statutory rights under the Intellectual Property Code of the Philippines (IP Code) and its implementing rules and regulations. The provisions of the IP Code are further elaborated and explained through precedent case law.
Trade secret protection may be available for inventions that are not disclosed to the public. The IP Code expressly recognises 'protection of undisclosed information' as an intellectual property right. Although there is no law governing trade secrets, they are recognised and protected by case law.
Protection for invention is granted once it is registered with the Intellectual Property Office of the Philippines (IPOPHL). The Philippines follows the first-to-file rule in determining who has a better right over a patent.
The application for registration of inventions has two phases: the first is the formality examination phase, and the second is the substantive examination phase.
During the formality examination phase, the documents accompanying the application such as the priority documents (if applicable), proof of authority, deeds of assignment, identification of inventors, formal drawings, among others, are examined and evaluated. If the documents are found to be in order and complete, the invention application will be published together with the search document (the first publication). The written request for substantive examination and payment for the request must be made within six months from the date of the first publication. The failure to request substantive examination and pay the requisite fee will result in the withdrawal of the application.
The invention application will then undergo substantive examination to determine the invention’s patentability. Substantive examination phase typically lasts 32 months on average. When the applicant overcomes the issues raised by the examiner, the grant of the patent will undergo publication (the second publication). A patent takes effect on the date of the publication of the grant of the patent in the IPOPHL’s Electronic Gazette.
Utility model applications do not undergo substantive examination. Upon filing of an application, it will undergo formal examination. The examiner will only determine the adequacy of the application and the formal documents submitted. If the documents are satisfactory, the application will be published in the IPOPHL’s E-Gazette. Any objection to the application must be filed within 30 days from the date of publication. If no objection is filed within 30 days, the utility model will be granted registration.
The Philippines is a contracting state to the Patent Cooperation Treaty (PCT).
As of 2018, the average turnaround before an invention is granted is 47.4 months or almost four years. For utility models, the average turnaround time from application to registration is 7.8 months.
An applicant who is not a resident of the Philippines needs to appoint and maintain a resident agent or representative in the Philippines upon whom notice or process for judicial or administrative procedure relating to the application for a patent may be served. A resident applicant may represent his or her own application for registration.
In the Philippines, the IPOPHL distinguishes between a small and big entity applicant. A big entity refers to a natural or a legal entity whose assets are more than PHP100 million or approximately USD2 million.
The approximate government fee until the grant of an invention patent (assuming that there are no more than five claims) is PHP8,000 (USD160) for small entities and PHP14,000 (USD280) for big entities.
The approximate government fee until the registration of a utility model (assuming that the claims do not exceed five) is PHP3,200 (USD64) for small entities and PHP6,700 (USD134) for big entities.
An invention is protected for a term of 20 years from the date of filing the application. This period may not be extended.
A utility model is protected for a term of seven years from the date of filing the application. This term may also not be extended.
For PCT national phase entry applications, the term is counted from the international filing date.
A patent shall provide the owner exclusive rights to restrain, prohibit, and prevent any unauthorised person to make, use, offer for sale, sell or import any patented product or any product obtained from a patented process.
The patent-holder may file a civil action for patent infringement. Further, the patent-holder may recover damages sustained by the act of infringement, plus lawyers’ fees and other expenses of litigation. The patent-holder may also secure an injunction to prevent further acts of infringement, and to protect his or her rights.
If the damages cannot be readily ascertained with certainty, the court or any competent authority may award as damages a sum equivalent to a reasonable royalty. Depending on the circumstances of the case, the court may also award damages over and above the actual damages, although no more than three times that amount. The court may also order the infringing goods or any material used for the infringement to be disposed of or destroyed without compensation.
If infringement is repeated by the infringer or by anyone in connivance with him after finality of the judgment of the court against the infringer, the offenders shall, without prejudice to the institution of a civil action for damages, be criminally liable of patent infringement.
An annual fee shall be paid upon the expiration of four years from the date the application was first published, and on each subsequent anniversary of that date until the expiration of the patent. Failure to pay the annual fee will result in the withdrawal of the patent application or the lapsing of the patent registration.
The term of protection for invention patents and utility model registrations may not be extended. Once the term has lapsed, the invention or utility model forms part of the public domain.
Third-party observation is available for invention patent applications. Following the first publication of the patent application, any person may present observations in writing concerning the patentability of the inventions. These observations shall be communicated to the applicant who may comment on them. The IPOPHL will note the comments made by third parties and place its observations and comments in the file wrapper of the relevant application.
For utility model applications, any third party may file an objection to the application up to 30 days from when it is is published in the IPOPHL’s E-Gazette.
Where the patent application has been refused, the applicant may request a review of the application by the examiner. The request must be made in writing and the applicant must point out specifically the examiner’s errors. The application will be re-examined and the examiner may require amendments to be made or the examiner may rule that the refusal stands and is final.
In the case of a final refusal from the examiner, the applicant may appeal the matter to the Director of Patents. Should the Director still refuse the application, an appeal may be filed with the IPOPHL’s Director General. If the decision of the IPOPHL’s Director General is still negative, the applicant may file an appeal with the Court of Appeals and thereafter to the Supreme Court.
Failure to pay the annual fee will result in the withdrawal of the patent application or the lapse of the patent registration. A notice that the application is deemed withdrawn or has lapsed shall be published in the E-Gazette of the IPOPHL. The notice will also be mailed to the patent owner or the agent.
A grace period of six months counted from the publication of the withdrawal or lapse will be granted. The patent-owner or holder must pay the required annual fees, publication fees and surcharge fees in full within the six-month period. The amount of the surcharge fee is 50% of the total annual fee. Failure to pay will result in the withdrawal of the patent application or the lapsing of the registration as of the date following the expiry of the original period within which the annual fee was due. It will again be published in the IPOPHL’s E-Gazette, and this will be recorded in the IPOPHL’s Register.
A patent-holder may file a civil action against a patent infringer where damages may be recovered. The court may order the destruction of the infringing product, without compensation. The patent-holder may also request the issue of an injunction to prevent further acts of infringement.
If infringement is repeated by the infringer or by anyone in collusion with the infringer after the final judgment of the court in the civil action for infringement, the infringers shall be criminally liable without prejudice to the filing of a civil action for damages.
For inventions, any interested person may petition to cancel a patent or any connected claim, or parts of the claim on any of the following grounds:
Utility model registrations may sought to be cancelled by any interested person if:
Any person who has shown his capability to exploit the invention patent or utility model registration may file an action for compulsory licence under certain circumstances.
A patent infringement action may be filed with the designated commercial courts of the Regional Trial Court (RTC) where the principal office of either the complainant or the defendant is located. The case may also be filed with the Bureau of Legal Affairs (BLA) of the IPOPHL. The decision of the RTC may be appealed to the Court of Appeals and thereafter the Supreme Court. The decision of the BLA may be elevated to the IPOPHL Director General, whose decisions may then be brought to the Court of Appeals and then to the Supreme Court.
Apart from the specialised commercial courts in each jurisdiction designated by the Supreme Court to hear and decide intellectual property cases (ie, patent infringement cases), the IPOPHL is likewise mandated to receive and hear such cases (as administrative cases).
Civil search and seizure applications involving patent infringement are filed with, and heard by, the specialised commercial courts.
Generally, there is no prerequisite prior to filing a patent infringement suit. No damages, however, can be recovered for acts of infringement committed before the defendant knew, or had reasonable grounds to know, of the patent. It is presumed that the defendant knew of the patent if on the product, or on its container or packaging, or on the advertising material relating to it, there are the words 'Philippine patent' with a patent number.
In proceedings involving patent infringement before the court or the IPOPHL, the parties must be represented by counsel.
Injunctions may be granted when it is established that:
Before the issue of a writ of civil search and seizure or a writ of injunction involving patent infringement, the courts or the IPOPHL will require the applicant or complainant to post a bond, the amount of which to be determined by the court or hearing officer. The bond shall answer for any damage the defendant may suffer due to the litigation.
With respect to patent infringement cases, no damages may be recovered for acts of infringement committed more than four years prior to the filing of the action for infringement.
In criminal cases there is a limit of three years from the date of commission of the crime in which to bring an action for repetition of patent infringement.
In patent infringement cases, the complainant may avail of different modes of discovery, eg, a motion to produce and inspect documents, interrogatories and/or requests for admissions. These discovery procedures must be filed within 30 days from the joinder of issues, which is usually when the defendant files his answer to the complaint.
Also, an intellectual property right-holder in a pending civil action for infringement, or one who intends to commence such an action, may apply (ex parte) for the issue of a writ of search and seizure directing the defendant or expected adversary to admit into his or her premises the persons named by the court (hearing the application). The writ also allows for the search, inspection, copying, photographing, audio and audiovisual recording or seizure of any document and article specified by the court.
This may be resorted to where any delay is likely to cause irreparable harm to the intellectual property right-holder or where there is demonstrable risk of evidence being destroyed.
As far as formality requirements for patent infringement actions are concerned, the initial pleading (complaint) filed with the courts or IPOPHL must be verified by the complainant. Verification means that the complainant has read the complaint and the allegations are true and correct to the best of his knowledge and belief. The complaint must also be accompanied by a certificate of non-forum shopping, which states that the complainant has not filed any action involving the same issues before any tribunal or agency, and that if any action of the same nature has been filed,, the complainant shall inform the relevant court of agency within five days of knowledge of the filing.
The complaint must contain the names and addresses of the parties, and a concise statement of the ultimate facts constituting the complainant’s cause of action. The complaint must also specify the relief sought and must be accompanied by the required filing fees.
Supplemental pleadings or complaints are allowed only upon a motion by a party and it must allege transactions, occurrences or events that have happened since the date of the pleading sought to be supplemented.
Class suits are generally allowed in the Philippines. However, there are no patent infringement cases decided by the Supreme Court that involve this type of claim.
The owner of a patent has no right to prevent third parties from performing, without his or her authorisation, the rights conferred by a patent, in the following circumstances:
A prior user who, in good faith, was using the invention or has undertaken serious preparations to use the invention in his business before the filing date or priority date of the application on which the patent is granted, shall have the right to continue its use within the country of manufacture..
Moreover, the government or a party duly authorised by the government may exploit a patented invention even without a patent-holder’s consent where:
The party bringing the infringement action must be the patentee, or anyone possessing any right, title or interest in and to the patented invention, whose rights have been infringed.
Any of the following acts constitute direct infringement of a patented product or a patented process:
Indirect infringement may be by way of contributory infringement. Anyone who actively induces the infringement of a patent or provides the infringer with a component of a patented product or of a product produced because of a patented process, knowing it to be especially adopted for infringing the patented invention and not suitable for substantial non-infringing use, shall be liable as a contributory infringer and shall be jointly and severally liable with the infringer.
The extent of protection conferred by the patent shall be determined by the claims, which are to be interpreted in the light of the description and drawings.
For the purpose of determining the extent of protection conferred by the patent, due account shall be taken of elements that are equivalent to the elements expressed in the claims, so that a claim shall be considered to cover not only all the elements as expressed therein, but also equivalents.
Defences against patent infringement include the following:
Two or more assessors may be appointed by the court. The assessors shall be possessed of the necessary scientific and technical knowledge required by the subject matter in litigation. Either party may challenge the fitness of any assessor proposed for appointment.
Committee of Three
The court, of its own volition or upon a motion by a party, may order the creation of a committee of three experts to provide advice on the technical aspects of the patent in dispute. Within 30 days from receipt of the order creating the committee, each side shall nominate an expert, who shall then be appointed by the court. The court shall appoint the third expert from a list submitted by the experts on each side.
In patent infringement proceedings, each party usually presents its own expert witness or witnesses. The affidavit of the expert witness must be attached to the complaint. The affidavit shall serve as the direct testimony of the expert during trial, subject to cross-examination by the adverse party.
There is no separate procedure for construing the claims of a patent. Claim construction issues are determined in the same proceedings as other issues, eg, validity and infringement.
The Bureau of Legal Affairs of the Intellectual Property Office of the Philippines has the exclusive jurisdiction to hear and decide patent cancellation proceedings. However, the invalidity of the patent may be raised as a defence in a patent infringement case. If, in an action for infringement filed before the court, the court finds the patent or any claim to be invalid, it shall cancel it. An order of cancellation shall be forwarded to the Director of the Bureau of Legal Affairs.
Where the grounds for cancellation relate to some of the claims or parts of the claim, cancellation may be effected to that extent only. In this case, the Intellectual Property Office shall reissue the amended patent.
Amendment by the patentee is allowed during cancellation proceedings. In such a case, the Bureau of Legal Affairs of the Intellectual Property Office may decide to maintain the patent as amended. If the patent is amended, the Bureau shall, at the same time as it publishes the mention of the cancellation decision, publish the abstract, representative claims and drawings, indicating clearly what the amendments contain.
An invalidity defence raised in a patent infringement case is heard and decided together with the case. An inter partes case for cancellation of patent is heard and decided separately from an infringement action.
Cases for patent infringement filed in courts apply the Rules of Procedure in Intellectual Property Rights Cases 2011, while similar cases filed before the Bureau of Legal Affairs of the Intellectual Property Office apply the Rules and Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property Rights 2001.
Cases for cancellation of patent filed before the Bureau of Legal Affairs of the Intellectual Property Office apply the Regulations on Inter Partes Proceedings.
There is no trial by jury in the Philippines. Cases filed in court are heard and decided by judges while cases filed before the Bureau of Legal Affairs of the Intellectual Property Office are heard and decided by hearing officers. Judges and hearing officers are members of the Philippine Bar. Often they do not possess technical backgrounds. Thus, they are allowed to create a committee of three experts or appoint assessors to assist them on technical matters.
The parties may settle the case at any stage of the proceedings. However, for cases filed before both the court and the Intellectual Property Office, there are formal mediation procedures before the commencement of trial to encourage the parties to arrive at an amicable settlement.
Based on jurisprudence, the earlier institution of a case for patent cancellation does not bar the subsequent filing of an infringement case by the patent-holder. However, the court trying an infringement action has the power to stay the proceedings before it until resolution of the cancellation action pending before the Intellectual Property Office.
Regular courts and the IPOPHL have equal jurisdiction over patent infringement cases. Only civil remedies can be sought before these bodies, such as payment of damages and injunctions. If the case is filed with the IPOPHL instead of the regular court, the case takes the form of an administrative complaint instead of a civil case.
In civil cases filed with the regular courts, appeals are to be filed with the Court of Appeals. From the Court of Appeals, an appeal can be filed with the Supreme Court.
In administrative cases filed with the IPOPHL, the decision at the first level (ie, the Bureau of Legal Affairs) can be appealed to the Director General of the IPOPHL. The Decision of the Director General can then be appealed to the Court of Appeals. From the Court of Appeals, an appeal can be filed with the Supreme Court.
In case of a patent cancellation case, it must be filed with the Bureau of Legal Affairs of the IPOPHL. The decision of the Adjudication Officer may be appealed to the Director of the Bureau of Legal Affairs. Once the Director renders a decision, appeals may then be brought to the Director General of the IPOPHL, then the Court of Appeals and finally the Supreme Court.
Appeals at any stage may involve a full review of the facts. However, as a rule, appeals to the Supreme Court are normally limited to questions of law only.
Possible costs that may be incurred even before a lawsuit is filed are costs related to warning letters.
When the case is filed, filing fees will be required. If preliminary injunction is sought, a bond must be deposited with the court in order to implement the injunction.
Court fees are determined based on the amount of damages the complainant is seeking to recover. This is regardless of the number of parties and patents involved, or whether an injunction is sought.
The complainant will shoulder litigation costs such as court fees, lawyers’ fees, etc. However, the court, in its discretion and after presentation of evidence, may order the defendant to reimburse the complainant for litigation costs.
Mediation is mandatory in civil cases filed with the regular courts, as well as in administrative cases filed with the Intellectual Property Office of the Philippines. Arbitration is also allowed, but the consent of all the parties is needed.
An assignment of a patent must be in writing and notarised. Recording of the assignment with the Intellectual Property Office of the Philippines is advised since it is deemed to be a notice to the public.
Non-recording of the assignment will make the agreement void for subsequent assignees of the patent who have no knowledge or no notice of the existence of the earlier assignment.
Assignments may apply to the whole or to part of the patent.
An assignment document is executed by both parties and then notarised. Either party must then file a request to record the assignment in question with the IPOPHL.
After examining the request and the assignment document, the IPOPHL will issue a notice evidencing the registration of the assignment.
In order for a licensing agreement of a patent to become enforceable, it must contain the various mandatory provisions required by the law on patents. The licensing agreement must also not contain any of the provisions prohibited by the law on patents.
A certificate of compliance may be sought from the IPOPHL so that the parties can ensure their compliance with the patent law’s requirements. Another option is to obtain a pre-clearance from the IPOPHL, which option is available even to draft or unsigned licensing agreements. A third option is to request an exemption from the IPOPHL from any of the prohibited or mandatory clauses of the law on patents for licensing agreements.
When licensing a patent, the parties may first pre-clear the draft agreement with the IPOPHL. This will allow the parties to amend the agreement where there are provisions that are lacking or do not comply with the requirements of the patent law.
If the parties already have a signed licensing agreement, they may register the said agreement with the IPOPHL. However, they would need to amend the agreement if there are findings of non-compliance with the requirements of the patent law.
The parties may seek reconsideration or also appeal the initial findings on the agreement.