In today’s blog post we take a closer look at how European SMEs can protect the IP rights of their environmental technologies in the Philippines. This sector has recently started to boom and offers many promising business opportunities to European SMEs. You will hear more about patent protection and trade mark protection. We will also offer some tips on how to enforce your rights.
European SMEs that are working on high-tech sustainable solutions for environmental problems find the Philippines quite a promising market. The country that is highly vulnerable to climate change faces many environmental challenges including deforestation, costal degradation, air and water pollution as well as issues arising from waste disposal, just to mention the few most pressing issues. At the same time, the government of the Philippines is committed to looking for solutions, including sustainable high-tech solutions to the most pressing environmental issues, as it is annually allocating over 16 million EUR for climate change adaptation and mitigation funding.
European SMEs offering technological solutions to energy efficiency issues, environmentally sustainable transportation, sustainable infrastructure or waste management sectors, are expected to find many promising business opportunities in the Philippines, as these are the sectors that the government of the Philippines is highlighting as the priority sectors in its National Framework Strategy on Climate Change 2010-2022.
European environmental technology providers wishing to enter the Philippines’ market need to keep in mind that despite the recent improvements in the Philippines’ IP laws and regulations, counterfeiting and other IP infringements are still commonplace in the country and thus a robust IP strategy is needed to grow their business in the Philippines.
Patents are the cornerstone for high-tech companies
Patent protection is perhaps the most common form of IP protection available for high-tech companies active in the environmental technologies sector. This is because many eco and green technologies are highly capital-intensive and take a long time to achieve market acceptance, especially for those that are currently too expensive to be commercially viable. Besides technology, SMEs can also patent business methods relating to environmental sector, such as Fannie Mae’s patent for “System and method for residential emissions trading”, which is a method for identifying, quantifying, and aggregating reductions in residential emissions into a tradable commodity.
A patent confers its owner the exclusive right to restrain, prohibit and prevent any unauthorized person or entity from making, using, offering for sale, selling or importing the patented product, thus European SMEs active in environmental technologies sector should consider applying for patents in the Philippines to protect their products from being copied.
At the same time, eco and green technologies businesses will oftentimes need to decide whether to protect inventions as patents or keep them as trade secrets and know-how. Inventions that are protected by patents become public knowledge, which can allow competitors to refine, design-around, or re-invent the technology so that it can no longer be protected by the patent. Inventions with a commercial shelf-life of significantly longer than 20 years should be considered for trade secret protection, but only if the business is confident in its capacity to protect its trade secrets, meaning that it has sufficient know-how and legal resources directed at trade secret and confidential information security.
The Philippines adopts a ‘first-to-file’ patent system, meaning that the first person to file a patent in the jurisdiction of the Philippines will own that right within the country once the application is granted. The Philippines also allows utility model registrations for an invention with lesser degree of inventiveness. The process for obtaining a utility model is shorter, however, there is a reduced term of protection – as patents are protected for 20 years after filing whilst utility models are only protected for 10 years after filing. Utility models should nevertheless be considered by the eco and green technologies companies, as a lot of technology these companies produce consists of improved versions of the technology already in use. Finally, combining utility models with invention patents can also be a smart way to deal with environmental technologies based on legacy technology.
Once the patent has been granted, SMEs should keep in mind to always indicate the wording as “Philippine Patent No.” or “Philippine Patent Pending” on their products. This is to establish the presumption that the infringer had known about the existence of the patent. Otherwise, damages may not be recovered for acts of infringement if the infringer shows that he/she has not known or had no reasonable grounds to know that there exists a patent for this product.
Trade mark protection is equally important for the SMEs
Branding is important for eco and green technologies providers, as their logo and brand name help to distinguish their products from the other similar products on the market. Furthermore, brand name also functions as a badge of trust for the SMEs in environmental technologies sector. It could be very damaging to SME’s reputation if someone would use a similar or an identical brand to provide substandard products or services, as it could directly translate into loss of clients’ confidence in the original product or service provider. It is thus of utmost importance for EU SMEs operating in the eco and green technologies industry to protect their brand through trade mark registration when planning to do business in the Philippines.
SMEs planning to enter the Philippines market should register their trade mark in the country well in advance before even starting their business there because the Philippines applies the first-to-file’ trade mark registration system, meaning that the first person to register a trade mark owns that mark, regardless of the first use. It is especially important to register trade marks in the Philippines because trade mark piracy due to ‘bad-faith’ registration is still a major problem. Bad-faith registrations exist where a third party (not the legitimate owner of the mark) first registers the mark in the Philippines, thereby preventing the legitimate owner from registering it in the country. These unscrupulous companies would normally try to resell the trade mark back to its legitimate owner at an inflated price.
At the same time owners of well-known marks may benefit from the Philippines membership to the Paris Convention. Foreign nationals may request the refusal or cancellation of a registration of a trade mark which constitutes a reproduction, imitation or translation of a well-known mark in another country that is also a member of the Convention. This process can, however, be costly.
European SMEs should also keep in mind that according to the Trade Mark Law of the Philippines, to maintain the registration of a mark, a Declaration of Actual Use of the mark together with the proof of use of the mark must be filed after 3 years from the application date of the mark and then again within 1 year from the 5th anniversary of the registration.
Enforce your rights
Entering a new market also means being ready to enforce or defend IP rights to ensure that business objectives are met and therefore budget planning for enforcement is key to a successful and comprehensive business strategy. When European SMEs identify that their products are being infringed, they should actively enforce their rights in the Philippines through the various avenues available. If an SME builds a reputation for being prompt and reactive, then unscrupulous companies will be less likely to infringe its rights in the future.
In the Philippines, there are three avenues to enforce intellectual property rights: administrative actions, civil litigation and criminal prosecution. As civil litigation and criminal prosecution tend to take longer time and become costly, administrative actions are often the preferred means of enforcement for SMEs. Administrative authorities have the power to impose preliminary injunctions, preliminary attachments (a provisional remedy wherein the court/administrative body is asked to take custody of the property of the adverse party as security for satisfaction of any judgment) as well as damages and administrative fines. In many cases, however, negotiations or mediation between the parties can be a more viable option as they are cost effective.
South-East Asia IPR SME Helpdesk
The South-East Asia IPR SME Helpdesk supports small and medium sized enterprises (SMEs) from European Union (EU) member states to protect and enforce their Intellectual Property Rights (IPR) in or relating to South-East Asian countries, through the provision of free information and services. The Helpdesk provides jargon-free, first-line, confidential advice on intellectual property and related issues, along with training events, materials and online resources. Individual SMEs and SME intermediaries can submit their IPR queries via email (email@example.com) and gain access to a panel of experts, in order to receive free and confidential first-line advice within 3 working days.
The South-East Asia IPR SME Helpdesk is co-funded by the European Union.
To learn more about the South-East Asia IPR SME Helpdesk and any aspect of intellectual property rights in South-East Asia, please visit our online portal at http://www.ipr-hub.eu/
 Eco-Business, available at: http://www.eco-business.com/news/what-has-happened-to-the-philippines-climate-funding/
 National Framework Strategy on Climate Change 2010-2022, available at: http://www.neda.gov.ph/wp-content/uploads/2013/10/nfscc_sgd.pdf