In our newest South-East Asia IPR Basics series, we take a look at IPR issues in the Philippines. In the coming weeks, stay on the lookout for additional articles as well as our new podcast Espresso IP, set to be released shortly.

The Philippines is a thriving market and a hub for EU-Asian trade. In particular, machinery and electronics are Philippine trade staples. However, enforcement problems linger in this island nation and SMEs would do well to use patents to protect their IP.

The Philippines: a background for SMEs

The Philippines is an emerging, newly-industrialized market with the world’s 39^th-largest economy, according to the World Bank. With Q2 2015 GDP growth of 5.6% and the EU-Philippines Partnership and Cooperation Agreement signed in 2012 set to be implemented soon, the Philippines presents a number of ready business opportunities for European SMEs. Low wage inflation, consistent liberalizing reforms to the economy and regulatory efficiency, and a free banking sector contribute to the Philippines’ Ease of Doing Business score of 95. Balancing these strengths are lingering issues with corruption and an inefficient and political judiciary.

The EU is the largest investor in the Philippines, contributing roughly 8 billion euros, or 30% of FDI, while EU-Philippines trade reached 12.47 billion Euros in 2014. Major EU exports to the Philippines grew an average of 16.1% per annum from 2010 to 2014 and included machinery and transport equipment (58.8%), chemicals and related products (11.5%), and food and live animals (10.3%) in 2014. That year, primary Filipino exports to the EU included machinery and appliances (60.2%), optical and photographic instruments (11.1%), and animal or vegetable fats and oils such as coconut oil (6.2%).

The Philippines is a member of the following international conventions regulating IP matters[1]:

• Patent Cooperation Treaty
• Berne Convention for the Protection of Literary and Artistic Works
• Paris Convention for the Protection of Industrial Property
• Convention Establishing the World Intellectual Property Organization
• WIPO Copyright Treaty
• WIPO Performances and Phonograms Treaty
• Madrid Agreement and Protocol
• ASEAN Framework Agreement on Intellectual Property Cooperation
• ASEAN Trade in Goods Agreement

 

Patents in the Philippines

Applications for patents or utility models are handled by the Bureau of Patents at the Intellectual Property Office. According the Philippines’ Republic Act No. 8293, which lays out the law on patents, something is patentable if it is a technical solution to a problem which

• Is new; it has not been made available to the public before anywhere in the world before the filing date and contains no content present in an earlier patent, utility model, or industrial design application. This does not extend to disclosures made the inventor, other patent offices which release the information in an unauthorized way, or a third party which gained information directly from the inventor.
• Involves an inventive step; it is not obvious to a person skilled in the art at the time the patent was filed.
• Is industrially applicable; an invention that can be produced and used in any industry.

Items which are not patentable include discoveries and scientific theories, computer programs (though they are protected under copyright), medical treatments, plant varieties (though they can be protected by other means), or aesthetic creations (though they are protected under copyright).

 

Applying for a patent or utility model

Applications can be made in either English or Filipino and are required to contain:

• A request for grant of a patent
• The name and other data of the applicant
• An identification of the inventor
• The title of the invention (as short and plain as possible)
• A description of the invention sufficiently clear for the invention to be carried out by a person skilled in the art
• One or more claims of subject areas for the patent to cover
• An abstract consisting of a concise (150 words or fewer) summary of the disclosure of the invention, listing the technical problem, the gist of the solution to it, and the principal use of the invention
• (if necessary to understand the invention) Drawings of the invention
• (if the applicant is not a resident of the Philippines) Contact information for an agent or representative in the Philippines who may be served notice or process for the application

Applications should be for a single invention or a group of independent inventions which only constitute an “inventive step” when used together. The filing date of the patent is considered to be the date that the IPO receives at least an indication that a patent is sought, information identifying the applicant, and a description of the invention with one or more claims in English or Filipino.

 

Examination process and length of protection

The Philippines has a first to file system, meaning that patents are assigned to the first person to file for them. The law provides two exceptions to this; first, patents belong to those who commission work leading to the patent, or to an employer if an employee creates the invention in the course of his regularly-assigned duties. Second, patents gain priority when the same patent was earlier filed with an international patent convention or a in a nation with a patent treaty with the Philippines. To gain priority in this way, there are three requirements:

• The local application must expressly claim priority
• The local application must be filed within 12 months of the earliest foreign filing date
• A certified copy of the foreign application must be provided along with an English translation within 6 months of filing in the Philippines

An application with a priority date is treated as though it was filed on that date and thus offers additional protection to companies’ IPR. For example, if Company A files a patent in France, Company B may read the details of that patent and try to copy that patent in the Philippines. Claiming priority would allow Company A to be treated as though it had filed its Filipino patent at the same time as its French patent, giving it a leg up over Company B in the Philippines’ first-to-file system. An application which does not initially claim priority can still add a priority claim within two months so long as the applicant pays a fee and provides a written explanation stating that the omission was accidental.

Fees for patent applications are assessed differently for small (assets worth one hundred million Philippines Pesos or less) and large entities (all others). Applicants are assumed to be large entities unless they can prove otherwise. Filing fees can be paid up to one month after filing. Please visit here for a list of fees for Philippines patent applications and for Patent Cooperation Treaty patent applications and the filing procedures for PCT applications.

Examinations

Once an application is complete and fees are paid, the applicant has four months to ensure all materials have been provided. Once the application is complete, the IPO will classify the patent and conduct a search wherein it attempts to verify that the patent is actually an innovation. After 18 months from the filing date or priority date, the IPO will published the application in its IPO Gazette along with a search document detailing the state of the art before the invention. After this publication, any party may inspect the application documents filed with the IPO.

Within six months of the publication of the patent in the Gazette, the applicant must request a substantive examination to be conducted (by the Bureau of Patents) to determine if a patent meets requirements. During this examination, an applicant can change his application as long as doing so does not introduce new materials. If a patent has already been filed for an invention in another ASEAN country, the applicant can request that the examination be expedited by use of the previous application’s examination. Such a transfer of examination files is conducted through the ASEAN Patent Examination Cooperation (ASPEC) mechanism.

If a patent is refused, the decision may be appealed to the Director of the Bureau of Patents. That decision may then itself be appealed to the Director General of the Intellectual Property Office, to the Court of Appeals, and to the Supreme Court.

Period of protection

If an application passes the examination and all fees have been paid, a patent will be granted. The patent will take effect on the date of the publication of the granting of the patent in the Gazette. Patents are good for 20 years after the filing date of the application. After four years from the date of publication, to maintain a patent, the patent holder must pay a yearly fee at least three months before the anniversary of the filing of the application. If the yearly fee is not paid and no grace period is requested, the patent is considered lapsed.

 

Enforcing your Intellectual Property Rights

Grounds for action and cancellation petitions

Sections 46 and 71 of The Intellectual Property Code of the Philippines state that an individual can take action to uphold his IPR if he has been issued a patent or if his patent has been published and is pending approval. In the latter case, he must be able to show that the infringer knew of the patent and has been notified to cease infringement (Sections 46 and 71). In case of infringement, the individual can bring charges regardless of whether he is licensed to conduct business in the Philippines. Should a patent be for process for obtaining or producing a particular product, the burden of proof is on the suspected infringer to show that they obtained their product through alternative methods without using the IPR contained within the patent in question. In any case, no damages can be recovered for acts of infringement more than four years old or for acts of infringement committed before the infringer knew or could reasonably be expected to know of the patent. Additionally, any prior user of an invention who did so in good faith and had undertaken “serious preparations” to use the invention before the filing date or priority date of the application will have the right to continue use of the invention. The Legal Affairs Bureau of the Intellectual Property Office is the organ responsible for resolving many patent disputes, including:

• Cancellation or suspension of any permits or licenses issued by the IPO
• Administrative complaints for violations of IPR laws where total damages do not exceed 200,000 Filipino pesos
• Issuance of cease and desist orders
• Seizure of products and properties which are subject of IPR offenses
• Issuance of administrative fines of up to 150,000 pesos

If a company finds another firm attempting to publish a patent which infringes upon its IPR rights, it can submit comments to the IPO and the applicant notifying them of this. It can also petition to cancel the infringing patent by paying a fee and showing that the patent is not new or that the patent does not disclose the invention clearly enough. This petition must be clearly argued and in writing and must be issued within one year of the patent’s publication. If printed publications or patents from other countries are used as evidence, they must be supplied with an English translation. In highly technical cases, any party involved can ask for a committee composed of the Director of Legal Affairs and two members with relevant expertise to reach a decision, although this decision can be appealed to the Director General. If the court finds that the “true and actual inventor” has been deprived of a patent without his consent, then the court can cancel or transfer the patent and assign damages as circumstances warrant.

Civil action

Any patentee or anyone possessing an infringed right may bring a civil action. The court can award damages or, if damages are inadequate or difficult to assess, the court can award damages of value equal to reasonable royalties. Awards can also exceed damages, though they are capped at 300% of total damages, and can include destruction of infringing goods. Anyone who supplies the infringer with components of a patented process knowing them to be “especially adopted for infringing the patented invention and not suitable for substantial non-infringing use” can also be held jointly liable with the infringer.

 

Utility models

Article 108 establishes that utility models are registered and treated just as patents with minor differences, including:

• An invention can be registered as a utility model if it is new and industrially applicable. Thus, no inventive step is needed
• Utility models are protected for seven years with no chance for renewal
• Utility model registrations can be cancelled if drawings necessary for understanding the utility model have not been furnished
• They can also be cancelled if the applicant is not the inventor or his “successor in title”
• A patent application can once and only once be converted into a utility model application after payment of a fee, and vice versa
• An applicant cannot file a patent application and a utility model application simultaneously for the same content

Please visit here for a list of fees for petty patent applications.

 

Additional Information

For more information on IPR in the Philippines and how to best product your products against infringement in, check out the guides available at our Helpdesk or contact one of our experts for free, tailored advice.

Relevant contacts

• Intellectual Property Office of the Philippines

28 Upper McKinley Road, McKinley Hill Town Center

Fort Bonifacio, Taguig City 1634, Philippines

Web: http://www.ipophil.gov.ph/index.php/contact-us#sthash.zP4D8nWc.dpuf

 

[1]For a full list, see the WIPO website at: http://www.wipo.int/wipolex/en/profile.jsp?code=ph