REPUBLIC ACT NO.

8293
Intellectual Property Code of the Philippines

ACTIVIITY 3

Name : CABUNGCAL, Keneth Joe A.

Course & Section : BS Management Accounting
Subject : Regulatory Framework and Legal Issues in Business
Professor/Instructo : Atty. Jonathan Valliente
r

1. PATENT DEFINED

The right granted to an inventor by the State, or by the regional office acting
for several States, which allows the inventor to exclude anyone else from
commercially exploiting his invention for a limited period (World Intellectual
Property Organization, Understanding Industrial Property, p.5).

A patent is a statutory monopoly which protects against unlicensed use of

the patented device or process even by one who discovers it properly through
independent research (60 Am Jur 2d, Patents, Section 6).

2. PURPOSES
a) The patent law seeks to foster and reward invention;
b) It promotes disclosures of inventions to stimulate further innovation and
to permit the public to practice the invention once the patent expires;
c) The stringent requirements for patent protection seeks to ensure that
ideas in the public domain remain there for the free use of the public
(Pearl & Dean (Phil.)., Inc. v. Shoemart, Inc., GR No. 148222, August 15,
2003).

3. PRINCIPLES
a) Test of Non-Obviousness – If any person possessing ordinary skill in the
art was able to draw the inferences and the constructs that the supposed
inventor drew from prior art, then the latter did not really invent.
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b) Unity of Invention – The application shall relate to one invention only or

to a group of inventions forming a single general inventive step (Sec.
38.1).
c) An applicant may not file 2 applications for the same subject, one for
utility model registration and the other for the grant of a patent whether
simultaneously or successively (Parallel Application, Sec. 111).
d) Whatever right one has to the invention covered by the patent arises
alone from the grant of patent (Creser Precision Systems vs. CA, GR No.
118708, February 2, 1998).
e) Patents or application for patents and invention to which they relate,
shall be protected in the same way as the rights of other property under
the Civil Code (Sec. 103.1).

4. PATENTABLE INVENTIONS
a) Useful machine;
b) A product;
c) A process;
d) Improvement of (1), (2), (3);
e) Micro- organism; and
f) Non-biological and microbiological process (Rule 201, Rules and
Regulations of Inventions)

5. NON-PATENTABLE INVENTIONS

SECTION 22. Non-Patentable Inventions. — The following shall be excluded

from patent protection:

a) Discoveries, scientific theories and mathematical methods;

b) Schemes, rules and methods of performing mental acts, playing games or
doing business, and programs for computers;
c) Methods for treatment of the human or animal body by surgery or
therapy and diagnostic methods practiced on the human or animal body.
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This provision shall not apply to products and composition for use in any
of these methods;
d) Plant varieties or animal breeds or essentially biological process for the
production of plants or animals. This provision shall not apply to
microorganisms and non-biological and microbiological processes.
Provisions under this subsection shall not preclude Congress to consider
the enactment of a law providing sui generis protection of plant varieties
and animal breeds and a system of community intellectual rights
protection;
e) Aesthetic creations; and
f) Anything which is contrary to public order or morality. (Sec. 8, R.A. No.
165a)

6. COMPARE PATENT FROM UTILITY MODEL AND INDUSTRIAL

DESIGN

PATENT

Requisites:

a) New (Novel) – That which does not form part of a prior art (Sec. 23);
b) Inventive – An invention involves an inventive step if, having regard to
prior act, it is not obvious to a person skilled in the art at the time of the
filing date or priority date of the application claiming the invention (Sec.
26).
c) Industrially patentable – An invention that can be produced and used in
any industry (Sec. 27).

Patent has all of the 4 essential requisites a patentable invention. Twenty (20)
years of term from the filing date of the application and rules applicable shall
govern by under sections 20 to 107.

UTILITY MODEL
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Requisites:

a) New; and
b) Industrially Applicable

Utility model has no inventive steps and it has 7 years of term from the filing
date of the application and non-renewable. Rules applicable shall govern by
under sections 108-111 and provisions on patents applying mutatis mutandis.

INDUSTRIAL DESIGN

Requisite:

a) It must be new.

It has no inventive step and not industrially applicable. It has 5 years of term
from the filing date of the application, which is renewable for not more than 2
consecutive periods of 5 years each. Rules applicable shall govern by under
Sections 112-120 and certain provisions on patents applying mutatis
mutandis.

7. REQUISITES OF PATENTABILITY
A. Technical Solution of a problem in any field of human activity.
B. New (Novelty) – an invention shall not be considered new if it forms part
of a prior art (Sec. 23).
 Prior Art (Sec. 24)
That which has been made available to the public anywhere in the
world BEFORE the filing date or the priority date of the
application;

General Rule: That which forms part of an application whether for

patent, utility model or industrial design, effective in the
Philippines, provided that:
 The inventors or applicants are not the same
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 The contents of the application are published in accordance

with the requirements of patent application rules;
 The filing date of the prior art is earlier
Exception: Non-prejudicial disclosure
 Disclosure of information contained in the application;
 Made by:
 The inventor;
 Patent office and the information was contained:
In another application filed by the inventor and
should not have been disclosed by the office; or
In an application filed without the knowledge or
consent of the inventor by a third party which
obtained the information directly or indirectly
from the inventor; or
A third party which obtained the information
directly or indirectly from the inventor (Sec. 25).
 Made during the 12 months preceding the filing date or the
priority date of the application.
C. Involves an Inventive Step (Inventiveness) – an invention involves
inventive step of, having regard to prior art, it is not obvious to a person
skilled in the art at the time of the filing date or priority date of the
application claiming the invention (Section 27).
D. Industrially Applicable – an invention that can be produced and used in
any industry (Section 28).

8. EXPLAIN THE “FIRST-TO-FILE” RULE/SYSTEM

“First-to-File” Rule/ System This is the system of patent registration adopted

under the IPC in lieu of the first-to-invent system. In other words, it is the right
to the grant of a patent for a given invention lies with the first person to file a
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patent application for protection of that invention, regardless of the date of

actual invention.

9. REQUISITES OF RIGHT TO PRIORITY OF AN EARLIER-FILED

FOREIGN APPLICATION

SECTION 31_Requisites:

a) The local application expressly claims priority;

b) It is filed within 12 months from the date of the earliest foreign
application;
c) Filing within 6 months from the certified copy of the foreign application,
with an English translation, from the date of the local application.

10. RIGHTS CONFERRED BY PATENT

SECTION 71. Rights Conferred by Patent. —

a) A patent shall confer on its owner the following exclusive rights:

 Where the subject matter of a patent is a product, to
restrain, prohibit and prevent any unauthorized person or
entity from making, using, offering for sale, selling or
importing that product;
 Where the subject matter of a patent is a process, to
restrain, prevent or prohibit any unauthorized person or
entity from using the process, and from manufacturing,
dealing in, using, selling or offering for sale, or importing any
product obtained directly or indirectly from such process.
b) Patent owners shall also have the right to assign, or transfer by
succession the patent, and to conclude licensing contracts for the same.
(Sec. 37, R.A. No. 165a)
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11. LIMITATIONS OF RIGHTS CONFERRED BY PATENT

SECTION 72. Limitations of Patent Rights. — The owner of a patent has no

right to prevent third parties from performing, without his authorization, the
acts referred to in Section 71 hereof in the following:

a) Using a patented product which has been put on the market in the
Philippines by the owner of the product, or with his express consent,
insofar as such use is performed after that product has been so put on
the said market;
b) Where the act is done privately and on a non-commercial scale or for a
non-commercial purpose: Provided, That it does not significantly
prejudice the economic interests of the owner of the patent;
c) Where the act consists of making or using exclusively for the purpose of
experiments that relate to the subject matter of the patented invention;
d) Where the act consists of the preparation for individual cases, in a
pharmacy or by a medical professional, of a medicine in accordance with
a medical prescription or acts concerning the medicine so prepared;
e) Where the invention is used in any ship, vessel, aircraft, or land vehicle
of any other country entering the territory of the Philippines temporarily
or accidentally: Provided, That such invention is used exclusively for the
needs of the ship, vessel, aircraft, or land vehicle and not used for the
manufacturing of anything to be sold within the Philippines. (Secs. 38
and 39, R.A. No. 165a)

12. INFRINGEMENT IN PATENT

SECTION 76. Civil Action for Infringement. — 76.1. The making, using,
offering for sale, selling, or importing a patented product or a product obtained
directly or indirectly from a patented process, or the use of a patented process
without the authorization of the patentee constitutes patent infringement.
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13. DOCTRINE OF PATENT EXHAUSTION

It espouses that the patentee who has already sold his invention and has
received all the royalty and consideration for the same will be deemed to have
released the invention from his monopoly. The invention thus becomes open to
the use of the purchaser without further restriction (Adams v. Burke, cited in
Notes on Selected Commercial Laws: A Guide for Bar Reviewees, Catindig,
2003ed).

14. TESTS OF PATENT

INFRINGEMENT

Economic Interest Test

When the process-discoverer’s economic interests are compromised, i.e., when

others can import the products that result from the process, an act is said to
be prohibited.

a) Literal Infringement Test Resort, in the first instance, must be had to the
“words” of the claim. If the accused matter clearly falls within the claim,
infringement is made out and that is the end of it. The claims of patent
and the accused product must be juxtaposed within the overall context
of claims and specification (Godines v. CA, GR 97343, September 13,
1993).
b) Doctrine of Equivalents Test If two devices do the same work in
substantially the same way, the same result, and produce substantially
the same result, they are the same even though they differ in name, form
or shape (Godines v. CA, Ibid.).

Note: The doctrine of equivalents thus requires satisfaction of the function

means-and-result test, the patentee having the burden to show that all three
components of such equivalency test are met (Ibid).
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The doctrine of equivalents cannot be applied when the infringing invention is

clearly beyond what is written in the claim (Reviewer on Commercial Law,
Sundiang and Aquino, 2006ed).

15. DOCTRINE OF FILE WRAPPER ESTOPPEL

Balances the doctrine of equivalents. Patentee is precluded from claiming as

part of patented product that which he had to excise or modify in order to avoid
patent office rejection, and he may omit any additions he was compelled to add
by patent office regulations. In other words, it is a term used to indicate that a
person who has filed a patent application, and then makes narrowing
amendments to the application to accommodate the patent law, may be
precluded from invoking the doctrine of equivalents to broaden the scope of
their claims to cover subject matter ceded by the amendments. Although
primarily a U.S. term, questions of whether, or the extent to which the
prosecution history should be relevant for determining the extent of protection
of a patent also arise outside the U.S.

16. DEFENSES IN ACTION OF INFRINGEMENT

SECTION 81. Defenses in Action for Infringement. — In an action for

infringement, the defendant, in addition to other defenses available to him:

a) May show the invalidity of the patent; or

b) Any claim thereof, on any of the grounds on which a petition of
cancellation can be brought under Section 61 hereof. (Sec. 45, R.A. No.
165)

17. REMEDIES OF FOR INFRINGEMENT

a) Action for damages

Limitations:
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 Recoverable damages are limited to acts of infringement committed

within 4 years before institution of action (Sec. 79);
 Damages cannot be recovered if the infringer did not know, or had
no reasonable grounds to know, of the patent (Sec. 80).
b) Injunction (Sec. 76);
c) Disposal or destruction by court’s order of the infringing goods, materials
and implements, without compensation (Sec. 76)
d) Criminal action for repetition of infringement (Sec. 84).

Note: The institution of an Inter Partes case for cancellation of a mark with the
Bureau of Legal Affairs, IPO does not bar the adverse party from filing a
subsequent action for infringement with the regular courts of justice in
connection with the same registered mark. This is because the certificate of
registration upon which the infringement case is based, remains valid and
subsisting for as long as it has not been cancelled by the Bureau (Shangri-La
International Hotel Mgt., Inc., v. Court of Appeals, GR No. 111580. June 21,
2001).

18. LICENSING

Licensing May be Voluntary (Secs. 85-92, IPC) or Compulsory (93-102, IPC).

a) Voluntary (Secs. 85-92). The grant by the patent owner to a third person
of the right to exploit a patented invention. Prohibited Clauses (Sec. 87)
 Those which impose upon the licensee the obligation to acquire
from a specific source capital goods, intermediate products, raw
materials, and other technologies, or of permanently employing
personnel indicated by the licensor;
 Those pursuant to which the licensee reserves the right to fix the
sale or resale prices of the products manufactured on the basis of
the license;
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 Those that contain restrictions regarding the volume and structure

of production;
 Those that prohibit the use of competitive technologies in a
nonexclusive technology transfer arrangement;
 Those that establish full or partial purchase option in favor of the
licensor;
 Those that obligate the licensee to transfer for free to the licensor
the inventions or improvements that may be obtained through the
use of the licensed technology;
 Those that require payment of royalties to the owners of patents for
patents which are not used;
 Those that prohibit the licensee to export the licensed product
unless justified for the protection of the legitimate interest of the
licensor such as exports to countries where exclusive licenses to
manufacture and/or distribute the licensed product(s) have
already been granted;
 Those which restrict the use of the technology supplied after the
expiration of the technology transfer arrangement, except in cases
of early termination of the technology transfer arrangement due to
reason(s) attributable to the licensee;
 Those which require payments for patents and other industrial
property rights after their expiration or termination of the
technology transfer arrangement;
 Those which require that the technology recipient shall not contest
the validity of any of the patents of the technology supplier;
 Those which restrict the research and development activities of the
licensee designed to absorb and adapt the transferred technology
to local conditions or to initiate research and development
programs in connection with new products, processes or
equipment;
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 Those which prevent the licensee from adapting the imported

technology to local conditions, or introducing innovation to it, as
long as it does not impair the standards prescribed by the licensor;
 Those which exempt the licensor from liability for non-fulfillment of
his responsibilities under the technology transfer arrangement
and/or liability arising from third party suits brought about by the
use of the licensed product or the licensed technology; and
 Other cases with equivalent effects.
Mandatory Provisions (Sec. 88)
 That the laws of the Philippines shall govern the interpretation of
the agreement and in the event of litigation, the venue shall be the
proper court in the place where the licensee has its principal office;
 Continued access to improvements in techniques and processes
related to the technology shall be made available during the period
of the technology transfer arrangement;
 In the event the technology transfer arrangement shall provide for
arbitration, the Procedure of Arbitration of the Arbitration Law of
the Philippines or the Arbitration Law of the United Nations
Commission on International Trade Law (UNCITRAL) or the Rules
of Conciliation and Arbitration of the International Chamber of
Commerce shall apply and the venue of arbitration shall be the
Philippines or any neutral country; and
 The Philippine taxes on all payments relating to the technology
transfer arrangement shall be borne by the licensor.
b) Compulsory (Secs. 93-102)

The grant by the Director of Legal Affairs of a license to exploit a patented

invention even without the agreement of the patent owner in favor of any
person who has shown his capability to exploit the invention under certain
circumstances.

Terms and Conditions for Compulsory License:

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a) The scope and duration of such license shall be limited to the purpose
for which it was authorized;
b) Non exclusive license;
c) Non assignable license;
d) Use of the subject matter of the license shall be devoted predominantly to
the supply of the Philippine market;
e) May be terminated if the circumstances which led to its grant have
ceased; and
f) The patentee shall be paid adequate remuneration.

Grounds:

a) National emergency or other circumstances of extreme emergency;

b) When public interest requires;
c) Manner of exploitation of patent is anti-competitive;
d) Public non-commercial use of the patent;
e) Patented invention is not being worked in the Philippines on a
commercial scale although capable of being worked; and
f) Where the demand for the patented drugs and medicines is not being
met to an adequate extent and on reasonable terms (Sec. 10 RA 9502)