What is the legal framework for the protection of Intellectual Property Rights in the Philippines?

Republic Act 8293, otherwise known as the Intellectual Property Code, provides the legal framework for intellectual property protection in the Philippines. It came into effect on January 1, 1998.

What is Trademark Infringement?

Trademark infringement is the unauthorized use in commerce of a registered trademark or a copy or colorable imitation thereof, which results in the likelihood of confusion among the consuming public. The elements of trademark infringement are: (1) a registered trademark in the Philippines, (2) plaintiff’s ownership of said mark, and (3) use of the trademark or imitation thereof by a third person, which results in likelihood of confusion.

What is Unfair Competition?

Unfair Competition is a form of copying and making false statements by one which passes off its own goods for those of another that has an established goodwill. The copying and or passing off may include copying of the trademark or giving one’s own goods the general appearance of another, which causes likelihood of confusion. The elements of unfair competition are: (1) confusing similarity in the appearance of the goods involved, and (2) intent to deceive the public.

What is False Designation of Origin and False Description of Goods?

False designation of origin or false description is committed when one who in the course of trade uses any word, term, symbol or device, which is likely to cause confusion or mistake on the consuming public as to the affiliation, connection, association of such person with another person, sponsorship or approval of his or her goods, services or commercial activities by another person. It is also committed by misrepresenting the nature, characteristic, quality and geographic origin of the goods or services in advertising or promotion of said goods and services.

Can a foreign company file an action for trademark infringement, unfair competition or false designation of goods in the Philippines?

Yes. A foreign national or corporation, whether or not licensed to do business in the Philippines, may bring a civil or administrative action for trademark infringement, unfair competition or false designation so long as such individual or corporation is domiciled in a country which is a party to any convention, treaty or agreement relating to intellectual property rights or the repression of unfair competition, to which the Philippines is also a party, or extends reciprocal rights to the nationals of the Philippines by law.

What enforcement actions are available to intellectual property owners whose rights are being infringed in the Philippine market?

The intellectual property owner may work with government agencies to conduct a raid action pursuant to a valid search warrant or a visit/inspection pursuant to some of the government agencies’ visitorial powers.

A raid action is usually conducted by the National Bureau of Investigation (Intellectual Property Rights Division) and the Philippine National Police (Criminal Investigation and Detection Group).

The Optical Media Board and the Intellectual Property Enforcement Office can conduct an inspection and issue warning letters through their visitorial powers.

The course of action depends on the end goal of the intellectual property owner. If the owner wants to seize a huge inventory of counterfeit items, it is best to conduct a raid action. If the aim is to deter continuing infringing acts done in a small scale, a visit/inspection by the Intellectual Property Enforcement Office or the Optical Media Board may suffice.

How can one seize counterfeit products or infringing items from the market?

A raid pursuant to a court issued search warrant may be conducted to ensure that the counterfeit products are seized and removed from the market. The IP owner may file a letter complaint with the enforcement agency, usually the National Bureau of Investigation or the Philippine National Police, who will conduct an independent investigation to ascertain the validity and truthfulness of the complaint and the scope of the infringement.

Once the infringement is confirmed, the enforcement agent will apply for the issuance of a search warrant. If there are valid grounds, the court will issue a search warrant, which must be served within 10 days. The raiding team will then conduct a search and seizure operation whereby all counterfeit and infringing items will be confiscated and will be placed under the court’s custody and stored in a bonded warehouse. An inventory and a return of the search warrant should be submitted to the court after the raid.

How is trademark infringement, unfair competition and false designation prosecuted?

An IP owner may file a criminal, civil, or administrative action against an infringer.

Criminal Action

A criminal action may be initiated by filing a complaint with the prosecutor. The Prosecutor then conducts the preliminary investigation to determine if there are reasonable grounds for infringement. If there are reasonable grounds, the Prosecutor will issue an Order recommending the filing of Criminal Information in Court.

After the filing of the Criminal Information, the Court will issue a warrant of arrest. The Accused has the option to post bail. Once the Accused is arrested and/or posts bail, he or she will be arraigned. The Court will then proceed to try the criminal case and if the accused is found guilty of infringement beyond a reasonable doubt, it will issue a decision of conviction.

The IP owner will participate in the civil aspect of the criminal action if he is claiming damages.

A person found guilty in a criminal case for trademark infringement, unfair competition and/or false designation will be imprisoned for a term of 2 years to 5 years, and will be ordered to pay a fine ranging from Php 50,000 to Php 200,000.

Civil Action

An IP owner may file a civil action to recover damages from any person who infringes his or her rights. The award of damages shall be either the reasonable profit the plaintiff would have made, had a defendant not infringed his rights, or the profit that the defendant actually received from the infringement. In the event that such damages cannot be ascertained with reasonable certainty, the Court may award as damages a reasonable percentage based upon the amount of gross sales received by the defendant in connection with the use of plaintiff’s trademark. In cases where actual intent to mislead the public or to defraud the plaintiff is shown, the damages may be doubled upon the discretion of the Court.

Other forms of relief, such as injunction and the impounding of the counterfeit products, sales invoices and other documents evidencing sales, are also available as remedies to plaintiff.

Administrative Action

An administrative action for trademark infringement, unfair competition and/or false designation may be filed with the Bureau of Legal Affairs (BLA) of the Intellectual Property Office (IPO). The total amount of damages claimed should be Php 200,000 or more. Provisional remedies, such as an injunction are available.

The administrative penalties available may include the issuance of a cease and desist order; condemnation and seizure of infringing products; imposition of administrative fines ranging from Php 5,000 to Php 150,000 and an additional fine of up to Php 1,000 for each day of continuing violation; cancellation or withholding of any permit, license or registration granted or being secured from the IPO; the assessment of damages; censure; and other analogous penalties or sanctions.

Can a foreign corporation or trademark owner enforce its trademark rights even if the trademark is not registered in the Philippines?

Yes. An action for unfair competition may be filed by owners of trademarks, which are not registered in the Philippines.

Is actual use of a trademark necessary before one can file for a trademark infringement or unfair competition action?

Yes. Likelihood of confusion is an element of trademark infringement and unfair competition. To prove likelihood of confusion, the mark being infringed upon should be used on goods or services that are available in the Philippines. An exception to this rule is if the mark being infringed upon is an internationally well-known trademark, that is also a well-known trademark in the Philippines.

Can one prevent counterfeit goods from entering the Philippines?

Yes. The Bureau of Customs has a system of recording intellectual property rights, where it alerts owners of shipment of counterfeit and/or original goods imported by unauthorized importers or distributors. If the goods are confirmed as counterfeit, they will be seized accordingly.

The recordation of IP rights or products covered therein is valid for two (2) years from the date of recordation, and shall be renewable every two (2) years thereafter.

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