Challenges to curbing piracy in e-commerce platforms in the Philippines

By: Ernest Luigi A. Manzanares

Earlier this year, the Intellectual Property Office of the Philippines (IPOPHL) Rules on Voluntary Administrative Site Blocking, or Memorandum Circular No. 2023-025, became effective. This legally enables internet service providers (ISPs) to block websites that distribute infringing content or pirated material. By restricting access to these pirate sites, the initiative also aims to steer consumers towards legitimate sources. This is one of several measures targeting still rampant online piracy in the Philippines.

The IPOPHL’s site-blocking mechanism is lauded as the Asia-Pacific’s pioneer voluntary site-blocking mechanism, and second in the world. This regulation promises substantial advantages, particularly for the film and television industries, which incurred a staggering USD700 million loss in 2022 from illicit streaming. Authors, publishers and other creatives stand to benefit as well. The challenge, however, lies in the continual monitoring required, as pirates can swiftly migrate to new online servers to evade detection and enforcement. More sophisticated consumers can also access international pirate sites through VPNs.

Currently, the new blocking mechanism is voluntary in nature, but backing legislation that would otherwise give the IPOPHL more teeth is currently pending in Congress. House Bill No. 7600, which amends the IP Code of the Philippines, has been approved by the lower house on the third reading, while the counterpart Senate Bill No. 2150 is still pending.

If enacted, these measures will authorise the IPOPHL itself to receive complaints and issue site-blocking orders, and ISPs will be required to comply within 48 hours. The bills would grant the IPOPHL more enforcement functions such as gathering of intelligence information and conducting investigations.

Meanwhile, research reveals that about 44% of Filipinos engage with pirated content on social media platforms. While the above-mentioned site-blocking rules and pending legislation facilitate the blocking of websites associated with e-retailers such as individual sellers and merchants, these measures do not extend to e-marketplaces including Facebook, Shopee and Lazada, where the piracy threat is exponentially greater. Pirates exploit the expansive reach and influence of social media to promote illicit products and distribute pirated materials with ease.

Joint Administrative Order 22-01 (JAO 22-01) defines an e-retailer as “an organisation selling products or services directly to consumers online”. Meanwhile, an e-marketplace refers to “an online intermediary that allows participating merchants to exchange information about products or services to enter into an electronic commerce transaction, which may or may not provide information/services about payments and logistics”. JAO 22-01 defines online sellers/merchants as an “organisation or retailer selling products or services to customers through an e-marketplace”.

A cursory survey of popular e-marketplaces in the Philippines suggests piracy and the unauthorised distribution of copyrighted material, ranging from e-books to computer software, continue unabated.

Worse, the algorithms of these e-marketplaces themselves often direct consumers to this pirated and infringing content. The timeliness of responses to takedown requests varies. While there has been an increase in the application for and issuance of Certificates of Copyright Registration by the IPOPHL, demonstrating copyright ownership may also pose a challenge to the copyright holders.

JAO 22-01 lays some of the basic principles that online businesses should observe, such as “take consumer complaints seriously, establish a fair and transparent system to address complaints” and “refrain from illegal, fraudulent, and/or unethical business practices”. But the reality is the internet harbours bad-faith actors whose very business is to profit from the copyrighted works of others.

In COSAC Inc v FILSCAP (G.R. No. 222537, February 28, 2023), the Supreme Court ruled that sections 216 and 216.1 of the IP Code, as amended by RA 10372, contemplate two kinds of copyright infringers: primary infringers, or those who directly commit the infringing acts; and secondary infringers, or those who induce, materially contribute to or benefit from an infringing act of another.

Secondary infringement through contributory infringement happens when a person, with knowledge of infringing activity, materially contributes to the infringing conduct of another. Hence, e-marketplaces such as Facebook may not escape liability by arguing they are mere online intermediaries. An e-marketplace that has been notified of the piracy but refuses or fails to take down the infringing/pirated material may be held liable for secondary infringement.

The Philippine digital economy reached a value of USD17 billion in 2021 and is expected to further grow to USD40 billion by 2025. Beyond the clear pecuniary damage, piracy disincentivises and demoralises our creatives. Efforts to curb, if not eliminate, piracy must be concerted and responsive.

Originally posted by the Asia Business Law Journal via this link. 

Federis hosts AIPLA Women in IP Law event

The firm had the fantastic opportunity to host a segment of this year’s AIPLA Women in IP Law: Cultivating Leaders Global Networking Event. We had a diverse turnout of over 23 lawyers coming from 11 law firms and from a public service agency.

The interactive discussion focused on leadership, where we shared our different perspectives on the qualities of a good leader and how we, as women members of the IP community, can embody these qualities. Through a Zoom call moderated by AIPLA, we connected with other women IP lawyers in India, the United States, China, and Brazil.

Attendees feasted on hot breakfast, just like the popular breakfast that is usually served by the Women in IP Committee during AIPLA conferences.

Thank you to AIPLA for initiating this unique way of connecting women in IP law worldwide.

IPOPHL amends Mediation Rules

The IPOPHL recently released Amendments to the Revised Rules on Mediation. The salient points are as follows:

1. Mediation proceedings at the level of appeals with the Office of the Director General (ODG) are no longer mandatory.
2. The pre-mediation conference has been renamed as follows: Alternative Dispute Resolution (ADR) Conference.
3. At the ADR Conference and again if the mediation proceedings are terminated, the parties will be briefed of their option to submit the dispute to arbitration in accordance with existing IPOPHL arbitration rules and guidelines.
4. If the parties do not settle, once a Non-Settlement of Dispute has been furnished by the Bureau of Legal Affairs- Alternative Dispute Resolution Services (BLA-ADRS), the adjudication proceedings will immediately resume.

These amendments reflect the IPOPHL’s commitment to furnish IP rights holders with a variety of options in the settlement of IP-related disputes. These also show the BLA’s resolve to facilitate speedier resolution of cases.

The Amendments will take effect on March 29, 2024.

Federis participates in the seizure and destruction of counterfeit UNIQLO and Cotton On goods

The firm, in behalf of its clients, Fast Retailing Co., Ltd., and COGI Pty. Ltd., recently cooperated with the Bureau of Customs in the seizure and destruction of counterfeit UNIQLO and Cotton On goods. These goods were seized from a shipment inspection conducted at the Subic Bay Port on July 2023. After prompt notification by the Customs authorities, members of the firm were able to certify that these goods were counterfeit, resulting in the destruction of 3,852 Cotton On and 2,161 Uniqlo items. This collaboration signals the joint effort of the private and public sectors to eliminate the proliferation of pirated goods, solidifying the status of the IPOPHL as a leader in ASEAN anti-piracy efforts.


Federis joins UNIQLO in the IPOPHL Enforcement Summit

On November 15, 2023, members of the firm joined longtime client, Fast Retailing Co., Ltd., in the IPOPHL Enforcement Summit. The IPOPHL Enforcement Summit is a three-day event showcasing the various initiatives of a number of notable brands, in conjunction with the government, in combating counterfeits. The Summit allowed the firm’s representatives, along with other mainstays in the field, to discuss best practices and future plans.

AVP Legal Atty. Ana Singcol, assisted by the firm’s Atty. Montini Felicilda, presented Fast Retailing’s anti-counterfeit actions, including the seizure of counterfeit items in coordination with the Bureau of Customs and the conduct of test buys to ascertain the authenticity of UNIQLO products found on e-commerce websites.

Atty. Singcol and Atty. Felicilda likewise met with the IPOPHL’s Director General Rowel S. Barba, among other key government officials, to discuss these initiatives moving forward, including the possibility of joining the IPOPHL’s Memorandum of Understanding with various e-commerce websites to address challenges in enforcement.

The firm congratulates the IPOPHL on a successful event and looks forward to more events furthering brand protection and awareness.

Federis supports the creativity of local artists

We support the creativity of artists and their works in all forms. Federis Law Firm is the proud Counsel of Georcelle Dapat-Sy, the most sought-after choreographer in the Philippines today, having created some of the most riveting dance choreographies performed by popular singers and actresses in sold-out concerts in the country.

Ms. Dapat-Sy is the first to record copyright for choreographic works at the IPOPHL. Copyright law recognizes choreographic works as protected intellectual creations under Sec. 172.1(e) of the IP Code. Ms. Dapat-Sy runs a successful dance studio, inspiring hundreds of young artists to follow their passion for dancing. Her decision to deposit for recordation many of her new choreographies is a personal statement that just like any other works, the creations of dancers must be recognized and protected under the copyright laws.

Complaints filed against Shimano counterfeiters

Complaints for trademark infringement were filed against the proprietors of Edlimbos Bicycle Trading and Starbright Bicycle Trading before the Prosecution Offices in Mandaue City and Cebu Province respectively. These follow the raids conducted by the firm, in coordination with the National Bureau of Investigation and Neo Zigma, Shimano’s official distributor in the Philippines, which yielded a total of 3,716 bicycle parts, fittings, and accessories bearing the mark “SHIMANO”.

These recent filings reflect Shimano’s resolve to do what it takes to minimize, if not eradicate, all counterfeiting activities in the Philippines. It will continue to work with NBI, Neo Zigma, and Federis Law Office in all investigations and raid actions against infringement of Shimano products wherever they occur in the Philippines.

Counterfeit SHIMANO products raided in Cebu

Working alongside the agents of the National Bureau of Investigation’s Intellectual Property Rights Division, Atty. Montini Felicilda and Mr. Isaias Villanueva of Federis and Associates conducted two (2) simultaneous raids on May 25, 2023 against the warehouses of Starbright Bicycle Trading and Edlimbros Bicycles in Mandaue City, Cebu, suspected sellers of counterfeit SHIMANO products.

An assortment of 3,328 pieces of bicycle parts, fittings, and accessories bearing the mark “SHIMANO” were seized from Starbright Bicycle Trading while 388 bicycle parts, fittings, and accessories bearing the mark “SHIMANO” were confiscated from Edlimbros Bicycles.

The seized products were certified as counterfeit by a representative of Neo Zigma, Shimano’s official supplier in the Philippines, who was present at these raids. Complaints for infringement against Rolly Gica Gomez and Kirsten Sarena Lim, owners of Starbright Bicycle Trading and Edlimbros Bicycles, respectively, will follow.

These recent raids follow an earlier raid conducted on March 22, 2022 by SHIMANO against Hyx Enterprises of Guiguinto, Bulacan, which yielded 10,506 pieces of assorted counterfeit  SHIMANO bicycle parts.

This series of raids is a clear indication that SHIMANO is serious in its efforts to rid the Philippine market of counterfeit SHIMANO products.  It is closely monitoring the market for any counterfeiting activities and will continue to work closely with the NBI, Neo Zigma, and the Federis Law Office in implementing its anti-counterfeiting activity in the country.

Geographical Indication System in the Philippines

Registration of Geographical Indications is now available in the Philippines. The Rules and Regulations on Geographical Indications (GI-RR), which issued on 5 October 2022, establishes a GI registration system. Any interested party may now apply to register a GI with the IP Office of the Philippines (IPOPHL).

Under this system GI is defined as any indication which identifies a good as originating in a territory, region or locality, where a given quality, reputation, or other characteristics of the good is essentially attributable to its geographical origin, and/or human factors.

GI receives protection in the Philippines only if registered under the GI-RR. A registered GI is protected against: (1) third party uses of geographical names other than the true place of origin in a manner that can mislead the public, (2) use of GI which falsely represents that the goods originate in another territory, (3) and use of a GI on a good that does not originate from the place indicated in the GI even if accompanied by the name of the place where the goods originates from, or even if accompanied by expressions such as “kind”, “type”, “style”, imitation”, “method”, “as produced in” or other similar qualifying terms, (4) use of a GI which constitutes an act of unfair competition within the meaning of Art. 10bis of the Paris Convention.

The Bureau of Trademarks will maintain a Register of Protected Geographical Indications. The registration includes publication and allows for the filing of third-party observations or objections.

Foreign applicants must be a national of, or a juridical entity organized in or has an effective commercial or industrial establishment in a country which is a party to the World Trade Organization or other international conventions concerning the protection of GI to which the Philippines is also a party.

Along with other standard application requirements, an applicant must submit a government certification validating the causal link between the specific quality, reputation or other characteristics of the goods and the geographic area which it originated and a technical information pertaining to the product specifications.

A foreign applicant will be required to submit a certification from the competent government agency in the country of origin that the GI is a registered or protected GI in that country.

The system will protect homonymous GI’s but may require owners to comply with certain conditions to differentiate one GI from another to avoid misleading the public. The principle of first in time first in right will apply. Full text of the rules is here:

Additional Accolades for Our Managing Partner

Cheers to our Managing Partner, Mila Federis, for making it once again to the “Philippines Top 100 Lawyers 2022” and for being included in the Asian Legal Business “Asia Top 15 IP Lawyers 2022” ranking.

The Asian Legal Business ranking highlights the top 15 IP lawyers across Asia “who have consistently delivered high-quality IP work and set high standards in the IP space, while earning accolades from their colleagues, superiors, and clients.” Full details can be found here. Asian Legal Business Online is published by Thomson Reuters.

Known as the “A-List”, the Asia Business Law Journal ranking “is based on extensive research conducted and nominations received from in-house counsel in the Philippines and elsewhere, as well as Philippines-focused partners in international law firms.” Further details can be found here

Thank you Thomson Reuters, and thank you to all our clients that continue to enable our firm’s CULTURE OF SERVICE®.

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