COMMERCIAL LAW

Peñ alosa, Belle Marie G.

University of San Jose- Recoletos
printed publication or publications circulated within the
country, or if it is substantially similar to any other utility
PART ONE: COMMERCIAL LAW model so known, used or described within the country.
The validity of the patent issued by the Philippine Patent
V. Intellectual Property Code (R.A. No. 8293) [Note: Office in favor of private respondent and the question over
Exclude Implementing Rules and Regulations] the inventiveness, novelty and usefulness of the improved
model of the LPG burner are matters which are better
A. Patents determined by the Patent Office. The technical staff of the
Philippine Patent Office composed of experts in their field
1. Patentable Inventions has, by the issuance of the patent in question, accepted
private respondent’s model of gas burner as a discovery.
SECTION 21. Patentable Inventions. - Any technical There is a presumption that the Office has correctly
solution of a problem in any field of human activity determined the patentability of the model and such action
which is new, involves an inventive step and is must not be interfered with in the absence of competent
industrially applicable shall be patentable. It may be, evidence to the contrary.
or may relate to, a product, or process, or an
improvement of any of the foregoing. (Sec. 7, R.A. No. b)  Inventive Step
165a)
SECTION 26. Inventive Step. - 26.1. An invention
involves an inventive step if, having regard to prior
a)  Novelty art, it is not obvious to a person skilled in the art at the
time of the filing date or priority date of the
SECTION 23. Novelty. - An invention shall not be application claiming the invention. (n)
considered new if it forms part of a prior art. (Sec. 9,
R.A. No. 165a) Kho vs. Court of Appeals
G.R. NO. 115758, 19 MAR 2002

Manzano v. Court of Appeals

G.R. No. 113388, September 5, 1997 Issue:
Whether or not petitioner is entitled to the exclusive use of
Issue: the trademark Chin Chun Su based on her copyright and
Whether or not Madolaria’s patented utility was a novel. patent registration over the product.

Ruling:
Ruling:
Yes, the element of novelty is an essential requisite of the No.
patentability of an invention or discovery. If a device or
process has been known or used by others prior to its Trademark, copyright and patents are different intellectual
invention or discovery by the applicant, an application for property rights that cannot be interchanged with one
a patent therefor should be denied; and if the application another.
has been granted, the court, in a judicial proceeding in
which the validity of the patent is drawn in question, will A trademark is any visible sign capable of distinguishing
hold it void and ineffective. It has been repeatedly held the goods (trademark) or services (service mark) of an
that an invention must possess the essential elements enterprise and shall include a stamped or marked
of novelty, originality and precedence, and for the patentee container of goods. In relation thereto, a trade name means
to be entitled to the protection the invention must be new the name or designation identifying or distinguishing an
to the world. enterprise. Meanwhile, the scope of a copyright is confined
to literary and artistic works which are original intellectual
In issuing Letters Patent No. UM-4609 to Melecia creations in the literary and artistic domain protected from
Madolaria for an “LPG Burner” x x x, the Philippine Patent the moment of their creation.
Office found her invention novel and patentable. The
issuance of such patent creates a presumption which yields Patentable inventions, on the other hand, refer to any
only to clear and cogent evidence that the patentee was the technical solution of a problem in any field of human
original and first inventor. activity which is new, involves an inventive step and is
A utility model shall not be considered “new” if before the industrially applicable. Petitioner has no right to support
application for a patent it has been publicly known or her claim for the exclusive use of the subject trade name
publicly used in this country or has been described in a and its container. The name and container of a beauty

1
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
cream product are proper subjects of a trademark Issue:
inasmuch as the same falls squarely within its definition. Whether or not the patent secured by the Respondent was
valid?
c)  Industrial Applicability
Ruling:
SECTION 27. Industrial Applicability. - An invention Yes. The validity of the patent issued by the Philippines
that can be produced and used in any industry shall be Patent Office in favor of the private respondent and the
industrially applicable. (n) question over the inventiveness, novelty and usefulness of
the improved process therein specified and described are
matters which are better determined by the Philippines
Creser Precision Systems Inc. vs. Court of Appeals, Patent Office. The technical staffs of the Philippines Patent
G.R. No. G.R. No. 118708, 02 Feb 1998 Office, composed of experts in their field, has, by the
issuance of the patent in question, accepted the thinness of
Issue: the private respondent’s new tiles as a discovery.
Whether or not the Court of Appeals in reversing the trial
court’s Order. In fact, as we have already pointed out, the clear
preponderance of evidence bolsters said presumption of
Ruling: validity of appellee’s patent. There is no indication in the
The Court sustains the assailed decision of the respondent records of this case — and this Court is unaware of any
Court of Appeals. fact, which would tend to show that concrete wall tiles
similar to those produced by appellee had ever been made
A person or entity who has not been granted letters patent by others before he started manufacturing the same. In
over an invention and has not acquired any right or title fact, during the trial, appellant was challenged by appellee
thereto either as assignee or as licensee, has no cause of to present a tile of the same kind as those produced by the
action for infringement because the right to maintain an latter, from any earlier source but, despite the fact that
infringement suit depends on the existence of the patent. appellant had every chance to do so, he could not present
any. There is, therefore, no concrete proof that the
Petitioner admits it has no patent over its aerial fuze. improved process of tile-making described in appellee’s
Therefore, it has no legal basis or cause of action to patent was used by, or known to, others previous to his
institute the petition for injunction and damages arising discovery thereof." The contention of the petitioner Aguas
from the alleged infringement by private respondent. that the letters-patent of de Leon was actually a patent for
While petitioner claims to be the first inventor of the aerial the old and non-patentable process of making mosaic pre-
fuze, still it has no right of property over the same upon cast tiles is devoid of merit. De Leon never claimed to have
which it can maintain a suit unless it obtains a patent invented the process of tile-making.
therefor. Under American jurisprudence, and inventor has
no common-law right to a monopoly of his invention. He The records disclose that de Leon’s process is an
has the right to make, use and vend his own invention, but improvement of the old process of tile-making. The tiles
if he voluntarily discloses it, such as by offering it for sale, produced from de Leon’s process are suitable for
the world is free to copy and use it with impunity. A patent, construction and ornamentation, which previously had not
however, gives the inventor the right to exclude all others. been achieved by tiles made out of the old process of tile-
As a patentee, he has the exclusive right of making, using making. De Leon’s invention has therefore brought about a
or selling the invention. new and useful kind of tile. The old type of tiles was
usually intended for floors although there is nothing to
As correctly ruled by the respondent Court of Appeals in prevent one from using them for walling purposes. These
its assailed decision: since the petitioner (private tiles are neither artistic nor ornamental. They are heavy
respondent herein) is the patentee of the disputed and massive. The respondent’s improvement is indeed
invention embraced by letters of patent UM No. 6938 inventive and goes beyond the exercise of mechanical skill.
issued to it on January 23, 1990 by the Bureau of Patents, it
has in its favor not only the presumption of validity of its He has introduced a new kind of tile for a new purpose. He
patent, but that of a legal and factual first and true inventor has improved the old method of making tiles and precast
of the invention. articles which were not satisfactory because of an
intolerable number of breakages, especially if deep
2. Non-Patentable Inventions engravings are made on the tile. He has overcome the
problem of producing decorative tiles with deep engraving,
Aguas vs. De Leon but with sufficient durability. Durability inspite of the
G.R. No. L32160, 30 Jan 1982 thinness and lightness of the tile is assured, provided that a
certain critical depth is maintained in relation to the

2
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
dimensions of the tile. In view of the foregoing, this Court from the date of filing in the Philippines. (Sec. 15, R.A.
finds that Patent No. 658 was legally issued, the process No. 165a)
and/or improvement being patentable.

Boothe vs. The Director of Patents

3. Ownership of a Patent G.R. L24919, 28 Jan 1980
Issue:
a)  Right of a Patent Whether or not petitioners are entitled to priority right in
the application of patent under R.A. 165.
SECTION 28. Right to a Patent. - The right to a patent
belongs to the inventor, his heirs, or assigns. When two Ruling:
(2) or more persons have jointly made an invention, No. Under Rule 47 and 48 of the Revised Rules of Practice
the right to a patent shall belong to them jointly. (Sec. in Patent cases, an application is deemed complete when
10, R.A. No. 165a) all the required parts to comply with the rules are
submitted except that minor informalities may be waived
b)  First-to-FileRule subject to subsequent correction, whenever required. The
filing date of the applicant is the date on which the
complete application is received in the Patent Office.
SECTION 29. First to File Rule. - If two (2) or more
The submission made by petitioner on March 5, 1954 was
persons have made the invention separately and
far from complete since its defect was one of substance
independently of each other, the right to the patent
and not merely one of form. Their invention was not
shall belong to the person who filed an application for
completely determinable therefrom due to the
such invention, or where two or more applications are
incompleteness of the Specification. It was only the time
filed for the same invention, to the applicant who has
petitioners submitted the additional pages of
the earliest filing date or, the earliest priority date.
Specifications and Claims to the Patent Office when the
(3rd sentence, Sec. 10, R.A. No. 165a)
application was deemed complete. In order to be entitled
to the priority right under the Patent Law which provided
that the local application must be filed within 12 months
c)  Inventions Created Pursuant to a from the date of the foreign application and such
Commission application must be complete. The facts show that the
application of petitioners was only deemed completed in
April 14, 1954 which was outside the one-year period from
SECTION 30. Inventions Created Pursuant to a
its application in March 16, 1953. Thus, petitioners are no
Commission. - 30.1. The person who commissions the
longer entitled to the priority right in the application of
work shall own the patent, unless otherwise provided
patent under the Patent Law.
in the contract.

4. Grounds for Cancellation of a Patent

d)  Right of Priority

SECTION 61. Cancellation of Patents. - 61.1. Any

SECTION 31. Right of Priority. - An application for
interested person may, upon payment of the required
patent filed by any person who has previously applied
fee, petition to cancel the patent or any claim thereof,
for the same invention in another country which by
or parts of the claim, on any of the following grounds:
treaty, convention, or law affords similar privileges to
Filipino citizens, shall be considered as filed as of the (a) That what is claimed as the invention is not new or
date of filing the foreign application: Provided, That: patentable;
(a) the local application expressly claims priority; (b) (b) That the patent does not disclose the invention in a
it is filed within twelve (12) months from the date the manner sufficiently clear and complete for it to be
earliest foreign application was filed; and (c) a carried out by any person skilled in the art; or
certified copy of the foreign application together with (c) That the patent is contrary to public order or
an English translation is filed within six (6) months morality.

3
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
5. Remedy of the True and Actual Inventor and subject to the same provisions and requirements as
relate to patents for inventions insofar as they are
applicable, except as otherwise herein provide.
SECTION 68. Remedies of the True and Actual
Inventor. - If a person, who was deprived of the patent The Patent Law expressly acknowledges that any new
without his consent or through fraud is declared by model of implements or tools of any industrial product
final court order or decision to be the true and actual even if not possessed of the quality of invention but which
inventor, the court shall order for his substitution as is of practical utility is entitled to a patent for utility model.
patentee, or at the option of the true inventor, cancel Here, there is no dispute that the letters patent issued to
the patent, and award actual and other damages in his petitioner are for utility models of audio equipment. In
favor if warranted by the circumstances. (Sec. 33, R.A. issuing, reissuing or withholding patents and extensions
No. 165a) thereof, the Director of Patents determines whether the
patent is new and whether the machine or device is the
proper subject of patent. In passing on an application, the
4. Rights Conferred by a Patent
Director decides not only questions of law but also
questions of fact, i.e. whether there has been a prior public
SECTION 71. Rights Conferred by Patent. - 71.1. A use or sale of the article sought to be patented. Where
patent shall confer on its owner the following petitioner introduces the patent in evidence, if it is in due
exclusive rights: form, it affords a prima facie presumption of its
(a) Where the subject matter of a patent is a product, correctness and validity. The decision of the Director of
to restrain, prohibit and prevent any unauthorized Patents in granting the patent is always presumed to be
person or entity from making, using, offering for sale, correct, and the burden then shifts to respondent to
selling or importing that product; overcome this presumption by competent evidence. Under
Sec. 55 of The Patent Law a utility model shall not be
(b) Where the subject matter of a patent is a process,
considered “new” if before the application for a patent it
to restrain, prevent or prohibit any unauthorized
has been publicly known or publicly used in this country or
person or entity from using the process, and from
has been described in a printed publication or publications
manufacturing, dealing in, using, selling or offering for
circulated within the country, or if it is substantially
sale, or importing any product obtained directly or
similar to any other utility model so known, used or
indirectly from such process.
described within the country.
Respondent Corporation failed to present before the trial
Del Rosario vs. Court of Appeals court competent evidence that the utility models covered
G.R. No. 115106, 15 Mar 1996 by the Letters Patents issued to petitioner were not new.
This is evident from the testimony of Janito Cua, President
of respondent Janito Corporation, during the hearing on
Issue:
the issuance of the injunction. As may be gleaned herein,
Whether or not respondent Janito Corporation’s the rights of petitioner as a patentee have been sufficiently
trademark Miyata equipment infringing the petitioner’s established, contrary to the findings and conclusions of
patent rights. respondent Court of Appeals.
Consequently, under Sec. 37 of the Patent law, petitioner as
Ruling: a patentee shall have the exclusive right to make, use and
Yes, trademark iyata equipment violates the petitioner’s sell the patented machine, article or product for the
patent rights. In this regard Sec. 55 of R.A. 165 as amended purpose of industry or commerce, throughout the territory
known as The Patent Law, provides — Sec. 55. Design of the Philippines for the term of the patent, and such
patents and patents for utility models. — (a) Any new, making, using or selling by any person without
original, and ornamental design for an article of authorization of the patentee constitutes infringement of
manufacture and (b) new model or implements or tools or his patent. Petitioner established before the trial court that
of any industrial product or of part of the same, which does respondent Janito Corporation was manufacturing a
not possess the quality of invention but which is of similar sing-along system bearing the trademark miyata
practical utility by reason of its form, configuration, which infringed his patented models. He also alleged that
construction or composition, may be protected by the both his own patented audio equipment and respondent’s
author thereof, the former by a patent for a design and the singalong system were constructed in a casing with a
latter by a patent for a utility model, in the same manner control panel, the casing having a vertical partition wall

4
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
defining the rear compartment from the front Clearly, therefore, both petitioner’s and respondent’s
compartment, with the front compartment consisting of a models involve substantially the same modes of operation
loud speaker baffle, both containing a transistorized and produce substantially the same if not identical results
amplifier circuit capable of being operated from outside when used. In view thereof, we find that petitioner had
through various controls mounted on the control panel, established before the trial court prima facie proof of
and that both had loud speakers fitted inside the front violation of his rights as patentee to justify the issuance of
compartment of the casing and connected to the output of a writ of preliminary injunction in his favor during the
the main audio amplifier section both having a tape pendency of the main suit for damages resulting from the
recorder and a tape player mounted on the control panel alleged infringement.
with the tape recorder and tape player being both
connected to the transistorized amplifier circuit.
5. Limitations of Patent Rights
Respondent Janito Corporation denied that there was any
violation of petitioner’s patent rights, and cited the
differences between its miyata equipment and petitioner’s Roma Drug vs. The RTC of Guagua, Pampanga,
audio equipment. But it must be emphasized; respondent G.R. No. 149907, 16 Apr 2009
only confined its comparison to the first model, Utility
Model No. 5269, and completely disregarded Utility Model Issue: Whether or not the seized imported drugs were
No. 6237 which improved on first.
counterfeit.
It is elementary that a patent may be infringed where the
essential or substantial features of the patented invention
are taken or appropriated, or the device, machine or other Ruling:
subject matter alleged to infringe is substantially identical Yes. The Supreme Court denounced R.A. No. 8203 for it
with the patented invention. In order to infringe a patent, a violated equal protection. It does not allow private
machine or device must perform the same function, or 3rd parties to import such medicines abroad even in cases
accomplish the same result by identical or substantially of life and death nor does it allow the importation by
identical means and the principle or mode of operation 3rd parties in cases wherein the stocks of such medicine
must be substantially the same It may be noted that would run out. It discriminates at the expense of Filipinos
respondent corporation failed to present before the trial who cannot travel abroad to purchase such medicines yet
court a clear, competent and reliable comparison between need them badly. Nevertheless, the flawed intention of
its own model and that of petitioner, and disregarded Congress had been abrogated by the passage of RA No.
completely petitioner’s Utility Model No. 6237 which 9502 or the “Universally Accessible Cheaper and Quality
improved on his first patented model. Notwithstanding the Medicines Act of 2008” and its Implementing Rules and
differences cited by respondent corporation, it did not Regulations. This law did not expressly repeal R.A. NO.
refute and disprove the allegations of petitioner before the 8203 but it emphasized that any medicine introduced into
trial court that: (a) both are used by a singer to sing a the Philippines by its patent holder should be accessible to
amplify his voice; (b) both are used to sing with a minus- anyone. It provides that the right to import drugs and
one or multiplex tapes, or that both are used to play minus- medicines shall be available to any government agency OR
one or standard cassette tapes for singing or for listening ANY PRIVATE 3rd PARTY. The Supreme Court noted that
to; (c) both are used to sing a minus-one tape and this law provided and recognized the constitutionally-
multiplex tape and to record the singing and the guaranteed right of the public to health.
accompaniment; (d) both are used to sing with live
accompaniment; (d) both are used to sing with live a) Prior User
accompaniment and to record the same; (e) both are used
to enhance the voice of the singer using echo effect, treble,
bass and other controls; (g) both are equipped with SECTION 73. Prior User. - 73.1. Notwithstanding
cassette tape decks which are installed with one being Section 72 hereof, any prior user, who, in good faith
used for playback and the other, for recording the singer was using the invention or has undertaken serious
and the accompaniment, and both may also be used to preparations to use the invention in his enterprise or
record a speaker’s voice or instrumental playing, like the business, before the filing date or priority date of the
guitar and other instruments; (h) both are encased in a application on which a patent is granted, shall have the
box-like cabinets; and (i) both can be used with one or right to continue the use thereof as envisaged in such
more microphones. preparations within the territory where the patent
produces its effect.

5
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
be considered to cover not only all the elements as
b) Use by Government  expressed therein, but also equivalents. (n)

6. Patent Infringement Godines v. Court of Appeals

SECTION 76. Civil Action for Infringement. - 76.1. The G.R. No. L-97343, September 13, 1993
making, using, offering for sale, selling, or importing a
patented product or a product obtained directly or Issue:
indirectly from a patented process, or the use of a
Whether or not petitioner’s products infringe upon the
patented process without the authorization of the
patent of respondent SV-Agro.
patentee constitutes patent infringement: Provided,
That, this shall not apply to instances covered by
Sections 72.1 and 72.4 (Limitations of Patent Rights); Ruling: YES.
Section 74 (Use of Invention by Government); Section Tests have been established to determine infringement.
93.6 (Compulsory Licensing); and Section 93-A These are (a) literal infringement; and (b) the doctrine of
(Procedures on Issuance of a Special Compulsory equivalents. In using literal infringement as a test, “. . .
License under the TRIPS Agreement) of this Code. resort must be had, in the first instance, to the words of the
claim. If accused matter clearly falls within the claim,
Pearl & Dean v. Shoemart infringement is made out and that is the end of it.” To
determine whether the particular item falls within the
G.R. No. 148222, August 15, 2003
literal meaning of the patent claims, the court must
juxtapose the claims of the patent and the accused product
Issue: within the overall context of the claims and specifications,
Whether there was a patent infringement. to determine whether there is exact identity of all material
elements. It appears from the observation of the trial court
that these claims of the patent and the features of the
Ruling: patented utility model were copied by petitioner: In
Petitioner never secured a patent for the light boxes. It appearance and form, both the floating power tillers of the
therefore acquired no patent rights which and could not defendant and the turtle power tiller of the plaintiff are
legally prevent anyone from manufacturing or virtually the same. Viewed from any perspective or angle,
commercially using the contraption. To be able to the power tiller of the defendant is identical and similar to
effectively and legally preclude others from copying and that of the turtle power tiller of plaintiff in form,
profiting from the invention, a patent is a primordial configuration, design and appearance. The parts or
requirement. No patent, no protection. components thereof are virtually the same. In operation,
the floating power tiller of the defendant operates also in
similar manner as the turtle power tiller of plaintiff.
a) Tests in Patent Infringement 
Petitioner’s argument that his power tillers were different
(1) Literal Infringement
from private respondent’s is that of a drowning man
clutching at straws. Recognizing that the logical fallback
SECTION 75. Extent of Protection and Interpretation of position of one in the place of defendant is to aver that his
Claims. - 75.1. The extent of protection conferred by product is different from the patented one, courts have
the patent shall be determined by the claims, which adopted the doctrine of equivalents. Thus, according to this
are to be interpreted in the light of the description and doctrine, “(a)n infringement also occurs when a device
drawings. appropriates a prior invention by incorporating its
innovative concept and, albeit with some modification and
(2) Doctrine of Equivalents change, performs substantially the same function in
substantially the same way to achieve substantially the
same result.” In this case, the trial court observed: But a
75.2. For the purpose of determining the extent of careful examination between the two power tillers will
protection conferred by the patent, due account shall show that they will operate on the same fundamental
be taken of elements which are equivalent to the principles.
elements expressed in the claims, so that a claim shall

6
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
We are compelled to arrive at no other conclusion but that 4.2. The term “technology transfer arrangements” refers to
there was infringement. contracts or agreements involving the transfer of
systematic knowledge for the manufacture of a product,
the application of a process, or rendering of a service
b) Defenses in Action for Infringement
including management contracts; and the transfer,
assignment or licensing of all forms of intellectual property
SECTION 81. Defenses in Action for Infringement. - In rights, including licensing of computer software except
an action for infringement, the defendant, in addition computer software developed for mass market.
to other defenses available to him, may show the
invalidity of the patent, or any claim thereof, on any of
b) Compulsory
the grounds on which a petition of cancellation can be
brought under Section 61 hereof. (Sec. 45, R.A. No.
165) Parke, Davis and Company vs. Doctors'
Pharmaceuticals, Inc., et. al.,
7. Licensing G.R. No L22221, 31 Aug 1965
a) Voluntary
Issue:
SECTION 85. Voluntary License Contract. - To Whether or not the Director of Patents gravely abused his
encourage the transfer and dissemination of discretion in ordering the grant of compulsory license to
technology, prevent or control practices and the respondent for the manufacture of preparations
conditions that may in particular cases constitute an containing chloramphenicol under Letters Patent No. 50
abuse of intellectual property rights having an adverse issued to the petitioner.
effect on competition and trade, all technology
transfer arrangements shall comply with the
Ruling:
provisions of this Chapter. (n)
The Court finds no error in the decision of the Director of
Patents.
Feliciano vs. The Director of Patent
G.R. No. L-4572, 22 May 1953
The pertinent statutory provisions that govern the issues
raised herein are found in Chapter VIII of Republic Act No.
Issue: 165, as amended, which for ready reference are hereunder
Whether or not petitioner has the exclusive right to sell quoted: “SEC. 34. Grounds for compulsory license. — Any
person may apply to the Director for the grant of a license
under a particular patent at any time after the expiration of
Ruling: three years from the date of the grant of the patent, under
No, despite the amendment to the first motion to the any of the following circumstances: (d) If the patented
intervene by which he claims assignment of the invention, invention relates to food or medicine or is necessary for
still it remains that the alleged assignment is not the public health or public safety.”
invention but it is an agreement whereby he is to act as
selling agent for the inventors of the patent (if granted)
In order that any person may be granted a license under a
and of the invention covered thereby and to receive
particular patented invention relating to medicine under
compensation therefor. It was not an assignment of rights. 
Section 34(d), it is sufficient that the application be made
after the expiration of three years from the date of the
SECTION 85. Voluntary License Contract. - To encourage grant of the patent and that the Director should find that a
the transfer and dissemination of technology, prevent or case for granting such license has been made out. Since in
control practices and conditions that may in particular the instant case it is admitted by petitioner that the
cases constitute an abuse of intellectual property rights chemical substance chloramphenicol is a medicine, while
having an adverse effect on competition and trade, all Letters Patent No. 50 covering said substance were
technology transfer arrangements shall comply with the granted to Parke Davis & Company on February 9, 1950,
provisions of this Chapter. (n) and the instant application for license under said patent
was only filed in 1960, verily the period that had elapsed

7
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
then is more than three years, and so the conditions for the another. A trademark is any visible sign capable of
grant of the license had been fulfilled. We find, therefore, distinguishing the goods (trademark) or services (service
no error in the decision of the Director of Patents on this mark) of an enterprise and shall include a stamped or
aspect of the controversy. marked container of goods. In relation thereto, a trade
name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a
The claim that a compulsory license cannot be granted to
copyright is confined to literary and artistic works which
respondent because the latter does not intend to work the
are original intellectual creations in the literary and artistic
patented invention itself but merely to import it has also
domain protected from the moment of their creation.
no legal nor factual basis. In the first place, Section 34 of
Patentable inventions, on the other hand, refer to any
Republic Act No. 165 does not require the petitioner of a
technical solution of a problem in any field of human
license to work the patented invention if the invention
activity which is new, involves an inventive step and is
refers to medicine, for the term "worked" or "working"
industrially applicable. Petitioner has no right to support
used in said section does not apply to the circumstance
her claim for the exclusive use of the subject trade name
mentioned in subsection (d), which relates to medicine or
and its container. The name and container of a beauty
to one necessary for public health and public safety.
cream product are proper subjects of a trademark
inasmuch as the same falls squarely within its definition.
Finally, the Court adds that it is not a valid ground to
refuse the license applied for the fact that the patentee is
1. Marks vs. Collective Marks vs. Trade Names
working the invention and as such has the exclusive right
to the invention for a term of 17 years, the reason for it
being that the provision permitting the grant of SECTION 121. Definitions. - As used in Part III, the
compulsory license is intended not only to give a chance to following terms have the following meanings:
others to supply the public with the quantity of the 121.1. “Mark” means any visible sign capable of
patented article but especially to prevent the building up of distinguishing the goods (trademark) or services
patent monopolies. (service mark) of an enterprise and shall include a
stamped or marked container of goods; (Sec. 38, R.A.
8. Assignment and Transmission of Rights No. 166a)
121.2. “Collective mark” means any visible sign
designated as such in the application for registration
SECTION 103. Transmission of Rights. - 103.1. Patents
and capable of distinguishing the origin or any other
or applications for patents and inventions to which
common characteristic, including the quality of goods
they relate, shall be protected in the same way as the
or services of different enterprises which use the sign
rights of other property under the Civil Code.
under the control of the registered owner of the
collective mark; (Sec. 40, R.A. No. 166a)
121.3. “Trade name” means the name or designation
B. Trademarks identifying or distinguishing an enterprise; (Sec. 38,
KHO v. COURT OF APPEALS R.A. No. 166a)
G.R. NO. 115758, 19 MAR 2002
Mirpuri v. Court of Appeals
G.R. No. 114508, November 19, 1999
Issue:
Whether or not petitioner is entitled to the exclusive use of
the trademark Chin Chun Su based on her copyright and Issue:
patent registration over the product. Whether or not respondent may invoke the protection
under Article 6bis of the Paris Convention.

Ruling: Ruling:
No. YES.
Trademark, copyright and patents are different intellectual The Convention of Paris for the Protection of Industrial
property rights that cannot be interchanged with one Property, otherwise known as the Paris Convention, is a

8
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
multilateral treaty that seeks to protect industrial property A certificate of registration of a mark is a prima facie
consisting of patents, utility models, industrial designs, evidence of the validity of the registration of the
trademarks, service marks, trade names and indications of registrant’s ownership and exclusive right to use the mark.
source or appellations of origin, and at the same time aims RA 8293 requires the registrant to file a Declaration of
to repress unfair competition. The Convention is Actual Use (DAU) of the mark, with evidence, within 3
essentially a compact among various countries which, as years from filing of application for registration. Otherwise,
members of the Union, have pledged to accord to citizens the application shall be refused or the mark shall be
of the other member countries trademark and other rights removed from register.
comparable to those accorded their own citizens by their The prima facie presumption brought by the registration of
domestic laws for an effective protection against unfair a mark may be challenged by proof of the nullity of the
competition. Art. 6bis is a self-executing provision and registration or non-use of the mark.
does not require legislative enactment to give it effect in
The presumption may also be defeated by evidence of
the member country. It may be applied directly by the
prior use by another person. This is because a trademark is
tribunals and officials of each member country by the mere
a creation of use and belongs to one who first used it in
publication or proclamation of the Convention, after its
trade or commerce. The determination of priority of use of
ratification according to the public law of each state and
a mark is a question of fact.
the order for its execution.
The Philippines and the United States of America have
acceded to the WTO Agreement. Conformably, the State 3. Acquisition of Ownership of Trade Name
must reaffirm its commitment to the global community Shangri-la International Hotel Management v.
and take part in evolving a new international economic Developers Group of Companies
order at the dawn of the new millennium. G.R. No. 159938

2. Acquisition of Ownership of Mark

SECTION 122. How Marks are Acquired. — The rights

G.R. No. 169440

in a mark shall be acquired through registration made
validly in accordance with the provisions of this law.
(Sec. 2-A, R.A. No. 166a)

Berris Agri Co. v Abyadang

G.R. No. 183404, October 13, 2010
November 23,
Issue:
Whether there is confusing similarity between the
2011
trademarks.
GEMMA ONG
A.K.A. Maria
Ruling:
Yes. The SC found that both products have the component
D-10 as their ingredient and that it is the dominant feature

Teresa Gemma
in both their marks. Applying the Dominancy Test,
Abyadang's product is similar to Berris' and that confusion
may likely to occur especially that both in the same type of
goods. Also using the Holistic Test, it was more obvious
that there is likelihood of confusion in their packaging and
color schemes of the marks. The SC states that buyers
would think that Abyadang's product is an upgrade of
Catacutan,
Petitioner, vs.
Berris'.

9
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos

PEOPLE OF the Intellectual

THE Property
PHILIPPINES, Code. This
Respondent. decision was
FACTS: assailed based on
On September facts established
2003, the that Gemma Ong
Regional Trial was engaged in
Court of Manila the distribution,
convicted sale and offering
Gemma Ong for for sale of
Infringement counterfeit
under Sec. 155 in Marlboro
relation to Sec. cigarettes which
170 of Republic caused
Act. No. 8293 or
10
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos

confusion and (PMPI) which is

deception to the registered
public and owner and
without permit or proprietor of the
authority from MARLBORO
the Telengtan trademark. The
Brothers decision of the
and Sons Inc., RTC Manila was
the exclusive affirmed by the
manufacturer of Court of Appeals
Malboro and hence this
cigarette in the appeal by
Philippines and certiorari by
from the Gemma Ong
Philip Morris praying that the
Products, Inc.
11
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos

decision of RTC PHILIPPINES,

and CA to Respondent.
be set aside and FACTS:
reverse. On September
ISSUE: 2003, the
Regional Trial
G.R. No. 169440 Court of Manila
November 23, convicted
2011 Gemma Ong for
GEMMA ONG Infringement
A.K.A. Maria under Sec. 155 in
Teresa Gemma relation to Sec.
Catacutan, 170 of Republic
Petitioner, vs. Act. No. 8293 or
PEOPLE OF the Intellectual
THE Property
12
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos

Code. This without permit or

decision was authority from
assailed based on the Telengtan
facts established Brothers
that Gemma Ong and Sons Inc.,
was engaged in the exclusive
the distribution, manufacturer of
sale and offering Malboro
for sale of cigarette in the
counterfeit Philippines and
Marlboro from the
cigarettes which Philip Morris
caused Products, Inc.
confusion and (PMPI) which is
deception to the registered
public and
13
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos

owner and be set aside and

proprietor of the reverse.
MARLBORO ISSUE:
trademark. The
Issue:
Whether or not respondent’s prior use of the mark is a
requirement for its registration.

decision of the
Ruling: Yes.

While the present law on trademarks has dispensed with

RTC Manila was

the requirement of prior actual use at the time of
registration, the law in force at the time of registration
must be applied. Under the provisions of the former
trademark law, R.A. No. 166, as amended, hence, the law in

affirmed by the
force at the time of respondent’s application for
registration of trademark, the root of ownership of a
trademark is actual use in commerce. Section 2 of said law
requires that before a trademark can be registered, it must

Court of Appeals have been actually used in commerce and service for not
less than two months in the Philippines prior to the filing
of an application for its registration. Trademark is a

and hence this

creation of use and therefore actual use is a pre-requisite
to exclusive ownership and its registration with the
Philippine Patent Office is a mere administrative
confirmation of the existence of such right.

appeal by While the petitioners may not have qualified under Section
2 of R.A. No. 166 as a registrant, neither did respondent
DGCI, since the latter also failed to fulfill the 2-month

certiorari by
actual use requirement. What is worse, DGCI was not even
the owner of the mark. For it to have been the owner, the
mark must not have been already appropriated (i.e., used)
by someone else. At the time of respondent DGCI’s

Gemma Ong registration of the mark, the same was already being used
by the petitioners, albeit abroad, of which DGCI’s president
was fully aware.

praying that the 4. Non-Registrable Marks

decision of RTC
Dermaline, Inc. vs. Myra Pharmaceuticals, Inc.
G.R. No. 190065, 16 Aug 2010
Issue:

and CA to Whether Dermaline’s application should be rejected.

Ruling:
Yes. As Myra correctly posits, as a registered trademark
owner, it has the right under Section 147 of R.A. No. 8293
to prevent third parties from using a trademark, or similar
signs or containers for goods or services, without its

14
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
consent, identical or similar to its registered trademark, and registration of the trademark "LEE" in the Philippines
where such use would result in a likelihood of confusion. and is thus entitled to protection from any infringement
Thus, the public may mistakenly think that Dermaline is upon the same. The dissenting opinion of Justice Padilla is
connected to or associated with Myra, such that, more acceptable.
considering the current proliferation of health and beauty
products in the market, the purchasers would likely be 6. Well-Known Marks
misled that Myra has already expanded its business
through Dermaline from merely carrying pharmaceutical In-N-Out Burger, Inc. vs. Sehwani, Inc.
topical applications for the skin to health and beauty G.R. No. 179127, 24 Dec 2008
services.

Verily, when one applies for the registration of a Issue:

trademark or label which is almost the same or that very Whether or not the Respondent has the legal capacity to
closely resembles one already used and registered by sue for the protection of its trademarks albeit it is not
another, the application should be rejected and dismissed doing business in the Philippines
outright, even without any opposition on the part of the
owner and user of a previously registered label or
trademark. This is intended not only to avoid confusion on Ruling:
the part of the public, but also to protect an already used Yes. Section 160 RA No. 8293 provides for the right of
and registered trademark and an established goodwill. foreign corporations to sue in trademark or service mark
enforcement action, provided that it meets the
5. Test to Determine Confusing Similarity requirements under Section 3 thereof, which are a) Any
Between Marks convention, treaty or agreement relation to intellectual
property right or the repression of unfair competition
wherein Philippines is also a party; and b) An extension
a) Dominancy Test
therein of reciprocal rights.
Moreoever, Article 6 of The Paris Convention, which
Emerald Garment Manufacturing Corporation vs. Court governs the protection of well-known trademarks, is a
of Appeals self-executing provision and does not require legislative
G.R. No. 100098, 29 Dec 1995 enactment to give it effect in the member country. The
essential requirement therein is that the trademark must
Issue: be well-known in the country where protection is sought.
In this case, Director Beltran-Abelardo found that In-n-out
Whether or not a trademark causes confusion and is
Burger and Arrow Design is an internationally well known
likely to deceive the public is a question of fact which is to
mark as evidenced by its trademark registrations around
be resolved by applying the "test of dominancy", meaning,
the world and its comprehensive advertisements therein.
if the competing trademark contains the main or essential
or dominant features of another by reason of which 7. Rights Conferred by Registration
confusion and deception are likely to result.
Philips Export v. Court of Appeals
Ruling: G.R. NO. 96161 FEBRUARY 21, 1992
The word "LEE" is the most prominent and distinctive
Issue:
feature of the appellant's trademark and all of the
appellee's "LEE" trademarks. It is the mark which draws Can petitioner Philips prevent respondent Standard Philips
the attention of the buyer and leads him to conclude that Corporation to use the name “Philips”?
the goods originated from the same manufacturer. The
alleged difference is too insubstantial to be noticeable. The Ruling:
likelihood of confusion is further made more probable by Yes. Section 18 of the Corporation Code provides that No
the fact that both parties are engaged in the same line of corporate name may be allowed by the Securities and
business. Exchange Commission if the proposed name is identical or
deceptively or confusingly similar to that of any existing
Although the Court decided in favor of the respondent, the corporation or to any other name already protected by law
appellee has sufficiently established its right to prior use or is patently deceptive, confusing or contrary to existing

15
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
law. Where a change in a corporate name is approved, the the same as it may protect its tangible property, real or
commission shall issue an amended certificate of personal against trespass or conversion.
incorporation under the amended name.
A foreign corporation is allowed there under to sue
To come within this scope, two requisites must be proven, "whether or not it has been licensed to do business in the
namely: (1) that the complainant corporation acquired a Philippines" pursuant to the Corporation Law. In any
event, respondent in the present case is not suing for
prior right over the use of such corporate name; (2) the
infringement or unfair competition under Section 21- A,
proposed name is either: (a) identical; or (b) deceptively but for cancellation under Section 17, on one of the
or confusingly similar to that of any existing corporation or grounds enumerated in Section 4. And while a suit under
to any other name already protected by law; or (c) patently Section 21-A requires that the mark or tradename
deceptive, confusing or contrary to existing law. alleged to have been infringed has been "registered or
assigned" to the suing foreign corporation, a suit for
The right to the exclusive use of a corporate name with cancellation of the registration of a mark or tradename
freedom from infringement by similarity is determined by under Section 17 has no such requirement. For such
priority of adoption. In this case, petitioners Philips mark or tradename should not have been registered in
Electrical and Philips Industrial were incorporated on 29 the first place (and consequently may be cancelled if so
August 1956 and 25 May 1956, respectively, while registered) if it "consists of or comprises a mark or
tradename which so resembles a mark or tradename ...
Respondent Standard Philips was issued a Certificate of
previously used in the Philippines by another and not
Registration on 12 April 1982, twenty-six (26) years later. abandoned, as to be likely, when applied to or used in
Moreover, since the name “Philips” is known connection with goods, business or services of the
internationally, petitioner Philips has an exclusive right to applicant, to cause confusion or mistake or to deceive
the use of its name, which may be protected by injunction purchasers.
upon a principle similar to that upon which persons are
protected in the use of trademarks and trade names. 9. Trademark Infringement

8. Cancellation of Registration Coffee Partners, Inc. v. San Francisco Coffee and

Roastery, Inc.
General Garments vs. Director of Patents G.R. NO. 169504, 03 MAR 2010
41 SCRA 50 (1971)
Issue:
Whether or not petitioner’s trademark would infringe
Issue: respondent’s tradename.

Whether or not Puritan Sportswear Corporation has Ruling:

legal capacity to sue in the Philippine Patent Office for Yes.
cancellation of a trademark registered. In the case of Prosource International, Inc. v. Horphag
Research Management SA, this Court laid down what
Ruling: constitutes infringement of an unregistered trade name,
thus:
Yes, Puritan has capacity to sue in Philippines for the
(1) The trademark being infringed is registered in the
recovery of any debt, claim or demand for which a
Intellectual Property Office; however, in infringement of
license to transact business in the Philippines is
trade name, the same need not be registered;
required by Section 69 of the Corporation Law, subject
only to the exception already noted.
(2) The trademark or trade name is reproduced,
The purpose of such a suit is to protect its reputation, counterfeited, copied, or colorably imitated by the
corporate name and goodwill which has been infringer;
established, through the natural development of its
trade for a long period of years, in the doing of which (3) The infringing mark or trade name is used in
it does not seek to enforce any legal or contract connection with the sale, offering for sale, or advertising of
rights arising from, or growing out of any business any goods, business or services; or the infringing mark or
which it has transacted in the Philippine Islands. trade name is applied to labels, signs, prints, packages,
wrappers, receptacles, or advertisements intended to be
The right to the use of the corporate or trade name is a used upon or in connection with such goods, business, or
property right, a right in rem, which it may assert and services;
protect in any of the courts of the world — even in (4) The use or application of the infringing mark or trade
jurisdictions where it does not transact business — just name is likely to cause confusion or mistake or to deceive

16
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
purchasers or others as to the goods or services No, While there is similarity between the trademark or
themselves or as to the source or origin of such goods or trade name “Wellington Department Store,” no confusion
services or the identity of such business; and or deception can possibly result or arise from such
(5) It is without the consent of the trademark or trade similarity because the latter is a “department store,” while
name owner or the assignee thereof. the former does purport to be so. The name “Wellington” is
admittedly the name of the trademark on the shirts, pants,
Clearly, a trade name need not be registered with the IPO drawers, and other articles of wear for men, women and
before an infringement suit may be filed by its owner children, whereas the name used by the defendant
against the owner of an infringing trademark. All that is indicates not these manufactured articles or any similar
required is that the trade name is previously used in trade merchandise, but a department store. Neither can the
or commerce in the Philippines. public be said to be deceived into the belief that the goods
RA 8293, which took effect on 1 January 1998, has being sold in defendant’s store originate from the
dispensed with the registration requirement. Section 165.2 plaintiffs, because the evidence shows that defendant’s
of RA 8293 categorically states that trade names shall be store sells no shirts or wear bearing the trademark
protected, even prior to or without registration with the “Wellington,” but other trademarks. Neither could such
IPO, against any unlawful act including any subsequent use deception be by any possibility produced because
of the trade name by a third party, whether as a trade defendant’s store is situated on the Escolta, while
name or a trademark likely to mislead the public. plaintiffs’ store or place of business is located in another
It is the likelihood of confusion that is the gravamen of business district far away from the Escolta. The mere fact
infringement. Applying the dominancy test or the holistic that two or more customers of the plaintiffs thought of the
test, petitioner’s “SAN FRANCISCO COFFEE” trademark is a probable identity of the products sold by one and the other
clear infringement of respondent’s “SAN FRANCISCO is not sufficient proof of the supposed confusion that the
COFFEE & ROASTERY, INC.” trade name. The descriptive public has been led into by the use of the name adopted by
words “SAN FRANCISCO COFFEE” are precisely the the defendants. As we have stated, appellant have not
dominant features of respondent’s trade name. Petitioner shown any well-established reputation or goodwill
and respondent are engaged in the same business of previous to the establishment of appellees’ business, such
selling coffee, whether wholesale or retail. The likelihood that it can be said that something was unfairly taken by the
of confusion is higher in cases where the business of one use of such reputation by the appellees’ department store.
corporation is the same or substantially the same as that of We agree, therefore, with the trial court that plaintiffs-
another corporation. In this case, the consuming public appellants have not been able to show the existence of a
will likely be confused as to the source of the coffee being cause of action for unfair competition against the
sold at petitioner’s coffee shops. defendants-appellees.

   C. Copyright
1. Basic Principles [Sec. 172.2, 175, and 181 only]
172.2. Works are protected by the sole fact of their
creation, irrespective of their mode or form of
10. Unfair Competition expression, as well as of their content, quality and
purpose. (Sec. 2, P.D. No. 49a)
SECTION 168. Unfair Competition, Rights, Regulation
and Remedies. - 168.1. A person who has identified in
the mind of the public the goods he manufactures or Twentieth Centure Music Corp v. Aiken
deals in, his business or services from those of others, 422 U.S. 151
whether or not a registered mark is employed, has a
property right in the goodwill of the said goods, Issue:
business or services so identified, which will be Whether or not the respondent infringe upon petitioners'
protected in the same manner as other property exclusive right, under Copyright Act of 1909.
rights.
Ruling:
Ang Si Heng vs. Wellington Department Store, Inc. It was held the respondent did not infringe upon
G.R. No. L4531, 10 Jan 1953 petitioners' exclusive right, under the Copyright Act which
provides, "to perform the copyrighted work publicly for
Issue: profit," since the radio reception did not constitute a
WON there is unfair competition "performance" of the copyrighted songs. To hold that
respondent "performed" the copyrighted works would
Ruling: obviously result in a wholly unenforceable regime of
copyright law, and would also be highly inequitable, since,

17
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
short of keeping his radio turned off, one in respondent's
position would be unable to protect himself from This means that Rural’s white pages do not meet both
infringement liability. Such a ruling, moreover, would constitutional and statutory requirements for copyright
authorize the sale of an untold number of licenses for what protection.
is basically a single rendition of a copyrighted work, thus
conflicting with the balanced purpose of the Copyright Act b) Derivative Works
of assuring the composer an adequate return for the value
of his composition while at the same time protecting the PEDRO SERRANO LAKTAW v. MAMERTO PAGLINAWAN
public from oppressive monopolies. G.R. No. L-11937, 1 April 1918

1. Copyrightable Works Issue:

a) Original Works  Whether or not the defendant, Mamerto Paglinawan,
violated Article 7 of the Law of January 10, 1879 on
Feist Publications, Inc. vs. Rural Tele. Servs. Co. Intellectual Property
499 U.S. 340, 1991
Ruling:
Issue: Yes. The defendant, Mamerto Paglinawan violated Article 7
Whether or not Rural’s white pages listings are entitled to of the Law of January 10, 1879 on Intellectual Property.
copyright The said article states that, “Nobody may reproduce
another person’s work without the owner’s consent, even
Ruling: merely to annotate or add anything to it, or improve any
It was held that Rural's white pages are not entitled to edition thereof”. It is not necessary that a work should be
copyright which as a consequence, Feist's use of them does an improper copy of another work previously published.
not constitute infringement. The court makes no special pronouncement as to the costs
of this instance.
As provided for in the Constitution, originality is a
prerequisite for copyright protection. This constitutional
requirement necessitates independent creation plus a 3. Non-Copyrightable Works
modicum of creativity or minimal creativity. Since
subscribers’ data are facts and are not a result of an act of SECTION 175. Unprotected Subject Matter. -
authorship, they are not original and, thus, are not Notwithstanding the provisions of Sections 172 and
copyrightable. There is nothing original in Rural’s white 173, no protection shall extend, under this law, to any
pages which contained data of subscribers. Data are not idea, procedure, system, method or operation,
copyrightable. Copyright does not extend to facts. This is concept, principle, discovery or mere data as such,
because the sine qua non of copyright is originality. To even if they are expressed, explained, illustrated or
qualify for copyright protection, a work must be original to embodied in a work; news of the day and other
the author. In copyright, original means only that the work miscellaneous facts having the character of mere items
was independently created by the author and not copied, of press information; or any official text of a
and that it possesses at least some minimal degree of legislative, administrative or legal nature, as well as
creativity. any official translation thereof. (n)

The subscriber’s data extracted by Feist from Rural’ Francisco Joaquin vs Franklin Drilon
directory are not original because they are not created by
Rural, but are rather facts gathered during subscribers’ GR No. 108946, January 28, 1999
application for telephone service. Also, there was also no
amount or creativity in the arrangement of names white
Issue:
page listings since the listings were arranged in the usual
Whether or not the format or mechanics of television show
or typical and widely-practiced alphabetical order.
is entitled copyright protection.
Also the in Copyright Act of 1976, "all the writings of an
Held: No.
author" was replaced it with the phrase "original works of
Copyright is purely a statutory right. Being one, the rights
authorship" making explicit the originality requirement.
are only such as the statute confers. The format or
This was merely to clarify that the two fundamental
mechanics of a television show is not included in the list of
criteria of copyright protection are originality and fixation
protected works in PD No. 49. Thus, the protection
in tangible form. And clearly the white pages listings
afforded by law cannot be extended to cover them.
which contain subscriber data, though tangible in form but
are not originally created by Rural itself.

18
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
No protection extends to ideas, concepts, etc. 5. Ownership of a Copyright
The idea of a dating game show is a non-copyrightable
material. Ideas, concepts, formats or schemes in their SECTION 178. Rules on Copyright Ownership. -
abstract form clearly do not fall within the class of works Copyright ownership shall be governed by the
susceptible of copyright registration. What are subject to following rules:
copyright are finished works and not concepts.
BJPI’s copyright covers only audiovisual recordings of each 178.1. Subject to the provisions of this section, in the
episode of Rhoda and Me. case of original literary and artistic works, copyright
shall belong to the author of the work;
However, they did not submit the master video tape so
they cannot compare if there was really similarity. Mere
OLANO V. CO
description by words of the general format of the two
dating game shows is insufficient. A television show
includes more than mere words can describe because it G.R. 195835, March 14, 2016
involves a whole spectrum of visuals and effects, video and
audio, such that no similarity or dissimilarity may be found Issue:
by merely describing the general copyright/format of both Whether or not the hatch doors of LEC fall within the
dating game shows. copyrightable works.

Ruling:
1. Copyright infringement is thus committed by any person
4. Rights Conferred by a Copyright who shall use original literary or artistic works, or
derivative works, without the copyright owner's consent in
FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND such a manner as to violate the foregoing copy and
PUBLISHERS, INC v. BENJAMIN TAN economic rights. For a claim of copyright infringement to
prevail, the evidence on record must demonstrate: (1)
G.R. No. L-36402. March 16, 1987 ownership of a validly copyrighted material by the
complainant; and (2) infringement of the copyright by the
Issue: respondent. The respondent failed to substantiate the
alleged reproduction of the drawings/sketches of hatch
Whether or not the playing and signing of musical doors. There is no proof that the respondents reprinted
compositions which have been copyrighted under the and copyrighted sketches/drawings of LEC’s hatch doors.
provisions of the Copyright Law inside the establishment
Tan constitute a public performance for profit. Since hatch doors cannot be considered as either
illustrations, maps, plans, sketches, charts and three-
Held: dimensional works relative to geography, topography,
architecture or science, to be properly classified as a
The playing of music in dine and dance establishment copyrightable class. To constitute infringement, the
which was paid for by the public in purchases of food and usurper, must have copied or appropriated the original
drink constituted "performance for profit" within a work of an author. Absent of copying, there can be no
Copyright Law. infringement of copyright.

However, Tan cannot be said to have infringed upon the 2. Ownership of copyrighted material is shown by proof of
Copyright Law. The Patent Office AO No. 3, provides that originality and copyrightability. While it is true that where
an intellectual creation should be copyrighted thirty (30) the complainant presents a copyright certificate in support
days after its publication, if made in Manila, or within the of the claim of infringement, the validity and ownership of
(60) days if made elsewhere, failure of which renders such the copyright is presumed. This presumption, however, is
creation public property." rebuttable and it cannot be sustained where other
evidence in the record casts doubt on the question of
Indeed, if the general public has made use of the object ownership. The hinges on LEC's "hatch doors" have no
sought to be copyrighted for thirty (30) days prior to the ornamental or artistic value. The gaskets on LEC's "hatch
copyright application, the law deems the object to have doors", aside from not being ornamental or artistic, were
been donated to the public domain and the same can no merely procured from a company named Pemko and are
longer be copyrighted. Under the circumstances, it is clear not original creations of LEC
that the musical compositions in question had long become
public property, and are therefore beyond the protection Utility - A hatch door, by its nature is an object of utility. It
of the Copyright Law. is defined as a small door, small gate or an opening that

19
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
resembles a window equipped with an escape for use in A&M Records Inc. vs. Napster Inc.
case of fire or emergency.64 It is thus by nature, functional No. 00-16401
and utilitarian serving as egress access during emergency.
It is not primarily an artistic creation but rather an object
of utility designed to have aesthetic appeal. Issue:
A "useful article" defined as an article "having an intrinsic Whether transferring copyrighted works in digital audio
utilitarian function that is not merely to portray the files from someone else’s computer through a P2P file-
appearance of the article or to convey information" is sharing network to download a copy, without
excluded from copyright eligibility. authorization or payment, constituted fair use.

This means that the design on the hatch door panel was Ruling:
not a product of LEC's independent artistic judgment and The Ninth Circuit held that the district court did not err in
discretion but rather a mere reproduction of an already ruling that transfer of digital files through Napster’s
existing design. service was not fair use.

The court deemed the purpose of the use non-

6. Limitations on Copyright transformative, noting that courts are reluctant to find fair
use where the original work is merely retransmitted in a
ABS-CBN BROADCASTING CORP. v. PHILIPPINE MULTI- new medium. The court also found the purpose to be
MEDIA SYSTEM, INC.
commercial, concluding that recurring exploitative copying
G.R. NO. 1757699-70, 19 JAN 2009 constitutes commercial use when made to avoid the
Issue: expense of buying an authorized copy and that users also
Whether or not the issuance MC 4-08-88 by the NTC is a received other copyrighted works in exchange for making
valid exercise of the police power of the State. their own files available for download. Additionally, the
court found that the nature of the works was creative (as
opposed to fact-based) and that the file-sharing process
Ruling: generally involved copying works in their entirety, both
weighing against a finding of fair use. Regarding the
YES. The law on copyright is not absolute. The carriage of market effect, plaintiffs introduced sufficient evidence to
ABS-CBN’s signals by virtue of the must-carry rule in show that Napster caused a reduction in audio CD sales
Memorandum Circular No. 04-08-88 is under the direction and hindered plaintiffs’ ability to enter the digital sales
and control of the government though the NTC which is
market.
vested with exclusive jurisdiction to supervise, regulate
and control telecommunications and broadcast The court also found that the lower court did not err in
services/facilities in the Philippines. The imposition of the determining that downloading for sampling purposes is a
must-carry rule is within the NTC’s power to promulgate commercial use. It determined that, even if users
rules and regulations, as public safety and interest may
ultimately buy the recording, free promotional downloads
require, to encourage a larger and more
are highly regulated by the recording industry.
effective use of communications, radio and television
Furthermore, the court found that the users who
broadcasting facilities, and to maintain effective
downloaded for sampling purposes were actually less
competition among private entities in these activities
likely to purchase an authorized copy. Regarding space-
whenever the Commission finds it reasonably feasible. shifting, the court remarked that courts have only
permitted space shifting by the original user. Napster
Moreover, radio and television waves are mere franchised impermissibly allowed space shifting between different,
which may be reasonably burdened with some form of subsequent users.
public service. It is a privilege subject, among other things,
to amendment by Congress in accordance with the
constitutional provision that “any such franchise or right 8. Copyright Infringement
granted shall be subject to amendment, alteration or
MICROSOFT CORPORATION v. HWANG
repeal by the Congress when the common good so
G.R. NO. 147043, 21 JUN 2005
requires.”

Issue:
7. Doctrine of Fair Use

20
 COMMERCIAL LAW
Peñ alosa, Belle Marie G.
University of San Jose- Recoletos
Whether or not the respondents are liable for Copyright
Infringement.

Ruling:

Yes. Respondents are liable for Copyright Infringement.

Section 5 of P.D. 49 enumerates the rights vested

exclusively on the copyright owner. Contrary to the DOJ’s
ruling, the gravamen of copyright infringement is not
merely the unauthorized “manufacturing”of intellectual
works but rather the unauthorized performance of any of
the acts covered by Section 5.

Hence, any person who performs any of the acts under

Section 5 without obtaining the copyright owner’s prior
consent renders himself cilvilly and criminally liable for
copyright infringement.

In the case of Columbia Pictures, Inc. v. Court of Appeals,

the Court held that:

Infringement of a copyright is a trespass on a private

domain owned and occupied by the owner of the
copyright, and, therefore, protected by law, and
infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the
doing of any person, without the consent of the owner of
the copyright, of anything the sole right to do which is
conferred by statute on the owner of the copyright.

Significantly, under Section 5 (A), a copyright owner is

vested with the exclusive right to “copy, distribute,
multiply, [and] sell” his intellectual works.

VI. Electronic Commerce Act (R.A. No. 8792)

21