Copyright Lex Mundi Ltd.

2011

Intellectual Property and Competition Law PHILIPPINES Romulo Mabanta Buenaventura Sayoc & De Los Angeles
CONTACT INFORMATION Romulo Mabanta Buenaventura Sayoc & De Los Angeles 30th Floor, Citibank Tower 8741 Paseo de Roxas Makati City, Philippines 1260 632.848.0114 www.romulo.com Part A - Technology Licences 1. Legislation/Rules Intellectual Property Code (Republic Act Number 8292). s.87 provides a list of prohibited provisions 2. Market Shares 3. Duration N/A (a) intellectual property rights, generally: No specific provision limiting duration of IP licences. Licence duration is left to agreement between the parties. It is understood however that a patent licence may not exceed the life time of the patent. (b) know-how: The Philippines still has no Trade Secrets law. Protection of Trade Secrets is effected through contractual provisions.

4. Regulation of Price

No, provisions pursuant to which the licensor reserves the right to affect the sale or resale prices of products manufactured on the basis of the licence are deemed prima facie to have an adverse effect on competition and trade (IP Code Section 87.2).

 Copyright Lex Mundi Ltd. 2011

5. Limitation of Production

No, provisions that contain restrictions regarding volume and structure of production shall be deemed prima facie to have an adverse effect on competition and trade (IP Code Section 87.3). No, provisions which impose upon the licensee the obligation to acquire from a specific source capital goods, intermediate products, raw materials and other technologies or of permanently employing personnel indicated by the licensor, shall be deemed prima facie to have an adverse effect on competition and trade (IP Code Section 87.1). (a) specified customers: There is no prohibition of such restrictions in section 87. (b) customer groups: There is no prohibition of such restrictions in section 87. (c) 87. (d) field of use: There is no prohibition of such restrictions in section territory: There is no prohibition of such restrictions in section 87.

6. Tie-in Clauses

7. General Restrictions

1987 Constitution of the Republic of the Philippines ARTICLE XII Section 19. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. 8. Active/Passive Sales Restrictions Restrictions on active sales to territories which are justified to protect the legitimate interests of the licensor (e.g. where an exclusive licence has been granted by the licensor) are excepted from the prohibition (section 87.8 of the IP Code) on agreements that restrict a licensee from exporting licensed products. Conversely restriction on active or passive sales to nonexclusively licensed territories will be prohibited. No, such restrictions prohibited by IP Code section 87.12.

9. Restriction on exploitation of Licensee IP 10. Improvements

(a) an assignment of severable improvements: No. There is prohibition on such obligations to assign improvements under section 87.6 of the IP Code. (b) an exclusive licence of severable improvements: No, prohibited under section 87.6. (c) a non exclusive licence of severable improvements: No, prohibited under section 87.6. (d) an assignment or exclusive licence of non severable improvements: No, prohibited under section 87.6.

 Copyright Lex Mundi Ltd. 2011

11. Challenge to IPR

No. Note: a licensor cannot include a provision in an agreement preventing a licensee from challenging the validity of a patent right. [No response].

12. Severability

Part B Agreements

Distribution

1. Legislation/Rules 2. Regulation of Price

Intellectual Property Code (Republic Act Number 8292) (a) Recommended sales prices: Recommendation of prices permissible provided this does not amount to fixing of sale prices. is

(b) Minimum sales prices: Prescribing a minimum sales price is prohibited under section 87.2 of the IP Code if this amounts to a fixing of prices. (c) Maximum sales prices: Prescribing a maximum sales price is prohibited under section 87.2 if this amounts to a fixing of prices. 3. Restrictions (a) Territories: No legal provision prohibiting such restrictions with respect to resellers. (b) Customers: No legal provision prohibiting such restrictions with respect to resellers. (c) Customer groups: No legal provision prohibiting such restrictions with respect to resellers. 4. Active/Passive Sales Restrictions 5. Non-compete provisions No prohibition with respect to active or passive sales by resellers.

Yes. There are no specific prohibitions restricting inclusion of non-compete provisions during and after the term of an agreement, however, case-law indicates that non-compete clauses should not be allowed to continue beyond 2 years from the date of expiration of the agreement. There are no statutory provisions prohibiting restriction of a reseller from selling competing products. See above, Part A - 12

6. Restrictions on competing products 7. Severability