DATA PRIVACY ACT OF 2012

R.A. 10173

1. State’s policy
 It is the policy of the State to protect the fundamental human right of privacy, of communication while ensuring
free flow of information to promote innovation and growth. The State recognizes the vital role of information
and communications technology in nation-building and its inherent obligation to ensure that personal
information in information and communications systems in the government and in the private sector are
secured and protected.
2. Definition of terms
 Whenever used in this Act, the following terms shall have the respective meanings hereafter set forth:

 (a) Commission shall refer to the National Privacy Commission created by virtue of this Act.

 (b) Consent of the data subject refers to any freely given, specific, informed indication of will, whereby the data
subject agrees to the collection and processing of personal information about and/or relating to him or her.
Consent shall be evidenced by written, electronic or recorded means. It may also be given on behalf of the data
subject by an agent specifically authorized by the data subject to do so.

 (c) Data subject refers to an individual whose personal information is processed.

 (d) Direct marketing refers to communication by whatever means of any advertising or marketing material
which is directed to particular individuals.

 (e) Filing system refers to any act of information relating to natural or juridical persons to the extent that,
although the information is not processed by equipment operating automatically in response to instructions
given for that purpose, the set is structured, either by reference to individuals or by reference to criteria relating
to individuals, in such a way that specific information relating to a particular person is readily accessible.

 (f) Information and Communications System refers to a system for generating, sending, receiving, storing or
otherwise processing electronic data messages or electronic documents and includes the computer system or
other similar device by or which data is recorded, transmitted or stored and any procedure related to the
recording, transmission or storage of electronic data, electronic message, or electronic document.

 (g) Personal information refers to any information whether recorded in a material form or not, from which the
identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding the
information, or when put together with other information would directly and certainly identify an individual.

 (h) Personal information controller refers to a person or organization who controls the collection, holding,
processing or use of personal information, including a person or organization who instructs another person or
organization to collect, hold, process, use, transfer or disclose personal information on his or her behalf. The
term excludes:

 (1) A person or organization who performs such functions as instructed by another person or organization; and

 (2) An individual who collects, holds, processes or uses personal information in connection with the individual’s
personal, family or household affairs.

 (i) Personal information processor refers to any natural or juridical person qualified to act as such under this Act
to whom a personal information controller may outsource the processing of personal data pertaining to a data
subject.

 (j) Processing refers to any operation or any set of operations performed upon personal information including,
but not limited to, the collection, recording, organization, storage, updating or modification, retrieval,
consultation, use, consolidation, blocking, erasure or destruction of data.

 (k) Privileged information refers to any and all forms of data which under the Rules of Court and other pertinent
laws constitute privileged communication.

 (l) Sensitive personal information refers to personal information:

 (1) About an individual’s race, ethnic origin, marital status, age, color, and religious, philosophical or political
affiliations;

 (2) About an individual’s health, education, genetic or sexual life of a person, or to any proceeding for any
offense committed or alleged to have been committed by such person, the disposal of such proceedings, or the
sentence of any court in such proceedings;
  (3) Issued by government agencies peculiar to an individual which includes, but not limited to, social security
numbers, previous or current health records, licenses or its denials, suspension or revocation, and tax returns;
and

 (4) Specifically established by an executive order or an act of Congress to be kept classified.

3. Functions of National Privacy commission
 To administer and implement the provisions of this Act, and to monitor and ensure compliance of the country
with international standards set for data protection, there is hereby created an independent body to be known
as the National Privacy Commission, winch shall have the following functions:

 (a) Ensure compliance of personal information controllers with the provisions of this Act;

 (b) Receive complaints, institute investigations, facilitate or enable settlement of complaints through the use of
alternative dispute resolution processes, adjudicate, award indemnity on matters affecting any personal
information, prepare reports on disposition of complaints and resolution of any investigation it initiates, and, in
cases it deems appropriate, publicize any such report: Provided, That in resolving any complaint or investigation
(except where amicable settlement is reached by the parties), the Commission shall act as a collegial body. For
this purpose, the Commission may be given access to personal information that is subject of any complaint and
to collect the information necessary to perform its functions under this Act;

 (c) Issue cease and desist orders, impose a temporary or permanent ban on the processing of personal
information, upon finding that the processing will be detrimental to national security and public interest;

 (d) Compel or petition any entity, government agency or instrumentality to abide by its orders or take action on
a matter affecting data privacy;

 (e) Monitor the compliance of other government agencies or instrumentalities on their security and technical
measures and recommend the necessary action in order to meet minimum standards for protection of personal
information pursuant to this Act;

 (f) Coordinate with other government agencies and the private sector on efforts to formulate and implement
plans and policies to strengthen the protection of personal information in the country;

 (g) Publish on a regular basis a guide to all laws relating to data protection;

 (h) Publish a compilation of agency system of records and notices, including index and other finding aids;

 (i) Recommend to the Department of Justice (DOJ) the prosecution and imposition of penalties specified in
Sections 25 to 29 of this Act;

 (j) Review, approve, reject or require modification of privacy codes voluntarily adhered to by personal
information controllers:Provided, That the privacy codes shall adhere to the underlying data privacy principles
embodied in this Act: Provided, further,That such privacy codes may include private dispute resolution
mechanisms for complaints against any participating personal information controller. For this purpose, the
Commission shall consult with relevant regulatory agencies in the formulation and administration of privacy
codes applying the standards set out in this Act, with respect to the persons, entities, business activities and
business sectors that said regulatory bodies are authorized to principally regulate pursuant to the law: Provided,
finally. That the Commission may review such privacy codes and require changes thereto for purposes of
complying with this Act;

 (k) Provide assistance on matters relating to privacy or data protection at the request of a national or local
agency, a private entity or any person;

 (l) Comment on the implication on data privacy of proposed national or local statutes, regulations or
procedures, issue advisory opinions and interpret the provisions of this Act and other data privacy laws;

 (m) Propose legislation, amendments or modifications to Philippine laws on privacy or data protection as may be
necessary;

 (n) Ensure proper and effective coordination with data privacy regulators in other countries and private
accountability agents, participate in international and regional initiatives for data privacy protection;

 (o) Negotiate and contract with other data privacy authorities of other countries for cross-border application
and implementation of respective privacy laws;

 (p) Assist Philippine companies doing business abroad to respond to foreign privacy or data protection laws and
regulations; and
  (q) Generally perform such acts as may be necessary to facilitate cross-border enforcement of data privacy
protection.

4. Processing of personal information

 SEC. 11. General Data Privacy Principles. – The processing of personal information shall be allowed, subject to
compliance with the requirements of this Act and other laws allowing disclosure of information to the public and
adherence to the principles of transparency, legitimate purpose and proportionality.

 Personal information must, be:,

 (a) Collected for specified and legitimate purposes determined and declared before, or as soon as reasonably
practicable after collection, and later processed in a way compatible with such declared, specified and legitimate
purposes only;

 (b) Processed fairly and lawfully;

 (c) Accurate, relevant and, where necessary for purposes for which it is to be used the processing of personal
information, kept up to date; inaccurate or incomplete data must be rectified, supplemented, destroyed or their
further processing restricted;

 (d) Adequate and not excessive in relation to the purposes for which they are collected and processed;
 (e) Retained only for as long as necessary for the fulfillment of the purposes for which the data was obtained or
for the establishment, exercise or defense of legal claims, or for legitimate business purposes, or as provided by
law; and

 (f) Kept in a form which permits identification of data subjects for no longer than is necessary for the purposes
for which the data were collected and processed: Provided, That personal information collected for other
purposes may lie processed for historical, statistical or scientific purposes, and in cases laid down in law may be
stored for longer periods: Provided, further,That adequate safeguards are guaranteed by said laws authorizing
their processing.

 The personal information controller must ensure implementation of personal information processing principles
set out herein.

 SEC. 12. Criteria for Lawful Processing of Personal Information. – The processing of personal information shall be
permitted only if not otherwise prohibited by law, and when at least one of the following conditions exists:

 (a) The data subject has given his or her consent;

 (b) The processing of personal information is necessary and is related to the fulfillment of a contract with the
data subject or in order to take steps at the request of the data subject prior to entering into a contract;

 (c) The processing is necessary for compliance with a legal obligation to which the personal information
controller is subject;

 (d) The processing is necessary to protect vitally important interests of the data subject, including life and
health;

 (e) The processing is necessary in order to respond to national emergency, to comply with the requirements of
public order and safety, or to fulfill functions of public authority which necessarily includes the processing of
personal data for the fulfillment of its mandate; or

 (f) The processing is necessary for the purposes of the legitimate interests pursued by the personal information
controller or by a third party or parties to whom the data is disclosed, except where such interests are
overridden by fundamental rights and freedoms of the data subject which require protection under the
Philippine Constitution.

 SEC. 13. Sensitive Personal Information and Privileged Information. – The processing of sensitive personal
information and privileged information shall be prohibited, except in the following cases:

 (a) The data subject has given his or her consent, specific to the purpose prior to the processing, or in the case of
privileged information, all parties to the exchange have given their consent prior to processing;

 (b) The processing of the same is provided for by existing laws and regulations: Provided, That such regulatory
enactments guarantee the protection of the sensitive personal information and the privileged information:
Provided, further, That the consent of the data subjects are not required by law or regulation permitting the
processing of the sensitive personal information or the privileged information;
  (c) The processing is necessary to protect the life and health of the data subject or another person, and the data
subject is not legally or physically able to express his or her consent prior to the processing;

 (d) The processing is necessary to achieve the lawful and noncommercial objectives of public organizations and
their associations: Provided, That such processing is only confined and related to the bona fide members of
these organizations or their associations: Provided, further, That the sensitive personal information are not
transferred to third parties: Provided, finally, That consent of the data subject was obtained prior to processing;

 (e) The processing is necessary for purposes of medical treatment, is carried out by a medical practitioner or a
medical treatment institution, and an adequate level of protection of personal information is ensured; or

 (f) The processing concerns such personal information as is necessary for the protection of lawful rights and
interests of natural or legal persons in court proceedings, or the establishment, exercise or defense of legal
claims, or when provided to government or public authority.

 SEC. 14. Subcontract of Personal Information. – A personal information controller may subcontract the
processing of personal information: Provided, That the personal information controller shall be responsible for
ensuring that proper safeguards are in place to ensure the confidentiality of the personal information processed,
prevent its use for unauthorized purposes, and generally, comply with the requirements of this Act and other
laws for processing of personal information. The personal information processor shall comply with all the
requirements of this Act and other applicable laws.

 SEC. 15. Extension of Privileged Communication. – Personal information controllers may invoke the principle of
privileged communication over privileged information that they lawfully control or process. Subject to existing
laws and regulations, any evidence gathered on privileged information is inadmissible.

5. Rights of the data subject

 The data subject is entitled to:

 (a) Be informed whether personal information pertaining to him or her shall be, are being or have been
processed;

 (b) Be furnished the information indicated hereunder before the entry of his or her personal information into
the processing system of the personal information controller, or at the next practical opportunity:

 (1) Description of the personal information to be entered into the system;

 (2) Purposes for which they are being or are to be processed;

 (3) Scope and method of the personal information processing;

 (4) The recipients or classes of recipients to whom they are or may be disclosed;

 (5) Methods utilized for automated access, if the same is allowed by the data subject, and the extent to which
such access is authorized;

 (6) The identity and contact details of the personal information controller or its representative;

 (7) The period for which the information will be stored; and

 (8) The existence of their rights, i.e., to access, correction, as well as the right to lodge a complaint before the
Commission.

 Any information supplied or declaration made to the data subject on these matters shall not be amended
without prior notification of data subject: Provided, That the notification under subsection (b) shall not apply
should the personal information be needed pursuant to a subpoena or when the collection and processing are
for obvious purposes, including when it is necessary for the performance of or in relation to a contract or service
or when necessary or desirable in the context of an employer-employee relationship, between the collector and
the data subject, or when the information is being collected and processed as a result of legal obligation;

 (c) Reasonable access to, upon demand, the following:

 (1) Contents of his or her personal information that were processed;

 (2) Sources from which personal information were obtained;

 (3) Names and addresses of recipients of the personal information;

 (4) Manner by which such data were processed;

  (5) Reasons for the disclosure of the personal information to recipients;

 (6) Information on automated processes where the data will or likely to be made as the sole basis for any
decision significantly affecting or will affect the data subject;

 (7) Date when his or her personal information concerning the data subject were last accessed and modified; and

 (8) The designation, or name or identity and address of the personal information controller;

 (d) Dispute the inaccuracy or error in the personal information and have the personal information controller
correct it immediately and accordingly, unless the request is vexatious or otherwise unreasonable. If the
personal information have been corrected, the personal information controller shall ensure the accessibility of
both the new and the retracted information and the simultaneous receipt of the new and the retracted
information by recipients thereof: Provided, That the third parties who have previously received such processed
personal information shall he informed of its inaccuracy and its rectification upon reasonable request of the data
subject;

 (e) Suspend, withdraw or order the blocking, removal or destruction of his or her personal information from the
personal information controller’s filing system upon discovery and substantial proof that the personal
information are incomplete, outdated, false, unlawfully obtained, used for unauthorized purposes or are no
longer necessary for the purposes for which they were collected. In this case, the personal information
controller may notify third parties who have previously received such processed personal information; and

 (f) Be indemnified for any damages sustained due to such inaccurate, incomplete, outdated, false, unlawfully
obtained or unauthorized use of personal information.
6. Security of sensitive personal information in government
 SEC. 22. Responsibility of Heads of Agencies. – All sensitive personal information maintained by the government,
its agencies and instrumentalities shall be secured, as far as practicable, with the use of the most appropriate
standard recognized by the information and communications technology industry, and as recommended by the
Commission. The head of each government agency or instrumentality shall be responsible for complying with
the security requirements mentioned herein while the Commission shall monitor the compliance and may
recommend the necessary action in order to satisfy the minimum standards.

 SEC. 23. Requirements Relating to Access by Agency Personnel to Sensitive Personal Information. – (a) On-site
and Online Access – Except as may be allowed through guidelines to be issued by the Commission, no employee
of the government shall have access to sensitive personal information on government property or through
online facilities unless the employee has received a security clearance from the head of the source agency.
 (b) Off-site Access – Unless otherwise provided in guidelines to be issued by the Commission, sensitive personal
information maintained by an agency may not be transported or accessed from a location off government
property unless a request for such transportation or access is submitted and approved by the head of the
agency in accordance with the following guidelines:

 (1) Deadline for Approval or Disapproval – In the case of any request submitted to the head of an agency, such
head of the agency shall approve or disapprove the request within two (2) business days after the date of
submission of the request. In case there is no action by the head of the agency, then such request is considered
disapproved;

 (2) Limitation to One thousand (1,000) Records – If a request is approved, the head of the agency shall limit the
access to not more than one thousand (1,000) records at a time; and

 (3) Encryption – Any technology used to store, transport or access sensitive personal information for purposes of
off-site access approved under this subsection shall be secured by the use of the most secure encryption
standard recognized by the Commission.

 The requirements of this subsection shall be implemented not later than six (6) months after the date of the
enactment of this Act.

 SEC. 24. Applicability to Government Contractors. – In entering into any contract that may involve accessing or
requiring sensitive personal information from one thousand (1,000) or more individuals, an agency shall require
a contractor and its employees to register their personal information processing system with the Commission in
accordance with this Act and to comply with the other provisions of this Act including the immediately preceding
section, in the same manner as agencies and government employees comply with such requirements.

7. Penalties
 SEC. 25. Unauthorized Processing of Personal Information and Sensitive Personal Information. – (a) The
unauthorized processing of personal information shall be penalized by imprisonment ranging from one (1) year
to three (3) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but not more than
 Two million pesos (Php2,000,000.00) shall be imposed on persons who process personal information without
the consent of the data subject, or without being authorized under this Act or any existing law.

 (b) The unauthorized processing of personal sensitive information shall be penalized by imprisonment ranging
from three (3) years to six (6) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but
not more than Four million pesos (Php4,000,000.00) shall be imposed on persons who process personal
information without the consent of the data subject, or without being authorized under this Act or any existing
law.

 SEC. 26. Accessing Personal Information and Sensitive Personal Information Due to Negligence. – (a) Accessing
personal information due to negligence shall be penalized by imprisonment ranging from one (1) year to three
(3) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but not more than Two
million pesos (Php2,000,000.00) shall be imposed on persons who, due to negligence, provided access to
personal information without being authorized under this Act or any existing law.

 (b) Accessing sensitive personal information due to negligence shall be penalized by imprisonment ranging from
three (3) years to six (6) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but not
more than Four million pesos (Php4,000,000.00) shall be imposed on persons who, due to negligence, provided
access to personal information without being authorized under this Act or any existing law.

 SEC. 27. Improper Disposal of Personal Information and Sensitive Personal Information. – (a) The improper
disposal of personal information shall be penalized by imprisonment ranging from six (6) months to two (2)
years and a fine of not less than One hundred thousand pesos (Php100,000.00) but not more than Five hundred
thousand pesos (Php500,000.00) shall be imposed on persons who knowingly or negligently dispose, discard or
abandon the personal information of an individual in an area accessible to the public or has otherwise placed
the personal information of an individual in its container for trash collection.

 (b) The improper disposal of sensitive personal information shall be penalized by imprisonment ranging from
one (1) year to three (3) years and a fine of not less than One hundred thousand pesos (Php100,000.00) but not
more than One million pesos (Php1,000,000.00) shall be imposed on persons who knowingly or negligently
dispose, discard or abandon the personal information of an individual in an area accessible to the public or has
otherwise placed the personal information of an individual in its container for trash collection.

 SEC. 28. Processing of Personal Information and Sensitive Personal Information for Unauthorized Purposes. –
The processing of personal information for unauthorized purposes shall be penalized by imprisonment ranging
from one (1) year and six (6) months to five (5) years and a fine of not less than Five hundred thousand pesos
(Php500,000.00) but not more than One million pesos (Php1,000,000.00) shall be imposed on persons
processing personal information for purposes not authorized by the data subject, or otherwise authorized under
this Act or under existing laws.

 The processing of sensitive personal information for unauthorized purposes shall be penalized by imprisonment
ranging from two (2) years to seven (7) years and a fine of not less than Five hundred thousand pesos
(Php500,000.00) but not more than Two million pesos (Php2,000,000.00) shall be imposed on persons
processing sensitive personal information for purposes not authorized by the data subject, or otherwise
authorized under this Act or under existing laws.

 SEC. 29. Unauthorized Access or Intentional Breach. – The penalty of imprisonment ranging from one (1) year to
three (3) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but not more than Two
million pesos (Php2,000,000.00) shall be imposed on persons who knowingly and unlawfully, or violating data
confidentiality and security data systems, breaks in any way into any system where personal and sensitive
personal information is stored.

 SEC. 30. Concealment of Security Breaches Involving Sensitive Personal Information. – The penalty of
imprisonment of one (1) year and six (6) months to five (5) years and a fine of not less than Five hundred
thousand pesos (Php500,000.00) but not more than One million pesos (Php1,000,000.00) shall be imposed on
persons who, after having knowledge of a security breach and of the obligation to notify the Commission
pursuant to Section 20(f), intentionally or by omission conceals the fact of such security breach.

 SEC. 31. Malicious Disclosure. – Any personal information controller or personal information processor or any of
its officials, employees or agents, who, with malice or in bad faith, discloses unwarranted or false information
relative to any personal information or personal sensitive information obtained by him or her, shall be subject to
imprisonment ranging from one (1) year and six (6) months to five (5) years and a fine of not less than Five
hundred thousand pesos (Php500,000.00) but not more than One million pesos (Php1,000,000.00).

 SEC. 32. Unauthorized Disclosure. – (a) Any personal information controller or personal information processor or
any of its officials, employees or agents, who discloses to a third party personal information not covered by the
immediately preceding section without the consent of the data subject, shall he subject to imprisonment
ranging from one (1) year to three (3) years and a fine of not less than Five hundred thousand pesos
(Php500,000.00) but not more than One million pesos (Php1,000,000.00).
  (b) Any personal information controller or personal information processor or any of its officials, employees or
agents, who discloses to a third party sensitive personal information not covered by the immediately preceding
section without the consent of the data subject, shall be subject to imprisonment ranging from three (3) years to
five (5) years and a fine of not less than Five hundred thousand pesos (Php500,000.00) but not more than Two
million pesos (Php2,000,000.00).

 SEC. 33. Combination or Series of Acts. – Any combination or series of acts as defined in Sections 25 to 32 shall
make the person subject to imprisonment ranging from three (3) years to six (6) years and a fine of not less than
One million pesos (Php1,000,000.00) but not more than Five million pesos (Php5,000,000.00).

 SEC. 34. Extent of Liability. – If the offender is a corporation, partnership or any juridical person, the penalty
shall be imposed upon the responsible officers, as the case may be, who participated in, or by their gross
negligence, allowed the commission of the crime. If the offender is a juridical person, the court may suspend or
revoke any of its rights under this Act. If the offender is an alien, he or she shall, in addition to the penalties
herein prescribed, be deported without further proceedings after serving the penalties prescribed. If the
offender is a public official or employee and lie or she is found guilty of acts penalized under Sections 27 and 28
of this Act, he or she shall, in addition to the penalties prescribed herein, suffer perpetual or temporary absolute
disqualification from office, as the case may be.

 SEC. 35. Large-Scale. – The maximum penalty in the scale of penalties respectively provided for the preceding
offenses shall be imposed when the personal information of at least one hundred (100) persons is harmed,
affected or involved as the result of the above mentioned actions.

 SEC. 36. Offense Committed by Public Officer. – When the offender or the person responsible for the offense is a
public officer as defined in the Administrative Code of the Philippines in the exercise of his or her duties, an
accessory penalty consisting in the disqualification to occupy public office for a term double the term of criminal
penalty imposed shall he applied.

 SEC. 37. Restitution. – Restitution for any aggrieved party shall be governed by the provisions of the New Civil
Code.

INTELLECTUAL PROPERTY LAW

(R.A. 8293 aka Intellectual Property Code of the Philippines)

I. THE LAW ON PATENTS

1. Patent defined
 A Patent is a grant issued by the government through the Intellectual Property Office of the Philippines (IP
Philippines). It is an exclusive right granted for a product, process or an improvement of a product or process
which is new, inventive and useful. This exclusive right gives the inventor the right to exclude others from
making, using, or selling the product of his invention during the life of the patent.
2. Mode of creation of right

3. Term of patent
 A patent has a term of protection of twenty (20) years providing an inventor significant commercial gain. In
return, the patent owner must share the full description of the invention. This information is made available to
the public in the form of the Intellectual Property Official Gazette and can be utilized as basis for future research
and will in turn promote innovation and development.
4. Requisites of Patentable inventions
 REQUIREMENT FOR PATENTABILITY
• NOVELTY
• INVENTIVE STEP
• INDUSTRIAL APPLICABILITY

*l Patent/Invention flyer

 INVENTIVE STEP

 An invention involves an inventive step, if having regard to prior art

 • it is not obvious to a person skilled in the art

 OBVIOUSNESS

• Not beyond normal progress of technology

• Follows plainly or logically from the prior art
• Does not require any skill or ability beyond that to be expected of the person skilled in the art

 SKILLED PERSON
• Ordinary practitioner who is Aware of common general knowledge in specific art
 • Has access to everything disclosed as the state of the art
• Observes developments in related technical field
5. Non-patentable inventions
 Section 22. Non-Patentable Inventions. - The following shall be excluded from patent protection:

 22.1. Discoveries, scientific theories and mathematical methods;

 22.2. Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for
computers;

 22.3. Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods
practiced on the human or animal body. This provision shall not apply to products and composition for use in
any of these methods;

 22.4. Plant varieties or animal breeds or essentially biological process for the production of plants or animals.
This provision shall not apply to micro-organisms and non-biological and microbiological processes.

 Provisions under this subsection shall not preclude Congress to consider the enactment of a law providing sui
generis protection of plant varieties and animal breeds and a system of community intellectual rights protection:

 22.5. Aesthetic creations; and

 22.6. Anything which is contrary to public order or morality. (Sec. 8, R.A. No. 165a)
6. First to file rule
 Section 29. First to File Rule. - If two (2) or more persons have made the invention separately and
independently of each other, the right to the patent shall belong to the person who filed an application for
such invention, or where two or more applications are filed for the same invention, to the applicant who has
the earliest filing date or, the earliest priority date. (3rd sentence, Sec. 10, R.A. No. 165a.)
7. Right of priority
 Section 31. Right of Priority. . - An application for patent filed by any person who has previously applied for
the same invention in another country which by treaty, convention, or law affords similar privileges to
Filipino citizens, shall be considered as filed as of the date of filing the foreign application: Provided, That: (a)
the local application expressly claims priority; (b) it is filed within twelve (12) months from the date the
earliest foreign application was filed; and (c) a certified copy of the foreign application together with an
English translation is filed within six (6) months from the date of filing in the Philippines. (Sec. 15, R.A. No.
165a)
8. Right to a patent
 Section 28. Right to a Patent. - The right to a patent belongs to the inventor, his heirs, or assigns. When two
(2) or more persons have jointly made an invention, the right to a patent shall belong to them jointly. (Sec.
10, R.A. No. 165a)
9. Invention created pursuant to a commission
 Rule 302. Inventions Created Pursuant to a Commission. - The person who commissions the work shall own
the patent, unless otherwise provided in the contract. (Sec. 30.1, IP CODE)
10. Patent infringement
 Section 76. Civil Action for Infringement. - 76.1. The making, using, offering for sale, selling, or importing a
patented product or a product obtained directly or indirectly from a patented process, or the use of a
patented process without the authorization of the patentee constitutes patent infringement.

 76.2. Any patentee, or anyone possessing any right, title or interest in and to the patented invention, whose
rights have been infringed, may bring a civil action before a court of competent jurisdiction, to recover from
the infringer such damages sustained thereby, plus attorney's fees and other expenses of litigation, and to
secure an injunction for the protection of his rights.

 76.3. If the damages are inadequate or cannot be readily ascertained with reasonable certainty, the court
may award by way of damages a sum equivalent to reasonable royalty.

 76.4. The court may, according to the circumstances of the case, award damages in a sum above the amount
found as actual damages sustained: Provided, That the award does not exceed three (3) times the amount of
such actual damages.

 76.5. The court may, in its discretion, order that the infringing goods, materials and implements
predominantly used in the infringement be disposed of outside the channels of commerce or destroyed,
without compensation.
 76.6. Anyone who actively induces the infringement of a patent or provides the infringer with a component
of a patented product or of a product produced because of a patented process knowing it to be especially
adopted for infringing the patented invention and not suitable for substantial non-infringing use shall be
liable as a contributory infringer and shall be jointly and severally liable with the infringer. (Sec. 42, R.A. No.
165a)
  Section 77. Infringement Action by a Foreign National. - Any foreign national or juridical entity who meets
the requirements of Section 3 and not engaged in business in the Philippines, to which a patent has been
granted or assigned under this Act, may bring an action for infringement of patent, whether or not it is
licensed to do business in the Philippines under existing law. (Sec. 41-A, R.A. No. 165a)

 Section 78. Process Patents; Burden of Proof . - If the subject matter of a patent is a process for obtaining a
product, any identical product shall be presumed to have been obtained through the use of the patented
process if the product is new or there is substantial likelihood that the identical product was made by the
process and the owner of the patent has been unable despite reasonable efforts, to determine the process
actually used. In ordering the defendant to prove that the process to obtain the identical product is different
from the patented process, the court shall adopt measures to protect, as far as practicable, his
manufacturing and business secrets. (n)

 Section 79. Limitation of Action for Damages. - No damages can be recovered for acts of infringement
committed more than four (4) years before the institution of the action for infringement. (Sec. 43, R.A. No.
165)

 Section 80. Damages, Requirement of Notice. - Damages cannot be recovered for acts of infringement
committed before the infringer had known, or had reasonable grounds to know of the patent. It is presumed
that the infringer had known of the patent if on the patented product, or on the container or package in
which the article is supplied to the public, or on the advertising material relating to the patented product or
process, are placed the words "Philippine Patent" with the number of the patent. (Sec. 44, R.A. No. 165a)

 Section 81. Defenses in Action for Infringement. - In an action for infringement, the defendant, in addition to
other defenses available to him, may show the invalidity of the patent, or any claim thereof, on any of the
grounds on which a petition of cancellation can be brought under Section 61 hereof. (Sec. 45, R.A. No. 165)

 Section 82. Patent Found Invalid May be Cancelled. - In an action for infringement, if the court shall find the
patent or any claim to be invalid, it shall cancel the same, and the Director of Legal Affairs upon receipt of
the final judgment of cancellation by the court, shall record that fact in the register of the Office and shall
publish a notice to that effect in the IPO Gazette. (Sec. 46, R.A. No. 165a)

 Section 83. Assessor in Infringement Action. - 83.1. Two (2) or more assessors may be appointed by the
court. The assessors shall be possessed of the necessary scientific and technical knowledge required by the
subject matter in litigation. Either party may challenge the fitness of any assessor proposed for
appointment.

 83.2. Each assessor shall receive a compensation in an amount to be fixed by the court and advanced by the
complaining party, which shall be awarded as part of his costs should he prevail in the action. (Sec. 47, R.A.
No. 165a)

 Section 84. Criminal Action for Repetition of Infringement. - If infringement is repeated by the infringer or by
anyone in connivance with him after finality of the judgment of the court against the infringer, the offenders
shall, without prejudice to the institution of a civil action for damages, be criminally liable therefor and,
upon conviction, shall suffer imprisonment for the period of not less than six (6) months but not more than
three (3) years and/or a fine of not less than One hundred thousand pesos (P100,000) but not more than
Three hundred thousand pesos (P300,000), at the discretion of the court. The criminal action herein
provided shall prescribe in three (3) years from date of the commission of the crime. (Sec. 48, R.A. No. 165a)
11. Tests of patent infringement
a. Literal infringement
 A literal infringement is present if one makes, uses or sells an item that contains all the elements of the
patent claim. The test is satisfied by either of the following:

 a.) An infringing product/process includes each and every essential element of the patent claim
(Exactness Rule.) Ergo, the omission of an essential element of a patent claim avoids infringement.
 b.) One makes, uses or sells an item that has all the elements of the patent claim plus other elements
(Addition Rule.)

 Only patentees and their assignees can file a case for infringement of patents; licensees can't sue, but
can attack the patent's validity by filing an opposition in the IPO's Bureau of Legal Affairs.
b. Doctrine of equivalents infringement
 This applies if there is no literal infringement. Where 2 devices do the same work in substantially the
same way and accomplish substantially the same result, they are the same, even if they look different.
This doctrine must be used with care because it can work against the patentee.
II. THE LAW ON TRADEMARKS, SERVICE MARKS AND TRADE NAMES
1. Definition of Terms
a. Trademark
 A trademark is a tool used that differentiates goods and services from each other. It is a very important
marketing tool that makes the public identify goods and services. A trademark can be one word, a
 group of words, sign, symbol, logo, or a combination of any of these. Generally, a trademark refers to
both trademark and service mark, although a service mark is used to identify those marks used for
services only.
b. Service mark
 Services (service mark) of an enterprise and shall include a stamped or marked container of goods
c. Collective mark
 "Collective mark" means any visible sign designated as such in the application for registration and
capable of distinguishing the origin or any other common characteristics, including the quality of goods
or services of different enterprises which use the sign under the control of the registered owner of the
collective mark
d. Trade name
 "Trade name" means the name or designation identifying or distinguishing an enterprise, also known or
referred to as business identifier.
2. Mode of creation of right

3. Non-registrable marks
 Section 123. Registrability. - 123.1. A mark cannot be registered if it:

 (a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely
suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring
them into contempt or disrepute;

 (b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its political
subdivisions, or of any foreign nation, or any simulation thereof;

 (c) Consists of a name, portrait or signature identifying a particular living individual except by his
written consent, or the name, signature, or portrait of a deceased President of the Philippines, during
the life of his widow, if any, except by written consent of the widow;

 (d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier
filing or priority date, in respect of:

 (i) The same goods or services, or

 (ii) Closely related goods or services, or

 (iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;

 (e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is
considered by the competent authority of the Philippines to be well-known internationally and in the
Philippines, whether or not it is registered here, as being already the mark of a person other than the
applicant for registration, and used for identical or similar goods or services: Provided, That in
determining whether a mark is well-known, account shall be taken of the knowledge of the relevant
sector of the public, rather than of the public at large, including knowledge in the Philippines which has
been obtained as a result of the promotion of the mark;

 (f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-
known in accordance with the preceding paragraph, which is registered in the Philippines with respect
to goods or services which are not similar to those with respect to which registration is applied for:
Provided, That use of the mark in relation to those goods or services would indicate a connection
between those goods or services, and the owner of the registered mark: Provided further, That the
interests of the owner of the registered mark are likely to be damaged by such use;

 (g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical
origin of the goods or services;

 (h) Consists exclusively of signs that are generic for the goods or services that they seek to identify;

 (i) Consists exclusively of signs or of indications that have become customary or usual to designate the
goods or services in everyday language or in bona fide and established trade practice;

 (j) Consists exclusively of signs or of indications that may serve in trade to designate the kind,
quality, quantity, intended purpose, value, geographical origin, time or production of the goods or
rendering of the services, or other characteristics of the goods or services;

 (k) Consists of shapes that may be necessitated by technical factors or by the nature of the goods
themselves or factors that affect their intrinsic value;

 (l) Consists of color alone, unless defined by a given form; or

  (m) Is contrary to public order or morality.

 123.2. As regards signs or devices mentioned in paragraphs (j), (k), and (l), nothing shall prevent the
registration of any such sign or device which has become distinctive in relation to the goods for which
registration is requested as a result of the use that have been made of it in commerce in the Philippines.
The Office may accept as prima facie evidence that the mark has become distinctive, as used in
connection with the applicant's goods or services in commerce, proof of substantially exclusive and
continuous use thereof by the applicant in commerce in the Philippines for five (5) years before the date
on which the claim of distinctiveness is made.

 123.3. The nature of the goods to which the mark is applied will not constitute an obstacle to
registration. (Sec. 4, R.A. No. 166a)

4. Term of trademark
 Section 145. Duration. - A certificate of registration shall remain in force for ten (10) years: Provided, That
the registrant shall file a declaration of actual use and evidence to that effect, or shall show valid reasons
based on the existence of obstacles to such use, as prescribed by the Regulations, within one (1) year from
the fifth anniversary of the date of the registration of the mark. Otherwise, the mark shall be removed from
the Register by the Office. (Sec. 12, R.A. No. 166a)

 Section 146. Renewal. - 146.1. A certificate of registration may be renewed for periods of ten (10) years at
its expiration upon payment of the prescribed fee and upon filing of a request. The request shall contain the
following indications:

 (a) An indication that renewal is sought;

 (b) The name and address of the registrant or his successor-in-interest, hereafter referred to as the "right
holder";

 (c) The registration number of the registration concerned;

 (d) The filing date of the application which resulted in the registration concerned to be renewed;

 (e) Where the right holder has a representative, the name and address of that representative;

 (f) The names of the recorded goods or services for which the renewal is requested or the names of the
recorded goods or services for which the renewal is not requested, grouped according to the classes of the
Nice Classification to which that group of goods or services belongs and presented in the order of the classes
of the said Classification; and

 (g) A signature by the right holder or his representative.

 146.2. Such request shall be in Filipino or English and may be made at any time within six (6) months
before the expiration of the period for which the registration was issued or renewed, or it may be made
within six (6) months after such expiration on payment of the additional fee herein prescribed.

 146.3. If the Office refuses to renew the registration, it shall notify the registrant of his refusal and the
reasons therefor.

 146.4. An applicant for renewal not domiciled in the Philippines shall be subject to and comply with the
requirements of this Act. (Sec. 15, R.A. No. 166a)
5. Trademark infringement
 (Section 155) Any person who shall, without the consent of the owner of the registered mark:

 155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the
same container or a dominant feature thereof in connection with the sale, offering for sale, distribution,
advertising of any goods or services including other preparatory steps necessary to carry out the sale of any
goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to
deceive; or

 155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and
apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering
for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to
cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the
registrant for the remedies hereinafter set forth: Provided, That the infringement takes place at the moment any
 of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether there is actual sale
of goods or services using the infringing material. (Sec. 22, R.A. No 166a)

 17. REMEDIES FOR TRADEMARK OWNER

 (RECOVERY OF DAMAGES - Section 156.1) The owner of a registered mark may recover damages from any
person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit
which the complaining party would have made, had the defendant not infringed his rights, or the profit which
the defendant actually made out of the infringement, or in the event such measure of damages cannot be
readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage
based upon the amount of gross sales of the defendant or the value of the services in connection with which the
mark or trade name was used in the infringement of the rights of the complaining party. (Sec. 23, first par., R.A.
No. 166a)

 (DOUBLE DAMAGES – Section 156.3) In cases where actual intent to mislead the public or to defraud the
complainant is shown, in the discretion of the court, the damages may be doubled. (Sec. 23, first par., R.A. No.
166)

 156.2. On application of the complainant, the court may impound during the pendency of the action, sales
invoices and other documents evidencing sales. (n)

 (INJUNCTION – Section 156.4) The complainant, upon proper showing, may also be granted injunction. (Sec. 23,
second par., R.A. No. 166a)

 (DESTRUCTION OF INFRINGING MATERIALS – Section 157.1) In any action arising under this Act, in which a
violation of any right of the owner of the registered mark is established, the court may order that goods found
to be infringing be, without compensation of any sort, disposed of outside the channels of commerce in such a
manner as to avoid any harm caused to the right holder, or destroyed; and all labels, signs, prints, packages,
wrappers, receptacles and advertisements in the possession of the defendant, bearing the registered mark or
trade name or any reproduction, counterfeit, copy or colorable imitation thereof, all plates, molds, matrices and
other means of making the same, shall be delivered up and destroyed.

 (Section 157.2) In regard to counterfeit goods, the simple removal of the trademark affixed shall not be
sufficient other than in exceptional cases which shall be determined by the Regulations, to permit the release of
the goods into the channels of commerce. (Sec. 24, R.A. No. 166a)
6. Tests of trademark infringement
a. Dominancy test
 The Dominancy Test focuses on the similarity of the prevalent features of the competing trademarks
that might cause confusion or deception.[17] It is applied when the trademark sought to be registered
contains the main, essential and dominant features of the earlier registered trademark, and confusion or
deception is likely to result. Duplication or imitation is not even required; neither is it necessary that the
label of the applied mark for registration should suggest an effort to imitate. The important issue is
whether the use of the marks involved would likely cause confusion or mistake in the mind of or deceive
the ordinary purchaser, or one who is accustomed to buy, and therefore to some extent familiar with,
the goods in question. Given greater consideration are the aural and visual impressions created by the
marks in the public mind, giving little weight to factors like prices, quality, sales outlets, and market
segments.The test of dominancy is now explicitly incorporated into law in Section 155.1 of R.A. No. 8293
which provides

 155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark
or the same container or a dominant feature thereof in connection with the sale, offering for sale,
distribution, advertising of any goods or services including other preparatory steps necessary to carry
out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; (emphasis supplied)
b. Holistic test
 Holistic Test entails a consideration of the entirety of the marks as applied to the products, including
labels and packaging, in determining confusing similarity. The scrutinizing eye of the observer must
focus not only on the predominant words but also on the other features appearing in both labels so that
a conclusion may be drawn as to whether one is confusingly similar to the other.
7. Differences between trademark infringement and unfair competition
a. Trademark infringement defined
 Trademark infringement is the unauthorized use in commerce of a registered trademark or a copy or
colorable imitation thereof, which results in the likelihood of confusion among the consuming public.
The elements of trademark infringement are: (1) a registered trademark in the Philippines, (2) plaintiff’s
ownership of said mark, and (3) use of the trademark or imitation thereof by a third person, which
results in likelihood of confusion.
b. Unfair competition
 Unfair competition is a form of copying and making false statements by one who passes off his own
goods for those of another that has an established goodwill. The copying and or passing off may include
 copying of the trademark or giving one’s own goods the general appearance of another, which causes
likelihood of confusion. The elements of unfair competition are: (1) confusing similarity in the
appearance of the goods involved, and (2) intent to deceive the public and defraud a competitor.
c. Trademark infringement vs. unfair competition
 (1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is the
passing off of one's goods as those of another.
 (2) In infringement of trademark fraudulent intent is unnecessary whereas in unfair competition
fraudulent intent is essential.
 (3) In infringement of trademark the prior registration of the trademark is a prerequisite to the action,
whereas in unfair competition registration is not necessary.

III. THE LAW ON COPYRIGHT

1. Copyright defined
 Copyright is a collection of all rights enjoyed by the owner of an artistic or literary work.
2. Original work defined
 “Original work” refers to every production in the literary, scientific and artistic domain. Among the literary and
artistic works enumerated in the IP Code includes books and other writings, musical works, films, paintings and
other works, and computer programs.
3. Mode of creation of right

4. Term of copyright
 In the Philippines, copyright protection for artistic, literary and derivative works lasts during the lifetime of the
author plus 50 years after the author’s death. This term of protection also applies to posthumous works. In the
case of joint authorship, the economic rights shall be protected during the lifetime of the last surviving author
plus 50 years after such author’s death.
 In case of anonymous or pseudonymous works, copyright protection shall last for 50 years from the date on
which the work was first lawfully published. If the work was not published, it shall be protected for 50 years
counted from the creation of the work.
 Works of applied art shall be protected for 25 years from the date of its creation.
 Audio-visual works shall be protected for 50 years from the date of publication. If it is unpublished, it is
protected for 50 years from the date of creation.
 Performances not incorporated in recordings shall be protected for 50 years from the end of the year in which
the performance took place. Sound or image and sound recordings and performances incorporated therein shall
be protected for 50 years from the end of the year in which the recording took place.
 Broadcasts shall be protected for 20 years from the date the broadcast took place.
5. Two rights under copyright
a. Economic right
 Enables the creator to obtain remuneration from the exploitation of his works by third parties
b. Moral rights
 makes it possible for the creator to undertake measures to maintain and protect the personal
connection between himself and the work.
Economic rights include:
 Reproduction
 Transformation First public distribution
 Rental
 Public display
 Public performance
 Other communication to the public of the work.
Moral rights include:
 Right of Attribution
 Right of Alteration
 Right of Integrity (object to any prejudicial distortion)
 Right to restrain use of his name.
 Exception to the moral rights
 When an author contributes to a collective work, his right to have his contribution attributed to him is
deemed waived unless he expressly reserves it. A collective work is a work which has been created by
two (2) or more natural persons at the initiative and under the direction of another with the
understanding that it will be disclosed by the latter under his own name and that contributing natural
persons will not be identified.
 In the absence of a contrary stipulation at the time an author licenses or permits another to use his
work, the necessary editing, arranging or adaptation of such work, for publication, broadcast, use in a
motion picture, dramatization, or mechanical or electrical reproduction in accordance with the
reasonable and customary standards or requirements of the medium in which the work is to be used,
shall not be deemed to contravene the author's rights secured by this chapter. Nor shall complete
destruction of a work unconditionally transferred by the author be deemed to violate such rights.
6. Ownership of copyright
 Generally, the natural person who created the literary and artistic work owns the copyright to the same.
  For work created during or in the course of employment (works for hire):
 Employee - if the work is not part of his regular duties, even if he used the time, facilities and materials of
the employer;
 Employer - if the work is the result of the performance of his regularly assigned duties, unless there is an
express or implied agreement to the contrary.
 For commissioned works: the person who commissioned the work owns the work but the copyright thereto
remains with the creator, unless there is a written agreement to the contrary.
 For audiovisual works: the producer, the author of the scenario, the composer of the music, the film
director, and the author of the work so adapted.
7. Infringement of copyright
Under the IP Code
 Copyright infringement consists in infringing any right secured or protected under the Code. It may also
consist in aiding or abetting such infringement. The law also provides for the liability of a person who at the
time when copyright subsists in a work has in his possession an article which he knows, or ought to know, to
be an infringing copy of the work for the purpose of:
 Selling or letting for hire, or by way of trade offering or exposing for sale or hire, the article;
 Distributing the article for the purpose of trade, or for any other purpose to an extent that will prejudice the
rights of the copyright owner in the work; or
 Trade exhibit of the article in public.
8. Works that can be protected by copyrights (copyrightable works)
 Under Philippine law, original intellectual creations in the literary and artistic domain are copyrightable.
These include books, pamphlets, articles and other writings; periodicals and newspapers; lectures, sermons,
addresses, dissertations prepared for oral delivery; letters; dramatic or dramatico-musical compositions;
choreographic works or entertainment in dumb shows; musical compositions; drawing, painting,
architecture, sculpture, engraving, lithography; models or designs for works of art; original ornamental
designs or models for articles of manufacture; illustrations, maps, plans, sketches, charts and three-
dimensional works relative to geography, topography, architecture or science; drawings or plastic works of a
scientific or technical character; photographic works including works produced by a process analogous to
photography; lantern slides; audiovisual works and cinematographic works and works produced by a process
analogous to cinematography or any process for making audio-visual recordings; pictorial illustrations and
advertisements and computer programs.

 Derivative works are also protected as new works, provided that it does not affect the existing copyright on
original works. Derivative works may include: dramatizations, translations, adaptations, abridgements,
arrangements, and other alterations of literary music work; collections of literary, scholarly or artistic works,
and compilations of data and other materials which are original by reason of the selection or coordination or
arrangement of their contents.

9. Works that are not protected by copyrights (non-copyrightable works)

Copyright protection does not cover:

 Idea, procedure, system method or operation, concept, principle, discovery or mere data as such, even if
they are expressed, explained, illustrated or embodied in a work;
 News of the day and other miscellaneous facts having the character of mere items of press information;
 Official text of a legislative, administrative or legal nature, as well as any official translation thereof;
 Work of the Philippine Government, unless there was a prior approval by the appropriate government
agency; and
 Statutes, rules and regulations, and speeches, lectures, sermons, addresses, and dissertations, pronounced,
read or rendered in courts of justice, before administrative agencies, in deliberative assemblies and in
meetings of public character.
10. Doctrine of fair works
 The fair use of a copyrighted work for criticism, comment, news, reporting, teaching including multiple
copies for classroom use, scholarship, research and similar purposes is not an infringement of copyright.

 Decompilation, which is the reproduction of the code and translation of the forms of the computer
programs to achieve the inter-operability of an independently created computer program with other
programs, may also constitute fair use.

 To determine whether use of a work constitutes fair use, the following factors are considered:

 The purpose and character of the use, including whether such use is of a commercial nature or is for non-
profit educational purposes;
 The nature of the copyrighted work;
 The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
 The effect of the use upon the potential market for or value of the copyrighted work.

REVISED CODE OF CORPORATE GOVERNANCE (RCCG)

 (SEC Memorandum Circular No. 6 Series of 2009)

1. Companies covered by the RCCG

 Registered corporations and to branches or subsidiaries of foreign corporations operating in the Philippines that
(a) sell equity and/or debt securities to the public that are required to be registered with the Commission, or (b)
have assets in excess of Fifty Million Pesos and at least two hundred (200) stockholders who own at least one
hundred (100) shares each of equity securities, or (c) whose equity securities are listed on an Exchange; or (d)
are grantees of secondary licenses from the Commission.
2. Corporate governance defined
 The framework of rules, systems and processes in the corporation that governs the performance by the Board of
Directors and Management of their respective duties and responsibilities to the stockholders;
3. Board of Directors (BOD) defined
 the governing body elected by the stockholders that exercises the corporate powers of a corporation, conducts
all its business and controls its properties;
4. Composition of the BOD of corporations covered by the RCCG
 The Board shall be composed of at least five (5), but not more than fifteen (15), members who are elected by
the stockholders.
 All companies covered by this Code shall have at least two (2) independent directors or such number of
independent directors that constitutes twenty percent (20%) of the members of the Board, whichever is lesser,
but in no case less than two (2). All other companies are encouraged to have independent directors in their
boards.
 The membership of the Board may be a combination of executive and non-executive directors (which include
independent directors) in order that no director or small group of directors can dominate the decision- making
process.
 The non-executive directors should possess such qualifications and stature that would enable them to
effectively participate in the deliberations of the Board.

5. Additional qualifications of Directors of Corporations covered by the RCCG

In addition to the qualifications for membership in the Board provided for in the Corporation Code, Securities
Regulation Code and other relevant laws, the Board may provide for additional qualifications which include, among
others, the following:

 (i) College education or equivalent academic degree;

 (ii) Practical understanding of the business of the corporation;
 (iii) Membership in good standing in relevant industry, business or professional organizations; and
 (iv) Previous business experience.
6. Grounds for permanent disqualification of directors of corporations covered by the RCCG

The following shall be grounds for the permanent disqualification of a director:

 (i) Any person convicted by final judgment or order by a competent judicial or administrative body of any crime
that (a) involves the purchase or sale of securities, as defined in the Securities Regulation Code; (b) arises out of
the person’s conduct as an underwriter, broker, dealer, investment adviser, principal, distributor, mutual fund
dealer, futures commission merchant, commodity trading advisor, or floor broker; or (c) arises out of hisfiduciary
relationship with a bank, quasi-bank, trust company, investment house or as an affiliated person of any of them;
 (ii) Any person who, by reason of misconduct, after hearing, is permanently enjoined by a final judgment or
order of the Commission or any court or administrative body of competent jurisdiction from: (a) acting as
underwriter, broker, dealer, investment adviser, principal distributor, mutual fund dealer, futures commission
merchant, commodity trading advisor, or floor broker; (b) acting as director or officer of a bank, quasi- bank,
trust company, investment house, or investment company; (c) engaging in or continuing any conduct or practice
in any of the capacities mentioned in sub-paragraphs (a) and (b) above, or willfully violating the laws that govern
securities and banking activities.

The disqualification shall also apply if such person is currently the subject of an order of the Commission or any
court or administrative body denying, revoking or suspending any registration, license or permit issued to him
under the Corporation Code, Securities Regulation Code or any other law administered by the Commission or
Bangko Sentral ng Pilipinas (BSP), or under any rule or regulation issued by the Commission or BSP, or has
otherwise been restrained to engage in any activity involving securities and banking; or such person is currently
the subject of an effective order of a self-regulatory organization suspending or expelling him from membership,
participation or association with a member or participant of the organization;
  (iii) Any person convicted by final judgment or order by a court or competent administrative body of an offense
involving moral turpitude, fraud, embezzlement, theft, estafa, counterfeiting, misappropriation, forgery, bribery,
false affirmation, perjury or other fraudulent acts;
 (iv) Any person who has been adjudged by final judgment or order of the Commission, court, or competent
administrative body to have willfully violated, or willfully aided, abetted, counseled, induced or procured the
violation of any provision of the Corporation Code, Securities Regulation Code or any other law administered by
the Commission or BSP, or any of its rule, regulation or order;
 (v) Any person earlier elected as independent director who becomes an officer, employee or consultant of the
same corporation;
 (vi) Any person judicially declared as insolvent;
 (vii) Any person found guilty by final judgment or order of a foreign court or equivalent financial regulatory
authority of acts, violations or misconduct similar to any of the acts, violations or misconduct enumerated in
sub-paragraphs (i) to (v) above;
 (viii) Conviction by final judgment of an offense punishable by imprisonment for more than six (6) years, or a
violation of the Corporation Code committed within five (5) years prior to the date of his election or
appointment.
7. Grounds for temporary disqualification of directors of corporations covered by the RCCG

The Board may provide for the temporary disqualification of a director for any of the following reasons:

 (i) Refusal to comply with the disclosure requirements of the Securities Regulation Code and its Implementing
Rules and Regulations. The disqualification shall be in effect as long as the refusal persists.
 (ii) Absence in more than fifty (50) percent of all regular and special meetings of the Board during his
incumbency, or any twelve (12) month period during the said incumbency, unless the absence is due to illness,
death in the immediate family or serious accident. The disqualification shall apply for purposes of the
succeeding election.
 (iii) Dismissal or termination for cause as director of any corporation covered by this Code. The disqualification
shall be in effect until he has cleared himself from any involvement in the cause that gave rise to his dismissal or
termination.
 (iv) If the beneficial equity ownership of an independent director in the corporation or its subsidiaries and
affiliates exceeds two percent of its subscribed capital stock. The disqualification shall be lifted if the limit is later
complied with.
 (v) If any of the judgments or orders cited in the grounds for permanent disqualification has not yet become
final.
 A temporarily disqualified director shall, within sixty (60) business days from such disqualification, take the
appropriate action to remedy or correct the disqualification. If he fails or refuses to do so for unjustified reasons,
the disqualification shall become permanent.
8. Specific duties and responsibilities of a director

A director’s office is one of trust and confidence. A director should act in the best interest of the corporation in a
manner characterized by transparency, accountability and fairness. He should also exercise leadership, prudence
and integrity in directing the corporation towards sustained progress.

A director should observe the following norms of conduct:

 (i) Conduct fair business transactions with the corporation, and ensure that his personal interest does not
conflict with the interests of the corporation.

The basic principle to be observed is that a director should not use his position to profit or gain some benefit or
advantage for himself and/or his related interests. He should avoid situations that may compromise his
impartiality. If an actual or potential conflict of interest may arise on the part of a director, he should fully and
immediately disclose it and should not participate in the decision-making process. A director who has a
continuing material conflict of interest should seriously consider resigning from his position.

A conflict of interest shall be considered material if the director’s personal or business interest is antagonistic to
that of the corporation, or stands to acquire or gain financial advantage at the expense of the corporation.
 (ii) Devote the time and attention necessary to properly and effectively perform his duties and responsibilities.

A director should devote sufficient time to familiarize himself with the corporation’s business. He should be
constantly aware of and knowledgeable with the corporation’s operations to enable him to meaningfully
contribute to the Board’s work. He should attend and actively participate in Board and committee meetings,
review meeting materials and, if called for, ask questions or seek explanation.
  (iii) Act judiciously.
Before deciding on any matter brought before the Board, a director should carefully evaluate the issues and, if
necessary, make inquiries and request clarification.

 (iv) Exercise independent judgment.

A director should view each problem or situation objectively. If a disagreement with other directors arises, he
should carefully evaluate and explain his position. He should not be afraid to take an unpopular position.
Corollarily, he should support plans and ideas that he thinks are beneficial to the corporation.

 (v) Have a working knowledge of the statutory and regulatory requirements that affect the corporation,
including its articles of incorporation and by-laws, the rules and regulations of the Commission and, where
applicable, the requirements of relevant regulatory agencies.

A director should also keep abreast with industry developments and business trends in order to promote the
corporation’s competitiveness.

 (vi) Observe confidentiality.

A director should keep secure and confidential all non-public information he may acquire or learn by reason of
his position as director. He should not reveal confidential information to unauthorized persons without the
authority of the Board.

9. Establishment of audit committee

 The Audit Committee shall consist of at least three (3) directors, who shall preferably have accounting and
finance backgrounds, one of whom shall be an independent director and another with audit experience. The
chair of the Audit Committee should be an independent director. The committee shall have the following
functions:
i. Assist the Board in the performance of its oversight responsibility for the financial reporting process,
system of internal control, audit process, and monitoring of compliance with applicable laws, rules and
regulations;
ii. Provide oversight over Management’s activities in managing credit, market, liquidity, operational, legal
and other risks of the corporation. This function shall include regular receipt from Management of
information on risk exposures and risk management activities;
iii. Perform oversight functions over the corporation’s internal and external auditors. It should ensure that
the internal and external auditors act independently from each other, and that both auditors are given
unrestricted access to all records, properties and personnel to enable them to perform their respective
audit functions;
iv. Review the annual internal audit plan to ensure its conformity with the objectives of the corporation.
The plan shall include the audit scope, resources and budget necessary to implement it;
v. Prior to the commencement of the audit, discuss with the external auditor the nature, scope and
expenses of the audit, and ensure proper coordination if more than one audit firm is involved in the
activity to secure proper coverage and minimize duplication of efforts;
vi. Organize an internal audit department, and consider the appointment of an independent internal
auditor and the terms and conditions of its engagement and removal;
vii. Monitor and evaluate the adequacy and effectiveness of the corporation’s internal control system,
including financial reporting control and information technology security;
viii. Review the reports submitted by the internal and external auditors;
ix. Review the quarterly, half-year and annual financial statements before their submission to the Board,
with particular focus on the following matters:
a. Any change/s in accounting policies and practices
b. Major judgmental areas
c. Significant adjustments resulting from the audit
d. Going concern assumptions
e. Compliance with accounting standards
f. Compliance with tax, legal and regulatory requirements

x. Coordinate, monitor and facilitate compliance with laws, rules and regulations;
xi. k) Evaluate and determine the non-audit work, if any, of the external auditor, and review periodically
the non-audit fees paid to the external auditor in relation to their significance to the total annual income
of the external auditor and to the corporation’s overall consultancy expenses. The committee shall
 disallow any non-audit work that will conflict with his duties as an external auditor or may pose a threat
to his independence. The non-audit work, if allowed, should be disclosed in the corporation’s annual
report;
xii. Establish and identify the reporting line of the Internal Auditor to enable him to properly fulfill his duties
and responsibilities. He shall functionally report directly to the Audit Committee.

The Audit Committee shall ensure that, in the performance of the work of the Internal Auditor, he shall
be free from interference by outside parties.

For Philippine branches or subsidiaries of foreign corporations covered by this Code, their Internal
Auditor should be independent of the Philippine operations and should report to the regional or
corporate headquarters.
10. Appointment of compliance officer
 The Board shall appoint a Compliance Officer who shall report directly to the Chair of the Board. He shall
perform the following duties:

(i) Monitor compliance by the corporation with this Code and the rules and regulations of regulatory agencies
and, if any violations are found, report the matter to the Board and recommend the imposition of appropriate
disciplinary action on the responsible parties and the adoption of measures to prevent a repetition of the
violation;
(ii) Appear before the Commission when summoned in relation to compliance with this Code; and
(iii) Issue a certification every January 30th of the year on the extent of the corporation’s compliance with this
Code for the completed year and, if there are any deviations, explain the reason for such deviation.
11. Period for filing Annual Financial Statements And General Information Sheet (SEC Circular No. 2 Series of 2017


 Note: SEC is allowing corporation to file before April 17 regardless of their Registration number.

 2. Corporations whose fiscal year ends on a date other than Dec 31, 2016 shall comply with their original filing
schedule which is within 120 days from the end of their fiscal year.

 3. Corporations who are categorized under the following shall comply with their original filing schedule which is
within 105 days from the end of their fiscal year:

 Securities are listed on the Philippine Stock Exchange (PSE)

 Securities are registered but not listed in PSE
 Public companies

SECURITIES REGULATIONS CODE RULE 68

FINANCIAL REPORTING REQUIREMENTS

1. Covered entities
 a) Stock corporations with paid-up capital stock of P50,000.00 or more;
 b) Non-stock corporations with total assets of P500,000.00 or more, or with gross annual receipts of
P100,000.00 or more;
 c) Branch offices of stock foreign corporations with assigned capital in the equivalent amount of P1,000,000.00
or more;
 d) Branch offices of non-stock corporations with total assets in the equivalent amount of P1,000,000.00 or more;
 e) Regional operating headquarters of foreign corporations with total revenues in the equivalent amount of
P1,000,000.00 or more.
2. Applicable financial reporting framework
a) Full Philippine Financial Reporting Standards (Full PFRS)
 Large and/or Publicly-Accountable Entities
 (a) For purposes of this Rule, large or publicly accountable entities are those that meet any of
the following criteria:
 (1) Total assets of more than P350 Million or total liabilities of more than P250 Million; or
(2) Are required to file financial statements under Part II of SRC Rule 68; or
(3) Are in the process of filing their financial statements for the purpose of issuing any class of
instruments in a public market; or
(4) Are holders of secondary licenses issued by regulatory agencies.

 (b) Large and/or publicly-accountable entities shall use as their financial reporting framework
the Philippine Financial Reporting Standards (“PFRS”) as adopted by the Commission. However,
a set of financial reporting framework other than the PFRS may be allowed by the Commission
for certain sub-class (e.g., banks, insurance companies) of these entities upon consideration of
the pronouncements or interpretations of any of the bodies listed in paragraph 1(B)(ii) above.
b) Philippine Financial Reporting Standards for Medium Entities (PFRS for SMEs)
 Medium-sized entities

c) Philippine Financial Reporting Standards for Small entities (PFRS for Small Entities)
d) Full PFRS or PFRS for SMEs or PFRS for Small entities or Tax/Cash Basis

E-COMMERCE ACT OF 2000

REPUBLIC ACT NO. 8792

1. State policy
 The State recognizes the vital role of information and communications technology (ICT) in nation-building; the
need to create an information-friendly environment which supports and ensures the availability, diversity and
affordability of ICT products and services; the primary responsibility of the private sector in contributing
investments and services in telecommunications and information technology; the need to develop, with
appropriate training programs and institutional policy changes, human resources for the information technology
age, a labor force skilled in the use of ICT and a population capable of operating and utilizing electronic
appliances and computers; its obligation to facilitate the transfer and promotion of technology; to ensure
network security, connectivity and neutrality of technology for the national benefit; and the need to marshal,
organize and deploy national information infrastructures, comprising in both telecommunications network and
strategic information services, including their interconnection to the global information networks, with the
necessary and appropriate legal, financial, diplomatic and technical framework, systems and facilities.
2. Objective
 This Act aims to facilitate domestic and international dealings, transactions, arrangements agreements,
contracts and exchanges and storage of information through the utilization of electronic, optical and similar
medium, mode, instrumentality and technology to recognize the authenticity and reliability of electronic
documents related to such activities and to promote the universal use of electronic transaction in the
government and general public.
3. Application
 This Act shall apply to any kind of data message and electronic document used in the context of commercial and
non-commercial activities to include domestic and international dealings, transactions, arrangements,
agreements contracts and exchanges and storage of information.
4. Definition of terms
 (a) "Addressee" refers to a person who is intended by the originator to receive the electronic data message or
electronic document. The term does not include a person acting as an intermediary with respect to that
electronic data message or electronic data document.

 (b) "Computer" refers to any device or apparatus which, by electronic, electro-mechanical, or magnetic impulse,
or by other means, is capable of receiving, recording, transmitting, storing, processing, retrieving, or producing
information, data, figures, symbols or other modes of written expression according to mathematical and logical
rules or of performing any one or more of these functions.

 (c) "Electronic Data Message" refers to information generated, sent, received or stored by electronic, optical or
similar means.

 (d) "Information and Communications System" refers to a system intended for and capable of generating,
sending, receiving, storing, or otherwise processing electronic data messages or electronic documents and
 includes the computer system or other similar device by or in which data is recorded or stored and any
procedures related to the recording or storage of electronic data message or electronic document.

 (e) "Electronic Signature" refers to any distinctive mark, characteristic and/or sound in electronic form,
representing the identity of a person and attached to or logically associated with the electronic data message or
electronic document or any methodology or procedures employed or adopted by a person and executed or
adopted by such person with the intention of authenticating or approving an electronic data message or
electronic document.

 (f) "Electronic Document" refers to information or the representation of information, data, figures, symbols or
other modes of written expression, described or however represented, by which a right is established or an
obligation extinguished, or by which a fact may be prove and affirmed, which is receive, recorded, transmitted,
stored, processed, retrieved or produced electronically.

 (g) "Electronic Key" refers to a secret code which secures and defends sensitive information that cross over
public channels into a form decipherable only with a matching electronic key.

 (h) "Intermediary" refers to a person who in behalf of another person and with respect to a particular electronic
document sends, receives and/or stores provides other services in respect of that electronic data message or
electronic document.

 (i) "Originator" refers to a person by whom, or on whose behalf, the electronic document purports to have been
created, generated and/or sent. The term does not include a person acting as an intermediary with respect to
that electronic document.

 (j) "Service provider" refers to a provider of -

i. On-line services or network access or the operator of facilities therefor, including entities offering the
transmission, routing, or providing of connections for online communications, digital or otherwise, between or
among points specified by a user, of electronic documents of the user's choosing; or

ii. The necessary technical means by which electronic documents of an originator may be stored and made
accessible to designated or undesignated third party.

 Such service providers shall have no authority to modify or alter the content of the electronic data message or
electronic document received or to make any entry therein on behalf of the originator, addressee or any third
party unless specifically authorized to do so, and who shall retain the electronic document in accordance with
the specific request or as necessary for the purpose of performing the services it was engaged to perform.
5. Legal recognition of electronic writing or document and data messages
 Section 6. Legal Recognition of Electronic Data Messages - Information shall not be denied legal effect, validity
or enforceability solely on the grounds that it is in the data message purporting to give rise to such legal effect,
or that it is merely referred to in that electronic data message.

 Section 7. Legal Recognition of Electronic Documents - Electronic documents shall have the legal effect, validity
or enforceability as any other document or legal writing, and -

(a) Where the law requires a document to be in writing, that requirement is met by an electronic document if
the said electronic document maintains its integrity and reliability and can be authenticated so as to be usable
for subsequent reference, in that -

i. The electronic document has remained complete and unaltered, apart from the addition of any endorsement
and any authorized change, or any change which arises in the normal course of communication, storage and
display; and
ii. The electronic document is reliable in the light of the purpose for which it was generated and in the light of all
relevant circumstances.

(b) Paragraph (a) applies whether the requirement therein is in the form of an obligation or whether the law
simply provides consequences for the document not being presented or retained in its original from.
 (c) Where the law requires that a document be presented or retained in its original form, that requirement is
met by an electronic document if -

 i. There exists a reliable assurance as to the integrity of the document from the time when it was first
generated in its final form; and

 ii. That document is capable of being displayed to the person to whom it is to be presented: Provided, That
no provision of this Act shall apply to vary any and all requirements of existing laws on formalities required
in the execution of documents for their validity.

For evidentiary purposes, an electronic document shall be the functional equivalent of a written document
under existing laws.

This Act does not modify any statutory rule relating to admissibility of electronic data massages or electronic
documents, except the rules relating to authentication and best evidence.
6. Electronic commerce in carriage of goods
 Section 25. Actions Related to Contracts of Carriage of Goods. - Without derogating from the provisions of part
two of this law, this chapter applies to any action in connection with, or in pursuance of, a contract of carriage of
goods, including but not limited to:

(a) (i) furnishing the marks, number, quantity or weight of goods;

(ii) stating or declaring the nature or value of goods;
(iii) issuing a receipt for goods;
(iv) confirming that goods have been loaded;

(b) (i) notifying a person of terms and conditions of the contract;

(ii) giving instructions to a carrier;

(c) (i) claiming delivery of goods;

(ii) authorizing release of goods;
(iii) giving notice of loss of, or damage to goods;

(d) giving any other notice or statement in connection with the performance of the contract;
(e) undertaking to deliver goods to a named person or a person authorized to claim delivery;
(f) granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods;
(g) acquiring or transferring rights and obligations under the contract.

 Section 26. Transport Documents. - (1) Where the law requires that any action referred to contract of carriage of
goods be carried out in writing or by using a paper document, that requirement is met if the action is carried out
by using one or more data messages or electronic documents.

(2) Paragraph (1) applies whether the requirement there in is in the form of an obligation or whether the law
simply provides consequences for failing either to carry out the action in writing or to use a paper document.

(3) If a right is to be granted to, or an obligation is to be acquired by, one person and no person, and if the law
requires that, in order to effect this, the right or obligation must be conveyed to that person by the transfer, or
use of, a paper document, that requirement is met if the right or obligation is conveyed by using one or more
electronic data messages or electronic documents unique;

(4) For the purposes of paragraph (3), the standard of reliability required shall be assessed in the light of the
purpose for which the right or obligation was conveyed and in the light of all the circumstances, including any
relevant agreement.

(5) Where one or more data messages are used to effect any action in subparagraphs (f) and (g) of Section 25,
no paper document used to effect any such action is valid unless the use of electronic data message or
electronic document has been terminated and replaced by the used of paper documents. A paper document
issued in these circumstances shall contain a statement of such termination. The replacement of the electronic
data messages or electronic documents by paper documents shall not affect the rights or obligation of the
parties involved.
 (6) If a rule of laws is compulsorily applicable to a contract of carriage of goods which is in, or is evidenced by, a
paper document, that rule shall not be inapplicable to such a contract of carriage of goods which is evidenced by
one or more electronic data messages or electronic documents by reason of the fact that the contract is
evidenced by such electronic data messages or electronic documents instead of by a paper document.

7. Electronic transactions in government

 Section 27. Government Use of Electronic Data Messages, Electronic Documents and Electronic Signatures. -
Notwithstanding any law to the contrary, within two (2) years from the date of the effectivity of this Act, all
departments, bureaus, offices and agencies of the government, as well as all government-owned and -controlled
corporations, that pursuant to law require or accept the filling of documents, require that documents be
created, or retained and/or submitted, issue permits, licenses or certificates of registration or approval, or
provide for the method and manner of payment or settlement of fees and other obligations to the government,
shall -

(a) accept the creation, filing or retention of such documents in the form of electronic data messages or
electronic documents;

(b) issue permits, licenses, or approval in the form of electronic data messages or electronic documents;

(c) require and/or accept payments, and issue receipts acknowledging such payments, through systems using
electronic data messages or electronic documents; or

(d) transact the government business and/or perform governmental functions using electronic data messages or
electronic documents, and for the purpose, are authorized to adopt and promulgate, after appropriate public
hearing and with due publication in newspapers of general circulation, the appropriate rules, regulations, or
guidelines, to, among others, specify -
1) the manner and format in which such electronic data messages or electronic documents shall be filed,
created, retained or issued;
2) where and when such electronic data messages or electronic documents have to signed, the use of an
electronic signature, the type of electronic signature required;

3) the format of an electronic data message or electronic document and the manner the electronic signature
shall be affixed to the electronic data message or electronic document;

4) the control processes and procedures as appropriate to ensure adequate integrity, security and
confidentiality of electronic data messages or electronic documents or records of payments;

5) other attributes required to electronic data messages or electronic documents or payments; and

6) the full or limited use of the documents and papers for compliance with the government requirements:
Provided, that this Act shall be itself mandate any department of the government, organ of state or
statutory corporation to accept or issue any document in the form of electronic data messages or electronic
documents upon the adoption, promulgation and publication of the appropriate rules, regulations or
guidelines.

EASE OF DOING BUSINESS AND EFFICIENT DELIVERY OF GOVERNMENT SERVICES DELIVERY ACT
Republic Act No. 11032

1. State policy
 It is hereby declared the policy of the State to promote integrity, accountability, proper management of public
affairs and public property as well as to establish effective practices, aimed at efficient turnaround of the
delivery of government services and the prevention of graft and corruption in government. Towards this end,
the State shall maintain honesty and responsibility among its public officials and employees, and shall take
appropriate measures to promote transparency in each agency with regard to the manner oftransacting with
the public, which shall encompass a program for the adoption ofsimplified requirements and procedures that
will reduce red tape and expedite business and nonbusiness related transactions in government."
2. Coverage
 This Act shall apply to all government offices and agencies including local government units (LGUs),
government-owned or -controlled corporations and other government instrumentalities, whether located in the
Philippines or abroad, that provide services covering business and nonbusiness related transactions as defined in
this Act."