Intellectual Property
1. Copyright
A. General Principles of Intellectual Property
1. Natural Rights Perspective (Labor Theory)
Similar difficulties afflict efforts to apply labor theory to intellectual
property. The problems begin at the threshold. As was true of utilitarianism,
it is not altogether clear that the labor theory supports any sort of intellectual-
property law. The source of the difficulty is ambiguity in Locke's original
rationale for property rights – from which this entire theory springs. Why
exactly should labor upon a resource held "in common" entitle the laborer to a
property right in the resource itself? Scattered in Chapter 5 of the Second
Treatise can be found six related but distinguishable answers to that question.
a and inventors the carrot of monopoly power and (b) the aggregate
losses generated by such a system of incentives (the consumer surplus
sacrificed when authors and inventors price their creations above the marginal
costs of producing them, the "administrative costs" of interpreting and
enforcing intellectual-property rights, etc.) In rougher terms, incentive theory
urges a lawmaker to establish or increase intellectual-property protection when
doing so would help consumers by stimulating creativity more than it would
hurt them by constricting their access to intellectual products or raising their
taxes.
B. Constitutional Basis
1. US Constitution, Article 1, Sec. 8 (8 IP Clause)
Clause 8. To promote the Progress of Science and useful Arts, by
securing for limited Times to Authors and Inventors the exclusive Right to
their respective Writings and Discoveries;
2. Philippine Constitution, Article XIV, Section 13
The State shall protect and secure the exclusive rights of scientists,
inventors, artists, and other gifted citizens to their intellectual property and
creations, particularly when beneficial to the people, for such period as may
be provided by law.
C. Modes of Intellectual Property (Definitions)
It is a legal concept that gives the creator of original work exclusive rights to
it, usually for a limited period of time. It is literally “the right to copy”, but
also gives the copyright holder the right to be credited for work, to determine
who may adapt the work to other forms, to determine who may perform the
work, to benefit financially from the work, and other related rights.
2. Trademarks
A distinctive mark of authenticity through which the merchandise of a
particular producer or manufacturer may be distinguished from that of others,
and its sole function is to designate distinctively the origin of the products to
which it is attached.
3. Patents
It is a set of exclusive rights granted by a State to an inventor or his assignee
for a fixed period of time in exchange for a disclosure of an invention.
D. Philippine Laws
1. Article 721 of the Civil Code
By intellectual creation, the following persons acquire ownership:
1. The author with regard to his literary, dramatic, historical, legal.
Philosophical, scientific or other work;
2. The composer, as to his musical composition;
3. The painter, sculptor, or other artist, with respect to the product of his art;
4. The scientist or technologist or any other person with regard to discovery or
invention.
2. Article 722 of the Civil Code
The author and the composer, mentioned in Nos. 1 and 2 of the preceding
article, shall have the ownership of their creations even before the publication
of the same. Once their works are published, their rights are governed by the
Copyright laws.
The painter, sculptor or other artist shall have dominion over the product
of his art even before it copyrighted.
 The scientist or technologist has the ownership of his discovery or
invention even before it is patented.
3. Article 1625 of the Civil Code
An assignment of a credit, right or action shall produce no effect as
against third person, unless it appear in a public instrument, or the instrument
is recorded in the Registry of Property in case the assignment involves real
property.
RA 8293
Section 1. Title. - This Act shall be known as the "Intellectual Property Code
of the Philippines."
Section 2. Declaration of State Policy. - The State recognizes that an effective
intellectual and industrial property system is vital to the development of
domestic and creative activity, facilitates transfer of technology, attracts
foreign investments, and ensures market access for our products. It shall
protect and secure the exclusive rights of scientists, inventors, artists and other
gifted citizens to their intellectual property and creations, particularly when
beneficial to the people, for such periods as provided in this Act.
The use of intellectual property bears a social function. To this end, the State
shall promote the diffusion of knowledge and information for the promotion
of national development and progress and the common good.
It is also the policy of the State to streamline administrative procedures of
registering patents, trademarks and copyright, to liberalize the registration on
the transfer of technology, and to enhance the enforcement of intellectual
property rights in the Philippines. (n)
Section 3. International Conventions and Reciprocity. - Any person who is a
national or who is domiciled or has a real and effective industrial establishment
in a country which is a party to any convention, treaty or agreement relating to
intellectual property rights or the repression of unfair competition, to which
the Philippines is also a party, or extends reciprocal rights to nationals of the
Philippines by law, shall be entitled to benefits to the extent necessary to give
effect to any provision of such convention, treaty or reciprocal law, in addition
to the rights to which any owner of an intellectual property right is otherwise
entitled by this Act. (n)
Section 4. Definitions. - 4.1. The term "intellectual property rights" consists
of:
a) Copyright and Related Rights;
b) Trademarks and Service Marks;
c) Geographic Indications;
d) Industrial Designs;
e) Patents;
f) Layout-Designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information (n, TRIPS).
4.2. The term "technology transfer arrangements" refers to contracts or
agreements involving the transfer of systematic knowledge for the
manufacture of a product, the application of a process, or rendering of a service
including management contracts; and the transfer, assignment or licensing of
all forms of intellectual property rights, including licensing of computer
software except computer software developed for mass market.
4.3. The term "Office" refers to the Intellectual Property Office created by this
Act.
4.4. The term "IPO Gazette" refers to the gazette published by the Office under
this Act. (n)
Section 5. Functions of the Intellectual Property Office (IPO). - 5.1. To
administer and implement the State policies declared in this Act, there is
hereby created the Intellectual Property Office (IPO) which shall have the
following functions:
a) Examine applications for grant of letters patent for inventions and
register utility models and industrial designs;
b) Examine applications for the registration of marks, geographic
indication, integrated circuits;
c) Register technology transfer arrangements and settle disputes
involving technology transfer payments covered by the provisions of
Part II, Chapter IX on Voluntary Licensing and develop and
implement strategies to promote and facilitate technology transfer;

d) Promote the use of patent information as a tool for technology
development;
e) Publish regularly in its own publication the patents, marks, utility
models and industrial designs, issued and approved, and the
technology transfer arrangements registered;
f) Administratively adjudicate contested proceedings affecting
intellectual property rights; and
g) Coordinate with other government agencies and the private sector
efforts to formulate and implement plans and policies to strengthen the
protection of intellectual property rights in the country.
5.2. The Office shall have custody of all records, books, drawings,
specifications, documents, and other papers and things relating to intellectual
property rights applications filed with the Office. (n)
Section 171. Definitions. - For the purpose of this Act, the following terms
have the following meaning:
171.1. "Author" is the natural person who has created the work;
171.2. 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;
171.3. "Communication to the public" or "communicate to the public" means
the making of a work available to the public by wire or wireless means in such
a way that members of the public may access these works from a place and
time individually chosen by them;
171.4. A "computer" is an electronic or similar device having information-
processing capabilities, and a "computer program" is a set of instructions
expressed in words, codes, schemes or in any other form, which is capable
when incorporated in a medium that the computer can read, of causing the
computer to perform or achieve a particular task or result;
171.5. "Public lending" is the transfer of possession of the original or a copy
of a work or sound recording for a limited period, for non-profit purposes, by
an institution the services of which are available to the public, such as public
library or archive;
171.6. "Public performance", in the case of a work other than an audiovisual
work, is the recitation, playing, dancing, acting or otherwise performing the
work, either directly or by means of any device or process; in the case of an
audiovisual work, the showing of its images in sequence and the making of the
sounds accompanying it audible; and, in the case of a sound recording, making
the recorded sounds audible at a place or at places where persons outside the
normal circle of a family and that family's closest social acquaintances are or
can be present, irrespective of whether they are or can be present at the same
place and at the same time, or at different places and/or at different times, and
where the performance can be perceived without the need for communication
within the meaning of Subsection 171.3;
171.7. "Published works" means works, which, with the consent of the authors,
are made available to the public by wire or wireless means in such a way that
members of the public may access these works from a place and time
individually chosen by them: Provided, That availability of such copies has
been such, as to satisfy the reasonable requirements of the public, having
regard to the nature of the work;
171.8. "Rental" is the transfer of the possession of the original or a copy of a
work or a sound recording for a limited period of time, for profit-making
purposes;
171.9. "Reproduction" is the making of one (1) or more copies of a work or a
sound recording in any manner or form (Sec. 41 (E), P.D. No. 49 a);
171.10. A "work of applied art" is an artistic creation with utilitarian functions
or incorporated in a useful article, whether made by hand or produced on an
industrial scale;
171.11. A "work of the Government of the Philippines" is a work created by
an officer or employee of the Philippine Government or any of its subdivisions
and instrumentalities, including government-owned or controlled corporations
as a part of his regularly prescribed official duties.
CHAPTER II
ORIGINAL WORKS
Section 172. Literary and Artistic Works. - 172.1. Literary and artistic works,
hereinafter referred to as "works", are original intellectual creations in the
literary and artistic domain protected from the moment of their creation and
shall include in particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for oral delivery,
whether or not reduced in writing or other material form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions; choreographic works or
entertainment in dumb shows;
(f) Musical compositions, with or without words;
(g) Works of drawing, painting, architecture, sculpture, engraving, lithography
or other works of art; models or designs for works of art;
(h) Original ornamental designs or models for articles of manufacture, whether
or not registrable as an industrial design, and other works of applied art;
(i) Illustrations, maps, plans, sketches, charts and three-dimensional works
relative to geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical character;
(k) Photographic works including works produced by a process analogous to
photography; lantern slides;
(l) Audiovisual works and cinematographic works and works produced by a
process analogous to cinematography or any process for making audio-visual
recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works.
172.2. Works are protected by the sole fact of their creation, irrespective of
their mode or form of expression, as well as of their content, quality and
purpose. (Sec. 2, P.D. No. 49a)
E. Copyright Act of 1976 [17 US 102 (a)]
Copyright protection subsists, in accordance with this title, in original
works of authorship fixed in any tangible medium of expression, now known
or later developed, from which they can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or device. Works
of authorship include the following categories:
(1) literary works;
(2) musical works, including any accompanying words;
(3) dramatic works, including any accompanying music;
(4) pantomimes and choreographic works;
(5) pictorial, graphic, and sculptural works;
(6) motion pictures and other audiovisual works;
(7) sound recordings; and
(8) architectural works.
F. Cases
1. Santos vs McCullough Printing Company
Facts:
This is an action for damages based on the provisions of Articles 721
and 722 of the Civil Code of the Philippines, allegedly on the unauthorized
use, adoption and appropriation by the defendant company of plaintiff's
intellectual creation or artistic design for a Christmas Card. The design depicts
"a Philippine rural Christmas time scene consisting of a woman and a child in
a nipa hut adorned with a star-shaped lantern and a man astride a carabao,
beside a tree, underneath which appears the plaintiff's pen name, Malang."
The complaint alleges that plaintiff Mauro Malang Santos designed
for former Ambassador Felino Neri, for his personal Christmas Card greetings
for the year 1959, the artistic motif in question. The following year the
defendant McCullough Printing Company, without the knowledge and
authority of plaintiff, displayed the very design in its album of Christmas cards
and offered it for sale, for a price. For such unauthorized act of defendant,
plaintiff suffered moral damages to the tune of P16,000.00, because it has
 placed plaintiff's professional integrity and ethics under serious question and
caused him grave embarrassment before Ambassador Neri. He further prayed
for the additional sum of P3,000.00 by way of attorney's fee.
Issue:
Whether Santos is entitled for protection, notwithstanding the fact that
he has not copyrighted his design.
Ruling:
No.
The lower court dismisses the complaint which the Supreme Court
affirmed.
Santos did not choose to protect his intellectual creation by a copyright.
The fact that the design was used in the Christmas card of Ambassador Neri
who distributed 800 copies thereof among his friends during the Christmas
season of 1959, shows the same was published.
Unless satisfactory explained a delay in applying for a copyright, of
more than 30 days from the date of its publication, converts the property to one
of public domain.
Since the name of the author appears in each of the alleged infringing
copies of intellectual creation, the defendant may not be said to have pirated
the work nor guilty of plagiarism. Consequently, the complaint does not state
a cause of action against the defendant.
The Supreme Court held that Santos is not entitled to a protection.
Rules of Practice in the Philippine Patent Office relating to the
Registration of Copyright Claims.
“An intellectual creation should be copyrighted 30 days after its
publication, if made in Manila, or within 60 days if made elsewhere, failure of
which renders such creation public property.”
When the purpose is limited publication, but the effect is general
publication, irrevocable rights thereupon become vested in the public, in
consequence of which enforcement of the restriction becomes impossible.
2. Filipino Society of composers, authors and publishers, Inc. vs Tan
Facts:
Filipino Society is the owner of certain musical compositions among
which are the songs entitled: Dahil Sa’yo, Sapagkat Ikaw ay Akin, Sapagkat
Kami ay Tao lamang and the Nearness of You.
Tan is the operator of a restaurant where a combo with professional
singers, hired to play and sing musical compositions to entertain and amuse
customers therein, were playing and singing the above mentioned
compositions without any license or permission from the appellant to play or
sing the same.
FS demanded payment of necessary license fee but the demand was
ignored, hence, they filed a complaint for infringement of copyright against
Tan.
Issue:
Whether Tan is liable for infringement of copyright.
Ruling:
No.
The composers of the contested musical compositions waived their
rights in favor of the general public when they allowed their intellectual
creations to become property of the public domain before applying or the
corresponding copyrights for the same.
3. Bayanihan Music vs BMG
Facts:
Jose Mari Chan entered into a contract with petitioner Bayanihan,
whereunder Chan assigned Bayanihan all his rights. Interests and participation
over his musical composition “Can We Just Stop and Talk a While” and other
musical composition “Afraid for Love to Fade”. Bayanihan applied for and
was granted a certificate of Copyright Registration.
Without knowledge and consent of Bayanihan, Chan authorized his co-
respondent BMG records to record and distribute the aforementioned musical
compositions in a then recently released album of singer Lea Salonga.
Bayanihan filed with RTC QC complaint against Chan and BMG for
violation of 216 RA 8293.
Issue:
Whether Chan and BMG liable.

Ruling:
No.
Chan, the composer and author of the lyrics of the two songs, is
protected by the mere fact alone that he is the creator thereof.
IP CODE. 172. 2. Works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as their content,
quality and purpose.
4. Kho vs Court of Appeals
Facts:
Kho of KEC Cosmetics Laboratory is the registered owner of the
Copyrights Chin Chun Sua / Oral Facial Cream / Case and Patent rights of
Chin Chun Su and Device and Chin Chun Su for medicated cream.
Summerville is the exclusive and authorized importer, re-packer and
distributor of Chin Chun Su products.
Respondent Summerville advertised and sold petitioner’s cream
products under the brand name Chin Chun Su, in similar containers that
petitioner uses, thereby misleading the public, and resulting in the decline in
the petitioner’s business sales and income; and, that the respondents should be
enjoined from allegedly infringing on the copyrights and patents of the
petitioner.
Trial Court granted preliminary injunction by KEC.
Court of Appeals set aside and declare null and void.
Issue:
Whether the copyright and patent over the name and container of a
beauty cream product would entitle the registrant to use and ownership over
the same to the exclusion of others.
Ruling:
No.
Petitioner has no right to support her claim for the exclusive use of the
subject trade name and its container. The name and container of a beauty cream
product are proper subjects of a trademark inasmuch as the same falls squarely
within its definition.
Trademark is any visible sign capable of distinguishing the goods
(Trademark) or services (Service mark) of an enterprise and shall include a
stamped or marked container of goods.
Copyright is confined to literary and artistic works which are original
intellectual creations in the literary and artistic domain protected from the
moment of their creation.
Patentable inventions refer to any technical solution of a problem in
any field of human activity which is new, involves an inventive step and
industrially applicable.
5. Unilever vs P&G
Facts:
P & G filed a complaint for injunction with damages. A P & G
subsidiary in Italy used a key visual in the advertisement of its laundry
detergent and bleaching products. This key visual known as the “Double Tug”
or “tac tac” demonstration.
Unilever, started airing its “Breeze PowerWhite” laundry product
called “Porky”. The said TVC included a stretching visual presentation and
sound effects almost identical or substantially identical or substantially similar
to P&G’s “tac tac” key visual.
Issue:
Whether P&G is entitled for the relief which is to enjoin the petitioner from
airing said TVC.
(Petitioner has copyright Registration for advertisement while P&G has none.
Ruling:
Yes.
Section 2. PD 49 stipulates that the copyright for a work or intellectual
creation subsists from the moment of its creation. Accordingly, the creator
acquires copyright for his work right upon its creation.
Section 173. Derivative Works. - 173.1. The following derivative works shall
also be protected by copyright:
(a) Dramatizations, translations, adaptations, abridgments, arrangements, and
other alterations of literary or artistic works; and
(b) 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. (Sec. 2, [P] and [Q], P.D. No.
49)

173.2. The works referred to in paragraphs (a) and (b) of Subsection 173.1
shall be protected as new works: Provided however, That such new work shall
not affect the force of any subsisting copyright upon the original works
employed or any part thereof, or be construed to imply any right to such use of
the original works, or to secure or extend copyright in such original works.
(Sec. 8, P.D. 49; Art. 10, TRIPS)

Article 10 (Agreement on Trade-Related Aspects of Intellectual Property

Rights)
Computer Programs and Compilations of Data
1. Computer programs, whether in source or object code, shall be protected as
literary works under the Berne Convention (1971).
2. Compilations of data or other material, whether in machine readable or other
form, which by reason of the selection or arrangement of their contents
constitute intellectual creations shall be protected as such. Such protection,
which shall not extend to the data or material itself, shall be without prejudice
to any copyright subsisting in the data or material itself.

Section 174. Published Edition of Work. - In addition to the right to publish

granted by the author, his heirs, or assigns, the publisher shall have a copyright
consisting merely of the right of reproduction of the typographical
arrangement of the published edition of the work. (n)