LEGAL OPINION

TO: Atty. Roberto D. Quizeo

FROM: Belteshazzar L. Cabacang

DATE: December 29, 2016

RE: R.A. 8293 AS AMENDED OR OTHERWISE KNOWN AS THE INTELLECTUAL PROPERTY CODE OF THE
PHILIPPINES

QUESTIONS PRESENTED

INTELLECTUAL PROPERTY

1. A. What are Intellectual Property Rights?

1. B. What is the governing Law of Intellectual Properties?

1. C. When was it promulgated?

1. D. What are the principal subjects of the Law on Intellectual Properties?

PATENTS

2. A. What is a Patent?

2. B. What are the different kinds of Patents and the requisites for its application or
registration?

2. C. To whom the rights to a Patent conferred?

2. D. Is there a right to assign Patent?

2. E. Whether or not Patents can be assigned?

3. TRADEMARKS AND SERVICE MARKS

3. A. What is a Trademark?

3. B. What is a Collective Mark?

3. C. What is a Trade Name?

 3. D. Whether or not Trademarks, Service Marks and Trade Names are assignable.

4. COPYRIGHT

4. A.What is a Copyright?

4. B. When does Copyright subsist?

4. C. Whether or not a Copyright can be assigned?

ANSWERS/ APPLICABLE LAWS

INTELLECTUAL PROPERTY

1. A. Intellectual Property Rights are those property rights which result from the physical
manifestation of original thought ( Ballentines Law Dictionary)

Likewise, it refers to the category of intangible rights protecting commercially valuable

products of human intellect. Cruz C. (2016). Intellectual Property Law Reviewer for Jurists
Bar Review Center

1. B. The governing Law of Intellectual Properties is R.A. 8293, as amended or otherwise

known as AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING
THE INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND
FOR OTHER PURPOSES.

1. C. The Intellectual Property Code was promulgated on January 1, 1998.

1. D. R.A. 8293 grouped together the three (3) laws of the principal subjects namely: 1)
Trademarks (R.A. 166); 2) Patent ( R.A. 165); and 3) Copyright (PD 49). Further, it was only
enforced soon after our country ratified the General Agreement on Tariff and Trade and its
accompanying TRIPS Agreement or Trade Related Aspects of Intellectual Property Rights
together with several countries around the world.

2. PATENT

2. A. Patent is a grant issued by the government giving an inventor, designer, or maker the
right to exclude others from making , using, or selling his invention, design or utility model
within the country for a specific term, in exchange for his patentable disclosure. Cruz C.
(2016). Intellectual Property Law Reviewer for Jurists Bar Review Center

2. B. Kinds of Patents:
 1. Invention Patent- requires novelty, inventiveness and industrial applicability.

2. Design Patent- requires novelty and ornamentality.

3. Utility Model- requires only novelty and industrial applicability. The presence of an
inventive step in a utility model is not necessary.

2. C. Section 28 of the Intellectual Property Code bestows to some persons the right to a
patent. The law provides: Sec. 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.

Since the said provision bestows to an assignee the right to a patent, it therefore presupposes
that a patent is assignable.

2. D. speaking of rights, one of the rights conferred by patent is its assignability. Again, said
right is given to patent owners. This right has its basis and is made clear under Section 71.2 of
the Code when it says: Sec. 71.2. Patent owners shall also have the right to assign, or transfer
by succession the patent, and to conclude licensing contracts for the same.

2. E. Section 103.2 of the Code is a provision which expressly or directly mentions the
assignability of patents, it provides : Inventions and any right, title or interest in and to
patents and inventions covered thereby, may be assigned or transmitted by inheritance or
bequest or may be the subject of a license contract.

Therefore, patents and inventions may be assigned or transmitted either through succession
as when the decedent-inventor dies, its right , title or interest to both patent and invention
passes to his or her compulsory or designated heirs or when such patents and inventions were
the subject of either voluntary or compulsory license contract.

A voluntary license/s is a form of Technology Transfer Agreement. In turn, Rule 1, n of the

Rules and Regulations on Voluntary Licensing defines technology transfer arrangement as
contracts or agreements involving the 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 the
licensing of computer software, except computer software develop for mass market.

Under this form of technology transfer, a patentee or rights-holder licenses local producers to
produce the protected product. Aquino R. (2014 ed.). Intellectual Property Law Comments and
Annotations

Also, in technology transfer agreement, the code requires various restrictions on the
stipulations that may be embodied in the said agreement. However, if the agreement contains
any of the prohibited clauses under the code, it will not be considered as void but only
unenforceable.

On the other hand, compulsory licensing is a section of patent law that reminds us of the laws
overriding concern: that public profit from useful inventions: Corollary then to this principle is
the appropriateness of state action to make available inventions which, either through neglect,
malice, sheer apathy or impoverishment, an inventor may fail to exploit, to the detriment of
the public. Because it is state action in the case of compulsory licensing that makes the
invention available to the public, consent of the inventor or patent owner is immaterial.
Aquino R. (2014 ed.). Intellectual Property Law Comments and Annotations

Section 93 enumerates the circumstances that justify compulsory licensing which are the
following: (1) national emergency; (2) public interest; (3) public non-commercial use; 4)
insufficient commercial use; 5) anti-competitive; and (6) demand for patented drugs is not
being met (R.A. 9502)

Of unique significance is a form of license called Compulsory License Based on

Interdependence of Patents. It exists when the circumstances under Section 97 of the code
occurs, that is when the invention protected by a patent, hereafter referred to as the second
patent, within the country cannot be worked without infringing another patent, hereafter
referred to as the "first patent," granted on a prior application or benefiting from an earlier
priority, a compulsory license may be granted to the owner of the second patent to the extent
necessary for the working of his invention. This Compulsory License Based on Interdependence
of Patents is subject to conditions and one of these is that provided for under Section 97.3.
Section 97.3 relays that the use authorized in respect of the first patent shall non- assignable
except with the assignment of the second patent.

Still under Compulsory Licensing, Section 100.3 of the code mandates that the license shall be
non-assignable, except with that part of enterprise or business with which the invention is
being exploited.

Another provision of the code which deals with assignment of patent is Section 104 which
states: Sec. 104. Assignment of Inventions. - An assignment may be of the entire right, title or
interest in and to the patent and the invention covered thereby, or of an undivided share of the
entire patent and invention, in which event the parties become joint owners thereof. An
assignment may be limited to a specified territory.

In other words, an inventor is given the choice to assign his/her or its right, title or interest in
and to the patent and invention in it its entirety or for only the aliquot portion thereof, in the
latter case, the assignor and the assignee becomes co-owners. Likewise, an assignment may be
made respecting a specified portion only.

Section 105 of the Code speaks of the form of assignment. Section 105 provides: The
assignment must be in writing, acknowledged before a notary public or other officer authorized
 to administer oath or perform notarial acts, and certified under the hand and official seal of the
notary or such other officer.

Therefore, assignment must be in writing, notarized, and recorded with Intellectual Property
Office (IPO); otherwise such assignment is void as against any subsequent purchaser or
mortgagee without notice, unless recorded in IPO within three (3) months from date of
instrument, or prior to subsequent purchase or mortgage. Villanueva, C. ( 2015 ed.) Commercial
Law Review

After the occurrence of a valid assignment of patents and inventions or application for patents
or inventions, the same must be recorded in and by the Intellectual Property Office. Section 106
of the Code laid down the procedure for its recording. It provides in part: The Office shall record
assignments, licenses and other instruments relating to the transmission of any right, title or
interest in and to inventions, and patents or application for patents or inventions to which they r
elate, which are presented in due form to the Office for registration, in books and records kept
for the purpose. The same section of the code also requires the publication of the notice of
recording in the IPO Gazette.

In case of joint-ownership of the patent and the invention covered thereby, section 107 of the
Code gives each joint-owner the same rights of an owner or joint-owner as that provided for
under the Civil Code. These rights include the right by each to personally make, use, sell, or
import the invention for their own profit. However, neither of the joint owners may grant
licenses or to assign his right, title or interest or part thereof, without consent of the other
owner/s, or import the invention for his own profit.

3. TRADEMARK

3. A. Trademark is any visible sign that distinguishes a good or service from others. Accordingly,
a sound mark at this point is still not registrable. Cruz C. (2016). Intellectual Property Law
Reviewer for Jurists Bar Review Center

3. B. Collective Mark is any visible sign 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. Villanueva, C. ( 2015 ed.)
Commercial Law Review

3. C. A Trade Name is any name or designation identifying or distinguishing an enterprise.

Villanueva, C. ( 2015 ed.) Commercial Law Review

3. D. A glance of Section 137.3 of the Code, would reveal that: a certificate of registration of a
mark may be issued to the assignee of the applicant: Provided, That the assignment is recorded
in the Office. In case of a change of ownership, the Office shall at the written request signed by
the owner, or his representative, or by the new owner, or his representative and upon a proper
showing and the payment of the prescribed fee, issue to such assignee a new certificate of
registration of the said mark in the name of such assignee, and for the unexpired part of the
original period.

Hence, one would readily conclude that Trademarks and Service Marks are assignable upon c
compliance of recording requirement, in case of assignment, and submission of written request
and payment of prescribed fees, in case of transfer of ownership.

Another provision that would exhibit assignability of Trademarks and Service Marks, albeit
impliedly, is section 147 of the Code which confers several rights to an owner of a registered
mark. Of those several rights, an obvious right which is conferred therein is the right to the
exclusive use of the mark for ones own good or services.

The right to the use of a registered trademark may be licensed to another person, natural or
juridical, enabling such a party to produce, market, distributes and advertises goods or services
by trade or service mark of the licensor. Section 150.1 however requires that a licensor
effectively control the quality of the goods or services of the licensee. Obviously, the
requirement precludes deceit and deception of the purchasing or consuming public. A purchaser
of the goods of Toyota (Philippines) is entitled to trust the quality of Toyota products, whether
Japanese or Philippine. It is not fair to make him rely on the mark of Toyota without legally
requiring the licensor Toyota to oversee the quality of the goods produced by the licensee
Toyota. Aquino R. (2014 ed.). Intellectual Property Law Comments and Annotations

More provisions of equal import, starting from Section 149 up to Section 149.5 refers to
Assignment and Transfer of Application and Registration. An application for registration of a
mark, or its registration, may be assigned or transferred with or without the transfer of the
business using the mark. (Sec. 149.1)

Such assignment or transfer shall, however, be null and void if it is liable to mislead the public,
particularly as regards the nature, source, manufacturing process, characteristics, or suitability
for their purpose, of the goods or services to which the mark is applied. (Sec 149.2)

The instrument or Deed of Assignment, under the Law on Trademarks, requires as well the
observance of a specific form. The assignment of the application for registration of a mark, or of
its registration, shall be in writing and require the signatures of the contracting parties. Transfers
by mergers or other forms of succession may be made by any document supporting such
transfer. (Sec. 149.3)

Assignments and transfers of registration of marks shall be recorded at the Office on payment of
the prescribed fee; assignment and transfers of applications for registration shall, on payment of
the same fee, be provisionally recorded, and the mark, when registered, shall be in the name of
the assignee or transferee. (Sec. 149.4)

Take note that as contradistinguished from issuance of Certificate of Registration to the new
owner under Section 137.3, in case of transfer of ownership, payment of the prescribed fee is
 not enough as a written request that a new certificate of registration be issued to him is
necessary.

Assignments and transfers shall have no effect against third parties until they are recorded at
the Office. (Sec. 149.5)

As a corollary rule, recording of assignments and transfers at the office serves as a constructive
notice and would bind third persons with respect to the agreements.

4. COPYRIGHT

4. A. A Copyright is an economic right given to the author or composer of an original work. Cruz
C. (2016). Intellectual Property Law Reviewer for Jurists Bar Review Center

4. B. The rights conferred by the Intellectual Property Code insofar as copyright is concerned
subsist from the moment of creation. (Sec. 172.1) Under Philippine Law, no formality is required
that the author be vested with the rights of copyright. In this important respect, the unfortunate
doctrine of Santos v. MacCullogh, 12 SCRA 321 (1964) , requiring a registration of a copyright
claim so that the author might enjoy the benefits of copyright is clearly abandoned. Aquino R.
(2014 ed.). Intellectual Property Law Comments and Annotations

Recordal made with National Library is for evidence purposes only. The Certificate of Deposit
given by the National Library is not proof of ownership but is only proof that there is deposit of
work. Cruz C. (2016). Intellectual Property Law Reviewer for Jurists Bar Review Center

4. C. Under Section 171.1 an Author is a natural person who has created a work. Therefore,
corporations and legal entities cannot become copyright owners. The remedy however would
be to assign copyright to juridical persons.

In Copyright Law, there are protected and unprotected works. Protected works involves original
works (Sec.172) and Derivative works (Sec. 173). On the other hand, works not protected
include, among others, works of Government. Section 176.3 however does not preclude the
Government from being an assignee or transferee of copyright. The relevant portion of the
provision provides: Section 176.3. Notwithstanding the foregoing provisions, the Government is
not precluded from receiving and holding copyrights transferred to it by assignment, bequest or
otherwise; xxxx.

Prior to assignment or transfer of copyright, rules on copyright ownership ought to be

considered. The most common rule of copyright ownership which is of prevalent applicability is
found under Section 178.3 which has something to do with copyright ownership for the work
done by an employee.

Copyright of the work done by an employee belongs to the employer, if the end product is the
result of the actual functions of the employee. Otherwise, copyright belongs to the employee
even if he uses the time and resources of the employer. In the latter case, assignment of
copyright could also be made in favor of the employer, failing of which, the employers recourse
would be to go against the employee because of unauthorized usage by the latter of the
formers time and resources.

Going to the heart of the Copyright Law which tackles expressly and directly the issue on the
assignability of Copyright would be done by looking into the Provisions on Transfer and
Assignment of Copyright from Sections 180 up to 183.

Copyright may be assigned in whole or in part, which would entitle the assignee to all the rights
and remedies which the assignor had with respect to the copyright. (Sec. 180.1)

In other words, in case of assignment of copyright, the assignee would step into the shoes of the
assignor and acquire the latters rights and remedies with respect to the copyright. Included in
these remedies is the right of the assignee to recover actual damages, including legal cost and
other expenses, as he may incur due to infringement as well as the profits the infringer may
have made due to such infringement. [Sec. 216.1 (b)]

The copyright is not deemed assigned inter vivos unless there is a written indication of such
intention ( Sec. 180.2)

Written intention of assignment during the lifetime of the assignor may be deduced from a deed
of assignment executed by him or any other deed or instrument which convey copyright
ownership to others, whether gratuitously or for a consideration.

Unless a greater right is expressly granted, submission of a literary, photographic or artistic work
to a newspaper, magazine or periodical for publication shall constitute only a license to make a
single publication. (Sec. 180.3)

As a general rule, literary, photographic or artistic work assigned to a newspaper, magazine or

periodical publisher may be published only once unless the assignor expressly allows
subsequent publications of such works.

If two (2) or more persons jointly own a copyright or any part thereof, neither of the owners shall
be entitled to grant licenses without the prior written consent of the other owner or owners.
(Sec. 180.3)

Grant of licenses by joint owners of a copyright or any part thereof may only be had if consent
from all of them is secured.

Since copyright is distinct from the property in the material object subject to it:

(1) Transfer or assignment of the copyright shall not itself constitute a transfer of the material
object.

(2) Transfer or assignment of the sole copy or of one or several copies of the work shall not
imply transfer or assignment of the copyright. (Sec. 181)
 Copyright and the material object subject to it are separable from each other. Consequently,
the transfer or assignment of the copyright does not necessarily include the transfer of the
material object and vice versa.

The copyright owners or their heirs may designate a society of artists, writers or composers to
enforce their economic rights and moral rights on their behalf. (Sec. 183)

Section 183 of the Code regarding Designation of Society was already amended by R.A. 10372.
The amendment now requires the Society designated to first secure accreditation from the
IPO to enforce the rights of its members.

Copyright involves two important rights which are: 1) the Economic Rights; and 2) the Moral
Rights. One thing worth mentioning is that moral rights which incudes right of attribution
(authorship) and integrity (to make alterations, to object to any distortion or modification of
the work, etc.) may be waived subject to conditions but cannot be assigned or subject of a
license. (Sec. 198.1)

ANALYSIS AND CONCLUSION

Hence, taking into consideration all the above mentioned and/or discussed provisions and
applying the rule on reason, the inevitable conclusion would be that Intellectual Property
Rights are assignable.

The following are the express provisions which directly confirms assignability of patents: 1)
Sec. 71.2.- The right to assign or transfer patent by patent owners ; 2) Section 103.2 -The
assignability or transferability of inventions; and 3) Section 104- The assignability of patents
and inventions in its entirety or for an undivided share only.

When it comes to Trademark, the following are the express provisions which directly exhibit its
assignability: 1) Section 137.3- Issuance of certificate of registration to the assignee of the
applicant or a new certificate of registration of the said mark in the name of such assignee, and
for the unexpired part of the remaining period. The latter occurs in case of change of ownership.
2) Section 149.1- The assignability or transferability of an application for registration of a mark,
or its registration itself; 3) Section 149.5- The non-binding effect of assignments and transfers
against third parties for non-compliance of recording requirement.

Lastly, the following are the express provisions which directly reflects assignability of
Copyright: 1) Section 180.1- The assignability of Copyright in its entirety or for a specified
portion and the subrogation of the rights and remedies of the assignor in favor of the assignee;
2 ) Section 180.2- The assignability of copyright during the lifetime of the assignor and with his
written consent; 3) Section 180.3- Grant of licenses with the prior written consent of the join-
owners; 4) Section 181- The copyright being distinct from the property in the material object
subject to it; 5) Section 198.1- The non-assignability of Moral Rights.
Thus, with all the possible provisions of the Intellectual Property Code relating to assignability of
intellectual property rights having been discussed, I am confident to arrive in to a judgment that
one may very well assign or transfer its patent and inventions, enter into a licensing agreement
for patents, assign or transfer ownership of trademark, and assign and grant licenses for
copyrights.