INTELLECTUAL PROPERTY LAW 3.
Person/individual who bought a reproduced copy of *computer programs = copyrightable
#copyright
#patent
#trademark [service marks]
*PROPERTY RIGHTS – (which) are incorporeal rights
(cannot be seen/ingtangible)
*Granted by the State to have this property so long as you
are the OWNER of that.
- privilege to produce, sell, dispose that right
★only a privilege
- to apply, you should be the originator. And if given, such
privilege is exclusive. You may produce such property right,
exploit, sell, assign even commercially.
Pertinent laws:
- Paris Conventions (1960s)
- TRIPPS
- ASEAN agreement
- General Agreement on Trade and Tariff (GATT)
Signatories = countries
Filipinos are automatically protected worldwide
insofar as in the countries who are signatories thereof.
- all countries, insofar as the international
convention is concerned, which are participants
are protected worldwide.
- Thus, if your country is represented in the
convention, the nationals of that country are
protected worldwide/internationally. This concept
is also known as Reverse Reciprocity Rule.
1. COPYRIGHT
Your Exclusive Right to print, publish, translate, make
another versions etc. etc.
It includes books, poems, photographs (those who make a
living out of it), paintings.
Books, for example, the book of Dean Sundiang. Nabalitaan
mo na maraming kopya niyan sa may Recto, may mga re-
print. If ever you are Dean Sundiang, what will you do? With
whom you have a right of action?
1. Photocopier – they will be liable if they reproduce
the book with intent to gain. Commercial
gain.
2. A person/individual – if such person reproduce and
distribute with intent to make profit or gain,
he/she may be liable (parang yung proposed
business dati ni jaise na mag co-comission ng
reproduce ng mga libro tapos ibebenta,
papatungan yung value ng pag reproduce).
the book of Dean Sundiang – it depends. Kung
personal use, there is no infringement. Ano ba GR: Intellectual rights are protected worldwide.
yung mga personal use? Yung for Research, - Even if NOT registered in your country, still
Lectures, Educational. This is also known as protected so long as from the moment of creation,
Fair Use Doctrine/Rule. you own the same.
1. The Fair Use Doctrine is an - Even if NOT registed in another country Harvard
exception because there is no case
gain or profit from such use. XPN: Country is NOT a signatory. Thus, one cannot sue
4. Library ng Arellano or any library – there is no in his own country.
liability fore there is no infringement.
Reproduction of the books was without intent 11/20/16
to gain/profit.
Intangible asset (cannot be seen)
GR: Register with IPO.
XPN: Copyright is either before the National Library or the PROPERTY is either tangible or intangible
Supreme Court.
INTELLECTUAL PROPERTY
★FROM THE MOMENT OF CREATION = PROTECTED - Grant by statute (law) by the State
ALREADY. –acquired by intellectual creator from the - Applicant must be the originator [inventor, author,
moment of creation or scientist]
- Given exclusive privilege to produce that
FAIR USE DOCTRINE ≠ infringement of copyright intellectual property
(aminin mo na. Hahahaha. Umorder kami sa classmate
namin na magpapa-book alike ng libro ni dean sundiang, What is “exploit”?
liable ba yung nagbenta?YES. kasi nag-offer e. Pero pag - Exploit means to produce it commercially (for
ready-made [finished product] na yung book-alike, hindi gain) orsell or assign.
liable si classmate.)  panong ready-made? - Ex. Industrial design
FAIR USE RULE – for educational purposes only and NOT GR: All countries insofar as international treaties and
for commercial gain. conventions are concerned must protect the citizens of the
(pero yung nagbebenta at gumagawa nun ang liable sa signatories of the same (ie Paris Convention)
infringement of copyright) [all participants therein]  intellectual property
rights are protected worldwide.
“Infringement” = trespassing a private domain a.k.a.
INTELLECTUAL PIRACY OR PLAGIARISM REVERSE RECIPROCITY RULE
- Country represented reverses back to the
COPYING ≠ long-term use  not liable nationals.
★What is infringed is the music/melody/tune and NOT the Other matters regarding foreign trade laws include IP
change of lyrics. rights, though the treaty is for commercial
transactions/businesses.
TEST OF INFRINGEMENT
The test of infringement is whether the act caused injury to COPYRIGHT
the owner of the copyright or diminish the value of the
copyright. COPYRIGHT
- Exclusive right to print, publish, recopy, distribute,
Halimbawa may libro, tapos ikaw ay kinopya mo yung libro or to translate or make other versions of your
nya, not in full, pero halos pareho na then you sell it for a work.
relatively lower price. In that scenario, the SC said, there - Ex. Books, if you are the author, you have the right
was infringement becuase the value of the property of the to translate in other languages, it likewise applies
originator has been diminished. Effort was exerted to make to photos, paintings, sculptures
products look genuineto deceive the public. Nawala yung
projected or expected gain nung originator. ★ Reproductions of your work
From the moment of creation = whether registered or not. Whom to file infringement of copyright? Against the use or
Ownership is vested already. producer?
 - Photocopier and seller [producer]. So long as for
commercial gain = liable
- Distributor of commercial gain = liable
What If you bought the same replica of the book. Are you
liable?
- It depends. If for personal use = NO
INFRINGEMENT
- Basta for information purposes.
- Copying is allowed as long as the purpose is NOT
for profit.
- Educational purposes  Doctrine of Fair Use
FAIR USE RULE
NOT used for profit but for educational purposes only.
INFRINGEMENT – [aka intellectual piracy;plagiarism]
trespass on somebody’s work/ on private domain.
TEST: DID IT PRODUCE INJURIOUS EFFECT ON YOUR
WORK/ DIMINISHED THE VALUE OF YOUR WORK?
Can you file for infringement?
- Yes if you follow the TEST.
An author copied a similar high school text book written by
another. The author who copied the material sold the text
book for a cheaper price. Is he liable?
- YES. Because it diminished the value of the work
of the first author [original]
★“INJURY” to the work of a certain person (Estimated
profit was lost)
GR: Liable for infringement of copyright
XPN: Fair Use Rule
★NO registration of copyright with the IPO  only to the
National Library or the Supreme Court.
SC: From the moment of creation [even if you do NOT
deposit the required registration fees] = ownership is
vested.
*There are 2 rights involved(CREATED) in infringement:
1. property [right] – something that can be seen
2. copyright – something that cannot be seen
Ownership = work can be reproduced------------
CONFLICTING
Creator = copyright owner [with exceptions]
FOR WORK = employer owns the work BUT he cannot
reproduce your work. The right to reproduce such work is a
right that belongs to the creator UNLESS there is
agreement on the contrary.
178.3. In the case of work created by an author during and in
the course of his employment, the copyright shall belong to:
(a) The employee, if the creation of the object of
copyright is not a part of his regular duties even
if the employee uses the time, facilities and
materials of the employer.
(b) The employer, if the work is the result of the
performance of his regularly-assigned duties,
unless there is an agreement, express or
implied, to the contrary.
FOR COMMISSION = nag-commission  owner
Maker  owner of copyright UNLESS there is agreement on
the contrary.
So let us say Raemond was commissioned to paint. The
painting belongs to the the person who commissioned
Raemond. However, the copyright over such painting
belongs to Raemond.
Remember that in trademark, what the law punishes is the
act of giving one’s goods the general appearance that it
would likely mislead buyers, that such goods rightfully belong
to the complainant.
TRADEMARK
“Trademark” – could be a mark, logo, or emblem
-visible sign/mark/logo/emblem, the purpose of which is to
distinguish the goods or service from other
producer/provider and to determine the origin.
121.1. "Mark" means 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;
What is the purpose of the trademark?
- To distinguish the product and the service. And to
determine the origin. SO DISTINGUISH and
ORIGIN!
*Trade Names need NOT be registered with the IPO,
however, if a trade name is used as a trademark, then it is
considered as a trademark. ★There is AURAL EFFECT to
consider from the others. NANI vs NAN case [both milk
products], dito in-explain yung Aural Effect.
SC: There are aural effects on the letters [design] seen on
the containers, packaging, labels, also, there was confusion
(halos magkapareho). Thus, there is an infringement of
trademark.
In the case, it was explained that there was a colorable
confusion which was determined by applying the:
1. Dominancy Test (The Dominancy test was applied where
it focused on the similarity of dominant features of the
trademark so as to confuse the public.) and the;
2. Holistic Test (Holistic test is applied where the entirety of
the mark was copied to cause confusion)
*although similar, yet there is confusion  deceives public
= infringement
★There is COLORABLE IMITATION of the original.
DOMINANCY TEST – “dominant features”, aural effects are
similar (though not exactly) so as to confuse, mislead the
public = original owner will be damaged because of the
counterfeit.
kung exactly, then apply HOLLISTIC TEST. 
entirety of work was copied!!!!!!!!!!
May manufacturer ng t-shirts tapos ginawang trademark
yung Jollibee, pero instead of a bee, a cat was imprinted
[JolliCat? Haha].
Is there infringement of trademark?
- NO. First, register the trademark, and also make
a list of things where your trademark will be
used. [like for wrappers, packaging, etc.]
DOCTRINE OF RELATED (OR UNRELATED) GOODS
Under this doctrine, the business of the trademark owner is
NOT impaired, however, if the use was included on the
list, then there is infringement.
NOT used for the things on the products used by
the registered owner of the TM – apply this
doctrine although there are dominant features.
(Ex. Nilagay mo sa sapatos yung registered TM ng
mcdo)
*”…included on the list of goods submitted to the IPO.”
Dapat daw kasi pag nag pa register ka ng TM mo, kailangan
mag prepare ka ng list kung saan saan mo siya gagamitin.
Halimbawa, sa tissue, sa spoon and fork, sa mga boxes.
Para ma enforce mo yung exclusive use mo nung trademark
and you can effectively deny others from using the same.
Sabi pa ni maam, kahit pa dominant or holistic test ang
gamitin, kung di naman included sa list pursuant to
Doctrine of Related Goods.
Thus, going back to the case of Jollibee, walang
infringement dun sa mga tshirt na ginawa yung logo ng
jollibee. Kasi di naman daw used sa business nung Jollibee
yung mga t shirt.
------IRRELEVANT ANG HOLISTIC AT DOMINANT TEST
SA DOCTRINE OF RELATED GOODS
FIRST REGISTRANT RULE
Q: Do we need to register trademarks?
GR: Trademarks must be registered with the IPO.
Before: Prior Use
Now: First-Registrant Rule  so ano
talaga?!?!??!?!!?!!?!
First Registrant > Prior User
If you register the trademark of McDonald’s (registered in the
U.S.) then you copied it and sold the goods here then
registered the same with the IPO in the PH. Who has a
better right?
- If already registered in the country of origin,
provided the same is a signatory in an
international agreement where PH is also a
signatory thereof.
SC: Trademarks are protected worldwide,((((((
notwithstanding the fact that you are the Prior User.))))) This
principle was explained in the case of Shari-La.
Shangri-La case
Shangri-La restaurant in QC copied the same trademark of
the Shangri-La hotel and restaurant.
SC: TM of the Shangri-La hotel and restaurant was
registered prior since the 1970s even before Shangri-La QC
registered theirs, the fact that it was already registered in the
country of origin = owner thereof is given the PRIOR RIGHT.
E ASAN NA ANG PROVIDED SIGNATORY????!?!!!!!
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. - BASTA ITO ANG GR!!!!!!!!!!!!
★If TM is famous – internationally known, that TM can file a
case here.
Harvard University case
*As long as there is confusion = infringement of TM and
Unfair Competition
UNFAIR COMPETITION – NO need to register the TM with
the IPO. ★But if there is (alleged) infringement = registration
is required but there are exceptions [doctrine of
related/unrelated goods]
Sabi kasi ni ma’am may 2 ways daw para mag enforce ka ng
right mo over the intellectual property. it can be a case for
unfair competition and it can be a case for infringement. Sa
ingringement, material kung registered ba yung tradename
or hindi. Sa unfair competition, registration is immaterial. So
pag nag file ka daw ng kaso, in practice, i-consider mod aw
itong mga sitwasyon na ito.
Also take note of levi’s and skecher’s case
GR: Again, the general rule is that the first registrant is has a
better right UNLESS the trade name is already registered in
the country of origin and PROVIDED that the country of
origin is a signatory in the treaty/convention, they will be
protected.
HOLISTIC TEST – copy in its entirety.
★Registered in country of origin [signatory] = protected
worldwide.
FIRST REGISTRANT RULE – provided, no registration in
another country.
PRIOR USE < PRIOR REGISTRATION
Meaning, mas preferred ang Registered as against sa prior
use.
★Grounds for Infringement:
- “Likelihood of Confusion” ;
- Colorable Imitation;
- Injury
(SC language, use this daw in the exam) *To protect the
person for the fruits of his toil [labor].
Aural effect in the letters, etc.
ELEMENTS:
- Colorable title
- Imitation
- Deception = “likelihood of confusion”
*”Cloud” (Ex. Ginebra – TM na binili ng San Miguel, at hindi
na register ng SMC yung right on Ginebra TM)
SC: there is a cloud as to exclusive right over the TM
“Ginebra”. Di kasi original owner ang SMC, assignee lang
siya.
★To register, you must be the OWNER.
GINEBRA, hindi daw SMC ang originator- so pano
e binili na e??!!!!!!!!
Importer/Distributor ng Levi’s, can he register the TM?
- NO. The original owner must register the TM even
if one is the exclusive distributor.
- No, you must be the owner in order for your to
register. di porke exclusive distributor ka pwede
mo nang i-register. kailangan exclusive owner ka
nung TM.
*products are separate and distinct from the TM.
Term of Trademark = renew every 5 YEARS.
If you stopped using that, you must inform the IPO and file
for renewal.
PURPOSE: To allow other user to register the same.
LIFE: 10 YEARS renewable for 10 YEARS.
pareho din sa ibang bansa [same din sa
copyright] because of the treaties, like TRIPPS.
*Declare muna that you are still using the trademark on the
5th Year, otherwise the IPO will allow other entities to use the
trademark.  declaration of actual use
Raemond: to my understanding, the Term is for 10 years and
renewable for another 10 years. However, you must notify
the IPO every 5 years that you are still using the TM.
Furthermore, Continuous non-use of the mark for 3 years,
after which, IPO may allow registration of said trademark by
another applicant.
PATENTS
Inventions  Patent [patentable inventions] “technical
solution of a problem”
- we have patents because of inventions.
However, inventions must meet the following elements to
qualify for the application:
Section 21. Patentable Inventions. - Any technical solution
of a problem in any field of human activity which is new,
involves an inventive step and is industrially applicable shall
be Patentable. It may be, or may relate to, a product, or
process, or an improvement of any of the foregoing.
ELEMENTS: (P-U-N-O)
- New/novel
- Original
- Usefulness
- Precedence
Who has a better right over an invention, the originator or the
registrant?
- First Registrant (with the IPO) (sad!). There is one
case, yung stove ay naimbento, DOST even gave
an award to the inventor. HOWEVER, another guy
copied his invention and somehow made some
modifications and improved the same then he
submitted the same to the IPO. IPO published.
The guy who made the resgistration was given
preference. Lesson: you must register.
 - The inventor, kahit nauna pa siya cannot sue for
injunction because patent was not issued to him.
He can sue for cancellation of patent because the
invention forms part of prior art.
NO proof of originality that somebody registered it with the
IPO because the IPO would have to publish that on its
Official Gazette.
st
1 Registrant was given Certificate of Patent
*PATENT = formula only
★Remedy: File for Revocation of the (patent) invention.
LICENSING OF PATENT:
- VOLUNTARY LICENSING – you exploit your own
invention [commercially viable] or sell invention or
give it to somebody – “any right or any transfer of
the same”
- COMPULSORY LICENSING – right of the State to
compel [or others in behalf of the state] to produce
the invention for the good of the country  upon
payment of just compensation.
o The State in itself or allow somebody to
manufacture invention commercially =
EXPLOITATION you have been
granted such right for the good of the
country/ for the benefit of the people.
(agapito flores – fluorescent lamp)
Especially if the invention is vital to economy, safety/health,
or military defense.
*if public interest so requires = compulsory
licensing applied so inventors can commercially
produce the invention.
*voluntary licensing (rights of an owner)
remember yung story nung hacker ng software ng Microsoft.
You are an INFRINGER if you [copy and produced
formula].
Ex. Medicines with medicinal value, na wala pang
confirmation from the Food and Drug Administration (at least
18 MONTHS to grant the same) for the IPO to approve the
formula.
*Grant of Patent = takes effect when published on the Official
Gazette.
Certificate issued by the IPO granted, only at that time when
the right was granted
“PUBLICATION”
- Application with IPO
- Official Gazette
Ang licensing dawn g patent ay two step process:
1. application
2. then publication sa OG
An Invention made under a commission/employment;
Rule:
A person invented a formula for water to run on motor
vehicles and it was done as a commission and agreed to
invent the same. Who owns the patent?
The person who commissions the work, unless otherwise.
(this is not like a copyright that produces (2) rights). This
situation differs from Copyright!!!!! RATIONALE: You are
paid to invent the same, usually by a corporation.
30.1. The person who commissions the work shall own
the patent, unless otherwise provided in the contract.
If an invention made under an employment; Rule:
GR: employer owns the invetion
XPN: Employee made the invetion [when NOT his
duty/purpose] or not part of his work.
Madami daw nangongopya kaya we have this:
Doctrine of Equivalents and Literal Infringement
1. DOCTRINE OF EQUIVALENTS
Similar raw materials used, but with minor changes or
modifications and produces the same results. There is
infringement.
Yung original formula, plant ang gamit pero instead of plants,
ang ginamit mo ay flowers [roses]. Is there infringement?
- YES, because you arrived at the same result.
2. LITERAL INFRINGEMENT
*When you copied exactly the formula, then it is “LITERAL
INFRINGEMENT” ≠ Equivalents
*Apply First Registrant Rule always.
- Copyright
- Trademark
- Patent
When is the expiration of patents?
- 20 YEARS only. NO renewal!!! In all countries, the
expiration of the formula is 20 years as well, which
means it is applicable worldwide.
this is the reason why there are generic
medicines is because the patents has already
expired. Yung patent dun sa formula ng medicine
nag expire na so pwede na makopya. There is no
infringement if the patent is already expired.
★NO INFRINGEMENT WHEN PATENT EXPIRES.
State can copy your formula under the Doctrine of
Compulsory Licensing.
exercised when vital to Defense, Economy, and
Safety
SPECIAL COMMERCIAL LAWS
Code of Commerce
NCC repealed some CoC provisions particularly on rule on
transportation, partnership, agency.
Coc: All business transaction for exchange of
goods/services for purposes of commercial gain.
Ito daw yung mga actice pa sa Code of Commerce:
1. Letter of Credit
2. Bulk Sales Law
3. Trust Receipt Law
LETTER OF CREDIT
Letter of Credit (LC) - financial engagement by Bank to pay
Seller under its conditions for the seller present B/L/WR to
the bank. Letter of Credit is independent from the contract
of sale between buyer and seller following the
independence rule (where the contract of sale is separate
and distinct from the Letter of Credit, not a negotiable
instrument).
Commercial contracts – letter of credit
BANKS issues LC (to pay seller)
- To solve irreconcilable differences between the
buyer and seller (what if hindi magbayad, what if
hindi i-ship yung goods)
- Protection of buyer/seller in case of nonpayment.
They were able to come up with the letter of credit
or payment through letter of credit. This is done by
applying to a bank (by showing, for example a
Contract of Sale to evidence the legitimacy of the
transaction). Bank will then inform the
correspondent bank (usually mga bangko to sa
country nung ka transaction mo). The bank will
inform the corresponding bank na may application
na for letter of credit. The seller must show proof
nan a ship na niya yung goods (i.e. Bill of Lading).
Requirement – show proof that product were shipped to
buyer.
*Before execution of the LC, there must first be a Contract to
Sale between the buyer and the seller.
★EVIDENCE: Bill of Lading of the goods subject of the LC.
So the seller could o to the bank and present the LC by
showing the bill of lading.

Problem: X open letter of credit. Upon presentment ng
Toyota ng bill of lading, nagbayad na ang bangko. However,
pagdating dito sa pilipinas, defective yung ibang sasakyan.
Question: can the buyer stop the payment?
Ans: NO, following the INDEPENDENCE RULE. Pursuant to
this rule, the contract of the buyer and the seller is treated as
independent from that of the bank and the buyer. The
Contract of Sale and the Letter of Credit are distinct from
one another. The Bank has no duty to inspect or
guaranty the quality of the goods subject of the sale.
INDEPENDENCE RULE – contract between the buyer and
seller is separate and distinct from the LC.
Pagdating ng goods dito, kumonti or deteriorated/defective
yung goods. Can the buyer stop the bank to pay the seller
via LC?
- NO. Following the independence rule.
- (Remedy¨File action for violation of contract
law.)
BANK assumes full responsibility. It has no time to verify the
correctness of the bill of lading. The bank need not go to
inspect the correctness of the BOL or contract of carriage.
TRUST RECEIPT AGREEMENT
Trust Receipt Agreement (TRA) a commercial document
under PD 115 is a security transaction to aid
importers/buyers to finance their business by utilizing as
collateral the goods bought/imported. The financier/Bank,
becomes the entrustor/owner of goods while
importer/trader/borrower, becomes entrustee. In case of
failure of entrustee to turnover sales proceeds or the goods
to the entrustor, estafa is committed because of
dishonesty/abuse of trust. Also, in case of loss of goods, the
entrustee bears the loss, as exception to “res permit
domino”. If the goods covered by TRA were not sole but
instead, delivered/transferred to another person, the
entrustee still liable (estafa). Entrustee/borrower should not
mortgage/pledge the goods because he is not the absolute
owner. But anyone who anyone who acquires the goods
subject of the Trust Receipt Agreement, acquires good title,
but the Entrustee is still liable for Estafa.
Raemond: PARANG FINANCER TO!
Problem: what if ikaw ay isang mahirap na businessman,
wala kang pang margin fee, ang remedy mo ay TRUST
RECEIPT AGREEMENT.
Enter into TRA with the bank if LC cannot be afforded and
the buyer has NO money but can assure the bank [of
payment].
Bank and the buyer enter into a TRA.
- Publish, inform the creditor when the assets are
BANK: Entrustor (meaning, legal owner by legal fiction) disposed, otherwise, = liable under BSL kasi
BUYER: Entrustee (siya pa din yung magbebenta) fraudulent transaction
Ex P100M subject ng TRA, pero yung bank gusto P200M FRAUDULENT SALE – null and void if creditors are NOT
yung total sales para tig P100M sila pag nabenta ng buyer informed of the disposition of the corporation’s assets,
yung cars na binili nya sa ibang bansa. Principal contract is except in merger.
for P100M, hindi pwede galawin ng buyer yung P100M gain
ng bank pag nabenta yung imported vehicles. The SC ruled that Letters of Credit and Trust Receipts are
not Negotiable Instruments although Drafts Issued with the
Q: Eh what if yung 50% ng unit nasa warehouse at Letters of Credit are Negotiable Instruments.
minortgage? Ans: The entrustee is not the absolute owner,
so BAWAL! Because to Mortgage you must be the (absolute
owner). Q: eh yung mortgagor, is he liable? If he is a
mortgagor in good faith, then he is not liable. Entrustee is still
liable.
EXN EXN EXN:::::::::::::::::::::::::::::::::::::::::::::::::::::
What if 30% ng goods ay hindi pa nabebenta tapos biglang
nagkaroon ng sunog sa warehouse, who then bears the
loss? It is still the entrustee. This is an exception to Res
Perit Domino because the entrustor (bank) is only an owner
by legal fiction.
OWNER BEARS THE LOSS (bank is only a mere owner by
legal fiction, yung BUYER as entrustee ang magsusuffer)
XPN to the rule on RES PERIT DOMINO
MARINE TRANSPORTATION
REAL AND HYPOTHECARY NATURE IN MARITIME
TRANSACTIONS = in case of loss, damage, because of the
limited liability of the owner, the liability is limited to the value
of the vessel. So when the ship sank, no liability.
MARINE INSURANCE
- Claim to insurer if ALL-RISK
- Right of subrogation applies
BULK SALES LAW
Bulk Sales Law (BSL) covers: transaction/s on 1. sale,
transfer, mortgage, assignment of all/substantially all of the
fixtures, equipment, goods/merchandise, materials used in
the business of seller which renders him incapable of
continuing his business/trade. Other assets not directly used
in the business/trade of seller is not covered by BSL. Failure
to comply with BSL makes the transaction Fraudulent and
Void. Sanctions for violation of BSL - imprisonment, 6
months to 5 years or fine or both. Buyer, transferee,
mortgagee not criminally liable unless aware by
indispensable cooperation or bad faith.
Merger – all assets and liabilities combined and survivor
assumes everything, however, there is Bulk Sales Law.
Is the buyer obliged to return goods when there is creditor?