PATENT INFRINGEMENT – (Sec.76) (a) making, using, offering for sale, selling or importing patented product or obtained directly or indirectly from

patented process or (b) use of patented process without authorization of patentee

Exception: (1) Use of Invention by Government (2) Compulsory Licensing

(3) Special Compulsory License (4) Limitation of Patented Rights under Sec. 72.1 & 72.4

USE of INVENTION BY GOVERNMENT: any government agency or 3rd person authorized by the GOVERNMENT may exploit any patented invention even without authority from the patent owner, on the FF. grounds:

(a) PUBLIC INTEREST, in particular, national security, nutrition, health or the development of other sectors, as determined by the appropriate agency of the government, so requires

(b) judicial or administrative body has determined that the manner of exploitation, by the owner of the patent or his licensee, is anti-competitive

(c) In cases of DRUGS and MEDICINES (RA 9502) i. National Emergency or Extreme Urgency ii. Public Non-commercial use of patent by patentee without satisfactory reasoniii. Demand for the patented article in the Phils. is NOT being MET for an adequate extent &

unreasonable terms as determined by Sec. of DOH

STEPS in DETERMINING the presence of Infringement (1) determine if there is a LITERAL INFRINGEMENT -- if there such defendant is liable

(2) If no Literal INFRINGEMENT , determine if DOCTRINE OF EQUIVALENTS is applicable – if applicable defendant is liable.

LITERAL INFRINGEMENT- if one makes, uses or sells an item that contains ALL elements of the patent claim or with additional of other elements of the patent claim.

2 TEST: a. EXACTNESS RULE: item being sold, made or used conforms exactly to the patent claim of another b. ADDITIONAL RULE: One makes, uses or sells an item that has all the elements of the patent claim of another

plus other element

DOCTRINE OF EQUIVALENT - when a device appropriates a prior invention by incorporating its innovative concept and with some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result.

Hence there must be PRINCIPLE or MODE of OPERATION Must be the same or substantially the same. IT requires SATISFACTION of the function-means-and-result Test – the patentee having the burden to

show that all 3 components of such equivalency test are MET.

NOTE! Doctrine of Equivalents cannot be applied when the infringing invention is clearly beyond what is written in the claim

When the language of the PATENTEE’s CALIMS is CLEAR and DISTINCT – a. The patentee is bound thereby and may NOT claim anything beyond hem. b. COURTS are bound to it – hence cannot add or detract from the claims on matters not expressed or implied

NOR may enlarge the patent beyond the scope of that which the inventor claimed and the patent officer allowed

2 AVAILABLE ACTIONS FOR PATENT INFRINGEMENTS:

(1) CIVIL ACTION FOR INFRINGEMENT (Sec. 76)

Rights of Patentee in Case of infringement (Sec. 76)

a. Bring CIVIL action to recover from infringer DAMAGES sustained plus attorney’s fees and other expenses of litigation;

Limitations for AMOUNT of DAMAGES: 1. Must NOT EXCEED 3 times of the actual damages amount (76.4)

2. No damages be recovered for acts of infringement committed MORE than 4 years before the institution of the action for infringement Ex. 2015 R Filed action for infringement against X and claimed that he acquired damages from 2002. Amount of damages can only be claimed from 2012, damages acquired from 2002 up to 2011 cannot be claimed.

b. IF damages are inadequate or cannot reasonably ascertained – court may award by way of DAMAGES a SUM equivalent to reasonable ROYALTY (Sec. 76.3)

c. Secure an INJUNCTION for the protection of his rights (sec. 76.2) d. Court to ORDER infringing goods, materials and implements predominantly be disposed of outside the

channels of commerce or destroyed, without compensation (sec.76.5)e. CONTRIBUTORY NEGLIGENCE – 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.76.6)

Effect when Patent found is INVALID? Sec.82 – upon court’s finding the patent or any claim to be invalid, it shall CANCEL the PATENT and the Director of Legal Affairs upon receipt of 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.

(2) CRIMINAL ACTION FOR INFRINGEMENT – ONLY when there is a REPETITION OF INFRINGEMENT, without prejudice to institution of civil action for damages (Sec. 84)

When is there a REPETITION of Infringement ? a. Patent Infringement is repeated by Infringer after finality of judgment against infringer b. Patent infringement BY ANYONE in connivance with infringer after finality of judgment against infringer

PRESCRIPTION of the Crime? 3 years from the date of commission of crime.

CAN design Patent be subject to Criminal offense of Unfair competition?

- NO! In the case of Kenneth Roy Savage vs. Taypin GR 134217 [2000]) Pursuant to the definition of UNFAIR COMPETITION under the IPC (Sec.168.2 and 168.3), it did not mention any CRIME of unfair competition involving DESIGN PATENTS . In the face of this ambiguity, we must strictly construe the statute against the State and liberally in favor of the accused, for penal statutes cannot be enlarged or extended by intendment, implication or any equitable consideration. 

- In the case, Respondents invoke UNFAIR COMPETITION, however this is inapplicable to patent infringement – because patent infringement is based on the use, making, selling or importing a patented product or such product obtained from a patented process OR use of patented process without authorization --- while UNFAIR COMPETITION is based on the conduct to deceive the public and pass off his goods or business as and for that of another.

In patent infringement there is NO conduct to deceive the public --- it is only delve on the use of a patented product without authority.

CAN a FOREIGN NATIONAL or ENTITY NOT ENGAGED or UNLICENSED to do business in the Philippines, FILE an Action for Infringement in the Philippines? YES! Provided the following are complied, that the COUNTRY of the DOMICILE of the foreign national or entity is a:

(1) PARTY to the convention, treaty or agreement relating to intellectual property rights to which the Philippines is a party

(2) GRANT reciprocal rights to the nationals of the Philippine by law.

IN IPC THERE ARE 2 WAYS TO GRANT LICENSE TO EXPLOIT PATENTED INVENTION: (1) Voluntary Licensing Contract (2) Compulsory Licensing Contract

*** As a rule: TO exploit PATENTED INVENTION, there should be an AGREEMENT of the patent owner and a 3 rd

person, in effect it is a VOLUNTARY licensing contract EXCEPT, no agreement is needed for a grant of license to exploit in cases of Compulsory licensing contract.

*** pursuant to the Code, the STATE encourages patent owners to enter into VOLUNTARY LICENSING – the patent owner and the applicant enters into agreement to give authority to the applicant the right to exploit the patented inventions.

VOLUNTARY LICENSING is encouraged by the state for it transfer and disseminate technology, prevent or control practices and conditions that may in particular cases constitutes an abuse of intellectual property right having an adverse effect on competition and trade. (Sec. 85)

VOLUNTARY LICENSING CONTRACT – is allowed to be entered upon provided, ALL technology transfer arrangements are compliant under the IPC.

Technology Transfer Arrangements - contract or agreements INVOLVING transfer of systematic knowledge for the manufacture of a product, application of a process, or rendering of a service including management contracts; and transfer, assignment or licensing of all forms of intellectual property rights including licensing of computer software EXCEPT computer software developed for mass market.

Gen. Rule: FOLLOWING Provisions shall be deemed PRIMA FACIE to have an adverse effect on competition and trade:

a. Imposing an obligation upon Licensee to: i. Acquire from a SPECIFIC SOURCE capital goods, intermediate products, raw materials and other

technologies; or ii. Permanently empty personnel indicated by licensor

b. Reservation by Licensor of right to FIX SALE or RESALE prices of products manufactured; c. Restrictions regarding volume and structure of production; d. Prohibiting use of competitive technologies in a non-exclusive technology transfer agreement e. Establishing full or partial purchase option in favor of licensor; f. Obligating Licensee to transfer for free or Licensor the inventions or improvements obtained through use of

licensed technology; g. Requiring the payment ROYALTIES to owners of patents not USED or expired or after termination of

arrangement h. Prohibiting the Licensee from exporting licensed products, UNLESS Justified for the protection of the

legitimate interest of Licensor i. Restricting the use of the technology supplied after expiration of the arrangement EXCEPT : early

termination of the technology transfer arrangement due to reason(s) attributable to the licensee; j. Technology recipient shall NOT contest validity of any of patents of technology supplier; k. Restricting the research and development activities of Licensee designed to absorb and adapt the transferred

technology to local conditions or initiates research and development programs in connection with products, processes or equipment

l. Preventing the Licensee from adapting imported technology to local conditions or introducing innovation to it as long as it ides not impair the quality standards prescribed by licensor;

m. Exempt licensor for liability for non-fulfillment of his responsibilities under the arrangement and/or liability arising from 3rd party suits brought about by the use of licensed product technology; and

n. Other clauses with equivalent effects.

EXCEPT: Provisions that are NOT deemed prima facie to have an Adverse effect on Competition and trade, Where substantial benefits will ACCRUE to the economy

MANDATORY Provisions in Transfer Agreement: (Sec. 88)

a. Philippine Laws shall GOVERN in event of litigation b. VENUE for litigation shall be in proper court where LICENSEE has its principal office; c. Continued access to improvements in techniques and processes related to technology SHALL BE available

during the period of the arrangement d. For ARBITRATION, the following LAW may be deemed applicable:

1. Procedure of Arbitration of the Arbitration Law of the PHILIPPINES or2. Arbitration Rules of UNCITRAL ( United Nations Commission on International Trade Law) 3. Rules of Conciliation and Arbitration of ICC (International Chamber of Commerce)

e. VENUE for ARBITRATION – shall be the PHILIPPINES or any NEUTRAL country f. Philippine TAXES relating to technology transfer arrangement shall be borne by LICENSOR

** Does TECHNOLOGY TRANSFER ARRANGEMENT needed to be registered in IPO? NO! under the IPC, such agreement does not need to be registered PROVIDED it complies with the provisions in IPC.

EFFECTS of FAILURE to Conform to the IPC rules? As a rule Transfer Arrangement shall be AUTOMATICALLY be unenforceable unless approved and registered with Documentation, Information and Technology Transfer Bureau (DITTB)

*** In entering into a TTA, licensor is NOT PROHIBITED to grant further licenses to other 3 rd person and still ALLOWED to exploit the subject matter of license.

*** after the grant of license – licensee have ALL the rights to EXPLOIT the subject matter of the arrangement DURING the whole term of agreement

WHO has JURISDICTION over Voluntary Licensing? IPO through Director of Documentation, Information and Technology Transfer Bureau – quasi – judicial jurisdiction in SETTLEMNT of disputes between parties to a technology transfer agreement arising FROM:

a. Technology transfer payment b. Fixing of appropriate amount or rate of royalty

****** Director of Legal affairs of IPO may GRANT license to exploit patented invention EVEN WITHOUT AGREEMENT

COMPULSORY LICENSING

GROUNDS for Grant of Compulsory Licensing: (Sec.93 RA8293 as amended by RA 9502a. National Emergency or other circumstance of extreme urgency b. PUBLIC INTEREST like:

i. National Security ii. Nutrition Health or Development of other Vital sectors of national economy as determined by the

appropriate agency of the Government, so requiresc. Where a JUDICIAL or ADMNISTRATIVE body has determined that manner of exploitation by patent owner or

his licensee is ANTI-COMPETITIVE; or d. Public non-commercial use of patent by patentee, without satisfactory reason; (ex. Semi-conductor

Technology [Sec.96])e. patented invention is not being worked in the Philippines on a commercial scale, although capable of being

worked, without satisfactory reason: Provided, That the importation of the patented article shall constitute working or using the patent; and

f. demand for patented drugs and medicines is not being met to an adequate extent and on reasonable terms, as determined by the Secretary of the Department of Health.

g. Interdependence of Patents

REQUIREMENT to OBTAIN COMPULSORY LICENSE (Sec.95 RA8293 as amended by RA 9502)

AS a RULE: (1) petitioner has made efforts to obtain authorization from the patent owner on reasonable commercial terms and conditions (2) Petitioner’s efforts have not been successful within a reasonable period of time.

EXCEPTIONS: NO need to show effort to obtain Authorization from patent owner and failed to do so, is needed for grant of compulsory license ON the following grounds, but NOTICE is required for such grant to the patent owner:

(a) To remedy a practice determined after judicial or administrative process to be anti-competitive;(b) National emergency or other circumstances of extreme urgency;(c) Public non-commercial use; and(d) Demand for the patented drugs and medicines in the Philippines is not being met to an adequate extent and

on reasonable terms, as determined by the Secretary of the Department of Health.

CANCELLATION of Compulsory License : GROUNDS for:(a) Upon existence of any of the following grounds:

1. If the ground granting compulsory license NO LONGER EXIST and is unlikely to recur; 2. If the licensee has neither begun to supply the domestic market nor made serious preparation

therefor; 3. If the licensee has NOT complied with the prescribed terms of the license.

WHEN to file APPLICATION for Complusory License (Sec.95 RA8293 as amended by RA 9502)

AS a RULE: At ANY TIME after the grant of the patent Exception: NO compulsory license shall be applied on the ground of patented invention is not being worked in the Philippines on a commercial scale BEFORE the expiration of 4yrs from the date of filing of the application OR 3 yrs. from the date of the patent whichever period expires last.