I. INTRODUCTION

On January 1, 1998, Republic Act No. 8293, or the Intellectual Property Code of the Philippines (the "Code") took effect. The law created the Intellectual Property Office (IPO) establishing its powers and functions. The passage of the Code is timely for three reasons. First, it updates the Philippine intellectual property law to prepare the country for the onset of the 21st century or the Information Age. Second, the Code addresses emerging intellectual property issues brought about by new scientific and technological discoveries and third, it embodies modifications that will further the rights of inventors, trademark owners, authors, and other creators of intellectual property to give them the utmost protection.

Nineteen ninety-eight to the present were busy years for IPO officials and personnel. In those years, activities to smoothly effect a transition from the old system of first-to-invent to the first-to-file system were undertaken. In 1998, ad hoc functions and interim steps were taken to ensure the protection of substantive rights already existing prior to the Code as well as those arising on the effectivity of the Code. Alongside the preparation of the organizational structure of the IPO, the formulation of the Rules and Regulations to implement the Code was undertaken.

Rules and Regulations

Seven rules and regulations to implement the Code were promulgated and published in 1998. These rules were drafted in close consultation with IP practitioners and owners. Specifically, the Rules are:

Effectivity

1. Rules and Regulations on Trademarks, Service Marks, October 15, 1998
Trade Names, and Marked or Stamped Containers
(subsequently Titled as "Trademark Regulations")

2. Rules and Regulations on Voluntary Licensing October 20, 1998

3. Rules and Regulations on Settlement of Disputes October 20, 1998
Involving Technology Transfer payments and the
Terms of a License Involving the Author's Right
to Public Performance or other Communication
of His Work

4. Regulations on the Inter Partes Proceedings October 20, 1998
(Petitions for Cancellation of a Mark, Patent, (Amended by
Utility Model, Industrial Design, Opposition to Office Order No. 18
Registration of a Mark, and Compulsory Licensing) dated 31 Dec. 1998)

5. Rules and Regulations on Administrative Complaints December 16, 1998
for Violation of Laws Involving Intellectual Property
Rights

6. Rules and Regulations on Utility Models and December 17, 1998
Industrial Design (Subsequently Titled as
"Utility Model and Industrial Design Regulations")

7. Rules and Regulations on Invention January 15, 1999

In order to further disseminate the Code as well as the Implementing Rules and Regulations (IRRs), the same were published in the IPO Gazette, January-February 1999, Vol. II, No. 1. They can also be download from the IPO website.

The need to immediately disseminate to the public the provisions of the Code and the newly-issued IRRs was addressed by conducting a series of seminar/workshops. The first of these seminars/workshops was held at the Development Academy of the Philippines on October 26-27, 1998 where a total of 130 participants from the government and private sectors attended. Subsequently, two more seminars/workshops were conducted that year, one in Iloilo City on November 26-27, 1998 and the other in Davao City on December 10-11, 1998.

To better equip IPO personnel to provide competent and efficient services to the public, an in-house Seminar/Workshop on the IRRs was conducted for IPO personnel on November 16-18, 1998. The activity also doubled as an opportunity for teambuilding.

This initiative to raise public awareness on the Code and the IRRs through seminars/workshops continued in 1999. Taking the regions one-by-one, the IPO conducted a total of 14 Seminar/Workshops in key cities.

In addition to IPO-organized activities, the Office also coordinated and co-organized with other government agencies, e.g., Presidential Inter-Agency Committee on Intellectual Property Rights, the Department of Science and Technology, private and government-run universities/technical schools, and international organizations, among others, additional information dissemination activities. A total of 25 of such additional seminars in 1998 and 32 in 1999 were conducted.

II. CHANGES IN INTELLECTUAL PROPERTY LAW/PRACTISE

A. Patent Cooperation Treaty. - The Philippines became the 112th Contracting State of the Patent Cooperation Treaty (PCT) when it deposited its instrument of ratification with the World Intellectual Property Organization (WIPO) in Geneva, Switzerland on 17 May 2001. The PCT enters into force in the Philippines three (3) months after the deposit of the said instrument of ratification with the WIPO, or on 17 August 2001. The IPO has issued the implementing rules and regulations this October 2001.

Starting August 17, 2001, the IPO, being the national patent office of the Philippines, acts as a receiving office for applicants who are nationals and residents of the Philippines. The PCI enables a Philippine national or resident to file one application, "an international application", with the Intellectual Property Office and have that application acknowledged as regular national filing in as many PCT member countries as the applicant desires to seek patent protection.

On 17 August 2001, IPO Director General Emma C. Francisco and Korean Intellectual Property Office (KIPO) Commissioner Laegue Leem had concluded an Agreement which makes KIPO as one of the competent ISAs and IPEAs for international applications originating from the IPO. This is an auspicious occasion as the IPO is actually the first national patent Office for which KIPO will act as ISA and IPEA under the PCT.

Meanwhile, the Philippine Implementing Rules and Regulations on PCT Applications was published on 04 October 2001 and shall take effect on 22 October 2001, without prejudice to the functions of the IPO as a receiving Office, designated Office or elected Office under the Treaty.

As of 04 October 2001, the IPO is yet to receive applications under the PCT.

B. New Law on Industrial Design and Layout-Designs of Integrated Circuits. - The Philippine Legislature passed Republic Act No. 9150 entitled An Act Providing For the Protection Of Layout-Designs (Topographies) Of Integrated Circuits, amending certain sections of the Intellectual Property Code on Industrial Designs and adding provisions on Layout designs of integrated circuit.

The new law, in compliance with the TRIPS Agreement, has the following salient features as far as industrial design is concerned:

1. The first 2 categories of applications filed with the Bureau of Patents are inventions and utility models. The third category of applications has been broadened from "industrial design" to "industrial design and layout-designs (topographies) of integrated circuits.

2. The substantive conditions for protection of industrial designs are amended from "new or original' to "new or ornamental".

3. The condition for protection of layout-designs of integrated circuits is "originality".

4. The procedures and requirements for the applications of registration of an industrial design and layout-design are the same.

5. The term of registration of a layout-design is longer at 10 years to be counted from the date of commencement of the protection accorded it, but without renewal. Industrial design's term of registration is 5 years from the filing date of the application, renewable for not more than 2 consecutive period of 5 years.

6. The date of the commencement of protection accorded to a layout design is either: 1) the date of the first commercial exploitation anywhere in the world of the layout design, subject to filing of an application within the 1st 2 years from such date; or 2) the filing date, if the design has not been previously exploited commercially.

7. The provisions re right to a patent; first to file rule; inventions created pursuant to a commission; appointment of agent or representative; surrender of patents; form and publication of amendment; remedies of a person with a right to patent; rights of patentees and infringement of patents; compulsory licensing; assignment and transmission of rights, relating to patents apply mutates mutandis to a layout design of integrated circuits registration.

The implementing rules and regulations (IRR) covering layout-design have not been finalized. We however expect the IRR to be issued before the end of the year.

C. E-Commerce Act. - June 14, 2000, Republic Act No. 8792 ("An Act Providing for the Recognition And Use of Electronic Commercial and Non-Commercial Transactions and Documents, Penalties for Unlawful Use Thereof and For Other Purposes"), or what is more commonly referred to as the E-Commerce Act, was signed into law. Shortly thereafter, the E-Commerce Act's Implementing Rules and Regulations (the "IRR") came into force, as well.

Section 3 of the Act specifically states that the law 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". The E-Commerce 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.

The penal provisions of the IRR of the E-Commerce Act are as follows:

1. "Hacking" or "cracking", which refers to the unauthorized access into or interference in a computer system /server or information and communication system; or any access in order to corrupt, alter, steal or destroy using a computer or other similar information and communication devices, without the knowledge and consent of the owner of the computer or information and communications system, including the introduction of computer viruses and the like, resulting in the corruption, destruction, alteration, theft or loss of electronic data messages or electronic document, shall be punishable by a minimum fine of P100,000.00 (roughly US$2,000.00 using the exchange rate of US$1.00 = P50.00) and a maximum commensurate to the damage incurred and a mandatory imprisonment of 6 months to 3 years;

2. "Piracy" or the unauthorized copying, reduction, dissemination, distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting of protected material, electronic signature or copyrighted works including legally protected works, through the use of telecommunication networks, such as but not limited to, the internet, in a manner that infringes intellectual property rights shall be punished by a minimum fine of P100,000.00 and maximum commensurate to the damage incurred, and a mandatory imprisonment of 6 months to 3 years. This is without prejudice to the rights, liabilities and remedies provided under the Philippine IP Code.

The primary guiding principle behind the Act is the "functional equivalent" approach. In simple terms, the functions of say, a document or a signature is analyzed, and if an equivalent exists in electronic form, then it will be adopted. For example, a signature performs the function, among others, of identifying the signer and indicating his consent to a document. If an electronic method performs the same functions, then such method would be considered an electronic signature.

Apart from the "functional equivalent" approach, the Act is likewise technology neutral- that is, it does not favor any particular technology. It has long been recognized that if laws are not technology-neutral, they would have an adverse impact against competing technologies. A technology-specific statute would encourage the private sector to support only that technology which consequently establishes it as a single or sole standard. If this persists, it will inevitably result in a dearth of innovation and inventiveness as all resources will be devoted to sustain the favored technology. To avoid this, the Act was written with an over-riding concern to embrace the full range of electronic technology without bias or prejudice. Thus, the Act does not discriminate among any type of electronic document or signature utilizing a particular technology. At most, the Act specifies standards and criteria but the same are written in a neutral manner. For example, the Act admits all types of security measures and the parties are free to determine the type and level of security needed for their transactions and to select and use or implement appropriate technological methods that suit their needs.

A necessary adjunct to technology neutrality is the principle of "media neutrality" which is likewise ingrained in the Act. In sum, the Act will recognize electronic documents and signatures in whatever media they may be found. For example, if an electronic message is received both as an electronic mail and fax, both of them will be considered an electronic data message or electronic document.

The Act is not intended nor designed to supplant any substantive law, particularly on contracts. Activities which were lawful (or unlawful) prior to the passage of the Act generally retain their status. This is, of course, excepted by the new crimes which are defined in the Act.

It is important to remember that the Act only affects the form of transactions and activities and not their underlying legal validity. In other words, Philippine substantive law will continue to apply.

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