PHILIPPINES: An Introduction to Intellectual Property

2024 was a banner year for intellectual property in the Philippines.

A study by the Transnational Alliance to Combat Illicit Trade has identified the Philippines as a regional leader in “promoting domestic co-operation, particularly in IP co-ordination because of the successful enforcement work done by the Philippine Intellectual Property Office (IPOPHL) and the National Committee on Intellectual Property Rights (NCIPR)”.

Through the co-ordinated efforts of different government agency-members of the NCIPR, the Philippines has remained off the United States Trade Representative Watchlist (since 2014) and the EU IP Watchlist (pre a 2023 EU report on protection and enforcement of IP rights in third countries).

Not resting on its laurels, the IPOPHL-led NCIPR continued its year-round anti-counterfeiting operations and has seized over PHP35 billion (almost USD60 million) in counterfeit goods as of September 2024. In addition, before the end of the year, the NCIPR netted its biggest haul of counterfeit products with a market value of PHP7 billion (almost USD119 million). 

PHIPS: Positioning the Philippines as a Global Leader in IP Commerce

This is the momentum the IPOPHL wants to sustain for the next five years by unveiling the Philippine Intellectual Property Strategy (PHIPS) 2025-2030.

Putting forward the Philippines as a hub of innovation and creativity, the IPOPHL envisions transforming the country as a “Hapag-Isipan” or a “Banquet of Ideas”. Explaining this concept, the IPOPHL stated that the “term uses the Filipino word “hapag” to symbolise community, collaboration and togetherness, setting the Philippines as the global table for creativity, innovation and collaboration to build and enjoy IP [right]s towards shared progress”.

To attain this vision, PHIPS has identified four key strategies for the Philippines:

1. strengthening IP awareness and education;
2. building systems for IP valuation and commercialisation;
3. enhancing local and global co-operation; and
4. maximising emerging technologies.

PHIPS intends to highlight the country’s enhanced treatment of IP as a tangible investment which could lead to maximising its value. Specific initiatives identified are the following:

• building capacities for IP commercialisation to help creators transform ideas into marketable ventures;
• establishing systems for IP-backed financing to enable the use of IP as collateral and as a means to access capital; and
• integrating investment banking services for IP to ensure creators and IP owners can achieve the full financial and economic potential of their innovations.

PHIPS seeks to build on existing laws which were recently passed by Philippine Congress. One of these laws is Republic Act No 11967 or the Internet Transactions Act (ITA) was enacted to “promote and maintain a robust electronic commerce (e-commerce) environment in the Philippines by building trust between online merchants and online consumers”. It was enacted in December 2023, with its implementing rules issued on 24 May 2024 (the “ITA Rules”).

Under the ITA, e-marketplaces or digital platforms that connect online consumers and online merchants, facilitate the sales, process the payment, facilitate the shipment or provide support within the platform, and which retain oversight over the consummation of the internet transaction, shall ensure that goods sold on their platforms comply with relevant laws and pertinent details such as the price, description, and condition are sufficiently identified. This obligation includes compliance with the Philippine Intellectual Property Code (the “IP Code”) .

The following key features were unveiled in the ITA:

• E-retailers or online merchants shall be primarily liable for indemnifying online consumers in civil actions or administrative complaints arising from an internet transaction.
• Subject to certain requirements, e-marketplaces or digital platforms that facilitated the internet transaction that is the subject of a civil action or administrative complaint may also be subsidiarily liable to online consumers.
• E-marketplaces or digital platforms shall be solidarily liable with the online merchants or e-retailers if they fail, after notice, to act expeditiously to remove or disable access to goods or services appearing on their platform which are prohibited by law, imminently injurious, unsafe, or dangerous.
• Under this law, the Philippine Department of Trade and Industry Secretary shall have the power to issue summons, subpoena ad testificandum and subpoena duces tecum to alleged violators of the ITA and may also issue compliance and takedown orders directing the removal of a listing or offer from a webpage, website, platform, or application when the sale or lease of goods or services are prohibited or regulated under existing laws, such as endangered animals, illicit drugs, fireworks and other explosives, and counterfeit goods. The ITA likewise authorises the DTI Secretary to blacklist an online business.

Rules and Regulations Reform in the IPOPHL

Digitalisation

Proceeding from the digitalisation initiatives it began during the pandemic, the IPOPHL has officially amended the Rules and Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property Rights by promulgating Memorandum Circular No 2024-021 (the “Circular”) on 10 June 2024. The amendment, which seeks to streamline administrative procedures and enhance the enforcement of IP rights in the country, took effect on 15 July 2024.

The Site Blocking Rules

The Rules on Voluntary Administrative Site Blocking (“Site Blocking Rules”) or Memorandum Circular No 2023-025 dated 20 September 2023 was also enacted to allow the blocking of pirate websites by internet service providers (ISPs). It became effective on 14 January 2024 after its publication last 14 November 2023.

Under the Site Blocking Rules, a copyright owner or a right holder, through a Verified Complaint, may file an application with IPOPHL’s IP Rights Enforcement Office (IEO) for the issuance of a request to an ISP to block or disable access to pirate websites.

A pirate website is defined under the Site Blocking Rules as “a website that that has the primary purpose or effect of infringing copyright or facilitating copyright infringement and/or that contains goods, materials, or contents which are made, produced, or replicated, without the consent of copyright owner (or) right holder”.

Upon a finding of piracy, the Supervising Director or the Deputy Director General of the IPOPHL shall issue a request to the ISP/s to take one or more of the following steps to disable access to the pirate website:

• domain name system (DNS) blocking with respect to all domain names where the infringing online location operates;
• IP address blocking or re-routing with respect to static IP addresses for infringing online locations;
• uniform resource locator (URL) blocking of the target online location and their domain names; or
• any other alternative technical means for disabling access.

The Site Blocking Rules also contain a mechanism to prevent a pirate website from circumventing any request by changing its domain name or IP address.

To implement the Site Blocking Rules, IPOPHL has signed:

• a memorandum of understanding with ISPs, namely Globe Telecom, Inc., Smart Communications, Inc., PLDT, Inc., Sky Cable Corp. and DITO Telecommunity Corp., wherein the ISPs have committed to willingly block pirate websites upon IPOPHL’s request; and
• a memorandum of agreement with the National Telecommunications Commission, which has regulatory supervision over ISPs.

Comprehensive guidelines on the disposal and destruction of seized counterfeit and pirated goods are also under development to further implement the provisions of the Revised Rules on IP Rights cases issued by the Philippine Supreme Court.

Pending legislation

While the last amendment made to the IP Code was enacted in 2013 (Republic Act No. 10372), several bills involving intellectual property are pending in the Philippine Senate and the House of Representatives (the Philippine legislative branch). In a Trademark Conference hosted by the IPOPHL, its Director General Rowel S. Barba emphasised that the IP Code needs to be amended to be responsive to the developments in technology which have created new challenges in protecting and enforcing IP rights. A key proposed amendment will address IPOPHL’s limited enforcement function by elevating its IP Enforcement Office into a bureau. Another policy proposal is to remove the PHP200,000 damages threshold for filing complaints with IPOPHL. Some of the pending bills are as follows:

• Senate Bill No 2326 seeks to address counterfeiting and piracy by institutionalising certain offices in the Philippine Intellectual Property Office such as the IPR Enforcement Office and the National Council for Intellectual Property Rights. It also seeks to amend the IP Code by including protection of non-traditional marks and certification marks.
• Senate Bill No 2259 aims to empower independent artists by providing educational initiatives that inform the public about the protection of intellectual property rights.
• Senate Bill Nos 2385 and 2150 proposes to disable access to online sites which facilitate copyright infringement and introduces procedures for preventive action and site blocking. They also recommend imposition of higher fines for copyright infringement.
• Senate Bill No 1734 seeks to extend term of copyright protection from 50 to 70 years from death of author.
• Senate Bill No 173 and House Bill No 3633 proposed to formally include traditional knowledge, genetic resources, and traditional cultural expressions under the protection of the IP Code.
• Senate Bill No 891 seeks to explicitly include exclusive right to carry out, authorise or prevent digital reproduction in the list of copyright or economic rights a copyright holder has over their work. It likewise redefined copyright infringement to include secondary infringement through vicarious acts or intentional inducement.
• House Bill No 2672 seeks to amend the IP Code by recognising non-visible marks and certification marks, recognising extended collective licences, and providing more power to the IPOPHL.
• House Bill No 0888 seeks to increase the penalties and sanctions for violating the IP Code.
• House Bill Nos 0799 and 3838 seek to revise the IP Code.

Enhanced Collaborations

The IPOPHL has exerted efforts in enhancing and expanding the E-Commerce Memorandum of Understanding (MOU), which IPOPHL helps oversee, by adding more key players from the digital ecosystem.

The E-Commerce MOU aims to create streamlined co-ordination between them and brand owners and pick up the pace in disrupting piracy and counterfeiting on e-commerce platforms. It currently has 38 signatories which include four online platforms, 27 brand owners and seven chambers of commerce/industry associations.

The MOU is now on its third successful year and has been cited as an ASEAN example for building online trust and IP awareness.

With these key initiatives in place, the Philippines is on track to reach its goal as major player in the IP sphere.