Intellectual Property

A. General Principles of Intellectual Property

1. Natural Rights Perspective (Labor Theory)
Similar difficulties afflict efforts to apply labor theory to intellectual property. The
problems begin at the threshold. As was true of utilitarianism, it is not altogether clear
that the labor theory supports any sort of intellectual-property law. The source of the
difficulty is ambiguity in Locke's original rationale for property rights – from which this
entire theory springs. Why exactly should labor upon a resource held "in common"
entitle the laborer to a property right in the resource itself? Scattered in Chapter 5 of
the Second Treatise can be found six related but distinguishable answers to that
question.
(1) “Natural reason" tells us that men have "a right to their Preservation," and the only
practicable way in which they can sustain themselves is by individually "appropriating"
materials necessary to provide them food and shelter.
(2) Religious obligation reinforces the foregoing proposition. God did not merely give the
Earth to man in common, but "commanded" him to "subdue" it – that is, "improve it for
the benefit of Life" – which man can do only by both laboring upon it and appropriating
the fruits of that labor.
(3) Intuitions regarding self-ownership point in the same direction. Each person plainly
has "a Property in his own Person," including the "Labour of his Body, and the Work of
his Hands." It seems only natural that whatever he mixes that Labour with should
belong to him as well.
(4) The moral value of work reinforces the foregoing insight. God gave the World to "the
Industrious and Rational, not to the Fancy or Covetousness of the Quarrelsom and
Contentious." It is thus fitting that the former acquire, through their labour, title to
that which they labor upon.
(5) A sense of proportionality and fairness also figures in the inquiry. Most of the value
of things useful to men derives not from the value of the raw materials from which they
are made, but from the labour expended on them. It is thus not "so Strange" that, when
determining whether ownership should be assigned to the worker or the community,
the individual "Property of labour should be able to over-balance the Community of
Land."
(6) Finally, Locke relies throughout the chapter on an imagery of productive
transformation. By labouring upon unclaimed land or other resources, the worker
changes them from wild to domestic, from raw to cultivated, from chaotic to ordered,
from pointless to purposeful. The self-evident desirability of that transformation
supports a reward for the worker.

2. Personhood Perspective (Margaret Jane Radin, Property & Personhood)

If it makes sense to say that one owns one's body, then, on the embodiment
theory of personhood, the body is quintessentially personal property because it is
literally constitutive of one's personhood. If the body is property, then objectively it is
property for personhood. This line of thinking leads to a property theory for the tort of
assault and battery: Interference with my body is interference with my personal
property. Certain external things, for example, the shirt off my back, may also be
considered personal property if they are closely enough connected with the body.
3. Economic Incentive Theory
The first and most common of the three tacks argues that the optimal doctrine is
the one that maximizes the difference between (a) the present discounted value to
consumers of the intellectual products whose creation is induced by holding out to
authors and inventors the carrot of monopoly power and (b) the aggregate losses
generated by such a system of incentives (the consumer surplus sacrificed when authors
and inventors price their creations above the marginal costs of producing them, the
"administrative costs" of interpreting and enforcing intellectual-property rights, etc.) In
rougher terms, incentive theory urges a lawmaker to establish or increase intellectual-
property protection when doing so would help consumers by stimulating creativity more
than it would hurt them by constricting their access to intellectual products or raising
their taxes.
B. Constitutional Basis
1. US Constitution, Article 1, Sec. 8 (8 IP Clause)
Clause 8. To promote the Progress of Science and useful Arts, by securing for
limited Times to Authors and Inventors the exclusive Right to their respective Writings
and Discoveries;

2. Philippine Constitution, Article XIV, Section 13

The State shall protect and secure the exclusive rights of scientists, inventors,
artists, and other gifted citizens to their intellectual property and creations, particularly
when beneficial to the people, for such period as may be provided by law.

C. Modes of Intellectual Property (Definitions)

1. Copyright
It is a legal concept that gives the creator of original work exclusive rights to it, usually
for a limited period of time. It is literally “the right to copy”, but also gives the copyright
holder the right to be credited for work, to determine who may adapt the work to other
forms, to determine who may perform the work, to benefit financially from the work,
and other related rights.

2. Trademarks
A distinctive mark of authenticity through which the merchandise of a particular
producer or manufacturer may be distinguished from that of others, and its sole
function is to designate distinctively the origin of the products to which it is attached.

3. Patents
It is a set of exclusive rights granted by a State to an inventor or his assignee for a fixed
period of time in exchange for a disclosure of an invention.

D. Philippine Laws
1. Article 721 of the Civil Code
By intellectual creation, the following persons acquire ownership:
1. The author with regard to his literary, dramatic, historical, legal. Philosophical,
scientific or other work;
2. The composer, as to his musical composition;
3. The painter, sculptor, or other artist, with respect to the product of his art;
4. The scientist or technologist or any other person with regard to discovery or invention.
2. Article 722 of the Civil Code
 The author and the composer, mentioned in Nos. 1 and 2 of the preceding article,
shall have the ownership of their creations even before the publication of the same. Once
their works are published, their rights are governed by the Copyright laws.
The painter, sculptor or other artist shall have dominion over the product of his art
even before it copyrighted.
The scientist or technologist has the ownership of his discovery or invention even
before it is patented.
3. Article 1625 of the Civil Code
An assignment of a credit, right or action shall produce no effect as against third
person, unless it appear in a public instrument, or the instrument is recorded in the
Registry of Property in case the assignment involves real property.

RA 8293
Section 1. Title. - This Act shall be known as the "Intellectual Property Code of the
Philippines."
Section 2. Declaration of State Policy. - The State recognizes that an effective intellectual
and industrial property system is vital to the development of domestic and creative
activity, facilitates transfer of technology, attracts foreign investments, and ensures
market access for our products. It shall protect and secure the exclusive rights of
scientists, inventors, artists and other gifted citizens to their intellectual property and
creations, particularly when beneficial to the people, for such periods as provided in this
Act.
The use of intellectual property bears a social function. To this end, the State shall
promote the diffusion of knowledge and information for the promotion of national
development and progress and the common good.
It is also the policy of the State to streamline administrative procedures of registering
patents, trademarks and copyright, to liberalize the registration on the transfer of
technology, and to enhance the enforcement of intellectual property rights in the
Philippines. (n)
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. (n)
Section 4. Definitions. - 4.1. The term "intellectual property rights" consists of:
a) Copyright and Related Rights;
b) Trademarks and Service Marks;
c) Geographic Indications;
d) Industrial Designs;
e) Patents;
f) Layout-Designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information (n, TRIPS).
4.2. The term "technology transfer arrangements" refers to contracts or agreements
involving the transfer of 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 licensing of computer software except computer software developed for mass
market.
4.3. The term "Office" refers to the Intellectual Property Office created by this Act.
4.4. The term "IPO Gazette" refers to the gazette published by the Office under this Act.
(n)
Section 5. Functions of the Intellectual Property Office (IPO). - 5.1. To administer and
implement the State policies declared in this Act, there is hereby created the Intellectual
Property Office (IPO) which shall have the following functions:
a) Examine applications for grant of letters patent for inventions and register utility
models and industrial designs;
b) Examine applications for the registration of marks, geographic indication, integrated
circuits;
c) Register technology transfer arrangements and settle disputes involving technology
transfer payments covered by the provisions of Part II, Chapter IX on Voluntary
Licensing and develop and implement strategies to promote and facilitate technology
transfer;
d) Promote the use of patent information as a tool for technology development;
e) Publish regularly in its own publication the patents, marks, utility models and
industrial designs, issued and approved, and the technology transfer arrangements
registered;
f) Administratively adjudicate contested proceedings affecting intellectual property
rights; and
g) Coordinate with other government agencies and the private sector efforts to formulate
and implement plans and policies to strengthen the protection of intellectual property
rights in the country.
5.2. The Office shall have custody of all records, books, drawings, specifications,
documents, and other papers and things relating to intellectual property rights
applications filed with the Office. (n)
Section 171. Definitions. - For the purpose of this Act, the following terms have the
following meaning:
171.1. "Author" is the natural person who has created the work;
171.2. A "collective work" is a work which has been created by two (2) or more natural
persons at the initiative and under the direction of another with the understanding that
it will be disclosed by the latter under his own name and that contributing natural
persons will not be identified;
171.3. "Communication to the public" or "communicate to the public" means the making
of a work available to the public by wire or wireless means in such a way that members
of the public may access these works from a place and time individually chosen by them;
171.4. A "computer" is an electronic or similar device having information-processing
capabilities, and a "computer program" is a set of instructions expressed in words,
codes, schemes or in any other form, which is capable when incorporated in a medium
that the computer can read, of causing the computer to perform or achieve a particular
task or result;
171.5. "Public lending" is the transfer of possession of the original or a copy of a work
or sound recording for a limited period, for non-profit purposes, by an institution the
services of which are available to the public, such as public library or archive;
171.6. "Public performance", in the case of a work other than an audiovisual work, is
the recitation, playing, dancing, acting or otherwise performing the work, either directly
or by means of any device or process; in the case of an audiovisual work, the showing
of its images in sequence and the making of the sounds accompanying it audible; and,
in the case of a sound recording, making the recorded sounds audible at a place or at
places where persons outside the normal circle of a family and that family's closest
social acquaintances are or can be present, irrespective of whether they are or can be
present at the same place and at the same time, or at different places and/or at different
times, and where the performance can be perceived without the need for communication
within the meaning of Subsection 171.3;
171.7. "Published works" means works, which, with the consent of the authors, are
made available to the public by wire or wireless means in such a way that members of
the public may access these works from a place and time individually chosen by them:
Provided, That availability of such copies has been such, as to satisfy the reasonable
requirements of the public, having regard to the nature of the work;
171.8. "Rental" is the transfer of the possession of the original or a copy of a work or a
sound recording for a limited period of time, for profit-making purposes;
171.9. "Reproduction" is the making of one (1) or more copies of a work or a sound
recording in any manner or form (Sec. 41 (E), P.D. No. 49 a);
171.10. A "work of applied art" is an artistic creation with utilitarian functions or
incorporated in a useful article, whether made by hand or produced on an industrial
scale;
171.11. A "work of the Government of the Philippines" is a work created by an officer or
employee of the Philippine Government or any of its subdivisions and instrumentalities,
including government-owned or controlled corporations as a part of his regularly
prescribed official duties.
CHAPTER II
ORIGINAL WORKS
Section 172. Literary and Artistic Works. - 172.1. Literary and artistic works,
hereinafter referred to as "works", are original intellectual creations in the literary and
artistic domain protected from the moment of their creation and shall include in
particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or
not reduced in writing or other material form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment
in dumb shows;
(f) Musical compositions, with or without words;
(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other
works of art; models or designs for works of art;
(h) Original ornamental designs or models for articles of manufacture, whether or not
registrable as an industrial design, and other works of applied art;
(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to
geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical character;
(k) Photographic works including works produced by a process analogous to
photography; lantern slides;
(l) Audiovisual works and cinematographic works and works produced by a process
analogous to cinematography or any process for making audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works.
 172.2. Works are protected by the sole fact of their creation, irrespective of their mode
or form of expression, as well as of their content, quality and purpose. (Sec. 2, P.D. No.
49a)

E. Copyright Act of 1976 [17 US 102 (a)]

Copyright protection subsists, in accordance with this title, in original works of

authorship fixed in any tangible medium of expression, now known or later developed,
from which they can be perceived, reproduced, or otherwise communicated, either
directly or with the aid of a machine or device. Works of authorship include the following
categories:
(1) literary works;
(2) musical works, including any accompanying words;
(3) dramatic works, including any accompanying music;
(4) pantomimes and choreographic works;
(5) pictorial, graphic, and sculptural works;
(6) motion pictures and other audiovisual works;
(7) sound recordings; and
(8) architectural works.

F. Cases
1. Santos vs McCullough Printing Company
Facts:
This is an action for damages based on the provisions of Articles 721 and 722 of
the Civil Code of the Philippines, allegedly on the unauthorized use, adoption and
appropriation by the defendant company of plaintiff's intellectual creation or artistic
design for a Christmas Card. The design depicts "a Philippine rural Christmas time
scene consisting of a woman and a child in a nipa hut adorned with a star-shaped
lantern and a man astride a carabao, beside a tree, underneath which appears the
plaintiff's pen name, Malang."
The complaint alleges that plaintiff Mauro Malang Santos designed for former
Ambassador Felino Neri, for his personal Christmas Card greetings for the year 1959,
the artistic motif in question. The following year the defendant McCullough Printing
Company, without the knowledge and authority of plaintiff, displayed the very design in
its album of Christmas cards and offered it for sale, for a price. For such unauthorized
act of defendant, plaintiff suffered moral damages to the tune of P16,000.00, because it
has placed plaintiff's professional integrity and ethics under serious question and
caused him grave embarrassment before Ambassador Neri. He further prayed for the
additional sum of P3,000.00 by way of attorney's fee.

Issue:
Whether Santos is entitled for protection, notwithstanding the fact that he has
not copyrighted his design.

Ruling:
No.
The lower court dismisses the complaint which the Supreme Court affirmed.
 Santos did not choose to protect his intellectual creation by a copyright. The
fact that the design was used in the Christmas card of Ambassador Neri who distributed
800 copies thereof among his friends during the Christmas season of 1959, shows the
same was published.
Unless satisfactory explained a delay in applying for a copyright, of more than
30 days from the date of its publication, converts the property to one of public domain.
Since the name of the author appears in each of the alleged infringing copies of
intellectual creation, the defendant may not be said to have pirated the work nor guilty
of plagiarism. Consequently, the complaint does not state a cause of action against the
defendant.
The Supreme Court held that Santos is not entitled to a protection.
Rules of Practice in the Philippine Patent Office relating to the Registration of
Copyright Claims.
“An intellectual creation should be copyrighted 30 days after its publication, if
made in Manila, or within 60 days if made elsewhere, failure of which renders such
creation public property.”
When the purpose is limited publication, but the effect is general publication,
irrevocable rights thereupon become vested in the public, in consequence of which
enforcement of the restriction becomes impossible.

2. Filipino Society of composers, authors and publishers, Inc. vs Tan

Facts:
Filipino Society is the owner of certain musical compositions among which are
the songs entitled: Dahil Sa’yo, Sapagkat Ikaw ay Akin, Sapagkat Kami ay Tao lamang
and the Nearness of You.
Tan is the operator of a restaurant where a combo with professional singers,
hired to play and sing musical compositions to entertain and amuse customers therein,
were playing and singing the above mentioned compositions without any license or
permission from the appellant to play or sing the same.
FS demanded payment of necessary license fee but the demand was ignored,
hence, they filed a complaint for infringement of copyright against Tan.

Issue:
Whether Tan is liable for infringement of copyright.

Ruling:
No.
The composers of the contested musical compositions waived their rights in
favor of the general public when they allowed their intellectual creations to become
property of the public domain before applying or the corresponding copyrights for the
same.

3. Bayanihan Music vs BMG

Facts:
Jose Mari Chan entered into a contract with petitioner Bayanihan, whereunder
Chan assigned Bayanihan all his rights. Interests and participation over his musical
composition “Can We Just Stop and Talk a While” and other musical composition “Afraid
for Love to Fade”. Bayanihan applied for and was granted a certificate of Copyright
Registration.
 Without knowledge and consent of Bayanihan, Chan authorized his co-
respondent BMG records to record and distribute the aforementioned musical
compositions in a then recently released album of singer Lea Salonga.
Bayanihan filed with RTC QC complaint against Chan and BMG for violation of
216 RA 8293.

Issue:
Whether Chan and BMG liable.

Ruling:
No.
Chan, the composer and author of the lyrics of the two songs, is protected by
the mere fact alone that he is the creator thereof.
IP CODE. 172. 2. Works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as their content, quality and
purpose.

4. Kho vs Court of Appeals

Facts:
Kho of KEC Cosmetics Laboratory is the registered owner of the Copyrights Chin
Chun Sua / Oral Facial Cream / Case and Patent rights of Chin Chun Su and Device
and Chin Chun Su for medicated cream.
Summerville is the exclusive and authorized importer, re-packer and distributor
of Chin Chun Su products.
Respondent Summerville advertised and sold petitioner’s cream products under
the brand name Chin Chun Su, in similar containers that petitioner uses, thereby
misleading the public, and resulting in the decline in the petitioner’s business sales and
income; and, that the respondents should be enjoined from allegedly infringing on the
copyrights and patents of the petitioner.
Trial Court granted preliminary injunction by KEC.
Court of Appeals set aside and declare null and void.

Issue:
Whether the copyright and patent over the name and container of a beauty
cream product would entitle the registrant to use and ownership over the same to the
exclusion of others.

Ruling:
No.
Petitioner has no right to support her claim for the exclusive use of the subject
trade name and its container. The name and container of a beauty cream product are
proper subjects of a trademark inasmuch as the same falls squarely within its definition.
Trademark is 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.
Copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their creation.
Patentable inventions refer to any technical solution of a problem in any field of
human activity which is new, involves an inventive step and industrially applicable.
5. Unilever vs P&G
Facts:
P & G filed a complaint for injunction with damages. A P & G subsidiary in Italy
used a key visual in the advertisement of its laundry detergent and bleaching products.
This key visual known as the “Double Tug” or “tac tac” demonstration.
Unilever, started airing its “Breeze PowerWhite” laundry product called “Porky”.
The said TVC included a stretching visual presentation and sound effects almost
identical or substantially identical or substantially similar to P&G’s “tac tac” key visual.

Issue:
Whether P&G is entitled for the relief which is to enjoin the petitioner from airing said
TVC.
(Petitioner has copyright Registration for advertisement while P&G has none.

Ruling:
Yes.
Section 2. PD 49 stipulates that the copyright for a work or intellectual creation
subsists from the moment of its creation. Accordingly, the creator acquires copyright for
his work right upon its creation.

Section 173. Derivative Works. - 173.1. The following derivative works shall also be
protected by copyright:
(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other
alterations of literary or artistic works; and
(b) Collections of literary, scholarly or artistic works, and compilations of data and other
materials which are original by reason of the selection or coordination or arrangement
of their contents. (Sec. 2, [P] and [Q], P.D. No. 49)
173.2. The works referred to in paragraphs (a) and (b) of Subsection 173.1 shall be
protected as new works: Provided however, That such new work shall not affect the force
of any subsisting copyright upon the original works employed or any part thereof, or be
construed to imply any right to such use of the original works, or to secure or extend
copyright in such original works. (Sec. 8, P.D. 49; Art. 10, TRIPS)
Article 10 (Agreement on Trade-Related Aspects of Intellectual Property Rights)
Computer Programs and Compilations of Data
1. Computer programs, whether in source or object code, shall be protected as literary
works under the Berne Convention (1971).
2. Compilations of data or other material, whether in machine readable or other form,
which by reason of the selection or arrangement of their contents constitute intellectual
creations shall be protected as such. Such protection, which shall not extend to the data
or material itself, shall be without prejudice to any copyright subsisting in the data or
material itself.

Section 174. Published Edition of Work. - In addition to the right to publish granted by
the author, his heirs, or assigns, the publisher shall have a copyright consisting merely
of the right of reproduction of the typographical arrangement of the published edition of
the work. (n)