7 key IP strategies in the Philippines

31 July 2021

7 key IP strategies in the Philippines In this digital age, intangible assets, including intellectual property rights, are proving to be more valuable to businesses than tangible assets. Susan D. Villanueva, Patricia A. O. Bunye and Andrea Y. Alegre share seven key IP strategies for rights owners in the Philippines.

In this digital age, intangible assets, including intellectual property rights, are proving to be more valuable to businesses than tangible assets. It is therefore critical to develop an effective IP strategy to derive maximum benefit from one’s IP and for an IP owner to strategize how IP can help advance its business objectives.

IP strategy should not only be aligned with an organization’s business mission and vision. There must be top-to-bottom awareness of the value of IP as a growth driver such that its protection and promotion become the business paradigm and part of the organization’s DNA and culture.

The following are some practical considerations in formulating your IP strategy in the Philippines:


1. Conduct IP audits

If your business is just beginning to develop its IP strategy, you should consider conducting an IP audit. The IP audit is a vital tool to review potential and existing IP assets, procedures, policies, and agreements, and evaluate how your IP is currently being managed. A thorough IP audit can identify opportunities and risks that would otherwise have been missed. It can also detect potential issues on the rightful ownership or use of IP so that you can craft the necessary agreements or revise those that are already in place. Even if your business already has an IP strategy, regular audits will ensure that your IP strategy is updated and comprehensive, and that all of your important IP is protected and fully utilized.


2. Be aware of existing IP registrations

IP rights are exclusionary, i.e., they prevent other parties from using your IP. Accordingly, before you begin to invest in a brand or a product intended for the Philippine market or elsewhere, it is best to first assess whether it is already covered by another entity’s IP rights. Apart from ensuring that your IP is registrable, being aware of existing IP registrations can also protect your business from potential infringement suits.

Prior to brand launch, a trademark search should be conducted to determine the existence of any identical or confusingly similar trademarks that might prevent the registration of your brand as a trademark. While this may appear to be an unnecessary expense, trademark searches are relatively inexpensive compared to having to change your brand name after already incurring significant advertising and marketing costs, not to mention litigating any infringement suits.

If your business involves the development of technology, you should conduct a prior art search to assess whether the technology has already been disclosed elsewhere, which will prevent a patent from being registered. If an invention is not patentable, you may consider conducting a freedom-to-operate search to determine whether you can use the invention without risk of infringement.

You may also consider conducting other IP searches depending on the type of IP you hold. IP searches can cover copyright registrations/deposits, business name registrations, corporate name registrations, domain name registrations, and registrations with the Philippine Food and Drug Administration.


3. Register your IP as early as possible

The Philippines follows the first-to-file rule for both patents and trademarks. If you foresee that your business will enter the Philippine market in the near future, you should consider registering your IP ahead of time to ensure that it is available for use.

For patents, it is also necessary to file your application before use or disclosure of the invention to retain novelty, which is required for patentability. Should you need time to decide on whether you require patent protection in the Philippines, note that the Philippines is a signatory to the Patent Cooperation Treaty (PCT). Instead of directly filing a patent application in the local patent office, you may file under the PCT, which allows applicants 30 months from the filing date of the international application to decide on whether to enter the country. In this case, the filing date for the purpose of applying the first-to-file rule is the international filing date.

For trademarks, ownership is acquired solely through registration. You may therefore consider filing early in order to prevent others from appropriating your trademark, as well as to maintain any pre-existing goodwill in the Philippines. While the Philippines requires actual use to maintain trademark registrations, the registrant has a three-year window from filing of the application to submit proof of use. The registrant can use this window to prepare for entry into the Philippine market.

For copyright, registration is not necessary for protection in the Philippines. Philippine law automatically protects copyrightable works from the moment of their creation. Nevertheless, you may consider securing a Certificate of Copyright Registration and Deposit from either the National Library of the Philippines or the Bureau of Copyright and Other Related Rights of the Philippine Intellectual Property Office, which functions as a receiving office for the National Library. Works in the field of law may also be deposited with the Supreme Court Library. The certificate constitutes prima facie evidence of validity and ownership, which will be helpful in asserting ownership when enforcing the copyright.

It is also important to consider your budget. Certificates of Copyright Registration and Deposit are relatively inexpensive to obtain and have no maintenance costs. For trademarks, however, you must regularly submit proof of use in order to maintain registration. Pre-emptive registration may be a wasteful expense if the trademark registration ends up being cancelled for failure to submit proof of use. Meanwhile, registering a patent takes several years and can entail significant expenses. Maintaining a patent also requires the payment of annuities. You should therefore evaluate whether the Philippines is a key market for your patented product or process.


4. Consider future business goals

Before filing any application to protect your IP rights, it is important to consider future business goals.

In the Philippines, trademark registrations cover particular goods and services and generally afford protection only where such goods and services are concerned. If you anticipate that your business will provide other goods and services in the future, you can already indicate them in the trademark application to avoid having to apply again. However, this is advisable only when you expect to enter the Philippine market within three years from the filing date of the application. Otherwise, you may not be able to provide the proof of use required to maintain registration. Nevertheless, this issue will not arise if the additional goods and services fall under the same class. Under Philippine trademark rules, actual use for some of the goods or services in the same class constitutes use for the entire class.

For patentable inventions, consider whether acquiring a patent is appropriate for your business. If you expect that the subject of the patent will quickly become obsolete, a patent may be unnecessary. Moreover, while patents prevent others from making, using, selling, and importing the patented product, a patent application requires that the patent be published. Trade secrets are recognized as intellectual property rights in the Philippines, and may sufficiently protect your invention without the necessity of disclosure.


5. Enforce your IP

A comprehensive IP strategy does not end with the registration of the IP assets. To get the fullest benefit of your IP, ensure that third parties are not using them to the detriment of your business. Infringement cases can be filed to protect against unauthorized use of your registered trademark, patent, or copyright. Sending cease-and-desist letters is also an efficient way to stop the selling and importation of counterfeit goods.

For trademarks, trademark watches can be conducted to identify any applications or registrations that may prejudice your trademark registration. Once a trademark that is identical or confusingly similar to yours has been identified, you can file a cancellation or opposition case. Even if your trademark is not registered in the Philippines, you can still bring suit if your trademark is a well-known mark.

Philippine IP registrations can also be recorded with the Bureau of Customs. Seizure and forfeiture at the border is an efficient way to protect your IP since it is an expedited procedure.


6. Commercialize your IP

After conducting an IP audit and assuming the required registrations have been obtained, you can make the most of your IP by identifying possible IP assets for licensing. An IP valuation that specifically considers the Philippine market can determine the monetary value of IP assets for decisions to license in the Philippines and other jurisdictions.

Once you have decided to license your IP, ensure that the license agreement complies with applicable laws. In the Philippines, contracts involving the transfer, assignment, or licensing of all forms of intellectual property rights are generally considered technology transfer arrangements, which must have all of the mandatory provisions and none of the prohibited clauses specified by the Intellectual Property Code of the Philippines. Otherwise, they may be rendered unenforceable unless the agreement is approved and registered with the Documentation, Information and Technology Transfer Bureau of the Philippine Intellectual Property Office.


7. Enlist the help of professionals

Formulating your IP strategy in the Philippines can be a complex endeavor. IP laws and regulations are different in every country and can frequently change. The assistance of experienced professionals is invaluable in crafting a practical and cost-effective IP strategy.

About the author

 Andrea Y. Alegre

Andrea Y. Alegre

Andrea Y. Alegre is an associate in Cruz Marcelo & Tenefrancia’s Intellectual Property Department. She holds a Bachelor of Science degree in Industrial Engineering from the University of the Philippines, where she graduated magna cum laude. Her practice focuses on patent and trademark prosecution. Alegre has likewise assisted in advising clients on IP policies, and in the review and registration of IP licensing agreements and data privacy agreements.

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