Foreign-Related Intellectual Property Lawyer: What Are the Legal Rules Governing Intellectual Property Assignment in the Philippines?

1. Requirements or Restrictions for Intellectual Property Assignment in the Philippines

For an assignment of a patent or patent application to be recognized, the following conditions must be met:

It must be in writing; if the language used is neither English nor Filipino, an English translation must be attached.

It must be authenticated by a notary public or another officer authorized to administer oaths or perform notarial acts, and must bear the handwritten signature and official seal of such notary or officer.

It must be legalized or Apostilled under the Hague Apostille system.

If the assignee is not a resident of the Philippines, an appointment of a resident agent must be attached.

It must clearly indicate the number and date of the patent certificate involved, the name of the patent owner, and the title of the invention as stated in the patent; if it concerns a patent application, it must indicate the application number, filing date, name of the applicant, and the title of the invention in the application.

The prescribed recording fee and publication fee must be paid.

The assignment is valid between the parties, but unless the assignment document is recorded with the Intellectual Property Office of the Philippines (IPOPHL) within three months from the date of execution or before any subsequent sale or mortgage, it is void against a subsequent purchaser or mortgagee acting in good faith and for valuable consideration.

1. Intellectual Property Assignment Procedure in the Philippines

If recordation is to be made with the Intellectual Property Office of the Philippines, the document evidencing the assignment must be notarized and legalized / Apostilled. The original document and a signed copy must be submitted; if the original cannot be provided, two certified true copies may be submitted instead. In addition, a power of attorney signed by the authorized representative of the assignee must be filed with the Intellectual Property Office of the Philippines, together with payment of the recording fee and publication fee.

If the document is formally compliant and satisfies the recording requirements, the Intellectual Property Office of the Philippines will record the assignment in its books and records. The effective date of recordation is the date on which the Office receives the formally compliant documents together with full payment of the required fees.

1. Requirements or Restrictions for Intellectual Property Licensing in the Philippines

To encourage the transfer and dissemination of technology and to prevent or control acts and situations that may constitute abuse of intellectual property rights or have anti-competitive effects, all licenses involving technology transfer arrangements (TTAs) must comply with the relevant provisions of the Intellectual Property Code.

Section 87 of the Intellectual Property Code lists clauses that are prohibited in license agreements, mainly including:

Clauses requiring the licensee to acquire capital goods, intermediate products, raw materials, or other technologies from a specific source, or to permanently employ personnel designated by the licensor.

Clauses reserving to the licensor the right to fix the sale or resale prices of products manufactured on the basis of the license.

Clauses containing restrictions on the volume and structure of production.

Clauses prohibiting the use of competing technologies in non-exclusive technology transfer agreements.

Clauses granting the licensor an option to purchase, in whole or in part.

Clauses requiring the licensee to transfer to the licensor, free of charge, inventions or improvements obtained through the use of the licensed technology.

Other clauses having equivalent effect.

Section 88 of the Intellectual Property Code sets out the mandatory provisions that must be included in voluntary license contracts:

The agreement must be interpreted under Philippine law, and in the event of litigation, jurisdiction shall lie with the proper court in the place where the licensee has its principal office.

During the term of the technology transfer arrangement, the licensee must continue to have access to technical and process improvements relating to the technology.

If the technology transfer arrangement provides for dispute resolution by arbitration, the arbitration procedure must be conducted under the Philippine Arbitration Law, the UNCITRAL Arbitration Rules, or the ICC Rules of Conciliation and Arbitration, and the seat of arbitration must be in the Philippines or in another neutral country.

All Philippine taxes payable on payments relating to the technology transfer arrangement shall be borne by the licensor.

1. Intellectual Property Licensing Procedure in the Philippines

Technology transfer arrangements that comply with Sections 87 and 88 do not need to be registered with the Documentation, Information and Technology Transfer Bureau (DITTB) of the Intellectual Property Office of the Philippines. However, if the agreement does not fully comply with those provisions, it must be registered with the DITTB.

A technology transfer arrangement is not enforceable unless it complies with Sections 87 and 88, or, under Section 91, it is approved and registered by the DITTB in exceptional circumstances, such as where it is expected to bring substantial economic benefits, including high technology content, increased foreign exchange earnings, employment generation, regional industrial dispersal, and/or the use of local raw materials in place of imports, or where it involves a registered enterprise with pioneer status as determined by the Philippine Board of Investments.

Disclaimer

Laws and procedures may change. This article provides general information only and does not constitute legal advice. If you encounter an intellectual property dispute overseas, please contact us immediately to consult a professional foreign-related lawyer.