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Trademark Applications assigned for examination by the Philippine Intellectual Property Office as of 15 March 2003

As of 15 March 2003 , trademark applications numbered 4-2002-0010158 and below, and which were filed not later than the last week of November 2002, have been assigned for examination by the IPO.

Clients shall be provided with specific reports on the status of their applications.

Villaraza & Angangco Establishes Intellectual Property Enforcement Group

Contributed by: Ms. Laxmi J. Rosell

Villaraza & Angangco now provides investigation and enforcement services for intellectual property matters in the Philippines. Services include, but are not limited to: market surveys; identity and background checks; drafting and service of demand letters; surveillance and investigation; coordination with government enforcement agencies; application for, and enforcement of, search warrants; filing and prosecution of administrative, civil and criminal action; and border control measures.

For more information, please contact our Intellectual Property Enforcement Group at ip.department@cvclaw.com.

With the assistance of lawyers from the Villaraza & Angangco Law Offices, major liquefied petroleum gas ("LPG") suppliers in the Philippines have undertaken concerted action against entities believed to be illegally refilling, selling and distributing LPG products bearing well-known marks. The undertaking comes amidst reports of mishaps involving LPG cylinders bearing marks belonging to the major LPG suppliers that are suspected of being fake or tampered with and illegally refilled by entities taking advantage of the substantial goodwill attached to the said marks.

Villaraza & Angangco lawyers assisted the National Bureau of Investigation ("NBI") in: (1) conducting surveillance and test-buy operations on two (2) major LPG refilling stations in Metro Manila suspected of illegally refilling, selling and distributing LPG cylinders belonging to Pilipinas Shell Petroleum Corporation (“Shell”) and Petron Corporation (“Petron”), two (2) of the largest LPG suppliers in the Philippines; and (2) filing several applications for search warrants, which were granted by the Regional Trial Court of Makati on the strength of the evidence gathered during the surveillance and test-buy operations.

Armed with such search warrants, the NBI successfully raided the LPG refilling stations owned and operated by Republic Gas Corporation (“Regasco”) and Omni Gas Corporation (“Omni”) last 19 July 2002, seizing hundreds of illegally refilled Shell and Petron LPG tanks as well as accounting and inventory records and LPG refilling tools and equipment.

Complaints for trademark infringement and unfair competition have been filed against the owners of Regasco and Omni and are presently pending before the Department of Justice.

In light of grave public health problems in many developing and least developed countries, the World Trade Organization ("WTO") has adopted the Declaration on the TRIPS Agreement and Public Health, more popularly known as the “Doha Declaration” to address concerns over the balance between intellectual property protection and public health.

While the Doha Declaration reaffirms the right of WTO members of the to pursue public health measures to fight diseases such as HIV/AIDS, tuberculosis, malaria and other epidemics, the Declaration does not, and should not, imply that public health overrides patent protection. Rather, the Declaration aims to implement an interpretation of the TRIPS Agreement consistent with and contributory to public health needs and access to medicines in times of exigencies. Among the rights of WTO member-countries recognized by the Declaration are the right to grant compulsory licenses and freedom to determine the grounds upon which such licenses are granted; the right to determine what constitutes a national emergency or other circumstances of extreme urgency; and the freedom to establish a regime for the exhaustion of intellectual property rights without challenge.

The Declaration was adopted by the Fourth Ministerial Conference of the WTO on 14 November 2001.

The Patent Cooperation Treaty (“PCT”) applies, with respect to the Philippines, to applications filed on or after 17 August 2001, the date the PCT entered into force in the Philippines. Thus, an applicant may enter into the “national phase” in the Philippines only if the international application was filed on or after 17 August 2001.

If the application was filed before the PCT entered into force in the Philippines, the applicant would have no basis for entering into the “national phase” in the Philippines as it could not have been one of the designated states. In such a case, a patent application may still be filed in the Philippines. However, said application will be treated as a new and independent application, not one that is in the “national phase”.

To enter the national phase, the applicant must furnish the Philippine Intellectual Property Office ("IPO") a copy of the PCT international application in English wherein the Philippines is one of the designated states. If the application is filed in another language, the applicant must file its English translation, which shall include: a) the description; b) the claims as filed and, where applicable, as amended under PCT Article 19; c) any text matter of the drawings; d) the abstract; and e) where applicable, the amendments to the description, claims or drawings under PCT Article 34. The PCT application or its English translation must be filed with the IPO not later than thirty (30) months from the priority date.

Smith Kline & French Laboratories v. Court of Appeals and Danlex Research Laboratories. October 23, 2001

The Philippine Supreme Court has upheld the rights of member-countries of the Paris Convention under Section A(2), Article 5, of the Paris Convention to adopt legislative measures to provide for the grant of compulsory licenses to prevent abuses which might result from the exercise of the exclusive rights conferred by the patent. Therefore, the inclusion of grounds for the grant of a compulsory license in Section 34 of the (old) Philippine Patent Law other than those provided under the Paris Convention does not violate the Philippines’ obligation to adhere to the provisions of the said Convention. The Court noted that "failure to work" the patent is merely provided as an example in Section A(2), Article 5, of the Paris Convention and by no means precludes member-states from including other forms of abuses as grounds for granting compulsory licenses.

Smith Kline & French Laboratories is the assignee of Letters Patent No. 12207, issued on 29 November 1978, covering the pharmaceutical product Cimetidine, which relates to derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl thiourea, ureas or guanadines.

On 21 August 1989, Danlex Research Laboratories ("Danlex") filed a petition for compulsory license to manufacture and produce its own brand of medicines using Cimetidine. Danlex invoked Section 134(1)(e) of the Patent Law, which states that an application for the grant of a compulsory license under a particular patent may be filed at any time after the lapse of two (2) years from the date of grant of such patent, if the patented article relates to food or medicine, or manufactured substances which can be used as food or medicine, or is necessary for public health or public safety. The petition for compulsory license stated that Cimetidine is useful as an antihistamine and in the treatment of ulcers and that Danlex is capable of using the patented product in the manufacture of a useful product.

Smith Kline & French Laboratories opposed the petition for compulsory license, arguing, among others, that the Paris Convention allows the grant of a compulsory license only to prevent abuses which might result from the exercise of the exclusive rights conferred by the patent, or on the ground of failure to work or insufficient working of the patented product within four (4) years from the date of filing of the patent application or three (3) years from the date of grant of the patent, whichever expires last. Thus, it argued that the inclusion of grounds for the grant of a compulsory license in Section 34 of the Patent Law other than those provided under the Paris Convention allegedly constitutes a violation of the Philippines’ obligation to adhere to the provisions of the said Convention.

Assuming that the grant of the compulsory license is in order, Smith Kline & French Laboratories likewise questioned the royalty rate prescribed by the Bureau of Patents, Trademarks and Technology Transfer ("BPTTT", now the Intellectual Property Office), arguing that it is tantamount to expropriation of private property without just compensation.

The Court ruled that the grant of the compulsory license satisfied the requirements of the Patent Law, considering that more than ten (10) years have lapsed since the patent for Cimetidine was granted to Smith Kline & French Laboratories and its predecessors-in-interest and the compulsory license applied for by Danlex is for the use, manufacture and sale of a medicinal product. Moreover, Danlex has the capability to work Cimetidine or to make use thereof in the manufacture of a useful product.

Further, the Court held that, in the absence of any agreement between the parties with respect to a compulsory license, the Director of the BPTTT may fix the terms thereof, including the rate of the royalty payable to the licensor. The Patent Law explicitly provides that the rate of royalty shall not exceed five percent (5%) of the net wholesale price.

In the instant case, the Court found the royalty rate of 2.5% of net sales fixed by the BPTTT to be reasonable, considering that what was granted under the compulsory license is only the right to manufacture Cimetidine, without any technical assistance from Smith Kline & French Laboratories. Moreover, the BPTTT has prescribed the said royalty rate for the grant of compulsory license in a good number of patent cases.

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