Commercial Nia

8/12/2019 Commercial Nia

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Can I Buy The Philippines?

At the beginning of the year, I promised that this blog will

return to its roots. That is, to post some law topics that I do hope to be interesting enough

to be read by my non-lawyer friends. I must admit, I have learned so much from looking at

the photos of some of my idols here in blogosphere like Ferdz, Oggie, Langyaw, Sidney and

many more. So in return, I just hope that I can share not only my current enthusiasm in

photography but also share my world of numbers and laws.

This will only be my second post about law this year and I have chosen to feature land and

property ownership in the Philippines dedicated to all those foreigners whom in one way or

another have landed in this humble blogsite.

As a general rule, only a Filipino citizen or a corporation organized under Philippine law,

where at least 60% of the capital stock is owned by citizens of the Philippines, may own

land in the Philippines. A foreigner may own land by hereditary succession, or if he is a

former natural-born Filipino.

The Supreme Court held that hereditary succession only applies to intestate succession or

succession by operation of law, and not to testamentary succession. Otherwise, the general

prohibition against land ownership by a foreigner may be negated. When the foreigner is a

natural-born Filipino, he may acquire private land subject to limitations provided by law.

For instance, he may own a maximum area of five thousand square meter of urban land or

three hectares of rural land.

In case of real properties, there is generally no prohibition against foreign ownership of

real property other than land. Thus, foreigners may own houses but not the land upon

which they are built. They can however lease this land.

Foreigners may own condominium units, provided the land on which the condominium

stands is owned by a corporation where at least 60% of the capital stock is owned by

citizens of the Philippines even after a foreigner acquires ownership of a condominium

unit.

Although a foreigner is not allowed to own land, he can however lease private land in the

Philippines. The maximum period of the lease of private land to foreigners is twenty-five

years, renewable for another twenty-five years upon mutual agreement of the parties.

Subject to certain conditions, however, a foreign investor may lease private land for a

maximum period of fifty years, renewable once for a period of not more than twenty-five

years upon mutual agreement of the parties. For the foreign investors to take advantage of

the longer lease term, the law requires, among other, things that the purpose of the lease is
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the establishment of industrial estate, factories, assembly or processing plants, agro-

industrial enterprises, land development for tourism, industrial or commercial use, or

similar priority productive endeavors.

Although the law does not provide for this, there is also another way of buying the

Philippinesthat is for the foreigners to enter into a multi-billion IT andtelecommunications contract with the president, her husband and her cabinet members in

exchange for renouncing a claim against a group of islands which historically belongs to

the Philippines. Now this will be another interesting topic and requires a solo post of its

own.

Personal Note:

Congratulations to all my friends who passed the 2007 Bar Examinations:

ATTY. ENRICO INTERIOR

ATTY. JOHN ALBERT REYES

ATTY. RACHELLE ERNIE

Welcome to the wonderful and crazy world of LAW!!!Reactions:

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Labels:Civil Law,Commercial Law,Law,Opinion,Politics

Wednesday, May 17, 2006

Intellectual Property Law

Samson vs Daway(GR No 160054-55, July 21, 2004)

Facts:

The petitioner allegedly sold or offers the sale of garment product using thetrademark Caterpillar to the prejudice of its previous user, private

respondent in this case. The respondent filed the case to the RTC. Thepetitioner contended that the case should be filed with the MTC because

violation of unfair competition is penalized with an imprisonment notexceeding 6 years under RA 7691.

Issue:

Where do you file a suit for unfair competition?

Held:
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The SC held that under Sec 163 of the IPC, actions for unfair competition

shall be brought before the proper courts with appropriate jurisdiction underexisting laws. The law contemplated in Sec 163 of IPC is the Trademark Law.

Sec 27 of Trademark Law states that action for unfair competition shall befiled with the CFI (now RTC). Since RA 7691 is a general law and IPC in

relation to Trademark law is a special law, the latter shall prevail. Actions forunfair competition therefore should be filed with the RTC.

Mighty Corporation vs ENJ Gallo Winers(GR No 154342, July 14, 2004, Corona)

Facts:Respondent manufacture wines and uses the trademarkGallo for itsproduct. On the other hand, the petitioner is a manufacturer of cigarette and

also uses Gallo in its products.

Issue:

Is there infringement?

Held:At the time the cause of action accrued in this case, the IPC was not yet

enacted so the relevant laws used were the Trademark Law and the ParisConvention.

The SC held that there was no infringement. The use of the respondent ofthe mark Gallo for its wine products was exclusive in nature. The court

mentioned two types of confusion in Trademark Infringement:

Confusion of Goods when an otherwise prudent purchaser is induced topurchase one product in the belief that he is purchasing another, in which

case defendants goods are then brought as the plaintiffs and its poor

quality reflects badly on the plaintiffs reputation.Confusion of Business wherein the goods of the parties are different butthe defendants product can reasonably (though mistakenly) be assumed tooriginate from the plaintiff, thus deceiving the public into believing that there

is some connection between the plaintiff and defendant which, in fact, does

not exist.

In determining the likelihood of confusion, the Court must consider:

(a) the resemblance between the trademarks;(b) the similarity of the goods to which the trademark is attached;

(c) the likely effect on the purchaser; and(d) the registrants express or implied consent and other fair and equitable

considerations.


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In this case, the SC employing the dominancy test, concluded that there isno likelihood of confusion. They materially differ in color scheme, art works

and markings. Further, the two goods are not closely related because heproducts belong to different classifications, form, composition and they have

different intended markets or consumers.

Mc Donalds Corp vs LC Big Mak Burger Inc.(GR No 143993, Aug 18, 2004)

The SC held that the respondent is liable for infringement because it violated

Sec 155.1 of the IPC which stated that any person who shall, without theconsent of the owner of the registered mark use in commerce anyreproduction, counterfeit, copy or colorable imitation of a registered mark or

the same container or a dominant feature thereof in connection with the

sale, offering for sale, distribution, advertising of any goods or services on orin connection with which such use is likely to cause confusion, or to cause

mistake, or to deceive.

Addendum:TEST OF TRADEMARK INFRINGEMENT

1) Dominancy Test consists in seeking out the main, essential or dominantfeatures of a mark.

2) Holistic Test takes stock of the other features of a mark, taking intoconsideration the entirety of the marks.

DIFFERENTIATED FROM UNFAIR COMPETITION

1) Cause of action: in infringement, the cause of action is the unauthorizeduse of a registered trademark; in unfair competition, it is the passing off of

ones goods as those of another merchant.

2) Fraudulent intent is not necessary in infringement, but necessary in UC.3) Registration of trademarks: in infringement, it is a pre-requisite; in UC, itis not required.4) Class of goods involved: in infringement, the goods must be of similar

class; in UC, the goods need not be of the same class.

v infringement is a form of unfair competition

REMEDIES AVAILABLE IN CASE OF INFRINGEMENT OF A REGISTERED MARK

a) Sue for damages (Sec. 156.1);b) Have the infringing goods impounded (Sec. 156.2);

c) Ask for double damages (Sec. 156.3)


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d) Ask for injunction (156.4)

e) Have the infringing goods disposed of outside the channels of commerce(Sec. 157.1)

f) Have the infringing goods destroyed (Sec. 157.1)g) File criminal action (Sec. 170);

h) Administrative Sanctions

Smithklein Beckman vs CA(Aug 14, 2003)

Facts:

Petitioner in this case filed an application for a patent of a drug used to killparasites in animals. Tyco Pharma opposed the application for patentcontending that the product of the petitioner proposed to be patented is

substantially the same as their product. The only difference is the use of one

ingredient. Tyco then contended that there is infringement of patent due toviolation of doctrine of equivalents.

Issue:

Is there infringement?

Held:The SC in defining the Doctrine of Equivalents stated that infringement

also takes place when a particular devise appropriates a prior invention byincorporating its innovative concept and although with some modification

and changes performs substantially the same function in substantially thesame way to achieve substantially the same result.

The SC held that this doctrine does not apply in the instant case because

Tyco Pharma failed to substantiate its claim that the two products works the

same way in fighting parasites in animals. Therefore, there was noinfringement.Reactions:Posted byOman at10:08 AMNo comments:

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Labels:Commercial Law

Negotiable Instrument Law - New Cases

Spouses Eduardo and Epifania Evangelista vs Mercator Financing Co.(GR No 148864, Aug 21, 2003, Puno)

The promissory not in question is worded as follows:
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For value received, I/we jointly and severally promise to pay to the order ofMercator Financing Company ..

Are the spouses jointly and severally liable?

The SC held that under Section 17 (g) of the NIL and Article 1216 of the Civil

Code, where the promissory note was executed jointly and severally by twoor more persons, the payee of the promissory note had the right to hold anyone of the two (2) signers of the promissory note responsible for thepayment of the whole amount of the note.

Garcia vs Llamas(Dec 8, 2003, Panganiban)

The accommodation party is liable on the instrument to a holder for valuenotwithstanding that such holder at the time of taking the instrument knew

him to be only an accommodation party. It is not a valid defense that theaccommodation party did not receive any valuable consideration when he

executed the instrument. He is liable to a holder for value by virtue of hisbeing an accommodation party.

An accommodation party to a negotiable instrument, inspite of the lack of

consideration between him and the accommodated party, is liable to anyother holder NOT to the accommodated party.

The relationship between an accommodation party and the party

accommodated is that of a surety. It is a settled rule that a surety is boundequally and absolutely with the principal and is deemed an original

promissory and debtor from the beginning. The liability is immediate and

direct.

Samsung Construction Company Phils., Inc vs FEBTC

(GR No 129015, Aug 13, 2004, Tinga)

Facts:Petitioner maintains a current account with the respondent bank. The

petitioner authorized Jong to sign checks in behalf of the company. Thechecks are in the custody of an accountant Kyu. On one occasion, a certain

Gonzaga presented a check to FEBTC purportedly drawn by the Company inthe amount of P999,500. The check was payable to cash and appeared to be

signed by Jong. FEBTC upon ascertaining that there are sufficient fund to


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cover the check and finding the signature of Jong appears to be genuine paid

Gonzaga. Later, the forgery was discovered. Samsung demanded that theamount paid to Gonzaga be credited back to its account because they have

not authorized the encashment of the check. On the other hand, therespondent bank claimed negligence on the part of the petitioner in

protecting its check.

Issue:Who should bear the loss?

Held:

The SC held that the FEBTC should bear the loss. Under Sec. 62 of NIL,among the warranties to be assumed by the acceptor is it admits theexistence of the drawer, the genuineness of his signature, and his capacity

and authority to draw the instrument. It is incumbent upon the drawee bank

to ascertain the genuineness of the signature of its depositor. Therespondent bank in this case did not exercise the degree of diligence

required to enable it to detect the forgery.

Addendum:

***Aside from the warranties as an indorser, the collecting bank is madeliable because it is privy to the depositor who negotiated the check because

it knows him, his address and history for being a client thereof. Thus, it is ina better position to detect forgery or irregularity in the indorsement.

(Associated bank v. CA, 252 SCRA 620). aka Doctrine of ComparativeNegligence

Ilusorio vs CA

(GR No 139130, Nov 27, 2004)

Facts:The petitioner maintains a current account with Manila Banking Corp. He

entrusts his checkbook and credit cards to his secretary. During the period

1980-81. His secretary was able to encash a total of 17 checks drawnagainst Manila Banking Corp. Ilusorio discovered these checks uponexamination of his bank statements forwarded by the bank. And upon

investigation, it was found out that his signatures was forged by hissecretary on those 17 checks. Ilusorio demanded the return of amount by

the drawee bank. The drawee bank contended negligence on the part of thepetitioner.


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Issue:

Who should suffer the loss?

Held:The SC held that Ilusorio was negligent. While it may be true that the

signature of Ilusorio was forged by his secretary and that he did notauthorized the encashment of these checks (claiming real defense of forgery

on his part), Ilusorios previous conduct effectively precluded him fromclaiming forgery as a defense. The mere fact that these checks have beenencashed for a period of almost two years, the petitioner should havedetected the forgery. Further, the unusual degree of trust which he had

accorded his secretary, such as unrestricted access to his credit cards an

checkbooks amounts to negligence on his part and the proximate loss of hisfunds is attributable to this unusual degree of trust and confidence which hereposed to his secretary.

Therefore:General Rule drawee bank bears the loss because of Sec 62 of NIL.

Exception Ilusorio case (negligence on the part of the drawer)

Addendum:Question:

1. How about if it is the signature of the endorser which is forged? Is thedrawee bank still liable?

2. How about if the drawee bank has already paid the holder when itdiscovered the forged endorsement of the payee? Who bears the loss?

Answer:

No. The drawee bank should not be made liable. The collecting bank or lastendorser generally suffers the loss because it has the duty to ascertain the

genuineness of all prior indorsements considering that the act of presenting

the check for payment to the drawee is an assertion that the party makingthe presentment has done its duty to ascertain the genuineness of theindorsements.As between the drawer and the drawee bank, the drawee bank should bear

the loss. The drawee bank shall have recourse against the collecting bank

because such collecting bank guarantees that all prior endorsements aregenuine. The collecting bank then can go against the forger.

In cases involving a forged check, where the drawers is forged, drawer canrecover from the drawee bank. No drawee bank has a right to pay a forged

check. If it does, it shall have to recredit the amount of check to the accountof the drawer. The liability chain ends with drawee bank whose responsibility

it is to know the drawers signature since the latter is its customer.


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(Associated Bank vs CA, 252 SCRA 620).

The endorser is liable on the instrument although the signature of the payeeis forged because the endorser by his endorsement guaranteed that the

instrument is genuine, therefore, impliedly, that the instrument is valid,otherwise, there would be nothing for the endorser to guarantee. (Republic

vs Ebrada 65 SCRA 680).Reactions:

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Letters of Credit - New Laws

Transfield Philippines vs Luzon Hydro Electric Corp.(GR No 146717, Nov 22, 2004, Tinga)

Transfield entered into a turn-key contract with Luzon Hydro Corp. (LHC).Under the contract, Transfield were to construct a hydro-electric plants inBenguet and Ilocos. The contract provides for a period for which the projectis to be completed and also allows for the extension of the period provided

that the extension is based on justifiable grounds such as fortuitous event.In order to guarantee performance by Transfield, two stand-by letters of

credit were required to be opened. During the construction of the plant,Transfield requested for extension of time citing fortuitous events brought

about by typhoon, barricades and demonstration. LHC did not give duecourse to the extension of the period prayed for but referred the matter to

arbitration committee.

In the meanwhile, because of the delay in the construction of the plant, LHCcalled on the stand-by letters of credit because of default. However, the

demand was objected by Transfield on the ground that there is still pendingarbitration on their request for extension of time. LHC invoked the

independence principle. On the other hand, Transfield claims fraud on the

part of LHC on calling the stand-by letters of credit.

Under the independence principle, a LC accommodation is entirely distinctand separate, independent agreement. It is not supposed to be affected by

the main contract upon which it rests.

The court held for the LHC. Following the independence principle, evengranting that there is still issue to be resolved arising from the turn-keyproject. This issue is not supposed to affect the obligation of the bank to paythe letter of credit in question. The court stressed that a LC accommodation

is intended to benefit not only the beneficiary therein but the applicant
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thereon. On the issue of fraud, the SC held that there is nothing in the turn-

key contract which states that all issues between the parties must beresolved first before LHC can call on the stand-by LC but the contract

provides that if Transfield defaults, then LHC can call on these stand-by LC.

Lander vs Metrobank(GR No. 159622 July 30, 2004, Santiago)

Facts:

The business of the petitioner is importation of welding rods. Lander opened

a LC with Metrobank and as security, a trust receipt was executed by Landerin favor of Metrobank. The TR matured but Lander was unable to payMetrobank so the former returned the goods to Metrobank to avoid criminal

liability (estafa). Metrobank sold the goods in an auction but the proceeds

were not sufficient to satisfy the entire obligation of the petitioner.

Issues:1. Can the Metrobank claim the deficiency?

2. Can we not consider the return of the goods in full satisfaction ofMetrobanks claim against the petitioner?

Held:

Yes. Sec 7 of the TR Law provides that in case of sale by the entruster of thepossessed goods, the entrustee shall receive any surplus but shall be liable

to the entruster for any deficiency.No. Repossession of the goods is not intended to transfer ownership of the

goods (dacion en pago does not lie) but as a security for the loan obligationof the debtor that arose from the trust receipt agreement.

National Commercial Bank of Saudi Arabia vs CA(GR No. 124269, Jan 31 2003)

Facts:

Petitioner in this case was sued in connection with a LC transaction. Thedefense of prescription was invoked by the petitioner claiming that solutioindebeti cases prescribe in six years.

Issue:If one is to pursue a claim arising from a LC accommodation, within what

time/period should he bring an action thereon?


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Can the court apply the doctrine of laches?

Held:

10 years because LC is a written contract.Courts are not permitted to apply the doctrine of laches earlier than the

expiration of time limited for the commencement of action of law.Reactions:

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Transportation Law - New Cases

AF Sanchez Brokerage vs CA and FGU Insurance

(Dec 21, 2004)

Facts:AF Sanchez is engaged in a broker business wherein its main job is to

calculate customs duty, fees and charges as well as storage fees for thecargoes. Part also of the services being given by AF Sanchez is the delivery

of the shipment to the consignee upon the instruction of the shipper.

Wyett engaged the services of AF Sanchez where the latter delivered theshipment to Hizon Laboratories upon instruction of Wyett. Upon inspection, it

was found out that at least 44 cartons containing contraceptives were in badcondition. Wyett claimed insurance from FGU. FGU exercising its right of

subrogation claims damages against AF Sanchez who delivered the damagedgoods. AF Sanchez contended that it is not a common carrier but a

brokerage firm.

Issue:

Is AF Sanchez a common carrier?

Held:SC held that Art 1732 of the Civil Code in defining common carrier does not

distinguish whether the activity is undertaken as a principal activity ormerely as an ancillary activity. In this case, while it is true that AF Sanchez

is principally engaged as a broker, it cannot be denied from the evidencepresented that part of the services it offers to its customers is the delivery ofthe goods to their respective consignees.

Addendum:
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AF Sanchez claimed that the proximate cause of the damage is improper

packing. Under the CC, improper packing of the goods is an exoneratingcircumstance. But in this case, the SC held that though the goods were

improperly packed, since AF Sanchez knew of the condition and yet itaccepted the shipment without protest or reservation, the defense is deemed

waived.

Foul Bill of Lading reservation or protest on a shipment or goodsimproperly packed.

National Trucking and Forwarding Corp vs Lorenzo Shipping Corp

(GR No 153563, Feb 7, 2005)

Art 353 of the Code of Commerce provides after the contract has been

complied, the bill of lading which the carrier has issued shall be returned to

him and by virtue of the exchange of this title with the thing transported therespective obligations and actions shall be deemed canceled.

Issue:

What if the original copy of the bill of lading could not be returned?

Held:The SC held that in case the consignee upon receiving the goods cannot

return the bill of lading because it has been lost, he must give the carrier areceipt for the goods delivered, this receipt producing the same effects as

return of the bill of lading.

William Tiu vs Arriesgado

(GR No 138060, Sept 1, 2004, Callejo)

Spouses Arriesgado were passengers of a bus owned by the petitioner. Therespondents sustained injures when the bus collided with a cargo truck. Inits defense, petitioner invoked the defense of last clear chance.

The SC held that Doctrine of last clear chance applies to a suit involving theowners of the two colliding vehicle. It does not apply to a suit involvingbreach for a contract of carriage.

Philippine Rabbit Bus Lines vs Macalinao(GR No 141856, Feb 11, 2005, Sandoval-Gutierrez)


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Doctrine of last clear chance was applied in this case because it involves a

suit between two colliding vehicles.

Nostradamus Villanueva vs Priscilla and Leandro Domingo

(GR No 144274, Sept 20, 2006, Corona)

Application of the Registered Owner Rule

The registered owner of a vehicle is directly and principally responsible forany accident, injury or death caused by the operation of the vehicle in the

streets and highways.

The purpose is to protect the public in general and for easy identification ofthe persons who could be held responsible for the injury sustained.

Addendum:Extraordinary diligence is required to common carriers in transporting goods

and passengersReasons:

1. nature of the business2. public policy

Registered owner primarily and solidarily liable with driver under the KABIT

SYSTEM. Kabit system is contrary to public policy; therefore, void andinexistent.

Spouses Hernandez vs Spouses Dolor(GR No 160286, Jul 30, 2004, Santiago)

A vehicle owned by the petitioners figured in an accident as a result of whichthe petitioners were sued for damages. Petitioners main defense at the timethe incident happened is that the vehicle is being leased to the driver. Thelatter paying the rental by way of boundary at P150 per day. Since they are

merely lessors, they should not be held liable for the injury sustained by the

respondents.

The SC held that for the purpose of imputing liability, employer-employee

relationship exist between the owner and the driver although the latter maypay rental by way of boundary. (Boundary System).

To sustain the petitioners contention that they should be excused from

liability because they are merely lessors will be a flagrant disregard of our


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public service law which imputes liability upon registered owner of the

subject vehicle. To sustain the contention of the petitioner will put the publicat the mercy of irresponsible and reckless drivers.

Japan Air Lines vs Michael Asuncion et al(GR No 161730, Jan 28, 2005, Santiago)

The case involves the application of extra-ordinary diligence in the dischargeof carriers duty.

The respondent left Manila on board an aircraft being operated by the

petitioner. Part of the itinerary of the respondent is a stop-over in Naritawhere they will have an overnight stay in Narita Hotel. However, the laws ofJapan require them to apply for a shore pass wherein they have to be

interviewed by immigration officials of Japan. During the interview, the

immigration officials denied their application for shore pass because thereappears to be errors in the travel documents. His height recorded in the

documents appears to be taller than his actual height. Therefore, thepetitioners were not allowed to stay in Narita Hotel but rather spent their

nights uncomfortably at the airport.

As a result, petitioners sued the airlines claiming that they did not exerciseextra-ordinary diligence required in the contract of carriage. They contend

that JAL should have appraised them of the requirement needed to obtain ashore pass. Is JAL liable?

SC held that JAL is not liable and did not breach its contract of carriage with

the petitioners. While it may be true that JAL are required to appraise theirclients with all the necessary travel documents to obtain a shore pass, this

duty does not extend to verification as to whether or not the

information/entries in these travel documents are correct.Reactions:



Insurance Law - New Cases

White Gold Marine Services vs Pioneer Insurance and Surety Corpand Steamship Mutual Underwriting Assoc.(GR No 154514, July 28, 2005, Quisumbing)
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Facts:

White Gold obtained an indemnity coverage of its vessel from SMUA, aforeign cooperative, thru Pioneer Insurance as its broker. Pioneer has a

license to do insurance business in the Philippines.

Issue:Is SMUA doing insurance business/transacting insurance business?

If you have been duly-licensed to engage in insurance business but youwanted to act as broker or agent of an insurance company, do you need aseparate license thereof?

Held:

Yes. SMUA is insurance business/transacting insurance business because itpartakes that of a mutual insurance whereby it operates as a cooperativeenterprise where the members thereof are the insurers and the insured

themselves. The members contribute premiums to their common fund. And

if one of them suffers loss, the common fund shall pay for the loss.Yes. Sec 299 of the ICP provides that no person shall act as insurance agent

or broker in soliciting or procuring insurance without first securing a licensefrom the Insurance Commission of the Philippines.

FGU Insurance Corp vs CA/Estate of Ang Wee vs CA(Mar 31, 2005, Nasario)

If the insured himself or his agents were negligent, is this negligence a

defense available to the insurance company in order to defeat payment ofthe insurance claims?

SC held that if it is:

Ordinary negligence their negligence will not lie as a defense for theInsurance Co to defeat their claim because the purpose of the insured intaking out indemnity coverage is to protect the insured against theconsequences of his own negligence as well as that of his agent.

Blatant or Gross Negligence the insurer will be exonerated from liability.

In this case, the SC held that the negligence is so blatant or gross that it

already amount to a wrongful act. The tug boat was left in a wharf despitethe fact of bad weather condition and not withstanding the earlier request to

transfer the same to a safer place. The carriers own acts and refusalamounted to blatant or gross negligence that enabled the Insurance Co to

defeat their claims.


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Danzas Corporation vs All Transport Network Inc(GR No 141462, Dec 15, 2005)

What happens if after the proceeds of the policy has been paid, the

wrongdoer enters into a compromise/settlement with the insured party andthe insured party accepted the same. Will this circumstance defeatsubrogation on the part of the Insurance Company?

General Rule:

In the case of Manila Mahogany Manufacturing vs CA, 154 SCRA 650, sincethe insurer can be subrogated to only such rights as the insured may have,should the insured, after receiving payment from the insurer, release the

wrongdoer who caused the loss, the insurer loses his right against the latter.

But in such a case, the insurer will be entitled to recover from the insuredwhatever it has paid to the latter, unless the release was made with the

consent of the insurer.

Exception:As laid down by the SC in this case, where the wrongdoer himself is in bad

faith, he settles with the insured knowing for the fact that the insured hasbeen paid the proceeds of the policy and knowing that the insurer has the

right of subrogation, this circumstance will not defeat subrogation on thepart of the insurer.

Golf Resorts Incorporated vs Philippine Charter Insurance Corp(GR No. 156167, May 16, 2005, Puno)

Facts:Golf Resorts obtained an indemnity coverage on its properties and theinsurance policy contains an earthquake shock clause. During the period ofits effectivity an earthquake struck the Luzon area and among those

damaged where the properties of Golf Resorts, among which are two

swimming pools and other properties of Golf. Golf claims indemnification forthe swimming pools and other properties rellying upon the earthquake shockloss contained in the policy.

Issue:Does the clause extend to properties of the petitioner other that the two

swimming pools in question?


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Held:

Applying the rule on construction, the SC held that each of the provisions ofthe insurance policy must be interpreted in consonance with each other. A

reading of the policy including riders and clauses taken all together showthat the intention of the parties is to extend the earthquake shock clause

only to the two swimming pools. The evidence presented to the trial courtreadily showed that only the swimming pools are intended to be covered bythe earthquake shock clause. Aside from this, no premiums were paid forother properties in consideration for the earthquake shock clause other than

for the two swimming pools in violation of Sec 77 of the ICP.

William Tiu vs Arriesgado

(GR No 130060, Sept 1, 2004, Callejo)

Issues:

In third-party liability insurance, would it be possible for a third party to suethe insurer directly?

Would it be possible for an insurance company to be held jointly andseverally liable with the insured?

Held:

Yes. This is an exception to the rule on mutuality of contract. Whenever acontract contains stipulation for the benefit of a third person and the

moment the third person communicates his assent thereto, the contractbecomes binding upon him. The fact that a third person demands fulfillment

of the insurance policy may be reasonably construed as an assent on hispart to the benefit provided in the policy. This provision arms him with the

requisite legal personality to bring an action on the insurance policy.

(stipulation pour artrui)No. The basis of cause of action is different. The cause of action against theinsurer is based on contract while the cause of action against the insured isbased on torts. Considering that there are two different causes of action, it

will be legally impossible for them to be made as jointly and severally liable

to the injured third party.

Federal Express Corporation vs American Home Insurance Corp andPhilam Insurance Company

(GR No 150094, Aug 18, 2004)

Facts:


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Smithklein caused the transportation of 109 cartons of veterinary biologicals.

The Shipment was initially loaded to Burlington Air Express and then later onforwarded to the petitioner for delivery to the consignee. When the

consignee received the same it was found out that goods was damaged anddecided to abandon the shipment and declared a total loss and then claimed

against the insurance company. The insurance company paid the loss.

Issue:Is there legal subrogation on the part of the Insurance Company?

Held:Yes. Upon payment, the insurers entitlement to subrogation pro tanto

equips the insurance company with a cause of action in case of a contractual

breach or negligence. The insurance company stands in the same footing orin substitution of the insured party.Reactions:



Banking Laws - New Cases

Spouses Larobis vs Philippine Veterans Bank

(GR No 135705, October 1, 2004, Martinez)

The Spouses Larobis applied for a loan with the PVB. Shortly thereafter, PVBwas placed under receivership at the instance of the CB. 14 years after the

loan was obtained, PVB initiated foreclosure on the mortgage earlierinstituted by the spouses. Spouses contended that foreclosure is not in order

because under the Civil Code, PVB only has 10 years to initiate theforeclosure proceedings. PVB contended that they were placed under

receivership by the CB and this constitute fortuitous event which effectivelysuspended the running of the 10-year period.

The SC did not find PVBs argument persuasive. The SC held that the factthat the bank was held under receivership does not amount to caso fortuito

that effectively suspends the running of period of 10-year period of which toforeclose the mortgage.

SC further held that foreclosure or mortgages is not amount those activities

which a corporation under receivership is prevented from performing.

DBP vs West Negros(May 21, 2004)/

Ibaan Rural Bank vs CA(Dec 17, 1999)
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SC held that an agreement between the parties extending the period to

redeem foreclosed properties shall be valid and this shall take precedenceover the period to redeem set forth by law. The party who voluntarily agreed

thereto shall be estopped from ascertaining otherwise.

Intengan, et al vs CA(GR No 128996, Feb 15, 2002, Tinga)

Citibank sued two of its officers for violation of the Corp Code contendingthat these officers are persuading their clients to transfer their dollardeposits to competitor banks because the latter gives higher interests. A

complaint was filed by Mr. Lim in behalf of Citibank and such complaint

includes an affidavit containing the names and the amount allegedlytransferred from Citibank to other banks. Because of the affidavit, thepetitioners are now complaining against Citibank claiming that it is in

violation of the Secrecy of Bank Deposit Act.

The SC held that since the deposits involved therein are foreign currency

deposits, there is no violation here of Secrecy of Bank Deposit Act but of theForeign Currency Deposit Act. If the case was filed in violation of FCDA, the

court may give due course to case for Citibank violated FCDA because therewas no written permission from the petitioners. Further, the case can no

longer be re-filed because the action has already prescribed.

Addendum:There are now 2 exceptions for which a bank may disclose foreign currency

deposits:upon the written assent or permission of the depositor; and

in cases covered by the Anti-Money Laundering Act

Estrada vs Desierto(GR No 159160, Dec 9, 2001)

In this case, the petitioners foreign currency deposits with Citibank are

placed in a constructive restraint by the BIR. Petitoners claim that the

restraint is in violation of the FCDA.

Absolute confidentiality of foreign currency deposit under RA 6426 does not

apply to foreign currency deposits to the petitioners in this case for thereason that petitioners are residents of the Philippines. The protection is

intended only to depositors who are non-residents and are not engaged in


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trade or business in the Philippines.

Benedicto vs Court of Appeals(GR No 125359, Sept 4, 2001)

The FCDA does not apply to foreign currency deposits maintained in foreign

banks.

Salvacion vs Central Bank

(GR No 94723, Aug 21, 1997)

Facts:Salvacion was frequently abused by Barteli, a foreigner. Salvacion filed a

case against Barteli for which she won and awarded damages. However, the

only property found by the sheriff is a foreign currency deposit with ChinaBank. When a notice of garnishment was presented with China Bank, the

bank did not honor the writ contending that it is a violation of FCDA andthere was no written permission coming from Barteli.

Issue:

Whether in this particular case, garnishment of Bartelis foreign currencydeposit with China Bank is in order.

Held:

The SC departed from the literal meaning of the FCDA and resorted to theintrinsic aids (whereas clauses appearing in the FCDA). It ruled that the

protection of the framers is to give that protection to foreign investors andlenders. Barteli is neither an investor nor a lender so he is not the foreign

depositor contemplated under the FCDA. His deposit is not the one that

deserved protection of the FCDA. Justice and righteousness dictates that thedeposit be garnished in favor of Salvacion.

BPI Family Savings Bank vs First Metro Investment(GR No 132390, May 21, 2004, Sandoval-Gutierrez)

Issues:Whether or not the deposit in question may be treated as demand deposit or

time deposit.If it is to be considered a demand deposit, is it legally proscribed from

earning interest?


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Held:The deposit in question is a time deposit because the deposit of Php 100

million is not withdrawable for one year provided that an advance interest of17% is paid.

No. Demand Deposits are not legally proscribed from earning interest. UnderCB Cir 22 s 1994, demand deposits shall not be subject to any rate ceiling.

This, according to the SC is an open authority to pay interest even ondemand deposit and with more reason because interest is not even subjectto any ceiling.

Addendum:

Time Deposit is one where the payment of which cannot be legallyrequired within a specified number of days.Demand Deposit (Current Account) is one where the liability of the bank is

denominated in Philippine currency subject to payment in legal tender upon

presentation of the depositors check.Reactions:Posted byOman at9:53 AM3 comments:



Corporation Law - New Cases

Hydro Resources Contractors vs National Irrigation Administration(GR No 160251, Nov 10, 2005, Santiago)

Facts:

A contract was entered into between Hydro and NIA for the project of thelatter. The contract price is to be payable partly in Philippine peso and US

dollars. Once the project was being executed, there was depreciation invalue of Peso resulting to price differential. In order to resolve the issue, the

administrator of NIA, Mr Tek, and Hydro made a joint computation of the

amount corresponding to the foreign currency differential. The computationshowed that NIA owed Hydro for the differential. When a demand was made

by Hydro against NIA, NIA refused to pay contending that Mr Tek has noauthority to participate into a joint computation of the foreign currency

differential and that Mr Tek has no authority to bind NIA.

Issue:Whether or not Mr Tek has the authority to bind NIA in the joint computationof the foreign currency differential.

Held:
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The SC found out that in the course of the project, Hydro has been dealing

with NIA represented by Mr. Tek. And applying the doctrine of apparentauthority, if a corporation knowingly permits one of its officers to act within

the scope of an apparent authority, it holds him out to the public possessingthe power to do those acts; and thus, the corporation will, as against anyone

who has in good faith dealt with it through such agent, be stopped fromdenying the agents authority.

Woodchild Holdings Inc. vs Roxas Electric and Construction(GR No 140667, Aug 12, 2004, Callejo)

The doctrine of apparent authority was not applicable in this case becausethe president of the company was given a specific authority by virtue of aboard resolution to sell a particular land. Any actions of the president outside

such vested authority shall not bind the corporation with third party.

Spouses David and Coordinated Group, Inc. vsCIAC and Spouses Quiambao

(GR No 159795, July 30, 2004, Puno)

Facts:The spouses Quiambao engaged the services of the petitioner for the

construction of a five-storey building. In the performance of the project, thepetitioner allegedly deviated from the original plan without the approval of

Spouses Quiambao. The latter therefore decided to rescind the contract andhired the services of another contractor. When a definitive finding that

indeed there was deviation on the structural plan, Quiambao sued for

damages impleading the officers of the construction company, among themEngr. David, who is also an officer of the Company. The officer contendedthat he cannot be made personally liable for what appears to be a corporateact by virtue of the doctrine of corporate entity.

Issue:Whether or not Engr. David is personally liable to the Spouses Quiambao.

Held:The SC held that an exception to the doctrine of corporate entity is when

there is bad faith in the performance of the duty of the officer. In the instantcase, bad faith was proven when Engr. David categorically admitted that the

company deviated from the original structural plan in order to lower the cost


23/45

of construction. By his act, Engr. David violated Sec 31 of the Corporation

Code which provides that directors or trustees who are guilty of grossnegligence or bad faith in directing the affairs of the corporation or acquire

any personal or pecuniary interest in conflict with their duty as suchdirectors or trustees shall be liable jointly and severally for all damages

resulting therefrom suffered by the corporation, its stockholders or membersand other persons. Therefore, the SC deemed that equity demand that he

should be liable to Spouses Quiambao.

DBP vs CA(GR No 147217, Oct 7, 2004, Sandoval-Gutierrez)

When you file petitions for review, the Rules of Court provides that the certof non-forum shopping be appended to the petition. If the petitioner is ajuridical person, it must act through its agent but such agent must be armed

with authority to represent such corporation thru a board resolution or

secretarys certificate.In this case, the petitioner failed to submit to the court certified true copy of

board resolution authorizing its officer to represent the company in this case.The SC said that this deficiency is fatal to the case and would constitute a

sufficient ground for the dismissal of the case. The SC can neither takejudicial notice of board resolutions passed by corporation nor said court may

take judicial notice of the officers authority to represent the corporation inthe particular suit.

Monfort Hermanos Agricultural Development Corp. vs Monfort III(GR No 152542, July 8, 2004, Santiago)

Facts:

Monfort Corp represented by its president, Antonia Salvatierra filed a

complaint against the respondents for the delivery of motor vehicles,tractors and fighting cocks. The respondents filed a motion to dismiss on theground that Antonia does not have the authority to represent the corporationin this particular case. Antonia contended that they have submitted board

resolutions signed by its directors. However, this board resolution is being

contested because four of the directors who signed the resolution have notbeen duly elected by the company.

Issue:Whether or not Antonia has the authority to represent the corporation in this

case.

Held:


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The SC said Antonia does not have the authority to represent the

corporation in this particular case. The board resolution in question was heldinvalid because the general information sheet of the corporation readily

indicated that four out of the six signatories in the board resolution do notappear in the general information sheet. This only showed there is now a

doubt whether the four directors appearing in the resolution were dulyelected as directors of the corporation.

CIR vs Estate of Toda Jr(GR No 147188, Sept 14, 2004, Davide)

Cibeles Incorporated authorized its former president, Mr. Toda Jr. to sell abuilding and two parcels of land which the insurance company owns for 90 Mpesos. The properties were sold and income was realized.

In the meanwhile, Mr Toda sold all his shareholdings in the insurancecompany to a certain Mr. Choa. A deed of sale was concluded between them

for Mr. Todas shareholdings in the insurance company. Thereafter, BIRassessed the insurance company deficiency income tax arising from the sale

of the subject real properties. Three years thereafter, Mr. Toda died. The BIRthen impleaded the estate of Mr. Toda as party defendant. The respondent

contended that the liability is a corporate liability, therefore the estate couldnot be held liable following the doctrine of corporate entity.

Issue:

Since the sale took place during the incumbency of Mr. Toda and he was theone authorized by the corporation to do so, would it be possible for him or

his estate to be liable for the obligation?

Held:

The SC held that following the doctrine of corporate entity, officers are notsupposed to be made personally liable for what appears to be corporateliabilities. However, the rule is not without exceptions. Exception to this ruleis when the officer concerned has expressly agreed to be personally bound

for corporate obligations. Perusal of the deed of sale would readily show that

for the tax liability of the corporation arising from the sale of real propertiesin question, Mr. Toda agreed to be personally liable along with thecorporation.

Clarion Printing House Inc vs NLRC


25/45

(GR No 148372, June 27, 2005, Carpio-Morales)

Facts:

The petitioner company filed with the SEC a petition for suspension ofpayment as well as an appointment of a rehabilitation receiver. While the

petitioner was placed under receivership, a certain Mr. Miclat, a formeremployee of a corporation filed a case for illegal dismissal.

Issue:Should his claim in this case be suspended?

Held:

The SC held that even labor cases are suspended. Upon the appointment ofa receiver, all claims and all pending cases against the corporation aredeemed suspended the purpose being in order to give the receiver sufficient

time to proceed with rehabilitation work.

Tysons Super Concrete, Inc. vs CA(GR No 140081, June 23, 2005, Austria-Martinez)

Facts:

Romana Dela Cruz owns a parcel of land and leased it to Tysons. During theperiod of lease, Tyson filed rehabilitation and Tysons was placed under

receivership. The SEC appointed a management committee to take charge ofthe rehabilitation of the corporation.

In the meanwhile, because of Tysons failure to pay the rent, Romana filed

an ejectment suit against the corporation. The ejectment case prospered andwhile the case was pending appeal, Romana filed for the execution of

judgment.

Issue:Should the ejectment suit be suspended because of the rehabilitation ofTysons?

Held:The ejectment was sustained by the SC.

The fact that a management committee had already been created by theSEC does not divest the first level courts of their exclusive jurisdiction.

The avowed purpose of suspending all actions against distressed corporation

when management committee or rehabilitation is appointed, which is to


26/45

enable such management committee or rehabilitation receiver to effectively

exercise its powers free from any judicial or extra-judicial interference thatmight unduly hinder or prevent the rescue of the distressed company, can

no longer be effectively met if the proceedings have already been pendingfor almost ten years and have already reached the SC.

Nakpil vs IBC(GR No 144764, Mar 21, 2002)

Facts:

Mr, Nakpil has been engaged as Asst. General Manager and Comptroller of

IBC. The president of the corporation was replaced by a certain Mr. Temploand upon his assumption, the petitioner was dismissed. The petitioner thenfiled a complaint for illegal dismissal before the labor arbiter.Issues:

Does the labor arbiter have jurisdiction over this case?Could Mr. Nakpil be considered a corporate officer?

Do additional claims such as back wages or damages make it a labor case?

Held:No. This case involves an issue or controversy involving a corporate officer,

therefore the SEC (now RTC) has jurisdiction over the case.Yes. Although his appointment was made by the general manager of the

company, his appointment was subject to the approval of the Board ofDirectors.

No. These claims are not essential. Controversy remains to be an intra-corporate controversy.

Addendum:

Who are officers of the corporation?

Those statutory corporate officers provided in the Corporation Code such asthe president, treasurer and secretary.Those who have been named in the by-laws of the corporation.Those who may be appointed by the Board of Directors for as long as the

Board of Directors has the authority to do so in the by-laws of the

corporation.

PNB vs Andrada(Apr 17, 2002)

The mere acquisition of all or substantially all of the assets of another

company would not make the buying company liable for the existing


27/45

obligations of the selling company. Even in this particular case, we maintain

the separate identities of the selling company and the buying company sothat the selling company would remain liable for its obligations. It could not

legally pass-on this liabilities to the buying corporation provided that theselling corporation acted in good faith and there is an adequate

consideration for the disposition of the assets.

The court also enumerated exceptions to this rule:When the buying company expressly or impliedly agreed to assume thedebts of the selling company;When the transaction amounted to merger or consolidation;

When the purchasing company is only a continuation of the selling company;

When the transaction is fraudulently entered into in order to escape liabilityfor the debts of the selling company; andWhen the sale is in bulk and the selling company was not able to comply

with the formalities mentioned under the bulk sales law.Reactions:Posted byOman at9:48 AM4 comments:



Commercial Law Bar Exam Coverage

The chairman of the 2006 Bar Examination promulgated the coverage of the 2006 Bar

Examinations for Mercantile law to be held on September 17, 2006. (Exactly 4 months from

today)

1. Code of Comerce

(a) Merchants and Commercial Transaction, Articles 1-63

(b) Letters of Credit under te Code of Commerce (Articles 1-63

INCLUDE the following:i. Bulk Sales Law

ii. The Warehouse Receipt Law in relation to the General Bonded Warehouse Act

iii. Trust Receipts Law

2. Negotiable Instruments Law

3. Insurance CodeINCLUDE PDIC

4. Transportation Laws(a) Common Carriers

(b) Commercial Contracts for Trnsportation Overland

(c) Maritime Commerce(d) Public Service Act
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(e) The Warsaw Convention of 1929

5. Corporation Law(a) The Corporation Code

(b) Securities Regulation Code

(c) Banking Lawsi. The New Central Bank Actii. Law on Secrecy of Bank Deposits

6. Intellectual Property Code

7. Special Laws

(a) The Chattel Mortgage Law

(b) Real Estate Mortgage Law(c) The Insolvency Law

(d) Truth in Lending Act

(e) Anti-Money Laundering Law

EXCLUDE the following:

1. Omnibus Investment Code of 1987

2. Foreign Investment Act of 1991Reactions:

Posted byOman at9:29 AMNo comments:

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Monday, March 27, 2006

Reviewer in Intellectual Property Code

INTELLECTUAL PROPERY-those property rights which results from the physical manifestation of an original thought.

(Ballantines Law Dictionary)

COVERAGEIntellectual property rights consists of:a) Copyrights and related rights;

b) Trademarks and service marks;

c) Geographic indications;

d) Industrial designs;e) Patents;

f) Layout-designs (Topographies) of Integrated Circuits; andg) Protection of Undisclosed Information. (Sec. 4)

STATE POLICY IN RESPECT OF INTELLECTUAL PROPERTY RIGHTS (IPR)

-There is a declaration of State Policy that, among others, the State recognizes that an effectiveintellectual and industrial property system is vital to the development of domestic and creative
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activity, facilitates transfer of technology, attracts foreign investments and ensures market access

for our products, hence it shall protect and secure exclusive rights of scientists, inventors, artists,

and other gifted citizens to their intellectual property and creations. (Sec. 2)

INTERNATIONAL CONVENTION AND RECIPROTICY

Any person who is a national or who is domiciled or has a real and effective industrialestablishment in a country which1) 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

2) extends reciprocal rights to nationals of the Philippines by law, shall be entitled to benefits tothe 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 rights is otherwise

provided by law. (Sec. 3)

REVERSE RECIPROCITY OF FOREIGN LAWS

Section 231making enforceable on nationals of a foreign state all conditions, restrictions,

limitations, diminutions, requirements or penalties that may be imposed by such foreign state ona Filipino national seeking intellectual property protection.

v Reciprocal application is not automatic

Rather, the Phils. may apply to the foreign national those restrictions that his country imposes onFilipino applicants

What are TECHNOLOGY TRANSFER ARRANGEMENTS?-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. (Sec. 4)

PRESCRIPTIVE PERIOD OF ACTIONS FOR DAMAGES UNDER THE IPC

-No damages may be recovered after four (4) years from the time the cause of action arose (Sec.226)

JURISDICTION OVER DISPUTES UNDER IPC

A. Original Jurisdiction1) Director General (IPO)

-has original jurisdiction to resolve disputes relating to the terms of a license involving the

authors right to public performance or other communication of his work.

2) Bureau of Legal Affairs

-has jurisdiction over the ff:

i. Opposition to applications for registration of marks;ii. Cancellation of trademarks;


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iii. Cancellation of patents, utility models and industrial designs;

iv. Petition for compulsory licensing of patents;

v. Administrative Complaints for violations of laws involving IPR where the total damagesclaimed is not less than P200,000.00

3) Documentation, Information and Technology Transfer Bureau-has jurisdiction to settle disputes involving technology transfer payments

B. Appellate Jurisdiction

1) Director General-over all decisions rendered by the ff:

Dir. of Legal Affairs

Dir. of Patents

Dir. of Trademarks Dir. of the Documentation, Information and Technology Transfer

2) Court of Appeals-over decisions of the Director General in the exercise of his appellate jurisdiction over the

decisions of the:

Dir. of Legal Affairs

Dir. of Patents Dir. of Trademarks

3) Secretary of Trade and Industry-over decisions of the Director General on the exercise of his appellate jurisdiction of the

Director of Documentation, Information and Technology Transfer; AND

-over decisions of the Director General in the exercise of his original jurisdiction relating to the

terms of license involving the authors right.

ADMINISTRATIVE PENALTIES IMPOSED FOR VIOLATIONS OF LAWS INVOLVING

IPR-The Director for Legal Affairs may impose the ff:

a) Issuance of a cease and desist order (CDO);

b) Acceptance of voluntary assurance compliance (VAC) or voluntary assurance ofdiscontinuance (VAD);

c) Condemnation or seizure of products subject of the offense;

d) Forfeiture of properties used in the commission of the offense;

e) Imposition of administrative fines;f) Cancellation of permit, license, authority or registration;

g) Withholding of permit, license, authority or registration;

h) Assessment of damages;

i) Censure;j) Analogous penalties or sanctions (Sec. 10.2 [b])

LAW ON PATENTS


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PATENTan exclusive right acquired over an invention, to sell, use, and make the same

whether for commerce or industry.

PATENTABLE INVENTIONS

-any technical solution of a problem in any field of human activity which is NEW, involves anINVENTIVE STEP and is INDUSTRIALLY APPLICABLE shall be patentable. The patentableinvention may be, or may relate to, a product, or process, or an improvement of any of the

foregoing. (Sec. 21)

Requirements:

1) Technical solution of a problem in any field of human activity

2) Noveltythat which does not form part of a prior art consists of:

a) that which has been made available to the public anywhere in the world before the filing dateor the priority date of the application

b) that which forms part of an application whether for patent, utility or industrial design,

effective in the Philippines, provided that:i. the inventors or applicants are not the same

ii. the contents of the application are published in accordance with the requirements of patent

application rules.

iii. the filing date of the prior art is earlier.

3) Inventiveness/Inventive Step

-an invention involves an inventive step if, having regard to prior art, it is not obvious to a person

skilled in the art of the time of the filing date or priority date of the application claiming the

invention. (Sec. 26)

4) Industrial Applicability

-an invention that can be produced and used in any industry. (Sec. 27)

NON-PATENTABLE INVENTIONS

The following shall be excluded from patent protection:a) Discoveries, Scientific Theories and Mathematical Methods;

b) Schemes, rules and methods of performing mental acts, playing games or doing business, and

programs for computer;

c) Methods for treatment of the human or animal body by surgery or therapy and diagnosticmethods practiced on the human or animal body;

d) Plant varieties or animal breeds of essentially biological process for the production of plants

or animals;

e) Aesthetic creations;f) Anything which is contrary to public order or morality (Sec. 22)


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RIGHT TO A PATENT

The right to a patent belongs:

a) to the inventor, his heirs, or assignsb) when 2 or more persons have made the invention separately and independentlyto them

jointly

c) if two (2) or more persons have made the invention separately and independently of each otherto the person who filed an application for such invention (FIRST TO FILE RULE)d) where 2 or more applications are filed for the same inventionto the applicant who has the

earliest filing date or the earliest priority date (FIRST TO FILE RULE) (Sec. 29)

e) in case of inventions created pursuant to a commissionto the person who commissions thework UNLESS agreed otherwise.

f) in case an employee made the invention in the course of his employment, the patent shall

belong to:

the employeeif invention not part of his regular duties even if he uses the time, facilities andmaterials of the employer; OR

the employerif the invention is the result of the performance of his regularly assigned duties

unless agreed otherwise.

RIGHTS ACQUIRED BY THE PATENTEE

The patentee acquires the following rights under his patent

a) Where the subject matter of a patent is a product, to restrain, prohibit and prevent anyunauthorized person or entity from making, using, offering for sale, selling or importing that

product;

b) Where the subject matter of a patent is a process, to restrain, prevent or prohibit anyunauthorized person or entity from using the process, and from manufacturing, dealing in, using

or offering for sale, or importing any product obtained directly or indirectly from such process;

c) to assign, or transfer by succession the patent, and to conclude licensing contracts for the same

(Sec. 71)

CONTENTS OF PATENT APPLICATION

A patent application shall contain:1) a request for the grant of patent;

2) a description of the invention;

-the disclosure of the invention must be in a manner sufficiently clear and complete for it to becarried out by a skilled in the art.

3) Drawings necessary for the understanding of the invention;

4) One or more claims

5) An abstract (Sec. 32)

v must contain relevant information as to the identity of the person (no anonymous person)

v if the applicant is not the inventor; he must show proof of authority to seek application for

registration

UNITY OF INVENTION

-every application for patent registration must contain an application over a simple invention orseveral inventions but must form part of a single general inventive concept


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PROCEDURE FOR THE GRANT OF PARENT

a) According a filing date to the application (Sec. 41);b) Examination of compliance by applicant with the formal requirements specified in Sec. 32,

i.e., contents of application (Sec. 42);

c) Classification of application and search for prior art (Sec. 43)d) Publication of patent application in the IPO Gazette (Sec. 44);e) Inspection of the application documents by any interested party and written observations by

any third party concerning the patentability of the invention (Secs. 44.2 and 47);

f) Written request by the applicant, within 6 months from the date of publication of his patentapplication, for the substantive examination by the IPO of his application. (Sec 48);

g) Grant of the patent (Sec. 50), or refusal of the examiner to grant the patent (Sec. 51); in the

latter case, the refusal may be appealed to the Director of the Bureau of Patents;

h) Publication of the grant of patent in the IPO Gazette (Sec. 52)

TERM OF A PATENT, UTILITY MODEL, INDUSTRIAL DESIGN

a) Patent20 yrs from the filing date of application, without renewalb) Utility model7 yrs, w/out renewal

c) Industrial design5 yrs, renewable twice

UTILITY MODELS-models of implement or tools of any industrial product even if not possessed of the quality of

invention but which is of practical utility

INDUSTRIAL DESIGN

-any composition of lines or colors or any three-dimensional form, whether or not associated

with lines or colors provided that such composition or form gives a special appearance to and can

serve as pattern for an industrial product or handicraft.

CANCELLATION OF PATENTS

Who may file? any person

IPO motu proprio

Grounds:

a) That the patent is invalid (Sec. 81);

b) That what is claimed as the invention is not new or patentable;

c) That the patent does not disclose the invention in a manner sufficiently clear and complete forit to be carried out by any person skilled in the art; or

d) That the patent is contrary to public order or morality. (Sec. 61)

e) failure to make payments of annual fees or dues

Where to file?

BLAif in violation of IPC (administrative)

RTCotherwise


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INFRINGEMENT

-the making, using, offering for sale, selling or importing a patented product or a product

obtained directly or indirectly from a patented process or the use of a patented process withoutthe authorization of the patentee. (Sec. 76)

TEST OF PATENT INFRINGEMENT1) Literal Infringementresort is had to the words of the claim.2) Doctrine of Equivalentsif two devices do the same work in substantially the same way, the

same result, and produce substantially the same result, they are the same even though they differ

in name, form, or shape.

REMEDIES IN CASE OF INFRINGEMENT

A) File civil case for the following purposes:

1) To recover from the infringer such damages as the court may award considering thecircumstances of the case provided it shall not exceed 3 times the amount of the actual damages

sustained plus attorneys fees and other expenses of litigation;

2) To secure an injunction for the protection of his rights;3) To receive a reasonable royalty, if the damages are inadequate or cannot be readily ascertained

with reasonable certainty;

4) To have the infringing goods, materials and implements predominantly used in the

infringement disposed of outside the channels of commerce, or destroyed without compensation;5) To hold the contributory infringer jointly and severally liable with the infringer.

B) File criminal case within 3 years from date of commission of the crime for repetition ofinfringement (Sec. 84)

LAW ON TRADEMARKS

TRADEMARKanything which is adopted and used to identify the source of origin of goods,

and which is capable of distinguishing them from goods emanating from a competitor

SERVICE MARKdistinguishes the services of an enterprise from the service of other

enterprises. It performs for services what a trademark does for goods.

COLLECTIVE MARK - any visible sign designated as such in the application for registration

and capable of distinguishing the origin or any other common characteristic, including the

quality of goods and services of different enterprises which use the sign under the control of theregistered owner of the collective mark (Sec. 121.2)

TRADE NAMESthe person (whether natural or juridical) who does business and produces the

goods or the services is designated by a trade name.-Under the law, there is no need to register trade names in order to secure protection for them.

TRADE DRESSinvolves the total image of a product, including such features as size, shape,color or color combinations, texture, and/or graphics.


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HOW MARKS ARE ACQUIRED

-Under RA 8293, the rights in a mark shall be acquired through registration made validly inaccordance with its provisions. (Sec. 122)

-This proposition of law, however, may not be converted for it is not true that where there is no

registration, there is no protection. Acquisition through use-Whether or not a registered trademark is employed, when a person has identified in the mind of

the public the goods he manufactures or deals in his business or services from those of others,

such a person has a property right in the goodwill of said goods or services which will beprotected in the same manner as other property rights (Sec. 168.1)

RIGHTS CONFERRED

-the owner of a registered mark shall have the exclusive right to prevent all third parties nothaving the owners consent from using in the course of trade identical or similar signs or

containers for goods or services which are identical or similar to those in respect of which the

trademark is registered where such use would result in a likelihood of confusion. (Sec. 147)

DURATION

-the certificate of registration of a trademark shall be ten (10) years from the filing date of

application provided the registrant shall file a declaration of actual use within a year from the 5thanniversary of registration date (Sec. 145)

-renewable for another 10 yrs. (Sec. 146)

NON-REGISTRABLE TRADEMARKS, TRADE NAMES AND SERVICE MARK

A mark cannot be registered if it:

a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falselysuggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or

bring them into contempt or disrepute;

b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its politicalsubdivisions, or of any foreign nation, or any simulation thereof;

c) Consists of a name, portrait or signature identifying a particular living individual except by his

written consent, or the name, signature, or portrait of a deceased President of the Philippines,during the life of his widow, if any, except by written consent of the window;

d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier

filing or priority date, in respect of:

(i) The same gods or services, or(ii) Closely related goods or services, or

(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;

e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is

considered by the competent authority of the Philippines to be well-known internationally and inthe Philippines, whether or not it is registered here, as being already the mark of a person other

than the applicant for registration, and used for identical or similar goods or services: provided,

that in determining whether a mark is well-known, account shall be taken of the knowledge ofthe relevant sector of the public, rather than of the public at large, including knowledge in the


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Philippines which has been obtained as a result of the promotion of the mark;

f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered

well-known in accordance with the preceding paragraph, which is registered in the Philippineswith respect to goods or services which are not similar to those with respect to which registration

is applied for: provided, that use of the mark in relation to those goods or services would indicate

a connection between those goods or services, and the owner of the registered trademark:Provided further that the interests of the owner of the registered mark are likely to be damagedby such use;

g) Is likely to mislead the public, particularly as to

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