Rampant intellectual property infringements affect both the domestic and international economies. Due to piracy, there is a transfer of revenues from the legitimate businesses to the free-riders (IPR violators). Piracy also results in government losses, in the form of taxes.
Piracy and other IPR violations are economic issues that affect both the private and government sectors. The protection of intellectual property, therefore, lies not only in the hands of the government, but also of the private entities. The importance of the cooperation between the two is presented in Figure 9, in the Total IP Protection Model this paper conceptualized.
Figure 9. INTELLECTUAL PROPERTY RIGHTS PROTECTION MODEL
s shown in the model, there are three cornerstones of IPR protection, namely: 1) Policy and Regulation, 2) Public Information and Education Campaign, and 3) Enforcement and Adjudication41. In addressing these issues, the government should mobilize all its branches, with an emphasis on the legislative and executive branches. The legislative branch of the government is responsible for the placement of adequate laws and regulations for the safeguard of intellectual property rights. Meanwhile, the law enforcement agencies, and IPR concerned government agencies, have the duty to implement the said rules.
However, government efforts will not be effective without the support of the individual stakeholders and other private sector entities, especially those belonging to the industries affected by IPR infringements. Thus, on the side of the private sector, the individual IP stake-holders and the IP related organizations must actively take part in the endeavor. And to involve the whole society in the cause, the above mentioned sectors must cooperate in informing and educating the public regarding IPR protection.
Policy and Regulation
The Philippine government has been protecting intellectual property rights since 1947, when the first laws on the protection IPR were enacted42. Such laws include:
Republic Act No. 165 otherwise known as “An Act Creating a Patent Office, Prescribing its Powers and Duties, Regulating the Issuance of Patents and Appropriating Funds Therefore”
Republic Act No. 166 otherwise known as “An Act to Provide for the Registration and Protection of Trademarks, Trade Names and Service Marks, Defining Unfair Competition and False Marking and Providing Remedies Against the Same, and for other Purposes”
IPR promotion and protection have also been made a state policy as the 1973 Constitution provides that
The exclusive rights to inventions, writings and artistic creations shall be secured to inventors, authors, and artists for a limited period.
The 1987 Constitution, meanwhile, explicitly mandates that the State shall protect intellectual property43.
The major turning point in the protection of IPR in the Philippines is the passing and signing into law of the Intellectual Property Code of the Philippines (Republic Act 8293) in 1997. The IP Code repealed the old IP and IP-related laws such as the Republic Act 165 (Patents Law); Republic Act 166 (Trademarks Law); Presidential Decree 49 (Copyright/Related Rights Law); Presidential Decree 285 (Textbook reprinting Law); and Articles 188 and 189 of the Revised Penal Code (on unlawful competition/infringement). Consequent to this was the establishment of the Intellectual Property Office that would administer and implement the State policies declared in the Act. The significant changes in the IPR protection in the country, as a result of the implementation of the IP Code, are presented in Table 13.
The IP code was later followed by the attempt to combat internet piracy through the Electronic Commerce (E-Commerce) Act, Republic Act No. 8792, in June 2000. The law provides specific provisions to fight copyright piracy in the internet. As stated in Section 33 (b) of the E-Commerce Act:
Piracy or the unauthorized copying, reproduction, dissemination, distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting of protected material, electronic signature or copyrighted works including legally protected sound recordings or phonograms or information material on protected works, through the use of telecommunications networks, such as, but not limited to, the internet, in a manner that infringes intellectual property rights shall be punished by a minimum fine of One hundred thousand pesos (P100,000.00) and a maximum commensurate to the damage incurred and a mandatory imprisonment of six (6) months to three (3) years.
In another legislative effort to protect IPR, the Senate and House of Representatives passed in 2001 the Republic Act 9150 - "An Act Providing for the Protection of Lay-out Designs (Topographies) of Integrated Circuits, Amending for the Purpose Certain Sections of Republic Act No. 8293, Otherwise Known as the Intellectual Property Code of the Philippines and for other Purposes". The law took effect on August 31 of the same year. Moreover, the Patent Cooperation Treaty (PCT) was ratified by the Senate and was implemented, also in 2001. The PCT is a “treaty for rationalization and cooperation among contracting states with regard to the filing, searching and examination of patent applications and the dissemination of the technical information.”44 Intellectual property rights encompass a broad range of concern that includes invention and innovation in the field of science. Hence, in June of 2002, to protect the plant breeder’s rights, Congress passed the Republic Act No. 9168, the Plant Variety Act. This is an Act that aims to protect the exclusive rights of plant breeders with respect to their new plant variety. This plant breeder’s right is an “exclusive right that enables the holder of the right to prohibit others from exploiting or using the protected plant variety without any permission or license from the rights holder.” 45 The agency that will manage the implementation of the law is the National Plant Variety Protection Board (NPVPB).
On the judicial aspect of IPR protection, the Philippine Supreme Court passed the A.M.46 No. 02-1-06-SC. It is a Resolution on the Proposed Rule on Search and Seizure in Civil Actions for the Infringement of Intellectual Property Rights that took effect on February 15, 2002. With this Rule, the copyright holder may apply ex parte for the issuance of a search warrant to an alleged infringing defendant, wherein a delay is likely to cause harm to the IPR holder or where there is enough risk of the evidence being destroyed.
In another effort to combat IPR violations, the Philippine Bureau of Customs has issued guidelines on border control measures through the Customs Administrative Order 6-2002. As a follow-up regulation, the Bureau also issued the Customs Special Order No. 24-2002. The Order intends to strengthen customs border control over imports containing goods suspected to be infringing upon the IPR of owners as defined by the IP Code and related Laws, through the creation of an Interim Intellectual Property Unit (IPU) in the BOC. Meanwhile, as of September 12, 2003, the Bureau had approved the Customs Special Order 19-2003 that transformed the Interim IPR unit to a Permanent Intellectual Property Unit. This would centralize border policy development and implementation for better monitoring and interdiction of possible IPR violations at the ports of entry.
This significant progress equips the BOC to efficiently concentrate on the concerns and issues surrounding IPR in the area of border control. As a specialized unit, the IPU will be able to effectively monitor IPR related activities through the creation of an IPR database system, and hence, be able to competently coordinate with other agencies and organizations that have same purpose. Moreover, a permanent IPU will result to a swifter response of the Bureau on complaints by IP stakeholders on piracy and trademark infringements, among others
On the other hand, the Revised Implementing Rules and Regulations of R.A.47 No. 9160 (Anti-Money Laundering Act of 2001) as amended by R.A. No. 9194 (Anti-Money Laundering Law) includes among its provisions the following:
Rule 3.i “Unlawful activity refers to any act or omission or series or combination thereof involving or having relation, to the following:
(K) Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;
(K.2) Piracy, which refers to:
(58) the unauthorized copying, reproduction,
(59) the unauthorized dissemination, distribution,
(62) the unauthorized storage, uploading, downloading, communication, making available to the public, or
(63) the unauthorized broadcasting of protected materials, electronic signature on copyrighted works, including legally protected sound recordings or phonograms or information material on protected works, through the use of telecommunication networks, such as, but not limited to, the internet in a manner that infringes intellectual property rights.
These rules were approved by the Senate and the House of Representatives on August 6, 2003.
Acknowledging the importance of technology in the proliferation of IPR violations, new laws are being geared towards regulating the processes by which pirated products are produced. In fact, the Optical Media Act of 2003 or Republic Act 9239, has been ratified into law last February 10, 2004. This legislation focuses on the “unregulated mastering, manufacture of and replication in optical media” of copyrighted materials in the Philippines, wherein the importation and exportation of optical media are among the activities to be licensed by the Optical Media Board. The new law is expected to help curtail piracy in the software, music and video/movie industries.
The law component of IPR protection also includes the membership of a country in international copyright treaties and enforcement measures. The Philippines has been actively participating and joining such agreements, such as the World Trade Organization – Trade-Related Aspects of Intellectual Property Rights (WTO-TRIPS Agreement)48. As stated in the IAC-IPR 1999 Executive Summary Report, “in compliance with the WTO-TRIPS Agreement, the IPR Laws namely: PD 49, - Copyright Laws as amended by PD 1988; RA 165 – Patent Laws; RA 166 – Laws on Trademarks, Trade names, and Service marks; Articles 188 and 189 of the Revised Penal Code; and PD 1987 – Videogram Regulatory Board Law – were simplified and rolled into one law called, RA 8293, otherwise known as the Intellectual Property Code of the Philippines.” The latest international treaty in which the country participated in are the WIPO Copyright Treaty, WCT, and the WIPO Performances and Phonograms Treaty, WPPT, in October of 2002.
Among the different IPR laws listed in Table 14, the Optical Media Act is the law that tackles, not the intellectual property itself, but the medium in which the IP is stored. The Act seeks to regulate the technology and medium through which the songs, movies, software and all other such IPR materials, are recorded and transmitted/transferred, which is the Optical Media. The development of the optical media has made the mass production of optical discs fast and easy, taking no more than four (4) seconds to replicate one disk. Currently, the minimum number of copies a replicating machine can duplicate is 60,000 (OMB Primer). This number is reproduced at marginal costs to the pirate hence, the activity becomes very lucrative.
Through the OMB better IPR protection is expected to be achieved through:
the expanded jurisdiction of the concerned government agency in its arrest and seizure activities;
the greater punishment rendered to the pirates; and
better licensing system for the machines used for replication and production.
Concern for IPR protection does not only involve the national government, but the local government units (LGUs) in the Philippines as well. During the last quarters of 2003, LGUs in the country passed anti-piracy ordinances in their jurisdictions. The first anti-piracy LGU ordinance, Ordinance 2003-09249, was passed and adopted in Naga City last September 3, 2003. The ordinance requires that all business licenses and permits issued by the City government must carry the express condition that the licensee(s) will not engage in the sale, rental, transfer, distribution, manufacture and/or production of pirated counterfeit or fake goods, articles or services. It also prohibits other persons to commit said acts within the licensee’s business establishment or premises.
A breach of these conditions may be grounds for the revocation or suspension of the business permit. Moreover, the ordinance provides authority to the local government to seize or confiscate pirated or counterfeit goods of any person engaged in any business or trade.
The same type of local law was passed in Iloilo City last December 2003. It is expected that other cities and municipalities will follow suit with the passage of Department of Interior and Local Government (DILG) Memorandum Circular (MC) No. 2003-229, entitled “Protection of Intellectual Property Rights” last December 8, 2003. This MC endorses the anti-piracy LGU ordinance and enjoins all LGUs in the country to help enforce IPR protection.