20 February 2013
Elpidio V. Peria

A lot of Filipinos who have recently noticed this on-going debate in the IP Code amendments tell me they have difficulty digesting the concepts of intellectual property and all these provisions in the IP Code, but one thing we should note first and foremost is that intellectual property rights (IPRs) are PRIVATE RIGHTS, and if you will ask where is this coming from, it is there stated in the Preamble of the so-called TRIPs Agreement, TRIPS meaning Trade-Related Intellectual Property rights of the World Trade Organization (WTO), which agreement is part of a package of agreements that we signed on to when we ratified the treaty establishing the WTO back in December 1994.

Notwithstanding the fact that IPRs are private rights, now we have the much-talked-about IP Code amendments giving powers to the Director General and the Deputies Director General of Intellectual Property Office (IPO) to undertake enforcement functions with the support of the PNP, NBI, Bureau of Customs, Optical Media Board and the local government units, among others and in addition, these same people will now be able to conduct visits during reasonable hours to establishments and businesses engaging in activities violating intellectual property rights and provisions of this act based on report, information or complaint received by the Intellectual Property Office.

Prof. JJ Disini of the University of the Philippines College of Law characterizes this latter set of powers as warrantless searches which are unconstitutional, but what we will highlight is that this enforcement function makes the IPO officials both judge and executioner of the cases involving violations of IPRs and this is what makes it problematic. How so? The amendments give these officials the power to “exercise exclusive appellate jurisdiction” over all decisions rendered by their underlings, particularly the Director of Legal Affairs, the Director of Patents, the Director of Trademarks, the Director of Copyright and Other Related Rights, and the Director of the Documentation, Information and Technology Transfer Bureau.

This power to “exercise exclusive appellate jurisdiction” is a quasi-judicial function, which involves resolving the appeals of parties who may not be satisfied with the rulings of the underlings of the IPO Director-General and Deputies Director-General. Couple this with the power to “undertake enforcement functions” then it means the same people – the IPO Director-General and Deputies Director-General – will be the ones to have the power to execute or implement their own decisions. We may say but of course, such power should be considered built-in, in fact courts themselves are empowered to issue writs to enforce their decisions via the sheriffs of the court, but these IPO officials are not courts per se, they are tasked to implement the IP Code which are part of their mandates.

Putting together these quasi-judicial and enforcement functions in one agency appears to have no precedent in Philippine law, though if one may look at some old laws, we can see that some agencies perform some kind of enforcement functions, like,

a) The Investigation, Security and Law Enforcement Staff of the Secretary of the Department of Transportation and Communication (DOTC), which undertakes law enforcement functions and activities in relation to land transportation as provided by then President Cory Aquino in Executive Order 201 in 1987;

b) The Office of Intelligence and Security of the Department of Foreign Affairs (DFA )which undertake enforcement and monitoring of security procedures in the DFA and foreign service establishments in Executive Order 132 also issued by President Aquino in 1987;

c) The Philippine Atomic Energy Commission which may issue rules and regulations for the protection of its personnel and the general public and undertake their enforcement in relation to its work on research and development relating to nuclear processes and techniques, etc. in Republic Act 2067, the Science Act of 1958;

The other intellectual property-granting agency, the Plant Variety Protection Office, which issues plant variety certificates (also called plant breeder rights) through its Registrar, does not have such enforcement functions but it has the power to “implement the rules and regulations issued by the Board”, under Republic Act 9168, the Plant Variety Protection Act.

Even the other title-granting agency, the Land Registration Authority, through its Land Registration Commissioner, may have quasi-judicial functions but no enforcement function save that function to “Implement all orders, decisions, and decrees promulgated relative to the registration of lands and issue, subject to the approval of the Secretary of Justice, all needful rules and regulations thereof” in Presidential Decree 1529 or the Property Registration Decree.

The point of this survey is to show that there appears to be no government agency which performs both quasi-judicial functions and enforcement functions at the same time; what has apparently happened is that the IP Code amendments gave somewhat excessive powers to this one agency, the IPO, and Congress forgot provisions for check and balance, like the correction of any abuses that may be committed by these officials built in already in the same amendments.

But the other problem with those powers is that they are overly broad and glaringly vague – after all, what does “undertake enforcement functions” mean and this is not in the singular but plural, what are the other things that the IPO officials may do? And part of this set of powers is the phrase “such other functions in furtherance of protecting IP rights and objectives of this Act”. Aren’t these officials also the guardians of the public interest, after all they are a government agency, how come they don’t also have the function to protect the ordinary user of these various rights in the IP code, are these users their enemies? Where will the people and establishments subjected to enforcement functions get their redress from any abuses that may be committed in the implementation of these provisions? The amendments do not say.

If we look at our treaty obligations where these enforcement obligations may be coming from, for example, the TRIPS Agreement of the World Trade Organization, one of the general obligations of WTO members like the Philippines on IPR enforcement, in art. 41.1 of the said Agreement, says in part, “these procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.” There is also a provision in art. 48.2 on indemnification of the defendant which says:

Article 48.1 Indemnification of the Defendant. – The judicial authorities shall have the authority to order a party at whose request measures were taken and who has abused enforcement procedures to provide to a party wrongfully enjoined or restrained adequate compensation for the injury suffered because of such abuse. The judicial authorities shall also have the authority to order the applicant to pay the defendant expenses, which may include appropriate attorney’s fees

The amendments to the IP Code do not have any safeguards against the abuse of these powers the amendments purportedly give to the officials of the Intellectual Property Office including the indemnification in case of wrongful injunction or abusive enforcement. What these defendants will have to do is file a separate case in these instances, which adds to their expenses, are uncertain and will add to their anxieties. Notwithstanding this, the IP Code amendments pile it on against the ordinary user or establishment, so in addition to the infringement action that will be filed against the alleged violator of the copyright and related rights, sec. 22 of the bill amends sec. 216.2 of the current IP Code to add the following:

“The foregoing shall not preclude an independent suit. for relief by the injured party by way of damages. injunction, accounts or otherwise.”

What does this provision mean? So in addition to the action for infringement already available to the copyright holder where they can sue for damages and ask for injunction (an order to stop whatever infringing act the defendant may be doing when the case was filed), and an order to seize and impound any article which may serve as evidence in the court proceedings, the rights holders, the injured party referred to in the law, can still file another independent, meaning separate, suit or case against the same defendants for the same acts. But that’s not all, there are also criminal penalties that can be added to these infringement and independent civil cases. And the law provides for statutory damages, a fixed amount to be paid set by the law itself and a provision which doubles these damages in some instances. Aren’t these measures a bit excessive ? The IPO may say that will serve to deter people from infringing the rights of copyright holders.

There are other detailed provisions on enforcement but the more important one for our purposes is art. 41.5 of the TRIPS Agreement which says : “It is understood that this Part does not create any obligation to put in place a judicial system for the enforcement of intellectual property rights distinct from that for the enforcement of law in general, nor does it affect the capacity of members to enforce their law in general. Nothing in this part creates any obligation with respect to the distribution of resources as between enforcement of intellectual property rights and the enforcement of law in general.” What does this all mean? Antony Taubman, Hannu Wager and Jayashree Watal in A Handbook on the WTO TRIPS Agreement say that this provision “addresses some general understandings about resource constraints and the relation with other areas of law enforcement.”

If we are to hazard our ordinary lawyer’s opinion on this item, given that IPRs are private rights, developing countries like the Philippines which have other, more serious, problems in law enforcement in general no longer need to create a special system in its courts to deal with the issue of enforcement of IPRs, but we actually have special IPR courts, a special set of rules for IPRs enforcement from the Supreme Court and dedicated IPR enforcement units in our law enforcement agencies through the National Committee on IPR. Why are we spending our limited budget on law enforcement to the protection of private rights, the TRIPS Agreement already said we don’t really have to do this and that same agreement actually is aware of the need to balance the needs for sustainable development of countries when enforcing the TRIPS Agreement obligations.


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