1. Definitions
(1) Definition
of terms. - For purposes of these rules and regulations, the
following
terms shall be understood as follows:
(a) "Office" shall refer to the Intellectual Property
Office.
(b) "DITTB" shall refer to the documentation, Information
and Technology Transfer Bureau of the Office.
(c) "AFHRDSB" shall refer to the Administrative, Financial
and Human Resource Development of the Office.
(d) "Technology Transfer Arrangements" shall mean
contracts/agreements
involving the transfer of systematic knowledge for the manufacture of a
product, the application of a process, 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.
4.2, PART I of the INTELLECTUAL PROPERTY CODE)
Pursuant to the provisions of SEC. 182, CHAPTER VII of the INTELLECTUAL
PROPERTY CODE, licensing of copyrights and related rights shall not be
covered under the definition of a technology transfer arrangement
unless
the licensing thereof shall involve the transfer of systematic
knowledge.cralaw:red
(e) "Intellectual Property Rights" shall consist of: (SEC.
4.1, PART I of the INTELLECTUAL PROPERTY CODE)
1. Copyright and Related Rights;
2. Trademarks and Service Marks;
3. Geographic Indications;
4. Industrial Designs;
5. Patents
6. Layout-Designs (Topographies) of Integrated Circuits; and
7. Protection of Undisclosed Information.
(f) "Undisclosed Information" shall mean information which:
(i) is secret in the sense that it is not, as a body or in the
precise
configuration andassembly of its components, generally known among or readily accessible
topersons within the circles that normally deal with the kind of
information
in question.
(ii) has commercial value because it is secret; and
(iii) has been subject to reasonable steps under the circumstances to
keep
it secret,by the person lawfully in control of the information.
(g) "Computer software developed for mass market" shall
mean
computer software produced, made and marketed for a broad range of
purposes
and users including end-users and commercial users; sold over the
counter
or via standard delivery mechanisms; payments not based on
royalty
basis; generally provides for an indefinite term for the use of
the
software; and where there is no need of any customization, by the
supplier
or distributor.
(h) "IPO Gazette" shall refer to the gazette published
by
the Office. (SEC 4.4, PART i of the INTELLECTUAL
PROPERTY
CODE)
2. Functions
of DITTB
(1) Functions.
The DITTB shall have the following functions: (SEC.
11 PART of the INTELLECTUAL PROPERTY CODE)
(a) Support the search and examination activities of the Office
through
the following activities:
i)
Maintain
and upkeep classification system whether they be national or
international
suchas the International Patent Classification (IPC) system;
ii)
provide advisory services for the determination of search patterns;
iii)
Maintain
search files and search rooms and reference libraries; and
iv) Adapt and
package
industrial property information.
(b)
Establish networks or intermediaries or regional representatives;
(c) Educate the public and build awareness on intellectual
property
through the conduct of seminars and lectures, and other similar
activities;
(d) Establish working relations with research and development
institutions
as well as with local and international intellectual property
professional
groups and the like;
(e) Perform state-of-the-art searches;
(f) Promote the use of patent information as an effective tool to
facilitate the development of technology in the country;
(g) Provide technical, advisory, and other services relating to
the
licensing and promotion of technology, and carry out an efficient and
effective
program for technology transfer; and
(h) Register technology transfer arrangements, and settle
disputes
involving technology transfer payments.
3. Registration
of Technology Transfer Arrangements
(1) Filing
of Technology Transfer Arrangements. Exemption from the
provisions
of SEC. 87 and SEC. 88, CHAPTER IX, PART II of the INTELLECTUAL
PROPERTY
CODE may be allowed by the Director of the DITTB after the evaluation
of
the request therefor accompanied by the following:
(a) Letter from the applicant stating the exemption/s being
requested
and the verified statement of the justification for the exemption/s;
(b) Copy of the agreement; and
(c) Other documents that will be required by the DITTB to support
and establish the merits of the request. For purpose of he above,
the applicant may submit either a draft or a duly executed agreement to
the DITTB.cralaw:red
(2) Who
may File. Either party to a technology transfer arrangement
or
his duly authorized representative may file a request for exemption
with
the DITTB Director.cralaw:red
(3) Where
to File. Filing of agreements shall be in accordance with the
following schedule:
(a) New Agreements - within thirty (30) days from the date of
execution
or effectivity, whichever is earlier;
(b) Renewal Agreements - within thirty (30) days before the
expiration
of the term of the existing technology transfer agreement; and
(c) Amendatory Agreements - Within thirty (30) days from such
amendment
or modification.cralaw:red
(4) Notice
of Additional Requirements. - Should the DITTB find the documents
submitted
incomplete, DITTB shall issue a notice to the applicant, within six (6)
days from the filing of the request, requiring applicant to submit the
additional documents. Failure of the applicant to comply with any
of the requirements within a period of fifteen (15) days from the date
of receipt of the notice shall be construed as an abandonment of the
application.
Should the applicant require additional time to comply with the
submission
of the documentary requirements, a final extension of fifteen (15) days
will be granted upon payment of the required fee.cralaw:red
(5) Notice
of Official Acceptance. The date of full compliance by the
applicant
with all the pertinent requirements of the DITTB shall be deemed as the
date of official acceptance, which shall be duly recorded in the
Official
Acceptance Entry Book. The DITTB shall issue a Notice of Official
Acceptance in favor of the applicant. Evaluation of the request
shall
commence on the date of official acceptance.cralaw:red
4. Evaluation
Procedures and Guidelines
(1) Scope
of Evaluation. In exceptional or meritorious cases where
substantial
benefits will accrue to the economy, such as high technology content,
increase
in foreign exchange earning, employment generation, regional dispersal
of industries and/or substitution with or use of local raw materials,
or
in the case of Board of Investments registered companies with pioneer
status,
exemption from the requirements of SEC. 87 of the Prohibited Clauses
and
SEC. 88 of Mandatory Provisions may be allowed by the DITTB after
evaluation
thereof on a case by case basis. (SEC. 91,
CHAPTER
IX, PART II of the INTELLECTUAL PROPERTY CODE)
(2) Acceptable
Worldwide Industry Standards and Practices. As part of the
evaluation
procedure for request for exemptions, the DITTB shall take into account
accepted worldwide industry standards and practices for licensing
technology.cralaw:red
(3) Prohibited
Clauses. The following provisions shall be deemed prima
facie
to have an adverse effect on competition and trade:
(Quoted From SEC. 87, CHAPTER IX, PART II of the INTELLECTUAL PROPERTY
CODE)
(a) Those which impose upon the licensee the obligation to
acquire
from a specific source capital goods, intermediate products, raw
materials,
and other technologies, or of permanently employing personnel indicated
by the licensor;
(b) Those pursuant to which the licensor reserves the right to
fix
the sale or resale prices of the products manufactured on the basis of
the license;
(c) Those that contain restrictions regarding the volume and
structure
of production;
(d) Those that prohibit the use of competitive technologies in a
non-exclusive technology transfer arrangement;
(e) Those that establish a full or partial purchase option in
favor
of the licensor;
(f) Those that obligate the licensee to transfer for free to the
licensor the inventions or improvements that may be obtained through
the
use of the licensed technology;
(g) Those that require payment of royalties to the owners of
patents
for patents which are not used;
(h) Those that prohibit the licensee to export the licensed
product
unless justified for the protection of the legitimate interest of the
licensor
such as exports to countries where exclusive licenses to manufacture
and/or
distribute the licensed product(s) have already been granted;
(i) Those which restrict the use of the technology supplied after
expiration of technology transfer arrangement, except in cases of early
termination of technology transfer arrangement due to reason(s)
attributable
to the licensee;
(j) Those which require payments for patents and other industrial
property rights after their expiration, termination arrangement;
(k) Those which require that the technology recipient shall not
contest
the validity of any patents of the technology supplier;
(l) Those which restrict the research and development activities
of the licensee designed to absorb and adapt the transferred technology
to local conditions or to initiate research and development programs in
connection with new products, processes or equipment;
(m) Those which prevent the licensee from adapting the
imported
technology to local conditions, or introducing innovation to it, as
long
as it does not impair the quality standards prescribed by the licensor;
(n) Those which exempt the licensor from liability for
non-fulfillment
of his responsibilities under the technology transfer arrangement
and/or
liability arising from third party suits brought about by the use of
the
licensed product or the licensed technology; and
(o) Other clauses with equivalent effects.cralaw:red
(4) Recognition
of Valid Intellectual Property Rights. In the assessment of
requests
for exemptions under Rule 4.3(i) of this Rule, the DITTB shall take
into
consideration valid patent, copyright, trademark, trade secret or other
similar intellectual property rights protection subsisting upon the
termination
or expiration of the technology transfer arrangement, unless the
prohibition
is authorized by Philippine law.cralaw:red
(5) Mandatory
Provisions. The following provisions shall be included in
voluntary
license contracts: (Quoted From SEC. 88, CHAPTER
IX,
PART II of the INTELLECTUAL PROPERTY CODE)
(a) That the laws of the Philippines shall govern the
interpretation
of the same and in the event of litigation, the venue shall be the
proper
court in the place where the licensee has its principal office;
(b) Continued access to improvements in techniques and processes
related to technology shall be made available during the period of the
technology transfer arrangement;
(c) In the event the technology transfer arrangement shall
provide
for arbitration, the Procedure of Arbitration of the Arbitration Law of
the Philippines or the Arbitration Rules of the United Nations
Commission
on International Trade Law (UNCITRAL) or Rules of Conciliation and
Arbitration
of the International Chamber of Commerce (ICC) shall apply and the
venue
of arbitration shall be the Philippines or any neutral country;
(d) The Philippine taxes on all payments relating to the
technology
transfer arrangement shall be borne by the licensor.cralaw:red
(6) Decision.
The DITTO shall render action on applications within thirty-five (35)
days
from date of official acceptance.cralaw:red
(7) Issuance of
Certificate. The DITTB shall issue the Certificate of
Registration
within two (2) days from the date of full compliance by the applicant
of
all the registration requirements.cralaw:red
In the event that
a draft agreement was submitted for evaluation, the issuance of the
Certificate
of Registration shall be subject to the submission of the duly executed
agreement which shall not contain any amendment not authorized by the
DITTB.cralaw:red
(8) Certificate
Registry Book. After the issuance of the Certificate of
Registration,
the title of the technology transfer arrangement and parties thereto,
its
registration number and the date of registration shall be entered
in the Certificate Registry Book.cralaw:red
(9) Cancellation
Registry Book. Automatic cancellation of registration shall be made
upon receipt of a verified copy of the registered contract which was
amended
or modified by the parties without approval of the DITTB and where the
amendment constituted a violation of the provisions of Sec. 87
and
SEC. 88, CHAPTER IX, PART II of the INTELLECTUAL PROPERTY CODE.cralaw:red
The DITTB may also cancel the registration of the technology transfer
arrangement
and require the surrender of the Certificate of Registration if after
evaluation
the DITTB has established that the justification for the grant of an
exemption
submitted by the applicant does not exist or has ceased to exist.
Such action will be made only after the parties in whose names the
Certificate
of Registration was issued are given an opportunity to be heard.cralaw:red
5. Trademark License
Agreement.cralaw:red
(1) DITTB Clearance Prior to Recordal with the IPO. Any trademark
license agreement falling under the purview of SEC. 150.1 and SEC.
150.2,
PART III of the INTELLECTUAL PROPERTY CODE shall be filed with the
DITTB
for clearance.cralaw:red
(2) Within a period of ten (10) days, the DITTB shall determine whether
such agreement violates any of the provisions of SEC. 87 or SEC. 88,
CHAPTER
IX, PART II of the INTELLECTUAL PROPERTY CODE.cralaw:red
(3) If an agreement submitted for DITTB clearance does not
violate
SEC. 87 and SEC. 88, CHAPTER IX, PART II of the INTELLECTUAL PROPERTY
CODE,
the DITTB shall issue a notice of clearance and shall forward the
agreement
to the relevant Bureau of the Office for recordal purposes.cralaw:red
(4) Should any provision of the agreement violate SEC. 87 and SEC. 88,
CHAPTER IX, PART II of the INTELLECTUAL PROPERTY CODE, the DITTB shall
issue a notice to the parties in the agreement informing them of the
violation
and requiring them to comply with Rule 4.3 and Rule 4.5 prior to
recordal.cralaw:red
6. Requests for Reconsideration
(1) Requests for Reconsideration. Requests for
reconsideration
of all actions or decisions rendered by the DITTB Director shall
be filed in writing stating clearly and concisely the reasons therefor
and shall, whenever relevant, be accompanied by supporting
documents.
The request shall be filed with the DITTB Director within fifteen (15)
days from receipt of the decision and shall be accompanied with full
payment
of the required fee. The DITTB Director shall render final
decision
within thirty-five (35) days from the date of filing of the request in
accordance with this section.cralaw:red
(2) Appeal to the Director-General. Appeals from the
decision
of the DITTB Director shall be filed with the Office of the
Director-General
in writing stating clearly and concisely the reasons therefor and shall
whenever relevant, be accompanied by supporting documents. The
appeal
to the Office of the Director-General shall be made within fifteen (15)
days from receipt of the decision of the DITTB Director and shall be
accompanied
with full payment of the required fee.cralaw:red
(3) Appeal to the Secretary of Trade and Industry.
Decisions
of the Director-General shall be final and executory unless an appeal
to
the Secretary of Trade and Industry is filed within fifteen (15) days
from
receipt of the decision of the Director-General.cralaw:red
7. Miscellaneous
Provisions
(1) Rights of Licensor. In the absence of any provision
to
the contrary in the technology transfer arrangement, the grant of
license
shall not prevent the licensor from granting further licenses to third
person nor from exploiting the subject matter of the technology
transfer
arrangement himself. (Quoted From SEC. 89,
CHAPTER
IX, PART II of the INTELLECTUAL PROPERTY CODE).cralaw:red
(2) Rights of Licensee. The licensee shall be entitled to
exploit the subject matter of the technology transfer arrangement
during
the whole term of the technology transfer arrangement.
(SEC. 90, CHAPTER IX, PART II of the INTELLECTUAL PROPERTY CODE)
(3) Technology Transfer Agreements Subject of Judicial Proceedings.
The DITTB shall not take cognizance of any request for exemption,
clearance
for Bureau of Internal Revenue purposes or recordal where the
enforceability
of a technology transfer arrangement has become the subject of a
judicial
proceeding.cralaw:red
(4) Publications. The DITTB shall cause to be published
in
the IPO Gazette all registered technology transfer agreements.
The
publication shall contain the names of the parties, title and subject
of
the agreement, and specific exemptions granted. (Quoted From SEC.
5.1 (e), PART I of the INTELLECTUAL PROPERTY CODE)
(5) Certificate of Compliance and Approval for Internal Revenue
Purposes.
(a) The parties to a technology transfer arrangement may jointly
file a request under oath for a certification to the effect that the
technology
transfer arrangement conforms with SEC. 87 and SEC. 88 of the
INTELLECTUAL
PROPERTY CODE. The request shall also contain a statement that
the
certification is for the sole purpose of complying with the requirement
of the Bureau of Internal Revenue on approval of technology transfer
arrangements.cralaw:red
(b) The DITTO shall conduct a summary evaluation of the technology
transfer
arrangement within ten (10) days from filing. If the technology
transfer
arrangement conforms with the provisions of SEC. 87 and SEC. 88 of the
INTELLECTUAL PROPERTY CODE, the DITTB shall issue a Certificate of
Compliance
and Approval. Otherwise, the DITTB shall consider the technology
transfer arrangement as filed pursuant to the provisions of Rule 3 of
these
Rules and Regulations..cralaw:red
8. Transitory
Provisions
(1) Transitory
Provisions. These RULES shall apply to:
(a) all applications for registration/request for exemption of new,
renewal
or mandatory technology transfer arrangement with effectivity date of
January
1, 1998 filed on, before, or after January 1, 1998;
(b) all applications for registration of new, renewal or mandatory
technology
transfer arrangement with effectivity date earlier than January 1, 1998
and filed on or after January 1, 1998;
(c) all applications for registration of new, renewal or mandatory
technology
transfer arrangements with effectivity date earlier than January 1,
1998
and filed before January 1, 1998 unless the applicant elects to pursue
the application under the Rules of Procedures of the Technology
Transfer
Registry of the Bureau of Patents, Trademarks and Technology Transfer
within
ten (10) days from receipt of notice from the DITTB.
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