RULES
AND REGULATIONS ON
VOLUNTARY
LICENSING
WHEREAS, the State
recognizes that an effective intellectual and industrial property
system
is vital to the development of domestic creativity, facilitates
transfer
of technology, attracts foreign investments and ensures market access
for
our products;
WHEREAS, the State
recognizes that the use of intellectual property bears a social
function
and to this end, the State shall promote the diffusion of knowledge and
information for the promotion of national development and progress and
the common good;
WHEREAS, it is the
policy of the State to liberalize the registration of the transfer of
technology
and enhance the enforcement of intellectual property rights in the
Philippines;
WHEREAS, there is
a need to encourage the transfer of technology, prevent or control
practices
and conditions that may in particular cases constitute an abuse of
intellectual
property rights having an adverse effect on competition and trade;
NOW, THEREFORE, pursuant
to the provisions of Republic Act No. 8293, otherwise known as the
Intellectual
Property Code of the Philippines, the following rules and regulations
on
voluntary licensing are hereby promulgated:
PART
1 DEFINITIONS
Rule 1. Definition
of terms. Unless otherwise specified, the following terms
shall
have the meaning provided in this Rule:
(a) “Amendatory
Agreement” means an agreement that amends any of the terms
and
conditions of the agreement;
(b) “Bureau” means
the Documentation, Information and Technology Transfer Bureau of the
Intellectual
Property Office;
(c) “Computer
software developed for mass market” means computer software
that:
(i) is
produced,
made and marketed for a broad range of purposes and users including
end-users
and commercial users;
(ii) is
sold over
the counter or via standard delivery mechanisms;
(iii)
involves payments
that are not based on royalty;
(iv)
generally provides
for an indefinite term for the use of the software; and
(v) does
not need
any customization by the supplier or distributor.
(d) “Director”
means the Director of the Documentation, Information and Technology
Transfer
Bureau;
(e) “Director
General” means the head of the Intellectual Property Office;
(f) “Intellectual
Property Rights” means:
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
(g) “IP Code”
means Republic Act No. 8293 otherwise known as the Intellectual
Property
Code of the Philippines;
(h) “IPO
Gazette” means the Intellectual Property Office’s own
publication
where all matters required to be published under the IP Code shall be
published;
(i) “Mandatory
Provisions” means provisions that shall be included in voluntary
license
contracts as provided in Section 88 of the IP Code and reproduced in
rule
3 of these Regulations;
(j) “Office”
means the Intellectual Property Office;
(k) “Prohibited
Clauses” means provisions in Technology Transfer Arrangements that
are deemed prima facie to have an adverse effect on competition and
trade
as provided in Section 87 of the IP Code and reproduced in Rule 2 of
these
Regulations;
(l) “Regulations”
means this set of rules and regulations and such rules and regulations
as may be formulated by the Director of the Documentation, Information
and Technology Transfer Bureau and approved by the Director
General;
(m) “Renewal Agreement”
means any agreement that extends the term of an agreement
registered
with the Office or with the former Technology Transfer Registry of the
former Bureau of Patents, Trademarks and Technology Transfer, without
any
amendment or other modification of any other provision of the
previously
registered agreement;
(n) “Technology
Transfer Arrangements” shall mean 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
The licensing of
copyright is considered a technology transfer arrangement only if it
involves
the transfer of systematic knowledge.
(o) “Undisclosed
Information” shall mean information which:
(i)
is
secret in the sense that it
is
not, as a body or in the
precise
configuration and assembly of its
components,
generally known among or readily
accessible
to persons 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.
Rule 2. Prohibited
clauses. Pursuant to Section 87 of the IP Code, the
following
provisions and other clauses with equivalent effect shall
be
deemed prima facie to have an
adverse
effect on competition and trade:
(1)
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;
(2)
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;
(3)
Those that
contain restrictions regarding the volume
and structure of production;
(4)
Those that
prohibit the use of competitive
technologies
in a non-exclusive technology
transfer
arrangement;
(5)
Those that
establish a full or partial
purchase
option in favor of the licensor;
(6)
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;
(7)
Those that
require payment of royalties to the
owners of patents for patents which
are not used;
(8)
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;
(9)
Those which
restrict the use of the technology
supplied after the expiration of
technology
transfer arrangement, except in cases
of
early termination of the technology
transfer
arrangement due to reason(s) attributable
to the licensee;
(10)
Those
which require payments for patents
and
other industrial property rights after
their
expiration or termination of the technology transfer
arrangement;
(11)
Those
which require that the technology
recipient
shall not contest the validity of
any
patents of the technology supplier;
(12)
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;
(13)
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;
(14)
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.
Rule 3.
Mandatory provisions. Pursuant to Section 88 of the IP
Code, the following provisions shall be
included
in voluntary license contracts:
(1)
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;
(2)
Continued
access to improvements in techniques
and
processes related to technology shall be
made
available during the period of the
technology transfer arrangement;
(3)
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; and
(4)
The Philippine
taxes on all payments relating to
the
technology transfer arrangement shall be
borne by the licensor.
PART
2 REGISTRATION
OF EXEMPT TECHNOLOGY TRANSFER ARRANGEMENTS
Rule 4. Application
for exemption. A sworn application for exemption from any of
the Prohibited Clauses and/or Mandatory Provisions of the IP Code may
be
filed with the Director stating the exemption/s being requested,
the justification for the exemption/s, and that the agreement is
not subject of any judicial, administrative or other proceeding.
The application
must be accompanied by a copy of the agreement, payment of the
appropriate
fee/s, and other documents that may be required by the Bureau to
support
and establish the merits of the request.
The applicant
may submit either a draft or a duly executed and notarized
agreement.
Rule 5. Who
may
file. Any party to a technology transfer arrangement or his
duly
authorized representative may file an application for exemption with
the
Director.
Rule 6. When
to file. The application shall be filed 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 - anytime prior to the expiration of
the term of the existing technology
transfer agreement; and
(c)
Amendatory
Agreements - within thirty (30) days from
the date of effectivity of such amendment or
modification.
Rule 7. Filing
date. The date on which the applicant complies with the
requirements of the Bureau is the Filing Date which shall be duly
recorded in the Filing Date Entry Book. The Bureau shall issue to
the applicant a Notice of Filing Date which is also
the
date when evaluation of the request
shall
commence.
Rule 8.
Notice of additional requirements. Should
the Bureau find that the documents submitted are incomplete
or insufficient, the Bureau shall issue a
notice
to the applicant, within six (6)
days
from the Filing Date, requiring the
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
without
prejudice to refiling as a new application. Should the
applicant
require additional time to comply with
the
requirements, a final extension of
fifteen
(15) days will be granted upon
payment
of the required fee.
Rule 9. Scope
of evaluation. Requests for exemption shall be evaluated based on
the
adverse effects of the terms and conditions of the technology
transfer
arrangement on competition and trade. Exemption from
the Prohibited Clauses and Mandatory Provisions of the IP Code will be
granted in exceptional or meritorious cases where
substantial
benefits will accrue to the economy, such as:
(a)
high technology
content;
(b)
increase
in foreign exchange earnings;
(c)
employment
generation;
(d)
regional
dispersal of industries;
(e)
substitution
with or use of local raw
materials;
(f)
pioneer status
registration with the Board of Investments.
Rule 10.
Acceptable
worldwide industry standards and practices. As part of the
evaluation
procedure for requests for exemptions, the Bureau shall take into
account
acceptable worldwide industry standards and practices for licensing
technology
in the relevant sectors.
Rule
11. Recognition of valid intellectual property rights. In
the assessment of requests for exemptions involving clauses which
restrict
the use of the technology supplied after the expiration of the
technology
transfer arrangement under Section 87.9 of the IP Code, the Bureau
shall
take into consideration the protection of valid patent, copyright,
trademark,
trade secret or other intellectual property rights subsisting even
after
the termination or expiration of the technology transfer
arrangement.
Rule 12.
Payment
of taxes. In the evaluation of requests for exemption
involving
provisions which do not require the licensor to pay Philippine taxes on
all payments relating to the technology transfer arrangement under
section
88.4 of the IP Code [Rule 3 (4) of these Regulations], the Bureau shall
take into consideration current laws, rules and regulations issued by
the
Bureau of Internal Revenue regarding the liability for payment of
such taxes.
Rule
13. Decision. The Bureau shall decide whether or
not
to grant the application within thirty-five (35) days from the Filing
Date.
Rule 14.
Issuance
of certificate. The Bureau shall issue
the
Certificate of Registration within two
(2)
days from approval of the application.
If a
draft agreement was submitted for evaluation,
the
Certificate of Registration shall be issued two (2) days
after
the submission of the duly executed
agreement provided it shall not contain
any
amendment or any modification not authorized by
the
Bureau.
Rule 15.
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.
Rule 16.
Cancellation of registration. Automatic
cancellation
of registration shall be made upon
receipt
of a duplicate original or certified copy
of
the registered technology transfer arrangement
containing
amendments or modifications that violate the
Prohibited
Clauses and Mandatory Provisions of the IP Code without approval of the
Bureau.
The Bureau may
also cancel the registration of the
technology transfer arrangement if, after evaluation,
the Bureau 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.
In both cases, the
parties shall be required to surrender the Certificate of
Registration
provided that the surrender of the Certificate shall not be a
pre-requisite
to the cancellation of the registration.
PART
3 SUMMARY
PROCEDURES
CHAPTER
1.
TRADEMARK LICENSE AGREEMENT
Rule 17. Clearance
prior to recordal with the Office. Prior to its
recordal,
any trademark license agreement covered
by
Section 150.1 and Section 150.2 of the IP
Code shall be filed with the Bureau
for clearance together with the proof of payment of the filing
fee.
Rule 18.
Evaluation
period. Within a period of ten
(10)
days, the Bureau shall determine whether
such
agreement violates any of Prohibited Clauses or
Mandatory
the Provisions of the IP Code.
Rule
19.
Certificate of clearance. If an
agreement submitted
for clearance does not violate any of the Prohibited Clauses or
Mandatory
Provisions of the IP Code, the Bureau
shall
issue a certificate of clearance and
the
agreement shall be recorded by the appropriate officer in the
Office.
Rule 20.
Notice
to comply. Should any provision of
the
agreement violate any of the Prohibited Clauses or Mandatory
Provisions
of the IP Code, the Bureau shall issue
a
notice to the parties in the
agreement
informing them of the violation and
requiring
them to comply with pertinent provision of the IP
Code
prior to recordal.
CHAPTER 2.
CERTIFICATE
OF COMPLIANCE AND APPROVAL FOR LEGAL
PURPOSES.
Rule
21.
Request for certification of compliance. The
parties
to a technology transfer arrangement
may
jointly file a request for a
certification
to the effect that the technology
transfer
arrangement conforms with the Prohibited Clauses and
Mandatory
Provisions of the IP Code. The
request
shall be under oath, filed in duplicate, state the purpose
of
the certification, and state that the agreement is not subject of
any judicial, administrative or other proceeding. It shall be
accompanied
by a duplicate original copy of the duly executed and notarized
agreement,
payment of the required fees, and other documents that will be required
by the Bureau to support and establish the merit of
the
request.
Rule 22.
Evaluation period; action on the request. The Bureau
shall
conduct a summary evaluation of the
technology transfer arrangement within ten
(10)
days from filing. If the technology
transfer arrangement conforms with the
Prohibited
Clauses and Mandatory Provisions of the IP Code, the
Bureau shall issue a Certificate of
Compliance. Otherwise, the Bureau shall give the parties a notice
informing them of the violation and requiring them to comply with the
IP
Code if they wish to obtain a Certificate of Compliance.
CHAPTER
3.
PRELIMINARY REVIEW AND/OR PRE-CLEARANCE OF TECHNOLOGY TRANSFER
ARRANGEMENTS.
Rule
23. Request for preliminary review. Any party to a
technology
transfer arrangement may file a request for a preliminary review of
a
draft technology transfer arrangement to determine conformance with the
Prohibited Clauses and Mandatory Provisions of the IP Code.
Rule 24.
Evaluation
period. The Bureau shall conduct a summary evaluation of the
draft technology transfer arrangement within ten (10) days from
filing
of the application and upon payment of the required fees.
Rule 25.
Notice
of findings. The Bureau shall issue a notice of its
findings
on the draft technology transfer arrangement as submitted.
Rule 26.
Submission
of the agreement under Part 2. After the completion of the
foregoing
summary procedure, the technology transfer arrangement may be submitted
for registration under Part 2 of these Regulations.
PART
4 RECONSIDERATION
AND APPEAL
Rule 27. Requests
for reconsideration. Requests for reconsideration of all
actions
or decisions rendered by the 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 Director within fifteen (15) days from receipt of the
decision and shall be accompanied with proof of payment of the
required
fee. The Director shall render final
decision
within thirty-five (35) days from the
date
of filing of the request in accordance with
this
Section.
Rule 28.
Appeal
to the Director General. Appeal from a decision
of
the 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
appellant’s receipt of the decision of the Director and shall be
accompanied
with proof of payment of the required fee.
Rule 29.
Appeal
to the Secretary of Trade and
Industry.
A decision or final order of the Director General shall be
final and
executory unless an appeal is filed with the Secretary of Trade
and
Industry within fifteen (15) days
from
appellant’s receipt of the decision.
PART
5 MISCELLANEOUS
PROVISIONS
Rule 30.
Rights of licensor. In the
absence
of any provision to the contrary
in
the technology transfer arrangement, the
grant of a license shall not
prevent
the licensor from granting further
licenses
to third persons nor from
exploiting
the subject matter of the
technology
transfer arrangement himself.
Rule
31.
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.
Rule 32.
Technology
transfer agreements subject of judicial proceedings. The Bureau
shall
not take cognizance of any request for
exemption,
clearance for legal purposes, and/or recordal of trademark license
agreement
where the validity, enforceability, or any issue involving
such technology transfer arrangement has
become the subject of a judicial proceeding.
Rule
33.
Publications. The Bureau 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 exemption/s
granted,
if any.
Rule 34.
Office forms. For the convenience of applicants, the Office shall
draw
up and make available a standard application form, and such other forms
as may be necessary or useful, which may be reproduced at will by
applicants
and other persons at their own cost.
Rule 35.
Coverage.
These rules and regulations shall apply to:
(a) all
applications,
requests, exemption, and clearance prior to recordal of a trademark
license
agreement covering new, renewal or amendatory technology transfer
arrangements
filed on or after January 1, 1998 regardless of the date of execution
or
date of effectivity;
(b) all
agreements
extending the life of technology transfer agreements with subsisting
registration
under the Rules of the Technology Transfer Registry of the Bureau of
Patents,
Trademarks and Technology Transfer. Minor changes, such as change in
licensor/licensee,
addition/deletion of products, among others, affecting technology
transfer
agreements with subsisting registration under the Rules of Practice of
the Technology Transfer Registry of the Bureau of Patents and
Technology
Transfer may be submitted to the Bureau for notation purposes.
FINAL
PROVISIONS
Section
1.
Implementation. In the interest of the service, until the
organization
of the Bureau is completed, the functions necessary to implement these
Regulations shall be performed by the personnel of the former Bureau of
Patents, Trademarks, and Technology Transfer as may be designated by
the
Director General upon the recommendation of the Chief of the Technology
Transfer Registry of the Bureau of Patents Trademarks and Technology
Transfer
heretofore designated as Officer-in-Charge or Caretaker of the
Documentation
Information and Technology Transfer Bureau.
Section 2. Fees
and charges to be prepaid; fees and charges payable in advance.
Express charges, freight, postage, telephone, telefacsimile including
cost
of paper and other related expenses, and all other charges on any
matter
sent to the Office must be prepaid in full. Otherwise, the Office shall
not receive nor perform any action on such matters.The filing fees and
all other fees and charges payable to the Office shall be collected in
advance of any service to be rendered.
Section
3.
Repeal. All rules and regulations, memoranda,
circulars and
memorandum circulars and parts thereof inconsistent with these
Regulations
particularly the Rules of Practice of the Technology Transfer Registry
of the Bureau of Patents, Trademarks and Technology Transfer [BPTTT],
as
amended, are hereby repealed.
Section
4.
Separability. If any provision in these Regulations or
application
of such provision to any circumstance is held invalid, the
remainder
of these Regulations shall not be affected thereby.
Section
5.
Effectivity. These rules and regulations shall take
effect fifteen
(15) days after publication in a newspaper of general circulation.
Done
this
day
of
1998.
EMMA C.
FRANCISCO
Director General
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