Legislative Implementation of Flexibilities - Philippines
| Title: | Sections 86, 87, 91 and 92 of the Intellectual Property Code, Act No. 8293 of 06/06/1997 as last amended by Act No. 9502 of 2008 |
| Field of IP: | Patents |
| Type of flexibility: | Ex-officio IP office control of anti-competitive clauses in licensing agreements |
| Summary table: |  |
Provisions of Law
Jurisdiction to Settle Disputes on Royalties
86. The Director of the Documentation, Information and Technology Transfer Bureau shall exercise quasi-judicial jurisdiction in the settlement of disputes between parties to a technology transfer arrangement arising from technology transfer payments, including the fixing of appropriate amount or rate of the royalty. (n)
Prohibited Clauses
87. Except in cases under Section 91, the following provisions shall be deemed prima facie to have an adverse 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 agreement;
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 the 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, termination arrangement;
11. Those which require that the technology recipient shall not contest the validity of any of the 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 for 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
15. Other clauses with equivalent effects. (Sec. 33-C(2), R.A. No. 165a)
Exceptional Cases
91. In exceptional or meritorious cases where substantial benefits will accrue to the economy, such as high technology content, increase in foreign exchange earnings, 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 any of the above requirements may be allowed by the Documentation,
Information and Technology Transfer Bureau after evaluation thereof on a case-by- case basis. (n)
Non-Registration with the Documentation, Information and Technology Transfer Bureau
92. Technology transfer arrangements that conform with the provisions of Sections 86 and 87 need not be registered with the Documentation, Information and Technology Transfer Bureau. Non-conformance with any of the provisions of Sections 87 and 88, however, shall automatically render the technology transfer arrangement unenforceable, unless said technology transfer arrangement is approved and registered with the Documentation, Information and Technology Transfer Bureau under the provisions of Section 91 on exceptional cases. (n)