adjudication: Harnessing BLA power

Intellectual-property (IP) stakeholders, particularly foreign IP owners from developed countries, have criticized the Philippines for its inability to protect and enforce their IP rights.

One such vocal critic is the United States, which evaluates the performance of the Philippines, as a trading partner, in IP-rights protection. The Office of the US Trade Representative, on the basis of feedback from US IP-rights holders and data on IP enforcement actions, annually issues a Special 301 Report containing a list of countries that fail its standard for protecting IP rights. 

The worst violators are placed in a Priority Watch List and the less serious violators are included in an ordinary Watch List. The Philippines has consistently been on that list.

From 2001 up to 2005 the Philippines was on the Priority Watch List.  Optical-media piracy was the primary problem. Our country had gained a reputation for not only manufacturing pirated videos and music for domestic sale, but also for being a major exporter of these contraband items. 

In response, in 2003 the Optical Media Act was passed into law. This paved the way for the Philippines to be taken off the Priority Watch List in 2006 and placed on the lower level Watch List.  But to date, our country has remained on the Watch List.

A major stumbling block for our country in getting out of the Watch List is our unremarkable record of convictions in IP-violation actions. Although the number of raids and seizures of pirated videos, music and software programs increased, these are insufficient to deter repetition. Convictions and major awards of damages remain a rarity.

The present structure of our judicial system requires that special commercial courts, already burdened by heavy caseloads, hear IP-rights cases. The highly technical nature of IP issues has contributed to significant delays in resolving these cases. Unfortunately, the Supreme Court has not found it necessary to establish special courts exclusively dedicated to hearing IP-rights cases.

Compounding the problem is the absence of designated commercial courts in some judicial districts, with aggrieved parties constrained to have their cases raffled to courts lacking the resources to fully grasp and appreciate the various complexities of IP-rights issues.

As indicated by the number of IP- rights cases clogging the court
dockets, stakeholders are vigilant over their IP rights. Not many, however, are aware of one of the most important innovations created by the IP Code (Republic Act 8293) which, if fully utilized, will considerably reduce the IP caseload of the regular courts and effectively promote the speedy and effective resolution of IP cases.

The IP Code empowers the Intellectual Property Office (IP Philippines), through the Bureau of Legal Affairs (BLA), to exercise original jurisdiction in administrative complaints for violations of laws on IP rights involving claims for damages of not less than P200,000. Considering that almost all IP cases in the regular courts involve claims for damages of at least P200,000, filing an administrative complaint with the BLA is an excellent alternative to filing with the regular courts. In fact, IP Philippines actively encourages the use of the administrative adjudication process and mediation system of the BLA as an alternative venue for IP stakeholders.

Apart from its well-known function of hearing and deciding oppositions to applications for registration of marks, and resolving petitions for cancellation of trademarks and patents, the BLA has the power to adjudicate any case on the protection and enforcement of IP rights provided that the required amount of monetary damages claimed is met.

In 2001 the BLA began accepting administrative complaints involving cases of infringement, unfair competition, false and fraudulent declaration, false designation of origin, false description and other IP violations. The legislative grant also empowered the BLA to issue provisional remedies, e.g., temporary restraining orders and injunctions, in accordance with the Rules of Court.

Adding teeth to the BLA’s authority to hear and decide cases on IP-rights violations is the grant of coercive and punitive powers. After formal investigation, the director of the BLA may impose administrative penalties, such as the issuance of a cease-and-desist order; acceptance of a voluntary assurance of compliance or discontinuance; condemnation or seizure of products subject of the offense; forfeiture of paraphernalia and all real and personal properties used in the commission of the offense; cancellation or withholding of any permit, license, authority or registration granted by IP Philippines; censure; the assessment of damages; and other analogous penalties or sanctions.

IP Philippines has constantly endeavored to strengthen the BLA. As part of this program, additional hearing officers have been appointed.

The BLA has also amended its rules for Inter Partes Cases (IPC) providing for a summary procedure and is currently revising its rules of procedure in IP-rights violation cases to further shorten the period of trial, including the implementation of mandatory mediation proceedings.

As a result of these efforts to streamline its operations, the BLA increased its disposal of cases to about 96 percent. Thus, in 2006, the BLA disposed of 284 IPCs compared with the 145 IPCs it disposed of in 2005, and increasing this in 2007 to 295 IPCs.

The summary procedure has also significantly reduced the time frame in resolving IPCs from four years to an efficient 10 to 14 months. In addition, the BLA was able to dispose of 26 IP-violation cases in 2006, and the same number in 2007.

A well-settled rule is that if a case or controversy involves complex issues, such that its determination requires the expertise, specialized training and knowledge of an administrative body, relief must first be obtained in an administrative proceeding before resorting to judicial relief.

This “doctrine of primary jurisdiction” recognizes that in some cases, it behooves the courts to stand aside and give way to the special technical knowledge and expertise of administrative tribunals, even when the courts apparently have the statutory power to proceed.

As a specialized government agency given the mandate of administering and implementing our country’s IP laws and policies expressed in the IP Code, the expertise and efficiency of IP Philippines in resolving disputes relating to IP-rights protection and enforcement must be recognized and maximized.

Harnessing the powers of the BLA will help the Philippines improve its image in IP-rights protection. It may even be the key to our country’s de-listing from the Watch List. Undoubtedly, with an efficient adjudication system in place, the decisions that will emanate therefrom will improve our level of knowledge and awareness of IP issues that will keep us at pace with the continually evolving global IP landscape.

*****

Atty. Bienvenido I. Somera, Jr. is a senior partner at the Villaraza & Angangco Law Offices (web site: www.cvclaw.com), where he is the Monitor of the Intellectual Property Department. Atty. Somera is the Chairman of the Intellectual Property Association of the Philippines. His areas of expertise are intellectual property law and litigation.

Disclaimer:

This article has been prepared for informational purposes only and should not be treated as legal advice.

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On Firm Ground: Expert, efficient IP rights adjudication: Harnessing BLA power

Intellectual-property (IP) stakeholders, particularly foreign IP owners from developed countries, have criticized the Philippines for its inability to protect and enforce their IP rights.