Voluntary Licensing Requirements (Sec. 33-A)
- Voluntary license contracts involving royalties for patents or technology transfer must be submitted for approval and registration by the Technology Resource Center when made between residents and non-residents.
- Royalties on manufacturing licenses from alien licensors to Filipino licensees are capped at 5% of net wholesale price.
- Definition of net wholesale price excludes certain discounts, returns, commissions, and taxes.
- License contracts not approved and registered cannot be the basis for applications to the Board of Investment or the Central Bank and have no effect against third parties.
Rights of Licensor (Sec. 33-B)
- License grants do not prevent the licensor from granting further licenses or exploiting the invention unless the license is exclusive.
- Exclusive licenses restrict the licensor from granting other licenses or exploiting the invention unless stated otherwise in the contract.
Rights and Restrictions on Licensees (Sec. 33-C)
- Licensees can exploit the invention throughout the patent’s duration across the Philippines.
- Clauses imposing certain restrictions are void, including:
- Obligations to buy from specific suppliers or employ certain personnel.
- Fixing resale prices.
- Restrictions on production volume.
- Prohibitions on use of competitive technologies.
- Purchase options favoring licensor.
- Requiring transfer of improvements to licensor.
- Royalties on non-used patents.
- Prohibitions on exporting licensed products.
Grounds for Compulsory Licensing (Sec. 34)
- After two years of patent grant, anyone may apply for a compulsory license if:
- The invention is not worked commercially in the Philippines without satisfactory reason.
- The demand for the patented article is not met adequately.
- Refusal or unreasonable conditions from patentee restrain trade/industry development.
- Working is hindered by importation.
- The invention relates to vital products necessary for public health or safety.
- Applicants must prove capability to work the patented product/process.
- "Working" means substantial manufacture or application in the Philippines; importation does not count.
Special Provisions for Vital Products and Investment Projects (Secs. 34-A, 34-B)
- National Economic Development Authority may fast-track compulsory licenses for vital products or processes before 2-year period.
- Products/processes in Board of Investments-approved projects deemed vital; compulsory licenses may be granted without usual requirements.
- Compliance with procedural sections required, but hearings limited to establishing patent owner identity.
Compulsory Licenses Based on Patent Interdependence (Sec. 34-C)
- If use of a later patent infringes on earlier patents, compulsory licenses can be granted to owners of earlier patents without usual requirements, under specified conditions.
Petition and Processing of Compulsory Licenses (Secs. 34-D, 34-E)
- Petitions must be in writing, verified, and include specific details about parties, patents, grounds, facts, and relief sought.
- Notices of hearings must be served properly and published thrice in general circulation newspapers.
Grant and Terms of Compulsory Licenses (Secs. 35, 35-A, 35-B)
- Director must grant appropriate licenses within 180 days, or 120 days for Board-approved projects.
- Licenses give rights similar to patentees.
- Licenses are non-exclusive; terms may impose obligations on licensee and patentee.
- Royalties capped at 5% of net wholesale price; 3% for Board-approved projects, distributed proportionally if multiple patents involved.
Transfer, Amendment, and Cancellation of Compulsory Licenses (Secs. 35-C, 35-D)
- Transfers require authorization and registration; invalid without them.
- Terms may be amended by the Director when justified.
- Licenses may be cancelled for non-compliance by licensee.
Licensee's Protection and Penalties (Sec. 35-E)
- Licensees working under valid licenses are exempted from infringement liability, barring proven collusion.
- Conflicting patents do not invalidate licensee's right to work invention.
- Violators face fines between PHP 5,000 to 30,000 or imprisonment 1 to 5 years.
Amendments to Filing Fees and Related Charges (Sec. 75)
- Filing fees set at PHP 400 (invention patent) and PHP 200 (utility model/design) plus additional fees for claims.
- Other fees detailed for patents issuance, annual fees, surcharges, petitions, copies, assignments, appeals, and renewals.
- Higher fees may apply to nationals from developed countries.
- Philippine Inventors Commission exempt when filing for indigent inventors.
Use of Patent Office Income (Sec. 82-A)
- Up to 50% of Office income may be used for improving facilities, equipment, and participation in international cooperation for patent processing.
Effectivity
- The decree becomes effective 30 days after promulgation.