Philippines strikes back against counterfeits and piracy

By Amanda Carlota, Federis & Associates
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In reports recently published on its official website, the Intellectual Property Office of the Philippines (IPOPHL) revealed that filings in 2020 for all types of intellectual property (IP) were down from 2019, while reports and complaints of IP violations went up dramatically compared to previous years. The biggest losses in IP filings were for trademarks, which comprised the bulk of filings and decreased by 10%, and utility models, which decreased by 45%. Copyright registrations also took a big hit, decreasing by 44%.

However, the IPOPHL director general, Rowel Barba, was optimistic about future prospects. He noted that the overall decline was expected due to the pandemic, and pointed out that while patent filings fell immediately after the 2008 financial crisis, they eventually surpassed pre-crisis levels.

Amanda Carlota
Federis & Associates

Meanwhile, after introducing a new reporting system, IPOPHL’s enforcement office received 121 reports from consumers, and complaints from rights holders, of counterfeiting and piracy. In contrast, the office received a total of 129 reports and complaints for all types of infringements from 2015 to 2019. In fact, from January to September 2020 alone, the office already surpassed the previous five years when it recorded 135 reports and complaints for all IP violations.

With many consumers turning to the internet in lieu of crowded malls and markets, it comes as no surprise that 90% of last year’s reported counterfeiting and piracy occurred online, mostly on popular social media and e-commerce platforms such as Facebook, Lazada, Shopee and YouTube. The most commonly reported counterfeits are apparel, gadgets, and cosmetics, whereas piracy reports focused on movies, shows, e-books and software.

On a related note, the Department of Trade Industry’s (DTI) Consumer Protection Group said that it received 15,947 complaints related to online transactions last year. This figure will likely increase as the Philippine internet economy continues to grow. According to the “e-Conomy SEA 2020” study by Google, Temasek and Bain, the internet economy reached US$7.5 billion in 2020 and is projected to hit US$28 billion by 2025.

Amid these developments, local authorities have continued their anti-counterfeiting efforts. Last December, the Bureau of Customs (BOC) announced that it had seized PHP15 million (US$309,000) worth of suspected counterfeit goods, including bags and food items, from a warehouse in north of Manila. In January, the bureau seized PHP100 million worth of suspected counterfeit designer bags and unregistered face masks, face shields, medicines and soaps from a warehouse in Manila. And in February, it seized PHP45 million worth of goods, including counterfeit toys. All told, the BOC seized PHP1.02 billion worth of counterfeit items in 2020.

Lawmakers have proposed legislation intended to address the new challenges facing consumers, rights holders and other stakeholders in this rapidly changing landscape. For instance, the House of Representatives recently approved House Bill 7805, otherwise known as the Internet Transactions Act. Notable provisions include the creation of an e-commerce bureau to regulate online trade and deal with consumer complaints.

E-commerce platforms would be held solidarily liable with their merchants in certain cases, such as failure to exercise ordinary diligence to prevent any loss or damage to the consumer, or failure to take necessary measures when it knew, or should have known, that goods or services on the platform did not comply with the law, or otherwise infringed IP rights. The bill is now up for deliberation before the Senate.

Meanwhile, a technical working group under the house committee on trade and industry is consolidating three separate bills, all seeking to amend the Philippine IP Code, which took effect in 1998. In a statement posted on the IPOPHL website, Barba called on lawmakers to prioritise 17 proposed amendments, including empowering the IPOPHL to take down websites with infringing material, increasing fines for infringements, and removing the PHP200,000 minimum damage claim threshold to adjudicate cases.

Other priority amendments include aligning the definition of industrial designs with the definition provided in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), protection of non-visual marks and certification marks, and extended collective licensing of copyrighted works.

Patents also received special attention, with the priority amendments including parallel patent and utility model protection for inventions, and provisional patent protection. If enacted, these amendments would complement the Board of Investment’s 2020 Investment Priorities Plan (IPP), which identified patent generation and the commercialisation of uncommercialised patents as innovation-driver activities for the economy.

Amanda Carlota is an associate lawyer at Federis & Associates Law Office

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