Understanding revised rules on vital IPR mediation

By Editha Hechanova, Hechanova & Co

On 26 August 2018, the Revised Rules on Mediation under Memorandum Circular No. 008, issued by the Intellectual Property Office of the Philippines (IPOPHL), took effect. This makes mediation compulsory for intellectual property rights (IPR) cases. Mediation in the IPOPHL was introduced in 2010 under the Republic Act No. 9285, known as the Alternative Dispute Resolution Act of 2004. Mediation has resulted in a significant and speedier disposition of cases filed before the IPOPHL, as shown in the table.

Editha HechanovaPresident and CEO of Hechanova & CoManaging partner of Hechanova Bugay Vilchez & Andaya-Racadio
Editha Hechanova
President and CEO of Hechanova & Co
Managing partner of Hechanova Bugay Vilchez & Andaya-Racadio

Under the old rules, only the referral to mediation was mandatory, leaving the parties to decide whether to go through mediation or not during the pre-mediation conference, which the parties had to attend. As shown in the table, about 55.7% of the cases referred by the Bureau of Legal Affairs (BLA), the adjudication bureau of the IPOPHL, go through mediation.

Out of the cases that agree to mediate, about 43% ripen into settlement agreements. This represents 25% of the average number of cases being handled by the BLA and other bureaus of the IPOPHL being decided on within a period of 60-90 days, certainly a great boon to the capacity of the IPOPHL to adjudicate IPR cases.

The revised rules cover the following IP cases where mediation is mandatory: (1) administrative complaints for IP violations, e.g. infringement, unfair competition; (2) inter partes cases; (3) disputes involving technology transfer payments; (4) disputes relating to the terms of a licence involving the author’s rights to public performance or other communication of their work; and (5) appeals to the Office of the Director General (ODG) from the decisions of the Bureau of Copyright and the Documentation, Information and Technology Transfer Bureau. This mandatory rule does not apply to IPR cases in which there have been applications for temporary restraining orders, injunctions, or other interim ancillary remedies, unless the parties request for it by joint written motion.

Year Referred Mediated Settled Success Rate
2011 381 279 90 32.2%
2012 298 166 83 50.0%
2013 250 125 55 44.0%
2014 238 135 69 51.1%
2015 199 125 47 44.3%
2016 282 134 51 43.2%
2017 261 112 66 53.8%
2018 (Up to August) 154 74 37.3%
Total 2,063 1,150 489 42.9%

No. of Cases Referred/Mediated

The mediation proceedings are usually conducted within the IPOPHL premises, but parties may request that it be held in other locations, provided all related expenses shall be borne by the parties.

Non-appearance of parties. The failure of the party initiating the case, e.g. the opposer or complainant, to appear during the mediation proceedings, including the pre-mediation conference, shall be a ground for the case’s dismissal. For non-appearance, the respondent can be declared as in default. A party may be excused for non-appearance by providing a valid reason by way of a motion with the relevant fees paid, filed within five days from the mediation conference.

Originating bureau’s approval of the settlement or compromise agreement. The originating bureaus where IPR complaints or appeals are filed are the BLA, Bureau of Copyrights, Documentation, Information and Technology Transfer Bureau, and the Office of the Director General. Where the parties come to a settlement, and submit their compromise agreement, the IPOPHL’s Alternative Dispute Resolution Services (ADRS) shall forward the agreement to the originating bureau for approval within five days from its receipt.

If the originating bureau finds the same not contrary to law, public policy, morals or good customs, it shall issue a judgment or decision based on compromise agreement, which has the effect of a judgment on the merits and shall be immediately executory. Otherwise, it shall return the compromise agreement to the parties for amendment.

Benefits of mediation. Mediation as a means of resolving IPR disputes in a faster and cost-effective manner cannot be overemphasized. The IPOPHL has a dedicated unit, the ADRS, which handles only cases referred to mediation, and its mediators have been trained not only by the World Intellectual Property Organization and the IPOPHL, but also by the regular courts.

Editha Hechanova is the president and CEO of Hechanova & Co and managing partner of Hecha-nova Bugay Vilchez & Andaya-Racadio

Hechanova Group

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