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Month: January 2017

Alienation of Aliens

SEC-OGC Opinion No. 16-29 cites Section 2 of the Anti-Dummy Law in clarifying that management positions – such as that of a President or Vice President – may not be held by aliens. Likewise, SEC-OGC Opinion No. 16-02 cites the same provision of law in saying that an alien national cannot act as President/Chairman of the Board.
 
But, is an alien likewise prohibited from acting as the Chairman of the Board only and not holding another position concurrently? Based on SEC-OGC Opinion No. 07-07, it appears that chairmanship can be so vested. Thus: “for as long as the association is not engaged in nationalized activity, a non-Philippine national may serve as a member of its board of trustees or be the chairman of the board… On the other hand, if the association engages in partly nationalized activities, foreign nationals may sit in the board in proportion to their allowable membership therein. In the same vein, an alien national may assume the post of the Chairman of the board whose act shall be limited to that of a presiding officer during board meetings.” 

Latest rankings in!

The firm was recognized again in the 2017 ranking tables of the World Trademark Review (WTR), Legal500 and Chambers and Partners.

According to WTR, “(e)lite boutique Betita Cabilao Casuela Sarmiento wins praise from foreign counsel the world over: ‘All the partners are responsive, dedicated, reliable and prompt in their advice. Working with them, you feel as if you you’re their only client.’ The four-partner team has secured favourable results for household-name brands in a string of high-stakes cases, and prides itself on its uniquely personalised approach to both contentious and non-contentious matters. Managing partner Andre Philippe Betita is a regular in the Supreme Court, but also deftly handles filing and prosecution issues before IPOPHL; having helped to draft the country’s IP Code, he knows every line of the statute inside out. Pericles Jose Conrado Casuela is a go-to practitioner for licensing matters and IP-rich M&A negotiations.” Andre and Pericles are ranked as tier 2 recommended experts by WTR. The full publication can be viewed here.

The firm is ranked as a second-tier recommended firm by Legal 500, which describes the firm: “Betita Cabilao Casuela Sarmiento’s practice handles licensing, transactions, litigation and enforcement relating to trade marks. Name partners Andre Betita, Pericles Casuela, Joseph Sarmiento and John Paul Cabilao are active practitioners.” The full publication can be viewed here.

The firm’s Andre Betita is ranked in band 3 of the leading Intellectual Property lawyers in the Philippines in Chambers and Partners’ 2017 Asia-Pacific guide. The full publication can be viewed here.

The rankings complement the firm’s milestone achievement of building a portfolio of more than 2,000 trademarks filed and registered with the Philippine Intellectual Property Office within the fifth year from its founding in 2011.  To view the firm’s portfolio, visit http://www.wipo.int/branddb/ph/en/ and enter “Betita Casuela” in the “Names/Representative” search option.

Renewable Energy Companies Limited to 40% Foreign Equity

In SEC-OGC No. 16-29, the Office of the General Counsel (OGC) of the SEC considered renewable energy to be within the ambit of businesses involved in the “exploration, development, and utilization of natural resources”, among others, and thus subject to a 40% foreign equity limitation.  This limitation is in accordance with Article XII, Section 2 of the Constitution, which declares that “all forces of potential energy… and other natural resources are owned by the State” and allows the State to “enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens.”

A Patented Logo? No Such Thing.

Patents and trademarks are both intellectual properties, for sure, but the two cannot be interchanged. Interestingly, a recent article from a reputable local daily reported about a certain popular festival’s logo being patented with the Intellectual Property Office (IPO). It warned individuals and entities from using said “patented logo” in their respective businesses to ride with the popularity of the merrymakings without the owners’ permission. It even went on citing Section 71 of the Intellectual Property Code (“the Code”), enumerating the rights of owners of patents.

True enough, Section 71 enumerates the rights of owners of patents, period. But a patented logo? There is no such thing. 

The IPO would not have registered the same as a patent if it applied for one. What the article should have referred to was a trademark – and not a patent – registration. Section 121.1 of the Code defines a “mark” as “any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise.”

Meanwhile, Section 21 of the Code explicitly reserves patents for “any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable… It may be, or may relate to, a product, a process, or an improvement of any of the foregoing.”

The prominent festival’s logo is used for promoting the event or branding, and is in no way an invention per se. Simply put: branding indicia gets registered as a trademark, not as a patent. 

Data Privacy in the Time of Leaks and Hackers

#Comeleak became a trending topic early in 2016 when hackers exposed the data of over 55 million registered voters. The wealth of information leaked included crucial data that could enable identity theft – including full names, birthdays, addresses, height, weight, and passport details, among others.
 
Roughly a year after, the National Privacy Commission (NPC) released a press statement singling out Chairman Andres Bautista of the Commission on Elections (COMELEC) as the lone officio personally liable for the leak. The NPC posits that Bautista is liable under the Data Privacy Act of 2012 for failing to put data privacy policies in place. Specifically, NPC recommends the filing of criminal charges against Bautista based on Section 26, which provides for a penalty of imprisonment for one to three years and a fine ranging from Php500,000 to Php2,000,000.00 for accessing of personal information due to negligence, and a penalty of imprisonment for three to six years and a fine ranging from Php500,000 to Php4,000,000.00 for accessing sensitive personal information due to negligence.
 
COMELEC, for its part, issued a statement maintaining that data breach is not a new phenomenon, and that it has been following generally accepted standards and international best practices regarding technology-related activities. In his personal Facebook page, Bautista shared a December 2016 news article pertaining to Yahoo! data security issues, wherein the international tech-giant admitted that over one billion user accounts have been hacked. Indeed, “Comeleak” is just one of the many “leaks” surfacing in the political arena – with a number of otherwise privileged information/communication being exposed via “WikiLeaks”, among others.
 
At present, there is yet no landmark Supreme Court decision tackling the Data Privacy Act. To what extent can individuals be protected? What measures are expected to be taken? If even tech giants are vulnerable to hackers, is anyone really safe? Where do we draw the line in establishing liability? It would be interesting to monitor the jurisprudential development of data privacy laws as this case progresses.

Guidelines on Nationalized Industries

The Supreme Court recently upheld the constitutionality of SEC Memorandum Circular No. 8, Series of 2013. The salient points of said Memorandum Circular are as follows:


a. The covered corporations are those involved in areas of activities or enterprises specifically reserved, wholly or partly, to Philippine Nationals by the Constitution, the Foreign Investments Act, and other existing laws.


b. All covered corporations shall, at all times, observe the constitutional or statutory ownership requirement.


c. The required percentage of Filipino ownership must be met in both (a) the total number of outstanding shares of stock entitled to vote in the election of directors, and (b) the total number of outstanding shares of stock, whether or not entitled to vote in the election of directors.


d. Corporate Secretaries of covered corporations are directed to monitor and observe compliance thereto. The Corporate Secretary may not delegate this responsibility without an express authority from the Board of Directors or Trustees.


e. Failure to comply will be punished with the administrative sanctions provided in Section 14 of the Foreign Investments Act as amended, summarized below:


Juridical entity

Fine of ½ of 1% of the paid-in capital, but not more than Php5,000,000.00

President / officials responsible

Fine not exceeding Php200,000.00

Any person, firm, or juridical entity

Forfeiture of all benefits granted under the Foreign Investments Act as amended