Author: Joseph Sarmiento

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. 

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

It’s Not Called “The Old Spaghetti House” for Nothing

Café de Coral Assets Ltd. (CDC) opposed the application of Albertito Guerero for “The Old Spaghetti House” based on the former’s “The Spaghetti House” trademark registration worldwide including the Philippines. While CDC was able to show that it had a prior registration in the Philippines, CDC and its predecessor-in-interest were actually not able to use the mark in the Philippines. CDC filed an affidavit of non-use on the basis that it is still looking for a suitable franchisee in the Philippines. The Bureau of Legal Affairs (BLA), however, considered this excuse to be unacceptable. Mr. Guerrero was thus able to show that he was the first one to have used “The Old Spaghetti House” mark in the Philippines, and was in fact the “OLDER” Spaghetti House. The decision of the BLA may be accessed here.

INTA Leadership and 2017 Annual Meeting

Two of our Firm’s Partners, Andre Betita and Joseph Sarmiento, recently attended the INTA Leadership Meeting in Hollywood, Florida. Both partners actively participated in the Leadership Meeting in their respective Committees. Andre Betita is a member of the Enforcement Committee, while Joseph Sarmiento is a member of the Trademarks Practices Committee.  They also met with existing and prospective clients and correspondent firms. 
 
All of our Firm’s partners will be attending the 2017 INTA Annual Meeting at Barcelona. If you would like to set up a meeting with any of them, please do not hesitate to send us an e-mail at INTA@bccslaw.com.  

May the Power of Trade Names Compel You

The Bureau of Legal Affairs (BLA) has recently issued decisions that sustained oppositions on the basis of trade names or corporate names. 
 
In the case of Aura Hotels and Resorts vs. Racher SNV Inc., the BLA sustained an opposition filed by Aura Hotels for the Racher’s trademark application for AURA covering hotels and restaurant services. In the case of MUHLE GMBH & CO. KG vs. Rishi N. Mirani for the latter’s trademark application for MUHLE GLASSHUTE, the BLA sustained the opposition of MUHLE GMBH on the basis that its trade name had the word “MUHLE”, even if MUHLE GMBH was not able to prove that its mark was well known in the Philippines.
 
In both of these cases, it has to be noted that the applicants applied for the marks in question covering goods/services that are being offered or distributed by the opposers. 

Viva La Madrid

The Philippine Supreme Court dismissed the petition filed praying for the nullification of the Philippines’ accession to the Madrid Protocol. The Philippines acceded to the Madrid Protocol on 25 April 2012 by way of an executive agreement. This manner of accession was questioned on the basis that the Madrid Protocol is a treaty that requires ratification by the Philippine Senate. Foreign trademark proprietors may now breathe easy knowing that the Madrid Protocol is here to stay. A copy of the decision may be accessed here

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