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Heads up, MSMEs! – A new guide for MSME franchise agreements

On 12 May 2022, Executive Order (E.O.) No. 169, s. 2022 was signed into effectivity, requiring all franchise agreements between franchisors and Micro, Small and Medium Enterprise (MSME) franchisees to be in writing, duly notarized, and to contain a number of minimum provisions, such as, among others, those relating to full disclosure of pre-signing, initial or recurring fees; a cooling-off period, where the MSME can opt to terminate the agreement; and an alternative dispute resolution mechanism which shall include a stipulation that the parties may seek voluntary mediation under Republic Act No. 9285 or the “Alternative Dispute Resolution Act of 2004”.

Under E.O. No. 169, franchisors, with MSMEs as franchisees, are required to register the franchise agreement with the Department of Trade and Industry (DTI), who is also tasked to create an MSME Registry of Franchise Agreements for this purpose. E.O. No. 169 also provides that compliance with the listed minimum terms and conditions may entitle franchisors to incentives from the National Government.

What does this mean for existing franchise agreements?

The guidelines shall apply not only to franchise agreements yet to be entered into but also to existing franchise agreements between a franchisor and an MSME franchisee upon renewal of their respective agreements.

What about the IP Code provisions covering franchise agreements?

Since franchise agreements come within the description of technology transfer arrangements (TTAs), which are regulated under the IP Code, franchise agreements involving MSME franchisees will also need to be consistent with the provisions of the IP Code on mandatory and prohibited clauses. Otherwise, the agreement will be unenforceable. In other words, franchise agreements involving MSME franchisees will need to comply with both the IP Code provisions governing TTAs and E.O. No. 169.

With the continuous proliferation of MSMEs amid a global pandemic, this executive measure regulating franchise agreements will not only protect MSME franchisees, but it will also empower franchisors in view of the incentivization scheme to be formulated and helmed by the National Government.

For more details, E.O. No. 169, s. 2022 may be accessed at https://www.officialgazette.gov.ph/downloads/2022/05may/202200512-EO-169-RRD.pdf.

For additional discussion on TTAs, please refer to

https://bccslaw.com/technology-transfer-and-licensing/.

Katherine Imperial promoted to partner

BCCSLAW is delighted to announce the promotion of Katherine R. Imperial to partner with effect on January 1, 2022.

Katherine obtained her law degree from the Ateneo de Manila University School of Law. She joined the firm as a senior associate to focus on domestic and international trademark registration, licensing and enforcement. She expanded her practice to cover data privacy, online media and fintech, advising various industry leaders in air transportation, e-commerce, streaming, networking, and finance.

BCCSLAW at INTA

BCCSLAW will attend the in-person mini conferences of the International Trademark Association at the following locations:

New York, New York, USA — Tuesday, November 16, 2021
811 7th Avenue, 53rd St, New York, NY 10019

Berlin, Germany —Wednesday, November 17, 2021
Inge-Beisheim-Platz 1, Berlin 10785 Germany

Los Angeles, California, USA —Thursday, November 18, 2021
900 West Olympic Boulevard, Los Angeles, CA 90015

We are PROUDLY FULLY VACCINATED TO KEEP YOU SAFETM.

BCCSLAW celebrates its 10th year as a leading legal service provider for IP, Technology and Data Privacy in the Philippines by continuing to act for the largest online retailer, the largest multimedia streaming service provider, the largest pharmaceutical company, the largest microblogging social networking service, the largest multimedia conglomerate, and the largest Filipino quick service restaurant chain, among other highly admired and innovative companies in the world including well-established FMGCs, airlines and automobile manufacturers. BCCSLAW has also expanded the scope of its trademark protection services to most of the Pacific Islands, including the Northern Marianas, Palau, Fiji, the Marshall Islands, and Micronesia.

Leo Singson joins BCCSLAW

We are pleased to announce that Leonardo Singson has joined our firm as Of Counsel for Special Corporate Transactions, Regulatory Compliance, and Immigration. Mr. Singson was formerly a Partner in the Corporate and Special Projects Department of Villaraza and Angangco. He obtained his law degree from the University of the Philippines.

COVID-19 corporate report submission guidelines

The Securities and Exchange Commission has issued a summary of guidelines on the filing of reports and other documents during the enhanced community quarantine that has been imposed over Luzon and other regions in the Philippines due to the COVID-19 pandemic. A copy of the issuance can be downloaded here: SEC COVID guidelines

Cancelled Events

Due to concerns relating to COVID-19, some conferences that we intended to attend, including the ICANN Community Forum in Cancun, the ASEAN IPA meeting in Jakarta, and the INTA annual meeting in Singapore, have been cancelled or postponed. Please visit our events calendar for updates on our attendance during upcoming conferences.

Beneficial Owner of the Corporation: He Who Shall Be Named

Beginning 31 July 2019, all General Information Sheet (GIS) due for submission by corporations shall include a Beneficial Ownership Declaration in the form prescribed by SEC Memorandum Circular No. 15-2019.

Corporations are now required to disclose in the Declaration the beneficial owner/s of their corporate shareholders. Previously, corporations were only required to disclose their direct shareholders regardless of whether or not these consisted of natural or corporate persons.

A “beneficial owner” is defined under the SEC Circular as the NATURAL PERSON/S who ultimately own/s or control/s, or exercise/s ultimate effective control over the corporation. 

The Circular also provides for categories of beneficial owners arranged in order of priority for determining the beneficial owners of corporations.  At the top of the list are the beneficial owners who directly and/or indirectly own at least twenty-five percent (25%) of the shares in the corporation. For corporations with multiple layers of corporate shareholders, this will entail tracing both the direct and indirect ownership of shares.  If the beneficial owners cannot be determined based on the first category, the next category will apply and so forth. 

Only after exhausting all the categories can the members of the board of directors or trustees be declared as the beneficial owners of the corporation.

Non-compliance with the beneficial ownership disclosure rules will expose not only the reporting corporation but also the directors or trustees to liability.

INTA Committee Membership

We are pleased to announce that the partners of our firm have been appointed to various committees of the International Trademark Association (INTA). Their committee memberships are as follows:

Andre Betita– Famous and Well-Known Marks

John Cabilao– Right of Publicity

Pericles Casuela– Data Protection

Joseph Sarmiento– Designs

Their appointments are effective beginning January 1, 2020, and will conclude on December 31, 2021.

Registration of Data Processing Systems (NPC Circular 17-01)

The National Privacy Commission recently issued NPC Circular 17-01 on the registration of data processing systems and notifications regarding automated decision-making.

Under the Circular, covered Personal Information Controllers and Personal Information Processors should complete Phase 1 of the process for the registration of data processing systems by September 9, 2017 and Phase 2 by March 8, 2018.

A copy of the circular can be downloaded here.

Seminars

Oops!

Our webmaster made a mistake and thought that we were serious about conducting seminars. It’s a bad idea, don’t you think? We bill you for practical advice that we will then give away for free in a seminar? Not fair.

We value our relationship with you and we do our best to keep our tools sharp, through actual experience, to help you traverse the complexities of the issues on which you come to us for advice. 

Thanks to the following (of course, among other things), you continue to regard us as your trusted advisor:

  • Our local trademark registration practice is growing at an amazing pace.  We now handle a portfolio of more than 2,200 trademarks, as shown in the records of the Philippine Intellectual Property Office. http://www.wipo.int/branddb/ph/en/
  • Privacy law is not an academic matter for us. We are regularly consulted to address real-life situations and have dealt with the regulators.
  • Like our trademark registration practice, our patent registration and litigation practice is also growing. More than 70 multinational patent holders in the pharmaceutical, biosciences, automotive, manufacturing, equipment testing and gaming industries have entrusted the protection of their innovations to our firm.
  • We embrace and enjoy the convenience of online commerce, online media and online financial transactions. That is why we are comfortable acting for the major players on the planet, including the biggest one, on matters ranging from intellectual property to licensing, privacy, e-commerce and telecommunications. We walk the talk and do our best to be like them. As a matter of fact, this site was designed, created, coded and continues to be managed by one of our firm’s founding partners.
  • Telecommunications- read about us in the papers when the next huge deal rolls out.
  • We have friends- intelligent ones.  We keep a network of correspondents worldwide with whom we have developed a strong sense of community, professionalism and competence.  That ensures that you get the correct advice from competent counsel overseas.