Article 164p. 164

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

87.4.

Those

that

prohibit

the

use

of

competitive

technologies

in

a

non-exclusive

technology

transfer

agreement;

87.5. Those that establish a full or partial purchase option

in favor of the licensor;

87.6. Those that obligate the licensee to transfer for free

to the licensor the inventions or improvements that may

be obtained through the use of the licensed technology;

87.7. Those that require payment of royalties to the

owners of patents for patents which are not used;

87.8. Those that prohibit the licensee to export the

licensed product unless justified for the protection of the

legitimate interest of the licensor such as exports to

countries where exclusive licenses to manufacture and/or

distribute the licensed product(s) have already been

granted;

87.9. Those which restrict the use of the technology

supplied after the expiration of the technology transfer

arrangement, except in cases of early termination of the

technology

transfer

arrangement

due

to

reason(s)

attributable to the licensee;

87.10. Those which require payments for patents and

other industrial property rights after their expiration,

termination arrangement;

87.11. Those which require that the technology recipient

shall not contest the validity of any of the patents of the

technology supplier;

87.12. Those which restrict the research and development

activities of the licensee designed to absorb and adapt

the

transferred technology to local conditions or to

initiate

research

and

development

programs

in

connection with new products, processes or equipment;

87.13. Those which prevent the licensee from adapting

the

imported

technology

to

local

conditions,

or

introducing innovation to it, as long as it does not impair

the quality standards prescribed by the licensor;

87.14. Those which exempt the licensor for liability for

non-fulfilment

of

his

responsibilities

under

the

technology transfer arrangement and/or liability arising

from third party suits brought about by the use of the

licensed product or the licensed technology; and

87.15. Other clauses with equivalent effects. (Sec. 33-C (2),

RA 165a)

SECTION 88. Mandatory Provisions . — The following

provisions shall be included in voluntary license contracts:

88.1. That the laws of the Philippines shall govern the

interpretation of the same and in the event of litigation,

the venue shall be the proper court in the place where

the licensee has its principal office;

88.2. Continued access to improvements in techniques

and processes related to the technology shall be made

available during the period of the technology transfer

arrangement;

88.3. In the event the technology transfer arrangement

shall provide for arbitration, the Procedure of Arbitration

of the Arbitration Law of the Philippines or the Arbitration

Rules of the United Nations Commission on International

Trade Law (UNCITRAL) or the Rules of Conciliation and

Arbitration of the International Chamber of Commerce

(ICC) shall apply and the venue of arbitration shall be the

Philippines or any neutral country; and

88.4. The Philippine taxes on all payments relating to the

technology transfer arrangement shall be borne by the

licensor. (n)

SECTION 89. Rights of Licensor . — In the absence of any

provision to the contrary in the technology transfer

arrangement, the grant of a license shall not prevent the

licensor from granting further licenses to third person nor

from exploiting the subject matter of the technology

transfer arrangement himself. (Sec. 33-B, R.A. 165a)

SECTION 90. Rights of Licensee . — The licensee shall be

entitled to exploit the subject matter of the technology

transfer arrangement during the whole term of the

technology transfer arrangement. (Sec. 33-C (1), R.A. 165a)

SECTION 91. Exceptional Cases . — In exceptional or

meritorious cases where substantial benefits will accrue

to

the

economy,

such

as

high

technology content,

increase

in

foreign

exchange

earnings,

employment

generation,

regional

dispersal

of

industries

and/or

substitution with or use of local raw materials, or in the

case of Board of Investments, registered companies with

pioneer

status,

exemption

from

any

of

the

above

requirements may be allowed by the Documentation,

Information

and

Technology

Transfer

Bureau

after

evaluation thereof on a case by case basis. (n)

SECTION 92. Non-Registration with the Documentation ,

Information

and

Technology

Transfer

Bureau .

—

Technology transfer arrangements that conform with the

provisions of Sections 86 and 87 need not be registered

with the Documentation, Information and Technology

Transfer

Bureau.

Non-conformance

with

any

of

the

provisions

of

Sections

87

and

88,

however,

shall

automatically

render

the

technology

transfer

arrangement

unenforceable,

unless

said

technology

transfer arrangement is approved and registered with the

Documentation, Information and Technology Transfer

Bureau under the provisions of Section 91 on exceptional

cases. (n)

CHAPTER X Compulsory Licensing

SECTION 93. Grounds for Compulsory Licensing . — The

Director General of the Intellectual Property Office may

grant a license to exploit a patented invention, even

without the agreement of the patent owner, in favor of

any person who has shown his capability to exploit the

invention, under any of the following circumstances:

93.1.

National

emergency

or

other

circumstances of

extreme urgency;

93.2. Where the public interest, in particular, national

security, nutrition, health or the development of other

vital sectors of the national economy as determined by

the appropriate agency of the Government, so requires; or

93.3.

Where

a

judicial

or

administrative

body

has

determined that the manner of exploitation by the owner

of the patent or his licensee is anti-competitive; or

93.4. In case of public non-commercial use of the patent

by the patentee, without satisfactory reason;

93.5. If the patented invention is not being worked in the

Philippines on a commercial scale, although capable of

being worked, without satisfactory reason: Provided, That

the importation of the patented article shall constitute

working or using the patent; (Secs. 34, 34-A, 34-B, R.A. No.

165a) and

93.6.

Where

the

demand

for

patented

drugs

and

medicines is not being met to an adequate extent and on

reasonable terms, as determined by the Secretary of the

Department of Health.

(as amended by RA No 9502)

SECTION 93-A.

Procedures on Issuance of a Special

Compulsory License under the TRIPS Agreement. —

93-A.1. The Director General of the Intellectual Property

Office,

upon

the

written

recommendation

of

the

Secretary of the Department of Health, shall, upon filing

of a petition, grant a special compulsory license for the

importation

of

patented

drugs

and

medicines.

The

special

compulsory

license

for

the

importation

contemplated under this provision shall be an additional

special alternative procedure to ensure access to quality

affordable medicines and shall be primarily for domestic

consumption:

Provided,

That

adequate remuneration

shall be paid to the patent owner either by the exporting

or importing country. The compulsory license shall also

contain a provision directing the grantee the license to

exercise

reasonable

measures

to

prevent

the

re-exportation

of

the

products

imported

under this

provision.

© Compiled by RGL

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