Protecting IP ownership and rights in the Philippines: 4 things employers need to know
Intellectual property rights (IPR) protect a company’s ideas by prohibiting any third parties from profiting off unoriginal work. While often intangible, IP is among the most vital assets for any business.
If you’re a global company hiring in the Philippines, you want to make sure you’re familiar with the country’s unique IP laws so that new inventions, designs, and trademarks are protected. Act slow and you risk losing out on market share. You could also run afoul of Philippine law; employers who infringe upon IP rules are subject to fines and potentially 3 years’ imprisonment.
So how can employers protect their IP? Read our primer on IP ownership rights in the Philippines for the basics, but keep in mind this guide is for informational purposes and not intended to provide legal advice.
1. The Intellectual Property Code of the Philippines recognizes 7 types of IP rights
The code outlines the country’s IP rules, which are administered by the Intellectual Property Office of the Philippines (IPOPHL). IP rights covered include:
Copyright:
The Philippines offers copyright protections for literary, scientific, and artistic works and computer programs upon the moment of their creation, regardless of whether they’ve been published. While copyright registration isn’t required for the copyright owner to have protection rights, you can submit the work to the National Library to get a certificate (copyrighted works related to Philippine law go to the Supreme Court Library).
Copyrights generally belong to authors for 50 consecutive years after their death. Authors of audiovisual products, photographic works, and sound recordings are the rightful IP owners for 50 years after the work’s initial creation.
Patent Protection:
The Bureau of Patents manages exclusive rights for inventors who create new products or processes. Patent applications are available online. If granted by the patent office, rights last for 20 years from the application’s filing date, provided the owner pays annual maintenance fees.
According to the IP Code, patentable inventions can be any solution to a problem that is new, innovative, and useful for the related industry.
Third parties can challenge a patent through a process known as cancellation if they think the IP isn’t sufficiently inventive or isn’t within the public interest.
Trademarks and service marks:
Under the IP Code, businesses can seek protections for signs that distinguish goods and services. You can file a trademark application with IPOPHL, which takes about three months to process. If accepted, trademark protections last for 10 years, after which they can be renewed. Fees for filing a trademark range from PHP 3,600 (for smaller entities) to PHP 5,800 (bigger entities). Businesses who deceptively market goods or services in the style of a trademark are vulnerable to unfair competition penalties from Philippine courts.
Under the IP Code, trademark protections don’t apply to importations of generic medications.
Geographic Indications:
A geographical indication is a tag qualifying businesses can put on products to market their origin. This type of IP can be used for:
- Agricultural products
- Food
- Alcohol
- Textiles
- Handicrafts
These protections last forever unless they’re revoked.
Industrial design:
You can register for industrial design rights through the Bureau of Patents. Under the IP Code, these designs are compositions that make up the patterns for commercial products. In order to successfully apply for these rights, the design can’t be too derivative of any prior art. Protections last for five years from the application’s filing date, if accepted, and are renewable for up to two consecutive periods.
Layout-designs of integrated circuits:
This refers to three-dimensional electronic products intended for manufacturing. These IP rights are also handled through the patent office. Protections last for 10 years.
Trade secrets and confidentiality agreements:
Trade secrets are internal company processes or practices concealed from competitors to gain business advantages. In the Philippines, they’re often sealed under confidentiality agreements, which legally prohibit one or more parties from unearthing protected information. For more on this topic, see the next section.
2. NDAs are enforceable in the Philippines
In the Philippines, the courts have historically upheld non-disclosure agreements (NDAs) as enforceable. To ensure a confidentiality agreement holds up to legal scrutiny, it should include the full names of the consenting parties, a thorough definition of the information that can’t be disclosed, situations where the NDA is nullified, and provisions for maintaining confidentiality after an employee is terminated.
Philippine criminal law provides some legal protections against trade secrets. For instance, under the Cybercrime Prevention Act, an employer can take criminal action against an employee who accesses information on someone else’s computer without proper consent. Unlike other forms of IP in the Philippines, trade secrets and similar sources of proprietary information can’t be registered.
3. Always clarify IP ownership and protections in your employment agreement
Employers should include a clause in every employment agreement outlining IP protections with new hires. This can include:
- Who owns the IP created by the employee
- Rules for commercialization of IP
- Conditions for a transfer or IP ownership
- Confidentiality agreements for trade secrets and other proprietary information
- Non-compete agreements
- A power of attorney clause
Under Philippine laws, employers own the IP created by employees on the job, so long as it’s relevant to the underlying business and the employee’s prescribed duties. For any exception to this rule to be legally binding, it needs to be in the employment agreement.
4. Contractors own the copyrights to their work unless you override this in a written agreement
IP protections are only enforceable if an employment relationship exists—so make sure you’re not misclassifying contractors. In the Philippines, independent contractors own IP they’ve developed for a company unless their contract states otherwise. Certain “work made for hire” provisions, if signed, can stipulate that the client owns any relevant IP created by the contractor over the course of doing business.
Frequently asked questions about IP law in the Philippines
Which international IP organizations does the Philippines belong to?
The Philippines is a member of several international trade organizations that provide consistent IP protections and guidelines across participating countries. This includes (but isn’t limited to):
- WIPO: A UN agency that provides global IP “services, policy, information, and cooperation.”
- Patent Cooperation Treaty: Upholds international patent rights for 157 contracting countries, but requires a separate patent application.
- Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement: A legal agreement between all World Trade Organization (WTO) members, the Philippines included, that sets international norms and standards for the different types of IP.
- Association of Southeast Asian Nations (ASEAN): Manages IP regulations across member countries in Southeast Asia.
Who owns IP in the Philippines: employee or employer?
Employers own IP created by employees as part of their work, so long as the underlying IP is directly related to the business or the employee’s job function. For instance, if an employee creates new software for a tech company on company time, the employer owns the underlying IP. If they wrote a love song, the tech company wouldn’t own the copyright.
Any exceptions to employer-employee IP ownership must be written into the employment agreement.
What is a utility model?
If a new product or idea isn’t “inventive” enough to qualify for patent registration, creators can alternatively attempt to certify it as a utility model which, like patents, protects rights holders from commercial exploitation. Utility model protections last for seven years, but aren't eligible for renewals. You can apply for registration online.
What is a Technology Transfer Arrangement?
According to IPOPHL, a technology transfer agreement is the process that allows one entity to transfer IP ownership to another. Once this transaction is made, the receiving party gets a certificate of compliance from the government’s IP authorities. Before applying for the transfer, the IP rights holder needs to request a preliminary review to make sure the transfer complies with the IP Code.
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Rippling and its affiliates do not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
