The Intellectual Property Office of the Philippines (IPOPHL) issued the Revised Rules & Regulations on Voluntary Licensing (Memorandum Circular No. 2020-002) that took effect on 21 February 2020. The salient portions of the Revised Rules are as follows:
- The Documentation, Information, and Technology Transfer Bureau (DITTB) of the IPOPHL shall also be known as the Innovation Bureau (Bureau).
- The catch-all provision provided below was added to the Prohibited Clauses:
(15) Other clauses with equivalent effects.
Other Anti-competitive Clauses or Stipulations in Restraint of Trade, e.g., unreasonable Post-Termination Non-Compete Covenants, likewise are prima facie to have an adverse effect on competition and trade. The burden of overcoming the presumption rests with the party claiming exemption.
- The Revised Rules defined “neutral country” for arbitration purposes as any third country, other than the Philippines, where neither the licensor nor the licensee was organized, registered, or existing, and one where neither party has a direct connection or legal ties.
- Draft agreements for preliminary review may be filed at any time before the execution of the agreement.
- In determining whether a provision in a Technology Transfer Arrangement (TTA) establishes a full or partial purchase option in favor of the licensor is prohibited, the Bureau shall take into consideration if there is an option for the licensor to purchase the licensee’s business. An option to purchase the remaining amount of stocks or inventory after the term of a TTA may be allowed. However, an option to purchase all or substantially all of the licensee’s assets or equity is a prohibited clause.
- With regard to a request for registration of a TTA, the Bureau Director shall decide on the request within twenty (20) working days from the filing date. A favorable decision shall cause the corresponding certificate to be issued.
- The Bureau issues the following certificates:
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- Certificate of Registration – A certification that the TTA has been granted certain exemption/s from the requirements of the Prohibited Clauses and Mandatory Provisions of the Intellectual Property Code of the Philippines (IP Code).
- Certificate of Compliance – A certification that the TTA does not violate any of the Prohibited Clauses and conforms to all the Mandatory Provisions of the IP Code;
- Certificate of Clearance – A certification that a trademark license agreement has been cleared for recordal with the Bureau of Trademarks.
- Minor changes on a TTA, such as addition or deletion of products, increase or decrease in royalty rates and other commercial terms that do not violate the requirements of the Prohibited Clauses and Mandatory Provisions of the IP Code, will not affect the findings of the Bureau and will not necessitate another round of review. Such requests for annotation shall be acted upon by the Bureau within three (3) working days from receipt of all the requirements, which may include the surrender of a previously issued certificate covering the TTA.
- The above-mentioned certificates shall not exceed the life of the TTA.
- A TTA that has already expired shall not be issued a new certification unless the TTA has been renewed or extended in due course.
- The Certificate of Registration and Certificate of Compliance may carry a maximum validity of ten (10) years from the date of effectivity of the TTA or from the date of issuance of the certificate, whichever is earlier.
- The Certificate of Clearance issued on account of a Trademark License Agreement for recordal with the Bureau of Trademarks may carry a maximum validity of ten (10) years. However, the period shall not exceed the expiration of the trademark registration.
The full text of the Revised Rules & Regulations on Voluntary Licensing is available [here].