IPOPHL Temporarily Suspends Strict Implementation of Rules on Payment of Filing Fee and 1st Publication Fee for Patents, Utility Models, and Industrial Designs
On 29 May 2023, the Intellectual Property Office of the Philippines (“IPOPHL“) issued Memorandum Circular No. 2023-014 (“MC 2023-014“), which took effect on 1 July 2023, suspending the strict implementation of rule 401.1 of the 2022 Revised Implementing Rules and Regulations for Patents, Utility Models, and Industrial Designs (“Rules“) (“Rule 401.1“). Under Rule 401.1, if the Filing Fee and 1st Publication Fee for patent applications are not paid at the time of filing of the application, the application shall be considered as a failed application. In practice, however, if the Filing Fee and 1st Publication Fee are not paid either at the time the application is filed or within 24 hours from filing, the application is not considered to have been filed and there is no application to speak of.
However, IPOPHL has become aware that its external online payment gateway partners have encountered challenges in adapting their systems to align with the Rules such that late payments, up until one week from submission of applications to IPOPHL, have been accepted by the external online payment gateways. This has resulted in the assignment of an application number to applications which would have otherwise been considered as failed applications under Rule 401.1 for failure to pay the Filing Fee and 1st Publication Fee within the prescribed period.
As a compromise between the Rules and the present limitations in the external online payment gateway system, MC 2023-014 allows an applicant to pay the Filing Fee and 1st Publication Fee of its patent application within one week from the initial submission of the application with IPOPHL. The full payment of the Filing Fee and the 1st Publication Fee must actually be paid within the one-week period; otherwise, the application shall be considered to have failed, and a Notice of Failed Application shall be issued. IPOPHL stressed that this is an interim measure that will be implemented only until such time that the external online payment gateway system is able to align with the requirements of the Rules.
The Philippines and Hong Kong Sign Memorandum of Understanding on Personal Data Protection
On 22 May 2023, the National Privacy Commission of the Philippines (“NPC“) and the Office of the Privacy Commissioner for Personal Data of Hong Kong (PCPD) (collectively, “Parties“) signed a Memorandum of Understanding (“MOU“) to strengthen collaboration and cooperation on personal data protection while complying with the domestic laws and regulations of each jurisdiction. With the MOU, NPC aims to build trust in digital services in order to harness the potential of data as a tool for social and economic progress.
The Parties are obliged under the MOU to provide mutual assistance during investigations regarding potential breaches of each country’s privacy and data protection laws. The investigations may be conducted jointly if the case involves cross-border personal data incidents or breaches. The Parties shall also engage in knowledge sharing, training, education on data privacy and protection issues and trends, and exert joint efforts to promote personal data protection within their regions and beyond. The execution of the MOU is in line with section 6 of the Republic Act No. 10173 or the Data Privacy Act of 2012 which provides that the provisions of the Data Privacy Act of 2012 have extraterritorial application and apply to any act done or practice engaged in by an entity if:
- the act, practice or processing relates to personal information about a Philippine citizen or resident;
- the entity has a link with the Philippines and is processing personal information in the Philippines, or outside the Philippines as long as it is about Philippine citizens or residents, such as, but not limited to, a contract entered into in the Philippines, an unincorporated juridical entity in the Philippines that has its central management and control in the country, or an entity with a branch, agency, office, or subsidiary in the Philippines and the parent or affiliate has access to personal information; and
- the entity has other links in the Philippines such as, but not limited to, carrying on business in the Philippines or where the personal information was collected by or held by an entity in the Philippines.
NPC Signs Memorandum of Understanding with Leading Telcos to Strengthen Data Privacy and Protection
On 10 May 2023, the National Privacy Commission (“NPC“) signed a Memorandum of Understanding (“MOU“) with leading telecommunication companies – Globe Telecom, Inc., Smart Communications, Inc., and Dito Telecommunity Corporation (collectively, “Telcos“) to enhance privacy and data protection awareness and practices. The MOU aims to establish a framework for collaboration between NPC and the Telcos in addressing privacy issues and ensuring the protection of personal data.
A Joint Task Force has been established under the MOU comprising representatives from NPC and the Telcos to strengthen coordination, communication, and implementation of the parties’ obligations regarding data privacy and protection. The Joint Task Force shall convene once every six months, or more frequently if necessary, to share information, identify priorities, and discuss relevant issues. The MOU emphasises the importance of educating the public on their privacy rights and providing them with mechanisms to exercise control over their personal data. In this light, a joint information and dissemination campaign will be launched by NPC and the Telcos across multiple platforms such as television, radio, and social media to educate and inform the public on fraudulent schemes such as targeted smishing messages and the proper way to report them (more details on “smishing” below). The expenses related to this campaign will be shouldered by the Telcos.
With the cooperation of the Telcos, NPC aims to strengthen its efforts to combat the rising number of fraudulent schemes conducted through text message scams that induce the public to disclose personal data such as “smishing”, which is a short term for SMS phishing. It is a security attack involving text messaging in which the user is tricked into downloading a trojan horse, virus, or other malware onto the user’s mobile device. A smisher often targets the user’s online password, social security number, credit card information, and other personal information.
NEDA Approves the Implementing Rules and Regulations of the Amended Public Service Act
On 4 April 2023, the Implementing Rules and Regulations (“IRR“) of Republic Act No. 11659 which amended Commonwealth Act No.146 or the Public Service Act (“Amended Public Service Act“) took effect. The IRR was released by the National Economic and Development Authority (“NEDA“) on 20 March 2023. It implements the Amended Public Service Act, which liberalised foreign ownership restrictions in key public services such as airports, railways, expressways, and telecommunications, but also retained foreign restrictions in public utilities, namely, distribution and transmission of electricity, petroleum and petroleum products’ pipeline transmission systems, water pipeline distribution systems, wastewater and sewerage pipeline systems, seaports, and public utility vehicles.
The Amended Public Service Act has also introduced the concept of critical infrastructures, the operation and management of which are subject to a 50% foreign ownership restriction unless the country of the foreign national intending to own more than 50% of the critical infrastructure extends reciprocal rights to Philippine nationals. The IRR clarifies that reciprocity requirements are deemed satisfied when (i) Philippine nationals are allowed to own more than 50% of capital stock in any activity related to agriculture, industry and services in the home country of the foreign national, and (ii) the home country of the foreign national allows Philippine nationals to invest the same value of capital in any economic activity related to agriculture, industry, or services.
The Amended Public Service Act also specifically recognises only telecommunication services as critical infrastructure. The IRR has likewise recognised only telecommunications services as critical infrastructure and provided that no other public service shall be considered critical infrastructure unless declared so by the President through an executive order. The classification of a public service as a critical infrastructure by executive fiat shall apply prospectively.
The Amended Public Service Act grants the President to power to suspend or prohibit merger and acquisition transactions and other investments on the basis of national security. The IRR clarifies the criteria for reviewing these investments:
- impact on national security;
- applicability of other Philippine laws and policies;
- implication of any national security risk arising from the investment to the Philippine economy and community;
- whether the investment will affect the ability of the Philippines to protect its strategic and security interests; and
- nature, history, and previous business transactions of the investor and any cases filed against the same, in their country of origin, or in any other country or state where the investor is involved.
The review may be undertaken by any relevant government agency.
Supreme Court Clarifies Period for Confirmation of Domestic Arbitral Award and Public Policy Exception to Enforcement of Arbitral Awards
In the En Banc decision of Maynilad Water Services, Inc. v. National Water and Resources Board, et. al dated 7 December 2021, the Supreme Court ruled that rule 11.2(A) of the Special Rules of Court on Alternative Dispute Resolution (“Special ADR Rules“) (“Rule 11.2“) has superseded section 23 of the Republic Act (“RA“) No. 876 (“Domestic Arbitration Law“) (“Section 23“). As such, the period for filing a Petition for Confirmation and Execution of Arbitral Award is no longer any time within one month after an award is made (as provided under section 23 of the Domestic Arbitration Law) but at any time after the lapse of 30 days from receipt of the arbitral award (as provided under rule 11.2 of the Special ADR Rules).
In this case, Maynilad Water Services, Inc. (“Maynilad“), secured a favorable arbitral award and then sought to enforce it. Maynilad thus filed a Petition for Confirmation of the Arbitral Award with the Regional Trial Court, albeit beyond the period for filing provided in Section 23, but within the period provided in Rule 11.2. The Supreme Court held that Maynilad’s Petition was timely filed in accordance with Rule 11.2. The Supreme Court explained that Section 23 is deemed to have been superseded by rule 11.2(A) of the Special ADR Rules insofar as the reglementary period for filing a Petition for Confirmation of a Domestic Arbitral Award is concerned. While RA No. 9285 or the Alternative Dispute Resolution Act states that domestic arbitration shall continue to be governed by the Domestic Arbitration Law, it also provides that its provisions are without prejudice to the alternative dispute resolution system that the Supreme Court may adopt, which shall be governed by the rules that the Supreme Court may approve.
Nevertheless, the Supreme Court held that the arbitral award in favor of Maynilad could not be enforced as it would be contrary to public policy. Rule 19.10 of the Special ADR Rules provides that recognition and enforcement of an arbitral award may be refused on public policy grounds such as when the enforcement of the award would be contrary to the state’s fundamental tenets of justice and morality, or would blatantly be injurious to the public, or the interests of the society. The Supreme Court held that the award in favor of Maynilad, which allowed Maynilad to include its corporate income taxes in its water charges, would adversely affect and be unfair to Maynilad’s customers vis-à-vis customers serviced by another water service provider (Manila Water) that was previously prohibited from incorporating its corporate income taxes in its water charges. According to the Supreme Court, the enforcement of Maynilad’s arbitral award would result in an unequal protection of water consumers.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
