Intellectual Creation

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THE PROGRAMMER’S SOURCE CODE

All software that we used is a product of a list of instructions which the machine is capable to follow. These
lists of instruction are called program which is then translated into machine language which the computers can directly
understand. A computer program is a set of instructions expressed in words, codes, schemes or in any other form,
which is capable when incorporated in a medium that the computer can read, of causing the computer to perform or
achieve a particular task or result (Sec. 1714 RA 8293). Of course, machines cannot understand our language, thus,
programs are written is some programing language. So if one is to write programs, he must learn an appropriate
programming language.

Writing programs is not easy, thus, before the open source technology blooms, it is normal for a programmer
not to share and/or distribute his program or source code. A programmer’s source code is like a recipe, or a secret
formula or process from which the execution by the computers is anchored. If a programmer had written programs for
his employer, who will own the system, the employer or the programmer? How about the source code? Can the
employer demand, as a matter of right, from his programmer to provide him with the source code? These are some of
the questions which will be addressed by this chapter.

INTELLECTUAL CREATION
Our civil code provides for different modes of acquiring ownership, thus;
1) Occupation;
2) Law;
3) Donation;
4) Tradition;
5) Intellectual Creation;
6) Prescription and
7) Succession. We will focus on the fifth mode, which is, acquiring ownership through intellectual creations.

To illustrate, suppose Engr. Sean designed a car which uses a gas-saving device which lessen the gasoline
consumption by ninety percent (90%), the patent of the said invention belongs to Engr. Sean. Another example is a
painting made by an artist, books written by an author, a logo designed by a student and programs written by a
programmer, newspaper articles, powerpoint presentations, thesis and dissertations. These are considered as
intellectual creations.

THE INTELLECTUAL PROPERTY CODE (RA 8293)


With regard to legal aspects of computing, the intellectual property code contains the most important provisions
concerning ICT professionals including computer and electronic engineers. Other laws which govern the use of
technology such as the E-Commerce Law, Access Devices Regulation Act and the Cybercrime Law generally contain
the norms and proper usage of technologies and penalize those who shall disobey. The intellectual property code, on
the other hand, contains provisions which protect the rights of authors, inventors, programmers, and other gifted
citizens regarding their intellectual creation.

Under the Republic Act 8293 otherwise known as the Intellectual Property Code of the Philippines, the term
“intellectual property rights” consists of
a) Copyright and related rights; b) Trademarks and Service Marks;
c) Geographic Indications; d) Industrial Design;
e) Patents; f) Layout-designs and
g) Protection of Undisclosed Information.

From the above intellectual property rights, this chapter will deal more on patents and copyrights since
programmers and other ICT professionals are concerned more on these two intellectual property rights.

STATE POLICY REGARDING INTELLECTUAL PROPERTY

Declaration of State Policy. The State recognizes that an effective intellectual and industrial property system is vital
to the development of domestic and creative activity, facilities transfer of technology, attracts foreign investments, and ensures
market access for our products. It shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted
citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in
this Act.
The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of knowledge
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and information for the promotion of national development and progress and the common good.
It is also policy of the state to streamline administrative procedures of registering patents, trademarks and copyright,
AN EFFECTIVE INTELLECTUAL AND INDUSTRIAL PROPERTY SYSTEM IS VITAL.
1. To the Development of Domestic and Creative Activity.

2. Facilities Transfer of Technology.


This is due to the fact that if the State cannot afford to protect the creative activities done by scientists, inventors,
composers, and other gifted citizens, they will be discouraged to do such activities, and in case they do, they won’t
share or transfer it to the public due to fear of infringement of their intellectual properties;

3. Attracts Foreign Investments.


Our country had entered into treaties and international agreements with other foreign countries regarding the protection
of intellectual property laws. To illustrate, McDonald’s trademark is originally registered in the US. Since McDonalds is
internationally known, our country, pursuant to internationally comity is also bound to protect the trademark/ tradename
owner McDonalds. Thus, if Juan, a Filipino is using the trademark of McDonalds without the permission of the latter,
our government shall prosecute Juan, notwithstanding the fact that Juan is Filipino.

4. Ensures Market Access to our Products.


This means that a business who owns the trademark of goods will be assured that it would be sold distributor of that
product unless it authorizes another for a fee (franchise fee). For instance, if Faye own the trademark “havaianas”, only
Faye can produce, manufactured and distribute havaianas. This will ensure access to Faye’s products. Moreover,
consumers will be protected because the Government will prosecute those unauthorized distributors of havaianas. But
dear readers, please don’t get me wrong, what I am saying is what the law says; the beauty of our laws and our State
policies, but I am not saying that these laws and State policies are fully complied with by our Government.
Assuming that the above State policies will be fully executed and fully complied with, the last sentence of the first
paragraph of Sec. 2 of RA 8293 will be fulfilled thus: “It shall protect and secure the exclusive rights of scientists,
inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the
people, for such periods as provided in this Act.

5. The Use of Intellectual Property Bears a Social Function.


To this end, the State shall promote the diffusion of knowledge and information for the promotion of national
development and progress and the common good.
How can the state promote the diffusion knowledge? To illustrate, suppose Engr. Sean T. Abako designed a
car with a mechanical engine capable of running without gasoline. Instead, it uses specialized water-formulated by
Engr. Sean.
Now Sean has two (2) options, thus:
First, he may keep his invention formula secret. This way, the public has no option to buy engines directly from
Engr. Sean. Sean has no reason to be afraid of because he is confident that no one can imitate his work. Bear in mind
that when a person registers his patentable inventions in the Intellectual Property Office (IPO), he is NOT doing it solely
for credit or for popularity, but for protection from unfair competition. Even if Engr. Sean would not register his invention,
people would come to recognize him.
You may ask, is there any reason why Engr. Sean would NOT register his patentable inventions to the IPO?
The answer is yes. In registering a patentable invention, the applicant will reveal his formula and explain before experts
in the same field that his work is new, involves inventive steps and is industrially applicable. Thus, if one of the experts
(agent of the government) would falsely deny the claim of the inventor, despite its ingenuity, the invention was in effect
already stolen from the inventor. Why? Because he already revealed to the government his secret which involved
inventive steps. He cannot get it back because he already diffused his knowledge, that is, secrets had been revealed!
I am not alleging that this is happening in our government; neither do I claim the contrary, I am just stating this so that
we can appreciate the importance of intellectual and industrial property system. If we don’t have this, our inventors will
diffuse their inventions in foreign countries, NOT in our country.
Now, are there disadvantages if Sean won’t register? Yes, of course. If Engr. Sean will die, the invention will
be buried with him in the grave. Worst, the invention will not be subject anymore to improvement. The public will have
no choice but “to reinvent the wheel”, if they can. Can they?
Second, if Sean won’t register, he cannot maximize profit from his invention. Why? Because he cannot afford
to share his secrets to anyone because his invention is not protected by the State. If that is so, the manufacturing and
design of his engine id very limited. If he hires employees to do his work, there is no guarantee that such employee

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will be loyal to him. Chances are, after knowing his secret invention, his employee will leave him, establish his own
business and worst, register the patent in his name to the prejudice of Sean! Will the State protect Sean? No, because
he did NOT register his patent. “NO PATENT, NO PROTECTION” Pearl and Dean vs. SMI, G.R. No. 148222. August
15, 2003). Worst, the State will protect the said employee of Sean under the principle of “First to File rule.” Section 9
of the Intellectual Property Code reads:

Sec. 29. First to File Rule. – If two (2) or more persons have made the invention separately and independently of
each other, the right to the patent shall belong to the person who filed an application for such invention, or where
two or more applications are filed for the same invention, to the applicant who has the earliest filing date or, the
earliest priority date. (3rd Sentence, Sec. 10, R.A No. 165a.)

The patent law has a three-fold purpose: “First, patent law seeks to foster and reward inventions; second, it
promotes disclosures of inventions to stimulate other innovation and to permit the public to practice the invention once
the patent expires; third, the stringent requirements for patent protection seek to ensure that areas in the public domain
remain there for the free use of the public.”
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth
investigation is required because “in rewarding a useful invention, the rights and welfare of the community must be
fairly dealt with and effectively guarded. To that end, the prerequisites to obtaining a patent exactly observed and when
a patent is issued, the limitations on its exercise are usually To begin with, a genuine invention or discovery must be
demonstrated lest in the constant demand for new appliances, the heavy hand tribute be laid on each slight
technological advance in art,” (Pearl and dean vs. MI, G.R, No. 148222, August 15, 2003)

MOST COMMON INTELLECTUAL PROPERTY


Trademark, copyright and patents are the most common intellectual property rights.
Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one
another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services service mark) of
an enterprise and shall include a stamped or marked container of goods. In relation thereto, a trade name means the
name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to
literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on activity which is new, involves an inventive step and is industrially
applicable (Kho vs. CA, 3/19/2002)
Obviously violations involving trademark is called trademark infringement; for copyright, copyright infringement
and for patent, patent infringement. To have a quick understanding about these breaches, let’s take a look at the case
of Pearl and Dean vs. SMI. The following is the digested version of the case for your easy understanding.

[G.R, No. 148222 August 15, 2003]


PEARL & DEAN (PHIL.), INCORPORATED, vs. SHOEMART, INCORPORATED, ET AL

FACTS:
Pearl and Dean (Phil), Inc. is a corporation engaged in the manufacture of advertising display units simply
referred to as light boxes. These units utilize specially printed posters sandwiched between plastic sheets and
illuminated with back lights. Pearl and Dean was able to secure a Certificate of Copyright Registration dated January
20, 1981 over these illuminated display units. The advertisement light boxes were marketed under the trademark
“Poster Ads.”
Sometimes in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc, (SMI) for the lease and
installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under construction at that time,
SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl and Dean Vergara, submitted for signature
the contracts covering SM Cubao and SM Makati to SMI’s Advertising Promotions and Publicity Division Manager,
Ramonlito Abano. Only the contract for SM Makati, however, was returned signed.
Two years later, SMI contracted with Metro Industrial Services, the company formerly contracted by Pearl and
Dean to fabricate its display units. After its contract with Metro Industrial was terminated, SMI engaged the services of
EYD Rainbow Advertising Corporation to make the light boxes. Some 300 units were fabricated in 1991. These were
delivered on a staggered basis and installed at SM Megamall and SM City.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and NEMI
enjoining them to cease using the subject light boxes and to remove the same from SMI’s establishments. It also
demanded the discontinued use of the trademark “Poster Ads” and the payment to Pearl and Dean of compensatory
damages in the amount of Twenty Million Pesos (P20,000,000.00).

ISSUES:

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1. if the engineering or technical drawings of an advertising display unit (light box) are granted copyright
protection(copyright certificate of registration) by the National Library, is the light box depicted in such
engineering drawings ipso facto 25 also protected by such copyright?
2. or should the light box be registered separately and protected by a patent issued by the Bureau of Patents
Trademarks and Technology Transfer (now Intellectual Property Office) – In addition of the copyright of the
engineering drawings?
3. can the owner of a registered trademark legally prevent others from using such trademark if it is a mere
abbreviation of a term descriptive of his goods, services or business?

RULING:

ON THE ISSUES OF COPYRIGHT INFRINGEMENT


Petitioner P & D’s complaint was that SMI infringed on its copyright over the light boxes when the SMI had the
units manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously, petitioner’s position was
premised on its belief that its copyright over the engineering drawings extended ipso facto to the light boxes depi cted
or illustrated in said drawings. This premise was wrong for the following reasons:
Even as we find that P & D indeed owned a valid copyright, the same could have referred only to the technical
drawings within the category of “pictorial illustrations.” It could not possibly stretched out to include the underlying light
box.
In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the public without license from P & D,
then no doubt they would have been guilty of copyright infringement. But this was not the case. SMI’s and NEMI’s acts
complained of by P & D were to have units similar or identical to the light box illustrated in the technical drawings
manufactured by Metro and EYD Rainbow Advertising, for leasing out to different advertisers. Was this an infringement
of petitioner’s copyright over the technical drawings? The SC said NO.

ON THE ISSUES OF PATENT INFRINGEMENT


This brings us to the next point: if, despite its manufacturer and commercial use of the light boxes without
license from petitioner, private respondents cannot be held legally liable for infringement of P & D’s copyright over its
technical drawings of the said light boxes, should they be liable instead for the infringement of patent? We do not thing
so either.
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Ipso facto means “by the fact itself,” by mere fact”, ”by mere effect on an act or a fact”; Black’s Law dictionary
For some reason or another, petitioner never secured a patent for the light boxed. It therefore acquired no
patent rights which could have protected its invention, if in fact it really was. And because it has no patent, petitioner
could not legally prevent anyone from manufacturing or commercially using the contraption.
Note: I could have deleted the subsequent paragraphs and just state that since there is no patent, P & D cannot acquire
any protection. However, the wording of the SC in the following paragraphs are rich in both moral and legal doctrines.
There can be no infringement of a patent until a patent has been issued, since whatever right one has to the
invention covered by the patent arises alone from the grant of patent. xxx (A)n inventor has no common law right to a
monopoly of his invention. He has the right to make use of and vend his invention but if he voluntarily discloses it, such
as by offering it for sale, the world is free to copy and use it with impunity. A patent, however, gives the inventor the
right to exclude all others. As a patentee, he has the exclusively right of making, selling or using the invention. On he
assumption that petitioner’s advertising units were patentable inventions, petitioner revealed them fully to the public by
submitting the engineering drawings thereof to the National Library.
To be able to effectively and legally preclude others from copying and profiting from the invention, a patent is
a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to bring new designs and
technologies into the public domain through disclosure. Ideas, once disclosed to the public without the protection of a
valid patent, are subject to appropriation without significant restraint.
The law attempts to strike an ideal balance between the two interest:
“The patent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure of
new useful and non-obvious advances in technology and design, in return for the exclusive right to practice the intention
for a number of years. The inventor may keep his invention secret and reap its fruits indefinitely. In consideration of its
disclosure and the consequent benefit to the community, the patent is granted. An exclusive enjoyment is guaranteed
him for 17 years? but upon the expiration of that period, the knowledge of th invention inures to the people, who are
thus or added to practice it and profit by its use.”
There is no such scrutiny (security) in the case of copyright nor any notice published before its grant to the
effect that a person is claiming the creation and the copyright certificate is issued upon registration with the National
Library of a sworn ex-parte claim of creation.
Therefore, not having gone the arduos examination for patents, the petitioner cannot exclude others from the
manufacture, sale or commercial use of the light boxes on the sole basis of its copyright certificate over the technical
drawings.

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Stated otherwise, what petitioner seeks is exclusivilitywithout any opportunity for the patent office (IPO) to
scrutinize the light box’s eligibility as a patentable invention. The irony here is that, had petitioner secured a patent
instead, its exclusivity would have been for 17 years only. But through the simplified procedure of copyright-registration
with the National Library – without undergoing the rigor or defending the patentability of its invention before teh IPO
and the public – the petitioner would be protected for 50 years. This situation could not have been the intention of the
law.
In the oft-cited case of Baker vs Selden, The United States Supreme Court held that only the expression of an
idea is protected by copyright, not the idea itself. In that case, the plaintiff held the copyright of a book which expounded
on a new accounting system he had develped. The publication illustrated blank forms of ledgers utilized in such a
system. The defendant reproduced forms similar to those illustrated in the plaintiff’s copyrighted book. The US Supreme
Court ruled that:
“There is no doubt that a work on the subject of book-keeping, though only explanatory of well known system,
may be the subject of a copyright; but, then, it is claimed only as a book. xxx. But there is a clear distinction between
the books, as such, and the art, which it is, intended to illustrate. The mere statement of the proposition is so evident
that it requires hardly any argument to support it. The same distinction may be predicated of every other art as well as
that of bookkeeping. A treatise on the composition and use of medicines, be they old or new; on the construction and
use of ploughs or watches or churns; or on the mixture and application of colors for painting or dyeing; or on the mode
of drawing lines to produce the effect of perspective, would be the subject of copyright; but no one would contend that
the copyright of the treatise would give the exclusive right to the art or manufacture described therein. The copyright
of the book, if not pirated from other works, would be valid without regard to the novelty or want of novelty of its subject
matter. The novelty of the art or thing described or explained has nothing to do with the validity of the copyright. To
give to the author of the book an exclusive property in the art described therein , when no examination of its novelty
has ever been officially made, would be a surprise and a fraud upon the public. That is the province of the letters
patent, not of copyright. The claim to an invention of discovery of an art or manufactured must be subjected to the
examination of the Patent Office before an exclusive right therein can be obtained; and a patent from the goverment
can only secure it.
The different between two things, letters patent and copyright, may be illustrated by reference to the subjects
just enumerated. Take the case of medicines. Certain mixtures are found to be of great value in the healing art. If the
discoverer writes and publishes a book on the subject (as regular physicians generally do), he gains no exclusive right
to the manufactured and sale of the medicine; he gives that to the public. If he desires to acquire such exclusive right,
he must obtain a patent for the mixture as a new art, manufacture or composition of matter. He may copyright his book,
if he pleases; but that only secures to him the exclusive right of printing and publishing his book. sonof all other
inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives
no exclusive right to the modes of drawing described, through they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to the public.

ON THE ISSUE OF TRADEMARK INFRINGEMENT


This issue concerns the use by respondents of the mark “Poster Ads” which petitioner’s president said was a
contraction of “poster advertising” P & D was able to secure a trademark certificate for it, but one where the goods
specified were “stationaries such as letterheads, envelopes, calling cards and newsletters.” Petitioner admitted it did
not commercially engage in or market these goods. On the contrary, it dealt in electrically operated backlit advertising
units and the sale of advertising spaces thereon, which however, were not at all specified in the trademark certificate.
Assuming arguendo that “Poster Ads” could validly qualify as trademark, the failure of P & D to secure a
trademark registration for specific use on the light boxes meant that there could not have been any trademark
infringement since registration was an essential element thereof.

THE ISSUE ON UNFAIR COMPETITION


By the nature of things, they can be no unfair competition under the law on copyrights although it is applicable
to disputes over the use of trademarks. Even a name or phrase incapable of appropriation as a trademark or tradename
may, by long or exclusive use by a business (such that the name or phrase becomes associated with the business or
product in the mind of the purchasing public), be entitled to protection against unfair competition. In this case, there
was no evidence that P & D’s use of “Poster Ads” was distinctive or well-known. As noted by the Court of Appeals,
petitioner’s expert witnesses himself had testified that “Poster Ads” was too generic a name. So it was difficult to identify
it with any company, honestly speaking.” This crucial admission by its own expert witness that “Poster Ads” could not
be associated with P & D showed that, in the mind of the public, the goods and services carrying the trademark “Poster
Ads” could not be distinguished from the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary meaning, “Poster Ads” was generic and
incapable of being used as a trademark because it was used in the field of poster advertising, the very business
engaged in by petitioner. “Secondary meaning” means that a word or phrase originally incapable of exclusive
appropriation with reference to an article in the market (because it is geographically or otherwisedescriptive) might

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nevertheless have been used for so long and so exclusively by one producer with reference to his article that, in the
trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his
property. The admission by petitioner’s own expert witness thet he himself could not associate “Poster Ads” with
petitioner P & D because it was “too generic” definitely precluded the application of this exception. Having discussed
the most important and critical issues, we see no need to belabor the rest.

ARE COMPUTERS PROGRAMS PATENTABLE?


Before we look into the intellectual property code to see the answer, let us try to answer this question applying
the knowledge we learned in the case of Pearl and Dean vs. SMI. Recall that when something is being patented, the
patent owner can deprive others from using his patent for period of twenty (20) years (before 1998, 17 years). Can we
afford to apply this patent for a period process in computer programs? The answer is NO. thus a general rule computer
programs cannot be a subject of a patent.
Recall also that the elements of a patentable inventions are:
1. It is technical solution of a problem in any field of human activity;
2. It must be a new;
3. It must involve an inventive steps and
4. It must be industrially applicable.

Considering the above elements, elements no. 3 is absent with regard to computer programs. Take for instance
the swapping algorithm swap (x,y), which swap or exchange the values of two parameters x and y, imagine if someone
applies for its patents, which means to say, others will be deprived to use such algorithm for the next 20 (20) years!

Section 22. Non-Patentable Inventions. – The following shall be excluded from patent protection:
xxx
22.2 Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for
computers;
xxx
The law is very clear that programs for computers shall be excluded from patent protection. This is because if the law
is otherwise, programmers will be deprived of using or even thinking of a simple algorithm like the swap algorithms.
The swap algorithm can be designed by a novice programmer and hence, does not involve an inventive steps.
So, how can programmers protect their programs? The answer is found in Section 172 which reads:

Section 172. Literary and Artistic Works. – 172.1. Literary and artistic works, hereinafter
referred to as “works”, are original intellectual creations in the literary and artistic domain
protected from the moment of their action and shall include in particular:
A. Books, pamphlets, articles and other writings;
B. Periodicals and newspapers;
C. Lectures, sermons, addresses, dissertations prepared for oral delivery whether or not
reduced in writing or other material form;
D. Letters;
E. Dramatic or dramatico-musical compositions; choreographic works or entertainment
in dumb shows;
F. Musical compositions, with or without words;
G. Works of drawing, painting, architecture, sculpture, engraving, lithography or other
works of art; models or designs fir works of art;
H. Original ornamental designs or models for articles or manufacture, whether or not
registrable as an industrial design, and others works of applied art;
I. Illustration, maps, plans, sketches, charts and three-dimensional works relative to
geography, topography, architecture or science;
J. Drawings or plastic works of scientific or technical character;
K. Photographic works including works produced by a process analogous to
photography; lantern slides;
L. Audio-visual works and cinematographic works and works produces by a process
analogous to cinematography or any process for making audio-visual recordings;
M. Pictorials illustrations and advertisements;
N. Computer programs; and
O. Other literary, scholarly scientific and artistic works.

As a guide in interpreting the above provision of the law, Section 172 is under PART IV – LAW ON
COPYRIGHT of RA 8293. Thus, computer programs shall be governed by the rules of copyright ownership.

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