Addressing Counterfeiting

Nepomuceno M. Mendoza III

Just last month, representatives from the Enforcement Office of the Philippine Intellectual Property Office (“IPOPHL”) met with representatives of the Korea Trade-Investment Promotion Agency, a trade and investment promotion organization funded and operated by the South Korean government. The parties discussed possible collaboration in the field of intellectual property (“IP”) protection and enforcement for Korean products and services in the Philippines.

The IPOPHL, as Vice-Chair of the National Committee on Intellectual Property Rights (“NCIPR”), an inter-agency body composed of fifteen (15) members coordinating efforts against piracy and counterfeiting, have continued to make great strides in its efforts to uphold IP rights.

With the recent publication of the United States (“US”) Trade Representative’s 2023 Special 301 Report, which listed countries where the US has IP protection and enforcement concerns, it is worthy to note that the Philippines has remained out of the US’ watch list for ten (10) consecutive years already, after twenty (20) years of being on the list. The Report even highlighted, as an illustrative best practice, the IP awareness and education campaign conducted by the IPOPHL, namely the “Raise the Economy by Acquiring Protection of the IP of your Community” or REAP IP Program, which engaged over one hundred sixty (160) local government units on IP awareness.

Even with these developments, the seriousness and importance of addressing counterfeiting cannot be overstated. The failure to address the issue will have broad effects on the economy. Weak protection for IP (such as trademarks, design rights, and patents) limits product development and the entry of firms. In general, adequate and enforceable IP rights help reward risk-taking among enterprises and provide protection for firms undertaking costs. Counterfeit products, which are generally of lower quality, can damage the reputation of a legitimate enterprise and may even force an enterprise to close down or abandon its IP. This most definitely does not make any country attractive to potential foreign investors, to the detriment of its economy. It stands not only to lose direct foreign investment but also miss out on foreign know-how. Moreover, if products, including genuine ones, gain a reputation for being of poor quality, this will cause export losses which in turn implies both job losses and loss of foreign exchange.

Certainly, the fight against counterfeiting is a national one. In this fight, there are various authorities in the Philippines from which aggrieved parties can seek redress. The IPOPHL’s Enforcement Office can receive, evaluate, and act on complaints for IP violations. The Enforcement Office may visit establishments dealing in counterfeits, request them to cease and desist from engaging in infringing conduct, or recommend the filing of cases against them.

Law enforcement agencies like the Philippine National Police (“PNP”), National Bureau of Investigation (“NBI”), and the Bureau of Customs (“BOC”), all of which are members of the NCIPR, are also ready to help IP owners. Complaints may be filed with the PNP and the NBI. The PNP has a dedicated IP Section, which has the primary duty of enforcing IP rights, in its Criminal Investigation and Detection Group’s Anti-Fraud and Commercial Crimes Division. On the other hand, the NBI, specifically its IP Rights Division, also conducts investigations, arrests, and implementation of search warrants for crimes involving infringement of IP rights. Lastly, an IP rights holder may record its rights with the BOC in order to help the latter in effectively monitoring and evaluating infringing goods at the border. On the basis of the recordation, the BOC monitors and inspects on its own initiative suspect imports to determine whether or not they are liable to seizure and forfeiture for being violative of IP rights.

The active presence of these various offices and agencies is certainly another step in the right direction. But more importantly, stakeholders must be encouraged to enforce their IP rights. It is only through cooperation between stakeholders and the government will the country be able to have in place “an effective intellectual and industrial property system” that is “vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products”.

This article is for general information and educational purposes only and not offered as legal advice or opinion.

Nepomuceno M. Mendoza III is an Associate of the Intellectual Property Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

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