Intellectual Property Code with the 2020 Revised Rules of Procedure for Intellectual Property Rights Cases

Section 1

Disposal and/or Destruction of Infringing Goods, Related Objects, or Devices; When to File Motion. — At any time after the filing of the complaint or information, a motion for the disposal and/or destruction of the seized infringing goods, or materials and implements predominantly used in the infringement, may be filed by the plaintiff, complainant or right-holder before the court. There is destruction when the infringing goods are completely destroyed and are put beyond further use. There is disposal when the infringing goods are effectively prohibited from re-entry into the channels of commerce but may be reused for some other lawful purpose. In case the infringing goods are counterfeit or pirated, the procedure for their disposal and/or destruction shall be summary in nature with notice to the defendant or the accused to his or her last known address to afford him or her the opportunity to oppose the motion. For this purpose, the lack of authority of the defendant or the accused to exercise any of the rights of the right holder shall be a sufficient ground for the disposal and/or destruction of infringing goods. Counterfeit trademark goods mean goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question. Pirated copyright goods means any goods which are copies made without the consent of the right-holder or person duly authorized by the right-holder, and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a copyright or a related right. The motion for disposal and/or destruction shall be granted where the violation of the intellectual property right of the owner or right-holder is established. In case any genuine issue is raised, such as but not limited to, where the infringement may involve determination of confusing similarity, applicability of fair use or other limitations and exceptions, substantial equivalence, construction of claims, and/or good faith, the court shall continue to receive evidence of the parties during trial in support of their respective claims and defenses, and the disposal and/or destruction of the goods, related objects, or devices shall be resolved after trial.

Section 2

The motion for disposal and/or destruction of infringing goods, related objects, or devices shall contain the following: a) An inventory and photographs of the infringing goods, related objects, or devices at the place where the goods are stored; b) The complete address of the place where the infringing goods, related objects, or devices are being stored; c) The classification and nature of the infringing goods, related objects, or devices, whether hazardous or non-hazardous; d) The proposed manner, method and plan of disposal and/or destruction; e) Estimated cost of disposing and/or destruction of the goods, if any; and f) Other facts and evidence relied on in support of the motion.

Section 3

The infringing goods, related objects, or devices are hazardous when they present: a) Short-term acute hazards, such as acute toxicity by ingestion, inhalation or skin absorption, corrosivity or other skin or eye contact hazards, or the risk of fire or explosion; b) Long-term environmental hazards, including chronic toxicity upon repeated exposure, carcinogenicity, which may in some cases result from acute exposure but with a long latent period, resistance to detoxification process such as biodegradation, the potential to pollute underground or surface waters, or aesthetically objectionable properties such as offensive odors; or c) Unreasonable risk and/or injury to health and safety and to the environment. Hazardous goods, related objects, and devices also include health sensitive infringing goods, which are considered harmful as a result of substandard or incorrect active pharmaceutical ingredients or lack of therapeutic benefits, which can further endanger the public's health. Hazardous goods, related objects and devices shall only be subject to destruction. All other infringing goods, related objects and devices shall be subject to disposal and/or destruction.

Section 4

The manner or method of disposal and/or destruction of infringing goods, related objects, or devices depends on their nature and circumstances, and whether hazardous or non-hazardous. The proposed manner or method of disposal and/or destruction of infringing goods must be compliant with existing laws and regulations. a) The following methods of destruction may be allowed by the court, depending on the nature and circumstances of the infringing goods, related objects, or devices: i. Crushing, shredding, and discarding at sanitary landfills; ii. Incineration; iii. Encapsulation; or iv. Other methods that do not pose any risk to the environment or public health and safety. Provided that open burning, or placing these goods in non-sanitary and open landfills shall not be allowed. b) The following methods of disposal may be allowed by the court, depending on the nature and circumstances of the infringing goods, related objects, or devices: i. Recycling; ii. Humanitarian donation; or iii. Other methods that do not pose any risk to the environment or public health and safety. Provided that the manner of disposal must effectively prevent the re-entry of the infringing goods, related objects, or devices into the channels of commerce.

Section 5

Once the court determines that the motion for disposal and/or destruction is meritorious, it shall issue an order of disposal and/or destruction of infringing goods, related objects, or devices, including but not limited to, sales invoices, other documents evidencing sales, labels, signs, prints, packages, wrappers, receptacles, and advertisements and the like used in the infringing act. The order shall include the manner, method, and plan of disposal and/or destruction, if any. Upon issuance of the order, the movant must comply with the following: a) An inventory and photographs of the infringing goods must have been taken before the disposal and/or destruction at the place where the seized infringing goods are stored; b) The taking of the inventory and photographs must be witnessed and attested to by: (1) the defendant, or accused or counsel or agent, or in their absence, an officer of the barangay where the seized infringing goods are stored; (2) the plaintiff, complainant or right-holder, or his or her representative or counsel; (3) the public officer who seized the items or a representative of his or her office; (4) a court officer authorized by the court; and/or (5) authorized representative of the regulatory government agency involved, to supervise the disposal and/or destruction of the infringing goods; c) Representative samples of the infringing goods have been retained in a number and nature as to suffice for evidentiary purposes; d) An inventory of the representative samples has been made by the persons enumerated under (b) above; e) The court officer authorized to supervise the destruction has submitted a report thereon, within five (5) calendar days from the date of the disposal and/or destruction, to which is attached (i) the inventory and photographs of the infringing goods and (ii) the inventory of the representative samples; and f) The movant has posted a bond in an amount fixed by the court sufficient to answer for any damage that the adverse party may suffer. Within ten (10) calendar days after the disposal and/or destruction, the movant must file a report with the court stating that he, she, or it has complied with the above conditions and with the order of the court granting the disposal and/or destruction of the seized infringing goods, related objects, or devices.

Section 6

Representative samples of the goods, objects and devices referred to in this Rule, together with the inventory and photographs of the same, shall be admissible in lieu of the actual items.

Section 7

The court may issue an order disposing the seized infringing goods, related objects, or devices by way of donation for humanitarian use, subject to the following conditions: a) The infringing goods will not cause harm to the donee(s); b) All infringing marks or features identifying the complainant, plaintiff, or right-holder as the source of the goods shall be removed to the most possible extent; and c) The government entities or charitable institutions to which the infringing goods are to be donated must be properly identified. Within thirty (30) calendar days from the issuance of the decision or final order, the court shall furnish the IPO a copy of the decision or final order. The application of and adherence to these Rules shall be subject to periodic monitoring by the Office of the Court Administrator (OCA) by visitation and submission of data. For this purpose, all courts covered by these Rules shall accomplish and submit a periodic report of data in a form to be generated and distributed by the OCA. Training of judges and court personnel shall be undertaken by the PHILJA in coordination with the OCA.