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Roderick P. Vera, JD, LLM | Managing Partner
Tel. +63.2.829.1145 | Cell. +63.917.884.8372

Vera & Associates

78 Lourdes Street, Teoville | Parañaque, Philippines 1720
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The bee has lost its sting

The bee has lost its sting.

Our appellate court has dismissed a case against an alleged infringer accused of using a hamburger name for a shoe brand minus one letter. According to the Inquirer Article, the CA found that using a registered trademark for another merchandise in an unrelated and totally non-competitive product is plausible.

As I have mentioned before in a previous blog entry, an arbitrary name such as what the local hamburger chain has, should be afforded the strongest protection. The uniqueness of one’s brand name is highly sought after by companies. Name recognition is a form of goodwill that can’t be bought.

In Philippines, we have made famous brand names as generics. Kodak and Colgate have become synonymous with any camera and toothpaste respectively. Using that culture trait, is quite advantageous here. Let me explain.

When we hear the phrase, “Mag Kodakan tayo”, it means it’s time for picture taking. When a sari-sari store hears the question, “Pabili ng Colgate”, toothpaste is being asked for. Any store clerk will inherently and without thinking will look for those brands instead of cheaper alternatives. These brand names have been ingrained in our instinct.

Now here comes the hamburger chain which started as an ice cream store in Chinatown. After three decades, it is now a superbrand. The whole idea of trademark is associating names or symbols to the origin of the goods or service. For example, when we say Corolla, we don’t think of Honda but of Toyota.

Going back to the hamburger chain, its brand name is a made up word that has nothing to do with food (well, maybe honey). It has been in the country so long that it has been recognized as a leader in the food industry. We know many brand names that neither describe nor indicate the service or the product it is named after. For example, a coffee company named after a celestial male deer. In this country of ours, mention that name, we all know its about the hamburgers.

In case this issue goes to appeal with the highest court of the land, we will finally have some jurisprudence to settle the issue of trademark confusion.

For questions regarding intellectual property, feel free to email me.

You could have......

Let me tell you a story about a couple who had a long drive to attend a relative’s wedding. Not wanting to drive all night, they stopped a hotel before 10pm to rest. Early next morning as they were checking out, the husband was surprised to see a bill worth $400 for one night’s stay. He immediately called for the manager. The latter explained that the hotel was an establishment with 5 star facilities such as an Olympic sized pool, 24 hour world class gym and sauna, 24 hour business center and 3 nightly broadway-type shows. The husband claimed that they just slept for the night to rest. The manager claimed that the couple could have used those facilities mentioned that is why the rate was so high. Frustrated, the husband wrote a check for $50. Upon presentment of the check, the manager protested the low amount. The husband then said “You see, I have a beautiful wife and I am charging you $350 for sleeping with her”. “But I did not!” bawled the manager. In response, the husband said, “Ah, but you could have…”

I began this article on a funny note to prepare you on what’s to come. Last year, the Minnesota District Court (a Federal court as opposed to a state court), in Capitol Records vs. Jammie Thomas convicted the defendant (a single mother) of distributing 24 songs from her computer. Ms. Thomas had a “shared folder” in her computer which was open to users in the Kazaa Peer to Peer (P2P) network. A jury convicted her of “making available” the songs for download. The ultimate fact in this case is that NO ONE downloaded a song from her computer.

Fortunately, the judge in that case is reviewing whether his instruction to the jury that “making available” as an element of infringement was valid. The copyright law community has been shocked by this issue and is asking legal experts to take sides.

Again, fortunately, in the Philippines, this type of trial is far from happening. Our internet community is definitely part of the “downloading” society (come on, you know who you are). So, if you have downloaded without permission, be glad that the Record Industry Association America cannot sue you here.

But this case and its current issue could have a chilling effect on the way record company owners can sue grandmothers whose grandsons are using their lola’s DSL to connect to Kazaa. You could be convicted even though no actual transfer of files occurred. What does this mean? To set an extreme example, you can be charged with attempted murder of someone in your house because you have a gun in your room. Because you could have shot that person!

The ruling in the U.S. follows an interpretation of an exclusive right of copyrighted work. The particular section reads: “to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or be rental, lease or lending.” (17 U.S.C. § 106). Our law reads slightly different, Sec. 177.3 of R.A. 8293 (IP Code of the Philippines) states an exclusive right in “the first public distribution of the original and each copy of the work by sale or other forms of transfer of ownership”.

Violations of any law should be strictly construed, more so if such violation provides a fine or criminal prosecution. By sale or other forms of transfer of ownership should remain shut to the construction that there was an actual transfer. In the case of Jammie Thomas, there was no such transfer, she just logged in and her “shared folder” became accessible to the public.

I am sure you are going to tell me that my argument would mean that those stores in the tiangge can’t be caught if no one buys. But hold on, those stores are selling obviously pirated material. Secondly, before any arrest can be made, there must be a sale to break the law (a requirement before search and seizure). What you see on TV are the raids to confiscate contraband. Third, there is no confusion as to the legality of the items.

Don’t get me wrong, I am all for copyright protection and burning all those pirated disks. But we should do it the right way. If we allow that what happened in Minnesota here, the slippery slope mentality would allow fortune tellers to charge double because we could have asked more questions or husbands not bringing along their beautiful wives.

If you have any questions on IP law please email me.

The genius of Philippine Trademarks

Filipino’s ingenuity goes both ways. We can think of smart ideas but sometimes they cross the line into infringement. But we can harness this genius in creating “marks” of our own. To illustrate, there are 4 types of trademarks in terms listed in the order of their strengths:

1) Arbitrary (made up, original) Ex. Exxon, Kodak

2) Suggestive (suggesting a product in the mind) Ex. Coppertone

3) Descriptive (trait emphasized) Ex. Quarter Pounder

4) Generic (natural inference). Ex. Mineral Water

Arbitrary trademarks bear no relationship to the products or services to which they are applied. Suggestive trademarks imply some particular characteristics of the good or service to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the good or service. A descriptive term identifies a characteristic or quality of the goods or services such as color, function, dimensions or ingredients. They are can only be protected if they have acquired secondary meaning in the minds of the consuming public. Lastly, generic terms are names of a particular genus or class of which an individual article or service is but a member.[1]

There are two cases which have recently caught the headlines. The word Ginebra has been considered “generic” in a legal battle between two liquor companies. The one who won sought to register and the losing company protested and sought to protect it’s own mark and claim confusing similarity. The IPO claimed that the word “ginebra” is generic and couldn’t have obtained secondary meaning in favor of the losing company. The standard in trademark disputes is that generic trademarks cannot be subject of registration or subject to cancellation. Why then did the IPO “approve” the trademark application if the word in question is generic? Think about it.

The other case is obviously a case of “riding” on the popularity of an arbitrary name. Harvard University went after a clothing company using the school name for a brand of jeans. This is clear cut. Trademark confusion creates a cause of action for the owner of the mark because it will cause confusion as to the origin of the goods. We all know that Harvard does not make jeans. If that be the case, I would go for further studies at Levi’s University.

In summary, it is best to consult a legal professional before making product names public. You wouldn’t want to be caught drinking a strong colorless alcoholic beverage without jeans.

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[1] Zatarains v. Oak Grove, U.S. Court of Appeals for the 5^th Circuit (698 F.2d 786, 1983).

Why you should NOT buy pirated CDs or DVDs

It may seem so easy for any of us to do such a thing. But when you realize that it is more expensive to buy a hotdog at the place of honeyed burgers than it is buy a silver disc of pirated material, it becomes an easier choice. But what is paramount is that buying pirated material is a crime. Whether it is easy to do or cheap to buy, the act is still criminal.

Taking aside the criminal aspect, the real reason for not buying pirated material is the economic incentive that is lost. The reason why our government affords copyright protection is to provide a security measure for a return on investment. All of us want to earn money. Most of us are earning our daily bread by doing things we don’t love. But those who write the music and make the movies are doing exactly what they love to do.

Making music and movies takes money. These artists, if you are willing to call them that, put up money up front for the costs of making their work. One album could cost easily six figures to make and that just the recording studio. Movies are a whole other ball game. It is not uncommon for an action movie from a major U.S. studio to run a figure of more than 100 million.

The only way for them to see that money come back is for us, the economic power that we are, to buy their products legitimately. When you buy pirated material, you give money to scrupulous men who don’t know how to make movies or write music. The wrong people are making money.

If the money comes back to the artists, they will in turn make more music and more movies for us to enjoy. Come on, we all love to hear our music and see our movies. But when there are no more new ones, we will be stuck with watching Conan, the Barbarian over and over again.

You might argue that these creative minds are making too much money such as J.K. Rowling who is now a billionaire. But that argument doesn’t hold water when you buy your cell phone load. Do you see anyone complaining when the Ayala’s are raking it in or when MVP is upping his monthly per diem.

If we had a choice, we wouldn’t want to buy fake burgers or fake sodas. Why should you settle for less when it comes to music or movies?

Apple contributing to music piracy

Indirectly, Apple is contributing to music piracy in the Philippines. How so? Read on.

First of all, I must applaud Apple for creating one of the world’s greatest innovations. The design and simplicity of the iPod makes it easy for everyone from 4 to 80 to use. But innovativeness in their proprietary thinking has led to selfishness which has led to music piracy. Did I make it more confusing? Bear with me please.

As every iPod owner will know, the only way to load songs to the little white machine is through a music library in iTunes. Well, ok, I forgot the little white cable. The capacity of these iPods range from the mundane 1GB to the monstrous 160GB. It’s not just music, you can now load pictures and full length movies. Again, the latter has to be in the iPod proprietary format. Am I boring you now, don’t worry, the next paragraph is the core of the article.

Where do the owners of these iPods get their songs and movies? From itunes.com? Think again. There is no iTunes for the Philippines! That means that no one with a Philippine based credit card can purchase a song for 42 pesos (99 cents). Most people (and you know who you are!) will load their iPods from tiangge type establishments for 5 pesos song and 100 pesos per movie. If they won’t load, they will download the songs they want through utorrent or other illegal means. If not that way, they will buy a 30 peso (is it still 30?) pirated CD and rip it to their iTunes. One little sweet revenge is that they will have to type the song info one by one so that the song title will register in their iPod.

I don’t want to brag, but because of my legal practice, I stick to a non-pirated mode of loading iPods. My newly tuned philosophy has redounded to my 12 year son. He refuses to log on to the downloading websites despite the fact that we have had DSL broadband for 2 years now. Secondly, we are at an impasse on how to convert original DVDs to the iPod movie format (Any tips?). I had to thicken my face and ask a friend of mine (actually client) to buy $50 worth of iTunes cards in the U.S. My son still has $35 balance as of this writing.

With so many iPods out there, where are all the songs coming from? When was the last time you bought an original music CD? I am sure there are only a handful of us who still do. iPod has thickened both sides of the fence. Their popularity has renewed interest in music. The more music is out there, the more business for otolaryngologists (ear doctors). Seriously though, if the source for iPods is scarce, nay, non-existent in this country, a resort to unsavory means is inevitable.

But we should not blame the buyers of iPods. I dare say that Apple should make iTunes accessible to Filipinos. I am sure that after reading this blog, I would have converted a four year old and an 80 year old to stop pirating music. If the source of our music is easily reached and affordable, we will have more new songs to appreciate (just no more NKOTB, please.) More new songs, more new iPods.

So, Apple, make iTunes for the Philippines possible!

Newspaper sued for copyright infringement

My client posted this on his blog.

Photog sues major newspaper for copyright infringement

More updates as the come.

Reasons for Proctection

Intellectual property (in the U.S.) is fundamentally about incentives to invent and create.¹

Granting intellectual property rights to an author creates incentive to make more creative works. By allowing the author to make money out of his creation and a monopoly on the copying, a return on investment could be established. Without such protection, free-riders would rein the imaginative output of artists and inventors. The monopoly is balanced the limited duration of the protection. The control granted by the current intellectual property laws will expire within a prescribed time.

There is some opposition to the control granted to intellectual property rights holders. Some people prescribe to the theory that ideas should be shared for all to all to benefit. If we regard the ideas we create as our property, then we should be able to protect the same like we protect our own home. The Lockean natural rights theory states that the labor of one’s body and the work of ones’ hands are own by the actor. Further, the theory also states that whatever is taken from nature by someone and is mixed with his labor, it becomes his property.²

In today’s world, everyone wants to make money. This instinct is what separates the men from boys, the leaders from the followers. To economically benefit from the one’s own ideas is the fundamental principle in entrepreneurship. Our government has sought to protect intellectual property through a series of laws amended over the years to keep in tune with the current trends.

If inventors, artists and businessmen (yes, even those guys) see that there can be little or no return on their ideas, they will stop making them. We see the day when the new songs cease, no new paintings or works of art are made, and no new inventions. Just think, if have no intellectual property rights, we will still be stuck listening to music with tape recorders and pressing endless buttons to skip or playback a song. We would have to watch movies through reels of film in our own home. And worse, start a car by turning a rotor with our bare hands.

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¹ Intellectual Property in the New Technological Age (Robert Merges et al., 3^rd Edition, Aspen Publishers, 2003, p. 10).

² John Locke, Two Treatises on Government reprinted in Intellectual Property in the New Technological Age (Robert Merges et al., 3^rd Edition, Aspen Publishers, 2003).

Ideas are protected

Intellectual Property is a branch of law that hardly taught yet extensively exercised in everyday business transactions. Everything around you has been the subject of IP law whether in the past or in the present. Every soda you buy, every gadget you purchase and every movie or television show you have seen is under IP law.

There are three major branches of IP law: Copyrights, Patents and Trademarks. Each is distinct but can be combined in a single product. I will briefly give a layman’s explanation to each branch.

Copyright

Simply put, this is an expression of an idea in an artistic form. The popular examples are songs, movies, and paintings. The core of copyright is the mode of expression and the fixation in a medium. You can think of song or a great painting but unless it is placed in a medium for people to see or feel, it can not be subject to copyright protection. This is the branch that is the easiest to protect, has no discretion for the government for protection and has the longest period of protection.

Patents

This is an expression of an idea or an improvement of an idea placed or manifested in a useful article. The imperative ingredient in patent is that the idea has to have utility. If the idea has no use whatsoever, then it might fall under copyright. This is the hardest branch of intellectual property to qualify for because it involves discretion upon the government body granting the patents. It is the hardest to obtain but ironically, has the shortest span of protection.

Trademarks

This is an expression of an idea to mark goods or services in trade. It is attaching an identity to a product or service. The ultimate purpose of trademarks is to identify the origin of the product. Trademarks are also subject to government discretion as each one has to be distinct from one another.