IPOPHL to enforce mandatory mediation for IP cases by October

Quicker resolution of IP disputes seen

In a bid to achieve a quicker, more cost-effective, and a more amicable means of resolving IP disputes, the Intellectual Property Office of the Philippines (IPOPHL) has ordered all intellectual property cases (IP cases) to be compulsory mediated by disputing parties.

Through Memorandum Circular No. 008 s. 2018 on the Revised Rules for Mediation issued recently, the mediation of IP cases will be mandatory for the following:

• Administrative complaints for Intellectual Property Rights violations ("IPV") and/or unfair competition;

• Inter partes cases (“IPC");

• Disputes involving technology transfer payments;

• Disputes relating to the terms of a license involving the author's rights to public performance or other communication of his work; and

• Appeals to the Office of the Director General from the decisions of the Bureau of Copyright and Other Related Rights ,  the Bureau of Legal Affairs , and the Documentation, Information and Technology Transfer Bureau.

The new procedure will come into force October 5, 2018.

In the past, when a case is received by any of the bureaus and an answer or comment is filed, or an appeal is received by the Office of the Director General, IPOPHL applies mandatory referral to mediation, giving the parties a chance to resolve the dispute out of court first.

But even if the referral to mediation is mandatory, the mediation itself is not. According to the Bureau of Legal Affairs which manages the mediation system, only half of the cases referred mediation actually proceed.

“Right now the yearly average of cases that accept mediation is 40 to 45 precent of intellectual property disputes. If they don’t accept mediation, they return to litigation and that process is quite long not to mention expensive,” said IPOPHL Director General Josephine R. Santiago.

In the litigation route, the losing party may appeal the decision of an adjudication officer to the Director of the Bureau of Legal Affairs, whose decision in turn is appealable to the Director General.

This appellate process could go all the way up to the Supreme Court.

With the mandatory mediation, the IPOPHL is also aligning its procedures with the court system which also advocate for parties to undergo mediation first as a ‘soft approach’ before litigation.

“In mediation, the resolution is arrived at by the parties themselves, so benefits can be mutually received. In litigation, a judge or a hearing officer hears the evidence and makes a decision to favor one or another, and only awards the winner. In mediation, they can make a compromise agreement with mutually beneficial terms. That’s the value here,” Director General Santiago added.

Most of the cases referred to mandatory mediation are IPCs or opposition cases relating to trademark.

According to statistics from the Bureau of Legal Affairs, a total of 2,063 IP cases were referred to mediation from 2011 up to August 2018. Of this number, some 1,150 cases actually underwent mediation or an acceptance rate of 55.7%.

The settlement rate on the other hand - when parties reach a compromise agreement -  is at 42.9% of the total number of mediated cases from 2011 to August 2018 which amounts to 1,140. The BLA hopes that with mandatory mediation, the settlement rate can improve.