R.A. 9052---the “Cheaper and Quality Medicines” law---signed by President Arroyo on 7 June 2008, incorporates several amendments to the Intellectual Property Code (IPC) of the Philippines designed, among others, to facilitate access by Philippine consumers to affordable drugs and medicines sold with substantial price differences in other countries. The amendments are as follows:
1. Exclusion from patentability of mere discovery of a new form, new property or new uses of drugs and medicines [Sections 22.1 and 26.2]. This amendment is intended to encourage more intensive research and development activities and recognition that the incentives of the patent system are granted only to real and substantive innovations.
2. Adoption of the international exhaustion doctrine for patents on drugs and medicines to allow parallel importation [Sec. 72.1]. The clause on international exhaustion would allow the Philippines to take advantage of the substantial price differences offered to other countries for the same drugs or medicines. It would also allow the entry of competition into the Philippine market that will lead to a lowering of prices of medicines distributed locally by the patent holders or their licensees.
3. Amendment clarifying the experimental use of patents [Sec. 72.3]. The amendment allows members of the TRIPS Agreement to provide limited exceptions to the exclusive rights conferred by a patent. It is also sufficiently qualified by the limitation that such acts shall be limited to the “experimental use of the invention for scientific purposes or educational purposes and such other activities directly related to such scientific or educational experimental use.
4. Amendment to provide for the allowance of the early working or “Bolar” provision (Sec. 72.4). The “Bolar” provision, an exception to the exclusive rights conferred by patents, permit generic firms to make, use or import patented products while they are on patent, without license or payment of royalty, for limited purpose of testing product in preparation for subsequent manufacturing.
The amendment would enable the Bureau of Food and Drugs (BFAD) to rely on data from clinical trials submitted by the originating company to test the bio-equivalence of generic applications. Such allowance would shorten the period of time required for a generic equivalent to enter the market, thereby allowing Filipinos to access more affordable and quality medicines.
5. Clarification of situations when government use of an invention is allowed [Sec. 741 (c) to (e); Sec. 74.2 to 74.4].
These amendments provide for instances of use of the patented invention without the authorization of the right holder. Thus, in addition to the notice requirements, non-exclusive use for a limited scope and duration, the right to remuneration by the right holder and availability of judicial review, the amendments also define the role of the agencies under the Executive Branch in ensuring that medicines can be made immediately available when the situations defined by law arise.
6. Amendment of the trademark provisions to clarify trademark rights of importers of drugs or medicines to protect public health [Sec. 147.1 and Sec. 159.4].
This provision complements the adoption of the principle of international exhaustion of rights to facilitate the exercise of parallel importation of drugs and medicines.
There must be a lawful decree or order supporting an employee’s claim. Since the step increments were granted without the required DBM approval, no vested rights to the increments could have been acquired. Thus, the Court reversed and set aside the RTC decision, directing the trial court to proceed with the trial on the merits of the case (G.R. 162716, 9/27/06).
The TRIPS Agreement only requires countries to protect trademark holders against the use of their marks where there is likelihood of confusion. In cases of parallel importation the drugs or medicines bear the trademark of the owner so that there is no likelihood of confusion.
A vested right, said the Court, is one that is absolute and unconditional; to its exercise, no obstacle exists; and it is immediate and perfect in itself and not dependent upon any contingency. To be vested, a right must have become a title --- legal or equitable --- to the present or future enjoyment of property (G.R. 162716, 9/27/06).
Sections 93-A.1, 93-A.2 and 93-A.3 of the law recognize the principles of compulsory licensing set forth in the Doha Declaration on TRIPS Agreement and Public Health.
The Doha Declaration recognizes the role of IP protection for the development of new medicines, as well as its effects on the pricing of medicines. It reaffirms the right of WTO members to make full use of the TRIPS safeguard provisions to protect public health and promote access to medicines.
The termination of the project employee’s employment in the particular project or undertaking must be reported to the Regional Office, DOLE, having jurisdiction over the workplace within 30 days following the date of his separation from work. Failure of the employer to report to the nearest Regional office of the DOLE the termination of workers it claims as project employees at the time the project is completed is deemed proof that the workers are not project employees (G.R. 165910, 4/10/06).
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Rule on appeal
Well-settled is the rule that no question will be entertained on appeal unless they have been raised below (491 SCRA 9).
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Management prerogative
Management prerogative must be exercised in good faith for the advancement of the employer’s interest and not for the purpose of circumventing the rights of the employees (484 SCRA 187).
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Seaman’s death held compensable
Respondent seaman was hired by CMSC, the local manning agent of a Saudi shipping company. Prior to his deployment, he was issued a certification by the CMSC accredited physician as “fit to work”.
On December 22, 2001, respondent complained of stomach pain, and on December 29, 2001, he again fell ill despite immediate treatment. Then on January 4, 2002 or barely 5 months after deployment, he died due to “acute cessation of blood circulation and respiration."
After CMSC denied the claims for death benefits the widow filed the claims with the NLRC Arbitration Branch where the Labor Arbiter ordered the agency and its principal to pay death benefits of $50,000 and $7,000 for each of their four children.
CMSC appealed to the NLRC, contending that there was no reasonable work connection between the seaman’s death and his illness. The agency further submitted an affidavit of waiver by the seaman releasing it from any responsibility and liability, and contending that the fit-to-work certification was issued only upon his insistence to be deployed after his medical examination revealed his unstable blood pressure. The NLRC affirmed the Arbiter’s decision.
The provision of the POEA Standard Employment contract integrated into the seaman’s contract with CMSC was based on the POEA Memorandum Circular No. 9, Series of 2000 which provides that for a seaman’s death to be compensable, it must be work-related and must occur during the terms of his employment. In view, however, of the temporary restraining order (TRO) issued by the Supreme Court dated Sept. 2000, suspending the implementation of certain amendments to POEA circular No. 9, the POEA decreed that Section 20 (Pars. A, B, D) of the former Standard Terms and conditions as provided in POEA Memo Circular No. 55, series of 1996, shall apply in lieu of POEA Circular No. 9, Series of 2000.
The Supreme Court agreed with the NLRC rulings.
The seaman boarded the vessel on August 2001. But he died on January 4, 2002, before the TRO was lifted on June 5, 2002. Thus, the seaman’s contract with CMSC must conform with Section 20 (A) of the POEA standard contract based on circular No. 55, series of 1966 which provides that for the death of seaman to be compensable, the only condition is that the death must occur during the term of his employment contract. (G.R. 168210, 6/17/08).
Although the reinstatement aspect of the decision [in an illegal dismissal findings] is immediately executory, it does not follow that it is self-executory. A writ of execution must still be issued motu propio by the Labor Arbiter or on motion of an interested party. Absent then of an order for the issuance of a writ of execution on the immediate reinstatement aspect of the decision of the Labor Arbiter, the employer is under no legal obligation to admit back to work the dismissed employee, or, at the employer’s option, to merely reinstate the complainant in the payroll (C.A. – G.R. SP No. 86220, citing G.R. 110027, 11/16/94).
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In culpa contractual or breach of contract moral damages are recoverable only if the defendant has acted fraudulently or in bad faith, or is found guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligations (G.R. 146918, 5/2/06).
Same ruling applied in “P. Ram v. NLRC (G.R. 115759, 6/21/96/). “Absent a writ of execution and served upon the employer, the latter is not formally and appropriately given the chance to choose between actual and payroll reinstatement; hence, there is no basis for any payroll backwages.”
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(Above-cited ruling applied in “Archille Mfg. Corporation vs. NLRC (244 SCRA 750, 1995).”.
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Supreme Court reversed earlier rulings
But in Pioneer Texturising v. NLRC (G.R. 118651, 10/16/97) the Supreme Court reversed these earlier rulings:
“Henceforth, we rule that an award or order for reinstatement is self-executory. After receipt of the decision or resolution ordering the employee’s reinstatement, the employer has the right to choose whether to re-admit the employee to work under the same terms and conditions prevailing prior to his dismissal or to reinstate the employee in the payroll. In either instance the employer has to inform the employee of his choice. The notification is based on practical considerations for without notice, the employee has no way of knowing if he has to report for work or not.”
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Law of the case
distinguished from
res judicata
Law of the case does not have the finality of the doctrine of res judicata, and applies only to that one case. Res judicata forecloses parties or privies in one case by what resolution has been made in another case.
Law of the case relates entirely to questions of law, and is confined in its operation to subsequent proceedings in the same case.
The doctrine of res judicata applies to the conclusive determination of issues of fact, although it may include questions of law, and although it may apply to collateral proceeding it is generally concerned with the effect of an adjudication in a wholly independent proceeding (G.R. 157911, 9/19/06).
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Corporate officer may also
serve as an employee
A corporation is not prohibited from hiring its corporate officer to perform services under a circumstance which will make him an employee. Moreover, a director of a corporation while not its employee by virtue of his position, may act as an employee or accept duties that make him also an employee (250 SCRA 290).
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Rule unenforceable if not published
A rule that carries a penal sanction will bind the public only if the public is officially and specifically informed of the contents and penalties prescribed for breach of the rule. If such rule was not published nor registered with UP Law Center, it is ineffective and unenforceable (cited in G.R. 172598).
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Petition for review
Under Rule 45 divests
CA of jurisdiction
Where the respondents in a case before the Court of Appeals seasonably filed with the Supreme Court a petition for review on certiorari [under Rule 45] the Court assumed jurisidiction over the case regardless of whether or not the said petition would be given due course. Thus, the CA committed no reversible error in ruling that it had lost jurisdiction over the case upon filing of the said petition (G.R. 132388, 4/10/06).
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Arbitration clause in contract
binds only parties to agreement
The distributorship Agreement between petitioner and respondent includes an arbitration clause which the Supreme Court held as a valid clause and the dispute between the parties is arbitrable. In the civil case pending before the Regional Trial Court between petitioner and respondent, the court denied the “Motion to Suspend Proceedings” in the civil case, filed by petitioner who contends that the causes of action in the civil case relate to the Distributorship Agreement between the parties and hence, all disputes arising out of or relating to the Agreement or the parties’ relationship shall be resolved by arbitration.
In its petition for review before the Court, petitioner assails the decision of the Court of Appeals affirming the earlier order of the RTC denying petitioner’s “Motion to Suspend Proceedings” in the civil case.
In denying reversal of the Court of Appeals decision affirming the RTC order, the Court declared that while the Distributorship Agreement with its Arbitration clause is a valid contract, only parties to the agreement--petitioner and respondent--are bound by the Agreement and its Arbitration clause as they are the only signatories thereto. Hence, referral to arbitration pursuant to the arbitration clause and suspension of the proceedings in the civil case before the RTC could be called for but only as to the petitioner and the respondent to the exclusion of the other third parties in the case. However, the object of arbitration is the expeditious resolution of a dispute. Accordingly, said the Court, the interest of justice would only be served if the trial court hears and adjudicates the case in a single and complete proceeding. Thus, the RTC was directed to proceed with the hearing of the civil case with dispatch (G.R. 136154, 2/7/01).
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Contract of adhesion
is not void per se
A contract of adhesion is one whose terms and phraseology are set up and written exclusively by one party. But a contract of adhesion in itself is not an invalid agreement: it is as binding as a mutually executed transaction. However, as held by the court in an earlier case, “it will not hesitate to rule out blind adherence to such contracts if they prove to be too one-sided under the attendant facts and circumstances.”
An insurance contract is such a contract prepared unilaterally by the insurance company the terms and conditions of which are not subject to negotiations. In non-legal concept, such an agreement is on a “take-it or leave-it” basis. But since the terms and phraseology of the contract are the exclusive province of the insurer, ambiguity of any provision must be strictly interpreted against the insurance company and liberally in favor of the insured specially to avoid forfeiture.
Mere inaction of the insurer on the insurance application cannot prejudice the insured: it cannot be interpreted as a termination of the insurance contract. The termination of the contract by the insurer must be explicit and unambiguous (G.R. 166245, 4/9/08).
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Execution pending
appeal is discretionary
Execution of the judgment or final order pending appeal is discretionary, and the exception to the rule that only a final judgment may be executed. As such exception, the execution order must be strictly construed.
The CA, said the SC, ruled correctly with its finding that the trial court acted with grave abuse of discretion when it granted the private respondent’s motion for execution pending appeal in the absence of good reasons to justify the grant of said motion. The Court has held in earlier cases that “good reasons” consist of compelling or superior circumstances demanding urgency which will outweigh the injury or damages should the losing party secure a reversal of the judgment or final order. The existence of “good reasons” is what confers discretionary power to a court to issue a writ of execution pending appeal. These “reasons” must be stated in the order granting the same (G.R. 141447, 5/4/06).
