To formally extend its mediation services outside of litigation, the Intellectual Property Office of the Philippines (IPOPHL) recently issued Memorandum Circular No. 2019-006, entitled "Rules of Procedure for IPOPHL Mediation Outside of Litigation" (Circular). The Circular lays down the process on how parties may request for mediation even without a pending case, as well as the rules on the fees, commencement, and termination of mediation.

Implications for intellectual property owners

Prior to instituting an actual case involving or related to issues on intellectual property matters, parties may now file a request for mediation with the IPOPHL Bureau of Legal Affairs - Alternative Dispute Resolution Services (BLA-ADRS).

Effectivity

The Circular officially takes effect today, 2 September 2019.

What the Circular says

Before the issuance of the Circular, disputes were only referred to mediation once a case is actually filed with any of the originating bureaus of the IPOPHL or in case of an appeal to the Office of the Director General.

Under this Circular, parties in dispute may now directly file a request for mediation with the BLA-ADRS without having to file a case in the IPOPHL. It further provides the following:

a. Parties in dispute may request for mediation with the BLA-ADRS by filing a request signed by the parties with the necessary information, together with a brief description of the dispute and the payment of the mediation filing fee;

b. Each party is required to pay a non-refundable filing fee of Php 7,500 (approximately USD 150)1 plus one percent (1%) legal research fund. The initial mediation fee shall cover the mediator's compensation, administrative costs and other related expenses. It also entitles the parties to have eight (8) sessions at a maximum of one (1) hour per session. In case the parties seek for an extension, each party shall pay an extension fee of Php 1,000 (approximately USD 20) plus one percent (1%) legal research fund, which will entitle them to two (2) one-hour sessions;

c. Upon submission of the request for mediation and the payment of the filing fee, the BLA-ADRS shall issue a Notice directing the parties to appear before the BLA-ADRS for a pre-mediation conference where the parties are required to appear. Representative(s) of the parties are allowed to attend, provided that a proof of written authority (e.g., Special Power of Attorney, Secretary's Certificate, Board Resolution) is submitted to the BLA-ADRS;

d. During the pre-mediation conference, the parties shall be briefed on the mediation process and shall be assisted in the selection and appointment of their mediator from the list of IPOPHL accredited mediators;

e. The mediation proceedings shall be conducted within the IPOPHL offices. However, upon the request of both parties, the mediation may be conducted at any other venue, as maybe agreed upon, provided all related expenses, including transportation, food and accommodation, shall be borne by both parties or pursuant to their agreement;

f. The mediation is terminated upon: (1) the signing by the parties of a settlement agreement; (2) the notification in writing made to the Mediator by any party that such party has decided to no longer pursue the mediation; or (3) the notification in writing by the Mediator to the parties that, in the Mediator's opinion, the mediation will not resolve the dispute between the parties. In any case, the non-settlement of the dispute shall in no way result in the parties being precluded or barred from bringing an action to IPOPHL or to a competent judicial or administrative body;

g. In case the parties agree to enter into a settlement agreement, the same shall be kept confidential, except that a party shall have the right to disclose it to the extent that such disclosure is necessary for the purpose of its implementation or enforcement - which if needed, is done by filing a petition in court pursuant to Republic Act No. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004; and

h. In the absence of any agreement of the parties, the mediation proceedings are private and confidential, except the fact that they are taking place, have taken place, or will take place.

Actions to Consider

The Circular allows parties to request for mediation without having to enter into formal litigation in the IPOPHL. IP rights owners should strongly consider mediation as an option in enforcing their IP rights in the Philippines as traditional litigation is usually characterized by delay and is costly, unlike mediation which has been deemed as an effective and efficient mode of dispute resolution in resolving IP rights cases filed with the IPOPHL.

Quisumbing Torres' Intellectual Property Practice Group can help you in exploring the feasibility of availing this option, especially if initiating a full-blown IP dispute at the outset will not necessarily serve your company's business interests.