25 August, 2017
Underpinned by the intensive governmental investments in marketing and infrastructure to support the tourism industry, the Philippines’ tourism industry is rapidly growing. The industry contributes around 11% to the annual GDP of the Philippines, bringing in about EUR 30 billion in 20141. As the country is promoting foreign investments in special economic zones of tourism development like Metro Manila, Cebu City and Mactan Island, there will be many lucrative future business opportunities for European SMEs in the tourism industry in the Philippines.
SMEs engaged in tourism industry need to pay special attention to protecting their intellectual property (IP) rights, because IP infringements are still relatively common in the Philippines. IP rights are a key factor for business success and neglecting to register these rights in the Philippines could easily end SMEs’ business endeavor in the country. Thus, a robust IPR strategy is needed, when entering the promising market of the Philippines.
Make Sure your Brand is Protected
Branding is especially crucial for the tourism sector, as it allows companies to differentiate themselves from the rest, creating a niche market and an individual appeal that will translate into more tourist arrivals. Thus, it could have devastating consequences for a European SME if another company started to use similar or identical brand to promote their services. In tourism sector ‘destination branding’ is equally important to company branding.
Destination branding often relies on a logo and a tagline, the examples being the Swiss resort St. Moritz using the tagline ‘Top of the World’, the Tourism Malaysia campaign of ‘Malaysia, Truly Asia’ or the slogan ‘it’s more fun in the Philippines’ that the Philippines Department of Tourism uses to promote the country internationally.
SMEs are strongly advised to register their logo and tagline as a trade mark in in the Philippines in order to protect their brand because IP rights are territorial and European trade marks do not enjoy automatic protection in the Philippines. Trade mark registration should be done well in advance before even starting business in the country because the Philippines applies the first-to-file’ trade mark registration system, meaning that the first person to register a trade mark owns that mark, regardless of the first use. Registering in an advance is important because trade mark piracy due to ‘bad-faith’ registration is still a problem in the Philippines. Bad-faith registrations means that a third party (not the legitimate owner of the mark) first registers the mark in the Philippines, thereby preventing the legitimate owner from registering it in the country. These unscrupulous companies would normally try to resell the trade mark back to its legitimate owner at an inflated price.
At the same time, owners of well-known marks may benefit from the Philippines membership to the Paris Convention. Foreign companies can request the refusal or cancellation of a registration of a trade mark which constitutes a reproduction, imitation or translation of a well-known mark in another country that is also a member of the Convention. On the other hand, SMEs’ brand names rarely enjoy the status of a well-known trade mark and thus it is not advisable to rely on the well-known trade mark status, but to register trade mark in the Philippines.
European SMEs should also keep in mind that according to the Trade Mark Law of the Philippines, In order to maintain the registration of a trade mark, a Declaration of Actual Use of the mark together with the proof of use of the mark must be filed after 3 years from the application date of the mark and then again within one 1 year from the 5th anniversary of the registration. Actual use of the mark in commerce is very important because if an SME is not using the mark in its business, its mark will be removed from the trade marks register.
Protect your Brand also by Registering your Internet Domain Name
Most companies engaged in tourism rely on their websites to attract customers and thus protecting online domain name is very important for the SMEs. It is advisable to register internet domain name in the Philippines because problems like ‘cybersquatting’ and typosquatting are a serious concern in the country. Cybersquatting is similar to bad-faith trade mark registration and it means that a third party registers a domain name that is identical to European company’s product or trade mark name, with the purpose of selling the domain names back to the rightful owner at a premium price.
Typosquatting refers to registering a domain name with misspellings, or typos of famous brands, or company names. Typosquatters target Internet users who incorrectly type a website address into their web browser (e.g. www.euroap.eu instead of www.europa.eu). When users make such an error, they can be led to an alternative website owned by a hacker. This may lead to consumer confusion or lost web traffic, as internet users may be directed to either fraudulent websites or competitor’s websites.
Internet domain names can be registered with the Internet Domain Name Registry of the Philippines (dotPH). Registrations should be done as soon as the company envisages doing business in the Philippines because internet domain name registration also functions under the ‘first-to-file’ system. Indicatively, it costs around EUR 34 per year to register internet domain names in the Philippines.
Cybersquatting and typosquatting are illegal under the intellectual property laws of the Philippines and European SMEs should keep in mind that the Philippines Internet Domain Name Registry has a domain name dispute resolution system that can help to enforce IP rights. Thus, companies should monitor similar domain names and actively enforce their domain name rights in case of confusion or cybersquatting.
Advertising Materials Can Be Protected by Copyrights
Besides websites, tourism sector also relies a lot on physical advertising materials such as information booklets, leaflets or tourist guide books. All these advertising materials can be protected by copyrights. Even though, in the Philippines works are protected by copyright from the moment of their creation, it is still advisable for foreign SMEs to voluntarily register their copyright in the Philippines, because it is common practice for the authorities in the country to require copyright certificate in order to initiate copyright infringement proceedings.
Copyrights could be registered either at the Copyright Division of the National Library or at the Intellectual Property Office of the Philippines and costs about EUR 380 to record copyrights in the Philippines (including official costs of PHP 625.00 approximately EUR 12). The IP Code defines “author” as the person who has created the work. SMEs can apply for the recordal by submitting the required documents including a copy of their business registration certificate and a certified copy of the notarized assignment document from the author in person.
The IP Law also states that, if the work is created during the course of the employment as part of employee’s regular assignment, then the employer will be the owner of the copyright. If employers wishes to register copyright in the Philippines, they need to provide supporting documents evidencing ownership of the copyright, the manner of its acquisition if they are not the authors of the work and information on where and in what establishment the work was made.
Always Enforce your Rights
IP enforcement is very important and if companies manage to build a reputation of always enforcing their rights then unscrupulous companies are more likely to move on to harass less litigious companies. Thus, strategic enforcement of IP rights is the key to a successful and comprehensive business strategy. When European SMEs identify infringement, they should actively enforce their rights in the Philippines through the various avenues available.
In the Philippines, there are 3 avenues available to enforce intellectual property rights: administrative actions, civil litigation and criminal prosecution. As civil litigation and criminal prosecution tend to take very long time and be quite costly, administrative actions are often the preferred means of enforcement. Administrative authorities have the power to impose preliminary injunctions, preliminary attachments (a provisional remedy wherein the court/administrative body is asked to take custody of the property of the adverse party as security for satisfaction of any judgment) as well as damages and administrative fines.
Recently, the Intellectual Property Office of the Philippines has opened an Arbitration and Mediation Centre (ACM) that has the jurisdiction to resolve trade mark and copyright infringements as well as IP licensing disputes. The ACM has reported many successfully mediated cases in 2015 and can thus be a viable alternative to resorting to civil or criminal proceedings.
Edoardo Caroli, China IPR SME-Helpdesk
