E-News No.47

E-News No.47

Philippine Supreme Court Upheld Article 34 of TRIPS

by Susan D. Villanueva, Member of the Standing Committee on TRIPS

On December 14, 1994, the Philippine Senate concurred in the ratification by the President of the Agreement Establishing the World Trade Organization (“WTO”). Petitioners questioned the constitutionality of paragraph 1, Article 34 of TRIPS that provides that for civil proceedings involving process patents, judicial authorities of member states can order the defendant to prove that the process to obtain an identical product is different from the patented process. Under the said provision, member states shall provide, in at least one of the following circumstances, that any identical product when produced without the consent of the patent owner shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process:

(a) if the product obtained by the patented process is new;

(b) if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable through reasonable efforts to determine the process actually used.

ISSUE:

Whether or not paragraph 1, Article 34 of the TRIPS unduly interfere with the Supreme Court’s exercise of judicial power in promulgating rules on procedure.

DISCUSSION:

No, Article 34 of the TRIPS Agreement does not unduly interfere with the Supreme Court’s exercise of judicial power.

Article 34 requires a WTO Member to provide a rule of disputable presumption that a product shown to be identical to one produced with the use of a patented process shall be deemed to have been obtained by the (illegal) use of the said patented process, (1) where such product obtained by the patented product is new, or (2) where there is substantial likelihood that the identical product was made with the use of the said patented process but the owner of the patent could not determine the exact process used in obtaining such identical product. Hence, the burden of proof contemplated by Article 34 actually refers to the burden of evidence (burden of going forward) placed on the producer of the identical (or fake) product to show that his product was produced without the use of the patented process.

The patent owner still has the burden of proof since, regardless of the presumption provided under paragraph 1 of Article 34, such owner still has to introduce evidence of the existence of the alleged identical product, the fact that it is identical to the genuine one produced by the patented process and the fact of newness of the genuine product or the fact of substantial likelihood that the identical product was made by the patented process.

Article 34 also does not change the rules of evidence as Section 60 of Republic Act No. 165 (Patent Law) provides a similar presumption in cases of infringement where it provides that the identity or substantial identity with the patented design or utility model shall constitute evidence of copying.

Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption applies only if (1) the product obtained by the patented process is new or (2) there is a substantial likelihood that the identical product was made by the process and the process owner has not been able through reasonable effort to determine the process used. Where either of these two provisos does not obtain, members shall be free to determine the appropriate method of implementing the provisions of TRIPS within their own internal systems and processes.

Article 34 does not contain an unreasonable burden, consistent as it is with due process and the concept of adversarial dispute settlement inherent in our judicial system.