The Supreme Court upheld the President’s ratification of the Madrid Protocol, concerning international trademark registration, as a valid executive agreement that doesn’t require Senate concurrence. This decision affirms the executive branch’s authority in international agreements related to administrative procedures already aligned with existing laws. The ruling clarifies the balance between executive and legislative powers in foreign affairs, ensuring the Philippines can efficiently participate in international trademark systems.

Trademarks on the World Stage: Did the President Overstep Authority by Joining the Madrid Protocol?

The Intellectual Property Association of the Philippines (IPAP) challenged the Philippines’ accession to the Madrid Protocol, arguing that it is a treaty requiring Senate concurrence under Section 21, Article VII of the Constitution. IPAP contended that the Protocol’s implementation conflicts with the Intellectual Property Code of the Philippines (IP Code), specifically Section 125, which mandates foreign trademark applicants to designate a Philippine resident agent. The core legal question was whether the President’s ratification of the Madrid Protocol as an executive agreement was constitutional, and whether its provisions clashed with existing domestic intellectual property laws.

The Supreme Court, in its decision, addressed IPAP’s challenge, first tackling the issue of locus standi, or legal standing. While initially doubtful of IPAP’s direct injury, the Court recognized the transcendental importance of the constitutional issues raised, thereby granting IPAP the standing to sue. The Court emphasized that the requirement of direct and material injury can be relaxed when the case involves paramount public interest, particularly when it questions the overreach of one government branch into another’s functions.

The Court then delved into the heart of the matter: the validity and constitutionality of the President’s ratification of the Madrid Protocol as an executive agreement. To resolve this, the Court distinguished between treaties and executive agreements. Treaties, as defined by Executive Order No. 459, Series of 1997, are international agreements requiring legislative concurrence after executive ratification, often involving political issues or changes in national policy. Executive agreements, on the other hand, are similar to treaties but do not require legislative concurrence, typically embodying adjustments of detail carrying out well-established national policies.

The landmark case of Commissioner of Customs v. Eastern Sea Trading provides guidance in differentiating the two, noting that agreements concerning trademark protection have historically been handled as executive agreements. The Court underscored the Department of Foreign Affairs’ (DFA) authority, under Executive Order No. 459, to determine whether an agreement should be treated as a treaty or an executive agreement. This determination is crucial in delineating the boundaries of executive power in international relations.

The Court then considered the state policy on intellectual property, as articulated in Section 2 of the IP Code. This section declares that an effective intellectual property system is vital for domestic development, technology transfer, foreign investment, and market access. Importantly, it expresses the State’s policy to streamline administrative procedures for registering patents, trademarks, and copyrights. It also empowers the Executive Branch to implement rules and regulations that enhance the registration process without amending the existing legal framework.

Section 2. Declaration of State Policy. – The State recognizes that an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products. It shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in this Act.

The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of knowledge and information for the promotion of national development and progress and the common good.

It is also the policy of the State to streamline administrative procedures of registering patents, trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the Philippines.

Crucially, the Supreme Court found no conflict between the Madrid Protocol and the IP Code. The Court emphasized that the method of trademark registration through the IPOPHL, as defined by the IP Code, is separate from the registration method through the WIPO, as outlined in the Madrid Protocol. The Court stated that comparing the two methods, governed by distinct registration systems, is misplaced. Section 125 of the IP Code requiring a resident agent, was misinterpreted by IPAP, the Court noted, that the provision does not grant anyone in particular the right to represent the foreign trademark applicant.

The Court also clarified the procedure for examination under the Madrid Protocol. It stated that the designation of a resident agent is required by the IPOPHL when refusing the registration of a mark, in submitting the Declaration of Actual Use, and in submitting the license contract. This requirement ensures that non-resident entities seeking protection under Philippine Intellectual Property Laws are subject to the country’s jurisdiction.

Moreover, the Supreme Court underscored that the Madrid Protocol does not amend or modify the IP Code regarding the acquisition of trademark rights. Applications under the Madrid Protocol are still examined according to the relevant national law. The IPOPHL will only grant protection to marks that meet local registration requirements. As such, the procedure outlined in the Madrid Protocol complements, rather than conflicts with, existing Philippine law.

FAQs

What was the key issue in this case?	The central issue was whether the President’s ratification of the Madrid Protocol as an executive agreement was constitutional, without the concurrence of the Senate. Additionally, the Court examined if the Protocol conflicted with the Philippine Intellectual Property Code.
What is the Madrid Protocol?	The Madrid Protocol is an international treaty that simplifies the process of registering trademarks in multiple countries through a centralized system. It allows trademark owners to file a single application in one language and pay one set of fees to protect their mark in numerous member states.
What is the difference between a treaty and an executive agreement?	Treaties require Senate concurrence and typically address political issues or changes in national policy, while executive agreements do not require such concurrence and usually involve adjustments that carry out established national policies. The key distinction lies in the level of legislative involvement required for ratification.
Did the Supreme Court find any conflict between the Madrid Protocol and the Philippine IP Code?	No, the Court found no conflict. It clarified that the Madrid Protocol complements the IP Code by providing an alternative method for international trademark registration, but it does not alter the substantive requirements for trademark protection under Philippine law.
Does the Madrid Protocol eliminate the need for a resident agent for foreign trademark applicants?	No, the Court clarified that the resident agent requirement under Section 125 of the IP Code is not entirely eliminated. Local representation is still necessary for certain actions, such as submitting the Declaration of Actual Use and dealing with oppositions to trademark registrations.
What is ‘locus standi’ and why was it an issue in this case?	Locus standi refers to legal standing, or the right to bring a case in court. It was initially an issue because IPAP’s direct injury was not immediately apparent, but the Court recognized the case’s transcendental importance, granting IPAP standing to sue.
What is the role of the Department of Foreign Affairs (DFA) in international agreements?	The DFA is responsible for determining whether an international agreement should be treated as a treaty or an executive agreement. This determination is based on the nature and scope of the agreement and its potential impact on national policy.
What is the significance of Section 2 of the IP Code in this case?	Section 2 of the IP Code outlines the State’s policy on intellectual property, including the streamlining of administrative procedures for registering trademarks. The Court cited this section to support the President’s authority to enter into the Madrid Protocol as an executive agreement.
What does it mean to streamline administrative procedures in the context of trademark registration?	Streamlining administrative procedures means simplifying and making the registration process more efficient. This can involve reducing bureaucratic hurdles, speeding up processing times, and using technology to improve accessibility and convenience for applicants.

In conclusion, the Supreme Court’s decision validates the President’s authority to enter into executive agreements, like the Madrid Protocol, that align with existing laws and policies. This ruling provides clarity on the division of powers between the executive and legislative branches in international affairs, particularly in the context of intellectual property rights. It also highlights the importance of an efficient and streamlined trademark registration system for promoting domestic development and attracting foreign investment.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Intellectual Property Association of the Philippines v. Hon. Paquito Ochoa, G.R. No. 204605, July 19, 2016