A new tool to aid the enforcement of intellectual property rights in the e-commerce space
From Jan. 1 to Dec. 1, 2023, the Bureau of Customs (BoC) seized over P24.36 billion worth of smuggled counterfeit foods, up from P20 billion in the previous year.1 This indicates that the counterfeit goods market in the Philippines remains to be a pressing problem demanding the attention and best efforts of law enforcement.
Much attention has been given to the Greenhills Shopping Center, which is the only physical market in the Philippines cited in the “2023 Review of Notorious Markets for Counterfeiting and Piracy” of the United States Trade Representative (USTR)2, first appearing in the 2018 iteration and retaining its place ever since. In fact, the Intellectual Property Office of the Philippines (IPOPHL), acknowledging this fact, recently issued a statement reiterating that Greenhills remains a priority in its bid to clear the markets of counterfeit goods.3
The 2023 Review also highlights a vast array of online markets, including Singapore-based e-marketplace platform Shopee.4 This renewed focus on online markets is a response to the rise in their popularity throughout the years. Although online e-commerce platforms house a substantial number of verified sellers and legitimate goods, ranging from small entrepreneurs and businesses to worldwide householdname brands, some of them are also known to house, to varying degrees, an assortment of counterfeit goods.
In recognition of this, there have been commendable efforts from the IPOPHL and relevant stakeholders in curbing counterfeiting in the e-commerce space. In 2021, both Shopee and fellow e-commerce platform Lazada signed a memorandum of understanding (MoU) with several rights holders, establishing “a code of practice among online marketplaces” and “an efficient notice and takedown procedure” to aid the fight against counterfeit goods sold online.5 Speaking to their achievements in light of this MoU, in 2022 Shopee and Lazada both reported massive increases in listings removed from their platforms for counterfeiting, and the implementation of renewed IP rights campaigns and legitimate product guarantees.6
Recent legislation represents another helpful tool to aid in this fight, this time on the enforcement side.
On Dec. 5, 2023, Republic Act No. 11967, or the “Internet Transactions Act of 2023,” was signed into law, providing for the regulation of e-commerce to, among other things, protect consumer rights and uphold intellectual property rights.7 To this end, e-commerce merchants who are determined to have established “minimum contacts” in the Philippines may now be subject to Philippine laws and regulations despite not having a legal presence in the country.8 This brand-new law adds to the ever-growing list of applicable local laws for online transactions, a list which already includes R.A. No. 7394 (the Consumer Act of the Philippines), R.A. No. 8792 (the Electronic Commerce Act), R.A. No. 10173 (the Data Privacy Act of 2012), and R.A. No. 10175 (the Cybercrime Prevention Act of 2012).
This now makes potential sanctions and penalties under Philippine Intellectual Property laws possible for e-commerce merchants who sell their goods on the Philippine market. This development may also indirectly aid in the overhaul of Greenhills, as suppliers of merchants therein who transact primarily online may withdraw under threat of penalties.
It bears stressing the adverse effect that counterfeit goods have on the economy: they discourage innovation and product development, scare away potential foreign investment, and eat into the sales of legitimate manufacturers. It is hoped that with the applicability of Philippine laws to e-commerce merchants no longer in doubt, along with the combined efforts of the IPOPHL, law enforcement and the e-commerce marketplaces themselves, the enforcement of intellectual property rights in the e-commerce space continues to take steps forward.
Louisse Maureen Simeon, 2023. “Fake foods remain Philippines top smuggled item,” https://www.philstar.com/ headlines/2023/12/08/2317268/ fake-goods-remain-philippinestop-smuggled-item.
United States Trade Representative, 2023 Review of Notorious Markets for Counterfeiting and Piracy, at 49-50, https://ustr. gov/sites/default/files/2023_Review_of_Notorious_Markets_for_ Counterfeiting_and_Piracy_Notorious_Markets_List_final.pdf.
Intellectual Property Office of the Philippines (2024), “Statement of IPOPHL on the USTR Notorious Markets Report: Greenhills Shopping Center,” https://www. ipophil.gov.ph/news/statementof-ipophl-on-the-ustr-notoriousmarkets-report-greenhills-shopping-center/.
United States Trade Representative, 2023 Review of Notorious Markets for Counterfeiting and Piracy, Id., at 31.
Intellectual Property Office of the Philippines (2021), “Lazada, Shopee and IP right holders band together in fight vs. rising online counterfeiting, piracy,” https:// www.ipophil.gov.ph/news/lazadashopee-and-ip-right-holdersband-together-in-fight-vs-risingonline-counterfeiting-piracy/.
Intellectual Property Office of the Philippines (2022), “E-commerce MoU drives heightened takedown efforts against counterfeiting, piracy,” https://www.ipophil. gov.ph/news/e-commerce-codeof-practice-drives-heightenedtakedown-efforts-against-onlinecounterfeiting-piracy/.
Republic Act No. 11967, Section 2.
Republic Act No. 11967, Section 5. (R.A. No. 11967 does not provide a definition or standard for what constitutes “minimum contacts.” As of the date of writing, the Implementing Rules and Regulations (IRR) for R.A. No. 11967 have not been released, therefore it remains to be seen what standard will be provided, if any.)
This article is for general informational and educational purposes only, and is not offered as, and does not constitute, legal advice or legal opinion.
LUIS ALFONSO F. MANLANGIT is an associate of the Intellectual Property Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
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