Why Intellectual Property Rights Infringement Remains Entrenched in The Philippines

Pace International Law Review
Volume 21
Article 3
Issue 1 Winter 2009
January 2009
Why Intellectual Property Rights Infringement

Remains Entrenched in the Philippines
Andrew Jaynes
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Andrew Jaynes, Why Intellectual Property Rights Infringement Remains Entrenched in the Philippines, 21
Pace Int'l L. Rev. 55 (2009)
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WHY INTELLECTUAL PROPERTY RIGHTS

INFRINGEMENT REMAINS ENTRENCHED
IN THE PHILIPPINES
Andrew Jaynes1
I. INTRODUCTION
Nearly fifteen years has passed since the finalization of the
Agreement on Trade-Related Aspects of Intellectual Property
Rights Agreement (TRIPS). Like other World Trade Organiza-
tion (WTO) member countries, the Philippines has enacted cer-
tain minimum standards of intellectual property rights (IPR)
protection to comply with its TRIPS obligations.2 Yet even with
1 U.S. Fulbright Scholar, Philippines, 2007-08; J.D., University of Wisconsin
Law School, 2007; B.A., University of Michigan, 2003. This Article is based on the
author’s research in the Philippines. The author thanks Dr. Esmerelda Cunanan
and everyone at the Philippine-American Educational Foundation, with a special
thank you to Atty. Numeriano F. Rodriguez, Jr. and his family, John Lesaca, the
IP Coalition, David Rovinsky, and the U.S. Embassy in Manila. The author takes
responsibility for any errors.
2 See, e.g., E-mail from the Intell. Prop. Coalition to Sybia Harrison, Special
Assistant to the Section 301 Committee, Office of the United States Trade Repre-
sentative (Feb. 12, 2007) (on file with the Intellectual Property Coalition and au-
thor) (“The Philippines has an adequate legal framework to protect intellectual
property rights. Though imperfect, such a framework includes an Intellectual
Property Code that substantially meets international standards set by TRIPS and
other conventions.”) [hereinafter IP COALITION 2007 SUBMISSION]; David Moser,
26570_pir_21-1 Sheet No. 34 Side A

Piracy in the Philippines and the Proposed Optical Media Act, 17 LAW. REV. 9
(2003) (“In 1997, the Philippines enacted a new Intellectual Property Code which
strengthened intellectual property protection and brought the Philippines in line
with international standards.”); Grace P. Nerona, Comment, The Battle Against
Software Piracy: Software Copyright Protection in the Philippines, 9 PAC. RIM L. &
POL’Y J. 651, 671 (pointing out the WTO’s acknowledgement that the Philippines
has taken the necessary steps to comply with TRIPS); MOTION PICTURE ASS’N,
ANTI-PIRACY FACT SHEET, ASIA-PACIFIC REGION (2007), www.mpaa.org/
AsiaPacificPiracyFactSheet.pdf (“By and large, the countries in the Asia-Pacific
region have strong anti-piracy legislation.”) [hereinafter ANTI-PIRACY FACT SHEET];
David L. Llorito, Technology, Weak Institutions Spawn Piracy, MANILA TIMES,
Jan. 4, 2003. (“The legal framework for IPR protection in the Philippines is well in
place. . .[and] substantially compliant with the [TRIPS] component of the World
Trade Organization. We have the right legal infrastructure.”); but c.f. OFFICE OF
THE U.S. TRADE REPRESENTATIVE, NATIONAL TRADE ESTIMATE REPORT 476 (2007),
available at http://www.ustr.gov/assets/Document_Library/Reports_Publications/
04/08/2009 15:17:04
55
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26570_pir_21-1 Sheet No. 34 Side B 04/08/2009 15:17:04
56 PACE INT ’L L. REV. [Vol. 21:55
the internationally mandated laws on the books, IPR infringe-

ment remains entrenched in the country. The question is, why?
Evaluators of IPR protection in the Philippines, such as the In-
ternational Intellectual Property Alliance (IIPA), blame the
lack of effective enforcement for the country’s thriving piracy
business.3 This response, while correct, only scrapes the sur-
face. The more fundamental reason is that IPR protection and
enforcement, in the eyes of those in power in the Philippines,
are not priorities worthy of the government’s attention and re-
sources. Ignorance of and indifference towards IPR protection
among the majority of Filipinos—whether private citizens or
civil servants—has meant that the country can boast only mini-
mal success when it comes to efforts to clamp down on piracy
and counterfeiting.
For the average pirated optical media or counterfeit goods
vendor, selling IPR-infringing products may simply be a means
of existence. There is a chance that the vendor does not fully
comprehend the illicit nature of his activities, but more likely
he simply does not care that what he is doing is illegal. And for
the organized crime syndicates that often supply the vendors
with the pirated optical media and fake goods, the relatively low
risk and high profit margins provide all the reasons they need
to spurn the laws and continue producing and distributing their
knock-offs.
Likewise, consumers share in the IPR ignorance and indif-
ference. With the country’s inadequate education system4 and
26570_pir_21-1 Sheet No. 34 Side B

2007/2007_NTE_Report/asset_upload_file855_10945.pdf (stating that the Intellec-
tual Property Code still contains ambiguous provisions relating to the rights of
copyright owners over broadcasting and licensing) [hereinafter 2007 NTE REPORT].
3 INT’L INTELL. PROP. ALLIANCE, 2002 SPECIAL 301 REPORT 205 (2002) (“The
systemic failure to deliver effective enforcement is the best explanation for why
piracy is a thriving business throughout the Philippines.”); see also Rosielyn Alviar
Pulmano, Comment, In Search of Compliance with TRIPS Against Counterfeiting
in the Philippines: When is Enough Enough?, 12 TRANSNAT’L LAW. 241, 269 (1999)
(“The reasonable efforts of the legislature, executive, judiciary and the private sec-
tor did not terminate counterfeiting. The actual problem was the lack of effective
enforcement mechanisms.”).
4 See Cai U. Ordinario, Educated but Jobless Youth: A Global Problem, BUS.
MIRROR (Phil.), Dec. 20, 2007 [hereinafter Ordinario]; Volt Contreras & Michael
Lim Ubac, Education Summit Aims to Fix Mess in RP Schools, PHILIPPINE DAILY
INQUIRER, Feb. 1, 2008 [hereinafter Education Summit]; Ma. Isabel Ongpin, Op-
04/08/2009 15:17:04
Ed, Improving Education, MANILA TIMES, Jan. 25, 2008 [hereinafter Improving
Education];
http://digitalcommons.pace.edu/pilr/vol21/iss1/3 2
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2009] INTELLECTUAL PROPERTY RIGHTS IN PHILIPPINES 57
one out of three Filipinos living in poverty,5 the average con-

sumer may not understand IPR and may not be able to afford
most legitimate products. Rather than forego the products alto-
gether, she buys that counterfeit children’s DVD or that fake
pair of Adidas shoes. Even wealthier Filipinos who can comfort-
ably afford legitimate products seek out pirated optical media or
counterfeit goods for a variety of reasons, including getting
their hands on a movie, bag or album otherwise unavailable in
the country, or merely saving several hundred pesos.
The Philippine government is also responsible for the
proliferation of pirated optical media and counterfeit goods. De-
spite statements by officials to placate the United States Trade
Representatives’ (USTR) office and industry associations such
as the IIPA,6 IPR protection and enforcement are not Philippine
priorities. For a variety of reasons, the political will necessary
to address IPR infringement effectively does not exist. People
in power either do not understand or respect IPR, believe the
resources would be better spent on other, more pressing, issues
such as poverty or education, or fear that stronger IPR protec-
tion and enforcement would jeopardize their wealth and
influence.
While the majority of Filipinos remain ignorant or indiffer-
ent toward IPR, the Philippines still has a passionate group of
IPR advocates in government, business, and academia who are
working hard to reduce IPR infringement. Thanks to these in-
dividuals, the country has been making some progress tackling

piracy and counterfeiting. In the past few years there has been
an increase in number of raids and the amount of IPR-infring-
ing goods seized, better coordination among enforcement agen-
cies, and an emphasis on IPR training and education programs.
Unfortunately, IPR advocates can accomplish only so much
within the country’s larger institutional constraints. Major re-
forms in the economic, legal, and political sectors are necessary
before there will be a significant reduction in IPR infringement
in the Philippines. As it is, the country will see only limited
benefits should it choose to vigorously protect and enforce IPR.
5 Press Release, National Statistical Coordination Board, Poverty Worsens
between 2003 and 2006 (Mar. 5, 2008), http://www.nscb.gov.ph/pressreleases/2008/

04/08/2009 15:17:04
PR-200803-SS2-02_pov.asp [hereinafter Poverty Worsens].

6 See discussion infra Parts III.C.
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The insignificance of the country’s IPR industries, whether for-

eign or domestic, makes justifying the devotion of scarce re-
sources to IPR protection and enforcement problematic. Keith
E. Maskus and other scholars note strong IPR protection and
enforcement alone do not lead to economic development.7 They
may have the potential to result in “long-term economic growth
and technological innovation[,]”8 but this ultimately depends on
other, institutional, factors such as an open and transparent
economy, political stability, and a sound legal system—things
the Philippines has yet to achieve.
Right now, the concentration of wealth in the hands of a
limited few reduces investments in the country and limits its
competitiveness. The economic oligarchs are often also part of
the political elite, which is composed largely of dynasties that
attempt to hold on to their power at all costs, including through
violence and corruption. Moreover, the overburdened and dys-
functional legal system provides little deterrence, especially for
IPR violators, and hurts the public’s confidence in the adminis-
tration of justice. Reforming these sectors, however, can facili-
tate economic growth. Once on this path, the Philippines will
start to accrue more benefits from strong IPR protection and
enforcement in the forms of foreign direct investment (FDI) and
growth in its domestic IPR industries. Because they will be de-
riving more wealth from IPR, Filipinos will make strong IPR
protection and enforcement a higher priority. That is when
there will be a significant reduction in piracy and counterfeiting

around the country.
This Article examines why IPR infringement remains en-
trenched in the Philippines, focusing on physical goods, piracy
and counterfeiting. Part II provides a brief overview of Philip-
pine IP laws and the government bodies responsible for oversee-
ing and enforcing them. Part III discusses IPR infringement in
the country, detailing the most prevalent types of trademark
and copyright violations and highlighting recent IPR protection
and enforcement successes and failures. Part IV takes a closer
look at the roots of the IPR infringement problem, examining
7See discussion infra Parts V.D, V.D.1.

8Keith E. Maskus, Intellectual Property Challenges for Developing Coun-
04/08/2009 15:17:04
tries: An Economic Perspective, 2001 U. ILL. L. REV. 457, 457 [hereinafter Intellec-
tual Property Challenges].
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how an ignorance of and indifference towards IPR among the

majority of Filipinos perpetuates IPR infringement in the coun-
try. Part V explains the keys to reducing IPR infringement in
the country significantly—the need for Filipinos to understand
IPR and have a stake in their protection and enforcement—and
offers suggestions for accomplishing these goals. Part V also
analyzes the link between a strong IPR regime and economic
development, concluding that the Philippines will not be able to
protect and enforce IPR vigorously until reforms in the eco-
nomic, political, and legal sectors take place. Part VI examines
specific reforms needed to permit effective IPR enforcement,
describing how oligopolies, political dynasties, corruption, and a
dysfunctional legal system restrict the Philippines’ economic
growth and, ultimately, its incentive to spend its limited re-
sources on IPR protection and enforcement. In the end, this Ar-
ticle concludes that significantly reducing IPR infringement in
the Philippines can happen over time.
II. IPR LAWS AND GOVERNMENT BODIES RESPONSIBLE FOR

THEIR OVERSIGHT AND ENFORCEMENT IN THE PHILLIPPINES
The Philippines has the legal and regulatory framework in
place, consistent with its international obligations, to handle
the proliferation of pirated media and counterfeit goods around
the country effectively.9 The real problem, which will be ex-
amined later, lies in the implementation and enforcement of
these laws.10 This section provides an overview of IPR protec-

tion in the Philippines, discussing the laws pertaining to IPR
and the government bodies that deal with IPR policy and
enforcement.
A. Laws and International Agreements

IPR protection in the Philippines dates back to the begin-
ning of the 19th century—earlier than any other country in
Southeast Asia—when then-colonizer Spain introduced decrees
addressing IP.11 Today, the primary source of IP laws in the
9
See supra note 2.
10
See discussion infra Parts III, IV.
11 See Christoph Antons, Intellectual Property Law in Southeast Asia: Recent
04/08/2009 15:17:04
Legislative and Institutional Developments, ARC CENTRE OF EXCELLENCE FOR CRE-

ATIVE INDUSTRIES AND INNOVATION 3 (2006), http://www2.warwick.ac.uk/fac/soc/
5
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Philippines is the Intellectual Property Code (IPC),12 a “major

turning point” in IPR protection in the country,13 which was en-
acted in 1997 in order to fulfill the Philippines’s TRIPS obliga-
tions.14 It contains laws covering patents, trademarks, and
copyrights.15 Also significant is the Optical Media Act (OMA),
ratified in 2004,16 which “regulates the manufacture, master-
ing, replication, importation and exportation of optical me-
dia.”17 It “fills the gaps in the IPC for the protection of optical
media[,]” which includes movies, music, video games, and
software.18 Additionally, the E-Commerce Act19 complements
the IPC by addressing liability for internet piracy.20
In addition to TRIPS, the Philippines is a party to a variety
of other international agreements, including the Paris Conven-
tion for the Protection of Industrial Property, Berne Convention
for the Protection of Literary and Artistic Works, Budapest
Treaty on the International Recognition of the Deposit of Micro-
organisms for the Purpose of Patent Procedure, Patent Cooper-
law/elj/jilt/2006_1/antons/antons.pdf. There is also evidence of a patent system in

place before 1862 and trademarks that existed as early as the 1840s. Adrian S.
Cristobal Jr., Op-Ed, A Shared Passion, BUS. MIRROR (Phil.), July 5, 2007 [herein-
after Shared Passion]. In general, the Philippine legal system “evolved as a syn-
thesis of indigenous, Spanish (Roman), and American common laws, each building
on its forerunner . . . .” Amy Rossabi, The Colonial Roots of Criminal Procedure in
the Philippines, 11 COLUM. J. ASIAN L. 175, 175 (1997) (discussing Spanish and
American influence on criminal procedure in the Philippines).
12 Intellectual Property Code, Rep. Act No. 8293 (June 6, 1997) (Phil.).
13 INTELLECTUAL PROPERTY COALITION REPORT ON IPR PROTECTION 21 (2004)

(on file with author) [hereinafter IP COALITION REPORT].
14 Nerona, supra note 2, at 659.
15 Rep. Act No. 8293, supra note 12. See generally IP COALITION REPORT,
supra note 13, at 22 (comparing intellectual property laws before and after the IPC
was enacted); Nerona, supra note 2, at 659-73 (discussing the IPC in-depth).
16 An Act Regulating Optical Media, Reorganizing For This Purpose The Vide-
ogram Regulatory Board, Providing Penalties Therefor, And For Other Purposes,
Rep. Act No. 9239 (Feb. 10, 2004) (Phil.).
17 4 TERRENCE F. MACLAREN, ECKSTROM’S LICENSING IN FOREIGN AND DOMES-
TIC OPERATIONS: JOINT VENTURES § 20:9 (West 2008).
18 Ignacio S. Sapalo & Augusto R. Bundag, The Philippines, MANAGING IN-
TELL. PROP., Apr. 2005, at 53, available at 2005 WLNR 7592634.
19 An Act Providing For The Recognition And Use Of Electronic Commercial
And Non-Commercial Transactions And Documents, Penalties For Unlawful Use

Thereof And For Other Purposes, Rep. Act No. 8792 (June 14, 2000) (Phil.).
20 INTELLECTUAL PROPERTY OFFICE, ENFORCEMENT OF INTELLECTUAL PROP-
ERTY RIGHTS (IPR): PHILIPPINES 2 (2007), http://www.ecap-project.org/how_to_en-
04/08/2009 15:17:04
force_your_ipr/philippines.html [hereinafter ENFORCEMENT OF IPR]. See also IP

COALITION REPORT, supra note 13, at 22.
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ation Treaty, and Rome Convention.21 The Philippines is also a

signatory to both the World Intellectual Property Organization
(WIPO) Copyright Treaty and WIPO Performances and Phono-
grams Treaty, but has yet to pass the required legislation im-
plementing the treaties.22
B. Government Bodies
A number of different government agencies have a role in
IPR protection and enforcement.23 These separate bodies often
work together to share information24 or to carry out enforce-
ment operations.25 Public-private partnerships between the
government and private organizations such as the Business
Software Alliance (BSA) and the Intellectual Property Coalition
(IP Coalition) also play an important role in fighting IPR
infringement.26
First, the Intellectual Property Office of the Philippines (IP
Philippines), which was established under the IPC, “is prima-
rily tasked to administer and implement the state policies on
the protection, utilization and enhancement of enforcement of
IPR in the country . . . [and] to coordinate with other govern-
ment agencies and the private sector to strengthen IPR protec-
tion.”27 While not directly responsible for enforcing laws, IP
Philippines has oversight authority over enforcement efforts,
and plays a coordinating and reporting role in the enforcement

21 U.S. DEPT. OF STATE, 2007 INVESTMENT CLIMATE STATEMENT – THE PHILIP-
PINES (2007), www.philippine-embassy.de/bln/images/PTIC/2007%20investment%
20climate%20statement.pdf [hereinafter INVESTMENT CLIMATE STATEMENT].
22 E-mail from the Intellectual Property Coalition to Jennifer Choe Groves,
Director of Intellectual Property and Innovation and Chair of the Special 301 Com-
mittee, Office of the United States Trade Representative 14 (Feb. 11, 2008) (on file
with the Intellectual Property Coalition and author) [hereinafter IP COALITION
2008 SUBMISSION]; see also 2007 NTE REPORT, supra note 2, at 477.
23 See ROUSE & CO. INT’L, PHILIPPINES: ENFORCEMENT GUIDE 1 (2006), http://
www.iprights.com/assets/pdf/PIL_enforcementguide.pdf [hereinafter ENFORCE-

MENT GUIDE].
24 See GOV’T OF THE REPUBLIC OF THE PHILIPPINES, STRENGTHENING THE IP
SYSTEM: THE CAMPAIGN AGAINST PIRACY AND COUNTERFEITING IN THE PHILIPPINES

(2005-2006) 8, http://ipophil.gov.ph/ipenforcement/IPRCampaign2005-2006_Up-
dated15March2007.pdf [hereinafter STRENGTHENING THE IP SYSTEM].
25 See id. at 10-12 (discussing institutional linkages).
04/08/2009 15:17:04
26 See id. at 12-13.

27 ENFORCEMENT OF IPR, supra note 20, § 1.
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process.28 Additionally, its Bureau of Legal Affairs can review

and decide administrative complaints involving damages
PHP200,000 ($4,808)29 and above, as well as cases involving
compulsory licenses and cancellations of trademarks and
patents.30
Next, the Optical Media Board (OMB) was established in
2005 by the Implementing Rules and Regulations of the OMA.31
The OMB is the body responsible for regulating the optical me-
dia industry.32 It is best known for “conducting raids and in-
spections, seizing infringing optical media and instituting
criminal actions against erring optical disc plants and
retailers. . . .”33
Additionally, the country’s law enforcement agencies, the
Philippine National Police (PNP) and the National Bureau of
Investigation (NBI), can bring a criminal case against a sus-
pected IPR infringer, but only at the request of an IP holder or
in conjunction with the OMB.34 Both agencies have divisions
that handle IPR violations,35 and these divisions frequently
work with the OMB in conducting raids against suspected IPR-
infringing establishments such as malls or optical disc plants.36
28 See INT’L INTELL PROP. ALLIANCE, 2008 SPECIAL 301 REPORT 301 (2008),
http://www.iipa.com/rbc/2008/2008SPEC301PHILIPPINES.pdf [hereinafter IIPA

2008 SPECIAL 301 REPORT]; 2007 NTE REPORT, supra note 2, at 477.
29 U.S. dollar amounts are based on the exchange rate on April 1, 2008
($1=PHP41.6) from http://www.exchange-rates.org/Rate/USD/PHP/4-1-2008.

30 IP COALITION REPORT, supra note 13, at 25.; see also ENFORCEMENT GUIDE,

supra note 23, at 1-2.
31 See INVESTMENT CLIMATE STATEMENT, supra note 21, at 11. The OMB re-
placed the Videogram Regulatory Board (VRB). Id.

32 See IP COALITION 2007 SUBMISSION, supra note 2, at 8.
33 Id. For a further discussion of the OMB and its problems, see infra Part
III.D.3.
34 See ENFORCEMENT GUIDE, supra note 23, at 1; see also INT’L INTELL. PROP.
ALLIANCE, 2007 SPECIAL 301 REPORT 371, 382 (2007), available at http://www.iipa.
com/rbc/2007/2007SPEC301PHILIPPINES.pdf [hereinafter 2007 SPECIAL 301
REPORT].
35 See STRENGTHENING THE IP SYSTEM, supra note 24, at 21. The PNP has the
Anti-Fraud and Commercial Crimes Division of the Criminal Investigation and

Detection Group (AFCCD/CIDG-PNP), while the NBI has the Intellectual Property
Rights Division (IPRD). Id. at 20-21.
36 See 2008 SPECIAL 301 REPORT, supra note 28, at 302. In 2005, the PNP,
NBI, and OMB signed a Memorandum of Understanding creating the Pilipinas

04/08/2009 15:17:04
Anti-Piracy Team (PAPT) in an effort to reduce software piracy and increase the
country’s competitiveness in the IT sector. Id. Often acting on information pro-
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Other agencies involved in IPR enforcement include the

Bureau of Customs (BOC), the Department of Justice (DOJ),
and the National Telecommunications Commission (NTC). The
BOC maintains a registry of patents, trademarks, and copy-
rights, as well as a list of known or suspected IPR infringers.37
IP owners can record their rights with the BOC in order to facil-
itate the seizure of infringing goods.38 An ad hoc IP Unit within
the BOC was created in 2002.39 In the DOJ, a limited number
of prosecutors (six at the head office in Manila and ninety-four
nationwide in 2005, although the group is constantly reconsti-
tuted) handle IPR cases, but these cases make up only a small
portion of their overall caseloads.40 Finally, the NTC deals with
piracy relating to satellite and cable programming.41
III. IPR INFRINGEMENT IN THE PHILIPPINES
A. Overview
Counterfeiting and piracy continue to grow and evolve

around the world.42 Fake goods used to be limited to knock-offs
of designer sunglasses or bags, but now include almost any
product—shampoo, batteries, electronics, airline parts, and
vided by the BSA, the PAPT has enjoyed continued success raiding businesses that
use pirated software. Id.
37 MICHAEL BLAKENEY, GUIDEBOOK ON ENFORCEMENT OF INTELLECTUAL PROP-
ERTY RIGHTS 46 (2005), available at http://www.delpak.ec.europa.eu/WHATSNEW/

Guidelines.pdf; see also 2007 NTE REPORT, supra note 2, at 478. For more informa-
tion on customs procedures and IPR, see Leonard Vinz O. Ignacio, First Line of
Defense Against Intellectual Property Rights Infringement, BUS. WORLD (Phil.),
Feb. 14, 2008.
38 BLAKENEY, supra note 37, at 46.
39 2007 NTE REPORT, supra note 2, at 478; see also IP COALITION REPORT,
supra note 13, at 23.

40 STRENGTHENING THE IP SYSTEM, supra note 24, at 33.
41 INVESTMENT CLIMATE STATEMENT, supra note 21, at 12.
42 See 2007 SPECIAL REPORT, supra note 34, at 6; Guy Sebban & Urho
Ilmonen, Preface to INT’L CHAMBER OF COM., CURRENT AND EMERGING INTELLEC-

TUAL PROPERTY ISSUES FOR BUSINESS: A ROADMAP FOR BUSINESS AND POLICY MAK-
ERS 1 (8th ed. 2007); accord Ian Traynor, Forget the Rolexes, Fake Ferrari Proves
$600bn Industry Has Moved Up a Gear, GUARDIAN (London), Mar. 11, 2008, avail-
able at http://www.guardian.co.uk/world/2008/mar/11/internationalcrime.con-
sumeraffairs; Leo Cendrowicz, Piracy Derailed Biz Growth, Report Says,
04/08/2009 15:17:04
HOLLYWOOD REP., Oct. 30, 2007, available at http://www.adweek-online.com/aw/

esearch/article_display.jsp?vnu_content_id=1003665063.
9
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even Ferraris.43 The once localized fake goods industry has ex-
ploded into a worldwide enterprise worth as much as $600 bil-
lion,44 which is “growing exponentially in terms of volume,
sophistication, range of goods, and countries affected.”45 Rising
internet use and technological developments with mobile de-
vices such as phones have left music and movie executives
scrambling for ways to protect their revenue.46
In the Philippines, IPR infringement remains entrenched.
One of the chief problems is for-profit enterprises selling IPR-
infringing tangible goods.47 Walk around a medium-sized,
multi-storied, indoor mall in Manila’s financial center such as
Makati Cinema Square, or navigate the crowds, stalls, and
chaos of the outdoor Quiapo market area, and you will find ram-
pant, brazen copyright and trademark infringement involving
pirated DVDs, CDs, video games, and software, and counterfeit
clothes, bags, shoes, and other items.48 But the problem is not
limited to malls and markets.49 Blankets displaying counterfeit
DVDs are laid out on sidewalks as the workday comes to an
end. Small shop owners on the side of the road frequently ped-
43 2007 SPECIAL 301 REPORT, supra note 34, at 6; see generally Traynor, supra
note 42 (describing a confiscated fake 1967 P4 cherry red Ferrari made with Japa-
nese parts in the Thai countryside).
44 Traynor, supra note 42.
45 INT’L CHAMBER OF COM., supra note 42, at 1; see also 2007 SPECIAL 301 RE-
PORT, supra note 34, at 6.
46 See 2007 SPECIAL 301 Report, supra note 34, at 380; see also Coming Soon,
ECONOMIST, Feb. 21, 2008.

47 See Llorito, supra note 2 (“By 2000, one could buy. . .pirated [music, movies,
and software] almost everywhere: in sidewalk and street vendors’ carts, corner
stores, malls, and in LRT and MRT stations); accord Fel V. Maragay, The War
Against Pirates, MANILA STANDARD, July 21, 2007 (commenting on the evolution of
pirated movies and music from being sold in stalls on the side of the street to
places such as higher-end shopping malls); Likha C. Cuevas, Movie Outfit’s Losses
Mount on Piracy, MANILA TIMES, May 2, 2007 (“Pirated CDs, pirated CDs every-
where!”). For a discussion of “bad” copyright infringements, see Trotter Hardy,
Criminal Copyright Infringement, 11 WM. & MARY BILL RTS. J. 305, 326 (2002).
48 The USTR included the Quiapo area on its list of “Notorious Markets” for
IPR infringement in the 2007 Special 301 report. 2007 SPECIAL 301 REPORT, supra
note 34, at 376, 378; see also Abigail L. Ho, Media ‘Pirates’ Remain Elusive as Ever,
PHILIPPINE DAILY INQUIRER, Feb. 28, 2005) (mentioning Quiapo as a notorious pi-
rated optical media hub).
49 See, e.g., Abigail L. Ho, Gov’t Seizes P2B in Pirated Goods as of HI, PHILIP-
PINE DAILY INQUIRER, July 20, 2007, at 227, available at http://business.inquirer.
04/08/2009 15:17:04
net/money/topstories/view_article.php?article_id=77733 (describing the ubiquity of

pirated optical media in the country).
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dle pirated CDs or trademark-infringing National Basketball

Association (NBA) merchandise in addition to their legitimate
goods. The more entrepreneurial sellers will even come to your
home on request with a trunk full of fake DVDs.50
Because of the relatively low risk and high profit potential
involved in selling counterfeit goods,51 some vendors are sur-
prisingly enterprising in their operations. They will often have
a television and a DVD player or a boom box so that the pro-
spective customer can view or listen to pirated DVDs or CDs.
Some sellers even hand out business cards with their mobile
phone numbers and issue receipts so that a customer can return
items that do not work. When it comes to the likely law enforce-
ment raids, these vendors treat their losses from confiscated
counterfeit goods as a business expense, and blithely set up
shop again the next day.52
The next section provides a more detailed look at IPR in-
fringement in the Philippines, starting with the types of trade-
mark and copyright infringement present in the country, which
range from fake bags and watches to pirated movies and books.
It then notes the positive steps the Philippines has taken to
curb IPR violations, including conducting raids and seizing
large amounts of infringing goods, and carrying out training
and awareness campaigns. Finally, it analyzes the administra-
tive and legal system problems that prevent the Philippines
from significantly improving IPR protection and enforcement.

50 Additionally, in Taiwan, counterfeit goods vendors use home delivery as a
way to avoid confrontation with law enforcement. Stephen K. Shiu, Note, Motion
Picture Piracy: Controlling the Seemingly Endless Supply of Counterfeit Optical
Discs in Taiwan, 39 VAND. J. TRANSNAT’L L. 607, 616 (2006).
51 See Michael M. DuBose, Criminal Enforcement of Intellectual Property
Laws in the Twenty-First Century, 29 COLUM. J.L. & ARTS 481, 484 (noting the low
likelihood of conviction and small fines that accompany IPR crimes in most coun-
tries, as well as marginal start-up costs and high profit margins for sellers of coun-
terfeit goods).
52 See Clifford Coonan, Studio Retool Anti-Piracy Tactics, VARIETY ASIA, Dec.
04/08/2009 15:17:04
2, 2007, available at http://www.varietyasiaonline.com/content/view/5060/; 2007

NTE REPORT, supra note 2, at 477.
11
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B. Trademark Infringement
Counterfeit products such as sunglasses,53 designer cloth-
ing, cigarettes, shoes,55 and a variety of other goods can be
54
found throughout the Philippines.56 IP Philippines includes

these counterfeit goods, along with copyright-infringing goods,
in its annual enforcement data figures, which totaled over
PHP2.9 billion ($69.7 million) worth of seized goods in 2007.57
However, some apparel and footwear firms, such as Levi
Strauss, have complained that the counterfeit goods problem
does not receive the same time and resources as those devoted
to addressing pirated optical media and cable piracy.58
C. Copyright Infringement
The IIPA estimated U.S. copyright industry losses in the
Philippines to be $212.3 million in 2007.59 Compared to re-
gional neighbors, that is more than Malaysia ($174 million), but
less than Thailand ($361 million) and Indonesia ($255 million),
and nowhere close to China ($2.975 billion).60 The main copy-
53 See Katrice R. Jalbuena, P10-M Worth of Fake Sunglasses Seized, MANILA
TIMES, July 12, 2007 (describing a raid where the NBI seized over 35,000 fake
Louis Vitton and Prada sunglasses worth an estimated PHP10 million ($240,000)).
54 See Tina Santos, P30M Fake Lacoste Seized in Manila Raid, PHILIPPINE
DAILY INQUIRER, Oct. 3, 2007 (noting the NBI seized roughly PHP30 million
($721,000) worth of fake Lacoste goods in a 2007 raid on stalls and warehouses),
available at http://newsinfo.inquirer.net/breakingnews/metro/view_article.php?ar-
ticle_id=92282.

55 The basketball-crazed Philippines is one of the bigger markets for Adidas
basketball shoes in Asia. Raphael Bartholomew, Arenas Savors a Filipino Em-

brace, N.Y. TIMES, July 17, 2008.
56 See 2007 NTE REPORT, supra note 2, at 476.
57 IP COALITION 2008 SUBMISSION, supra note 22, at 4.
58 See Felipe S. Salvosa, RP Hit on Selective Anti-Piracy Drive, BUS. WORLD
(Phil.), Mar. 7, 2007 [hereinafter Selective Anti-Piracy Drive].

59 IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 297. IIPA
member associations (such as the BSA and the Recording Industry Association of
America (RIAA) calculate the estimated losses and piracy levels based on a num-
ber of (often complicated) methodologies). See INT’L INTELL. PROP. ALLIANCE 2007
SPECIAL 301 REPORT, APPENDIX B: METHODOLOGY (2007).
60 Press Release, Int’l Intell. Prop. Alliance, The Copyright Industries in the
International Intellectual Property Alliance (IIPA) Submit to USTR their 2008 Re-
port on Piracy in 51 Countries/Territories (Feb. 11, 2008), http://www.iipa.com/pdf/
IIPA2008Special301PressRelease021108.pdf [hereinafter IIPA Press Release].
China’s market size, of course, is much, much larger than the Philippines. China
04/08/2009 15:17:04
has a population of roughly 1.3 billion while the Philippines’ population is around
90 million. Central Intelligence Agency, The World Factbook (2008), https://www.
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right enforcement issues of a developing Asian country such as

the Philippines are slightly different from those of a developed
country such as the United States. Optical disc production is
the biggest piracy problem in Asia.61 Enforcement agencies in
the region are primarily concerned with raiding malls or ware-
houses and confiscating physical goods. In contrast, the coun-
terfeit optical media problem takes a back seat to digital piracy
in terms of media, law enforcement, and movie and music exec-
utives’ attention in the United States.62 This is because the
proportion of internet users in a developed country such as the
United States is far greater than that in a developing country
such as the Philippines.63 Moreover, internet piracy is more dif-
ficult to control than physical piracy.64 Digital piracy is a grow-
ing problem in the Philippines, and the country will soon have
to take further steps to address it.65 For now, physical piracy
garners the most attention from the authorities.
cia.gov/library/publications/the-world-factbook/geos/rp.html. Thailand and Indone-

sia, which both account for more trade losses than the Philippines, have popula-
tions of 60 million and 250 million, respectively. See IIPA Press Release, supra;
See also Central Intelligence Agency, The World Factbook (2008), https://www.
cia.gov/library/publications/the-world-factbook/geos/th.html; Central Intelligence
Agency, The World Factbook (2008), https://www. cia.gov/library/publications/the-
world-factbook/geos/id.html. Thus, Thailand accounts for $150 million more in
trade losses than the Philippines, even though its population is 30 million smaller.
See id.
61 ANTI-PIRACY FACT SHEET, supra note 2.
62 However, pirated DVDs and CDs are still a very real problem in the United
States, from New York to Los Angeles, and even to San Antonio. See DuBose,

supra note 51, at 482 (noting New York City’s Canal Street as a notorious area for
pirated and counterfeit goods); Ryan Vaillancourt, Legislators Attend Anti-Piracy
Event, GLENDALE NEWS-PRESS (Cal.), Feb. 1, 2008, http://www.glendalenewspress.
com/articles/2008/02/03/politics/gnp-entertainment02.txt (“Counterfeiters and dig-
ital pirates cost Los Angeles County about 106,000 jobs with wages of $5.6 billion
in 2006); KSAT.com, 6,000 Bootleg CDs, DVDs Seized in Raid, Jan. 24, 2008, http:/
/www.ksat.com/news/15133427/detail.html (describing a raid where San Antonio
police confiscated over 6,000 bootleg CDs and DVDs).
63 The United States has approximately 215 million internet users, or 71.4%
of its population. Internet World Stats, North America Internet Users (Nov. 2007),
http://www.internetworldstats.com/stats14.htm. However, the Philippines has
only 14 million internet users, or 15.4% of the population. IIPA 2008 SPECIAL 301
REPORT SUBMISSION, supra note 28, at 298.
64 Coming Soon, supra note 46 (“Online piracy costs Hollywood less than the
physical variety, ripping off DVDs, but the gap is closing. ‘We are more concerned
about internet piracy than physical piracy, because controlling it is harder,’ says
04/08/2009 15:17:04
Ron Wheeler, head of anti-piracy efforts at Fox Entertainment Group.”).

65 For more information about digital piracy, see infra Parts III.C.5, VI.
13
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1. Movie and Music Piracy

Large quantities of pirated optical discs continue to be
available throughout the Philippines.66 A recent estimate put
the motion picture piracy rate at around 80% in 2005,67 while
the music piracy rate doubled from 40% in 2005 to 80% in
2007.68 Pirates in the Philippines import the illegal discs from
countries such as China and Malaysia and also produce them on
their own soil for domestic consumption or exportation.69
Piracy has been blamed as one of the factors contributing to the
local film industry’s decline over the years.70 Compared to the
1970s—dubbed the “Second Golden Age of Philippine Cin-
ema”—local film production has been cut in half.71
The camcording of a film still in theaters is a growing con-
cern in the country and threatens to be one of the major IPR
issues in the near future.72 Well-organized gangs seem to be
more involved in the activity in addition to small-time play-
ers.73 Plus, movies illegally recorded in Philippine cinemas are
now being distributed globally, bolstering the country’s role as
an exporter of pirated content.74
Music piracy in the Philippines now consists mainly of
counterfeit CDs.75 The IP Coalition’s “Report on IPR Protec-
tion” contains a quote from a local industry association group
that uses a vivid image to capture the sentiments of at least
66See 2007 NTE REPORT, supra note 2, at 476.

67IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 297 (showing

the motion picture piracy rate at 78% in 2005, the last year data was available).
68 IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 297.
69 See Dave L. Llorito, Loose Rules Make CD Pirates Feel at Home Here, MA-
NILA TIMES, Jan. 2, 2003 [hereinafter Loose Rules].
70 See Cuevas, supra note 47; Ernesto F. Herrera, Editorial, Help the Film
Industry, MANILA TIMES, May 1, 2007. One anonymous official of the former Vide-
ogram Regulatory Board (now the OMB) said, “Before, we use (sic) to produce 300
films per year. Now, it’s good if we can have 50 films a year.” Dave L. Llorito &
Kristine R. Payuan, Intellectual Piracy a P9-billion Headache for Law Enforcers,
MANILA TIMES, Jan. 3, 2003 [hereinafter Intellectual Piracy]. Other factors con-
tributing to the local movie industry’s decline include a “high cost of production,
competition from blockbuster foreign films, competition from free and pay televi-
sion and low household entertainment budgets. Cuevas, supra note 47.
71 See Herrera, supra note 70.
72 See supra note 2, at 298 for a further discussion of camcording.
73 See IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 298.
04/08/2009 15:17:04
74 See id.
75 See IP COALITION REPORT, supra note 13, at 17.
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some in the music business: “[T]he Philippine music industry

was a thriving industry before the vicious tentacles of music
piracy choked it to near collapse.”76 With the increasing popu-
larity of piracy through mobile devices,77 as well as the inevita-
ble ubiquity of the internet,78 the music industry has even more
reason for concern.
2. Software Piracy
Of the different types of software piracy,79 end-user
piracy80 hurts the software industry in the Philippines the
most.81 BSA figures show that while the software piracy rates
in the Philippines remained steady at around 71% from 2003 to
2006, U.S. industry losses in the country more than doubled
over the same period, going from $55 million to $119 million.82
Counterfeit software, both business and entertainment, is also
readily available in many of the same places that sell fake
DVDs or CDs. Software piracy receives much of the copyright
infringement attention in the country, due largely to the efforts
of the Pilipinas Anti-Piracy Team (PAPT).
3. Cable Piracy
Television signal theft, both cable and satellite, continues
to escalate around the country.83 Illegal cable television users
76 Id. (quoting a Music Piracy Situationer prepared by the Philippine Associa-

tion of the Recording Industry (PARI) in 2002).
77 See infra Part III.D.5.
78 See infra Part VI.
79 Bus. Software Alliance, Software Piracy and the Law (Philippines), http://
portal.doh.gov.ph/chd10/piracy.pdf (listing the five common types of software

piracy: end-user, client-server overuse, internet, hard-disk loading, and software
counterfeiting).
80 End-user piracy consists of a business or organization making unautho-
rized copies of software. Id.

81 See id.; IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 300.
82 BUS. SOFTWARE ALLIANCE, 2006 GLOBAL SOFTWARE PIRACY STUDY: SUM-
MARY OF FINDINGS (2007), available at http://global.bsa.org/idcglobalstudy2007/
studies/summaryfindings_globalstudy07.pdf. However, estimated losses provided
by organizations such as the BSA need to be approached with some skepticism, as
calculation methods often include inflated infringement rates. Kaitlin Mara, Panel
Shows Flaws in Global IP Enforcement Push, Especially for Developing Countries,
INTELL. PROP. WATCH, July 31, 2008, http://www.ip-watch.org/weblog/index.php?p
04/08/2009 15:17:04
=1182.
15
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now outnumber legitimate ones.84 The Cable and Satellite

Broadcasting Association of Asia (CASBAA) estimates that rev-
enue losses increased to $85 million in 2007, a $5 million jump
from 2006.85 The industry’s chief concern remains rogue cable
television operators, mostly outside the major cities.86
4. Book and Journal Piracy

Book and journal piracy also poses a significant threat to
domestic and international publishers.87 According to the IIPA,
“[i]llegal commercial-scale photocopying of entire books contin-
ues, in commercial establishments surrounding universities, or
in street stalls in metropolitan areas. Photocopy shops also op-
erate on campuses, in hospitals, and in medical and nursing
schools, often in highly organized fashion, selling door-to-door
to doctors’ offices and medical establishments.”88 In some cases,
teachers encourage students to photocopy material.89 The IIPA
estimates that U.S. trade losses due to book piracy increased
slightly from $45 million in 2003 to $49 million in 2007.90
5. Mobile Devices and Piracy

The use of mobile devices as a medium for copyright in-
fringement, a growing issue around the world,91 may soon be
the biggest piracy problem in the Philippines.92
[I]llegal vendors set up dedicated booths and stalls within shop-
ping malls and load pirate content (music, published materials,

etc.) onto mobile telephones, MP3 devices, flash drives, recordable
optical discs, and even computer hard drives. These downloads
84 Kristine L. Alave, Authorities Face Uphill Battle in Campaign vs Cable
Piracy, BUS. WORLD (Phil.), Oct. 10, 2006; IIPA 2008 SPECIAL 301 REPORT SUBMIS-
SION, supra note 28, at 299.
86 See 2007 SPECIAL 301 REPORT, supra note 34, at 34; IIPA 2008 SPECIAL 301
REPORT SUBMISSION, supra note 28, at 299.

87 See IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 297;
Before You Photocopy that Book. . ., PHILIPPINE DAILY INQUIRER, July 24, 2006.
88 IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 297 (citations
omitted); see also Before You Photocopy that Book. . ., supra note 87 (describing the
book piracy problem and efforts to curb it).
89 See Before You Photocopy that Book. . ., supra note 87.
04/08/2009 15:17:04
91 See 2007 SPECIAL 301 REPORT, supra note 34, at 10.

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onto mobile devices occur prior to sale as an added incentive, or

after sale, or are offered as a download for a fee.93
While personal computers may be generally too expensive for
people in developing countries such as the Philippines, mobile
phones are much more affordable. The mobile phone subscrip-
tion rate in the Philippines is nearly 50 percent.94
D. Recent IPR Protection and Enforcement Successes

So what is the Philippines doing well when it comes to IPR
protection and enforcement? As mentioned above, the country
has solid laws and regulations in place to combat counterfeiting
and piracy.95 It also has a strong base of IPR supporters, rang-
ing from members of NGOs such as the IP Coalition96 to govern-
ment personnel in agencies such as IP Philippines and the PNP.
President Gloria Macapagal-Arroyo has drawn attention to IPR
by publicly ordering IP Philippines and the OMB to step up ef-
forts against IPR infringement97 and by asserting that fighting
piracy is in the country’s best interest because of the benefits
strong IPR protection has on Philippine creativity and innova-
tion.98 In 2006, the Philippines received a big boost when the
USTR rewarded the country for its improved IPR protection by
moving it from the Special 301 Priority Watch List to the Watch
List.99 The USTR reasoned:
93 Id.
94 See id.

95 See supra note 2 and accompanying text.
96 The IP Coalition:
is a non-stock, non-profit corporation duly registered under Philippine
law. . .[that aims] through focused advocacy, education, and enforcement
monitoring programs, to serve as the primary policy caucus of industry
organizations and stakeholder associations that promote the protection
and advancement of intellectual property rights in the Philippines.
IP COALITION 2007 SUBMISSION, supra note 2.
97 See GMA’s Next War: DVD, MANILA STANDARD, Mar. 9, 2005 (quoting Presi-
dent Arroyo in a speech at the World Bank 2005 Philippine Development Forum in
Davao City).
98 See STRENGTHENING THE IP SYSTEM, supra note 24, at 3 (quoting President
Arroyo’s policy statement at a luncheon for the National Committee for IPR
(NCIPR) in 2006). However, in reality, IPR protection and enforcement remain
low priorities in the country. See discussion infra Part V.
99 See OFFICE OF THE U.S. TRADE REPRESENTATIVE, 2006 SPECIAL 301 REPORT
04/08/2009 15:17:04
(2007) [hereinafter 2006 SPECIAL 301 REPORT]. The Philippines takes the Special
301 results very seriously. The country’s ultimate gauge of IPR protection pro-
17
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Throughout 2005, the Philippines took steps to bolster the imple-

mentation of its Optical Media Act, including increasing the num-
ber of raids against pirate optical disc production facilities and
retail establishments. The Philippines’ Intellectual Property Of-
fice coordinated among IPR enforcement agencies, which resulted
in an increased number of raids and enforcement actions.100
In 2005, the government confiscated PHP1.08 billion ($30 mil-

lion) worth of IPR-infringing goods as the result of over 2,400
enforcement operations.101 The value of IPR-infringing goods
seized has nearly tripled since, reaching PHP2.9 billion ($69.7
million) in 2007.102 Part of the success in enforcement resulted
from increased cooperation between the private and public sec-
tors.103 Improved institutional coordination within the govern-
gress is its Special 301 status. See, e.g., Maricel E. Estavillo, Gov’t Expects Re-
moval from US Watch List, BUS. WORLD (Phil.), June 19, 2006. While IP
Philippines has said that improving its investment climate is its major reason for
increased IPR enforcement, it has also stated that its objective is to be removed
from the Watch List. See Michael Geist, The Sounds and Fury of the USTR Spe-
cial 301 Report, 1 KNOWLEDGE ECOLOGY STUDIES 1 (2007), http://kestudies.org/ojs/
index.php/kes/article/view/26/36. The Philippines, like other countries with lack-
luster IPR protection, feels pressure from the U.S. government to make strides
against IPR infringement, even to the point where Special 301 may negatively af-
fect policy decisions. See IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note
28, at 296. For instance, the Philippines’ Strategic Plan (2007-09) has been criti-
cized as “being designed with a political aim in mind (i.e., to get off the Special 301
list) rather than to be helpful to creators.” Id. Moreover, the Philippines depends
heavily on the U.S. government when it comes to trade and investment. See Chino

S. Leyco, Philippines Pushes Free-Trade Deal with US, MANILA TIMES, Dec. 13,
2007 (“The US remains the Philippines’ top economic partner in both trade and
investments. The US is also the top destination for Philippine agricultural exports
and its second-largest source of imports”). Also, IPR enforcement would be a major
factor in any free-trade negotiation between the two countries. See Dugie
Standeford, US Government, Copyright Industry Continue Push for Stronger En-
forcement, INTELL. PROP. WATCH, Feb. 13, 2008, http://www.ip-watch.org/weblog/
index.php?p=922.
100 2006 SPECIAL 301 REPORT, supra note 99.
101 IP COALITION 2008 SUBMISSION, supra note 22, at 5. Enforcement opera-
tions included inspections, search warrants, and customs alert-hold orders. Id.
102 Id. at 4. The number of enforcement operations has also risen to around
3,000 in 2007. Id.

103 Rosa Katrina Venegas Banzon, Interorganizational Coordination and Intel-
lectual Property Rights Enforcement 134, 138 (May 11, 2006) (unpublished M.A.
thesis, University of Asia and the Pacific (Phil.)) (on file with University of Asia
04/08/2009 15:17:04
and the Pacific Institute of Political Economy) [hereinafter Interorganizational

Coordination].
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ment also played a role.104 OMB Executive Director Rosendo

Meneses’ statement sums up the OMB’s newfound vigor when it
comes to raids and inspections: “Let this serve as a warning to
all copyright violators: Your days are numbered! The OMB will
stop at nothing until the menace of piracy is eradicated in the
country.”105
Another positive IPR protection development has been the
government’s training and education programs. IP Philippines
organized fifty-two workshops and seminars for both the pri-
vate sector and government agencies throughout the country in
2006.106 Judges, customs officials, police officers, and other gov-
ernment workers also received IPR enforcement training
outside of the Philippines.107 Furthermore, IP Philippines has
carried out IPR awareness campaigns targeting research and
academic institutions and small and medium-sized enter-
prises,108 which make up 99% of businesses in the country.109
E. Persistent IPR Protection and Enforcement Problems

Unfortunately, the positives—solid laws and regulations,
passionate IPR advocates, impressive enforcement data, and
training and awareness campaigns—go only so far in the Phil-
ippines’s uphill battle against IPR infringement. The country’s
lack of resources and administrative capability, persistent
problems with interagency coordination, and lackluster leader-
ship and professionalism all play a role in preventing the coun-

104 See Ho, supra note 49 (noting Director-General of IP Philippines Attorney
Adrian Cristobal Jr.’s comments about better coordination among government bod-
ies such as the DOJ and NTC 2005-07, leading to more effective IPR enforcement).
105 OMB: Pirates’ Days are Numbered with Joint Efforts, MANILA TIMES, Nov.
2, 2007 (quoting Executive Director Meneses’ statement to the media). For the
downside to this focus on raids and seizures, see discussion infra Part III.D.3.
107 See id. at 39.
108 Lawrence Casiraya, IPO Reports Growth in Trademark Applicants, IN-
QUIRER.NET, Oct. 17, 2007, http://technology.inquirer.net/infotech/infotech/view_
article.php?article_id=95100.
109 Arun Agrawal, Good Governance for SMEs with Special Reference to Prac-
tices in South/South-Asian Countries 2, Econ. Comm’n for Europe, Working Party

on Industry and Enterprise Dev. Paper No. 22, 2004, available at https://www.
businessgrowthinitiative.org/ResourceCenter/Studies % 20Enterprise % 20Develop
ment/Good%20Governance%20for%20SMEs%20with%20Special%20Reference%2
04/08/2009 15:17:04
0to%20Practices%20in%20South%20and%20South-East%20Asian%20Countries_.
pdf.
19
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try from significantly reducing IPR infringement. A misplaced

focus on raids and seizures rather than building administrative
capabilities in the OMB and an inefficient legal system also add
to the problem.
1. Lack of Resources and Administrative Capability
Government agencies obviously need adequate funding in

order to carry out their mandates. For a developing country
such as the Philippines, funding IPR enforcement “constitute[s]
a palpable drain on very scarce resources.”110 Limited re-
sources continue to be one of the primary reasons for the lack of
effective IPR protection and enforcement.111 IP Philippines ac-
knowledged that one of the major challenges standing in the
way of effective implementation of IPR in the country is the
“[l]ack of institutional and personal capacities of the IP commu-
nity (practitioners, enforcers, prosecutors, judges, etc.)[.]”112
For instance, the OMB’s budget is only about PHP25 million
($600,000) a year.113 This leaves as little as PHP1 million
($24,000) for enforcement actions after taking care of adminis-
trative costs such as payroll and rent.114 A mere fifteen mem-
bers are available for enforcement actions around the
110 J.H. Reichman, The TRIPS Agreement Comes of Age: Conflict or Coopera-
tion with the Developing Countries?, 32 CASE W. RES. J. INT’L L. 441, 450 (2000)

(discussing the high transaction costs associated with protecting IPR in developing
countries); see also Jeffrey W. Berkman, Intellectual Property Rights in the P.R.C.:
Impediments to Protection and the Need for the Rule of Law, 15 UCLA PAC. BASIN
L.J. 1, 20 (1996) (discussing China’s problem enforcing IPR effectively, due in part
to lack of financial resources for enforcement bodies).
111 See 2007 NTE REPORT, supra note 2, at 477; MACLAREN, supra note 17;
Pulmano, supra note 3, at 269; Intellectual Piracy, supra note 70 (“We are doing all
our best to address the problem of intellectual property rights violations . . . . Yet
there is this tendency for people to look at the problem alone and not at how far we
have gone to address it given our very limited resources.”); Antons, supra note 11,
at 7 (noting the difficulties in competing with the private sector and attracting
qualified employees with limited government resources).
113 Erwin Oliva, Amendments to Optical Media Law Needed to Increase Penal-
ties, INQUIRER.NET, Nov. 27, 2007, http://newsinfo.inquirer.net/breakingnews/info

tech/view_article.php?article_id=10339 [hereinafter Amendments to Optical Media
04/08/2009 15:17:04
Law Needed].
114 See id.; Maragay, supra note 47.
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country.115 Moreover, the lack of both personnel and appropri-

ate training for employees limit the agencies’ ability to do their
jobs.116
The lack of resources also prevents the much-needed
strengthening of the BOC.117 It is estimated that anywhere
from 70-90% of counterfeit optical media in the country is im-
ported.118 While the BOC now has a permanent IP unit,119 the
agency remains too small,120 and too prone to corruption,121 to
effectively limit IPR-infringing goods from entering the country.
Another IPR enforcement problem related to the lack of re-
sources is that “[e]nforcement agencies generally will not proac-
tively target infringement unless the IPR owner brings it to
their attention and works with them on surveillance and en-
forcement actions.”122 Thus, IP owners end up footing of most
the bill for any enforcement actions.123 Cooperation between
IPR owners and the government has proved somewhat success-
115 Erwin Oliva, OMB Changes Tack in Deterring Optical Media Piracy in RP,
INQUIRER.NET, Sept. 11, 2007, http://technology.inquirer.net/infotech/infotech/view

_article.php?article_id=87937 [hereinafter OMB Changes Tack].
117 See 2007 SPECIAL 301 REPORT, supra note 34, at 34; IP COALITION 2008 SUB-
MISSION, supra note 22, at 13.
118 See IP COALITION 2007 SUBMISSION, supra note 2, at 17. However, accord-
ing to the IIPA, pirated optical media production in the Philippines is growing. Id.
(quoting INT’L INTELL. PROP. ALLIANCE, 2006 SPECIAL 301 REPORT 133 (2006)).
119 See Press Release, Bureau of Customs (Phil.), Customs Institutional Re-
forms Push Piracy Enforcement Up (2007) (on file with author).


121 Both BOC officials and members of the group responsible for overseeing the
BOC, the Presidential Anti-Smuggling Group (PASG), have been linked to corrup-
tion. See, e.g., William B. Depasupil, Importers’ Documents for Sale to Smugglers,
MANILA TIMES, Aug. 7, 2007, available at http://www.manilatimes.net/national/
2007/aug/07/yehey/top_stories/20070807top7.html (describing an importer accredi-
tation scam involving customs officials); Tonette Orejas, 179 in Antismuggling
Body Sacked, PHILIPPINE DAILY INQUIRER, Jan. 31, 2008, available at http://news
info.inquirer.net / inquirerheadlines / regions / view / 20080131-116045 / 179 - in - anti
smuggling-body-sacked (recounting the dismissal of 179 personnel from the PASG
for suspected involvement in the smuggling of cell phones and cars into the
country).
122 MACLAREN, supra note 14. Ultimately, the effective prosecution of IPR
crimes will depend on the IPR owner cooperating with law enforcement authori-
ties. See Press Release, U.S. Dept. of Justice, U.S. Department of Justice Leads
International Effort to Combat Intellectual Property Crime (Oct. 22, 2007), http://
www.uspto.gov/web/offices/com/speeches/10-22-2007ir.htm. See also Interorgani-
04/08/2009 15:17:04
zational Coordination, supra note 103, at 144.

123 See Interorganizational Coordination, supra note 103, at 131.
21
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ful,124 but as will be examined later on, the lack of government

initiative to address IPR infringement comes as no surprise con-
sidering the low place IPR protection and enforcement have on
the country’s list of priorities.125
2. Interagency Cooperation
Having resources to devote to IPR enforcement is one thing;

using those resources efficiently is another. Interagency coordi-
nation, while improving, remains an obstacle to effective IPR
protection and enforcement. According to IP Philippines, “[t]he
lack of leadership, systems and procedures in the inter-agency
task force led to weak coordination, gaps in enforcement and
prosecution, lack of data and information for effective decision-
making, transparency of operations and monitoring of execution
policies.”126 One of the interagency coordination issues is the
“absence of retrievable data and information about IPR mat-
ters, particularly on enforcement and prosecution.”127 IP Phil-
ippines, as the IPR coordination and oversight body,128 has been
working to address this issue by establishing a central counter-
feiting and anti-piracy database to allow agencies such as the
DOJ, OMB, and PNP to share more reliable data.129 However,
the system is still a work in progress, and its success will de-
pend on the willingness and diligence of each agency to contrib-
ute information.130
IP Philippines also notes that “the absence of clearly de-

fined roles, jurisdiction and responsibilities” hampers inter-
agency coordination and, in turn, effective enforcement.131 As
is the case in countries ranging from China to the United
States, turf wars between agencies have undermined IPR en-
124
See MACLAREN, supra note 17.
125
Id. See discussion infra Part IV.
127 Id. at 5.
128 Id. at 7.
129 See id. at 9.
130 STRENGTHENING THE IP SYSTEM, supra note 24, at 9-10. The database,
launched in February 2007, “is a secure interactive web-based application that

provides real time updating of cases and document tracking from any interest-
04/08/2009 15:17:04
enabled location through a standards complaint browser.” Id.

131 Id. at 10.
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forcement efforts in the Philippines.132 Moreover, the fear of

leaks often prevents one agency from sharing information with
another.133 Again, IP Philippines is working to address these
problems, but the responsibility to share information and work
together ultimately hinges on the willingness and trust among
the agencies involved.
3. Issues with the OMB

Pirated optical media continue to be widely available in the
Philippines, and the OMB is partly to blame. In addition to its
lack of resources, the OMB suffers from questionable leadership
and professionalism, and has focused mainly on raids and
seizures that have limited effectiveness instead of devoting
more of its efforts to institutionalization.
Some critics lay the blame for the continued pirated optical
media problem on the OMB leadership and staff.134 Despite
winning an award for his efforts to curb the piracy problem in
the Philippines,135 OMB Chairman Eduardo Manzano has been
criticized for his lack of vision for the agency136 and for his ques-
tionable dedication to the job.137 Also adding to the OMB’s trou-
132 See id. at 10; Berkman, supra note 110, at 20 (describing interagency coor-
dination problems in China); Janet Reno, U.S. Attorney-General, Statement at the

Symposium of the Americas: Protecting Intellectual Property in the Digital Age
(Sept. 12, 2000), available at http://www.usdoj.gov/criminal/cybercrime/ip
symposium.htm (noting the history of a lack of cooperation between the Depart-
ment of Commerce and the Department of Justice over IP matters). [hereinafter

Statement at the Symposium of the Americas].
133 See Interorganizational Coordination, supra note 103, at 129.
134 See Fel V. Maragay, Where Revamp is Afoot, MANILA STANDARD, July 7,
2007, available at http://www.manilastandardtoday.com/?page=felMaragay_july7_

2007; Sammy Martin, Slighted Senators Suggest ‘Zero Budget’ for OMB, Dec. 12,
2007, available at http://www.manilatimes.net/national/2007/dec/12/yehey/top_
stories/20071212top5.html.
135 See Asia-Pacific Copyright Enforcer, MANILA BULLETIN, Dec. 13, 2006,
available at http://www.mb.com.ph/issues/2006/12/13/BSNS2006121382214.html#.
136 See Maragay, Where Revamp is Afoot, supra note 134.
137 The Chairman has come under fire from journalists, as well as politicians
including President Gloria Macapagal-Arroyo, for his duties as the host of more
than one regular television show in addition to his responsibilities at the OMB.
See, e.g., id. (“[The Chairman’s television hosting] smacks of his sheer insensitivity
to the worsening piracy problem and low regard for his mandate); Fel V. Maragay,
Edu, Do More!, MANILA STANDARD, Mar. 10, 2005 (describing a presidential
spokesperson’s comments that the Chairman’s television appearances were a con-
04/08/2009 15:17:04
flict of interest). Furthermore, the Chairman’s “repeated failure . . . to attend [the

Senate Finance Committee’s] hearings on its budget” led the head of the Senate
23
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bles are leaks about the time and location of raids and seizures
originating from within the agency.138
OMB raids, while responsible for the seizure of large
amounts of IPR infringing goods,139 remain only minimally ef-
fective in deterring IPR violators. A number of factors reduce
the element of surprise necessary to catch vendors red-handed.
If leaks within the agency do not provide pirated optical media
vendors with information about a potential raid, then a public
OMB announcement about its next targets might.140 Even if
the vendors receive no prior warning, OMB members walk
through the main entrances of malls wearing t-shirts reading
“OMB” in large yellow letters. This often gives vendors enough
time to close up shop or hide their IPR-infringing goods, espe-
cially if they receive warnings from sympathetic mall security
guards.
Moreover, whether surprised or not, vendors are often back
in business the day after raids.141 Leaders of the OMB and
PNP have both admitted that raiding malls provide little deter-
rence to IPR violators.142 Yet these agencies continue to con-
duct the raids, probably to bolster their enforcement data.143 To
be more effective, IPR enforcement agencies need to arrest and
Finance Committee to recommend a one-peso budget for the OMB in protest. Mar-
tin, supra note 134.
138 Leaks, however, are not unique to the OMB. See Selective Anti-Piracy
Drive, supra note 58 (noting the Washington-based International Anti-Counter-

feiting Coalition’s comments that occasional leaks compromise raids and seizures

of IPR-infringing goods involving the PNP and NBI); IIPA 2008 SPECIAL 301 RE-
PORT SUBMISSION, supra note 28, at 296.
139 See discussion supra Part III.C.
140 See OMB Changes Tack, supra note 115.
141 Id.; Authorities Entrust Malls with Anti-Piracy Measures, BUS. WORLD
(Phil.), Nov. 28, 2007.

142 OMB Changes Tack, supra note 115 (“The government executive [OMB Ex-
ecutive Director Meneses] admitted that conducting raids of malls has become an
embarrassment for OMB. He said that during raids, the retail stall owners would
abandon their pirated goods. The next day, would (sic) go back to normal opera-
tions”); Authorities Entrust Malls with Anti-Piracy Measures, supra note 141
(“[Head of the PNP and Commercial Crimes Division Rene Ong] admitted . . . that
the repeated raids ‘are not working anymore’ since visited establishment (sic) eas-
ily rebound after the operations”); see also Technology, Weak Institutions, supra
note 2 (“Despite the high number of raids . . . most of the pirates just move to other
locations and continue with their illegal activities.”).
143 The Philippine government likes to use the number of raids and the
04/08/2009 15:17:04
amount of counterfeit goods seized as a measurement of its IPR enforcement

success.
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prosecute individuals involved in optical disc production, and

hold mall owners accountable for vendors selling IPR infringing
goods on their premises, rather than raid small-time vendors.144
Furthermore, the OMB, still a relatively new agency, has
experienced some growing pains. The agency’s primary focus is
on raids and seizures that end up having only a minimal deter-
rent effect rather than building up its capacity as the regulator
of the optical media industry.145 This one-track mindset has
been holding back the agency’s IPR enforcement potential.146
According to the IP Coalition, “[t]hough the OMB has retained
the same, if not greater, enthusiasm and vigor [from 2006 to
2007] to seize and confiscate violating optical media, there is
little or no improvement in its institutional capacities to ad-
dress the bigger mandates of its charter.”147 These bigger man-
dates include the resolution of administrative cases arising
from its inspections and the filing of criminal complaints.148
The OMB took a step in the right direction when it published
administrative rules in 2007, but the effectiveness of these rules
remains to be seen.149
4. Problems with the Legal System

a. Overview
In addition to its administrative problems, the Philippines
suffers from an overburdened, inefficient legal system that ulti-
mately provides little deterrence to IPR infringers.150 The IIPA

144 For more information on mall-owner liability for IPR-infringing goods, see
infra Part IV.B.2.b.

145 See IP COALITION 2007 SUBMISSION, supra note 2, at 15-16; IP COALITION
2008 SUBMISSION, supra note 22, at 10-11.

146 For instance, in early 2008 an OMB task force recovered six master copies
of films entered in the Metro Manila Film Festival (MMFF) in a bag after a
botched payoff between suspected pirates. Marlon Ramos, OMB Thwarts Alleged
Plan to ‘Pirate’ MMFF Entries, PHILIPPINE DAILY INQUIRER, Jan. 10, 2008, availa-
ble at http://newsinfo.inquirer.net/inquirerheadlines/metro/view_article.php?
article_id=111421. However, the OMB task force, whose presence caused the sus-
pects to flee the incomplete transaction, failed to make any arrests. Id. Instead, in
what is a good example of the OMB’s attitude towards IPR enforcement, the
agency was content with merely obtaining the films rather than holding anyone
accountable.
147 IP COALITION 2008 SUBMISSION, supra note 22, at 11.
148 Id. at 10.
04/08/2009 15:17:04
149 See id.

150 See MACLAREN, supra note 17.
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goes as far as calling the judicial system a “near-total failure[,]”

the effect of which “cannot be overstated.”151 The legal system,
like other branches of government, is plagued by a lack of re-
sources152 and corruption.153 Political pressure also constantly
threatens the integrity of court employees, prosecutors and
judges.154 Large case backlogs and long delays stifle
prosecutorial will to pursue both IPR and non-IPR cases and
put justice even more out of reach.
b. Backlogs and Delays

Backlogs and long delays are the norm in the Philippine
legal system. While the court case disposition rate improved
from 2004 to 2006, meaning the number of cases resolved sur-
passed the inflow of new cases,155 the disposition rate was still
only 79% for the regional trial courts in 2005.156 This came af-
ter the regional court disposition rate dropped eight percentage
points, from 72% to 64%, from 2001 to 2003,157 raising ques-
tions about the legal system’s ability to maintain its gains in
151 IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 304. One
report documenting human rights abuses in the Philippines describes the coun-
try’s criminal justice system as “rotten.” Basil Fernando, Foreword in The Crimi-
nal Justice System of the Philippines is Rotten, ARTICLE 2 OF THE INT’L COVENANT
ON CIVIL & POL. RIGHTS 2 (vol. 6) (2007).
152 See INVESTMENT CLIMATE STATEMENT , supra note 21; Ma. Lourdes A. Ser-
eno, Emmanuel S. de Dios, & Joseph J. Capuno, Justice and the Cost of Doing
Business: The Philippines 35 (2007) (Univ. of the Philippines School of Economics,
Discussion Paper No. 0711) [hereinafter Justice and the Cost of Doing Business].

Philippine Supreme Court Chief Justice Reynato S. Puno has suggested that the
private sector can help make up for the judiciary’s lack of budget and manpower
and accelerate the disposition of cases by monitoring and identifying cases espe-
cially important to the business community. See Katrina Mennen A. Valdez, Su-
preme Court Seeks Support of Big Business, MANILA TIMES, Nov. 22, 2007,
available at http://www.manilatimes.net/national/2007/nov/22/yehey/metro/2007
1122met2.html.
153 For example, the Philippine Supreme Court dismissed seven court officials
and personnel, including four Clerks of Court and a sheriff, for various administra-
tive offenses in 2007. Anna Katrina M. Martinez, The Cleansing Continues: SC
Dismisses Seven Court Employees, BENCHMARK ONLINE (Phil.), Oct. 2007, http://
www.supremecourt.gov.ph/publications/benchmark/2007/10/100704.php.
154 See Justice and the Cost of Doing Business, supra note 153, at 35.
155 National Statistics Coordination Board, Statistical Indicators on Philippine
Development 2006: Chapter on Rule of Law, http://www.nscb.gov.ph/stats/statdev/

2006/ruleoflaw/Chapter_Rule_of_Law.asp.
156 Supreme Court of the Philippines, Court Case Disposition Rate by Type of
04/08/2009 15:17:04
Court 1997-2005, http://www.nscb.gov.ph/secstat/d_safety.asp.

157 Id.
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efficiency. Another troubling statistic is the drop in the disposi-

tion rate of cases investigated from 2004 to 2006, which means
that more cases continue to linger in the system.158
Philippine Court of Appeals Justice Myrna Dimaranan
Vidal commented on some of the causes of backlogs and delays
in the court system in 2005:
As far back as in 1967, a survey disclosed the problem of judicial
delay in the Philippines as due to such factors as the misuse of the
due process and the abuse of legal technicalities; the intervention
of political pressure in court cases; the sheer weight of court liti-
gations arising from development and growth; the dilatory tactics
of lawyers; and neglect and laxity on the part of judges.159
How much each of these factors contributes to the backlogs and

delays is hard to determine. A judge’s lack of knowledge and
training can slow down the disposition of her IPR cases, which
are often technically complex.160 Robert W. Blume of the Amer-
ican Chamber of Commerce in the Philippines suggests another
reason for backlogs may be that “[s]ociety tends to be litigious[,]
throwing matters to the courts and lawyers for decision, so as to
avoid face to face direct confrontation by parties involved.”161
Dilatory tactics by lawyers may be significant, or there may
simply be too many cases in a system that has too few judges.162
Or, as discussed below, there may be a judicial lack of
urgency.163

158 National Statistics Coordination Board, supra note 155. On the bright side,
the prosecutor to case ratio improved from 2004 to 2006. Id.

159 Justice Myrna Dimaranan Vidal, Effective Tool in Settlement of Business
Disputes, Lecture at the Chamber-to-Chamber II-Dialogues with the Business Sec-

tor and Integration of Mediation in Business (Mar. 29, 2005), http://ca.supreme
court.gov.ph/index.php?action=mnuactual_contents&ap=dispute. Overburdened
courts are a problem for regional neighbor Malaysia, too. See Antons, supra note
11, at 3.
160 See Arthur Wineburg, Jurisprudence in Asia: Enforcing Intellectual Prop-
erty Rights, 5 U. BALT. INTELL. PROP. L.J. 25 (1997). For example, even an exper-
ienced judge may have trouble adjudicating copyright issues in an increasingly
digital environment. See Op-Ed, Adrian Cristobal Jr., The Wisdom of the Judges?,
BUS. MIRROR (Phil.), Sept. 28, 2006.
161 Robert W. Blume, American Investment: Philippines Prospects and Oppor-
tunities, http://www.dot.com.ph/amcham/amboi.html (last visited Feb. 28, 2009).

04/08/2009 15:17:04
162 See Justice and the Cost of Doing Business, supra note 153, at 4.
163 See discussion infra Part III.D.4.c.
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One thing is certain: judicial vacancies are causing cases to

pile up. Currently, around 20% of courts do not have judges.164
Philippine Supreme Court Chief Justice Reynado S. Puno said
that “[t]he ideal judiciary system is one judge for every 10,000
inhabitants, while in the Philippines, one judge serves 45,000
people, this means, for every 1-million population, there are
only 22 judges[.]”165 Lack of incentives and traditionally low
salaries have made it difficult to attract top legal talent to the
judiciary.166
Previous efforts to streamline the disposition of IPR cases
(there were 511 pending cases of IPR violations as of October
2007)167 have been largely ineffective due to resource con-
straints, the heavy non-IPR caseloads of judges and prosecu-
tors, and the low precedence IPR cases take compared to
others.168 At one time the Philippine Supreme Court desig-
nated 34 special IP courts, but these courts received no addi-
tional funding and continued to maintain a significant non-IP
caseload.169 Since 2003, Special Commercial Courts have han-
dled IPR cases in addition to cases formerly heard by the Secur-
ities and Exchange Commission.170 Additionally, the Philippine
Supreme Court “designated a team of judges and prosecutors to
handle IPR cases exclusively, but in practice IPR cases re-
present only about 10% of the workload of taskforce mem-
164 Compare INVESTMENT CLIMATE STATEMENT, supra note 21 (quoting the judi-
cial vacancy rate at 29% in 2006) with Valdez, Supreme Court Seeks Support of Big

Business, supra note 153 (quoting the judicial vacancy rate at 21% in 2007).
165 Valdez, Supreme Court Seeks Support of Big Business, supra note 153.
166 See Press Release, SC Administrator Dialogs with Samar Island Judges,
Philippine Information Agency (Sept. 29, 2008), http://www.pia.gov.ph/tacloban.

htm. See also Ava Kashima K. Austria, Increased Salaries for Judiciary Members
Sought, BUS. WORLD (Phil.), Mar. 1, 2008, available at http://www.bworldonline.
com/BW030108/content.php?id=078 (discussing a House Bill that would increase
judges’ salaries); Op-Ed, Artemio V. Panganiban, Solving the Judicial Vacancy
Problem, PHILIPPINE DAILY INQUIRER, Sept. 23, 2007 (discussing ways to solve the
judicial vacancy problem), available at http://opinion.inquirer.net/inquireropinion/
columns/view_article.php?article_id=90144.
167 Max V. de Leon, Slow Prosecution Gives RP Slim Chance of Getting Re-
moved from List of Countries with IPR Problems, BUS. MIRROR (Phil.), Oct. 16,
2007.
168 See INVESTMENT CLIMATE STATEMENT, supra note 21; MACLAREN, supra
note 17.
04/08/2009 15:17:04
169 MACLAREN, supra note 17.

170 Id.
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bers.”171 Despite these efforts, substantial backlogs and delays

persist.
c. A Lack of Judicial Urgency

A final reason for the delays and backlogs in the legal sys-
tem may be what the IP Coalition labels as the need to “cul-
tivat[e] a judicial sense of urgency.”172 Under this view,
attorneys are merely doing their jobs—acting as advocates on
behalf of their clients—when they use dilatory tactics.173 The
appeals processes and procedural rules are not the evil, per se;
instead, the problem is that judges are not under pressure to
dispose of their cases in a timely manner or to reach a proper
outcome.174 It is the judge’s responsibility in her role as gate-
keeper to deny any frivolous motions.175 The IP Coalition
elaborates:
The trial judge has control over the disposition. . .of cases before
him. By nurturing a healthy sense of urgency, a judge may gain a
keener sense to see through an attempt to slow down, halt or de-
rail the proceedings. When facing a judge who has a reputation
for being a stickler to the Rules, a lawyer is encouraged, if not
compelled, to come to court more prepared than usual. He thinks
twice, even thrice, before submitting ‘canned’ or ‘ready-to-file’ mo-
tions. He will not risk taking any delaying tactic unless he himself
believes that he has a substantial cause that will stand close scru-
tiny. Under this realizable scenario, unjustified delay can, hope-
fully, be minimized.176

As one court administrator said, judges are responsible for con-
trolling the pace of litigation and disposing of their cases in a
timely manner.177 They have a duty to keep the public’s faith in
the judicial system.178 Judges must be prepared to hear cases
171INVESTMENT CLIMATE STATEMENT, supra note 21.

172IP COALITION 2007 SUBMISSION, supra note 2, at 10.
173 Id. But cf. US Reiterates Call for Stronger Enforcement of Antipiracy Law,
BUS. WORLD (Phil.), Sept. 30, 2005 (noting that IPR violators have been successful
in exploiting the system to obstruct prosecution).
174 IP COALITION 2007 SUBMISSION, supra note 2, at 10-12.
175 Id.
176 Id. at 11.
177 Nimfa Cuesta Vilches, No-Nonsense Court Management, BENCHMARK ON-
LINE (Phil.), Dec. 2007, http://www.supremecourt.gov.ph/publications/benchmark/
04/08/2009 15:17:04
2007/12/120723.php.
178 Id.
29
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on the scheduled days and diligently go about their business.179

Justice, after all, is in their hands.180
Perhaps the way to cultivate a judicial sense of urgency is
by inspiring judges to want to do their job well. Philippine Su-
preme Court Senior Associate Justice Josue N. Bellosillo cap-
tures this idea eloquently in a speech on the judiciary and IPR:
[IPR protection] will only be successful if the judges will have the
integrity and honesty, industry and dedication, as well as the
knowledge and wisdom to dissect the issues in the field of science,
technology, and commerce. I therefore encourage my co-workers
in the Judiciary to study well, know our laws, and strive hard to
give justice where it is due.181
True, modest salaries and political pressure create problems for

judges.182 With little to no security in the courtrooms, the job
can be dangerous as well.183 Dispensing justice is a critical job,
and Filipinos, rich or poor, deserve a fair shake. Whether
judges are stirred to do their job well through the satisfaction
they derive from dispensing justice or because they are in some
way held accountable for the disposition of their cases, the legal
system as a whole will benefit.184
179 Id.
180 See id.

181 Josue N. Bellosillo, The Judiciary and the Protection of Intellectual Prop-
erty Rights, LAWYER’S REVIEW (Phil.), July 31, 2002, at 78, available at http://www.
articlearchives.com/law-legal-system/international-law/62792-1.html.
182 See Arcie M. Sercado, SC Justice Tinga Speaks on Declining Judicial Pay,
Calls for Judicial Budget Increase, Supreme Court News Flash, Apr. 4, 2007, http:/
/www.supremecourt.gov.ph/news/courtnews%20flash/2007/04/04040703.php; IN-
VESTMENT CLIMATE STATEMENT, supra note 21.
183 See Tetch Torres, Chief Justice Puno: Secure Our Courtrooms, IN-
QUIRER.NET, Jan. 29, 2008, http://newsinfo.inquirer.net/breakingnews/metro/view/
20080129-115478/Pimentel-hits-Misamis-Occidental-mayors-killing.
184 Lawyers, too, have a duty to refrain from abusing the legal system, as well
as to be zealous advocates for their clients. Op-Ed, Rita Linda V. Jimeno, Op-Ed, A
Breath of Fresh Air, MANILA STANDARD, Mar. 5, 2007, available at http://www.
manilastandardtoday.com/?page=ritaLindaJimeno_mar5_2007. The IIPA points
out that “[c]ases sent into the public prosecution system languish for years, with
little hope of any resolution or any progress. Prosecutors do not move cases
04/08/2009 15:17:04
through the system, and are indeed careless in their approaches to cases. IIPA
2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 304.
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d. No Deterrence for IPR Violators
The Philippine legal system’s failure to deter IPR violators

is another significant problem. According to Trotter Hardy,
the concepts of punishment and deterrence [can be expressed] in
terms of costs, benefits, and probabilities: Potential wrongdoing
defendants will, in general, be deterred from wrongdoing if the
contemplated wrong “costs” more than it is worth.185
This “cost” is the probability that the wrongdoing defendant will

be apprehended, prosecuted, and convicted.186
In the Philippines, the reality is that very few people are
ever arrested, prosecuted, or convicted of IPR crimes, and even
if they are convicted, it is doubtful they will ever pay fines or
actually serve jail time. A quote from the U.S. National Trade
Estimate Report (NTE Report) explains the lack of deterrence
for IPR infringers in the country:
Among those cases that have made it to court, there have been
relatively few successful prosecutions. While companies have in-
vested significant resources in investigations and litigation, some
cases remain unresolved as long as two decades after the initial
complaint. The Philippines has failed to establish punitive sanc-
tions sufficient enough to serve as a deterrent to IPR violators.
The nominal damages awarded by the Philippine courts in IPR
cases add little to the cost of doing business for IP pirates, and
thus far there has been no risk of imprisonment for offenders.187

The NTE Report highlights two important points about the lack
of IPR crime deterrence in the Philippines. First, the low num-
ber of arrests and successful prosecutions, along with the inade-
quate punitive sanctions, fail to deter IPR violators.188 IP
Philippines Director-General Adrian Cristobal Jr. admitted
that despite the successful enforcement actions resulting in the
seizure of large numbers of fake goods, “the big challenge is now
185
Hardy, supra note 47, at 312.
186
Stuart P. Green, Plagiarism, Norms, and the Limits of Theft Law: Some
Observations on the Use of Criminal Sanctions in Enforcing Intellectual Property
Rights, 54 HASTINGS L.J. 167, 233 (2002).
187 2007 NTE REPORT, supra note 2, at 479.
188 See Press Release, US Holds IPR Dialogue, Philippine Information Agency,
04/08/2009 15:17:04
(May 16, 2006), http://www.pia.gov.ph/default.asp?m=12&sec=reader&rp=5&fi=p

060516.htm&no=41&date=.
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moving these cases in the courts.”189 From 2001 to 2007, there

were only sixty-four convictions in the country.190 While the
number of convictions could be seen as somewhat encouraging
at first glance, the figure is hollow and misleading. Convicted
IPR violators rarely, if ever, spend time jail191 or pay their
fines.192 The USTR highlighted this shortcoming in its 2007
Special 301 report when it encouraged the Philippines to “en-
sure that courts impose deterrent sentences against criminal
IPR infringers (such as) significant fines or prison sentences
that are actually served.”193 Thus, even if IPR violators are ac-
tually arrested and convicted, they will most likely avoid any
serious punishment because they will not pay their fines or
serve any jail time.
This culture of impunity for IPR infringers extends to all
types of violators, big and small. When a business is raided for
189 Bernardette S. Sto. Domingo, Intellectual Property Office Reports Anti-
Piracy Gains, BUS. WORLD (Phil.), Jan. 29, 2008.

190 STRENGTHENING THE IP SYSTEM, supra note 24, at 29. In comparison, 287
defendants were sentenced for IP crimes in the United States in 2007 alone. K.C.
Jones, IP Crime Convictions Nearly Doubled in 2007, INFORMATION WEEK, Feb. 11,
2008, http://www.informationweek.com/news/internet/showArticle.jhtml?articleID
=206401978.
191 Finding any accurate, detailed information about IPR violators’ sentences
served and fines paid proved difficult for the author. The Philippine government
does not keep track of this information. IP Philippines admits that the “[a]bsence
of retrievable data and information about IPR matters, particularly on enforce-
ment and prosecution” is one of its major challenges that “result[s] in lack of trans-
parency in operations, weak follow through and inadequate facts to guide strategic

and tactical operations and policy making.” STRENGTHENING THE IP SYSTEM, supra
note 24, at 5.
192 See INVESTMENT CLIMATE STATEMENT, supra note 21. “[T]he six year pen-
alty enables [IPR violators] to apply for probation immediately under Philippine
law.” Id. See also, Technology, Weak Institutions, supra note 2. (“Despite the high
number of raids, no one has been charged, no one held in pre-trial detention, not
one convicted.”). In a telling example, the IIPA noted the sentencing of two DVD
pirates to six months in prison in its 2008 Special 301 Submission to the USTR,
but could not say whether there was a fine or if any of the sentences were served.
IIPA 2008 SPECIAL 301 REPORT SUBMISSION, supra note 28, at 299 n. 14.
193 Intellectual Property Coalition, Inc., 2007: Issues and Challenges in the
Protection and Advancement of Intellectual Property Rights in the Philippines, at 3,

http://www.ustr.gov/assets/Trade_Sectors/Intellectual_Property/Special_301_Pub-
lic_Submissions_2008/asset_upload_file63_14489.pdf (last visited Feb. 28, 2009).
One notorious example of a convicted IPR violator failing to serve any part of her
sentence is medical book pirate Catherine Marquez. IIPA 2008 SPECIAL 301 RE-
PORT SUBMISSION, supra note 28, at 295, 303. After her conviction, Marquez ab-
04/08/2009 15:17:04
sconded. Id. at 303. She remains on the loose and is rumored to be engaging in
her pirate activities in the country once again. Id.
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selling IPR infringing goods, the owners or operators view the

penalties simply as a cost of doing business.194 Knowing it is
unlikely that they will be arrested, these vendors are back in
business again the next day.195 When it comes to camcording
movies in theaters, an increasing problem in the Philippines,196
perpetrators can get off with little more than a slap on the
wrist.197 For example, when nine individuals were caught ille-
gally recording “Transformers” at the film’s premiere in July
2007, police failed to charge the perpetrators and instead gave
them a chance to apologize.198 The perpetrator’s letters of apol-
ogy “had to be signed by the perpetrator’s immediate family,
spiritual adviser, school dean or employer, and the theater
manager.”199 One IPR advocate praised this way of dealing
with violators,200 but whether effective or not, the message it
sends is that a person need not worry too much about the conse-
quences of camcording if he gets caught.
Second, as touched upon earlier, case backlogs and delays
often leave cases unresolved after many years.201 The prospect
that court action will be lengthy puts pressure on IPR holders to
settle out of court rather than see their cases through to trial.202
In this way, justice delayed is justice denied. Unless IPR hold-
ers want to invest the time and money involved in years of liti-
gation, the sluggishness of the legal system puts them at a
disadvantage because they lose one of their bargaining chips—
the threat of taking the defendant to trial.
e. The Lack of Quality Convictions

Another problem that contributes to the lack of deterrence
in the country is the quality of convictions. Going after the pro-
194See Coonan, supra note 52.

195Id.
196 See OFFICE OF THE U.S. TRADE REPRESENTATIVE, 2008 SPECIAL 301 REPORT
43 (2008) [hereinafter 2008 SPECIAL 301 REPORT].

197 See Transformers’ Breaking Records, MANILA TIMES, July 12, 2007.
198 See id.
199 Id.
200 Id. Movie Industry Anti-Film Piracy Organization president Engr.
Roesholm Camaligan said, “This proven [sic] to be a far more effective way of en-
suring that the person would not do it again. The public needs a reminder that
bringing recording devices into theaters is strictly prohibited.” Id.
04/08/2009 15:17:04
201 See discussion supra Part III.E.4.b.

202 See INVESTMENT CLIMATE STATEMENT, supra note 21, at 11.
33
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ducers and suppliers of pirated optical media and counterfeit

goods is more effective than targeting the street vendors who
ultimately sell the goods to the public.203 Also, when major IPR
violators get arrested, convicted, and end up serving prison
sentences, other IPR criminals are likely to take note.204 Yet
the IPR violators being arrested and convicted in the Philip-
pines are not the “big fish.”205 The IIPA notes that no pirate
manufacturer of optical discs has ever been convicted.206 The
USTR also raised this point in 2007 when it encouraged the
Philippines to increase the number of convictions “arising out of
the optical disc plant inspections.”207
And the big fish are out there. For example, organized
crime syndicates play a role in optical disc piracy in the country.
The Motion Picture Association (MPA) lists a large number of
organized crime groups involved with counterfeit DVDs in
Asian countries, including the Philippines.208 In Metro Manila,
Muslim-Filipino gangs dominate the retail market in areas
such as Quiapo, while Filipino-Chinese gangs working for inter-
203 See Focus on Intellectual Property Rights: Roundtable: Enforcement, A Pri-
ority for All Countries (Jan. 2006), available at http://www.america.gov/st/econ-

english/2008/April/20080429224837myleen0.7652354.html [hereinafter Focus on
IPR]. The apprehension and conviction of Huang Jer-sheng and three of his associ-
ates in Taiwan illustrates the importance of stopping the producers and distribu-
tors of pirated optical media. Press Release, Microsoft, Prison Sentences for
Ringleaders of Global Software Counterfeit Syndicate (Feb. 8, 2008), http://
www.microsoft.com/presspass/press/2008/feb08/02-04TaiwanConvictionsPR.mspx.
Huang was part of an international piracy ring that was responsible for “the pro-

duction and distribution of more than 90 percent of the high-quality counterfeit
Microsoft software products either seized by law enforcement or test-purchased
around the world.” Id. (emphasis added). Huang received four years imprison-
ment, the longest sentence ever handed down by a Taiwanese court for this type of
crime. Id.
204 See Statement at the Symposium of the Americas, supra note 132; David
Hechler, Fast Footwork: Hunting for Fakes, IP LAW & BUS., June 2007 (“When a
guy is arrested and put in prison . . . [e]veryone hears about it. So it’s a great
threat”).
205 See Coonan, supra note 52; Martin, supra note 134.
207 Intellectual Property Coalition, Inc., 2007: Issues and Challenges in the
Protection and Advancement of Intellectual Property Rights in the Philippines, at 3,

http://www.ustr.gov/assets/Trade_Sectors/Intellectual_Property/Special_301_Pub
lic_Submissions_2008/asset_upload_file63_14489.pdf (last visited Feb. 28, 2009).
208 See MOTION PICTURE ASS’N OF AMERICA, ORGANIZED CRIME INVOLVEMENT IN
04/08/2009 15:17:04
MOTION PICTURE PIRACY, ASIA-PACIFIC REGION (2007) (on file with author) [herein-
after ORGANIZED CRIME].
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national criminal syndicates manufacture the goods.209 Organ-

ized crime groups from countries such as Malaysia, Singapore,
and Thailand provide money, “management, technical assis-
tance, and the production of stampers and other equipment” to
pirate production plants that would otherwise be unviable.210
Even politicians dabble in counterfeit goods production in order
to help fund their campaigns, one senior law enforcement offi-
cial admitted to the author.211 In the end, though, very few, if
any, of these big fish are arrested, prosecuted, and convicted.
Overall, the legal system suffers from a number of
problems that contribute to the country’s rampant IPR infringe-
ment: backlogs and delays, a judicial lack of urgency, and the
lack of deterrence that results from IPR violators either failing
to be caught, prosecuted, and convicted or failing to pay their
fines or serve their prison sentences. IP Philippines recognizes
these issues, noting that “[i]mproving prosecution and adjudica-
tion is one of the most challenging tasks faced by the [Philip-
pine government].”212 If the country is going make significant
strides against IPR infringement, it needs not only to overhaul
the legal system, but also to address its administrative short-
comings by devoting more resources to agencies such as the
OMB and by installing leadership that will push that same
agency more towards institutionalization. However, there are
other, more fundamental, reasons that prevent these things
from happening and cause IPR infringement to remain en-
trenched in the country.

IV. A CLOSER LOOK AT WHY IPR INFRINGEMENT REMAINS
ENTRENCHED IN THE PHILIPPINES
So far this Article has provided an overview of the IPR pro-
tection and enforcement situation in the Philippines; it has
identified the laws, international agreements, and government
agencies dealing with IPR; discussed the scope and types of in-
fringement; and analyzed some of the positive steps the country
has taken and also the persisting problems it faces in combating
IPR infringement. Next, it analyzes how Filipinos’ ignorance of
209 See id.

210 Loose Rules, supra note 69.
04/08/2009 15:17:04
211 The official revealed this information under the guarantee of anonymity.
35
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and indifference towards IPR perpetuates IPR infringement in

the country. The general lack of respect for IPR, which comes
from the minimal awareness or understanding, or both, of IPR
among Filipinos, along with an acceptance of the current IPR
protection and enforcement status quo and a desire to stand up
to the developed world while making or saving money through
IPR infringement, are the driving forces behind the continued
rampant IPR violations in the Philippines.
A. Ignorance of IPR
Getting people to respect and protect IPR is difficult if
those people lack an adequate understanding of IPR and the
consequences of violating them.213 In the Philippines, most peo-
ple, whether they are small business owners or consumers,
know very little, if anything, about IPR.214 Small and medium-
sized enterprises may be run by people who do not understand
the concept of IPR or that their IP is an asset that can be pro-
tected.215 Similarly, consumers who are incapable of distin-
guishing between legitimate and illegitimate products will
usually opt for the cheapest goods, which are the counterfeit
versions.216
This IPR ignorance is not due simply to the limited number
of IPR programs and awareness campaigns throughout the
country, but is also the result of the dire state of education in
general in the Philippines.217 Nearly twelve million people,

213 See Chun-Hsien Chen, Explaining Different Enforcement Rates of Intellec-
tual Property Protection in the United States, Taiwan, and the People’s Republic of
China, 10 TUL. J. TECH. & INTELL. PROP. 211, 221 (2007).
214 See STRENGTHENING THE IP SYSTEM, supra note 24, at 5; Intellectual Piracy,
supra note 70. Cf. Chen, supra note 213, at 220 (“[Consumers in developing coun-
tries] are often simply unaware of or insensitive to the consequences of purchasing
or using infringing products.”).
215 See Maricris C. Carlos, In Search of a Clear National IP Strategy, BUS.
WORLD (Phil.), Sept. 14, 2006.

216 See Chen, supra note 213, at 220; Danilo V. Adorador III, Microsoft Part-
ners with Local IT Sector vs. Piracy, SUN STAR (Cagayan de Oro, Phil.), Feb. 12,
2008 (noting that consumers who buy computers may be unaware that the com-
puters are loaded with pirated software), available at http://www.sunstar.com.ph/
static/cag/2008/02/12/bus/microsoft.partners.with.local.it.sector.vs.piracy.html.
217 See Contreras & Ubac, supra note 4 (discussing some of the problems the
Philippines faces with its education system); see also Press Release, U.S. Agency
04/08/2009 15:17:04
Int’l Div., United States Delegation Statement 2006 Philippines Development Fo-
rum Consultative Group and Other Stakeholder Meeting for the Philippines, (Mar.
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roughly 13 percent of the population, have not attended

school.218 Classrooms remain overcrowded despite the Depart-
ment of Education’s attempt to limit class sizes to 45 students
per classroom.219 Add to this poor facilities220 and incompetent
teachers, especially in rural areas,221 and it is no wonder that
most Filipinos lack a basic understanding of IPR. These
problems stem from the “[w]eak fiscal position of the coun-
try[.]”222 Basic education does not receive enough money, leav-
ing administrators unable to effectively address the
deficiencies.223 The Philippines allocates only 2.5% of its GDP
for education when UNESCO suggests 6%.224 Also, while the
World Bank recommends countries spend at least 20% of their
national budget on education, the Philippines spends only
12%.225 Even those Filipinos who are educated may not have
sufficient IPR training or, as the next section examines, may
have little regard for IPR.
B. Indifference towards IPR

There are a large number of individuals dedicated to im-
proving IPR protection and enforcement in the Philippines. De-
spite these advocates’ efforts, IPR is not a Philippine priority—
neither for the average citizen nor the average politician.226
The vast majority of the population remains indifferent towards
IPR protection for a number of reasons. As discussed above, ig-

31, 2006), http://www.pdf.ph/downloads/Summary%20Report%20of%20the%20
Chairman%27s%20Proceedings_Final%20Jun6_2006.pdf (emphasizing that the
Philippine education system has deteriorated significantly over the past three de-
cades) [hereinafter U.S. Delegation Statement].
218 Contreras & Ubac, supra note 4.
219 Id.
220 See Ongpin, supra note 4.
221 See Ordinario, supra note 4 (discussing the U.N.’s “2007 World Youth
Report”).
223 See Contreras & Ubac, supra note 4. Resources alone, however, are not
enough; they need to be spent in an efficient manner. See Ordinario, supra note 4.
225 Id.
226 See, e.g., Cleofe Maceda, Officials Lack Motivation to Fight Counterfeiting,
GULF NEWS (U.A.E.), Feb. 4, 2008 (“We haven’t motivated our leaders to take the
04/08/2009 15:17:04
steps that must be taken . . . . Policymakers must stand up and make intellectual
property (IP) enforcement a priority.”).
37
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norance may be one.227 Yet even when Filipinos understand

IPR, many still violate them. The next section takes a closer
look at some of the reasons for their indifference, including
their assumption that the benefits of strong IPR protection do
not outweigh the costs and the culture of acceptance of IPR vio-
lations that is fed, in part, by the backlash against pressure
from the more dominant developed world and the money to be
made or saved through IPR infringement.
1. What is in the Philippines’ Best Interest?
Every country has different goals and priorities “due to the

variations in the level of wealth, economic structure, technologi-
cal capability, political system, and cultural tradition. . . .”228
For example, examine the United States. According to one U.S.
government official, “[i]ntellectual property is America’s com-
petitive advantage in the global economy of the 21st cen-
tury. . . . Theft of intellectual property threatens America’s
economic prosperity and the health, safety, and security of its
citizens.”229 After all, the United States is a major producer
and exporter of IP in the world.230 IPR protection is thus one of
the United States’ priorities, both at home and abroad, that re-
ceives a great deal of attention and resources.
227See supra Part IV.A.

228Peter K. Yu, From Pirates to Partners: Protecting Intellectual Property in
China in the Twenty-First Century, 50 AM. U. L. REV. 131, 239 (2001).
229 D. Kyle Sampson, Message from the Chairman in U.S. DEP’T OF JUSTICE,
PROGRESS REPORT OF THE DEPARTMENT OF JUSTICE’S TASK FORCE ON INTELLECTUAL

PROPERTY iii (2006). The IIPA estimates that “core” copyright industries (copy-
right-related industries whose primary purpose is to produce and distribute or
both copyright materials) in the U.S. accounted for 6.56% of GDP, or $819.06 bil-
lion, in 2005. INT’L INTELL. PROP. ALLIANCE, COPYRIGHT INDUSTRIES IN THE U.S.
ECONOMY: THE 2006 REPORT (2007), http://www.ifpi.org/content/library/20070130-
highlights.pdf. “Total” copyright industries in the U.S., which include core, partial,
non-dedicated support, and interdependent copyright industries, accounted for
11.2% of GDP, or $1.3 trillion, in 2005. Id.
230 See Michael Geist, Op-Ed, Ignore the U.S. Copyright Bullies, BBC NEWS,
Apr. 25, 2007, http://news.bbc.co.uk/go/pr/fr/-/2/hi/technology/6592133. stm. Also,

in the United Kingdom, for example, copyright and related industries accounted
for 7.1% of GDP in 2000. See INT’L INTELL. PROP. ALLIANCE, INITIAL SURVEY OF THE
04/08/2009 15:17:04
CONTRIBUTION OF THE COPYRIGHT INDUSTRIES TO ECONOMIC DEVELOPMENT 7 n. 44

(2005) [hereinafter IIPA SURVEY].
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The Philippines, on the other hand, is primarily a consumer

and net importer of IP.231 Its economy is made up of mostly
non-IP intensive commerce such as light industry and agricul-
ture.232 In the entertainment industry, foreign movies and mu-
sic make up a majority of the market.233 Devoting time and
resources to IPR protection may be a high priority for the
United States, but not for the Philippines. As a developing
country with both limited technological and industrial develop-
ment capabilities and copyright industries and marketing, it
has a different optimal level of IPR protection than a developed
country.234 Spending a significant amount of its already scarce
resources on IPR protection would not “maximize social wel-
fare.”235 Instead, letting IPR enforcement slide can be attrac-
tive to a developing country such as the Philippines because
IPR-infringing industries provide jobs and keep consumers con-
tent with low prices, all while costing the government little, if
anything.236
231 See CHARMAINE NUGUID-ANDEN, Enhancing Business-Community Rela-
tions: Sun Microsystems Case Study 5 (2003), http://www.worldvolunteerweb.org/

fileadmin/docs/old/pdf/2003/031201_EBCR_PHL_sun.pdf (noting that the Philip-
pines is a net importer of IT products and services); cf. COMMISSION ON INTELL.
PROP. RIGHTS, INTEGRATING INTELLECTUAL PROPERTY RIGHTS AND DEVELOPMENT
POLICY 17 (2002), available at http://www.iprcommission.org/graphic/documents/fi-
nal_report.htm (“[M]ost developing countries are net importers of copyrighted ma-
terial, just as they are net importers of technologies.”) [hereinafter “IPR
Commission Report”].
232 See Van V. Mejia, The Modern Foreign Investment Laws of the Philippines,
17 TEMP. INT’L & COMP. L.J. 467, 470 (2003).

233 See, e.g., IP COALITION REPORT, supra note 13, at 16-17 (noting that from
1995-2000, foreign music sales shares accounted for more than half of the Philip-
pine market).
234 Matt Jackson, Harmony or Discord? The Pressure Toward Conformity in
International Copyright, 43 IDEA 607, 619 (2003).

235 Id.; WALDEN BELLO, MULTILATERAL PUNISHMENT: THE PHILIPPINES IN THE
WTO, 1995-2003, 13-14 (2003), http://www.apl.org.ph/ps/multilateral-punishment.

pdf (discussing the costs that come with making domestic legislation consistent
with WTO obligations). IPR protection and enforcement can be expensive, with
substantial costs for “developing a system adequate for handling mere counterfeit
cases, let alone complicated patent disputes.” Maskus, supra note 8, at 466. There-
fore, “the demand for IPRs must be large to permit a country to achieve adminis-
trative economics of scale.” Id. at 467.
236 See Assafa Endeshaw, Intellectual Property Enforcement in Asia: A Reality
Check, 13 INT’L J.L. & INFO. TECH. 378, 381 (2005); Jean Raymond Homere, Intel-
lectual Property Rights Can Help Stimulate the Economic Development of Least
04/08/2009 15:17:04
Developed Countries, 27 COLUM. J.L. & ARTS 277, 291 (2004) (“LDCs will not be
able to justify their share of the costs to comply with TRIPs unless they seek to
39
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One reason that IPR infringement remains entrenched in

the Philippines is that Filipinos are generally content with the
IPR protection and enforcement status quo. As IP Philippines
Director-General Cristobal notes, “[t]he value of an effective IP
regime and its contribution to the economy in developing coun-
tries have yet to be felt, articulated and appreciated by its (sic)
citizens.”237 There are serious questions whether those in
power believe that improving IPR protection and enforcement is
worth the effort. President Arroyo may have said that “we must
not lose sight of the fact that protection of IPR is first and fore-
most in the interest of the Filipino people” after the USTR
moved the country from the Priority Watch List to the Watch
List in 2006.238 IP Philippines Director-General Cristobal may
have stated that “there was no doubt that IPR protection is a
national priority. . . and [that] the campaign against piracy
shall and will be sustained” in a 2005-06 report.239 But the
president and IP Philippines have legitimate reasons for mak-
ing those statements, whether they truly support those beliefs
or not. It is in a country’s best interest to put on an air of devo-
tion to strong IPR protection because there are international
repercussions for doing otherwise: trade sanctions,240 loss of
current and prospective foreign investment241 and damage to
global reputation.242
Saying IPR protection and enforcement is a Philippine pri-
ority is one thing; backing up that statement with action is an-
other. In the battle for government attention and resources,

IPR protection ultimately takes a back seat243 to bigger priori-
obtain a greater economic return from such compliance.”). Note the Philippines is
now considered a middle-income developing country, not an LDC. See Op-Ed, Edg-
ardo B. Espiritu, The ‘Middle-Income Trap’, MANILA TIMES, Apr. 26, 2007.
237 Adrian Cristobal Jr., Op-Ed, “In Support of Copyright,” BUS. MIRROR (Phil.),
Mar. 29, 2007.

238 Adrian Cristobal Jr., Op-Ed, The Watch List (Part 3), BUS. MIRROR (Phil.),
May 3, 2007 [hereinafter Watch List Part 3].

240 See 2007 SPECIAL 301 REPORT, supra note 34, at 311, n. 59.
241 See Homere, supra note 236, at 286-87.
242 See An Open Letter to Buyers and Users of Pirated and Counterfeit Prod-
ucts, E-MAIL NEWSBITS (Intell. Prop. Coalition, Manila, Philippines) Jan. 2007 (on
file with the Intellectual Property Coalition and author).
243 Former U.S. Attorney General Janet Reno stated, “Counterfeiting and
04/08/2009 15:17:04
piracy crimes have historically been a low enforcement priority for several rea-
sons. Law enforcement officials too often perceive intellectual property enforce-
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ties such as eradicating poverty,244 improving education, build-

ing infrastructure, and ensuring murderers are brought to
justice.245 Assafa Endeshaw, an outspoken critic of the devel-
oped world’s IPR policies, suggests:
[M]ost [non-industrialized countries] cannot afford to pay even
normal infrastructure development costs. Education, roads,
health and policing (keeping the peace) take such a huge chunk of
the annual state budget (even without considering the toll of ex-
ternal debt repayments) that it would be idealistic to expect them
to protect foreign IP interests. Nine times out of ten, the choices
available to them would be the same regardless of the rewards
they might reap or the punishments they might face for any suc-
cess or default in enforcement.246
It would make sense for the Philippines to put its limited re-
sources towards enforcing IPR if the benefits outweighed the
costs.247 Regardless of whether the benefits of enforcing IPR do
in fact outweigh the costs, the perception of the Philippines—
and other developing countries—is that IPR protection serves
mostly foreign IPR holders.248 Some ask why public funds
should be used to enforce private rights, especially when law
enforcement will confiscate IPR-infringing goods, only to have
the rights holder fail to cooperate with authorities or file
charges.249
ment as advancing purely private, commercial interests, or interests that can be

adequately vindicated by administrative or civil courts.” Statement at the Sympo-

sium of the Americas, supra note 132.
244 See generally Cal U. Ordinario, High GDP Growth Not Enough to Lick Pov-
erty in RP, BUS. MIRROR (Phil.), Feb. 1, 2008 (discussing the challenges the Philip-
pines faces when it comes to eradicating poverty).
245 See Leila Salaverria, After Murder Victims, SC Will Focus on the Poor,
PHILIPPINE DAILY INQUIRER, Feb. 4, 2008.

246 See Endeshaw, supra note 236, at 398. Accord Paul Engel & Sophie Houée,
Capacities for a Global Management of Intellectual Property: Mapping Out Global

Initiatives and Opportunities for Improvement 2 (April 2005), available at http://
www.gpgtaskforce.org/show_file.aspx?file_id=95 (unpublished paper prepared for
the Int. Task Force on Global Public Goods).
247 See Jishnu Guha, Note, Time for India’s Intellectual Property Regime to
Grow Up, 13 CARDOZO J. INT’L & COMP. L. 225, 241 (2005).

248 See Peter Drahos, Securing the Future of Intellectual Property: Intellectual
Property Owners and their Nodally Enforcement Pyramid, 5 CASE W. RES. J. INT’L
04/08/2009 15:17:04
L. 53, 62 (2004).
249 See Technology, Weak Institutions, supra note 2.
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As it is, the benefits of strong IPR protection and enforce-

ment do not outweigh the costs. The Philippines does not yet
have enough of a stake in IPR protection and enforcement to
justify devoting the resources required to address the problem
adequately. IPR industries remain insignificant to the coun-
try’s economy.250 This is not to say that the Philippines receives
no benefits from IPR protection and enforcement—it does. The
president was right when she said that IPR protection was in
the country’s best interest, and the reasons why will be ex-
amined later.251 The tougher sell—the part that most Filipinos
are not buying yet—is that IPR protection is “first and foremost
in the interest of the Filipino people.”252 Politicians are reluc-
tant to make IPR a priority,253 especially whenever an election
looms on the horizon, and the police—who often lack training
and education—would rather tackle other, more straightfor-
ward, problems.254 This translates into inadequate funding for
enforcement agencies such as the OMB and sloppy investiga-
tions of IPR cases. Were it not for pressure from the U.S., a
close ally of the Philippines, IPR infringement would likely be
even more widespread.
C. The Culture of Acceptance of IPR Infringement

Another reason IPR protection and enforcement are such a
tough sell in the Philippines is the culture of acceptance of IPR
infringement.255 Throughout Asia, laws criminalizing certain
types of IPR infringement seem to be only minimally effective in

influencing the masses because people tend to “develop personal
codes of conduct through interactions with people in their fam-
250See e.g. discussion infra Part V.C.2.

251See discussion infra Part V.C.1.
252 See Watch List Part 3, supra note 99.
253 Cf. Guha, supra note 247, at 246 (noting that support for IPR protection can
be a political liability).
254 One IP expert (Numeriano Rodriguez of the IP Coalition), talking to the
author, lamented that the police were mostly indifferent towards IPR, which ended
up hurting the quality of investigations.
255 See generally IP COALITION REPORT, supra note 13, at 39 (noting the general
acceptance of IPR infringement in the Philippines); Intellectual Piracy, supra note

70 (discussing Filipino attitudes towards IPR protection and enforcement). For a
discussion of the lack of respect for IPR in another developing Asian country, see
04/08/2009 15:17:04
Eric Priest, The Future of Music and Film Piracy in China, 21 BERKELEY TECH.
L.J. 795, 822, 829-30 (China).
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ily and social circles, not from external sources such as law.256
Many people who have a general understanding of copyrights
and trademarks buy or sell counterfeit goods anyway. These
people know that purchasing a pirated copy of the movie “Iron
Man” for the equivalent of $1.50 is illegal, but that does not stop
them. Legitimate goods are too expensive for the majority of
Filipinos, so when these people are faced with either getting the
movie or going away empty-handed, they will buy the pirated
copy. Moreover, a person may view illegally downloading a
song from the internet as a victimless crime or something other
than stealing.257 Or that person may simply be greedy, impa-
tient, or both. IPR-infringing goods, tangible or not, are just so
cheap (or free) and easy for consumers to come by; they are also
a low-risk, high-profit venture for manufacturers, distributors,
and sellers.
Additionally, in the Philippines and other developing coun-
tries, IPR protection can be a symbol of the developed world’s
desire to impose its will on poorer, less powerful countries.
Rather than seeing IPR protection as in their own best interest,
developing countries view it as a threat to their sovereignty.
Furthermore, weaker IPR protection and enforcement has bene-
fits for many Filipinos, rich or modestly poor: it earns, or saves,
them money.
a. Nobody Likes Being Told What to Do

Developing countries such as the Philippines often feel bul-

lied by the developed world.258 With constant pressure from
governments such as the United States to improve their IPR
regimes, these developing countries may feel rushed into devot-
256 Geraldine Szott Moohr, The Crime of Copyright Infringement: An Inquiry
Based on Morality, Harm, and Criminal Theory, 83 B.U. L. REV. 731, 775-76
(2003) (discussing copyright infringement as a crime). See generally Wineburg,
supra note 160, at 26-29 (discussing the role Asian culture plays in IPR
enforcement).
257 See Laura H. Parsky, Deputy Assistant Att’y General, U.S. Dept. of Justice,
Statement before the Subcommittee on Oversight of Government Management,

the Federal Workforce, and the District of Columbia Committee on Homeland Se-
curity and Governmental Affairs, United States Senate (June 14, 2006), available
at http://www.usdoj.gov/criminal/cybercrime/ParskyIPtestimony061405.htm.
258 See Mary Kopczynski, Comment, Robin Hood Versus the Bullies: Software
04/08/2009 15:17:04
Piracy and Developing Countries, 33 RUTGERS COMPUTER & TECH. L.J. 299, 328
(2007) (discussing software piracy in developing countries).
43
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ing attention and resources to IPR protection and enforcement

when the developed world, not the developing countries, are re-
ceiving the bulk of the benefits.259 This leads to a resentment of
the developed world that manifests itself in a number of ways,
including a disregard for IP coming from wealthy countries.260
One example is the “Robin Hood” mentality—take from the rich
and give to the poor—that India’s patent regime,261 and now it
seems the Philippines’ system as well,262 exemplify. In the
same vein is the idea, not unique to citizens of developing coun-
tries, that the IPR holder—whether a multinational drug com-
pany, a Hollywood film studio, or a famous musician—is rich
enough as it is.263
Nobody likes being told what to do, and developing coun-
tries such as the Philippines are no exception.264 With their
history of colonization (first the Spanish for roughly 330 years,
then the Americans for close to a half century),265 Filipinos
grapple with complex emotions over giving in to demands from
other countries. “Few things touch the delicate nerve of national
sovereignty more than the autonomous capacity of states to ad-
minister their domestic laws in conformity with their own legal
philosophies.”266 Filipinos cannot help but remain somewhat
259See id. at 328.

260See, e.g., id. (developing countries stealing software from developed
countries).
261 Guha, supra note 247, at 248-50. India’s patent regime includes doctrines

such as “compulsory licensing” and “working requirements” that have led to “a
rapid, almost overnight, evolution of a domestic industry that would normally have
had to invent its way up or buy its way in.” Id.
262 See Barbara Mae Dacanay, Philippine Cheap Medicine Bill Approved, GULF
NEWS (U.A.E.), Apr. 29, 2008 available at http://www.gulfnews.com/world/Philip-
pines/10209407.html. The bill will allow the Philippine government to set price
ceilings on drugs and to import drugs from countries such as India. Id.
263 See Vaillancourt, supra note 62. This attitude ignores the jobs and tax rev-
enue IPR industries create for others, including those in developing countries. See
id.
264 See Assafa Endeshaw, Do Asian Nations Take Intellectual Property Rights
Seriously? 4 SCRIPT-ED 167, 175 (2007) [hereinafter Asian Nations]; Yu, supra
note 28, at 133-34 (China).
265 JOSE S. ARCILLA, AN INTRODUCTION TO PHILIPPINE HISTORY 14, 101, 123 (4th
ed. 1998).
266 Jackson, supra note 234, at 640 (quoting J.H. Reichman, Enforcing the En-
04/08/2009 15:17:04
forcement Procedures of the TRIPS Agreement, 37 Va. J. Intl. L. 335, 339-40

(1997)).
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skeptical about sacrificing national autonomy, especially when

a former colonizer such as the United States is involved.267
This is the case with IPR.268 The Philippines and the
United States are close allies, but that relationship does not
keep Filipinos from harboring doubts over U.S. demands for
stronger IPR protection and enforcement. After all, developing
countries tend to view IPR protection as a tool developed coun-
tries use to keep poorer countries technologically dependent on
them.269 U.S. pressure to devote scarce resources to IPR protec-
tion may keep the Philippines from addressing what it sees as
more pressing policy concerns such as poverty or education.270
One Filipino commentator captured the tension underlying the
Philippine-U.S. relationship when he described what seems to
be a Filipino preference for protectionism:
Protectionist sentiment may be only one expression of our inward-
looking nationalism. In our country—as in Latin America—na-
tionalism has been shaped by the overpowering presence of the
United States. Resentment of the Americans—coupled with a rec-
ognition of our utter dependence on them—had produced self-
doubt and turned nationalism inward, toward cultural authentic-
ity and economic preferences for nationals.271
This turn toward cultural authenticity and economic prefer-
ences for nationals works on at least two levels with IPR. First,
at the government level, the Philippines may be reluctant to do
what the United States says, such as devote more resources to
IPR enforcement, because it sees foreign IPR holders, and not

Filipinos, reaping most of the benefits.272 Second, at the con-
sumer level, Filipinos may buy IPR-infringing goods because
they believe doing so is not really hurting Filipinos, again be-
cause foreign IPR holders dominate the market.273
267Id.
268Id.
269 See Pulmano, supra note 3, at 255.
270 Jackson, supra note 234, at 640.
271 Juan T. Gatbonton, Op-Ed, ‘Hospitable’ Filipinos Like their Economy
Closed, MANILA TIMES, Feb. 4, 2008, available at http://www.manilatimes.net/na-

tional/2008/feb/04/yehey/top_stories/20080204top4.html.
272 For example, local businesses could suffer from stronger IPR protection be-
cause foreign companies may be more likely to enter the market and compete. See
Asian Nations, supra note 264, at 176.
04/08/2009 15:17:04
273 This, of course, is not true because even foreign IPR industries create jobs
and tax revenue in the Philippines. See infra Part V.C.1.
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Overall, the culture of acceptance of IPR infringement in

the Philippines can be seen as a backlash against developed
countries (the United States in particular) and an effort on the
Philippines’ part to retain national autonomy. But there is
something else at work here, too.
D. Money Earned or Saved through IPR Infringement
The absence of a culture of respect for IPR in the Philip-

pines can also be attributed to the root of all evil: money. IPR
infringement is a low risk, high profit enterprise that means
more money in the pockets of sellers and buyers alike.274
For vendors of pirated optical media or fake bags, shoes,
and watches, IPR infringement may simply be a means of sur-
vival. For example, as Matt Jackson points out, in China:
[E]conomic reforms . . . have left tens of millions of unemployed
workers scrambling for a living. Selling pirated films and music is
an easy and fairly safe method of getting by. According to one re-
cent story, even a man jailed three times for a total of nine
months continues to sell pirated goods as a way to make a
living.275
The same holds true, albeit on a much smaller scale, in the Phil-
ippines. Continued efforts to crack down on sellers of IPR-in-
fringing goods such as President Arroyo’s offer of an alternative
source of income to pirated optical media vendors in the notori-
ous Quiapo market area have met with little, if any, success.276

These are among the same vendors who supposedly “committed
to stop distribution of Filipino movies as well as porno-
graphic. . .materials” back in early 2005.277 But as anyone who
has walked around the Quiapo market area as late as the mid-
dle of 2008 can attest, both Filipino movies and pornographic
DVDs continue to be widely available.278 Vendors keep selling
274See DuBose, supra note 51, at 484.

275See Jackson, supra note 234, at 638.
276 See STRENGTHENING THE IP SYSTEM, supra note 24, at 56.
277 Rommer M. Balaba et al., DVD Pirates Request for Arrest Moratorium, BUS.
WORLD (Phil.), Feb. 10, 2005. The spokesperson for the Quiapo building owners
also said, “We . . . would advise our tenants to stop selling pirated music CDs,
particularly those that feature Filipino artists.” Id. This is an example of the
04/08/2009 15:17:04
“Robin Hood” mentality discussed earlier. See supra Part IV.B.2.a.

278 Foreign movies tend to be easier to find than Filipino movies.
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the illicit items because it provides them with income that

would otherwise be out of reach.279
While some vendors remain in the for-profit IPR infringe-
ment business out of economic necessity, others do so in order to
make more money than they could with legitimate jobs. Yet
vendors are only part of the for-profit IPR infringement story.
Someone has to produce, distribute, and in some cases facilitate
the sale of the goods, and that person will do so because, just
like selling the goods, it is profitable. Organized crime syndi-
cates are involved in the business.280 But so are politicians and
mall owners.281 According to the IIPA, key mall owners, who
often collect rent and then turn a blind eye to the sale of IPR-
infringing goods on their premises, are members of Congress.282
Holding mall owners criminally liable for the sale of IPR-in-
fringing goods on their premises is an established practice in
countries such as the United States, but not so in the Philip-
pines, where even though such a provision exists, it has never
been enforced.283 Instead, in an attempt to hold mall owners
more accountable for the items being sold on their premises, the
OMB has tried to convince mall owners to agree to require ven-
dors selling optical media to secure clearance from the NBI and
the OMB before the vendors would be allowed to continue oper-
ating.284 With people in high places profiting from IPR in-
fringement, improving IPR enforcement becomes all that much
more difficult.285

279 See Intellectual Property Challenges, supra note 8, at 467 (“In most develop-
ing economies there is significant employment in producing counterfeit goods and

pirated copies of music and videos. These workers must find alternative employ-
ment as stronger standards are enforced.”). However, a reduction in piracy could
translate into higher paying jobs for counterfeit optical media vendors, as legiti-
mate firms, which pay better than pirate outlets, would hire workers as they ex-
pand to meet the new consumer demand for legitimate goods. See id.
280 See ORGANIZED CRIME, supra note 208.
281 See Authorities Entrust Malls with Anti-Piracy Measures, supra note 141.
282 See Salvosa, supra note 58.
283 Elaine Ruzul S. Ramos, Govt Pursues Drive Against Fake Products, MANILA
STANDARD, Jan. 19, 2007.

Only one entity, SM Malls, had given a definite response. Id.

285 Cf. Robert M. Sherwood, The TRIPS Agreement: Implications for Develop-
04/08/2009 15:17:04
ing Countries, 37 IDEA 491, 538 (1997) (noting that self-interest among a country’s
elite is one motive preventing judicial system reform in developing countries).
47
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Finally, most Filipinos remain indifferent toward IPR in-

fringement because, as consumers, they benefit financially from
piracy and counterfeiting.286 IPR infringers act as an “economic
leveler,” making goods that would otherwise be out of reach af-
fordable.287 For a country with as sharp class distinctions as
the Philippines,288 pirated DVDs and fake watches help narrow
the gap between the rich and the poor.289 Moreover, for the mi-
nority of Filipinos who can afford legitimate goods, counterfeit
products simply save them money.290 The often significantly
higher price of legitimate goods versus their much cheaper ille-
gitimate counterparts makes the decision to buy pirated copies
of software easy for many consumers.291 Legitimate operating
system software may cost over the equivalent of $300, while the
illegitimate version may go for as little as $4 or $5 in the coun-
try.292 Likewise, consumers can buy single DVDs containing
twelve or even sixteen movies from pirated optical media ven-
dors for one-tenth the cost of a legitimate DVD.293
286 BELLO, supra note 81, at 13-14 (quoting Earning from Others’ Intellectual
Creations, PHILIPPINE DAILY INQUIRER, Feb. 17, 2003, at C7).

287 Id.
288 See Survey: Rich-Poor Gap Widens, PHILIPPINE DAILY INQUIRER, Jan. 13,
2008 available at http://newsinfo.inquirer.net/inquirerheadlines/nation/view_arti-

cle.php?article_id=111995.
289 Jonas Baes, Paper read at the Conference on “Media Practice and Perform-
ances Across Cultures” at the University of Wisconsin-Madison, Towards a Politi-

cal Economy of the “Real”: Music Piracy and the Philippine Cultural Imaginary,
(Mar. 14-17, 2002), available at http://polyglot.lss.wisc.edu/mpi/Activities/Media%
20Practice%20Spring%202002/Baes.htm

290 See IP COALITION REPORT, supra note 13, at 38; Chen, supra note 213, at
216.
292 Id. Microsoft, realizing that the majority of people in developing countries
are priced out of the market, finds ways to make some of its products more afforda-
ble, such as selling heavily discounted software designed for students to govern-
ments. See Lawrence Casiraya, Microsoft to Offer $3 Software for Students,
INQUIRER.NET, Apr. 21, 2007, available at http://technology.inquirer.net/infotech/
infotech/view_article.php?article_id=61714.
293 One of these 12-in-1 DVDs may cost as little as PHP50 ($1.20) after bar-
gaining. A legitimate DVD, on the other hand, can cost PHP500 ($12) or more.
Video compact discs (VCDs) are also popular in the Philippines. VCDs are similar
to DVDs, but they hold less information. See Seth Faison, China Turns Blind Eye
to Pirated Disks, N.Y. TIMES, Mar. 28, 1998 at D1. They are also priced much more
competitively than DVDs. New releases in VCD format usually sell for around
PHP250 ($6), while older ones may be as cheap as PHP50 or PHP100 ($1.20 to
04/08/2009 15:17:04
2.40). However, pirated DVDs will almost always be cheaper than legitimate VCDs
or DVDs. A camcorded version of a movie still in the theaters costs around PHP70
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In summary, under one view, the Philippines may be doing

what it can to protect IPR considering its limited resources.294
The country has an adequate legislative framework with the ap-
propriate regulatory agencies in place to protect IPR. Yet, de-
spite this, IPR infringement remains entrenched in the country.
The blame lies in a number of areas. First, the lack of re-
sources, administrative capacity, and interagency cooperation
all limit the effectiveness of enforcement efforts. The OMB, in
particular, suffers from insufficient funding and lackluster
leadership that keeps the agency from focusing more on build-
ing up its institutional capacities rather than conducting its
largely ineffective raids. Moreover, the Philippine legal system
provides little deterrence to IPR violators, as it is plagued by
backlogs and delays and fails to ensure penalties—whether
fines or jail time—are served. Finally, IPR is low on the Philip-
pines’ list of priorities. Many Filipinos are either not aware or
do not understand IPR, thanks in part to a poor education sys-
tem. And even if they do have a basic grasp of IPR, the assump-
tion is that devoting scarce resources to their protection and
enforcement is not in the country’s best interest. IPR industries
in the Philippines are too insignificant to justify the expenses
that come with strong IPR protection and enforcement because
the country already has its hands full with major developmen-
tal issues such as poverty eradication and a lack of infrastruc-
ture. Filipinos—especially those who belong to the economic
and political elite—are content with the IPR protection and en-
forcement status quo because a culture of acceptance of IPR in-

fringement has taken a hold that stems from the country’s
desire to assert its sovereignty in the face of pressure from the
developed world, and also the money that Filipinos make or
save from violating copyright and trademark laws. This Article
will now examine what it will take for there to be a significant
reduction in IPR infringement in the Philippines.
($1.70). The quality of the pirated DVDs is a bit of a wild card, but the more savvy
vendors will usually allow a potential customer to view parts of the DVD before
04/08/2009 15:17:04
purchase.
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V. KEYS TO SIGNIFICANTLY REDUCING IPR INFRINGEMENT

IN THE PHILIPPINES
A. Overview
There is no easy solution to eliminating IPR infringement
in the Philippines (or in any other country for that matter). Do-
ing so will take time and will involve everyone from the average
consumer to senior government officials.295 Citizens need to be
educated and violators need to be punished.296 The Interna-
tional Chamber of Commerce lists three goals to help curb
piracy counterfeiting:
1) increase public and political awareness of the economic and so-
cial harm associated with counterfeiting and piracy activities, 2)
encourage government action and the allocation of resources to-
ward improved IPR enforcement, and 3) create an environment in
which intellectual property is respected and protected.297
This well-rounded approach aims to instill an understanding of
and respect for IPR in people that will translate into more re-
sponsible consumer behavior and increased funding for IPR en-
forcement agencies.
If the Philippines is going to make significant strides in re-
ducing IPR infringement, its citizens have to understand IPR
protection and enforcement and believe that they are in their
best interest. Education and training are an important part of
the solution, but ultimately Filipinos must have a stake in
strong IPR protection and enforcement so that they make them

a priority. As a middle-income developing country, the Philip-
pines focuses on more pressing issues such as poverty rather
than IPR protection and enforcement, which require adequate
funding to be effective. In order to make IPR protection and
enforcement priorities, Filipinos have to realize the damage IPR
295See Coonan, supra note 52.

296Mike Ellis, Senior Vice President and Regional Director for the MPA in
Asia-Pacific stated, “It’s a difficult task to stamp out piracy overnight, as the prob-
lem needs to be addressed on many levels — from educating consumers about the
problem and how it impacts them to enforcing tougher penalties that make pirat-
ing activities less attractive[.]” Id.
297 INT’L CHAMBER OF COMMERCE, INTELLECTUAL PROPERTY: SOURCE OF INNOVA-
TION, CREATIVITY, GROWTH, AND PROGRESS 4 (2005), http://www.iccwbo.org/
04/08/2009 15:17:04
uploadedFiles/ICC/policy/intellectual_property/Statements/BASCAP_IP_pub.pdf
[hereinafter INTELLECTUAL PROPERTY].
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infringement does to the country, and also the potential strong

protection and enforcement hold for increasing economic devel-
opment and global competitiveness. But, right now, strong IPR
protection and enforcement alone will not necessarily translate
into sustained economic growth and technological innovation in
the Philippines. This is because other, institutional, factors,
such as an the openness of a country’s economy, political stabil-
ity, and the quality of its legal system affect the likelihood that
strong IPR protection and enforcement will lead to long-term
growth.
B. Education and Training

One way to get people to understand and respect IPR is
through education and training. An individual—whether a
judge, a customs official, a politician, or a private citizen—
needs at least a basic understanding of IPR before he can de-
velop a respect for IPR protection and a desire to enforce or
abide by these rights. But education and training alone are not
enough. Even when people understand IPR, some will still vio-
late them in order to make or save money. Thus, in order to
effectively instill the merits of a strong IPR protection regime,
deterrence is also needed.
Improving IPR protection in the Philippines depends in
large part on public support. Passing IPR laws and then hoping
for compliance is not enough.298 If Filipinos are going to respect
and abide by IPR laws, they need to understand what IPR re-

present and how they can benefit from protecting these
rights.299 After all, their consumer demand fuels the produc-
tion, distribution, and sale of pirated optical media and counter-
feit goods.300 Eliminating the people’s willingness or desire to
own pirated or counterfeit goods will mean eliminating the sup-
ply of those goods. Moreover, if Filipinos support strong IPR
protection, then the police will be more willing to shut down
vendors, prosecutors will more vigorously pursue IPR cases,
and judges will be more likely to hand down deterrent
sentences.301
298 See Green, supra note 186, at 239.

299 See IP COALITION REPORT, supra note 13, at 37.
04/08/2009 15:17:04
300 See BLAKENEY, supra note 37, at 42.

301 See Focus on IPR, supra note 203.
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Building IPR awareness and understanding is a challenge.

What is the best way to instill the benefits of strong IPR protec-
tion in the masses effectively? Governments, organizations,
and individuals can all play a role in IPR, doing so through edu-
cation and training. For instance, public awareness campaigns,
whether sponsored by the government or pro-IPR businesses or
organizations, help foster a basic understanding of IPR.302
Also, seminars for small and medium-sized businesses, such as
those put on by IP Philippines, highlight IP as a potential asset
and provide information on how to protect it.303
Governments also need to provide adequate training for
civil servants who deal with IPR.304 For example, effective IPR
enforcement will be limited without knowledgeable customs
personnel. As Michael Smith, an attorney adviser in the Office
of Enforcement at the U.S. Patent and Trademark Office
(USPTO), said, “You need customs officials at the border who
are good consumers, familiar with the trademarks that have
been recorded, and who have an interest in enforcing the rights
of trademark holders.”305
Ideally, parents and other family members would have a
part in instilling a respect for IPR in children, just like they do
with such things as personal property and other basic values.
The problem is that a lot of parents either do not understand or
do not respect IPR. So without role models at home, younger
Filipinos may need to learn about IPR in school. IP Philippines
recognizes the need to target younger Filipinos, so it suggests

developing an IP conscious culture through the education sys-
tem.”306 Coordinating efforts with the Department of Educa-
tion to include IPO awareness in the curriculum,307 while a
good idea, may be more of a dream than reality for now. The
education system is in a poor state.308 While some kind of IPR
302See STRENGTHENING THE IP SYSTEM, supra note 24, at 13, 38-40.

303See id. at 38-39.
304 See Sherwood, supra note 285, at 543 (“A major obstacle to upgrading intel-
lectual property systems is the lack of trained people qualified to conduct an effec-
tive public administration.”).
305 Focus on IPR, supra note 203.
307 See Iris Cecilia C. Gonzales, Philippines Targets Delisting from US List In-
04/08/2009 15:17:04
tellectual Property, BUS. WORLD (Phil.), Mar. 7, 2006.

308 See U.S. Delegation Statement, supra note 217, ¶¶ 21, 35, 36.
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curriculum may be possible in well-funded private schools, it is

not likely to take hold in other schools that may not even have
enough desks for their students. And major investment in pri-
mary and secondary education is critical not just for any kind of
IPR curriculum to have a chance; it is also essential for an in-
creasingly knowledge-based economy “because adequate sup-
plies of labor skills promote innovation and technology
adoption.”309 Even at the university level, IP garners only mini-
mal attention. Most Philippine universities—the hotbeds of in-
novation in the country—have yet to adopt IP policies.310
Overall, education and training are essential components
in the fight against piracy and counterfeiting, as they help en-
courage a culture of respect for IPR. Yet even with education
and training, consumers and politicians often remain indiffer-
ent. There is no guarantee that an individual will think twice
about purchasing counterfeit goods or go around beating the
IPR drum afterwards. The key to overcoming this indifference
towards IPR depends on the benefits people derive from strong
IPR protection and enforcement.
C. Political Will
With solid IPR legislation and enforcement mechanisms in
place, as well as an understanding that public IPR education
and awareness remains an integral part in combating IPR in-
fringement, the Philippines needs a true commitment to vigor-
ous IPR protection and enforcement from its leaders, especially

those in the executive and legislative branches, that goes be-
yond the usual U.S.-mollifying rhetoric.311 Strong political will
at the top of the government is necessary for IPR enforcement
to receive enough funding and attention to be effective.312 Andy
Y. Sun, discussing lessons learned from Taiwan’s experience re-
309 Intellectual Property Challenges, supra note 8, at 472; accord Op-Ed, Sin-
Ming Shaw, Thaksin Can Help Reawaken the Thai Tiger, S. CHINA MORNING POST,
Mar. 8, 2008 (“Without quality education, there can be no quality workforce, with-
out which no country can hope to compete.”).
310 See Veronica S. Cusi, IP Policy Finalized by Gov’t, BUS. WORLD (Phil.), Nov.
8, 2007.
311 For example, the Philippines “continues to lack aggressive prosecution of
intellectual property rights (IPR) violators.” INVESTMENT CLIMATE STATEMENT,

supra note 21.
04/08/2009 15:17:04
312 See Focus on IPR, supra note 203. Some of the large malls in Manila pro-
vide an example of strong will (albeit business rather than political) that leads to a
53
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forming its IP regime, writes, “[a]n unequivocal commitment

from the political leadership is perhaps the single most critical
element to further momentum for reform.”313 The Philippines
has to be willing to make IPR enforcement a priority and com-
mit more of its scarce resources to addressing the problem.314
And those resources have to be used efficiently and effectively.
As mentioned above, IPR is not yet a Philippine priority.315
So what needs to happen for the political leadership in the
Philippines to make IPR a priority, and how will the leadership
gain the general public’s support for this goal? The answer is
that, ultimately, Filipinos need to see, believe, and act on the
idea that they have a stake in strong IPR protection and en-
forcement. They need to realize that they can benefit from
strong IPR protection and enforcement and that it is, in fact, in
their long-term national interest.316 However, at the moment,
this is not happening on the scale necessary to significantly re-
duce IPR infringement in the country. As one Filipino copy-
right insider, speaking about book piracy, said, “[w]e lack the
teeth, funds and the willpower in implementing the Copyright
Law and the Intellectual Property Code. . . .”317 Filipinos have
trouble justifying the cost of strong IPR protection and enforce-
ment because they are net consumers and importers of IP
rather than producers and exporters.318 They believe a high
level of IPR protection and enforcement is not yet in the coun-
try’s best economic interest,319 especially the economic and po-

lack of counterfeit goods. These malls are virtually free of counterfeit goods be-
cause their owners want to maintain the malls’ reputations. Id.
313 Andy Y. Sun, From Pirate King to Jungle King: Transformation of Taiwan’s
Intellectual Property Protection, 9 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 67,
168 (1998).
314 See INTELLECTUAL PROPERTY, supra note 297, at 4; Press Release, Bus.
Software Alliance, New Study Projects Significant Economic Benefits from Reduc-
ing Software Piracy (March 10, 2008), http://w3.bsa.org/ india/press/ newsreleases/
india-pr-2008-03-10.cfm (noting that one of the steps a government can take to
reduce software piracy is to devote significant resources to the problem).
315 See supra Part IV.B.
316 See Reichman, supra note 110, at 469 (“Once the developing countries see
that they, too, have a big stake in the global intellectual property system, the long-
term prospects for that system would become bright, indeed.”).
317 Before You Photocopy that Book. . ., supra note 87.
318 See IPR Commission Report, supra note 231, at 11.
319 Cf. Endeshaw, supra note 236, at 378 (“The fundamental reason for the
04/08/2009 15:17:04
impasse in enforcement of IP in Asia, as elsewhere in the non-industrial world, lies

in the huge economic and technological gap between them and those of the indus-
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litical oligarchs that do quite well with the status quo.320 The
Philippines has to embrace an IPR system that translates into
significant benefits for its citizens, and not just foreign IPR
holders from developed countries, in order to justify its expense
on such a system.321
Domestic IPR industries have a role to play in pushing for
better IPR protection and enforcement. Their support sends a
signal to the government that local industries have a stake in
strong IPR protection and enforcement. According to Sun,
[t]he most effective tool to convince that nation’s leadership of the
need for better Intellectual Property protection is the pressure
from within, [i.e.], a self-initiated urge that stronger Intellectual
Property protection is more to the benefit of that nation than to
foreign states.322
For example, in Taiwan, the government “did not capitulate to
U.S. demands for better IPR enforcement but rather voluntarily
adopted a stricter regime upon evolving to a state where doing
so was in its economic interest.”323 Only when the domestic
copyright industry in Taiwan evolved did the government crack
down on copyright piracy.324 As domestic IPR industries grow
and local businesses recognize that they can benefit from IP,
they will be more likely to put more pressure on the government
to commit to IPR protection and enforcement.325 Yes, pressure
trial nations”); Priest, supra note 255, at 820 (“[The Chinese government is not]
obligated or inclined to protect the interest of private parties (many of whom, in

the case of copyright owners, are foreigners) with the same urgency with which it
protects its own interests.”).
320 See supra Part V.A-B (a further discussion of the Philippines’ economic and
political oligarchy).
321 Cf. Reichman, supra note 110, at 466 (“In the end, of course, the developing
countries’ greatest need is to make the worldwide intellectual property system

work for them and not just for coalitions of powerful rights holders operating from
the developed countries.”); Sherwood, supra note 285, at 493 (“A great deal will
depend on the political willingness of countries to make their intellectual property
systems work well to benefit their nations.”).
322 Sun, supra note 313, at 168.
323 Guha, supra note 247, at 242.
324 See id. at 245.
325 Cf. Horacio Teran, Intellectual Property Protection and Offshore Software
Development An Analysis of the U.S. Software Industry, 2 MINN. INTELL. PROP.

REV. 1, 9-10 (2001) (“[L]ocal suppliers can play a role in overcoming nationalist and
administrative barriers to improvements in public enforcement of intellectual
04/08/2009 15:17:04
property rights. With adequate organizational and financial resources, they can
put pressure on local authorities to commit to public enforcement of intellectual
55
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from foreign players such as the U.S. government has an impact

on the strength of IPR protection and enforcement. And these
foreign players play an important role in assisting developing
countries with their IPR regimes.326 But a true commitment to
IPR protection and enforcement from the political leadership in
the Philippines—one that results in adequate attention and
funding—will come only when the domestic IPR industries have
a strong enough voice to make it known that IPR protection and
enforcement is in the country’s best interest.327
1. How Strong IPR Protection and Enforcement can Help

the Philippines
Regardless of the size or significance of a country’s IPR in-

dustries, a solid IPR system can lead to a number of benefits.328
It can spur economic development and increase global competi-
tiveness by encouraging innovation and inviting FDI, which fa-
cilitates technology transfer and creates jobs and a source of tax
revenue for the government.329 When it comes to FDI, Jean
Raymond Homere notes:
[D]eveloping countries with stronger IPR regimes are in a better
position to attract knowledge-related foreign direct investments
(FDI) flows. . . .Studies have shown a positive correlation between
stronger IPR protection, FDI and the transfer of technology from
developed countries to developing countries.. . .This is due to the

property rights.”); Shiu, supra note 50, at 631 (“As a developing industrialized na-
tion [Taiwan] with much economic power, local development may provide an inter-
nal push to increase IPR protection.”); Joseph A. Massey, The Emperor is Far
Away: China’s Enforcement of Intellectual Property Rights Protection, 1986-2006, 7
CHI. J. INT’L L. 231, 237 (2006) (noting that domestic businesses in China benefit
from IPR enforcement).
326 For example, through training and technical assistance.
327 Cf. Sun, supra note 313, at 167-69 (citing domestic pressure as one of the
keys to better IPR protection and enforcement).

328 See IIPA SURVEY, supra note 230, at 1; Homere, supra note 236, at 277. But
see Yu, supra note 228, at 234 (claiming that the idea that stronger IPR protection
benefits developing countries has yet to be demonstrated); Endeshaw, supra note
236, at 380 (asserting that stronger IPR protection can have negative economic
impacts on developing countries).
329 See Homere, supra note 236, at 283; Simon Helm, Intellectual Property in
Transition Economies: Assessing the Latvian Experience, 14 FORDHAM INTELL.

04/08/2009 15:17:04
PROP. MEDIA & ENT. L.J. 119, 130 (2003); INTELLECTUAL PROPERTY, supra note 297,
at 10.
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fact that foreign investors are more willing to invest in countries

that provide adequate legal protection for intellectual property.330
Weak IP regimes can stunt the growth of a country’s economy,

as FDI in those cases “tends to be more limited and directed
toward sales and distribution rather than manufacturing.”331
Strong IPR protection can also help address one of the Phil-
ippines’ most pressing concerns, eradicating poverty. As Presi-
dent Arroyo said, “[f]ighting piracy is fighting poverty because
it enables Filipino excellence and enterprise to rise in the global
arena, expanding opportunities and jobs along the way.”332
Countries with strong copyright protection, for instance, tend to
experience a greater contribution to their GDP from copyright
sectors.333
2. The Philippines’ Survival in the Global Economy
The Philippines has to face the realities of an increasingly

knowledge-based, global economy if it wants to improve the
plight of its citizens.334 As IP Philippines Director-General
Cristobal said, “IP and innovation are essential to [the] coun-
try’s survival and continued competitiveness” in the new econ-
330Homere, supra note 236, at 286-87 (citations omitted).

331Helm, supra note 329, at 130.
332 IP COALITION 2007 SUBMISSION, supra note 2, at 4 (quoting a speech by

President Arroyo). Accord BLAKENEY, supra note 37, at 4 (“For developing coun-
tries, the nurturing of indigenous technological capacity through the intellectual
property system has also proved to be a key determinant of economic growth and
poverty reduction.”); INTELLECTUAL PROPERTY, supra note 297, at 5 (“Intellectual
property protection contributes to economic growth in both developed and develop-
ing countries by stimulating innovation, cultural diversity and technical develop-
ment as part of a larger policy framework. Properly used, intellectual property
rights can also be key tools for the alleviation of poverty through trade.”).
333 See IIPA SURVEY, supra note 230, at 1.
334 Cf. Ongpin, supra note 4 (stating that high value work that depends on
knowledge and innovation is a key to improved living conditions for the citizens of
a country such as the Philippines); B. Zorina Khan, Intellectual Property and Eco-
nomic Development: Lessons from American and European History 47 (Commis-
sion on Intell. Prop. Rights & Nat’l Bureau of Econ. Research, Study Paper No. 1a)
(“Knowledge intensive industries account for an increasing fraction of national
output in the developed countries and have led to claims of a ‘new economy.’”),
04/08/2009 15:17:04
available at http://www.iprcommission.org/papers/pdfs/study_papers/sp1a_khan_
study.pdf.
57
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omy.335 The country “should not be contented as a nation

importing technologies. Neither should [it] be satisfied with be-
ing mere users of other nation’s technology.”336 Instead, the
Philippines “needs to be the creator, the inventor, the supplier
of new technologies in the world market.”337
The country is home to a great deal of innovative and crea-
tive talent, but its domestic IPR industries suffer from the lack
of effective IPR protection and enforcement.338 This deficiency
prevents these industries from reaching their full potential.339
Because developing countries have limited capital and labor,
they must depend on technical progress if they hope to someday
grow their economies to the level of developed countries.340 Pro-
moting domestic IPR industries and IPR protection is a key
component in a country’s economic development strategy.341 It
also helps support and enrich a country’s cultural heritage.342
One area where the Philippines can excel is the copyright
sector.343 Through vigorous IPR protection and enforcement,
the country can help harness its creative talent in a number of
copyright-related industries.344 Copyright-related industries
335 Bernadette S. Sto. Domingo, Strategy Grounded on Eight Areas, BUS.
WORLD (Phil.), Nov. 27, 2007. Accord STRENGTHENING THE IP SYSTEM, supra note
24, at 4.
336 Sto. Domingo, supra note 335.
337 Max V. de Leon, IP Plan May Turn RP Into Global Player, BUS. MIRROR
(Phil.), Nov. 27, 2007.

338 Cf. U.S. Embassy Hosts IPR Roundtable Discussion Between U.S. Embassy,

Industry Representatives, U.S. FED. NEWS, June 8, 2005 (noting the downsides to
weak IPR protection that hinder Philippine economic development) [hereinafter
U.S. Embassy Hosts IPR Roundtable].
339 See Marian Grace S. Ramos, Investors Discouraged By Rampant Software
Piracy, Says Group, BUS. WORLD (Phil.), Oct. 23, 2007; Kerlyn G. Bautista, IT In-
vestments Fall As Piracy Rises, BUS. WORLD (Phil.), Feb. 25, 2005.
340 See Homere, supra note 236, at 283 (commenting on the work of develop-
mental economist Robert Solow).

341 STRENGTHENING THE IP SYSTEM, supra note 24, at 4; see U.S. Embassy
Hosts IPR Roundtable. One of the aims of an IPR system is to “promot[e] . . . in-
vestment in knowledge creation and business innovation.” Homere, supra note
236, at 280.
342 See IP Philippine Confab Tackles Piracy, BUS. WORLD (Phil.), May 3, 2007.
343 See Carlos, supra note 215.
344 See Bernadette S. Sto. Domingo, Competitiveness Boost Seen From Creative
Sectors, BUS. WORLD (Phil.), July 20, 2006; Focus on IPR, supra note 203 (noting
04/08/2009 15:17:04
the link between effective IPR enforcement and growth in local music industries,
especially in Asia). According to Maskus,
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make up an estimated 5% of the Philippines’ GDP,345 but much

of this comes from industries such as business process outsourc-
ing (BPO), the fastest growing sector in the country, where Fili-
pinos are working in an IP industry but not necessarily creating
the IP.346 Core copyright industries—those responsible for the
creation of IP or high-value IP work such as the software,
movie, or book publishing industry—account for much less of
the 5% figure.347 Many of these industries have only started to
develop,348 and have the potential to be a significant source of
jobs and wealth in the country.349
For example, the information technology (IT) sector has
been the source of a lot of government attention in recent
years.350 Yet the industry still lags behind its regional neigh-
bors when it comes to IT competitiveness.351 Piracy has hurt
investments in the sector, which, for instance, dropped from
2002 to 2003 when the piracy rate increased.352 On the bright
side, industries such as software development and animation
[c]opyrights also may materially promote business development. In the

presence of weak and poorly enforced protection, copyright industries,
such as publishing, entertainment, and software, are likely to be domi-
nated by foreign enterprises (which can absorb temporary losses and af-
ford to deter infringement) and pirate firms. Thus, imitative copies are
cheaply available but the economy’s domestic cultural and technological
development is discouraged.
Intellectual Property Challenges, supra note 8, at 461-62.
345 Press Release, Philippine Information Agency, Creative Sector Contribute
5% to Country’s GDP – IP Philippines (Jan. 22, 2008), available at http://www.

pia.gov.ph/?m=12&r=&y=&mo=&fi=p080122.htm&no=18.
Another estimate puts that number as high as 10%, although that figure is for
the broad category of copyright-applicable industries. Kristine L. Alave, Policy
Makers Press for Updates to Copyright Law, BUS. WORLD (Phil.), Sept. 14, 2006.
346 Id. For instance, basic call center and transcription services generate over
$2 billion a year. Federico C. Gonzalez, EntrepreNEWS, BUS. WORLD (Phil.), July

19, 2007.
347 Higher-end content such as software, engineering design, and animation
services generate around $300 million a year. Id.

348 See Sto. Domingo, Competitiveness Boost Seen From Creative Sectors, supra
note 344.
349 See Alave, supra note 345.
350 See Mejia, supra note 232, at 470-71.
351 Press Release, Bus. Software Alliance, Philippines Ranks 11th in Asia
Pacific in IT Competitiveness (Sept. 12, 2007), available at http://www.bsa.org/

country / News%20and%20Events / News%20Archives/enPH/2007/enPH-09122007-
itcompetitiveness.aspx. The Philippines ranked 11th in the Asia Pacific region,
04/08/2009 15:17:04
and 47th out of 64 countries. Id.

352 See Ho, supra note 49.
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possess great potential. “Philippine software houses now have

a foothold in the global market,” with sales of $359 million in
2007 and a projected 30% growth in 2008.353 These sales ac-
count for only a sliver of the world market.354 The animation
industry, which made $105 million in 2007, is growing, and it
aims to increase its number of animators from 7,500 to 25,000
by 2010.355
Also, the film industry in the Philippines could benefit from
improved IPR protection and enforcement. The industry, whose
rich history includes the works of such great directors as Ge-
rardo de Leon and Lino Brocka, has been struggling.356 Today
it produces less than half the number of movies that it did only
twenty years ago.357 While the industry suffers from steep pro-
duction costs, high taxes,358 and strong competition from big
budget foreign films and television, piracy remains its biggest
problem.359 The recent proliferation of digital films360 and
bump in local production revenue361 are encouraging, but more
effective IPR enforcement efforts will be needed if the industry
is going to return to its past glory.362
D. IPR Protection and Economic Development

Strong IPR protection and enforcement have the potential
to help a nation’s economy grow, especially in a country with a
promising copyright sector such as the Philippines. But the no-

353 Ike Suarez, Pay Dirt Finally For Software Houses, MANILA TIMES, Feb. 18.
2008.
354See id.
355Erwin Oliva, RP Animators Producing More Original Content, INQUIRER.
NET, Feb. 18, 2008, http://technology.inquirer.net/infotech/infotech/view/20080218-
119545/RP-animators-producing-more-original-content.u.
356 See Antipiracy Drive Brings Higher Earnings for Local Films, MANILA
TIMES, July 10, 2007.
357 Id.
358 See Jeffrey O. Valisno, Stakeholders Push Reduction of Amusement Tax,
BUS. WORLD (Phil.), May 9, 2008.

359 See Cuevas, supra note 47.
360 See Nestor Torre, Signs of Recovery and Renewal on Local Film Scene,
PHILIPPINE DAILY INQUIRER, Feb. 8, 2008; Antipiracy Drive Brings Higher Earnings
for Local Films, supra note 356.
361 See id. From £1.025 billion in 2005, receipts from local productions rose to
£1.437 billion in 2006, or an increase of £.412 million or 40 percent.” Id.

04/08/2009 15:17:04
362 Anti-piracy efforts may be a factor contributing to the increased local film
revenue. See id.
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tion that a developing country will see significant benefits from

IPR enforcement is no slam-dunk. Players with vested inter-
ests in IPR enforcement, such as the IIPA, argue for stronger
IPR protection in developing countries such as the Philippines
by highlighting the economic advantages that will accrue to
that particular country.363 And the leaders of these developing
countries, such as the president of the Philippines, often sub-
scribe to this view, at least publicly.364 But make no mistake:
players such as the U.S. government ultimately push for
stronger IPR protection because they themselves will benefit
from it.365 More objective observers do not necessarily buy into
the idea that stronger IPR protection alone will lead to eco-
nomic development.366 As the prominent IPR scholar Keith
Maskus contends, stronger IPR protection, by itself, could pro-
duce economic benefits for a developing country, but only under
certain circumstances.367 Other complementary policies must
exist for a country to realize the benefits that come with
stronger IPR protection.368 What follows is a closer look at the
connection between IPR enforcement and economic
development.
1. Strong IPR Protection and Enforcement Alone are Not

Enough
The relationship between IPR protection and economic de-
velopment is complex and unclear.369 According to Maskus, se-
rious questions surround the idea that strong IPR protection

363See IIPA SURVEY, supra note 230, at 1.
364Watch List Part 3, supra note 238; STRENGTHENING THE IP SYSTEM, supra
note 24, at 4.
365 After all, IP is one of the U.S.’s “competitive advantages[.]” Sampson,
supra note 229, at iii.

366 See Intellectual Property Challenges, supra note 8, at 457; Ruth L. Gana,
Prospects for Developing Countries Under the TRIPS Agreement, 29 VAND. J.

TRANSNAT’L L. 735, 738-39 (1996); Homere, supra note 236, at 277; Khan, supra
note 334, at 4; S. Mohan, New Values in Intellectual Properties, HINDU MAGAZINE,
Nov. 24, 2002, available at http://www.hinduonnet.com/thehindu/mag/2002/11/24/
stories/2002112400390400.htm.
367 Maskus, Intellectual Property Rights and Economic Development, 32 CASE
W. RES. J. INT’L L. 471, 495-96 (2000).

368 Id. at 496.
04/08/2009 15:17:04
369 Intellectual Property Challenges, supra note 8, at 457-58; Mohan, supra
note 366.
61
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increases economic growth.370 “Economic evidence currently

available is fragmented and somewhat contradictory,” he states,
“in part because many of the concepts involved are not easily
measured.”371 Maskus submits two reasons for this
uncertainty:
First, an array of other factors influences growth in ways that
could be more important than tighter IPR. Such variables include
openness to international trade and investment, encouragement
of an adequate technology infrastructure, support for literacy and
technical education, and macroeconomic stability. Second, IPR
could have numerous and contradictory effects on development,
the importance of which would depend on the economic and social
situation in each country.372
Despite these doubts, Maskus claims that “a regime of ex-
panded property right protection holds considerable promise for
promoting long-term economic growth and technological inno-
vation among developing nations.”373 He argues that “if devel-
oping countries embed their intellectual property systems
within a broad and coherent set of collateral policies and trans-
parent regulation, the systems bear considerable promise for
promoting growth in the long run.”374
Other scholars support Maskus’ belief that strong IPR pro-
tection can promote economic development, but only under the
right circumstances.375 Ruth Gana argues that IPR protection’s
“transformative potential is freed only by the existence of legal,
economic, and political structures associated with free market

systems in which property rights play a pivotal role.”376 B.
Zorina Khan, analyzing American and European history, con-
cludes that:
[T]he impact of intellectual property rights will depend on their
institutional context. This implies that changes in IPR rules
370Intellectual Property Challenges, supra note 8, at 457-58.

371Id. at 458.
372 Id.
373 Id. at 457
374 Id. at 458.
375 See, e.g., Gana, supra note 366, at 738-39; Homere, supra note 236, at 277
(noting that “[m]odern economists have been increasingly inclined to recognize

IPRs as a tool capable of stimulating economic growth when tailored to the partic-
04/08/2009 15:17:04
ular needs of a country); Khan, supra note 334, at 4; Mohan, supra note 366.
376 Gana, supra note 366, at 738-39.
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must occur in tandem with developments in the legal system, the

market system, and cultural norms. . . . Developing countries that
adopt strong IPR will find that the benefits are likely to be mini-
mal unless these contextual institutions are also reformed.377
Thus, whether strong IPR protection and enforcement will lead
to economic development likely depends on the institutional fac-
tors that surround it. A country with an open, competitive econ-
omy, a transparent democracy with political stability, and a
sound legal system is likely to experience economic growth as
the result of strong IPR protection and enforcement, while one
with a more protected economy, more political instability, and a
more problem-ridden legal system is more likely to miss out on
the economic benefits that come with strong IPR protection and
enforcement.
FDI inflows illustrate this point. Market size and poten-
tial, and not simply IPR protection, have a significant effect on
a company’s decision to invest in a country.378 As Maskus
notes:
[I]t must be emphasized that strong IPR alone do not sufficiently
generate strong incentives for firms to invest in a country. If that
were the case, recent FDI flows to developing economies would
have gone largely to sub-Saharan Africa and Eastern Europe. In
contrast, China, Brazil, and other high-growth, large-market de-
veloping economies with weak IPR would have attracted less
FDI.379
A country with an open economy and adequate regulations and

competition rules is in the best position to draw and benefit
from FDI.380 In contrast, a country prone to “expropriation,
377Khan, supra note 334, at 4.

378See Keith E. Maskus, The Role of Intellectual Property Rights in Encourag-
ing Foreign Direct Investment and Technology Transfer, 109 DUKE J. COMP. &
INT’L L. 109, 128-29 (1998) [hereinafter Role of Intellectual Property Rights];
Teran, supra note 325, at 3 (discussing a study in which there was only a tenuous
relationship between the level of IPR enforcement and the level of FDI in the
software sector).
379 Role of Intellectual Property Rights, supra note 378, at 128-29 (citations
omitted). The market potential in China and India “presumably offsets the risk of
loss from poor intellectual property enforcement.” Teran, supra note 325, at 6.
380 See Role of Intellectual Property Rights, supra note 379, at 150; Intellectual
Property Challenges, supra note 8, at 471. “[M]arket liberalization, promotion of

04/08/2009 15:17:04
free entry, and the removal of distribution monopolies should encourage dynamic
gains from IPRs.” Id. at 472.
63
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limited and variable profit repatriation rules, terrorism and vio-

lence, corruption, bureaucracy and red tape, ineffective legal
systems, and considerable income inequality” is less likely to
garner the investments of multinational corporations, regard-
less of the strength of IPR protection it provides.381 Some inves-
tors may be able to look past these factors, depending on the
type and duration of their investment; nevertheless, the risks
can only scare off investors, not entice them.382 Strong IPR pro-
tection and enforcement can be a factor that lures FDI, but it is
only one aspect that influences a company’s decision.383
In addition to having an impact on FDI, a country’s eco-
nomic, political, and legal institutions also affect the potential
of domestic IPR industries to generate economic growth, even
when the country has a functioning IPR regime in place. First,
IPR protection can boost domestic innovation, but it is “econom-
ically useful only where innovations may be brought freely to
the marketplace”—in other words, in an open economy without
too many impediments.384 Next, a broken, unstable political
system can make it difficult to pass pro-IP reforms and ade-
quately fund agencies dealing with IP.385 Corruption within
the government also results in unnecessary costs for anyone do-
ing business, including those in IPR industries.386 Finally, an
inefficient legal system can prevent inventors and creators from
fully profiting from their IP, as rights holders cannot depend on
courts to resolve their disputes in a timely manner or on deter-
rence for IPR violators.387

Thus, IPR infringement will remain entrenched in the Phil-
ippines until wide-scale reforms in the economic, legal, and po-
litical sectors take place.388 As Maskus and other scholars
argue, IPR protection will likely lead to economic growth if a
381Role of Intellectual Property Rights, supra note 378, at 143.

382See id.
383 See id. at 152.
384 Intellectual Property Challenges, supra note 8, at 459, 472.
385 See Michael Elliot, The Global Stall, TIME, Sept. 3, 2001 (stating that polit-
ical instability marred prospects for economic reforms in the Philippines following
the Asian financial crisis in 1997-98).
386 See Op-Ed, Cost of Corruption, PHILIPPINE DAILY INQUIRER, Feb. 12, 2008.
04/08/2009 15:17:04
387 See discussion infra Part III.E.4.

388 See discussion infra Part V.
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country has sound institutions in place.389 Right now, the Phil-

ippines has a lot of work to do when it comes to institutional
reforms. When the country makes significant progress towards
breaking up its oligopolies, unlocking the political stranglehold
exercised by family dynasties, curbing corruption, and cutting
down on judicial backlogs and delays, the IPR situation will im-
prove because Filipinos will start seeing the benefits that come
with stronger IPR protection and enforcement.390 Today, the
Philippines is content with the IPR protection and enforcement
status quo. It is primarily a consumer and importer of IP.391 It
has other, more pressing problems, such as poverty, education,
and infrastructure that vie for its limited funds. However, as
IPR industries become more important to the Philippine econ-
omy, Filipinos will be more inclined to support IPR protection
and enforcement, including the politicians who dole out the re-
sources. Filipinos have to want to protect IPR,392 but the real-
ity is that they are not there yet. International pressure to
389 See, e.g., Intellectual Property Challenges, supra note 8, at 458; Gana, supra
note 367, at 738-39; Homere, supra note 236, at 277; Khan, supra note 334, at 4;
Mohan, supra note 366.
390 IIPA SURVEY, supra note 230, at 2 (discussing Maskus’ and other scholars’
views that strengthened IPRs can increase economic growth); IP COALITION 2007
SUBMISSION, supra note 2, at 19 (noting that more effective IPR protection depends
on institutional development and capacity-building); Khan, supra note 334, at 10
(“[T]he major lesson. . .from the economic history of Europe and America is that
intellectual property institutions best promoted the progress of science and arts
when they evolved in tandem with other institutions and in accordance with the
needs and interests of social and economic development in each nation.”). One

study of the relationship between a country’s culture and economic wealth and
software piracy rates concluded:
Is this quote formatted correctly? It would appear that increased personal
wealth has resulted in a natural decline in software piracy rates through-
out the world. . .. [A]s people become richer, they become more individual-
istic, and the combination of these two effects result in the tendency to
buy legal, rather than pirated copies of software, even in countries that
traditionally have high software piracy rates.
Trevor T. Moores, The Effect of National Culture and Economic Wealth on Global
Software Piracy Rates, 46 COMMUNICATIONS OF THE ACM 207, 213 (2003).
391 See ORGANIZED CRIME, supra note 208.
392 The difference between Taiwan and China illustrates the importance of a
country’s self-initiated desire to vigorously protect and enforce IPR. See Michael
Yeh, Note, Up Against A Great Wall: The Fight Against Intellectual Property
Piracy in China, 5 MINN J. GLOBAL TRADE 503, 516 (1996).
Taiwan established an effective IP regime because its ‘explosive economic
04/08/2009 15:17:04
expansion, increasing awareness of the need for indigenous technology,

ever-more-pluralistic political and intellectual life, growing commitment
65
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improve IPR protection and enforcement can go only so far in

provoking reforms. As mentioned above, the pressure most
likely to effect change is domestic—Filipinos understanding
and embracing IPR.393
Of course, this does not mean that the country should neg-
lect IPR protection until these reforms take place. IPR protec-
tion and enforcement are important—and necessary—
components of a country’s economic development strategy.394
As IPR protection and enforcement improves, so will economic
development, and vice versa. Better IPR protection and en-
forcement can encourage FDI and domestic innovation, which
create economic growth. Likewise, as the economy grows, IPR-
intensive industries will become a more important source of the
country’s income, which will then warrant stronger legal protec-
tion for IP.395
The economic, political, and legal sectors are all interde-
pendent, as reforms in one will benefit the others. An open
economy leads to FDI, which results in money to hire more
judges and prosecutors. Limiting political dynasties makes it
easier to break up family economic monopolies and liberalize
the market. Cutting down on corruption means more capital to
invest in education and infrastructure, and a well-functioning
legal system fosters investor confidence and deters corruption.
The next section identifies and analyzes problems in the Philip-
pine economic, political, and legal sectors that need to be ad-
dressed before the IPR infringement situation will improve

significantly.
VI. WHAT IS HOLDING THE ECONOMY BACK?

The Philippine economy is growing, but a long list of
problems continues to restrict its potential.396 It is still rela-
to formal legal processes, and international aspirations . . .’ made the need

for IP law evident.
Id. (quoting WILLIAM P. ALFORD, TO STEAL A BOOK IS AN ELEGANT OFFENSE 108
(1995)). China, on the other hand, “remains a consumer of IP and is therefore
unlikely to see gains from the vigorous protection of IP rights.” Id.
393 See discussion supra Part V.C.
394 See discussion supra Part V.C.1.
395 Cf. Yeh, supra note 392, at 516 (noting that Taiwan’s economic growth was
04/08/2009 15:17:04
a factor in the country’s establishment of a strong IPR regime).

396 See U.S. Delegation Statement, supra note 217, at 1.
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tively closed, enough so that the Heritage Foundation rates it as

“mostly unfree.”397 Inadequate revenue collection,398 poor in-
frastructure,399 a bloated bureaucracy,400 red tape,401 insuffi-
cient employment,402 and a lack of quality education403 all
397 Darwin G. Amojelar, RP Ups Ranks as a Free Economy, but Remains
‘Mostly Unfree’, MANILA TIMES, Jan. 16, 2008.

398 See Maricel V. Cruz, House Urged to Probe P53.7-B Revenue Shortfall, MA-
NILA TIMES, Jan. 20, 2008 available at http://www.manilatimes.net/national/2008/
jan/20/yehey/metro/20080120met1.html; Alessandro Magnoli Bocchi, Rising
Growth, Declining Investment: The Puzzle of the Philippines: Breaking the “Low-
Capital-Stock” Equilibrium 16 (World Bank Group, E. Asia & Pac. Region, Policy
Research Working Paper No. 4472, 2008), available at http://papers.ssrn.com/sol3/
papers.cfm?abstract_id=1082647. For example, in 2007, the Bureau of Internal
Revenue (BIR) missed its 2007 collection target by 7%. Chino S. Leyco, BIR Tax
Collection Falls Short of Target, MANILA TIMES, Jan. 31, 2008, available at http://
www.manilatimes.net/national/2008/jan/31/yehey/business/20080131bus2.html.
Eleven out of fifteen BOC districts also failed to meet their revenue goals that
same year. Chino S. Leyco, Majority of Customs Districts Miss Targets, MANILA
TIMES, Jan. 21, 2008, available at http://www.manilatimes.net/national/2008/jan/
21/yehey/top_stories/20080121top1.html.
399 See Darwin G. Amojelar, ADB: Tight Finances, Weak Infra Brakes to RP
Growth, MANILA TIMES, Feb. 4, 2008, available at http://www.manilatimes. net/

national/2008/feb/04/yehey/business/20080204bus1.html [hereinafter ADB: Tight
Finances, Weak Infra Brakes to RP Growth]; Romer S. Sarmiento, More Invest-
ments Needed for Growth, BUS. WORLD (Phil.), Feb. 11, 2008, available at http://
afrim.org.ph/minda-news-page.php?nid=1908. According to the ADB, this lack of
infrastructure, which is the result of “low levels of public sector revenue mobiliza-
tion, poor prioritization in public spending, weak institutions and regulatory fail-
ures,” hinders industrialization and job creation. Darwin G. Amojelar, ADB:
Infrastructure Gap Holding Back Industrialization, Job-Creation, MANILA TIMES,
Mar. 11, 2008.
400 A major problem is the lack of professionalism in the civil service. See Fidel

V. Ramos, Former President of the Republic of the Philippines, Good Governance
Against Corruption, Keynote Address at the Fletcher School of Law and Diplo-
macy’s “Conference on Good Governance Against Corruption” (Apr. 26, 2001), in 25
FLETCHER FORUM OF WORLD AFFAIRS, Fletcher Forum of World Affairs, Summer
2001, at 15-16. The Philippine president appoints around 8,500 high officials, twice
the number the U.S. president appoints, and over 8,000 more than the British
prime minister. Id.
401 For example, doing business the Philippines can be quite a chore. The
country ranks 140 out of 181 in ease of business according the World Bank’s Doing
Business Project. DOING BUSINESS PROJECT, WORLD BANK GROUP, DOING BUSINESS
2009 PHILIPPINES (2008), http://www.doingbusiness.org/ ExploreEconomies/?econo-
myid=153. It takes 52 days and 15 procedures to start a business. Id. In contrast,
it takes 33 days and 8 procedures to open a business in Thailand. DOING BUSINESS
PROJECT, WORLD BANK GROUP, DOING BUSINESS 2009 THAILAND (2008), http://
www.doingbusiness.org/Explore Economies/?economyid=186.
402 “Heavy labor rules and protections – enforced by large enforcement agen-
04/08/2009 15:17:04
cies (which employ some 20,000 labor inspectors) – hamper job growth in the for-
mal labor market.” Bocchi, supra note 398, at 24. At nearly 8%, the
67
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require long-term fixes.404 And, as will be discussed, both pub-

lic and private investment is declining, due in large part to oli-
gopolies that limit economic entry and competitiveness in the
country.405 These oligopolies, combined with the political dy-
nasties that run the country, make passing significant eco-
nomic, political, and legal reforms that would negatively impact
the families that control the majority of the country’s wealth
and power more difficult. Other major problems that limit eco-
nomic growth include corruption, which results in lost tax reve-
nue and scares away investment, and a dysfunctional legal
system, which damages public and investor confidence in the
enforceability of their rights. Ultimately, all these factors have
an impact on the IPR situation in the country, as the key to
stronger IPR protection and enforcement lies in a further devel-
oped Philippine economy that derives more wealth from its IPR
industries.
unemployment rate in the Philippines was higher than that of its neighboring
countries in 2006. Id. The underemployment rate also grew five percentage points
from 2004 to 2006, landing at 22.7%. Id. These problems drive many of the best
and brightest workers overseas. See id. at 25. Having an army of workers abroad
has its advantages, though, as Overseas Filipino Workers (OFWs) remitted $14.4
billion—about 10% of GDP—in 2006. Chino S. Leyco, Money Sent Home by Over-
seas Filipino Workers Hits New Record, MANILA TIMES, Feb. 16, 2008. Overall,
however, the exodus of skilled labor from the Philippines hurts the country, both
socially and economically. Kristin Choo, The Families Left Behind – For Better or
Worse, CHICAGO TRIBUNE, July 7, 1996.
403 See discussion supra Part IV.A. World Bank Vice President of the East

Asia & Pacific Region James W. Adams noted that “[e]ducation has long been a key
ingredient in most Asian countries’ growth strategies. Giving education priority
has paid off. Increasing levels of education have been estimated to account for well
over one third growth in the highest performing Asian economies between 1960
and 1990.” James W. Adams, Back to School: Education Pays Off for Asian Econo-
mies, SINGAPORE BUS. TIMES, Dec. 6, 2007, available at http://web.worldbank.org/
WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/MALAYSIAEXTN/
0,,contentMDK:21576095~menuPK:50003484~pagePK:2865066~piPK:2865079~
theSitePK:324488,00.html. He also stated that in today’s global, knowledge-based
economy, “a nation’s competitiveness has come to depend more and more on its
ability to acquire, apply and produce knowledge.” Id.
404 See Bernadette S. Sto. Domingo, Investment Tally Has RP Behind Asian
Neighbors, BUS. WORLD (Phil.), Jan. 10, 2008, available at http://www.gmanews.tv/

story/75964/BusinessWorld-Investment-tally-has-RP-behind-Asian-neighbors.
405 See Bocchi, supra note 398, at 5; Cai U. Ordinario, Inefficient Tax Collec-
tion, Corruption Worsen Poverty in RP, says ADB, BUS. MIRROR (Phil.), Mar. 7,
04/08/2009 15:17:04
2008, available at http://www.businessmirror.com.ph/0307&082008/economy01.

html.
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A. Oligopolies
Recently, the Philippines has experienced a period of rela-
tive prosperity. Since 2002, the country’s economic growth has
averaged 5.3%.406 In 2007, the economy grew at 7.3%, its high-
est rate in decades.407 The country is getting richer, but not all
Filipinos are seeing the benefits. A small number of families
control much of the country’s wealth. The rich-poor gap, rather
than decreasing with the country’s economic growth, has wid-
ened.408 Filipinos were on average poorer in 2006 than they
were in 2004.409 Poverty reduction in the Philippines lags be-
hind the rest of East Asia.410 Contemplating this failure to re-
duce poverty, a former School of Economics dean at one of the
Philippines’ top universities speculated that “[e]ither GDP
growth is not as high as we think or that GDP growth only ben-
efits the very affluent or the members of the elite.”411
The concentration of wealth in the hands of a limited elite
winds up hurting the economy. Despite economic growth, in-
vestments continue to decline.412 The World Bank’s working
paper, “Rising Growth, Declining Investment: The Puzzle of the
Philippines,” addresses this dilemma, and reaches the following
conclusions: “investment does not grow at the pace of GDP be-
cause the public sector cannot afford it, the capital-intensive
private sector does not want to expand that fast, and the rest of
the private sector does not need it.”413 The paper offers a com-
406Bocchi, supra note 398, at 5.

407See Op-Ed, Needed: Growth with Equity, BUS. MIRROR (Phil.), Feb. 4, 2008,
available at http://www.businessmirror.com.ph/02042008/opinion01. html; see also
Ordinario, Inefficient Tax Collection, Corruption Worsen Poverty in RP, says ADB,
supra note 405.
408 See Survey: Rich-Poor Gap Widens, supra note 288; Ordinario, Inefficient
Tax Collection, Corruption Worsen Poverty in RP, says ADB, supra note 406;
Ordinario, High GDP Growth Not Enough to Lick Poverty in RP, supra note 244.
The ADB cites low revenue collection, rampant corruption, and political instability
among the main reasons for the lack of poverty reduction in times of substantial
economic growth. Ordinario, Inefficient Tax Collection, Corruption Worsen Poverty
in RP, says ADB, supra note 405 (discussing the ADB’s report, “Philippines: Criti-
cal Development Constraints”).
409 See id. (noting that the percentage of families below the poverty threshold
grew from 24.4% in 2004 to 26.9% in 2006).

410 See Bocchi, supra note 398, at 34.
411 Needed: Growth with Equity, supra note 407.
04/08/2009 15:17:04
412 See Bocchi, supra note 398, at 5.

413 Id.
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prehensive discussion of each of these points, but for the pur-

poses of this Article, the focus will be on the unwillingness of
much of the private sector (which is made up of large corporate
conglomerates, many owned by the country’s ultra-wealthy
families) to change the status quo.
First, “there is a low productivity of capital” because “sev-
eral rentseeking corporate conglomerates, controlled by the lo-
cal elite[,]” limit their competition.414 The oligopolies:
[U]se their political connections to: a) hinder tax collection, hence
hampering public capital spending (which is a necessary condition
for private investment: for example, the availability of public in-
frastructure is essential to stimulate the private sector’s willing-
ness to invest); and b) limit economic entry, drive potential
investors out, discourage smaller firms to grow bigger, produce
expensive inputs, and enjoy market power and oligopolistic
rents.415
Moreover, according to the World Bank paper, the oligopolies
“reduce the investment appetite” in the Philippines.416 “Oper-
ating as monopolies and oligopolies, the corporate conglomer-
ates find [it] convenient to restrict production – and investment
– below the competitive level. Also, their willingness to invest
is inhibited by their concentrated ownership structure, and
their uncertainties about the stability and duration of govern-
ment favoritism.”417 Additionally, the country has trouble at-
tracting FDI.418 FDI barely grew in 2007,419 and still lags
behind other Asian countries.420 Restrictions on foreign invest-

ment and land ownership,421 a “highly-protected business envi-
414Id. at 17.
415Id.
416 Id.
417 Id. (citations omitted)
418 See Sarmiento, supra note 399; see also Gatbonton, ‘Hospitable’ Filipinos
Like their Economy Closed, supra note 271(discussing the Philippine proclivity for
protectionism). See generally Mejia, supra note 232 (discussing Philippine foreign
investment law).
419 See Chino S. Leyco, Slow Growth for Foreign Investments, MANILA TIMES,
Mar. 11, 2008 available at http://www.manilatimes.net/national/2008/mar/11/

yehey/business/20080311bus4.html.
420 See INVESTMENT CLIMATE STATEMENT, supra note 21.
421 See id.; Epictetus E. Patalinghug, Globalization and State Capacity: The
Philippines 38 (Phil. Inst. for Dev. Studies, Discussion Paper Series No. 2003-20,
04/08/2009 15:17:04
2003) available at http://dirp4.pids.gov.ph/ris/dps/pidsdps0320.pdf. For example,

“[t]he 1991 Foreign Investment Act (FIA) contains two ‘negative lists’ that outline
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ronment” that features “regulatory inconsistency and a lack of

transparency[,]” and the lack of a comprehensive competition
policy keep many multinational corporations out of the coun-
try.422 And political turmoil, which is common in the Philip-
pines, does little to encourage investment.
The World Bank paper also states that the oligopolies limit
the country’s competitiveness while at the same time paying
their workers enough to keep them complacent.423 The oligopo-
lies hurt traditional sectors of the economy, raising food prices,
inhibiting trade, deterring tourism, limiting access to bank
loans, and increasing the cost of infrastructure develop-
ments.424 Yet,
[b]y paying higher wages—relative to other Asian countries—to
the salaried insiders, the politically-connected corporate conglom-
erates use the rents resulting from the government’s preferential
treatment to stabilize the economic system, secure ‘national labor
peace’, and perpetuate the status quo.425
For the Philippine economy to move forward, “[t]o break

monopolies and increase competition in protected sectors,” the
country needs “a clear vision, political will, and a coherent im-
plementation strategy,” the World Bank paper states.426 Unfor-
tunately, none of these currently exists. There has traditionally
been little, if any, political will to close the income inequality
gap.427 After all, as former president Fidel Ramos said, “the
costs of reform must be paid largely by the rich and powerful
families and social groups who have historically benefited from

areas in which foreign investment is restricted or limited. These lists are normally
updated every two years. The restrictions stem from a constitutional provision,
Section 10 of Article XII, which permits Congress to reserve to Philippine citizens
certain areas of investment.” INVESTMENT CLIMATE STATEMENT, supra note 21.
422 Bocchi, supra note 398, at 29; INVESTMENT CLIMATE STATEMENT, supra note
21; see generally Emmanuel A. Cruz, The Development of a Philippine Competition

Policy and Law (Difficulties Encountered) (2004), http://www.jftc.go.jp/eacpf/05/
APECTrainingProgram2003/Nazareth.pdf (discussing Philippine economic policy
and arguing for the enactment of a comprehensive competition policy) [hereinafter
Philippine Competition Policy].
423 Bocchi, supra note 398, at 25, 33.
424 Id. at 33.
425 Id. at 25.
426 Id. at 42.
427 See Tom Ashbrook, In Philippines, It’s the Same Old Song as the Days of
04/08/2009 15:17:04
Marcos, the Rich Flaunt their Wealth and the Poor Stay Poor, BOSTON GLOBE, Apr.
10, 1988, available at http://www.highbeam.com/doc/1P2-8057036.html.
71
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their influence over the political and economic system, while its
benefits are diffuse and the beneficiaries are largely the inartic-
ulate and powerless masses of ordinary and poor people.”428
These groups that oppose reform “are powerful, well-organized,
and focused” while the groups pushing for change and the “po-
tential beneficiaries are weak, scattered, and disorganized.”429
The wealthy elite maintains its political clout through its fami-
lies in office (the owners or majority shareholders of a number
of powerful corporations are also members of Congress)430 or
through political donations (thanks to limited lobbying regula-
tions)431 or both.432 Few “dare challenge the entrenched oligar-
chy[,]” whether political or economic.433
B. Political Dynasties
As with the economy, a limited group of people exhibits too
much control, this time over politics, in a culture that is more
family-oriented than the individualistic West.434 One of the
major barriers to instituting the economic reforms necessary to
open up the Philippine economy is the political system—and
more specifically, the political dynasties.435 The Philippines
428Ramos, supra note 400, at 14.

429Id.
430 Philippine Competition Policy, supra note 422, at 9 (discussing sources of
opposition to any kind of comprehensive competition policy in the country).

431 See Malou Mangahas, Government Splurges Millions on Multiple, Secret
Lobby Contracts, PHILIPPINE CENTER FOR INVESTIGATIVE JOURNALISM, Sept. 20,

2005, available at http://www.pcij.org/stories/2005/lobbygate.html (noting the lack
of lobby firm disclosure and financial reporting laws in the Philippines).
432 For instance, a discussion paper from the Philippine Institute for Develop-
ment Studies notes the reality that family-owned monopolies in the telecommuni-
cations and power distribution sectors “would be difficult to break” in part because
of the influence they have on regulatory bodies. Patalinghug, supra note 421, at
43.
433 Ramos, supra note 400, at 14.
434 See Cherry C. Bobadilla, Special Feature: Philippine Business Icons, BUS.
WORLD (Phil.), Sept. 10, 2004.

435 See, e.g., Alexis Douglas B. Romero, Congress Bypasses Anew Anti-Political
Dynasty Bill, BUS. WORLD (Phil.), Feb. 7, 2007; Carlos H. Conde, Family Ties Bind
Philippine Government, N.Y. TIMES, May 13, 2007, available at http://www.ny
times.com/2007/05/13/world/asia/13filip.html?_r=1&scp=1&sq=family%20ties%20
bind%20philippine%20government&st=cse; The Philippines: Limping Forwards,
ECONOMIST, Mar. 19, 2005, available at http://www.alacrastore.com/storecontent/
eiuftxml/EN_EN_MAIN_20050319T000000_0006; William M. Esposo, Editorial,
04/08/2009 15:17:04
Who is Stopping the Filipino?, PHILIPPINE STAR, Mar. 9, 2008, available at http://
www.philstar.com/Article.aspx?articleId=49020&publicationSubCategoryId=64.
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has more of an oligarchy than a genuine democracy.436 Fami-

lies dominate the political scene, making it difficult for outsid-
ers to run a credible campaign.437 And these political clans tend
to be the same families that are members of the country’s eco-
nomic elite,438 a fact that hinders any efforts to break up the
existing economic monopolies.439
Political dynasties in the Philippines, whose origins date
back to the Spanish and subsequent American colonial periods,
continue to grow in influence.440 The reach of country’s esti-
mated 250 political families extends into all positions of the gov-
ernment and into every province.441 One 2004 study found that
two-thirds of the members of the House of Representatives were
a part of political clans, with the majority being second or third-
generation politicians.442
Despite the constitutional mandate guaranteeing equal ac-
cess to public office and explicitly prohibiting political dynas-
ties,443 powerful families remain dominant in Philippine
politics.444 The political clans maintain their grip on power due
to the “seemingly immutable and unequal socioeconomic struc-
ture[.]”445 They use their money and influence to quash any ef-
fective political opposition.446 And it works, largely because the
costs of running a credible independent campaign are far too
436See Esposo, supra note 435.

437See Conde, supra note 435.
438 See id.
439 Personal Property, PHILIPPINE DAILY INQUIRER, Jan. 23, 2007, available at

http://opinion.inquirer.net/inquireropinion/editorial/view_article.php?article_id=
44973; See Doris Dumlao, Politics Seen Curbing Growth Momentum, PHILIPPINE
DAILY INQUIRER, Oct. 28, 2007, available at http://archive.inquirer.net/view.php?db
=1&story_id=97293
440 See Conde, supra note 435. “Even after the country gained independence,
in 1946, a largely feudal system persisted, as landed Filipino families [who were
among the elite nurtured by the Spanish and Americans] sought to protect their
interests by occupying public offices.” Id.
441 Id.
442 Alastair McIndoe, It’s All in the Family in Filipino Politics: Wealthy Fami-
lies Build Political Dynasties and Control Government, STRAIGHTS TIMES (Sing.),
Jan. 29. 2007, available at http://app.mfa.gov.sg/pr/read_content. asp?View,6383.
443 See SALIGANG BATAS NG PILIPINAS [Constitution] art. II (Phil.).
444 See Romero, supra note 435. There are, of course, many fine politicians
that come from political dynasties. The real problem lies in the absence of choice
Filipinos have when dynasties continue to dominate politics.
04/08/2009 15:17:04
445 See Conde, supra note 435.

446 See id.
73
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high for the average person.447 Violence is also common, with

more than 100 persons murdered in the run up to the May 2007
elections.448 Over the years the political clans have developed a
sense of entitlement when it comes to public office, viewing a
political position as “personal property” that can be transferred
from one relative to another.449
Another reason for the persistence of political dynasties in
the country stems from the lack of genuine democracy and the
consistently uninspiring political leadership.450 Political par-
ties are personality-focused and organized around local political
families and politicians, rather than being built around political
issues and ideologies.451 Voters may have little idea what a
particular candidate stands for (something they may have in
common with the candidate), so they cast their ballot for the
most recognizable name or not at all. Or their general distrust
of politicians452 and feeling that all politicians are the same
(i.e., ineffective or corrupt) fuel their apathy, keeping them from
attempting to change the system.453 Sadly, many Filipinos
have simply accepted the current dysfunctional political situa-
tion as inevitable.454
C. Corruption
Corruption is the elephant in the room whenever anyone
discusses governance in the Philippines. It ranges from the

447See id.
448Id.
449 Personal Property, supra note 439; accord The Philippines: Limping For-
wards, supra note 435; McIndoe, supra note 442; Conde, Family Ties Bind Philip-
pine Government, supra note 435.
451 AUSTRALIAN DEP’T OF FOREIGN AFFAIRS AND TRADE, REPUBLIC OF THE PHIL-
IPPINES COUNTRY BRIEF (Feb. 2009), http://www.dfat.gov.au/geo/philippines/philip
pines_brief.html.
452 One survey found that sixty-five percent of Filipino respondents considered
their current political leaders to be dishonest. Darwin G. Amojelar, Majority of

Pinoys See Politicians as Dishonest, MANILA TIMES, Jan. 18, 2008, available at
http://www.manilatimes.net/national/2008/jan/18/yehey/top_stories/20080118top2.
html (quoting Gallup International’s “Voice of the People” survey). Forty-nine per-
cent said politicians behave unethically. Id.
453 See Conde, supra note 435; Op-Ed, Same Same, PHILIPPINE DAILY INQUIRER,
Jan. 21, 2008, available at http://opinion.inquirer.net/inquireropinion/editorial/

04/08/2009 15:17:04
view/20080121-113667/Same-same.
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small-time (traffic police soliciting bribes) to the more signifi-

cant (transportation officials smuggling cars)455 to the most se-
rious (senior civil servants pocketing the equivalent of millions
of U.S. dollars on overpriced government contracts).456 The
Philippines consistently ranks as one of the most corrupt coun-
tries in Asia.457 According to a 2000 World Bank report and a
Social Weather Stations (SWS) survey, it loses an astounding
20% of its capital spending each year to corruption.458
A number of institutional and cultural factors contribute to
the corruption problem in the Philippines. For instance, often it
“is simply that of badly underpaid officials possessing wide dis-
cretionary powers over the conduct of business, the amount of
taxes you must pay, and even whether or not you are to go to
jail for violating some law or other.”459 Also, morale among civil
servants is a problem, due in large part to the considerable
number of political appointees in government that often leave
the most qualified individuals behind.460 On the cultural side,
455 See Jolene Bulambot, ‘Grand Collusion’ Seen in Car Smuggling, PHILIPPINE
DAILY INQUIRER, Jan. 13, 2008, available at http://newsinfo. inquirer.net/inquirer

headlines/regions/view_article.php?article_id=112002.
456 See Erwin Oliva, NBN Scandal Shows ‘Checks, Balances’ in RP – Research
Group, PHILIPPINE DAILY INQUIRER, Feb. 15, 2008, available at http://technology.

inquirer.net/infotech/infotech/view/20080215-119131/NBN-scandal-shows-checks-
balances-in-RP—research-group.
457 See, e.g., Press Release, Transparency International, Persistent Corruption
in Low-Income Countries Requires Global Action (Sept. 26, 2007), http://www.

transparency.org/news_room/latest_news/press_releases/2007/2007_09_26_cpi_

2007_en (follow link at bottom of page to CPI table and Sources) (stating that the
Philippines is tied for 131 out of 180 in Transparency International’s 2007 Corrup-
tion Perceptions Index (degree of public sector corruption as perceived by business-
people and country analysts)) [hereinafter Persistent Corruption]; RP, Thailand
Among Most Corrupt Asian Economies – Survey, PHILIPPINE DAILY INQUIRER, Mar.
10, 2008, available at http://globalnation.inquirer.net/news/breakingnews/view/
20080310-123887/RP-Thailand-among-most-corrupt-Asian-economies-survey
(showing the Philippines scored 9.0 out of a possible 10 points under a grading
system used by PERC under which zero is the best score and 10 the worst). Moreo-
ver, one survey reported that only 13% of businesses were untouched by corrup-
tion. World Bank Report, Combating Corruption in the Philippines: An Update,
23687-PH, (Sep. 30, 2001), available at http://www1.worldbank.org/publicsector/
anticorrupt/FlagshipCourse2003/PhiliCombatCorruptUpdate.pdf.
458 See Alex Douglas B. Romero, P30-B Leakage to Graft Feared, BUS. WORLD
(Phil), Feb. 11, 2008.

459 Ramos, supra note 400, at 10; accord Op-Ed, Our Bureaucracy, MANILA
TIMES, Jan. 25, 2008, available at http://www.manilatimes.net/national/2008/ jan/

04/08/2009 15:17:04
25/yehey/opinion/20080125opi1.html.
460 See id.
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“[g]raft and corruption has become so ingrained in the national

life that it is considered ‘normal.’ ”461 Indifference and a sense
of helplessness have set in among many Filipinos: even if they
report something such as bribery, the belief is that nothing will
be done.462
Corruption is a serious problem that has curbed the coun-
try’s economic growth. As U.S. Ambassador to the Philippines
Kristie Kenney said, “[c]ompared to some of the fast-moving
economies in Asia, the Philippines is not where it ought to be
. . . [and] corruption plays a role in this.”463 Economic and social
development slow down when scarce government resources go
into the pockets of crooked government officials rather than into
programs and projects aimed at helping the average Filipino.464
The quality and quantity of public resources and infrastructure
suffers.465 Goods and services become more expensive.466 In-
vestors think twice about putting money into the country.467 In
the end, it is the poor Filipinos who suffer most from the selfish-
ness and greed of their fellow citizens who are in positions of
power.468
Corruption, of course, remains a challenge all over the
world, not just in the Philippines.469 It is another complex prob-
lem without easy solutions.470 Promoting ethical behavior is
461 Op-Ed, Cost of Corruption, PHILIPPINE DAILY INQUIRER, Feb. 12, 2008,
available at http://opinion.inquirer.net/inquireropinion/editorial/view/20080212-
118232/Cost-of-corruption.

462 See Social Weather Stations, Transparent Accountable Governance: The
2007 SWS Business Survey on Corruption, Presentation to the Philippine Cabinet,

Malacañang, Manila (Aug. 21, 2007), available at http://www.sws.org.ph/TAG
7%20for%20Cabinet%20Aug21-final.pdf.
463 US Support vs. Graft, BUS. WORLD (Phil.), Apr. 21, 2006.
464 See Cost of Corruption, supra note 386; NBN Deal Controversy Sparks Soul-
Searching in Business Sector, BUS. MIRROR (Phil.), Feb. 15, 2008, available at
http://www.businessmirror.com.ph/0215&162008/nation03.html.
465 See Cost of Corruption, supra note 387; Op-Ed, Red Tape and Then Some,
INQUIRER NEWS SERVICE, June 9, 2003, available at 2003 WLNR 471915; Persis-
tent Corruption, supra note 457.
466 See Cost of Corruption, supra note 38.
467 See INVESTMENT CLIMATE STATEMENT, supra note 21.
468 See Cost of Corruption, supra note 387; Red Tape and Then Some, supra
note 466; Persistent Corruption, supra note 457.

469 The United States, for example, still grapples with issues such as the role of
04/08/2009 15:17:04
money in politics. See Ramos, supra note 400, at 16.

470 Id.
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one strategy.471 Ultimately, though, government practices need

to be transparent, and corrupt officials need to be held account-
able.472 The pardon of former president and convicted plun-
derer Joseph Estrada by President Arroyo, before he served any
prison time, reinforced the wrong message to politicians and
civil servants—that well-connected and powerful individuals
are above the law.473 Transparency International points out
the strong correlation between poverty and corruption.474 As
the Philippines gets richer, corruption will likely become less
significant. As former president Ramos notes, for a country such
as the Philippines:
[T]he central task in the fight against corruption must be to build
community and state capacity, because successful development
needs an efficient state with transparent government, skilled and
honest bureaucrats, stable policies, and an effective legal
order.475
D. The Dysfunctional Legal System

Finally, a dysfunctional legal system likely constrains a
country’s economic growth, perhaps significantly.476 It dam-
ages public and investor confidence “in the enforceability of con-
tractual and property rights.”477 Despite this knowledge, the
Philippines, whose legal system is riddled with inefficiency and
corruption,478 has failed to implement reforms that would curb

471See id.
472Needed: Growth with Equity, BUS. MIRROR (Phil.), Feb. 4, 2008, available at
http://www.businessmirror.com.ph/02042008/opinion01.html.
473 See Carlos H. Conde, Arroyo Pardons Former President Joseph Estrada,
INT’L HERALD TRIBUNE, Oct. 25, 2007, available at http://www.iht.com/articles/

2007/10/25/asia/manila.php. Estrada was, however, under house arrest for six and
a half years. Id.
474 Persistent Corruption, supra note 457.
475 Ramos, supra note 400, at 15.
476 See Sherwood, supra note 285, at 538 (noting economic research that indi-
cates institutions, including the judicial system, are important to a country’s eco-
nomic performance); Robert M. Sherwood, Judicial Performance: Its Economic
Impact in Seven Countries, available at http://www.isnie.org/ISNIE04/Papers/
Sherwood.pdf [hereinafter Judicial Performance].
477 Helm, supra note 329, at 204; accord Persistent Corruption, supra note 457.
478 See Patalinghug, supra note 421, at 13-14. The report describes corruption
as “entrenched” in the country and states that two agencies responsible for inter-
04/08/2009 15:17:04
preting and implementing laws, the DOJ and the Office of the Ombudsman, have a
history “littered with corruption and ineptness, which [has] fostered skepticism
77
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corruption and cut down on the backlogs and delays that slow
down the administration of justice. In order to correct these
problems, resources must be devoted to, and used efficiently for,
judicial prosecutorial capacity building. Judicial vacancies need
to be filled, more prosecutors need to be hired, and both need to
be trained, especially those who deal with IPR.479 Judges also
should be held accountable in some way for the timely disposi-
tion of their cases, whether through the cultivation of a judicial
sense of urgency, or monitoring, or both.480
There may be a straightforward answer, besides the coun-
try’s general lack of resources, for the Philippines’ continued le-
gal system woes: reform is not a priority for those who exercise
power and influence in the country, the political and economic
elite.481 According to a report by Robert M. Sherwood, which
looked at the link between judicial performance and economic
growth in seven countries, including the Philippines:
[T]he research shows that poor judicial performance costs a coun-
try dearly. Would this news not prompt citizens to press for im-
proved judicial performance? Logic would suggest so, but even
where the results have been well disseminated, reaction has in-
stead been interested but mild. The reason may be simple. People
in many countries, including particularly people in economically
and politically powerful elite groups, prefer an alternative to judi-
cial system recourse. They transact business largely within their
social networks and thus have limited need for a judicial system
that works well.482

Sherwood states in another, earlier, article that significant le-
gal system reform “is essentially a matter of political will” that
can be achieved “[o]nce it is more widely understood that a na-
tional economy suffers substantially for lack of an effective judi-
ciary[.]”483 But the leaders in the Philippines, even with this
understanding, lack the political will for reform because it
would do little to advance their interests, a phenomenon that
and ridicule among the general public with regard to the rule of law in the Philip-
pines.” Id.
479 See discussion supra Part III.D.4.b.
480 See IP COALITION 2007 SUBMISSION, supra note 2, at 10-12; see also discus-
sion supra Part III.D.4.c.

481 See Judicial Performance, supra note 476, at 2.
04/08/2009 15:17:04
482 Id.
483 Sherwood, supra note 285, at 542.
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Sherwood notes above. Just like with the current oligopolies

and political dynasties, the economic and political elite is con-
tent with the legal system status quo.
Establishing specialized IPR courts, a long term goal of IP
Philippines,484 may be one way to cut down on IPR case
backlogs and delays and build a group of judges better equipped
to handle complex IPR issues.485 Thailand’s specialized IPR
court, which also hears international trade matters, has met
with success since its creation in 1996,486 and Taiwan is now
following Thailand’s lead by establishing its own specialized
court and prosecutor’s office to deal with IPR cases.487 Despite
their potential to shorten the disposition of IPR cases from a
range of two to ten years to something more like six months to
one year, IPR courts may be more dream than reality for the
time being in the Philippines.488 One previous attempt to form
two specialized IPR courts failed in 2005,489 and “there is noth-
ing [on] the horizon that indicates the creation of [an] IPR Court
or IP-dedicated Court is going to happen anytime soon[,]” ac-
cording to the IP Coalition.490 IPR courts, unlike specialized en-
vironmental courts, of which the Supreme Court created 117
“for improved environmental adjudication” at the beginning of
2008, do not seem to be a priority.491
Overall economic growth and a greater contribution to the
country’s wealth from its IPR industries are the keys to im-
proved IPR protection and enforcement in the Philippines. Cur-
rently, however, institutional problems in the economic,

political, and legal sectors stand in the way of these goals. Oli-
484STRENGTHENING THE IP SYSTEM, supra note 24, at 35.

485See Sherwood, supra note 285, at 539.
486 See Antons, supra note 11, at 4.
487 See Dan Nystedt, Taiwan Gets Serious About Intellectual Property, Mar. 6,
2007, http://www.pcworld.com/article/id,129642-c,legalissues/article.html.
489 See Ronnel W. Domingo, 2 IPR Courts to Be Formed, PHILIPPINE DAILY IN-
QUIRER, Oct. 25, 2005.
490 IP COALITION 2008 SUBMISSION, supra note 22, at 11. The IP Coalition
notes that a specialized IPR court “need not be created by another special law; it
can be some existing court made ‘IP-dedicated’ by an order issued by the Supreme
Court.” Id. The important part is that the court has “the flexibility to allocate the
time needed to resolve its cases most expeditiously and a judge imbued with a
judicial sense of urgency.” Id.
04/08/2009 15:17:04
491 Leila Salaverria, SC Designates 117 Environmental Courts, PHILIPPINE
DAILY INQUIRER, Jan. 14, 2008.
79
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gopolies, political dynasties, rampant corruption, and an ineffi-

cient legal system are all holding back the country’s economic
potential. More specifically, they are preventing the country
from fully realizing the benefits that come with strong IPR pro-
tection and enforcement, as whether strong IPR protection and
enforcement translates into economic development likely de-
pends on the soundness of a country’s economic, political, and
legal institutions.
VII. CONCLUSION
Significantly reducing IPR infringement in the Philippines,
whether the counterfeiting of physical goods or the growing
problem of digital piracy, will take time.492 Outside pressure
from the United States and other developed countries may help
speed things up, but ultimately Filipinos have to understand
and have a stake in strong IPR protection and enforcement.
That IPR infringement remains entrenched in the Philippines
is a reflection of the plight of a developing country. IPR advo-
cates—from police to politicians to business owners—can effect
only so much change within the country’s larger institutional
framework. The Philippines is a poor nation, and just like other
countries, developing or not, it has to prioritize how it uses its
time and resources. IPR protection and enforcement—whose
effectiveness suffer, in part, from a lack of funding and adminis-
trative capability as well as an overburdened, inefficient legal
system—currently take a back seat to more pressing issues

such as alleviating the suffering of the 27 million Filipinos who
live in poverty,493 improving the country’s dire education sys-
tem, and limiting terrorism and violent crime. Those in power,
whether politicians or members of the economic elite (often the
same people), are content with the IPR protection and enforce-
ment status quo because IPR industries remain an insignificant
source of the country’s wealth and because they want to protect
their status and influence. While developed countries such as
the United States tout the economic benefits that come with
strong IPR protection and enforcement, Maskus and other
scholars point out that strong IPR protection and enforcement
492 Cf. Coonan, supra note 52 (noting the difficulty in eliminating piracy in any
04/08/2009 15:17:04
country).
493 Poverty Worsens, supra note 5.
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alone will not likely lead to long-term economic growth and

technological innovation. A country also needs sound institu-
tions such as an open economy, political stability, and a well-
functioning legal system in order to realize the lasting benefits
that come with strong IPR protection and enforcement. These
areas are where the Philippines need major improvements.
Once the country pushes through institutional reforms, no easy
feat considering the grip oligarchs have on money and politics,
its economy will grow. In turn, IPR industries will become more
important to its sustained economic growth and global competi-
tiveness. Only after these changes are in place will the Philip-
pines vigorously protect and enforce IPR, and that is when IPR
infringement will no longer remain entrenched in the
Philippines.

04/08/2009 15:17:04
81
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Why Intellectual Property Rights Infringement Remains Entrenched in The Philippines

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Pace International Law Review

Why Intellectual Property Rights Infringement

Follow this and additional works at: http://digitalcommons.pace.edu/pilr

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WHY INTELLECTUAL PROPERTY RIGHTS

26570_pir_21-1 Sheet No. 34 Side A

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56 PACE INT ’L L. REV. [Vol. 21:55

the internationally mandated laws on the books, IPR infringe-

26570_pir_21-1 Sheet No. 34 Side B

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2009] INTELLECTUAL PROPERTY RIGHTS IN PHILIPPINES 57

one out of three Filipinos living in poverty,5 the average con-

26570_pir_21-1 Sheet No. 35 Side A

5 Press Release, National Statistical Coordination Board, Poverty Worsens

between 2003 and 2006 (Mar. 5, 2008), http://www.nscb.gov.ph/pressreleases/2008/

PR-200803-SS2-02_pov.asp [hereinafter Poverty Worsens].

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58 PACE INT ’L L. REV. [Vol. 21:55

The insignificance of the country’s IPR industries, whether for-

26570_pir_21-1 Sheet No. 35 Side B

7See discussion infra Parts V.D, V.D.1.

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2009] INTELLECTUAL PROPERTY RIGHTS IN PHILIPPINES 59

how an ignorance of and indifference towards IPR among the

II. IPR LAWS AND GOVERNMENT BODIES RESPONSIBLE FOR

26570_pir_21-1 Sheet No. 36 Side A

A. Laws and International Agreements

Legislative and Institutional Developments, ARC CENTRE OF EXCELLENCE FOR CRE-

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60 PACE INT ’L L. REV. [Vol. 21:55

Philippines is the Intellectual Property Code (IPC),12 a “major

law/elj/jilt/2006_1/antons/antons.pdf. There is also evidence of a patent system in

26570_pir_21-1 Sheet No. 36 Side B

And Non-Commercial Transactions And Documents, Penalties For Unlawful Use

force_your_ipr/philippines.html [hereinafter ENFORCEMENT OF IPR]. See also IP

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2009] INTELLECTUAL PROPERTY RIGHTS IN PHILIPPINES 61

ation Treaty, and Rome Convention.21 The Philippines is also a

26570_pir_21-1 Sheet No. 37 Side A

www.iprights.com/assets/pdf/PIL_enforcementguide.pdf [hereinafter ENFORCE-

SYSTEM: THE CAMPAIGN AGAINST PIRACY AND COUNTERFEITING IN THE PHILIPPINES

26 See id. at 12-13.

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62 PACE INT ’L L. REV. [Vol. 21:55

process.28 Additionally, its Bureau of Legal Affairs can review

http://www.iipa.com/rbc/2008/2008SPEC301PHILIPPINES.pdf [hereinafter IIPA

($1=PHP41.6) from http://www.exchange-rates.org/Rate/USD/PHP/4-1-2008.

26570_pir_21-1 Sheet No. 37 Side B

placed the Videogram Regulatory Board (VRB). Id.

Anti-Fraud and Commercial Crimes Division of the Criminal Investigation and

NBI, and OMB signed a Memorandum of Understanding creating the Pilipinas

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2009] INTELLECTUAL PROPERTY RIGHTS IN PHILIPPINES 63

Other agencies involved in IPR enforcement include the

III. IPR INFRINGEMENT IN THE PHILIPPINES

Counterfeiting and piracy continue to grow and evolve

26570_pir_21-1 Sheet No. 38 Side A

supra note 13, at 23.