AN ACT PROVIDING THE FRAMEWORK AND SUPPORT SYSTEM FOR THE OWNERSHIP, MANAGEMENT, USE, AND COMMERCIALIZATION OF INTELLECTUAL PROPERTY GENERATED FROM RESEARCH AND DEVELOPMENT FUNDED BY GOVERNMENT AND FOR OTHER PURPOSES

Fourteenth Congress

Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-seventh day of July, two thousand nine.

REPUBLIC ACT NO. 10055

AN ACT PROVIDING THE FRAMEWORK AND SUPPORT SYSTEM FOR THE OWNERSHIP, MANAGEMENT, USE, AND COMMERCIALIZATION OF INTELLECTUAL PROPERTY GENERATED FROM RESEARCH AND DEVELOPMENT FUNDED BY GOVERNMENT AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

ARTICLE I

TITLE, DECLARATION OF POLICY AND OBJECTIVE, SCOPE AND OTHER GENERAL PROVISIONS

Section 1. Short Title. - This Act shall be known as the "Philippine Technology Transfer Act of 2009".

Section 2. Declaration of Policies and Principles. - The State fully recognizes that science, technology and innovation are essential for national development and progress. It shall, therefore, give priority to research and development, invention, innovation and their utilization. It shall also encourage the widest and most systematic participation of all stakeholders in policy-making related to science and technology, and in the generation, transfer and utilization of intellectual property, especially for the benefit of the general public.

The State shall facilitate the transfer and promote the utilization of intellectual property for the national benefit and shall call upon all research and development institutes and/or institutions (RDIs) that perform government-funded research and development (R&D) to take on technology transfer as their strategic mission and to effectively translate results of government-funded R&D into useful products and services that will redound to the benefit of Filipinos, notwithstanding the income generated from intellectual property rights (IPRs) and technology transfer activities.

The State acknowledges that the successful transfer of government-funded R&D results depend on the proper management of intellectual property, development of capacity by RDIs to become self-sustaining and competitive, and on enhancing interaction and cooperation with the private sector, particularly small and medium enterprises through collaborative and contract research based on equitable, fair access, and mutual benefit for all involved partners.

The State shall establish the means to ensure greater public access to technologies and knowledge generated from government-funded R&D while enabling, where appropriate, the management and protection of related intellectual property-

Section 3. Objective. - This Act aims to promote and facilitate the transfer, dissemination, and effective use, management, and commercialization of intellectual property, technology and knowledge resulting from R&D funded by the government for the benefit of national economy and taxpayers.

Section 4. Definition of Terms. - For purposes of this Act:

Section 5. Coverage. -

ARTICLE II

INTELLECTUAL PROPERTY OWNERSHIP

Section 6. Ownership of Intellectual Property and Intellectual Property Rights. - The ownership of IPs and IPRs shall be governed by the following:

ARTICLE III

RIGHTS AND RESPONSIBILITIES OF THE GOVERNMENT FUNDING AGENCIES AND RESEARCH AND DEVELOPMENT INSTITUTES OR INSTITUTIONS

Section 7. Rights and Responsibilities of a Government Funding Agency. - Under this Act, the GFA shall:

The fairness opinion report shall contain a statement expressing the opinion of the body as to the fairness to the GFA of the proposed transaction, particularly its financial terms. The report shall include, but not be limited to, a review and analysis of the proposed transaction, financial statements, industry information, economic conditions and assumptions used therein and a comparison of similar transactions: Provided, however, That it shall not be precluded from resorting to other modes of commercialization as allowed by ail applicable laws.

Section 8. Rights and Responsibilities of the RDIs. - The following are the rights and responsibilities of the RDIs that availed of research funds from GFAs:

ARTICLE IV

MANAGEMENT OF IPS FROM R&D PERFORMED BY GOVERNMENT RDIS THROUGH THEIR OWN BUDGET

Section 9. Responsibilities of RDIs Performing R&D with their Own Budget. - All government RDIs performing R&D through an annual budget provided by the government shall submit intellectual property management reports annually to the national government agencies where they are attached. The report shall contain plans for securing protection on IPs with commercial promise, the technology transfer approaches to be pursued, and the progress of ongoing commercialization of technologies derived from R&D funded from their own budget.

Section 10. Responsibilities of the Concerned National Government Agencies. - Concerned government and/or parent agencies shall monitor efforts and effectiveness of their RDIs in securing IP protection and pursuing IP commercialization, based on the annual IP management reports submitted by the RDIs.

ARTICLE V

REVENUE SHARING

Section 11. Revenue Sharing. - All revenues from the commercialization of IPs and IPRs from R&D funded by GFAs shall accrue to the RDI, unless there is a revenue sharing provision in the research funding agreement: Provided, That in no case will the total share of the GFAs be greater than the share of the RDI: Provided, further, That in case of joint funding, where research is funded by a GFA in part, and by other entity or entities in part, the RDI may enter into contractual agreements with the other entity or entities providing funding.

Sharing of revenues between RDI and researcher shall be governed by an employer-employee contract or other related agreements, without prejudice to the rights of researchers granted under Republic Act No. 8439 or the "Magna Carta for Scientists, Engineers, Researchers, and other S&T Personnel in the Government".

ARTICLE VI

COMMERCIALIZATION BY THE RESEARCHER AND ESTABLISHMENT OF SPIN-OFF FIRMS

Section 12. Commercialization by Researchers. - In meritorious cases and to help ensure successful commercialization, an RDI shall allow its researcher-employee to commercialize or pursue commercialization of the IP and/or IPRs generated from R&D funded by the GFA by creating, owning, controlling, or managing a company or spin-off firm undertaking commercialization, or accepting employment as an officer, employee, or consultant in a spin-off firm undertaking such commercialization: Provided, That the concerned researcher-employee takes a leave of absence, whenever applicable, for a period of one (1) year and renewable for another year, for a total period not exceeding two (2) years, from the time the researcher signifies in writing that he/she desires to create or participate in a spin-off company: Provided, however, That the researcher-employee may still be allowed access to the RDIs' laboratory facilities, subject to reasonable fees and regulations which the RDIs may impose.

The leave of absence shall be included in computing the length of service for retirement but not for the commutation of leave credits earned in the public RDI. The researcher shall not earn leave credits in the public RDI during such period of leave of absence. Such leave of absence shall not likewise affect the researcher-employee's security of tenure or result in the loss of one's seniority rights.

Section 13. Detail or Secondment to the Private Sector. - In case where the researcher of a public RDI would be employed by an existing company, which will pursue the commercialization, the applicable provisions of Republic Act No. 8439 or the "Magna Carta for Scientists, Engineers, Researchers and other S&T Personnel in the Government" shall prevail.

Section 14. Management of Conflict of Interest. - The RDIs shall properly manage any possible conflict of interest by adopting appropriate guidelines for its researcher-employee. The guidelines for handling of such conflicts shall include, but are not limited to, the following:

ARTICLE VII

USE BY GOVERNMENT, COMPULSORY LICENSING AND ASSUMPTION OF POTENTIAL IPRS

Section 15. Use by Government or Third Person Authorized by Government and/or Compulsory Licensing. - This Act shall adopt the grounds, terms and conditions for the use by government or third person authorized by government, and/or compulsory licensing as stated in the IP Code of all IPRs generated under this Act.

Section 16. Assumption of Ownership of Potential IPRs. - The GFA and/or the parent agency may assume ownership of any potential IPRs in cases of national emergency or other circumstances of extreme urgency, or where the public interest requires, and in particular concerns for national security, nutrition, health, or the development of other vital sectors of the national economy, as determined by the head of the parent agency. Such determination shall be made within thirty (30) days after the receipt of the recommendation of the Head of the GFA. Such recommendation shall be made within thirty (30) days upon the discovery of the potential IPR by the GFA or the disclosure of the same by the RDI pursuant to Section 8(c) of this Act, or upon written notice or petition by other government agencies, or other interested persons. In cases where the parent agency itself is acting as the GFA, the Head of the parent agency may make such determination motu proprio, or upon written notice or petition by other government agencies or other interested parties. The right to the potential IPR shall be assumed by the GFA upon written order, declaration or determination by the Department Secretary or Head of the parent agency. The department or the agency that has functional jurisdiction over the technology or IPRs shall be deemed as the parent agency,

The determination by the Secretary or the Head of the parent agency of cases falling under the first paragraph of the right to the potential IPR to be vested to the GFA and/or parent agency shall be subject to the following conditions:

Section 17. Except where otherwise provided by the IP Code, in all cases arising from the implementation of this article, no court, except the Supreme Court of the Philippines, shall issue any temporary restraining order or preliminary injunction or such other provisional remedies that will prevent its immediate execution.

ARTICLE VIII

USE OF INCOME AND ESTABLISHMENT AND MAINTENANCE OF REVOLVING FUND FOR R&D AND TECHNOLOGY TRANSFER

Section 18. Use of Income and Revolving Fund. - Public RDIs undertaking technology transfer shall be vested with the authority to use its share of the revenues derived from commercialization of IP generated from R&D funded by GFAs. All income generated from commercialization of IPs and/or IPRs from R&D funded by public funds shall be constituted as a revolving fund for use of the RDI undertaking technology transfer, deposited in an authorized government depository bank subject to accounting and auditing rules and regulations: Provided, That said income shall be used to defray intellectual property management costs and expenses and to fund R&D, science and technology capability building, and technology transfer activities, including operation of technology licensing offices: Provided, further, That no amount of said income shall be used for payment of salaries and other allowances.

In case the income after payment of all costs and expenses for IPR management, including the payment of royalties to other parties, shall exceed ten percent (10%) of the annual budget of the RDI, a minimum of seventy percent (70%) of the excess income shall be remitted to the Bureau of Treasury: Provided, That this shall apply only if the GFA has solely funded the research: Provided, finally, That this paragraph shall not apply to state universities and colleges and government-owned and -controlled corporations, which enjoy fiscal autonomy under their respective charters or other applicable laws.

ARTICLE IX

INSTITUTIONAL MECHANISM

Section 19. Establishment of Technology Information Access Facility and Public Access Policy. - The DOST shall establish a system for the cost-effective sharing of and access to technologies and knowledge generated from government-funded R&D by developing appropriate policies and procedures on public access which shall be made known to the public. These policies and procedures shall be aimed at promoting the advancement of R&D, boosting its quality and enabling cross-disciplinary collaboration, and thereby, increasing the returns from public investment in R&D and contribute to the betterment of society. The DOST shall call for a regular national conference of all GFAs and RDIs in order to: (a) promote multi-disciplinary, joint, and cross collaboration in R&D; (b) coordinate and rationalize the R&D agenda; and (c) harmonize all R&D agenda and priorities.

Section 20. Development of Internal IP Policies and Establishment of Technology Licensing Offices (TLOs) and/or Technology Business Development Offices. - All RDIs are encouraged to establish their own TLOs in whatever form and to adopt their own policies on IPR management and technology transfer, in accordance with this Act and other existing laws and in support of the policies of the Intellectual Property Office Philippines and the national policy and the mandate of their parent agency.

Section 21. Capacity-Building and Guidelines on IP Commercialization. - The Department of Science and Technology (DOST), the Department of Trade and Industry (DTI) and the Intellectual Property Office (IPO), in consultation with the GFAs such as the Commission on Higher Education (CHED), the Department of Agriculture (DA), the Department of Health (DOH), the Department of Energy (DOE), the Department of Environment and Natural Resources (DENR), and the Department of National Defense (DND), shall undertake activities geared towards building the capacity of the GFAs and RDIs in commercializing IPs. The DOST as chair and convenor, together with the DTI and the IPO shall jointly issue the necessary guidelines on IP valuation, commercialization, and information sharing, which may include, but not be limited to, the following considerations: public benefit and national interest, market size, cost and income. These guidelines shall be issued within one hundred twenty (120) days from the date of effectivity of this Act.

ARTICLE X

DISPUTE RESOLUTION

Section 22. The administrative procedure for resolving any disputes on the determination for government ownership shall be provided by the Implementing Rules and Regulations (IRR) of this Act.

ARTICLE XI

MISCELLANEOUS, TRANSITORY AND FINAL PROVISIONS

Section 23. Administrative, Criminal or Civil Liability. - The failure of the GFA or RDI to fulfill its responsibilities under this Act, or the violation of any provision by any person, natural or juridical, shall subject the person involved to appropriate administrative, criminal, or civil liability, under applicable laws.

Section 24. Congressional Oversight Committee. - For the effective implementation of this Act, there shall be a Congressional Oversight Committee, hereinafter referred to as the Technology Transfer Oversight Committee, to be composed of five (5) members from the Senate, which shall include the Chairpersons of the Senate Committees on Science and Technology, and Trade and Commerce, and five (5) members from the House of Representatives, which shall include the Chairpersons of the House Committees on Science and Technology and Trade and Industry. The Technology Transfer Oversight Committee shall be jointly chaired by the Chairpersons of the Senate and House of Representatives Committees on Science and Technology. The Vicechair of the Oversight Committee shall be jointly held by the Chairpersons of the Senate Committee on Trade and Commerce and the House of Representatives Committee on Trade and Industry.

Section 25. Funding. - The activities and operational expenses related to the implementation of this Act shall be funded from the budget appropriations and other incomes of GFAs and public RDIs. The Heads of the GFAs and public RDIs shall include in the agency's program the implementation of this Act.

The COA shall exercise its auditing authority over the funds of the GFAs and public RDIs in order to ensure transparency and accountability.

Section 26. Implementing Rules and Regulations. - Except where otherwise indicated, the DOST and the IPO, with the participation of GFAs, RDIs, and other stakeholders, shall formulate the IRR for the effective implementation of this Act. The DOST Secretary shall chair the drafting committee. The IRR shall be issued within one hundred twenty (120) days after the effectivity of this Act. Copies of the IRR shall be submitted to the Committees on Science and Technology of both Houses of Congress within thirty (30) days after its promulgation, as well as to other appropriate agencies as may be required by law.

Nothing in the IRR shall derogate ownership of any copyright as conferred by the IP Code or other applicable laws. The IPO shall issue the necessary rules and regulations governing the ownership of copyrights as conferred by the IP Code or other applicable laws: Provided, That such IRR are consistent with the objectives of this Act. The IPO shall also issue the IRR to implement the disclosure requirements stated in Section 8.

Section 27. Applicability to Intellectual Property Created Under Existing Laws. - The provisions of this Act shall likewise apply to intellectual property created under existing laws, including, among others, Republic Act No. 9168 or the "Philippine Plant Variety Protection Act of 2002".

Section 28. Repealing Clause. - All laws, presidential decrees, executive orders, presidential proclamations, rules and regulations or part thereof which may be contrary to or inconsistent with this Act are hereby repealed or modified accordingly.

Section 29. Separability Clause. - If any provision of this Act is declared unconstitutional, the same shall not affect the validity and effectivity of the other provisions hereof.

Section 30. Effectivity. - This Act shall take effect fifteen (15) days after its complete publication in two (2) newspapers of general circulation.

Approved,

This Act which is a consolidation of Senate Bill No. 3416 and House Bill No. 5208 was finally passed by the Senate and House of Representatives December 1, 2009 and December 15, 2009, respectively.

Approved: MAR 23 2010

(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines