i .. 
i t  
1' 
1 i i  "It3 :y[) 'Xf! 
OF THE PHILIPPINES 
" i . d  .JL 
THIRTEENTH CONGRESS OF THE REPUBLIC 
First Regular Session 
Introduced by Senator Magsaysay, Jt.. 
EXPLANATORY NOTE 
The Constitutional mandate under Article XI1 Section 14 and XVI 
Sections 10 to 13 has not been fully pursued through legislation. Even 
Republic Act Numbered 7459 has not been that effective to address the 
plight of the Filipino inventors for its just an expanded function of the 
Technology Application and Promotion Institute, Department of Science 
and Technology. 
Thus, establishing or creating an agency, such as a National 
Inventors Commission, for a focused or concentrated duties and 
functions will make a difference in the generation, production and 
market of the inventive reservoir of talents, skills and intelligence of the 
Filipinos. This bill will give the full realization of independence and 
freedom of a commission to govern and determine its own future in 
pursuit of its invention research and development (R&D) initiatives to 
help develop more enterprises generating more jobs, income and wealth 
for the nation resulting from inventive efforts and activities. 
The 
inherent problems of the inventors would be best approximated with 
solutions by an agency solely tasked to do it! 
Under an expanded function only of the Technology Application 
and Promotion Institute, RA 7459 has some setbacks/drawbacks. 
Difficulties have been encountered to meet the so great a responsibility to 
full implement the said Inventors and Invention Incentives Act 
addressing the so vast a resource sector to be developed into a viable 
economic impacting zone. 
Superior economies of developed countries of the world have 
demonstrated their aggressive concentrated and/or focused efforts in 
keeping themselves sustainable by putting virtually unlimited support 
and profound interest in inventions with budgetary support ranging from 
2.5 to 4% of GNGP like US, Japan, UK, and others including the Eastern 
Block. The UN suggested at least 1% to attain a break-even point! 1% of 
our GNP is about Sixteen Billion Pesos (P16,000,000.00) some years ago 
that must be allocated for our invention research and development 
activities. The dismal reality is that only 0.128 of GNP goes to our home- 
grown invention/ technology development effort. If and when we could 
only focus a decisive political will of the entire government machinery on 
inventive activities we, as a nation second only to Japan after the World 
War 11, can still be technologically or inventively competitive with our 
untapped vast storage of inventive manpower. 


In pursuing this bill, we cannot help but cite the Japan Institute of 
Invention and Innovation (JIII), organized in 1904 which was converted, 
two (2) years later into a public corporation in 1906. Likewise, the Korea 
Invention ion Association (KIPA), organized only in 1973, became a 
public corporation in 1995 by legislation like JIII. These country showed 
to the world what a focused efforts can do to develop, produce and 
market inventions or technology. 
We as a developing, if not under developed country, can do no less 
but follow the footsteps of the developed economies or countries of the 
world. Let it happen in this country what happened to Japan, South 
Korea and other developed countries supportive of invention development 
program considered to be the single greatest national economic resource 
of any developed economies. Give the Filipino inventors a chance to 
prove their worth to the highest possibilities to demonstrate their 
capabilities to the hilt. Let it make the difference between economic 
stagnancy and industrial prosperity the Filipino way. Let it happen at no 
other time than now. 
Passage of this bill is most respectfully requested. 


. 
THIRTEENTH CONGRESS OF THE REPUBLIC 
First Regular Session 
OF THE PHILIPPINES 
S E N A T E  
S.B. No. 
1174 
I’ 
.!? 
Introduced by Senatot: Magsaysay, Jr. 
AN ACT 
ENCOURAGING THE GENERATION, 
DEVELOPMENT, CREATION, 
PROMOTION 
AND 
MARKETING 
OF PHILIPPINE INVENTIONS 
CREATING 
FOR 
THIS 
PURPOSE 
A 
NATIONAL 
INVENTORS 
COMMISSION, 
APPROPRIATING FUNDS THEREFOR AND FOR 
OTHERPURPOSES 
Be it enacted by the Senate and House of Representatives of the 
Philippines in Congress assembled: 
SECTION 1. This Act shall be known and cited as the “Inventors 
and Inventions Incentives Act of the Philippines of 2004.” 
SEC. 2. Thereis hereby created a National Inventors Commission, 
under the Office of the President of Republic of the Philippines, 
hereinafter referred to as the Commission, for the purpose of giving 
technical, financial, legal and marketing assistance to inventors and 
their inventions. 
SEC. 3. The Commission shall have the following functions, power 
and duties: 
3.1 
To give technical assistance to inventors by examining their 
submitted inventions to determine their patentability and by 
helping them prepare their patent application, under certain terms 
and conditions; 
To grant financial aid to inventors to enable them to develop, 
perfect and produce their patented inventions or those which are 
pending patent, under certain terms and conditions; 
To render legal assistance to inventors by representing them in 
filing their patent applications here and/or abroad and in 
protecting their patents from infringement in patent cases, under 
certain terms and conditions; 
To extend financial assistance and/or recommend to government 
lending institutions inventions that are beneficial to our country 
for long term loans to enable inventors to manufacture their 
inventions, with only their letters patent as collateral, the arnount 
of loan to be granted depending upon the importance and market 
of their inventions as determined by the Commission; 
3.2 
3.3 
3.4 


‘ 
3.5 
To develop and establish import and export assistance program 
and help inventors find’ markets for their inventions here and 
abroad; 
To encourage Philippine inventors to make known their inventions 
by giving annually sizeable cash awards and medals, to be known 
as the “Presidential Awards for Inventions,” to patented inventions 
in the Philippines in the filed of agriculture, chemistry, commerce, 
communications, 
education, 
engineering, fishery, 
forestry, 
medicine, national defense, pharmacy, physics, public safety and 
welfare, public works, transportation and other fields science 
chosen by distinguished persons in their respective field of 
endeavor appointed annually by the President of the Philippines to 
serve as judges of the contest, which shall be open to all Filipino 
inventors who may submit entries in one or more fields; Prouided,. 
however, That inventions developed in the country by other 
nationality of economic potential which are beneficial to the 
country may be accepted for entry. 
3.7 
To establish and maintain a public research laboratory and 
experimental station where authorized inventors and researchers 
may avail themselves of its facilities and services for carrying out 
or perfecting their approved inventions and researches: Provides, 
That the inventor or researcher shall, before making use of its 
facilities and services, agree to give to the Commission at least one 
tenth of all royalties arising from his invention or research, 
depending upon the extent of facility or service to be given to him, 
to help maintain the public research laboratory and experimental 
station: 
Provided, 
further, That the laboratory facilities and 
services of the Department of Science and Technology and other 
government agencies, offices and instrumentalities shall be made 
available to inventors or researchers who may need the same, as 
recommended by the Commission against which the expenses 
incurred in such laboratories shall be chargeable; 
To promote and encourage inventiveness and creativeness among 
our people by including them to submit new and useful ideas, 
researches or gadget in the fields mentioned in paragraph (3.6) 
that may solve the problems of our country through an annual 
“Creative Research Contest” with cash prizes and medals to the 
winners chosen by the respective judges of the “Presidential 
Awards for Inventions,” 
3.9 
To publish and disseminate information about inventions, 
researches and science in general; 
3.10 To hold regular monthly sessions for the exchange of ideas among 
inventors; 
3.1 1 To help Philippine inventors join international competitions on 
inventions or researches, or recommend 
them 
to 
such 
competitions; and 
3.12 To organize creative societies in schools, colleges and universities 
to promote and encourage creativeness among our youth. 
3.6 
3.8 
SEC. 4. 
All functions, duties and responsible referring to the 
promotion and development of inventions conferred upon the Technology 
Application and Promotion Institute and/or Department of Science and 
Technology in Republic Act Numbered Two thousand sixty-seven and 
Republic Act Numbered 7459 respectively are hereby transferred to the 
Cornmission which shall hereafter exercise those functions. All real and 
personal properties, moneys, assets, bequests, devices and the like 


accumulated in the exercise of those functions in implementing the said 
Acts shall also be transferred to the Commission; Provided, That the 
Commission may choose to deposit any and/or all its funds in other 
banks than the Development Bank of the Philippines (DBP) as it deems 
necessary. Provided, further, That the research and development (R&D) 
fund under Section 7 of RA 7459, the Invention Development Assistance 
Fund, shall be accordingly increased and provided under the General 
Appropriation Act in the initial amount of five hundred million pesos 
(500,000,000.00) pursuing the global average of 2% of the gross national 
product (GNP) allocated for research and development activities. 
SEC. 5. The Commission shall be under a Chairman and to be 
assisted by four (4) Commissioners appointed by the President of the 
Philippines and shall hold office for a period of seven years unless 
otherwise renewed. Each one shall be a Filipino citizen, at least twenty- 
five of age and an inventor with at least one invention or utility model 
patent issued by the Intellectual Property Office. The Chairman and the 
Commissioners respectively shall receive an annual compensation not 
more than the existing salary grade of any other government agency of 
same level, and may be removed earlier from office only for cause. 
SEC. 6. The Commission shall promulgate, subject to approval of 
the President, such rules and regulations as may be necessary for the 
conduct and exercise of the functions, powers and duties of the 
Cornmission under this Act: Provided, That any assistance rendered or 
extended by the Commission in accordance with Section three of this Act 
shall be given on condition that the inventor-applicant shall sign a 
contract agreeing to give to the Commission at least ten percent of all 
royalties arising from the local and foreign patents of his invention 
developed and perfected or secured and/or protected through the service 
and/or financing of the Commission, depending upon the extent of the 
service or financing given to him. The proceed from these contracts shall 
accrue to the general funds of the Commission and shall be used to carry 
out its objectives. The invention and the patent that may be obtained 
therefore shall belong to the inventor, subject to provision of this section. 
SEC. 7. The Commission, with the approval of the President, may 
select a suitable location on any public land owned by the National 
Government for the site of its public research laboratory, experimental 
station and manufacturing plants/ factories or branch thereof with 
housing facilities for the inventors and researchers working therein to be 
known as Invention City and/or Invention Economic Zone. Within three 
months from receipt of the choice of the Commission duly approved, the 
Director of Lands shall cause the chosen site to be surveyed, delimited 
and transferred to the Commission to be under its exclusive jurisdiction 
and control. 
SEC. 8. 
The Commission shall have the following divisions: 
Intellectual Property and Legal Division, Finance Division, Administrative 
Division, Research and Development Division, Project Development and 
Business Consultancy Division, Record and Information Division, 
Personnel Division and other divisions that the Commission, with the 
approval of the President may deem necessary to create. 
To better 
assure the attainment of the objectives of this Act, the heads of divisions 
of the Commission, shall be Filipino inventors, at least twenty-five years 
of age with at least one invention or utility model or industrial design 


patent issued by the Intellectual Property Office. 
The annual 
compensation of the division heads and other staff/personnel shall be 
determined by the Commission. 
Such technical and administrative 
personnel as may be necessary to carry out the functions shall be 
appointed by the Chairman of the Commission subject to the approval of 
the President. 
In view of the limited number of persons who may qualify for 
positions in the Commission requiring the appointee to be an inventor 
with at least one invention or utility mode or industrial design patent 
issued by the Intellectual Property Office, where nobody qualifies for a 
given position any technical person trained in any field of engineering, 
preferably with experience, may be qualified. 
SEC. 9. All donations and grants to the Commission shall be tax- 
exempt and deductible in full from the donor’s income tax returns when 
evidenced by a certificate duly issued by the Commission. Any person 
who evades or defeats, or attempts to evade or defeat in any manner any 
tax imposed by law by availing himself of the provisions of this section 
through fraud or misrepresentation shall be punished by a fine of not 
more than fifty thousand pesos or imprisonment not exceeding one year 
or both, in the discretion of the court. 
In case the violator is a 
corporation or association, the president or general manager thereof 
shall be criminally liable, without prejudice to the criminal responsibility 
of the member, officer or employee thereof committing such violation. 
. 
SEC. 10. To promote, encourage and accelerate the manufacture 
and sale of home grown and/or adopted inventions or technologies the 
inventors and their inventions shall be exempted from all kinds of taxes 
effective from the date of the tax exemption approval, such as the 
following: 
10.1 Exemption from the payment of direct and indirect taxes, 
customs duties, taxes, import value added taxes, and other 
charges on import of machinery/equipment, parts and 
materials and other components which shall be actually 
directly and exclusively used for the manufacture and 
market of the invention/ technology. 
10.2 Exemption from the payment of income and value added 
taxes on the income derived from the commercialization and 
market of their inventions and technologies; 
10.3 Exemption from the payment of fees, and such other fees 
required for the renewal of patent certificate by the 
intellectual property office, exemption from the payment of 
license and business permits fees, inspection fees, and 
realty taxes on machinery and equipment used for the 
development, 
manufacture 
and 
sale 
of 
their 
invention/technology; and all of these tax exemption 
privileges shall be extended to their legal heir, or 
assigneellicensee. 
Provided, further, that any business 
entity, organization and the like of which the inventor is an 
owner or stockholder of not less than 50% of the total 
capital shall be extended the same tax exemption privilege. 
The Commission shall issue tax exemption certificate as an 
exemption to the power and authority of the Bureau of Internal Revenue, 


local government unit 
the incentive principle 
other agencies concerned pursuant to 
objectives of this Act. 
SEC. 11. 
An 
tor 
- 
supplier and/or manufacturer, 
ission, dealing in inventions with any 
or any other agency shall exempt from 
a purchase order or letter of credit and 
for the conclusion of government sales 
the date of commercialization of the 
certified/endorsed by 
government departme 
bidding requirements to 
any other instrument n 
for a period of ten (10) 
invention. 
SEC. 12. The 
hall be constituted within one month 
from the approval of 
the sum of one hundred fifty million 
pesos is hereby app 
f any funds in the National Treasury 
not otherwise ap 
be released immediately to the 
Commission to en 
ut as soon possible the objectives of 
this Act. 
horized to the appropriated annually 
such sums as 
to carry out the provisions and 
objectives of this Act to be included under the general appropriations for 
the Office of the President: Provided, That these sums shall not be less 
than the original appropriation of one hundred fifty million pesos. 
SEC. 14. The unconstitutionality of any section sentence, clause 
or term of this Act shall not affect the validity of the other provisions 
thereof. 
SEC. 15. 
All provisions of law, rules, regulations or orders 
contrary to or inconsistent with the provisions of this Act are hereby 
repealed. 
SEC. 16. This Act shall take effect upon its approval. 
Approved,