FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Third Regular Session 
) 
) 
) 
SENi\TE 
S. B. ~359 
Introduced by Senator Villar 
EXPLANATORY NOTE 
In a presentation made at the National Innovation Summit (2007), it was reported 
that the percentage between grant of patents to residents vs. total grants in the 
Philippines is at 0.90%. This pales comparison with the percentages in other countries 
such as Japan, USA and Taiwan which registered a 90%, 52% and 44% respectively. 
This means very few residents of the Philippines file for patent grant in the country, or 
worse, very few inventions are made in the country or made by Filipinos. 
It is clear that the government needs to encourage and assist ou" Filipino 
inventors to improve this lacklustre performance. Through this bill, tax incentives and 
exemptions are envisioned to promote and accelerate the development and 
commercialization of Filipino inventions or technologies. 
Thus, this bill also seeks to support and encourage Filipino inventors and their 
inventions through the creation of a Philippines Inventors Commission. This 
Commission will have the power to render technical assistance to inventors relating to 
patent application, to grant financial aid, to render legal assistance, to establish import 
and export assistance to help inventors find market for their inventions, and to 
encourage inventions by holding contests, among others. 
For this reason, the passage of this bill is earnestly sought. 
Ma 


FIFTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
) 
SENATE 
S.B. No. 3359 
Introduced by SENATOR MANNY VILLAR 
AN ACT 
RESTORING THE PHILIPPINE INVENTORS COMMISSION, DEFINING ITS 
POWERS, FUNCTIONS AND DUTIES, AND FOR OTHER PURPOSES THAT 
WILL ENCOURAGE THE GENERATION, DEVELOPMENT, MANUFACTURE, 
PROMOTION AND MARKET OF THE PHILIPPINE INVENTIONS 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled. 
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SECTION 1. 
Title. -
This Act shall be known as the "Inventors and 
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Invention Incentives Act of 2012" 
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SECTION 2. Declaration of Policy. - It is hereby declared a policy of the 
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State to give priority to research and development, invention, innovation, and their 
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utilization. The State shall also support indigenous, appropriate, and self-reliant 
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scientific and technological capabilities, and their application to the country's 
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productive systems and national life. 
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The State shall regulate the transfer and promote the adaptation of 
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te(;hnology from all sources for the national benefit. It shall encourage the widest 
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participation of private groups, local governments, and community-based 
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organizations in the generation and utilization of science and technology. The 
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sustained development of a reservoir of national talents conSisting of Filipino 
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scientists, entrepreneur, professionals, managers, high-level technical manpower 
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and skilled workers and craftsmen in all fields shall be promoted by the State I 
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Further, the State shall protect and secure the exclusive rights of scientists, 
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and inventors to their intellectual property and creations, particularly when 
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beneficial to the people, for such period as may be provided by law. 
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Furthermore, the State shall promote the preferential use of Filipino labor, 
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domestic materials and locally produced goods, and adopt measures that make 
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them competitive. 
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SECTION 3. Definition of Terms. The following terms shall mean: 
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a. 
Innovation (Utility Model) shall mean any new model of implement or 
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tool of any industrial product or part of the same, which does not 
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possess the quality of an invention, configuration, construction or 
composition. A certificate of registration is issued to a utility model. 
b. 
Industrial Design is any composition of lines or colors or any three-
dimensional form, whether or not associated with lines or colors; 
Provided, that such composition or form gives a special appearance to 
and can serve as a pattern for industry or handicraft (as defined in RA 
8293, Intellectual Property Code). 
c. 
Inter-Agency Committee 
refers 
to the following 
government 
agencies: 
Department 
of 
Science 
and 
Technology 
(DOST), 
Department of Trade and Industry (DTI), National Economic and 
Development Authority (NEDA), Development Bank of the Philippines 
(DBP), Department of Agriculture (DA) that shall consult private 
agency associations and 
appropriate government agencies 
in 
identifying technological research priorities in order to guide inventors' 
research work and enhance the economic viability and commercial 
applicability of their inventions. 
d. 
Filipino Inventors Society pertains to a single umbrella organization 
to represent the inventors sector, where associations of the Filipino 
inventors may join. 
e. 
Mega Regions refer to Northern Luzon, Central Luzon, SO'Jthern 
Luzon, the Visayas and Mindanao. 
SECTION 4. Philippine Inventors Commission. -
The Philippine 
Inventors Commission is hereby restored as provided for under Republic Act No. 
3850, as amended. The Philippine Inventors Commission, hereinafter referred to 
a5 the Commission, shall be under the Office of the President of the Republic of 
the Philippines for the purpose of giving technical, financial, legal and marketing 
assistance to Filipino inventors and their inventions. 
SECTION 5. 
Functions, Duties and Responsibilities. -
The 
Commission shall have the following functions, power and duties: 
a) 
To accredit 
inventors and 
Filipino Inventors' associations! 
organizations; 
b) 
To take responsibility of the Invention Development AssistanCE' Fund 
(IDAF) which is at least 12% of DOST-TAPI's operational fund; 
c) 
To render technical assistance to inventors in the preparation of the 
disclosure, description, 
abstract, claims, drawings and 
other 
documents relating to the patent application, under certain terms 
and conditions; 
d) 
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; 
e) 
To render legal assistance to inventors by representing them in filing 
their patent application here and! or abroad, in prosecuting said 
application until grant or final action, and in protecting their patent 
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f) 
g) 
h) 
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from infringement in patent cases, under certain terms and 
conditions; 
To facilitate financial assistance from local and international lending 
institutions on the development of 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 
amount of loan to be granted will depend upon the importance and 
commercial viability of their inventions as determined by the 
Commission; 
To develop and establish import and export assistance programs 
and help inventors find markets for their inventions here and abroad; 
To encourage Filipino inventors to promote their inventions by 
holding periodic contests, conventions, citations and awards to 
patented inventions, utility models, industrial designs, and creative 
research in the Philippines and abroad in various fields includiilg but 
not limited to the following: agriculture, chemistry, commerce, 
communications, education, environment, engineering, fishery, food, 
science and technology , forestry, medicine, national defense, 
pharmacy, physics, public safety and welfare, public works, 
transportation and other fields of science. This shall be open to all 
Filipino inventors who may submit entries in one or more fields; 
To provide assistance to inventors, technologists and researchers in 
availing laboratories and other facilities of the Research and 
Development Institutes (RDI's), including regional 
offices and 
instrumentalities of the Department of Science and Technology and 
other government agencies; Provided, that the recipient of the 
assistance agrees to give the Commission at least one tenth (1/10) 
of all royalties arising from the technology or inventions depending 
on the extent of facility or services utilize to help maintain the 
research laboratory. The determination of royalty shall be ba~,ed on 
the existing international standards. 
In case there is no royalty 
arrangement in the commercialization andl or production and market 
of the assisted ideas, products and processes, the inventor or 
researcher shall give the commission at least five percent (5%) of 
the net income derived therefrom. 
Proceeds from all kinds of 
assistance rendered by the Commission shall accrue to its account 
and shall be used to carryout its objectives and mandate. 
To assist inventors, SCientists, technologists and the researchers in 
joining national and 
international invention competitions duly 
recognized by the Commission, including market development here 
and abroad; 
To exercise arbitration power, when necessary, organize an 
Arbitration Board to help settlel or arbitrate or encourage extra 
judicial settlement of conflict problem and the like besetting between 
and among inventors organization in order to foster unity, harmony 
and camaraderie among themselves. An Arbitration Board shall be 
presided over the Commission with at least three (3) members 
invited from disinterested organizations of veritable and respectable 
reputation, and one from the Filipino Inventors Society. 
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I) 
To publish and disseminate information about inventions, and other 
related information; 
m) 
To hold regular monthly dialogues for the exchange of ideas among 
inventors, and 
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To help organize in coordination with other government agencies 
creative societies in schools, colleges and universities to promote 
and encourage inventiveness among our youth and citizenry. 
SECTION 6. Organization. -
The Commission shall be composed of a 
Chairperson and five (5) commissioners representing the five (5) mega regions 
apPointed by the President of the Philippines. 
Each shall be a natural born 
Filipino citizen and at least thirty-five (35) years of age, an inventor with at least 
one invention letter patent, with no final conviction by a court of an offense 
in' 'olving moral turpitude, a degree holder, preferably with M.S. or MBA and a 
member of the Filipino Inventors' umbrella organization. 
They shall exercise 
collective decision-making as the highest policymaking body of the Commission. 
The Board of Commissioners shall promulgate and implement rules and 
regulations necessary to perform the functions of the Commission to carryout the 
provisions of this Act. 
The Commission shall 
have the following 
standing 
departments: 
Intellectual Property and Legal Department, Finance Department, Administrative 
Department, Research and Development Department, Project Development and 
Business Consultancy Department, Record and Information Departmen~. The 
Commission, with the approval of the President, may create additional units 
deemed necessary by the Board of Commissioners. 
SECTION 7. 
Inter-Agency Committee.-
The Commission shall within 
three (3) months of the effectivity of this law, constitute an Inter-Agency 
Cl'mmittee whose function is to guide the inventors' research work and enhance 
the economic viability of their inventions. The findings of the Committee shall 
serve as the basis for the issuance of certifications required from the Commission 
for inventors to avail of the Invention Guarantee Fund. This is in addition to the 
requirements prescribed by the Development Bank of the Philippines (DBP). 
SECTION 8. Invention Economic Zone. -
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 sites to be surveyed, delimited and transferred to the 
Cnmmission to be under its exclusive jurisdic"tion and control. 
SECTION 9. Transfer of Functions and Funds to the Commission.- All 
functions, duties and responsibilities referring to the promotion and development 
of inventions conferred upon the Technology Application and Promotion Institute 
and!or Department of Science and Technology under Republic Act No. 7459 are 
hereby transferred to the Commission which shall hereafter exercise those 
functions. All real and personal properties, moneys, assets, bequests, devices 
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and the like accumulated in the exercise of those functions in implementing the 
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said Act shall also be transferred to the Commission; Provided, that the research 
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and development (R & D) fund under Section 7 of R.A. 7459, the Invention 
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Development Assistance Fund, shall be increased and provided under the 
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General Appropriation Act in the initial amount of One Hundred Fifty Million Pesos 
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(Php 150,000,000.00). 
The TAPI shall identify equipment acquired from the 
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defunct PIDI and shall donate the same to the Commission, subject to acceptable 
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accounting rules and regulations. 
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The TAPI shall transfer to the Commission the balance of the Inventions 
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Guarantee Fund (IGF) deposited with the DBP. The Commission shall establish 
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ru,es for the availment of the IGF including all the pending loans funded under 
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IGF. Uncompleted inventors projects funded under the lOAF shall be transferred 
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to the Commission, subject to accounting rules and regulations. 
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SECTION 10. 
Tax Exemptions and Incentives. -
To promote, 
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encourage and accelerate the development, manufacture and commercialization 
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of Filipino inventions or technologies, any income derived from these technologies 
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or inventions, shall be exempted from all kinds of taxes for a period of ten (10) 
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years effective from the date of the tax exemption approval, subject to the rules 
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and regulations of the Department of Finance: Provided, that this tax exemption 
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privilege shall be extended to the legal heir or assignee upon the death of the 
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inventor. 
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The Inventor shall also be entitled to the following tax incentives and tax 
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exemptions: 
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a) Exemption from the payment of customs duties and value added tax on 
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import of machinery/ equipment, parts and materials and other components 
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which shall be actually, directly and exclusively used for the manufacture of 
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the patented inventions and registry utility models. The Commission, in 
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coordination with the Department of Finance, Bureau of Internal Revenue, 
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and the Bureau of Customs, shall determine the ceiling on tax incentives 
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and import duty privileges. 
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b) Exemption from the payment of license fees, permit fees and other 
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business taxes from the machinery and equipment used fer the 
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development, manufacture and sale of their patented inventions, as an 
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exemption to the taxing power of the local government units. 
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SECTION 11. Free Patent Registration.-
Inventors shall be exempted 
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from the payment of any registration fees for their inventions, utility models and 
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industrial designs required by the Intellectual Property Philippines (lPP). The IPP 
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and the Commission shall establish the rules and requirements for the 
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implementation of the provision of this section to avoid violation of existing 
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International Agreements and/ or rules. 
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SECTION 12. All donations and grants to the Commission shall be tax-
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exempt and deductible in full from the donor's gross income tax returns when 
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evidenced by a certificate duly issued by the Commission. 
Any person who 
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evades or defeats, or attempts to evade or defeat in any manner any tax imposed 
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by law by availing himself of the provisions of this section through fraud or 
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misrepresentation shall be punished by a fine of not more than fifty thousand 
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pesos (Php 50,000.00) or imprisonment of not exceeding one year or both, in the 
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discretion of the court. In case the violator is a corporation or association, the 
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president or general manager thereof shall be criminally liable, without prejudice 
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to the criminal responsibility of the member, officer or employee thereof 
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committing such violation. 
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SECTION 13. The Board of Commissioners shall be constituted by the 
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President within three (3) months from the approval of this Act to formulate the 
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implementing rules and regulations, and organize the Commission. 
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SECTION 14. Appropriations. - There is hereby appropriated the sum of 
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one hundred fifty million pesos ( Php 150,000,000.00) to fund the initial year of 
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th" Commission's operation. 
Thereafter, the amount necessary to effectively 
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carry out the provisions of this Act shall be included in the Annual General 
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Appropriations Act. 
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SECTION 15. Repealing Clause. - All laws, decrees, orders, rules and 
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regulations or portions thereof inconsistent with the provisions of this Act are 
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hereby repealed, amended or modified accordingly. 
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SECTION 16 
Separability Clause. -
If any provISion of this Act is 
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declared invalid, other parts or provisions thereof not affected thereby shall 
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remain and continue to be in full force and effect. 
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SECTION 17. Effectivity. - This Act shall take effect fifteen (15) days 
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after its publication in at least two (2) national newspapers of general circulation. 
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Approved, 
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