FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
.) 
Second Regular Session 
) 
S E N A T E  
.. 
8 
SEP -3 ,’:, 
C ’  
S.B. No. 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
Innovation is defined as ”the generation, diffusion, absorption and application of 
new technologies, knowledge or ideas which are generally regarded as essential drivers 
of long-term economic growth and development.” 
Developed countries have long since acknowledged the correlation between 
innovation and economic development having prioritized successful technology 
transfers and innovation policies to sustain and facilitate their growth. ,The remarkable 
productivity growth recorded in the United States, Japan, some European countries and 
recently India is a consequence of this precedence. Sufficient investment in research and 
development, highly capacitated research institutions, strong university-industry 
research collaboration, promotion of entrepreneurship and economic activities, and 
well-defined intellectual property rights regime support the innovation activities set by 
the aforementioned countries. 
As enshrined in the 1987 Philippine Constitution, it is the policy of the State to 
”give priority to research and development, invention, innovation, and ,their utilization; 
and to science and technology education, training, and services.” Certain laws for the 
protection of the intellectual property rights have also been enacted to safeguard 
innovative knowledge in the country. 
Amidst initiatives, the Philippines lack the system that would transfer and 
commercialize the results of the studies done by government-funded R&D institutions, 
thereby failing to realize the potentials of our country’s competitiveness in the global 
arena. This is clearly manifested in the 2007-2008 Global Competitiveness Report which 
gives the Philippines a global competitiveness index of 3.99. The country, thus, claims 
the 71~t ranking, which is low compared to the high rankings of our Asian neighbors 
like Singapore (7*), Hong Kong (Eh), 
Korea (11*), Japan (W), Malaysia (21St) and 
Thailand (28th). In the same report, the Philippines garnered the 79th position, a far cry 
from the ranks of our neighboring countries in the Southeast Asian’ region such as 
Singapore (Il*), Malaysia (219, Indonesia (41St) and Thailand (36*), in terms of 
innovation. 
The problem can be traced from the lack of a favorable policy environment that 
encourages strong support from both public and private sector necessary for successful 
technology transfer. In contrast with other countries, the Philippines has not enacted 


measures that are instrumental in creating a system on translating publicly funded R&D 
results into tangible technology that would facilitate the country’s economic 
development. 
This bill therefore proposes to establish a policy framework that shall effectively 
aid transfer of technology from the government R&D institutions to appropriate 
industries. The salient features of the proposed measure include: 
1. Establishinent of the Technology Information Access Facility which shall serve as 
a common access facility for a11 technologies generated from R&D funded by 
Government Funding Agencies and those generated by Research and 
Development Institutes; 
2. Development of Internal IP Policies and establishment of techiilology licensing 
offices (TLOs) and/ or technology business development offices; 
3. Financial guidelines in terms of revenue sharing and usage of income derived 
from the technology transfer; 
4. Compulsory licensing procedure for the promotion of the Intellectual Property 
Rights; and 
5. Establishment of the rights and responsibilities of Spin Off Firms and 
Government Funding Agencies as well as Research and Development Institutes. 
Furthermore, this proposed measure encourages coordination of both the public 
and private sector to facilitate the fulfilment of its objectives. 
In cognizance of science and technology’s role in national development, this bill 
will harness the opportunities brought by globalization but at the same time protect and 
secure the exclusive rights of the scientists, inventors, and other gifted citizens to their 
intellectual property. The Philippines needs to rise from its state of being a laggard in 
international development and address its own needs to upgrade the welfare of its 
people. 
In view of the foregoing considerations, the approval of this bill is earnestly 
sought. 
Senator 


FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
Second Regular Session 
1 
S E N A T E  
S.B. No. 
Introduced by Senator Loren Legarda 
AN ACT PROVIDING THE FRAMEWORK AND SUPPORT SYSTEM FOR THE 
OWNERSHIP, 
MANAGEMENT, 
USE, 
AND 
COMMERCIALIZATION 
OF 
INTELLECTUAL 
PROPERTY 
GENERATED 
FROM 
R&D 
FUNDED 
BY 
GOVERNMENT 
Be it enncted by the Senate and House of Repueseiztatives of the Philippines i n  Congress 
Assembled 
ARTICLE I 
TITLE, DECLARATION OF POLICY, OBJECTIVES AND SCOPE OF'PRACTICE 
SECTION 1. Short Title. -This Act shall be known as the Teclzrzology Tvansfer 
Act of2008. 
SECTION 2. Declaration of Policies and Principles. The State fully recognizes 
that science and technology are essential for national developinent and progress. It 
shall, therefore, give priority to research and development, invention, innovation, and 
their utilization. It shall also encourage the widest and systematic participation of all 
stakeholders in policy making related to science and technology, and in the generation, 
transfer and utilization of intellectual property. 
To harness the opportunities brought by globalization, the State shall facilitate 
the transfer and promote the utilization of intellectual property from all sources for the 
national benefit. It shall protect and secure the exclusive rights of scientists, inventors, 
and other gifted citizens to their intellectual property particularly when beneficial to the 
people. 
SECTION 3. Objective. This Act aims to promote more effective use, 
management, and commercialization of intellectual property resulting from research 
and development fuiided by government to the benefit of national economy and 
taxpayers and consistent with the needs of government to disseminate, diffuse and 
transfer economically relevant knowledge and technologies. 
SECTION 4. Definition of terms. For purposes of this Act, 
1. "Itztellectual properly (IP)" is the term used to describe tangible assets resulting 
froin the creative work of an individual or organization. They form the basis of 
legal rights as defined in Republic Act 2893 (Intellectual Property Code of the 


Philippines). These legal rights provide protection to the creator of the original 
material. They can trade in the same as physical assets and can be extremely 
valuable; 
2. “Intellectual Property Rights (IPR)” refers to the entitlement and enjoyment of 
the attributes of ownership over intellectual properties as defined by law; 
3. “Government Funding Agency (GFA)” refers to an executive agency that provides 
research grants from goveriunent appropriations including government- 
managed Official Development Assistance (ODA) funds; 
4. “Research and developnzent institute (RDI)” refers to a public or private Filipino 
organization, association, partnership, joint venture, or a corporation that 
performs research funded by GFAs; 
5. ”Reseurclz Fuiidiizg Aqeemeizt” refers to a contract entered into by and among 
GFA, RDI, and researcher. It governs ownership of IP, duties of GFAs and RDIs, 
technology disclosure, exclusivity of the license, use for cominercialization 
establishment of spin-off firms, technologies for research use, and sharing of 
income and benefits froin technology commercialization; 
6. ”Spin off firm” refers to an independent business technology taker created 
through the initiative of the researcher-employee who generated the technology; 
7. ”Tecllizology” refers to the process by which one party gains access to technology 
of anotlier party, and successful learns it and applies it for productive ends; and 
8. ”Teclzrzology transfer” refers to the process by which one party gains access to 
technology of another party, and successfully learns it and applies it for 
productive ends. 
SECTION 5. Scope of Practice. This Act shall cover the following: 
1. All R&D activities carried out by research and development institutions on 
behalf of the Philippine Government; 
2. ‘All intellectual properties derived from R&D activities funded by government 
that have commercial potential; 
3. All government agencies that fund R&D activities; and 
4. All R&D iiistitutions including higher education institutions that implement 
government funded R&D 
ARTICLE I1 
INTELLECTUAL PROPERTY OWNERSHIP 
SECTION 6. Ownership of Intellectual Property generated from research 
funded by GFA shall, in general, be vested in the RDI that, actually performed the 
research, unless there are valid and compelling reasons to the contrary (as may be 
defined in Chapter X, Part 1 of RA 8293- Intellectual Property Code, and the mandated 
2 


functions of the GFA). This is in recognition of tlie fact that RDls are in better position to 
identify the potential for economic utilization of intellectual property, subject to their 
having the right skills and inanageineiit capability. 
It should also be recognized that the GFAs need not own the IP generated in the 
research they funded to be able to use it for Goveriiment purposes. The RDI owning the 
IP can license it for tlie use of the GFA. 
In case of joint funding, the RDls shall the IPS but R&D funding agreements 
should consider tlie policies of contracting parties whether private or international 
parties. 
ARTICLE 111 
RIGHTS AND RESPONSIBILITIES 
SECTION 7. Rights and Responsibilities of Govemmelzt Fnnding Agency. Under 
this Act the GFA shall: 
1. Protect government interest in the IP generated from the R&D that it funded 
through suitable provisions in the R&D funding agreement; 
2. Monitor efforts and effectiveness of the RDI in securing IP protection and 
pursuing IP commercialization, as well as provide alternative solutions in case of 
shortfall in RDI's performance in utilizing and commercializing the IP; 
3. Ensure adequate freedom to use the IP for its policy and business needs 
including its use for further research to expand the knowledge frontier, and 
requirements for publication of information as appropriate in accordance with 
government policy; and 
4. Allow sharing of revenues from IP commercialization in a way that is not 
onerous to discourage cormnercialization. 
SECTION 8. Riglzts and Respoflsibilities of the Reseavch and Development 
Institutes, RDI's shall be entitled to the following rights and responsibilities: 
1. Identify, protect, and manage the IP generated from R&D funded by GFA and 
pursue coininercial exploitation diligently as a required performance stipulated 
in the R&D funding agreement; 
2. Provide a means for addressing any shortfall of its performance in utilizing and 
commercializing the IP; 
3. Notify GFA of all patent applications and assignments made; 
4. Report to GFA progress of IP commercialization efforts and of all license granted; 
5. Keep account of revenues and payments to tlie GFA f revenue sharing is 
provided in tlie R&D funding agreement; 
3 


6. Ensure that they have access to the skills and management capability to 
effectively perform their responsibilities of owning, managing, and exploiting the 
IP. Smaller RDIs that may need external advice are encouraged to pool and share 
resources; and 
7. Accord their staff with incentives consistent with existing laws to sustain efforts 
in identifying valuable IP and pursuing IP commercialization. 
ARTICLE IV 
MANAGEMENT OF IPS FROM R&D PERFORMED BY GOVERNMENT RDIs 
THROUGH THEIR OWN BUDGET 
SECTION 9. Responsibilities of RDI performing R&D with their Own Budget. 
All government RDIs performing R&D shall submit intellectual property management 
report to the national government agencies that they are attached to. The report shall 
contain plans for securing protection on IPS with commercial promise, tlie 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 agencies shall monitor efforts and effectiveness of their RDIs in 
securing IP protection and pursuing IP commercialization, based on the annual 
statement of plans and actions of managing the IPS submitted by the RDIs. 
ARTICLE V 
REVENUE SHARING 
SECTION 11. Revenue Sharing. All revenues from the commercialization of IPS 
from R&D funded by GFA shall accrue to the RDI, unless there is a revenue sharing 
provision in the R&D funding agreement. In all cases, GFA and RDT shall negotiate 
whether a revenue sharing scheme will be included as entitlement clauses in the R&D 
funding agreement. 
Sharing of revenue between RDI and researcher shall be governed by an 
employer-employee contract. 
ARTICLE vr 
ESTABLISHMENT OF SPIN-OFF FIRMS 
SECTION 12. Conzmercialization by Researclzers/Teclznology Generators. On 
meritorious cases, an RDI shall allow its researcher-employee to coinmercialize the IP 
generated from R&D funded by GFA through the creation of a spin-off firin provided 
that its researcher-employee takes a leave of absence for a period not exceeding two 
years. 
The RDIs shall properly manage any possible conflict of interest by 
issuing/establishing appropriate guidelines for its research/employee. Mechanisms for 
handling conflicts are the following: 
4 


The RDIs shall properly manage any possible conflict of interest by 
issuing/establishing appropriate guidelines for its research/ employee. Mechanisms for 
halidling conflicts are the following: 
1. RDIs shall ensure that its staff are made fully accountable for their researches 
and that commercial objectives do not divert the staff from carrying out tlie RDI’s 
core research program 
2. IHeads of RDI should ensure that where a member of the staff has financial 
interest in a spin-off company (e.g. shareholding, personal dictatorship, or 
consultancy agreement), this individual should not also act as an RDI contact 
with that company on day-to-day matters; 
3. Where staffs are nominated as non executive directors to the board of a sin-off 
company in which the RDI or its sponsor hold an equity stake, they should have 
a clear duty to ensure that RDI’s interests are not compromised by their role; and 
4. RDIs should take steps to ensure that collaborative undertaking with a spin-off 
company is governed by a formal agreement. 
ARTICLE VI1 
COMPULSORY LICENSING 
SECTlON 13. Applicability of Conzpulsoy Licensing. This law shall adopt the 
grounds, terins and conditioiis of Chapter X (Compulsory Licensing) Part I of RS 8293, 
Intellectual Property Code of the Philippines on tlie granting of license to exploit a 
protected IP, even without the agreement of tlie IP owner, in favor of any person who 
has shown his capability to exploit the IP. 
ARTICLE VI11 
USE OF INCOME FROM COMMERCIALIZATION OF IP ASSETS 
SECTION 14. Use of Income- Public RDIs undertaking technology transfer shall 
be vested with the authority to use the income derived from commercialization of IP 
generated froin R&D funded by GFAs. Income from commercialization of IP generated 
from R&D funded by GFAs. Income from commercialization shall be used to 
compensate the researcher-employee; and to fund R&D, S&T capability building, and 
technology transfer activities including the establislunent and management of 
technology licensing offices. 
All income from IP cominercialization shall be deposited in a revolving fund 
established by tlie RDI and shall be exempted from the duty of remitting such incoine to 
the Bureau of Treasury. The revolving fund shall be subjected to regular auditing of the 
Commission on Audit. 
ARTICLE IX 
INSTITUTIONAL MECHANISM 
SECTION 15. Establishi?zent of Technology Infomation Access Facility. The 
Department of Science aid Techiiology (DOST) shall establish a common access facility 
5 


for all technologies generated from R&D funded by GFAs and those generated by RDIs 
through their own budget. All RDIs shall contribute to this Technology Information 
Access Facility. 
SECTION 16. Development of Internal ID Policies and Establishment of 
technolopj licensing offices (TLOs) and/or technology business development offices- 
All public RDIs with substantial R&D capacity involved in technology transfer activities 
are encouraged to establish their own TLOs in whatever form they may deem 
appropriate and develop their own 11' policies in accordance/in support with the 
policies of the Intellectual Property Philippines. 
ARTICLE X 
MISCELLANEOUS, TRANSITORY, AND FINAL PROVISIONS 
SECTION 17. Fzinding. The activities and operational expenses related to the 
implementation of this Act shall be funded from the budget appropriations of GFAs 
and RDIs. 
SECTION 18. Periodic review. Every three (3) years from tlie effective of this 
Act, an independent review panel to be appointed by the President shall review tlie 
policies and prograins on technology transfer under this Act and shall recommend 
appropriate measures to the President and to both Houses of Congress. 
SECTION 19. Implementing Rules and Regulations. The Department of Science 
and Tecluiology, in collaboration with the Intellectual Property Philippines, shall lead 
GFAs in formulating the IRR for the effective implementation of this Act. The DOST 
Secretary shall chair the drafting committee. The IRR shall be issued within 90 days 
after the effectivity of this Act. Copies of the IRR shall be submitted to the Committees 
011 Science and Technology of both Houses of Congress within (30) days after its 
promulgation, as well as to other appropriate agencies as may be required by law. 
SECTION 20. Repealing Clause. All laws, presidential decrees, executive orders, 
presidential proclaims, rules and regulations or part thereof which may be contrary to 
or inconsistent with this Act are hereby repealed or modified accordingly. 
SECTION 21. Separability Clause. If any provision of this 'Act is declared 
uiiconstitutional, the same shall not affect the validity and effectivity of the other 
provisions hereof. 
SECTION 22. Effectivity. This Act shall take effect fifteen (15) days after its 
complete publication in two (2) newspaper general circulation. 
Approved, 
6