Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 1473

Introduced by Representatives
CARLOS ISAGANI T. ZARATE, NERI J, COLMENARES and ANTONIO L. TINIO

AN ACT
PROMOTING THE DEVELOPMENT AND USE OF FREE/OPEN SOURCE
SOFTWARE (FOSS) IN THE PHILIPPINES, AMENDING RA 8293 OTHERWISE,
KNOWN AS THE “INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES”,
PROVIDING PENALTIES THEREOF, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

‘The era of Free/Open Source Software (FOSS) has come.

Once considered the realm of geeks, computer experts and cyberspace activists, FOSS is
now steadily gaining ground among a broad range of information and communications technology
(ICT) consumers ~ from home users and barangays, schools to large corporate enterprises and
government agencies — who are looking for alternatives to the expensive, overbearing and
restrictive products of proprietary software monopolies like Microsoft, Unix and Adobe, among
others.

Unlike proprietary software, FOSS is cheap (in fact, most FOSS are distributed gratis to
the public by their own developers and can be freely distributed), flexible and
development-friendly (FOSS source codes are accessible to consumers who may study, modify
and customize the software), interoperable (FOSS adheres to open standards and are meant to
work actoss various platforms and protocols), and safe (the opening of the source codes and the
use of open standards have allowed hundreds of thousands of users around the globe to serve as a
virtual research and development team, providing patches and solutions to bugs and glitches in
real time over the intemet).

Today, most widely-used proprietary softwares have equivalent FOSS which is cheaper,
safer and more robust. This is why the use of FOSS is steadily gaining ground in many countries in
Europe, North America, Latin America and Asia.



FOSS give software users freedom — the freedom to ran the program in any way one
wishes, to study and modify its source codes, to make copies and distribute them as one wishes,
and to redistribute the said program.

An apparent benefit of FOSS is its low cost. Giant chip maker Intel reportedly saved $200
million for switching their servers from proprietary UNIX software to open GNU/Linux software,
while Amazon reported a US$17 million savings for migrating from Microsoft to GNU/Linux,

‘Many organizations and several studies have shown that using FOSS in lieu of proprietary
software results in significant savings of anywhere from 15% to 35% over a span of three years not
only due to lower licensing costs but lower personnel and hardware costs.

A study produced by the International Open Source Network (IOSN) and United Nations
Development Program - Asia-Pacific Developinent Information Programme have identified the
following strategic benefits of FOSS: (1) Developing local capacity industry; (2) reducing
imports/conserving foreign exchange; (3) Enhancing national security; (4) Reducing copyright
infringements; (5) Enabling localization.

The study also identified economic benefits as: (1) Increasing competition; (2) Reducing
total cost of ownership; (3) Enhancing security; (4) Achieving vendor independence.

Add to this the social benefit of increasing access to information, promoting citizens’
knowledge about software and software techniques, encouraging cooperation among the citizenry,
and providing the public with democratic control over the sofeware that it uses.

In fact, the viability and advantages of FOSS has not been lost on us Filipinos. ‘The
Advanced Science and Technology Institute of the Department of Science and ‘Technology
(ASTI-DOST) has developed the Bayanihan Linux, a complete desktop solution for office and
school use based on GNU/Linux, and Bayanihan Linux Server, an easy-to-use GNU/Linux server
for government agencies, schools and SMEs. These Bayanihan Linux programs can do everything
that proprietary operating systems can do, except drain one’s pockets, mainly because they are
distributed by their developers for free.

Exist, a 100%-owned Filipino open-source software company was recently awarded the
prestigious Red Herring award for the top 100 start-up technology companies. ‘This is proof that
given the opportunity and proper support, Filipino companies can be a major supplier in the
growing global FOSS market.

This bill, which mandates the use of FOSS, open standards and open formats in all
government agencies, and which encourages the use and development of FOSS in the private and
public sectors, will benefit the Philippines by: (1) Promoting the people’s right to access public
informations; (2) Lowering the overall cost of ICT in the public and private sectors by reducing the
countty’s dependence on proprietary software and computer applications; (3) Making ICT more
accessible to a greater number of users; (4) Unlocking the potential and encouraging the
development of a self-reliant, genuinely Filipino TT industry; and, (5) Providing greater security for
highly sensitive government and private information systems.

In view of the foregoing, passage of the bill is eamestly sought.


Approved,

SAGAPUI T. ZARATE Rep. NHRI J.|COLMENA\
Bafan Muna Partylist”* Baye Mira Partbylist

ACT-Teachers Partyist


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

1473

House Bill No.

Introduced by Representatives
CARLOS ISAGANI T. ZARATE, NERI J. COLMENARES and ANTONIO L. TINIO

AN ACT
PROMOTING THE DEVELOPMENT AND USE OF FREE/OPEN SOURCE
SOFTWARE (FOSS) IN THE PHILIPPINES, AMENDING RA 8293 OTHERWISE,
KNOWN AS THE “INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES”,
PROVIDING PENALTIES THEREOF, AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. — This Act shall be known as the “Free/Open Source Software
(FOSS) Aa”

SEC. 2, Declaration of Poligy. — In accordance with Section 24 of Article Il of the
Constitution which declares that: “The State recognizes the vital role of communication and
information in nation building”, and remgnizing the wide discrepancy between the technologies of
developing countries and advanced countries; realizing the economic limitations in the information
and communication technology (ICT) of developing countries, especially on the viability of
purchasing and implementing expensive software solutions; aware of the telatively slow diffusion of
technology between the developed and developing countries; it is hereby declared the policy of the
State to:

1, Ensure the self-reliance of the State in technology and technology capabilities, in
accordance with Article XIV, Sec. 10 of the Constitution, by ensuring that the State
has access to the source codes of its computers’ software;

2. Strengthen the public’s access to information and government data, in accordance with
Article III, Section 7 of the Constitution, by mandating the use of open standards and
formats in government, hence ensuring the interoperability of data and government
communications;

3. Promote the preferential use of domestic material and Filipino labor in information
communications technology, in accordance with Article XII, Sec. 12 of the


Constitution;

4, Adopt mechanisms to ensure fiscal discipline in the purchase of sofeware without
compromising the State’s security and the stability and robustness of the country’s ICT
infrastructure, and

5, Develop Filipino professionals and scientists in the field of software technology and
ICT by promoting the use and purchase of frec/open source software, in accordance
with Article XII, Sec. 14 of the Constitution,

SEC. 3. Definition of Terms, ~ For pusposes of this Act, the following terms and phrases
are so defined:

Source code ~The set of human readable instructions and statements written by the
programmer using a particular programming language, including the modules, components of the
executable program, and any interface definition files and scripts used to compile and install a
program.

Interoperability — The ability of information systems to operate in conjunction with each
other encompassing protocols, hardware software, application, and data compatibility layers. In
particular, itis the ability of different types of computers, networks, operating systems, and
applications to work together effectively, without ptior communication, in order to exchange
information in a useful and meaningful manner,

Open standards — Those standards, protocols, specifications, and any other data formats
made available to the general public and are developed, approved and maintained via a public,
collaborative, transparent and consensus-driven process. In addition, open standards must mect all
of the following criteria:

4. The adoption and development of the standard includes the consideration of and
response to inputs by interested parties, and occurs on the basis of an open
decision-making procedure available to all;

2. ‘The standard has been published and the published document is available freely. Tt
must be permissible for all to copy, distribute and use it without any fee;

3. ‘The standard is affirmed by an international standards development organization
(SDO) or, in the absence of such affirmation, at least by a government-commissioned
spo;

4, The standard is vendor neutral and allows for sufficient development of a vatiety of
competing interoperable products or services, and;

5. There are no constraints on the re-use of the standard.

Open Format — A published specification for storing digital data that is based on and
‘employs open standards, and which are implementable by both proprietary and free-open source
sofiware.


Free-Open Source Software (FOSS) — Any software computer program that meets all of
the following criteria:

1. The source code of the software, including the source code for such other parts and
components needed to compile and install the software shall be readily available and
accessible;

2. The license to use the program does not restrict nor require fees such as royalties from
anyone to redistribute, in any way, the program as part of an agyregate software
distribution or solution containing other programs from several other sources;

3. ‘The license must allow modifications and derived works which, as specified in
Paragraph 4.2 of this Section, must allow for redistribution without additional charges;

4, The license to use must not discriminate against persons nor a specific group of
persons;

5. The license of the program shall not be restricted to it being part of a particular
software distribution, hence, individual components of an aggregate solution can be
modified and redistributed in accordance to Paragraphs 4.2 and 4.3 of this section;

6, A sofeware license must not restrict other software from being used as part or in
cooperation with the FOSS. Hence, the license of the open source software can be
‘used in conjunction with proprietary software, and;

7. The license must be technology neutral. No foreseeable deliberate restrictions should
be placed regarding the use of the software in any platform, or for any purpose.

FOSS License ~ any license and/or end-user agreement that ensures free access and
redistribution of free/open source software, the licenses of which are generally approved by an
internationally recognized FOSS advocate body.

‘Total Cost of Ownership (TCO) ~ covers all the costs involved in a technology ot
business solution, including the initial investment cost and maintenance, support, replacement,
training and upgrade costs.

Government — includes the three separate branches of government and all departments,
bureaus, offices and agencies operating under each separate branch of government, including
schools and government-owned and controlled corporations.

SECTION 4. Legal Recognition of FOSS. ~The government shall recognize the validity
and legitimacy of FOSS and FOSS licenses, subject to the provisions of existing laws, rules and
regulations.

SECTION 5. Government Rules and Policies on the Use and Adoption of Open
Standards and FOSS in Government.


1. Use of Open Standards ~The government shall use only ICT goods and services that
comply with open standards except under extraordinary circumstances as defined in
Section 5.5 of this Act;

2. Use of Open Formats — All government communication and data intended for public
consumption shall be encoded in open standard data format;

3. Use of FOSS — The government shall apply only FOSS or FOSS solutions in all ICT
projects and activities except under extraordinary circumstances as defined in Section
5,5 of this Act;

4, Use of RAND License for Open Standards — Open standards licensed under
“Reasonable and Non-Discriminatory” (RAND) terms, and hence are not free but are
available for a reasonable fee shall be used only under extraordinary circumstances as
defined in Seetion 5.5 of this Act;

5. Extraordinary Circumstances ~The Commission on Information and Communications
Technology (CICT), through the Office of FOSS Migration created under Section 15
shall determine, through public hearing, whether there exists extraordinary
circumstances that will exempt a government agency or project from Sections 5.1 to
5.4 of this Act.

Extraordinary circumstances exist when:

a. Thete is no reasonably available ICT goods ot services supporting open
standards and/or FOSS in the field, area or activity that the government
intends to engage in, ox;

b. A particular government agency or office has an existing , widely-used and
widely implemented proprietary ICT system and there ate no reasonably
available technology using open standards and/or FOSS that can be used with
the said proprietary system.

6. Limitations on the Use of Proprietary Standards and Software in Government ~
Should thete exist extraordinary circumstances as enumerated in Section 5.5 of this
‘Act, the government may use proprietary standards and software subject to the
following conditions:

a. The state shall procure, purchase or acquire only ICT goods and services that
ate interoperable and scalable with open standards;

b. The state shall procure, purchase or acquite available software that offers
license most similar to FOSS as defined in Section 3 of this Act, and;

¢. Open standards and FOSS will be selected and given preference when existing
systems are to be retired or need major enhancements.

SEC. 6. Adoption of FOSS Policy in Government Research and Development. — All
software developed by government must be FOSS and open standards compliant except in exigent

7


circumstances where national security may be in peril, or in such other case where the right to
freedom to public information is reasonably controlled as provided for by law. In case of exigent
circumstances, government shall release under a FOSS license for public consumption said
software, system and ICT goods and services when itis to be retired or replaced.

SEC. 7. Provision Against Single Vendor Lock-in and Dependence, Under no
circumstances shall the government acquire ICT goods and services that are restricted for use in a
single vendor environment only. All prospective ICT investments of the government shall comply
with open standards, Existing ICT systems will be reviewed for open standards compatibility and
will be enhanced to achieve open standards compatibility when appropriate.

SEC. 8, Preference in Procurement of ICT Services and Goods, In case there is more
than one company that offers FOSS and open standard compliant solutions to the government
with almost equal total cost of ownership, preference shall be given to the Filipino-owned ICT
company.

SEC. 9. Promotion of FOSS and Open Standards in Educational Institutions.

4, The government, through the Commission on Higher Education (CHED), Department
of Education (DepEd), the National Computer Center (NCC), the Department of
Science and ‘Technology (DOST) and other appropriate agencies shall promote FOSS
by providing laboratories, organizing competitions, and encouraging research, thesis
and dissertations on FOSS development and the development of open standards;

2. Within eight (8) months after this Act takes effect, DepEd, DOST, CHED and the
‘Technical Education and Skills Development Authority (TESDA) shall spearhead the
formulation and implementation of a custiculum for training students and teachers on
the use and development of FOSS in all levels of education. They will also formulate in
cooperation with the CICT and other appropriate agencies, a basic government
retraining and certification program for existing IT’ professionals to test theit
ptoficiencies and skills in implementing FOSS solutions.

3. Higher educational institutions that offer professional certification progtams on the use
and implementation of proprietary software and solutions will be encouraged to offer
similar certification programs for FOSS and open standard solutions.

SEC. 10, Promotion of FOSS and Open Standards in the Private Sector, _‘The
government shall provide various types of non-fiscal incentives and support to private sector
entities involved in the use, promotion and development of FOSS and open standards.

SEC. 11. Amending Section 22 of RA 8293, otherwise known as the “Intellectual Property
Code of the Philippines”.

Sec. 22 of RA 8293 otherwise known as the Intellectual Property Code of the Philippines
is hereby amended to read as follows:



Section 22. Non-Patentable Inventions, The following shall be excluded from patent
protection:

22.1, Discoveries, scientific theories and mathematical methods;

22.2. Schemes, rules and methods of performing mental acts, playing games or doing

business, and programs for computers;

22.3. Methods for the treatment of the human or animal body by surgery or therapy and

diagnostic methods practiced on the human or animal body. This provision shall not
apply to products and composition for use in any of these methods;

22.4, Plant vaticties or animal breeds or essentially biological process for the production of

plants or animals. This provision shall not apply to micro-organisms and
non-biological and microbiological processes.

Provisions under this subsection shall not preclude Congress to consider the
enactment of a law providing sui generis protection of plant varieties and animal
breeds and a system of community intellectual rights protection:

22,8. Aesthetic creations; fand]

22.6, COMPUTER PROGRAMS, TECHNIQUES AND METHODS IN COMPUTING

AND ARRANGING DATA FOR USE IN DIGITAL FORMAT, INCLUDING
ALGORITHMS;

22.7, PROTOCOLS, SPECIFICATIONS, METHODS OF ARRANGING DATA THAT

ARE KNOWN TO FORM PART OF OPEN STANDARDS OR ARE INTEGRAL
TO IMPLEMENTATION OF OPEN STANDARDS, AND;

22.8. Anything which is contrary to public order or morality,

SEC. 12. Penaltic

Any act or omission on the part of any public official(s) and/or

individuals , juridical or otherwise , acting in conspiracy with public officials violating provisions
of this Act shall be penalized in accordance with pertinent provision(s) of RA 3019, otherwise
known as the “Anti-Graft and Corrupt Practices Ac as Amended”, “The Civil Service Law as
Amended” or both whichever is applicable.

SEC. 13, Implementation. ‘The Commission on Information and Communications
‘Technology (CICT) shall be the main government agency tasked to oversee the implementation of
this Act. Within six (6) months after this Act takes effect, the CICT shall:

4.

Submit to the Office of the President and to Congress an audit of all existing
government ICT systems, and its recommendations as to system migration and changes
needed to fulfill the objectives of this Act;

Come up with implementing rales and regulations for this Act which shall include as
minimum the following:


a, Within three years, 90% of government IT professionals, and 65% of the
country’s IT professionals must be proficient in the implementation of FOSS
systems, and;

b. Within five years, 75% of all existing government systems shall be open.
standards compliant, and all government communication and research data
intended for public consumption and access shall be in open standard data
format;

c. Within five years, 75% of all existing government systems shall employ FOSS.
‘To be qualified as compliant to this Act, one machine is counted as employing
FOSS when at the minimum, its operating system, and the computing programs
used to fulfill the purpose of the machine (c.g,, office suite programs for
machines intended for office use, or counting programs for counting machines)
are FOSS.

d. The effective advocacy, training and development of a FOSS community in the
country that will help in the development of FOSS programs and in the
advocacy of FOSS.

SEC, 14. Amending EO 269, Promulgating Additional Mandate to the CICT. ~To
successfully implement provisions of this Act, the mandate of CICT shall now include the
following:

1. Catalogue, compile and publish all existing international open standards applicable to
the Philippines;

2. Pending applicable international open standards for the Philippines, the CICT shall
speathead the development of open standards for the country in the process ensuring,
the participation of Philippine ICT professional organizations, non-government
organizations and other stakcholders in the creation of such;

3, Ensure the compliance of all government agencies to this Act, ands

4, Encourage private entities to adopt systems and solutions compliant with open
standards.

SEC. 15. Creating the Office on FOSS Migration. ~ There shall be created an office on
FOSS migration to be headed by a known FOSS advocate with at least ten years of experience in
the field of ICT and FOSS. Such office shall be an attached agency of the CICT with its head
receiving compensation, benefits, privileges and other emoluments equivalent to a Commissioner
of the CICT.

‘The new office thus created shall have the following mandate, duties, powers and
responsibilities:

4, Ensure the efficient, prompt and successful migration of all government ICT goods and
0


services to FOSS as mandated in this Act and its IRR;

2. Determine, upon request of a government agency, if there exists extraordinary
circumstances enumerated in Section 5.5 of this Act that will exempt a particular
project or ICT implementation from Sections 5.1 to 5.4 of this Act;

3. Review and ensure the compliance of all government agencies to pertinent provisions
of this Act;

4, Train and develop human capital for FOSS in the Philippines

5. Coordinate with the DOST, National Computer Center (NCC) and other government
agencies, State Universities and Colleges, for modification, customization and
development of FOSS for government use;

6. Aid in the prosecution of public officials and individuals, juridical or otherwise, acting
in conspiracy with government officials in refusing to implement provisions of this Act;

7. Create its own sub-offices, hire staff including programmers for modification,
improvement and development of existing FOSS, and seek the services of consultants
to aid in its mandate and successful implementation of this Act, ands

8. Disburse funds thereof for its operations.

SEC. 16. Appropriations. ~ The sum of twenty million pesos (P20,000,000.00) shall be
allocated for the CICT for the implementation of its new additional mandate, and another fifty
million pesos (P50,000,000.00) for the creation and operations of the Office of FOSS Migration
for the first year this bill is enacted into law. Appropriations for the implementation of this Act for
the succeeding years shall be included in the General Appropriations Act

SEC. 17. Repealing Clause ~ Section 22 of RA 8295 otherwise known as the “Intellectual
Property Code of the Philippines” is hereby amended in accordance to Section 11 of this Act.

All other laws, presidential decrees, executive orders, and rules and regulations, or parts
thereof inconsistent with the provisions of this Act are hereby repealed, modified or amended

accordingly.

SEC. 18. Separability Clause — If any section ot provision of this Act is held
‘unconstitutional of invalid, the validity of other sections herein shall not be affected thereby.

SEC. 19. Effectivity — this Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in at least two (2) newspapers of general circulation

Approved,

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