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

Ae ecamey >

14 SEP 2016

SEVENTEENTH CONGRESS
First Regular Session

2° 8612

House Bill No.

Introduced by BAYAN MUNA Rep. CARLOS ISAGANI T. ZARATE,

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
or free to the public by their own developers and can be freely distributed), flexible and
deyelopment-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 across 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 internet).

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 run 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 USS17 million savings for migrating from Microsoft to
GNU/Linux.

Many organizations and several studies have shown that using FOSS in licu 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 Development 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 software 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 named one of CIO
Review's 20 Most Promising Banking Technology Solution Providers in 2015 and has been
selected by APAC CIO Outlook as one of the 25 Most Promising IT Services Providers in
2015. In 2016, Exist was shortlisted as a finalist under the Most Innovative Company of the
Year category at the 10th International ICT Awards Philippines. 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, first filed by Bayan Muna Rep. Teodoro Casifio in 2006 in the 13"
Congress, mandates the use of FOSS, open standards and open formats in all government
agencies, and, also encourages the use and development of FOSS in the private and public
sectors, as this will greatly 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 country’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 IT 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,

ERE Ee
Rep. CARLOS ISAGANIT. ZARATE

Bayan Muna Party-list


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

SEVENTEENTH CONGRESS
First Regular Session

°* 3612

House Bill No.

Introduced by BAYAN MUNA Rep. CARLOS ISAGANI T. ZARATE

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) Act”

SEC. 2. Declaration of Policy. — 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 recognizing 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 relatively slow diffusion of technology between the developed and developing
counties; 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 software 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 free/open source software, in
accordance with Article XII, See. 14 of the Constitution.

SEC. 3. Definition of Terms. — For purposes 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
cach 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 prior 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 meet all of the following criteria:

1. 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. It
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 SDO;

4, The standard is vendor neutral and allows for sufficient development of a variety
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 software.

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 aggregate
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 software 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 or
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 Section 5.5 of this Act;

5. Extraordinary Circumstances — The Department of 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. There is no reasonably available ICT goods or services supporting open
standards and/or FOSS in the field, area or activity that the government
intends to engage in, or;

b. A particular government agency or office has an existing , widely-used and
widely implemented proprietary ICT system and there are 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 there exist extraordinary circumstances as enumerated in Section 5.5 of
this Act, the government may use proprietary standards and sofiware subject to
the following conditions:

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

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

c. 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 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

7


of exigent circumstances, government shall release under a FOSS license for public
consumption said software, system and ICT goods and services when it is 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
ina single vendor environment only. Alll 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.

1. The government, through the Department of Information and Communications
‘Technology (DICT), 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, DICT, DepEd, DOST, CHED
and the Technical Education and Skills Development Authority (TESDA) shall
spearhead the formulation and implementation of a curriculum 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 their proficiencies and skills in implementing
FOSS solutions.

3, Higher educational institutions that offer professional certification programs 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”.

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


XXX

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 varieties 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:

22.5. Aesthetic creations; [and]

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. Penalties, — 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 Act as Amended”, “The
Civil Service Law as Amended” or both whichever is applicable.

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

1. 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;

2. Come up with implementing rules 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 R.A. 10844, Promulgating Additional Policy to the DICT. ~ To
successfully implement provisions of this Act, the mandate of DICT 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 DICT
shall spearhead the development of open standards for the country in the process
ensuring the participation of Philippine ICT professional organizations, non-
government organizations and other stakeholders in the creation of such;

3. Ensure the compliance of all government agencies to this Act, and;

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 DICT
with its head receiving compensation, benefits, privileges and other emoluments equivalent to
other attached agencies to the DICT.

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

1. Ensure the efficient, prompt and successfull migration of all government ICT
goods and 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, and;

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 8293 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 or provision of this Act is held
unconstitutional or invalid, the validity of other sections herein shall not be affected thereby.

SEC. 19. Effectivity — this Act shall take effect fifteen (1 5) days after its publication
in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,