HOUSE OF REPRESENTATIVES

Republic of the Philippines are
HOUSE OF REPRESENTATIVE! REGEIM 7016
Quezon City DATE: |
SEVENTEENTH CONGRESS aN tT |

First Regular Session
House Bill No._ 80.15

Introduced by HON. MARIANO MICHAEL M.

NUNIT
ERVICE

EXPLANATORY NOTE

This Bill seeks to restore the Philippine Inventors Commission that will serve as the
lead agency that will promote research and development, provide comprehensive support
services to Filipino inventors and protect their inventions.

Article XIV, Section 10 of the Constitution provides that the State shall give
priority to research and development, invention, innovation, and their utilization and to
support indigenous, appropriate, and self-reliant scientific and technological capabilities,
d their application to the country’s productive systems and national life. Currently, the
Technology Application and Promotion Institute (TAPI) under the Department of Science
and Technology (DOS') is taking the lead in implementing Republic Act No. 7459, the
law providing incentives to Filipino inventors and inventions. R.A. No. 7459 only
expanded the function of TAPI but had difficulties providing the necessary support
mechanism that will have a significant impact on the sector.

The intent of the Constitutional provision to harness local inventions for national
progress would be advanced further if there would be an agency with the appropriate and
sufficient mandate, powers and resources to formulate and implement programs that have a
far-reaching impact on the plight of Filipino inventors. R.A. No. 3850 had created such an
agency, the Inventors Commission. However, said Commission was effectively abolished
by way of Executive Order No. 128 when bureaucracy was reorganized during the term of.
President Corazon Aquino. At present, the need for re-instituting an agency such as the
Inventors Commission becomes ever relevant as the role of science and technology is more
pronounced in economic development in the Philippines and elsewhere.

This bill will strengthen the mechanisms for providing the much needed support to
Filipino inventors by rationalizing programs for research and development, manufacture
and market of our inventive ideas, products, processes and such other areas of technology
development.

This Bill was filed by BUHAY Party List since the 14" Congress. Last 16"
Congress, the BUHAY Bill, House Bill 928 was consolidated together with the other bills
has undergone a technical working group. Again, we are seeking for the passage of this
meas

REP. MA! |. VELARDE JR.
\


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
QUEZON CITY

SEVENTEENTH CONGRESS
First Regular Session

House BILL No._ 3016

Introduced by HON. MARIANO MICHAEL M. VELARDE JR.

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.

SECTION 1. Title. — This Act shall be known as the “Inventors and
Invention Incentives Act of 2016”

SEC. 2. Declaration of Policy. — It is hereby dectared a policy of the State
to give priority to research and development, invention, innovation, and their
utilization. The State shall also support indigenous, appropriate, and self-reliant
scientific and technological capabilities, and their application to the country’s
productive systems and national life.

The State shall regulate the transfer and promote the adaptation of
technology from all sources for the national benefit. It shall encourage the widest
participation of private groups, local governments, and community-based
organizations in the generation and utilization of science and technology. The
sustained development of a reservoir of national talents consisting of Filipino
scientists, entrepreneur, professionals, managers, high-level technical manpower
and skilled workers and craftsmen in all fields shall be promoted by the State.

Further, the State shall protect and secure the exclusive rights of scientists,
and inventors to their intellectual property and creations, particularly when
beneficial to the people, for such period as may be provided by law.

Furthermore, the State shall promote the preferential use of Filipino labor,
domestic materials and locally produced goods, and adopt measures that make
them competitive.

SEC. 3. Definition of Terms. The following terms shall mean:

a. Creative Research shall refer to research results with demonstrable
qualities and potential for improvement and or widespread
commercialization/dissemination not elsewhere qualified and is forming
mental pictures of new ideas not yet existing; or, seeing past the
obvious to improve an existing idea.


Industrial Design shall refer to 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.

Innovation is embodying creativity into things we can actually see,
touch or taste. (innovation is applied creativity. So, if you have
imaginative ideas, but don’t act on them, you are creative but not
innovative.

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), any government bank, nd the 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.

Invention shall mean, any new and useful machine, manufactures
product, substance, process of any improvement thereof that satisfies
the requirement of novelty, utility and operativeness. It may refer to any
technical solution of a problem in any field of human activity which is
new, involves an inventive step and is industrially applicable.

Utility Model shall refer to any technical solution of a problem in any
field of human activity which is new and industrially applicable, within
the contemplation. It shall also mean any new model of implement or
tool of any industrial product or part of the same, which does not
possess the quality of an invention, configuration, construction or
composition. A certificate of registration is issued to a utility model

Intellectual property (ip) refers to creations of the mind duly registered
by an intellectual property authority, such as inventions, utility models,
designs, literary and artistic works; and symbols, names and images
used in commerce.

Patent is a title granted to an invention that confers the right for the
exclusive commercial exploitation of an invention by the owner, called a
patentee, or joint owners for a limited time — beyond which it becomes
public domain and ceases to be a patent -- in return for describing the
invention in a public document.

Industrial intellectual property (jip) are innovations applicable in
manufacturing or technically productive enterprises, comprised by an
invention, utility model and industrial design, wherein:
Invention is an in force patent for a technical solution,

Product, process or improvement innovation thereof that is new,
useful and characteristically non-obvious to a knowledgeable person:


Utility model is an in force certificate given to a registered technical
solution, product, process, or improvement innovation thereof that is
new and useful but does not possess the quality of being a non-obvious
inventive step; the registrant to a utility model is called a maker, and,

._ Industrial design is an in force certificate given to a registered novel

innovation which constitutes the ornamental or aesthetic aspect of an
article. A design may consist of three-dimensional features, such as
the shape or surface of an article, or of two-dimensional features, such
as patterns, lines or color. The registrant to an industrial design is
known as a designer.

Filipino innovators federation pertains to a central body functioning as
an umbrella parent organization formed by the linking of several joining
member innovation associations, companies, individual innovators and
innovation enthusiasts, each retaining the autonomous control of its
own respective affairs, for the purpose of articulating with one single
voice the members’ attitudes, concerns, desires and needs towards
influencing policy development affecting the future of intellectual
property rights in deliberations, proceedings, procedures or inquiries
before appropriate regulatory bodies like the wipo and ipphil, and in
fostering and developing filipino innovators and their intellectual
property rights to their patents, registered utility models, industrial
designs, copyrights and related rights, trademarks and service marks,
geographic indications, layout designs or topographies of integrated
circuits, and, trade secrets.

Mega Regions refer to Northern Luzon, Central Luzon, Southern
Luzon, National Capital Region (NCR) the Visayas and one Mega
Region in Mindanao.

SEC. 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 as 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.

SEC. 5. Functions, Duties and Responsibilities. - The Commission shall
have the following functions, power and duties:

a)

b)

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;

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 application here and/ or abroad, in prosecuting said


d)

e)

9)

h)

application until grant or final action, and in protecting their patent
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 including 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. In case there is no royalty arrangement in the
commercialization and/ 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 settle/ 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.

To publish and disseminate information about inventions, and other
related information;


k) To hold regular dialogues for the exchange of ideas among inventors,
and to publish and disseminate information about inventions, and
other related information, leaflets brochures and books.

!) To help organize in coordination with other government agencies
creative societies in schools, specially State Colleges and universities
to promote and encourage inventiveness among our youth and
citizenry.

m) To endorse any patented products , tools and devices to any
concerned government agency

n) To extend financial assistance to inventors in their initial experiments
and prototype development and other related inventions

SEC. 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 involving
moral turpitude, a degree holder, preferably with M.S. or MBA. 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 Department. The Commission,
with the approval of the President, may create additional units deemed necessary
by the Board of Commissioners.

SEC. 7. Inter-Agency Committee. The Commission shall within three (3)
months of the effectivity of this law, constitute an Inter-Agency Committee 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 required by the commission for inventors to avail of the
Invention Guarantee Fund. This is in addition to the requirements prescribed by
any government bank where the IGF is deposited.

SEC. 8. Invention Economic Zones. - The Commission, with the approval
of the President, may select a suitable locations 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 Commission to be under its
exclusive jurisdiction and control.

SEC. 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. The Invention Development Assistance Fund, shall be increased and
provided under the General Appropriation Act in the initial amount of two hundred
fifty million (PhP250,000,000.00). The TAPI shall transfer all the appropriations,
funds, records, equipment, facilities, rights and other assets acquired from the
defunct PIDI, as per P.D. No. 1423, as amended by EO No. 128, subject to
acceptable accounting rules and regulations.

The TAPI shall transfer to the Commission the balance of the Inventions
Guarantee Fund (IGF) after proper auditing by the Commission on audit (COA,)
deposited with the Land Bank of the Philippines (LBP). The Commission must
establish rules for the availment of the IGF including all the pending loans funded
under IGF. Uncompleted inventors projects funded under the IDAF shall be
transferred to the Commission, subject to accounting rules and regulations.

SEC. 10. Tax Exemptions and Incentives. - To promote, encourage and
accelerate the development, manufacture and commercialization of Filipino
inventions or technologies, any income derived from these technologies or
inventions, shall be exempted from all kinds of taxes for a period of ten (10) years
effective from the date of the tax exemption approval, subject to the rules and
regulations of the Department of Finance: Provided, that this tax exemption
privilege shall be extended to the legal heir or assignee upon the death of the
inventor.

The Inventor shall also be entitled to the following tax incentives and tax
exemptions:

a) Exemption from the payment of customs duties and value added tax on
import of machinery/ equipment, parts and materials and other components
which shall be actually, directly and exclusively used for the manufacture of
the patented inventions and registry utility models. The Commission, in
coordination with the Department of Finance, Bureau of Internal Revenue,
and the Bureau of Customs, shall determine the ceiling on tax incentives
and import duty privileges.

b)

Exemption from the payment of license fees, permit fees and other business
taxes from the machinery and equipment used for the development,
manufacture and sale of their patented inventions, as an exemption to the
taxing power of the local government units.

¢) The commission shall issue and/or certify for tax exemption privilege, from
the date of approval for a period of ten years, the following:

1) Any income derived from the manufacture and sale of the
inventions or technologies;
Payment for customs duties and value added tax on import of
machinery, tools and equipment including materials and other
components which shall be actually, directly and exclusively used
or the manufacture of the inventions or technologies; and
Payment of license fees, permit fees and other business fees and
other taxes on machineries, tools and equipment used directly
and exclusively for the development, manufacture and sale of
inventions or technologies.

2)

3

Provided, however, that inventions or technologies with pending patents or
registries shall be extended the same tax exemption privilege upon presentation of
verifiable documents that the manufacture and sale of said inventions or
technologies are exclusively manufactured and do not have prior and known
competitor.


SEC. 11. Free Patent Registration And Renewal. Inventors shall be
exempted from the payment of any registration and renewal fees for their
inventions, utility models and industrial designs required by the Intellectual
Property Philippines (IPOPHL). The IPOPHL and the Commission shall establish
the rules and requirements for the implementation of the provision of this section to
avoid violation of existing International Agreements and/or rules. inventors shall be
exempted from payment of any registration and renewal fees for their inventions,
utility models and industrial designs.

SEC. 12. All donations and grants to the Commission shall be tax-exempt
and deductible in full from the donor’s gross 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 (PhP 50,000.00)
or imprisonment of 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. 13. The Board of Commissioners. It shall be constituted by the
President within three (3) months from the approval of this Act to formulate the
implementing rules and regulations, and organize the Commission.

SEC. 14. Appropriations. There is hereby appropriated the sum of Two
hundred fifty million pesos ( PhP 250,000,000.00) to fund the initial year of the
Commission's operation. Thereafter, the amount necessary to effectively carry out
the provisions of this Act shall be included in the Annual General Appropriations
Act.

SEC. 15. Repealing Clause. - All laws, decrees, orders, rules and
regulations or portions thereof inconsistent with the provisions of this Act are
hereby repealed, amended or modified accordingly.

SEC. 16. Separability Clause. - If any provision of this Act is declared
invalid, other parts or provisions thereof not affected thereby shall remain and
continue to be in full force and effect.

SEC. 17. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) national newspapers of general circulation

|. VELARDE JR.