Intellectual Property Contract Laws for Written Works in the Philippines

Introduction

In the Philippines, the protection of intellectual property (IP) rights for written works is primarily governed by Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines (IP Code), which took effect on January 1, 1998. This legislation aligns with international standards, including the Berne Convention for the Protection of Literary and Artistic Works, to which the Philippines acceded in 1951, and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) under the World Trade Organization. Written works, encompassing literary creations such as books, articles, manuscripts, poems, essays, and even computer programs as literary works, fall under copyright protection. This article provides a comprehensive overview of the IP contract laws applicable to these works within the Philippine context, covering protection mechanisms, contractual arrangements, rights transference, enforcement, and related legal considerations.

The IP Code distinguishes between economic rights, which can be assigned or licensed, and moral rights, which are inalienable. Contracts play a pivotal role in the commercialization and dissemination of written works, allowing creators to monetize their creations while safeguarding their interests. However, these contracts must comply with the IP Code's provisions to be enforceable, and any disputes are resolved through administrative, civil, or criminal proceedings.

Scope of Protection for Written Works

Under Section 172 of the IP Code, written works are classified as original literary and artistic works eligible for copyright protection. This includes:

Books, pamphlets, articles, and other writings;
Lectures, sermons, addresses, dissertations prepared for oral delivery;
Dramatic or dramatico-musical compositions;
Musical compositions with or without words;
Works of drawing, painting, architecture, sculpture, engraving, lithography, or other works of art;
Computer programs, which are treated as literary works.

Protection is automatic upon creation and fixation in a tangible medium, without the need for registration. However, registration with the Intellectual Property Office of the Philippines (IPOPHL) or the National Library provides prima facie evidence of ownership and creation date, which is crucial in contractual disputes or infringement cases.

The duration of copyright for written works is the life of the author plus 50 years after death (Section 213). For works of joint authorship, it extends 50 years after the death of the last surviving author. Anonymous or pseudonymous works are protected for 50 years from publication, unless the author's identity is revealed. For works created by government employees in the course of their duties, protection lasts 50 years from publication.

Economic and Moral Rights

Economic Rights (Section 177)

These are transferable and include:

Reproduction of the work or substantial portions thereof;
Dramatization, translation, adaptation, abridgment, arrangement, or other transformation;
First public distribution of the original and each copy;
Rental of the original or a copy;
Public display;
Public performance;
Other communication to the public.

Economic rights can be assigned in whole or in part, or licensed exclusively or non-exclusively through contracts.

Moral Rights (Section 193)

These are personal to the author and inalienable, even after assignment of economic rights. They include:

Attribution (right to be recognized as the author);
Integrity (right to object to distortion, mutilation, or other modifications that prejudice the author's honor or reputation);
False attribution (right to prevent others from attributing the work to them falsely);
Disclosure (right to decide whether and how the work is disclosed).

Moral rights last for the duration of the copyright and are passed to heirs upon the author's death. Contracts cannot waive moral rights, though authors may undertake not to enforce them in certain circumstances.

Contracts Involving Written Works

Contracts are essential for the exploitation of written works, such as publishing agreements, licensing deals, and assignments. The IP Code and the Civil Code of the Philippines (Republic Act No. 386) govern these, with the former taking precedence on IP-specific matters.

Types of Contracts

Assignment Contracts: Under Section 180, copyright or specific rights can be assigned in whole or in part. Assignments must be in writing and recorded with the IPOPHL to be effective against third parties (Section 183). Partial assignments specify the rights transferred, duration, territory, and compensation. Without specification, assignments are presumed to last five years, cover only the Philippines, and allow non-exclusive use by the author.
Licensing Agreements: These grant permission to use the work without transferring ownership. Licenses can be exclusive (licensor cannot grant to others) or non-exclusive. They must detail scope, duration, royalty rates, and termination clauses. Compulsory licenses are rare for written works but possible under TRIPS for educational purposes in limited cases.
Publishing Contracts: Common for books and articles, these typically involve the author granting the publisher exclusive rights to reproduce, distribute, and sell the work. Key clauses include advance payments, royalties (often 10-15% of net sales), subsidiary rights (e.g., film adaptations), reversion of rights if out of print, and audit rights for sales records.
Work-for-Hire Agreements: In employment contexts, works created by employees belong to the employer if within the scope of employment (Section 178.3). For commissioned works, the commissioner owns the copyright unless otherwise agreed, but the author retains moral rights and rights to other uses unless specified.
Collaboration Agreements: For joint works, co-authors share rights equally unless agreed otherwise. Contracts should address contribution shares, decision-making, and revenue division.

Formal Requirements

All contracts must be in writing to be enforceable (Article 1358, Civil Code; Section 180, IP Code).
Consideration is required, which can be monetary (royalties) or non-monetary (promotion).
Contracts must not contravene public policy, such as those unduly restricting fair use or moral rights.

International Aspects

For contracts with foreign elements, the IP Code applies the national treatment principle from the Berne Convention, treating foreign authors similarly to Filipinos if their country reciprocates. Choice-of-law clauses are permissible, but Philippine courts may apply local law for acts within the territory.

Fair Use and Limitations

Contracts cannot override statutory limitations on copyright. Section 184 allows fair use for criticism, comment, news reporting, teaching, scholarship, research, and similar purposes, considering factors like purpose, nature of the work, amount used, and market effect. Libraries and archives may reproduce works for preservation. Decompilation of computer programs is permitted for interoperability.

Infringement and Remedies

Breach of IP contracts or unauthorized use constitutes infringement. Remedies include:

Civil Remedies (Section 216)

Injunctions to stop infringement;
Damages (actual, moral, exemplary);
Impounding of infringing copies;
Destruction of infringing materials;
Accounting for profits.

Criminal Penalties (Section 217)

Imprisonment from 1-9 years and fines from PHP 50,000 to PHP 1,500,000 for willful infringement, depending on scale.

Administrative Remedies

IPOPHL handles oppositions, cancellations, and alternative dispute resolution (ADR) for contract disputes.

Jurisdiction lies with Regional Trial Courts designated as Special Commercial Courts for IP cases. The Supreme Court has issued rules for expeditious proceedings.

Enforcement Mechanisms

The IPOPHL administers copyright registration and deposit requirements (two copies to the National Library within three weeks of publication). It also conducts mediation and arbitration for contract disputes.

The Philippine National Police and National Bureau of Investigation handle raids and seizures. Customs authorities monitor borders for infringing imports under the Customs Modernization and Tariff Act.

Special Considerations

Digital Works: The IP Code covers electronic publications. Republic Act No. 10175 (Cybercrime Prevention Act) addresses online infringement, with penalties for digital piracy.
Open Access and Creative Commons: Authors may use licenses like Creative Commons to permit certain uses, but these must align with IP Code provisions.
Indigenous Works: Traditional cultural expressions may receive sui generis protection under Republic Act No. 8371 (Indigenous Peoples' Rights Act), affecting contracts involving folklore-derived writings.
Tax Implications: Royalties from IP contracts are subject to withholding tax (10% for residents, 25% for non-residents) under the Tax Code.
Recent Developments: Amendments to the IP Code, such as those under Republic Act No. 10372 (2013), strengthened enforcement against camcording and signal piracy, indirectly benefiting written works adapted into media.

Conclusion

The intellectual property contract laws for written works in the Philippines provide a robust framework that balances creators' rights with public access and commercial exploitation. Authors and contracting parties must craft agreements meticulously to avoid pitfalls, ensuring compliance with the IP Code's mandates on transferability, moral rights, and limitations. As the digital landscape evolves, ongoing vigilance and potential legislative updates will be essential to address emerging challenges like AI-generated content and global licensing. Legal counsel is advisable for drafting and negotiating these contracts to mitigate risks and maximize protections.