Reforming the courts

A FORUM on “Speedy Trial and Court Decongestion Issues” will be sponsored by the Financial Executives Institute of the Philippines (FINEX) on July 3 at the Tower Club in Makati City.

Keynoted by Supreme Court Justice Diosdado M. Peralta, the breakfast forum is co-presented by the Judicial Reform Initiative, the Management Association of the Philippines, and the Institute of Corporate Directors. A limited number of participants can beACCOMMODATEDon a first come, first served basis. For registration, email crsalazar@finex.org.ph or call Cherry Basilio of the FINEX Secretariat at 811-4188.

This forum’s topic is very timely due to the massive number of unresolved cases in Philippine courts. For a country where the wheels of justice grind notoriously slow, unclogging the court dockets should be top priority of our judiciary.

In 2013, Supreme Court Chief Justice Maria Lourdes A. Sereno was the guest speaker at a general membership meeting of FINEX. At that time, she said the backlog in the lower courts was more than 600,000 cases, and she vowed to reduce this level by 30-50% over the next five years.

That same year, the National Statistical Coordination Board (now under the Philippine Statistics Authority) revealed the heavy caseload of regional, metropolitan, and municipal trial courts had reached 1,059,484 cases annually or an average of 4,221 cases per working day. Meanwhile, the number of judges in more than 2,000 lower courts nationwide has been decreasing, with their annual vacancy rate averaging 24.3%.

There’s no available data yet on the current status of pending cases in the judiciary, although Ms. Sereno has been pushing for the eCourt or electronic court program to automate the trial courts. Pilot testing is still being conducted in the regional and metropolitan trial courts of Quezon City, aimed to speed up the delivery of justice by reducing case processing time, eliminating sources of graft, and improving public access to court performance information.

Leslie Chew, a former senior district judge in Singapore’s subordinate courts, was a recent Manila visitor. After heading the civil justice division of the State Courts of Singapore, he joined KhattarWong law firm as senior counsel for its litigation and dispute resolution department.

As an advocate of international arbitration, Mr. Chew has participated in cases brought before the International Chambers of Commerce, the Singapore International Arbitration Center, and the United Nations Commission on International Trade Law. He also believes in alternative dispute resolution as an effective tool to decongest the judicial system.

I learned from him that Singaporean courts used to have a heavy caseload problem. Before Lee Kuan Yew appointed lawyer-banker Yong Pung How as Chief Justice of Singapore in 1990, it took six to seven years on the average for cases to get resolved in the subordinate courts. During his 16-year stint, Mr. Yong implemented reforms that drastically reduced the backlog of cases, including aggressive case management, non-adversarial court mediation, and extensive computerization.

Arbitration has been gaining ground in the Philippines since the passage of Republic Act (RA) No. 9285, otherwise known as the Alternative Dispute Resolution Law of 2004. Today, the arbitration practice in the country can be ad hoc, institutionalized, or specialized. 

For ad hoc arbitration, RA 9285 grants disputing parties the right to select arbitrators and to choose procedures that would govern the proceedings.

Publicly-listed company DFNN Inc. recently won in the arbitration proceedings it initiated against state-run Philippine Charity and Sweepstakes Office (PCSO). The case stemmed from PCSO’s termination of its equipment lease agreement (ELA) with DFNN in 2005. Pursuant to the ELA signed in 2003, PCSO had agreed to exclusively lease from DFNN the equipment and technology to design and develop a system for acceptance and processing of bets from personal communication device users nationwide.

An ad hoc arbitration panel composed of lawyers Victor N. Alimurung, Fulgencio S. Factoran, and Jose Tomas C. Syquia ruled that PCSO improperly terminated the ELA on misplaced or unfounded grounds, and ordered the government agency to pay DFNN the amount of P27 million in damages. The ELA would have enabled DFNN to provide wireless technology for lotto betting.

DFNN President Ramon C. Garcia, Jr. expressed his willingness to work with the incumbent PCSO management led by its new Chair Erineo S. Maliksi. “We would like to reiterate our commitment to partner with the PCSO in the critical task of nation building,” he said.

The result of this arbitration is indeed a triumph of the rule of law, thereby showcasing the transparency of the judicial system under the present dispensation.

J. ALBERT GAMBOA is chief financial officer of Asian Center for Legal Excellence and Senior Advisor of KSearch Asia Consulting, Inc.

source:  Businesworld - 

FINEX FOLIO
J. ALBERT GAMBOA

Enterprises need to fully use the function of trademarks

The contribution of micro-, small and medium enterprises (MSMEs) to our economy cannot be gainsaid. In the 2014-2015 Global Competitiveness Report of the World Economic Forum, we ranked 52 out of the 144 countries surveyed. Although we are behind our ASEAN neighbors Singapore (2), Malaysia (20), Thailand (31), and Indonesia (34), the study took note that the Philippines’ “gain of 33 places since 2010 is the largest” among all the 144 countries surveyed. It said that the main strengths of our “leapfrog” in the rankings lie in a sound macroeconomic environment, the size and sophistication of the market, and increasing efficiency and conduciveness of the finance sector to business activities. The Philippines has now been called a “breakout nation,” and is poised to be the new global economic miracle.

Based on statistics from the Department of Trade and Industry (DTI), there are around 780,000 business enterprises operating in the Philippines, with 96% or approximately 777,000 classified as MSMEs. Only around 3,000 are operating as large companies. Out of those 777,000 MSMEs, 92% or around 710,000 are categorized as micro-enterprises. A majority of the MSMEs are engaged in wholesale and retail (386,000); followed by manufacturing (112,000); hotels & restaurants (97,000); real estate & renting activities (47,000); and other community, social and personal services (44,000). In terms of employment, MSMEs generated more than 3.5 million jobs versus the two million jobs generated by large companies. Moreover, 25% of the country’s export revenues are attributable to MSMEs, with around 60% of the country’s exporters classified as MSMEs.

The government continues to create an environment conducive to the establishment and operation of MSMEs, what with the two primary laws that govern and regulate the promotion of MSMEs -- Republic Act No. 6977 or the Magna Carta for Small Enterprises (which was amended by Republic Act No. 8289), and Republic Act No. 9178 or the Barangay Micro Business Enterprises Act of 2002.

RA 9178 redefined the classification of business enterprises registered and operating in the Philippines as follows: (a) micro-enterprise, where capitalization does not exceed P3 million; (b) small enterprise, with a capitalization that exceeds P3 million but not more P15 million; (c) medium enterprise, with a capitalization that is more than P15 million but does not exceed P100 million; and (d) large enterprise, where capitalization is more than P100 million.

The law also encourages the promotion of micro-enterprises by extending fiscal and non-fiscal incentives (e.g., income tax exemption, exemption from the coverage of the minimum wage law, priority to a special window setup, technology transfer, production and management training, and marketing assistance programs).

RA 6977 mandates the government to help MSMEs by creating a conducive business environment, improving access to financing, providing adequate business support, providing training on entrepreneurship and worker skills, providing effective linkages between MSMEs and large companies, and strengthening government-private sector partnership. To oversee the programs for MSMEs, the MSME Development Council was created. The council developed the MSMED Plan 2011-2016, which serves as the blueprint for all projects geared toward the development of the MSMEs.

As a majority of the MSMEs are involved in wholesale/retail and service-oriented industries, effective branding/marketing strategies are essential. Data derived from the Intellectual Property Office of the Philippines (IPO) reveals a steady increase in the number of trademark applications filed by local owners -- from 7,048 in 2005 to 10,572 in 2011. In terms of our competitiveness ranking in the report, we ranked well in intellectual property protection at 87, as opposed to Thailand’s 101 and Vietnam’s 123.

The success story of Jollibee is a clear testament that the development of a sound brand strategy plays a crucial role in one’s business. Unfortunately, not all Filipino entrepreneurs possess this knowledge, or even how to pick the appropriate trademark for one’s goods and services. Not many local businessmen know that a trademark registration issued by the IPO is different from a business name registration issued by the DTI and from a corporate name registration issued by the SEC. More importantly, not many local entrepreneurs are aware that in the hierarchy of property rights, trademark protection is placed on a higher tier than the protection extended to a corporate name registration and business name registration.

With respect to choosing the correct brand, one must consider the brand or “look” that will come to carry not only the goods or services but the whole business as well. Factors such as availability for use in commerce, availability for registration, and inherent registrability of the chosen brand must be taken into account. One should conduct a trademark availability search using, among others, the publicly available searching tools of the IPO. Also, hiring the services of an intellectual property lawyer may be useful in order to secure a more informed opinion regarding a chosen brand or logo. These costs entailed during the initial business development stages may prove to be justified if, in the long run, litigation for trademark infringement, unfair competition, trademark opposition/cancellation cases are avoided, which are definitely more expensive and cumbersome.

Choosing the “right” brand is only half of the promise of success; how to market or make “notorious” one’s chosen brand is another matter. The traditional way of securing trademark registration from the IPO may not suffice to accommodate the marketing strategies available nowadays. With the prevalence of online and mobile communications, “going online” and “going mobile” are the way to go. In the report, the Philippines ranks better with most of its ASEAN neighbors in terms of degree of customer orientation (25) and availability of latest technologies (58). Coming up with a catchy Web site address (or domain name) and securing domain name registration are now business necessities. Moreover, apart from a regular trademark registration from the IPO and domain name registration secured from the domain name registry, one can also seek further registration of the same trademark as an Internet domain name also from the IPO. This type of IPO registration follows the same procedure as that of a regular trademark application filed with the IPO, only that the process is faster.

Opportunities for success among local MSMEs are limitless, provided that the foundation of sound business tools are laid early on. Selecting the right trademark to identify one’s business, goods and services is one of the factors toward attaining sustainability of any commercial undertaking. This promise of success to Filipino entrepreneurs is bright, especially to those who realize the importance of sound branding.

John Paul M. Gaba is a partner of the Intellectual Property Department of the Angara Abello Concepcion Regala & Cruz Law Offices.

jmgaba@accralaw.com

source:  Businessworld

EDITORIAL - A national embarrassment

Perhaps it’s better late than never, but it’s still dismaying to learn that it took 43 years to resolve a graft case in this country. The four public officials indicted are dead, prompting the Sandiganbayan to dismiss the graft case against them involving P71 million in behest loans granted by the Philippine National Bank during the Marcos dictatorship.

The three private defendants, meanwhile, can still appeal their conviction and sentence of six to 10 years. Will it take another 43 years before this case is resolved with finality? By that time, Integrated Shoes Inc. executives Leticia Teodoro, Marfina Singian and Gregorio Singian would surely have joined their deceased co-accused, PNB officials Domingo Ingco, Constantino Bautista and Tomas Teodoro.

Perhaps the martial law regime prevented the early prosecution and trial of the accused. But the case should firm up the resolve of those in charge of supervising the courts to overhaul the administration of justice. The lethargic pace of Philippine justice has become a national embarrassment.

Donor countries and multilateral agencies can be tapped for aid if funding is needed; several in fact have existing aid programs for Philippine judicial reform. A number of these donors have a direct stake in seeing improvements in the administration of justice; their investors complain about the problems that arise from dealing with a weak and arbitrary justice system in the Philippines. Failure of justice also breeds impunity among criminals and inspires short cuts to law enforcement.

In reforming the justice system, those in charge need not reinvent the wheel. Templates abound and there are enough models to serve as inspiration. Many countries, including several developing economies, have efficient and credible justice systems. Potential areas of delay are resolved before a case is brought to trial. Measures are implemented to discourage dilatory tactics and sanctions imposed for deliberately protracting litigation. If other countries can do it, there’s no reason why the Philippines can’t.

source:  Philippine Star