PHILIPPINES Law and Practice Contributed by: Mark Leo Bejemino, Maria Patricia Cruz and Edward King Chua, Villaraza & Angangco
loss suffered. Temperate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can ‑ not, from the nature of the case, be provided with certainty. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. Exemplary or corrective damages are imposed by way of example or correction for the pub ‑ lic good, in addition to moral, temperate, liquidated or compensatory damages. The primary considerations when determining and computing damages are lost profits, reasonable roy ‑ alty or account of profits. • Lost profits are calculated based on the amount the patentee would have earned if the infringement had not occurred, typically by comparing the sales made by the infringer to what the patentee would have earned. • Reasonable royalty is based on a hypothetical negotiation between the parties and determines what the infringer would have paid if they had licensed the patent. • Account of profits requires the infringer to pay the profits they earned from using the patented inven ‑ tion. If the patentee/exclusive licensee has no competing product, lost profits might not be an option, and dam ‑ ages are more likely calculated via reasonable royalty or account of profits. In the pharma, biopharma and medical device indus ‑ tries, damage awards are primarily calculated based on lost profits and royalty. These methods aim to compensate the patentee or exclusive licensee for the harm caused by the infringement, particularly in cas ‑ es where the infringement has resulted in lost market share or sales. Special awards like treble damages for wilful infringement are not automatically available in the Philippines, but courts may award such damages in cases of wilful infringement, based on the severity of the infringement or the infringer’s conduct. While such treble damages are rare, the court has the dis ‑ cretion to increase the damages up to three times the
actual or compensatory damages if the infringement was egregious or carried out in bad faith. No damages can be recovered for acts of infringement committed more than four years before the institu ‑ tion of the action for infringement. Moreover, dam ‑ ages cannot be recovered for acts of infringement committed before the infringer knew of the patent, or had reasonable grounds to know of it. It is presumed that the infringer had known of the patent if the words “Philippine Patent” with the number of the patent are placed on the patented product, or on the container or package in which the article is supplied to the public, or on the advertising material relating to the patented product or process. Interest on the damages accrues only when the judg ‑ ment of the court awarding a sum of money becomes final and executory. The rate of legal interest shall be 6% per annum from such finality until its satisfaction, with this interim period being deemed to be by then an equivalent to a forbearance of credit. In the context of criminal and civil cases, damages refer to monetary compensation awarded to an injured party for harm caused by a wrongful act. Civil dam ‑ ages are typically considered in a separate quantum hearing after the court has determined liability in the trial. These damages are aimed at compensating the injured party for actual loss, moral suffering or oth ‑ er damages arising from the defendant’s wrongful conduct. The prosecution of a criminal case in the Philippines typically includes the civil aspect for the recovery of damages by the offended party, unless the injured party chooses to waive their claim for damages or opts to file a separate civil action for damages. Criminal damages typically include penalties such as fines or imprisonment, whereas civil damages focus on compensating the injured party. Moreover, an alleged infringer who was later declared not to be an infringer may claim damages from the complainant, provided this is one of the resolutions it sought in its answer. Lastly, third parties are generally not allowed to claim damages in proceedings to which they are not a party. In such cases, they cannot simply join an ongoing
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