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Patently absurd

"This company’s utility model is questionable because it is absolutely not new."


No vaccines, no MGCQ (Modified General Community Quarantine), President Duterte said, giving priority to public health over reopening the economy amid uptick of cases. He is right in quashing a recommendation to place the entire country, including regions with high COVID-19 cases like Metro Manila, under the least restrictive of four quarantine levels.

Despite the recommendations of the President’s economic team, nine out of 17 Metro Manila mayors recommending a shift from GCQ (General Community Quarantine) to MGCQ in a bid to revive the economy which has been devastated by the COVID-19 pandemic, Duterte used logic and reason by prioritizing the safety and health of the nation.

The President also said that the nation was not ready to allow face-to-face classes.

We can understand the need to jumpstart the economy by putting us under the least restrictive community quarantine, but as the President said public health and safety of Filipinos comes first. In other words, there is time for everything.

In the case of face-to-face classes there is great danger, my gulay, of exposing students and teachers to COVID-19 cases!

But, Santa Banana, when will the vaccines come? If Duterte is getting impatient, so are we.

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Patents and intellectual property (IP) has often been a hot topic in Southeast Asia, especially in the Philippines. At the beginning of 1990, a smaller version of ASEAN we know today consisted of countries of rather equal levels of IP protection. 

Nowadays, we have countries like the city-state of Singapore, where there are very strict IP laws and enforce them as needed - and Indonesia, where IP is not as big a concern as, let’s say, political upheaval.

The Philippines is an amazing test case of IP rights, because on paper, we are doing everything right. We have IP courts, we have the means for enforcement, we have business registration filters in the Department of Trade and Industry, and Securities and Exchange Commission and so on. However, we also have “dibidi,” Adobo Photoshop, Si Ben Eleven, and so on. 

The sheer number of IP laws seem to be directly proportional to the actual instances of IP violations. Perhaps, my gulay, many IP laws have, like Winston Churchill and Tacitus warned, desensitized us to the spirit behind IP laws.

For the most part, especially in the realm of Financial Technology (fintech), IP laws are rigidly enforced because the nature of the products and solutions that require protection and solutions have to do with big amounts of money. Yet, there are nevertheless cases that crop up once in a while, leaving you scratching your head at how absurd some people can get.

MEPS TouchPay, the operator and electronic collection system, accused similar collection system companies BTI Payments Philippines and Electronic Transfer & Advance Processing (eTap) for Utility Infringement and Unfair Competition. Touchpay alleged that the designs were too similar and might confuse users. 

They had the National Bureau of Investigation - Intellectual Property Rights Division (NBI-IPRD) seize BTI and eTap machines. Fortunately, for BTI and eTap, the office of the Prosecutor of Manila summarily threw out the cases as TouchPay failed to show much evidence or merit in their arguments.

The whole issue raised by this case revolves around the utility model registered to Angelo Huang, with no mention of TouchPay whatsoever, which sought IP protection for the “method of remitting payment through an automated payment machine.”

The steps outlined in the method were 1) Choose a service provider. 2) Provide details of payments. 3) Remit payments. 4) Validate payments. 5) Accept Payments. 6) Issue confirmation of payment.

My gulay! It’s the same model that literally every single other bank uses when I go to pay my bills. There is literally no difference, ever for the fact that other financial institutions seem to be more above-board than TouchPay. But, I’m getting ahead of myself. There is a lot to unpack here. 

Firstly, what is a utility model? In the Philippines, it is an intellectual property right similar to a patent that lasts for only seven years and has a faster application process and less stringent requirements. According to the Intellectual Property Office of the Philippines (IPOPHL), it is registrable to “any technical solution of a problem in any field of human activity which is new and industrially applicable.” 

TouchPay’s utility model is therefore questionable because it is absolutely not new. Automated payments of deposits have been around since the 1930s, when the food and drink dispenser “Vendo” sold packages of snacks and cups of coffee (hence, vending machines). Automated Teller Machines (ATMs) have been around since the 1970s, with Cash Acceptance Machines (CAMs) existing not long after. 

What’s more, these interfaces are used all around the world, especially by banking and financial institutions. Similar interfaces exist in the retail space, such as the CLIQQ machines in various convenience stores that are used for bill payments and cash-in/out processes for GCash and PayMaya.

Not only do I find it curious that a utility model was granted for a universal process and interface that violates Section 109.1 of the Intellectual Property Code (RA 8293) namely the fact that it must be a new solution, but it is clearly stated in Section 22.3 of the same Act that utility models cannot be registered to “Methods of ….doing business, and programs for computers.”

What else are these payment machines if not exactly a method of payment to businesses, which arguably is a method of payment doing business - and a computer program? A little sleuthing only also reveals that TouchPay may not even have developed its own program. 

A software development for payment systems, banks, and billing centers called “Soft-logic,” a website hosted in Russia, has TouchPay listed as a customer. The website states that TouchPay “uses capabilities of Paylogic processing center (SIC) to provide payments for utility services, cellular operators, public services, insurance, education services, loans, and a large number of other services.”

The description goes in to say TouchPay “is one of the largest payment networks in the Asian region, and includes a number of exclusive local services that can be paid only at the network of TouchPay, payment kiosks.”

What are these exclusive services? TouchPay alleged they provide exclusive rights to refill the balance of the “Globe Telecom operator” through its payment kiosks in the Philippines. Santa Banana, does this imply that every single GCash location save for a TouchPay terminal, is in danger of receiving a nasty surprise from the NBI-IPRD?

This latest discovery about the program now being developed by TouchPay is particularly irksome, because it comes off to me like they have the temerity to file utility models of an existing technology and on top of that, did not even build the system they themselves are using. A slap on the face of BTI and eTap, that signed a Memorandum of Agreement in order to franchise and use a system that was just bought from somewhere else.

Lastly, this may just be splitting hairs, the law uses the term “utility model,” not “utility model patent.” The two are distinct and different from each other, yet TouchPay once again seems to be stretching the truth by calling itself the only “patented” payment system in the Philippines on their literature and social media.

While all this is enough to make a person only pay via non-TouchPay terminals from now, I would like to end this column with a somewhat smug note: as the utility model at the heart of this patently absurd series of events was filled in 2014, this year marks the end of its protection under IP law - according to RA 8293, there is no possibility of renewal, my gulay!

Topics: Vaccine , Rodrigo Duterte , Modified General Community Quarantine , TouchPay , Patent
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