Tañada v. Angara G.R. No.

118295 | May 2, 1997

Petitioners: Wigberto Tanada, et al.
Respondents: Edgardo Angara, et al.

Summary: Petitioners assail the constitutionality of the Philippines acceding to the World
Trade Organization for being violative of provisions which are supposed to give preference
to Filipino workers and economy and on the ground that it infringes legislative and judicial
power. The WTO, through it provisions on “most favored nation” and national treatment,
require that nationals and other member countries are placed in the same footing in terms
of products and services. However, the Court brushed off these contentions and ruled that
the WTO is constitutional. Sections 10 and 12 of Article XII (National Economy and
Patrimony) should be read in relation to Sections 1 and 13 (promoting the general welfare).
Also, Section 10 is self-executing only to “rights, privileges, and concessions covering
national economy and patrimony” but not every aspect of trade and commerce. There are
balancing provisions in the Constitution allowing the Senate to ratify the WTO agreement.
Also, the Constitution doesn’t rule out foreign competition. States waive certain amount of
sovereignty when entering into treaties.

Historical Background:
 This case questions the constitutionality of the Philippines being part of the World
Trade Organization, particularly when President Fidel Ramos signed the Instrument
of Ratification and the Senate concurring in the said treaty.
 Following World War 2, global financial leaders held a conference in Bretton Woods
to discuss global economy. This led to the establishment of three great institutions:
International Bank for Reconstruction and Development (World Bank), International
Monetary Fund and International Trade Organization.
 However, the ITO failed to materialize. Instead, there was the General Agreement on
Trades and Tariffs, a collection of treaties on access to economies of treaty
adherents with no institutionalized body administering agreements or dependable
system of dispute settlement. It was on the Uruguay Round of the GATT that the
WTO was then established.
 After decades of negotiations, principally the Kennedy Round, we came up with
WTO, the administering body. The WTO is an institution regulating trade among
nations, including the reduction of tariff and barriers.
 PH joined WTO as founding member, with goal of improving PH access to tariffs on
its exports – agri and indus. Also for opportunities of services sector x x x reduction
of costs and uncertainty in exporting x x x and attraction of investments into country.
PH will also benefit thru independent WTO settlement bodies called (Dispute
settlement panels; (2) appellate tribunal.
 Petitioners filed a case assailing the WTO Agreement for violating the mandate of
the 1987 Constitution to “develop a self-reliant and independent national economy
effectively controlled by Filipinos, to give preference to qualified Filipinos and to
promote the preferential use of Filipino labor, domestic materials and locally
produced goods.”
 It is petitioners’ position that the “national treatment” and “parity provisions” of the
WTO Agreement “place nationals and products of member countries on the same
footing as Filipinos and local products,” in contravention of the “Filipino First” policy
 of the Constitution. They allegedly render meaningless the phrase “effectively
controlled by Filipinos.”

Petition in brief:
1. WTO requires the Philippines to place nationals and products of member-countries
on the same footing as Filipinos and local products
2. WTO intrudes, limits and/or impairs the constitutional powers of both Congress and
the Supreme Court
3. Violating the mandate of the 1987 Constitution to develop a self-reliant and
independent national economy effectively controlled by Filipinos x x x (to) give
preference to qualified Filipinos (and to) promote the preferential use of Filipino
labor, domestic materials and locally produced goods.
4. Petition for Certiorari, prohibition, and mandamus
a. Nullify concurrence of PH Senate (Resolution No. 97, Dec 14, 1994) in
ratification by Pres Ramos of the Agreement Establishing WTO
b. Prohibition of implementation and enforcement thru release and utilization
of public funds, assignment of officials and employees, and use of gov
properties and resources by respondent-heads of various executive offices
concerned.
Facts:
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of the Department of Trade
and Industry (Secretary Navarro, for brevity), representing the Government of the Republic
of the Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the Results of the
Uruguay Round of Multilateral Negotiations (Final Act, for brevity).

By signing the Final Act, Secretary Navarro on behalf of the Republic of the Philippines,
agreed:

(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective
competent authorities, with a view to seeking approval of the Agreement in accordance
with their procedures; and

(b) to adopt the Ministerial Declarations and Decisions.

On August 12, 1994, the members of the Philippine Senate received a letter dated August
11, 1994 from the President of the Philippines, stating among others that the Uruguay
Round Final Act is hereby submitted to the Senate for its concurrence pursuant to Section
21, Article VII of the Constitution.

On August 13, 1994, the members of the Philippine Senate received another letter from the
President of the Philippines likewise dated August 11, 1994, which stated among others that
the Uruguay Round Final Act, the Agreement Establishing the World Trade Organization, the
Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial
Services are hereby submitted to the Senate for its concurrence pursuant to Section 21,
Article VII of the Constitution.
On December 9, 1994, the President of the Philippines certified the necessity of the
immediate adoption of P.S. 1083, a resolution entitled Concurring in the Ratification of the
Agreement Establishing the World Trade Organization.

On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which Resolved, as
it is hereby resolved, that the Senate concur, as it hereby concurs, in the ratification by the
President of the Philippines of the Agreement Establishing the World Trade Organization.
The text of the WTO Agreement is written on pages 137 et seq. of Volume I of the 36-
volume Uruguay Round of Multilateral Trade Negotiations and includes various agreements
and associated legal instruments (identified in the said Agreement as Annexes 1, 2 and 3
thereto and collectively referred to as Multilateral Trade Agreements, for brevity) as
follows:

ANNEX 1

Annex 1A: Multilateral Agreement on Trade in Goods

General Agreement on Tariffs and Trade 1994

Agreement on Agriculture

Agreement on the Application of Sanitary and

Phytosanitary Measures

Agreement on Textiles and Clothing

Agreement on Technical Barriers to Trade

Agreement on Trade-Related Investment Measures

Agreement on Implementation of Article VI of the General Agreement on Tariffs and

Trade 1994

Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994

Agreement on Pre-Shipment Inspection

Agreement on Rules of Origin

Agreement on Imports Licensing Procedures

Agreement on Subsidies and Coordinating Measures

Agreement on Safeguards

Annex 1B: General Agreement on Trade in Services and Annexes

Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights

ANNEX 2

Understanding on Rules and Procedures Governing the Settlement of Disputes

ANNEX 3

Trade Policy Review Mechanism

On December 16, 1994, the President of the Philippines signed the Instrument of
Ratification, declaring:

NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the

Republic of the Philippines, after having seen and considered the
aforementioned Agreement Establishing the World Trade Organization and
the agreements and associated legal instruments included in Annexes one (1),
two (2) and three (3) of that Agreement which are integral parts thereof,
signed at Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm
the same and every Article and Clause thereof.

To emphasize, the WTO Agreement ratified by the President of the Philippines is composed
of the Agreement Proper and the associated legal instruments included in Annexes one (1),
two (2) and three (3) of that Agreement which are integral parts thereof.

On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO
Agreement (and its integral annexes aforementioned) but also (1) the Ministerial
Declarations and Decisions and (2) the Understanding on Commitments in Financial
Services. In his Memorandum dated May 13, 1996, the Solicitor General describes these two
latter documents as follows:

The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a
wide range of matters, such as measures in favor of least developed countries, notification
procedures, relationship of WTO with the International Monetary Fund (IMF), and
agreements on technical barriers to trade and on dispute settlement.

The Understanding on Commitments in Financial Services dwell on, among other things,
standstill or limitations and qualifications of commitments to existing non-conforming
measures, market access, national treatment, and definitions of non-resident supplier of
financial services, commercial presence and new financial service.

On December 29, 1994, the present petition was filed. After careful deliberation on
respondents comment and petitioners reply thereto, the Court resolved on December 12,
1995, to give due course to the petition, and the parties thereafter filed their respective
memoranda. The Court also requested the Honorable Lilia R. Bautista, the Philippine
Ambassador to the United Nations stationed in Geneva, Switzerland, to submit a paper,
hereafter referred to as Bautista Paper, for brevity, (1) providing a historical background of
and (2) summarizing the said agreements.

During the Oral Argument held on August 27, 1996, the Court directed:

(a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy
and (2) the transcript of proceedings/hearings in the Senate; and

(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties
signed prior to the Philippine adherence to the WTO Agreement, which derogate from
Philippine sovereignty and (2) copies of the multi-volume WTO Agreement and other
documents mentioned in the Final Act, as soon as possible.

After receipt of the foregoing documents, the Court said it would consider the case
submitted for resolution. In a Compliance dated September 16, 1996, the Solicitor General
submitted a printed copy of the 36-volume Uruguay Round of Multilateral Trade
Negotiations, and in another Compliance dated October 24, 1996, he listed the various
bilateral or multilateral treaties or international instruments involving derogation of
Philippine sovereignty. Petitioners, on the other hand, submitted their Compliance dated
January 28, 1997, on January 30, 1997.

Issues and Rulings:

Issue 1: Does the petition present a justiciable controversy? YES!

 In seeking to nullify the Senate’s act as being unconstitutional, the petition no doubt
raises a justiciable controversy. When a legislative action is alleged to hae infringed
Consti, it becomes not only the right but in fact the duty of the judiciary to settle the
dispute
 The jurisdiction of this Court raised in petition is set out in the 1987 Const:
o Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government.
o judiciary is the final arbiter on such a question.
 As there is grave abuse, and no other plain or speedy or adequate remedy, we do
not hesitate to hold that this petition should be given due course
 Certiorari, prohibition, and mandamus is the proper remedy for const issues
 Court will not review wisdom of the Pres and Senate in enlisting country in the WTO,
not on the propriety of governments economic policy in reducing/ removing tariffs,
taxes, subsides, quantitative restrictions, etc.

Issue 2: Do the provisions of the WTO Agreement contravene Section 19, Article II and
Section 10 & 12, Article XII of the 1987 Constitution?
 No.
 Petitioners argue that the “letter, spirit and intent” of the Constitution mandating
“economic nationalism” are violated by the so-called “parity provisions” and
“national treatment” clauses scattered in parts of WTO Agreement
o This is in view of the most-favored nation clause (MFN) of the TRIMS (trade-
related investment measures), TRIPS (Trade Related aspects of intellectual
property rights), Trade in Services, and par. 4 of Article III of GATT 1994.
o “shall be accorded treatment no less favorable than that accorded to like
products of national origin”
o The Const provisions referred to are:

Sec. 19, Art II: The State shall develop a self-reliant and independent
national economy effectively controlled by Filipinos.

Sec. 10, Art XII: Congress shall enact measures that will encourage the
formation and operation of enterprises whose capital is wholly owned
by Filipinos. || In the grant of rights, privileges, and concessions
covering the national economy and patrimony, the State shall give
preference to qualified Filipinos.

Sec. 12, Art XII: The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced goods, and
adopt measures that help make them competitive.”

o The violative WTO principles are the ff:

 TRIMS:

Art 2.

1. Without prejudice to other rights and obligations under GATT

1994. no Member shall apply any TRIM that is inconsistent with
the provisions of Article III or Article XI of GATT 1994.

2. An Illustrative list of TRIMS that are inconsistent with the

obligations of general elimination of quantitative restrictions
provided for in paragraph I of Article XI of GATT 1994 is contained
in the Annex to this Agreement. (Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round, Legal Instruments,
p.22121, emphasis supplied).

ANNEX

1. TRIMS that are inconsistent with the obligation of national

treatment provided for in paragraph 4 of Article III of GATT 1994
include those which are mandatory or enforceable under
domestic law or under administrative rulings, or compliance with
which is necessary to obtain an advantage, and which require:
 (a) the purchase or use by an enterprise of products of domestic origin
or from any domestic source, whether specified in terms of
particular products, in terms of volume or value of products, or in
terms of proportion of volume or value of its local production; or

(b) that an enterprises purchases or use of imported products be

limited to an amount related to the volume or value of local
products that it exports.

2. TRIMS that are inconsistent with the obligations of general

elimination of quantitative restrictions provided for in paragraph 1
of Article XI of GATT 1994 include those which are mandatory or
enforceable under domestic laws or under administrative rulings,
or compliance with which is necessary to obtain an advantage,
and which restrict:

(a) the importation by an enterprise of products used in or related to

the local production that it exports;

(b) the importation by an enterprise of products used in or related to

its local production by restricting its access to foreign exchange
inflows attributable to the enterprise; or

(c) the exportation or sale for export specified in terms of particular

products, in terms of volume or value of products, or in terms of a
preparation of volume or value of its local production. (Annex to
the Agreement on Trade-Related Investment Measures, Vol. 27,
Uruguay Round Legal Documents, p.22125, emphasis supplied).

 GATT 1994:

The products of the territory of any contracting party imported into

the territory of any other contracting party shall be accorded
treatment no less favorable than that accorded to like products of
national origin in respect of laws, regulations and requirements
affecting their internal sale, offering for sale, purchase,
transportation, distribution or use. the provisions of this paragraph
shall not prevent the application of differential internal transportation
charges which are based exclusively on the economic operation of the
means of transport and not on the nationality of the product. (Article
III, GATT 1947, as amended by the Protocol Modifying Part II, and
Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation
to paragraph 1(a) of the General Agreement on Tariffs and Trade
1994, Vol. 1, Uruguay Round, Legal Instruments p.177, emphasis
supplied).

 TRIPS (Trade related aspects of intellectual property rights)

 Each Member shall accord to the nationals of other Members
treatment no less favourable than that it accords to its own
nationals with regard to the protection of intellectual property... (par.
1, Article 3, Agreement on Trade-Related Aspect of Intellectual
Property rights, Vol. 31, Uruguay Round, Legal Instruments, p.25432
(emphasis supplied)

 General Agreement on Trade in Services:

National Treatment

1. In the sectors inscribed in its schedule, and subject to any

conditions and qualifications set out therein, each Member shall
accord to services and service suppliers of any other Member, in
respect of all measures affecting the supply of services, treatment
no less favourable than it accords to its own like services and
service suppliers.

2. A Member may meet the requirement of paragraph I by according

to services and service suppliers of any other Member, either
formally identical treatment or formally different treatment to
that it accords to its own like services and service suppliers.

3. Formally identical or formally different treatment shall be

considered to be less favourable if it modifies the conditions of
completion in favour of services or service suppliers of the Member
compared to like services or service suppliers of any other
Member. (Article XVII, General Agreement on Trade in Services,
Vol. 28, Uruguay Round Legal Instruments, p.22610 emphasis
supplied).

o Respondents argue thru OSC:

 Such Charter provisions are not self-executing and merely set out
general policies;
 These nationalistic portions of the Constitution invoked by
petitioners should not be read in isolation but should be related to
other relevant provisions of Art. XII, particularly Secs. 1 and 13
thereof;
 Cited WTO clauses do not conflict with the Constitution;
 WTO Agreement contains sufficient provisions to protect developing
countries like the Philippines from the harshness of sudden trade
liberalization.

 These provisions are not self-executing

o Principles in Art II and some in Art XII Const are not self-executing ready for
enforcement thru Courts.
  Merely guides in the exercise of judicial review and in making laws
(Kilosbayan, Inc. V Morato).
 Broad Const principles need legislative enactments to implement
(Basco V Pagcor).
o We deny cause of action to alleged infringement of broad const principles
because of due process and lack of judicial authority to wade into uncharted
ocean of social and economic policy making. J. Feliciano concurring in Oposa
V Factoran:
 Petitioners must show a more specific, operable legal right then an
appeal const or statutory policy. Why?
 Defendants may not be able to defend themselves intelligently
and effectively
 When a violation is not proved, petitioners can be expected to
fall back on the expended conception of judicial power in Art
VIII Sec 1 Par 2:

When substantive standards as general as the right to a balanced and

healthy ecology and the right to health are combined with remedial
standards as broad ranging as a grave abuse of discretion amounting
to lack or excess of jurisdiction, the result will be, it is respectfully
submitted, to propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area of
environmental protection and management, our courts have no claim
to special technical competence and experience and professional
qualification. Where no specific, operable norms and standards are
shown to exist, then the policy making departments -- the legislative
and executive departments -- must be given a real and effective
opportunity to fashion and promulgate those norms and standards,
and to implement them before the courts should intervene.

 Economic Nationalism Should Be Read with Other Constitutional Mandates to

Attain Balanced Development of Economy.
o Secs. 10 and 12 of Article XII should be read and understood in relation to the
other sections in said article, especially Sec. 1 and 13:

Section 1. The goals of the national economy are a more equitable

distribution of opportunities, income, and wealth; a sustained increase
in the amount of goods and services produced by the nation for the
benefit of the people; and an expanding productivity as the key to
raising the quality of life for all, especially the underprivileged.

The State shall promote industrialization and full employment based

on sound agricultural development and agrarian reform, through
industries that make full and efficient use of human and natural
resources, and which are competitive in both domestic and foreign
markets. However, the State shall protect Filipino enterprises against
unfair foreign competition and trade practices.
 In the pursuit of these goals, all sectors of the economy and all regions
of the country shall be given optimum opportunity to develop.

xxxxx

Sec. 13. The State shall pursue a trade policy that serves the general
welfare and utilizes all forms and arrangements of exchange on the
basis of equality and reciprocity.

As pointed out by the Solicitor General, Sec. 1 lays down the basic
goals of national economic development, as follows:

1. A more equitable distribution of opportunities, income and wealth;

2. A sustained increase in the amount of goods and services
3. An expanding productivity as the key to raising the quality of life

o Const ordains ideals of economic nationalism by:

 Preference in favor of qualitied Fils. In grant of rights, privileges,
concessions on national economy and patrimony, and use of Fil labor,
domestic materials and locally-produced goods
 State to adopt measures that help make them competitive
 State to adopt self-reliant and independent national economy
controlled by Fils. Const to take into account realities of outside world
by requiring pursuit of trade policy that serves on general welfare
thru all forms and arrangements of exchange on basis of equality and
reciprocity.
o Manila Prince Hotel: Art XII Sec 10 par 2 is a mandatory command that needs
to further guidelines or implementing rules for enforcement. It is judicially
enforceable. BUT, it is enforceable ONLY in regard to grants and rights,
privileges, and concessions on national economy and patrimony, NOT every
aspect of trade and commerce.
o The issue here is not whether this paragraph of Sec. 10 of Art. XII is self-
executing or not. Rather, the issue is whether, as a rule, there are enough
balancing provisions in the Constitution to allow the Senate to ratify the
Philippine concurrence in the WTO Agreement. And we hold that there are.
o There is a bias for Fil, but we recognize the need for international business
exchange, and limits are only on unfair competition. We do not have an
isolationist policy – we do not shut out foreign investments, goods, and
services. Const also discourages unlimited importation – has to be on basis of
equality and reciprocity.
 WTO Recognizes Need to Protect Weak Economies
o Unlike in the UN where major states have permanent seats and veto powers
in the Security Council, in the WTO, decisions are made on the basis of
sovereign equality, with each member’s vote equal in weight.
 WTO decides by consensus – 2/3s vote
 MFN amendments require assent of all members
  Any member may withdraw from Agreement after 6 months.
o Poor countries can protect their common interests more thru WTO than 1-1
negotiations with developed countries.

The Parties to this Agreement,

Recognizing that their relations in the field of trade and economic

endeavour should be conducted with a view to raising standards of
living, ensuring full employment and a large and steadily growing
volume of real income and effective demand, and expanding the
production of and trade in goods and services, while allowing for the
optimal use of the worlds resources in accordance with the objective
of sustainable development, seeking both to protect and preserve the
environment and to enhance the means for doing so in a manner
consistent with their respective needs and concerns at different levels
of economic development,

Recognizing further that there is need for positive efforts designed to

ensure that developing countries, and especially the least developed
among them, secure a share in the growth in international trade
commensurate with the needs of their economic development,

Being desirous of contributing to these objectives by entering into

reciprocal and mutually advantageous arrangements directed to the
substantial reduction of tariffs and other barriers to trade and to the
elimination of discriminatory treatment in international trade
relations,

Resolved, therefore, to develop an integrated, more viable and

durable multilateral trading system encompassing the General
Agreement on Tariffs and Trade, the results of past trade liberalization
efforts, and all of the results of the Uruguay Round of Multilateral
Trade Negotiations,

Determined to preserve the basic principles and to further the

objectives underlying this multilateral trading system, x x x.
(underscoring supplied.)

 Specific WTO Provisos Protect Developing Countries

o GATT Tariff reduction – developed countries must reduce at rate of 36% in 6
years; developing, 24% in 10 years
o GATT Domestic subsidy – developed countries must reduce 20% over six (6)
years, developing countries at 13% in 10 years
o Export subsidy – developed countries, 36% in 6 years; developing countries,
3/4ths of 36% in 10 years
o GATT has built-in protection from unfair foreign competition and trade:
  Anti-dumping measures, countervailing jeopardized by unfair foreign
competition.
o No basis that developing countries will lose control of economy. Weaker
situation of developing nations were considered.
o The Court will not pass upon the advantages and disadvantages of trade
liberalization as an economic policy. It will only perform its constitutional
duty of determining whether the Senate committed grave abuse of discretion
 Constitution Does Not Rule Out Foreign Competition
o Encourages industries that are competitive in both domestic and foreign
markets, for the gradual development of robust industries that can compete
with best foreign markets.
 Fil workers show capability and tenacity to compete internationally.
 Fil managers and entrepreneurs in Hongkong show potential under
laissez fair.
o Const. Commissioner Bernardo Villegas:

Economic self-reliance is a primary objective of a developing country

that is keenly aware of overdependence on external assistance for
even its most basic needs. It does not mean autarky or economic
seclusion; rather, it means avoiding mendicancy in the international
community. Independence refers to the freedom from undue foreign
control of the national economy, especially in such strategic industries
as in the development of natural resources and public utilities.

 Constitution favors consumers, not industries of enterprises.

o WTO/GATT aims to make available to Fil consumer best goods and services
obtainable anywhere in the world at most reasonable prices.
o Will WTO/GATT favor the general welfare of the public at large? Will this be
reality? Will it succeed in bringing prosperity, employment, purchasing power
and quality products at reasonable rates in PH?
 Answers here involve policy makers who are answerable to the
people during electoral exercises. Not Court.
 The constitution designed to meet future events and contingencies
o Even tho WTO Agreement was not yet existent when Const was ratified in
1987, does not mean the Const is flawed that its framers might not have
anticipated international business trades.
o They should be interpreted to cover even future and unknown
circumstances. It is to the credit of its drafters that a Constitution can
withstand the assaults of bigots and infidels but at the same time bend with
the refreshing winds of change necessitated by unfolding events

[incomplete]***Issue 3: Do the provisions of said agreement and its annexes limit,

restrict, or impair the exercise of legislative power by congress?
 A portion of sovereignty may be waived without violating the Constitution.
 While sovereignty has traditionally been deemed absolute and all-encompassing on
the domestic level, it is however subject to restrictions and limitations voluntarily
 agreed to by the Philippines, expressly or impliedly, as a member of the family of
nations.
 The sovereignty of a state therefore cannot in fact and in reality be considered
absolute. Certain restrictions enter into the picture: limitations imposed by the
nature of membership in the family of nations & limitations imposed by treaty
stipulations.

Issue 4: Do said provisions unduly impair the exercise of judicial power by this court in
promulgating rules on evidence? NO.
 Petitioners: Art 34 Par 1 of General Provisions and Basic Principles of the Agreement
on Trade-Related Aspects of Intellectual Property Rights (TRIPS) intrudes SC power to
promulgate rules concerning pleading, practices, procedures.

Process Patents: Burden of Proof

For the purposes of civil proceedings in respect of the infringement of
the rights of the owner referred to in paragraph 1(b) of Article 28, if
the subject matter of a patent is a process for obtaining a product, the
judicial authorities shall have the authority to order the defendant to
prove that the process to obtain an identical product is different from
the patented process. Therefore, Members shall provide, in at least
one of the following circumstances, that any identical product when
produced without the consent of the patent owner shall, in the
absence of proof to the contrary, be deemed to have been obtained by
the patented process:

(a) if the product obtained by the patented process is new;

(b) if there is a substantial likelihood that the identical product was

made by the process and the owner of the patent has been unable
through reasonable efforts to determine the process actually used.

2. Any Member shall be free to provide that the burden of proof

indicated in paragraph 1 shall be on the alleged infringer only if the
condition referred to in subparagraph (a) is fulfilled or only if the
condition referred to in subparagraph (b) is fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests of

defendants in protecting their manufacturing and business secrets
shall be taken into account.

 WTO members are required to provide rule of disputable presumption that a

product shown to be identical to patented ones are illegal;
o APPLIES ONLY (Where either of these two provisos does not obtain, members
shall be free to determine the appropriate method of implementing the
provisions of TRIPS within their own internal systems and processes):
 Where such product obtained by patented product is new
  Where there is substantial likelihood that the identical product was
made with use of patented process, but owner could not determine
exact process used.
o Burden of proof:
 Burden of proof is on alleged patent infringer to overthrow such
presumptions.
 Patent owner still has burden to introduce evidence of existence of
the alleged identical product.
 The foregoing should be no problem in changing rules of evidence, since Republic
Act 165 (Patent Law), provides similar presumption.

SEC. 60. Infringement. - Infringement of a design patent or of a patent

for utility model shall consist in unauthorized copying of the patented
design or utility model for the purpose of trade or industry in the
article or product and in the making, using or selling of the article or
product copying the patented design or utility model. Identity or
substantial identity with the patented design or utility model shall
constitute evidence of copying. (underscoring supplied)

Issue 5: Were the concurrence of the senate in the WTO agreement and its annexes
sufficient and/or valid, since it did not include the Fina Act, Ministerial Declarations and
Decisions, and the Understanding on Commitments in Financial Services?
 Petitioners: Senate concurrence in WTO (not other documents in Final Act – the
Ministerial Declaration and Decisions and the Understanding on Commitments in
Financial Services) is defective and insufficient, and abuse of discretion.
o It rejects the Final Act that is signed by Sec Navarro.
o The 2nd letter of the Pres to Senate explaining the Final Act should have been
the subject of the Senate concurrence.
 Final Act: Protocol de clture - They should be interpreted to cover even future and
unknown circumstances. It is to the credit of its drafters that a Constitution can
withstand the assaults of bigots and infidels but at the same time bend with the
refreshing winds of change necessitated by unfolding events.
o By signing Final Act, Sec. Navarro undertook:
(a) to submit, as appropriate, the WTO Agreement for the
consideration of their respective competent authorities with a view
to seeking approval of the Agreement in accordance with their
procedures
(b) to adopt the Ministerial Declarations and Decisions
o Assailed Senate Resolution No. 97 is concurrence in the Final Act
o Ministerial Declarations and Decisions were deemed adopted without need
of ratification, by virtue of Art XXV of GATT
o Understanding on Commitments in Financial Services also approved in
Marrakesh does not apply to the Philippines. It applies only to those 27
Members which have indicated in their respective schedules of commitments
on standstill, elimination of monopoly, expansion of operation of existing
financial service suppliers, temporary entry of personnel, free transfer and
processing of information, and national treatment with respect to access to
 payment, clearing systems and refinancing available in the normal course of
business.
 Senate was well aware of what it was concurring as shown in members deliberation
in Aug. 25, 1994. After reading Pres.’ letter dated Aug. 11, 1994, senators of Republic
dissected the concurred subject.

SEN. TAADA: Thank you, Mr. Chairman.

Based on what Secretary Romulo has read, it would now clearly

appear that what is being submitted to the Senate for ratification is
not the Final Act of the Uruguay Round, but rather the Agreement on
the World Trade Organization as well as the Ministerial Declarations
and Decisions, and the Understanding and Commitments in Financial
Services.

I am now satisfied with the wording of the new submission of

President Ramos.

SEN TOLENTINO, Mr. Chairman, I have not seen the new submission
actually transmitted to us but I saw the draft of his earlier, and I think
it now complies with the provisions of the Constitution, and with the
Final Act itself. The Constitution does not require us to ratify the Final
Act. It requires us to ratify the Agreement which is now being
submitted. The Final Act itself specifies what is going to be submitted
to with the governments of the participants.

In paragraph 2 of the Final Act, we read and I quote:

By signing the present Final Act, the representatives agree: (a) to

submit as appropriate the WTO Agreement for the consideration of
the respective competent authorities with a view to seeking approval
of the Agreement in accordance with their procedures.

In other words, it is not the Final Act that was agreed to be submitted
to the governments for ratification or acceptance as whatever their
constitutional procedures may provide but it is the World Trade
Organization Agreement. And if that is the one that is being submitted
now, I think it satisfies both the Constitution and the Final Act itself.

SEN. GONZALES. Mr. Chairman, my views on this matter are already a

matter of record. And they had been adequately reflected in the
journal of yesterdays session and I dont see any need for repeating the
same.

Now, I would consider the new submission as an act ex abudante

cautela.
SEN. LINA. Mr. President, I agree with the observation just made by
Senator Gonzales out of the abundance of question. Then the new
submission is, I believe, stating the obvious and therefore I have no
further comment to make.