I. Introduction

This memorandum provides an exhaustive analysis of the rule on patentable inventions under Philippine mercantile law, with a specific focus on the requirement of inventive step. The primary governing statute is Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines (the “IP Code“). The grant of a patent is a territorial right that provides the patentee with the exclusive right to exclude others from making, using, selling, or importing the invention for a limited period. For an invention to be considered patentable, it must satisfy the four substantive conditions set forth in Section 21 of the IP Code: it must be (1) a technical solution to a problem in any field of human activity; (2) new; (3) involves an inventive step; and (4) industrially applicable. This memo will dissect these requirements, with particular emphasis on the often-contested element of inventive step, its interpretation by the Intellectual Property Office of the Philippines (the “IPO“) and the courts, and its practical implications for inventors and businesses.

II. Legal Framework and Definition of a Patentable Invention

The foundational provision is Section 21 of the IP Code, which states: “Any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable shall be patentable. It may be, or may relate to, a product, or process, or an improvement of any of the foregoing.” This definition establishes a broad scope for patentable subject matter, centered on the concept of a technical solution. The law explicitly excludes certain subject matters from patentability under Sections 22 and 23, including discoveries, scientific theories, mathematical methods, schemes, rules and methods of doing business, and treatments of the human or animal body. The IP Code implements the patent system as an instrument of national development, aiming to promote innovation, transfer technology, and attract investments.

III. The Element of Novelty

Novelty is the first gatekeeper of patentability. Section 23 of the IP Code provides that an invention shall not be considered new if it forms part of a prior art. Prior art is defined under Section 24 as consisting of “everything which has been made available to the public anywhere in the world, before the filing date or the priority date of the application claiming the invention.” This establishes an absolute worldwide novelty standard. The disclosure can be in written, oral, or through use. Crucially, the IP Code provides for a grace period of twelve (12) months under Section 25, wherein disclosure by the inventor shall not prejudice patentability if the application is filed within that period. The examination for novelty involves a comparison of the claimed invention with a single piece of prior art to determine if all its elements are anticipated.

IV. The Core Requirement: Inventive Step

The requirement of inventive step is the most critical and subjective criterion for patentability. Section 26 of the IP Code defines it: “An invention involves an inventive step if, having regard to prior art as defined in Section 24, it is not obvious to a person skilled in the art at the time of the filing date or priority date of the application claiming the invention.” This provision establishes a three-part test: (1) identification of the relevant prior art; (2) determination of the person skilled in the art; and (3) assessment of whether the claimed invention would have been obvious to that person at the relevant time. The inventive step inquiry asks whether the difference between the claimed invention and the prior art involves a degree of ingenuity that transcends the ordinary skill and common knowledge in the field. It is not satisfied by mere workshop improvements, the mere substitution of materials, or the mere juxtaposition of known elements without a synergistic result.

V. The Person Skilled in the Art

The person skilled in the art is a legal construct, a hypothetical person used as a standard for judging obviousness. This person is presumed to be an ordinary practitioner in the relevant technical field who possesses average knowledge and ability, is aware of the common general knowledge in the field at the relevant date, and has access to all prior art, particularly the documents cited in the search report. This person is not presumed to have any inventive capability. The level of skill may vary; in some arts, it may be a researcher with a PhD, while in others, it may be a technician with ordinary training. The determination of this person’s attributes is a factual matter critical to the obviousness analysis, as what may be obvious to a highly skilled specialist may not be so to a general practitioner.

VI. Assessment of Obviousness and Relevant Jurisprudence

The IPO and courts assess obviousness using a problem-solution approach, often implicitly incorporating elements of the Graham v. John Deere factors from U.S. jurisprudence. The examiner or tribunal will: (1) determine the scope and content of the prior art; (2) ascertain the differences between the prior art and the claims at issue; and (3) resolve the level of ordinary skill in the pertinent art. Secondary considerations, or indicia of non-obviousness, may also be considered. These include: (a) commercial success linked to the invention; (b) fulfillment of a long-felt but unsolved need; (c) failure of others to find a solution; and (d) unexpected or superior results (synergistic effect). In Shoemart, Inc. v. The Honorable Court of Appeals, the Supreme Court emphasized that a combination of old elements may be patentable if it produces a new and useful result, or a synergistic effect, beyond the sum of its parts. Conversely, in Smith Kline & French Laboratories, Ltd. v. The Court of Appeals, the Court found no inventive step where the process was a mere mechanical combination of known steps without a new or unexpected outcome.

VII. Comparative Analysis: Inventive Step vs. Novelty

The following table delineates the key distinctions between the requirements of novelty and inventive step, which are often conflated but are legally distinct.

VIII. Industrial Applicability

The final substantive requirement is industrial applicability, found in Section 27 of the IP Code. An invention is industrially applicable “if it can be produced and used in any industry.” This is a low threshold, requiring only that the invention has a practical, useful purpose and is capable of being made or used in a field of industry, which is interpreted broadly to include agriculture, fisheries, and services. It excludes inventions that are purely theoretical or aesthetic. This requirement ensures that the patent system rewards and promotes utilitarian advances.

IX. Procedure for Establishing Inventive Step Before the IPO

During examination, an examiner will conduct a search for prior art and issue an action stating any grounds for refusal. If inventive step is questioned, the applicant must file a response arguing and demonstrating why the claimed invention is not obvious. This involves construing the claims, distinguishing the cited prior art, and potentially amending the claims to clarify the inventive concept. Arguments may include pointing to a problem not addressed by the prior art, an unexpected technical effect, or the presence of prejudice in the art that taught away from the claimed solution. If refused, the applicant can appeal to the Director of Patents, and subsequently to the Office of the Director General via a petition for review, and ultimately to the Court of Appeals via a petition for review under Rule 43 of the Rules of Court.

X. Conclusion and Practical Recommendations

The requirement of inventive step is the cornerstone of a valid patent, ensuring that exclusive rights are granted only for genuine advances, not trivial developments. Its subjective nature makes it the most frequent ground for patent refusal and invalidation. To maximize the chance of securing a patent, applicants should: (1) conduct a thorough prior art search before filing; (2) draft claims and the specification to clearly articulate the technical problem and the inventive solution, highlighting any unexpected benefits or synergistic effects; (3) document the inventive process, including failed attempts, to later evidence non-obviousness; and (4) be prepared to persuasively argue the differences from the prior art and the level of skill in the art during prosecution. A robust understanding of this requirement is essential for any entity navigating the Philippine patent system to protect its innovations and commercial interests.