Auditing IP Assets Before Acquiring a Philippine Solar or Wind Power Firm: Verifying Trademark and Patent Ownership, Validity, and Transferability

Introduction: why IP due diligence matters in renewable energy acquisitions

In Philippine solar and wind power acquisitions, intellectual property (IP) assets often sit quietly behind the target’s commercial value: brand goodwill (registered trademarks), proprietary technologies, and patent portfolios used in operations, monitoring, or equipment integration. For international buyers, IP due diligence is not limited to confirming that registrations exist; it must confirm that the registrations are valid, owned by the correct entity, and capable of being transferred or licensed without hidden defects.

Two recurring deal risks are (1) a registered mark or invention that is not actually owned by the target (e.g., registered in bad faith, registered by the wrong entity, or subject to competing claims), and (2) an “asset” that exists on paper but lacks enforceability due to defects in registration, chain of title, or use and maintenance requirements. Philippine law provides clear rules on acquisition and enforceability of trademark rights through registration, while also recognizing scenarios where registration may be attacked for bad faith.

Governing Philippine laws and legal sources for IP verification

Primary statute: Republic Act No. 8293, or the Intellectual Property Code of the Philippines (1997), governs trademarks and patents, the registration system, and remedies. It also establishes the Intellectual Property Office of the Philippines (IPO).

Legacy trademark statute (historical note only): Republic Act No. 166 (1947), as amended, previously governed trademarks, including evidentiary rules on certificates of registration. For current transactions, the operative rules are under the IP Code; older registrations or disputes may still reference earlier concepts, but the deal analysis should center on current law.

Jurisprudence (trade marks): The Supreme Court has emphasized that trademark rights are acquired through registration under the IP Code, but registration creates only a rebuttable presumption and may be defeated by evidence such as bad faith. See Lim, et al. v. See (2023) and Zuneca Pharmaceutical, et al. v. Natrapharm, Inc. (2020).

Core legal principles buyers should apply to trademarks during diligence

1) Trademark rights are acquired through registration, but registration is not an absolute shield

Under the IP Code, rights in a mark are acquired through registration in accordance with law. The Supreme Court has reiterated that the registration system supports a uniform, easily verifiable method of establishing ownership, and encourages registration by market entrants. Zuneca Pharmaceutical, et al. v. Natrapharm, Inc. (2020) explains that ownership is generally acquired through valid registration under the IP Code, not by prior use alone.

However, a certificate of registration creates only prima facie evidence of validity and ownership. That presumption is rebuttable, including where the registration was secured in bad faith. In Lim, et al. v. See (2023), the Court stressed that the first-to-file approach does not protect an applicant who registered a mark despite knowledge of another’s prior creation or use; bad-faith registration may be treated as void and does not confer ownership.

2) Prior user protections can affect infringement and coexistence risk

Even where the target is the registrant, you must assess whether there is a prior user in good faith who may continue using the mark in limited circumstances. Zuneca Pharmaceutical, et al. v. Natrapharm, Inc. (2020) recognizes that a prior user in good faith before the filing or priority date may be protected from infringement liability and may continue using the mark for the same business, subject to conditions (including that any transfer is with the business in which the mark is used).

For buyers, this matters because the target’s registration may not deliver full exclusivity in the market if a protected prior user exists, and this can affect valuation, branding plans, and post-closing enforcement.

Step-by-step due diligence manual: trademarks (Philippine renewable energy target)

Step 1: Build the IP inventory and map it to revenue and operations

Start by requesting a complete schedule of trademarks (word marks, logos, slogans), along with brand use evidence (marketing collateral, product/service brochures, website screenshots, invoices). In power projects, look beyond the corporate name and check marks used in:

Typical renewable energy trademark touchpoints: project name branding, customer-facing “green energy” programs, O&M services, monitoring platforms, warranties, training materials, and group marks used by affiliates.

Step 2: Confirm the registrant name and identify mismatches with the deal perimeter

Compare the IPO registration owner/registrant against the target company’s exact corporate name. Red flags include:

Registrant mismatch: mark registered under a shareholder, founder, offshore parent, sister company, or a dissolved entity. If the registrant is not the target, the buyer is not acquiring the IP simply by buying shares—an assignment or license structure must be addressed.

Name changes: If the target has changed its corporate name, confirm that the change has been recorded properly for IP registrations to avoid chain-of-title doubts.

Step 3: Check chain of title and transfer documentation

Request and review: deeds of assignment, merger documents, contribution-to-capital documents, board approvals, and proof of recordation where relevant. In IP disputes, paperwork gaps often appear when marks were “informally” transferred inside a corporate group without a clean assignment.

Deal tip: If the mark is mission-critical (used on permits, customer agreements, or public-facing project identity), require closing deliverables that include executed assignments and confirmatory deeds, with warranties tied to ownership and non-infringement.

Step 4: Screen for bad-faith registration risk

Because a registration can be attacked where it was secured in bad faith, buyers should examine whether the target’s registration history raises credibility issues. Under Lim, et al. v. See (2023), bad faith can defeat the usual protection expected from registration, especially where the registrant knew of another’s prior creation or use.

Common indicators:

• the mark resembles a well-known competitor’s earlier branding used in the same industry;
• the target’s founders previously worked for a competitor and filed shortly after;
• the target cannot produce genuine evidence of adoption and honest use.

Step 5: Evaluate coexistence and “prior user” exposure

Even if the registration stands, check whether a local entity claims earlier good-faith use and may continue use under the rules discussed in Zuneca Pharmaceutical, et al. v. Natrapharm, Inc. (2020). This matters in renewables where project developers, EPC contractors, and O&M providers can share similar descriptors and branding elements.

Typical scenario: the target registered a service mark for “operations and maintenance services,” but another firm has long used an identical or confusingly similar mark for O&M in a different region. The legal risk may not be immediate infringement damages, but it can create branding limits post-closing.

Step 6: Confirm maintenance and enforceability posture

Request proof that the target has maintained its registrations and can show continued use. While the IP Code governs maintenance requirements, the diligence goal is business-focused: confirm the mark is actually used as registered and is enforceable against imitators.

Actionable advice: Require a management representation that (1) the marks are in active use, (2) no abandonment issues exist, and (3) no third-party oppositions, cancellation actions, or demand letters are pending or threatened.

Due diligence manual: patents (what to verify and why it changes the deal)

Patents can be more technical than trademarks, but the buyer’s diligence questions are straightforward: is the target the real owner, is the patent still in force, and does it actually cover what the business relies on.

Step 1: Identify what the patent portfolio really covers

In solar and wind deals, patents may relate to control systems, monitoring methods, mounting structures, storage integration, or proprietary processes. Ask for claim summaries in plain English and map them to actual equipment or software deployed.

Typical scenario: the company markets a “proprietary energy forecasting system,” but the patent is actually owned by a foreign affiliate or only covers a narrow method that is not used in production.

Step 2: Confirm ownership, inventorship, and employer/contractor issues

Request inventor assignment agreements, employment contracts with IP assignment clauses, contractor agreements, and any university or R&D partner documents. If an invention was developed by consultants or joint venture partners, ownership can be contested without a clean assignment.

Step 3: Validate status, scope, and risk of challenge

Ask for: current status confirmation (in force vs. lapsed), annuity/maintenance payment proofs if applicable, and any known validity challenges. A patent listed in the asset schedule may have expired or lapsed, or may be under dispute, which affects valuation and post-closing use plans.

Step 4: Confirm freedom to operate versus “paper ownership”

Owning a patent does not automatically mean the target can operate without infringing other patents. For buyers, this means diligence should include a targeted freedom-to-operate check for core technologies, especially where the plant uses vendor-integrated systems from major manufacturers.

What international buyers should require in transaction documents

IP diligence is only as good as the remedies built into the deal documents. Consider requiring the following in the share purchase agreement or asset purchase agreement:

• Representations and warranties that the target owns the trademarks and patents, registrations are valid and subsisting, and no undisclosed disputes exist.
• Special indemnities for identified IP risks (e.g., a threatened cancellation action or an ownership gap in a critical mark).
• Closing deliverables such as executed deeds of assignment, confirmatory assignments from founders, and recordation steps where appropriate.
• Operational covenants requiring the target to maintain registrations and keep evidence of use until closing.

Summary table: common IP red flags in Philippine renewable energy acquisitions

Issue found in diligence	Why it matters	Common fix
Trademark registrant is not the target company	Buyer may not acquire the mark via share purchase; enforcement and licensing become uncertain	Assignment to the target or buyer; confirmatory deed; board approvals
Registration secured with signs of bad faith	Registration can be attacked; ownership claim weakens despite first-to-file expectations	Risk allocation: price adjustment, indemnity, or rebranding plan
Prior user in good faith may continue use	Exclusivity may be limited; expansion plans may face coexistence constraints	Coexistence agreement; brand architecture change; targeted enforcement strategy
Patent ownership not supported by inventor assignments	Inventor or contractor may claim rights; patent asset value impaired	Obtain assignments; ratifications; cure conditions prior to closing
Patent or mark status/maintenance unclear	Rights may have lapsed or become difficult to enforce	Status verification; update filings; post-closing compliance program

Doctrinal anchors from Supreme Court rulings (trademarks)

Registration-based ownership, with prior-user protection: The IP Code supports ownership through valid registration, but recognizes that prior users in good faith may have limited rights to continue use under defined conditions. Zuneca Pharmaceutical, et al. v. Natrapharm, Inc. (2020).

Bad faith defeats the comfort of first-to-file: Even with registration, the presumption of ownership can be overcome, and bad-faith registration does not confer legitimate ownership. Lim, et al. v. See (2023).

Conclusion: what buyers should do before signing and before closing

International buyers acquiring Philippine solar or wind power firms should treat IP diligence as a verification exercise, not a checklist. For trademarks, confirm that registrations are in the target’s name, supported by real-world use, and free from bad-faith or prior-user complications that could limit exclusivity. For patents, confirm that the target has clean chain of title from inventors and partners, that rights are current, and that the patents actually cover what the business depends on.

Before signing, require full IP schedules, chain-of-title documents, and disclosure of disputes. Before closing, insist on executed assignments or confirmatory instruments for any ownership gaps, backed by tailored indemnities for risks that cannot be fully cured in time.

About Nicolas and De Vega Law Offices

 Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com.