Defending Against Patent Trolls: Litigation Tactics for Foreign Corporations Facing Frivolous Infringement Suits in the Philippines

Introduction: why patent-troll suits matter for foreign tech firms

Foreign technology companies operating in or selling into the Philippines can become targets of non-practicing entities (NPEs)—often called “patent trolls”—that assert patents mainly to pressure defendants into paying settlement amounts that are cheaper than litigation. In the Philippine setting, the strongest defenses typically come from disciplined claim-focused litigation, early testing of the plaintiff’s capacity to sue, and a tight evidentiary strategy showing that the accused product or process does not appropriate the patented invention.

This article discusses defense options and courtroom tactics grounded on Philippine patent law and recent Supreme Court rulings on claim interpretation and infringement proof.

Governing law and main institutions

Philippine patent infringement and remedies are governed primarily by the Intellectual Property Code of the Philippines (Republic Act No. 8293, 1997). Under Section 76, infringement includes making, using, offering for sale, selling, or importing a patented product (or a product obtained from a patented process), or using a patented process without authorization; the patentee (or one with rights in the invention) may seek damages and injunction, and the court may award reasonable royalty where damages are hard to prove, and may order destruction or disposal of infringing goods. The law also recognizes contributory infringement with joint and several liability in defined situations. (Republic Act No. 8293, Intellectual Property Code of the Philippines, 1997)

For foreign patentees (or assignees) not engaged in business in the Philippines, the IP Code expressly allows them to sue for infringement even without a local license in certain circumstances. (Republic Act No. 8293, Intellectual Property Code of the Philippines, 1997, Section 77)

What courts look for in patent-troll cases: claims control everything

Philippine doctrine is clear that the patent claims define the scope of protection. Courts do not decide infringement based on broad descriptions, marketing language, or general similarity. The Supreme Court emphasizes a structured approach: (1) interpret the patent claims to determine scope and meaning; then (2) compare the accused product or process against the properly interpreted claims. (Phillips Seafood Philippines Corporation v. Tuna Processors, Inc., G.R. No. 214148, 2023)

Two practical consequences follow:

• All essential elements must be present (or their equivalents). If the accused system performs only some claim elements, infringement is not established. (Phillips Seafood Philippines Corporation v. Tuna Processors, Inc., G.R. No. 214148, 2023; Tuna Processors, Inc. v. Frescomar Corporation, et al., G.R. No. 226445, 2024)
• Using what is already prior art (existing technology) does not amount to infringing the inventive step. The Court cautions that ruling otherwise would penalize legitimate use of prior art and discourage improvements. (Tuna Processors, Inc. v. Frescomar Corporation, et al., G.R. No. 226445, 2024)

Common patent-troll pressure points and how to answer them

1) Early “claim chart” demand and narrowing the issues

NPE suits often start with broad accusations, hoping the defendant pays to avoid discovery and expert costs. A disciplined defense insists on claim-by-claim, element-by-element proof. Internally, foreign tech firms should immediately prepare a claim chart mapping each claim element to the accused product/process and identifying the missing elements.

In court, this supports early motions and positions the case for dismissal or favorable judgment once the plaintiff fails to prove appropriation of all essential elements. The Supreme Court’s claim-centered approach makes this tactic especially effective. (Phillips Seafood Philippines Corporation v. Tuna Processors, Inc., G.R. No. 214148, 2023)

2) Attack the plaintiff’s theory on “equivalents”

NPE plaintiffs may invoke the doctrine of equivalents to widen the patent beyond its literal terms. The Supreme Court has held that equivalents cannot be applied so broadly as to eliminate or ignore any material element of the claim; substantial evidence is required to show the accused process performs substantially the same function, in substantially the same way, to achieve substantially the same result. (Phillips Seafood Philippines Corporation v. Tuna Processors, Inc., G.R. No. 214148, 2023)

Defense tactic: isolate which claim element the plaintiff is trying to “read out” of the claim, then focus expert testimony and technical documents on how your product/process differs in function, method, or result for that element.

3) Raise patent invalidity as a defense

Even in an infringement action, the defendant may assert the invalidity of the patent or any claim on the same grounds available for cancellation. (Republic Act No. 8293, Intellectual Property Code of the Philippines, 1997, Section 81)

This is important against NPEs because some asserted patents are vulnerable due to overbreadth or weak inventive contribution. While the specific cancellation grounds are technical and evidence-heavy, the litigation point is straightforward: invalidity can be used as a defense to defeat liability, and it can also improve settlement posture.

4) Challenge “indirect” or “contributory” infringement when there is no direct infringement

Section 76 recognizes contributory infringement in specific situations (e.g., supplying a component especially adapted for infringing use and not suitable for substantial non-infringing use). (Republic Act No. 8293, Intellectual Property Code of the Philippines, 1997, Section 76)

Recent jurisprudence stresses that indirect infringement cannot exist without direct infringement. If the plaintiff cannot prove direct infringement (appropriation of all claim elements), claims of induced or contributory infringement should fail as well. (Tuna Processors, Inc. v. Frescomar Corporation, et al., G.R. No. 226445, 2024)

Foreign corporation issues: capacity to sue and “doing business” defenses

Patent trolls sometimes assert rights through foreign entities or assignments. For defendants, it is useful to distinguish two recurring issues: (a) the foreign entity’s right to sue under the IP Code for patent infringement, and (b) corporate licensing rules tied to “doing business” in the Philippines.

1) Foreign patentee/assignee suing for infringement

The IP Code expressly allows certain foreign nationals or juridical entities—meeting statutory requirements and not engaged in business in the Philippines—to bring an infringement action even without a Philippine license to do business. (Republic Act No. 8293, Intellectual Property Code of the Philippines, 1997, Section 77)

Defense takeaway: do not assume a foreign plaintiff is barred solely for lack of license; instead, verify whether the plaintiff is actually “doing business” locally and whether it sues in the capacity the law recognizes (patentee, assignee, or right-holder).

2) If the foreign plaintiff is “doing business” without a license

As a general corporate rule applied by the Court, a foreign corporation transacting business in the Philippines without a license is not permitted to maintain or intervene in actions in Philippine courts, although it may be sued. (Tuna Processing, Inc. v. Philippine Kingford, Inc., G.R. No. 185582, 2012)

Regulators likewise interpret “doing business” to include substantial online commercial activities directed at Philippine residents (e.g., offering online services, accepting payments, and marketing to Philippine users), even without physical presence. (SEC-OGC Opinion No. 17-03, 2017)

Defense use-case: if the plaintiff is a foreign corporation asserting patents while also engaging in sustained commercial activity in the Philippines without a license, the defense can explore a capacity-to-sue challenge, subject to the plaintiff’s reliance on the IP Code’s allowance for foreign infringement suits and the factual question of whether it is “doing business.”

Remedies and counter-pressures: what the plaintiff seeks, and how defendants respond

Understanding statutory remedies helps defendants predict plaintiff leverage and respond in proportion.

1) Damages, reasonable royalty, and enhanced damages

In infringement suits, courts may award actual damages plus attorney’s fees and litigation expenses; where damages are inadequate or not readily ascertainable, the court may award reasonable royalty. In appropriate cases, the court may also award damages above actual damages, capped at three times actual damages. (Republic Act No. 8293, Intellectual Property Code of the Philippines, 1997, Section 76)

Defense tactic: require strict proof of (a) the infringement act tied to each claim element and (b) the causal link between infringement and alleged losses. If the plaintiff pivots to “reasonable royalty,” scrutinize the asserted royalty base and whether the patented feature actually drives value.

2) Injunctions and destruction/disposal of goods

Courts may issue injunctions to protect the patentee’s rights and may order infringing goods and materials predominantly used in infringement to be disposed of outside commerce or destroyed. (Republic Act No. 8293, Intellectual Property Code of the Philippines, 1997, Section 76)

Defense tactic: prioritize early technical proof and business-impact affidavits to resist overbroad injunctive relief, especially when the accused product includes substantial non-infringing features or when the plaintiff’s claim theory is claim-element incomplete.

Typical scenarios (with defense responses)

• Scenario A: “We found your app infringes our patent; pay a settlement in 10 days.” Response: demand the specific patent claims asserted and a claim chart; check whether the alleged feature is prior art or missing claim elements; preserve evidence and prepare a non-infringement position anchored on the claims. (Phillips Seafood Philippines Corporation v. Tuna Processors, Inc., G.R. No. 214148, 2023)
• Scenario B: Plaintiff alleges induced or contributory infringement for supplying a component or API.Response: assess whether there is provable direct infringement at all; emphasize substantial non-infringing uses and the absence of appropriation of all elements of any asserted claim. (Republic Act No. 8293, 1997, Section 76; Tuna Processors, Inc. v. Frescomar Corporation, et al., G.R. No. 226445, 2024)
• Scenario C: Foreign plaintiff sues but appears to be selling and collecting recurring payments from Philippine customers. Response: evaluate “doing business” indicators and licensing status; consider capacity-to-sue arguments, while accounting for the IP Code’s treatment of foreign infringement actions. (Tuna Processing, Inc. v. Philippine Kingford, Inc., G.R. No. 185582, 2012; Republic Act No. 8293, 1997, Section 77; SEC-OGC Opinion No. 17-03, 2017)

Quick reference table: defenses that often matter most in NPE-style cases

Defense theme	What you must show	Main authority
Non-infringement (claims test)	At least one essential claim element is missing (or not met by an equivalent)	Phillips Seafood Philippines Corporation v. Tuna Processors, Inc. (2023); Tuna Processors, Inc. v. Frescomar Corporation, et al. (2024)
Doctrine of equivalents limits	Plaintiff’s equivalence theory removes/ignores a material claim element; lack of substantial evidence	Phillips Seafood Philippines Corporation v. Tuna Processors, Inc. (2023)
Invalidity as a defense	Patent/claim invalid on cancellation grounds (raised defensively in the case)	Republic Act No. 8293 (1997), Section 81
No indirect liability absent direct infringement	Plaintiff fails to prove direct infringement; thus induced/contributory theories fail	Tuna Processors, Inc. v. Frescomar Corporation, et al. (2024); Republic Act No. 8293 (1997), Section 76
Foreign plaintiff capacity-to-sue (when “doing business” unlicensed)	Foreign corporation is transacting business in PH without license (subject to IP Code rules on foreign infringement suits)	Tuna Processing, Inc. v. Philippine Kingford, Inc. (2012); SEC-OGC Opinion No. 17-03 (2017); Republic Act No. 8293 (1997), Section 77

Action points for international tech firms sued in the Philippines

• Freeze the facts early: preserve source code snapshots, architecture diagrams, release notes, and import/sales records tied to the accused versions.
• Build a claim-element defense: treat every asserted claim as a checklist; identify which element(s) the plaintiff cannot prove.
• Prepare parallel positions: (a) non-infringement; (b) invalidity defense under the IP Code; and (c) capacity-to-sue issues if the plaintiff is a foreign corporation with “doing business” indicators.
• Manage injunction risk: document business impact and non-infringing design features to resist broad injunctive relief and to support a targeted case theory.
• Settlement discipline: do not price settlement against the threat letter alone; price it against the plaintiff’s ability to prove all essential claim elements and survive invalidity challenges.

Conclusion

In Philippine patent litigation, the most effective response to patent-troll style suits is a defense anchored on what the claims actually cover, not on generalized similarity accusations. Recent Supreme Court rulings reinforce that infringement requires appropriation of all essential claim elements (or proven equivalents), and indirect infringement theories do not stand without direct infringement. Combined with statutory defenses such as invalidity and careful review of the plaintiff’s capacity to sue, foreign tech firms can resist settlement pressure and litigate from a position of strength grounded on doctrine and evidence.

About Nicolas and De Vega Law Offices

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