Protecting Intellectual Property Rights During the Succession of a Tech Startup Founder in the Philippines
Introduction: why succession planning for patents and software matters
When a tech startup founder dies, their personally owned intellectual property (IP)—such as patents and software copyrights—does not vanish. These rights can be transmitted to heirs, but the value of the IP may be lost if the family cannot prove ownership, cannot enforce rights against infringers, or cannot properly authorize the startup to keep using the technology. This article explains how Philippine law treats the legal transition of patents and software copyrightsfrom a deceased founder to their lawful heirs, and how heirs and the surviving business should document and protect these rights.
Governing law: what statutes and Supreme Court rulings control
In the Philippines, patents and copyrights are governed primarily by the Intellectual Property Code of the Philippines (Republic Act No. 8293, 1997). For copyrights, amendments under Republic Act No. 10372 (2013) affect moral rights and modern digital realities. The Supreme Court has also emphasized that copyright is a statutory right, existing only to the extent and for the period provided by law, and that protection arises from creation under the statute (Philippine Home Cable Holdings, Inc. v. FILSCAP, G.R. No. 188933, 2023; Cosac, Inc. v. FILSCAP, G.R. No. 222537, 2023).
Important note on older laws: While older issuances like Presidential Decree No. 49 and early patent statutes are historically relevant, the controlling rules today for most ongoing succession issues are in Republic Act No. 8293 as amended, and current Supreme Court doctrine. This article focuses on those effective rules.
1) Patents owned personally by the deceased founder: transfer to heirs
Who has the right to the patent
The right to a patent belongs to the inventor, their heirs, or assigns (Intellectual Property Code of the Philippines, Republic Act No. 8293, 1997). If two or more persons jointly made the invention, the patent right belongs to them jointly, which matters when a co-inventor survives and the founder’s estate only succeeds to the deceased’s share.
Patents and patent applications are treated like property
Philippine law treats patents (and patent applications) as property capable of transmission. Patents and applications, and the inventions they relate to, are protected like other property rights; and rights in patents and inventions may be assigned or transmitted by inheritance or bequest, or be the subject of a license contract (Intellectual Property Code of the Philippines, Republic Act No. 8293, 1997).
Typical succession scenarios for patents
Scenario A: Founder is the sole inventor and patent owner. The patent becomes part of the estate and is transmitted to the lawful heirs, subject to estate settlement rules. The heirs then become the patent owners and may enforce the patent, license it, or assign it.
Scenario B: Founder co-invented with another person. The patent right is jointly held; upon death, the estate succeeds only to the founder’s interest. The surviving co-owner remains a co-owner, and the heirs should coordinate with them for exploitation decisions.
Scenario C: Founder filed a patent application but patent not yet granted. The application and related rights are still transmissible as property interests. Heirs should secure documentation showing their authority to deal with the application.
Recommended documents to preserve patent value during succession
Heirs commonly need a clean paper trail to prove authority to the IPO and to counterparties (investors, licensees, the startup itself). Common documents include:
1) Proof of death and heirship/authority. Death certificate and estate settlement documents showing who is authorized to act for the estate or who the heirs are.
2) Deed of assignment or transmission documentation. If the heirs will place the patent into the startup (or sell to a third party), formal instruments are essential.
3) Licensing documents. If the startup will keep using the technology while ownership sits with the heirs, a license agreement avoids disputes and supports investor due diligence.
2) Software copyrights owned personally by the deceased founder: what passes to heirs
Copyright arises from creation; registration is not the source of the right
Supreme Court doctrine recognizes that copyright protection under the Intellectual Property Code attaches from the moment of creation, and is a statutory grant (Cosac, Inc. v. FILSCAP, G.R. No. 222537, 2023; Philippine Home Cable Holdings, Inc. v. FILSCAP, G.R. No. 188933, 2023). For software, this matters because the family’s rights are not dependent on publication or any single administrative act—though documentation is still essential for enforcement and transactions.
Economic rights vs. moral rights: different treatment upon death
For software, it is important to distinguish:
Economic rights (the rights to exploit the work, authorize reproduction, distribution, etc.) are the rights that typically generate revenue for the estate and heirs.
Moral rights relate to attribution and integrity of the work. Under the IP Code as amended, the author’s right under the provision on attribution/integrity lasts during the author’s lifetime and in perpetuity after death, while certain other moral rights are coterminous with economic rights; and moral rights are not assignable or subject to license, with posthumous enforcement vested in a person named in a written instrument filed with the National Library, or in default, the heirs, and in default of heirs, the Director of the National Library (Republic Act No. 10372, 2013).
What heirs can do with software copyrights
As copyright owners (for economic rights transmitted through the estate), heirs can generally:
Grant the startup a license to continue using, improving (if permitted), and commercializing the software;
Assign the economic rights to the startup or a buyer (subject to appropriate instruments);
Enforce against infringers, including parties that copy code, distribute unauthorized versions, or use the software outside license terms.
However, heirs should be careful not to draft agreements that purport to assign moral rights, because moral rights are treated differently and are not assignable (Republic Act No. 10372, 2013).
Idea vs. expression: what software copyright actually protects
The Supreme Court has reiterated that the law protects the expression of an idea, not the idea itself. One who merely contributes concepts or ideas is not deemed an author and does not acquire copyright over the resulting work (Republic v. Heirs of Tupaz, et al., G.R. No. 197335, 2020). In a startup setting, this affects succession disputes where a founder’s relatives may claim rights based on business concepts, while developers claim authorship of the code, or vice versa.
3) Common problem: the startup uses IP personally owned by the founder
Many startups operate informally in the early stage: patents are filed in the founder’s name; source code is written on personal devices; repositories and cloud accounts are personal; and no assignment to the company is signed. Upon death, this often creates a gap: the company may be operating on technology it does not legally own.
Risk points after the founder’s death
Operational risk: the startup may lose the right to deploy or commercialize the software if heirs do not authorize use.
Investor/due diligence risk: funding or acquisition may fail if IP ownership is unclear.
Enforcement risk: the estate may be unable to credibly send demand letters or sue infringers without clear proof of title.
4) Step-by-step: measures heirs should take to protect patents and software copyrights
The exact steps depend on estate settlement posture and the startup’s needs, but the sequence below is commonly used to preserve value quickly.
Step 1: Identify the IP and confirm how it is titled
Create an inventory: patent numbers/applications, invention disclosures, source code repositories, build artifacts, technical documentation, and contracts with developers/contractors. Confirm whether the founder is listed as inventor/owner, whether co-inventors exist, and whether the startup has any signed assignments or licenses.
Step 2: Secure access and preserve evidence
Ensure lawful control of accounts and devices that contain source code, design documents, and patent prosecution files. Preserve logs and repository histories to support authorship and date-of-creation issues.
Step 3: Establish the heirs’ authority to act
For patents, note that the law recognizes transmission by inheritance or bequest (Republic Act No. 8293, 1997). For copyrights, rights arise under statute and can be enforced by the right holder (Cosac, Inc. v. FILSCAP, G.R. No. 222537, 2023). Heirs should be prepared to show the basis of their authority through proper estate documentation.
Step 4: Put the startup’s continued use on a clear legal footing
If the startup needs uninterrupted use, the estate/heirs should execute a written license (or assignment if that is the plan) covering:
Scope: what software modules and patent claims are covered;
Territory and term: Philippines and/or worldwide, duration tied to business needs;
Royalties or consideration: cash, equity, revenue share, or a combination;
Improvements: who owns modifications, derivative works, or new inventions;
Enforcement: who will sue infringers and how recoveries are allocated.
Step 5: For moral rights, ensure posthumous enforcement is properly designated
Where relevant, confirm whether the founder executed a written instrument filed with the National Library naming the person charged with posthumous enforcement of moral rights; otherwise, this role devolves upon the heirs (Republic Act No. 10372, 2013). Agreements should respect that moral rights are not assignable or licensable.
5) Quick reference table: patents vs. software copyrights in succession
| Topic | Patents (RA 8293, 1997) | Software copyrights (RA 8293; RA 10372, 2013; cases) |
|---|---|---|
| Who initially owns | Inventor; heirs/assigns can succeed | Author/creator; protection is statutory and arises upon creation (Cosac, Inc. v. FILSCAP, 2023) |
| Transfer on death | Transmissible by inheritance/bequest; treated like property | Economic rights pass through estate; moral rights have special rules and are not assignable (RA 10372, 2013) |
| What is protected | Invention/claims as granted | Expression of code and related materials, not mere ideas (Republic v. Heirs of Tupaz, 2020) |
| Business continuity tool | Assignment or license to startup | License/assignment for economic rights; respect limits on moral rights (RA 10372, 2013) |
6) Typical disputes and how to reduce them early
Dispute: “The company paid for development, so it owns everything.” Payment alone is often not enough; ownership depends on authorship, employment/commissioning arrangements, and written instruments. Document assignments and employment/contractor IP provisions early.
Dispute: “I gave the idea, so I own the software.” Courts distinguish ideas from protected expression (Republic v. Heirs of Tupaz, 2020). Keep records showing who wrote code and when.
Dispute: heirs vs. co-founders. If the founder personally owned the IP, heirs inherit it. Co-founders may need licenses to keep operating. A negotiated license or buyout is usually better than business interruption.
Conclusion: protecting value while respecting succession rights
Philippine law allows patents and patent applications to pass to heirs as property interests (Republic Act No. 8293, 1997), while software copyrights arise by statute upon creation and are enforceable by right holders, subject to the distinction between protected expression and unprotected ideas (Cosac, Inc. v. FILSCAP, 2023; Republic v. Heirs of Tupaz, 2020). After a founder’s death, the immediate goal is to document authority and ownership, preserve evidence, and put the startup’s use under clear written agreements. Heirs should also observe the special treatment of moral rights, including the rules on posthumous enforcement and the prohibition against assigning or licensing moral rights (Republic Act No. 10372, 2013).
Recommended next steps: (1) inventory all IP and confirm titling; (2) secure repositories and prosecution files; (3) complete estate authority documents; (4) execute a license or assignment to the startup with clear terms on improvements and enforcement; and (5) ensure moral-rights posthumous enforcement is properly designated and respected.
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.
