February 7, 2023

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TouchPay operator wins patent license arbitration

A Philippine Dispute Resolution Center Inc. (PDRCI) arbitration panel recently ordered BTI Payments Philippines, Inc. (BTI) to pay at least 5.3 million pesos to Manila Express Payments System (MEPS) over a patent infringement suit.

In a decision, the arbitral tribunal found that BTI unlawfully copied the patented utility model of MEPS, the operator of the electronic debt collection system “TouchPay”, and violated intellectual property law, allegedly with the connivance of Electronic Transfer & Advance Processing Inc. ( E – TAP).

MEPS had claimed that BTI and ETAP had illegally copied their payment machine.

The case stemmed from a series of raids conducted by National Bureau of Investigation-Intellectual Property Rights Division (NBI-IPRD) staff in July 2020 and March 2021 under search warrants issued by Judge Reinalda Estacio-Montesa of the Regional Court , Branch 46, of Manila and Judge Elma M. Rafallo-Lingan of the Regional Trial Court, Branch 159, of Pasig.

During these raids, NBI agents allegedly seized several “Pay & Go” kiosk machines with the identical payment system and utility model of TouchPay from various Metro Manila locations.

TouchPay is an automated payment engine that offers electronic transactions for paying utility bills, prepaid loads, and other commercial transactions. It is owned and operated by MEPS and its utility model is registered with the Intellectual Property Office (IPO).

The “Pay&Go” machines, on the other hand, are manufactured by E-TAP and were allegedly used by BTI, led by Peter Alexander Blacket, David Scott Glen, Danilo Ibarra, Neil Sison and Alina Sison.

TouchPay aggressively targeted machines that violated its patent model and filed lawsuits against other competing payment kiosk vendors through the National Bureau of Investigation’s Intellectual Property Division.

“Atti. Romina Miranda, the senior agent in the Intellectual Property Rights Division tasked with monitoring and investigating the alleged modification of MEPS’ APMs and their disclosure as Pay & Go, testified that she personally handled a number of APMs with the MEPS serial numbers saw machines bearing the Pay&Go label and modified APMs marked Pay&Go but with the serial number stickers removed,” reads the PDRCI tribunal’s decision.

Atty Miranda, the court added, checked the serial numbers of Pay&Go machines and found that they were also the serial numbers of MEPS’ APMS. She saw the modified MEPS APMS to appear as Pay&Go in several places that were BTI sites. The Pay&Go machines had similar features and functionality as TouchPay APMs, which transfer payments through automated payment machines.

“The testimony of Atty. Miranda clearly stated and confirmed that BTI disclosed confidential information about MEPS’s APMs to E-TAP and colluded with E-TAP to copy MEPS’s APMS functions and intellectual property and apply the modified APM machines to deploy and distribute to various locations in Metro Manila,” the verdict said.

“BTI copied the registered utility model of MEPS ATMS into its Pay&Go APTs and violated copyright law,” the tribunal said.

The arbitral tribunal’s decision reaffirms the importance and value of intellectual property.

The offenses of trademark infringement and unfair competition are addressed in Sections 155 and 168, both in relation to Section 170 of Republic Act (RA) No. 8293, also known as the Intellectual Property Law of the Philippines.

The invention or utility model of the TouchPay machines is protected by patents and therefore may not be used or imitated without the consent of the patent owner, creator or inventor. ###