Below is a comprehensive discussion of the legal and practical considerations surrounding landlord liability for trademark infringement in the Philippines under the Intellectual Property Code (Republic Act No. 8293), including key concepts, relevant provisions, judicial doctrines, and best practices.

1. Overview of Trademark Infringement Under Philippine Law

1.1. The Intellectual Property Code (R.A. 8293)

The principal law governing trademarks in the Philippines is the Intellectual Property Code of 1997 (Republic Act No. 8293, hereafter “IP Code”). Under Section 155 of the IP Code, trademark infringement occurs when a person:

“Uses in commerce, without the consent of the registered owner of the mark, any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or packaging, or a dominant feature thereof… in connection with the sale, offering for sale, distribution, advertising of any goods or services, and such use is likely to cause confusion, mistake, or deception.”

Typically, trademark infringement cases involve a party (“the infringer”) who sells, distributes, or otherwise deals in products bearing the registered trademark of another without permission. Liability for trademark infringement usually falls directly on the party that actually carried out the infringing activities (e.g., manufacturing or selling counterfeit goods).

1.2. Secondary and Indirect Liability

While trademark infringement typically focuses on the direct infringer, the legal concept of secondary or indirect liability can extend to other parties who contribute to or facilitate the infringement—even if they did not personally commit the infringing acts. In trademark law, such indirect liability sometimes appears under the rubrics of:

Contributory Infringement – Liability arises if a party knowingly or intentionally induces or contributes to another’s infringing conduct.
Vicarious Liability – Liability arises where one party has the right and ability to control the infringing activity and enjoys a direct financial benefit from that infringement.

In the Philippines, the IP Code does not explicitly articulate contributory or vicarious liability in the same manner as some foreign jurisdictions (such as the United States). However, certain provisions of the Code, read in conjunction with general principles of civil law (e.g., negligence, aiding and abetting, or conspiracy), can create indirect liability for those who knowingly facilitate, induce, or benefit from trademark infringement.

2. Landlord Liability: Key Legal Concepts

2.1. Potential Theories of Landlord Liability

A landlord can face potential liability for trademark infringement if the landlord’s actions (or inactions) rise to a level of knowledge and control, or if the landlord benefits directly from the infringing conduct. Generally, Filipino courts—and courts in many jurisdictions—would look at whether:

The landlord had actual or constructive knowledge that its tenants were engaging in trademark infringement (e.g., selling counterfeit goods).
The landlord had the right and ability to control or supervise the premises or the offending activities (e.g., the landlord could refuse to renew leases, evict offenders, or otherwise curb the infringing behavior).
The landlord directly benefited from the infringing activities beyond merely collecting standard rent, such as receiving additional financial incentives tied to sales.

Although the Philippines does not yet have extensive jurisprudence squarely addressing landlord liability for trademark infringement in a detailed, definitive fashion, courts might analogize from existing doctrines on contributory fault, vicarious liability, and obligations in contractual leases, as guided by the Civil Code and the IP Code.

2.2. Actual or Constructive Knowledge

A key element is typically proof that the landlord knew or had reason to know that the tenant was selling infringing goods. For example:

Direct Notice: The brand owner (trademark holder) sends a formal notice or demand letter to the landlord, informing them of the counterfeit or infringing activities on the premises.
Publicized Raids or Seizures: If customs authorities, police, or private investigators carry out raids in a landlord’s property or publish notices of seizure of counterfeit goods, the landlord would be put on actual or at least constructive notice.
Repeated Complaints: Multiple complaints from customers, other tenants, or authorities about the same tenant’s suspected infringement could also indicate the landlord’s awareness or “willful blindness.”

2.3. Right and Ability to Control

The second crucial factor is whether the landlord has the ability to remove or restrict the infringing tenant. Under Philippine law, landlords typically hold several contractual and statutory remedies:

Termination of Lease: Where the lease contract expressly prohibits illicit activities, counterfeit trade, or anything contrary to law, the landlord can evict or refuse to renew the tenancy upon breach of these covenants.
Injunction or Legal Remedies: If the landlord’s own reputation or property is jeopardized, the landlord can also resort to ejectment actions or other civil remedies.
Contractual Provisions: Many commercial lease agreements have clauses that allow immediate termination if the tenant engages in illegal conduct. If the landlord fails to enforce these clauses despite knowledge of infringement, that failure can be construed as acquiescence.

2.4. Direct Financial Interest

In standard scenarios, a commercial landlord primarily benefits from fixed rent payments rather than from the nature of a tenant’s sales. Such standard rent is typically insufficient to establish “direct financial interest” in the infringement. However, liability becomes more plausible if:

The landlord’s rent is directly tied to the volume or profit of the tenant’s sales (e.g., a percentage lease where the landlord receives a proportion of monthly revenue).
The landlord actively promotes or markets the tenant’s infringing goods (e.g., advertising or receiving additional fees because the goods attract more foot traffic).
There is some joint enterprise between the landlord and the tenant beyond a mere lessor-lessee relationship, showing the landlord’s involvement in the actual sale or distribution of infringing items.

3. Relevant Philippine Legal Provisions

While the IP Code does not overtly discuss “landlord liability,” several provisions and related statutes can inform a theory of liability:

Section 155, IP Code – Defines trademark infringement and imposes liability on any person who “uses in commerce” a reproduction or counterfeit of a registered mark without consent.
Sections 166 to 169, IP Code – Provide for actions for infringement, unfair competition, false designations, and remedies for infringement.
Civil Code of the Philippines – Contains general rules on obligations and contracts. A landlord who knew or should have known of wrongful acts on its property but failed to act may face liability under general tort or quasi-delict principles, or for breach of obligations under a lease contract if it explicitly prohibits illicit use of the premises.
Criminal Provisions – The IP Code includes criminal penalties for willful infringement. While criminal prosecution usually targets direct infringers, accessory or accomplice liability could, in theory, extend to a landlord who knowingly aids or abets the infringement.

4. Illustrative Scenarios

Market Stall Operators: In some cases, tenants at markets (tiangge or flea markets) sell knock-off or counterfeit goods. If the landlord or market operator is repeatedly notified by brand owners or official raids occur, yet the landlord continues to lease stalls to the same vendors, ignoring the infringing conduct, courts may find the landlord to have contributed to or tolerated the infringement.
Shopping Malls and Retail Spaces: Large mall operators who lease space to countless retailers might not be held liable if they have no reason to suspect a particular tenant is selling infringing goods. However, if brand owners supply the operator with evidence of infringement, or if authorities conduct repeated raids, the operator’s failure to take action (terminate the lease or discipline the tenant) can open the door to indirect liability.
Online Marketplaces: With the rise of online sales, a landlord’s liability is less direct if the tenant’s storefront is virtual. But if a landlord physically hosts a tenant’s warehouse or distribution center and knows that the facility is used for counterfeit goods, similar principles apply: knowledge plus control can create a risk of liability.

5. Remedies for Trademark Owners Against Landlords

If a landlord ignores a tenant’s infringing activities, the trademark owner has several potential remedies:

Cease and Desist Letters / Demand Letters: These formally put the landlord on notice, potentially establishing the knowledge prong. The demand typically requires the landlord to take steps to stop the infringing activities (e.g., eviction, non-renewal of lease).
Civil Infringement Action: The trademark owner can file a case under the IP Code (Sections 155 and 156), seeking an injunction against continued infringement. While the direct infringer is the primary defendant, the landlord may be named as a co-defendant if facts support contributory or vicarious liability.
Preliminary Injunction or Temporary Restraining Order (TRO): Courts can order the landlord to assist in halting the sale of counterfeit goods on their premises or to bar the tenant from operating during the pendency of litigation.
Damages: If the landlord is found liable, the court may award damages, attorney’s fees, and even impose exemplary damages in cases of gross negligence or bad faith.
Criminal Complaints: In severe cases involving willful infringement and the landlord’s complicity, criminal charges may be pursued under the IP Code’s penal provisions.

6. Defenses Available to Landlords

Landlords facing allegations of contributory or vicarious infringement can raise several defenses:

Lack of Knowledge: Demonstrating that the landlord had neither actual nor constructive knowledge of the infringement and that no warnings or red flags were brought to its attention.
Prompt, Reasonable Action: Showing that as soon as the landlord learned of possible infringement, it took swift and reasonable measures (e.g., issuing warnings, terminating the lease if permitted, or notifying authorities).
Contractual Limitations: If the lease contract does not give the landlord the power to control or supervise the tenant’s business activities beyond normal leasing aspects, the landlord might argue it lacked the requisite ability to control the infringing acts.
No Financial Benefit: Establishing that the landlord received only standard rent fees, with no direct link to sales volume or products sold, and thus no special financial incentive tied to the infringing conduct.

7. Best Practices and Preventive Measures for Landlords

Due Diligence: Screen prospective tenants, especially those claiming to sell branded or luxury goods, to reduce the risk of leasing space to counterfeiters.
Lease Provisions: Include strong clauses in the lease agreement explicitly prohibiting illegal or IP-infringing activities, and stipulate that violations are grounds for immediate lease termination.
Monitoring and Compliance: Maintain a regular monitoring system for tenant compliance, particularly in high-risk industries (e.g., fashion, electronics, pharmaceuticals).
Prompt Action: If a trademark owner or authorities provide evidence of infringement, investigate and act quickly to avoid allegations of willful blindness or acquiescence.
Cooperation with Authorities: Cooperate with the Intellectual Property Office (IPO), law enforcement, and brand owners in enforcing trademark rights when credible complaints arise.

8. Philippine Jurisprudence and Global Influence

To date, Philippine case law has not comprehensively settled the contours of landlord liability for trademark infringement in the same way that other jurisdictions (e.g., the United States) have well-developed doctrines on contributory trademark infringement (eBay, Swap Meet cases, etc.). In the Philippines, courts may adapt broader principles of civil liability and the IP Code’s infringement provisions to specific cases.

Nonetheless, as the Philippines increasingly participates in global trade and with the rise of large shopping malls and e-commerce, it is likely that courts will refine or expand legal principles on indirect liability over time. Decisions from other jurisdictions—though not binding—can be persuasive, especially if local factual scenarios closely resemble foreign cases.

9. Conclusion

While landlord liability for trademark infringement under the Philippine IP Code is not expressly detailed in statutory language, landlords do risk indirect liability under existing principles of civil law and intellectual property law if they knew or should have known of infringing activities and failed to take reasonable steps to prevent or stop them.

Key takeaways:

Knowledge is central: once the landlord has credible information of infringement on its property, inaction can be construed as acquiescence.
Control and benefit are also crucial: the more control the landlord has and the more it profits from the tenant’s illicit trade, the more likely it becomes that a court will hold the landlord liable.
Prudent safeguards—strong lease clauses, monitoring, and cooperation with IP owners—help reduce the risk of unintended liability.

In practice, brand owners can and often do include landlords in demand letters or legal actions as a strategy to compel them to assist in curbing counterfeiting or infringing activities. Landlords should take these notices seriously, ensure robust contractual safeguards, and promptly address possible infringement to avoid legal repercussions.