Congress of the Philippines

Metro Manila

Eleventh Congress

Second Regular Session

Begun and held in Metro Manila, on Monday, the fourteenth June, two thousand.

Republic Act No. 8792

ELECTRONIC COMMERCE ACT OF 2000

AN ACT PROVIDING FOR THE RECOGNITION AND USE OF ELECTRONIC COMMERCIAL AND NON-COMMERCIAL TRANSACTIONS AND DOCUMENTS, PENALTIES FOR UNLAWFUL USE THEREOF AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Republic of the Philippines in Congress assembled:

PART I

SHORT TITLE AND DECLARATION OF POLICY

Sec. 1. Short Title. - This Act shall be known as the “Electronic Commerce Act of 2000″.

Sec. 2. Declaration of Policy. - The State recognizes the vital role of information and communications technology (ICT) in nation-building; the need to create an information -friendly environment which supports and ensures the availability, diversity and affordability of ICT products and services; the primary responsibility of the private sector in contributing investments and services in telecommunications and information technology; the need to develop, with appropriate training programs and institutional policy changes, human resources for the information technology age, a labor force skilled in the use of ICT and a population capable of operating and utilizing electronic appliances and computers; its obligation to facilitate the transfer and promotion of adaptation technology, to ensure network security, connectivity and neutrality of technology for the national benefit; and the need to marshal, organize and deploy  national information infrastructures, comprising in both telecommunications network and strategic information services, including their interconnection to the global information networks, with the necessary and appropriate legal, financial, diplomatic and technical framework, systems and facilities.

PART II

ELECTRONIC COMMERCE IN GENERAL

CHAPTER I

Sec. 3. Objective. This Act aims to facilitate domestic and international dealings, transactions, arrangements, agreements, contracts and exchanges and storage of information through the utilization of electronic, optical and similar medium, mode, instrumentality and technology to recognize the authenticity and reliability of electronic documents related to such activities and to promote the universal use of electronic transaction in the government and general public.

Sec. 4. Sphere of Application. This Act shall apply to any kind of data message and electronic document used in the context of commercial and non-commercial activities to include domestic and international dealings, transactions, arrangements, agreements, contracts and exchanges and storage of information.

Sec. 5. Definition of Terms. For the purposes of this Act, the following terms are defined, as follows:

a) “Addressee” refers to a person who is intended by the originator to receive the electronic data message or electronic document. The term does not include a person acting as an intermediary with respect to that electronic data message or electronic document.

b) “Computer” refers to any device or apparatus which, by electronic, electro-mechanical or magnetic impulse, or by other means, is capable of receiving, recording, transmitting, storing, processing, retrieving, or producing information, data, figures, symbols or other modes of written expression according to mathematical and logical rules or of performing any one or more of those functions.

c) “Electronic Data message” refers to information generated, sent, received or stored by electronic, optical or similar means.

d) “Information and communication system” refers to a system intended for and capable of generating, sending, receiving, storing or otherwise processing electronic data messages or electronic documents and includes the computer system or other similar device by or in which data is recorded or stored and any procedures related to the recording or storage of electronic data message or electronic document.

e) “Electronic signature” refers to any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person and attached to or logically associated with the electronic data message or electronic document or any methodology or procedures employed or adopted by a person and executed or adopted by such person with the intention of authenticating or approving an electronic data message or electronic document.

f) “Electronic document” refers to information or the representation of information, data, figures, symbols or other modes of written expression, described or however represented, by which a right is established or an obligation extinguished, or by which a fact may be proved and affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced electronically.

g) “Electronic key” refers to a secret code which secures and defends sensitive information that crosses over public channels into a form decipherable only with a matching electronic key.

h) “Intermediary” refers to a person who in behalf of another person and with respect to a particular electronic document sends, receives and/or stores or provides other services in respect to that electronic document.

i) “Originator” refers to a person by whom, or on whose behalf, the electronic document purports to have been created, generated and/or sent. The term does not include a person acting as an intermediary with respect to that electronic document.

j) “Service provider” refers to a provider of -

i)  On-line services or network access, or the operator of facilities thereof, including entities offering the transmission, routing, or providing of connections for online communications, digital or otherwise, between or among points specified by a user, of electronic documents of the user’s choosing; or

ii)  The necessary technical means by which electronic documents of an originator may be stored and made accessible to a designated or undesignated third party;

iii)  Such service providers shall have no authority to modify or alter the content of the electronic data message or electronic document received or to make any entry therein on behalf of the originator, addressee or any third party unless specifically authorized to do so, and who shall retain the electronic document in accordance with the specific request or as necessary for the purpose of performing the services it was engaged to perform.

CHAPTER II

LEGAL RECOGNITION OF ELECTRONIC WRITING OR DOCUMENT AND DATA MESSAGES

Sec. 6. Legal Recognition of Data Messages - Information shall not be denied legal effect, validity or enforceability solely on the grounds that it is in the data message purporting to give rise to such legal effect, or that it is merely referred to in that electronic data message.

Sec. 7. Legal Recognition of Electronic Documents - Electronic documents shall have the legal effect, validity or enforceability as any other document or legal writing, and -

a) Where the law requires a document to be in writing, that requirement is met by an electronic document if the said electronic document maintains its integrity and reliability and can be authenticated so as to be usable for subsequent reference, in that -

i) The electronic document has remained complete and unaltered, apart from the addition of any endorsement and any authorized change, or any change which arises in the normal course of communication, storage and display; and

ii) The electronic document is reliable in the light of the purpose for which it was generated and in the light of all the relevant circumstances.

b) Paragraph (a) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the document not being presented or retained in its original form.

c) Where the law requires that a document be presented or retained in its original form, that requirement is met by an electronic document if -

i) There exists a reliable assurance as to the integrity of the document from the time when it was first generated in its final form; and

ii) That document is capable of being displayed to the person to whom it is to be presented: Provided, That no provision of this Act shall apply to vary any and all requirements of existing laws on formalities required in the execution of documents for their validity.

For evidentiary purposes, an electronic document shall be the functional equivalent of a written document under existing laws.

This Act does not modify any statutory rule relating to the admissibility of electronic data messages or electronic documents, except the rules relating to authentication and best evidence.

Sec. 8. Legal Recognition of Electronic Signatures - An electronic signature on the electronic document shall be equivalent to the signature of a person on a written document if that signature is proved by showing that a prescribed procedure, not alterable by the parties interested in the electronic document, existed under which -

a) A method is used to identify the party sought to be bound and to indicate said party’s access to the electronic document necessary for his consent or approval through the electronic signature;

b) Said method is reliable and appropriate for the purpose for which the electronic document was generated or communicated, in the light of all the circumstances, including any relevant agreement;

c) It is necessary for the party sought to be bound, in order to proceed further with the transaction, to have executed or provided the electronic signature; and

d) The other party is authorized and enabled to verify the electronic signature and to make the decision to proceed with the transaction authenticated by the same.

Sec. 9. Presumption Relating to Electronic Signatures - In any proceeding involving an electronic signature, it shall be presumed that -

a) The electronic signature is the signature of the person to whom it correlates; and

b) The electronic signature was affixed by that person with the intention of signing or approving the electronic document unless the person relying on the electronically signed electronic document knows or has notice of defects in or unreliability of the signature or reliance on the electronic signature is not reasonable under the circumstances.

Sec. 10. Original Documents -

(1)  Where the law requires information to be presented or retained in its original form, that requirement is met by an electronic data message or electronic document if:

(a) the integrity of the information from the time when it was first generated in its final form, as an electronic data message or electronic document is shown by evidence aliunde or otherwise; and

(b) where it is required that information be presented, that the information is capable of being displayed to the person to whom it is to be presented.

(2)  Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the information not being presented or retained in its original form.

(3)  For the purposes of subparagraph (a) of paragraph (1):

(a) the criteria for assessing integrity shall be whether the information has remained complete and unaltered, apart from the addition of any endorsement and any change which arises in the normal course of communication, storage and display; and

(b) the standard of reliability required shall be assessed in the light of the purpose for which the information was generated and in the light of all relevant circumstances.

HOUSE OF REPRESENTATIVES

Quezon City

THIRTEENTH CONGRESS

Third Regular Session

HOUSE BILL NO. ________

Introduced by Representative Teodoro A. Casiño

AN ACT

DEFINING THE PROCUREMENT OF SOFTWARE AND SOFTWARE LICENSES IN GOVERNMENT AGENCIES, PROMOTING THE DEVELOPMENT, AND USE OF FREE/OPEN SOURCE SOFTWARE (FOSS), DECLARING ILLEGAL THE PATENTING OF KNOWN FOSS AND STANDARDS OR ANY OF THEIR DERIVATIVES THEREBY AMENDING SECTION 22 OF RA 8293 OTHERWISE KNOWN AS THE INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title - This Act shall be known as the “Free/Open SourceSoftware (FOSS) Act of 2006″.

SECTION 2. Declaration of Policy – Recognizing the wide discrepancy between the technologies of developing countries and advanced countries, further recognizing the economic limitations in the information technology (IT) of developing countries,  especially on the viability of purchasing and implementing expensive software solutions, and further recognizing the relatively slow diffusion of technology between the advanced countries and industrializing countries; do hereby declare a policy of the state to:

2.1.  promote the preferential use of domestic material and Filipino labor in information communications technology, in accordance to Art XII, Sec. 12 of the Constitution;

2.2.  adoption of a mechanisms to ensure fiscal discipline in the purchase ofv software, without compromising the state’s security and the stability and robustness of the country’s ICT infrastructure; and,

2.3. Develop Filipino professionals and scientists in the field of software technology and ICT by promoting the use and purchase of free/open source software for state use, in accordance to Article XII, Sec. 14 of the Constitution.

SECTION 3. Definition of Terms – as used in this bill, the following terms and phrases shall mean:

FOSS License – any license and/or end user agreement that ensures free access and redistribution to free open source software; such licenses are generally approved by an internationally renowned FOSS advocate body such as the Open Source Initiative (OSI).

Open standards – standards, protocols or specifications for systems that are  publicly available and affirmed by a standards body.

In the absence of authentication or affirmation by an internationally recognized standards body, open standards shall mean all protocols, standards and specifications that are publicly available, are widely used, are interoperable and are scalable.

Source code -the set of human readable instructions and statements written by the programmer using a particular programming language, including the modules, components of the executable program, and any interface definition files and scripts used to compile and install program.

Compile – the translation of a source code into an object code, that is, the executable program which can be used by a user using an appropriate operating system. In some programming languages, different object codes may be needed to link each other to form the executable program.

Programming language - any program used to interpret machine codes into human readable text format used by programmers to form a program.

Interoperability -the ability of information systems to operate in conjunction with each other encompassing protocols, hardware software, application, and data compatibility layers. In particular, it is the ability of different types of computers, networks, operating systems, and applications to work together effectively, without prior communication, in order to exchange information in a useful and meaningful manner.

Scalability – the ease of a particular system or component to fit in a particular area without need to replace much of existing system hardware; it shall also mean the ability of a particular system or its components to accommodate upgrades and future needs.

TCO - abbreviation for Total Cost of Ownership, which covers all the costs involved in a technology or business solution, including the initial investment cost and maintenance, support, replacement, training and upgrade costs.

ICT - Information and Communications Technology

Government - includes the three separate branches of government and all departments, bureaus, offices and agencies operating under each separate branch of government, including government-owned and-controlled corporations.

CICT - the Commission on Information and Communications Technology

Higher Educational Institutions (HEI) - public or private institutions whose main objective for existing is to provide tertiary education whether vocational, baccalaureate or post-baccalaureate degrees including professional and skills certification short courses.

SECTION 4. Free/Open Source Software (FOSS) so defined - Free/Open Source Software (FOSS) are software that meets all of the following criteria:

4.1. the source code of the software, including the source code for such other parts and components the needed to compile and install the software shall be readily available and accessible;

4.2. The license to use the program does not restrict, nor require such other fees such as royalties, from anyone to redistribute, in any way it sees fit, the program as part of an aggregate software distribution or solution containing other programs from several other sources;

4.3. The license must allow modifications and derived works which, as specified in Section 4.2 of this Act, must allow for redistribution without additional charges;

4.4. The license to use must not discriminate against persons or group of persons nor must not discriminate against individuals by their field of endeavor;

4.5. Licenses may restrict the distribution of “modified source codes” only if the source code allows for “patches” to be implemented during build time. However, licenses must explicitly state that it allows for redistribution of the modified software and access to the original source code is still made available;

4.6. The license of the program shall not be restricted to it being part of a particular software distribution, hence, individual components of an aggregate solution can be modified and redistributed in accordance to Sections 4.2 and 4.3 of this Act;

4.7. Software’s license must not restrict other software from being used as part or in cooperation with the FOSS. Hence, licenses open source software can be used in conjuncture with proprietary software; and,

4.8. The license must be technology neutral. No restrictions should be placed regarding the use of the software in any platform. In case it is found that the software does not efficiently work on a particular platform, the software developer of the open source technology must address the interoperability issues post haste without extra charges;

SECTION 5. Legal Recognition of FOSS - The government shall recognize the validity and legitimacy of FOSS and FOSS licenses, subject to the provisions of existing laws, rules and regulations.

SECTION 6. Government Rules and Policies on the Use and Adoption of FOSS and Open Standards in Government

6.1.  Use of open standards - The Government shall only use ICT goods and services that are, support and / or interoperable with open standards, protocols or specifications.

6.2. Use of FOSS - The government shall apply only FOSS or FOSS  solutions, as defined in section 4 of this Act, in all ICT projects and activities;

6.3. Extraordinary circumstances - There may be extraordinary circumstances which may render the use of FOSS and Open Standards almost impossible for government use. They may include but are not limited to:

6.3.1where there is no reasonably available ICT good or services supporting open standards in the field, area or activity that the Government intends to enter or participate; or,

6.3.2   Where a particular government agency or office has existing, widely-used and widely implemented proprietary ICT system and there are no reasonably available technology using open standards that can be used with the said proprietary system.

6.4.  Limitations of Proprietary Software and Standards in Government Use - Should there exist extraordinary circumstances as enumerated in Section 6.3, the government may use proprietary standards and software subject to the following conditions:

6.4.1 The state shall procure, purchase or acquire software that offers license most similar to FOSS as defined in Section 4 of this Act;

6.4.2   Open standards and FOSS will be selected and given preference when existing systems are to be retired or need major enhancements; and,

6.4.3   Basic upgrade and software patches will be provided by the vendor to the state free of charge;

SECTION 7. Provision against single vendor lock-in and dependence - Under no circumstances are ICT goods and services to be acquired by the State restricted for use in a single vendor environment only. All prospective ICT investments of the government shall comply with open standards, and existing ICT systems will be reviewed for open standards compatibility and will be enhanced to achieve open standards compatibility when appropriate.

SECTION 8. Right to Derivatives and the Control and Modification Software - In any circumstances, Government shall obtain full rights and control over derivatives, modifications and customizations of software that it uses or adopts.

SECTION 9. Preference in procurement of ICT services and goods - In case the Total Cost of Ownership (TCO) of an FOSS or implementing an open standard system is equal to or slightly higher that of proprietary system, the Government shall give preference to FOSS and open standards, provided further that in case there is more than one company that offers FOSS and open standard solutions to the government with almost equal TCO, preference shall be given to the Filipino owned ICT Company.

SECTION 10. Promotion of FOSS and open standards in Higher Educational

Institutions (HEIs) -

10.1.   The government, through the Commission on Higher Education (CHED), the National Computing Center (NCC), the Department of Science and Technology (DOST), and any other government office, shall promote the awareness of Filipinos in free/open source software by providing laboratories; organizing competitions; encouraging research, thesis and dissertations on free/open source software development and the development of open standards;

10.2.   Within eighteen (18) months after this Act takes effect, the Department of Education, the Department of Science and Technology the Commission on Higher Education, and the University of the Philippines shall jointly formulate and implement a curriculum for student’s training in the use and development of free/open source software both in secondary and tertiary education. They will also formulate a basic government retraining and certification program for existing IT professionals to test their proficiencies and skills in implementing FOSS solutions.

10.3.   It shall be unlawful for any HEI to offer, as part of its curriculum, a certification program training students to become professionals on the use and implementation of proprietary software and solutions if it does not offer, also as part of its curriculum, a similar certification program for FOSS, open systems and standards.

SECTION 11. Amending Section 22 of RA 8293, otherwise known as the “Intellectual Property Code of the Philippines” -

Sec. 22 RA 8293 otherwise known as the Intellectual Property Code of the Philippines is hereby amended to read as follows:

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Section 22. Non-Patentable Inventions. - The following shall be excluded from patent protection

22.1. Discoveries, scientific theories and mathematical methods;

22.2. Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers;

22.3 Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body. This provision shall not apply to products and composition for use in any of these methods;

22.4. Plant varieties or animal breeds or essentially biological process for the production of plants or animals. This provision shall not apply to micro-organisms and non-biological and microbiological processes.

Provisions under this subsection shall not preclude Congress to consider the enactment of a law providing sui generis protection of plant varieties and animal breeds and a system of community intellectual rights protection:

22.5. Aesthetic creations; [and]

22.6. Anything which is contrary to public order or morality, AND

22.7 ANY STANDARD, PROTOCOL, SPECIFICATION, AND COMPUTER PROGRAM / SOFTWARE, WHICH HAD GENERALLY BEEN KNOWN AS FREE/OPEN SOURCE SOFTWARE OR FORM PART OF EXISTING OPEN STANDARDS, OR ANY OF THEIR DERIVATIVES.

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SECTION 12. Implementation - The CICT shall be the main government agency to oversee the implementation of this Act, within eighteen (18) months after this Act takes effect the CICT shall:

12.1. Submit to the Office of the President and to Congress a copy of its audit of all government’s existing ICT systems, and it’s recommendations as to system migration and changes needed to fulfill the objectives of this Act;

12.2. Be ready with the implementing rules and regulations for this Act which shall include as minimum the following:

12.2.1.  Within three years, 85% of all existing government systems shall be open standards compliant and employs FOSS;

12.2.2. Within three years, 90% of government IT professionals, and 65% of the country’s IT professionals, must be proficient in the implementation of FOSS systems; and,

12.2.3. The development of an FOSS community in the Philippines that will help in the development and advocacy of FOSS.

SECTION 13. Penalties -

13.1. Any act, or omission, on the part of any public official(s) and/or individuals acting in conspiracy with public officials violating provisions of this Act shall be penalized in accordance with pertinent provision(s) of RA 3019, otherwise known as The Anti-Graft and Corrupt Practices Act as amended.

13.2. The Commission on Higher Education (CHED) and/or the courts, whichever is applicable, shall penalize HEIs found violating Section 10.3 of this Act on the following schedule:

(a) “First Offense” - A fine of not less than ten thousand pesos (P10, 000.00) but  no more than fifty thousand pesos (P50,000.00);

(b) “Second Offense” - A fine of not less than fifty thousand pesos (P50,000.00) but no more than one hundred thousand pesos (P100,000.00), revocation of license to offer the course for which the curriculum was offered and/or imprisonment of the school officials responsible of not less than six (6) months but no more than eighteen (24) months in the discretion of the courts; and,

(c) “Third Offense” - A fine of not less than one hundred thousand pesos (P100,000.00) but no more than two hundred one thousand pesos (P201,000.00), revocation of license for the school to operate, and / or imprisonment of the school officials of not less than twenty-four (24) months but no more than forty-eight (48) months in the discretion of the courts;

SECTION 14. Repealing Clause - Section 22 of RA 8293 otherwise known ast he “Intellectual Property code of the Philippines” is hereby amended in accordance to Section 11 of this Act.

All other laws, presidential decrees, executive orders and rules and regulations, or

parts thereof, inconsistent with the provisions of this Act are hereby repealed, modified, or amended accordingly.

SECTION 15. Separability Clause - if any section or provision of this Article is held unconstitutional or invalid, the validity of other sections herein shall not be affected thereby.

SECTION 16. Effectivity - this Act shall take effect fifteen (15) days after its publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved.

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