[G.R. No. 115758. March 19, 2002]
[3]
ELIDAD C. KHO, doing business under the name and style of KEC COSMETICS
LABORATORY, petitioner, vs. HON. COURT OF APPEALS, SUMMERVILLE GENERAL
MERCHANDISING and COMPANY, and ANG TIAM CHAY, respondents.
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision[1] dated May 24, 1993 of the Court of
Appeals setting aside and declaring as null and void the Orders[2] dated February 10, 1992 and March 19,
1992 of the Regional Trial Court, Branch 90, of Quezon City granting the issuance of a writ of preliminary
injunction.
The facts of the case are as follows:
On December 20, 1991, petitioner Elidad C. Kho filed a complaint for injunction and damages with
a prayer for the issuance of a writ of preliminary injunction, docketed as Civil Case No. Q-91-10926,
against the respondents Summerville General Merchandising and Company (Summerville, for brevity) and
Ang Tiam Chay.
The petitioners complaint alleges that petitioner, doing business under the name and style of KEC
Cosmetics Laboratory, is the registered owner of the copyrights Chin Chun Su and Oval Facial Cream
Container/Case, as shown by Certificates of Copyright Registration No. 0-1358 and No. 0-3678; that she
also has patent rights on Chin Chun Su & Device and Chin Chun Su for medicated cream after purchasing
the same from Quintin Cheng, the registered owner thereof in the Supplemental Register of the Philippine
Patent Office on February 7, 1980 under Registration Certificate No. 4529; that respondent Summerville
advertised and sold petitioners cream products under the brand name Chin Chun Su, in similar containers
that petitioner uses, thereby misleading the public, and resulting in the decline in the petitioners business
sales and income; and, that the respondents should be enjoined from allegedly infringing on the copyrights
and patents of the petitioner.
The respondents, on the other hand, alleged as their defense that Summerville is the exclusive and
authorized importer, re-packer and distributor of Chin Chun Su products manufactured by Shun Yi Factory
of Taiwan; that the said Taiwanese manufacturing company authorized Summerville to register its trade
name Chin Chun Su Medicated Cream with the Philippine Patent Office and other appropriate
governmental agencies; that KEC Cosmetics Laboratory of the petitioner obtained the copyrights through
misrepresentation and falsification; and, that the authority of Quintin Cheng, assignee of the patent
registration certificate, to distribute and market Chin Chun Su products in the Philippines had already been
terminated by the said Taiwanese Manufacturing Company.
After due hearing on the application for preliminary injunction, the trial court granted the same in an
Order dated February 10, 1992, the dispositive portion of which reads:
ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing business under the style of KEC
Cosmetic Laboratory, for preliminary injunction, is hereby granted. Consequentially, plaintiff is required
to file with the Court a bond executed to defendants in the amount of five hundred thousand pesos
(P500,000.00) to the effect that plaintiff will pay to defendants all damages which defendants may sustain
by reason of the injunction if the Court should finally decide that plaintiff is not entitled thereto.
SO ORDERED.
The respondents moved for reconsideration but their motion for reconsideration was denied by the trial
court in an Order dated March 19, 1992.[4]
On April 24, 1992, the respondents filed a petition for certiorari with the Court of Appeals, docketed
as CA-G.R. SP No. 27803, praying for the nullification of the said writ of preliminary injunction issued
by the trial court. After the respondents filed their reply and almost a month after petitioner submitted her
comment, or on August 14 1992, the latter moved to dismiss the petition for violation of Supreme Court
Circular No. 28-91, a circular prohibiting forum shopping. According to the petitioner, the respondents
did not state the docket number of the civil case in the caption of their petition and, more significantly,
they did not include therein a certificate of non-forum shopping. The respondents opposed the petition and
submitted to the appellate court a certificate of non-forum shopping for their petition.
On May 24, 1993, the appellate court rendered a Decision in CA-G.R. SP No. 27803 ruling in favor
of the respondents, the dispositive portion of which reads:
WHEREFORE, the petition is hereby given due course and the orders of respondent court dated February
10, 1992 and March 19, 1992 granting the writ of preliminary injunction and denying petitioners motion
for reconsideration are hereby set aside and declared null and void. Respondent court is directed to
forthwith proceed with the trial of Civil Case No. Q-91-10926 and resolve the issue raised by the parties
on the merits.
SO ORDERED.[5]
In granting the petition, the appellate court ruled that:
The registration of the trademark or brandname Chin Chun Su by KEC with the supplemental register of
the Bureau of Patents, Trademarks and Technology Transfer cannot be equated with registration in the
principal register, which is duly protected by the Trademark Law.
xxx xxx xxx
As ratiocinated in La Chemise Lacoste, S.S. vs. Fernandez, 129 SCRA 373, 393:
Registration in the Supplemental Register, therefore, serves as notice that the registrant is using or has
appropriated the trademark. By the very fact that the trademark cannot as yet be on guard and there are
certain defects, some obstacles which the use must still overcome before he can claim legal ownership of
the mark or ask the courts to vindicate his claims of an exclusive right to the use of the same. It would be
deceptive for a party with nothing more than a registration in the Supplemental Register to posture before
courts of justice as if the registration is in the Principal Register.
The reliance of the private respondent on the last sentence of the Patent office action on application Serial
No. 30954 that registrants is presumed to be the owner of the mark until after the registration is declared
cancelled is, therefore, misplaced and grounded on shaky foundation. The supposed presumption not only
runs counter to the precept embodied in Rule 124 of the Revised Rules of Practice before the Philippine
Patent Office in Trademark Cases but considering all the facts ventilated before us in the four interrelated
petitions involving the petitioner and the respondent, it is devoid of factual basis. As even in cases where
presumption and precept may factually be reconciled, we have held that the presumption is rebuttable, not
conclusive, (People v. Lim Hoa, G.R. No. L-10612, May 30, 1958, Unreported). One may be declared an
unfair competitor even if his competing trademark is registered (Parke, Davis & Co. v. Kiu Foo & Co., et
al., 60 Phil 928; La Yebana Co. v. chua Seco & Co., 14 Phil 534). [6]
The petitioner filed a motion for reconsideration. This she followed with several motions to declare
respondents in contempt of court for publishing advertisements notifying the public of the promulgation
of the assailed decision of the appellate court and stating that genuine Chin Chun Su products could be
obtained only from Summerville General Merchandising and Co.
In the meantime, the trial court went on to hear petitioners complaint for final injunction and
damages. On October 22, 1993, the trial court rendered a Decision [7] barring the petitioner from using the
trademark Chin Chun Su and upholding the right of the respondents to use the same, but recognizing the
copyright of the petitioner over the oval shaped container of her beauty cream. The trial court did not
award damages and costs to any of the parties but to their respective counsels were awarded Seventy-Five
Thousand Pesos (P75,000.00) each as attorneys fees. The petitioner duly appealed the said decision to the
Court of Appeals.
On June 3, 1994, the Court of Appeals promulgated a Resolution [8] denying the petitioners motions
for reconsideration and for contempt of court in CA-G.R. SP No. 27803.
Hence, this petition anchored on the following assignment of errors:
I over the same to the exclusion of others.
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON
PETITIONERS MOTION TO DISMISS.
II
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN REFUSING TO
PROMPTLY RESOLVE PETITIONERS MOTION FOR RECONSIDERATION.
III
IN DELAYING THE RESOLUTION OF PETITIONERS MOTION FOR
RECONSIDERATION, THE HONORABLE COURT OF APPEALS DENIED
PETITIONERS RIGHT TO SEEK TIMELY APPELLATE RELIEF AND VIOLATED
PETITIONERS RIGHT TO DUE PROCESS.
IV
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO CITE THE
PRIVATE RESPONDENTS IN CONTEMPT.[9]
The petitioner faults the appellate court for not dismissing the petition on the ground of violation of
Supreme Court Circular No. 28-91. Also, the petitioner contends that the appellate court violated Section
6, Rule 9 of the Revised Internal Rules of the Court of Appeals when it failed to rule on her motion for
reconsideration within ninety (90) days from the time it is submitted for resolution. The appellate court
ruled only after the lapse of three hundred fifty-four (354) days, or on June 3, 1994. In delaying the
resolution thereof, the appellate court denied the petitioners right to seek the timely appellate relief. Finally,
petitioner describes as arbitrary the denial of her motions for contempt of court against the respondents.
We rule in favor of the respondents.
Pursuant to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one of the grounds for the
issuance of a writ of preliminary injunction is a proof that the applicant is entitled to the relief demanded,
and the whole or part of such relief consists in restraining the commission or continuance of the act or acts
complained of, either for a limited period or perpetually. Thus, a preliminary injunction order may be
granted only when the application for the issuance of the same shows facts entitling the applicant to the
relief demanded.[10] This is the reason why we have ruled that it must be shown that the invasion of the
right sought to be protected is material and substantial, that the right of complainant is clear and
unmistakable, and, that there is an urgent and paramount necessity for the writ to prevent serious
damage.[11]
In the case at bar, the petitioner applied for the issuance of a preliminary injunctive order on the
ground that she is entitled to the use of the trademark on Chin Chun Su and its container based on her
copyright and patent over the same. We first find it appropriate to rule on whether the copyright and patent
over the name and container of a beauty cream product would entitle the registrant to the use and ownership
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of
goods.[12] In relation thereto, a trade name means the name or designation identifying or distinguishing an
enterprise.[13] Meanwhile, the scope of a copyright is confined to literary and artistic works which are
original intellectual creations in the literary and artistic domain protected from the moment of their
creation.[14] Patentable inventions, on the other hand, refer to any technical solution of a problem in any
field of human activity which is new, involves an inventive step and is industrially applicable. [15]
Petitioner has no right to support her claim for the exclusive use of the subject trade name and its
container. The name and container of a beauty cream product are proper subjects of a trademark inasmuch
as the same falls squarely within its definition. In order to be entitled to exclusively use the same in the
sale of the beauty cream product, the user must sufficiently prove that she registered or used it before
anybody else did. The petitioners copyright and patent registration of the name and container would not
guarantee her the right to the exclusive use of the same for the reason that they are not appropriate subjects
of the said intellectual rights. Consequently, a preliminary injunction order cannot be issued for the reason
that the petitioner has not proven that she has a clear right over the said name and container to the exclusion
of others, not having proven that she has registered a trademark thereto or used the same before anyone
did.
We cannot likewise overlook the decision of the trial court in the case for final injunction and
damages. The dispositive portion of said decision held that the petitioner does not have trademark rights
on the name and container of the beauty cream product. The said decision on the merits of the trial court
rendered the issuance of the writ of a preliminary injunction moot and academic notwithstanding the fact
that the same has been appealed in the Court of Appeals. This is supported by our ruling in La Vista
Association, Inc. v. Court of Appeals[16], to wit:
Considering that preliminary injunction is a provisional remedy which may be granted at any time after
the commencement of the action and before judgment when it is established that the plaintiff is entitled to
the relief demanded and only when his complaint shows facts entitling such reliefs xxx and it appearing
that the trial court had already granted the issuance of a final injunction in favor of petitioner in its
decision rendered after trial on the merits xxx the Court resolved to Dismiss the instant petition having
been rendered moot and academic. An injunction issued by the trial court after it has already made a clear
pronouncement as to the plaintiffs right thereto, that is, after the same issue has been decided on the merits,
the trial court having appreciated the evidence presented, is proper, notwithstanding the fact that the
decision rendered is not yet final xxx. Being an ancillary remedy, the proceedings for preliminary
injunction cannot stand separately or proceed independently of the decision rendered on the merit of the
main case for injunction. The merit of the main case having been already determined in favor of the
applicant, the preliminary determination of its non-existence ceases to have any force and effect. (italics
supplied)
been rendered moot and academic by our ruling that she has no right over the trademark and, consequently,
to the issuance of a writ of preliminary injunction.
Finally, we rule that the Court of Appeals correctly denied the petitioners several motions for
contempt of court. There is nothing contemptuous about the advertisements complained of which, as
regards the proceedings in CA-G.R. SP No. 27803 merely announced in plain and straightforward
language the promulgation of the assailed Decision of the appellate court. Moreover, pursuant to Section
4 of Rule 39 of the Revised Rules of Civil Procedure, the said decision nullifying the injunctive writ was
immediately executory.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated
May 24, 1993 and June 3, 1994, respectively, are hereby AFFIRMED. With costs against the petitioner.
SO ORDERED.

La Vista categorically pronounced that the issuance of a final injunction renders any question on the
preliminary injunctive order moot and academic despite the fact that the decision granting a final injunction
is pending appeal. Conversely, a decision denying the applicant-plaintiffs right to a final injunction,
although appealed, renders moot and academic any objection to the prior dissolution of a writ of
preliminary injunction.
The petitioner argues that the appellate court erred in not dismissing the petition for certiorari for
non-compliance with the rule on forum shopping. We disagree. First, the petitioner improperly raised the
technical objection of non-compliance with Supreme Court Circular No. 28-91 by filing a motion to
dismiss the petition for certiorari filed in the appellate court. This is prohibited by Section 6, Rule 66 of
the Revised Rules of Civil Procedure which provides that (I)n petitions for certiorari before the Supreme
Court and the Court of Appeals, the provisions of Section 2, Rule 56, shall be observed. Before giving due
course thereto, the court may require the respondents to file their comment to, and not a motion to dismiss,
the petition xxx (italics supplied). Secondly, the issue was raised one month after petitioner had filed her
answer/comment and after private respondent had replied thereto. Under Section 1, Rule 16 of the Revised
Rules of Civil Procedure, a motion to dismiss shall be filed within the time for but before filing the answer
to the complaint or pleading asserting a claim. She therefore could no longer submit a motion to dismiss
nor raise defenses and objections not included in the answer/comment she had earlier tendered. Thirdly,
substantial justice and equity require this Court not to revive a dissolved writ of injunction in favor of a
party without any legal right thereto merely on a technical infirmity. The granting of an injunctive writ
based on a technical ground rather than compliance with the requisites for the issuance of the same is
contrary to the primary objective of legal procedure which is to serve as a means to dispense justice to the
deserving party.
The petitioner likewise contends that the appellate court unduly delayed the resolution of her motion
for reconsideration. But we find that petitioner contributed to this delay when she filed successive
contentious motions in the same proceeding, the last of which was on October 27, 1993, necessitating
counter-manifestations from private respondents with the last one being filed on November 9, 1993.
Nonetheless, it is well-settled that non-observance of the period for deciding cases or their incidents does
not render such judgments ineffective or void.[17] With respect to the purported damages she suffered due
to the alleged delay in resolving her motion for reconsideration, we find that the said issue has likewise
G.R. No. 195835, March 14, 2016
SISON OLA�O, SERGIO T. ONG, MARILYN O. GO, AND JAP FUK HAI, Petitioners, v. LIM
ENG CO, Respondent.
DECISION
REYES, J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court, assailing the Decision2dated
July 9, 2010 and Resolution3 dated February 24, 2011 of the Court of Appeals (CA) in CA-G.R. SP No.
95471, which annulled the Resolutions dated March 10, 2006 4 and May 25, 20065 of the Department of
Justice (DOJ) in I.S. No. 2004-925, finding no probable cause for copyright infringement against Sison
Olano, Sergio Ong, Marilyn Go and Jap Fuk Hai (petitioners) and directing the withdrawal of the criminal
information filed against them.
The Antecedents
The petitioners are the officers and/or directors of Metrotech Steel Industries, Inc. (Metrotech). 6 Lim Eng
Co (respondent), on the other hand, is the Chairman of LEC Steel Manufacturing Corporation (LEC), a
company which specializes in architectural metal manufacturing.7
Sometime in 2002, LEC was invited by the architects of the Manansala Project (Project), a high-end
residential building in Rockwell Center, Makati City, to submit design/drawings and specifications for
interior and exterior hatch doors. LEC complied by submitting on July 16, 2002, shop plans/drawings,
including the diskette therefor, embodying the designs and specifications required for the metal hatch
doors.8
After a series of consultations and revisions, the final shop plans/drawings were submitted by LEC on
January 15, 2004 and thereafter copied and transferred to the title block of Ski-First Balfour Joint Venture
(SKI-FB), the Project's contractor, and then stamped approved for construction on February 3, 2004. 9
LEC was thereafter subcontracted by SKI-FB, to manufacture and install interior and exterior hatch doors
for the 7th to 22nd floors of the Project based on the final shop plans/drawings.10
Sometime thereafter, LEC learned that Metrotech was also subcontracted to install interior and exterior
hatch doors for the Project's 23rd to 41st floors.11
On June 24, 2004, LEC demanded Metrotech to cease from infringing its intellectual property rights.
Metrotech, however, insisted that no copyright infringement was committed because the hatch doors it
manufactured were patterned in accordance with the drawings provided by SKI-FB.12
On July 2, 2004, LEC deposited with the National Library the final shop plans/drawings of the designs
and specifications for the interior and exterior hatch doors of the Project. 13 On July 6, 2004, LEC was
issued a Certificate of Copyright Registration and Deposit showing that it is the registered owner of
plans/drawings for interior and exterior hatch doors under Registration Nos. 1-2004-13 and 1-2004-14,
respectively.14This copyright pertains to class work "I" under Section 172 of Republic Act (R.A.) No.
8293, The Intellectual Property Code of the Philippines, which covers "illustrations, maps, plans, sketches,
charts and three-dimensional works relative to geography, topography, architecture or science."
On December 9, 2004, LEC was issued another Certificate of Copyright Registration and Deposit showing
that it is the registered owner of plans/drawings for interior and exterior hatch doors under Registration
Nos. H-2004-566 and H-2004-56715 which is classified under Section 172(h) of R.A. No. 8293 as "original
ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design,
and other works of applied art."
When Metrotech still refused to stop fabricating hatch doors based on LEC's shop plans/drawings, the
latter sought the assistance of the National Bureau of Investigation (NBI) which in turn applied for a search
warrant before the Regional Trial Court (RTC) of Quezon City, Branch 24. The application was granted
on August 13, 2004 thus resulting in the confiscation of finished and unfinished metal hatch doors as well
as machines used in fabricating and manufacturing hatch doors from the premises of Metrotech. 16
On August 13, 2004, the respondent filed a Complaint-Affidavit17 before the DOJ against the petitioners
for copyright infringement. In the meantime or on September 8, 2004, the RTC quashed the search warrant
on the ground that copyright infringement was not established. 18
Traversing the complaint, the petitioners admitted manufacturing hatch doors for the Project. They denied,
however, that they committed copyright infringement and averred that the hatch doors they manufactured
were functional inventions that are proper subjects of patents and that the records of the Intellectual
Property Office reveal that there is no patent, industrial design or utility model registration on LEC's hatch
doors. Metrotech further argued that the manufacturing of hatch doors per se is not copyright infringement
because copyright protection does not extend to the objects depicted in the illustrations and plans.
Moreover, there is no artistic or ornamental expression embodied in the subject hatch doors that would
subject them to copyright protection.19
Resolutions of the DOJ
In a Resolution20 dated August 18, 2005, the investigating prosecutor dismissed the respondent's complaint
based on inadequate evidence showing that: (1) the petitioners committed the prohibited acts under Section
177 of R.A. No. 8293; and (2) the interior and exterior hatch doors of the petitioners are among the classes
of copyrightable work enumerated in Sections 172 and 173 of the same law. 21
Adamant, the respondent filed a petition for review before the DOJ but it was also denied due course in
the Resolution22 dated November 16, 2005.
Upon the respondent's motion for reconsideration, however, the Resolution23 dated January 27, 2006 of
the DOJ reversed and set aside the Resolution dated August 18, 2005 and directed the Chief State
Prosecutor to file the appropriate information for copyright infringement against the petitioners. 24 The DOJ
reasoned that the pieces of evidence adduced show that the subject hatch doors are artistic or ornamental
with distinctive hinges, door and jamb, among others. The petitioners were not able to sufficiently rebut
these allegations and merely insisted on the non-artistic nature of the hatch doors. The DOJ further held
that probable cause was established insofar as the artistic nature of the hatch doors and based thereon the
act of the petitioners in manufacturing or causing to manufacture hatch doors similar to those of the
respondent can be considered as unauthorized reproduction; hence, copyright infringement under Section
177.1 in relation to Section 216 of R.A. No. 8293. 25cralawred

Aggrieved, the petitioners moved for reconsideration. This time, the DOJ made a complete turn around by
granting the motion, vacating its Resolution dated January 27, 2006 and declaring that the evidence on
record did not establish probable cause because the subject hatch doors were plainly metal doors with
functional components devoid of any aesthetic or artistic features. Accordingly, the DOJ Resolution26dated
March 10, 2006 disposed as follows:
chanRoblesvirtualLawlibrary
WHEREFORE, finding cogent reason to reverse the assailed resolution, the motion for reconsideration
is GRANTED finding no probable cause against the [petitioners]. Consequently, the City Prosecutor of
Manila is hereby directed to cause the withdrawal of the information, if any has been filed in court, and to
report the action taken thereon within TEN (10) DAYS from receipt hereof.
Resolution of the Secretory of Justice dated 27 January 2006 finding probable cause against [the
petitioners], is REINSTATED.
SO ORDERED.32ChanRoblesVirtualawlibrary
The CA reiterated the above ruling in its Resolution33 dated February 24, 2011 when it denied the
petitioners' motion for reconsideration. Hence, the present appeal, arguing that:
I. There was no evidence of actual reproduction of the hatch doors during the preliminary
investigation that would lead the investigating prosecutor to declare the existence of probable
cause;34

SO ORDERED.27ChanRoblesVirtualawlibrary II. Even assuming that the petitioners manufactured hatch doors based on the illustrations and plans
covered by the respondent's Certificate of Registration Nos. 1-2004-13 and 1-2004-14, the
The respondent thereafter filed a motion for reconsideration of the foregoing resolution but it was petitioners could not have committed copyright infringement. Certificate of Registration Nos. 1-
denied28 on May 25, 2006. The respondent then sought recourse before the CA via a petition 2004-13 and 1-2004-14 are classified under Section 172(i) which pertains to "illustrations, maps,
for certiorari29 ascribing grave abuse of discretion on the part of the DOJ. plans, sketches, charts and three-dimensional works relative to geography, topography,
architecture or science." Hence the original works that are copyrighted are the illustrations and
In its assailed Decision30 dated July 9, 2010, the CA granted the petition. The CA held that the vacillating plans of interior hatch doors and exterior hatch doors. Thus, it is the reproduction of the
findings of the DOJ on the presence or lack of probable cause manifest capricious and arbitrary exercise illustrations and plans covered by the copyright registration that amounts to copyright
of discretion especially since its opposite findings were based on the same factual evidence and arguments. infringement. The petitioners did not reproduce the illustrations and plans covered under
Certificate of Registration Nos. 1-2004-13 and 1-2004-14.
The CA then proceeded to make its own finding of probable cause and held that:
chanRoblesvirtualLawlibrary The manufacturing of hatch doors per se does not fall within the purview of copyright
[F]or probable cause for copyright infringement to exist, essentially, it must be shown that the violator infringement because copyright protection does not extend to the objects depicted in the
reproduced the works without the consent of the owner of the copyright. illustrations and plans;35 and

In the present case before Us, [the petitioners] do not dispute that: (1) LEG was issued copyrights for the III. LEC's copyright registration certificates are not conclusive proofs that the items covered thereby
illustrations of the hatch doors under Section 171.i, and for the hatch doors themselves as ornamental are copyrightable. The issuance of registration certificate and acceptance of deposit by the
design or model for articles of manufacture pursuant to Section 171.h of R.A. [No.] 8293; and (2) they National Library is ministerial in nature and does not involve a determination of whether the item
manufactured hatch doors based on drawings and design furnished by SKI-FB, which consists of LEC deposited is copyrightable or not. Certificates of registration and deposit serve merely as a notice
works subject of copyrights. These two (2) circumstances, taken together, are sufficient to excite the belief of recording and registration of the work but do not confer any right or title upon the registered
in a reasonable mind that [the petitioners] are probably guilty of copyright infringement. First, LEC has copyright owner or automatically put his work under the protective mantle of the copyright law. 36
indubitably established that it is the owner of the copyright for both the illustrations of the hatch doors and
[the] hatch doors themselves, and second, [the petitioners] manufactured hatch doors based on LEC's
Ruling of the Court
works, sans EEC's consent.
It is a settled judicial policy that courts do not reverse the Secretary of Justice's findings and conclusions
x x x x
on the matter of probable cause. Courts are not empowered to substitute their judgment for that of the
executive branch upon which full discretionary authority has been delegated in the determination of
[T]he fact that LEC enjoys ownership of copyright not only on the illustrations of the hatch doors but on
probable cause during a preliminary investigation. Courts may, however, look into whether the exercise
the hatch doors itself and that [the petitioners] manufactured the same is sufficient to warrant a finding of
of such discretionary authority was attended with grave abuse of discretion. 37
probable cause for copyright infringement. x x x.31ChanRoblesVirtualawlibrary
The CA further ruled that any allegation on the non-existence of ornamental or artistic values on the hatch Otherwise speaking, "judicial review of the resolution of the Secretary of Justice is limited to a
doors are matters of evidence which are best ventilated in a full-blown trial rather than during the determination of whether there has been a grave abuse of discretion amounting to lack or excess of
preliminary investigation stage. Accordingly, the CA disposed as follows: jurisdiction."38
chanRoblesvirtualLawlibrary
WHEREFORE, considering the foregoing premises, the present Petition is GRANTED, and accordingly, The CA anchored its act of reversing the DOJ Resolution dated March 10, 2006 upon the foregoing tenets.
the assailed Resolutions dated 10 March 2006 and 25 May 2006 are ANNULLED and SET ASIDE. The Thus, the Court's task in the present petition is only to determine if the CA erred in concluding that the
DOJ committed grave abuse of discretion in directing the withdrawal of any criminal information filed
22nd floors. The hatch doors were based on the plans/drawings submitted by LEC to SKI-FB and
against the petitioners.
subject of the above copyright registration numbers; and
Grave abuse of discretion has been defined as "such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and
(d) thereafter, Metrotech fabricated and installed hatch doors at the same building's 23 rd to 41st floor
gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or
based on the drawings and specifications provided by SKI-FB.44
to act at all in contemplation of law." 39 "'Capricious,' usually used in tandem with the term 'arbitrary,'
conveys the notion of willful and unreasoning action." 40cralawred The positions taken by the DOJ and the investigating prosecutor differed only in the issues tackled and the
conclusions arrived at.
According to the CA, the DOJ's erratic findings on the presence or absence of probable cause constitute
grave abuse of discretion. The CA explained: It may be observed that in the Resolution dated August 18, 2005 issued by the investigating prosecutor,
chanRoblesvirtualLawlibrary the primary issue was whether the hatch doors of LEC fall within copyrightable works. This was resolved
This, to Our minds, in itself creates a nagging, persistent doubt as to whether [the DOJ Secretary] issued by ruling that hatch doors themselves are not covered by LEC's Certificate of Registration Nos. 1-2004-
the said resolutions untainted with a whimsical and arbitrary use of his discretion. For one cannot rule that 13 and 1-2004-14 issued on the plans/drawing depicting them. The DOJ reversed this ruling in its
there is reason to overturn the investigating prosecutor's findings at the first instance and then go on to rule Resolution dated January 27, 2006 wherein the issue was streamlined to whether the illustrations of the
that ample evidence exists showing that the hatch doors possess artistic and ornamental elements at the hatch doors under LEC's Certificate of Registration Nos. H-2004-566 and H-2004-567 bore artistic
second instance and proceed to rule that no such artistry can be found on the purely utilitarian hatch doors ornamental designs.
at the last instance. x x x.41ChanRoblesVirtualawlibrary
The Court disagrees. It has been held that the issuance by the DOJ of several resolutions with varying This situation does not amount to grave abuse of discretion but rather a mere manifestation of the intricate
findings of fact and conclusions of law on the existence of probable cause, by itself, is not indicative of issues involved in the case which thus resulted in varying conclusions of law. Nevertheless, the DOJ
grave abuse of discretion.42 ultimately pronounced its definite construal of copyright laws and their application to the evidence on
record through its Resolution dated March 10, 2006 when it granted the petitioners' motion for
Inconsistent findings and conclusions on the part of the DOJ will denote grave abuse of discretion only if reconsideration. Such construal, no matter how erroneous to the CA's estimation, did not amount to grave
coupled with gross misapprehension of facts,43 which, after a circumspect review of the records, is not abuse of discretion. "[I]t is elementary that not every erroneous conclusion of law or fact is an abuse of
attendant in the present case. discretion."45

The facts upon which the resolutions issued by the investigating prosecutor and the DOJ were actually More importantly, the Court finds that no grave abuse of discretion was committed by the DOJ in directing
uniform, viz: the withdrawal of the criminal information against the respondents because a finding of probable cause
chanRoblesvirtualLawlibrary contradicts the evidence on record, law, and jurisprudence.

(a) LEC is the registered owner of plans/drawings for interior and exterior hatch doors under
Certificate of Registration Nos. 1-2004-13 and 1-2004-14 classified under Section 172(i) of R.A.
No. 8293 as pertaining to "illustrations, maps, plans, sketches, charts and three-dimensional
works relative to geography, topography, architecture or science";
"Probable cause has been defined as the existence of such facts and circumstances as would excite the
belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person
charged was guilty of the crime for which he was prosecuted. It is a reasonable ground of presumption that
a matter is, or may be, well-founded on such a state of facts in the mind of the prosecutor as would lead a
person of ordinary caution and prudence to believe, or entertain an honest or strong suspicion, that a thing
is so."46

(b) LEC is also the registered owner of plans/drawings for interior and exterior hatch doors under "The term does not mean actual and positive cause nor does it import absolute certainty. It is merely based
Certificate of Registration Nos. H-2004-566 and H-2004-567 classified under Section 172(h) of on opinion and reasonable belief. Thus, a finding of probable cause does not require an inquiry into
R.A. No. 8293 as to "original ornamental designs or models for articles of manufacture, whether whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or
or not registrable as an industrial design, and other works of applied art"; omission complained of constitutes the offense charged." 47

"In order that probable cause to file a criminal case may be arrived at, or in order to engender the well-
founded belief that a crime has been committed, the elements of the crime charged should be present. This
(c) LEC as the subcontractor of SKI-FB in the Project first manufactured and installed the interior is based on the principle that every crime is defined by its elements, without which there should be - at the
and exterior hatch doors at the Manansala Tower in Rockwell Center, Makati City, from the 7 th to most - no criminal offense."48
A copyright refers to "the right granted by a statute to the proprietor of an intellectual production to its NBI on Metrotech's premises yielded no copies or reproduction of LEC's copyrighted sketches/drawings
exclusive use and enjoyment to the extent specified in the statute."49 Under Section 177 of R.A. No. 8293, of hatch doors. What were discovered instead were finished and unfinished hatch doors.
the Copyright or Economic Rights consist of the exclusive right to carry out, authorize or prevent the
following acts: Certificate of Registration Nos. 1-2004-13 and 1-2004-14 pertain to class work "I" under Section 172 of
chanRoblesvirtualLawlibrary R.A. No. 8293 which covers "illustrations, maps, plans, sketches, charts and three-dimensional works
relative to geography, topography, architecture or science."51 As such, LEC's copyright protection there
177.1 Reproduction of the work or substantial portion of the work; under covered only the hatch door sketches/drawings and not the actual hatch door they depict. 52

As the Court held in Pearl and Dean (Philippines), Incorporated v. Shoemart, Incorporated:53
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the rights
177.2 Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the are limited to what the statute confers. It may be obtained and enjoyed only with respect to the subjects
work; and by the persons, and on terms and conditions specified in the statute. Accordingly, it can cover only the
works falling within the statutory enumeration or description. 54 (Citations omitted and italics in the
original)
177.3 The first public distribution of the original and each copy of the work by sale or other forms Since the hatch doors cannot be considered as either illustrations, maps, plans, sketches, charts and three-
of transfer of ownership; dimensional works relative to geography, topography, architecture or science, to be properly classified as
a copyrightable class "I" work, what was copyrighted were their sketches/drawings only, and not the actual
hatch doors themselves. To constitute infringement, the usurper must have copied or appropriated the
original work of an author or copyright proprietor, absent copying, there can be no infringement of
177.4 Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied copyright.55
in a sound recording, a computer program, a compilation of data and other materials or a
musical work in graphic form, irrespective of the ownership of the original or the copy which "Unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only to the
is the subject of the rental; expression of the idea � not the idea itself."56

The respondent claimed that the petitioners committed copyright infringement when they
fabricated/manufactured hatch doors identical to those installed by LEC. The petitioners could not have
177.5 Public display of the original or a copy of the work; manufactured such hatch doors in substantial quantities had they not reproduced the copyrighted
plans/drawings submitted by LEC to SK1-FB. This insinuation, without more, does not suffice to establish
probable cause for infringement against the petitioners. "[Although the determination of probable cause
requires less than evidence which would justify conviction, it should at least be more than mere
177.6 Public performance of the work; and suspicion."57

Anent, LEC's Certificate of Registration Nos. H-2004-566 and H-2004-567, the Court finds that the
ownership thereof was not established by the evidence on record because the element of copyrightability
177.7 Other communication to the public of the work. is absent.
Copyright infringement is thus committed by any person who shall use original literary or artistic works,
"Ownership of copyrighted material is shown by proof of originality and copyrightability."58 While it is
or derivative works, without the copyright owner's consent in such a manner as to violate the foregoing
true that where the complainant presents a copyright certificate in support of the claim of infringement,
copy and economic rights. For a claim of copyright infringement to prevail, the evidence on record must
the validity and ownership of the copyright is presumed. This presumption, however, is rebuttable and it
demonstrate: (1) ownership of a validly copyrighted material by the complainant; and (2) infringement of
cannot be sustained where other evidence in the record casts doubt on the question of ownership, 59 as in
the copyright by the respondent.50
the instant case.
While both elements subsist in the records, they did not simultaneously concur so as to substantiate
Moreover, "[t]he presumption of validity to a certificate of copyright registration merely orders the burden
infringement of LEC's two sets of copyright registrations.
of proof. The applicant should not ordinarily be forced, in the first instance, to prove all the multiple facts
that underline the validity of the copyright unless the respondent, effectively challenging them, shifts the
The respondent failed to substantiate the alleged reproduction of the drawings/sketches of hatch doors
burden of doing so to the applicant." 60
copyrighted under Certificate of Registration Nos. 1-2004-13 and 1-2004-14. There is no proof that the
respondents reprinted the copyrighted sketches/drawings of LEC's hatch doors. The raid conducted by the
Here, evidence negating originality and copyrightability as elements of copyright ownership was belt's function hence, conceptually separable from the belt, is eligible for copyright. It is copyrightable as
satisfactorily proffered against LEC's certificate of registration. a sculptural work with independent aesthetic value, and not as an integral element of the belt's
functionality.68
The following averments were not successfully rebuffed by LEC:
chanRoblesvirtualLawlibrary A table lamp is not copyrightable because it is a functional object intended for the purpose of providing
[T]he hinges on LEC's "hatch doors" have no ornamental or artistic value. In fact, they are just similar to illumination in a room. The general shape of a table lamp is likewise not copyrightable because it
hinges found in truck doors that had been in common use since the 1960's. The gaskets on LEC's "hatch contributes to the lamp's ability to illuminate the reaches of a room. But, a lamp base in the form of a statue
doors", aside from not being ornamental or artistic, were merely procured from a company named Pemko of male and female dancing figures made of semi vitreous china is copyrightable as a work of art because
and are not original creations of LEC. The locking device in LEC's "hatch doors" are ordinary drawer locks it is unrelated to the lamp's utilitarian function as a device used to combat darkness. 69
commonly used in furniture and office desks.61ChanRoblesVirtualawlibrary
In defending the copyrightability of its hatch doors' design, LEC merely claimed: In the present case, LEC's hatch doors bore no design elements that are physically and conceptually
separable, independent and distinguishable from the hatch door itself. The allegedly distinct set of hinges
chanRoblesvirtualLawlibrary
and distinct jamb, were related and necessary hence, not physically or conceptually separable from the
LEC's Hatch Doors were particularly designed to blend in with the floor of the units in which they are
hatch door's utilitarian function as an apparatus for emergency egress. Without them, the hatch door will
installed and, therefore, appeal to the aesthetic sense of the owner of units or any visitors thereto[;]
not function.
LEC's Hatch Doors have a distinct set of hinges, a distinct door a distinct jamb, all of which are both
More importantly, they are already existing articles of manufacture sourced from different suppliers. Based
functional or utilitarian and artistic or ornamental at the same time[;] and
on the records, it is unrebutted that: (a) the hinges are similar to those used in truck doors; (b) the gaskets
were procured from a company named Pemko and are not original creations of LEC; and (c) the locking
Moreover, the Project is a high-end residential building located in the Rockwell Center, a very prime area
device are ordinary drawer locks commonly used in furniture and office desks.
in Metro Manila. As such, the owner of the Project is not expected to settle for Hatch Doors that simply
live up to their function as such. The owner would require, as is the case for the Project, Hatch Doors that
not only fulfill their utilitarian purposes but also appeal to the artistic or ornamental sense of their Being articles of manufacture already in existence, they cannot be deemed as original creations. As earlier
stated, valid copyright ownership denotes originality of the copyrighted material. Originality means that
beholders.62ChanRoblesVirtualawlibrary
the material was not copied, evidences at least minimal creativity and was independently created by the
From the foregoing description, it is clear that the hatch doors were not artistic works within the meaning author.70 It connotes production as a result of independent labor. 71 LEC did not produce the door jambs
of copyright laws. A copyrightable work refers to literary and artistic works defined as original intellectual and hinges; it bought or acquired them from suppliers and thereafter affixed them to the hatch doors. No
creations in the literary and artistic domain.63 independent original creation can be deduced from such acts.

A hatch door, by its nature is an object of utility. It is defined as a small door, small gate or an opening The same is true with respect to the design on the door's panel. As LEC has stated, the panels were
that resembles a window equipped with an escape for use in case of fire or emergency. 64 It is thus by "designed to blend in with the floor of the units in which they [were] installed." 72 Photos of the panels
nature, functional and utilitarian serving as egress access during emergency. It is not primarily an artistic indeed show that their color and pattern design were similar to the wooden floor parquet of the
creation but rather an object of utility designed to have aesthetic appeal. It is intrinsically a useful article, condominium units.73 This means that the design on the hatch door panel was not a product of LEC's
which, as a whole, is not eligible for copyright. independent artistic judgment and discretion but rather a mere reproduction of an already existing design.

A "useful article" defined as an article "having an intrinsic utilitarian function that is not merely to portray
the appearance of the article or to convey information" is excluded from copyright eligibility. 65
The only instance when a useful article may be the subject of copyright protection is when it incorporates
a design element that is physically or conceptually separable from the underlying product. This means that
the utilitarian article can function without the design element. In such an instance, the design element is
eligible for copyright protection.66
The design of a useful article shall be considered a pictorial, graphic, or sculptural work only if, and only
to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified
separately from, and are capable of existing independently of, the utilitarian aspects of the article. 67
Verily then, the CA erred in holding that a probable cause for copyright infringement is imputable against
the petitioners. Absent originality and copyrightability as elements of a valid copyright ownership, no
infringement can subsist.chanrobleslaw
WHEREFORE, premises considered, the petition is hereby GRANTED. The Decision dated July 9, 2010
and Resolution dated February 24, 2011 of the Court of Appeals in CA-G.R. SP No. 95471
are REVERSEDand SET ASIDE. The Resolutions dated March 10, 2006 and May 25, 2006 of the
Department of Justice in I.S. No. 2004-925 dismissing the complaint for copyright infringement
are REINSTATED.
SO ORDERED.

A belt, being an object utility with the function of preventing one's pants from falling down, is in itself not
copyrightable. However, an ornately designed belt buckle which is irrelevant to or did not enhance the
[G.R. No. 113388. September 5, 1997]
ANGELITA MANZANO, petitioner, vs. COURT OF APPEALS, and MELECIA MADOLARIA, as
Assignor to NEW UNITED FOUNDRY MANUFACTURING
CORPORATION, respondents.
DECISION
BELLOSILLO, J.:
The primary purpose of the patent system is not the reward of the individual but the advancement of
the arts and sciences. The function of a patent is to add to the sum of useful knowledge and one of the
purposes of the patent system is to encourage dissemination of information concerning discoveries and
inventions. This is a matter which is properly within the competence of the Patent Office the official action
of which has the presumption of correctness and may not be interfered with in the absence of new evidence
carrying thorough conviction that the Office has erred. Since the Patent Office is an expert body
preeminently qualified to determine questions of patentability, its findings must be accepted if they are
consistent with the evidence, with doubts as to patentability resolved in favor of the Patent Office. [1]
Petitioner Angelita Manzano filed with the Philippine Patent Office on 19 February 1982 an action
for the cancellation of Letters Patent No. UM-4609 for a gas burner registered in the name of respondent
Melecia Madolaria who subsequently assigned the letters patent to New United Foundry and
Manufacturing Corporation (UNITED FOUNDRY, for brevity). Petitioner alleged that (a) the utility
model covered by the letters patent, in this case, an LPG gas burner, was not inventive, new or useful; (b)
the specification of the letters patent did not comply with the requirements of Sec. 14, RA No. 165, as
amended; (c) respondent Melecia Madolaria was not the original, true and actual inventor nor did she
derive her rights from the original, true and actual inventor of the utility model covered by the letters
patent; and, (d) the letters patent was secured by means of fraud or misrepresentation. In support of her
petition for cancellation petitioner further alleged that (a) the utility model covered by the letters patent of
respondent had been known or used by others in the Philippines for more than one (1) year before she filed
her application for letters patent on 9 December 1979; (b) the products which were produced in accordance
with the utility model covered by the letters patent had been in public use or on sale in the Philippines for
more than one (1) year before the application for patent therefor was filed.
Petitioner presented the following documents which she correspondingly marked as exhibits: (a)
affidavit of petitioner alleging the existence of prior art, marked Exh. A; (b) a brochure distributed by
Manila Gas Corporation disclosing a pictorial representation of Ransome Burner made by Ransome Torch
and Burner Company, USA, marked Exh. D; and, (c) a brochure distributed by Esso Gasul or Esso
Standard Eastern, Inc., of the Philippines showing a picture of another similar burner with top elevation
view and another perspective view of the same burner, marked Exh. E.
Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a helper in the
UNITED FOUNDRY where respondent Melecia Madolaria used to be affiliated with from 1965 to 1970;
that Ong helped in the casting of an LPG burner which was the same utility model of a burner for which
Letters Patent No. UM-4609 was issued, and that after her husbands separation from the shop she
organized Besco Metal Manufacturing (BESCO METAL, for brevity) for the casting of LPG burners one
of which had the configuration, form and component parts similar to those being manufactured by
UNITED FOUNDRY. Petitioner presented in evidence an alleged model of an LPG burner marked Exh.
K and covered by the Letters Patent of respondent, and testified that it was given to her in January 1982
by one of her customers who allegedly acquired it from UNITED FOUNDRY. Petitioner also presented
in evidence her own model of an LPG burner called Ransome burner marked Exh. L, which was allegedly
manufactured in 1974 or 1975 and sold by her in the course of her business operation in the name of
BESCO METAL. Petitioner claimed that this Ransome burner (Exh. L) had the same configuration and
mechanism as that of the model which was patented in favor of private respondent Melecia
Madolaria. Also presented by petitioner was a burner cup of an imported Ransome burner marked Exh M
which was allegedly existing even before the patent application of private respondent.
Petitioner presented two (2) other witnesses, namely, her husband Ong Bun Tua and Fidel
Francisco. Ong testified that he worked as a helper in the UNITED FOUNDRY from 1965 to 1970 where
he helped in the casting of LPG burners with the same form, configuration and mechanism as that of the
model covered by the Letters Patent issued to private respondent.Francisco testified that he had been
employed with the Manila Gas Corporation from 1930 to 1941 and from 1952 up to 1969 where he retired
as supervisor and that Manila Gas Corporation imported Ransome burners way back in 1965 which were
advertised through brochures to promote their sale.
Private respondent, on the other hand, presented only one witness, Rolando Madolaria, who testified,
among others, that he was the General Supervisor of the UNITED FOUNDRY in the foundry, machine
and buffing section; that in his early years with the company, UNITED FOUNDRY was engaged in the
manufacture of different kinds of gas stoves as well as burners based on sketches and specifications
furnished by customers; that the company manufactured early models of single-piece types of burners
where the mouth and throat were not detachable; that in the latter part of 1978 respondent Melecia
Madolaria confided in him that complaints were being brought to her attention concerning the early models
being manufactured; that he was then instructed by private respondent to cast several experimental models
based on revised sketches and specifications; that private respondent again made some innovations; that
after a few months, private respondent discovered the solution to all the defects of the earlier models and,
based on her latest sketches and specifications, he was able to cast several models incorporating the
additions to the innovations introduced in the models. Various tests were conducted on the latest model in
the presence and under the supervision of Melecia Madolaria and they obtained perfect results. Rolando
Madolaria testified that private respondent decided to file her application for utility model patent in
December 1979.
On 7 July 1986 the Director of Patents Cesar C. Sandiego issued Decision No. 86-56 denying the
petition for cancellation and holding that the evidence of petitioner was not able to establish
convincingly that the patented utility model of private respondent was anticipated. Not one of the various
pictorial representations of business clearly and convincingly showed that the devices presented by
petitioner was identical or substantially identical with the utility model of the respondent. The decision
also stated that even assuming that the brochures depicted clearly each and every element of the patented
gas burner device so that the prior art and patented device became identical although in truth they were
not, they could not serve as anticipatory bars for the reason that they were undated. The dates when they
were distributed to the public were not indicated and, therefore, were useless prior art references. The
records and evidence also do not support the petitioners contention that Letters Patent No. UM-4609 was
obtained by means of fraud and/or misrepresentation. No evidence whatsoever was presented by petitioner
to show that the then applicant Melecia Madolaria withheld with intent to deceive material facts which, if
disclosed, would have resulted in the refusal by the Philippine Patent Office to issue the Letters Patent
under inquiry.
 Petitioner elevated the decision of the Director of Patents to the Court of Appeals which on 15
October 1993 affirmed the decision of the Director of Patents. Hence, this petition for review
on certiorari alleging that the Court of Appeals erred (a) in relying on imaginary differences which in
actuality did not exist between the model of private respondent covered by Letters Patent No. UM-4609
and the previously known model of Esso Standard Eastern, Inc., and Manila Gas Corporation, making
such imaginary differences grounded entirely on speculation, surmises and conjectures; (b) in rendering
judgment based on misapprehension of facts; (c) in relying mainly on the testimony of private respondents
sole witness Rolando Madolaria; and, (d) in not canceling Letters Patent No. UM-4609 in the name of
private respondent.
Petitioner submits that the differences cited by the Court of Appeals between the utility model of
private respondent and the models of Manila Gas Corporation and Esso Standard Eastern, Inc., are more
imaginary than real. She alleges that based on Exhs. E, E-1, F and F-1 or the brochures of Manila Gas
Corporation and Esso Standard Eastern, Inc., presented by petitioner, the cup-shaped burner mouth and
threaded hole on the side are shown to be similar to the utility model of private respondent. The exhibits
also show a detachable burner mouth having a plurality of upwardly existing undulations adopted to act as
gas passage when the cover is attached to the top of said cup-shaped mouth all of which are the same as
those in the patented model. Petitioner also denies as substantial difference the short cylindrical tube of
the burner mouth appearing in the brochures of the burners being sold by Manila Gas Corporation and the
long cylindered tube of private respondents model of the gas burner.
Petitioner argues that the actual demonstration made during the hearing disclosed the similarities in
form, operation and mechanism and parts between the utility model of private respondent and those
depicted in the brochures. The findings of the Patent Office and the Court of Appeals that the brochures
of Manila Gas Corporation and Esso Standard Eastern, Inc., are undated cannot overcome the fact of their
circulation before private respondent filed her application for utility model patent. Petitioner thus asks this
Court to take judicial notice of the fact that Esso Standard Eastern, Inc., disappeared before 1979 and
reappeared only during the Martial Law years as Petrophil Corporation. Petitioner also emphasizes that
the brochures indicated the telephone number of Manila Gas Corporation as 5-79-81 which is a five (5)
numbered telephone number existing before 1975 because telephones in Metro Manila started to have six
(6) numbers only after that year.
Petitioner further contends that the utility model of private respondent is absolutely similar to the
LPG burner being sold by petitioner in 1975 and 1976, and also to the Ransome burner depicted in the old
brochures of Manila Gas Corporation and Esso Standard Eastern, Inc., fabricated by Ransome Torch and
Burner Company of Oakland, California, USA, especially when considered through actual physical
examination, assembly and disassembly of the models of petitioner and private respondent. Petitioner
faults the Court of Appeals for disregarding the testimonies of Ong Bun Tua and Fidel Francisco for their
failure to produce documents on the alleged importation by Manila Gas Corporation of Ransome burners
in 1965 which had the same configuration, form and mechanism as that of the private respondents patented
model.
Finally, it is argued that the testimony of private respondents lone witness Rolando Madolaria should
not have been given weight by the Patent Office and the Court of Appeals because it contained mere after-
thoughts and pretensions.
We cannot sustain petitioner. Section 7 of RA No. 165, as amended, which is the law on patents,
expressly provides -
Sec. 7. Inventions patentable. Any invention of a new and useful machine, manufactured product or
substance, process or an improvement of any of the foregoing, shall be patentable.
Further, Sec. 55 of the same law provides -
Sec. 55. Design patents and patents for utility models. - (a) Any new, original and ornamental design for
an article of manufacture and (b) any new model of implements or tools or of any industrial product or of
part of the same, which does not possess the quality of invention, but which is of practical utility by reason
of its form, configuration, construction or composition, may be protected by the author thereof, the former
by a patent for a design and the latter by a patent for a utility model, in the same manner and subject to the
same provisions and requirements as relate to patents for inventions insofar as they are applicable except
as otherwise herein provided.
The element of novelty is an essential requisite of the patentability of an invention or discovery. If a
device or process has been known or used by others prior to its invention or discovery by the applicant, an
application for a patent therefor should be denied; and if the application has been granted, the court, in a
judicial proceeding in which the validity of the patent is drawn in question, will hold it void and
ineffective.[2] It has been repeatedly held that an invention must possess the essential elements of novelty,
originality and precedence, and for the patentee to be entitled to the protection the invention must be new
to the world.[3]
In issuing Letters Patent No. UM-4609 to Melecia Madolaria for an LPG Burner on 22 July 1981,
the Philippine Patent Office found her invention novel and patentable. The issuance of such patent creates
a presumption which yields only to clear and cogent evidence that the patentee was the original and first
inventor. The burden of proving want of novelty is on him who avers it and the burden is a heavy one
which is met only by clear and satisfactory proof which overcomes every reasonable doubt. [4] Hence, a
utility model shall not be considered new if before the application for a patent it has been publicly known
or publicly used in this country or has been described in a printed publication or publications circulated
within the country, or if it is substantially similar to any other utility model so known, used or described
within the country.[5]
As found by the Director of Patents, the standard of evidence sufficient to overcome the presumption
of legality of the issuance of UM-4609 to respondent Madolaria was not legally met by petitioner in her
action for the cancellation of the patent. Thus the Director of Patents explained his reasons for the denial
of the petition to cancel private respondents patent -
Scrutiny of Exhs. D and E readily reveals that the utility model (LPG Burner) is not anticipated. Not one
of the various pictorial representations of burners clearly and convincingly show that the device presented
therein is identical or substantially identical in construction with the aforesaid utility model. It is relevant
and material to state that in determining whether novelty or newness is negatived by any prior art, only
one item of the prior art may be used at a time. For anticipation to occur, the prior art must show that each
element is found either expressly or described or under principles of inherency in a single prior art
reference or that the claimed invention was probably known in a single prior art device or
practice. (Kalman v. Kimberly Clark, 218 USPQ 781, 789)
Even assuming gratia arguendi that the aforesaid brochures do depict clearly on all fours each and every
element of the patented gas burner device so that the prior art and the said patented device become
identical, although in truth they are not, they cannot serve as anticipatory bars for the reason that they are
undated. The dates when they were distributed to the public were not indicated and, therefore, they are
useless prior art references.
xxxx
Furthermore, and more significantly, the model marked Exh. K does not show whether or not it was
manufactured and/or cast before the application for the issuance of patent for the LPG burner was filed by
Melecia Madolaria.
With respect to Exh. L, petitioner claimed it to be her own model of LPG burner allegedly manufactured
sometime in 1974 or 1975 and sold by her in the course of her business operation in the name of Besco
Metal Manufacturing, which burner was denominated as Ransome burner
xxxx
But a careful examination of Exh. L would show that it does not bear the word Ransome which is the
burner referred to as the product being sold by the Petitioner. This is not the way to prove that Exh. L
anticipates Letters Patent No. UM-4609 through Exhs. C and D. Another factor working against the
Petitioners claims is that an examination of Exh. L would disclose that there is no indication of the time
or date it was manufactured. This Office, thus has no way of determining whether Exh. L was really
manufactured before the filing of the aforesaid application which matured into Letters Patent No. UM-
4609, subject matter of the cancellation proceeding.
At this juncture, it is worthwhile to point out that petitioner also presented Exh. M which is the alleged
burner cup of an imported Ransome burner. Again, this Office finds the same as unreliable evidence to
show anticipation. It observed that there is no date indicated therein as to when it was manufactured and/or
imported before the filing of the application for issuance of patent of the subject utility model. What is
more, some component parts of Exh. M are missing, as only the cup was presented so that the same could
not be compared to the utility model (subject matter of this case) which consists of several other detachable
parts in combination to form the complete LPG burner.
xxxx
It must likewise be pointed out that Ong Bun Tua testified on the brochures allegedly of Manila Gas and
of Esso Gasul marked Exhs. E and F and on the alleged fact that Manila Gas Corporation was importing
from the United States Ransome burners. But the same could not be given credence since he himself
admitted during cross- examination that he has never been connected with Manila Gas Corporation. He
could not even present any importation papers relating to the alleged imported ransome burners. Neither
did his wife.[6]
The above findings and conclusions of the Director of Patent were reiterated and affirmed by the
Court of Appeals.[7]
The validity of the patent issued by the Philippine Patent Office in favor of private respondent and
the question over the inventiveness, novelty and usefulness of the improved model of the LPG burner are
matters which are better determined by the Patent Office. The technical staff of the Philippine Patent Office
composed of experts in their field has by the issuance of the patent in question accepted private respondents
model of gas burner as a discovery. There is a presumption that the Office has correctly determined the
patentability of the model[8] and such action must not be interfered with in the absence of competent
evidence to the contrary.
The rule is settled that the findings of fact of the Director of Patents, especially when affirmed by the
Court of Appeals, are conclusive on this Court when supported by substantial evidence. Petitioner has
failed to show compelling grounds for a reversal of the findings and conclusions of the Patent Office and
the Court of Appeals.
The alleged failure of the Director of Patents and the Court of Appeals to accord evidentiary weight
to the testimonies of the witnesses of petitioner showing anticipation is not a justification to grant the
petition. Pursuant to the requirement of clear and convincing evidence to overthrow the presumption of
validity of a patent, it has been held that oral testimony to show anticipation is open to suspicion and if
uncorroborated by cogent evidence, as what occurred in this case, it may be held insufficient. [9]
Finally, petitioner would want this Court to review all over again the evidence she presented before
the Patent Office. She argues that contrary to the decision of the Patent Office and the Court of Appeals,
the evidence she presented clearly proves that the patented model of private respondent is no longer new
and, therefore, fraud attended the acquisition of patent by private respondent.
It has been held that the question on priority of invention is one of fact. Novelty and utility are
likewise questions of fact. The validity of patent is decided on the basis of factual inquiries.Whether
evidence presented comes within the scope of prior art is a factual issue to be resolved by the Patent
Office.[10] There is question of fact when the doubt or difference arises as to the truth or falsehood of
alleged facts or when the query necessarily invites calibration of the whole evidence considering mainly
the credibility of witnesses, existence and relevance of specific surrounding circumstances, their relation
to each other and to the whole and the probabilities of the situation. [11]
Time and again we have held that it is not the function of the Supreme Court to analyze or weigh all
over again the evidence and credibility of witnesses presented before the lower tribunal or office. The
Supreme Court is not a trier of facts. Its jurisdiction is limited to reviewing and revising errors of law
imputed to the lower court, its findings of fact being conclusive and not reviewable by this Court.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals affirming that of the
Philippine Patent Office is AFFIRMED. Costs against petitioner.
SO ORDERED.
[G.R. No. 148222. August 15, 2003]
PEARL & DEAN (PHIL.), INCORPORATED, petitioner, vs. SHOEMART,
INCORPORATED, and NORTH EDSA MARKETING, INCORPORATED,respondents.
DECISION
CORONA, J.:
In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl
& Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision [1] of the Court of Appeals reversing the
October 31, 1996 decision[2] of the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516
which declared private respondents Shoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI) liable
for infringement of trademark and copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals[3] contained a summary of this dispute:
Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising
display units simply referred to as light boxes. These units utilize specially printed posters sandwiched
between plastic sheets and illuminated with back lights. Pearl and Dean was able to secure a Certificate of
Copyright Registration dated January 20, 1981 over these illuminated display units. The advertising light
boxes were marketed under the trademark Poster Ads. The application for registration of the trademark
was filed with the Bureau of Patents, Trademarks and Technology Transfer on June 20, 1983, but was
approved only on September 12, 1988, per Registration No. 41165. From 1981 to about 1988, Pearl and
Dean employed the services of Metro Industrial Services to manufacture its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease
and installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under
construction at that time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl and
Dean agreed. On September 11, 1985, Pearl and Deans General Manager, Rodolfo Vergara, submitted for
signature the contracts covering SM Cubao and SM Makati to SMIs Advertising Promotions and Publicity
Division Manager, Ramonlito Abano. Only the contract for SM Makati, however, was returned signed. On
October 4, 1985, Vergara wrote Abano inquiring about the other contract and reminding him that their
agreement for installation of light boxes was not only for its SM Makati branch, but also for SM
Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMIs house counsel informed Pearl and Dean that it was
rescinding the contract for SM Makati due to non-performance of the terms thereof. In his reply dated
February 17, 1986, Vergara protested the unilateral action of SMI, saying it was without basis. In the same
letter, he pushed for the signing of the contract for SM Cubao.
Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to fabricate
its display units, offered to construct light boxes for Shoemarts chain of stores. SMI approved the proposal
and ten (10) light boxes were subsequently fabricated by Metro Industrial for SMI. After its contract with
Metro Industrial was terminated, SMI engaged the services of EYD Rainbow Advertising Corporation to
make the light boxes. Some 300 units were fabricated in 1991. These were delivered on a staggered basis
and installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed at
SM City and in the fastfood section of SM Cubao. Upon investigation, Pearl and Dean found out that aside
from the two (2) reported SM branches, light boxes similar to those it manufactures were also installed in
two (2) other SM stores. It further discovered that defendant-appellant North Edsa Marketing Inc. (NEMI),
through its marketing arm, Prime Spots Marketing Services, was set up primarily to sell advertising space
in lighted display units located in SMIs different branches. Pearl and Dean noted that NEMI is a sister
company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and NEMI
enjoining them to cease using the subject light boxes and to remove the same from SMIs establishments. It
also demanded the discontinued use of the trademark Poster Ads, and the payment to Pearl and Dean of
compensatory damages in the amount of Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224) light
boxes and NEMI took down its advertisements for Poster Ads from the lighted display units in SMIs
stores. Claiming that both SMI and NEMI failed to meet all its demands, Pearl and Dean filed this instant
case for infringement of trademark and copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently developed its poster panels
using commonly known techniques and available technology, without notice of or reference to Pearl and
Deans copyright. SMI noted that the registration of the mark Poster Ads was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word Poster Ads is a generic term
which cannot be appropriated as a trademark, and, as such, registration of such mark is invalid. It also
stressed that Pearl and Dean is not entitled to the reliefs prayed for in its complaint since its advertising
display units contained no copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that Pearl
and Dean had no cause of action against it and that the suit was purely intended to malign SMIs good
name. On this basis, SMI, aside from praying for the dismissal of the case, also counterclaimed for moral,
actual and exemplary damages and for the cancellation of Pearl and Deans Certification of Copyright
Registration No. PD-R-2558 dated January 20, 1981 and Certificate of Trademark Registration No. 4165
dated September 12, 1988.
NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor having
engaged in the business of advertising. It repleaded SMIs averments, admissions and denials and prayed
for similar reliefs and counterclaims as SMI.
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of copyright
under Section 2 of PD 49, as amended, and infringement of trademark under Section 22 of RA No. 166,
as amended, and are hereby penalized under Section 28 of PD 49, as amended, and Sections 23 and 24 of a book entitled Seldens Condensed Ledger or Bookkeeping Simplified which purported to explain a new
RA 166, as amended. Accordingly, defendants are hereby directed: system of bookkeeping. Included as part of the book were blank forms and illustrations consisting of ruled
lines and headings, specially designed for use in connection with the system explained in the work. These
(1) to pay plaintiff the following damages: forms showed the entire operation of a day or a week or a month on a single page, or on two pages
following each other. The defendant Baker then produced forms which were similar to the forms illustrated
in Seldens copyrighted books. The Court held that exclusivity to the actual forms is not extended by a
(a) actual damages - P16,600,000.00,
copyright. The reason was that to grant a monopoly in the underlying art when no examination of its
representing profits
novelty has ever been made would be a surprise and a fraud upon the public; that is the province of letters
derived by defendants
patent, not of copyright. And that is precisely the point. No doubt aware that its alleged original design
as a result of infringe-
ment of plaintiffs copyright would never pass the rigorous examination of a patent application, plaintiff-appellant fought to foist a
from 1991 to 1992 fraudulent monopoly on the public by conveniently resorting to a copyright registration which merely
employs a recordal system without the benefit of an in-depth examination of novelty.
(b) moral damages - P1,000.000.00
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge Authority [43 F.
Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright over an unpublished drawing
(c) exemplary damages - P1,000,000.00 entitled Bridge Approach the drawing showed a novel bridge approach to unsnarl traffic congestion. The
defendant constructed a bridge approach which was alleged to be an infringement of the new design
(d) attorneys fees - P1,000,000.00 illustrated in plaintiffs drawings. In this case it was held that protection of the drawing does not extend to
plus the unauthorized duplication of the object drawn because copyright extends only to the description or
expression of the object and not to the object itself. It does not prevent one from using the drawings to
(e) costs of suit; construct the object portrayed in the drawing.

(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which
were fabricated by Metro Industrial Services and EYD Rainbow Advertising
Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the trademark Poster
Ads, for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiffs light boxes and its
trademark Poster Ads.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v. Maddox,
379 F. 2d 84, it was held that there is no copyright infringement when one who, without being authorized,
uses a copyrighted architectural plan to construct a structure. This is because the copyright does not extend
to the structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Deans copyright over the technical drawings of
the latters advertising display units.
xxx xxx xxx

Defendants counterclaims are hereby ordered dismissed for lack of merit. The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate Court that the
protective mantle of the Trademark Law extends only to the goods used by the first user as specified in
SO ORDERED.[4] the certificate of registration, following the clear mandate conveyed by Section 20 of Republic Act 166,
as amended, otherwise known as the Trademark Law, which reads:
On appeal, however, the Court of Appeals reversed the trial court:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a
mark or trade-name shall be prima facie evidence of the validity of the registration, the registrants
Since the light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial
ownership of the mark or trade-name, and of the registrants exclusive right to use the same in connection
illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable class
with the goods, business or services specified in the certificate, subject to any conditions and limitations
O work, we have to agree with SMI when it posited that what was copyrighted were the technical drawings
stated therein. (underscoring supplied)
only, and not the light boxes themselves, thus:
The records show that on June 20, 1983, Pearl and Dean applied for the registration of the trademark Poster
42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like plaintiff-
Ads with the Bureau of Patents, Trademarks, and Technology Transfer. Said trademark was recorded in
appellants will not extend to the actual object. It has so been held under jurisprudence, of which the leading
case is Baker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a copyright protection for
the Principal Register on September 12, 1988 under Registration No. 41165 covering the following
products: stationeries such as letterheads, envelopes and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the part of the defendants-
appellants for their use of the words Poster Ads, in the advertising display units in suit. Jurisprudence has
interpreted Section 20 of the Trademark Law as an implicit permission to a manufacturer to venture into
the production of goods and allow that producer to appropriate the brand name of the senior registrant on
goods other than those stated in the certificate of registration. The Supreme Court further emphasized the
restrictive meaning of Section 20 when it stated, through Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods not specified therein, then a
situation may arise whereby an applicant may be tempted to register a trademark on any and all goods
which his mind may conceive even if he had never intended to use the trademark for the said goods. We
believe that such omnibus registration is not contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Deans registered trademark and
defendants-appellants Poster Ads design, as well as the parallel use by which said words were used in the
parties respective advertising copies, we cannot find defendants-appellants liable for infringement of
trademark. Poster Ads was registered by Pearl and Dean for specific use in its stationeries, in contrast to
defendants-appellants who used the same words in their advertising display units. Why Pearl and Dean
limited the use of its trademark to stationeries is simply beyond us. But, having already done so, it must
stand by the consequence of the registration which it had caused.
xxx xxx xxx
We are constrained to adopt the view of defendants-appellants that the words Poster Ads are a simple
contraction of the generic term poster advertising. In the absence of any convincing proof that Poster Ads
has acquired a secondary meaning in this jurisdiction, we find that Pearl and Deans exclusive right to the
use of Poster Ads is limited to what is written in its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark Poster Ads.
There being no finding of either copyright or trademark infringement on the part of SMI and NEMI, the
monetary award granted by the lower court to Pearl and Dean has no leg to stand on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and another
is rendered DISMISSING the complaint and counterclaims in the above-entitled case for lack of merit.[5]
Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the
following errors for the Courts consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND
NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
INFRINGEMENT OF PEARL & DEANS TRADEMARK POSTER ADS WAS
COMMITTED BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF
THE TRIAL COURT, DESPITE THE LATTERS FINDING, NOT DISPUTED BY
THE HONORABLE COURT OF APPEALS, THAT SM WAS GUILTY OF BAD
FAITH IN ITS NEGOTIATION OF ADVERTISING CONTRACTS WITH PEARL &
DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL,
MORAL & EXEMPLARY DAMAGES, ATTORNEYS FEES AND COSTS OF
SUIT.[6]
ISSUES
In resolving this very interesting case, we are challenged once again to put into proper perspective
four main concerns of intellectual property law patents, copyrights, trademarks and unfair competition
arising from infringement of any of the first three. We shall focus then on the following issues:
(1) if the engineering or technical drawings of an advertising display unit (light box) are granted
copyright protection (copyright certificate of registration) by the National Library, is the light
box depicted in such engineering drawings ipso facto also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent issued by the
Bureau of Patents Trademarks and Technology Transfer (now Intellectual Property Office) in
addition to the copyright of the engineering drawings?
(3) can the owner of a registered trademark legally prevent others from using such trademark if
it is a mere abbreviation of a term descriptive of his goods, services or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & Ds complaint was that SMI infringed on its copyright over the light boxes when SMI
had the units manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously,
petitioners position was premised on its belief that its copyright over the engineering drawings
extended ipso facto to the light boxes depicted or illustrated in said drawings. In ruling that there was no
copyright infringement, the Court of Appeals held that the copyright was limited to the drawings alone
and not to the light box itself. We agree with the appellate court.
First, petitioners application for a copyright certificate as well as Copyright Certificate No. PD-
R2588 issued by the National Library on January 20, 1981 clearly stated that it was for a class O work
under Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the statute then prevailing. Said
Section 2 expressly enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any
of the following works:
xxxxxxxxx
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
xxxxxxxxx
Although petitioners copyright certificate was entitled Advertising Display Units (which depicted the
box-type electrical devices), its claim of copyright infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the
rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and conditions specified in the statute. [7] Accordingly, it can
cover only the works falling within the statutory enumeration or description. [8]
P & D secured its copyright under the classification class O work. This being so, petitioners copyright
protection extended only to the technical drawings and not to the light box itself because the latter was not
at all in the category of prints, pictorial illustrations, advertising copies, labels, tags and box wraps. Stated
otherwise, even as we find that P & D indeed owned a valid copyright, the same could have referred only
to the technical drawings within the category of pictorial illustrations. It could not have possibly stretched
out to include the underlying light box. The strict application[9] of the laws enumeration in Section 2
prevents us from giving petitioner even a little leeway, that is, even if its copyright certificate was entitled
Advertising Display Units. What the law does not include, it excludes, and for the good reason: the light
box was not a literary or artistic piece which could be copyrighted under the copyright law. And no less
clearly, neither could the lack of statutory authority to make the light box copyrightable be remedied by
the simplistic act of entitling the copyright certificate issued by the National Library as Advertising Display
Units.
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public without license
from P & D, then no doubt they would have been guilty of copyright infringement. But this was not the
case. SMIs and NEMIs acts complained of by P & D were to have units similar or identical to the light
box illustrated in the technical drawings manufactured by Metro and EYD Rainbow Advertising, for
leasing out to different advertisers. Was this an infringement of petitioners copyright over the technical
drawings? We do not think so.
During the trial, the president of P & D himself admitted that the light box was neither a literary not
an artistic work but an engineering or marketing invention.[10] Obviously, there appeared to be some
confusion regarding what ought or ought not to be the proper subjects of copyrights, patents and
trademarks. In the leading case of Kho vs. Court of Appeals,[11] we ruled that these three legal rights are
completely distinct and separate from one another, and the protection afforded by one cannot be used
interchangeably to cover items or works that exclusively pertain to the others:
Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with
one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods. In relation
thereto, a trade name means the name or designation identifying or distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic works which are original
intellectual creations in the literary and artistic domain protected from the moment of their
creation. Patentable inventions, on the other hand, refer to any technical solution of a problem in any field
of human activity which is new, involves an inventive step and is industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial use of the light
boxes without license from petitioner, private respondents cannot be held legally liable for infringement
of P & Ds copyright over its technical drawings of the said light boxes, should they be liable instead for
infringement of patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light boxes. It therefore acquired
no patent rights which could have protected its invention, if in fact it really was.And because it had no
patent, petitioner could not legally prevent anyone from manufacturing or commercially using the
contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,[12] we held that there can be no
infringement of a patent until a patent has been issued, since whatever right one has to the invention
covered by the patent arises alone from the grant of patent. x x x (A)n inventor has no common law right
to a monopoly of his invention. He has the right to make use of and vend his invention, but if he voluntarily
discloses it, such as by offering it for sale, the world is free to copy and use it with impunity. A patent,
however, gives the inventor the right to exclude all others. As a patentee, he has the exclusive right of
making, selling or using the invention.[13] On the assumption that petitioners advertising units were
patentable inventions, petitioner revealed them fully to the public by submitting the engineering drawings
thereof to the National Library.
To be able to effectively and legally preclude others from copying and profiting from the invention,
a patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to
bring new designs and technologies into the public domain through disclosure. [14] Ideas, once disclosed to
the public without the protection of a valid patent, are subject to appropriation without significant
restraint.[15]
On one side of the coin is the public which will benefit from new ideas; on the other are the inventors
who must be protected. As held in Bauer & Cie vs. ODonnel,[16] The act secured to the inventor the
exclusive right to make use, and vend the thing patented, and consequently to prevent others from
exercising like privileges without the consent of the patentee. It was passed for the purpose of encouraging
useful invention and promoting new and useful inventions by the protection and stimulation given to
inventive genius, and was intended to secure to the public, after the lapse of the exclusive privileges
granted the benefit of such inventions and improvements.
The law attempts to strike an ideal balance between the two interests:
(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure
of new useful and non-obvious advances in technology and design, in return for the exclusive right to
practice the invention for a number of years. The inventor may keep his invention secret and reap its fruits
indefinitely. In consideration of its disclosure and the consequent benefit to the community, the patent is
granted. An exclusive enjoyment is guaranteed him for 17 years, but upon the expiration of that period,
the knowledge of the invention inures to the people, who are thus enabled to practice it and profit by its
use.[17]
The patent law has a three-fold purpose: first, patent law seeks to foster and reward invention; second,
it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice
the invention once the patent expires; third, the stringent requirements for patent protection seek to ensure
that ideas in the public domain remain there for the free use of the public.[18]
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth
investigation is required because in rewarding a useful invention, the rights and welfare of the community
must be fairly dealt with and effectively guarded. To that end, the prerequisites to obtaining a patent are
strictly observed and when a patent is issued, the limitations on its exercise are equally strictly enforced. To
begin with, a genuine invention or discovery must be demonstrated lest in the constant demand for new
appliances, the heavy hand of tribute be laid on each slight technological advance in art. [19]
There is no such scrutiny in the case of copyrights nor any notice published before its grant to the
effect that a person is claiming the creation of a work. The law confers the copyright from the moment of
creation[20] and the copyright certificate is issued upon registration with the National Library of a sworn ex-
parte claim of creation.
Therefore, not having gone through the arduous examination for patents, the petitioner cannot
exclude others from the manufacture, sale or commercial use of the light boxes on the sole basis of its
copyright certificate over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office
(IPO) to scrutinize the light boxs eligibility as a patentable invention. The irony here is that, had petitioner
secured a patent instead, its exclusivity would have been for 17 years only. But through the simplified
procedure of copyright-registration with the National Library without undergoing the rigor of defending
the patentability of its invention before the IPO and the public the petitioner would be protected for 50
years. This situation could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden[21], the United States Supreme Court held that only the
expression of an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the
copyright of a book which expounded on a new accounting system he had developed. The publication
illustrated blank forms of ledgers utilized in such a system. The defendant reproduced forms similar to
those illustrated in the plaintiffs copyrighted book. The US Supreme Court ruled that:
There is no doubt that a work on the subject of book-keeping, though only explanatory of well known
systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x. But there is a
clear distinction between the books, as such, and the art, which it is, intended to illustrate. The mere
statement of the proposition is so evident that it requires hardly any argument to support it. The same
distinction may be predicated of every other art as well as that of bookkeeping. A treatise on the
composition and use of medicines, be they old or new; on the construction and use of ploughs or watches
or churns; or on the mixture and application of colors for painting or dyeing; or on the mode of drawing
lines to produce the effect of perspective, would be the subject of copyright; but no one would contend
that the copyright of the treatise would give the exclusive right to the art or manufacture described
therein. The copyright of the book, if not pirated from other works, would be valid without regard to the
novelty or want of novelty of its subject matter. The novelty of the art or thing described or explained has
nothing to do with the validity of the copyright. To give to the author of the book an exclusive property
in the art described therein, when no examination of its novelty has ever been officially made, would
be a surprise and a fraud upon the public. That is the province of letters patent, not of copyright. The
claim to an invention of discovery of an art or manufacture must be subjected to the examination of
the Patent Office before an exclusive right therein can be obtained; and a patent from the
government can only secure it.
The difference between the two things, letters patent and copyright, may be illustrated by reference to the
subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of great value in
the healing art. If the discoverer writes and publishes a book on the subject (as regular physicians
generally do), he gains no exclusive right to the manufacture and sale of the medicine; he gives that
to the public. If he desires to acquire such exclusive right, he must obtain a patent for the mixture
as a new art, manufacture or composition of matter. He may copyright his book, if he pleases; but
that only secures to him the exclusive right of printing and publishing his book. So of all other
inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may contain,
gives no exclusive right to the modes of drawing described, though they may never have been known or
used before. By publishing the book without getting a patent for the art, the latter is given to the public.
xxx
Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book intended
to convey instruction in the art, any person may practice and use the art itself which he has described and
illustrated therein. The use of the art is a totally different thing from a publication of the book
explaining it. The copyright of a book on bookkeeping cannot secure the exclusive right to make, sell and
use account books prepared upon the plan set forth in such book. Whether the art might or might not have
been patented, is a question, which is not before us. It was not patented, and is open and free to the use of
the public. And, of course, in using the art, the ruled lines and headings of accounts must necessarily be
used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas
produced by the peculiar nature of the art described in the books, which have been made the subject of
copyright. In describing the art, the illustrations and diagrams employed happened to correspond more
closely than usual with the actual work performed by the operator who uses the art. x x x The description
of the art in a book, though entitled to the benefit of copyright, lays no foundation for an exclusive
claim to the art itself. The object of the one is explanation; the object of the other is use. The former
may be secured by copyright. The latter can only be secured, if it can be secured at all, by letters
patent. (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
 This issue concerns the use by respondents of the mark Poster Ads which petitioners president said come to mean that the article was his property.[29] The admission by petitioners own expert witness that he
was a contraction of poster advertising. P & D was able to secure a trademark certificate for it, but one himself could not associate Poster Ads with petitioner P & D because it was too generic definitely
where the goods specified were stationeries such as letterheads, envelopes, calling cards and precluded the application of this exception.
newsletters.[22] Petitioner admitted it did not commercially engage in or market these goods. On the
contrary, it dealt in electrically operated backlit advertising units and the sale of advertising spaces thereon, Having discussed the most important and critical issues, we see no need to belabor the rest.
which, however, were not at all specified in the trademark certificate. All told, the Court finds no reversible error committed by the Court of Appeals when it reversed the
Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate Regional Trial Court of Makati City.
Appellate Court,[23] where we, invoking Section 20 of the old Trademark Law, ruled that the certificate of WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated May
registration issued by the Director of Patents can confer (upon petitioner) the exclusive right to use its own 22, 2001 is AFFIRMED in toto.
symbol only to those goods specified in the certificate, subject to any conditions and limitations specified
in the certificate x x x. One who has adopted and used a trademark on his goods does not prevent the SO ORDERED.
adoption and use of the same trademark by others for products which are of a
different description.[24] Faberge, Inc. was correct and was in fact recently reiterated in Canon Kabushiki
Kaisha vs. Court of Appeals.[25]
Assuming arguendo that Poster Ads could validly qualify as a trademark, the failure of P & D to
secure a trademark registration for specific use on the light boxes meant that there could not have been
any trademark infringement since registration was an essential element thereof.

ON THE ISSUE OF UNFAIR COMPETITION

If at all, the cause of action should have been for unfair competition, a situation which was possible
even if P & D had no registration.[26] However, while the petitioners complaint in the RTC also cited unfair
competition, the trial court did not find private respondents liable therefor. Petitioner did not appeal this
particular point; hence, it cannot now revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair
competition.
By the nature of things, there can be no unfair competition under the law on copyrights although it is
applicable to disputes over the use of trademarks. Even a name or phrase incapable of appropriation as a
trademark or tradename may, by long and exclusive use by a business (such that the name or phrase
becomes associated with the business or product in the mind of the purchasing public), be entitled to
protection against unfair competition.[27] In this case, there was no evidence that P & Ds use of Poster Ads
was distinctive or well-known. As noted by the Court of Appeals, petitioners expert witnesses himself had
testified that Poster Ads was too generic a name. So it was difficult to identify it with any company,
honestly speaking.[28] This crucial admission by its own expert witness that Poster Ads could not be
associated with P & D showed that, in the mind of the public, the goods and services carrying the trademark
Poster Ads could not be distinguished from the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary meaning. Poster Ads was generic
and incapable of being used as a trademark because it was used in the field of poster advertising, the very
business engaged in by petitioner. Secondary meaning means that a word or phrase originally incapable of
exclusive appropriation with reference to an article in the market (because it is geographically or otherwise
descriptive) might nevertheless have been used for so long and so exclusively by one producer with
reference to his article that, in the trade and to that branch of the purchasing public, the word or phrase has
G.R. No. 174379, August 31, 2016
E.I. DUPONT DE NEMOURS AND CO. (ASSIGNEE OF INVENTORS CARINI, DUNCIA AND
WONG), Petitioner, v. DIRECTOR EMMA C. FRANCISCO (IN HER CAPACITY AS
DIRECTOR GENERAL OF THE INTELLECTUAL PROPERTY OFFICE), DIRECTOR
EPIFANIO M. EVASCO (IN HIS CAPACITY AS THE DHUECTOR OF THE BUREAU OF
PATENTS), AND THERAPHARMA, INC., Respondents.
DECISION
LEONEN, J.:
A patent is granted to provide rights and protection to the inventor after an invention is disclosed to the
public. It also seeks to restrain and prevent unauthorized persons from unjustly profiting from a protected
invention. However, ideas not covered by a patent are free for the public to use and exploit. Thus, there
are procedural rules on the application and grant of patents established to protect against any infringement.
To balance the public interests involved, failure to comply with strict procedural rules will result in the
failure to obtain a patent.
This resolves a Petition for Review on Certiorari1 assailing the Court of Appeals Amended Decision2 dated
August 30, 2006, which denied the revival of Philippine Patent Application No. 35526, and the Court of
Appeals Resolution3 dated January 31, 2006, which granted the intervention of Therapharma, Inc. in the
revival proceedings.
E.I. Dupont Nemours and Company (E.I. Dupont Nemours) is an American corporation organized under
the laws of the State of Delaware.4 It is the assignee of inventors David John Carini, John Jonas Vytautas
Duncia, and Pancras Chor Bun Wong, all citizens of the United States of America.5chanrobleslaw
On July 10, 1987, E.I. Dupont Nemours filed Philippine Patent Application No. 35526 before the Bureau
of Patents, Trademarks, and Technology Transfer.6 The application was for Angiotensin II Receptor
Blocking Imidazole (losartan), an invention related to the treatment of hypertension and congestive heart
failure.7The product was produced and marketed by Merck, Sharpe, and Dohme Corporation (Merck), E.I.
Dupont Nemours' licensee, under the brand names Cozaar and Hyzaar. 8chanrobleslaw
The patent application was handled by Atty. Nicanor D. Mapili (Atty. Mapili), a local resident agent who
handled a majority of E.I. Dupont Nemours' patent applications in the Philippines from 1972 to
1996.9chanrobleslaw
On December 19, 2000, E.I. Dupont Nemours' new counsel, Ortega, Del Castillo, Bacorro, Odulio, Calma,
and Carbonell,10 sent the Intellectual Property Office11 a letter requesting that an office action be issued on
Philippine Patent Application No. 35526.12chanrobleslaw
In response, Patent Examiner Precila O. Bulihan of the Intellectual Property Office sent an office action
marked Paper No. 2 on January 30, 2002,13 which stated:ChanRoblesVirtualawlibrary
The appointed attorney on record was the late Atty. Nicanor D. Mapili. The reconstituted documents
provided no documents that will show that the authority to prosecute the instant application is now
transferred to the present counsel. No official revocation on record is available.
Therefore, an official revocation of the Power of Attorney of the former counsel and the appointment of
the present by the applicant is therefore required before further action can be undertaken.
1. Contrary to what was alleged, the Chemical Examining Division's (CED) record will
show that as far as the said division is concerned, it did not fail to issue the proper and
timely action on the instant application. CED record shows that the subject application
was assigned to the examiner on June 7, 1988. A month after that was July 19, 1988, the
first Office Action was mailed but was declared abandoned as of September 20, 1988
for applicant's failure to respond within the period as prescribed under Rule 112. Since
then, no other official transactions were recorded. This record is complemented by the
Examiner-in-charge's own record . . . .
....
2. It was noted that it took thirteen (13) long years for the applicant to request for such
Office Action. This is not expected of the applicant since it is an acceptable fact that
almost all inventors/applicants wish for the early disposition for their applications.14
On May 29, 2002, E.I. Dupont Nemours replied to the office action by submitting a Power of Attorney
executed by Miriam Meconnahey, authorizing Ortega, Castillo, Del Castillo, Bacorro, Odulio, Calma, and
Carbonell to prosecute and handle its patent applications.15 On the same day, it also filed a Petition for
Revival with Cost of Philippine Patent Application No. 35526.16chanrobleslaw
In its Petition for Revival, E.I. Dupont Nemours argued that its former counsel, Atty. Mapili, did not inform
it about the abandonment of the application, and it was not aware that Atty. Mapili had already died. 17 It
argued that it discovered Atty. Mapili's death when its senior-level patent attorney visited the Philippines
in 1996.18 It argued that it only had actual notice of the abandonment on January 30, 2002, the date of
Paper No. 2.19 Thus, it argued that its Petition for Revival was properly filed under Section 113 of the 1962
Revised Rules of Practice before the Philippines Patent Office in Patent Cases (1962 Revised Rules of
Practice).20chanrobleslaw
On April 18, 2002, the Director of Patents denied the Petition for Revival for having been filed out of
time.21 The Resolution22 stated:ChanRoblesVirtualawlibrary
Propriety dictates that the well-settled rule on agency should be applied to this case to maintain the
objectivity and discipline of the Office. Therefore, for cases such as the instant case, let the Office maintain
its position that mistakes of the counsel bind the client,' regardless of the degree of negligence committed
by the former counsel. Although it appears that the former counsel, Arty. Nicanor Mapili was remiss in
his obligations as counsel for the applicants, the Office cannot revive the abandoned application because
of the limitations provided in Rule 115. Clearly, the Petition for Revival was filed beyond the reglementary
period. Since the law and rules do not give the Director of Patents the discretion to stretch the period for
revival, the Office is constrained to apply Rule 115 to the instant case.
In view of the foregoing considerations, applicants' petition to revive the subject application is hereby
denied.
 an estimated 12.6 million Filipinos," 41 and noted that the presence of competition lowered the price for
23
SO ORDERED. chanroblesvirtuallawlibrary losartan products.42 It also found that the revival of the application prejudiced Therapharma, Inc.'s interest,
in that it had already invested more than P20,000,000.00 to develop its own losartan product and that it
E.I. Dupont Nemours appealed the denial to the Director-General of the Intellectual Property Office on
August 26, 2002.24 In the Decision25cralawred dated October 22, 2003, Director-General Emma C. acted in good faith when it marketed its product. 43chanrobleslaw
Francisco denied the appeal and affirmed the Resolution of the Director of Patents.
The Court of Appeals likewise found that it erroneously based its August 31, 2004 Decision on E.I Dupont
Nemours' allegation that it took seven (7) to 13 years for the Intellectual Property Office to act on a patent
On November 21, 2003, petitioner filed before the Court of Appeals a Petition for Review seeking to set
application.44 It stated that while it might have taken that long to issue the patent, it did not take that long
aside the Intellectual Property Office's Decision dated October 22, 2003. 26chanrobleslaw
for the Intellectual Property Office to act on application. 45 Citing Schuartz v. Court of Appeals,46 it found
On August 31, 2004, the Court of Appeals granted the Petition for Review. 27 In allowing the Petition for that both E.I. Dupont Nemours and Arty. Mapili were inexcusably negligent in prosecuting the patent
Revival, the Court of Appeals stated:ChanRoblesVirtualawlibrary application.47chanrobleslaw
After an exhaustive examination of the records of this case, this Court believes that there is sufficient
On October 19, 2006, petitioner E.I. Dupont Nemours filed before this Court this Petition for Review on
justification to relax the application of the above-cited doctrine in this case, and to afford petitioner some
Certiorari.48 Both respondents Intellectual Property Office and Therapharma, Inc. were directed to
relief from the gross negligence committed by its former lawyer, Atty. Nicanor D.
Mapili[.]28chanroblesvirtuallawlibrary comment on the comment on the Petition.49 Upon submission of their respective Comments,50 petitioner
was directed to file its Consolidated Reply.51 Thereafter, the parties were directed to file their respective
The Office of the Solicitor General, on behalf of the Intellectual Property Office, moved for memoranda.52chanrobleslaw
reconsideration of this Decision on September 22, 2004. 29chanrobleslaw
The arguments of the parties present several issues for this Court's resolution, as follows:
In the interim, Therapharma, Inc. moved for leave to intervene and admit the Attached Motion for
Reconsideration dated October 11, 200430 and argued that the Court of Appeals' August 31, 2004 Decision chanRoblesvirtualLawlibraryFirst, whether the Petition for Review on Certiorari complied with Rule 45,
directly affects its "vested" rights to sell its own product. 31chanrobleslaw Section 4 of the Rules of Court when petitioner failed to attach certain documents to support the allegations
in the complaint;
Therapharma, Inc. alleged that on January 4, 2003, it filed before the Bureau of Food and Drugs its own
application for a losartan product "Lifezar," a medication for hypertension, which the Bureau granted.32 It Second, whether petitioner should have filed a petition for certiorari under Rule 65 of the Rules of Court;
argued that it made a search of existing patent applications for similar products before its application, and
that no existing patent registration was found since E.I. Dupont Nemours' application for its losartan Third, whether the Petition for Review on Certiorari raises questions of fact;
product was considered abandoned by the Bureau of Patents, Trademarks, and Technology Transfer. 33 It
alleged that sometime in 2003 to 2004, there was an exchange of correspondence between Therapharma, Fourth, whether the Court of Appeals erred in allowing the intervention of respondent Therapharma, Inc.
Inc. and Merck. In this exchange, Merck informed Therapharma, Inc. that it was pursuing a patent on the in petitioner's appeal;
losartan products in the Philippines and that it would pursue any legal action necessary to protect its
product.34chanrobleslaw Fifth, whether the Court of Appeals erred in denying petitioner's appeal for the revival of its patent
application on the grounds that (a) petitioner committed inexcusable negligence in the prosecution of its
On January 31, 2006, the Court of Appeals issued the Resolution35 granting the Motion for Leave to patent application; and (b) third-party rights and the public interest would be prejudiced by the appeal;
Intervene. According to the Court of Appeals, Therapharma, Inc. had an interest in the revival of E.I.
Dupont Nemours' patent application since it was the local competitor for the losartan product. 36 It stated Sixth, whether Schuartz applies to this case in that the negligence of a patent applicant's counsel binds the
that even if the Petition for Review was premised on the revival of the patent application, Therapharma, applicant; and cralawlawlibrary
Inc.'s intervention was not premature since E.I. Dupont Nemours, through Merck, already threatened
Therapharma, Inc. with legal action if it continued to market its losartan product.37chanrobleslaw Lastly, whether the invention has already become part of public domain.

E.I. Dupont Nemours moved for reconsideration on February 22, 2006, assailing the Court of Appeals' I
January 31, 2006 Resolution.38chanrobleslaw
The question of whether the Court of Appeals may resolve a motion for intervention is a question that
On August 30, 2006, the Court of Appeals resolved both Motions for Reconsideration and rendered the assails an interlocutory order and requests a review of a lower court's exercise of discretion. Generally, a
Amended Decision39 reversing its August 31, 2004 Decision. petition for certiorari under Rule 65 of the Rules of Court will lie to raise this issue in a limited manner.
There must be a clear showing of grave abuse of discretion for the writ of certiorari to be issued.
The Court of Appeals ruled that the public interest would be prejudiced by the revival of E.I. Dupont
Nemours' application.40 It found that losartan was used to treat hypertension, "a chronic ailment afflicting However, when the Court of Appeals has already resolved the question of intervention and the merits of
the case, an appeal through a petition for review on certiorari under Rule 45 of the Rules of Court is the
proper remedy.
Respondent Therapharma, Inc. argues that the Petition should be dismissed outright for being the wrong
mode of appeal.53 It argues that petitioner should have filed a petition for certiorari under Rule 65 since
petitioner was assailing an act done by the Court of Appeals in the exercise of its discretion.54 It argues
that petitions under Rule 45 are limited to questions of law, and petitioner raised findings of fact that have
already been affirmed by the Court of Appeals.55chanrobleslaw
Petitioner, on the other hand, argues that Rule 65 is only available when there is no appeal or any plain,
speedy remedy in the ordinary course of law. Since a petition for review under Rule 45 was still available
to it, it argues that it correctly availed itself of this remedy. 56 Petitioner also argues that there are exceptions
to the general rule on the conclusiveness of the Court of Appeals' findings of fact. 57 It argues that it was
necessary for it to discuss relevant facts in order for it to show that the Court of Appeals made a
misapprehension of facts.58chanrobleslaw
The special civil action of certiorari under Rule 65 is intended to correct errors of jurisdiction. 59 Courts
lose competence in relation to an order if it acts in grave abuse of discretion amounting to lack or excess
of jurisdiction.60 A petition for review under Rule 45, on the other hand, is a mode of appeal intended to
correct errors of judgment. 61 Errors of judgment are errors committed by a court within its
jurisdiction.62This includes a review of the conclusions of law63 of the lower court and, in appropriate
cases, evaluation of the admissibility, weight, and inference from the evidence presented.
Intervention results in an interlocutory order ancillary to a principal action. 64 Its grant or denial is subject
to the sound discretion of the court.65 Interlocutory orders, or orders that do not make a final disposition
of the merits of the main controversy or cause of action, 66 are generally not reviewable.67 The only
exception is a limited one, in that when there is no plain, speedy, and adequate remedy, and where it can
be shown that the court acted without, in excess, or with such grave abuse of discretion that such action
ousts it of jurisdiction.
Judicial economy, or the goal to have cases prosecuted with the least cost to the parties,68 requires that
unnecessary or frivolous reviews of orders by the trial court, which facilitate the resolution of the main
merits of the case, be reviewed together with the main merits of the case. After all, it would be more
efficient for an appellate court to review a case in its entire context when the case is finally disposed.
The question of whether intervention is proper is a question of law. Settled is the distinction between a
question of law and a question of fact. A question of fact arises when there is doubt as to the truth or falsity
of certain facts.69 A question of law, on the other hand, arises when "the appeal raises doubt as to the
applicable law on a certain set of facts." 70 The test often used by this Court to determine whether there is
a question of fact or a question of law "is not the appellation given to such question by the party raising
the same; rather, it is whether the appellate court can determine the issue raised without reviewing or
evaluating the evidence, in which case, it is a question of law; otherwise it is a question of
fact."71chanrobleslaw
Petitioner raises the question of whether Republic Act No. 165 allows the Court of Appeals to grant a
motion for intervention. This necessarily requires a determination of whether Rule 19 of the Rules of
Court72 applies in appeals of cases filed under Republic Act No. 165. The determination of this question
does not require a review of re-evaluation of the evidence. It requires a determination of the applicable
law.
II
If a petition fails to attach material portions of the record, it may still be given due course if it falls under
certain exceptions. Although Rule 45, Section 4 of the Rules of Court requires that the petition "be
accompanied by . . . such material portions of the record as would support the petition," the failure to do
so will not necessarily warrant the outright dismissal of the complaint. 73chanrobleslaw
Respondent Therapharma, Inc. argues that the Petition should have been outright dismissed since it failed
to attach certain documents to support its factual allegations and legal arguments, particularly: the annexes
of the Petition for Review it had filed before the Court of Appeals and the annexes in the Motion for Leave
to Intervene it had filed.74 It argues that petitioner's failure to attach the documents violates Rule 45,
Section 4, which requires the submission of material portions of the record. 75chanrobleslaw
On the other hand, petitioner argues that it was able to attach the Court of Appeals Decision dated August
31, 2004, the Resolution dated January 31, 2006, and the Amended Decision dated August 30, 2006, all
of which were sufficient for this Court to give due course to its Petition. 76chanrobleslaw
In Magsino v. De Ocampo,77 this Court applied the procedural guideposts in Galvez v. Court of Appeals78in
determining whether the Court of Appeals correctly dismissed a petition for review under Rule 42 for
failure to attach relevant portions of the record. Thus:ChanRoblesVirtualawlibrary
In Galvez v. Court of Appeals, a case that involved the dismissal of a petition for certiorari to assail an
unfavorable ruling brought about by the failure to attach copies of all pleadings submitted and other
material portions of the record in the trial court (like the complaint, answer and position paper) as would
support the allegations of the petition, the Court recognized three guideposts for the CA to consider in
determining whether or not the rules of procedures should be relaxed, as
follows:ChanRoblesVirtualawlibrary
First, not all pleadings and parts of case records are required to be attached to the petition. Only those
which are relevant and pertinent must accompany it. The test of relevancy is whether the document in
question will support the material allegations in the petition, whether said document will make out a prima
facie case of grave abuse of discretion as to convince the court to give due course to the petition.
Second, even if a document is relevant and pertinent to the petition, it need not be appended if it is shown
that the contents thereof can also [sic] found in another document already attached to the petition. Thus, if
the material allegations in a position paper are summarized in a questioned judgment, it will suffice that
only a certified true copy of the judgment is attached.
Third, a petition lacking an essential pleading or part of the case record may still be given due course or
reinstated (if earlier dismissed) upon showing that petitioner later submitted the documents required, or
that it will serve the higher interest of justice that the case be decided on the
merits.79chanroblesvirtuallawlibrary
Although Magsino referred to a petition for review under Rule 42 before the Court of Appeals, the
procedural guideposts cited in Magsino may apply to this case since the contents of a pleading under Rule
4280 are substantially the same as the contents of a pleading under Rule 45, 81 in that both procedural rules
require the submission of "material portions of the record as would support the allegations of the
petition."82chanrobleslaw However, petitioner argues that intervention should not have been allowed on appeal99 since the revival of
a patent application is ex parte and is "strictly a contest between the examiner and the applicant" 100under
In support of its Petition for Review on Certiorari, petitioner attached the Court of Appeals Decision dated Sections 78101 and 79102 of the 1962 Revised Rules of Practice.103 It argues that the disallowance of any
August 31, 2004,83 the Resolution dated January 31, 2006,84 and the Amended Decision dated August 30, intervention is to ensure the confidentiality of the proceedings under Sections 13 and 14 of the 1962
2006.85 The Court of Appeals Resolution and Amended Decision quoted extensive portions of its rolloin Revised Rules of Practice.104chanrobleslaw
support of its rulings.86 These conclusions were sufficient to convince this Court not to outright dismiss
the Petition but to require respondents to first comment on the Petition, in satisfaction of the first and Respondents argue that the 1962 Revised Rules of Practice is only applicable before the Intellectual
second procedural guideposts in Magsino. Property Office.105 In particular, respondent Therapharma, Inc. argues that the issue before the Court of
Appeals was beyond the realm of patent examination proceedings since it did not involve the patentability
Upon filing of its Consolidated Reply,87 petitioner was able to attach the following additional documents: of petitioner's invention.106 It further argues that its intervention did not violate the confidentiality of the
patent application proceedings since petitioner was not required to divulge confidential information
chanRoblesvirtualLawlibrary regarding its patent application.107chanrobleslaw
(1) Petition for Review filed before the Court of Appeals;88 In the 1962 Revised Rules of Practice, final decisions of the Director of Patents are appealed to this Court
and governed by Republic Act No. 165. In particular:ChanRoblesVirtualawlibrary
(2) Letters dated July 18, 1995, December 12, 1995, and December 29, 1995; 89 PART X
PETITION AND APPEALS
(3) Declaration of Ms. Miriam Meconnahey dated June 25, 2002; 90
. . . .
(4) Spreadsheet of petitioner's patent applications handled by Atty. Mapili;91
CHAPTER IV
(5) Power of Attorney and Appointment of Resident Agent dated September 26, 1996; 92
APPEALS TO THE SUPREME COURT FROM FINAL ORDERS OR DECISIONS OF THE
DIRECTOR OF PATENTS IN EX PARTE AND INTER PARTES PROCEEDINGS
(6) Letter dated December 19, 2000 requesting an Office Action on Patent Application No. 35526; 93

(7) Paper No. 2 dated January 30, 2002;94 265. Appeals to the Supreme Court in ex parte and inter partes proceedings.�Any person who is
dissatisfied with the final decision of the Director of Patents, (affirming that of a Principal Examiner)
(8) Petition for Revival dated January 30, 2002 with attached Power of Attorney and Appointment denying him a patent for an invention, industrial design or utility model; any person who is dissatisfied
of Resident Agent;95 with any final decision of the Director of Patents (affirming that of the Executive Examiner) in any
proceeding; and any party who is dissatisfied with any final decision of the Director of Patents in an inter
(9) Resolution dated July 24, 2002 by Director of the Bureau of Patents; 96 and partes proceeding, may appeal such final decision to the Supreme Court within thirty days from the date
he receives a copy of such decision. (Republic Act No. 165, section 16, as amended by section 3, Republic
(10) Notice of and Memorandum on Appeal before the Director-General of the Intellectual Property Act No. 864.)
Office.97
266. Procedure on appeal to the Supreme Court.�For the procedure on appeal to the Supreme Court,
from the final decisions of the Director of Patents, see sections 63 to 73, inclusive, of Republic Act No.
The third procedural guidepost in Magsino was complied with upon the submission of these documents. 165 (patent law).
Petitioner, therefore, has substantially complied with Rule 45, Section 4 of the Rules of Court.
Particularly instructive is Section 73 of Republic Act No. 165, which
provides:ChanRoblesVirtualawlibrary
III
Section 73. Rules of Court applicable. � In all other matters not herein provided, the applicable provisions
of the Rules of Court shall govern.
Appeal is not a right but a mere privilege granted by statute.98 It may only be exercised in accordance with
the law that grants it. Republic Act No. 165 has since been amended by Republic Act No. 8293, otherwise known as the
Intellectual Property Code of the Philippines (Intellectual Property Code), in 1997. This is the applicable
Accordingly, the Court of Appeals is not bound by the rules of procedure in administrative agencies. The law with regard to the revival of petitioner's patent application. Section 7(7.1)(a) of the Intellectual
procedural rules of an administrative agency only govern proceedings within the agency. Once the Court Property Code states:ChanRoblesVirtualawlibrary
of Appeals has given due course to an appeal from a ruling of an administrative agency, the proceedings SECTION 7. The Director General and Deputies Director General. �
before it are governed by the Rules of Court.
7.1. Functions. � The Director General shall exercise the following powers and functions:

chanRoblesvirtualLawlibrary. . . . conducted patent searches from October 15, 1995 and found that no patent application for losartan had
b. Exercise exclusive appellate jurisdiction over all decisions rendered by the Director of Legal Affairs,
the Director of Patents, the Director of Trademarks, and the Director of the Documentation, Information
and Technology Transfer Bureau. The decisions of the Director General in the exercise of his appellate
jurisdiction in respect of the decisions of the Director of Patents, and the Director of Trademarks shall be
appealable to the Court of Appeals in accordance with the Rules of Court; and those in respect of the
decisions of the Director of Documentation, Information and Technology Transfer Bureau shall be
appealable to the Secretary of Trade and Industry[.] (Emphasis supplied)
Thus, it is the Rules of Court, not the 1962 Revised Rules of Practice, which governs the Court of Appeals'
proceedings in appeals from the decisions of the Director-General of the Intellectual Property Office
regarding the revival of patent applications.
Rule 19 of the Rules of Court provides that a court has the discretion to determine whether to give due
course to an intervention. Rule 19, Section 1 states:ChanRoblesVirtualawlibrary
RULE 19
INTERVENTION
SECTION 1. Who may intervene. � A person who has a legal interest in the matter in litigation, or in the
success of either of the parties, or an interest against both, or is so situated as to be adversely affected by
a distribution or other disposition of property in the custody of the court or of an officer thereof may, with
leave of court, be allowed to intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether
or not the intervenor's rights may be fully protected in a separate proceeding.
The only questions the court need to consider in a motion to intervene are whether the intervenor has
standing to intervene, whether the motion will unduly delay the proceedings or prejudice rights already
established, and whether the intervenor's rights may be protected in a separate action. 108chanrobleslaw
If an administrative agency's procedural rules expressly prohibit an intervention by third parties, the
prohibition is limited only to the proceedings before the administrative agency. Once the matter is brought
before the Court of Appeals in a petition for review, any prior prohibition on intervention does not apply
since the only question to be determined is whether the intervenor has established a right to intervene under
the Rules of Court.
In this case, respondent Therapharma, Inc. filed its Motion for Leave to Intervene 109 before the Court of
Appeals, not before the Intellectual Property Office. In assessing whether to grant the intervention, the
Court of Appeals considered respondent Therapharma, Inc.'s legal interest in the case and its other options
for the protection of its interests.110 This was within the discretion of the Court of Appeals under the Rules
of Court.
Respondent Therapharma, Inc. was able to show that it had legal interest to intervene in the appeal of
petitioner's revival of its patent application. While its intervention may have been premature as no patent
has been granted yet, petitioner's own actions gave rise to respondent Therapharma, Inc.'s right to protect
its losartan product.
Respondent Therapharma, Inc. filed an application for product registration before the Bureau of Food and
Drugs on June 4, 2003 and was granted a Certificate of Product Registration on January 27, 2004.111 It
been filed either before the Bureau of Patents, Trademarks, and Technology Transfer or before the
Intellectual Property Office.112chanrobleslaw
As early as December 11, 2003, petitioner through Merck was already sending communications
threatening legal action if respondent Therapharma, Inc. continued to develop and market losartan in the
Philippines. The letter stated:ChanRoblesVirtualawlibrary
Merck is strongly committed to the protection of its valuable intellectual property rights, including the
subject losartan patents. While fair competition by sale of pharmaceutical products which are domestically
produced legally is always welcomed by Merck and MSD Philippines, Merck will vigorously pursue all
available legal remedies against any unauthorized manufacturer, distributor or supplier of losartan in
countries where its patents are in force and where such activity is prohibited by law. Thus, Merck is
committed to preventing the distribution of losartan in the Philippines if it originates from, or travels
through, a country in which Merck holds patent rights.113 (Emphasis supplied)
This letter was presented before the Court of Appeals, which eventually granted the revival of the patent
application in its August 31, 2004 Decision. Petitioner had no pending patent application for its losartan
product when it threatened respondent Therapharma, Inc. with legal action. 114chanrobleslaw
Respondent Therapharma, Inc. expressed its willingness to enter into a Non-Use and Confidentiality
Contract if there was a pending patent application.115 After several negotiations on the clauses of the
contract,116 the parties were unable to come to an agreement. In its letter dated May 24, 2004,117respondent
Therapharma, Inc. expressed its frustration on petitioner's refusal to give a clear answer on whether it had
a pending patent application:ChanRoblesVirtualawlibrary
For easy reference, we have reproduced below paragraph 5 of the Confidentiality and Non-Use Agreement
("Confidentiality Agreement"), underscoring your proposed amendment:ChanRoblesVirtualawlibrary
"THERAPHARMA agrees that upon receipt of Specifications and Claims of Application No. 35526 or at
any time thereafter, before it becomes part of the public domain, through no fault of THERAPHARMA,
it will not, either directly or indirectly, alone, or through, on behalf of, or in conjunction with any other
person or entity, make use of any information contained therein, particularly the product covered by its
claims and the equivalents thereof, in any manner whatsoever."
We find your proposed insertion odd. What may be confidential, and which we agree you have every right
to protect by way of the Confidentiality Agreement, are the Specifications and Claims in the patent
application, not the product per se. The product has been in the market for years. Hence, how can it be
confidential? Or is the ambiguity intended to create a legal handle because you have no cause of action
against us should we launch our own version of the losartan product?
. . . .
Finally, the questions we posed in our previous letters are plain and simple � Is the Philippine Patent
Application No. 35526 still pending before the IPO, i.e., it has neither been withdrawn by your
licensor nor denied registration by the IPO for any reason whatsoever? When did your licensor file
said application with the IPO? These questions are easy to answer, unless there is an intention to mislead.
You are also aware that the IPO is the only government agency that can grant letters patent. This is why
we find disturbing your statement that the pendency of the patent application before the IPO is "not
relevant". Hence, unless we receive unequivocal answers to the questions above, we regret that we cannot
agree to execute the Confidentiality Agreement; otherwise, we may be acknowledging by contract a right the patent.
that you do not have, and never will have, by law.118 (Emphasis and underscoring in the original)
The threat of legal action against respondent Therapharma, Inc. was real and imminent. If respondent MR. TA�ADA. But you have made the period of protection longer, Mr. Speaker.
Therapharma, Inc. waited until petitioner was granted a patent application so it could file a petition for
compulsory licensing and petition for cancellation of patent under Section 240119 and Section 247120 of the MR. GONZALES. On the contrary, Mr. Speaker, when a similar question was previously propounded
1962 Revised Rules of Practice,121 its continued marketing of Lifezar would be considered as an before, actually Mr. Speaker, it may decrease in fact the period of protection, Mr. Speaker. Because unlike
infringement of petitioner's patent. before 17 years from grant, Mr. Speaker, now 20 years from application or from filing but actually, Mr.
Speaker, it normally takes three to four years before a patent is actually granted even under the proposed
Even assuming that the Intellectual Property Office granted the revival of Philippine Patent Application measure. Because as you can see[,] publication in the BPTTT Gazette would even taken place after 18
No. 35526 back in 2000, petitioner's claim of absolute confidentiality in patent proceedings is inaccurate. months from filing. In other words, the procedure itself is such a manner that normally takes a period of
about three years to finally grant the patent. So even if 20 years is given from the time of filing actually in
In the 1962 Revised Rules of Practice, the Bureau of Patents, Trademarks, and Technology Transfer essence it will be the same, Mr. Speaker, because under the existing law 17 years from grant. But even
previously required secrecy in pending patent applications. Section 13 states:ChanRoblesVirtualawlibrary under our existing law from the time that a patent application is filed it also takes about three to four years,
Mr. Speaker, to grant the same.
13. Pending applications are preserved in secrecy. � No information will be given to anyone respecting
the filing by any particular person of any application for a patent, the pendency of any particular case
Now, why from filing, Mr. Speaker? Because the patent holder applicant is now required to publish in a
before the Office, or the subject matter of any particular application, unless the same is authorized by the
manner easily understood by a person trained or with the same skill as that of a patent holder. And from
applicant in writing, and unless it shall be necessary, in the opinion of the Director of Patents for the proper
that time this is published, this process covered by the patent is already made available. In fact, from the
conduct of business before the Office.
time that it is published, any interested person may even examine and go over the records as filed with the
The Intellectual Property Code, however, changed numerous aspects of the old patent law. The Intellectual BPTTT and, therefore, this new technology or new invention is now made available to persons equipped
Property Code was enacted not only to amend certain provisions of existing laws on trademark, patent, or possessed with the same skills as that of the patent holder. And that is the reason why the patent is �
and copyright, but also to honor the country's commitments under the World Trade Organization - the time of the patent is now tacked from the time it is filed because as a compromise it is now mandatory
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), a treaty that to publish the said patent together with its description - the description of the process and even would, at
entered force in the Philippines on January 1, 1995. 122chanrobleslaw times demand the deposit of sample of the industrial design, Mr. Speaker. 128chanroblesvirtuallawlibrary

The mandatory disclosure requirement in the TRIPS Agreement 123 precipitated the shift from a first-to- Gonzales further clarified that the publication requirements of the Intellectual Property Code would
invent system to a first-to-file system. The first-to-file system required citizens of foreign countries to necessarily shorten the period for confidentiality of patent applications:ChanRoblesVirtualawlibrary
register their patents in the Philippines before they can sue for infringement. 124chanrobleslaw MR. MONFORT. Now, another question is, (another is) you know, the time from the filing of the date up
to publication which is the period of pendency or confidentiality, may I know how many years will it take,
Lawmakers, however, expressed their concern over the extension of the period of protection for registered that confidentiality period, variability.
patents.125 Under Section 21126 of Republic Act No. 165, a patent had a term of 17 years. The Intellectual
Property Code extended the period to 20 years. 127chanrobleslaw MR. GONZALES. Eighteen months, Mr. Speaker.

During the interpellations before the House of Representatives, then Representative Neptali Gonzales II MR. MONFORT. How many?
(Gonzales) explained that under the Intellectual Property Code, the period of protection would have been
shortened because of the publication requirement:ChanRoblesVirtualawlibrary MR. GONZALES. Eighteen months.
MR. TA�ADA. Under the proposed measure, Your Honor, what is the period of protection that is given
to the holder of the patent registered? MR. MONFORT. I do not think it is 18 months.

MR. GONZALES. It is provided for in the law, Mr. Speaker, because prior to the publication, naturally,
MR. GONZALES. Seventeen years from grant of patent, Mr. Speaker. Unlike before . . .
the records become confidential because the essence of a patent, trademark, or copyright is to give the
author or the inventor exclusive right to work on his own invention. And that is his invention, and naturally,
MR. TA�ADA. Under the present law, Mr. Speaker.
it is but right that he should have the exclusive right over his invention.
MR. GONZALES. I mean 17 years from filing, Mr. Speaker, unlike before which is 20 years from grant.
On the other hand, the law requires that after 18 months, it should now be published. When it is now
Okay.
published, naturally, it ceases to be confidential in character because it is now ready for examination. It is
now ready for possible copying of any interested person because the application, as we have repeatedly
I am sorry, Mr. Speaker. Seventeen years from filing under the existing law, 20 years from grant under the
proposed measure. It would appear, Mr. Speaker, that the proposed measure seeks to extend the grant of
said on the floor, would require the filing of a description of the invention that can be carried out by a
person similarly trained in the arts and sciences as that of the patent holder. 129chanroblesvirtuallawlibrary Respondents, on the other hand, argue that petitioner was inexcusably and grossly negligent in the
prosecution of its patent application since it allowed eight (8) years to pass before asking for a status update
Thus, the absolute secrecy required by the 1962 Revised Rules of Practice would not be applicable to a
patent application before the Intellectual Property Office. Section 13 of the 1962 Revised Rules of Practice on its application.137 Respondent Intellectual Property Office argues that petitioner's inaction for eight (8)
does not appear in the Intellectual Property Code,130 in the Rules and Regulations on Inventions,131 or in years constitutes actual abandonment.138 It also points out that from the time petitioner submitted its new
Special Power of Attorney on September 29, 1996, it took them another four (4) years to request a status
the Revised Implementing Rules and Regulations for Patents, Utility Models and Industrial Design. 132 The
update on its application.139chanrobleslaw
Intellectual Property Code now states that all patent applications must be published in the Intellectual
Property Office Gazette and that any interested party may inspect all documents submitted to the
Under Chapter VII, Section 111(a) of the 1962 Revised Rules of Practice, a patent application is deemed
Intellectual Property Office. The patent application is only confidential before its publication. Sections 44
and 45 of the Intellectual Property Code provide:ChanRoblesVirtualawlibrary abandoned if the applicant fails to prosecute the application within four months from the date of
the mailing of the notice of the last action by the Bureau of Patents, Trademarks, and Technology Transfer,
SECTION 44. Publication of Patent Application. �
and not from applicant's actual notice. Section 111 (a) states:ChanRoblesVirtualawlibrary
Chapter VII
44.1. The patent application shall be published in the IPO Gazette together with a search document
TIME FOR RESPONSE BY APPLICANT; ABANDONMENT OF APPLICATION
established by or on behalf of the Office citing any documents that reflect prior art, after the expiration of
eighteen (18) months from the filing date or priority date.
111. Abandonment for failure to respond within the time limit. � (a) If an applicant fails to prosecute his
application within four months after the date when the last official notice of action by the Office was
44.2. After publication of a patent application, any interested party may inspect the application documents
mailed to him, or within such time as may be fixed (rule 112), the application will become abandoned.
filed with the Office.
According to the records of the Bureau of Patents, Trademarks, and Technology Transfer Chemical
44.3. The Director General, subject to the approval of the Secretary of Trade and Industry, may prohibit Examining Division, petitioner filed Philippine Patent Application No. 35526 on July 10, 1987. It was
or restrict the publication of an application, if in his opinion, to do so would be prejudicial to the national assigned to an examiner on June 7, 1988. An Office Action was mailed to petitioner's agent, Atty. Mapili,
security and interests of the Republic of the Philippines. (n) on July 19, 1988. Because petitioner failed to respond within the allowable period, the application was
deemed abandoned on September 20, 1988.140 Under Section 113, petitioner had until January 20, 1989 to
SECTION 45. Confidentiality Before Publication. � A patent application, which has not yet been file for a revival of the patent application. Its Petition for Revival, however, was filed on May 30,
published, and all related documents, shall not be made available for inspection without the consent of the 2002,14113 years after the date of abandonment.
applicant.
Section 113 has since been superseded by Section 133.4 of the Intellectual Property Code, Rule 930 of the
It was inaccurate, therefore, for petitioner to argue that secrecy in patent applications prevents any
Rules and Regulations on Inventions, and Rule 929 of the Revised Implementing Rules and Regulations
intervention from interested parties. The confidentiality in patent applications under the Intellectual
for Patents, Utility Models and Industrial Design. The period of four (4) months from the date of
Property Code is not absolute since a party may already intervene after the publication of the application.
abandonment, however, remains unchanged. The Intellectual Property Code even provides for a shorter
period of three (3) months within which to file for revival:ChanRoblesVirtualawlibrary
IV
SECTION 133. Examination and Publication. �
An abandoned patent application may only be revived within four (4) months from the date of
. . . .
abandonment. No extension of this period is provided by the 1962 Revised Rules of Practice. Section 113
states:ChanRoblesVirtualawlibrary
133.4. An abandoned application may be revived as a pending application within three (3) months from
113. Revival of abandoned application. � An application abandoned for failure to prosecute may be
the date of abandonment, upon good cause shown and the payment of the required fee.
revived as a pending application if it is shown to the satisfaction of the Director that the delay was
unavoidable. An abandoned application may be revived as a pending application within four months from Rule 930 of the Rules and Regulations on Inventions provides:ChanRoblesVirtualawlibrary
the date of abandonment upon good cause shown and upon the payment of the required fee of P25. An Rule 930. Revival of application. - An application deemed withdrawn for failure to prosecute may be
application not revived within the specified period shall be deemed forfeited. revived as a pending application within a period of four (4) months from the mailing date of the notice of
withdrawal if it is shown to the satisfaction of the Director that the failure was due to fraud, accident,
Petitioner argues that it was not negligent in the prosecution of its patent application 133 since it was Atty.
mistake or excusable negligence.
Mapili or his heirs who failed to inform it of crucial developments with regard to its patent application. 134It
argues that as a client in a foreign country, it does not have immediate supervision over its local counsel
A petition to revive an application deemed withdrawn must be accompanied by (1) a showing of the cause
so it should not be bound by its counsel's negligence.135 In any case, it complied with all the requirements
of the failure to prosecute, (2) a complete proposed response, and (3) the required fee.
for the revival of an abandoned application under Rule 113 of the 1962 Revised Rules of
Practice.136chanrobleslaw
An application not revived in accordance with this rule shall be deemed forfeited.
Rule 929 of the Revised Implementing Rules and Regulations for Patents, Utility Models and Industrial the abandonment of its patent application was caused by its own lack of prudence.
Design provides:ChanRoblesVirtualawlibrary
Rule 929. Revival of Application. - An application deemed withdrawn for failure to prosecute may be In Bernardo v. Court of Appeals,146 "[n]o prudent party will leave the fate of his case entirely to his lawyer
revived as a pending application within a period of four (4) months from the mailing date of the notice of . . . . It is the duty of a party-litigant to be in contact with his counsel from time to time in order to be
withdrawal if it is shown to the satisfaction of the Director that the failure was due to fraud, accident, informed of the progress of his case." 147chanrobleslaw
mistake, or excusable negligence.
Even if Atty. Mapili's death prevented petitioner from submitting a petition for revival on time, it was
A petition to revive an application deemed withdrawn shall be accompanied by: clearly negligent when it subsequently failed to immediately apprise itself of the status of its patent
application.
chanRoblesvirtualLawlibrary(a) A showing of a justifiable reason for the failure to prosecute;
(b) A complete proposed response; and Upon learning of Atty. Mapili's death, petitioner issued a Power of Attorney and Appointment of Resident
(c) Full payment of the required fee. Agent in favor of Bito, Lozada, Ortega & Castillo on March 25, 1996.148 Despite the immediate action in
the substitution of its resident agent, it only requested a status update of Philippine Patent Application No.
No revival shall be granted to an application that has been previously revived with cost. 35526 from the Intellectual Property Office on December 14, 2000, 149 or four (4) years after it learned of
Atty. Mapili's death.
An application not revived in accordance with this Rule shall be deemed forfeited.
Petitioner attempts to explain that it took them four (4) years to request a status update because the Bureau
Even if the delay was unavoidable, or the failure to prosecute was due to fraud, accident, mistake, or
of Patents, Trademarks, and Technology Transfer failed to take any action when it submitted its Power of
excusable negligence, or the Petition was accompanied by a complete proposed response, or all fees were
Attorney and Appointment of Resident Agent in favor of Bito, Lozada, Ortega & Castillo. 150 The Power
paid, the Petition would still be denied since these regulations only provide a four (4)-month period within
of Attorney, however, shows that it was only to inform the Bureau that all notices relating to its pending
which to file for the revival of the application. The rules do not provide any exception that could extend
this four (4)-month period to 13 years. patent applications should be sent to it. Philippine Patent Application No. 35526 was declared abandoned
on September 20, 1988. As far as the Bureau was concerned, it was a forfeited application that had already
been archived. It was not the Bureau's duty to resurrect previous notices of forfeited and abandoned
Petitioner's patent application, therefore, should not be revived since it was filed beyond the allowable
applications to be sent to new resident agents unless a specific status update was requested. Considering
period.
that petitioner only requested a status update on December 14, 2000, it was only then that the Intellectual
Property Office would start sending notices to it.
V
Contrary to the posturing of petitioner, Schuartz is applicable.
Even assuming that the four (4)-month period could be extended, petitioner was inexcusably negligent in
the prosecution of its patent application.
In Schuartz, several foreign inventors seeking to file patent applications in the Philippines hired the law
firm Siguion Reyna, Montecillo and Ongsiako to process their applications.151 The Bureau of Patents,
Negligence is inexcusable if its commission could have been avoided through ordinary diligence and
Trademarks, and Technology Transfer mailed the law firm several notices of abandonment on its patent
prudence.142 It is also settled that negligence of counsel binds the client as this "ensures against the
applications from June 1987 to September 1987. The law firm only found out about this in December
resulting uncertainty and tentativeness of proceedings if clients were allowed to merely disown their
1987, after it dismissed two (2) of its employees in charge of handling correspondences from the
counsels' conduct."143chanrobleslaw
Bureau.152 The law firm filed petitions for revival of its patent applications from March 1988, all of which
were denied by the Director of the Bureau of Patents for being filed out of time.153 An appeal was
Petitioner's resident agent, Atty. Mapili, was undoubtedly negligent in failing to respond to the Office
subsequently filed before the Court of Appeals but was dismissed for being filed beyond the reglementary
Action sent by the Bureau of Patents, Trademarks, and Technology Transfer on June 19, 1988. Because of
period.154chanrobleslaw
his negligence, petitioner's patent application was declared abandoned. He was again negligent when he
failed to revive the abandoned application within four (4) months from the date of abandonment.
This Court found that although the Court of Appeals may have erred in counting the period for appeal, it
could not grant the Petition. This Court stated:ChanRoblesVirtualawlibrary
Petitioner tries to disown Atty. Mapili's conduct by arguing that it was not informed of the abandonment
[Petitioners lost sight of the fact that the petition could not be granted because of laches. Prior to the filing
of its patent application or of Atty. Mapili's death. By its own evidence, however, petitioner requested a
of the petition for revival of the patent application with the Bureau of Patents, an unreasonable period of
status update from Atty. Mapili only on July 18, 1995, eight (8) years after the filing of its application. 144It
time had lapsed due to the negligence of petitioners' counsel. By such inaction, petitioners were deemed
alleged that it only found out about Atty. Mapili's death sometime in March 1996, as a result of its senior
to have forfeited their right to revive their applications for patent.
patent attorney's visit to the Philippines.145 Although it was in petitioner's discretion as a foreign client to
put its complete trust and confidence on its local resident agent, there was a correlative duty on its part to
Facts show that the patent attorneys appointed to follow up the applications for patent registration had
be diligent in keeping itself updated on the progress of its patent applications. Its failure to be informed of
been negligent in complying with the rules of practice prescribed by the Bureau of Patents. The firm had
been notified about the abandonment as early as June 1987, but it was only after December 7, 1987, when b. it is filed within twelve (12) months from the date the earliest foreign application was filed;
their employees Bangkas and Rosas had been dismissed, that they came to know about it. This clearly and cralawlawlibrary
showed that petitioners' counsel had been remiss in the handling of their clients' applications.
c. a certified copy of the foreign application together with an English translation is filed within six (6)
"A lawyer's fidelity to the cause of his client requires him to be ever mindful of the responsibilities that months from the date of filing in the Philippines.
should be expected of him. A lawyer shall not neglect a legal matter entrusted to him." In the instant case,
A patent applicant with the right of priority is given preference in the grant of a patent when there are two
petitioners' patent attorneys not only failed to take notice of the notices of abandonment, but they failed to
or more applicants for the same invention. Section 29 of the Intellectual Property Code
revive the application within the four-month period, as provided in the rules of practice in patent cases.
provides:ChanRoblesVirtualawlibrary
These applications are deemed forfeited upon the lapse of such period. 155 (Emphasis supplied)
SECTION 29. First to File Rule. � If two (2) or more persons have made the invention separately and
Petitioner attempts to distinguish itself from Schuartz by arguing that the petitioners in Schuartz had actual independently of each other, the right to the patent shall belong to the person who filed an application for
notice of abandonment while petitioner here was only able to have actual notice when it received Paper such invention, or where two or more applications are filed for the same invention, to the applicant who
No. 2. has the earliest filing date or, the earliest priority date.
Since both the United States162 and the Philippines163 are signatories to the Paris Convention for the
The four (4)-month period in Section 111156 of the 1962 Revised Rules of Practice, however, is not counted
Protection of Industrial Property, an applicant who has filed a patent application in the United States may
from actual notice of abandonment but from mailing of the notice. Since it appears from the Intellectual
have a right of priority over the same invention in a patent application in the Philippines. 164 However, this
Property Office's records that a notice of abandonment was mailed to petitioner's resident agent on July
right of priority does not immediately entitle a patent applicant the grant of a patent. A right of priority is
19, 1988,157 the time for taking action is counted from this period. Petitioner's patent application cannot be
not equivalent to a patent. Otherwise, a patent holder of any member-state of the Paris Convention need
revived simply because the period for revival has already lapsed and no extension of this period is provided
not apply for patents in other countries where it wishes to exercise its patent.
for by the 1962 Revised Rules of Practice.
It was, therefore, inaccurate for petitioner to argue that its prior patent application in the United States
VI removed the invention from the public domain in the Philippines. This argument is only relevant if
respondent Therapharma, Inc. had a conflicting patent application with the Intellectual Property Office. A
The right of priority given to a patent applicant is only relevant when there are two or more conflicting
right of priority has no bearing in a case for revival of an abandoned patent application.
patent applications on the same invention. Because a right of priority does not automatically grant letters
patent to an applicant, possession of a right of priority does not confer any property rights on the applicant
VII
in the absence of an actual patent.
The grant of a patent is to provide protection to any inventor from any patent infringement. 165 Once an
Petitioner argues that its patent application was filed on July 10, 1987, within 12 months from the prior
invention is disclosed to the public, only the patent holder has the exclusive right to manufacture, utilize,
filing of a U.S. patent application on July 11, 1986.158 It argues that it is protected from becoming part of
and market the invention.166 In Creser Precision Systems v. Court of Appeals:167
the public domain because of convention priority under the Paris Convention for the Protection of
Under American jurisprudence, an inventor has no common-law right to a monopoly of his invention. He
Industrial Property and Section 9 of Republic Act No. 165. 159chanrobleslaw
has the right to make, use and vend his own invention, but if he voluntarily discloses it, such as by offering
it for sale, the world is free to copy and use it with impunity. A patent, however, gives the inventor the
Respondent Therapharma, Inc., on the other hand, argues that a mere patent application does not vest any
right to exclude all others. As a patentee, he has the exclusive right of making, using or selling the
right in the applicant before the issuance of the patent.160 It argues that the "priority date" argued by
invention.168chanroblesvirtuallawlibrary
petitioner is only relevant in determining who has a better right to the patent among the other applicants
who subsequently apply for the same invention. 161chanrobleslaw Under the Intellectual Property Code, a patent holder has the right to "to restrain, prohibit and
prevent"169 any unauthorized person or entity from manufacturing, selling, or importing any product
Under Section 31 of the Intellectual Property Code, a right of priority is given to any patent applicant who derived from the patent. However, after a patent is granted and published in the Intellectual Property Office
has previously applied for a patent in a country that grants the same privilege to Filipinos. Section 31 Gazette,170 any interested third party "may inspect the complete description, claims, and drawings of the
states:ChanRoblesVirtualawlibrary patent."171chanrobleslaw
SECTION 31. Right of Priority. � An application for patent filed by any person who has previously
applied for the same invention in another country which by treaty, convention, or law affords similar The grant of a patent provides protection to the patent holder from the indiscriminate use of the invention.
privileges to Filipino citizens, shall be considered as filed as of the date of filing the foreign application: However, its mandatory publication also has the correlative effect of bringing new ideas into the public
Provided, That: consciousness. After the publication of the patent, any person may examine the invention and develop it
into something further than what the original patent holder may have envisioned. After the lapse of 20
chanRoblesvirtualLawlibrarya. the local application expressly claims priority; years,172 the invention becomes part of the public domain and is free for the public to use. In Pearl and
Dean v. Shoemart, Inc.:173
To be able to effectively and legally preclude others from copying and profiting from the invention, a
patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to
bring new designs and technologies into the public domain through disclosure. Ideas, once disclosed to
the public without the protection of a valid patent, are subject to appropriation without significant
restraint.
On one side of the coin is the public which will benefit from new ideas; on the other are the inventors who
must be protected. As held in Bauer & Cie vs. O'Donnell, "The act secured to the inventor the exclusive
right to make use, and vend the thing patented, and consequently to prevent others from exercising like
privileges without the consent of the patentee. It was passed for the purpose of encouraging useful
invention and promoting new and useful inventions by the protection and stimulation new and useful
inventions by the protection and stimulation given to inventive genius, and was intended to secure to the
public, after the lapse of the exclusive privileges granted the benefit of such inventions and improvements."
The law attempts to strike an ideal balance between the two interests:ChanRoblesVirtualawlibrary
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure
of new useful and non-obvious advances in technology and design, in return for the exclusive right to
practice the invention for a number of years. The inventor may keep his invention secret and reap its fruits
indefinitely. In consideration of its disclosure and the consequent benefit to the community, the patent is
granted. An exclusive enjoyment is guaranteed him for 17 years, but upon the expiration of that period,
the knowledge of the invention inures to the people, who are thus enabled to practice it and profit by its
use."
The patent law has a three-fold purpose: "first, patent law seeks to foster and reward invention; second,
it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice
the invention once the patent expires; third, the stringent requirements for patent protection, seek to ensure
that ideas in the public domain remain therefor the free use of the public."
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth
investigation is required because "in rewarding a useful invention, the rights and welfare of the community
must be fairly dealt with and effectively guarded. To that end, the prerequisites to obtaining a patent are
strictly observed and when a patent is issued, the limitations on its exercise are equally strictly
enforced. To begin with, a genuine invention or discovery must be demonstrated lest in the constant
demand for new appliances, the heavy hand of tribute be laid on each slight technological advance in
art."174 (Emphasis supplied)
In addition, a patent holder of inventions relating to food or medicine does not enjoy absolute monopoly
over the patent. Both Republic Act No. 165 and the Intellectual Property Code provide for compulsory
licensing. Compulsory licensing is defined in the Intellectual Property Code as the "grant a license to
exploit a patented invention, even without the agreement of the patent owner." 175chanrobleslaw
was among the abuses which Section A, Article 5 of the Convention foresaw, and which our Congress
likewise wished to prevent in enacting R.A. No. 165.178chanroblesvirtuallawlibrary
The patent holder's proprietary right over the patent only lasts for three (3) years from the grant of the
patent, after which any person may be allowed to manufacture, use, or sell the invention subject to the
payment of royalties:ChanRoblesVirtualawlibrary
The right to exclude others from the manufacturing, using, or vending an invention relating to food or
medicine should be conditioned to allowing any person to manufacture, use, or vend the same after a period
of three years from the date of the grant of the letters patent. After all, the patentee is not entirely deprived
of any proprietary right. In fact, he has been given the period of three years of complete monopoly over
the patent. Compulsory licensing of a patent on food or medicine without regard to the other conditions
imposed in Section 34 is not an undue deprivation of proprietary interests over a patent right because the
law sees to it that even after three years of complete monopoly something is awarded to the inventor in the
form of a bilateral and workable licensing agreement and a reasonable royalty to be agreed upon by the
parties and in default of such agreement, the Director of Patent may fix the terms and conditions of the
license.179chanroblesvirtuallawlibrary
A patent is a monopoly granted only for specific purposes and objectives. Thus, its procedures must be
complied with to attain its social objective. Any request for leniency in its procedures should be taken in
this context. Petitioner, however, has failed to convince this court that the revival of its patent application
would have a significant impact on the pharmaceutical industry.
Hypertension, or high blood pressure, is considered a "major risk factor for cardiovascular disease" 180such
as "heart disease, stroke, kidney failure and blindness." 181 In a study conducted by the World Health
Organization, 25% of adults aged 21 years and older in the Philippines suffer from high blood
pressure.182 According to the Department of Health, heart disease remains the leading cause of mortality
in the Philippines.183 Angiotensin II Receptor Blocking Imidazole or "losartan" is one of the medications
used for the treatment of hypertension.184chanrobleslaw
In a study conducted by the Philippine Institute for Development Studies, "affordability of drugs remains
a serious problem"185 in the Philippines. It found that because of the cost of drugs, accessibility to drugs
become prohibitive for the lowest-earning households and are "even more prohibitive for the unemployed
and indigent."186 Several measures have been enacted by the government to address the high costs of
medicine, among them, parallel drug importation187 and the passage of Republic Act No. 9502, otherwise
known as the Universally Accessible Cheaper and Quality Medicines Act of 2008. 188 Figures submitted
by respondent Therapharma, Inc., however, also show that the presence of competition in the local
pharmaceutical market may ensure the public access to cheaper medicines.
According to respondent Therapharma, Inc., the retail price of petitioner's losartan product, Cozaar,
decreased within one (1) month of respondent Therapharma, Inc.'s entry into the market: 189

Under Republic Act No. 165, a compulsory license may be granted to any applicant three (3) years after BRAND TRADER RETAIL PRICE RETAIL PRICE
the grant of a patent if the invention relates to food or medicine necessary for public health or �As of Lifezar's first entry into the �Within one month from Lifezar's
safety.176In Smith Kline & French Laboratories, Ltd. vs. Court of Appeals:177 market on June 4, 2004 entry or by July 4, 2004
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to the [Paris]
Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the LIFEZAR Therapharma 50 mg - P20.20 50mg - P20.20
explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the legislative intent in the grant
of a compulsory license was not only to afford others an opportunity to provide the public with the quantity 50mg - P39.50 50mg - P39.50
COZAAR Merck
of the patented product, but also to prevent the growth of monopolies. Certainly, the growth of monopolies �100mg - P55.00 �100 - P44.00
Respondent Therapharma, Inc. also presented figures showing that there was a 44% increase in the number
of losartan units sold within five (5) months of its entry into the market.190 More Filipinos are able to
purchase losartan products when there are two (2) different players providing competitive prices in the
market.

Lifezar, and another of respondent Therapharma, Inc.'s products, Combizar, have also been recommended
as cheaper alternative losartan medication, since they were priced "50 percent less than foreign
brands."191chanrobleslaw

Public interest will be prejudiced if, despite petitioner's inexcusable negligence, its Petition for Revival is
granted. Even without a pending patent application and the absence of any exception to extend the period
for revival, petitioner was already threatening to pursue legal action against respondent Therapharma, Inc.
if it continued to develop and market its losartan product, Lifezar.192 Once petitioner is granted a patent
for its losartan products, Cozaar and Hyzaar, the loss of competition in the market for losartan products
may result in higher prices. For the protection of public interest, Philippine Patent Application No. 35526
should be considered a forfeited patent application.

WHEREFORE, the Petition is DENIED. The Resolution dated January 31, 2006 and the Amended
Decision dated August 30, 2006 of the Court of Appeals are AFFIRMED.

SO ORDERED.
G.R. L-45101 November 28, 1986
ROSARIO C. MAGUAN (formerly ROSARIO C. TAN), petitioner,
vs.
THE HONORABLE COURT OF APPEALS and SUSANA LUCHAN, respondents.
Ambrosio Padilla Law Offices for petitioner.
PARAS, J.:p
Submitted on December 9, 1977 for Our decision is this petition for review on certiorari of the two
Resolutions of the Court of Appeals, the first dated July 6, 1976, setting aside its Decision of
February 16, 1976 in CA-G.R. No. SP-04706, titled "SUSANA LUCHAN v. Hon. HONRADO, et
al." wherein it ruled for the dismissal of the petition for lack of merit and at the same time nullifying
the writ of preliminary injunction it had previously issued; and the second, dated November 4, 1976,
denying the motion for reconsideration of the first resolution above-mentioned.
Petitioner is doing business under the firm name and style of SWAN MANUFACTURING" while
private respondent is likewise doing business under the firm name and style of "SUSANA LUCHAN
POWDER PUFF MANUFACTURING."
It is undisputed that petitioner is a patent holder of powder puff namely:
1. UM-423 (extended and/or renewed under Extension No. UM-
109 for a period of 5 years from October 6, 1971)
2. UM-450 (extended and/or renewed under Extension No.
UM110 for a period of 5 years from January 26, 1972)
3. UM 1184, for a period of 5years fromApril 5, 1974.(Petition,
Rollo, pp. 6-7).
In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86), petitioner informed private respondent
that the powder puffs the latter is manufacturing and selling to various enterprises particularly
those in the cosmetics industry, resemble Identical or substantially Identical powder puffs of which
the former is a patent holder under Registration Certification Nos. Extension UM-109, Extension
UM-110 and Utility Model No. 1184; petitioner explained such production and sale constitute
infringement of said patents and therefore its immediate discontinuance is demanded, otherwise it
will be compelled to take judicial action. (Rollo, pp. 7-8).
Private respondent replied stating that her products are different and countered that petitioner's
patents are void because the utility models applied for were not new and patentable and the person
to whom the patents were issued was not the true and actual author nor were her rights derived
from such author. (Taken from allegations in the Answer, par. 4, Rollo, p. 93). And on July 25, 1974,
private respondent assailed the validity of the patents involved and filed with the Philippine Patent
Office petitions for cancellation of (1) Utility Model Letter Patent Extension No. UM-109 (Inter
Partes Case No. 838, Susana Luchan v. Rosario C. Tan), (2) Utility Model Letters Patent No. UM-
1184 (Inter Partes Case No. 839, Susana Luchan v. Rosario C. Tan), (3) Utility Model Letters Patent
Extension No. UM-110 (Inter Partes Case No. 840, Susana Luchan v. Rosario C. Tan. (Taken from
allegations in the Answer, par. 10, Rollo, pp. 94-95).
In view thereof, petitioner, on August 24, 1974, filed a complaint for damages with injunction and
preliminary injunction against private respondent with the then Court of First Instance of Rizal,
Pasig Branch, docketed as Civil Case No. 19908, for infringing the aforesaid letters patent, and
prayed, among others, that a writ of preliminary injunction be immediately issued (Complaint,
Rollo, p. 90).
In her answer, private respondent alleged that the products she is manufacturing and offering for
sale are not Identical, or even only substantially Identical to the products covered by petitioner's
patents and, by way of affirmative defenses, further alleged that petitioner's patents in question are
void on the following grounds:
(1) at the time of filing of application for the patents involved, the
utility models applied for were not new and patentable under Sec.
55 of R.A. 165, as amended by R.A. 864; and
(2) the person to whom the patents were issued was not the true
and actual author of the utility models applied for, and neither did
she derive her rights from any true and actual author of these
utility models.
for the following reasons:
(a) since years prior to the filing of applications for the patents
involved, powder puffs of the kind applied for were then already
existing and publicly being sold in the market; both in the
Philippines and abroad; and
(b) applicant's claims in her applications, of "construction" or
process of manufacturing the utility models applied for, with
respect to UM-423 and UM-450, were but a complicated and
impractical version of an old, simple one which has been well
known to the cosmetics industry since years previous to her filing
of applications, and which belonged to no one except to the general
public; and with respect to UM1184; her claim in her application
of a unitary powder puff, was but an limitation of a product well
known to the cosmetics industry since years previous to her firing
of application, and which belonged to no one except to the general
public; (Answer, Rollo, pp. 93-94).
On September 18, 1974, the trial court issued an Order (Annex "K", Rollo, p. 125) granting the
preliminary injunction prayed for by petitioner. Consequently, the corresponding writ was
subsequently issued (Annex "K-1", Rollo, p. 131) enjoining the herein private respondent (then
defendant) and all other persons employed by her, her agents, servants and employees from directly
or indirectly manufacturing, making or causing to be made, selling or causing to be sold, or using
or causing to be used in accordance with, or embodying the utility models of the Philippine Patent
Office Utility Model Letters Patent Nos. 423 (Extension No. UM-109), No. 450 (Extension No. UM-
110), and Utility Model No. 1184 or from infringement upon or violating said letters patent in any
way whatsoever (Annex " K-1 ", Rollo, p. 131).
Private respondent questioned the propriety of the trial court's issuance of the Writ of Preliminary
Injunction arguing that since there is still a pending cancellation proceedings before the Philippine
Patent Office concerning petitioner's patents, such cannot be the basis for preliminary injunction
(Motion for Reconsideration, Rollo, p. 132).
In an Order dated September 11, 1975, the trial court denied private respondent's motion for
reconsideration (Annex "N", Rollo, p. 142).
In challenging these Orders private respondent filed a petition for certiorari with the respondent
court on September 29, 1975 (Annex "D", Rollo, pp. 148-171) reiterating among other things the
invalidity of petitioner's patents and prayed that the trial court be restrained from enforcing or
continuing to enforce the following:
(1) Order dated September 18, 1974, granting the preliminary
injunction;
(2) Writ of preliminary injunction dated September 18, 1974; and
(3) Order dated September 11, 1974 denying petitioner's motion
petition for reconsideration.
On October 15, 1975, the Writ of Preliminary Injunction was issued by the respondent Court of
Appeals as follows:
NOW, THEREFORE, you, respondents, and/or any person/persons acting on your
stead, are hereby ENJOINED to RESTRAIN from enforcing or continuing to
enforce, the proceedings complained of in the petition to wit: 1) Order dated
September 18, 1974, granting the preliminary injunction; 2) Writ of Preliminary
Injunction dated September 18, 1974; and Order dated September 11, 1975,
denying petitioner's motion for reconsideration, all issued in connection with Civil
Case No. 19908, UNTIL FURTHER ORDERS FROM THIS COURT. (Annex "P",
Rollo, p. 1.73)
On February 16, 1976, respondent court promulgated a decision the dispositive portion of which
reads:
WHEREFORE, finding no merit in the herein petition, the same is hereby
dismissed and the preliminary injunction previously issued by this Court is hereby
set aside, with costs.
SO ORDERED. (CA Decision, Rollo, p. 189).
ln said decision respondent court stated that in disposing of the petition it tackled only the issue of
whether the court a quo acted with grave abuse of discretion in issuing the challenged orders. It
made clear the question of whether the patents have been infringed or not was not determined
considering the court a quohas yet to decide the case on the merits (Ibid., p. 186).
Feeling aggrieved, private respondent moved to reconsider the afore-mentioned Decision based on
the following grounds:
I
THAT THIS HONORABLE COURT ERRED IN NOT
APPRECIATING THE EXISTENCE OF A FAIR QUESTION
OF INVALIDITY OF PRIVATE RESPONDENT'S PATENTS.
II
THAT THIS HONORABLE COURT ERRED IN NOT
REJECTING THE THEORY OF RESPONDENT JUDGE
THAT HE HAS NO JURISDICTION TO INVALIDATE THE
PATENTS UPON GROUND OF LACK OF NOVELTY OF THE
PRODUCTS PATENTED. (Motion for Reconsideration, Rollo, p.
190).
Reviewing on reconsideration, respondent court gave weight to private respondent's allegation that
the latter's products are not identical or even only substantially identical to the products covered by
petitioner's patents. Said court noticed that contrary to the lower courts position that the court a
quo had no jurisdiction to determine the question of invalidity of the patents, Section 45 and 46 of
the Patent Law allow the court to make a finding on the validity or invalidity of patents and in the
event there exists a fair question of its invalidity, the situation calls for a denial of the writ of
preliminary injunction pending the evaluation of the evidence presented (Rollo, pp. 218-226). Thus,
finding the lower court's position to have been opposed to Patent Law, respondent court considered
it a grave abuse of discretion when the court a quo issued the writ being questioned without looking
into the defenses alleged by herein private respondent. Further, it considered the remedy of appeal,
under the circumstances, to be inadequate.
Thus, on July 6, 1976, respondent court made a complete turnabout from its original decision and
promulgated a Resolution, the dispositive portion of which reads:
WHEREFORE, our decision is hereby set aside. The writ of certiorari is ordered
issued. Accordingly, the challenged orders, Exhibit H and H-1 and the order
 denying the motion for reconsideration (Annex "K", Petition), are hereby set aside.
The writ of preliminary injunction previously ordered by this Court and ordered
lifted by the Decision now being set aside is hereby reinstated and made permanent.
Without pronouncement as to costs.
SO ORDERED. (CA Resolution, Rollo, p. 226).
In a Resolution dated November 4, 1976, respondent court, not persuaded by the grounds embodied
in the motion for reconsideration filed by herein petitioner (Annex "V ", Rollo, p. 227), denied the
same for lack of merit, thereby maintaining the same stand it took in its July 6, 1976 Resolution
(Rollo, p. 281). Hence, this petition.
On December 3, 1976, without giving due course to the petition, this Court required respondent to
file her Comment (Rollo, p. 290) which was filed on December 16, 1976 (Rollo, pp. 291-316).
Thereafter, petitioner filed her Reply (Rollo, p. 323) and on May 30, 1977, the petition was given due
course (Rollo, p. 345). Petitioner filed her brief on July 14, 1977 (Rollo, p. 351) while private
respondent filed her brief on August 25, 1977 (Rollo, p. 359). Thereafter, petitioner having failed to
file reply brief, the Court resolved to declare the case submitted for decision on December 9, 1977
(Rollo, p. 359).
The assignment of errors raised by the petitioner in this case (Rollo, pp. 15-16) may be reduced to
three main issues:
(1) Whether or not in an action for infringement the Court a
quo had jurisdiction to determine the invalidity of the patents at
issue which invalidity was still pending consideration in the patent
office.
(2) Whether or not the Court a quo committed grave abuse of
discretion in the issuance of a writ of preliminary injunction.
(3) Whether or not certiorari is the proper remedy.
The first issue has been laid to rest in a number of cases where the Court ruled that "When a patent
is sought to be enforced, the questions of invention, novelty or prior use, and each of them, are open
to judicial examination." (Vargas v. F.M. Yaptico & Co. 40 Phil. 199 [1919]; Vargas v. Chua, 57
Phil. 790-791 [1933]; Frank and Gohn v. Kosuyana 59 Phil. 207 [1933]).
Under the present Patent Law, there is even less reason to doubt that the trial court has jurisdiction
to declare the patents in question invalid. A patentee shall have the exclusive right to make, use and
sell the patented article or product and the making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the patent (Sec. 37, R.A. 165). Any patentee
whose rights have been infringed upon may bring an action before the proper CFI now (RTC) and
to secure an injunction for the protection of his rights (Sec. 42, R.A. 165). Defenses in an action for
infringement are provided for in Section 45 of the same law which in fact were availed of by private
respondent in this case. Then, as correctly stated by respondent Court of Appeals, this conclusion is
reinforced by Sec. 46 of the same law which provides that if the Court shall find the patent or any
claim thereof invalid, the Director shall on certification of the final judgment ... issue an order
cancelling the patent or the claims found invalid and shall publish a notice thereof in the Official
Gazette." Upon such certification, it is ministerial on the part of the patent office to execute the
judgment. (Rollo, pp. 221-222).
II.
The burden of proof to substantiate a charge of infringement is with the plaintiff. But where the
plaintiff introduces the patent in evidence, and the same is in due form, there is created a prima
facie presumption of its correctness and validity. The decision of the Commissioner (now Director)
of Patent in granting the patent is presumed to be correct. The burden of going forward with the
evidence (burden of evidence) then shifts to the defendant to overcome by competent evidence this
legal presumption.
The question then in the instant case is whether or not the evidence introduced by private respondent
herein is sufficient to overcome said presumption.
After a careful review of the evidence consisting of 64 exhibits and oral testimonies of five witnesses
presented by private respondents before the Court of First Instance before the Order of preliminary
injunction was issued as well as those presented by the petitioner, respondent Court of Appeals was
satisfied that there is a prima facie showing of a fair question of invalidity of petitioner's patents on
the ground of lack of novelty. As pointed out by said appellate court said evidence appeared not to
have been considered at all by the court a quo for alleged lack of jurisdiction, on the mistaken notion
that such question in within the exclusive jurisdiction of the patent office.
It has been repeatedly held that an invention must possess the essential elements of novelty ,
originality and precedence and for the patentee to be entitled to protection, the invention must be
new to the world. Accordingly, a single instance of public use of the invention by a patentee for more
than two years (now for more than one year only under Sec. 9 of the Patent Law) before the date of
his application for his patent, will be fatal to, the validity of the patent when issued. (Frank, et al. v.
Kosuyama Vargas v. F.M. Yaptico & Co. and Vargas v. Chua, et al., supra).
The law provides:
SEC. 9. Invention not considered new or patentable. — An invention shall not be
considered new or capable of being patented if it was known or used by others in
the Philippines before the invention thereof by the inventor named in an
application for patent for the invention; or if it was patented or described in any
printed publication in the Philippines or any foreign country more than one year
before the application for a patent therefor; or if it had been in public use or on
sale in the Philippines for more than one year before the application for a patent
therefor; or if it is the subject matter of a validity issued patent in the Philippines
granted on an application filed before the filing of the application for patent
therefor.
Thus, more specifically, under American Law from which our Patent Law was derived (Vargas v.
F.M. Yaptico & Co. supra) it is generally held that in patent cases a preliminary injunction will not
issue for patent infringement unless the validity of the patent is clear and beyond question. The
issuance of letters patent, standing alone, is not sufficient to support such drastic relief (8 Deller's
Walker on Patents p. 406). In cases of infringement of patent no preliminary injunction will be
granted unless the patent is valid and infringed beyond question and the record conclusively proves
the defense is sham. (Ibid., p. 402)
In the same manner, under our jurisprudence, as a general rule because of the injurious
consequences a writ of injunction may bring, the right to the relief demanded must be clear and
unmistakable. (Sangki v. Comelec, 21 SCRA 1392; December 26, 1967) and the dissolution of the
writ is proper where applicant has doubtful title to the disputed property. (Ramos v. C.A., 95 SCRA
359).
III.
It will be noted that the validity of petitioner's patents is in question for want of novelty. Private
respondent contends that powder puffs Identical in appearance with that covered by petitioner's
patents existed and were publicly known and used as early as 1963 long before petitioner was issued
the patents in question. (List of Exhibits, Rollo, pp. 194-199). As correctly observed by respondent
Court of Appeals, "since sufficient proofs have been introduced in evidence showing a fair question
of the invalidity of the patents issued for such models, it is but right that the evidence be looked into,
evaluated and determined on the merits so that the matter of whether the patents issued were in fact
valid or not may be resolved." (Rollo, pp. 286-287).
Private respondent maintains the position that the resolutions sought to be appealed from had long
become final and executory for failure of Hon. Reynaldo P. Honrado, the trial court judge, to appeal
by certiorari from the resolutions of respondent Court of Appeals. (Rollo, pp. 291-292).
Such contention is untenable.
There is no dispute that petitioner has seasonably petitioned. On the other hand, it is elementary
that the trial judge is a mere nominal party as clearly provided in Section 5, Rule 65 of the Revised
Rules of Court where it shall be the duty of such person or persons interested in sustaining the
proceedings in court, "to appear and defend, both in his or their own behalf and in behalf of the
court or judge affected by the proceedings."
Relative thereto "the judge whose order is under attack is merely a nominal party; wherefore, a
judge in his official capacity should not be made to appear as a party seeking reversal of a decision
that is unfavorable to the action taken by him." (Hon. Alcasid v. Samson, 102 Phil. 735-736; Tarona
v. Sayo, 67 SCRA 508, 524; Lim Se v. Argel, 70 SCRA 378).
As to petitioner's claim of prescription, private respondent's contention that such refers to the filing
of petitions for cancellation in the Patent Office under Sec. 28 of the Patent Law and not to a defense
against an action for infringement under Sec. 45 thereof which may be raised anytime, is evident
under aforesaid law.
PREMISES CONSIDERED, the assailed resolutions of the Court of Appeals are hereby
AFFIRMED.

All these notwithstanding, the trial court nonetheless issued the writ of preliminary injunction which
SO ORDERED.
under the circumstances should be denied.

For failure to determine first the validity of the patents before aforesaid issuance of the writ, the
trial court failed to satisfy the two requisites necessary if an injunction is to issue, namely: the
existence of the right to be protected and the violation of said right. (Buayan Cattle Co., Inc. v.
Quintillan, 128 SCRA 276).

Under the above established principles, it appears obvious that the trial court committed a grave
abuse of discretion which makes certiorari the appropriate remedy.

As found by respondent Court of Appeals, the injunctive order of the trial court is of so general a
tenor that petitioner may be totally barred from the sale of any kind of powder puff. Under the
circumstances, respondent appellate court is of the view that ordinary appeal is obviously
inadequate. (Rollo, p. 288). A parallel was drawn from a decision of the Supreme Court in the case
of Sanchez v. Hon. Court of Appeals, 69 SCRA 328 [1976] where the First Division of the Supreme
Court ruled that "The prerogative writ of certiorari may be applied for by proper petition
notwithstanding the existence of the regular remedy of an appeal in due cause when among other
reasons, the broader interests of justice so require or an ordinary appeal is not an adequate remedy."
G.R. No. 14101 September 24, 1919
ANGEL VARGAS, plaintiff-appellant,
vs.
F. M. YAPTICO & CO. (Ltd.), defendant-appellee.
Charles C. Cohn for appellants . finding the patent granted plaintiff void for lack of novelty and invention should be affirmed; (2) The
John Bordman for appellee.
MALCOLM, J.:
Rude wooden implements for tilling the soil have been in use in the Philippines, possibly not since the
Israelites "went down to sharpen every man his share and his coulter," but certainly for many years. Iron
plows called "Urquijo" and "Pony" have latterly been the vogue.
Angel Vargas, a farmer acquainted with local conditions and alive to the commercial possibilities, took it
upon himself to produce, with the native plow as the model, an improved, adjustable plow. On July 22,
1910, he made application for a United States patent to cover his so-called invention. On March 12, 1912,
letters patent were issued by the United States Patent Office in favor of Vargas .On April 24, 1912, a
certified copy of the patent was filed in the Division of Patents, Copyrights, and Trademarks of the
Executive Bureau, Government of the Philippine Islands. The patent and its registry was also published in
the newspaper, El Tiempo.
Since 1910, Vargas has engaged in the manufacture of these plows in the city of Iloilo, Philippine Islands.
On the plows there was first stamped the words "Patent Applied For," later after the patent had been
granted, changed to "Patented Mar. 12, 1912." Ninety per cent of the plows in use in the Visayas (Iloilo
and vicinity) are said to be Vargas plows.
During this same period, the firm of F. M. Yaptico & Co. (Ltd.), was engaged in the foundry business in
the City of Iloilo. It openly held itself out as a manufacturer of plow parts. It has in fact produced points,
shares, shoes, and heel pieces in a considerable amount adapted to replace worn-out parts of the Vargas
plow.
Such was the existing situation when, in the early part of 1918, the owner of the patent, and thus the proper
party to institute judicial proceedings, began action in the Court of First Instance of Iloilo to enjoin the
alleged infringement of U.S. Patent No. 1020232 by the defendant F. M Yaptico & Co. (Ltd.), and to
recover the damages suffered by reason of this infringement. The court issued the preliminary injunction
as prayed for. The defendant, in addition to a general denial, alleged, as special defenses, that the patent
lacked novelty or invention, that there was no priority of ideas or device in the principle and construction
of the plow, and that the plow, whose manufacture it was sought to have enjoined by the plaintiff, had
already been in public use for more than two years before the application of the plaintiff for his patent.
The parties subsequently entered into a stipulation that the court should first resolve the question of
whether or not there had been an infraction of the patent, reserving the resultant question of damages for
later decision. After the taking of evidence, including the presentation of exhibits, the trial judge, the
Honorable Antonio Villareal, in a very exhaustive and learned decision, rendered judgment in favor of the
defendant and against the plaintiff, declaring null and without effect the patent in question and dismissing
the suit with costs against the plaintiff .The preliminary injunction theretofore issued was dissolved.
From this judgment the plaintiff has appealed, specifying five errors. The principal assignment No. 1 is,
that the trial court erred in finding that the patented invention of the plaintiff is lacking in novelty and
invention. Defendant, in reply, relies on three propositions, namely: (1) The judgment of the trial court in
patent granted plaintiff is void from the public use of his plow for over two years prior to his application
for a patent, and (3) If the patent is valid, there has been no contributory infringement by defendant.
Before resolving these rival contentions, we should have before us the relevant law. Act No. 2235 of the
Philippine Legislature, enacted on February 10, 1913, in effect makes the United States Patent Laws
applicable in the Philippine Islands. It provides that "owners of patents, including design patents, which
have been issued or may hereafter be issued, duly registered in the United States Patent Office under the
laws of the United States relating to the grant of patents, shall receive in the Philippine Islands the
protection accorded them in the United States under said laws." (Sec. 1.) Turning to the United States
Patent Laws, we find the Act of Congress of March 3, 1897, amendatory of section 4886 of the United
States Revised Statutes, reading as follows:
Any person who has invented or discovered any new and useful art, machine, manufacture, or
composition of matter, or any new an useful improvements thereof, not known or used by others
in this country, before his invention or discovery thereof, and not patented or described in any
printed publication in this or any foreign country, before his invention or discovery thereof, or
more than two years prior to his application, and not in public use or on sale in this country for
more than two years prior to his application, unless the same is proved to have been abandoned,
may upon payment of the fees required by law, and other due proceeding had, obtain a patent
therefor. (29 Stat. L., 692, 7 Fed .Stat. Ann. [2d Ed.], p. 23.)
When a patent is sought to be enforced, "the question of invention, novelty, or prior use, and each of them,
are open to judicial examination." The burden of proof to substantiate a charge of infringement is with the
plaintiff. Where, however, the plaintiff introduces the patent in evidence, if it is in due form, it affords
a prima facie presumption of its correctness and validity. The decision of the Commissioner of Patents in
granting the patent is always presumed to be correct. The burden then shifts to the defendant to overcome
by competent evidence this legal presumption .With all due respect, therefore, for the critical and expert
examination of the invention by the United States Patent Office, the question of the validity of the patent
is one for judicial determination, and since a patent has been submitted, the exact question is whether the
defendant has assumed the burden of proof as to anyone of his defenses. (SeeAgawan Co. vs. Jordan
[1869], 7 Wall., 583; Blanchard vs .Putnam [1869], 8 Wall., 420; Seymour vs. Osborne [1871], 11 Wall.,
516; Reckendorfer vs. Faber [1876], 92 U.S., 347; 20 R. C. L., 1112, 1168, 1169.)
As herein before stated, the defendant relies on three special defenses. One such defense, on which the
judgment of the lower court is principally grounded, and to which appellant devotes the major portion of
his vigorous argument, concerns the element of novelty, invention, or discovery, that gives existence to
the right to a patent. On this point the trial court reached the conclusion that "the patented plow of the
plaintiff, Exhibit D, is not different from the native plow, Exhibit 2, except in the material, in the form, in
the weight and the grade of the result, the said differences giving it neither a new function nor a new result
distinct from the function and the result obtained from the native plow; consequently, its production does
not presuppose the exercise of the inventive faculty but merely of mechanical skill, which does not give a
right to a patent of an invention under the provisions of the Patent Law." In thus finding, the court may
have been right, since the Vargas plow does not appear to be such a "combination" as contains a novel
assemblage of parts exhibiting invention. (See Stimpson vs. Woodman [1870], 10 Wall., 117 — rollers;
Hicks vs. Kelsey [1874], 20 Wall., 353 — stoves; Washburn & Moen Mfg. Co. vs. Beat 'Em All Barbed
Wire Co. [1892], 143 U.S., 275 — barbed wire; Lynch vs .Dryden [1873], C. D., 73 — walking cultivators;
Torrey vs. Hancock [1910], 184 Fed., 61 — rotary plows.)
A second line of defense relates to the fact that defendant has never made a complete Vargas plow, but
only points, shares, shoes, and heel pieces, to serve as repairs. Defendant's contention is, that in common
with other foundries, he has for years cast large numbers of plow points and shares suitable for use either
on the native wooden plow, or on the Vargas plow. A difference has long been recognized between
repairing and reconstructing a machine. If, for instance, partial injuries, whether they occur from accident
or from wear and tear, to a machine for agricultural purposes, are made this is only re-fitting the machine
for use, and thus permissible. (Wilson vs. Simpson [1850], 9 How., 109.) Even under the more rigorous
doctrine of Leeds & Catlin Co. vs. Victor Talking Machine Co. ([1909], 213 U.S., 325), it may be possible
that all the defendant has done is to manufacture and sell isolated parts to be used to replace worn-out
parts.
Bonifacio Araneta, partner of Vargas in the plow business. Ko Pao Ko, a blacksmith, testified that he had
made fifty plow frames in 1905 for Vargas and Araneta, of which Exhibit 4 is one; Exhibit 4, the court
found, is a plow identical with that patented by Vargas, but without share and mould-board. Alfred Berwin,
an employee in the office of Attorney John Bordman, testified that on September 21, 1908, he had
knowledge of a transaction wherein Vargas and Araneta desired to obtain money to invest in a plow
factory. George Ramon Saul, a mechanic of the "Taller Visayas" of Strachan and MacMurray, testified
that he had made Vargas plow points and shares of the present form upon order of Araneta and Vargas in
1906 and 1907 .William MacMurray, proprietor of the "Taller Visayas," corroborated the evidence of the
witness Saul by the exhibition of the account against Vargas and Araneta wherein, under date of December
13, 1906, appears the item "12 new soft steel plow shares forged and bored for rivets as per sample."
Against all this, was the testimony of the plaintiff Angel Vargas who denied that Saul could have been
seen the Vargas plow in 1907 and 1907, who denied that Roces purchased the Vargas plow in 1907, who
denied that Lizarraga could have acted as an agent to sell two plows in November, 1908, who denied any
remembrance of the loan mentioned by Berwin as having been negotiated in September, 1908, who denied
that Ko Pao Ko made fifty plows one of which is Exhibit 4, for Araneta and Vargas in 1905. Plaintiff
introduced his books to substantiate his oral testimony .It is hardly believable that five or six witnesses for
the defense would deliberately perjure themselves under oath. One might, but that all together, of different
nationalities, would enter into such a conspiracy, is to suppose the improbable.

The third defense is, that under the provisions of the statute, an inventor's creation must not have been in Tested by the principles which go to make the law, we think a preponderance of the evidence is to the
public use or on sale in the United States (and the Philippine Islands) for more than two years prior to his effect that for more than two years before the application for the original letters patent, or before July 22,
application .Without, therefore, committing ourselves as to the first two defenses, we propose to base our 1908, there was, by the consent and allowance of Vargas, a public use of the invention covered by them.
decision on the one just suggested as more easily disposing of the case. (See 20 R. C. L., 1140-1142.) We
do so with full consciousness of the doubt which arose in the mind of the trial court, but with the belief To conclude, we are not certain but that appellee has proved every one of his defenses. We are certain that
that since it has been shown that the invention was used in public at Iloilo by others than Vargas, the he has at least demonstrated the public use of the Vargas plow over two years prior to the application for
inventor, more than two years before the application for the patent, the patent is invalid. a patent. Such being the case, although on a different ground, we must sustain the judgment of the lower
court, without prejudice to the determination of the damages resulting from the granting of the injunction,
Although we have spent some time in arriving at this point, yet having reached it, the question in the case with the costs of this instance against the appellant. So ordered.
is single and can be brought to a narrow compass. Under the English Statute of Monopolies (21 Jac. Ch.,
3), and under the United States Patent Act of February 21, 1793, later amended to be as herein quoted, it
was always the rule, as stated by Lord Coke, Justice Story and other authorities, that to entitle a man to a
patent, the invention must be new to the world. (Pennock and Sellers vs. Dialogue [1829], 2 Pet., 1.) As
said by the United States Supreme Court, "it has been repeatedly held by this court that a single instance
of public use of the invention by a patentee for more than two years before the date of his application for
his patent will be fatal to the validity of the patent when issued." (Worley vs. Lower Tobacco Co .[1882],
104 U. S., 340; McClurg vs. Kingsland [1843], I How., 202; Consolidated Fruit Jar Co. vs. Wright [1877],
94 U. S., 92; Egbert vs. Lippmann [1881], 104 U. S., 333; Coffin vs. Ogden [1874], 18 Wall., 120;
Manning vs. Cape Ann Isinglass and Glue Co. [1883], 108 U. S., 462; Andrews vs. Hovey [1887], 123 U.
S., 267; Campbell vs. City of New York [1881], 1 L. R. A., 48.)

On the facts, we think the testimony shows such a public use of the Vargas plow as to render the patent
invalid Nicolas Roces, a farmer, testified that he had bought twenty Vargas plows, of which Exhibit 5 was
one, in December, 1907; and Exhibit 5, the court found, was a plow completely identical with that for
which the plaintiff had received a patent. The minor exception, and this in itself corroborative of Roces'
testimony, is that the handle of plow Exhibit 5 is marked with the letters "A V" and not with the words
"Patent Applied For" or "Patented Mar.12, 1912." Salvador Lizarraga, a clerk in a business house, testified
that he had received plows similar to Exhibits D, 5, and 4, for sale on commission on May, 1908, from
G.R. No. L-36650 January 27, 1933
ANGEL VARGAS, plaintiff-appellee,
vs.
PETRONILA CHUA, ET AL., defendants-appellants.
Jose F. Orozco for appellants.
Jose Yulo for appellee.
IMPERIAL, J.:
The defendants Petronila Chua, Coo Pao and Coo Teng Hee, appeal from the judgment of the Court of
First Instance of Manila, the dispositive part of which reads as follows:
Wherefore judgment is rendered in favor of the plaintiff and against the defendants, ordering each
and every one of them, their agents, mandatories and attorneys, to henceforth abstain from
making, manufacturing, selling or offering for a sale plows of the type of those manufactured by
the plaintiff, and particularly plows of the model of Exhibits B, B-1 and B-2, and to render to the
plaintiff a detailed accounting of the profits obtained by them from the manufacture and sale of
said type of plows within thirty (30) days from the date of the receipt by them of notice of this
decision, with costs against all of the defendants.
Angel Vargas, the plaintiff herein, brought this action to restrain the appellants and the other defendant
entity, Cham Samco & Sons, their agents and mandatories, from continuing the manufacture and sale of
plows similar to his plow described in his patent No. 1,507,530 issued by the United States Patent Office
on September 2, 1924; and to compel all of said defendants, after rendering an accounting of the profits
obtained by them from the sale of said plows from September 2, 1924, to pay him damages equivalent to
double the amount of such profits.
It appears from the bill of exceptions that Cham Samco & Sons did not appeal.
In addition to the evidence presented, the parties submitted the following stipulation of facts:
The parties agree on the following facts:
1. That the plaintiff, Angel Vargas, is of age and a resident of the municipality of Iloilo, Iloilo,
Philippine Islands.
2. That the defendant, Petronila Chua, is also of age, and is married to Coo Pao alias Coo Paoco,
and resides in Iloilo.
3. That the defendant, Coo Teng Hee, is also of age and a resident of Iloilo, and is the sole owner
of the business known as Coo Kun & Sons Hardware Co. established in Iloilo.
4. That the defendant, Cham Samco & Sons, is a commercial partnership duly organized under
the laws of the Philippine Islands, with their principal office in the City of Manila, and that the
defendants Cham Samco, Cham Siong E, Cham Ai Chia and Lee Cham Say, all of age and
residents of the City of Manila, are the partners of the firm Cham Samco & Sons.
5. The parties take for granted that the complaint in this case is amended in the sense that it
includes Coo Paoco as party defendant in his capacity as husband of the defendant, Petronila
Chua, with Attorney Jose F. Orozco also representing him, and that he renounces his rights to
receive summons in this case by reproducing the answer of his codefendant, Petronila Chua.
6. That the plaintiff is the registered owner and possessor of United States Patent No. 1,507,530
on certain plow improvements, issued by the United States Patent Office on September 2, 1924,
a certified copy of which was registered in the Bureau of Commerce and industry of the
Government of the Philippine Islands on October 17, 1924. A certified copy of said patent is
attached to this stipulation of facts as Exhibit A.
7. That the plaintiff is now and has been engaged, since the issuance of his patent, in the
manufacture and sale of plows of the kind, type and design covered by the aforementioned patent,
said plows being of different sizes and numbered in accordance therewith from 1 to 5.
8. That, since the filing of the complaint to date, the defendant, Petronila Chua, has been
manufacturing and selling plows of the kind, type and design represented by Exhibits B, B-1 and
B-2, of different sizes, designated by Nos. 2, 4 and 5.
9. That, since the filing of the complaint to date, the defendant, Coo Teng Hee, doing business in
Iloilo under the name of Coo Kun & Sons Hardware Co., has been obtaining his plows, of the
form and size of Exhibits B, B-1 and B-2, from the defendant Petronila Chua.
10. Without prejudice to the plaintiff's right to ask the defendants to render an accounting in case
the court deem it proper, the parties agree that the defendant Coo Teng Hee, doing business under
the name of Coo Kun & Sons Hardware Co., has been selling to his customers in his store on J.
Ma. Basa Street in Iloilo, plows of the kind, type and design represented by Exhibits B, B-1 and
B-2, having bought said plows from his codefendant, Petronila Chua, who manufactures them in
her factory on Iznart Street, Iloilo.
11. That, according to the invoices marked Exhibits C and C-2 dated March 13, 1928, and June
19, 1928, respectively, the defendant Cham Samco & Sons, on the dates mentioned, had, in the
ordinary course of business, bought of its codefendant Coo Kun & Sons Hardware Co., 90 plows
of the form, type and design of Exhibits B, B-1 and B-2 which it has been selling in its store on
Sto. Cristo Street, Manila.
12. That the same defendant Cham Samco & Sons, in the ordinary course of business, bought on
March 17, 1928, of the store "El Progreso" owned by Yao Ki & Co., of Iloilo, a lot of 50 plows,
of the form, type and design of Exhibit B-1, as shown by Invoice C-1, and that it has been selling
them in its store on Sto. Cristo St., Manila.
 13. That, on September 19, 1928, the defendant Cham Samco & Sons, sold in its store on Sto.
Cristo St., Manila, the plow Exhibit B-1, for the sale of which invoice Exhibit D was issued.
14. That, on December 20, 1927, the plaintiff herein, through his attorneys Paredes, Buencamino
& Yulo, sent by registered mail to the herein defendant, Coo Kun & Sons Hardware Co., at Iloilo,
the original of the letter Exhibit E, which was received by it on September 28, 1927, according
to the receipt marked Exhibit E-1 attached hereto.
15. That the plows manufactured by the plaintiff in accordance with his patent, Exhibit A, are
commonly known to the trade in Iloilo, as well as in other parts of the Philippines, as "Arados
Vargas", and that the plaintiff is the sole manufacturer of said plows. A sample of these plows is
presented as Exhibit F.
16. That the document, Exhibit 1-Chua, is a certified copy of the amended complaint, the decision
of the Court of First Instance of Iloilo and that of the Supreme Court (R. G. No. 14101) in civil
case No. 3044 of Iloilo, entitled "Angel Vargas", plaintiff, vs. F. M. Yaptico & Co., Ltd.,
defendant", and that Exhibit 2-Chua et al. is a certified copy of Patent No. 1,020,232, to which
the aforementioned complaint and decision refer, issued in favor of Angel Vargas by the United
States Patent Office on March 12, 1912, and that Exhibit 3-Chua et al., represents the plow
manufactured by Angel Vargas in accordance with his Patent marked Exhibit 2-Chua et al.
The appellants assign the following errors:
FIRST ERROR
The trial court erred in declaring that the Vargas plow, Exhibit F (covered by Patent No.
1,507,530) is distinct from the old model Vargas plow, Exhibit 2-Chua, covered by the former
Patent No. 1,020,232, which had been declared null and void by this court.
SECOND ERROR
The trial court erred in mistaking the improvement on the plow for the plow itself.
THIRD ERROR
The trial court erred in rendering judgment in favor of the plaintiff and against the defendants.
FOURTH ERROR
The trial court erred in not dismissing the complaint with costs against the plaintiff.
The evidence shows that Exhibit F is the kind of plows the plaintiff, Angel Vargas, manufactures, for
which Patent No. 1,507,530, Exhibit A, was issued in his favor. Exhibits B, B-1 and B-2 are samples of
the plows which the herein appellants, Coo Pao and Petronila Chua, have been manufacturing since 1918,
and Exhibit 3-Chua represents the plow for which, on March 12, 1912, the appellee obtained a patent from
the United States Patent Office, which was declared null and void by the Supreme Court in the case
of Vargas vs. F. M. Yap Tico & Co. (40 Phil., 195).
With these facts in view, the principal and perhaps the only question we are called upon to decide is
whether the plow, Exhibit F, constitutes a real invention or an improvement for which a patent may be
obtained, or if, on the contrary, it is substantially the same plow represented by Exhibit 3-Chua the patent
for which was declared null and void in the aforementioned case of Vargas vs. F. M. Yaptico & Co., supra.
We have carefully examined all the plows presented as exhibits as well as the designs of those covered by
the patent, and we are convinced that no substantial difference exists between the plow, Exhibit F, and the
plow, Exhibit 3-Chua which was originally patented by the appellee, Vargas. The only difference noted
by us is the suppression of the bolt and the three holes on the metal strap attached to the handle bar. These
holes and bolt with its nut were suppressed in Exhibit F in which the beam is movable as in the original
plow. The members of this court, with the plows in view, arrived at the conclusion that not only is there
no fundamental difference between the two plows but no improvement whatever has been made on the
latest model, for the same working and movement of the beam existed in the original model with the
advantage, perhaps, that its graduation could be carried through with more certainty by the use of the bolt
which as has already been stated, was adjustable and movable.
As to the fact, upon which much emphasis was laid, that deeper furrows can be made with the new model,
we have seen that the same results can be had with the old implement.
In view of the foregoing, we are firmly convinced that the appellee is not entitled to the protection he seeks
for the simple reason that his plow, Exhibit F, does not constitute an invention in the legal sense, and
because, according to the evidence, the same type of plows had been manufactured in this country and had
been in use in many parts of the Philippine Archipelago, especially in the Province of Iloilo, long before
he obtained his last patent.
In the above mentioned case of Vargas vs. F. M. Yaptico & Co., we said:
When a patent is sought to be enforced, "the questions of invention, novelty, or prior use, and
each of them, are open to judicial examination." The burden of proof to substantiate a charge of
infringement is with the plaintiff. Where, however, the plaintiff introduces the patent in evidence,
if it is the due form, it affords a prima facie presumption of its correctness and validity. The
decision of the Commissioner of Patents in granting the patent is always presumed to be correct.
The burden then shifts to the defendant to overcome by competent evidence this legal
presumption. With all due respects, therefore, for the critical and expert examination of the
invention by the United States Patent Office, the question of the validity of the patent is one for
judicial determination, and since a patent has been submitted, the exact question is whether the
defendant has assumed the burden of proof as to anyone of his defenses. (See Agawan
Co. vs. Jordan [1869], 7 Wall., 583; Blanchard vs. Putnam [1869], 8 Wall., 420;
Seymour vs. Osborne [1871], 11 Wall., 516; Reckendorfer vs.Faber [1876], 92 U. S., 347; 20 R.
C. L., 1112, 1168, 1169.)
Although we spent some time in arriving at this point, yet, having reached it, the question in the
case is single and can be brought to a narrow compass. Under the English Statute of Monopolies
 (21 Jac. Ch., 3), and under the United States Patent Act of February 21, 1793, later amended to
be as herein quoted, it was always the rule, as stated by Lord Coke, Justice Story and other
authorities, that to entitle a man to a patent, the invention must be new to the world. (Pennock
and Sellers vs. Dialogue [1829], 2 Pet., 1.) As said by the United States Supreme Court, "it has
been repeatedly held by this court that a single instance of public use of the invention by a
patentee of more than two years before the date of his application for his patent will be fatal to
the validity of the patent when issued." (Worley vs. Lower Tobacco Co. [1882], 104 U. S., 340;
McClurg vs.Kingsland [1843], 1 How., 202; Consolidated Fruit Jar Co. vs. Wright [1877], 94 U.
S., 92; Egbert vs.Lippmann [1881], 104 U. S., 333; Coffin vs. Ogden [1874], 18 Wall., 120;
Manning vs. Cape Ann Isinglass and Glue Co. [1883], 108 U. S., 462; Andrews vs. Hovey [1887],
123 U. S., 267; Campbell vs. City of New York [1888], 1 L. R. A., 48.)

We repeat that in view of the evidence presented, and particularly of the examination we have made of the
plows, we cannot escape the conclusion that the plow upon which the appellee's contention is based, does
not constitute an invention and, consequently, the privilege invoked by him is untenable and the patent
acquired by him should be declared ineffective.

The judgment appealed from is hereby reversed and the appellants are absolved from the complaint, with
costs of this instance against the appellee. So ordered.
[G.R. No. 38010. December 21, 1933.] Philippine Islands on March 17, 1925, was the origin of this action brought by the plaintiffs herein who
prayed that judgment be rendered against the defendant, ordering him thereby to refrain immediately from
PATRICK HENRY FRANK and WILLIAM HENRY GOHN, Plaintiffs-Appellants, v. G. the manufacture and sale off machines similar to the one covered by the patent; to render an accounting of
KOSUYAMA, Defendant-Appellee. the profits realized from the manufacture and sale of the machines in question; that in case of refusal or
failure to render such accounting, the defendant be ordered to pay the plaintiffs the sum of P60 as profit
J. W. Ferrier for Appellants. on each machine manufactured or sold by him; that upon approval of the required bond, said defendant be
restrained from continuing the manufacture and sale of the same kind of machines; that after the trial the
Pablo Lorenzo for Appellee. preliminary injunction issued therein be declared permanent; and, lastly, that the said defendant be
sentenced to pay the costs and whatever damages the plaintiffs might be able to prove therein. The action
SYLLABUS therefore was based upon alleged infringement by the defendant of the rights patent through the
manufacture and sale by the former of machines similar to that covered by the aforesaid patent.
1. PATIENT; ESSENTIAL ELEMENTS. — Strictly speaking, the hemp stripping machine of the
plaintiffs does not constitute an invention on the ground that it lacks the element of novelty, originality The plaintiffs appealed from the judgment rendered by the trial court dismissing their complaint, with
and precedence (48 C. J., sec. 101, p. 97, and sec. 102, p. 98). costs, as well as the defendant’s counterclaim of P10,000. The defendant did not appeal.

2. ID.; KNOWLEDGE AND USE BY THE PUBLIC. — Before the plaintiffs herein obtained their patent, In their amended complaint, the plaintiffs alleged that their hemp stripping machines, for which they
they themselves had already publicly used the same kind of machine for many months, at least, and, various obtained a patent, have the following characteristics: "A stripping head, a horizontal table, a stripping knife
other machines, having in general, the same characteristics and important parts as that of the said plaintiffs, supported upon such table, a tapering spindle, a rest holder adjustably secured on the table portion, a lever
were known in the Province of Davao. and means of compelling the knife to close upon the table, a pallet or rest in the bottom of the table, a
resilient cushion under such pallet or rest." In spite of the fact that they filed an amended complaint from
3. ID.; ANNULMENT. — Notwithstanding all the facts herein stated, the trial court did not annul the which the "spindle’ or conical drum, which was the only characteristic feature of the machine mentioned
plaintiffs’ patent and the defendant herein insists that the patent in question should be declared null and in the original complaint, was eliminated, the plaintiffs insisted that the said part constitutes the essential
void. In view of the nature of the action brought by the plaintiffs, annulment does not lie in the absence of differences between the machine in question and other machines and it was the principal consideration
a cross-complaint to that effect. upon which their patent was issued. The said plaintiffs sustained their contention on this point even in their
printed brief and memorandum filed in this appeal.
4. ID.; INFRINGEMENT. — The defendant cannot be made civilly liable for alleged infringement of the
patent on which the action is based on the ground that the machines manufactured and sold by him did not During the trial, both parties presented voluminous evidence from which the trial court arrived at the
have any essential part unknown to the public in the Province of Davao at the time the plaintiffs applied following conclusions:jgc:chanrobles.com.ph
for and obtained their patent for improved abaca stripping machines.
"In considering their machine the plaintiffs did nothing but improve, to a certain degree, those that were
5. APPLICABILITY OF THE DOCTRINE OF "STARE DECISIS." — The doctrine laid down in the case already in vogue and in actual use in hemp producing provinces. It cannot be said that they have invented
of Frank and Gohn v. Benito (51 Phil., 712), to the effect that the defendant therein had actually infringed the ’spindle’ inasmuch as this was already known since the year 1909 or 1910. Neither can it be said that
upon the patent of the therein plaintiffs cannot be invoked in this case. It is true that the then plaintiffs in they have invented the stripping knife and the contrivance which controls the movement and pressure
the former and those in the latter case are the same but the defendant therein did not set up the special thereof on the ground that stripping knives together with their control sets were already in actual use in the
defenses as alleged by the herein defendant. Furthermore, the plaintiffs therein had only confined different stripping machines long before their machines appeared. Neither can it be said that they invented
themselves to presenting the patent, or rather, a copy thereof, wherein mention of the "spindle" was made, the flywheel because that part or piece thereof, so essential in every machine from time immemorial, was
and this court took for granted their claim that it was one of the essential characteristics thereof which had already known and actually employed in hemp stripping machines such as those of Riesgo (Exhibit 4-A),
been imitated or copied by the therein defendant. Crumb (Exhibit 1-A), Icsiar (Exhibit A-Suzara), Browne (Exhibit 28-A), McFie, etc., all of which were in
use for the benefit of hemp long before the appearance of the plaintiffs’ machines in the market. Much less
can it be said that they invented the pedal to raise the knife in order to allow the hemp to be stripped to
DECISION pass under it, on the ground that the use of such contrivance has, likewise, been known since the invention
of the most primitive of hemp stripping machines.

IMPERIAL, J.:
Patent No. 1519579 (Exhibit 117) on improvement in hemp stripping machines, issued by the United States
Patent Office on December 16, 1924, and registered in the Bureau of Commerce and Industry of the
"On the other hand, although the plaintiffs alleged in their original complaint that ’the principal and
important feature of said machine is a spindle upon which the hemp to be stripped is wound in the process
of stripping,’ nevertheless, in their amended complaint of March 3, 1928, which was filed after a portion
of the evidence therein had already been submitted and it was known that the use of the spindle was nothing
new, they still made the allegations appearing in paragraph 3 of their said amended complaint and
reproduced on pages 2, 3, 4 and 5 hereof, copying the same from the application which they filed with the Wherefore, reiterating that the defendant cannot be held civilly liable for alleged infringement of the patent
United States Patent Office, under which they obtained their patent in question. The aforesaid application upon which the present action is based on the ground that there is no essential part of the machine
clearly shows that what they applied for was not a patent for a ’pioneer or primary invention’ but only for manufactured and sold by him, which was unknown to the public in the Province of Davao at the time the
some ’new and useful improvement in hemp stripping machines.’" plaintiffs applied for an obtained their patent for improved hemp stripping machines, the judgment
appealed from is hereby affirmed, with costs against the plaintiffs-appellants. So ordered.
We have carefully reviewed the evidence presented and have had the opportunity of ascertaining the truth
of the conclusions above stated. We agree with the trial court that, strictly speaking, the hemp stripping
machine of the plaintiffs does not constitute an invention on the ground that it lacks the elements of
novelty, originality and precedence (48 C. J., sec. 101, p. 97, and sec. 102, p. 98). In fact, before the
plaintiffs herein obtained their patent, they themselves had already publicly used the same kind of machine
for some months, at least, and, various other machines, having in general, the same characteristics and
important parts as that of the said plaintiffs, were known in the Province of Davao. Machines known as
Molo, Riesgo, Crumb, Icsiar, Browne and McFie were already known in that locality and used by the
owners of hemp plantations before the machine of the plaintiffs came into existence. It may also be noted
that Adrian de Icsiar applied for a patent on an invention which resulted in the rejection by the United
States Patent Office of the plaintiffs’ original application for a patent on the so-called "spindle" or conical
drum which was then in actual use in the Dringman and Icsiar hemp stripping machines.

Notwithstanding the foregoing facts, the trial court did not decree the annulment of the plaintiffs’ patent
and the herein defendant-appellee insists that the patent in question should be declared null and void. We
are of the opinion that it would be improper and untimely to render a similar judgment, in view of the
nature of the action brought by the plaintiffs and in the absence of a cross-complaint to that effect. For the
purposes of this appeal, suffice it to hold that the defendant is not civilly liable for alleged infringement of
the patent in question.

In the light of sound logic, the plaintiffs cannot insists that the "spindle" was a patented invention on the
ground that said part of the machine was voluntarily omitted by them from their application, as evidenced
by the photographic copy thereof (Exhibit 41) wherein it likewise appears that the patent on Improved
Hemp Stripping Machines was issued minus the "spindle" in question. Were we to stress to this part of the
machine, we would be giving the patent obtained by the plaintiffs a wider range than it actually has, which
is contrary to the principles of interpretation in matters to patents.

In support of their claim the plaintiffs invoke the doctrine laid down by this court in the case of Frank and
Gohn v. Benito (51 Phil., 712), wherein it was held that the therein defendant really infringed upon the
patent of the therein plaintiffs. It may be noted that the plaintiffs in the former and those in the latter case
are the same and that the patent then involved is the very same one upon which the present action of the
plaintiffs is based. The above-cited case, however, cannot be invoked as a precedent to justify a judgment
in favor of the plaintiffs-appellants on the ground that the facts in one case are entirely different from those
in the other. In the former case the defendant did not set up the same special defenses as those alleged by
the herein defendant in his answer and the plaintiffs therein confined themselves to presenting the patent,
or rather a copy thereof, wherein the "spindle’ was mentioned, and this court took for granted their claim
that it was one of the essential characteristics thereof which was imitated or copied by the then defendant.
Thus it came to pass that the "spindle" in question was insistently mentioned in the decision rendered on
appeal as the essential part of the plaintiffs’ machine allegedly imitated by the then defendant. In the case
under consideration, it is obvious that the "spindle" is not an integral part of the machine patented by the
plaintiffs on the ground that it was eliminated from their patent inasmuch as it was expressly excluded in
their application, as evidenced by the aforesaid Exhibit 41.
G.R. No. L-32160 January 30, 1982
DOMICIANO A. AGUAS, petitioner,
vs.
CONRADO G. DE LEON and COURT OF APPEALS, respondents.
FERNANDEZ, J.:
This is a petition for certiorari to review the decision of the Court of Appeals in CA G.R. NO. 37824-R
entitled "Conrado G. de Leon, plaintiff-appelle vs. Dominciano Aguas and F.H. Aquino and Sons,
defendants-appellants," the dispositive portion of which reads:
WHEREFORE, with the modification that plintiff-applee's award of moral damages is
hereby redured to P3,000.00, the appealed judgment is hereby affirmed, in all othe
respects, with costs against appellants. 1
On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal at Quezon City a
complaint for infringement of patent against Domiciano A. Aguas and F. H. Aquino and Sons alleging that
being the original first and sole inventor of certain new and useful improvements in the process of making
mosaic pre-cast tiles, he lawfully filed and prosecuted an application for Philippine patent, and having
complied in all respects with the statute and the rules of the Philippine Patent Office, Patent No. 658 was
lawfully granted and issued to him; that said invention was new, useful, not known or used by others in
this country before his invention thereof, not patented or described in any printed publication anywhere
before his invention thereof, or more than one year prior to his application for patent thereof, not patented
in any foreign country by him or his legal representatives on application filed more than one year prior to
his application in this country; that plaintiff has the exclusive license to make, use and sell throughout the
Philippines the improvements set forth in said Patent No. 658; that the invention patented by said Patent
No. 658 is of great utility and of great value to plaintiff and of great benefit to the public who has demanded
and purchased tiles embodying the said invention in very large quantities and in very rapidly increasing
quant ies; that he has complied with the Philippine statues relating to marking patented tiles sold by him;
that the public has in general acknowledged the validity of said Patent No. 658, and has respected plaintiff's
right therein and thereunder; that the defendant Domiciano A. Aguas infringed Letters of Patent No. 658
by making, using and selling tiles embodying said patent invention and that defendant F. H. Aquino &
Sons is guilty of infringement by making and furnishing to the defendant Domiciano A. Aguas the
engravings, castings and devices designed and intended of tiles embodying plaintiff;s patented invention;
that he has given direct and personal notice to the defendants of their said acts of infringement and
requested them to desist, but nevertheless, defendants have refused and neglected to desist and have
disregarded such request, and continue to so infringe causing great and irreparable damage to plaintiff;
that if the aforesaid infringement is permitted to continue, further losses and damages and irreparable
injury will be sustained by the plaintiff; that there is an urgent need for the immediate issuance of a
preliminary injunction; that as a result of the defendants' wrongful conduct, plaintiff has suffered and the
defendants are liable to pay him, in addition to actual damages and loss of profits which would be
determined upon proper accounting, moral and exemplary or corrective damages in the sum of P90,000.00;
that plaintiff has been compelled to go to court for the protection and enforcement of his and to engage the
service of counsel, thereby incurring attorney's fees and expenses of litigation in the sum of P5,000.00. 2
On April 14, 1962, an order granting the plaintiff's petition for a Writ of Preliminary Injunction was
issued. 3
On May 23, 1962, the defendant Domiciano A. Aguas filed his answer denying the allegations of the
plaintiff and alleging that: the plaintiff is neither the original first nor sole inventor of the improvements
in the process of making mosaic pre-cast tiles, the same having been used by several tile-making factories
in the Philippines and abroad years before the alleged invention by de Leon; that Letters Patent No. 658
was unlawfully acquired by making it appear in the application in relation thereto that the process is new
and that the plaintiff is the owner of the process when in truth and in fact the process incorporated in the
patent application has been known and used in the Philippines by almost all tile makers long before the
alleged use and registration of patent by plaintiff Conrado G. de Leon; that the registration of the alleged
invention did not confer any right on the plaintiff because the registration was unlawfully secured and was
a result of the gross misrepresentation on the part of the plaintiff that his alleged invention is a new and
inventive process; that the allegation of the plaintiff that Patent No. 658 is of great value to plaintiff and
of great benefit to the public is a mere conclusion of the plaintiff, the truth being that a) the invention of
plaintiff is neither inventive nor new, hence, it is not patentable, b) defendant has been granted valid patents
(Patents No. 108, 109, 110 issued on December 21, 1961) on designs for concrete decorative wall tiles;
and c) that he can not be guilty of infringement because his products are different from those of the
plaintiff. 4
The trial court rendered a decision dated December 29, 1965, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the
defendants:
1. Declaring plaintiff's patent valid and infringed:
2. Granting a perpetual injunction restraining defendants, their officers, agents,
employees, associates, confederates, and any and all persons acting under their authority
from making and/or using and/or vending tiles embodying said patented invention or
adapted to be used in combination embodying the same, and from making,
manufacturing, using or selling, engravings, castings and devises designed and intended
for use in apparatus for the making of tiles embodying plaintiff's patented invention, and
from offering or advertising so to do, and from aiding and abetting or in any way
contributing to the infringement of said patent;
3. Ordering that each and all of the infringing tiles, engravings, castings and devices,
which are in the possession or under the control of defendants be delivered to plaintiff;
4. Ordering the defendants to jointly and severally pay to the plaintiff the following sums
of money, to wit:
(a) P10,020.99 by way of actual damages;
 (b) P50,000.00 by way of moral damages;
(c) P5,000.00 by way of exemplary damages;
(d) P5,000.00 by way of attorney's fees and
(e) costs of suit. 5
6
The defendant Domiciano Aguas appealed to the Court of Appeals, assigning the following errors.
I
THE TRIAL COURT ERRED IN NOT HOLDING THAT PLAINTIFF'S PATENT
FOR THE 'PROCESS OF MAKING MOSAIC PRE-CAST TILE' IS INVALID
BECAUSE SAID ALLEGED PROCESS IS NOT AN INVENTION OR DISCOVERY
AS THE SAME HAS ALREADY LONG BEEN USED BY TILE
MANUFACTURERS BOTH ABROAD AND IN THIS COUNTRY.
II
THE TRIAL COURT ERRED IN HOLDING THAT THE PATENT OF PLAINTIFF
IS VALID BECAUSE IT IS AN IMPROVEMENT OR THE AGE-OLD TILE
MAKING SYSTEM.
III
THE TRIAL COURT ERRED IN NOT ORDERING THE CANCELLATION OF
PLAINTIFF-APPELLEE'S LETTERS PATENT NO. 658, EXHIBIT L, IN
ACCORDANCE WITH THE PERTINENT PROVISIONS OF THE PATENT LAW,
REPUBLIC ACT 165.
IV
THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT DOMICIANO A.
AGUAS IS GUILTY OF INFRINGEMENT DESPITE THE FACT THAT
PLAINTIFF'S PATENT IS NOT A VALID ONE.
V of the tiles in escayola and explained to said engraver the plans, specifications and the
THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT
COULD NEVER BE GUILTY OF INFRINGEMENT OF PLAINTIFF'S PATENT
BECAUSE EVEN IN MATTERS NOT PATENTED BY THE PLAINTIFF - LIKE
THE COMPOSITION AND PROPORTION OF INGREDIENTS USED AND THE
STRUCTURAL DESIGNS OF THE MOULD AND THE TILE PRODUCED - THAT
OF THE DEFENDANT ARE DIFFERENT.
VI
THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN
HOLDING THE DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR
DAMAGES, AND ATTORNEY'S FEES.
On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with the modification
that plaintiff-appellee's award of moral damages was reduced to P3,000.00. 7
The petitioner assigns the following errors supposedly committed by the Court of Appeals:
It is now respectfully submitted that the Court of Appeals committed the following errors
involving questions of law, to wit:
First error. — When it did not conclude that the letters patent of the respondent although
entitled on the cover page as a patent for improvements, was in truth and in fact, on the
basis of the body of the same, a patent for the old and non-patentable process of making
mosaic pre-cast tiles;
Second error. — When it did not conclude from the admitted facts of the case,
particularly the contents of the letters patent, Exh. L and the pieces of physical evidence
introduced consisting of samples of the tiles and catalouges, that the alleged
improvements introduced by the respondent in the manufacture of mosaic pre-cast tiles
are not patentable, the same being not new, useful and inventive.
Third error. — As a corollary, when it sentenced the herein petitioner to pay the damages
enumerated in the decision of the lower court (Record on Appeal, pp. 74-75), as
confirmed by it (the Court of Appeals), but with the modification that the amount of
P50,000.00 moral damages was reduced to P3,000.00. 8
The facts, as found by the Court of Appeals, are:
The basic facts borne out by the record are to the effect that on December 1, 1959
plaintiff-appellee filed a patent application with the Philippine Patent Office, and on
May 5, 1960, said office issued in his favor Letters Patent No. 658 for a "new and useful
improvement in the process of making mosaic pre-cast tiles" (Exh, "L"); that defendant
F.H. Aquino & Sons engraved the moulds embodying plaintiff's patented improvement
for the manufacture of pre-cast tiles, plaintiff furnishing said defendant the actual model
details of the engravings as he wanted them to be made, including an explanation of the
lip width, artistic slope of easement and critical depth of the engraving that plaintiff
wanted for his moulds; that engraver Enrique Aquino knew that the moulds he was
engraving for plaintiff were the latter's very own, which possession the new features and
characteristics covered by plaintiff's parent; that defendant Aguas personally, as a
building contractor, purchased from plaintiff, tiles shaped out of these moulds at the
back of which was imprinted plaintiff's patent number (Exhs., "A" to "E"); that
 subsequently, through a representative, Mr. Leonardo, defendant Aguas requested
Aquino to make engravings of the same type and bearing the characteristics of plaintiff's
moulds; that Mr. Aquino knew that the moulds he was asked to engrave for defendant
Aguas would be used to produce cement tiles similar to plaintiff's; that the moulds which
F.H. Aquino & Sons eventually engraved for Aguas and for which it charged Aguas
double the rate it charged plaintiff De Leon, contain the very same characteristic features
of plaintiff's mould and that Aguas used these moulds in the manufacture of his tiles
which he actually put out for sale to the public (Exhs. "1" to "3" and Exhs. "A" to "E");
that both plaintiff's and defendant Aguas' tiles are sculptured pre-cast wall tiles intended
as a new feature of construction and wag ornamentation substantially Identical to each
other in size, easement, lip width and critical depth of the deepest depression; and that
the only significant difference between plaintiff's mould and that engraved by Aquino
for Aguas is that, whereas plaintiff's mould turns out tiles 4 x 4 inches in size, defendant
Aguas' mould is made to fit a 4-1/4 x 4-1/4 inch tile. 9
The patent right of the private respondent expired on May 5, 1977. 10 The errors will be discuss only to
determine the right of said private respondent to damages.
The petitioner questioned the validity of the patent of the private respondent, Conrado G. de Leon, on the
ground that the process, subject of said patent, is not an invention or discovery, or an improvement of the
old system of making tiles. It should be noted that the private respondent does not claim to be the discoverer
or inventor of the old process of tile-making. He only claims to have introduced an improvement of said
process. In fact, Letters Patent No. 658 was issued by the Philippine Patent Office to the private respondent,
Conrado G. de Leon, to protect his rights as the inventor of "an alleged new and useful improvement in
the process of making mosaic pre-cast tiles." 11Indeed, Section 7, Republic Act No. 165, as amended
provides: "Any invention of a new and useful machine, manufactured product or substance, process, or an
improvement of the foregoing, shall be patentable.
The Court of Appeals found that the private respondent has introduced an improvement in the process of
tile-making because:
... we find that plaintiff-appellee has introduced an improvement in the process of tile-
making, which proceeds not merely from mechanical skill, said improvement consisting
among other things, in the new critical depth, lip width, easement and field of designs
of the new tiles. The improved lip width of appellee's tiles ensures the durability of the
finished product preventing the flaking off of the edges. The easement caused by the
inclination of the protrusions of the patented moulds is for the purpose of facilitating the
removal of the newly processed tile from the female die. Evidently, appellee's
improvement consists in the solution to the old critical problem by making the
protrusions on his moulds attain an optimum height, so that the engraving thereon would
be deep enough to produce tiles for sculptured and decorative purposes, strong optimum
thickness of appellee's new tiles of only 1/8 of an inch at the deepest easement (Exhs.
"D" and "D-1") is a most critical feature, suggestive of discovery and inventiveness,
especially considering that, despite said thinness, the freshly formed tile remains strong
enough for its intended purpose.
While it is true that the matter of easement, lip width, depth, protrusions and depressions
are known to some sculptors, still, to be able to produce a new and useful wall tile, by
using them all together, amounts to an invention. More so, if the totality of all these
features are viewed in combination with the Ideal composition of cement, sodium
silicate and screened fine sand.
By using his improved process, plaintiff has succeeded in producing a new product - a
concrete sculptured tile which could be utilized for walling and decorative purposes. No
proof was adduced to show that any tile of the same kind had been produced by others
before appellee. Moreover, it appears that appellee has been deriving considerable profit
from his manufacture and sale of such tiles. This commercial success is evidence of
patentability (Walker on Patents, Dellers Edition, Vol. I, p. 237). 12
The validily of the patent issued by the Philippines Patent Office in favor of the private respondent and the
question over the inventiveness, novelty and usefulness of the improved process therein specified and
described are matters which are better determined by the Philippines Patent Office. The technical staff of
the Philippines Patent Office, composed of experts in their field, have, by the issuance of the patent in
question, accepted the thinness of the private respondent's new tiles as a discovery. There is a presumption
that the Philippines Patent Office has correctly determined the patentability of the improvement by the
private respondent of the process in question.
Anent this matter, the Court of Appeals said:
Appellant has not adduced evidence sufficient to overcome the above established legal
presumption of validity or to warrant reversal of the findings of the lower court relative
to the validity of the patent in question. In fact, as we have already pointed out, the clear
preponderance of evidence bolsters said presumption of validity of appellee's patent.
There is no indication in the records of this case and this Court is unaware of any fact,
which would tend to show that concrete wall tiles similar to those produced by appellee
had ever been made by others before he started manufacturing the same. In fact, during
the trial, appellant was challenged by appellee to present a tile of the same kind as those
produced by the latter, from any earlier source but, despite the fact that appellant had
every chance to do so, he could not present any. There is, therefore, no concrete proof
that the improved process of tile-making described in appellee's patent was used by, or
known to, others previous to his discovery thereof. 13
The contention of the petitioner Aguas that the letters patent of de Leon was actually a patent for the old
and non-patentable process of making mosaic pre-cast tiles is devoid of merit. De Leon never claimed to
have invented the process of tile-making. The Claims and Specifications of Patent No. 658 show that
although some of the steps or parts of the old process of tile making were described therein, there were
novel and inventive features mentioned in the process. Some of the novel features of the private
respondent's improvements are the following: critical depth, with corresponding easement and lip width
to such degree as leaves the tile as thin as 1/8 of an inch at its thinnest portion, Ideal composition of cement
and fine river sand, among other ingredients that makes possible the production of tough and durable wall
tiles, though thin and light; the engraving of deep designs in such a way as to make the tiles decorative,
artistic and suitable for wall ornamentation, and the fact that the tiles can be mass produced in commercial
quantities and can be conveniently stock-piled, handled and packed without any intolerable incidence of
breakages. 14
The petitioner also contends that the improvement of respondent is not patentable because it is not new,
useful and inventive. This contention is without merit.
The records disclose that de Leon's process is an improvement of the old process of tile making. The tiles
produced from de Leon's process are suitable for construction and ornamentation, which previously had
not been achieved by tiles made out of the old process of tile making. De Leon's invention has therefore
brought about a new and useful kind of tile. The old type of tiles were usually intended for floors although
there is nothing to prevent one from using them for walling purposes. These tiles are neither artistic nor
ornamental. They are heavy and massive.
The respondent's improvement is indeed inventive and goes beyond the exercise of mechanical skill. He
has introduced a new kind of tile for a new purpose. He has improved the old method of making tiles and
pre-cast articles which were not satisfactory because of an intolerable number of breakages, especially if
deep engravings are made on the tile. He has overcome the problem of producing decorative tiles with
deep engraving, but with sufficient durability. 15 Durability inspite of the thinness and lightness of the tile,
is assured, provided that a certain critical depth is maintained in relation to the dimensions of the tile. 16
The petitioner also claims that changing the design from embossed to engraved tiles is neither new nor
inventive because the Machuca Tile Factory and the Pomona Tile Manufacturing Company have been
manufacturing decorative wall tiles that are embossed as well as engraved; 17 that these tiles have also
depth, lip width, easement and field of designs; 18 and that the private respondent had copied some designs
of Pomona. 19
The Machuca tiles are different from that of the private respondent. The designs are embossed and not
engraved as claimed by the petitioner. There may be depressions but these depressions are too shallow to
be considered engraved. Besides, the Machuca tiles are heavy and massive.
There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles are made of
ceramics. 20The process involved in making cement tiles is different from ceramic tiles. Cement tiles are
made with the use of water, while in ceramics fire is used. As regards the allegation of the petitioner that
the private respondent copied some designs of Pomona, suffice it to say that what is in issue here is the
process involved in tile making and not the design.
In view of the foregoing, this Court finds that Patent No. 658 was legally issued, the process and/or
improvement being patentable.
Both the trial court and the Court of Appeals found as a fact that the petitioner Domiciano A. Aguas did
infringe de Leon's patent. There is no showing that this case falls under one of the exceptions when this
Court may overrule the findings of fact of the Court of Appeals. The only issue then to be resolved is the
amount of damages that should be paid by Aguas.
In its decision the Court of Appeals affirmed the amount of damages awarded by the lower court with the
modification that the respondent is only entitled to P3,000.00 moral damages. 21
The lower court awarded the following damages: 22
a) P10,020.99 by way of actual damages;
b) P50,000.00 by way of moral damages;
c) P5,000.00 by way of exemplary damages;
d) P5,000.00 by way of attomey's fees and
e) Costs of suit
because:
An examination of the books of defendant Aguas made before a Commissioner reveals
that during the period that Aguas was manufacturing and selling tiles similar to
plaintiff's, he made a gross income of P3,340.33, which can be safely be considered the
amount by which he enriched himself when he infringed plaintiff's patent. Under Sec.
42 of the Patent Law any patentee whose rights have been infringed is entitled to
damages which, according to the circumstances of the case may be in a sum above the
amount found as actual damages sustained provided the award does not exceed three
times the amount of such actual damages. Considering the wantonness of the
infringement committed by the defendants who knew all the time about the existence of
plaintiff's patent, the Court feels there is reason to grant plaintiff maximum damages in
the sum of P10,020.99. And in order to discourage patent infringements and to give more
teeth to the provisions of the patent law thus promoting a stronger public policy
committed to afford greater incentives and protection to inventors, the Court hereby
awards plaintiff exemplary damages in the sum of P5,000.00 to be paid jointly and
severally by defendants. Considering the status of plaintiff as a reputable businessman,
and owner of the likewise reputed House of Pre-Cast, he is entitled to an award of moral
damages in the sum of P50,000.00. 23
In reducing the amount of moral damages the Court of Appeals said:
As regards the question of moral damages it has been shown that as a result of the
unlawful acts of infringment committed by defendants, plaintiff was unstandably very
sad; he worried and became nervous and lost concentration on his work in connection
with his tile business (pp. 28, 30, t.s.n., Feb. 28, 1964). In addition, plaintiff's character
and reputation have been unnecessarily put in question because defendants, by their acts
of infringement have created a doubt or suspicion in the public mind concerning the truth
and honesty of plaintiff's advertisements and public announcements of his valid patent.
Necessarily, said acts of defendants have caused plaintiff considerable mental suffering,
considering especially, the fact that he staked everything on his pre-cast tile business (p.
36, t.s.n., Id.) The wantonness and evident bad faith characterizing defendants'
prejudicial acts against plaintiff justify the assessment of moral damages in plaintiff's
favor, though we do not believe the amount of P50,000.00 awarded by the lower court
 is warranted by the circumstances. We feel that said amount should be reduced to
P3,000.00 by way of compensating appellee for his moral suffering. "Willful injury to
property may be a legal ground for awarding moral damages if the court should find that,
under the circumstances such damages are justly due" (Art. 2219 NCC).

There is no reason to reduce the amount of damages and attorneys fees awarded by the trial court as
modified by the Court of Appeals.

WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed from is hereby
affirmed, without pronouncement as to costs.

SO ORDERED.
Diamond v. Chakrabarty
No. 79-136
Argued March 17, 1980
Decided June 16, 1980
447 U.S. 303
CERTIORARI TO THE UNITED STATES COURT OF CUSTOMS
AND PATENT APPEALS
Syllabus
Title 35 U.S.C. § 101 provides for the issuance of a patent to a person who invents or discovers "any" new
and useful "manufacture" or "composition of matter." Respondent filed a patent application relating to his
invention of a human-made, genetically engineered bacterium capable of breaking down crude oil, a
property which is possessed by no naturally occurring bacteria. A patent examiner's rejection of the patent
application's claims for the new bacteria was affirmed by the Patent Office Board of Appeals on the ground
that living things are not patentable subject matter under § 101. The Court of Customs and Patent Appeals
reversed, concluding that the fact that micro-organisms are alive is without legal significance for purposes
of the patent law.
Held: A live, human-made micro-organism is patentable subject matter under § 101. Respondent's micro-
organism constitutes a "manufacture" or "composition of matter" within that statute. Pp. 447 U. S. 308-
318.
(a) In choosing such expansive terms as "manufacture" and "composition of matter," modified by the
comprehensive "any," Congress contemplated that the patent laws should be given wide scope, and the
relevant legislative history also supports a broad construction. While laws of nature, physical phenomena,
and abstract ideas are not patentable, respondent's claim is not to a hitherto unknown natural phenomenon,
but to a nonnaturally occurring manufacture or composition of matter -- a product of human ingenuity
"having a distinctive name, character [and] use." Hartranft v. Wiegmann, 121 U. S. 609, 121 U. S.
615. Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U. S. 127, distinguished. Pp. 447 U. S. 308-310.
(b) The passage of the 1930 Plant Patent Act, which afforded patent protection to certain asexually
reproduced plants, and the 1970 Plant Variety Protection Act, which authorized protection for certain
sexually reproduced plants but excluded bacteria from its protection, does not evidence congressional
understanding that the terms "manufacture" or "composition of matter" in § 101 do not include living
things. Pp. 447 U. S. 310-314.
Page 447 U. S. 304
(c) Nor does the fact that genetic technology was unforeseen when Congress enacted § 101 require the
conclusion that micro-organisms cannot qualify as patentable subject matter until Congress expressly
authorizes such protection. The unambiguous language of § 101 fairly embraces respondent's invention.
Arguments against patentability under § 101, based on potential hazards that may be generated by genetic
research, should be addressed to the Congress and the Executive, not to the Judiciary. Pp. 447 U. S. 314-
318.
596 F.2d 952, affirmed.
BURGER, C J., delivered the opinion of the Court, in which STEWART, BLACKMUN, REHNQUIST,
and STEVENS, JJ., joined. BRENNAN, J., filed a dissenting opinion, in which WHITE, MARSHALL,
and POWELL, JJ., joined, post,p. 447 U. S. 318.
Page 447 U. S. 305
MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to determine whether a live, human-made micro-organism is patentable subject
matter under 35 U.S.C. § 101.
I
In 1972, respondent Chakrabarty, a microbiologist, filed a patent application, assigned to the General
Electric Co. The application asserted 36 claims related to Chakrabarty's invention of
"a bacterium from the genus Pseudomons containing therein at least two stable energy-generating
plasmids, each of said plasmids providing a separate hydrocarbon degradative pathway. [Footnote 1]"
This human-made, genetically engineered bacterium is capable of breaking down multiple components of
crude oil. Because of this property, which is possessed by no naturally occurring bacteria, Chakrabarty's
invention is believed to have significant value for the treatment of oil spills. [Footnote 2]
Chakrabarty's patent claims were of three types: first, process claims for the method of producing the
bacteria;
Page 447 U. S. 306
second, claims for an inoculum comprised of a carrier material floating on water, such as straw, and the
new bacteria; and third, claims to the bacteria themselves. The patent examiner allowed the claims falling
into the first two categories, but rejected claims for the bacteria. His decision rested on two grounds: (1)
that micro-organisms are "products of nature," and (2) that, as living things, they are not patentable subject
matter under 35 U.S.C. § 101.
Chakrabarty appealed the rejection of these claims to the Patent Office Board of Appeals, and the Board
affirmed the examiner on the second ground. [Footnote 3] Relying on the legislative history of the 1930
Plant Patent Act, in which Congress extended patent protection to certain asexually reproduced plants, the
Board concluded that § 101 was not intended to cover living things such as these laboratory created micro-
organisms.
The Court of Customs and Patent Appeals, by a divided vote, reversed on the authority of its prior decision
in In re Bergy, 563 F.2d 1031, 1038 (1977), which held that "the fact that micro-organisms . . . are alive .
. . [is] without legal significance" for purposes of the patent law. [Footnote 4] Subsequently, we granted
the Acting Commissioner of Patents and Trademarks' petition for certiorari in Bergy, vacated the
judgment, and remanded the case "for further consideration in light of Parker v. Flook, 437 U. S.
584 (1978)." 438 U.S. 902 (1978). The Court of Customs and Patent Appeals then vacated its judgment
in Chakrabarty and consolidated the case with Bergy for reconsideration. After reexamining both cases in
the light of our holding in Flook, that court, with one dissent, reaffirmed its earlier judgments. 596 F.2d
952 (1979).
Page 447 U. S. 307
The Commissioner of Patents and Trademarks again sought certiorari, and we granted the writ as to both
Bergy and Chakrabarty. 444 U.S. 924 (1979). Since then, Bergy has been dismissed as moot, 444 U.S.
1028 (1980), leaving only Chakrabarty for decision.
II
The Constitution grants Congress broad power to legislate to
"promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors
the exclusive Right to their respective Writings and Discoveries."
Art. I, § 8, cl. 8. The patent laws promote this progress by offering inventors exclusive rights for a limited
period as an incentive for their inventiveness and research efforts. Kewanee Oil Co. v. Bicron Corp., 416
U. S. 470, 416 U. S. 480-481 (1974); Universal Oil Co. v. Globe Co., 322 U. S. 471, 322 U. S. 484 (1944).
The authority of Congress is exercised in the hope that
"[t]he productive effort thereby fostered will have a positive effect on society through the introduction of
new products and processes of manufacture into the economy, and the emanations by way of increased
employment and better lives for our citizens."
Kewanee, supra, at 416 U. S. 480.
The question before us in this case is a narrow one of statutory interpretation requiring us to construe 35
U.S.C. § 101, which provides:
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of
matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions
and requirements of this title."
Specifically, we must determine whether respondent's micro-organism constitutes a "manufacture" or
"composition of matter" within the meaning of the statute. [Footnote 5]
Page 447 U. S. 308
III
In cases of statutory construction we begin, of course, with the language of the statute. Southeastern
Community College v. Davis, 442 U. S. 397, 442 U. S. 405 (1979). And "unless otherwise defined, words
will be interpreted as taking their ordinary, contemporary, common meaning." Perrin v. United States, 444
U. S. 37,444 U. S. 42 (1979). We have also cautioned that courts "should not read into the patent laws
limitations and conditions which the legislature has not expressed." United States v. Dubilier Condenser
Corp., 289 U. S. 178,289 U. S. 199 (1933) .
Guided by these canons of construction, this Court has read the term "manufacture" in § 101 in accordance
with its dictionary definition to mean
"the production of articles for use from raw or prepared materials by giving to these materials new forms,
qualities, properties, or combinations, whether by hand labor or by machinery."
American Fruit Growers, Inc. v. Brogdex Co., 283 U. S. 1, 283 U. S. 11 (1931). Similarly, "composition
of matter" has been construed consistent with its common usage to include
"all compositions of two or more substances and . . . all composite articles, whether they be the results of
chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids."
Shell Development Co. v. Watson, 149 F.Supp. 279, 280 (DC 1957) (citing 1 A. Deller, Walker on Patents
§ 14, p. 55 (1st ed.1937)). In choosing such expansive terms as "manufacture" and "composition of matter,"
modified by the comprehensive "any," Congress plainly contemplated that the patent laws would be given
wide scope.
The relevant legislative history also supports a broad construction. The Patent Act of 1793, authored by
Thomas Jefferson, defined statutory subject matter as "any new and useful art, machine, manufacture, or
composition of matter, or any new or useful improvement [thereof]." Act of Feb. 21, 1793, § 1, 1 Stat.
319. The Act embodied Jefferson's philosophy that "ingenuity should receive a liberal encouragement."
Page 447 U. S. 309
5 Writings of Thomas Jefferson 75-76 (Washington ed. 1871). See Graham v. John Deere Co., 383 U. S.
1, 383 U. S. 7-10 (1966). Subsequent patent statutes in 1836, 1870, and 1874 employed this same broad
language. In 1052, when the patent laws were recodified, Congress replaced the word "art" with "process,"
but otherwise left Jefferson's language intact. The Committee Reports accompanying the 1952 Act inform
us that Congress intended statutory subject matter to "include anything under the sun that is made by man."
S Rep. No 1979, 82d Cong., 2d Sess., 5 (1952); H.R.Rep. No. 1979, 82d Cong., 2d Sess., 6 (1952).
[Footnote 6]
This is not to suggest that § 101 has no limits, or that it embraces every discovery. The laws of nature,
physical phenomena, and abstract ideas have been held not patentable. See Parker v. Flook, 437 U. S.
584(1978); Gottschalk v. Benson, 409 U. S. 63, 409 U. S. 67 (1972); Funk Brothers Seed Co. v. Kalo
Inoculant Co., 333 U. S. 127, 333 U. S. 130 (1948); O'Reilly v. Morse, 15 How. 62, 56 U. S. 112-121
(1854); Le Roy v. Tatham, 14 How. 156, 55 U. S. 175 (1853). Thus, a new mineral discovered in the earth
or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his
celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such discoveries are
"manifestations of . . . nature, free to all men and reserved exclusively to none." Funk, supra at 333 U. S.
130.
Judged in this light, respondent's micro-organism plainly qualifies as patentable subject matter. His claim
is not to a hitherto unknown natural phenomenon, but to a nonnaturally occurring manufacture or
composition of matter -- a product of human ingenuity "having a distinctive name, character [and]
Page 447 U. S. 310
use." Hartranft v. Wiegmann, 121 U. S. 609, 121 U. S. 615 (1887). The point is underscored dramatically
by comparison of the invention here with that in Funk. There, the patentee had discovered that there existed
in nature certain species of root nodule bacteria which did not exert a mutually inhibitive effect on each
other. He used that discovery to produce a mixed culture capable of inoculating the seeds of leguminous
plants. Concluding that the patentee had discovered "only some of the handiwork of nature," the Court
ruled the product nonpatentable:
"Each of the species of root-nodule bacteria contained in the package infects the same group of leguminous
plants which it always infected. No species acquires a different use. The combination of species produces
no new bacteria, no change in the six species of bacteria, and no enlargement of the range of their utility.
Each species has the same effect it always had. The bacteria perform in their natural way. Their use in
combination does not improve in any way their natural functioning. They serve the ends nature originally
provided, and act quite independently of any effort of the patentee."
333 U.S. at 333 U. S. 131. Here, by contrast, the patentee has produced a new bacterium with markedly
different characteristics from any found in nature, and one having the potential for significant utility. His
discovery is not nature's handiwork, but his own; accordingly it is patentable subject matter under § 101.
IV
Two contrary arguments are advanced, neither of which we find persuasive.
(A)
The petitioner's first argument rests on the enactment of the 1930 Plant Patent Act, which afforded patent
protection to certain asexually reproduced plants, and the 1970 Plant
Page 447 U. S. 311
Variety Protection Act, which authorized protection for certain sexually reproduced plants but excluded
bacteria from its protection. [Footnote 7] In the petitioner's view, the passage of these Acts evidences
congressional understanding that the terms "manufacture" or "composition of matter" do not include living
things; if they did, the petitioner argues, neither Act would have been necessary.
We reject this argument. Prior to 1930, two factors were thought to remove plants from patent protection.
The first was the belief that plants, even those artificially bred, were products of nature for purposes of the
patent law. This position appears to have derived from the decision of the Patent Office in Ex parte
Latimer,1889 Dec.Com.Pat 123, in which a patent claim for fiber found in the needle of the Pinus australis
was rejected. The Commissioner reasoned that a contrary result would permit "patents [to] be obtained
upon the trees of the forest and the plants of the earth, which of course would be unreasonable and
impossible."Id. at 126. The Latimer case, it seems, came to "se[t] forth the general stand taken in these
matters" that plants were natural products not subject to patent protection. Thorne, Relation of Patent Law
to Natural Products, 6 J.Pat.Off.Soc. 23, 24
Page 447 U. S. 312
(1923). [Footnote 8] The second obstacle to patent protection for plants was the fact that plants were
thought not amenable to the "written description" requirement of the patent law. See 35 U.S.C. § 112.
Because new plants may differ from old only in color or perfume, differentiation by written description
was often impossible. See Hearings on H.R. 11372 before the House Committee on Patents, 71st Cong.,
2d Sess., 7 (1930) (memorandum of Patent Commissioner Robertson).
In enacting the Plant Patent Act, Congress addressed both of these concerns. It explained at length its belief
that the work of the plant breeder "in aid of nature" was patentable invention. S.Rep. No. 315, 71st Cong.,
2d Sess., 8 (1930); H.R.Rep. No. 1129, 71st Cong., 2d Sess., 7-9 (1930). And it relaxed the written
description requirement in favor of "a description . . . as complete as is reasonably possible." 35 U.S.C. §
162. No Committee or Member of Congress, however, expressed the broader view, now urged by the
petitioner, that the terms "manufacture" or "composition of matter" exclude living things. The sole support
for that position in the legislative history of the 1930 Act is found in the conclusory statement of Secretary
of Agriculture Hyde, in a letter to the Chairmen of the House and Senate Committees considering the 1930
Act, that "the patent laws . . . at the present time are understood to cover only inventions or discoveries in
the field of inanimate nature." See S.Rep. No. 315, supra at Appendix A; H.R.Rep. No. 1129, supra at
Appendix A. Secretary Hyde's opinion, however, is not entitled to controlling weight. His views were
solicited on the administration of the new law. and not on the scope of patentable
Page 447 U. S. 313
subject matter -- an area beyond his competence. Moreover, there is language in the House and Senate
Committee Reports suggesting that, to the extent Congress considered the matter, it found the Secretary's
dichotomy unpersuasive. The Reports observe:
"There is a clear and logical distinction between the discovery of a new variety of plant and of certain
inanimate things, such, for example, as a new and useful natural mineral. The mineral is created wholly
by nature unassisted by man. . . . On the other hand, a plant discovery resulting from cultivation is unique,
isolated, and is not repeated by nature, nor can it be reproduced by nature unaided by man. . . ."
S.Rep. No. 315, supra at 6; H.R.Rep. No. 1129, supra at 7 (emphasis added). Congress thus recognized
that the relevant distinction was not between living and inanimate things, but between products of nature,
whether living or not, and human-made inventions. Here, respondent's micro-organism is the result of
human ingenuity and research. Hence, the passage of the Plant Patent Act affords the Government no
support.
Nor does the passage of the 1970 Plant Variety Protection Act support the Government's position. As the
Government acknowledges, sexually reproduced plants were not included under the 1930 Act because new
varieties could not be reproduced true-to-type through seedlings. Brief for Petitioner 27, n. 31. By 1970,
however, it was generally recognized that true-to-type reproduction was possible, and that plant patent
protection was therefore appropriate. The 1970 Act extended that protection. There is nothing in its
language or history to suggest that it was enacted because § 101 did not include living things.
In particular, we find nothing in the exclusion of bacteria from plant variety protection to support the
petitioner's position. See n 7, supra. The legislative history gives no reason for this exclusion. As the Court
of Customs and
Page 447 U. S. 314
Patent Appeals suggested, it may simply reflect congressional agreement with the result reached by that
court in deciding In re Arzberger, 27 C.C.P.A.(Pat.) 1315, 112 F.2d 834 (1940), which held that bacteria
were not plants for the purposes of the 1930 Act. Or it may reflect the fact that, prior to 1970, the Patent
Office had issued patents for bacteria under § 101. [Footnote 9] In any event, absent some clear indication
that Congress "focused on [the] issues . . . directly related to the one presently before the Court," SEC v.
Sloan,436 U. S. 103, 436 U. S. 120-121 (1978), there is no basis for reading into its actions an intent to
modify the plain meaning of the words found in § 101. See TVA v. Hill, 437 U. S. 153, 437 U. S. 189-193
(1978); United States v. Price, 361 U. S. 304, 361 U. S. 313 (1960).
(B)
The petitioner's second argument is that micro-organisms cannot qualify as patentable subject matter until
Congress expressly authorizes such protection. His position rests on the fact that genetic technology was
unforeseen when Congress enacted § 101. From this it is argued that resolution of the patentability of
inventions such as respondent's should be left to Congress. The legislative process, the petitioner argues,
is best equipped to weigh the competing economic, social, and scientific considerations involved, and to
determine whether living organisms produced by genetic engineering should receive patent protection. In
support of this position, the petitioner relies on our recent holding in Parker v. Flook, 437 U. S. 584 (1978),
and the statement that the judiciary "must proceed cautiously when . . . asked to extend
Page 447 U. S. 315
patent rights into areas wholly unforeseen by Congress." Id. at 437 U. S. 596.
It is, of course, correct that Congress, not the courts, must define the limits of patentability; but it is equally
true that, once Congress has spoken, it is "the province and duty of the judicial department to say what the
law is." Marbury v. Madison, 1 Cranch 137, 5 U. S. 177 (1803). Congress has performed its constitutional
role in defining patentable subject matter in § 101; we perform ours in construing the language Congress
has employed. In so doing, our obligation is to take statutes as we find them, guided, if ambiguity appears,
by the legislative history and statutory purpose. Here, we perceive no ambiguity. The subject matter
provisions of the patent law have been cast in broad terms to fulfill the constitutional and statutory goal of
promoting "the Progress of Science and the useful Arts" with all that means for the social and economic
benefits envisioned by Jefferson. Broad general language is not necessarily ambiguous when congressional
objectives require broad terms.
Nothing in Flook is to the contrary. That case applied our prior precedents to determine that a "claim for
an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter
under § 101." 437 U.S. at 437 U. S. 595, n. 18. The Court carefully scrutinized the claim at issue to
determine whether it was precluded from patent protection under "the principles underlying the prohibition
against patents for ideas' or phenomena of nature." Id. at 437 U. S. 593. We have done that here. Flook did
not announce a new principle that inventions in areas not contemplated by Congress when the patent laws
were enacted are unpatentable per se.
To read that concept into Flook would frustrate the purposes of the patent law. This Court frequently has
observed that a statute is not to be confined to the "particular application[s] . . . contemplated by the
legislators." Barr v. United States, 324 U. S. 83, 324 U. S. 90 (1945). Accord, Browder v. United
States, 312 U. S. 335, 312 U. S. 339 (1941); Puerto Rico v. Shell Co.,
Page 447 U. S. 316
302 U. S. 253, 302 U. S. 257 (1937). This is especially true in the field of patent law. A rule that
unanticipated inventions are without protection would conflict with the core concept of the patent law that
anticipation undermines patentability. See Graham v. John Deere Co., 383 U.S. at 383 U. S. 12-17. Mr.
Justice Douglas reminded that the inventions most benefiting mankind are those that "push back the
frontiers of chemistry. physics, and the like." Great A. & P. Tea Co. v. Supermarket Corp., 340 U. S.
147, 340 U. S. 154 (1950) (concurring opinion). Congress employed broad general language in drafting §
101 precisely because such inventions are often unforeseeable. [Footnote 10]
To buttress his argument, the petitioner, with the support of amicus, points to grave risks that may be
generated by research endeavors such as respondent's. The briefs present a gruesome parade of horribles.
Scientists, among them Nobel laureates, are quoted suggesting that genetic research may pose a serious
threat to the human race, or, at the very least, that the dangers are far too substantial to permit such research
to proceed apace at this time. We are told that genetic research and related technological developments
may spread pollution and disease, that it may result in a loss of genetic diversity, and that its practice may
tend to depreciate the value of human life. These arguments are forcefully, even passionately, presented;
they remind us that, at times, human ingenuity seems unable to control fully the forces it creates -- that,
with Hamlet, it is sometimes better "to bear those ills we have than fly to others that we know not of."
It is argued that this Court should weigh these potential hazards in considering whether respondent's
invention is
Page 447 U. S. 317
patentable subject matter under § 101. We disagree. The grant or denial of patents on micro-organisms is
not likely to put an end to genetic research or to its attendant risks. The large amount of research that has
already occurred when no researcher had sure knowledge that patent protection would be available
suggests that legislative or judicial fiat as to patentability will not deter the scientific mind from probing
into the unknown any more than Canute could command the tides. Whether respondent's claims are
patentable may determine whether research efforts are accelerated by the hope of reward or slowed by
want of incentives, but that is all.

What is more important is that we are without competence to entertain these arguments -- either to brush
them aside as fantasies generated by fear of the unknown or to act on them. The choice we are urged to
make is a matter of high policy for resolution within the legislative process after the kind of investigation,
examination, and study that legislative bodies can provide and courts cannot. That process involves the
balancing of competing values and interests, which, in our democratic system, is the business of elected
representatives. Whatever their validity, the contentions now pressed on us should be addressed to the
political branches of the Government, the Congress and the Executive, and not to the courts. [Footnote 11]

Page 447 U. S. 318

We have emphasized in the recent past that

"[o]ur individual appraisal of the wisdom or unwisdom of a particular [legislative] course . . . is to be put
aside in the process of interpreting a statute."

TVA v. Hill, 437 U.S. at 437 U. S. 194. Our task, rather, is the narrow one of determining what Congress
meant by the words it used in the statute; once that is done, our powers are exhausted. Congress is free to
amend § 101 so as to exclude from patent protection organisms produced by genetic engineering. Cf. 42
U.S.C. § 2181(a), exempting from patent protection inventions "useful solely in the utilization of special
nuclear material or atomic energy in an atomic weapon." Or it may choose to craft a statute specifically
designed for such living things. But, until Congress takes such action, this Court must construe the
language of § 101 as it is. The language of that section fairly embraces respondent's invention.

Accordingly, the judgment of the Court of Customs and Patent Appeals is

Affirmed.
G.R. L-24919 January 28, 1980
JAMES HOWARD BOOTHE and JOHN MORTON, II, petitioners,
vs.
THE DIRECTOR OF PATENTS, respondent.
Picazo & Agcaoili for petition.
Office of the Solicitor General for respondent.
MELENCIO-HERRERA, J.:
Sought to be reviewed herein is the Decision of the Director of Patents, dated December 9, 1964, denying
priority rights under section 15 of our Patent Law (Republic Act No. 165) to petitioners, as foreign
applicants for Letters Patent, for their invention of "Chemotherapeutic Materials and Methods of Preparing
the same.
Petitioners James Howard Boothe and John Morton II, chemists, citizens and residents of the United States,
claim to be the inventors of a new antibiotic designated as "tetracycline", a new derivative of
chlortetracycline (popularly known as "aureomycin")
On February 19, 1954, petitioners applied for Letters Patent covering said invention to respondent Director
of Patents claiming the right of priority granted to foreign applicants under section 15 of the Patent Law
(RA 165). Receipt of petitioners' application was acknowledged by respondent Director on March 6, 1954.
On April 14, 1954, petitioners filed with respondent Director a legalized copy of their Application for
Letters Patent in the United States for the same invention (U.S. Serial No. 342556). Said legalized copy
indicated that the application in the United States was filed on March 16, 1963. 1 This latter date is of
crucial importance to petitioners' cause under section 15 of the Patent Law, which provides that:
Section 15. Application previously filed abroad. — An application for patent for an
invention filed in this country by any person who has previously regularly filed an
application for a patent for the same invention in a foreign country, which by treaty,
convention or law affords similar privileges to citizens of the Philippines, shall have the
same force and effect as the same application would have if filed in this country on the
date on which the application for patent for the same invention was first filed in such
foreign country: Provided, That the application in this country is filed within twelve
months from the earliest date on which such foreign application was filed and a certified
copy of the foreign application together with a translation thereof into English, if not in
the English language, is filed within six months from the date of filing in the Philippines,
unless the Director for good cause shown shall extend the time for filing such certified
copy: And provided, further, that no patent shall be granted on an application for patent
for an invention which had been patented or described in a printed publication in this or
any foreign country more than one year before the date of the actual filing of the
application in this country, or which had been in public use or sale in this country for
more than one year prior to such filing.
Under the foregoing provision, petitioners would be entitled to the priority date of March 16, 1953 if their
application is considered filed in the Philippines as of March 5, 1954, since the latter date would fall within
the one-year period prior to March 5, 1954.
On February 7, 1958, petitioners informed respondent Director that in interference proceedings in the
United States, Letters Patent for a similar invention as theirs was awarded to Pfizer and Co., which had
filed its application ahead and that they failed to obtain any U.S. patent for their own invention. Petitioners,
however, observed and requested:
In the Philippines, however, the situation is at least the reverse. Pfizer and Co. did not
file or else filed an application after the above application has already been filed. The
said above application therefore is good and valid.
We request, therefore, that the present application be granted on the basis of the claims
originally filed. 2
On August 5, 1959, in Paper No. 6, 3 Patent Examiner, Lydia Nueva España, rejected all of petitioners'
claims in view of "Philippine Patent No. 254 — November 29, 1956", apparently referring to a local Patent
obtained by Pfizer and Co., presumably covering the same invention. Additionally, petitioners were
advised that the "Specification" they had submitted was "incomplete" and that responsive action should be
filed them four months from date of mailing, which was also August 5, 1959. Paper No. 6 precipitated a
series of communications between the aforementioned Patent Examiner and petitioners, who apparently
failed to meet the deadline of four months for filing their responsive action.
On October 9, 1961, petitioners requested for clarification of Paper No. 6, particularly as to why their
Specification was considered incomplete.
In response, Supervising Patent Examiner Nelia de Castro informed petitioners as follows:
With respect to applicant's request for clarification as to the meaning of the second to
the last sentence contained in Paper 6, attention is called to the fact that the specification
which was originally filed is incomplete and not in accordance with Rule 62 of the
Revised Rules. Said specification ends on Page 9 with the incomplete sentence "The
refractive indices of this crystalline phase were found —
It appears from further from a comparison between the submitted 9 pages of the
specification and 2 pages of the claims on one hand and the corresponding pages of the
legalized copy of the U.S. application on the other that the present application does not
correspond with the said certified copy of the U.S. Application. The present application
cannot therefore be granted priority date under section 15 are requested by applicant. 4
On July 3, 1962, petitioners submitted two complete copies of the Specification, which included nine
additional pages, and reiterated their request for priority right in the Philippines. 5
On October 2, 1962, Chief Patent Examiner Nicanor Mapili issued Paper No. 20 rejecting the additional
nine pages of Specification submitted by petitioners, and ruling:
xxx xxx xxx
The filing of the alleged complete copy Of the specification is an attempt to effect a
remedy to the previous finding of incompleteness as stated in the 2nd to the last
paragraph of Office Action mailed Aug. 5, 1959, marked Paper 6. This cannot be
allowed inasmuch as 9 pages of new matter are actually proposed to be added to the
specification.
This action is made final for purpose of appeal 6
Petitioners moved for reconsideration on the ground that their application falls under the exception
provided for in Rule 47 of the Revised Rules of Practice in Patent Cases in that the missing nine pages
submitted by them are not really new matter but a mere "minor informality."
On February 5, 1963, Chief Patent Examiner Mapili issued Paper No. 22 denying petitioners' Motion for
Reconsideration and the findings of Examiner de Castro as follows:
The basis of the examiner's finding is applicant's verification on file, exclusive of what
is in an alleged corresponding application in the US as evidenced by a certified copy of
record. The only use of such certified a copy is to give proof to an earlier filing date as
provided for such section 15 of the Patent Law and to use the inventors' oath therein to
complete the form requirements relative to his application in a dance with the provisions
of section 13(3) of the same law.
The provisions of section 15 of the Patent Law, under which the present application was
filed, provides for a for filing. This deadline cannot be extended directly or indirectly by
the filing of an imperfect application which can be freely amended or rectified at a later
date. If this can be done legally, the restrictive provisions of section 15 will be nullified. 7
Adversely affected, petitioners appealed to dent Director of Patents.
In their Brief filed with respondent Directors petitioners prayed for 1) revocation of the of the Chief Patent
Examiner, 8 2) admission of their Specification submitted on July 3, 1962; and 3) allowance of their
application on the merits.
On December 9, 1964, respondent Director rendered the questioned Decision, the dispositive portion of
which reads:
WHEREFORE, the appeal is hereby sustained. The additional pages to the specification
are hereby admitted, but the application shall not be extended priority rights under
section 15 of the Patent Law. Let the filing date of this application be changed from
March 5, 1954 to April 14, 1954. The application is hereby remanded to the Chief Patent
Examiner for proper action and for further examination on the merits. 9
In reaching the foregoing conclusion, respondent Director opined that the portions subsequently supplied
in the local application are not new matter a comparison between the foreign and local applications showed
that the foreign application included the missing portions of the local one. However, respondent Direct
qualified that petitioners' application may be considered complete only on April 14, 1954 when the
certified copy of the foreign application was submitted. Consequently, the instant application is to be
considered an ordinary application, not entitled to the right of priority granted by section 15 of the Patent
Law, inasmuch as said application was not complete within the meaning of Rules 47 and 48 of the Revised
Rules of Practice in Patent Case when first filed on March 5, 1954.
Petitioners filed a Motion for Partial Reconsideration of the above-mentioned Decision questioning that
portion of respondent Director's ruling barring them from entitlement to the right of priority under section
15 of the Patent Law contending that their appeal centered merely on the issue of whether or not the
additional nine pages of Specification they had submitted should be treated as new matter.
On June 10, 1965, respondent Director denied reconsideration for lack of merit, and explained:
... It should be emphasized that under Rule 262 (b) of the Revised Rules of Practice in
Patent Cases, it is stated that should the Director have any knowledge of any ground not
involved in the appeal for rejecting any claim, he may include in his decision a statement
to that effect with his reasons for so holding, which statement shall constitute a rejection
of the claim. Priority claims are covered by the rule: 10
On June 11, 1965, petitioners filed a Second Motion for reconsideration on the ground that priority rights
are governed by convention and treaty, while invention claims are governed exclusively by the Statute and
Rules of Practice. Respondent Director denied that Motion for lack of merit on August 24, 1965.
Hence, this recourse.
On January 9, 1967, we deemed the case submitted for decision, after petitioners had filed their Brief on
February 12, 1966, and respondent Director, through the Solicitor General, his Brief on June 9, 1966.
On June 9, 1968, Republic Act No. 5434 was enacted providing that final Orders and Decisions of the
Director of Patents in ex parte and inter partes proceedings are appealable to the Court of Appeals. Since
no provision for retroactivity exists in said Act this Tribunal has resolved to retain jurisdiction over this
case.
Petitioners maintain before this Court that:
RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT
PETITIONERS' APPLICATION, SERIAL NO. 952, MAY NOT BE TREATED AS
FILED UNDER SECTION 15 AS AMENDED, OF REPUBLIC ACT NO. 165
KNOWN AS THE PATENT LAW.
and in support thereof stress that:
1) The Director had no jurisdiction to decide the question of whether or not the
Philippine Application should be treated as filed under Section 15 of the Act;
2) The Director had no jurisdiction to decide the question of whether or not the
Philippine Application was incomplete under Rules 47 and 48 of the Revised Rules of
Practice in Patent Cases;
3) The Director misconstrued and misapplied Rules 47 and 48 of the Rules;
4) The Director misconstrued and misapplied Rule 262 (b) of the Rules.
For resolution, therefore, are the following issues: the scope of the powers of the Director of Patents in
cases appealed to him and the correctness of his application of Rules 47, 48 and 262(b) of the Revised
Rules of Practice in Patent Cases.
The facts unfolded call for an affirmance of respondent Director's rulings.
Explicit in Rule 262 of the Revised Rules of Practice in Patent Cases is the power and authority of
respondent Director to decide petitioners' appeal in the manner that he did, and we quote:
262. Decision by the Director. — (a) The Director, in his decision, may affirm or reverse
the decision of the Principal Examiner in whole or in part on the ground and on the
claims specified by the Examiner. The affirmance of the rejection of a claim on any of
the grounds specified constitutes a general affirmance of the decision of the Principal
Examiner on that claim, except as to any ground specifically reversed.
(b) Should the Director have knowledge of any grounds not involved in the appeal for
rejecting any claim he may include in his decision a statement to that effect with his
reasons for so holding which statement shall constitute a rejection of the claims. ...
In other words, respondent Director is empowered to consider grounds which may have come to his
knowledge other than those specifically raised in an appeal He need not confine himself only to issues
invoked. Besides, the question of new matter is inextricably linked with the right of priority on which
petitioners have anchored their application. As early as Paper No. 18, supra, the Supervising Patent
Examiner had concluded that inasmuch as the submitted pages did not correspond with the certified copy
of the U.S. application, "the present application cannot therefore be granted priority date under section 16
as requested by applicant." Again, in Paper No. 22, supra, the Chief Patent Examiner made mention of
petitioner' imperfect application and the fact that the deadline for filinf required by section 15 of the Patent
Law cannot be extended directly or indirectly otherwise "the restrictive provisions of section 15 will be
nullified."
It is also far-fetched for petitioners to claim that in ruling on petitioners' right of priority, respondent
Director had contravened Rule 254 of the Revised Rules of Practice in Patent cases, which provides that
the Director of Patents exercises no direct control, direction and supervision over the Principal Examiner
and the Executive Examiner. What respondent Director exercised was his authority to review the decisions
of Patent Examiners, as explicitly provided for in the last paragraph of the same Rules 254, as follows:
xxx xxx xxx
The only supervision which the Director of Patent may lawfully exercise over the
Principal Examiners and the Executive Examiner is a general supervision, exercised
through a review of the recommendations they may make for the grant of a patent, and
through a review of their decision by petition and appeal.
Similarly untenable is petitioners' contention that respondent Director had misconstrued and misapplied
Rules 47 and 48 of the Revised Rules of Practice in Patent Cases. The said Rules provide:
47. Application accepted and filed for examination only w hen complete — An
application for an invention patent will not be accepted and placed upon the files for
examination until all its required parts, complying with the rules relating thereto are
received except that 'certain minor informalities may be waived subject to subsequent
correction, whenever required.
If the papers and parts are incomplete, or so defective that they cannot be accepted as a
complete application for examination, the applicant will be notified; the papers will be
held four months for completion and if not by then completed, will be stored as an
abandoned incomplete application and eventually destroyed or otherwise disposed of.
48. Serial number and filing date of application — Complete applications are numbered
in regular order, and the applicant win be informed of the serial number and filing date
of the application by a filing receipt. The filing date of the applicant is the, date on which
the complete application, acceptable for placing on the files for examination, is received
in the Patent Office; or the date on which the last part completing such application is
received, in the case of an incomplete or defective application completed within four
months. The Executive Examiner shall be in charge of fixing the filing date and serial
number of an application.
Under the aforecited provisions, it is imperative that the application be complete in order that it may be
accepted. It is essential to the validity of Letters Patent that the specifications be full, definite, and
specific. 11 The purpose of requiring a definite and accurate description of the process is to apprise the
public of what the patentee claims as his invention, to inform the Courts as to what they are called upon to
construe, and to convey to competing manufacturers and dealers information of exactly what they are
bound to avoid. 12
The specification which petitioners submitted on March 5, 1954 was far from complete. That defect was
one of substance and not merely one of form. What petitioners claimed as their invention was not
completely determinable therefrom. Petitioners' application could be deemed as complete only on July 2,
1963 when they submitted the additional pages on the Specifications and Claims. Respondent Director,
therefore, did not err in converting petitioners' application into an ordinary application filed on April 14,
1954, not only for their having failed to complete their application within the four-month period provided
for by Rules 47 and 48, Revised Rules of Practice in Patent Cases, and as required of them by Paper No.
6, but also for their having failed to file a complete application within twelve months from March 16, 1953,
the date of the foreign application For, to be entitled to the filing date of the patent application, an invention
disclosed in a previously filed application must be described within the instant application in such a manner
as to enable one skilled in the art to use the same for a legally adequate utility. 13

All told, we sustain respondent Director's findings in the absence of error or abuse of power or lack of
jurisdiction or grave abuse of discretion. 14 We have held that in the absence of arbitrariness, and provided
they are supported by substantial evidence, as in this case, the conclusions reached by the Director of
Patents are to be accorded respect and must be upheld. 15

WHEREFORE, we hereby affirm the Decision of respondent Director of Patents dated December 9, 1964.

SO ORDERED.
[G.R. No. 113407. July 12, 2000] by Incinerators

(6 )John Bernard Watkins, Harry Greaves 30819[7]

and Chen Woo Chin- Issuance of letters
LOTHAR SCHUARTZ, FRIEDEL VERDERBERG, UDOLF KUEHNE, DIETER FISCHER, patent for Preservation Composition
JOHN BERNARD WATKINS, HARRY GREAVES, CHEN WOO CHIN, YOSHIMI
IWASAKI, FABIO CARLI, MORTIMER THOMPSON, MALCOLM JOHN LAW, (7) Fabio Carli- Issuance of letters patent 31968[8]
MICHIBAZU OCHI, KENJI SHIGEMATSU, ENI SHINOZAKI, ROBERT CABI- for Pharmaceutical Compositions
AKMAN, ARTHUR SPRENGER, REMY SIMOND and HEINRICH EVBERGGER,
petitioners, vs. THE HONORABLE COURT OF APPEALS (SPECIAL FIFTH DIVISION)
(8) Lothar Schuartz, Friedel Verderberg, 31974[9]
and THE BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY
Rudolf Kuehne, and Dieter Fischer- Issuance
TRANSFER, respondents.
of letters patent for Process for Producing
Copper-Laminated Base Material for Printed
RESOLUTION Circuit Boards
PARDO, J.:
(9) Malcolm John Law- Issuance of letters 32050[10]
Petitioners appeal via certiorari from the decision[1]of the Court of Appeals dismissing their appeal from patent for Electrodeposition of Chromium and
the resolution of the Director of Patents that denied with finality their petition for revival of patent Chromium Bearing Alloys. [11]
applications. Petitioners patent applications lacked certain requirements and the Bureau informed the law firm
On different dates, petitioners applied to the Bureau of Patents, Trademarks and Technology Transfer about it, through correspondences called Office Actions. As petitioners law firm did not respond to these
for registration of patents. They hired the law firm Siguion Reyna, Montecillo and Ongsiako to process office actions within the prescribed time, notices of abandonment were sent on the following dates:
their patent applications in the Philippines, respectively identified as follows:
Serial Nos. Date of Office Action Date of Abandonment
Applicant Serial No.
(1) 23354 March 20, 1987 July 21, 1987
(1) Michibazu Ochi, Kenji Shigematsu and 23354[2]
Eni Shinozaki- Issuance of letters patent (2) 29630 June 18, 1986 October 21, 1986
for Hackling Drum Room or Chamber
at the Self-Feeding Equipment for (3) 29898 June 11, 1987 June 22, 1987
Threshing of Upper Hackling System
(2) Robert Cabi-Akman, Arthur Sprenger 29630[3] (4) 30112 June 3, 1987 August 6, 1987
and Remy Simond- Issuance of letters
patent for Colour Value Measurement (5) 30548 June 10, 1987 August 18, 1987

(3) Heinrich Evbergger- Issuance of letters 29898[4] (6) 30819 January 28, 1987 July 28, 1987
patent for Tool for Moulding the Top Past
of a Plastic Container (7) 31968 January 14, 1987 July 15, 1987

(4) Mortimer Thompson- Issuance of 30112[5] (8) 31974 July 23, 1987 September 24, 1987
letters patent for Tamper Evident Closures
and Packages (9) 32050 March 31, 1987 June 1, 1987[12]

(5) Yoshimi Iwasaki- Issuance of letters 30548[6] On December 7, 1987, two employees of the law firm, George Bangkas and Rafael Rosas were
patent for Method Generation for Hot Gas dismissed from employment. Prior to the dismissal, these employees worked with the patent group of the
law firm and had the duty, among others, of getting the firms letters and correspondence from the Bureau
of Patents.
Immediately after their dismissal, the law firm conducted an inventory of all the documents entrusted
to them. It was then that the firm learned about the notices of abandonment.
Thereafter, petitioners, through the law firm, filed with the Bureau of Patents separate petitions for
revival of the patent applications on the following dates:
Serial Nos. Date Petition Filed
On August 13, 1992, the Court of Appeals dismissed the consolidated appeal for being filed beyond
the 15-day reglementary period to appeal. There was an unreasonable delay before the petitions to revive
applications were filed. Moreover, petitioners patent applications could not be a proper subject of a
consolidated appeal because they covered separate and distinct subjects and had been treated by the Bureau
of Patents as separate and individual applications. Specifically the decision provides:
WHEREFORE, for reasons above stated and in the light of the applicable law on the matter, this petition
for review on appeal from the order/decision of the Director of Bureau of Patents is hereby DISMISSED
with costs against the appellants.

(1) 23354 March 3, 1988 SO ORDERED. [16]

On September 14, 1992, petitioners moved for reconsideration of the Court of Appeals decision, which
the court denied on January 7, 1994. The appellate court found no cogent reason to justify the reversal or
(2) 29630 March 3, 1988
modification of its decision.[17]
Aggrieved, petitioners filed the instant petition for review on certiorari.[18]
(3) 30122 January 15, 1988/February 29, 1988
At issue is the validity of the Court of Appeals dismissal of the consolidated appeal of petitioners
(4) 30548 January 25, 1988/March 1, 1988 from the Director of Patents denial of the revival of their patent applications.
Petitioners contend that the Court of Appeals committed grave abuse of discretion when it held that
(5) 30819 May 27, 1988/July 15, 1988 the consolidated appeal was filed out of time. They were appealing from the resolution of the Director of
Patents dated January 31, 1991, which denied the petition for revival of the patent applications. They
(6) 31968 January 21, 1988/March 1, 1988 received a copy of the resolution, through their patent attorneys, on February 7, 1991, and filed the
consolidated appeal seven (7) days after, or on February 14, 1991. According to petitioners, these dates
(7) 31974 March 14, 1988 clearly established that their appeal was seasonably filed.
The contention is not meritorious. If the facts above-mentioned were the sole basis of determining
(8) 32050 March 17, 1988 whether the appeal was filed on time, petitioners argument would be correct.However, petitioners lost
sight of the fact that the petition could not be granted because of laches. Prior to the filing of the petition
For Serial No. 29898, the applicant abandoned his application, for which reason no petition for revival was for revival of the patent application with the Bureau ofPatents, an unreasonable period of time had lapsed
filed.[13] due to the negligence of petitioners counsel. By such inaction, petitioners were deemed to have forfeited
their right to revive their applications for patent.
On January 31, 1991, Director Luis M. Duka, Jr. of the Bureau of Patents denied all the petitions for
revival because they were filed out of time. The dispositive portion specifically provides: Facts show that the patent attorneys appointed to follow up the applications for patent registration had
been negligent in complying with the rules of practice prescribed by the Bureau of Patents. The firm had
WHEREFORE, in consideration of the foregoing premises, all the petitions for revival of the above- been notified about the abandonment as early as June 1987, but it was only after December 7, 1987, when
captioned abandoned applications bearing Serial Nos. 23354, 29630, 29898, 30112, 30548, 30819, 31968, their employees Bangkas and Rosas had been dismissed, that they came to know about it. This clearly
31974, and 32050, are hereby denied and no further petitions nor requests for reconsideration hereof shall showed that petitioners counsel had been remiss in the handling of their clients applications. [19]
be entertained hereafter.
A lawyers fidelity to the cause of his client requires him to be ever mindful of the responsibilities that
SO ORDERED. should be expected of him. A lawyer shall not neglect a legal matter entrusted to him.[20]In the instant case,
petitioners patent attorneys not only failed to take notice of the notices of abandonment, but they failed to
revive the application within the four-month period, as provided in the rules of practice in patent cases.
Makati, Metro Manila, Philippines, this 31st day of January 1991.
These applications are deemed forfeited upon the lapse of such period. [21]

LUIS M. DUKA, JR.

Hence, we can not grant the present petition.[22] The Court of Appeals did not err or gravely abuse its
Director III [14]
discretion in dismissing the petition for review.
On February 14, 1991, petitioners appealed the above resolution of the Bureau of Patents to the Court of
Appeals.[15]
 WHEREFORE, the Court DENIES the petition for lack of merit. The Court AFFIRMS the decision
of the Court of Appeals in CA-G. R. SP No. 24175.
No costs.
SO ORDERED.
G.R. No. L-22221 August 31, 1965 Parke Davis & Company filed a written opposition setting up the following affirmative defenses: (1) a
compulsory license may only be issued to one who will work the patent and respondent does not intend to
PARKE, DAVIS and COMPANY, petitioner, work it itself but merely to import the patented product; (2) respondent has not requested any license to
vs. work the patented invention in the Philippines; (3) respondent is not competent to work the patented
DOCTORS' PHARMACEUTICALS, INC., ET AL., respondents. invention; (4) to grant respondent the requested license would be against public interest and would only
serve its monetary interest; and (6) the patented invention is not necessary for public health and safety.
Ross, Selph and Carrascoso for petitioner.
Manuel Serapio, Jr., for respondent Doctors' Pharmaceuticals, Inc. At the hearing held on November 14, 1962, respondent abandoned the second, third and fourth grounds of
Solicitor General for respondent Director of Patents. its petition and confined itself merely to the first ground, to wit: that the patented invention relates to
medicine and is necessary for public health and safety. Then, after the parties had presented oral and
documentary evidence and submitted memoranda in support of their contentions, the Director of Patents
BAUTISTA ANGELO, J.:
rendered on November 15, 1963 his decision granting to respondent the license prayed for. The following
is the dispositive part of the decision:
Parke Davis & Company, petitioner herein, is a foreign corporation organized and existing under the laws
of the State of Michigan, U.S.A., with principal office in the City of Detroit, and as such is the owner of a
WHEREFORE, the Respondent-Patentee is hereby ordered to grant the Petitioner a license under
patent entitled "Process for the Manufacturing of Antibiotics" (Letters Patent No. 50) which was issued by
Letters Patent No. 50. The parties hereto are hereby ordered to submit to me, within THIRTY
the Philippine Patent Office on February 9, 1950. The patent relates to a chemical compound represented
(30) days from their receipt of a copy of this decision a licensing agreement, and in default thereof,
by a formula commonly called chloramphenicol. The patent contains ten claims, nine of which are process
they may submit within the same period their respective proposals. It must be shown that
claims, and the other is a product claim to the chemical substance chloramphenicol.
negotiations as to the terms and conditions thereof have been made between the parties, and if
there are points of disagreement I shall fix such terms and conditions.
Respondent Doctors' Pharmaceuticals, Inc., on the other hand, is a domestic corporation duly organized
under our Corporation Law with principal office situated in Caloocan City. On October 9, 1959, its general
If, within the said period, no licensing agreement is filed or no negotiations therefor transpires
manager wrote a letter to Parke Davis & Company requesting that it be granted a voluntary license "to
between the parties, I shall issue the licensing agreement in such terms and conditions as may be
manufacture and produce our own brand of medicine, containing chloramphenicol, and to use, sell,
distribute, or otherwise dispose of the same in the Philippines under such terms and conditions as may be just and reasonable under the circumstances.
deemed reasonable and mutually satisfactory," to which Parke Davis & Company replied requesting
information concerning the facilities and plans for the manufacture of chloramphenicol of Doctors' In due time, Parke Davis & Company interposed the present petition for review.
Pharmaceuticals, Inc. The latter answered saying that it did not intend to
manufacture chloramphenicol itself but its purpose was merely to use it in its own brand of medicinal In this appeal, Parke, Davis & Company imputes to the Director of Patents eleven errors which may be
preparations, emphasizing that its request for license was based on an express provision of the Philippine briefly stated as follows:
law which has reference to patents that had been in existence for more than three years from their dates of
issue. Hence, it reiterated its request that said license be granted under such terms and conditions as may 1. Respondent has not proven the ground relied upon by it in its petition;
be reasonable and mutually satisfactory.
2. Respondent Doctors' Pharmaceuticals, Inc. has no intention to work the patent but merely to
As apparently Parke Davis & Company was not inclined to grant the request for a voluntary license, import the patented article chloramphenicol;
Doctors' Pharmaceuticals, Inc. filed on March 11, 1960 a petition with the Director of Patents, which was
later amended, praying that it be granted a compulsory license under Letters Patent No. 50 granted to Parke
3. Petitioner's invention is being worked in the Philippines;
Davis & Company based on the following grounds: (1) the patented invention relates to medicine and is
necessary for public health and safety; (2) Parke Davis & Company is unwilling to grant petitioner a
voluntary license under said patent by reason of which the production and manufacture of needed medicine 4. Respondent is not competent to work petitioner's patented invention, that is, to
containing chloramphenicol has been unduly restrained to a certain extent that it is becoming a monopoly; manufacture chloramphenicol and sell the same in the Philippines;
(3) the demand for medicine containing chloramphenicol is not being met to an adequate extent and on
reasonable prices; and (4) the patented invention is not being worked in the Philippines on a commercial 5. The grant of the license is against public interest;
scale. In its petition, Doctors' Pharmaceuticals, Inc. prayed that it be authorized to manufacture, use, and
sell its own products containing chloramphenicol as well as choose its own brand or trademark. 6. The license requested by respondent will not serve any legitimate purpose;

7. Respondent is not competent to use the license requested;

 8. The theory that a compulsory license under a patented invention, after the expiration of three
years after the grant of the letters patent, may be granted to one who petitions for a license, is
erroneous;
9. Respondent Director of Patents cannot issue an in personam order against petitioner to grant
the licence;
10. Respondent Director of Patents erred in not considering the defenses interposed by petitioner
to the application for license; and
11. Respondent Director of Patents erred in rendering his decision ordering petitioner to grant a
compulsory license to co-respondent Doctors' Pharmaceuticals, Inc.
As may be gleaned from the errors above pointed out, the principal issue raised by petitioner boils down
to whether or not the Director of Patents gravely abused his discretion in ordering the grant of compulsory
license to respondent under Section 34(d) of Republic Act No. 165 for the manufacture of preparations
containing chloramphenicol under Letters Patent No. 50 issued to petitioner despite the written objection
interposed against it by the latter based on the ground therein enumerated.
The pertinent statutory provisions that govern the issues raised herein are found in Chapter VIII of
Republic Act No. 165, as amended, which for ready reference are hereunder quoted:
CHAPTER VIII. — Compulsory Licensing
SEC. 34. Grounds for compulsory license. — Any person may apply to the Director for the grant
of a license under a particular patent at any time after the expiration of three years from the date
of the grant of the patent, under any of the following circumstances:
(a) If the patented invention is not being worked within the Philippines on a commercial scale,
although capable of being so worked, without satisfactory reason;
(b) If the demand for the patented article in the Philippines is not being met to an adequate extent
and on reasonable terms, without satisfactory reason;
(c) If by reason of the refusal of the patentee to grant a license or licenses on reasonable terms, or
by reason of the conditions attached by the patentee to licenses or to the purchase, lease or use of
the patented article or working of the patented process or machine of production the establishment
of any new trade or industry in the Philippines is prevented, or the trade or industry therein is
unduly restrained; or
(d) If the patented invention relates to food or medicine or is necessary for public health or public
safety.
The term "worked" or "working" as used in this section means the manufacture and sale of a patented
article, or the carrying on of a patented process or the use of a patented machine for production, in or by
means of a definite and substantial establishment or organization in the Philippines and on a scale which
is adequate and reasonable under the circumstances.
SEC. 35. Notice and hearing. — Upon the filing of a petition under section thirty-four hereof,
notice shall be given in the same manner and form as that provided in section thirty-one, Chapter
VII hereof.
SEC. 36. Grant of license. — If The Director finds that a case for the grant of a license under
section thirty-four hereof has been made out, he may order the grant of an appropriate license and
in default of an agreement among the parties as to the terms and conditions of the license he shall
fix the terms and conditions of the license in the order.
The order of the Director granting a license under this Chapter, when final, shall operate as a deed
granting a license executed by the patentee and the other parties in interest.
A cursory reading of the provisions above-quoted will reveal that any person may apply for the grant of a
license under any of the circumstances stated in Section 34 (a), (b), (c) or (d), which are in the disjunctive,
showing that any of the circumstances thus enumerated would be sufficient to support the grant, as
evidenced by the use of the particle "or" between paragraphs (c) and (d). As may be noted, each of these
circumstances stands alone and is independent of the others. And from them we can see that in order that
any person may be granted a license under a particular patented invention relating to medicine under
Section 34(d), it is sufficient that the application be made after the expiration of three years from the date
of the grant of the patent and that the Director should find that a case for granting such license has been
made out. Since in the instant case it is admitted by petitioner that the chemical
substance chloramphenicol is a medicine, while Letters Patent No. 50 covering said substance were
granted to Parke Davis & Company on February 9, 1950, and the instant application for license under said
patent was only filed in 1960, verily the period that had elapsed then is more than three years, and so the
conditions for the grant of the license had been fulfilled. We find, therefore, no error in the decision of the
Director of Patents on this aspect of the controversy.
The claim that respondent has not proven the ground it relies upon in its petition to the effect
that chloramphenicol is not only a medicine but is indispensable to public health and safety is not quite
correct, for the main reliance of respondent is on the fact that chloramphenicol is an invention that is
related to medicine and as such it comes under Section 34(d) of Republic Act 165. Respondent does not
predicate its claim on the fact that invention is necessary for public health or public safety, although either
ground is recognized as valid in itself for the grant of a license under said Section 34(d). Indeed, it is
sufficient that the invention be related to medicine. It is not required that it be at the same time necessary
for public health or public safety. Moreover, the claim of petitioner that the word "necessary" means
"indispensable" does not hold water, for necessity admits of many degrees, as it is clearly explained in
Bouvier's Law Dictionary. 1
But, even if we assume that the patented invention is not only related to medicine but to one that is also
indispensable or necessary to public health and public safety, here we can say that both conditions are
present, since according to Dr. Leon V. Picache, who testified in this case, the
substance chloramphenicol is one that constitutes an effective cure for gastro-enteritis diseases, while the
inventor's own specifications attest that chloramphenicol is a "therapeutic agent notably in the case of
shigella pradysenteria. Chloramphenicol is much more active than streptomycin" and "is the first antibiotic
exhibiting a high degree of activity against gram negative bacteria which is therapeutically effective upon
oral administration" (Exhibit 6). Again, Dr. Querbral-Greaga in the June, 1961 issue of the Scientific
Digest, a publication of the Manila Medical Society, affirmed that antibiotics like chloramphenicol have
played a very important role in the control of diarrhea-enteritis which is the third most rampant killer of
infants in this country.
such a grant as was done by said Director. Though in substance such is the effect of the grant, it cannot
however be said that the Director of Patents automatically ordered the grant of the license for it was only
after hearing and a careful consideration of the evidence that he ordered the grant. In fact, the decision
states that the Director has carefully weighed the evidence of the parties and the arguments in support of
their contentions and that it was only after analyzing the same that he became convinced of the right of
respondent to the compulsory license he prayed for.

The claim that a compulsory license cannot be granted to respondent because the latter does not intend to
work the patented invention itself but merely to import it has also no legal nor factual basis. In the first
place, Section 34 of Republic Act No. 165 does not require the petitioner of a license to work the patented
invention if the invention refers to medicine, for the term "worked" or "working" used in said section does
not apply to the circumstance mentioned in subsection (d), which relates to medicine or to one necessary
for public health and public safety. Indeed, the Director of Patents has already correctly stated in previous
cases that, in its strict sense, the term "worked" or "working" mentioned in the last paragraph of Section
34 of the Patent Law "has no applicability to those cited patented matters and the qualification of the
petitioner to work the invention is immaterial, it being not a condition precedent before any person may
apply for the grant of the license." In the second place, it is not the intention of respondent to work or
manufacture the patented invention itself but merely to manufacture its brand of medicinal preparations
containing such substance. And even if it be required that respondent should work itself the invention that
it intends to use in the manufacture of its own brand of medicinal preparations said respondent would not
be found wanting for it is staffed with adequate and competent personnel and technicians; it has several
laboratories where medicines are prepared for safety and quality; it is equipped with machines for
subdividing antibiotics; and it has capsule-filling machines and adequate personnel and facilities to test
the quality of chloramphenicol.
Finally, with regard to the contention that petitioner is entitled to the exclusive use of the invention for a
term which under the law extends to 17 years, suffice it for us to quote what the Director of Patents says
on this point:
The right to exclude others from the manufacturing, using, or vending an invention relating to
food or medicine should be conditioned to allowing any person to manufacture, use, or vend the
same after a period of three years from the date of the grant of the letters patent. After all, the
patentee is not entirely deprived of any proprietary right. In act, he has been given the period of
three years of complete monopoly over the patent. Compulsory licensing of a patent on food or
medicine without regard to the other conditions imposed in Section 34 is not an undue deprivation
of proprietary interests over a patent right because the law sees to it that even after three years of
complete monopoly something is awarded to the inventor in the form of a bilateral and workable
licensing agreement and a reasonable royalty to be agreed upon by the parties and in default of
such agreement, the Director of Patents may fix the terms and conditions of the license. (See Sec.
36, Rep. Act No. 165)
WHEREFORE, the decision appealed from is affirmed, with costs against petitioner.

Finally, we may add that it is not a valid ground to refuse the license applied for the fact that the patentee
is working the invention and as such has the exclusive right to the invention for a term of 17 years (Sections
20 & 21, Republic Act 165) as claimed in the third assignment of error, the reason for it being that the
provision permitting the grant of compulsory license is intended not only to give a chance to others to
supply the public with the quantity of the patented article but especially to prevent the building up of patent
monopolies. 2

The point is raised that the grant of the license is against public interest for it would force Parke, Davis &
Company to close or stop manufacturing the patented invention which would thereby adversely affect local
employment and prejudice technology and chemical manufacturing and cut off the local supply of
medicinal products. It should be noted, however, that respondent does not intend to compete with petitioner
in the manufacture of chloramphenicolfor it would either obtain the same from petitioner or would import
whatever it may need in the manufacture of its own brand of medicinal preparations. But even assuming
that the consequence the petitioner has envisioned may come true if the license is granted, still that should
not stand in the way of the grant for that is in line with an express provision of our law. The grant of such
license may work disadvantage on petitioner but the law must be observed until modified or repealed. On
the other hand, there is the advantage that the importation of chloramphenicol might redound to the benefit
of the public in general as it will increase the supply of medicines in our country
containing chloramphenicol thereby reducing substantially the price of this drug.

We find no merit in the contention that the Director of Patents erred in ordering the grant of the patent to
respondent for the simple reason that the application does not automatically entitle the person applying to
G.R. No. L-27793 March 15, 1928
PATRICK HENRY FRANK and WILLIAM HENRY GOHN, plaintiff-appellees,
vs.
CONSTANCIO BENITO, defendant-appellant.
Abad Santos, Camus, Delgado and Recto for appellant.
J. W. Ferrier for appellees.
STATEMENT
Plaintiffs allege that they are the owners of a patent covering hemp-stripping machine No. 1519579 issued
to them by the United States Patent Office of December 16, 1924, and duly registered in the Bureau of
Commerce and Industry of the Philippine Islands under the provisions of Act No. 2235 of the Philippine
Legislature on March 17, 1925. That the important feature of the machine "is a spindle upon which the
hemp to be stripped is wound in the process of stripping." That plaintiffs have for some time been
manufacturing the machine under the patent. That the defendant manufactured a hemp-stripping machine
in which, without authority from the plaintiffs, he has embodied and used such spindles and their method
of application and use, and is exhibiting his machine to the public for the purpose of inducing its purchase.
That the use by the defendant of such spindles and the principle of their application to the stripping of
hemp is in violation of, and in conflict with, plaintiffs' patent, together with its conditions and
specifications. That the defendant's machine is an infringement upon the patent granted the plaintiffs, and
plaintiffs pray for an injunction that the defendant be required to account to plaintiffs for any profits he
may have made by reason of such infringement, and for a temporary injunction restraining him in the
manufacture of other machines of the same kind of its exhibition, and that upon the final hearing, the
injunction be made permanent.
The defendant demurred to the complaint upon the ground that the facts alleged therein do not constitute
a cause of action, that it is ambiguous and vague, and that it was error to make William Henry Gohn
plaintiff.
After the demurrer was overruled, the defendant filed an answer in which he denied all of the material
allegations of the complaint, except those which are hereinafter admitted, and as a special defense alleges:
First. That the defendant has never had at any time nor does he have any knowledge of any
suppose invention of the plaintiffs of whatever kind of hemp-stripping machine, whether patented
or not, which has circulated or not in the Philippine Islands for the sale thereof or its private
exploitation.
Second. That not having had any knowledge of any kind of hemp-stripping machine supposed to
have been invented by the plaintiffs, it never occurred to the defendant to imitate the unknown
invention of the plaintiffs.
Third. That the hemp-stripping machine of the plaintiffs, known as "La Constancia," patent of
which is duly registered, has its characteristics and original invention belonging to the defendant
which consist of two pinions with horizontal grooves which form the tool for extracting the fibers
between a straight knife upon another which is cylindrical and provided with teeth and on the
center of said two pinions there is a flying wheel its transmission belt connecting it with the motor.
As a counterclaim, the defendant alleges:
First. That he reproduces in this paragraph each and every allegation contained in the preceding
special defense, as though the same were literally copied here.
Second. That by the filing of the complaint of the plaintiffs and the issuance, as a consequence
thereof, of a writ of injunction in this case, unduly obtained by the said plaintiffs through false
and fraudulent representations, the defendant has suffered damages in the sum of five thousand
pesos (P5,000), Philippine currency.
Wherefore, the defendant prays this court that he be absolved from the herein complaint, and that
the plaintiffs be ordered jointly and severally to pay the sum of five thousand pesos (P5,000),
Philippine currency, as damages, with legal interest thereon from the filing of this action until
fully paid; with the costs of this case, as well as any other remedy that may be proper in law and
equity.
The lower court rendered judgment in legal effect granting the plaintiffs the injunction prayed for in their
complaint, and absolving them from defendant's counterclaim, and judgment against the defendant for
costs.
The defendant's motion for a new trial was overruled, and on appeal, he contends that the court erred in
holding the same spindles used by the parties in this case, though different in material and form, have the
same utility and efficiency and that they are the same, and in finding that spindles used by the defendant
are an imitation of those of the plaintiffs, and in finding that the defendant infringed upon plaintiffs' patent,
and in not rendering judgment against the plaintiffs, requiring them to pay defendant P5,000 as damages,
and in enjoining the appellant from the manufacture, use and sale of this hemp-stripping machine.
JOHNS, J.:
It is conceded that on December 16, 1924, the United States Patent Office issued to the plaintiffs the patent
in question No. 1519579, and it was duly registered in the Bureau of Commerce and Industry of the
Philippine Islands on March 17, 1925. After such registration the patent laws, as they exist in the United
States for such patent, are then applied to and are in force and effect in the Philippine Islands. (Vargas vs.
F. M. Yaptico & Co., 40 Phil., 195.) In the instant case, the original patent is in evidence, and that decision
further holds that:
The burden of proof to substantiate a charge of infringement is with the plaintiff. Where, however,
the plaintiff introduces the patent in evidence, if it is in due form, it affords a prima
facie presumption of its correctness and validity. The decision of the Commissioner of Patents in
 granting the patent is always presumed to be correct. The burden the shifts to the defendant to
overcome by competent evidence this legal presumption.
That is to say, the patent, which in the instant case is in due form, having been introduced in
evidence, "affords a prima facie presumption of its correctness and validity." Hence, this is not a
case of a conflict between two different patents. In the recent of Temco Electric Motor Co. vs.
Apco Mfg. Co., decided by the Supreme Court of the United States on January 3, 1928, Advance
Sheet No. 5, p. 192, the syllabus says:
An improper cannot appropriate the basic patent of another, and if he does so without license is
an infringer, and may be used as such.
And on page 195 of the opinion, it is said:
It is well established that an improver cannot appropriate the basic patent of another and that the
improver without a license is an infringer and may be sued as such.
Citing a number of Federal decisions.
The plans and specifications upon which the patent was issued recite:
Our invention relates to hemp stripping machines and it consists in the combinations,
constructions and arrangements herein described and claimed.
An object of our invention is to provide a machine affording facilities whereby the operation of
stripping hemp leaves may be accomplished mechanically, thereby obviating the strain incident
to the performance of hemp stripping operations manually.
And on page 3 of the application for patent, it is said:
Obviously, our invention is susceptible of embodiment in forms other than the illustrated herein
and we therefore consider as our own all modifications of the form of device herein disclosed
which fairly fall within the spirit and scope of our invention as claimed.
We claim:
1. In a hemp stripping machine, a stripping head having a supporting portion on which the hemp
leaves may rest and having also an upright bracket portion, a lever of angular formation pivotally
attached substantially at the juncture of the arms thereof of the bracket portion of the stripping
head, whereby one arm of the lever overlies the supporting portion of the stripping head, a blade
carried by said one arm of the lever for cooperating with said supporting, means connected with
the other arm of the lever and actuating the latter to continously urge the blade toward said
supporting portion of the stripping head, and a rotatable spindle positioned adjacent to said
stripping head, said spindle being adapted to be engaged by hemp leaves extending across said
supporting portion of the stripping head underneath said blade and being operable to draw said
hemp leaves in the direction of their length between said supporting portion of the stripping head
and said blade.
2. In a hemp stripping machine, a stripping head having a horizontal table portion, a rest supported
upon said table portion, a stripping knife supported upon the table for movement into and out of
position to cooperate with the rest to strip hemp leaves drawn between the knife and the rest, and
power driven means adapted to be engaged with said hemp leaves and to pull the latter between
the knife and rest, said power driven means including a rotating spindle, said spindle being free
at one end and tapering regularly toward its free end.
3. In a hemp stripping machine, a stripping head having a horizontal table portion and an upright
bracket portion a rest holder adjustably on the table portion, a rest resiliently supported by the
holder, a knife carrying lever of angular formation and being pivotally attached substantially at
the juncture of the arms thereof to the bracket portion of the stripping head, whereby one arm of
the lever overlies the rest, a blade adjustably supported on said one arm, for cooperating with said
rest and gravity means connected with the other arm of the lever and actuating the latter to
continously urge the blade toward the rest.
The spindle upon which the patent was obtained, together with the spindle upon which the defendant relies
are exhibits in the record and were before the court at the time this case was argued. The spindle of the
plaintiffs was made of wood, conical in shape and with a smooth surface. That of the defendant was
somewhat similar in shape, but was made of metal with rough surface, and the defendant claims that his
spindle was more effective and would do better work than that of the plaintiffs. Be that as it may, the
plaintiffs have a patent for their machine, and the defendant does not have a patent, and the basic principle
of plaintiffs' patent is the spindle upon which they rely, together with its specified manner and mode of
operation, and in the final analysis, it must be conceded that the basic principle of the spindle upon which
the defendant relies is founded upon the basic principle of the spindle for which the plaintiffs have a patent.
Assuming, without deciding, that the defendant's spindle is an improvement upon and is a better spindle
than that of the plaintiffs, yet, under the authority above cited, the defendant had no legal right to
appropriate the basic principle upon which the plaintiffs obtained their patent. The plaintiffs having
obtained their patent, which was duly registered in the Philippines Islands, the defendant cannot infringe
upon its basic principle.
The defendant contends that the basic principle of the spindle was a very old one in mechanics, and that
there was nothing new or novel in the application of it by the plaintiffs. Be that as it may, the plaintiffs
applied for and obtained their patent with its specifications which are attached to, and made part of, the
patent, and the proof is conclusive that the defendant is infringing upon the basic principle of the spindle
as it is defined and specified in plaintiffs' patent.
The judgment of the lower court is affirmed, with costs. So ordered.
G.R. No. L-4720 January 19, 1909
CARLOS GSELL, plaintiff-appellee,
vs.
VALERIANO VELOSO YAP-JUE, defendant-appellant.
Chicote and Miranda, for appellant.
Haussermann and Cohn, for appellee.
CARSON, J.:
This an appeal from a final order of the Court of First Instance of the city of Manila, in contempt
proceedings prosecuted under the provisions of section 172 of the Code of Civil Procedure. The principal
case to which these proceedings are ancillary, was an action to enjoin infringement of a patented process
for the manufacture of curved handles for canes, parasols, and umbrellas. In that case plaintiff established
his title to a valid patent covering the process in question, and obtained against this defendant a judgment,
granting a perpetual injunction restraining its infringement, which judgment was affirmed by this court on
appeal (6 Phil. Rep., 143.) The order was couched in the following terms:
It is ordered that the defendant abstain from manufacturing canes and umbrellas with a curved
handle by means of a lamp or blowpipe fed with mineral oil or petroleum, which process was
protected by patent No. 19228, issued in favor of Henry Gsell, and by him transferred to Carlos
Gsell —
and the process therein mentioned is fully described in the following statement which accompanied the
application for the patent:
After the canes have been cut for cane or umbrella handles, the outsides are thoroughly cleaned.
This operation having been performed, they are then trimmed and the interior cleaned by means
of a gimlet of about 15 centimeters in length operated by a wheel, by means of which the knots
inside are broken. There is then introduced to a depth of about 15 centimeters a piece of very
clean bamboo, which completely fills the hole made by the gimlet, thereby giving to the cane the
necessary strength to resist the heat of the lamp or blowpipe without breaking or cracking.
This operation having been performed, the cane, the end of which is attached to a fixed point, is
given the shape of a hook or some other form by means of fire and pressure. Once the cane has
been shaped as desired, it is allowed to cool, and is then cleaned, varnished, and ornamented at
will.
This industry requires skillful, handiwork, owing to the great risk engendered by the treatment of
such fragile material as a light cane. On the other hand, however, it affords large profits to the
workman.
NOTE. — The patent applied for shall be for the industrial product "cane handles for walking
sticks and umbrellas, curved by means of a small lamp or blowpipe, fed by petroleum or mineral
fuel."
Thereafter the defendant continued to manufacture curved cane handled for walking sticks and umbrellas
by a process in all respectes identical with that used by the plaintiff under his patent, except only that he
be substituted for a lamp fed with petroleum or mineral oil, lamp fed with alcohol, as appears from a
stipulation entered into between plaintiff and defendant in the following terms:
The plaintiff and defendant agree upon the fact that the defendant has used and is still using a
process for curving handles of canes and umbrellas identical with that described in the application
for the patent by the plaintiff with the exception that he has substituted for the lamp fed with all
other lamp fed with alcohol.
Contempt proceedings were instituted against the defendant in the month of February, 1904, the plaintiff
in the original action alleging that the —
Defendant in disobediencce of the judgment of the same was and is now engaged in the unlawful
manufacture of umbrella handles by the identical process described in and protected said patent,
No. 19228, or a process so like the patented process as to be indistinguishable.
The trial court found the defendant "not guilty" of contempt as charged; and this court, on appeal, held that
— a character that it could be made patent by the mere annunciation of the acts performed by the defendant,
which are alleged to constitute the said violation. These acts were not clearly and manifestly contrary to
the precise terms of the prohibition. According to the express language of the judgment, the prohibition is
against the manufacture of canes and umbrellas with curved handles by means of the use of a cool or
mineral oil-burning lamp or blowpipe and the parties have stipulated that the defendant did not use a coal
or mineral oil-burning lamp but an alcohol-burning lamp.
The question, however, arises as to whether that prohibition included the substitution of alcohol
for coal or mineral oil. In more abstract and general terms, the appellant propounds this question
in his brief, as follows: "The question presented by this appeal is whether or not the use of a
patented process by a third person, without license or authority therefor, constitutes an
infringement when the alleged infringer has substituted in lieu of some unessential part of the
patented process a well-known mechanical equivalent." It has seen that by its very terms this
question implies in the present case the existence of two fundamental facts which must first be
duly established, viz: (1) That the use of the lamp fed with petroleum or mineral oil was an
unessential part of the patented process the use of which by the accused was prohibited by the
said judgment; and (2) that alcohol is an equivalent and proper substitute, well known as such,
for mineral oil or petroleum in connection with the said process. The appellant has failed to
affirmatively establish either of these two essential facts. He has merely assumed their existence,
without proving the same, thus begging the whole question. Consequently the contempt with
which the accused is charged has not been fully and satisfactorily proved, and the order appealed
from should accordingly be affirmed in so far as it holds that the defendant is not guilty of
contempt. (7 Phil. Rep., 130).
Thereafter the plaintiff continued the use of the patented process, save only for the substitutions of a lamp
fed by alcohol for a lamp fed by petroleum or mineral oil, and new proceedings were instituted under the
provisions of section 172 for the purpose of enforcing the original injunction above cited. Substantially
the same question is submitted in these new proceedings as that submitted in the former case, but at the
trial of this case testimony was introduced which, in our opinion, leaves no room for doubt, first, that
alcohol is an equivalent or substitute, well known as such at the time when the patent was issued, for
mineral oil or petroleum, in connection with blast lamps or blowpipes such as that which plaintiff uses in
the patented process, and, second, that the use of a blast lamp or blowpipe fed with petroleum or mineral
oil, rather than one fed with alcohol, is an unessential part of the patented process the use of which was
prohibited by the said judgment.
It was clearly proven at the trial, that kerosene and alcohol blast lamps are agencies for producing and
applying heat, well known throughout the world long prior to 1906, the date of the issue of the patent; that
it is and for many years has been known that one may for all ordinary purposes be used in the place of the
other, and especially for the purpose of applying heat in the manner described in the patent; that the only
consideration which determines the employment of one in place of the other is the convenience of the user
and the question of relative cost; and that the principle upon which both lamps work is substantially
identical, the only difference in construction being occasioned by the application of this principle to oils
of different physical and chemical composition.
The plaintiff does not and can not claim a patent upon the particular lamp used by him. The patent,
however, gives him the exclusive right to the use of "la lamparilla o soplete, alimentada de petroleo o
esencia mineral" (the small lamp or blowpipe fed with petroleum or mineral oil) in manufacturing curved
handles for umbrellas and canes, to which reference is made in the above-cited descriptive statement and
annexed note. "The small lamp or blowpipe" mentioned in the descriptive statement and annexed note
which accompanied the application for the patent, evidently referred to the design of a blast lamp which
was attached thereto; and in our opinion both plaintiff and defendant make use of a blast lamp substantially
similar, in principle and design, to that referred to in the descriptive statement and the annexed note, for
the exclusive use of which in the manufacture of curved handles, plaintiff holds a patent. True, defendant's
blast lamp is fed with alcohol, and its shape varies in unimportant details, for the purpose of
accommodating the principle, by which the flame is secured, to the different physical and chemical
composition of the fuel used therein; but the principle on which it works, its mode of application, and its
general design distinguish it in no essential particular from that used by the plaintiff. If the original design
accompanying the statement had shown a blast lamp made of brass or delf, he would be a reckless advocate
who would claim that the patent might lawfully be evaded by the use of a lamp made of iron or tin; or if
the original design had shown a blast lamp 6 inches high with a nozzle 4 inches long it would hardly be
seriously contended that the use of lamp 8 inches high with a nozzle 3 inches long would protect the
ingenious individual, who in all other respects borrowed the patented process, from the consequences of
an action for damages for infringement. But in the light of the evidence of record in this case, the reasoning
upon which these hypothetical claims should be rejected applies with equal force to the contentions of the
defendant, the ground for the rejection of the claims in each case being the same, and resting on the fact
that unessential changes, which do not affect the principle of the blast lamp used in the patented process,
or the mode of application of heat authorized by the patent, are not sufficient to support a contention that
the process in one case is in any essential particular different from that used in the other.
Counsel for plaintif invokes the doctrine of "mechanical equivalents" in support of his contention, and
indeed that doctrine is strikingly applicable to the facts in this case. This doctrine is founded upon sound
rules of reason and logic, and unless restrained or modified by law in particular jurisdiction, is of universal
application, so that it matters not whether a patent be issued by one sovereignty or another, the doctrine
may properly be invoked to protect the patentee from colorable invasions of his patent under the guise of
substitution of some part of his invention by some well known mechanical equivalent. Our attention has
not been called to any provision of the patent law of Spain, which denies to patentees thereunder the just
and equitable protection of the doctrine; and indeed a patent law which failed to recognize this doctrine
would afford scant protection to inventors, for it is difficult if not impossible to conceive an invention,
which is incapable of alteration or change in some unessential part, so as to bring that part outside of the
express terms of any form of language which might be used in granting a patent for the invention; and has
been well said by counsel for plaintiff, human ingenuity would be taxed beyond its powers in preparing a
grant of a patent so comprehensive in its terms, "as to include within the express terms of its detailed
description every possible alternative of form, size, shape, material, location, color, weight, etc., of every
wheel, rod, bolt, nut, screw, plate, and other component parts of an invention."
The following citations from various decisions of the Federal Courts of the United States illustrate the
application of the doctrine in that jurisdiction, and clearly point the way to the proper solution of the
questions involved in the case at bar:
Can the defendant have the right of infringement, by substituting in lieu of some parts of the
combination well-known mechanical equivalents? I am quite clear that be can not, both on
principle and authority. It is not to be disputed that the inventor of an ordinary machine is, by his
letters patent, protected against all mere formal alterations and against the substitution of mere
mechanical equivalents. Why should not the inventor of a new combination receive the same
protection? If he can not, then will his patent not be worth the parchment on which it is written.
If no one can be held to infringe a patent for a combination unless he uses all the parts of the
combination and the identical machinery as that of the patentee, then will no patent for a
combination be infringed; for certainly no one capable of operating a machine can be incapable
of adopting some formal alteration in the machinery, or of substituting mechanical equivalents.
No one infringes a patent for a combination who does not employ all of the ingredients of the
combination; but if he employs all the ingredients, or adopts mere formal alterations, or
substitutes, for one ingredient another which was well known at the date of the patent as a proper
substitute for the one withdrawn, and which performs substantially the same function as the one
withdrawn, he does infringe. (King vs. Louisville Cement Co., Fed. Cas., 7798.)
Bona fide inventors of a combination are as much entitled to equivalents as the inventors other
patentable improvements; by which is meant that a patentee in such a case may substitute another
ingredient for any one of the ingredients of his invention, if the ingredient substituted performs
the same function as the one omitted and as well known at the date of his patent as a proper
substitute for the one omitted in the patented combination. Apply that rule and it is clear that an
alteration in a patented combination which merely substitutes another old ingredient for one of
the ingredients in the patented combination, is an infringement of the patent, if the substitute
performs the same function and was well known at the date of the patent as a proper substitute
for the omitted ingredient. (Gould vs. Rees, 82 U.S., 187, 194.)
Mere formal alterations in a combination in letters patent are no defense to the charge of
infringement and the withdrawal of one ingredient from the same and the substitution of another
which was well known at the date of the patent as a proper substitute for the one withdrawn is a
mere formal alteration of the combination if the ingredient substituted performs substantially the
same function as the one withdrawn.
 Bona fide inventors of a combination are as much entitled to suppress every other combination The judgment of the lower court should be and is hereby affirmed, with the costs of this instance against
of the same ingredients to produce the same result, not substantially different from what they the appellant.
have invented and caused to be patented as to any other class of inventors. All alike have the right
to suppress every colorable invasion of that which is secured to them by letters patent.
(Seymour vs. Osborne, 78 U.S., 516, 556.)

A claim for the particular means and mode of operation described in the specification extends, by
operation of law, to the equivalent of such means — not equivalent simply because the same
result is thereby produced — but equivalent as being substantially the same device in structure,
arrangement and mode of operation. (Burden vs. Corning, Fed. Cas., 2143. Gottfried vs. Philip
Best Brewing Co., Fed. Cas., 5633.)

An equivalent device is such as a mechanic of ordinary skill in construction of similar machinery,

having the forms, specifications and machine before him, could substitute in the place of the
mechanism described without the exercise of the inventive faculty. (Burden vs. Corning, supra.)

All the elements of the invention in this case are old, and the rule in such cases, as before
explained, undoubtedly is that a purpose can not invoke the doctrine of equivalents to suppress
all other improvements of the old machine, but he is entitled to treat everyone as an infringer who
makes, uses, or vends his patented improvement without any other change than the employment
of a substitute for one of its elements, well known as such at the date of his invention, and which
any constructor acquainted with the art will know how to comply. The reason for the qualification
of the rule as stated is, that such change — that is, the mere substitution of a well- known element
for another — where it appears that the substituted element was well known as a usual substitute
for the element left out — is merely a formal one, and nothing better than a colorable evasion of
the patent. (Union Sugar Refining Co. vs. Matthieson, Fed. Cas., 14399.)

Counsel for the defendant insists that, under Spanish law, none of the steps of the process described in the
descriptive statement, save those mentioned in the "note" thereto attached are included in the patent, and
that the patent rights secured thereunder are strictly limited to the precise language of the "note" attached
to the descriptive statement; while counsel for plaintiff appears to think that the language of the patent
covers any process or device whereby wood or cane may be bent or curved by the use of heat. But for the
purpose of this decision it is not necessary to consider these questions, further than to hold, as we do, that
under the doctrine of equivalents, the language of the note in the descriptive statement applies to the
operation of applying heat for the purpose of curving handles or canes and umbrellas by means of a blast
lamp fed with alcohol, as well as by means of a blast lamp fed with petroleum or mineral oil; and the
defendant having admitted the fact that he applied heat for the purpose of curving handles for canes and
umbrellas by means of a blast lamp fed with alcohol, he must be deemed to have contempt of violating the
terms and the injunction issued in the principal case, wherein plaintiff was declared the owner of the patent
in question, and defendant enjoined from its infringement.

The argument of counsel for defendant and appellant, based on the theory that the questions herein
discussed and decided to have been heretofore settled by this court, and that the subject-matter of this
proceeding is res adjudicata between the parties thereto is sufficiently refuted by the simple reading of the
decision of this court in the case relied upon. (Gsell vs. Veloso, 7 Phil. Rep., 130.)
G.R. No. 97343 September 13, 1993
PASCUAL GODINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SPECIAL FOURTH DIVISION and SV-AGRO
ENTERPRISES, INC., respondents.
Jesus S. Anonat for petitioner.
Arturo M. Alinio for private respondent.
ROMERO, J.:
Through this petition for review in certiorari of a decision of the Court of Appeals affirming the decision
of the trial court, petitioner Pascual Godines seeks to reverse the adverse decision of the Court a quo that
he was liable for infringement of patent and unfair competition. The dispositive portion of the assailed
decision is hereby quoted to wit:
WHEREFORE, with the elimination of the award for attorney's fees, the judgment
appealed from is hereby AFFIRMED, with costs against appellant.1
The patent involved in this case is Letters Patent No. UM-2236 issued by the Philippine Patent Office to
one Magdalena S. Villaruz on July 15, 1976. It covers a utility model for a hand tractor or power tiller, the
main components of which are the following: "(1) a vacuumatic house float; (2) a harrow with adjustable
operating handle; (3) a pair of paddy wheels; (4) a protective water covering for the engine main drive; (5)
a transmission case; (6) an operating handle; (7) an engine foundation on the top midportion of the
vacuumatic housing float to which the main engine drive is detachedly installed; (8) a frontal frame
extension above the quarter — circularly shaped water covering hold (sic) in place the transmission case;
(9) a V-belt connection to the engine main drive with transmission gear through the pulley, and (10) an
idler pulley installed on the engine foundation."2 The patented hand tractor works in the following manner:
"the engine drives the transmission gear thru the V-belt, a driven pulley and a transmission shaft. The
engine drives the transmission gear by tensioning of the V-belt which is controlled by the idler pulley. The
V-belt drives the pulley attached to the transmission gear which in turn drives the shaft where the paddy
wheels are attached. The operator handles the hand tractor through a handle which is inclined upwardly
and supported by a pair of substanding pipes and reinforced by a U-shaped G.I. pipe at the V-shaped end."3
The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein private
respondent, from Magdalena Villaruz, its chairman and president, by virtue of a Deed of Assignment
executed by the latter in its favor. On October 31, 1979, SV-Agro Industries caused the publication of the
patent in Bulletin Today, a newspaper of general circulation.
In accordance with the patent, private respondent manufactured and sold the patented power tillers with
the patent imprinted on them. In 1979, SV-Agro Industries suffered a decline of more than 50% in sales
in its Molave, Zamboanga del Sur branch. Upon investigation, it discovered that power tillers similar to
those patented by private respondent were being manufactured and sold by petitioner herein.
Consequently, private respondent notified Pascual Godines about the existing patent and demanded that
the latter stop selling and manufacturing similar power tillers. Upon petitioner's failure to comply with the
demand, SV-Agro Industries filed before the Regional Trial Court a complaint for infringement of patent
and unfair competition.
After trial, the court held Pascual Godines liable for infringement of patent and unfair competition. The
dispositive portion of the decision reads as follows:
WHEREFORE, premises considered, JUDGMENT is hereby rendered in favor of the
plaintiff SV-Agro Industries Enterprises, Inc., and against defendant Pascual Godines:
1. Declaring the writ of preliminary injunction issued by this Court against defendant as
permanent;
2. Ordering defendant Pascual Godines to pay plaintiff the sum of Fifty Thousand Pesos
(P50,000.00) as damages to its business reputation and goodwill, plus the further sum of
Eighty Thousand Pesos (P80,000.00) for unrealized profits during the period defendant
was manufacturing and selling copied or imitation floating power tiller;
3. Ordering the defendant to pay the plaintiff, the further sum of Eight Thousand Pesos
(P8,000.00) as reimbursement of attorney's fees and other expenses of litigation; and to
pay the costs of the suit.
SO ORDERED.4
The decision was affirmed by the appellate court.
Thereafter, this petition was filed. Petitioner maintains the defenses which he raised before the trial and
appellate courts, to wit: that he was not engaged in the manufacture and sale of the power tillers as he
made them only upon the special order of his customers who gave their own specifications; hence, he
could not be liable for infringement of patent and unfair competition; and that those made by him were
different from those being manufactured and sold by private respondent.
We find no merit in his arguments. The question of whether petitioner was manufacturing and selling
power tillers is a question of fact better addressed to the lower courts. In dismissing the first argument of
petitioner herein, the Court of Appeals quoted the findings of the court, to wit:
It is the contention of defendant that he did not manufacture or make imitations or copies
of plaintiff's turtle power tiller as what he merely did was to fabricate his floating power
tiller upon specifications and designs of those who ordered them. However, this
contention appears untenable in the light of the following circumstances: 1) he admits
in his Answer that he has been manufacturing power tillers or hand tractors, selling and
distributing them long before plaintiff started selling its turtle power tiller in Zamboanga
del Sur and Misamis Occidental, meaning that defendant is principally a manufacturer
of power tillers, not upon specification and design of buyers, but upon his own
specification and design; 2) it would be unbelievable that defendant would fabricate
power tillers similar to the turtle power tillers of plaintiff upon specifications of buyers
 without requiring a job order where the specification and designs of those ordered are
specified. No document was (sic) ever been presented showing such job orders, and it is
rather unusual for defendant to manufacture something without the specification and
designs, considering that he is an engineer by profession and proprietor of the Ozamis
Engineering shop. On the other hand, it is also highly unusual for buyers to order the
fabrication of a power tiller or hand tractor and allow defendant to manufacture them
merely based on their verbal instructions. This is contrary to the usual business and
manufacturing practice. This is not only time consuming, but costly because it involves
a trial and error method, repeat jobs and material wastage. Defendant judicially admitted
two (2) units of the turtle power tiller sold by him to Policarpio Berondo. 5
Of general acceptance is the rule imbedded in our jurisprudence that ". . . the jurisdiction of the Supreme
Court in cases brought to it from the Court of Appeals in a petition for certiorari under Rule 45 of the
Rules of Court is limited to the review of errors of law, and that said appellate court's findings of fact are
conclusive upon this Court."6
The fact that petitioner herein manufactured and sold power tillers without patentee's authority has been
established by the courts despite petitioner's claims to the contrary.
The question now arises: Did petitioner's product infringe upon the patent of private respondent?
Tests have been established to determine infringement. These are (a) literal infringement; and (b) the
doctrine of equivalents.7 In using literal infringement as a test, ". . . resort must be had, in the first instance,
to the words of the claim. If accused matter clearly falls within the claim, infringement is made out and
that is the end of it."8 To determine whether the particular item falls within the literal meaning of the patent
claims, the court must juxtapose the claims of the patent and the accused product within the overall context
of the claims and specifications, to determine whether there is exact identity of all material elements. 9
The trial court made the following observation:
Samples of the defendant's floating power tiller have been produced and inspected by
the court and compared with that of the turtle power tiller of the plaintiff (see Exhibits
H to H-28). In appearance and form, both the floating power tillers of the defendant and
the turtle power tiller of the plaintiff are virtually the same. Defendant admitted to the
Court that two (2) of the power inspected on March 12, 1984, were manufactured and
sold by him (see TSN, March 12, 1984, p. 7). The three power tillers were placed
alongside with each other. At the center was the turtle power tiller of plaintiff, and on
both sides thereof were the floating power tillers of defendant (Exhibits H to H-2).
Witness Rodrigo took photographs of the same power tillers (front, side, top and back
views for purposes of comparison (see Exhibits H-4 to H-28). Viewed from any
perspective or angle, the power tiller of the defendant is identical and similar to that of
the turtle power tiller of plaintiff in form, configuration, design and appearance. The
parts or components thereof are virtually the same. Both have the circularly-shaped
vacuumatic housing float, a paddy in front, a protective water covering, a transmission
box housing the transmission gears, a handle which is V-shaped and inclined upwardly,
attached to the side of the vacuumatic housing float and supported by the upstanding
G.I. pipes and an engine base at the top midportion of the vacuumatic housing float to
which the engine drive may be attached. In operation, the floating power tiller of the
defendant operates also in similar manner as the turtle power tiller of plaintiff. This was
admitted by the defendant himself in court that they are operating on the same principles.
(TSN, August 19, 1987, p. 13) 10
Moreover, it is also observed that petitioner also called his power tiller as a floating power tiller. The patent
issued by the Patent Office referred to a "farm implement but more particularly to a turtle hand tractor
having a vacuumatic housing float on which the engine drive is held in place, the operating handle, the
harrow housing with its operating handle and the paddy wheel protective covering." 11 It appears from the
foregoing observation of the trial court that these claims of the patent and the features of the patented
utility model were copied by petitioner. We are compelled to arrive at no other conclusion but that there
was infringement.
Petitioner's argument that his power tillers were different from private respondent's is that of a drowning
man clutching at straws.
Recognizing that the logical fallback position of one in the place of defendant is to aver that his product is
different from the patented one, courts have adopted the doctrine of equivalents which recognizes that
minor modifications in a patented invention are sufficient to put the item beyond the scope of literal
infringement. 12 Thus, according to this doctrine, "(a)n infringement also occurs when a device
appropriates a prior invention by incorporating its innovative concept and, albeit with some modification
and change, performs substantially the same function in substantially the same way to achieve substantially
the same result." 13 The reason for the doctrine of equivalents is that to permit the imitation of a patented
invention which does not copy any literal detail would be to convert the protection of the patent grant into
a hollow and useless thing. Such imitation would leave room for — indeed encourage — the unscrupulous
copyist to make unimportant and insubstantial changes and substitutions in the patent which, though
adding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach
of the law. 14
In this case, the trial court observed:
Defendant's witness Eduardo Cañete, employed for 11 years as welder of the Ozamis
Engineering, and therefore actually involved in the making of the floating power tillers
of defendant tried to explain the difference between the floating power tillers made by
the defendant. But a careful examination between the two power tillers will show that
they will operate on the same fundamental principles. And, according to establish
jurisprudence, in infringement of patent, similarities or differences are to be determined,
not by the names of things, but in the light of what elements do, and substantial, rather
than technical, identity in the test. More specifically, it is necessary and sufficient to
constitute equivalency that the same function can be performed in substantially the same
way or manner, or by the same or substantially the same, principle or mode of operation;
but where these tests are satisfied, mere differences of form or name are immaterial. . .
. 15
It also stated:
 To establish an infringement, it is not essential to show that the defendant adopted the WHEREFORE, premises considered, the decision of the Court of Appeals is hereby AFFIRMED and this
device or process in every particular; Proof of an adoption of the substance of the thing petition DENIED for lack of merit.
will be sufficient. "In one sense," said Justice Brown, "it may be said that no device can
be adjudged an infringement that does not substantially correspond with the patent. But
another construction, which would limit these words to exact mechanism described in
the patent, would be so obviously unjust that no court could be expected to adopt it. . . .

The law will protect a patentee against imitation of his patent by other forms and
proportions. If two devices do the same work in substantially the same way, and
accomplish substantially the same result, they are the same, even though they differ in
name, form, or shape. 16

We pronounce petitioner liable for infringement in accordance with Section 37 of Republic Act No. 165,
as amended, providing, inter alia:

Sec. 37. Right of Patentees. — A patentee shall have the exclusive right to make, use
and sell the patented machine, article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of the Philippines for the
terms of the patent; and such making, using, or selling by any person without the
authorization of the Patentee constitutes infringement of the patent. (Emphasis ours)

As far as the issue regarding unfair competition is concerned, suffice it to say that Republic Act No. 166,
as amended, provides, inter alia:

Sec. 29. Unfair competition, rights and remedies. — . . .

xxx xxx xxx

In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general appearance of goods
of another manufacturer or dealer, either as to the goods themselves or in the wrapping
of the packages in which they are contained, or the devices or words thereon, or in any
other feature of their appearance, which would be likely to influence purchasers that the
goods offered are those of a manufacturer or dealer other than the actual manufacturer
or dealer, or who otherwise clothes the goods with such appearance as shall deceive the
public and defraud another of his legitimate trade. . . .

xxx xxx xxx

Considering the foregoing, we find no reversible error in the decision of the Court of Appeals affirming
with modification the decision of the trial court.
[G.R. No. 115106. March 15, 1996]
ROBERTO L. DEL ROSARIO, petitioner, vs. COURT OF APPEALS AND JANITO
CORPORATION, respondents.
DECISION
BELLOSILLO, J.:
Roberto del Rosario petitions this Court to review the decision of the Court of Appeals [1] which set
aside the order of the Regional Trial Court of Makati granting a writ of preliminary injunction in his favor.
The antecedents: On 18 January 1993 petitioner filed a complaint for patent infringement against
private respondent Janito Corporation.[2] Roberto L. del Rosario alleged that he was a patentee of an audio
equipment and improved audio equipment commonly known as the sing-along system or karaoke under
Letters Patent No. UM-5269 dated 2 June 1983 as well as Letters Patent No. UM-6237 dated 14 November
1986 issued by the Director of Patents. The effectivity of both Letters Patents was for five (5) years and
was extended for another five (5) years starting 2 June 1988 and 14 November 1991, respectively. He
described his sing-along system as a handy multi-purpose compact machine which incorporates an
amplifier speaker, one or two tape mechanisms, optional tuner or radio and microphone mixer with features
to enhance ones voice, such as the echo or reverb to stimulate an opera hall or a studio sound, with the
whole system enclosed in one cabinet casing.
In the early part of 1990 petitioner learned that private respondent was manufacturing a sing-along
system bearing the trademark miyata or miyata karaoke substantially similar if not identical to the sing-
along system covered by the patents issued in his favor. Thus he sought from the trial court the issuance
of a writ of preliminary injunction to enjoin private respondent, its officers and everybody elsewhere acting
on its behalf, from using, selling and advertising the miyata or miyata karaoke brand, the injunction to be
made permanent after trial, and praying for damages, attorneys fees and costs of suit.
On 5 February 1993 the trial court temporarily restrained private respondent from manufacturing,
using and/or selling and advertising the miyata sing-along system or any sing-along system substantially
identical to the sing-along system patented by petitioner until further orders.
On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on the basis
of its finding that petitioner was a holder of a utility model patent for a sing-along system and that without
his approval and consent private respondent was admittedly manufacturing and selling its own sing-along
system under the brand name miyata which was substantially similar to the patented utility model [3] of
petitioner.
Private respondent assailed the order of 24 February 1993 directing the issuance of the writ by way
of a petition for certiorari with prayer for the issuance of a writ of preliminary injunction and a temporary
restraining order before respondent Court of Appeals.
On 15 November 1993 respondent appellate court granted the writ and set aside the questioned order
of the trial court. It expressed the view that there was no infringement of the patents of petitioner by the
fact alone that private respondent had manufactured the miyata karaoke or audio system, and that the
karaoke system was a universal product manufactured, advertised and marketed in most countries of the
world long before the patents were issued to petitioner. The motion to reconsider the grant of the writ was
denied;[4] hence, the instant petition for review.
This petition alleges that: (a) it was improper for the Court of Appeals to consider questions of fact
in a certiorari proceeding; (b) the Court of Appeals erred in taking judicial notice of private respondents
self-serving presentation of facts; (c) the Court of Appeals erred in disregarding the findings of fact of the
trial court; and, (d) there was no basis for the Court of Appeals to grant a writ of preliminary injunction in
favor of private respondent.[5]
Petitioner argues that in a certiorari proceeding, questions of fact are not generally permitted the
inquiry being limited essentially to whether the tribunal has acted without or in excess of jurisdiction or
with grave abuse of discretion; that respondent court should not have disturbed but respected instead the
factual findings of the trial court; that the movant has a clear legal right to be protected and that there is a
violation of such right by private respondent. Thus, petitioner herein claims, he has satisfied the legal
requisites to justify the order of the trial court directing the issuance of the writ of injunction. On the other
hand, in the absence of a patent to justify the manufacture and sale by private respondent of sing-along
systems, it is not entitled to the injunctive relief granted by respondent appellate court.
The crux of the controversy before us hinges on whether respondent Court of Appeals erred in finding
the trial court to have committed grave abuse of discretion in enjoining private respondent from
manufacturing, selling and advertising the miyata karaoke brand sing-along system for being substantially
similar if not identical to the audio equipment covered by letters patent issued to petitioner.
Injunction is a preservative remedy for the protection of substantive rights or interests. It is not a
cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason
for the existence of the judicial power to issue the writ is that the court may thereby prevent a threatened
or continuous irremediable injury to some of the parties before their claims can be thoroughly investigated
and advisedly adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard of compensation. The application of the writ
rests upon an alleged existence of an emergency or of a special reason for such an order before the case
can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that
the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and
that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction
is reasonably necessary to protect the legal rights of plaintiff pending the litigation.[6]
A preliminary injunction may be granted at any time after the commencement of the action and before
judgment when it is established that the defendant is doing, threatens, or is about to do, or is procuring or
suffering to be done, some act probably in violation of the plaintiffs rights. Thus, there are only two
requisites to be satisfied if an injunction is to issue, namely, the existence of the right to be protected, and
that the facts against which the injunction is to be directed are violative of said right. [7]
For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected
must be a present right, a legal right which must be shown to be clear and positive.
In this regard Sec. 55 of R.A. 165 as amended, known as The Patent Law, provides
Sec. 55. Design patents and patents for utility models. - (a) Any new, original, and ornamental design for
an article of manufacture and (b) new model or implements or tools or of any Industrial product or of part
of the same, which does not possess the quality of invention but which is of practical utility by reason of
its form, configuration, construction or composition, may be protected by the author thereof, the former
by a patent for a design and the latter by a patent for a utility model, in the same manner and subject to the
same provisions and requirements as relate to patents for inventions insofar as they are applicable, except
as otherwise herein provide x x x
Admittedly, petitioner is a holder of Letters Patent No. UM-5629 dated 2 June 1985 issued for a term
of five (5) years from the grant of a Utility Model herein described
The construction of an audio equipment comprising a substantially cubical casing having a window at its
rear and upper corner fitted with a slightly inclined control panel, said cubical (casing) having a vertical
partition wall therein defining a rear compartment and a front compartment, and said front compartment
serving as a speaker baffle; a transistorized amplifier circuit having an echo section and writhed in at least
the printed circuit boards placed inside said rear compartment of said casing and attached to said vertical
partition wall, said transistorized amplifier circuit capable of being operated from outside, through various
controls mounted on said control panel of such casing; a loud speaker fitted inside said front compartment
of said casing and connected to the output of the main audio amplifier section of said transistorized
amplifier circuit and a tape player mounted on the top wall of said casing and said tape player being
connected in conventional manner to said transistorized amplifier circuit. [8]
Again, on 14 November 1986 petitioner was granted Letters Patent No. UM-6237 for a term of
five (5) years from the grant of a Utility Model described as
In an audio equipment consisting of a first cubical casing having an opening at its rear and upper rear
portion and a partition therein forming a rear compartment and a front compartment serving as a loud
speaker baffle, a control panel formed by vertical and horizontal sections, a transistorized amplifier circuit
wired in at least two printed circuit boards attached at the back of said control panel, a first loud speaker
fitted inside said first compartment of such first casing and connected to the output of said transistorized
amplifier circuit; the improvement wherein said control panel being removably fitted to said first cubical
casing and further comprises a set of tape recorder and tape player mounted on the vertical section of said
control panel and said recorder and player are likewise connected to said transistorized amplifier circuit; a
second cubical casing having an opening at its rear, said second cubical casing having (being ?) provided
with a vertical partition therein defining a rear compartment and a front compartment, said rear
compartment being provided with a door and enclosing therein a set of tape racks and said front
compartment serving as loud speaker baffle, said second cubical casing being adapted to said first cubical
casing so that said first and second casings are secured together in compact and portable form; and a second
loud speaker fitted inside said front compartment of said casing and connected to the output of said
amplifier circuit.[9]
The terms of both Letters Patents were extended for another five (5) years each, the first beginning 2
June 1988 and the second, 14 November 1991.
The Patent Law expressly acknowledges that any new model of implements or tools of any industrial
product even if not possessed of the quality of invention but which is of practical utility is entitled to a
patent for utility model.[10] Here, there is no dispute that the letters patent issued to petitioner are for utility
models of audio equipment.
In issuing, reissuing or withholding patents and extensions thereof, the Director of Patents determines
whether the patent is new and whether the machine or device is the proper subject of patent. In passing on
an application, the Director decides not only questions of law but also questions of fact, i.e. whether there
has been a prior public use or sale of the article sought to be patented. [11] Where petitioner introduces the
patent in evidence, if it is in due form, it affords a prima facie presumption of its correctness and
validity. The decision of the Director of Patents in granting the patent is always presumed to be correct,
and the burden then shifts to respondent to overcome this presumption by competent evidence. [12]
Under Sec. 55 of The Patent Law a utility model shall not be considered new if before the application
for a patent it has been publicly known or publicly used in this country or has been described in a printed
publication or publications circulated within the country, or if it is substantially similar to any other utility
model so known, used or described within the country.Respondent corporation failed to present before the
trial court competent evidence that the utility models covered by the Letters Patents issued to petitioner
were not new. This is evident from the testimony of Janito Cua, President of respondent Janito
Corporation, during the hearing on the issuance of the injunction, to wit -
Q. Mr. Cua, you testified that there are (sic) so many other companies which already have (sic)
the sing-along system even before the patent application of Mr. del Rosario and as a matter
of fact you mentioned Sanyo, Sony and Sharp, is that right?
A. Musicmate and Asahi.
Q. Now do you recall that your lawyer filed with this Honorable Court an Urgent Motion to Lift
Temporary Restraining Order of this Honorable Court. I am sure you were the one who
provided him with the information about the many other companies selling the sing-along
system, is that right? These 18 which you enumerated here.
A. More than that because x x x
Q. Now you will agree with me that in your statement Sharp you put the date as 1985 agreed?
A. No.
Q. You mean your lawyer was wrong when he put the word Sharp 1985?
A. Maybe I informed him already.
xxx xxx xxx
Q. You mean your lawyer was wrong in alleging to this Court that Sharp manufactured and sold
(in) 1985 as found in the Urgent Motion?
A. Since it is urgent it is more or less.
Q. The same also with Sanyo 1985 which you put, more or less?
A. Sanyo is wrong.
Q. It is not 1985?
A. Sanyo is 1979 I think.
Q. So this is also wrong. Panasonic 1986 is also wrong?
A. Panasonic I think.
Q. So you dont think this is also correct.
A. The date? As may be gleaned herein, the rights of petitioner as a patentee have been sufficiently established,
contrary to the findings and conclusions of respondent Court of Appeals. Consequently, under Sec. 37 of
Q. So you dont think also that this allegation here that they manufactured in 1986 is correct? The Patent law, petitioner as a patentee shall have the exclusive right to make, use and sell the patented
A. Wrong. Earlier. machine, article or product for the purpose of industry or commerce, throughout the territory of the
Philippines for the term of the patent, and such making, using or selling by any person without
Q. National by Precision Electronic 1986 this is also wrong? authorization of the patentee constitutes infringement of his patent.
A. I think earlier. Petitioner established before the trial court that respondent Janito Corporation was manufacturing a
similar sing-along system bearing the trademark miyata which infringed his patented models. He also
Q. So that means all your allegations here from 2 to 5 are wrong? OK. By Philipps Philippines
alleged that both his own patented audio equipment and respondents sing-along system were constructed
1986, this is also correct or wrong?
in a casing with a control panel, the casing having a vertical partition wall defining the rear compartment
A. More or less. We said more or less. from the front compartment, with the front compartment consisting of a loud speaker baffle, both
containing a transistorized amplifier circuit capable of being operated from outside through various
Q. Nakabutshi by Asahi Electronics that is also wrong? controls mounted on the control panel, and that both had loud speakers fitted inside the front compartment
A. No, that is 1979. of the casing and connected to the output of the main audio amplifier section both having a tape recorder
and a tape player mounted on the control panel with the tape recorder and tape player being both connected
Q. Electone by DICO 1989 is this correct or wrong? to the transistorized amplifier circuit.[14]
A. Correct. More or less. Respondent Janito Corporation denied that there was any violation of petitioners patent rights, and
cited the differences between its miyata equipment and petitioners audio equipment.But, it must be
Q. Skylers 1985 is that correct or wrong? emphasized, respondent only confined its comparison to the first model, Utility Model No. 5269, and
A. It is more or less because it is urgent. We dont have time to exact the date. completely disregarded Utility Model No. 6237 which improved on the first. As described by respondent
corporation,[15] these differences are
Q. Musicmate of G.A. Yupangco 1981 this is more or less? You are not also sure?
First. Under Utility Model 5269, the unit is a substantially cubical casing with a window at its rear
A. 95% sure. and upper corner fitted with slightly inclined control panel, while the miyata equipment is a substantially
rectangular casing with panel vertically positioned.
Q. Now you are sure 1981.
Second. Under Utility Model 5269, the cubical casing has a vertical partition wall defining a rear
A. This one because x x x
compartment and a front compartment serving as a speaker baffle, while the miyata equipment has no rear
Q. Mr. Witness so you are now trying to tell this Honorable Court that all your allegations here compartment and front compartment in its rectangular casing; it has only a front compartment horizontally
of the dates in this Urgent Motion except for Musicmate which you are only 95% sure divided into 3 compartments like a 3-storey building, the 1st compartment being a kit, the 2nd also the
they are all wrong or they are also more or less or not sure, is that right? speaker, and the 3rd are kits.

A. More or less. Third. Under Utility Model No. 5269, a transistorized amplifier circuit with an echo section wired in
at least 2 printed circuit boards is placed inside the rear compartment of the casing and attached to the
Q. Now do you have any proof, any advertisement, anything in writing that would show that all vertical partition wall, the printed circuit board having 1 amplifier and 1 echo, while in
these instruments are in the market, do you have it? the miyata equipment the amplifier is mainly IC (Integrated Circuit) - powered with 8 printed circuit
A. No, I dont have it because x x x boards almost all of which are IC controlled, with 1 amplifier with power supply, 1 main tuner, 1 equalizer
(3-band), 1 IC controlled volume control, 1 echo IC, 1 tape pream, 1 instrument and 1 wireless microphone.
Q. No. I am satisfied with your answer. Now Mr. Witness, you dont also have a proof that Akai
instrument that you said was also in the market before 1982? You dont have any written Fourth. Under Utility Model 5269, 4 printed circuits are placed inside the compartment of its casing
proof. any advertisement? attached to the vertical partition wall, while in the miyata, the 7 printed circuit boards (PCB) are attached
to the front panel and 1 attached to the horizontal divider.
A. I have the product.
Fifth. Under Utility Model 5269, there are various controls mounted on the control panel of the
Q. But you have not brought the product in (sic) this Honorable Court, right? casing, while in miyata, the various controls are all separated from the printed circuit boards and the
various controls are all attached thereto.
A. No.[13]
 Sixth. Under Utility Model 5269, a loud speaker fitted inside the front compartment of the casing is
connected to the output of the main audio amplifier section of the transistorized amplifier circuit, while
in miyata, there is no other way but to use 2 loud speakers connected to the amplifier.
Seventh. Under Utility Model 5269, a tape player is mounted on the top wall of the casing, while
in miyata, 2 tape players are used mounted side by side at the front.
It is elementary that a patent may be infringed where the essential or substantial features of the
patented invention are taken or appropriated, or the device, machine or other subject matter alleged to
infringe is substantially identical with the patented invention. In order to infringe a patent, a machine or
device must perform the same function, or accomplish the same result by identical or substantially identical
means and the principle or mode of operation must be substantially the same.[16]
It may be noted that respondent corporation failed to present before the trial court a clear, competent
and reliable comparison between its own model and that of petitioner, and disregarded completely
petitioners Utility Model No. 6237 which improved on his first patented model. Notwithstanding the
differences cited by respondent corporation, it did not refute and disprove the allegations of petitioner
before the trial court that: (a) both are used by a singer to sing and amplify his voice; (b) both are used to
sing with a minus-one or multiplex tapes, or that both are used to play minus-one or standard cassette tapes
for singing or for listening to; (c) both are used to sing with a minus-one tape and multiplex tape and to
record the singing and the accompaniment; (d) both are used to sing with live accompaniment and to record
the same; (e) both are used to enhance the voice of the singer using echo effect, treble, bass and other
controls; (g) both are equipped with cassette tape decks which are installed with one being used for
playback and the other, for recording the singer and the accompaniment, and both may also be used to
record a speakers voice or instrumental playing, like the guitar and other instruments; (h) both are encased
in a box-like cabinets; and, (i) both can be used with one or more microphones. [17]
Clearly, therefore, both petitioners and respondents models involve substantially the same modes of
operation and produce substantially the same if not identical results when used.
In view thereof, we find that petitioner had established before the trial court prima facie proof of
violation of his rights as patentee to justify the issuance of a writ of preliminary injunction in his favor
during the pendency of the main suit for damages resulting from the alleged infringement.
WHEREFORE, the Decision of the Court of Appeals dated 15 November 1993 is REVERSED and
SET ASIDE and the Order of the trial court dated 24 February 1993 granting petitioner the writ of
injunction is REINSTATED.
The trial court is directed to continue with the proceedings on the main action pending before it in
order to resolve with dispatch the issues therein presented.
SO ORDERED.
[G. R. No. 126627. August 14, 2003]
SMITH KLINE BECKMAN CORPORATION, petitioner, vs. THE HONORABLE COURT OF
APPEALS and TRYCO PHARMA CORPORATION, respondents.
DECISION
CARPIO-MORALES, J.:
Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the
state of Pennsylvania, United States of America (U.S.) and licensed to do business in the Philippines, filed
on October 8, 1976, as assignee, before the Philippine Patent Office (now Bureau of Patents, Trademarks
and Technology Transfer) an application for patent over an invention entitled Methods and Compositions
for Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate. The
application bore Serial No. 18989.
On September 24, 1981, Letters Patent No. 14561 [1] for the aforesaid invention was issued to
petitioner for a term of seventeen (17) years.
[2]
The letters patent provides in its claims that the patented invention consisted of a new compound
named methyl 5 propylthio-2-benzimidazole carbamate and the methods or compositions utilizing the
compound as an active ingredient in fighting infections caused by gastrointestinal parasites and lungworms
in animals such as swine, sheep, cattle, goats, horses, and even pet animals.
Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures,
distributes and sells veterinary products including Impregon, a drug that has Albendazole for its active
ingredient and is claimed to be effective against gastro-intestinal roundworms, lungworms, tapeworms and
fluke infestation in carabaos, cattle and goats.
Petitioner sued private respondent for infringement of patent and unfair competition before the
Caloocan City Regional Trial Court (RTC).[3] It claimed that its patent covers or includes the substance
Albendazole such that private respondent, by manufacturing, selling, using, and causing to be sold and
used the drug Impregon without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No.
14561[4] as well as committed unfair competition under Article 189, paragraph 1 of the Revised Penal
Code and Section 29 of Republic Act No. 166 (The Trademark Law) for advertising and selling as its own
the drug Impregon although the same contained petitioners patented Albendazole. [5]
On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining order
against private respondent enjoining it from committing acts of patent infringement and unfair
competition.[6] A writ of preliminary injunction was subsequently issued.[7]
Private respondent in its Answer[8] averred that Letters Patent No. 14561 does not cover the substance
Albendazole for nowhere in it does that word appear; that even if the patent were to include Albendazole,
such substance is unpatentable; that the Bureau of Food and Drugs allowed it to manufacture and market
Impregon with Albendazole as its known ingredient; that there is no proof that it passed off in any way its
veterinary products as those of petitioner; that Letters Patent No. 14561 is null and void, the application
for the issuance thereof having been filed beyond the one year period from the filing of an application
abroad for the same invention covered thereby, in violation of Section 15 of Republic Act No. 165 (The
Patent Law); and that petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such amount of actual damages as
may be proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary damages; and P150,000.00
in attorneys fees.
Finding for private respondent, the trial court rendered a Decision dated July 23, 1991, [9] the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is hereby, DISMISSED. The
Writ of injunction issued in connection with the case is hereby ordered DISSOLVED.
The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby declared null and
void for being in violation of Sections 7, 9 and 15 of the Patents Law.
Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby directed to cancel
Letters Patent No. 14561 issued to the plaintiff and to publish such cancellation in the Official Gazette.
Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual damages and
P100,000.00 attorneys fees as prayed for in its counterclaim but said amount awarded to defendant is
subject to the lien on correct payment of filing fees.
SO ORDERED. (Underscoring supplied)
On appeal, the Court of Appeals, by Decision of April 21, 1995, [10] upheld the trial courts finding
that private respondent was not liable for any infringement of the patent of petitioner in light of the latters
failure to show that Albendazole is the same as the compound subject of Letters Patent No. 14561. Noting
petitioners admission of the issuance by the U.S. of a patent for Albendazole in the name of Smith Kline
and French Laboratories which was petitioners former corporate name, the appellate court considered the
U.S. patent as implying that Albendazole is different from methyl 5 propylthio-2-benzimidazole
carbamate. It likewise found that private respondent was not guilty of deceiving the public by
misrepresenting that Impregon is its product.
The appellate court, however, declared that Letters Patent No. 14561 was not void as it sustained
petitioners explanation that Patent Application Serial No. 18989 which was filed on October 8, 1976 was
a divisional application of Patent Application Serial No. 17280 filed on June 17, 1975 with the Philippine
Patent Office, well within one year from petitioners filing on June 19, 1974 of its Foreign Application
Priority Data No. 480,646 in the U.S. covering the same compound subject of Patent Application Serial
No. 17280.
Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent Application Serial
No. 18989 was deemed filed on June 17, 1995 or still within one year from the filing of a patent application
abroad in compliance with the one-year rule under Section 15 of the Patent Law. And it rejected the
submission that the compound in Letters Patent No. 14561 was not patentable, citing the jurisprudentially
established presumption that the Patent Offices determination of patentability is correct. Finally, it ruled
that petitioner established itself to be the one and the same assignee of the patent notwithstanding changes
in its corporate name. Thus the appellate court disposed:
 WHEREFORE, the judgment appealed from is AFFIRMED with the
MODIFICATION that the orders for the nullification of Letters Patent No.
14561 and for its cancellation are deleted therefrom.
SO ORDERED.
Petitioners motion for reconsideration of the Court of Appeals decision having been denied[11] the
present petition for review on certiorari[12] was filed, assigning as errors the following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT
ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCOS IMPREGON DRUG, IS
INCLUDED IN PETITIONERS LETTERS PATENT NO. 14561, AND THAT
CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN
AWARDING TO PRIVATE RESPONDENT TRYCO PHARMA CORPORATION
P330,000.00 ACTUAL DAMAGES AND P100,000.00 ATTORNEYS FEES.
Petitioner argues that under the doctrine of equivalents for determining patent infringement,
Albendazole, the active ingredient it alleges was appropriated by private respondent for its drug Impregon,
is substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered by its patent since
both of them are meant to combat worm or parasite infestation in animals. It cites the unrebutted testimony
of its witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical formula in Letters Patent No.
14561 refers to the compound Albendazole.Petitioner adds that the two substances substantially do the
same function in substantially the same way to achieve the same results, thereby making them truly
identical. Petitioner thus submits that the appellate court should have gone beyond the literal wordings
used in Letters Patent No. 14561, beyond merely applying the literal infringement test, for in spite of the
fact that the word Albendazole does not appear in petitioners letters patent, it has ably shown by evidence
its sameness with methyl 5 propylthio-2-benzimidazole carbamate.
Petitioner likewise points out that its application with the Philippine Patent Office on account of
which it was granted Letters Patent No. 14561 was merely a divisional application of a prior application
in the U. S. which granted a patent for Albendazole. Hence, petitioner concludes that both methyl 5
propylthio-2-benzimidazole carbamate and the U.S.-patented Albendazole are dependent on each other
and mutually contribute to produce a single result, thereby making Albendazole as much a part of Letters
Patent No. 14561 as the other substance is.
Petitioner concedes in its Sur-Rejoinder[13] that although methyl 5 propylthio-2-benzimidazole
carbamate is not identical with Albendazole, the former is an improvement or improved version of the
latter thereby making both substances still substantially the same.
With respect to the award of actual damages in favor of private respondent in the amount
of P330,000.00 representing lost profits, petitioner assails the same as highly speculative and conjectural,
hence, without basis. It assails too the award of P100,000.00 in attorneys fees as not falling under any of
the instances enumerated by law where recovery of attorneys fees is allowed.
In its Comment,[14] private respondent contends that application of the doctrine of equivalents would
not alter the outcome of the case, Albendazole and methyl 5 propylthio-2-benzimidazole carbamate being
two different compounds with different chemical and physical properties. It stresses that the existence of
a separate U.S. patent for Albendazole indicates that the same and the compound in Letters Patent No.
14561 are different from each other; and that since it was on account of a divisional application that the
patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by definition of a divisional
application, such a compound is just one of several independent inventions alongside Albendazole under
petitioners original patent application.
As has repeatedly been held, only questions of law may be raised in a petition for review on certiorari
before this Court. Unless the factual findings of the appellate court are mistaken, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the findings culled by the
court of origin,[15] this Court does not review them.
From an examination of the evidence on record, this Court finds nothing infirm in the appellate courts
conclusions with respect to the principal issue of whether private respondent committed patent
infringement to the prejudice of petitioner.
The burden of proof to substantiate a charge for patent infringement rests on the plaintiff. [16] In the
case at bar, petitioners evidence consists primarily of its Letters Patent No. 14561, and the testimony of
Dr. Orinion, its general manager in the Philippines for its Animal Health Products Division, by which it
sought to show that its patent for the compound methyl 5 propylthio-2-benzimidazole carbamate also
covers the substance Albendazole.
From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions thereof,
no mention is made of the compound Albendazole. All that the claims disclose are:the covered invention,
that is, the compound methyl 5 propylthio-2-benzimidazole carbamate; the compounds being anthelmintic
but nontoxic for animals or its ability to destroy parasites without harming the host animals; and the
patented methods, compositions or preparations involving the compound to maximize its efficacy against
certain kinds of parasites infecting specified animals.
When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim
anything beyond them.[17] And so are the courts bound which may not add to or detract from the claims
matters not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that
which the inventor claimed and the patent office allowed, even if the patentee may have been entitled to
something more than the words it had chosen would include. [18]
It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561 is not
determinative of Albendazoles non-inclusion in the claims of the patent. While Albendazole is admittedly
a chemical compound that exists by a name different from that covered in petitioners letters patent, the
language of Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And no extrinsic
evidence had been adduced to prove that Albendazole inheres in petitioners patent in spite of its omission
therefrom or that the meaning of the claims of the patent embraces the same.
While petitioner concedes that the mere literal wordings of its patent cannot establish private
respondents infringement, it urges this Court to apply the doctrine of equivalents.
The doctrine of equivalents provides that an infringement also takes place when a device appropriates
a prior invention by incorporating its innovative concept and, although with some modification and change,
performs substantially the same function in substantially the same way to achieve substantially the same
result.[19] Yet again, a scrutiny of petitioners evidence fails to convince this Court of the substantial
sameness of petitioners patented compound and Albendazole. While both compounds have the effect of
neutralizing parasites in animals, identity of result does not amount to infringement of patent unless
Albendazole operates in substantially the same way or by substantially the same means as the patented
compound, even though it performs the same function and achieves the same result.[20] In other WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with
words, the principle or mode of operation must be the same or substantially the same.[21] MODIFICATION. The award of actual or compensatory damages and attorneys fees to private respondent,
Tryco Pharma Corporation, is DELETED; instead, it is hereby awarded the amount of P20,000.00 as
The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the temperate or moderate damages.
patentee having the burden to show that all three components of such equivalency test are met. [22]
SO ORDERED.
As stated early on, petitioners evidence fails to explain how Albendazole is in every essential detail
identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the fact that Albendazole is an
anthelmintic agent like methyl 5 propylthio-2-benzimidazole carbamate, nothing more is asserted and
accordingly substantiated regarding the method or means by which Albendazole weeds out parasites in
animals, thus giving no information on whether that method is substantially the same as the manner by
which petitioners compound works. The testimony of Dr. Orinion lends no support to petitioners cause,
he not having been presented or qualified as an expert witness who has the knowledge or expertise on the
matter of chemical compounds.
As for the concept of divisional applications proffered by petitioner, it comes into play when two or
more inventions are claimed in a single application but are of such a nature that a single patent may not be
issued for them.[23] The applicant thus is required to divide, that is, to limit the claims to whichever
invention he may elect, whereas those inventions not elected may be made the subject of separate
applications which are called divisional applications.[24] What this only means is that petitioners methyl 5
propylthio-2-benzimidazole carbamate is an invention distinct from the other inventions claimed in the
original application divided out, Albendazole being one of those other inventions. Otherwise, methyl 5
propylthio-2-benzimidazole carbamate would not have been the subject of a divisional application if a
single patent could have been issued for it as well as Albendazole.
The foregoing discussions notwithstanding, this Court does not sustain the award of actual damages
and attorneys fees in favor of private respondent. The claimed actual damages of P330,000.00 representing
lost profits or revenues incurred by private respondent as a result of the issuance of the injunction against
it, computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for eleven months, were
supported by the testimonies of private respondents President [25] and Executive Vice-President that the
average monthly sale of Impregon was P100,000.00 and that sales plummeted to zero after the issuance of
the injunction.[26] While indemnification for actual or compensatory damages covers not only the loss
suffered (damnum emergens) but also profits which the obligee failed to obtain (lucrum
cessans or ganacias frustradas), it is necessary to prove the actual amount of damages with a reasonable
degree of certainty based on competent proof and on the best evidence obtainable by the injured
party.[27] The testimonies of private respondents officers are not the competent proof or best evidence
obtainable to establish its right to actual or compensatory damages for such damages also require
presentation of documentary evidence to substantiate a claim therefor. [28]
In the same vein, this Court does not sustain the grant by the appellate court of attorneys fees to
private respondent anchored on Article 2208 (2) of the Civil Code, private respondent having been
allegedly forced to litigate as a result of petitioners suit. Even if a claimant is compelled to litigate with
third persons or to incur expenses to protect its rights, still attorneys fees may not be awarded where no
sufficient showing of bad faith could be reflected in a partys persistence in a case other than an erroneous
conviction of the righteousness of his cause.[29]There exists no evidence on record indicating that petitioner
was moved by malice in suing private respondent.
This Court, however, grants private respondent temperate or moderate damages in the amount
of P20,000.00 which it finds reasonable under the circumstances, it having suffered some pecuniary loss
the amount of which cannot, from the nature of the case, be established with certainty.[30]
 7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium (hereafter
PHIL PHARMAWEALTH, INC., G.R. No. 167715 Sulbactam Ampicillin). Ampicillin sodium is a specific example of the broad beta-
Petitioner,
lactam antibiotic disclosed and claimed in the Patent. It is the compound which efficacy
Present: is being enhanced by co-administering the same with sulbactam sodium. Sulbactam
sodium, on the other hand, is a specific compound of the formula IA disclosed and
CARPIO, J., Chairperson, claimed in the Patent.
- versus - NACHURA,
PERALTA,
8. Pfizer is marketing Sulbactam Ampicillin under the brand name Unasyn. Pfizer's
ABAD, and
Unasyn products, which come in oral and IV formulas, are covered by Certificates of
MENDOZA, JJ.
Product Registration (CPR) issued by the Bureau of Food and Drugs (BFAD) under the
name of complainants. The sole and exclusive distributor of Unasyn products in the
Promulgated: Philippines is Zuellig Pharma Corporation, pursuant to a Distribution Services
PFIZER, INC. and PFIZER (PHIL.) INC., Agreement it executed with Pfizer Phils. on January 23, 2001.
Respondents. November 17, 2010
9. Sometime in January and February 2003, complainants came to know that respondent
[herein petitioner] submitted bids for the supply of Sulbactam Ampicillin to several
hospitals without the consent of complainants and in violation of the complainants'
intellectual property rights. x x x
xxxx
x--------------------------------------------------x
10. Complainants thus wrote the above hospitals and demanded that the latter
immediately cease and desist from accepting bids for the supply [of] Sulbactam
DECISION Ampicillin or awarding the same to entities other than complainants. Complainants, in
the same letters sent through undersigned counsel, also demanded that respondent
immediately withdraw its bids to supply Sulbactam Ampicillin.
PERALTA, J.:
11. In gross and evident bad faith, respondent and the hospitals named in paragraph 9
hereof, willfully ignored complainants' just, plain and valid demands, refused to comply
therewith and continued to infringe the Patent, all to the damage and prejudice of
Before the Court is a petition for review on certiorari seeking to annul and set aside the Resolutions dated complainants. As registered owner of the Patent, Pfizer is entitled to protection under
January 18, 2005[1] and April 11, 2005[2] by the Court of Appeals (CA) in CA-G.R. SP No. 82734. Section 76 of the IP Code.

x x x x[4]
The instant case arose from a Complaint[3] for patent infringement filed against petitioner Phil Respondents prayed for permanent injunction, damages and the forfeiture and impounding of the alleged
Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with the Bureau of Legal infringing products. They also asked for the issuance of a temporary restraining order and a preliminary
Affairs of the Intellectual Property Office (BLA-IPO). The Complaint alleged as follows: injunction that would prevent herein petitioner, its agents, representatives and assigns, from importing,
xxxx distributing, selling or offering the subject product for sale to any entity in the Philippines.
6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (the Patent)
which was issued by this Honorable Office on July 16, 1987. The patent is valid until In an Order[5] dated July 15, 2003 the BLA-IPO issued a preliminary injunction which was effective for
July 16, 2004. The claims of this Patent are directed to a method of increasing the ninety days from petitioner's receipt of the said Order.
effectiveness of a beta-lactam antibiotic in a mammalian subject, which comprises co-
administering to said subject a beta-lactam antibiotic effectiveness increasing amount of
a compound of the formula IA. The scope of the claims of the Patent extends to a
combination of penicillin such as ampicillin sodium and beta-lactam antibiotic like
sulbactam sodium.
Prior to the expiration of the ninety-day period, respondents filed a Motion for Extension of Writ of
Preliminary Injunction[6] which, however, was denied by the BLA-IPO in an Order[7] dated October 15,
2003.
Respondents filed a Motion for Reconsideration but the same was also denied by the BLA-IPO in a
Resolution[8] dated January 23, 2004.
Respondents then filed a special civil action for certiorari with the CA assailing the October 15, 2003 and
January 23, 2004 Resolutions of the BLA-IPO. Respondents also prayed for the issuance of a preliminary
mandatory injunction for the reinstatement and extension of the writ of preliminary injunction issued by
the BLA-IPO.
While the case was pending before the CA, respondents filed a Complaint[9] with the Regional Trial Court
(RTC) of Makati City for infringement and unfair competition with damages against herein petitioner. In
said case, respondents prayed for the issuance of a temporary restraining order and preliminary injunction
to prevent herein petitioner from importing, distributing, selling or offering for sale sulbactam ampicillin
products to any entity in the Philippines. Respondents asked the trial court that, after trial, judgment be
rendered awarding damages in their favor and making the injunction permanent.
On August 24, 2004, the RTC of Makati City issued an Order [10] directing the issuance of a temporary
restraining order conditioned upon respondents' filing of a bond.
In a subsequent Order[11] dated April 6, 2005, the same RTC directed the issuance of a writ of preliminary
injunction prohibiting and restraining [petitioner], its agents, representatives and assigns from importing,
distributing or selling Sulbactam Ampicillin products to any entity in the Philippines.
Meanwhile, on November 16, 2004, petitioner filed a Motion to Dismiss [12] the petition filed with the CA
on the ground of forum shopping, contending that the case filed with the RTC has the same objective as
the petition filed with the CA, which is to obtain an injunction prohibiting petitioner from importing,
distributing and selling Sulbactam Ampicillin products.
On January 18, 2005, the CA issued its questioned Resolution[13] approving the bond posted by
respondents pursuant to the Resolution issued by the appellate court on March 23, 2004 which directed
the issuance of a temporary restraining order conditioned upon the filing of a bond. On even date, the CA
issued a temporary restraining order[14] which prohibited petitioner from importing, distributing, selling or
offering for sale Sulbactam Ampicillin products to any hospital or to any other entity in the Philippines,
or from infringing Pfizer Inc.'s Philippine Patent No. 21116 and impounding all the sales invoices and
other documents evidencing sales by [petitioner] of Sulbactam Ampicillin products.
On February 7, 2005, petitioner again filed a Motion to Dismiss[15] the case for being moot and academic,
contending that respondents' patent had already lapsed. In the same manner, petitioner also moved for the
reconsideration of the temporary restraining order issued by the CA on the same basis that the patent right
sought to be protected has been extinguished due to the lapse of the patent license and on the ground that
the CA has no jurisdiction to review the order of the BLA-IPO as said jurisdiction is vested by law in the
Office of the Director General of the IPO.
On April 11, 2005, the CA rendered its presently assailed Resolution denying the Motion to Dismiss, dated
November 16, 2004, and the motion for reconsideration, as well as Motion to Dismiss, both dated February
7, 2005.
Hence, the present petition raising the following issues:
a) Can an injunctive relief be issued based on an action of patent infringement when the
patent allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs
of the Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly different
causes of action and yet pray for the same relief? [16]
In the first issue raised, petitioner argues that respondents' exclusive right to monopolize the subject matter
of the patent exists only within the term of the patent. Petitioner claims that since respondents' patent
expired on July 16, 2004, the latter no longer possess any right of monopoly and, as such, there is no more
basis for the issuance of a restraining order or injunction against petitioner insofar as the disputed patent
is concerned.
The Court agrees.
Section 37 of Republic Act No. (RA) 165,[17] which was the governing law at the time of the issuance of
respondents' patent, provides:
Section 37. Rights of patentees. A patentee shall have the exclusive right to make,
use and sell the patented machine, article or product, and to use the patented process for
the purpose of industry or commerce, throughout the territory of the Philippines for the
term of the patent; and such making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the patent. [18]
It is clear from the above-quoted provision of law that the exclusive right of a patentee to make, use and
sell a patented product, article or process exists only during the term of the patent. In the instant case,
Philippine Letters Patent No. 21116, which was the basis of respondents in filing their complaint with the
BLA-IPO, was issued on July 16, 1987. This fact was admitted by respondents themselves in their
complaint. They also admitted that the validity of the said patent is until July 16, 2004, which is in
conformity with Section 21 of RA 165, providing that the term of a patent shall be seventeen (17) years
from the date of issuance thereof. Section 4, Rule 129 of the Rules of Court provides that an admission,
verbal or written, made by a party in the course of the proceedings in the same case, does not require proof
and that the admission may be contradicted only by showing that it was made through palpable mistake or
that no such admission was made. In the present case, there is no dispute as to respondents' admission that
the term of their patent expired on July 16, 2004. Neither is there evidence to show that their admission
was made through palpable mistake. Hence, contrary to the pronouncement of the CA, there is no longer
any need to present evidence on the issue of expiration of respondents' patent.
On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004, respondents no
longer possess the exclusive right to make, use and sell the articles or products covered by Philippine
Letters Patent No. 21116.
Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of a writ of
preliminary injunction, viz:
(a) That the applicant is entitled to the relief demanded, and the whole or part
of such relief consists in restraining the commission or continuance of the acts
complained of, or in requiring the performance of an act or acts, either for a limited
period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant; or
(c) That a party, court, or agency or a person is doing, threatening, or
attempting to do, or is procuring or suffering to be done, some act or acts probably in
violation of the rights of the applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.
In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide that if the matter is
of extreme urgency and the applicant will suffer grave injustice and irreparable injury, a temporary
restraining order may be issued ex parte.
From the foregoing, it can be inferred that two requisites must exist to warrant the issuance of an injunctive
relief, namely: (1) the existence of a clear and unmistakable right that must be protected; and (2) an urgent
and paramount necessity for the writ to prevent serious damage. [19]
In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution approving the bond
filed by respondents, the latter no longer had a right that must be protected, considering that Philippine
Letters Patent No. 21116 which was issued to them already expired on July 16, 2004. Hence, the issuance
by the CA of a temporary restraining order in favor of the respondents is not proper.
In fact, the CA should have granted petitioner's motion to dismiss the petition for certiorari filed before it
as the only issue raised therein is the propriety of extending the writ of preliminary injunction issued by
the BLA-IPO. Since the patent which was the basis for issuing the injunction, was no longer valid, any
issue as to the propriety of extending the life of the injunction was already rendered moot and academic.

As to the second issue raised, the Court, is not persuaded by petitioner's argument that, pursuant to the
doctrine of primary jurisdiction, the Director General of the IPO and not the CA has jurisdiction to review
the questioned Orders of the Director of the BLA-IPO.
It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual Property Code of the
Philippines, which is the presently prevailing law, the Director General of the IPO exercises exclusive
appellate jurisdiction over all decisions rendered by the Director of the BLA-IPO. However, what is being
questioned before the CA is not a decision, but an interlocutory order of the BLA-IPO denying
respondents' motion to extend the life of the preliminary injunction issued in their favor.
RA 8293 is silent with respect to any remedy available to litigants who intend to question an interlocutory
order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and Regulations on
Administrative Complaints for Violation of Laws Involving Intellectual Property Rights simply provides
that interlocutory orders shall not be appealable. The said Rules and Regulations do not prescribe a
procedure within the administrative machinery to be followed in assailing orders issued by the BLA-IPO
pending final resolution of a case filed with them. Hence, in the absence of such a remedy, the provisions
of the Rules of Court shall apply in a suppletory manner, as provided under Section 3, Rule 1 of the same
Rules and Regulations. Hence, in the present case, respondents correctly resorted to the filing of a special
civil action for certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot
appeal therefrom and they have no other plain, speedy and adequate remedy in the ordinary course of law.
This is consistent with Sections 1[20] and 4,[21] Rule 65 of the Rules of Court, as amended.
In the first place, respondents' act of filing their complaint originally with the BLA-IPO is already in
consonance with the doctrine of primary jurisdiction.
This Court has held that:
[i]n cases involving specialized disputes, the practice has been to refer the same to an
administrative agency of special competence in observance of the doctrine of primary
jurisdiction. The Court has ratiocinated that it cannot or will not determine a controversy
involving a question which is within the jurisdiction of the administrative tribunal prior
to the resolution of that question by the administrative tribunal, where the question
demands the exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal to determine technical
and intricate matters of fact, and a uniformity of ruling is essential to comply with the
premises of the regulatory statute administered. The objective of the doctrine of primary
jurisdiction is to guide a court in determining whether it should refrain from exercising
its jurisdiction until after an administrative agency has determined some question or
some aspect of some question arising in the proceeding before the court. It applies where
the claim is originally cognizable in the courts and comes into play whenever
enforcement of the claim requires the resolution of issues which, under a regulatory
scheme, has been placed within the special competence of an administrative body; in
such case, the judicial process is suspended pending referral of such issues to the
administrative body for its view.[22]
Based on the foregoing, the Court finds that respondents' initial filing of their complaint with the BLA-
IPO, instead of the regular courts, is in keeping with the doctrine of primary jurisdiction owing to the fact
that the determination of the basic issue of whether petitioner violated respondents' patent rights requires
the exercise by the IPO of sound administrative discretion which is based on the agency's special
competence, knowledge and experience.
However, the propriety of extending the life of the writ of preliminary injunction issued by the BLA-IPO
in the exercise of its quasi-judicial power is no longer a matter that falls within the jurisdiction of the said
administrative agency, particularly that of its Director General. The resolution of this issue which was
raised before the CA does not demand the exercise by the IPO of sound administrative discretion requiring
special knowledge, experience and services in determining technical and intricate matters of fact. It is
settled that one of the exceptions to the doctrine of primary jurisdiction is where the question involved is
purely legal and will ultimately have to be decided by the courts of justice.[23] This is the case with respect
to the issue raised in the petition filed with the CA.
Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations do not provide for a
procedural remedy to question interlocutory orders issued by the BLA-IPO. In this regard, it bears to
reiterate that the judicial power of the courts, as provided for under the Constitution, includes the authority
of the courts to determine in an appropriate action the validity of the acts of the political
departments.[24] Judicial power also includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.[25] Hence, the CA, and not the IPO Director General, has jurisdiction
to determine whether the BLA-IPO committed grave abuse of discretion in denying respondents' motion
to extend the effectivity of the writ of preliminary injunction which the said office earlier issued.
Lastly, petitioner avers that respondents are guilty of forum shopping for having filed separate actions
before the IPO and the RTC praying for the same relief.
The Court agrees.
Forum shopping is defined as the act of a party against whom an adverse judgment has been rendered in
one forum, of seeking another (and possibly favorable) opinion in another forum (other than by appeal or
the special civil action of certiorari), or the institution of two (2) or more actions or proceedings grounded
on the same cause on the supposition that one or the other court would make a favorable disposition. [26]
The elements of forum shopping are: (a) identity of parties, or at least such parties that represent the same
interests in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs being founded on
the same facts; (c) identity of the two preceding particulars, such that any judgment rendered in the other
action will, regardless of which party is successful, amount to res judicata in the action under
consideration.[27]
There is no question as to the identity of parties in the complaints filed with the IPO and the RTC.
Respondents argue that they cannot be held guilty of forum shopping because their complaints are based
on different causes of action as shown by the fact that the said complaints are founded on violations of
different patents.
The Court is not persuaded.
Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or omission by which a party
violates a right of another. In the instant case, respondents' cause of action in their complaint filed with the
IPO is the alleged act of petitioner in importing, distributing, selling or offering for sale Sulbactam
Ampicillin products, acts that are supposedly violative of respondents' right to the exclusive sale of the
said products which are covered by the latter's patent. However, a careful reading of the complaint filed
with the RTC of Makati City would show that respondents have the same cause of action as in their
complaint filed with the IPO. They claim that they have the exclusive right to make, use and sell Sulbactam
Ampicillin products and that petitioner violated this right. Thus, it does not matter that the patents upon
which the complaints were based are different. The fact remains that in both complaints the rights violated
and the acts violative of such rights are identical.
In fact, respondents seek substantially the same reliefs in their separate complaints with the IPO and the
RTC for the purpose of accomplishing the same objective.
It is settled by this Court in several cases that the filing by a party of two apparently different actions but
with the same objective constitutes forum shopping.[28] The Court discussed this species of forum shopping
as follows:
Very simply stated, the original complaint in the court a quo which gave
rise to the instant petition was filed by the buyer (herein private respondent and
his predecessors-in-interest) against the seller (herein petitioners) to enforce the
alleged perfected sale of real estate. On the other hand, the complaint in the
Second Case seeks to declare such purported sale involving the same real
property as unenforceable as against the Bank, which is the petitioner herein. In
other words, in the Second Case, the majority stockholders, in representation of
the Bank, are seeking to accomplish what the Bank itself failed to do in the
original case in the trial court. In brief, the objective or the relief being sought,
though worded differently, is the same, namely, to enable the petitioner
Bank to escape from the obligation to sell the property to respondent. [29]
In Danville Maritime, Inc. v. Commission on Audit,[30] the Court ruled as follows:
In the attempt to make the two actions appear to be different, petitioner impleaded
different respondents therein PNOC in the case before the lower court and the COA in
the case before this Court and sought what seems to be different reliefs. Petitioner asks
this Court to set aside the questioned letter-directive of the COA dated October 10, 1988
and to direct said body to approve the Memorandum of Agreement entered into by and
between the PNOC and petitioner, while in the complaint before the lower court
petitioner seeks to enjoin the PNOC from conducting a rebidding and from selling to
other parties the vessel T/T Andres Bonifacio, and for an extension of time for it to
comply with the paragraph 1 of the memorandum of agreement and damages. One can
see that although the relief prayed for in the two (2) actions are ostensibly different,
the ultimate objective in both actions is the same, that is, the approval of the sale of
vessel in favor of petitioner, and to overturn the letter directive of the COA of
October 10, 1988 disapproving the sale.[31]
 (2) impounding all the sales invoices and other documents
evidencing sales by pharmawealth of sulbactam
In the instant case, the prayer of respondents in their complaint filed with the IPO is as follows: ampicillin products; and

A. Immediately upon the filing of this action, issue an ex parte order (a) temporarily (3) disposing of the infringing goods outside the channels
restraining respondent, its agents, representatives and assigns from importing, of commerce.
distributing, selling or offering for sale Sulbactam Ampicillin products to the hospitals
named in paragraph 9 of this Complaint or to any other entity in the Philippines, or from (b) After hearing, issue a writ of preliminary injunction:
otherwise infringing Pfizer Inc.'s Philippine Patent No. 21116; and (b) impounding all
the sales invoices and other documents evidencing sales by respondent of Sulbactam (1) enjoining Pharmawealth, its agents, representatives and
Ampicillin products. assigns from importing, distributing, selling or
offering for sale infringing sulbactam ampicillin
B. After hearing, issue a writ of preliminary injunction enjoining respondent, its agents, products to various government hospitals or to any
representatives and assigns from importing, distributing, selling or offering for sale other entity in the Philippines, or from otherwise
Sulbactam Ampicillin products to the hospitals named in paragraph 9 of the Complaint infringing Patent No. 26810;
or to any other entity in the Philippines, or from otherwise infringing Pfizer Inc.'s
Philippine Patent No. 21116; and (2) impounding all the sales invoices and other documents
evidencing sales by Pharmawealth of sulbactam
C. After trial, render judgment: ampicillin products; and

(i) declaring that respondent has infringed Pfizer Inc.'s (3) disposing of the infringing goods outside the channels of commerce.
Philippine Patent No. 21116 and that respondent has no
right whatsoever over complainant's patent; (c) After trial, render judgment:

(ii) ordering respondent to pay complainants the following amounts: (1) finding Pharmawealth to have infringed Patent No.
26810 and declaring Pharmawealth to have no right
(a) at least P1,000,000.00 as actual damages; whatsoever over plaintiff's patent;
(b) P700,000.00 as attorney's fees and litigation expenses;
(d) P1,000,000.00 as exemplary damages; and (2) ordering Pharmawealth to pay plaintiffs the following
(d) costs of this suit. amounts:
(iii) ordering the condemnation, seizure or forfeiture of respondent's (i) at least P3,000,000.00 as actual damages;
infringing goods or products, wherever they may be found, including (ii) P500,000.00 as attorney's fees and P1,000,000.00 as litigation expenses;
the materials and implements used in the commission of infringement, (iii) P3,000,000.00 as exemplary damages; and
to be disposed of in such manner as may be deemed appropriate by (iv) costs of this suit.
this Honorable Office; and (3) ordering the condemnation, seizure or forfeiture of
Pharmawealth's infringing goods or products,
(iv) making the injunction permanent.[32] wherever they may be found, including the
materials and implements used in the commission
of infringement, to be disposed of in such manner
In an almost identical manner, respondents prayed for the following in their complaint filed with the RTC: as may be deemed appropriate by this Honorable
(a) Immediately upon the filing of this action, issue an ex parte order: Court; and

(1) temporarily restraining Pharmawealth, its agents, representatives and (4) making the injunction permanent.[33]
assigns from importing, distributing, selling or offering for sale infringing
sulbactam ampicillin products to various government and private hospitals or
to any other entity in the Philippines, or from otherwise infringing Pfizer Inc.'s
Philippine Patent No. 26810.
It is clear from the foregoing that the ultimate objective which respondents seek to achieve in their separate SO ORDERED.
complaints filed with the RTC and the IPO, is to ask for damages for the alleged violation of their right to
exclusively sell Sulbactam Ampicillin products and to permanently prevent or prohibit petitioner from
selling said products to any entity.Owing to the substantial identity of parties, reliefs and issues in the IPO
and RTC cases, a decision in one case will necessarily amount to res judicata in the other action.

It bears to reiterate that what is truly important to consider in determining whether forum shopping exists
or not is the vexation caused the courts and parties-litigant by a party who asks different courts and/or
administrative agencies to rule on the same or related causes and/or to grant the same or substantially the
same reliefs, in the process creating the possibility of conflicting decisions being rendered by the
different fora upon the same issue.[34]

Thus, the Court agrees with petitioner that respondents are indeed guilty of forum shopping.

Jurisprudence holds that if the forum shopping is not considered willful and deliberate, the subsequent
case shall be dismissed without prejudice, on the ground of either litis pendentia or res
judicata.[35] However, if the forum shopping is willful and deliberate, both (or all, if there are more than
two) actions shall be dismissed with prejudice.[36] In the present case, the Court finds that respondents did
not deliberately violate the rule on non-forum shopping. Respondents may not be totally blamed for
erroneously believing that they can file separate actions simply on the basis of different patents. Moreover,
in the suit filed with the RTC of Makati City, respondents were candid enough to inform the trial court of
the pendency of the complaint filed with the BLA-IPO as well as the petition for certiorari filed with the
CA. On these bases, only Civil Case No. 04-754 should be dismissed on the ground of litis pendentia.

WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions of the Court of Appeals,
dated January 18, 2005 and April 11, 2005, in CA-G.R. No. 82734, are REVERSED and SET ASIDE.
The petition for certiorari filed with the Court of Appeals is DISMISSED for being moot and academic.

Civil Case No. 04-754, filed with the Regional Trial Court of Makati City, Branch 138, is
likewise DISMISSED on the ground of litis pendentia.
[G.R. No. 118708. February 2, 1998]
CRESER PRECISION SYSTEMS, INC., petitioner, vs. COURT OF APPEALS AND FLORO
INTERNATIONAL CORP., respondents.
DECISION
MARTINEZ, J.:
This petition for review on certiorari assails the decision[1]. The decision of the Court of Appeals
was penned by Justice Gloria C. Paras and concurred in by Justice Salome A. Montoya and Justice Hector
L. Hofilea.
1 of the Court of Appeals dated November 9, 1994 in C.A.-G.R. SP. No. 34425 entitled Floro
International Corp. vs. Hon. Tirso D.C Cruz and Creser Precision System, Inc., the dispositive portion of
which reads:
WHEREFORE, THE PETITION IS HEREBY GRANTED. THE COMPLAINT FOR INJUNCTION
AND DAMAGES, CIVIL CASE NO. 93-1856 BEFORE THE RESPONDENT JUDGE IS HEREBY
ORDERED DISMISSED AND HIS ORDERS THEREIN OF DECEMBER 29, 1993 AND MAY 11,
1994 ARE ORDERED SET ASIDE.
Private respondent is a domestic corporation engaged in the manufacture, production, distribution
and sale of military armaments, munitions, airmunitions and other similar materials. [2]
On January 23, 1990, private respondent was granted by the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT), a Letters Patent No. UM-6938[3] covering an aerial fuze which was
published in the September-October 1990, Vol. III, No. 5 issue of the Bureau of Patents Official Gazette. [4]
Sometime in November 1993, private respondent, through its president, Mr. Gregory Floro, Jr.,
discovered that petitioner submitted samples of its patented aerial fuze to the Armed Forces of the
Philippines (AFP) for testing. He learned that petitioner was claiming the aforesaid aerial fuze as its own
and planning to bid and manufacture the same commercially without license or authority from private
respondent. To protect its right, private respondent on December 3, 1993, sent a letter [5] to petitioner
advising it fro its existing patent and its rights thereunder, warning petitioner of a possible court action
and/or application for injunction, should it proceed with the scheduled testing by the military on December
7, 1993.
In response to private respondents demand, petitioner filed on December 8, 1993 a complaint [6] for
injunction and damages arising from the alleged infringement before the Regional Trial Court of Quezon
City, Branch 88. The complaint alleged, among others: that petitioner is the first, true and actual inventor
of an aerial fuze denominated as Fuze, PDR 77 CB4 which is developed as early as December 1981 under
the Self-Reliance Defense Posture Program (SRDP) of the AFP; that sometime in 1986, petitioner began
supplying the AFP with the said aerial fuze; that private respondents aerial fuze is identical in every respect
to the petitioners fuze; and that the only difference between the two fuzes are miniscule and merely
cosmetic in nature. Petitioner prayed that a temporary restraining order and/or writ of preliminary
injunction be issued enjoining private respondent including any and all persons acting on its behalf from
manufacturing, marketing and/or profiting therefrom, and/or from performing any other act in connection
therewith or tending to prejudice and deprive it of any rights, privileges and benefits to which it is duly
entitled as the first, true and actual inventor of the aerial fuze.
On December 10, 1993, the trial court issued a temporary restraining order. Thereafter, hearings were
held on the application of petitioner for the issuance of a writ of preliminary injunction, with both parties
presenting their evidence. After the hearings, the trial court directed the parties to submit their respective
memoranda in support of their positions.
On December 27, 1993, private respondent submitted its memorandum[7] alleging that petitioner has
no cause of action to file a complaint of infringement against it since it has no patent for the aerial
fuze which it claims to have invented; that petitioners available remedy is to file a petition for cancellation
of patent before the Bureau of Patents; that private respondent as the patent holder cannot be stripped of
its property right over the patented aerial fuze consisting of the exclusive right to manufacture, use and
sell the same and that it stands to suffer irreparable damage and injury if it is enjoined from the exercise
of its property right over its patent.
On December 29, 1993, the trial court issued an Order[8] granting the issuance of a writ of preliminary
injunction against private respondent the dispositive portion of which reads:
WHEREFORE, plaintiffs application for the issuance of a writ of preliminary injunction is granted and,
upon posting of the corresponding bond by plaintiff in the amount of PHP 200,000.00, let the writ of
preliminary injunction be issued by the branch Clerk of this Court enjoining the defendant and any and all
persons acting on its behalf or by and under its authority, from manufacturing, marketing and/or selling
aerial fuzes identical, to those of plaintiff, and from profiting therefrom, and/or from performing any other
act in connection therewith until further orders from this Court.
Private respondent moved for reconsideration but this was denied by the trial courts in its Order [9] of
May 11, 1994, pertinent portions of which read:
For resolution before this Court is the Motion for Reconsideration filed by the defendant and the plaintiffs
Opposition thereto. The Court finds no sufficient cause to reconsider its order dated December 29, 1993.
During the hearing for the issuance of the preliminary injunction, the plaintiff has amply proven its
entitlement to the relief prayed for. It is undisputed that the plaintiff has developed its aerial fuze way back
in 1981 while the defendant began manufacturing the same only in 1987. Thus, it is only logical to
conclude that it was the plaintiffs aerial fuze that was copied or imitated which gives the plaintiff the right
to have the defendant enjoined from manufacturing, marketing and/or selling aerial fuzes identical to those
of the plaintiff, and from profiting therefrom and/or performing any other act in connection therewith until
further orders from this Court. With regards to the defendants assertion that an action for infringement
may only be brought by anyone possessing right, title or interest to the patented invention, (Section 42,
RA 165) qualified by Section 10, RA 165 to include only the first true and actual inventor, his heirs, legal
representatives to assignees, this court finds the foregoing to be untenable. Sec. 10 merely enumerates the
persons who may have an invention patented which does not necessarily limit to these persons the right to
institute an action for infringement. Defendant further contends that the order in issue is disruptive of
the status quo. On the contrary, the order issued by the Court in effect maintained the status quo. The last
actual , peaceable uncontested status existing prior to this controversy was the plaintiff manufacturing and
selling its own aerial fuzes PDR 77 CB4 which was ordered stopped through the defendants letter. With
issuance of the order, the operations of the plaintiff continue. Lastly, this court believes that the defendant
will not suffer irreparable injury by virtue of said order. The defendants claim is primarily hinged on its
patent (Letters Patent No. UM-6983) the validity of which is being questioned in this case.
WHEREFORE, premises considered, the Motion for Reconsideration is hereby denied for lack of merit.
SO ORDERED.
Aggrieved, private respondent on June 27, 1994, filed a petition for certiorari, mandamus and
prohibition[10]before respondent Court of Appeals raising as grounds the following:
a. Petitioner has no cause of action for infringement against private respondent, the latter not
having any patent for the aerial fuze which it claims to have invented and developed and
allegedly infringed by private respondent;
b. The case being an action for cancellation or invalidation of private respondents Letters Patent
over its own aerial fuze, the proper venue is the Office of the Director of Patents;
c. The trial court acted in grave abuse of discretion and or in excess of jurisdiction in finding
that petitioner has fully established its clear title or right to preliminary injunction;
d. The trial court acted in grave abuse of discretion and/or in excess of jurisdiction in granting
the preliminary injunction, it being disruptive of the status quo; and
e. The trial court acted in grave abuse of discretion and/or in excess of jurisdiction in granting
the preliminary injunction thereby depriving private respondent of its property rights
over the patented aerial fuze and cause it irreparable damages.
On November 9, 1994, the respondent court rendered the now assailed decision reversing the trial
courts Order of December 29, 1993 and dismissing the complaint filed by petitioner.
The motion for reconsideration was also denied on January 17, 1995. [11] Hence, this present petition.
It is petitioners contention that it can file, under Section 42 of the Patent Law (R.A. 165), an action
for infringement not as a patentee but as an entity in possession of a right, title or interest in and to the
patented invention. It advances the theory that while the absence of a patent may prevent one from lawfully
suing another for infringement of said patent, such absence does not bar the first true and actual inventor
of the patented invention from suing another who was granted a patent in a suit for declaratory or injunctive
relief recognized under American patent laws. This remedy, petitioner points out, may be likened to a civil
action for infringement under Section 42 of the Philippine Patent Law.
We find the above arguments untenable.
Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:
SECTION. 42. Civil action for infringement. Any patentee, or anyone possessing any right, title or interest
in and to the patented invention, whose rights have been infringed, may bring a civil action before the
proper Court of First Instance (now Regional Trial court), to recover from the infringer damages sustained
by reason of the infringement and to secure an injunction for the protection of his right. x x x
Under the aforequoted law, only the patentee or his successors-in-interest may file an action for
infringement. The phrase anyone possessing any right, title or interest in and to the patented
invention upon which petitioner maintains its present suit, refers only to the patentees successors-in-
interest, assignees or grantees since actions for infringement of patent may be brought in the name of the
person or persons interested, whether as patentee, assignees or grantees, of the exclusive
right.[12] Moreover, there can be no infringement of a patent until a patent has been issued, since whatever
right one has to the invention covered by the patent arises alone from the grant of patent. [13] In short, a
person or entity who has not been granted letters patent over an invention and has not acquired any right
or title thereto either as assignee or as licensee, has no cause of action for infringement because the right
to maintain an infringement suit depends on the existence of the patent. [14]
Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis or cause of
action to institute the petition for injunction and damages arising from the alleged infringement by private
respondent. While petitioner claims to be the first inventor of the aerial fuze, still it has no right of property
over the same upon which it can maintain a suit unless it obtains a patent therefor. Under American
jurisprudence, and inventor has no common-law right to a monopoly of his invention. He has the right to
make, use and vend his own invention, but if he voluntarily discloses it, such as by offering it for sale, the
world is free to copy and use it with impunity. A patent, however, gives the inventor the right to exclude
all others. As a patentee, he has the exclusive right of making, using or selling the invention. [15]
Further, the remedy of declaratory judgment or injunctive suit on patent invalidity relied upon by
petitioner cannot be likened to the civil action for infringement under Section 42 of the Patent Law. The
reason for this is that the said remedy is available only to the patent holder or his successors-in-interest.
Thus, anyone who has no patent over an invention but claims to have a right or interest thereto can not file
an action for declaratory judgment or injunctive suit which is not recognized in this jurisdiction. Said
person, however, is not left without any remedy. He can, under Section 28 of the aforementioned law, file
a petition for cancellation of the patent within three (3) years from the publication of said patent with the
Director of Patents and raise as ground therefor that the person to whom the patent was issued is not the
true and actual inventor. Hence, petitioners remedy is not to file an action for injunction or infringement
but to file a petition for cancellation of private respondent patent. Petitioner however failed to do so. As
such, it can not now assail or impugn the validity of the private respondents letters patent by claiming that
it is the true and actual inventor of the aerial fuze.
Thus, as correctly ruled by the respondent Court of Appeals in its assailed decision: since the
petitioner (private respondent herein) is the patentee of the disputed invention embraced by letters of
patent UM No. 6938 issued to it on January 23, 1990 by the Bureau of Patents, it has in its favor not only
the presumption of validity of its patent, but that of a legal and factual first and true inventor of the
invention.
In the case of Aguas vs. De Leon,[16] we stated that:
The validity of the patent issued by the Philippine Patent Office in favor of the private respondent and the
question over the investments, novelty and usefulness of the improved process therein specified and
described are matters which are better determined by the Philippines patent Office, composed of experts
in their field, have, by the issuance of the patent in question, accepted the thinness of the private
respondents new tiles as a discovery. There is a presumption that the Philippine Patent Office has correctly
determined the patentability of the improvement by the private respondent of the process in question.

In fine, in the absence of error or abuse of power or lack or jurisdiction or grave abuse of discretion,
we sustain the assailed decision of the respondent Court of Appeal.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No pronouncement as
to costs.
SO ORDERED.
G.R. No. 82542 September 29, 1988
BARRY JOHN PRICE, JOHN WATSON CLITHERON and JOHN BRADSHAW, Assignors to
ALLEN & HANBURYS, LTD., petitioners,
vs.
UNITED LABORATORIES, respondent.
Castillo, Laman, Tan & Pantaleon Law Offices for petitioners.
Teodoro B. Pison for respondent.
GRIÑO-AQUINO, J.:
The petitioners are the owners-assignees of Philippine Patent No. 13540 which was granted to them on
June 26,1980 for a pharmaceutical compound known as "aminoalkyl furan derivatives." On October 1,
1982, respondent United Laboratories, Inc. (or UNILAB) filed in the Philippine Patent Office a petition
Inter Partes Case No. 1683, "United Laboratories, Inc. versus Barry John Price, John Watson
CLITHERON and John Bradshaw, assignors to Allen & Hanburys Ltd.') for the issuance of a compulsory
license to use the patented compound in its own brands of medicines and pharmaceuticals and to sell,
distribute, or otherwise dispose of such medicines or pharmaceutical preparations in the country. The
petition further alleged that the patent relates to medicine and that petitioner, which has had long
experience in the business of manufacturing and selling pharmaceutical products, possesses the capability
to use the subject compound in the manufacture of a useful product or of making dosage formulations
containing the said compound.
After the hearing, the Philippine Patent Office rendered a decision on June 2, 1986, granting UNILAB a
compulsory license subject to ten (1 0) terms and conditions No. 3 of which provides as follows:
3. By virtue of this license, petitioner shall pay the respondent a royalty on all license
products containing the patented substance made and sold by the Petitioner in the
amount equivalent to TWO AND ONE HALF (2.5) PER CENT OF THE NET SALES
in Philippine currency. The terms 'net sales' means the gross billed for the product
pertaining to Letters Patent No. 13540 less-
a) Transportation charges or allowances, if any, included in such
amount;
b) Trade, quantity or cash discounts and broker's or agent's or
distributor's commissions, if any, allowed or paid;
c) Credits or allowances, if any, given or made on account with
reflection or return of the product previously delivered; and
d) Any tax, excise or government charge included in such amount, or
measured by the production, sale, transportation, use or delivery of the
products.
In case Petitioner's product containing the patented substance shall contain one or more
active ingredients as admixed product, the royalty to be paid shall be determined in
accordance with the following formula:
Net Sales on Value of
Admixed Product Patented Substance
Royalty = _______________ x 0.025 x ___________________
(Value of Pa Value of
tended Substance) Active Ingredients
4. The royalties shall be computed after the end of each calendar quarter for all goods
containing the patented substance herein involved, made and sold during the preceding
quarter and to be paid by the Petitioner at its place of business on or before the thirtieth
day of the month following the end of each calendar quarter. Payments should be made
to Respondent's authorized representative in the Philippines; (pp. 35-36, Rollo.)
The patentees appealed the decision to the Court of Appeals (CA-G.R. No. SP-09308) which dismissed
the appeal on December 4, 1 987. They have come to his Court praying for a review of the Appellate
Court's decision on the grounds that it erred:
1. in upholding the Director's unilateral determination of the terms and conditions of the
compulsory license, without affording the parties an opportunity to negotiate the terms
and conditions freely and by themselves;
2. in finding that the respondent possess the legally required capability to make use of
the petitioner's patented compound in the manufacture of a useful product;
3. in affirming the Director's award of the entire patent to the respondent, when only one
claim of the patent was controverted and
4. in considering evidence that UNILABs capability to use the compound was acquired
after, not before, filing its petition for compulsory licensing.
The first assignment of error has no merit. The terms and conditions of the compulsory license were fixed
by the Director of Patents after a hearing and careful consideration of the evidence of the parties and in
default of an agreement between them as to the terms of the license. This he is authorized to do under
Section 36 of Republic Act No. 165 which provides:
 Sec. 36. GRANT OF LICENSE.—If the Director finds that a case for the grant of license
under Section 34, hereof made out, he may order the grant of an appropriate license and
in default of agreement among the parties as to the terms and conditions of the license
he shall fix the terms and conditions of the license in the order.
The order of the Director granting a license under this Chapter, when final, shall operate
as a deed granting a- license executed by the patentee and the other patties in interest.
and under Section 35 of P.D. 1263, amending portions of Republic Act No.165 which reads:
Sec. 35. GRANT OF LICENSE.—(1)If the Director finds that a case for the grant of a
license under Sec. 34 hereof has been made out, he shall within one hundred eighty (180)
days from the date the petition was filed, order the grant of an appropriate license. The
order shall state the terms and conditions of the license which he himself must fix in
default of an agreement on the matter manifested or submitted by the parties during the
hearing.
The Court of Appeals found that the 2.5% royalty fixed by the Director of Patents 'is just and reasonable.'
We quote its observations hereunder:
Respondent-appellant contends further that the 2.5% royalty rate is unfair to respondent-
appellant as to amount to an undue deprivation of its property right. We do not hold this
view. The royalty rate of 2.5% provided for by the Director of Patents is reasonable.
Paragraph 3, Section 35-B, Republic Act No. 165, as amended by Presidential Decree
No. 1263, provides:
(3) A compulsory license shall only be granted subject to the payment
of adequate royalties commensurate with the extent to which the
invention is worked. However, royalty payments shall not exceed five
per cent (5%) of the net wholesale price (as defined in Section 33-A)
of the products manufactured under the license. If the product,
substance, or process subject of the compulsory license is involved in
an industrial project approved by the Board of Investments, the royalty
payable to the patentee or patentees shall not exceed three per cent
(3%) of the net wholesale price (as defined in Section 34-A) of the
patented commodity and/or commodity manufactured under the
patented process; the same rule of royalty shall be paid whenever two
or more patents are involved, which royalty shall be distributed to the
patentees in rates proportional to the extent of commercial use by the
licensee giving preferential values to the holder of the oldest
subsisting product patent.
Thus, said provision grants to the Director of Patents the use of his sound discretion in
fixing the percentage for the royalty rate and We find that the Director of Patents
committed no abuse of this discretion. Also, there is always a presumption of regularity
in the performance of one's official duties.
Moreover, what UNILAB has with the compulsory license is the bare right to use the
patented chemical compound in the manufacture of a special product, without any
technical assistance from herein respondent-appellant. Besides, the special product to be
manufactured by UNILAB will only be used, distributed, and disposed locally.
Therefore, the royalty rate of 2.5% is just and reasonable. (pp. 10-11, CA Decision, pp.
44-45, Rollo)
Furthermore, as pointed out in the respondent's comment on the petition, Identical terms and conditions
had been prescribed for the grant of compulsory license in a good number of patent cases (United
Laboratories, Inc. vs. Boehringer Ingelhelm, GMBH, IPC 929, July 27, 1981; United Laboratories, Inc.
vs. Bristol-Myers Company, IPC 1179, Aug. 20, 1981; United Laboratories, Inc. vs. E.R. Squibb & Sons,
Inc., IPC 1349, Sept. 30, 1981; United Laboratories, Inc. vs. Helmut Weber, et al., IPC 949, Dec. 13,1982;
Oceanic Pharmacal Inc. vs. Gruppo Lepetit S.A. IPC 1549, Dec. 21, 1982; United Laboratories. Inc. vs.
Boehringer Ingelheim, IPC 1185, June 8, 1983; United Laboratories, Inc. vs. Pfizer Corp., IPC 1184, June
10,, 1983; Doctors Pharmaceuticals, Inc. vs. Maggi, et al., July 11, 1983; Drugmaker's Laboratories v.
Herningen et al., IPC 1679, September 22,1983; Superior Pharmacraft Inc. vs. Maggi, et al., IPC 1759,
January 10, 1984; United Laboratories, Inc. vs. Van Gelder et al., IPC 1627, June 29, 1984; Drugmaker's
Laboratories, Inc. vs. Janssen Pharmaceutical N.V. IPC 1555, August 27,1984; United Laboratories Inc.
vs. Graham John Durant et al., IPC 1731, August 14, 1987; United Laboratories, Inc. vs. Albert Anthony
Carr, IPC 1906, August 31, 1987).
The Director's finding that UNILAB has the capability to use the patented compound in the manufacture
of an anti-ulcer pharmaceutical preparation is a factual finding which is supported by substantial evidence,
hence, the Court of Appeals did not commit a reversible error in affirming it (Philippine Nut Industry, Inc.
vs. Standard Brands, Inc., 65 SCRA 575; Sy Ching vs. Gaw Liu 44 SCRA 143; De Gala Sison vs. Manalo,
8 SCRA 595; Goduco vs. Court of Appeals, 14 SCRA 282; Ramos vs. Pepsi-Cola Bottling Company of
the P.I., 19 SCRA 289. Of indubitable relevance to this point is the evidence that UNILAB has been
engaged in the business of manufacturing drugs and pharmaceutical products for the past thirty (30) years,
that it is the leading drug manufacturer in the country, that it has the necessary equipment and technological
expertise for the development of solid dosage forms or for tablet, capsule, and liquid preparations, and that
it maintains standards and procedures to ensure the quality of its products. Even if it were true, as alleged
by the patentee (although it is denied by UNILAB), that its capability to use the patented compound was
only acquired after the petition for compulsory licensing had been filed, the important thing is that such
capability was proven to exist during the hearing of the petition.
The patented invention in this case relates to medicine and is necessary for public health as it can be used
as component in the manufacture of anti-ulcer medicine. The Director of Patents did not err in granting a
compulsory license over the entire patented invention for there is no law requiring that the license be
limited to a specific embodiment of the invention, or, to a particular claim. The invention in this case
relates to new aminoalkyl derivatives which have histamine H2 blocking activity, having the general
formula (I) and physiologically acceptable salts, Noxides and dehydrates thereof. The compound ranitidine
hydrochloride named in Claim 45 is also covered by General Claim I and several other sub-generic claims.
Therefore, a license for Claim 45 alone would not be fully comprehensive. In any event, since the petitioner
will be paid royalties on the sales of any products the licensee may manufacture using any or all of the
patented compounds, the petitioner cannot complain of a deprivation of property rights without just
compensation.
WHEREFORE, the petition for review is denied for lack of merit.

SO ORDERED.
[G.R. No. 121867. July 24, 1997]
SMITH KLINE & FRENCH LABORATORIES, LTD., petitioner, vs. COURT OF APPEALS,
BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER and
DOCTORS PHARMACEUTICALS, INC. respondents.
DECISION
DAVIDE, JR., J.:
This is an appeal under Rule 45 of the Rules of Court from the decision[1] of 4 November 1994 of the
Court of Appeals in CA-G.R. SP No. 33520, which affirmed the 14 February 1994 decision [2] of the
Director of the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) granting a compulsory
non-exclusive and non-transferable license to private respondent to manufacture, use and sell in the
Philippines its own brands of pharmaceutical products containing petitioners patented pharmaceutical
product known as Cimetidine.
Petitioner is a foreign corporation with principal office at Welwyn Garden City, England. It owns
Philippine Letters Patent No. 12207 issued by the BPTTT for the patent of the drug Cimetidine.
Private respondent is a domestic corporation engaged in the business of manufacturing and
distributing pharmaceutical products. On 30 March 1987, it filed a petition for compulsory licensing[3] with
the BPTTT for authorization to manufacture its own brand of medicine from the drug Cimetidine and to
market the resulting product in the Philippines. The petition was filed pursuant to the provisions of Section
34 of Republic Act No. 165 (An Act Creating a Patent Office Prescribing Its Powers and Duties,
Regulating the Issuance of Patents, and Appropriating Funds Therefor), which provides for the compulsory
licensing of a particular patent after the expiration of two years from the grant of the latter if the patented
invention relates to, inter alia, medicine or that which is necessary for public health or public
safety. Private respondent alleged that the grant of Philippine Letters Patent No. 12207 was issued on 29
November 1978; that the petition was filed beyond the two-year protective period provided in Section 34
of R.A. No. 165; and that it had the capability to work the patented product or make use of it in its
manufacture of medicine.
Petitioner opposed, arguing that private respondent had no cause of action and lacked the capability
to work the patented product; the petition failed to specifically divulge how private respondent would use
or improve the patented product; and that private respondent was motivated by the pecuniary gain attendant
to the grant of a compulsory license. Petitioner also maintained that it was capable of satisfying the demand
of the local market in the manufacture and marketing of the medicines covered by the patented
product. Finally, petitioner challenged the constitutionality of Sections 34 and 35 of R.A. No. 165 for
violating the due process and equal protection clauses of the Constitution.
After appropriate proceedings, the BPTTT handed down its decision on 14 February 1994, with the
dispositive portion thereof providing:
NOW, THEREFORE, by virtue of the powers vested in this Office by Republic Act No. 165, as
amended by Presidential Decree No. 1263, there is hereby issued a license in favor of the herein
[private respondent], United Laboratories, Inc., [sic] under Letters Patent No. 12207 issued on
November 29, 1978, subject to the following terms and conditions:
1. That [private respondent] be hereby granted a non-exclusive and non-transferable
license to manufacture, use and sell in the Philippines its own brands of
pharmaceutical products containing [petitioner's] patented invention which is
disclosed and claimed in Letters Patent No. 12207;
2. That the license granted herein shall be for the remaining life of said Letters Patent
No. 12207 unless this license is terminated in the manner hereinafter provided and
that no right or license is hereby granted to [private respondent] under any patent to
[petitioner] or [sic] other than recited herein;
3. By virtue of this license, [private respondent] shall pay [petitioner] a royalty on all
license products containing the patented substance made and sold by [private
respondent] in the amount equivalent to TWO AND ONE HALF PERCENT (2.5%)
of the net sales in Philippine currency. The term "net scale" [sic] means the gross
amount billed for the product pertaining to Letters Patent No. 12207, less --
(a) Transportation charges or allowances, if any, included in such amount;
(b) Trade, quantity or cash discounts and broker's or agent's or distributor's
commissions, if any, allowed or paid;
(c) Credits or allowances, if any, given or made on account of rejection or return of
the patented product previously delivered; and
(d) Any tax, excise or government charge included in such amount, or measured by
the production sale, transportation, use of delivery of the products.
In case [private respondent's] product containing the patented substance shall contain one or more
active ingredients admixed therewith, said product hereinafter identified as admixed product, the
royalty to be paid shall be determined in accordance with the following formula:
Net Sales on Value of Patented
ROYALTY = Admixed Product x 0.025 x Substance
Value of Patented Value of Other
Substance Active Ingredients
4. The royalties shall be computed after the end of each calendar quarter to all goods containing
the patented substance herein involved, made and sold during the precedent quarter and to be
paid by [private respondent] at its place of business on or before the thirtieth day of the month
following the end of each calendar quarter. Payments should be made to [petitioner's] authorized
representative in the Philippines;
5. [Private respondent] shall keep records in sufficient detail to enable [petitioner] to determine
the royalties payable and shall further permit its books and records to be examined from time to
time at [private respondent's] premises during office hours, to the extent necessary to be made at
the expense of [petitioner] by a certified public accountant appointed by [petitioner] and
acceptable to [private respondent].
6. [Private respondent] shall adopt and use its own trademark or labels on all its products
containing the patented substance herein involved;
7. [Private respondent] shall comply with the laws on drugs and medicine requiring previous
clinical tests and approval of proper government authorities before selling to the public its own
products manufactured under the license;
8. [Petitioner] shall have the right to terminate the license granted to [private respondent] by
giving the latter thirty (30) days notice in writing to that effect, in the event that [private
respondent] default [sic] in the payment of royalty provided herein or if [private respondent] shall
default in the performance of other covenants or conditions of this agreement which are to be
performed by [private respondent]:
(a) [Private respondent] shall have the right provided it is not in default to
payment or royalties or other obligations under this agreement, to
terminate the license granted to its, [sic]giving [petitioner] thirty (30)
days-notice in writing to that effect;
(b) Any termination of this license as provided for above shall not in any
way operate to deny [petitioner] its rights or remedies, either at
laws [sic] or equity, or relieve [private respondent] of the payment of
royalties or satisfaction of other obligations incurred prior to the effective
date of such termination; and
(c) Notice of termination of this license shall be filed with the Bureau of
Patents, Trademarks and Technology Transfer.
9. In case of dispute as to the enforcement of the provisions of this license, the matter shall be
submitted for arbitration before the Director of Bureau of Patents, Trademarks and Technology
Transfer or any ranking official of the Bureau of Patents, Trademarks and Technology Transfer
duly delegated by him;
10. This License shall inure to the benefit of each of the parties herein, to the subsidiaries and
assigns of [petitioner] and to the successors and assigns of [private respondent]; and
11. This license take [sic] effect immediately.[4]
Petitioner then appealed to the Court of Appeals by way of a petition for review, which was docketed
as CA-G.R. SP No. 33520. Petitioner claimed that the appealed decision was erroneous because:
I health. Hence, the award of compulsory license is a valid exercise of police power.
... [IT] VIOLATES INTERNATIONAL LAW AS EMBODIED IN THE PARIS
CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY AND MUST
ACCORDINGLY BE SET ASIDE AND MODIFIED.
II
... [IT] IS AN INVALID EXERCISE OF POLICE POWER.
III
CONCEDING ARGUENDO THE QUESTIONED DECISIONS VALIDITY, THE
BPTTTS PRONOUNCEMENT FIXING THE ROYALTY AT 2.5% OF THE NET
WHOLESALE PRICE IN PHILIPPINE CURRENCY WAS RENDERED WITHOUT ANY
FACTUAL BASIS AND AMOUNTS TO EXPROPRIATION OF PRIVATE PROPERTY
WITHOUT JUST COMPENSATION WHICH IS VIOLATIVE OF THE
CONSTITUTION.
IV
... [IT] SHOULD NOT HAVE PROCEEDED TO DECIDE THE CASE BELOW FOR
FAILURE OF PRIVATE RESPONDENT TO AFFIRMATIVELY PROVE THE
JURISDICTIONAL FACT OF PUBLICATION.[5]
In its decision of 4 November 1994,[6] the Court of Appeals affirmed in toto the challenged
decision. We quote its findings and conclusion upon which the affirmance is anchored, viz.:
An assiduous scrutiny of the impugned decision of the public respondent reveals that the same
is supported by substantial evidence. It appears that at the time of the filing of the petition for
compulsory license on March 24, 1987, the subject letters Patent No. 12207 issued on November
29, 1978 has been in effect for more than two (2) years. The patented invention relates to
compound and compositions used in inhibiting certain actions of the histamine, hence, it relates
to medicine. Moreover, after hearing and careful consideration of the evidence presented, the
Director of Patents ruled that - there is ample evidence to show that [private respondent]
possesses such capability, having competent personnel, machines and equipment as well as
permit to manufacture different drugs containing patented active ingredients such as ethambutol
of American Cyanamid and Ampicillin and Amoxicillin of Beecham Groups, Ltd.
As to the claim by the petitioner that it has the capacity to work the patented product although
it was not shown that any pretended abuse has been committed, thus the reason for granting
compulsory license is intended not only to give a chance to others to supply the public with the
quantity of the patented article but especially to prevent the building up of patent
monopolities [sic]. [Parke Davis v.Doctors Pharmaceuticals, Inc., 14 SCRA 1053].
We find that the granting of compulsory license is not simply because Sec. 34 (1) e, RA 165
allows it in cases where the invention relates to food and medicine. The Director of Patents also
considered in determining that the applicant has the capability to work or make use of the
patented product in the manufacture of a useful product. In this case, the applicant was able to
show that Cimetidine, (subject matter of latters Patent No. 12207) is necessary for the
manufacture of an anti-ulcer drug/medicine, which is necessary for the promotion of public
We do not agree to [sic] petitioners contention that the fixing of the royalty at 2.5% of the net
wholesale price amounted to expropriation of private property without just compensation.
Paragraph 3, Section 35-B, R.A. No. 165, as amended by P.D. No. 1267, states:
SEC. 35-B. Terms and Conditions of Compulsory License.
(1). x x x
(2). x x x
(3). A compulsory license shall only be granted subject to the payment of adequate royalties commensurate
with the extent to which the invention is worked. However, royalty payments shall not exceed five percent
(5%) of the net wholesale price (as defined in Section 33-A) of the products manufactured under the
license.
If the product, substance, or process subject of the compulsory license is involved in an industrial project
approved by the Board of Investments, the royalty payable to the patentee or patentees shall not exceed
three percent (3%) of the net wholesale price (as defined in Section 34-A) of the patented commodity
and/or commodity manufactured under the patented process, the same rate of royalty shall be paid
whenever two or more patents are involved, which royalty shall be distributed to the patentees in rates
proportional to the extent of commercial use by the licensee giving preferential values to the holder of the
oldest subsisting product patent.
The foregoing provision grants the Director of Patents the use of his sound discretion in fixing the
percentage for the royalty rate. In the instant case, the Director of Patents exercised his discretion and ruled
that a rate of 2.5% of the net wholesale price is fair enough for the parties. In Parke Davis & Co. vs. DPI
and Tiburcio, [L-27004, August 6, 1983, 124 SCRA 115] it was held that - liberal treatment in trade
relations should be afforded to local industry for as reasoned out by respondent company, it is so difficult
to compete with the industrial grants [sic] of the drug industry, among them being the petitioner herein,
that it always is necessary that the local drug companies should sell at much lower (than) the prices of said
foreign drug entities. Besides, foreign produce licensor can later on ask for an increase in percentage rate
of royalty fixed by the Director of Patents if local sales of license should increase. Further, in Price vs.
UNILAB, the award of royalty rate of 2.5% was deemed to be just and reasonable, to wit [166 SCRA 133]:
Moreover, what UNILAB has with the compulsory license is the bare right to use the patented chemical
compound in the manufacture of a special product, without any technical assistance from herein
respondent-appellant. Besides, the special product to be manufactured by UNILAB will only be used,
distributed, and disposed locally. Therefore, the royalty rate of 2.5% is just and reasonable.
It appearing that herein petitioner will be paid royalties on the sales of any products [sic] the licensee may
manufacture using any or all of the patented compounds, the petitioner cannot complain of a deprivation
of property rights without just compensation [Price v. UNILAB, L-82542, September 19, 1988].
We take note of the well-crafted petition submitted by petitioner albeit the legal milieu and a good number
of decided cases militate against the grounds posited by petitioner. In sum, considering the well-entrenched
jurisprudence sustaining the position of respondents, We reiterate the rule in Basay Mining Corporation vs.
SEC, to the effect that -
The legal presumption is that official duty has been performed. And it is particularly strong as regards
administrative agencies vested with powers said to be quasi-judicial in nature, in connection with the
enforcement of laws affecting particular fields of activity, the proper regulation and/or promotion of which
requires a technical or special training, aside from a good knowledge and grasp of the overall conditions,
relevant to said field, obtaining in the nations. The policy and practice underlying our Administrative Law
is that courts of justice should respect the findings of fact of said administrative agencies, unless there is
absolutely no evidence in support thereof or such evidence is clearly, manifestly and patently
insubstantial. [G.R. No. 76695, October 3, 1988, Minute Resolution; Beautifont, Inc., et al. v. Court of
Appeals, et al., G.R. No. 50141, January 29, 1988]
Its motion for reconsideration having been denied in the resolution [7] of 31 August 1995, petitioner
filed the instant petition for review on certiorari with the following assignment of errors:
I
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BPTTT'S
DECISION VIOLATES INTERNATIONAL LAW AS EMBODIED IN (A) THE PARIS
CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY AND (B) THE
GATT TREATY, URUGUAY ROUND, AND MUST ACCORDINGLY BE SET ASIDE AND
MODIFIED.
II
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BPTTT'S
DECISION IS AN INVALID EXERCISE OF POLICE POWER, ABSENT ANY SHOWING
BY EVIDENCE OF AN OVERWHELMING PUBLIC NEED FOR A COMPULSORY
LICENSE OVER CIMETIDINE IN FAVOR OF PRIVATE RESPONDENT.
III
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BPTTT'S
PRONOUNCEMENT FIXING THE ROYALTY FOR AN INVOLUNTARY LICENSE AT
2.5% OF THE NET WHOLESALE PRICE IN PHILIPPINE CURRENCY WAS RENDERED
WITHOUT ANY FACTUAL BASIS AND AMOUNTS TO EXPROPRIATION OF PRIVATE
PROPERTY WITHOUT JUST COMPENSATION AND IS IN VIOLATION OF THE
CONSTITUTIONAL RIGHT TO DUE PROCESS.
IV
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THE BPTTT'S ACTION
WAS RENDERED NULL AND VOID FOR FAILURE OF PRIVATE RESPONDENT TO
AFFIRMATIVELY PROVE THE JURISDICTIONAL FACT OF PUBLICATION AS
REQUIRED BY LAW.
We resolved to give due course to the petition and required the parties to submit their respective
memoranda, which they did, with that of public respondent filed only on 7 February 1997.
After a careful perusal of the pleadings and evaluation of the arguments adduced by the parties, we
find this petition to be without merit.
In its first assigned error, petitioner invokes Article 5 of the Paris Convention for the Protection of
Industrial Property,[8] or Paris Convention, for short, of which the Philippines became a party thereto only
in 1965.[9] Pertinent portions of said Article 5, Section A, provide:
A. x x x
 (2) Each country of the union shall have the right to take legislative measures
providing for the grant of compulsory licenses to prevent the abuses
which might result from the exercise of the exclusive rights
conferred by the patent, for example, failure to work.
xxx
(4) A compulsory license may not be applied for on the ground of failure to
work or insufficient working before the expiration of a period of four
years from the date of filing of the patent application or three years
from the date of the grant of the patent, whichever period expires
last; it shall be refused if the patentee justifies his inaction by
legitimate reasons. Such a compulsory license shall be non-exclusive
and shall not be transferable, even in the form of the grant of a sub-
license, except with that part of the enterprise or goodwill which
exploits such license.
It is thus clear that Section A(2) of Article 5 above unequivocally and explicitly respects the right of
member countries to adopt legislative measures to provide for the grant of compulsory licenses to prevent
abuses which might result from the exercise of the exclusive rights conferred by the patent. An example
provided of possible abuses is "failure to work;" however, as such is merely supplied by way of an
example, it is plain that the treaty does not preclude the inclusion of other forms or categories of abuses.
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines adhesion to the
Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the
explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the legislative intent in the grant
of a compulsory license was not only to afford others an opportunity to provide the public with the quantity
of the patented product, but also to prevent the growth of monopolies. [10] Certainly, the growth of
monopolies was among the abuses which Section A, Article 5 of the Convention foresaw, and which our
Congress likewise wished to prevent in enacting R.A. No. 165.
R.A. No. 165, as amended by Presidential Decree No. 1263, promulgated on 14 December 1977,
provides for a system of compulsory licensing under a particular patent. Sections 34 and 35, Article Two,
of Chapter VIII read as follows:
SEC. 34. Grounds for Compulsory Licensing. -- (1) Any person may apply to the Director for
the grant of a license under a particular patent at any time after the expiration of two years from
the date of the grant of the patent, under any of the following circumstances:
(a) If the patented invention is not being worked within the Philippines on a
commercial scale, although capable of being so worked, without satisfactory reason;
(b) If the demand for the patented article in the Philippines is not being met to an
adequate extent and on reasonable terms;
(c) If, by reason of refusal of the patentee to grant a license or licenses on reasonable
terms, or by reason of the conditions attached by the patentee to licensee or to the
purchase, lease or use of the patented article or working of the patented process or
machine for production, the establishment of any new trade or industry in the
Philippines is prevented, or the trade or industry therein is unduly restrained;
(d) If the working of the invention within the country is being prevented or hindered
by the importation of the patented article; or
(e) If the patented invention or article relates to food or medicine or manufactured
products or substances which can be used as food or medicine, or is necessary for
public health or public safety.
(2) In any of the above cases, a compulsory license shall be granted to the petitioner provided
that he has proved his capability to work the patented product or to make use of the patented
product in the manufacture of a useful product, or to employ the patented process.
(3) The term "worked" or "working" as used in this section means the manufacture and sale of
the patented article, of the patented machine, or the application of the patented process for
production, in or by means of a definite and substantial establishment or organization in the
Philippines and on a scale which is reasonable and adequate under the
circumstances. Importation shall not constitute "working."
xxx
SEC. 35. Grant of License. -- (1) If the Director finds that a case for the grant is a license under
Section 34 hereof has been made out, he shall, within one hundred eighty days from the date the
petition was filed, order the grant of an appropriate license. The order shall state the terms and
conditions of the license which he himself must fix in default of an agreement on the matter
manifested or submitted by the parties during the hearing.
(2) A compulsory license sought under Section 34-B shall be issued within one hundred twenty
days from the filing of the proponent's application or receipt of the Board of Investment's
endorsement.
The case at bar refers more particularly to subparagraph (e) of paragraph 1 of Section 34 -- the
patented invention or article relates to food or medicine or manufactured products or substances which can
be used as food or medicine, or is necessary for public health or public safety. And it may not be doubted
that the aforequoted provisions of R.A. No. 165, as amended, are not in derogation of, but are consistent
with, the recognized right of treaty signatories under Article 5, Section A(2) of the Paris Convention.
Parenthetically, it must be noted that paragraph (4) of Section A, Article 5 of the Paris Convention
setting time limitations in the application for a compulsory license refers only to an instance where the
ground therefor is "failure to work or insufficient working," and not to any ground or circumstance as the
treaty signatories may reasonably determine.
Neither may petitioner validly invoke what it designates as the GATT Treaty, Uruguay Round. This
act is better known as the Uruguay Final Act signed for the Philippines on 15 April 1994 by Trade and
Industry Secretary Rizalino Navarro.[11] Forming integral parts thereof are the Agreement Establishing the
World Trade Organization, the Ministerial Declarations and Decisions, and the Understanding on
Commitments in Financial Services.[12] The Agreement establishing the World Trade Organization
includes various agreements and associated legal instruments. It was only on 14 December 1994 that the
Philippine Senate, in the exercise of its power under Section 21 of Article VII of the Constitution, adopted
Senate Resolution No. 97 concurring in the ratification by the President of the Agreement. The President
signed the instrument of ratification on 16 December 1994.[13] But plainly, this treaty has no retroactive
effect.Accordingly, since the challenged BPTTT decision was rendered on 14 February 1994, petitioner
cannot avail of the provisions of the GATT treaty.
 The second and third assigned errors relate more to the factual findings of the Court of Appeals. Well-
established is the principle that the findings of facts of the latter are conclusive, unless: (1) the conclusion
is a finding grounded entirely on speculation or conjecture; (2) the inference made is manifestly absurd;
(3) there is grave abuse of discretion in the appreciation of facts; (4) the judgment is premised on a
misapprehension of facts; (5) the findings of fact are conflicting; and (6) the Court of Appeals, in making
its findings, went beyond the issues of the case and the same is contrary to the admissions of both the
appellant and appellee.[14] Petitioner has not convinced us that the instant case falls under any of the
exceptions. On the contrary, we find the findings of fact and conclusions of respondent Court of Appeals
and that of the BPTTT to be fully supported by the evidence and the applicable law and jurisprudence on
the matter.
Petitioners claim of violations of the due process and eminent domain clauses of the Bill of Rights
are mere conclusions which it failed to convincingly support. As to due the process argument, suffice it to
say that full-blown adversarial proceedings were conducted before the BPTTT pursuant to the Patent
Law. We agree with the Court of Appeals that the BPTTT exhaustively studied the facts and its findings
were fully supported by substantial evidence.
It cannot likewise be claimed that petitioner was unduly deprived of its property rights, as R.A. No.
165 not only grants the patent holder a protective period of two years to enjoy his exclusive rights thereto;
but subsequently, the law recognizes just compensation in the form of royalties. [15]
In Parke, Davies & Co. v. Doctors' Pharmaceuticals, Inc.,[16] we held:
The right to exclude others from the manufacturing, using, or vending an invention relating to,
food or medicine should be conditioned to allowing any person to manufacture, use, or vend the
same after a period of three [now two] years from the date of the grant of the letters patent. After
all, the patentee is not entirely deprived of any proprietary right. In fact, he has been given the
period of three years [now two years] of complete monopoly over the patent. Compulsory
licensing of a patent on food or medicine without regard to the other conditions imposed in
Section 34 [now Section 35] is not an undue deprivation of proprietary interests over a patent
right because the law sees to it that even after three years of complete monopoly something is
awarded to the inventor in the form of bilateral and workable licensing agreement and a
reasonable royalty to be agreed upon by the parties and in default of such an agreement, the
Director of Patents may fix the terms and conditions of the license.
As to the fourth assigned error, we hold that petitioner can no longer assail the jurisdiction of the
BPTTT, raising this issue only for the first time on appeal. In Pantranco North Express, Inc. v. Court of
Appeals,[17] we ruled that where the issue of jurisdiction is raised for the first time on appeal, the party
invoking it is so barred on the ground of laches or estoppel under the circumstances therein stated. It is
now settled that this rule applies with equal force to quasi-judicial bodies[18] such as the BPTTT. Here,
petitioner have not furnished any cogent reason to depart from this rule.
WHEREFORE, the petition is hereby DENIED and the challenged decision of the Court of Appeals
in CA-G.R. SP No. 33520 is AFFIRMED in toto.
Costs against petitioner.
SO ORDERED.
[G.R. No. 121267. October 23, 2001]
SMITH KLINE & FRENCH LABORATORIES, LTD. plaintiff-appellee, vs. COURT OF
APPEALS and DANLEX RESEARCH LABORATORIES, INC., defendant-appellant.
DECISION
KAPUNAN, J.:
This petition for review on certiorari assails the Decision dated January 27, 1995 of the Court of
Appeals in CA-G.R. SP No. 33770[1] which affirmed the decision of the Bureau of Patents, Trademarks
and Technology Transfer (BPTTT) granting a compulsory license to private respondent Danlex Research
Laboratories for the use of the pharmaceutical product Cimetidine. Likewise assailed is the July 25, 1995
Resolution of the Court of Appeals denying the motion for reconsideration filed by petitioner Smith Kline
and French Laboratories, Ltd.
Petitioner is the assignee of Letters Patent No. 12207 covering the pharmaceutical
product Cimetidine, which relates to derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl
thiourea, ureas or guanadines. Said patent was issued by the BPTTT to Graham John Durant, John Collin
Emmett and Robin Genellin on November 29, 1978.[2]
On August 21, 1989, private respondent filed with the BPTTT a petition for compulsory license to
manufacture and produce its own brand of medicines using Cimetidine. Private respondent invoked
Section 34 (1) (e) of Republic Act No. 165,[3] (the Patent Law) the law then governing patents, which states
that an application for the grant of a compulsory license under a particular patent may be filed with the
BPTTT at any time after the lapse of two (2) years from the date of grant of such patent, if the patented
invention or article relates to food or medicine, or manufactured substances which can be used as food or
medicine, or is necessary for public health or public safety. [4] The petition for compulsory license stated
that Cimetidine is useful as an antihistamine and in the treatment of ulcers, and that private respondent is
capable of using the patented product in the manufacture of a useful product. [5]
Petitioner opposed the petition for compulsory license, arguing that the private respondent had no
cause of action and failed to allege how it intended to work the patented product. Petitioner further stated
that its manufacture, use and sales of Cimetidine satisfied the needs of the Philippine market, hence, there
was no need to grant a compulsory license to private respondent to manufacture, use and sell the
same. Finally, petitioner also claimed that the grant of a compulsory license to private respondent would
not promote public safety and that the latter was only motivated by pecuniary gain.[6]
After both parties were heard, the BPTTT rendered a decision directing the issuance of a compulsory
license to private respondent to use, manufacture and sell in the Philippines its own brand of
pharmaceutical products containing Cimetidine and ordered the payment by private respondent to
petitioner of royalties at the rate of 2.5% of net sales in Philippine currency. [7]
Petitioner thereafter filed with the Court of Appeals a petition for review of the decision of the
BPTTT, raising the following arguments: (1) the BPTTTs decision is violative of the Paris Convention for
the Protection of Industrial Property; (2) said decision is an invalid exercise of police power; (3) the rate
of royalties payable to petitioner as fixed by the BPTTT was rendered without factual basis and amounts
to an expropriation of private property without just compensation; (4) the petition for compulsory license
should have been dismissed by the BPTTT for failure to prove the jurisdictional requirement of
publication.[8]
On January 27, 1995, the Court of Appeals promulgated its Decision, the dispositive portion of which
states:
WHEREFORE, the petition is DENIED, and the decision of the Bureau of Patents, Trademarks and
Technology Transfer is hereby AFFIRMED, with costs against the Petitioner.
SO ORDERED.[9]
In affirming the decision of the BPTTT, the appellate court held that the grant of a compulsory license
to private respondent for the manufacture and use of Cimetidine is in accord with the Patent Law since the
patented product is medicinal in nature, and therefore necessary for the promotion of public health and
safety.[10] It explained further that the provisions of the Patent Law permitting the grant of a compulsory
license are intended not only to give a chance to others to supply the public with the quantity of the patented
article but especially to prevent the building up of patent monopolies. [11] Neither did the appellate court
find the royalty rate of 2.5% of net sales fixed by the BPTTT unreasonable, considering that what was
granted under the compulsory license is only the right to manufacture Cimetidine, without any technical
assistance from petitioner, and royalty rates identical to that fixed by the BPTTT have been prescribed for
the grant of compulsory license in a good number of patent cases. [12] The Court of Appeals also ruled that
contrary to petitioners claim, private respondent complied with the requirement of publication under the
Patent Law and had submitted proof of such compliance.[13]
Not satisfied with the appellate courts decision, petitioner filed a motion for reconsideration thereof
as well as a motion for the issuance of a temporary restraining order against private respondents sister
company, Montreal Pharmaceutical, Inc. to refrain from marketing a product similar to Cimetidine, but
both motions were denied by the Court of Appeals in its Resolution of July 25, 1995. [14]
Petitioner thus filed the present petition on September 15, 1995, with the following assignment of
errors:
I. The respondent Court erred in upholding the validity of the decision of public respondent
BPTTT which is an arbitrary exercise of police power and is violative of international law.
II. The respondent Court erred in holding that compulsory licensing will not create a confusion
that the patented product is the brainchild of private respondent Danlex and not of petitioner.
III.Assuming that the grant of compulsory license is in order, the respondent Court still erred in
holding that the BPTTT decision fixing the royalty at 2.5% of the net wholesale price in
peso does not amount to expropriation of private property without just compensation.
IV.The respondent Court erred in finding that the jurisdictional requirement of publication in a
newspaper of general circulation for three (3) consecutive weeks has been complied with by
private respondent Danlex.[15]
While petitioner concedes that the State in the exercise of police power may regulate the manufacture
and use of medicines through the enactment and implementation of pertinent laws, it states that such
exercise is valid only if the means employed are reasonably necessary for the accomplishment of the
purpose and if not unduly oppressive.[16] According to petitioner, the grant of a compulsory license to
private respondent is an invalid exercise of police power since it was not shown that there is an
overwhelming public necessity for such grant, considering that petitioner is able to provide an adequate
supply of Cimetidine to satisfy the needs of the Philippine market. Petitioner also claims that the grant of
a compulsory license to private respondent unjustly deprives it of a reasonable return on its
investment.[17] It argues further that the provisions of the Patent Law on compulsory licensing contravene
the Convention of Paris for the Protection of Industrial Property[18] (Paris Convention), which allegedly
permits the granting of a compulsory license over a patented product only to prevent abuses which might
result from the exercise of the exclusive rights conferred by the patent, [19] or on the ground of failure to
work or insufficient working of the patented product, within four years from the date of filing of the patent
application or three years from the date of grant of the patent, whichever expires last.[20] Petitioner opines
that the inclusion of grounds for the grant of a compulsory license in Section 34 of the Patent Law other
than those provided under the Paris Convention constitutes a violation of the Philippines obligation to
adhere to the provisions of said treaty.[21]
It is also contended by petitioner that the grant of a compulsory license to private respondent will
allow the latter to liberally manufacture and sell medicinal products containing Cimetidine without even
extending to petitioner due recognition for pioneering the development and worldwide acceptance of said
invention, and will unreasonably dilute petitioners right over the patent. [22]
Petitioner likewise asseverates that the rate of royalty fixed by the BPTTT at 2.5% of net sales is
grossly inadequate, taking into consideration its huge investments of money, time and other resources in
the research and development, as well as marketing of Cimetidine. It is further alleged that such rate has
no factual basis since the appellate court and the BPTTT relied solely on analogous cases and did not
explain how such rate was arrived at.[23]
Lastly, petitioner claims that the appellate court erred in ruling that private respondent had complied
with the requirement of publication of the notice of the filing of the petition for compulsory license because
private respondent failed to formally offer in evidence copies of the notice of filing of the petition and
notice of the date of hearing thereof as published and the affidavits of publication thereof. Thus, it says,
the BPTTT did not properly acquire jurisdiction over the petition for compulsory license.[24]
In its Comment to the Petition, private respondent adopted the reasoning of the Court of Appeals in
the assailed decision and prayed that the petition be denied for lack of merit.[25]
The petition has no merit.
The Court of Appeals did not err in affirming the validity of the grant by the BPTTT of a compulsory
license to private respondent for the use, manufacture and sale of Cimetidine. The said grant is in accord
with Section 34 of the Patent Law which provides:
Grounds for Compulsory Licensing.(1) Any person may apply to the Director for the grant of a license
under a particular patent at any time after the expiration of two years from the date of the grant of
the patent, under any of the following circumstances:
(a) If the patented invention is not being worked within the Philippines on a commercial scale, although
capable of being so worked, without satisfactory reason;
(b) If the demand of the patented article in the Philippines is not being met to an adequate extent and on
reasonable terms;
(c) If, by reason of refusal of the patentee to grant a license or licenses on reasonable terms, or by reason
of the conditions attached by the patentee to licensee or to the purchase, lease or use of the patented article
or working of the patented process or machine for production, the establishment of any new trade or
industry in the Philippines is prevented, or the trade or industry therein is unduly restrained;
(d) If the working of the invention within the country is being prevented or hindered by the importation of
the patented article;
(e) If the patented invention or article relates to food or medicine or manufactured substances which
can be used as food or medicine, or is necessary for public health or public safety.
(2) In any of the above cases, a compulsory license shall be granted to the petitioner provided that
he has proved his capability to work the patented product or to make use of the patented product in
the manufacture of a useful product, or to employ the patented process.
(3) The term worked or working as used in this section means the manufacture and sale of the patented
article, of patented machine, or the application of the patented process for production, in or by means of a
definite and substantial establishment or organization in the Philippines and on a scale which is reasonable
and adequate under the circumstances. Importation shall not constitute working. (Emphasis supplied.)
The grant of the compulsory license satisfies the requirements of the foregoing provision. More than
ten years have passed since the patent for Cimetidine was issued to petitioner and its predecessors-in-
interest, and the compulsory license applied for by private respondent is for the use, manufacture and sale
of a medicinal product. Furthermore, both the appellate court and the BPTTT found that private respondent
had the capability to work Cimetidine or to make use thereof in the manufacture of a useful product.
Petitioners contention that Section 34 of the Patent Law contravenes the Paris Convention because
the former provides for grounds for the grant of a compulsory license in addition to those found in the
latter, is likewise incorrect. Article 5, Section A(2) of the Paris Convention states:
Each country of the union shall have the right to take legislative measures providing for the grant of
compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights
conferred by the patent, for example, failure to work. [26]
This issue has already been resolved by this Court in the case of Smith Kline & French Laboratories,
Ltd. vs. Court of Appeals,[27] where petitioner herein questioned the BPTTTs grant of a compulsory license
to Doctors Pharmaceuticals, Inc. also for the manufacture, use and sale of Cimetidine. We found no
inconsistency between Section 34 and the Paris Convention and held that:
It is thus clear that Section A(2) of Article 5 [of the Paris Convention] unequivocally and explicitly
respects the right of member countries to adopt legislative measures to provide for the grant of
compulsory licenses to prevent abuses which might result from the exercise of the exclusive rights
conferred by the patent. An example provided of possible abuses is failure to work; however, as
such, is merely supplied by way of an example, it is plain that the treaty does not preclude the
inclusion of other forms of categories of abuses.
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines adhesion to the
Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the
explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the legislative intent in the
grant of a compulsory license was not only to afford others an opportunity to provide the public
with the quantity of the patented product, but also to prevent the growth of
monopolies [Congressional Record, House of Representatives, 12 May 957, 998]. Certainly, the growth
of monopolies was among the abuses which Section A, Article 5 of the Convention foresaw, and
which our Congress likewise wished to prevent in enacting R.A. No. 165.[28] (Emphasis supplied.)
Neither does the Court agree with petitioner that the grant of the compulsory license to private
respondent was erroneous because the same would lead the public to think that the Cimetidine is the
invention of private respondent and not of petitioner. Such fears are unfounded since, as the appellate court
pointed out in the assailed decision, by the grant of the compulsory license, private respondent as licensee
explicitly acknowledges that petitioner is the source of the patented product Cimetidine.[29] Even
assuming arguendo that such confusion may indeed occur, the disadvantage is far outweighed by the
benefits resulting from the grant of the compulsory license, such as an increased supply of pharmaceutical
products containing Cimetidine, and the consequent reduction in the prices thereof.[30]
There is likewise no basis for the allegation that the grant of a compulsory license to private
respondent results in the deprivation of petitioners property without just compensation. It must be pointed
out that as owner of Letters Patent No. 12207, petitioner had already enjoyed exclusive rights to
manufacture, use and sell Cimetidine for at least two years from its grant in November, 1978. Even if other
entities like private respondent are subsequently allowed to manufacture, use and sell the patented
invention by virtue of a compulsory license, petitioner as owner of the patent would still receive
remuneration for the use of such product in the form of royalties.
Anent the perceived inadequacy of the royalty awarded to petitioner, the Court of Appeals correctly
held that the rate of 2.5% of net wholesale price fixed by the Director of the BPTTT is in accord with the
Patent Law. Said law provides:
Sec. 35. Grant of License.(1) If the Director finds that a case for the grant of a license under Section 34
hereof has been made out, he shall, within one hundred eighty days from the date the petition was filed,
order the grant of an appropriate license. The order shall state the terms and conditions of the license
which he himself must fix in default of an agreement on the matter manifested or submitted by the
parties during the hearing.
xxx
Section 35-B. Terms and Conditions of Compulsory License. (1) A compulsory license shall be non-
exclusive, but this shall be without prejudice to the licensees right to oppose an application for such a new
license.
(2) The terms and conditions of a compulsory license, fixed in accordance with Section 35, may contain
obligations and restrictions both for the licensee and for the registered owner of the patent.
(3) A compulsory license shall only be granted subject to the payment of adequate royalties
commensurate with the extent to which the invention is worked. However, royalty payments shall
not exceed five percent (5%) of the net wholesale price (as defined in Section 33-A) of the products
manufactured under the license. If the product, substance, or process subject of the compulsory license is
involved in an industrial project approved by the Board of Investments, the royalty payable to the patentee
or patentees shall not exceed three percent (3%) of the net wholesale price (as defined in Section 33-A) of
the patented commodity/and or commodity manufactured under the patented process; the same rate of
royalty shall be paid whenever two or more patents are involved; which royalty shall be distributed to the
patentees in rates proportional to the extent of commercial use by the licensee giving preferential values
to the holder of the oldest subsisting product patent.
xxx
Under the aforequoted provisions, in the absence of any agreement between the parties with respect
to a compulsory license, the Director of the BPTTT may fix the terms thereof, including the rate of the
royalty payable to the licensor. The law explicitly provides that the rate of royalty shall not exceed five
percent (5%) of the net wholesale price.
The Court agrees with the appellate courts ruling that the rate of royalty payments fixed by the
Director of the BPTTT is reasonable. The appellate court, citing Price vs. United Laboratories,[31] ruled as
such, considering that the compulsory license awarded to private respondent consists only of the bare right
to use the patented invention in the manufacture of another product, without any technical assistance from
the licensor.[32] Furthermore, this Court had earlier noted in the Price case that identical royalty rates have
been prescribed by the Director of the BPTTT in numerous patent cases. [33]
There was thus no error on the part of the Court of Appeals in affirming the royalty rate fixed by the
Director of the BPTTT, since it was not shown that the latter erred or abused his discretion in prescribing
said rate. The rule is that factual findings of administrative bodies, which are considered as experts in their
respective fields, are accorded not only respect but even finality if the same are supported by substantial
evidence.[34]
Finally, as to the alleged lack of jurisdiction of the BPTTT over the petition filed by private
respondent for failure to comply with the publication requirement under Section 35-F of R.A. No. 165, the
Court holds that petitioner is estopped from questioning the same since it did not raise the issue of lack of
jurisdiction at the earliest possible opportunity, i.e., during the hearings before the BPTTT. [35] The Court
notes that petitioner raised this contention for the first time when it appealed the case to the appellate court.
WHEREFORE, the petition is hereby DENIED for lack of merit and the Decision of the Court of
Appeals is hereby AFFIRMED.
SO ORDERED.
G.R. No. L-4572 May 22, 1953
DOLORITO M. FELICIANO and MAXIMO B. TAPINIO, applicants-appellees.
MELITON D ALBAÑA, petitioner-appellant,
vs.
THE DIRECTOR OF PATENT, respondent-appelle.
Meliton D. Albaña in his own behalf.
Office of the Solicitor General Pompeyo Diaz and Solicitor Pacifico P. de Castro for respondent and
appellee.
PADILLA, J.:
An application for patent was filed with the Patent Office.
Pending examination of the application, Meliton D. Albaña filed a motion to intervene claiming that the
applicant-inventors had "sold and/or bartered and assigned to him their right to contract or deal the sale of
their invention called Fel-Tap Meter Guard and Detector to or though the Corporation that they were then
organizing under his direction and to fix and decide on the purchase price of it to at least P200,000 in
installments cash and P300,000 in shares of stock of said Corporation . . ." and praying that applicant-
inventor Maximo D. Tapinio be compelled to sign a contract (Appendix I) and, together with the other
applicant-inventor Dolorito M. Feliciano who had already signed it, to acknowledge it and another contract
(Appendix II) before a notary public, to have both contracts recorded in the Patent Office and in the Office
of the Register of Deeds, and that the patent for the invention be issued in his name and in the name of the
inventors.
The motion was denied on the ground under the provisions of the Patent Law (Republic Act No. 165) the
Director of Patents has no jurisdiction or power to decide the question submitted to him.
The movant filed an amended motion to intervene claiming "that he is the assignee of inventors Dolorito
M. Feliciano and Maximo Tapinio of the undivided part interest in the invention for whose letter-patent
the named petitioners Dolorito M. Feliciano and Maximo Tapinio are herein applying."
The amended motion was denied on the ground that the assignment made to the movant is not one of
exclusive right to make, use the sell1 the electrical contrivance for which a patent is applied for; that it is
just an authority to act as the selling agent for the inventors of the patent, if granted, and the invention
covered thereby and to receive compensation therefor; and that not being entitled to have his name included
as one of the patentees, if patent for the invention be granted, the movant has no right to intervene in the
proceedings for the grant of the patent.
An exception to and a motion for reconsideration of the proceeding order were noted and denied.
From the orders denying his motions to intervene the movant has appealed. 2
What the appellant attempted to secure by his motion to intervene is clearly beyond the jurisdiction and
authority of the Director of Patents to grant. Despite the amendment to the first motion to the intervene by
which he claims assignment of the invention, still it remains that the alleged assignment is not the invention
but it is an agreement whereby he is to act as selling agent for the inventors of the patent (if granted) and
of the invention covered thereby and to receive compensation therefor. This finding of the Director of
Patents is supported by the following clauses found in the contract (Appendix I): "We (the inventors) . . .
hereby declare and ratify that both of us are the co-inventors and joint fifty-fifty owners of the "Fel-Tap
Electric Meter Guard & Detector' . . . ." "We are now organizing a Corporation under the direction of Mr.
Albaña (Meliton D. Albaña) to exploit and industrialize the invention . . . which we promise hereby to sell
to said Corporation with its letter-patent . . . except the Royalty Right of the same, . . . ." "For and in
consideration of the monetary and other helps (help) that said Mr. Meliton D. Albaña . . . has rendered and
is rendering us . . . of approaching, interesting and looking for subscribers and prayers to the capital stocks
(stock) of said Corporation to be . . . we hereby promise and actually pay to said Mr. Albaña in installment
fifty thousand pesos (P50,000) of said P200,000 installments cash purchase price . . . ." The above quoted
terms and stipulations of the executory contract clearly show that it was not an assignment of the invention
and the patent applied for.
Assignments of patents and inventions covered thereby may be recorded in books and records kept for the
purpose in the Patent Office is presented in due form;3 but the appellant does not ask for the registration
of the alleged agreement between him and the inventors, because as it is not in due form it cannot be
recorded, but prays that the Director of Patents compel applicant-inventor Maximo B. Tapinio to sign the
contract executed and signed by the other applicant-inventor Dolorito M. Feliciano on 14 March 1950
(Appendix I) and both applicant-inventors to acknowledge it and another document which by all indication
refers to the minutes of a meeting of the organizers of the Manufacturing Corporation held on 30 March
1950, before a notary public, and then to have both documents recorded in the Patent Office and in the
office of the Registrar of Deeds. Under the provisions of the Patent Law (Republic Act No. 165), the
Director of Patent has no power and authority to compel the applicant-inventors to do what the appellant
is asking them to perform. What the appellant asked the Director Patents to do for him is essentially a
judicial function which would require the determination or finding by a court of competent jurisdiction as
to whether there was a meeting of the minds of the contracting parties before it could compel the applicant-
inventors to perform what the appellant prays the court to order them to do. Aside from want of authority
and power, the Director of Patent lacks the means to make such determination and finding which would
be necessary before he could act on the appellant's motion.
The orders appealed from are affirmed, with costs against the appellant.