PAJALLA vs NFA

Facts:
Enrique Pajalla had been an employee of the National Food Authority (NFA) from 1947 until 1984 when he retired. During his
employment, he invented three (3) machines, intended to salvage rotten or infected rice, for which Letters Patent were issued in his name.
Before the machines were operated, a test was conducted to determine their efficiency and their corresponding saving to the NFA. Because of
the remarkable results of this test, the NFA requested Pajalla to fabricate additional units. He produced 26 machines, and the NFA was able to
export 500 to 700 million cavans of rice.
On December 1978 and August 1984, Pajalla, through his counsel, requested from the NFA a reasonable compensation for the use of his
inventions. However, his requests were denied.
The NFA, through the testimonies of its employees, claims that Pajalla fabricated the machines with the help of his subordinates; that Pajalla
got the spare parts from the NFA; that he did not spend his own funds; and that only one of the machines was used by the NFA up to the
present.
Trial ensued and the regional trial court held that the heirs of Pajalla were entitled to a reasonable compensation, inasmuch as Pajalla had
made a significant contribution to the NFA through his inventions. The NFA has greatly benefited by its use of the machines, which were
reported to have saved the government in expenses. In allowing the Pajalla’s heirs a reasonable compensation, the RTC relied on Sec 41 of R.
A. No. 165.

(SEC 41 Use of Invention by the Government – The Government of the Philippines may use any patented invention at anytime for
government purposes, and the manufacture or use of the invention by or for the Government for such purposes shall not constitute infringement
of the patent, but the patentee shall be entitled to receive a reasonable compensation for the use of the invention.)

Relying on the pronouncement in Solomons vs United States, the Solicitor General, however, contended that since Pajalla fabricated
the machines during office hours, harnessed the services of his co-employees, availed of the facilities and materials of the NFA and consented
to the use by the NFA of such patented machines, consequently his heirs were not entitled to compensation.

Issue:
Is Pajalla entitled to the remuneration?

Held:
Yes.

The general rule as enunciated in the Solomons case is that an employee exercising his inventive faculties while performing the
duties assigned to him in his department of service, is assured that any invention he may conceive is his individual property. The exception,
meaning the inventor will not be entitled to his work, is when he is in the employ of another in a certain line of work and uses the property of
his employer and services of other employees to develop the invention, and assents to the use by his employer of such invention.
However, the facts obtaining in Solomons and Pajalla were different. First, in Solomons, the experiment was conducted at the
expense of the Government; in Pajalla’s case, it was Pajalla himself who bought and supplied some of the materials since they cannot be found
in the NFA. Second, in Solomons, the inventor did not ask for for compensation. Third, Pajalla, at the earliest opportunity, made a claim for
remuneration for the use his patented devices.

Thus, in view of the foregoing, Pajalla is deemed to be the sole owner of the inventions. Accordingly, he is entitled to the
remuneration.