G.R. No.

113388 September 5, 1997 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
ANGELITA MANZANO, petitioner,
early years with the company, UNITED FOUNDRY was engaged in the
vs.
manufacture of different kinds of gas stoves as well as burners based on
COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to NEW
sketches and specifications furnished by customers; that the company
UNITED FOUNDRY MANUFACTURING CORPORATION, respondents.
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
BELLOSILLO, J.: 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
The primary purpose of the patent system is not the reward of the individual but
revised sketches and specifications; that private respondent again made some
the advancement of the arts and sciences. The function of a patent is to add to
innovations; that after a few months, private respondent discovered the solution
the sum of useful knowledge and one of the purposes of the patent system is to
to all the defects of the earlier models and, based on her latest sketches and
encourage dissemination of information concerning discoveries and inventions.
specifications, he was able to cast several models incorporating the additions to
This is a matter which is properly within the competence of the Patent Office the
the innovations introduced in the models. Various tests were conducted on the
official action of which has the presumption of correctness and may not be
latest model in the presence and under the supervision of Melecia Madolaria
interfered with in the absence of new evidence carrying thorough conviction that
and they obtained perfect results. Rolando Madolaria testified that private
the Office has erred. Since the Patent Office is an expert body preeminently
respondent decided to file her application for utility model patent in December
qualified to determine questions of patentability, its findings must be accepted if
1979.
they are consistent with the evidence, with doubts as to patentability resolved in
favor of the Patent Office.1
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 Angelita Manzano filed with the Philippine Patent Office on 19
petitioner was not able to establish convincingly that the patented utility model of
February 1982 an action for the cancellation of Letters Patent No. UM-4609 for a
private respondent was anticipated. Not one of the various pictorial
gas burner registered in the name of respondent Melecia Madolaria who
representations of business clearly and convincingly showed that the devices
subsequently assigned the letters patent to New United Foundry and
presented by petitioner was identical or substantially identical with the utility
Manufacturing Corporation (UNITED FOUNDRY, for brevity). Petitioner alleged
model of the respondent. The decision also stated that even assuming that the
that (a) the utility model covered by the letters patent, in this case, an LPG gas
brochures depicted clearly each and every element of the patented gas burner
burner, was not inventive, new or useful; (b) the specification of the letters patent
device so that the prior art and patented device became identical although in
did not comply with the requirements of Sec. 14, RA No. 165, as amended; (c)
truth they were not, they could not serve as anticipatory bars for the reason that
respondent Melecia Madolaria was not the original, true and actual inventor nor
they were undated. The dates when they were distributed to the public were not
did she derive her rights from the original, true and actual inventor of the utility
indicated and, therefore, were useless prior art references. The records and
model covered by the letters patent; and, (d) the letters patent was secured by
evidence also do not support the petitioner's contention that Letters Patent No.
means of fraud or misrepresentation. In support of her petition for cancellation
UM-4609 was obtained by means of fraud and/or misrepresentation. No
petitioner further alleged that (a) the utility model covered by the letters patent of
evidence whatsoever was presented by petitioner to show that the then
respondent had been known or used by others in the Philippines for more than
applicant Melecia Madolaria withheld with intent to deceive material facts which,
one (1) year before she filed her application for letters patent on 9 December
if disclosed, would have resulted in the refusal by the Philippine Patent Office to
1979; (b) the products which were produced in accordance with the utility model
issue the Letters Patent under inquiry.
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 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
Petitioner presented the following documents which she correspondingly
Patents. Hence, this petition for review on certiorari alleging that the Court of
marked as exhibits: (a) affidavit of petitioner alleging the existence of prior art,
Appeals erred (a) in relying on imaginary differences which in actuality did not
marked Exh. "A;" (b) a brochure distributed by Manila Gas Corporation
exist between the model of private respondent covered by Letters Patent No.
disclosing a pictorial representation of Ransome Burner made by Ransome
UM-4609 and the previously known model of Esso Standard Eastern, Inc., and
Torch and Burner Company, USA, marked Exh. "D;" and, (c) a brochure
Manila Gas Corporation, making such imaginary differences grounded entirely
distributed by Esso Gasul or Esso Standard Eastern, Inc., of the Philippines
on speculation, surmises and conjectures; (b) in rendering judgment based on
showing a picture of another similar burner with top elevation view and another
misapprehension of facts; (c) in relying mainly on the testimony of private
perspective view of the same burner, marked Exh. "E."
respondent's sole witness Rolando Madolaria; and, (d) in not cancelling Letters
Patent No. UM-4609 in the name of private respondent.
Testifying for herself petitioner narrated that her husband Ong Bun Tua worked
as a helper in the UNITED FOUNDRY where respondent Melecia Madolaria
Petitioner submits that the differences cited by the Court of Appeals between the
used to be affiliated with from 1965 to 1970; that Ong helped in the casting of an
utility model of private respondent and the models of Manila Gas Corporation
LPG burner which was the same utility model of a burner for which Letters
and Esso Standard Eastern, Inc., are more imaginary than real. She alleges that
Patent No. UM-4609 was issued, and that after her husband's separation from
based on Exhs. "E," "E-1," "F" and "F-1" or the brochures of Manila Gas
the shop she organized Besco Metal Manufacturing (BESCO METAL, for brevity)
Corporation and Esso Standard Eastern, Inc., presented by petitioner, the
for the casting of LPG burners one of which had the configuration, form and
cup-shaped burner mouth and threaded hole on the side are shown to be similar
component parts similar to those being manufactured by UNITED FOUNDRY.
to the utility model of private respondent. The exhibits also show a detachable
Petitioner presented in evidence an alleged model of an LPG burner marked
burner mouth having a plurality of upwardly existing undulations adopted to act
Exh. "K" and covered by the Letters Patent of respondent, and testified that it
as gas passage when the cover is attached to the top of said cup-shaped mouth
was given to her in January 1982 by one of her customers who allegedly
all of which are the same as those in the patented model. Petitioner also denies
acquired it from UNITED FOUNDRY. Petitioner also presented in evidence her
as substantial difference the short cylindrical tube of the burner mouth appearing
own model of an LPG burner called "Ransome" burner marked Exh. "L," which
in the brochures of the burners being sold by Manila Gas Corporation and the
was allegedly manufactured in 1974 or 1975 and sold by her in the course of her
long cylindered tube of private respondent's model of the gas burner.
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 Petitioner argues that the actual demonstration made during the hearing
Madolaria. Also presented by petitioner was a burner cup of an imported disclosed the similarities in form, operation and mechanism and parts between
"Ransome" burner marked Exh "M" which was allegedly existing even before the the utility model of private respondent and those depicted in the brochures. The
patent application of private respondent. 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
Petitioner presented two (2) other witnesses, namely, her husband Ong Bun Tua
application for utility model patent. Petitioner thus asks this Court to take judicial
and Fidel Francisco. Ong testified that he worked as a helper in the UNITED
notice of the fact that Esso Standard Eastern, Inc., disappeared before 1979 and
FOUNDRY from 1965 to 1970 where he helped in the casting of LPG burners
reappeared only during the Martial Law years as Petrophil Corporation.
with the same form, configuration and mechanism as that of the model covered
Petitioner also emphasizes that the brochures indicated the telephone number
by the Letters Patent issued to private respondent. Francisco testified that he
of Manila Gas Corporation as 5-79-81 which is a five (5) numbered telephone
had been employed with the Manila Gas Corporation from 1930 to 1941 and
number existing before 1975 because telephones in Metro Manila started to
from 1952 up to 1969 where he retired as supervisor and that Manila Gas
have six (6) numbers only after that year.
Corporation imported "Ransome" burners way back in 1965 which were
advertised through brochures to promote their sale.
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 respondent's patented model.
Finally, it is argued that the testimony of private respondent's 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. Inventians 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 respondent's 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.
xxx xxx xxx
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
xxx xxx xxx
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
Petitioner's 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.
xxx xxx xxx
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 respondent's model of gas burner as a discovery. There is a
presumption that the Office has correctly determined the patentability of the
model8 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.
Graham vs John Deere Co. of Kansas City
Brief Fact Summary. John Deere (Defendant) defended an infringement action
on grounds of obviousness.
Synopsis of Rule of Law. A case-by-case analysis of the scope and content of
the prior art, the differences between the prior art and the claims at issue, as well
as the level of ordinary skill in the applicable art, are required to determine the
non-obviousness of a claimed invention as to a prior art.
Facts. Graham (Plaintiff) filed suit against Defendant claiming patent
infringement on a device which consisted of old mechanical elements that
absorbed shock from plow shanks as they plowed through rocky soil. In a prior
case, The Fifth Circuit held that a patent was valid, ruling that a combination was
eligible for patent when it produced an "old result in a cheaper and otherwise
more advantageous way." The Eighth Circuit said the patent was invalid in the
present case as there was no new result or combination. Plaintiff petitioned for
certiorari, and the Supreme Court granted the request in order to resolve the
conflict.
Issue. Is a case-by-case analysis required of the scope and content of the prior
art, the differences between the prior art and the claims at issue, as well as the
level of ordinary skill in the applicable art to determine the non-obviousness of a
claimed invention as to prior art?
Held. (Clark, J.) Yes. A case-by-case analysis of the scope and content of the
prior art, the differences between the prior art and the claims at issue, as well as
the level of ordinary skill in the applicable art are required to determine the
non-obviousness of a claimed invention as to a prior art. The statutory
non-obviousness requirement was added by the Patent Act of 1952. However,
this was just a codification of the judicial precedent set forth in Hotchkiss v.
Greenwood, 11 How. 248 (1851). Although the term "non-obviousness" is used
instead of "invention," in § 103 of the Act, the general level of improvement and
originality needed in order to sustain a patent did not change. In order to
determine whether an invention is eligible for patent or is only an obvious
improvement to a prior art requires a case-by-case analysis of the criteria listed
above. Commercial success, long-felt but unsolved needs, and the failure of
others are secondary considerations that may also be relevant in considering
the obviousness of an invention. Regarding the patent at issue in these cases,
the differences between the patented invention and prior art would have been
obvious to one reasonably skilled in the art. The patent is therefore
invalid. Affirmed.
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).
All these notwithstanding, the trial court nonetheless issued the writ of
preliminary injunction which 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."
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.
G.R. No. 118708 February 2, 1998
CRESER PRECISION SYSTEMS, INC., petitioner,
vs.
COURT OF APPEALS AND FLORO INTERNATIONAL CORP., respondents.
MARTINEZ, J.:
This petition for review on certiorari assails the decision 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-69383 covering an aerial fuze which was published in the
September-October-1990, Vol. III, No. 5 issue of the Bureau of Patent's 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 letter5 to petitioner advising it of 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 respondent's demand, petitioner filed on December 8,
1993 a complaint6 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 it
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 respondent's aerial fuze is identical
in every respect to the petitioner's 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
for infringement against it since it has no patent for the aerial fuze which it claims
to have invented; that petitioner's 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 rights 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
court in its Order9 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 plaintiff's 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 plaintiff's 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 defendant's 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 Sec. 10, RA 165 to
include only "the first true and actual inventor, his heirs, legal representatives or
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 defendant's letter. With the
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 defendant's 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 10before 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
respondent's 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 court's 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 petitioner's 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:
Sec. 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. . . .
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 patentee's 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 as
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 light 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, an 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,
petitioner's remedy is not to file an action for injunction or infringement but to file
a petition for cancellation of private respondent's patent. Petitioner however
failed to do so. As such, it can not now assail or impugn the validity of the private
respondent's 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. 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 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 of 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.
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.
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 device or process in every particular; Proof of an adoption of the
substance of the thing 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.
WHEREFORE, premises considered, the decision of the Court of Appeals is
hereby AFFIRMED and this petition DENIED for lack of merit.
G. R. No. 126627 August 14, 2003
SMITH KLINE BECKMAN CORPORATION, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and TRYCO PHARMA
CORPORATION, Respondents.
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. 145611 for the aforesaid invention
was issued to petitioner for a term of seventeen (17) years.
The letters patent provides in its claims2 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. 145614 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 petitioner’s 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 Answer8 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; ₱1,000,000.00 in moral damages;
₱300,000.00 in exemplary damages; and ₱150,000.00 in attorney’s 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, plaintiff’s 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 attorney’s 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
court’s finding that private respondent was not liable for any infringement of the
patent of petitioner in light of the latter’s failure to show that Albendazole is the
same as the compound subject of Letters Patent No. 14561. Noting petitioner’s
admission of the issuance by the U.S. of a patent for Albendazole in the name of
Smith Kline and French Laboratories which was petitioner’s 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 petitioner’s 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 petitioner’s 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 Office’s
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.
Petitioner’s motion for reconsideration of the Court of Appeals’ decision having
been denied11 the present petition for review on certiorari12 was filed, assigning
as errors the following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT
ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCO’S "IMPREGON"
DRUG, IS INCLUDED IN PETITIONER’S 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 ATTORNEY’S 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 petitioner’s 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 result.19 Yet again, a scrutiny of petitioner’s evidence fails to convince this Court
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-Rejoinder13 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 ₱330,000.00 representing lost profits, petitioner assails the same as
highly speculative and conjectural, hence, without basis. It assails too the award
of ₱100,000.00 in attorney’s fees as not falling under any of the instances
enumerated by law where recovery of attorney’s 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 petitioner’s 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 court’s 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, petitioner’s 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 compound’s 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.
same function in substantially the same way to achieve substantially the same
of the substantial sameness of petitioner’s 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 words, the principle or mode of
operation must be the same or substantially the same.21
The doctrine of equivalents thus requires satisfaction of the
function-means-and-result test, the patentee having the burden to show that all
three components of such equivalency test are met.22
As stated early on, petitioner’s 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 petitioner’s compound
works. The testimony of Dr. Orinion lends no support to petitioner’s 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."24What this only
means is that petitioner’s 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.1âwphi1
The foregoing discussions notwithstanding, this Court does not sustain the
award of actual damages and attorney’s fees in favor of private respondent. The
claimed actual damages of ₱330,000.00 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 ₱100,000.00 monthly gross
sales for eleven months, were supported by the testimonies of private
respondent’s President25 and Executive Vice-President that the average
monthly sale of Impregon was ₱100,000.00 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
respondent’s 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
When the language of its claims is clear and distinct, the patentee is bound
attorney’s fees to private respondent anchored on Article 2208 (2) of the Civil
thereby and may not claim anything beyond them.17 And so are the courts
Code, private respondent having been allegedly forced to litigate as a result of
bound which may not add to or detract from the claims matters not expressed or
petitioner’s suit. Even if a claimant is compelled to litigate with third persons or to
necessarily implied, nor may they enlarge the patent beyond the scope of that
incur expenses to protect its rights, still attorney’s fees may not be awarded
which the inventor claimed and the patent office allowed, even if the patentee
where no sufficient showing of bad faith could be reflected in a party’s
may have been entitled to something more than the words it had chosen would
persistence in a case other than an erroneous conviction of the righteousness of
include.18
his cause.29 There exists no evidence on record indicating that petitioner was
moved by malice in suing private respondent.
It bears stressing that the mere absence of the word Albendazole in Letters
Patent No. 14561 is not determinative of Albendazole’s non-inclusion in the
This Court, however, grants private respondent temperate or moderate
claims of the patent. While Albendazole is admittedly a chemical compound that
damages in the amount of ₱20,000.00 which it finds reasonable under the
exists by a name different from that covered in petitioner’s letters patent, the
circumstances, it having suffered some pecuniary loss the amount of which
language of Letter Patent No. 14561 fails to yield anything at all regarding
cannot, from the nature of the case, be established with certainty.30
Albendazole. And no extrinsic evidence had been adduced to prove that
Albendazole inheres in petitioner’s patent in spite of its omission therefrom or
that the meaning of the claims of the patent embraces the same. WHEREFORE, the assailed decision of the Court of Appeals is hereby
AFFIRMED with MODIFICATION. The award of actual or compensatory
damages and attorney’s fees to private respondent, Tryco Pharma Corporation,
While petitioner concedes that the mere literal wordings of its patent cannot
is DELETED; instead, it is hereby awarded the amount of P20,000.00 as
establish private respondent’s infringement, it urges this Court to apply the
temperate or moderate damages.
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

G.R. No. 115106 March 15, 1996
ROBERTO L. DEL ROSARIO
vs.
COURT OF APPEALS AND JANITO CORPORATION, respondents.
BELLOSILLO, J.:p
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 one's 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, attorney's 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 mode 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 certiorariproceeding; (b) the Court of Appeals erred in
taking judicial notice of private respondent's 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 plaintiff's 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 . . . .
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 Q. The same also with Sanyo 1985 which you put, more or less?
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
A. Sanyo is wrong.
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 Q. It is not 1985?
and player are likewise connected to said transistorized amplifier circuit; a
second cubical casing having an opening at its rear, said second cubical casing
A. Sanyo is 1979 I think.
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 Q. So this is also wrong. Panasonic 1986 is also wrong?
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
A. Panasonic I think.
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 Q. So you don't think this is also correct.

The terms of both Letters Patents were extended for another five (5) years each, A. The date?
the first beginning 2 June 1988 and the second, 14 November 1991.
Q. So you don't think also that this allegation here that they manufactured in
The Patent Law expressly acknowledges that any new model of implements or 1986 is correct?
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. 10Here, there
A. Wrong. Earlier.
is no dispute that the letters patent issued to petitioner are for utility models of
audio equipment.
Q. National by Precision Electronic 1986 this is also wrong?
In issuing, reissuing or withholding patents and extensions thereof, the Director
of Patents determines whether the patent is new and whether the machine or A. I think earlier.
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
Q. So that means all your allegations here from 2 to 5 are wrong? OK. By
has been a prior public use or sale of the article sought to be patented. 11 Where
Philipps Philippines 1986, this is also correct or wrong?
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 A. More or less. We said more or less.
then shifts to respondent to overcome this presumption by competent
evidence. 12
Q. Nakabutshi by Asahi Electronics that is also wrong?

Under Sec. 55 of The Patent Law a utility model shall not be considered "new" if
A. No that is 1979.
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 Q. Electone by DICO 1989 is this correct or wrong?
model so known, used or described within the country. Respondent corporation
failed to present before the trial court competent evidence that the utility models
A. Correct. More or less.
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. Skylers 1985 is that correct or wrong?

Q. Mr. Cua, you testified that there are (sic) so many other companies which A. It is more or less because it is urgent. We don't have time to exact the date.
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,
Q. Musicmate of G.A. Yupangco 1981 this is more or less? You are not also
is that right?
sure?

A. Musicmate and Asahi.

A. 95% sure.

Q. Now do you recall that your lawyer filed with this Honorable Court an Urgent
Q. Now you are sure 1981.
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 A. This one because. . . .
enumerated here.
Q. Mr. Witness so you are now trying to tell this Honorable Court that all your
A. More than that because. . . . allegations here of the dates in this Urgent Motion except for Musicmate which
you are only 95% sure they are all wrong or they are also more or less or not
sure, is that right?
Q. Now you will agree with me that in your statement Sharp you put the date as
1985 agreed?
A. More or less.
A. No.
Q. Now do you have any proof, any advertisement, anything in writing that would
show that all these instruments are in the market, do you have it.
Q. You mean your lawyer was wrong when he put the word Sharp 1985?

A. No I don't have it because. . . .

A. Maybe I informed him already.

Q. No I am satisfied with your answer. Now Mr. Witness, you don't also have a
xxx xxx xxx
proof that Akai instrument that you said was also in the market before 1982?
You don't have any written proof, any advertisement?
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. I have the product.

A. Since it is urgent it is more or less.

Q. But you have not brought the product in (sic) this Honorable Court, right?
A. No. 13
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 The Patent law, petitioner as
a patentee shall have the exclusive right to make, use and sell the patented
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 authorization of the patentee constitutes
infringement of his patent.
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 alleged that both
his own patented audio equipment and respondent's sing-along system were
constructed in a casing with a control panel, the casing having a vertical partition
wall defining the rear compartment 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 controls
mounted on the control panel, and that both had loud speakers fitted inside the
front compartment 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 to the
transistorized amplifier circuit. 14
Respondent Janito Corporation denied that there was any violation of
petitioner's patent rights, and cited the differences between its miyata
equipment and petitioner's audio equipment. But, it must be emphasized,
respondent only confined its comparison to the first model, Utility Model No.
5269, and completely disregarded Utility Model No. 6237 which improved on the
first. As described by respondent corporation, 15 these differences are —
First. Under Utility Model 5269, the unit is a substantially cubical casing with a
window at its rear and upper corner fitted with slightly inclined control panel,
while the miyata equipment is a substantially rectangular casing with panel
vertically positioned.
Second. Under Utility Model 5269, the cubical casing has a vertical partition wall
defining a rear compartment and a front compartment serving as a speaker
baffle, while the miyata equipment has no rear compartment and front
compartment in its rectangular casing; it has only a front compartment
horizontally divided into 3 compartments like a 3-storey building, the 1st
compartment being a kit, the 2nd also the speaker, and the 3rd are kits.
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 vertical partition wall, the printed
circuit board having 1 amplifier and 1 echo, while in the miyataequipment the
amplifier is mainly IC (Integrated Circuit) — powered with 8 printed circuit 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.
Fourth. Under Utility Model 5269, 4 printed circuits are placed inside the
compartment of its casing 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.
Fifth. Under Utility Model 5269, there are various controls mounted on the
control panel of the casing, while in miyata, the various controls are all
separated from the printed circuit boards and the various controls are all
attached thereto.
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 petitioner's 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 speaker's 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 petitioner's and respondent's 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.
KENNETH ROY SAVAGE/K ANGELIN EXPORT TRADING, owned and
managed by GEMMA DEMORAL-SAVAGE, petitioners, vs. JUDGE
APRONIANO B. TAYPIN, Presiding Judge, RTC-BR. 12, Cebu City, CEBU
PROVINCIAL PROSECUTOR'S OFFICE, NATIONAL BUREAU OF
INVESTIGATION, Region VII, Cebu City, JUANITA NG MENDOZA, MENDCO
DEVELOPMENT CORPORATION, ALFREDO SABJON and DANTE
SOSMEA, respondents.
BELLOSILLO, J.:
Petitioners KENNETH ROY SAVAGE and K ANGELIN EXPORT TRADING,
owned and managed by GEMMA DEMORAL-SAVAGE, seek to nullify the
search warrant issued by respondent Judge Aproniano B. Taypin of the
Regional Trial Court, Br. 12 Cebu City, which resulted in the seizure of certain
pieces of wrought iron furniture from the factory of petitioners located in Biasong,
Talisay, Cebu. Their motion to quash the search warrant was denied by
respondent Judge as well as their motion to reconsider the denial. Hence, this
petition for certiorari.
The antecedent facts: Acting on a complaint lodged by private respondent Eric
Ng Mendoza, president and general manager of Mendco Development
Corporation (MENDCO),[1] Supervising Agent Jose Ermie Monsanto of the
National Bureau of Investigation (NBI) filed an application for search warrant
with the Regional Trial Court of Cebu City.[2] The application sought the
authorization to search the premises of K Angelin Export International located in
Biasong, Talisay, Cebu, and to seize the pieces of wrought iron furniture found
therein which were allegedly the object of unfair competition involving design
patents, punishable under Art. 189 of the Revised Penal Code as amended. The
assailed Search Warrant No. 637-10-1697-12 was issued by respondent Judge
on 16 October 1997 and executed in the afternoon of the following day by NBI
agents.[3] Seized from the factory were several pieces of furniture, indicated in
the Inventory Sheet attached to the Return of Search Warrant, and all items
seized have remained in NBI custody up to the present.[4]
On 30 October 1997 petitioners moved to quash the search warrant alleging that:
(a) the crime they were accused of did not exist; (b) the issuance of the warrant
was not based on probable cause; (c) the judge failed to ask the witnesses
searching questions; and, (d) the warrant did not particularly describe the things
to be seized.[5]
On 10 November 1997 petitioners filed a Supplemental Motion to Quash where
they additionally alleged that the assailed warrant was applied for without a
certification against forum shopping.[6] On 30 January 1998 respondent Judge
denied the Motion to Quash and the Supplemental Motion to Quash.[7] On 2
March 1998 petitioners moved to reconsider the denial of their motion to quash
and alleged substantially the same grounds found in their original Motion to securing any license or patent for the same, for the purpose of deceiving or
Quash but adding thereto two (2) new grounds, namely: (a) respondent court defrauding Mendco and the buying public.[20] The Code defines "unfair
has no jurisdiction over the subject-matter; and, (b) respondent court failed to competition" thus - Lexj uris
"substantiate" the order sought to be reconsidered.[8] The denial of their last
motion[9] prompted petitioners to come to this Court. Court
168.2. Any person who shall employ deception or any
other means contrary to good faith by which he shall pass
The principal issues that must be addressed in this petition are: (a) questions off the goods manufactured by him or in which he deals, or
involving jurisdiction over the offense; (b) the need for a certification of his business, or services for those of the one having
non-forum shopping; and, (c) the existence of the crime. established such goodwill, or shall commit any acts
calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.
Petitioners claim that respondent trial court had no jurisdiction over the offense
since it was not designated as a special court for Intellectual Property
Rights (IPR), citing in support thereof Supreme Court Administrative Order No. 168.3. In particular, and without in any way limiting the
113-95 designating certain branches of the Regional Trial Courts, Metropolitan scope of protection against unfair competition, the
Trial Courts and Municipal Trial Courts in Cities as Special Courts for IPR. The following shall be deemed guilty of unfair competition:
courts enumerated therein are mandated to try and decide violations of IPR
including Art. 189 of the Revised Penal Code committed within their respective
(a) Any person who is selling his
territorial jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9,
goods and gives them the general
Cebu City, was designated Special Court for IPR for the 7th Judicial
appearance of goods of another
Region.[10] Subsequently Supreme Court Administrative Order No.104-96 was
manufacturer or dealer, either as to
issued providing that jurisdiction over all violations of IPR was thereafter
the goods themselves or in the
confined to the Regional Trial Courts.[11]
wrapping of the packages in which
they are contained, or the devices or
The authority to issue search warrants was not among those mentioned in the words thereon, or in any other
administrative orders. But the Court has consistently ruled that a search warrant feature of their appearance which
is merely a process issued by the court in the exercise of its ancillary jurisdiction would be likely to influence
and not a criminal action which it may entertain pursuant to its original purchasers to believe that the goods
jurisdiction.[12] The authority to issue search warrants is inherent in all courts and offered are those of a manufacturer
may be effected outside their territorial jurisdiction.[13] In the instant case, the or dealer, other than the actual
premises searched located in Biasong, Talisay, Cebu, are well within the manufacturer or dealer, or who
territorial jurisdiction of the respondent court.[14] otherwise clothes the goods with
such appearance as shall deceive
the public and defraud another of his
Petitioners apparently misconstrued the import of the designation of Special
legitimate trade, or any subsequent
Courts for IPR. Administrative Order No. 113-95 merely specified which court
vendor of such goods or any agent
could "try and decide" cases involving violations of IPR. It did not, and could not,
of any vendor engaged in selling
vest exclusive jurisdiction with regard to all matters (including the issuance of
such goods with a like purpose;
search warrants and other judicial processes) in any one court. Jurisdiction is
conferred upon courts by substantive law; in this case, BP Blg.129, and not by a
procedural rule, much less by an administrative order.[15] The power to issue (b) Any person who by any artifice,
search warrants for violations of IPR has not been exclusively vested in the or device, or who employs any other
courts enumerated in Supreme Court Administrative Order No.113-95. J lexj means calculated to induce the false
belief that such person is offering
the services of another who has
Petitioners next allege that the application for a search warrant should have
identified such services in the mind
been dismissed outright since it was not accompanied by a certification of
of the public; or
non-forum shopping, citing as authority therefor Washington Distillers, Inc. v.
Court of Appeals.[16] In that case, we sustained the quashal of the search
warrant because the applicant had been guilty of forum shopping as private (c) Any person who shall make any
respondent sought a search warrant from the Manila Regional Trial Court only false statement in the course of
after he was denied by the courts of Pampanga. The instant case differs trade or who shall commit any other
significantly, for here there is no allegation of forum-shopping, only failure to act contrary to good faith of a nature
acquire a certification against forum-shopping. The Rules of Court as amended calculated to discredit goods,
requires such certification only from initiatory pleadings, omitting any mention of businesses or services of
"applications."[17] In contrast, Supreme Court Circular 04-94, the old rule on the another.[21]
matter, required such certification even from "applications." Our ruling
in Washington Distillers required no such certification from applications for
There is evidently no mention of any crime of "unfair competition" involving
search warrants. Hence, the absence of such certification will not result in the
design patents in the controlling provisions on Unfair Competition. It is therefore
dismissal of an application for search warrant.
unclear whether the crime exists at all, for the enactment of RA 8293 did not
result in the reenactment of Art. 189 of the Revised Penal Code. In the face of
The last question to be resolved is whether unfair competition involving design this ambiguity, we must strictly construe the statute against the State and
patents punishable under Art. 189 of the Revised Penal Code exists in this case. liberally in favor of the accused,[22] for penal statutes cannot be enlarged or
Prosecutor Ivan Herrero seems to agree as he filed the corresponding extended by intendment, implication or any equitable
Information against petitioners on 17 March 1998.[18] However, since consideration.[23] Respondents invoke jurisprudence to support their contention
the IPR Code took effect on 1 January 1998 any discussion contrary to the view that "unfair competition" exists in this case. [24] However, we are prevented from
herein expressed would be pointless. The repealing clause of the Code provides applying these principles, along with the new provisions on Unfair Competition
- found in the IPR Code, to the alleged acts of the petitioners, for such acts
constitute patent infringement as defined by the same Code-Juri smis
All Acts and parts of Acts inconsistent herewith, more
particularly, Republic Act No. 165, as amended; Republic Sec. 76. Civil Action for Infringement. - 76.1. The making,
Act No. 166, as amended; and Articles 188 and 189 of the using, offering for sale, selling, or importing a patented
Revised Penal Code; Presidential Decree No. 49, product or a product obtained directly or indirectly from a
including Presidential Decree No. 285, as amended, are patented process, or the use of a patented process
hereby repealed (italics ours).[19] without authorization of the patentee constitutes patent
infringement.[25]
The issue involving the existence of "unfair competition" as a felony involving
design patents, referred to in Art. 189 of the Revised Penal Code, has been Although this case traces its origins to the year 1997 or before the enactment of
rendered moot and academic by the repeal of the article. the IPR Code, we are constrained to invoke the provisions of the Code. Article
22 of the Revised Penal Code provides that penal laws shall be applied
retrospectively, if such application would be beneficial to the accused. [26] Since
The search warrant cannot even be issued by virtue of a possible violation of
the IPR Code effectively obliterates the possibility of any criminal liability
the IPR Code. The assailed acts specifically alleged were the manufacture and
attaching to the acts alleged, then that Code must be applied here.
fabrication of wrought iron furniture similar to that patented by MENDCO, without
In the issuance of search warrants, the Rules of Court requires a finding of
probable cause in connection with one specific offense to be determined
personally by the judge after examination of the complainant and the witnesses
he may produce, and particularly describing the place to be searched and the
things to be seized.[27] Hence, since there is no crime to speak of, the search
warrant does not even begin to fulfill these stringent requirements and is
therefore defective on its face. The nullity of the warrant renders moot and
academic the other issues raised in petitioners' Motion to Quash and Motion for
Reconsideration. Since the assailed search warrant is null and void, all property
seized by virtue thereof should be returned to petitioners in accordance with
established jurisprudence.[28]
In petitioners' Reply with Additional Information they allege that the trial court
denied their motion to transfer their case to a Special Court for IPR. We have
gone through the records and we fail to find any trace of such motion or even a
copy of the order denying it. All that appears in the records is a copy of an order
granting a similar motion filed by a certain Minnie Dayon with regard to Search
Warrant No. 639-10-1697-12.[29] This attachment being immaterial we shall give
it no further attention. Jjj uris
WHEREFORE, the Order of the Regional Trial Court, Br. 12, Cebu City, dated
30 January 1998, denying the Motion to Quash Search Warrant No.
637-10-1697-12 dated 30 October 1997 and the Supplemental Motion to
Quash dated 10 November 1997 filed by petitioners, as well as the Order dated
8 April 1998 denying petitioners' Motion for Reconsideration dated 2 March 1998,
is SET ASIDE. Search Warrant No. 637-10-1697-12 issued on 16 October 1997
is ANNULLED and SET ASIDE, and respondents are ordered to return to
petitioners the property seized by virtue of the illegal search warrant.
SO ORDERED.
G.R. No. L-22221 August 31, 1965
PARKE, DAVIS and COMPANY
vs.
DOCTORS' PHARMACEUTICALS, INC., ET AL., respondents.
BAUTISTA ANGELO, J.:
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 patent entitled "Process for
the Manufacturing of Antibiotics" (Letters Patent No. 50) which was issued by
the Philippine Patent Office on February 9, 1950. The patent relates to a
chemical compound represented by a formula commonly
called chloramphenicol. The patent contains ten claims, nine of which are
process claims, and the other is a product claim to the chemical
substance chloramphenicol.
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 manager wrote a
letter to Parke Davis & Company requesting that it be granted a voluntary
license "to 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 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' 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 preparations, emphasizing that its
request for license was based on an express provision of the Philippine 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 be reasonable and mutually
satisfactory.
As apparently Parke Davis & Company was not inclined to grant the request for
a voluntary license, 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
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
containing chloramphenicol has been unduly restrained to a certain extent that it
is becoming a monopoly; (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 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.
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 work it itself but merely to
import the patented product; (2) respondent has not requested any license to
work the patented invention in the Philippines; (3) respondent is not competent
to work the patented 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.
At the hearing held on November 14, 1962, respondent abandoned the second,
third and fourth grounds of 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 rendered on November 15, 1963 his
decision granting to respondent the license prayed for. The following is the
dispositive part of the decision:
WHEREFORE, the Respondent-Patentee is hereby ordered to grant the
Petitioner a license under Letters Patent No. 50. The parties hereto are hereby
ordered to submit to me, within THIRTY (30) days from their receipt of a copy of
this decision a licensing agreement, and in default thereof, they may submit
within the same period their respective proposals. It must be shown that
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.
If, within the said period, no licensing agreement is filed or no negotiations
therefor transpires between the parties, I shall issue the licensing agreement in
such terms and conditions as may be just and reasonable under the
circumstances.
In due time, Parke Davis & Company interposed the present petition for review.
In this appeal, Parke, Davis & Company imputes to the Director of Patents
eleven errors which may be briefly stated as follows:
1. Respondent has not proven the ground relied upon by it in its petition;
2. Respondent Doctors' Pharmaceuticals, Inc. has no intention to work the
patent but merely to import the patented article chloramphenicol;
3. Petitioner's invention is being worked in the Philippines;
4. Respondent is not competent to work petitioner's patented invention, that is,
to manufacture chloramphenicol and sell the same in the Philippines;
5. The grant of the license is against public interest;
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.
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, 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 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.

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.