G.R. No.
148222 August 15, 2003 Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner,
vs.
SHOEMART, INCORPORATED, and NORTH EDSA MARKETING,
INCORPORATED, Respondents.
DECISION
CORONA, J.:
In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl
& Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision1 of the Court of Appeals reversing
the October 31, 1996 decision2 of the Regional Trial Court of Makati, Branch 133, in Civil Case
No. 92-516 which declared private respondents Shoemart Inc. (SMI) and North Edsa Marketing
Inc. (NEMI) liable for infringement of trademark and copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals3 contained a summary of this dispute:
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of
advertising display units simply referred to as light boxes. These units utilize specially printed
posters sandwiched between plastic sheets and illuminated with back lights. Pearl and Dean was
able to secure a Certificate of Copyright Registration dated January 20, 1981 over these illuminated
display units. The advertising light boxes were marketed under the trademark "Poster Ads". The
application for registration of the trademark was filed with the Bureau of Patents, Trademarks and
Technology Transfer on June 20, 1983, but was approved only on September 12, 1988, per
Registration No. 41165. From 1981 to about 1988, Pearl and Dean employed the services of Metro
Industrial Services to manufacture its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for
the lease and installation of the light boxes in SM City North Edsa. Since SM City North Edsa was
under construction at that time, SMI offered as an alternative, SM Makati and SM Cubao, to which
Pearl and Dean agreed. On September 11, 1985, Pearl and Dean’s General Manager, Rodolfo
Vergara, submitted for signature the contracts covering SM Cubao and SM Makati to SMI’s
Advertising Promotions and Publicity Division Manager, Ramonlito Abano. Only the contract for
SM Makati, however, was returned signed. On October 4, 1985, Vergara wrote Abano inquiring
about the other contract and reminding him that their agreement for installation of light boxes was
not only for its SM Makati branch, but also for SM Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMI’s house counsel informed Pearl and Dean that it
was rescinding the contract for SM Makati due to non-performance of the terms thereof. In his
reply dated February 17, 1986, Vergara protested the unilateral action of SMI, saying it was without
basis. In the same letter, he pushed for the signing of the contract for SM Cubao.
Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to
fabricate its display units, offered to construct light boxes for Shoemart’s chain of stores. SMI
approved the proposal and ten (10) light boxes were subsequently fabricated by Metro Industrial
for SMI. After its contract with Metro Industrial was terminated, SMI engaged the services of EYD
Rainbow Advertising Corporation to make the light boxes. Some 300 units were fabricated in 1991.
These were delivered on a staggered basis and installed at SM Megamall and SM City.
at SM City and in the fastfood section of SM Cubao. Upon investigation, Pearl and Dean found
out that aside from the two (2) reported SM branches, light boxes similar to those it manufactures
were also installed in two (2) other SM stores. It further discovered that defendant-appellant North
Edsa Marketing Inc. (NEMI), through its marketing arm, Prime Spots Marketing Services, was set
up primarily to sell advertising space in lighted display units located in SMI’s different branches.
Pearl and Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI
and NEMI enjoining them to cease using the subject light boxes and to remove the same from
SMI’s establishments. It also demanded the discontinued use of the trademark "Poster Ads," and
the payment to Pearl and Dean of compensatory damages in the amount of Twenty Million Pesos
(P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224)
light boxes and NEMI took down its advertisements for "Poster Ads" from the lighted display units
in SMI’s stores. Claiming that both SMI and NEMI failed to meet all its demands, Pearl and Dean
filed this instant case for infringement of trademark and copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently developed its poster
panels using commonly known techniques and available technology, without notice of or reference
to Pearl and Dean’s copyright. SMI noted that the registration of the mark "Poster Ads" was only
for stationeries such as letterheads, envelopes, and the like. Besides, according to SMI, the word
"Poster Ads" is a generic term which cannot be appropriated as a trademark, and, as such,
registration of such mark is invalid. It also stressed that Pearl and Dean is not entitled to the reliefs
prayed for in its complaint since its advertising display units contained no copyright notice, in
violation of Section 27 of P.D. 49. SMI alleged that Pearl and Dean had no cause of action against
it and that the suit was purely intended to malign SMI’s good name. On this basis, SMI, aside from
praying for the dismissal of the case, also counterclaimed for moral, actual and exemplary damages
and for the cancellation of Pearl and Dean’s Certification of Copyright Registration No. PD-R-
2558 dated January 20, 1981 and Certificate of Trademark Registration No. 4165 dated September
12, 1988.
NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor
having engaged in the business of advertising. It repleaded SMI’s averments, admissions and denials
and prayed for similar reliefs and counterclaims as SMI."
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of
copyright under Section 2 of PD 49, as amended, and infringement of trademark under Section 22
of RA No. 166, as amended, and are hereby penalized under Section 28 of PD 49, as amended, and
Sections 23 and 24 of RA 166, as amended. Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:
(a) actual damages - ₱16,600,000.00,
representing profits
derived by defendants
as a result of infringe-
ment of plaintiff’s copyright
from 1991 to 1992
(b) moral damages - ₱1,000.000.00
(c) exemplary damages - ₱1,000,000.00
(d) attorney’s fees - ₱1,000,000.00
plus
(e) costs of suit;
(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which
were fabricated by Metro Industrial Services and EYD Rainbow Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the trademark "Poster
Ads", for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiff’s light boxes and its trademark
"Poster Ads".
Defendants’ counterclaims are hereby ordered dismissed for lack of merit.
SO ORDERED.4
On appeal, however, the Court of Appeals reversed the trial court:
Since the light boxes cannot, by any stretch of the imagination, be considered as either prints,
pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a
copyrightable class "O" work, we have to agree with SMI when it posited that what was copyrighted
were the technical drawings only, and not the light boxes themselves, thus:
42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like
plaintiff-appellant’s will not extend to the actual object. It has so been held under jurisprudence, of
which the leading case is Baker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a
copyright protection for a book entitled "Selden’s Condensed Ledger or Bookkeeping Simplified"
which purported to explain a new system of bookkeeping. Included as part of the book were blank
forms and illustrations consisting of ruled lines and headings, specially designed for use in
connection with the system explained in the work. These forms showed the entire operation of a
day or a week or a month on a single page, or on two pages following each other. The defendant
Baker then produced forms which were similar to the forms illustrated in Selden’s copyrighted
books. The Court held that exclusivity to the actual forms is not extended by a copyright. The
reason was that "to grant a monopoly in the underlying art when no examination of its novelty has
ever been made would be a surprise and a fraud upon the public; that is the province of letters
patent, not of copyright." And that is precisely the point. No doubt aware that its alleged original
design would never pass the rigorous examination of a patent application, plaintiff-appellant fought
to foist a fraudulent monopoly on the public by conveniently resorting to a copyright registration
which merely employs a recordal system without the benefit of an in-depth examination of novelty.
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge
Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright over an
unpublished drawing entitled "Bridge Approach – the drawing showed a novel bridge approach to
unsnarl traffic congestion". The defendant constructed a bridge approach which was alleged to be
an infringement of the new design illustrated in plaintiff’s drawings. In this case it was held that
protection of the drawing does not extend to the unauthorized duplication of the object drawn
because copyright extends only to the description or expression of the object and not to the object
itself. It does not prevent one from using the drawings to construct the object portrayed in the
drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v.
Maddox, 379 F. 2d 84, it was held that there is no copyright infringement when one who, without
being authorized, uses a copyrighted architectural plan to construct a structure. This is because the
copyright does not extend to the structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright over the technical
drawings of the latter’s advertising display units.
xxx xxx xxx
The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate
Court that the protective mantle of the Trademark Law extends only to the goods used by the first
user as specified in the certificate of registration, following the clear mandate conveyed by Section
20 of Republic Act 166, as amended, otherwise known as the Trademark Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration
of a mark or trade-name shall be prima facie evidence of the validity of the registration, the
registrant’s ownership of the mark or trade-name, and of the registrant’s exclusive right to use the
same in connection with the goods, business or services specified in the certificate, subject to any
conditions and limitations stated therein." (underscoring supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the registration of the
trademark "Poster Ads" with the Bureau of Patents, Trademarks, and Technology Transfer. Said
trademark was recorded in the Principal Register on September 12, 1988 under Registration No.
41165 covering the following products: stationeries such as letterheads, envelopes and calling cards
and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the part of the
defendants-appellants for their use of the words "Poster Ads", in the advertising display units in
suit. Jurisprudence has interpreted Section 20 of the Trademark Law as "an implicit permission to
a manufacturer to venture into the production of goods and allow that producer to appropriate the
brand name of the senior registrant on goods other than those stated in the certificate of
registration." The Supreme Court further emphasized the restrictive meaning of Section 20 when it
stated, through Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods not specified therein,
then a situation may arise whereby an applicant may be tempted to register a trademark on any and
all goods which his mind may conceive even if he had never intended to use the trademark for the
said goods. We believe that such omnibus registration is not contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Dean’s registered trademark and
defendants-appellants’ "Poster Ads" design, as well as the parallel use by which said words were
used in the parties’ respective advertising copies, we cannot find defendants-appellants liable for
infringement of trademark. "Poster Ads" was registered by Pearl and Dean for specific use in its
stationeries, in contrast to defendants-appellants who used the same words in their advertising
display units. Why Pearl and Dean limited the use of its trademark to stationeries is simply beyond
us. But, having already done so, it must stand by the consequence of the registration which it had
caused.
xxx xxx xxx
We are constrained to adopt the view of defendants-appellants that the words "Poster Ads" are a
simple contraction of the generic term poster advertising. In the absence of any convincing proof
that "Poster Ads" has acquired a secondary meaning in this jurisdiction, we find that Pearl and
Dean’s exclusive right to the use of "Poster Ads" is limited to what is written in its certificate of
registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark "Poster Ads".
There being no finding of either copyright or trademark infringement on the part of SMI and
NEMI, the monetary award granted by the lower court to Pearl and Dean has no leg to stand on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and
another is rendered DISMISSING the complaint and counterclaims in the above-entitled case for
lack of merit.5
Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the
following errors for the Court’s consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
INFRINGEMENT OF PEARL & DEAN’S TRADEMARK "POSTER ADS" WAS
COMMITTED BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF
THE TRIAL COURT, DESPITE THE LATTER’S FINDING, NOT DISPUTED BY THE
HONORABLE COURT OF APPEALS, THAT SM WAS GUILTY OF BAD FAITH IN ITS
NEGOTIATION OF ADVERTISING CONTRACTS WITH PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL, MORAL &
EXEMPLARY DAMAGES, ATTORNEY’S FEES AND COSTS OF SUIT.6
ISSUES
In resolving this very interesting case, we are challenged once again to put into proper perspective
four main concerns of intellectual property law — patents, copyrights, trademarks and unfair
competition arising from infringement of any of the first three. We shall focus then on the following
issues:
(1) if the engineering or technical drawings of an advertising display unit (light box) are granted
copyright protection (copyright certificate of registration) by the National Library, is the light box
depicted in such engineering drawings ipso facto also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent issued by the Bureau
of Patents Trademarks and Technology Transfer (now Intellectual Property Office) — in addition
to the copyright of the engineering drawings?
(3) can the owner of a registered trademark legally prevent others from using such trademark if it
is a mere abbreviation of a term descriptive of his goods, services or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & D’s complaint was that SMI infringed on its copyright over the light boxes when
SMI had the units manufactured by Metro and EYD Rainbow Advertising for its own account.
Obviously, petitioner’s position was premised on its belief that its copyright over the engineering
drawings extended ipso facto to the light boxes depicted or illustrated in said drawings. In ruling
that there was no copyright infringement, the Court of Appeals held that the copyright was limited
to the drawings alone and not to the light box itself. We agree with the appellate court.
First, petitioner’s application for a copyright certificate — as well as Copyright Certificate No. PD-
R2588 issued by the National Library on January 20, 1981 — clearly stated that it was for a class
"O" work under Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the statute
then prevailing. Said Section 2 expressly enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect
to any of the following works:
xxx xxx xxx
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
xxx xxx xxx
Although petitioner’s copyright certificate was entitled "Advertising Display Units" (which depicted
the box-type electrical devices), its claim of copyright infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant,
the rights are limited to what the statute confers. It may be obtained and enjoyed only with respect
to the subjects and by the persons, and on terms and conditions specified in the
statute.7 Accordingly, it can cover only the works falling within the statutory enumeration or
description.8
P & D secured its copyright under the classification class "O" work. This being so, petitioner’s
copyright protection extended only to the technical drawings and not to the light box itself because
the latter was not at all in the category of "prints, pictorial illustrations, advertising copies, labels,
tags and box wraps." Stated otherwise, even as we find that P & D indeed owned a valid copyright,
the same could have referred only to the technical drawings within the category of "pictorial
illustrations." It could not have possibly stretched out to include the underlying light box. The strict
application9 of the law’s enumeration in Section 2 prevents us from giving petitioner even a little
leeway, that is, even if its copyright certificate was entitled "Advertising Display Units." What the
law does not include, it excludes, and for the good reason: the light box was not a literary or artistic
piece which could be copyrighted under the copyright law. And no less clearly, neither could the
lack of statutory authority to make the light box copyrightable be remedied by the simplistic act of
entitling the copyright certificate issued by the National Library as "Advertising Display Units."
In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the public without license
from P & D, then no doubt they would have been guilty of copyright infringement. But this was
not the case. SMI’s and NEMI’s acts complained of by P & D were to have units similar or identical
to the light box illustrated in the technical drawings manufactured by Metro and EYD Rainbow
Advertising, for leasing out to different advertisers. Was this an infringement of petitioner’s
copyright over the technical drawings? We do not think so.
During the trial, the president of P & D himself admitted that the light box was neither a literary
not an artistic work but an "engineering or marketing invention."10 Obviously, there appeared to
be some confusion regarding what ought or ought not to be the proper subjects of copyrights,
patents and trademarks. In the leading case of Kho vs. Court of Appeals,11 we ruled that these
three legal rights are completely distinct and separate from one another, and the protection afforded
by one cannot be used interchangeably to cover items or works that exclusively pertain to the others:
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked
container of goods. In relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on the other hand, refer to any technical solution
of a problem in any field of human activity which is new, involves an inventive step and is
industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial use of the light
boxes without license from petitioner, private respondents cannot be held legally liable for
infringement of P & D’s copyright over its technical drawings of the said light boxes, should they
be liable instead for infringement of patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light boxes. It therefore
acquired no patent rights which could have protected its invention, if in fact it really was. And
because it had no patent, petitioner could not legally prevent anyone from manufacturing or
commercially using the contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,12 we
held that "there can be no infringement of a patent until a patent has been issued, since whatever
right one has to the invention covered by the patent arises alone from the grant of patent. x x x
(A)n inventor has no common law right to a monopoly of his invention. He has the right to make
use of and vend his invention, but if he voluntarily discloses it, such as by offering it for sale, the
world is free to copy and use it with impunity. A patent, however, gives the inventor the right to
exclude all others. As a patentee, he has the exclusive right of making, selling or using the
invention.13 On the assumption that petitioner’s advertising units were patentable inventions,
petitioner revealed them fully to the public by submitting the engineering drawings thereof to the
National Library.
To be able to effectively and legally preclude others from copying and profiting from the invention,
a patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system
is to bring new designs and technologies into the public domain through disclosure.14 Ideas, once
disclosed to the public without the protection of a valid patent, are subject to appropriation without
significant restraint.15
On one side of the coin is the public which will benefit from new ideas; on the other are the
inventors who must be protected. As held in Bauer & Cie vs. O’Donnel,16 "The act secured to the
inventor the exclusive right to make use, and vend the thing patented, and consequently to prevent
others from exercising like privileges without the consent of the patentee. It was passed for the
purpose of encouraging useful invention and promoting new and useful inventions by the
protection and stimulation given to inventive genius, and was intended to secure to the public, after
the lapse of the exclusive privileges granted the benefit of such inventions and improvements."
The law attempts to strike an ideal balance between the two interests:
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and
disclosure of new useful and non-obvious advances in technology and design, in return for the
exclusive right to practice the invention for a number of years. The inventor may keep his invention
secret and reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit
to the community, the patent is granted. An exclusive enjoyment is guaranteed him for 17 years,
but upon the expiration of that period, the knowledge of the invention inures to the people, who
are thus enabled to practice it and profit by its use."17
The patent law has a three-fold purpose: "first, patent law seeks to foster and reward invention;
second, it promotes disclosures of inventions to stimulate further innovation and to permit the
public to practice the invention once the patent expires; third, the stringent requirements for patent
protection seek to ensure that ideas in the public domain remain there for the free use of the
public."18
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-
depth investigation is required because "in rewarding a useful invention, the rights and welfare of
the community must be fairly dealt with and effectively guarded. To that end, the prerequisites to
obtaining a patent are strictly observed and when a patent is issued, the limitations on its exercise
are equally strictly enforced. To begin with, a genuine invention or discovery must be demonstrated
lest in the constant demand for new appliances, the heavy hand of tribute be laid on each slight
technological advance in art."19
There is no such scrutiny in the case of copyrights nor any notice published before its grant to the
effect that a person is claiming the creation of a work. The law confers the copyright from the
moment of creation20 and the copyright certificate is issued upon registration with the National
Library of a sworn ex-parte claim of creation.
Therefore, not having gone through the arduous examination for patents, the petitioner cannot
exclude others from the manufacture, sale or commercial use of the light boxes on the sole basis of
its copyright certificate over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office
(IPO) to scrutinize the light box’s eligibility as a patentable invention. The irony here is that, had
petitioner secured a patent instead, its exclusivity would have been for 17 years only. But through
the simplified procedure of copyright-registration with the National Library — without undergoing
the rigor of defending the patentability of its invention before the IPO and the public — the
petitioner would be protected for 50 years. This situation could not have been the intention of the
law.
In the oft-cited case of Baker vs. Selden21 , the United States Supreme Court held that only the
expression of an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the
copyright of a book which expounded on a new accounting system he had developed. The
publication illustrated blank forms of ledgers utilized in such a system. The defendant reproduced
forms similar to those illustrated in the plaintiff’s copyrighted book. The US Supreme Court ruled
that:
"There is no doubt that a work on the subject of book-keeping, though only explanatory of well
known systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x. But
there is a clear distinction between the books, as such, and the art, which it is, intended to illustrate.
The mere statement of the proposition is so evident that it requires hardly any argument to support
it. The same distinction may be predicated of every other art as well as that of bookkeeping. A
treatise on the composition and use of medicines, be they old or new; on the construction and use
of ploughs or watches or churns; or on the mixture and application of colors for painting or dyeing;
or on the mode of drawing lines to produce the effect of perspective, would be the subject of
copyright; but no one would contend that the copyright of the treatise would give the exclusive
right to the art or manufacture described therein. The copyright of the book, if not pirated from
other works, would be valid without regard to the novelty or want of novelty of its subject matter.
The novelty of the art or thing described or explained has nothing to do with the validity of the
copyright. To give to the author of the book an exclusive property in the art described therein,
when no examination of its novelty has ever been officially made, would be a surprise and a fraud
upon the public. That is the province of letters patent, not of copyright. The claim to an invention
of discovery of an art or manufacture must be subjected to the examination of the Patent Office
before an exclusive right therein can be obtained; and a patent from the government can only secure
it.
The difference between the two things, letters patent and copyright, may be illustrated by reference
to the subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of
great value in the healing art. If the discoverer writes and publishes a book on the subject (as regular
physicians generally do), he gains no exclusive right to the manufacture and sale of the medicine;
he gives that to the public. If he desires to acquire such exclusive right, he must obtain a patent for
the mixture as a new art, manufacture or composition of matter. He may copyright his book, if he
pleases; but that only secures to him the exclusive right of printing and publishing his book. So of
all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may
contain, gives no exclusive right to the modes of drawing described, though they may never have
been known or used before. By publishing the book without getting a patent for the art, the latter
is given to the public.
xxx
Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book
intended to convey instruction in the art, any person may practice and use the art itself which he
has described and illustrated therein. The use of the art is a totally different thing from a publication
of the book explaining it. The copyright of a book on bookkeeping cannot secure the exclusive
right to make, sell and use account books prepared upon the plan set forth in such book. Whether
the art might or might not have been patented, is a question, which is not before us. It was not
patented, and is open and free to the use of the public. And, of course, in using the art, the ruled
lines and headings of accounts must necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a confusion of
ideas produced by the peculiar nature of the art described in the books, which have been made the
subject of copyright. In describing the art, the illustrations and diagrams employed happened to
correspond more closely than usual with the actual work performed by the operator who uses the
art. x x x The description of the art in a book, though entitled to the benefit of copyright, lays no
foundation for an exclusive claim to the art itself. The object of the one is explanation; the object
of the other is use. The former may be secured by copyright. The latter can only be secured, if it
can be secured at all, by letters patent." (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark "Poster Ads" which petitioner’s president
said was a contraction of "poster advertising." P & D was able to secure a trademark certificate for
it, but one where the goods specified were "stationeries such as letterheads, envelopes, calling cards
and newsletters."22 Petitioner admitted it did not commercially engage in or market these goods.
On the contrary, it dealt in electrically operated backlit advertising units and the sale of advertising
spaces thereon, which, however, were not at all specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate
Appellate Court,23 where we, invoking Section 20 of the old Trademark Law, ruled that "the
certificate of registration issued by the Director of Patents can confer (upon petitioner) the exclusive
right to use its own symbol only to those goods specified in the certificate, subject to any conditions
and limitations specified in the certificate x x x. One who has adopted and used a trademark on his
goods does not prevent the adoption and use of the same trademark by others for products which
are of a different description."24 Faberge, Inc. was correct and was in fact recently reiterated
in Canon Kabushiki Kaisha vs. Court of Appeals.25
Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure of P & D to
secure a trademark registration for specific use on the light boxes meant that there could not have
been any trademark infringement since registration was an essential element thereof.1âwphi1
ON THE ISSUE OF UNFAIR COMPETITION
If at all, the cause of action should have been for unfair competition, a situation which was possible
even if P & D had no registration.26 However, while the petitioner’s complaint in the RTC also
cited unfair competition, the trial court did not find private respondents liable therefor. Petitioner
did not appeal this particular point; hence, it cannot now revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair
competition.
By the nature of things, there can be no unfair competition under the law on copyrights although
it is applicable to disputes over the use of trademarks. Even a name or phrase incapable of
appropriation as a trademark or tradename may, by long and exclusive use by a business (such that
the name or phrase becomes associated with the business or product in the mind of the purchasing
public), be entitled to protection against unfair competition.27 In this case, there was no evidence
that P & D’s use of "Poster Ads" was distinctive or well-known. As noted by the Court of Appeals,
petitioner’s expert witnesses himself had testified that " ‘Poster Ads’ was too generic a name. So it
was difficult to identify it with any company, honestly speaking."28 This crucial admission by its
own expert witness that "Poster Ads" could not be associated with P & D showed that, in the mind
of the public, the goods and services carrying the trademark "Poster Ads" could not be distinguished
from the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary meaning. "Poster Ads" was
generic and incapable of being used as a trademark because it was used in the field of poster
advertising, the very business engaged in by petitioner. "Secondary meaning" means that a word or
phrase originally incapable of exclusive appropriation with reference to an article in the market
(because it is geographically or otherwise descriptive) might nevertheless have been used for so long
and so exclusively by one producer with reference to his article that, in the trade and to that branch
of the purchasing public, the word or phrase has come to mean that the article was his
property.29 The admission by petitioner’s own expert witness that he himself could not associate
"Poster Ads" with petitioner P & D because it was "too generic" definitely precluded the application
of this exception.

Having discussed the most important and critical issues, we see no need to belabor the rest.

All told, the Court finds no reversible error committed by the Court of Appeals when it reversed
the Regional Trial Court of Makati City.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated
May 22, 2001 is AFFIRMED in toto.

SO ORDERED.
 G.R. No. 161295 June 29, 2005 Leaf Spring eye bushing

JESSIE G. CHING, petitioner, a) Plastic Polypropylene

vs.
WILLIAM M. SALINAS, SR., WILLIAM M. SALINAS, JR., JOSEPHINE L. SALINAS, - C190 27 }
JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE, JOHN ERIC I. SALINAS,
- C240 rear 40 }
NOEL M. YABUT (Board of Directors and Officers of WILAWARE PRODUCT
CORPORATION), respondents. - C240 front 41 } BAG 1
DECISION b) Polyvinyl Chloride Plastic
CALLEJO, SR., J.: - C190 13 }
This petition for review on certiorari assails the Decision1 and Resolution2 of the Court of Appeals c) Vehicle bearing cushion
(CA) in CA-G.R. SP No. 70411 affirming the January 3, 2002 and February 14, 2002 Orders3 of
the Regional Trial Court (RTC) of Manila, Branch 1, which quashed and set aside Search Warrant - center bearing cushion 11 }
Nos. 01-2401 and 01-2402 granted in favor of petitioner Jessie G. Ching.
Budder for C190 mold 8 }
Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co., the maker and
manufacturer of a Utility Model, described as "Leaf Spring Eye Bushing for Automobile" made up Diesel Mold
of plastic. a) Mold for spring eye bushing rear 1 set
On September 4, 2001, Ching and Joseph Yu were issued by the National Library Certificates of b) Mold for spring eye bushing front 1 set
Copyright Registration and Deposit of the said work described therein as "Leaf Spring Eye Bushing
for Automobile."4 c) Mold for spring eye bushing for C190 1 set
On September 20, 2001, Ching requested the National Bureau of Investigation (NBI) for d) Mold for C240 rear 1 piece of the set
police/investigative assistance for the apprehension and prosecution of illegal manufacturers,
producers and/or distributors of the works.5 e) Mold for spring eye bushing for L300 2 sets

After due investigation, the NBI filed applications for search warrants in the RTC of Manila against
William Salinas, Sr. and the officers and members of the Board of Directors of Wilaware Product
Corporation. It was alleged that the respondents therein reproduced and distributed the said models
penalized under Sections 177.1 and 177.3 of Republic Act (R.A.) No. 8293. The applications sought
the seizure of the following:
a.) Undetermined quantity of Leaf spring eye bushing for automobile that are made up of plastic
polypropylene;
b.) Undetermined quantity of Leaf spring eye bushing for automobile that are made up of polyvinyl
chloride plastic;
c.) Undetermined quantity of Vehicle bearing cushion that is made up of polyvinyl chloride plastic;
d.) Undetermined quantity of Dies and jigs, patterns and flasks used in the manufacture/fabrication
of items a to d;
e.) Evidences of sale which include delivery receipts, invoices and official receipts.6
f) Mold for leaf spring eye bushing C190 with metal 1 set
g) Mold for vehicle bearing cushion 1 set8
The respondents filed a motion to quash the search warrants on the following grounds:
2. The copyright registrations were issued in violation of the Intellectual Property Code on the
ground that:
a) the subject matter of the registrations are not artistic or literary;
b) the subject matter of the registrations are spare parts of automobiles meaning – there (sic) are
original parts that they are designed to replace. Hence, they are not original.9
The respondents averred that the works covered by the certificates issued by the National Library
are not artistic in nature; they are considered automotive spare parts and pertain to technology.
They aver that the models are not original, and as such are the proper subject of a patent, not
copyright.10

The RTC granted the application and issued Search Warrant Nos. 01-2401 and 01-2402 for the In opposing the motion, the petitioner averred that the court which issued the search warrants was
seizure of the aforecited articles.7 In the inventory submitted by the NBI agent, it appears that the not the proper forum in which to articulate the issue of the validity of the copyrights issued to him.
following articles/items were seized based on the search warrants: Citing the ruling of the Court in Malaloan v. Court of Appeals,11 the petitioner stated that a search
warrant is merely a judicial process designed by the Rules of Court in anticipation of a criminal case.
Until his copyright was nullified in a proper proceeding, he enjoys rights of a registered
owner/holder thereof.
On January 3, 2002, the trial court issued an Order12 granting the motion, and quashed the search
warrant on its finding that there was no probable cause for its issuance. The court ruled that the
work covered by the certificates issued to the petitioner pertained to solutions to technical
problems, not literary and artistic as provided in Article 172 of the Intellectual Property Code.
His motion for reconsideration of the order having been denied by the trial court’s Order of
February 14, 2002, the petitioner filed a petition for certiorari in the CA, contending that the RTC
had no jurisdiction to delve into and resolve the validity of the copyright certificates issued to him
by the National Library. He insisted that his works are covered by Sections 172.1 and 172.2 of the
Intellectual Property Code. The petitioner averred that the copyright certificates are prima
facie evidence of its validity, citing the ruling of the United States Court of Appeals in Wildlife
Express Corporation v. Carol Wright Sales, Inc.13 The petitioner asserted that the respondents
failed to adduce evidence to support their motion to quash the search warrants. The petitioner
noted that respondent William Salinas, Jr. was not being honest, as he was able to secure a similar
copyright registration of a similar product from the National Library on January 14, 2002.
On September 26, 2003, the CA rendered judgment dismissing the petition on its finding that the
RTC did not commit any grave abuse of its discretion in issuing the assailed order, to wit:
It is settled that preliminarily, there must be a finding that a specific offense must have been
committed to justify the issuance of a search warrant. In a number of cases decided by the Supreme
Court, the same is explicitly provided, thus:
"The probable cause must be in connection with one specific offense, and the judge must, before
issuing the warrant, personally examine in the form of searching questions and answers, in writing
and under oath, the complainant and any witness he may produce, on facts personally known to
them and attach to the record their sworn statements together with any affidavit submitted.
"In the determination of probable cause, the court must necessarily resolve whether or not an
offense exists to justify the issuance or quashal of the search warrant."
In the instant case, the petitioner is praying for the reinstatement of the search warrants issued, but
subsequently quashed, for the offense of Violation of Class Designation of Copyrightable Works
under Section 177.1 in relation to Section 177.3 of Republic Act 8293, when the objects subject of
the same, are patently not copyrightable.
It is worthy to state that the works protected under the Law on Copyright are: literary or artistic
works (Sec. 172) and derivative works (Sec. 173). The Leaf Spring Eye Bushing and Vehicle Bearing
Cushion fall on neither classification. Accordingly, if, in the first place, the item subject of the
petition is not entitled to be protected by the law on copyright, how can there be any violation?14
The petitioner’s motion for reconsideration of the said decision suffered the same fate. The
petitioner forthwith filed the present petition for review on certiorari, contending that the
revocation of his copyright certificates should be raised in a direct action and not in a search warrant
proceeding.
The petitioner posits that even assuming ex argumenti that the trial court may resolve the validity
of his copyright in a proceeding to quash a search warrant for allegedly infringing items, the RTC
committed a grave abuse of its discretion when it declared that his works are not copyrightable in
the first place. He claims that R.A. No. 8293, otherwise known as the Intellectual Property Code of
the Philippines, which took effect on January 1, 1998, provides in no uncertain terms that copyright
protection automatically attaches to a work by the sole fact of its creation, irrespective of its mode
or form of expression, as well as of its content, quality or purpose.15 The law gives a non-inclusive
definition of "work" as referring to original intellectual creations in the literary and artistic domain
protected from the moment of their creation; and includes original ornamental designs or models
for articles of manufacture, whether or not registrable as an industrial design and other works of
applied art under Section 172.1(h) of R.A. No. 8293.lawphil.net
As such, the petitioner insists, notwithstanding the classification of the works as either literary
and/or artistic, the said law, likewise, encompasses works which may have a bearing on the utility
aspect to which the petitioner’s utility designs were classified. Moreover, according to the petitioner,
what the Copyright Law protects is the author’s intellectual creation, regardless of whether it is one
with utilitarian functions or incorporated in a useful article produced on an industrial scale.
The petitioner also maintains that the law does not provide that the intended use or use in industry
of an article eligible for patent bars or invalidates its registration under the Law on Copyright. The
test of protection for the aesthetic is not beauty and utility, but art for the copyright and invention
of original and ornamental design for design patents.16 In like manner, the fact that his utility
designs or models for articles of manufacture have been expressed in the field of automotive parts,
or based on something already in the public domain does not automatically remove them from the
protection of the Law on Copyright.17
The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293 which gives the same
presumption to an affidavit executed by an author who claims copyright ownership of his work.
The petitioner adds that a finding of probable cause to justify the issuance of a search warrant
means merely a reasonable suspicion of the commission of the offense. It is not equivalent to
absolute certainty or a finding of actual and positive cause.18 He assists that the determination of
probable cause does not concern the issue of whether or not the alleged work is copyrightable. He
maintains that to justify a finding of probable cause in the issuance of a search warrant, it is enough
that there exists a reasonable suspicion of the commission of the offense.
The petitioner contends that he has in his favor the benefit of the presumption that his copyright
is valid; hence, the burden of overturning this presumption is on the alleged infringers, the
respondents herein. But this burden cannot be carried in a hearing on a proceeding to quash the
search warrants, as the issue therein is whether there was probable cause for the issuance of the
search warrant. The petitioner concludes that the issue of probable cause should be resolved
without invalidating his copyright.
In their comment on the petition, the respondents aver that the work of the petitioner is essentially
a technical solution to the problem of wear and tear in automobiles, the substitution of
materials, i.e., from rubber to plastic matter of polyvinyl chloride, an oil resistant soft texture plastic
material strong enough to endure pressure brought about by the vibration of the counter bearing
and thus brings bushings. Such work, the respondents assert, is the subject of copyright under
Section 172.1 of R.A. No. 8293. The respondents posit that a technical solution in any field of
human activity which is novel may be the subject of a patent, and not of a copyright. They insist
that the certificates issued by the National Library are only certifications that, at a point in time, a
certain work was deposited in the said office. Furthermore, the registration of copyrights does not
provide for automatic protection. Citing Section 218.2(b) of R.A. No. 8293, the respondents aver
that no copyright is said to exist if a party categorically questions its existence and legality. Moreover,
under Section 2, Rule 7 of the Implementing Rules of R.A. No. 8293, the registration and deposit
of work is not conclusive as to copyright outlay or the time of copyright or the right of the copyright
owner. The respondents maintain that a copyright exists only when the work is covered by the
protection of R.A. No. 8293.
The petition has no merit.
The RTC had jurisdiction to delve into and resolve the issue whether the petitioner’s utility models
are copyrightable and, if so, whether he is the owner of a copyright over the said models. It bears
stressing that upon the filing of the application for search warrant, the RTC was duty-bound to
determine whether probable cause existed, in accordance with Section 4, Rule 126 of the Rules of
Criminal Procedure:
SEC. 4. Requisite for issuing search warrant. – A search warrant shall not issue but upon probable
cause in connection with one specific offense to be determined personally by the judge after
examination under oath or affirmation of the complainant and the witnesses he may produce, and,
particularly, describing the place to be searched and the things to be seized.
In Solid Triangle Sales Corporation v. The Sheriff of RTC QC, Br. 93,19 the Court held that in the
determination of probable cause, the court must necessarily resolve whether or not an offense exists
to justify the issuance of a search warrant or the quashal of one already issued by the court. Indeed,
probable cause is deemed to exist only where facts and circumstances exist which could lead a
reasonably cautious and prudent man to believe that an offense has been committed or is being
committed. Besides, in Section 3, Rule 126 of the Rules of Criminal Procedure, a search warrant
may be issued for the search and seizure of personal property (a) subject of the offense; (b) stolen
or embezzled and other proceeds or fruits of the offense; or (c) used or intended to be used as the
means of committing an offense.
The RTC is mandated under the Constitution and Rules of Criminal Procedure to determine
probable cause. The court cannot abdicate its constitutional obligation by refusing to determine
whether an offense has been committed.20 The absence of probable cause will cause the outright
nullification of the search warrant.21
For the RTC to determine whether the crime for infringement under R.A. No. 8293 as alleged in
an application is committed, the petitioner-applicant was burdened to prove that (a) respondents
Jessie Ching and Joseph Yu were the owners of copyrighted material; and (b) the copyrighted
material was being copied and distributed by the respondents. Thus, the ownership of a valid
copyright is essential.22
Ownership of copyrighted material is shown by proof of originality and copyrightability. By
originality is meant that the material was not copied, and evidences at least minimal creativity; that
it was independently created by the author and that it possesses at least same minimal degree of
creativity.23 Copying is shown by proof of access to copyrighted material and substantial similarity
between the two works.24 The applicant must thus demonstrate the existence and the validity of
his copyright because in the absence of copyright protection, even original creation may be freely
copied.25
By requesting the NBI to investigate and, if feasible, file an application for a search warrant for
infringement under R.A. No. 8293 against the respondents, the petitioner thereby authorized the
RTC (in resolving the application), to delve into and determine the validity of the copyright which
he claimed he had over the utility models. The petitioner cannot seek relief from the RTC based on
his claim that he was the copyright owner over the utility models and, at the same time, repudiate
the court’s jurisdiction to ascertain the validity of his claim without running afoul to the doctrine of
estoppel.
To discharge his burden, the applicant may present the certificate of registration covering the work
or, in its absence, other evidence.26 A copyright certificate provides prima facie evidence of
originality which is one element of copyright validity. It constitutes prima facie evidence of both
validity and ownership27 and the validity of the facts stated in the certificate.28 The presumption
of validity to a certificate of copyright registration merely orders the burden of proof. The applicant
should not ordinarily be forced, in the first instance, to prove all the multiple facts that underline
the validity of the copyright unless the respondent, effectively challenging them, shifts the burden
of doing so to the applicant.29 Indeed, Section 218.2 of R.A. No. 8293 provides:
218.2. In an action under this Chapter:
(a) Copyright shall be presumed to subsist in the work or other subject matter to which the action
relates if the defendant does not put in issue the question whether copyright subsists in the work
or other subject matter; and
(b) Where the subsistence of the copyright is established, the plaintiff shall be presumed to be the
owner of the copyright if he claims to be the owner of the copyright and the defendant does not
put in issue the question of his ownership.
A certificate of registration creates no rebuttable presumption of copyright validity where other
evidence in the record casts doubt on the question. In such a case, validity will not be presumed.30
To discharge his burden of probable cause for the issuance of a search warrant for violation of R.A.
No. 8293, the petitioner-applicant submitted to the RTC Certificate of Copyright Registration Nos.
2001-197 and 2001-204 dated September 3, 2001 and September 4, 2001, respectively, issued by the
National Library covering work identified as Leaf Spring Eye Bushing for Automobile and Vehicle
Bearing Cushion both classified under Section 172.1(h) of R.A. No. 8293, to wit:
SEC. 172. Literary and Artistic Works. – 172.1. Literary and artistic works, hereinafter referred to
as "works," are original intellectual creations in the literary and artistic domain protected from the
moment of their creation and shall include in particular:
...
(h) Original ornamental designs or models for articles of manufacture, whether or not registrable
as an industrial design, and other works of applied art.
Related to the provision is Section 171.10, which provides that a "work of applied art" is an artistic
creation with utilitarian functions or incorporated in a useful article, whether made by hand or
produced on an industrial scale.
But, as gleaned from the specifications appended to the application for a copyright certificate filed
by the petitioner, the said Leaf Spring Eye Bushing for Automobile is merely a utility model
described as comprising a generally cylindrical body having a co-axial bore that is centrally located
and provided with a perpendicular flange on one of its ends and a cylindrical metal jacket
surrounding the peripheral walls of said body, with the bushing made of plastic that is either
polyvinyl chloride or polypropylene.31 Likewise, the Vehicle Bearing Cushion is illustrated as a
bearing cushion comprising a generally semi-circular body having a central hole to secure a
conventional bearing and a plurality of ridges provided therefore, with said cushion bearing being
made of the same plastic materials.32 Plainly, these are not literary or artistic works. They are not
intellectual creations in the literary and artistic domain, or works of applied art. They are certainly
not ornamental designs or one having decorative quality or value.
It bears stressing that the focus of copyright is the usefulness of the artistic design, and not its
marketability. The central inquiry is whether the article is a work of art.33 Works for applied art
include all original pictorials, graphics, and sculptural works that are intended to be or have been
embodied in useful article regardless of factors such as mass production, commercial exploitation,
and the potential availability of design patent protection.34
As gleaned from the description of the models and their objectives, these articles are useful articles
which are defined as one having an intrinsic utilitarian function that is not merely to portray the
appearance of the article or to convey information. Indeed, while works of applied art, original
intellectual, literary and artistic works are copyrightable, useful articles and works of industrial
design are not.35 A useful article may be copyrightable only if and only to the extent that such
design incorporates pictorial, graphic, or sculptural features that can be identified separately from,
and are capable of existing independently of the utilitarian aspects of the article.
We agree with the contention of the petitioner (citing Section 171.10 of R.A. No. 8293), that the
author’s intellectual creation, regardless of whether it is a creation with utilitarian functions or
incorporated in a useful article produced on an industrial scale, is protected by copyright law.
However, the law refers to a "work of applied art which is an artistic creation." It bears stressing
that there is no copyright protection for works of applied art or industrial design which have
aesthetic or artistic features that cannot be identified separately from the utilitarian aspects of the
article.36 Functional components of useful articles, no matter how artistically designed, have
generally been denied copyright protection unless they are separable from the useful article.37
In this case, the petitioner’s models are not works of applied art, nor artistic works. They are utility
models, useful articles, albeit with no artistic design or value. Thus, the petitioner described the
utility model as follows:
LEAF SPRING EYE BUSHING FOR AUTOMOBILE
Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile are made of hard
rubber. These rubber bushings after a time, upon subjecting them to so much or intermittent
pressure would eventually wore (sic) out that would cause the wobbling of the leaf spring.
The primary object of this utility model, therefore, is to provide a leaf-spring eye bushing for
automobile that is made up of plastic.
Another object of this utility model is to provide a leaf-spring eye bushing for automobiles made
of polyvinyl chloride, an oil resistant soft texture plastic or polypropylene, a hard plastic, yet both
causes cushion to the leaf spring, yet strong enough to endure pressure brought about by the up
and down movement of said leaf spring.
Yet, an object of this utility model is to provide a leaf-spring eye bushing for automobiles that has
a much longer life span than the rubber bushings.
Still an object of this utility model is to provide a leaf-spring eye bushing for automobiles that has
a very simple construction and can be made using simple and ordinary molding equipment.
A further object of this utility model is to provide a leaf-spring eye bushing for automobile that is
supplied with a metal jacket to reinforce the plastic eye bushing when in engaged with the steel
material of the leaf spring.
These and other objects and advantages will come to view and be understood upon a reading of
the detailed description when taken in conjunction with the accompanying drawings.
Figure 1 is an exploded perspective of a leaf-spring eye bushing according to the present utility
model;
Figure 2 is a sectional view taken along line 2-2 of Fig. 1;
Figure 3 is a longitudinal sectional view of another embodiment of this utility model;
Figure 4 is a perspective view of a third embodiment; and
Figure 5 is a sectional view thereof.
Referring now to the several views of the drawings wherein like reference numerals designated same
parts throughout, there is shown a utility model for a leaf-spring eye bushing for automobile
generally designated as reference numeral 10.
Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11 having a co-axial bore 12
centrally provided thereof.
As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a perpendicular flange
13 on one of its ends and a cylindrical metal jacket 14 surrounding the peripheral walls 15 of said
body 11. When said leaf-spring bushing 10 is installed, the metal jacket 14 acts with the leaf-spring
eye (not shown), which is also made of steel or cast steel. In effect, the bushing 10 will not be
directly in contact with steel, but rather the metal jacket, making the life of the bushing 10 longer
than those without the metal jacket.
In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl chloride, an oil resistant
soft texture plastic or a hard polypropylene plastic, both are capable to endure the pressure applied
thereto, and, in effect, would lengthen the life and replacement therefor.
Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of said bushing 10 is
insertably provided with a steel tube 17 to reinforce the inner portion thereof. This steel tube 17
accommodates or engages with the leaf-spring bolt (not shown) connecting the leaf spring and the
automobile’s chassis.
Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10 is elongated and
cylindrical as to its construction. Said another embodiment is also made of polypropylene or
polyvinyl chloride plastic material. The steel tube 17 and metal jacket 14 may also be applied to this
embodiment as an option thereof.38
VEHICLE BEARING CUSHION
Known bearing cushions inserted to bearing housings for vehicle propeller shafts are made of hard
rubber. These rubber bushings after a time, upon subjecting them to so much or intermittent
pressure would eventually be worn out that would cause the wobbling of the center bearing.
The primary object of this utility model therefore is to provide a vehicle-bearing cushion that is
made up of plastic.
Another object of this utility model is to provide a vehicle bearing cushion made of polyvinyl
chloride, an oil resistant soft texture plastic material which causes cushion to the propeller’s center
bearing, yet strong enough to endure pressure brought about by the vibration of the center bearing.
Yet, an object of this utility model is to provide a vehicle-bearing cushion that has a much longer
life span than rubber bushings.
Still an object of this utility model is to provide a vehicle bearing cushion that has a very simple
construction and can be made using simple and ordinary molding equipment.
These and other objects and advantages will come to view and be understood upon a reading of
the detailed description when taken in conjunction with the accompanying drawings.
Figure 1 is a perspective view of the present utility model for a vehicle-bearing cushion; and
Figure 2 is a sectional view thereof.
Referring now to the several views of the drawing, wherein like reference numeral designate same
parts throughout, there is shown a utility model for a vehicle-bearing cushion generally designated
as reference numeral 10.
Said bearing cushion 10 comprises of a generally semi-circular body 11, having central hole 12 to
house a conventional bearing (not shown). As shown in Figure 1, said body 11 is provided with a
plurality of ridges 13 which serves reinforcing means thereof.
The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture oil and chemical
resistant plastic material which is strong, durable and capable of enduring severe pressure from the
center bearing brought about by the rotating movement of the propeller shaft of the vehicle.39
A utility model is a technical solution to a problem in any field of human activity which is new and
industrially applicable. It may be, or may relate to, a product, or process, or an improvement of any
of the aforesaid.40 Essentially, a utility model refers to an invention in the mechanical field. This is
the reason why its object is sometimes described as a device or useful object.41 A utility model
varies from an invention, for which a patent for invention is, likewise, available, on at least three
aspects: first, the requisite of "inventive step"42 in a patent for invention is not required; second,
the maximum term of protection is only seven years43 compared to a patent which is twenty
years,44 both reckoned from the date of the application; and third, the provisions on utility model
dispense with its substantive examination45 and prefer for a less complicated system.
Being plain automotive spare parts that must conform to the original structural design of the
components they seek to replace, the Leaf Spring Eye Bushing and Vehicle Bearing Cushion are
not ornamental. They lack the decorative quality or value that must characterize authentic works of
applied art. They are not even artistic creations with incidental utilitarian functions or works
incorporated in a useful article. In actuality, the personal properties described in the search warrants
are mechanical works, the principal function of which is utility sans any aesthetic embellishment.
Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing Cushion as included in
the catch-all phrase "other literary, scholarly, scientific and artistic works" in Section 172.1(a) of
R.A. No. 8293. Applying the principle of ejusdem generis which states that "where a statute
describes things of a particular class or kind accompanied by words of a generic character, the
generic word will usually be limited to things of a similar nature with those particularly enumerated,
unless there be something in the context of the state which would repel such inference,"46 the Leaf
Spring Eye Bushing and Vehicle Bearing Cushion are not copyrightable, being not of the same kind
and nature as the works enumerated in Section 172 of R.A. No. 8293.
No copyright granted by law can be said to arise in favor of the petitioner despite the issuance of
the certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing and Vehicle
Bearing Cushion. Indeed, in Joaquin, Jr. v. Drilon47 and Pearl & Dean (Phil.), Incorporated v.
Shoemart, Incorporated,48 the Court ruled that:
Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right
granted by the statute, and not simply a pre-existing right regulated by it. Being a statutory grant,
the rights are only such as the statute confers, and may be obtained and enjoyed only with respect
to the subjects and by the persons, and on terms and conditions specified in the statute.
Accordingly, it can cover only the works falling within the statutory enumeration or description.
That the works of the petitioner may be the proper subject of a patent does not entitle him to the
issuance of a search warrant for violation of copyright laws. In Kho v. Court of Appeals49 and Pearl
& Dean (Phil.), Incorporated v. Shoemart, Incorporated,50 the Court ruled that "these copyright
and patent rights are completely distinct and separate from one another, and the protection afforded
by one cannot be used interchangeably to cover items or works that exclusively pertain to the
others." The Court expounded further, thus:
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a stamped or marked
container of goods. In relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on the other hand, refer to any technical solution
of a problem in any field of human activity which is new, involves an inventive step and is
industrially applicable.
The petitioner cannot find solace in the ruling of the United States Supreme Court in Mazer v.
Stein51 to buttress his petition. In that case, the artifacts involved in that case were statuettes of
dancing male and female figures made of semi-vitreous china. The controversy therein centered on
the fact that although copyrighted as "works of art," the statuettes were intended for use and used
as bases for table lamps, with electric wiring, sockets and lampshades attached. The issue raised was
whether the statuettes were copyright protected in the United States, considering that the copyright
applicant intended primarily to use them as lamp bases to be made and sold in quantity, and carried
such intentions into effect. At that time, the Copyright Office interpreted the 1909 Copyright Act
to cover works of artistic craftsmanship insofar as their form, but not the utilitarian aspects, were
concerned. After reviewing the history and intent of the US Congress on its copyright legislation
and the interpretation of the copyright office, the US Supreme Court declared that the statuettes
were held copyrightable works of art or models or designs for works of art. The High Court ruled
that:
"Works of art (Class G) – (a) – In General. This class includes works of artistic craftsmanship, in
so far as their form but not their mechanical or utilitarian aspects are concerned, such as artistic
jewelry, enamels, glassware, and tapestries, as well as all works belonging to the fine arts, such as
paintings, drawings and sculpture. …"
So we have a contemporaneous and long-continued construction of the statutes by the agency
charged to administer them that would allow the registration of such a statuette as is in question
here.52
The High Court went on to state that "[t]he dichotomy of protection for the aesthetic is not beauty
and utility but art for the copyright and the invention of original and ornamental design for design
patents." Significantly, the copyright office promulgated a rule to implement Mazer to wit:
… [I]f "the sole intrinsic function of an article is its utility, the fact that the work is unique and
attractively shaped will not qualify it as a work of art."
In this case, the bushing and cushion are not works of art. They are, as the petitioner himself
admitted, utility models which may be the subject of a patent.
IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of
merit. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 70411 are
AFFIRMED. Search Warrant Nos. 01-2401 and 01-2402 issued on October 15, 2001 are
ANNULLED AND SET ASIDE. Costs against the petitioner.
SO ORDERED.
G.R. No. 174379
E.I DUPONT DE NEMOURS AND CO., (assignee of inventors Carino, Duncia and
Wong), Petitioner
vs.
DIRECTOR EMMA C. FRANCISCO (in ger capacity as DIRECTOR GENERAL OF THE
INTELLECTUAL PROPERTY OFFICE), DIRECTOR EPIFANIO M. VELASCO (in his
capacity as the DIRECTOR OF THE BUREAU OF PATENTS, and THERAPHARMA, INC.,
Respondents
DECISION
LEONEN, J.:
A patent is granted to provide rights and protection to the inventor after an invention is disclosed
to the public. It also seeks to restrain and prevent unauthorized persons from unjustly profiting
from a protected invention. However, ideas not covered by a patent are free for the public to use
and exploit. Thus, there are procedural rules on the application and grant of patents established to
protect against any infringement. To balance the public interests involved, failure to comply with
strict procedural rules will result in the failure to obtain a patent.
This resolves a Petition for Review on Certiorari 1 assailing the Court of Appeals Amended
Decision2 dated August 30, 2006, which denied the revival of Philippine Patent Application No.
35526, and the Court of Appeals Resolution3 dated January 31, 2006, which granted the
intervention of Therapharma, Inc. in the revival proceedings.
E.I. Dupont Nemours and Company (E.I. Dupont Nemours) is an American corporation organized
under the laws of the State of Delaware. 4 It is the assignee of inv~ntors David John Carini, John
Jonas Vytautas Duncia, and Pancras Chor Bun Wong, all citizens of the United States of America.5
On July 10, 1987, E.I. Dupont Nemours filed Philippine Patent Application No. 35526 before the
Bureau of Patents, Trademarks, and Technology Transfer.6 The application was for Angiotensin II
Receptor Blocking Imidazole (losartan), an invention related to the treatment of hypertension and
congestive heart failure.7 The product was produced and marketed by Merck, Sharpe, and Dohme
Corporation (Merck), E.I. Dupont Nemours' licensee, under the brand names Cozaar and Hyzaar.8
The patent application was handled by Atty. Nicanor D. Mapili (Atty. Mapili), a local resident agent
who handled a majority of E.I. Dupont Nemours' patent applications in the Philippines from 1972
to 1996.9
On December 19, 2000, E.I. Dupont Nemours' new counsel, Ortega, Del Castillo, Bacorro, Odulio,
Calma, and Carbonell,10 sent the Intellectual Property Office11 a letter requesting that an office
action be issued on Philippine Patent Application No. 35526. 12
In response, Patent Examiner Precila O. Bulihan of Intellectual Property Office sent an office
action marked Paper No. 2 on January 30, 2002,13 which stated:
The appointed attorney on record was the late Atty. Nicanor D. Mapili. The reconstituted
documents provided no documents that will show that the authority to prosecute the instant
application is now transferred to the present counsel. No official revocation on record is available.
Therefore, an official revocation of the Power of Attorney of the former counsel and the
appointment of the present by the applicant is therefore required before further action can be
undertaken.
....
1. Contrary to what was alleged, the Chemical Examining Division's (CED) record will show that
as far as the said division is concern[ ed], it did not fail to issue the proper and timely action on the
instant application. CED record shows that the subject application was assigned to the examiner
on June 7, 1988. A month after that was July 19, 1988, the first Office Action was mailed but was
declared abandoned as of September 20, 1988 for applicant's failure to respond within the period
as prescribed under Rule 112. Since then, no other official transactions were recorded. Tlris record
is complemented by the Examiner-in-charge's own record ....
....
2. It was noted that it took thirteen (13) long years for the applicant to request for such Office
Action. This is not expected of the applicant since it is an acceptable fact that almost all inventors/
applicants wish for the early disposition for their applications.14
On May 29, 2002, E.I. Dupont Nemours replied to the office action by submitting a Power of
Attorney executed by Miriam Meconnahey, authorizing Ortega, Castillo, Del Castillo, Bacorro,
Odulio, Calma, and Carbonell to prosecute and handle its patent applications. 15 On the same day,
it also filed a Petition for Revival with Cost of Philippine Patent Application No. 35526. 16
In its Petition for Revival, E.I. Dupont Nemours argued that its former counsel, Atty. Mapili, did
not inform it about the abandonment of the application, and it was not aware that Atty. Mapili had
already died. 17 It argued that it discovered Atty. Mapili's death when its senior-level patent attorney
visited the Philippines in 1996. 18 It argued that it only had actual notice of the abandonment on
January 30, 2002, the date of Paper No. 2. 19 Thus, it argued that its Petition for Revival was
properly filed under Section 113 of the 1962 Revised Rules of Practice before the Philippines Patent
Office in Patent Cases (1962 Revised Rules of Practice).20
On April 18, 2002, the Director of Patents denied the Petition for Revival for having been filed out
of time.21 The Resolution22 stated:
Propriety dictates that the well-settled rule on agency should be applied to this case to maintain the
objectivity and discipline of the Office. Therefore, for cases such as the instant case, let the Office
maintain its position that mistakes of the counsel bind the client,' regardless of the degree of
negligence committed by the former counsel. Although it appears that the former counsel, Atty.
Nicanor Mapili was remiss in his obligations as counsel for the applicants, the Office cannot revive
the abandoned application because of the limitations provided in Rule 115. Clearly, the Petition for
Revival was filed beyond the reglementary period. Since the law and rules do not give the Director
of Patents the discretion to stretch the period for revival, the Office is constrained to apply Rule
115 to the instant case.
In view of the foregoing considerations, applicants' petition to revive the subject application is
hereby denied.
SO ORDERED.23
E.I. Dupont Nemours appealed the denial to the Director-General of the Intellectual Property
Office on August 26, 2002.24 In the Decision25 dated October 22, 2003, Director-General Emma
C. Francisco denied the appeal and affirmed the Resolution of the Director of Patents.
On November 21, 2003, petitioner filed before the Court of Appeals a Petition for Review seeking
to set aside the Intellectual Property Office's Decision dated October 22, 2003. 26
On August 31, 2004, the Court of Appeals granted the Petition for Review. 27 In allowing the
Petition for Revival, the Court of Appeals stated:
After an exhaustive examination of the records of this case, this Court believes that there is
sufficient justification to relax the application of the above-cited doctrine in this case, and to afford
petitioner some relief from the gross negligence committed by its former lawyer, Atty. Nicanor D.
Mapili[.]28
The Office of the Solicitor General, on behalf of the Intellectual Property Office, moved for
reconsideration of this Decision on September 22, 2004. 29
In the interim, Therapharma, Inc. moved for leave to intervene and admit the Attached Motion for
Reconsideration dated October 11, 200430 and argued that the Court of Appeals' August 31, 2004
Decision directly affects its "vested" rights to sell its own product. 31
Therapharma, Inc. alleged that on January 4, 2003, it filed before the Bureau of Food and Drugs its
own application for a losartan product "Lifezar," a medication for hypertension, which the Bureau
granted.32 It argued that it made a search of existing patent applications for similar products before
its application, and that no existing patent registration was found since E.I. Dupont Nemours'
application for its losartan product was considered abandoned by the Bureau of Patents,
Trademarks, and Technology Transfer.33 It alleged that sometime in 2003 to 2004, there was an
exchange of correspondence between Therapharma, Inc. and Merck. In this exchange, Merck
informed Therapharma, Inc. that it was pursuing a patent on the losartan products in the Philippines
and that it would pursue any legal action necessary to protect its product.34
On January 31, 2006, the Court of Appeals issued the Resolution35 granting the Motion· for Leave
to Intervene. According to the Court of Appeals, Therapharma, Inc. had an interest in the revival
of E.I. Dupont Nemours' patent application since it was the local competitor for the losartan
product. 36 It stated hat even if the Petition for Review was premised on the revival of the patent
application, Therapharma, Inc.' s intervention was not premature since E.I. Dupont Nemours,
through Merck, already threatened Therapharma, Inc. with legal action if it continued to market its
losartan product.37
E.I. Dupont Nemours moved for reconsideration on February 22, 2006, assailing the Court of
Appeals' January 31, 2006 Resolution.38
On August 30,. 2006, the Court of Appeals resolved both Motions for Reconsideration and
rendered the Amended Decision39 reversing its August 31, 2004 Decision.
The Court of Appeals ruled that the public interest would be prejudiced by the revival of E.I.
Dupont Nemours' application.40 It found that losartan was used to treat hypertension, "a chronic
ailment afflicting an estimated 12.6 million Filipinos,"41 and noted that the presence of competition
lowered the price for losartan products. 42 It also found that the revival of the application
prejudiced Therapharma, Inc.' s interest, in that it had already invested more than P20,000,000.00
to develop its own losartan product and that it acted in good faith when it marketed its product.43
The Court of Appeals likewise found that it erroneously based its August 31, 2004 Decision on E.I
Dupont Nemours' allegation that it took seven (7) to 13 years for the Intellectual Property Office
to act on a patent application. 44 It stated that while it might have taken that long to issue the
patent, it did not take that long for the Intellectual Property Office to act on application.45 Citing
Schuartz v. Court of Appeals,46 it found that both E.I. Dupont Nemours and Atty. Mapili were
inexcusably negligent in
prosecuting the patent application.47
On October 19, 2006, petitioner E.I. Dupont Nemours filed before this Court this Petition for
Review on Certiorari.48 Both respondents Intellectual Property Office and Therapharma, Inc. were
directed to comment on the comment on the Petition.49 Upon submission of their respective
Comments,50 petitioner was directed to file its Consolidated Reply. 51 Thereafter, the parties were
directed to file their respective memoranda. 52
The arguments of the parties present several issues for this Court's resolution, as follows:
First, whether the Petition for Review on Certiorari complied with Rule 45, Section 4 of the Rules
of Court when petitioner failed to attach certain documents to support the allegations in the
complaint;
Second, whether petitioner should have filed a petition for certiorari under Rule 65 of the Rules of
Court;
Third, whether the Petition for Review on Certiorari raises questions of fact;
Fourth, whether the Court of Appeals erred in allowing the intervention of respondent
Therapharma, Inc. in petitioner's appeal;
Fifth, whether the Court of Appeals erred in denying petitioner's appeal for the revival of its patent
application on the grounds that (a) petitioner committed inexcusable negligence in the prosecution
of its patent application; and (b) third-party rights and the public interest would be prejudiced by
the appeal;
Sixth, whether Schuartz applies to this case in that the negligence of a patent applicant's counsel
binds the applicant; and
Lastly, whether the invention has already become part of public domain.
I determine the issue raised without reviewing or evaluating the evidence, in which case, it is a
The question of whether the Court of Appeals may resolve a motion for intervention is a question
that assails an interlocutory order and requests a review of a lower court's exercise of discretion.
Generally, a petition for certiorari under Rule 65 of the Rules of Court will lie to raise this issue in
a limited manner. There must be a clear showing of grave abuse of discretion for writ of certiorari to
be issued.
However, when the Court of Appeals has already resolved the question of intervention and the
merits of the case, an appeal through a petition for review on certiorari under Rule 45 of the Rules
of Court is the proper remedy.
Respondent Therapharma, Inc. argues that the Petition should be dismissed outright for being the
wrong mode of appeal.53 It argues that petitioner should have filed a petition for certiorari under
Rule 65 since petitioner was assailing an act done by the Court of Appeals in the exercise of its
discretion. 54 It argues that petitions under Rule 45 are limited to questions of law, and petitioner
raised findings of fact that have already been affirmed by the Court of Appeals. 55 Petitioner, on
the other hand, argues that Rule 65 is only available when there is no appeal or any plain, speedy
remedy in the ordinary course of law. Since a petition for review under Rule 45 was still available
to it, it argues that it correctly availed itself of this remedy. 56 Petitioner also argues that there are
exceptions to the general rule on the conclusiveness of the Court of Appeals' findings of fact. 57 It
argues that it was necessary for it to discuss relevant facts in order for it to show that the Court of
Appeals made a misapprehension of facts. 58
The special civil action of certiorari under Rule 65 is intended to correct errors of
jurisdiction. 59 Courts lose competence in relation to an order if it acts in grave abuse of discretion
amounting to lack or excess of jurisdiction.60 A petition for review under Rule 45, on the other
hand, is a mode of appeal intended to correct errors of judgment.61 Errors of judgment are errors
committed by a court within its jurisdiction.62 This includes a review of the conclusions of law63 of
the lower court and, in appropriate cases, evaluation of the admissibility, weight, and inference from
the evidence presented.
Intervention results in an interlocutory order ancillary to a principal action.64 Its grant or denial is
subject to the sound discretion of the court.65 Interlocutory orders, or orders that do not make a
final disposition of the merits of the main controversy or cause of action,66 are generally not
reviewable.67 The only exception is a limited one, in that when there is no plain, speedy, and
adequate remedy, and where it can be shown that the court acted without, in excess, or with such
grave abuse of discretion that such action ousts it of jurisdiction.
Judicial economy, or the goal to have cases prosecuted with the least cost to the parties,68 requires
that unnecessary or frivolous reviews of orders by the trial court, which facilitate the resolution of
the main merits of the case, be reviewed together with the main merits of the case. After all, it would
be more efficient for an appellate court to review a case in its entire context when the case is finally
disposed.
The question of whether intervention is proper is a question of law. Settled is the distinction
between a question of law and a question of fact. A question of fact arises when there is doubt as
to the truth or falsity of certain facts.69 A question of law, on the other hand, arises when "the
appeal raises doubt as to the applicable law on a certain set of facts." 70 The test often used by this
Court to determine whether there is a question of fact or a question of law "is not the appellation
given to such question by the party raising the same; rather, it is whether the appellate court can
question of law; otherwise it is a question of fact."71
Petitioner raises the question of whether Republic Act No. 165 allows the Court of Appeals to grant
a motion for intervention. This necessarily requires a determination of whether Rule 19 of the Rules
of Court 72 applies in appeals of cases filed under Republic Act No. 165. The determination of this
question does not require a review of re-evaluation of the evidence. It requires a determination of
the applicable law.
II
If a petition fails to attach material portions of the record, it may still be given due course if it falls
under certain exceptions. Although Rule 45, Section 4 of the Rules of Court requires that the
petition "be accompanied by ... such material portions of the record as would support the petition,"
the failure to do so will not necessarily warrant the outright dismissal of the complaint. 73
Respondent Therapharma, Inc. argues that the Petition should have been outright dismissed since
it failed to attach certain documents to support its factual allegations and legal arguments,
particularly: the annexes of the Petition for Review it had filed before the Court of Appeals and the
annexes in the Motion for Leave to Intervene it had filed. 74 It argues that petitioner's failure to
attach the documents violates Rule 45, Section 4, which requires the submission of material portions
of the record. 75
On the other hand, petitioner argues that it was able to attach the Court of Appeals Decision dated
August 31, 2004, the Resolution dated January 31, 2006, and the Amended Decision dated August
30, 2006, all of which were sufficient for this Court to give due course to its Petition. 76
In Magsino v. De Ocampo, 77 this Court applied the procedural guideposts in Galvez v. Court of
Appeals 78 in determining whether the Court of Appeals correctly dismissed a petition for review
under Rule 42 for failure to attach relevant portions of the record. Thus:
In Galvez v. Court of Appeals, a case that involved the dismissal of a petition for certiorari to assail
an unfavorable ruling brought about by the failure to attach copies of all pleadings submitted and
other material portions of the record in the trial court (like the complaint, answer and position
paper) as would support the allegations of the petition, the Court recognized three guideposts for
the CA to consider in determining whether or not the rules of procedures should be relaxed, as
follows:
First, not all pleadings and parts of case records are required to be attached to the petition. Only
those which are relevant and pertinent must accompany it. The test of relevancy is whether the
document in question will support the material allegations in the petition, whether said document
will make out a prima facie case of grave abuse of discretion as to convince the court to give due
course to the petition.
Second, even if a document is relevant and pertinent to the petition, it need not be appended if it
is shown that the contents thereof can also [sic] found in another document already attached to the
petition. Thus, if the material allegations in a position paper are summarized in a questioned
judgment, it will suffice that only a certified true copy of the judgment is attached.
Third, a petition lacking an essential pleading or part of the case record may still be given due course
or reinstated (if earlier dismissed) upon showing that petitioner later submitted the documents
required, or that it will serve the higher interest of justice that the case be decided on the merits.79
Although Magsino referred to a petition for review under Rule 42 before the Court of Appeals, the
procedural guideposts cited in Mafilsino may apply to this case since the contents of a pleading
under Rule 4280 are substantially the same as the contents of a pleading under Rule 45,81 in that
both procedural rules require the submission of "material portions of the record as would support
the allegations of the petition."82
In support of its Petition for Review on Certiorari, petitioner attached the Court of Appeals
Decision dated August 31, 2004, 83 the Resolution dated January 31, 2006,84 and the Amended
Decision dated August 30, 2006.85 The Court of Appeals Resolution and Amended Decision
quoted extensive portions of its rollo in support of its rulings. 86 These conclusions were sufficient
to convince this Court not to outright dismiss the Petition but to require respondents to first
comment on the Petition, in satisfaction of the first and second procedural guideposts in Magsino.
Upon filing of its Consolidated Reply,87 petitioner was able to attach the following additional
documents:
(1) Petition for Review filed before the Court of Appeals;88
(2) Letters dated July 18, 1995, December 12, 1995, and December 29, 1995;89
(3) Declaration of Ms. Miriam Meconnahey dated June 25, 2002;90
(4) Spreadsheet of petitioner's patent applications handled by Atty. Mapili;91
(5) Power of Attorney and Appointment of Resident Agent dated September 26, 1996;92
(6) Letter dated December 19, 2000 requesting an Office Action on Patent Application No.
35526;93
(7) Paper No. 2 dated January 30, 2002;94
(8) Petition for Revival dated January 30, 2002 with attached Power of Attorney and Appointment
of Resident Agent;95
(9) Resolution dated July 24, 2002 by Director of the Bureau of Patents;96 and
(10) Notice of and Memorandum on Appeal before the DirectorGeneral of the Intellectual Property
Office.97
The third procedural guidepost in Magsino was complied with upon the submission of these
documents. Petitioner, therefore, has substantially complied with Rule 45, Section 4 of the Rules of
Court.
III
Appeal is not a right but a mere privilege granted by statute.98 It may only be exercised in
accordance with the law that grants it.
Accordingly, the Court of Appeals is not bound by the rules of procedure in administrative agencies.
The procedural rules of an administrative agency only govern proceedings within the agency. Once
the Court of Appeals has given due course to an appeal from a ruling of an administrative agency,
the proceedings before it are governed by the Rules of Court.
However, petitioner argues that intervention should not have been allowed on appeal99 since the
revival of a patent application is ex parte and is "strictly a contest between the examiner and the
applicant"100 under Sections 78101 and 79102 of the 1962 Revised Rules of Practice. 103 It argues
that the disallowance of any intervention is to ensure the confidentiality of the proceedings under
Sections 13 and 14 of the 1962 Revised Rules of Practice. 104
Respondents argue that the 1962 Revised Rules of Practice is only applicable before the Intellectual
Property Office. 105 In particular, respondent Therapharma, Inc. argues that the issue before the
Court of Appeals was beyond the realm of patent examination proceedings since it did not involve
the patentability of petitioner's invention. 106 It further argues that its intervention did not violate
the confidentiality of the patent application proceedings since petitioner was not required to divulge
confidential information regarding its patent application. 107
In the 1962 Revised Rules of Practice, final decisions of the Director of Patents are appealed to this
Court and governed by Republic Act No. 165. In particular:
PARTX
PETITION AND APPEALS
....
CHAPTER IV
APPEALS TO THE SUPREME COURT FROM FINAL ORDERS OR
DECISIONS OF THE DIRECTOR OF PATENTS IN EX PARTE AND
INTER PARTES PROCEEDINGS
265. Appeals to the Supreme Court in ex parte and inter partes proceedings.-Any person who is
dissatisfied with the final decision of the Director of Patents, (affirming that of a Principal
Examiner) denying him a patent for an invention, industrial design or utility model; any person who
is dissatisfied with any final decision of the Director of Patents (affirming that of the Executive
Examiner) in any proceeding; and any party who is dissatisfied with any final decision of the
Director of Patents in an inter partes proceeding, may appeal such final decision to the Supreme
Court within thirty days from the date he receives a copy of such decision. (Republic Act No. 165,
section 16, as amended by section 3, Republic Act No. 864.)
266. Procedure on appeal to the Supreme Court.-For the procedure on appeal to the Supreme
Court, from the final decisions of the Director of Patents, see sections 63 to 73, inclusive, of
Republic Act No. 165 (patent law).
Particularly instructive is Section 73 of Republic Act No. 165, which provides:
Section 73. Rules of Court applicable. - In all other matters not herein provided, the applicable
provisions of the Rules of Court shall govern.
Republic Act No. 165 has since been amended by Republic Act No. 8293, otherwise known as the
Intellectual Property Code of the Philippines (Intellectual Property Code), in 1997. This is the
applicable law with regard to the revival of petitioner's patent application. Section 7 (7.1 )(a) of the
Intellectual Property Code states:
SECTION 7. The Director General and Deputies Director General. -
7 .1. Functions. - The Director General shall exercise the following powers and functions:
....
b. Exercise exclusive appellate jurisdiction over all decisions rendered by the Director of Legal
Affairs, the Director of Patents, the Director of Trademarks, and the Director of the
Documentation, Information and Technology Transfer Bureau. The decisions of the Director
General in the exercise of his appellate jurisdiction in respect of the decisions of the Director of
Patents, and the Director of Trademarks shall be appealable to the Court of Appeals in accordance
with the Rules of Court; and those in respect of the decisions of the Director of Documentation,
Information and Technology Transfer Bureau shall be appealable to the Secretary of Trade and
Industry[.] (Emphasis supplied)
Thus, it is the Rules of Court, not the 1962 Revised Rules of Practice, which governs the Court of
Appeals' proceedings in appeals from the decisions of the Director-General of the Intellectual
Property Office regarding the revival of patent applications.
Rule 19 of the Rules of Court provides that a court has the discretion to determine whether to give
due course to an intervention. Rule 19, Section 1 states:
RULE 19
INTERVENTION
SECTION 1. Who may intervene. -A person who has a legal interest in the matter in litigation, or
in the success of either of the parties, or an interest against both, or is so situated as to be adversely
affected by a distribution or other disposition of property in the custody of the court or of an officer
thereof may, with leave of court, be allowed to intervene in the action. The court shall consider
whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the
original parties, and whether or not the intervenor's rights may be fully protected in a separate
proceeding.
The only questions the court need to consider in a motion to intervene are whether the intervenor
has standing to intervene, whether the motion will / unduly delay the proceedings or prejudice
rights already established, and whether the intervenor's rights may be protected in a separate
action.108
If an administrative agency's procedural rules expressly prohibit an intervention by third parties, the
prohibition is limited only to the proceedings before the administrative agency. Once the matter is
brought before the Court of Appeals in a petition for review, any prior prohibition on intervention
does not apply since the only question to be determined is whether the intervenor has established
a right to intervene under the Rules of Court.
In this case, respondent Therapharma, Inc. filed its Motion for Leave to Intervene 109 before the
Court of Appeals, not before the Intellectual Property Office. In assessing whether to grant the
intervention, the Court of Appeals considered respondent Therapharma, Inc.' s legal interest in the
case and its other options for the protection of its interests. 110 This was within the discretion of
the Court of Appeals under the Rules of Court.
Respondent Therapharma, Inc. was able to show that it had legal interest to intervene in the appeal
of petitioner's revival of its patent application. While its intervention may have been premature as
no patent has been granted yet, petitioner's own actions gave rise to respondent Therapharma, Inc.'
s right to protect its losartan product.
Respondent Therapharma, Inc. filed an application for product registration before the Bureau of
Food and Drugs on June 4, 2003 and was granted a Certificate of Product Registration on January
27, 2004. 111 It conducted patent searches from October 15, 1995 and found that no patent
application for losartan had been filed either before the Bureau of Patents, Trademarks, and
Technology Transfer or before the Intellectual Property Office.112
As early as December 11, 2003, petitioner through Merck was already sending communications
threatening legal action if respondent Therapharma, Inc. continued to develop and market losartan
in the Philippines. The letter stated:
Merck is strongly committed to the protection of its valuable intellectual property rights, including
the subject losartan patents. While fair competition by sale of pharmaceutical products which are
domestically produced legally is always welcomed by Merck and MSD Philippines, Merck will
vigorously pursue all available legal remedies against any unauthorized manufacturer, distributor or
supplier of losartan in countries where its patents are in force and where such activity is prohibited
by law. Thus, Merck is committed to preventing the distribution of losartan in the Philippines if it
originates from, or travels through, a country in which Merck holds patent rights. 113 (Emphasis
supplied)
This letter was presented before the Court of Appeals, which eventually granted the revival of the
patent application in its August 31, 2004 Decision. Petitioner had no pending patent application for
its losartan product when it threatened respondent Therapharma, Inc. with legal action.114
Respondent Therapharma, Inc. expressed its willingness to enter into a Non-Use and
Confidentiality Contract if there was a pending patent application. 115 After several negotiations
on the clauses of the contract, 116 the parties were unable to come to an agreement. In its letter
dated May 24, 2004, 117 respondent Therapharma, Inc. expressed its frustration on petitioner's
refusal to give a clear answer on whether it had a pending patent application:
For easy reference, we have reproduced below paragraph 5 of the Confidentiality and Non-Use
Agreement ("Confidentiality Agreement"), underscoring your proposed amendment:
"THERAPHARMA agrees that upon receipt of Specifications and Claims of Application No.
35526 or at any time thereafter, before it becomes part of the public domain, through no fault of
THERAPHARMA, it will not, either directly or indirectly, alone, or through, on behalf of, or in
conjunction with any other person or entity, make use of any information contained therein,
particularly the product covered by its claims and the equivalents thereof, in any manner
whatsoever."
We find your proposed insertion odd. What may be confidential, and which we agree you have
every right to protect by way of the Confidentiality Agreement, are the Specifications and Claims
in the patent application, not the product per se. The product has been in the market for years.
Hence, how can it be confidential? Or is the ambiguity intended to create a legal handle because
you have no cause of action against us should we launch our own version of the losartan product?
....
Finally, the questions we posed in our previous letters are plain and simple - Is the Philippine Patent
Application No. 35526 still pending before the IPO, i.e., it has neither been withdrawn by your
licensor nor denied registration by the IPO for any reason whatsoever? When did your licensor file
said application with the IPO? These questions are easy to answer, unless there is an intention to
mislead. You are also
aware that the IPO is the only government agency that can grant letters patent. This is why we find
disturbing your statement that the pendency of the patent application before the IPO is "not
relevant". Hence, unless we receive unequivocal answers to the questions above, we regret that we
cannot agree to execute the Confidentiality Agreement; otherwise, we may be acknowledging by
contract a right that you do not have, and never will have, by law. 118 (Emphasis and underscoring
in the original)
The threat of legal action against respondent Therapharma, Inc. was real and imminent. If
respondent Therapharma, Inc. waited until petitioner was granted a patent application so it could
file a petition for compulsory licensing and petition for cancellation of patent under Section
240119 and Section 247 120 of the 1962 Revised Rules of Practice, 121 its continued marketing of
Lifezar would be considered as an infringement of petitioner's patent.
Even assuming that the Intellectual Property Office granted the revival of Philippine Patent
Application No. 35526 back in 2000, petitioner's claim of absolute confidentiality in patent
proceedings is inaccurate.
In the 1962 Revised Rules of Practice, the Bureau of Patents, Trademarks, and Technology Transfer
previously required secrecy in pending patent applications. Section 13 states:
13. Pending applications are preserved in secrecy.-No information will be given to anyone
respecting the filing by any particular person of any application for a patent, the pendency of any
particular case before the Office, or the subject matter of any particular application, unless the same
is authorized by the applicant in writing, and unless it shall be necessary, in the opinion of the
Director of Patents for the proper conduct of business before the Office.
The Intellectual Property Code, however, changed numerous aspects of the old patent law. The
Intellectual Property Code was enacted not only to amend certain provisions of existing laws on
trademark, patent, and copyright, but also to honor the country's commitments under the World
Trade Organization - Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS
Agreement), a treaty that entered force in the Philippines on January 1, 1995.122
The mandatory disclosure requirement in the TRIPS Agreement123 precipitated the shift from a
first-to-invent system to a first-to-file system. The first-to-file system required citizens of foreign
countries to register their patents in the Philippines before they can sue for infringement. 124
Lawmakers, however, expressed their concern over the extension of the period of protection for
registered patents. 125 Under Section 21 126 of Republic Act No. 165, a patent had a term of 17
years. The Intellectual Property Code extended the period to 20 years. 127
During the interpellations before the House of Representatives, then Representative Neptali
Gonzales II (Gonzales) explained that under the Intellectual Property Code, the period of
protection would have been shortened because of the publication requirement:
MR. TANADA. Under the proposed measure, Your Honor, what is the period of protection that
is given to the holder of the patent registered?
MR. GONZALES. Seventeen years from grant of patent, Mr. Speaker. Unlike before ...
MR. TANADA. Under the present law, Mr. Speaker.
MR. GONZALES. I mean 17 years from filing, Mr. Speaker, unlike before which is 20 years from
grant. Okay.
I am sorry, Mr. Speaker. Seventeen years from filing under the existing law, 20 years from grant
under the proposed measure. It would appear, Mr. Speaker, that the proposed measure seeks to
extend the grant of the patent.
MR. TA.NADA. But you have made the period of protection longer, Mr. Speaker.
MR. GONZALES. On the contrary, Mr. Speaker, when a similar question was previously
propounded before, actually Mr. Speaker, it may decrease in fact the period of protection, Mr.
Speaker. Because unlike before 17 years from grant, Mr. Speaker, now 20 years from application or
from filing but actually, Mr. Speaker, it normally takes three to four years before a patent is actually
granted even under the proposed measure. Because as you can see[,] publication in the BPTTT
Gazette would even taken place after 18 months from filing. In other words, the procedure itself is
such a manner that normally takes a period of about three years to finally grant the patent. So even
if 20 years is given from the time of filing actually in essence it will be the same, Mr. Speaker,
because under the existing law 17 years from grant. But even under our existing law from the time
that a patent application is filed it also takes about three to four years, Mr. Speaker, to grant the
same.
Now, why from filing, Mr. Speaker? Because the patent holder applicant is now required to publish
in a manner easily understood by a person trained or with the same skill as that of a patent holder.
And from that time this is published, this process covered by the patent is already made available.
In fact, from the time that it is published, any interested person may even examine and go over the
records as filed with the BPTTT and, therefore, this new technology or new invention is now made
available to persons equipped or possessed with the same skills as that of the patent holder. And
that is the reason why the patent is - the time of the patent is now tacked from the time it is filed
because as a compromise it is now mandatory to publish the said patent together with its description
- the description of the process and even would, at times demand the deposit of sample of the
industrial design, Mr. Speaker. 128
Gonzales further clarified that the publication requirements of the Intellectual Property Code would
necessarily shorten the period for confidentiality of patent applications:
MR. MONFORT. Now, another question is, (another is) you know, the time from the filing of the
date up to publication which is the period of pendency or confidentiality, may I know how many
years will it take, that confidentiality period, variability.
MR. GONZALES. Eighteen months, Mr. Speaker.
MR. MONFORT. How many?
MR. GONZALES. Eighteen months.
MR. MONFORT. I do not think it is 18 months.
MR. GONZALES. It is provided for in the law, Mr. Speaker, because prior to the publication,
naturally, the records become confidential because the essence of a patent, trademark, or copyright
is to give the author or the inventor exclusive right to work on his own invention. And that is his
invention, and naturally, it is but right that he should have the exclusive right over his invention.
On the other hand, the law requires that after 18 months, it should now be published. When it is
now published, naturally, it ceases to be confidential in character because it is now ready for
examination. It is now ready for possible copying of any interested person because the application,
as we have repeatedly said on the floor, would require the filing of a description of the invention
that can be carried out by a Eerson similarly trained in the arts and sciences as that of the patent
holder.129
Thus, the absolute secrecy required by the 1962 Revised Rules of Practice would not be applicable
to a patent application before the Intellectual Property Office. Section 13 of the 1962 Revised Rules
of Practice does not appear in the Intellectual Property Code, 130 in the Rules and Regulations on
Inventions, 131 or in the Revised Implementing Rules and Regulations for Patents, Utility Models
and Industrial Design. 132 The Intellectual Property Code now states that all patent applications
must be published in the Intellectual Property Office Gazette and that any interested party may
inspect all documents submitted to the Intellectual Property Office. The patent application is only
confidential before its publication. Sections 44 and 45 of the Intellectual Property Code provide:
SECTION 44. Publication of Patent Application. -
44.1. The patent application shall be published in the IPO Gazette together with a search document
established by or on behalf of the Office citing any documents that reflect prior art, after the
expiration of eighteen (18) months from the filing date or priority date.
44.2. After publication of a patent application, any interested party may inspect the application
documents filed with the Office.
44.3. The Director General, subject to the approval of the Secretary of Trade and Industry, may
prohibit or restrict the publication of an application, if in his opinion, to do so would be prejudicial
to the national security and interests of the Republic of the Philippines. (n)
SECTION 45. Confidentiality Before Publication. -A patent application, which has not yet been
published, and all related documents, shall not be made available for inspection without the consent
of the applicant.
It was inaccurate, therefore, for petitioner to argue that secrecy in patent applications prevents any
intervention from interested parties. The confidentiality in patent applications under the Intellectual
Property Code is not absolute since a party may already intervene after the publication of
application.
IV
An abandoned patent application may only be revived within four (4) months from the date of
abandonment. No extension of this period is provided by the 1962 Revised Rules of Practice.
Section 113 states:
113. Revival of abandoned application.-An application abandoned for failure to prosecute may be
revived as a pending application if it is shown to the satisfaction of the Director that the delay was
unavoidable. An abandoned application may be revived as a pending application within four months
from the date of abandonment upon good cause shown and upon the payment of the required fee
of ₱25. An application not revived within the specified period shall be deemed forfeited.
Petitioner argues that it was not negligent in the prosecution of its patent application133 since it
was Atty. Mapili or his heirs who failed to inform it of crucial developments with regard to its patent
application. 134 It argues that as a client in a foreign country, it does not have immediate
supervision over its local counsel so it should not be bound by its counsel's negligence. 135 In any
case, it complied with all the requirements for the revival of an abandoned application under Rule
113 of the 1962 Revised Rules of Practice. 136
Respondents, on the other hand, argue that petitioner was inexcusably and grossly negligent in the
prosecution of its patent application since it allowed eight (8) years to pass before asking for a status
update on its application. 137 Respondent Intellectual Property Office argues that petitioner's
inaction for eight (8) years constitutes actual abandonment. 138 It also points out that from the
time petitioner submitted its new Special Power of Attorney on September 29, 1996, it took them
another four (4) years to request a status update on its application. 139
Under Chapter VII, Section 1 ll(a) of the 1962 Revised Rules of Practice, a patent application is
deemed abandoned if the applicant fails to prosecute the application within four months from the
date of the mailing of J the notice of the last action by the Bureau of Patents, Trademarks, and
Technology Transfer, and not from applicant's actual notice. Section 11 l(a)
states:
Chapter VII
TIME FOR RESPONSE BY APPLICANT; ABANDONMENT OF APPLICATION
111. Abandonment for failure to respond within the time limit.-
(a) If an applicant fails to prosecute his application within four months after the date when the last
official notice of action by the Office was mailed to him, or within such time as may be fixed (rule
112), the application will become abandoned.
According to the records of the Bureau of Patents, Trademarks, and Technology Transfer Chemical
Examining Division, petitioner filed Philippine Patent Application No. 35526 on July 10, 1987. It
was assigned to an examiner on June 7, 1988. An Office Action was mailed to petitioner's agent,
Atty. Mapili, on July 19, 1988. Because petitioner failed to respond within the allowable period, the
application was deemed abandoned on September 20, 1988.140 Under Section 113, petitioner had
until January 20, 1989 to file for a revival of the patent application. Its Petition for Revival, however,
was filed on May 30, 2002, 141 13 years after the date of abandonment.
Section 113 has since been superseded by Section 133.4 of the Intellectual Property Code, Rule 930
of the Rules and Regulations on Inventions, and Rule 929 of the Revised Implementing Rules and
Regulations for Patents, Utility Models and Industrial Design. The period of four (4) months from
the date of abandonment, however, remains unchanged. The Intellectual Property Code even
provides for a shorter period of three (3) months within which to file for revival:
SECTION 133. Examination and Publication. –
....
133.4. An abandoned application may be revived as a pending application within three (3) months
from the date of abandonment, upon good cause shown and the payment of the required fee.
Rule 930 of the Rules and Regulations on Inventions provides:
Rule 930. Revival of application. - An application deemed withdrawn for failure to prosecute may
be revived as a pending application within a
period of four (4) months from the mailing date of the notice of withdrawal if it is shown to the
satisfaction of the Director that the failure was due to fraud, accident, mistake or excusable
negligence.
A petition to revive an application deemed withdrawn must be accompanied by (1) a showing of
the cause of the failure to prosecute, (2) a complete proposed response, and (3) the required fee.
An application not revived in accordance with this rule shall be deemed forfeited.
Rule 929 of the Revised Implementing Rules and Regulations for Patents, Utility Models and
Industrial Design provides:
Rule 929. Revival of Application. - An application deemed withdrawn for failure to prosecute may
be revived as a pending application within a period of four (4) months from the mailing date of the
notice of withdrawal if it is shown to the satisfaction of the Director that the failure was due to
fraud, accident, mistake, or excusable negligence. A petition to revive an application deemed
withdrawn shall be accompanied by:
(a) A showing of a justifiable reason for the failure to prosecute;
(b) A complete proposed response; and
(c) Full payment of the required fee.
No revival shall be granted to an application that has been previously revived with cost.
An application not revived in accordance with this Rule shall be deemed forfeited.
Even if the delay was unavoidable, or the failure to prosecute was due to fraud, accident, mistake,
or excusable negligence, or the Petition was accompanied by a complete proposed response, or all
fees were paid, the Petition would still be denied since these regulations only provide a four (4 )-
month period within which to file for the revival of the application. The rules do not provide any
exception that could extend this four (4)-month period to 13 years.
Petitioner’s patent application, therefore, should not be revived since it was filed beyond the
allowable period.
V
Even assuming that the four (4)-month period could be extended, petitioner was inexcussably
negligent in the prosecution of its patent application.
Negligence is inexcusable if its commission could have been avoided through ordinary diligence
and prudence. 142 It is also settled that negligence of counsel binds the client as this "ensures
against the resulting uncertainty and tentativeness of proceedings if clients were allowed to merely
disown. 143 their counsels' conduct."
Petitioner's resident agent, Atty. Mapili, was undoubtedly negligent in failing to respond to the
Office Action sent by the Bureau of Patents, Trademarks, and Technology Transfer on June 19,
1988. Because of his negligence, petitioner's patent application was declared abandoned. He was
again negligent when he failed to revive the abandoned application within four (4) months from the
date of abandonment.
Petitioner tries to disown Atty. Mapili 's conduct by arguing that it was not informed of the
abandonment of its patent application or of Atty. Mapili's death. By its own evidence, however,
petitioner requested a status update from Atty. Mapili only on July 18, 1995, eight (8) years after the
filing of its application. 144 It alleged that it only found out about Atty. Mapili 's death sometime
in March 1996, as a result of its senior patent attorney's visit to the Philippines. 145 Although it was
in petitioner's discretion as a foreign client to put its complete trust and confidence on its local
resident agent, there was a correlative duty on its part to be diligent in keeping itself updated on the
progress of its patent applications. Its failure to be informed of the abandonment of its patent
application was caused by its own lack of prudence.
In Bernardo v. Court of Appeals, 146 "[n]o prudent party will leave the fate of his case entirely to
his lawyer .... It is the duty of a party-litigant to be in contact with his counsel from time to time in
order to be informed of the progress of his case." 147
Even if Atty. Mapili's death prevented petitioner from submitting a petition for revival on time, it
was clearly negligent when it subsequently failed to immediately apprise itself of the status of its
patent application.
Upon learning of Atty. Mapili’s death, petitioner issued a Power of Attorney and Appointment of
Resident Agent in favor of Bito, Lozada, Ortega & Castillo on March 25, 1996. 148 Despite the
immediate action in the substitution of its resident agent, it only requested a status update of
Philippine Patent Application No. 35526 from the Intellectual Property Office on December 14,
2000, 149 or four (4) years after it learned of Atty. Mapili' s death.
Petitioner attempts to explain that it took them four (4) years to request a status update because the
Bureau of Patents, Trademarks, and Technology Transfer failed to take any action when it
submitted its Power of Attorney and Appointment of Resident Agent in favor of Bito, Lozada,
Ortega & Castillo.150 The Power of Attorney, however, shows that it was only to inform the
Bureau that all notices relating to its pending patent applications should be sent to it. Philippine
Patent Application No. 35526 was declared abandoned on September 20, 1988. As far as the Bureau
was concerned, it was a forfeited application that had already been archived. It was not the Bureau's
duty to resurrect previous notices of forfeited and abandoned applications to be sent to new
resident agents unless a specific status update was requested. Considering that petitioner only
requested a status update on December 14, 2000, it was only then that the Intellectual Property
Office would start sending notices to it.
Contrary to the posturing of petitioner, Schuartz is applicable.
In Schuartz, several foreign inventors seeking to file patent applications in the Philippines hired the
law firm Siguion Reyna, Montecillo and Ongsiako to process their applications. 151 The Bureau of
Patents, Trademarks, and Technology Transfer mailed the law firm several notices of abandonment
on its patent applications from June 1987 to September 1987. The law firm only found out about
this in December 1987, after it dismissed two (2) of its employees in charge of handling
correspondences from the Bureau. 152 The law firm filed petitions for revival of its patent
applications from March 1988, all of which were denied by the Director of the Bureau of Patents
for being filed out of time. 153 An appeal was subsequently filed before the Court of Appeals but
was dismissed for being filed beyond the reglementary period. 154
This Court found that although the Court of Appeals may have erred in counting the period for
appeal, it could not grant the Petition. This Court stated:
[P]etitioners lost sight of the fact that the petition could not be granted because of laches. Prior to
the filing of the petition for revival of the patent application with the Bureau of Patents, an
unreasonable period of time had lapsed due to the negligence of petitioners' counsel. By such
inaction, petitioners were deemed to have forfeited their right to revive their applications for patent.
Facts show that the patent attorneys appointed to follow up the applications for patent registration
had been negligent in complying with the rules of practice prescribed by the Bureau of
Patents.1âwphi1 The firm had been notified about the abandonment as early as June 1987, but it
was only after December 7, 1987, when their employees Bangkas and Rosas had been dismissed,
that they came to know about it. This clearly showed that petitioners' counsel had been remiss in
the handling of their clients' applications.
"A lawyer's fidelity to the cause of his client requires him to be ever mindful of the responsibilities
that should be expected of him. A lawyer shall not neglect a legal matter entrusted to him." In the
instant case, petitioners' patent attorneys not only failed to take notice of the notices of
abandonment, but they failed to revive the application within the four-month period, as provided
in the rules of practice in patent cases. These applications are deemed forfeited upon the lapse of
such period. 155 (Emphasis supplied)
Petitioner attempts to distinguish itself from Schuartz by arguing that the petitioners in Schuartz
had actual notice of abandonment while petitioner here was only able to have actual notice when it
received Paper No. 2.
The four (4 )-month period in Section 111 156of the 1962 Revised Rules of Practice, however, is
not counted from actual notice of abandonment but from mailing of the notice. Since it appears
from the Intellectual Property Office's records that a notice of abandonment was mailed to
petitioner's resident agent on July 19, 1988,157 the time for taking action is counted from this
period. Petitioner's patent application cannot be revived simply because the period for revival has
already lapsed and no extension of this period is provided for by the 1962 Revised Rules of Practice.
VI
The right of priority given to a patent applicant is only relevant when there are two or more
conflicting patent applications on the same invention. Because a right of priority does not
automatically grant letters patent to an applicant, possession of a right of priority does not confer
any property rights on the applicant in the absence of an actual patent.
Petitioner argues that its patent application was filed on July 10, 1987, within 12 months from the
prior filing of a U.S. patent application on July 11, 1986.158 It argues that it is protected from
becoming part of the public domain because of convention priority under the Paris Convention for
the Protection of Industrial Property and Section 9 of Republic Act No. 165. 159
Respondent Therapharma, Inc., on the other hand, argues that a mere patent application does not
vest any right in the applicant before the issuance of the patent.160 It argues that the "priority date"
argued by petitioner is only relevant in determining who has a better right to the patent among the
other applicants who subsequently apply for the same invention. 161
Under Section 31 of the Intellectual Property Code, a right of priority is given to any patent
applicant who has previously applied for a patent in a country that grants the same privilege to
Filipinos. Section 31 states:
SECTION 31. Right of Priority. - An application for patent filed by any person who has previously
applied for the same invention in another country which by treaty, convention, or law affords
similar privileges to Filipino citizens, shall be considered as filed as of the date of filing the foreign
application: Provided, That:
a. the local application expressly claims priority;
b. it is filed within twelve (12) months from the date the earliest foreign application was filed; and
c. a certified copy of the foreign application together with an English translation is filed within six
(6) months from the date of filing in the Philippines.
A patent applicant with the right of priority is given preference in the grant of a patent when there
are two or more applicants for the same invention. Section 29 of the Intellectual Property Code
provides:
SECTION 29. First to File Rule. - If two (2) or more persons have made the invention separately
and independently of each other, the right to the patent shall belong to the person who filed an
application for such invention, or where two or more applications are filed for the same invention,
to the applicant who has the earliest filing date or, the earliest priority date.
Since both the United States162 and the Philippines163 are signatories to the Paris Convention for
the Protection of Industrial Property, an applicant who has filed a patent application in the United
States may have a right of priority over the same invention in a patent application in the
Philippines.164 However, this right of priority does not immediately entitle a patent applicant the
grant of a patent. A right of priority is not equivalent to a patent. Otherwise, a patent holder of any
member-state of the Paris Convention need not apply for patents in other countries where it wishes
to exercise its patent.
It was, therefore, inaccurate for petitioner to argue that its prior patent application in the United
States removed the invention from the public domain in the Philippines. This argument is only
relevant if respondent Therapharma, Inc. had a conflicting patent application with the Intellectual
Property Office. A right of priority has no bearing in a case for revival of an abandoned patent
application.
VII
The grant of a patent is to provide protection to any inventor from any patent
infringement. 165 Once an invention is disclosed to the public, only the patent holder has the
exclusive right to manufacture, utilize, and market the invention.166 In Creser Precision Systems v.
Court of Appeals:167
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. 168
Under the Intellectual Property Code, a patent holder has the right to "to restrain, prohibit and
prevent" 169 any unauthorized person or entity from manufacturing, selling, or importing any
product derived from the patent. However, after a patent is granted and published in the Intellectual
Property Office Gazette, 170 any interested third party "may inspect the complete description,
claims, and drawings of the patent." 171
The grant of a patent provides protection to the patent holder from the indiscriminate use of the
invention. However, its mandatory publication also has the correlative effect of bringing new ideas
into the public consciousness. After the publication of the patent, any person may examine the
invention and develop it into something further than what the original patent holder may have
envisioned. After the lapse of 20 years, 172 the invention becomes part of the public domain and
is free for the public to use. In Pearl and Dean v. Shoemart, Inc.: 173
To be able to effectively and legally preclude others from copying and profiting from the invention,
a patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system
is to bring new designs and technologies into the public domain through disclosure. Ideas, once
disclosed to the public without the protection of a valid patent, are subject to appropriation without
significant restraint.
On one side of the coin is the public which will benefit from new ideas; on the other are the
inventors who must be protected. As held in Bauer & Cie vs. O'Donnell, "The act secured to the
inventor the exclusive right to make use, and vend the thing patented, and consequently to prevent
others from exercising like privileges without the consent of the patentee. It was passed for the
purpose of encouraging useful invention and promoting new and useful inventions by the
protection and stimulation new and useful inventions by the protection and stimulation given to
inventive genius, and was intended to secure to the public, after the lapse of the exclusive privileges
granted the benefit of such inventions and improvements."
The law attempts to strike an ideal balance between the interests:
"(The p)atent system thus embodies a carefully varafted bargain for encouraging the creation and
disclosure of new useful and non-obvious advances in technology and design, in return for the
exclusive right to practice the invention for a number of years. The inventor may keep his invention
secret and reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit
to the community, the patent is granted. An exclusive enjoyment is guaranteed him for 17 years,
but upon the expiration of that period, the knowledge of the invention inures to the people, who
are thus enabled to practice it and profit by its use."
The patent law has a three-fold purpose: "first, patent law seeks to foster and reward invention;
second, it promotes disclosures of inventions to stimulate further innovation and to permit the
public to practice the invention once the patent expires; third, the stringent requirements for patent
protection. seek to ensure that ideas in the public domain remain there for the free use of the
public."
It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-
depth investigation is required because "in rewarding a useful invention, the rights and welfare of
the community must be fairly dealt with and effectively guarded. To that end, the prerequisites to
obtaining a patent are strictly observed and when a patent is issued, the limitations on its exercise
are equally strictly enforced. To begin with, a genuine invention or discovery must be demonstrated
lest in the constant demand for new appliances, the heavy hand of tribute be laid on each slight
technological advance in art."174 (Emphasis supplied)
In addition, a patent holder of inventions relating to food or medicine does not enjoy absolute
monopoly over the patent. Both Republic Act No. 165 and the Intellectual Property Code provide
for compulsory licensing. Compulsory licensing is defined in the Intellectual Property Code as the
"grant a license to exploit a patented invention, even without the agreement of the patent
owner." 175
Under Republic Act No. 165, a compulsory license may be granted to any applicant three (3) years
after the grant of a patent if the invention relates to food or medicine necessary for public health
or safety. 176 In Smith Kline & French Laboratories, Ltd. vs. Court of Appeals: 177
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to the
[Paris] Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention.
In the explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the legislative
intent in the grant of a compulsory license was not only to afford others an opportunity to provide
the public with the quantity of the patented product, but also to prevent the growth of monopolies.
Certainly, the growth of monopolies was among the abuses which Section A, Article 5 of the
Convention foresaw, and which our Congress likewise wished to prevent in enacting R.A. No.
165. 178
The patent holder’s proprietary right over the patent only lasts for three (3) years from the grant of
the patent, after which any person may be allowed to manufacture, use or sell the invention subject
to the payment of royalties:
The right to exclude others from the manufacturing, using or vending an invention relating to food
or medicine should be conditioned to allowing any person to manufacture, use or vend the same
after a period of three years from the date of the grant of the letters patent. After all, the patentee
is not entirely deprived of any proprietary right. In fact, he has been given the period of three years
of complete monopoly over the patent. Compulsory licensing of a patent on food or medicine
without regard to the other conditions imposed in Section 34 is not an undue deprivation of
proprietary interests over a patent right because the law sees to it that even after three years of
complete monopoly something is awarded to the inventor in the form of a bilateral and workable
licensing agreement and a reasonable royalty to be agreed upon by the parties and in default of such
agreement, the Director of Patent may fix the terms and conditions of the license.179
 A patent is a monopoly granted only for specific purposes and objectives. Thus, its procedures must loss of competition in the market for losartan products may result in higher prices. For the
be complied with to attain its social objective. Any request for leniency in its procedures should be protection of public interest, Philippine Patent Application No. 35526 should be considered a
taken in this context. Petitioner, however, has failed to convince this court that the revival of its forfeited patent application.
patent application would have a significant impact on the pharmaceutical industry.
WHEREFORE, the Petition is DENIED. The Resolution dated January 31, 2006 and the
Hypertension, or high blood pressure, is considered a "major risk factor for cardiovascular Amended Decision dated August 30, 2006 of the Court of Appeals are AFFIRMED.
disease" 180 such as "heart disease, stroke, kidney failure and blindness." 181 In a study conducted
by the World Health Organization, 25% of adults aged 21 years and older in the Philippines suffer SO ORDERED.
from high blood pressure. 182 According to the Department of Health, heart disease remains the
leading cause of mortality in the Philippines. 183 Angiotensin II Receptor Blocking Imidazole or
"losartan" is one of the medications used for the treatment ofhypertension. 184

In a study conducted by the Philippine Institute for Development Studies, "affordability of drugs
remains a serious problem" 185 in the Philippines. It found that because of the cost of drugs,
accessibility to drugs become prohibitive for the lowest-earning households and are "even more
prohibitive for the u:nemployed and indigent." 186 Several measures have been enacted by the
government to address the high costs of medicine, among them, parallel drug importation187 and
the passage of Republic Act No. 9502, otherwise known as the Universally Accessible Cheaper and
Quality Medicines Act of 2008. 188 Figures submitted by respondent Therapharma, Inc., however,
also show that the presence of competition in the local pharmaceutical market may ensure the
public access to cheaper medicines.

According to respondent Therapharma, Inc., the retail price of petitioner's losartan product,
Cozaar, decreased within one (1) month of respondent Therapharma, Inc.' s entry into the
market: 189

AND TRADER RETAIL PRICE RETAIL PRICE Within one

As of Lifezar's first entry into month from Lifezar's entry or
the market on June 4, 2004 by July 4, 2004

EZAR Therapharma 50 mg - P20.20 50 mg - P20.20

ZAAR Merck 50 mg - P39.50 50 mg - P39.50

100 mg - P55.00 100 -P44.00

Respondent Therapharma, Inc. also presented figures showing that there was a 44% increase in the
number of losartan units sold within five (5) months of its entry into the market. 190 More Filipinos
are able to purchase losartan products when there are two (2) different players providing
competitive prices in the market.

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

Public interest will be prejudiced if, despite petitioner's inexcusable negligence, its Petition for
Revival is granted.1awp++i1 Even without a pending patent application and the absence of any
exception to extend the period for revival, petitioner was already threatening to pursue legal action
against respondent Therapharma, Inc. if it continued to develop and market its losartan product,
Lifezar. 192 Once petitioner is granted a patent for its losartan products, Cozaar and Hyzaar, the
 G.R. No. L-32160 January 30, 1982
DOMICIANO A. AGUAS, petitioner,
vs.
CONRADO G. DE LEON and COURT OF APPEALS, respondents.
FERNANDEZ, J.:
This is a petition for certiorari to review the decision of the Court of Appeals in CA G.R. NO.
37824-R entitled "Conrado G. de Leon, plaintiff-appelle vs. Dominciano Aguas and F.H. Aquino
and Sons, defendants-appellants," the dispositive portion of which reads:
WHEREFORE, with the modification that plintiff-applee's award of moral damages is hereby
redured to P3,000.00, the appealed judgment is hereby affirmed, in all othe respects, with costs
against appellants. 1
On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal at Quezon City
a complaint for infringement of patent against Domiciano A. Aguas and F. H. Aquino and Sons
alleging that being the original first and sole inventor of certain new and useful improvements in
the process of making mosaic pre-cast tiles, he lawfully filed and prosecuted an application for
Philippine patent, and having complied in all respects with the statute and the rules of the Philippine
Patent Office, Patent No. 658 was lawfully granted and issued to him; that said invention was new,
useful, not known or used by others in this country before his invention thereof, not patented or
described in any printed publication anywhere before his invention thereof, or more than one year
prior to his application for patent thereof, not patented in any foreign country by him or his legal
representatives on application filed more than one year prior to his application in this country; that
plaintiff has the exclusive license to make, use and sell throughout the Philippines the improvements
set forth in said Patent No. 658; that the invention patented by said Patent No. 658 is of great utility
and of great value to plaintiff and of great benefit to the public who has demanded and purchased
tiles embodying the said invention in very large quantities and in very rapidly increasing quant ies;
that he has complied with the Philippine statues relating to marking patented tiles sold by him; that
the public has in general acknowledged the validity of said Patent No. 658, and has respected
plaintiff's right therein and thereunder; that the defendant Domiciano A. Aguas infringed Letters
of Patent No. 658 by making, using and selling tiles embodying said patent invention and that
defendant F. H. Aquino & Sons is guilty of infringement by making and furnishing to the defendant
Domiciano A. Aguas the engravings, castings and devices designed and intended of tiles embodying
plaintiff;s patented invention; that he has given direct and personal notice to the defendants of their
said acts of infringement and requested them to desist, but nevertheless, defendants have refused
and neglected to desist and have disregarded such request, and continue to so infringe causing great
and irreparable damage to plaintiff; that if the aforesaid infringement is permitted to continue,
further losses and damages and irreparable injury will be sustained by the plaintiff; that there is an
urgent need for the immediate issuance of a preliminary injunction; that as a result of the defendants'
wrongful conduct, plaintiff has suffered and the defendants are liable to pay him, in addition to
actual damages and loss of profits which would be determined upon proper accounting, moral and
exemplary or corrective damages in the sum of P90,000.00; that plaintiff has been compelled to go
to court for the protection and enforcement of his and to engage the service of counsel, thereby
incurring attorney's fees and expenses of litigation in the sum of P5,000.00. 2
On April 14, 1962, an order granting the plaintiff's petition for a Writ of Preliminary Injunction was
issued. 3
On May 23, 1962, the defendant Domiciano A. Aguas filed his answer denying the allegations of
the plaintiff and alleging that: the plaintiff is neither the original first nor sole inventor of the
improvements in the process of making mosaic pre-cast tiles, the same having been used by several
tile-making factories in the Philippines and abroad years before the alleged invention by de Leon;
that Letters Patent No. 658 was unlawfully acquired by making it appear in the application in
relation thereto that the process is new and that the plaintiff is the owner of the process when in
truth and in fact the process incorporated in the patent application has been known and used in the
Philippines by almost all tile makers long before the alleged use and registration of patent by plaintiff
Conrado G. de Leon; that the registration of the alleged invention did not confer any right on the
plaintiff because the registration was unlawfully secured and was a result of the gross
misrepresentation on the part of the plaintiff that his alleged invention is a new and inventive
process; that the allegation of the plaintiff that Patent No. 658 is of great value to plaintiff and of
great benefit to the public is a mere conclusion of the plaintiff, the truth being that a) the invention
of plaintiff is neither inventive nor new, hence, it is not patentable, b) defendant has been granted
valid patents (Patents No. 108, 109, 110 issued on December 21, 1961) on designs for concrete
decorative wall tiles; and c) that he can not be guilty of infringement because his products are
different from those of the plaintiff. 4
The trial court rendered a decision dated December 29, 1965, the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the defendants:
1. Declaring plaintiff's patent valid and infringed:
2. Granting a perpetual injunction restraining defendants, their officers, agents, employees,
associates, confederates, and any and all persons acting under their authority from making and/or
using and/or vending tiles embodying said patented invention or adapted to be used in combination
embodying the same, and from making, manufacturing, using or selling, engravings, castings and
devises designed and intended for use in apparatus for the making of tiles embodying plaintiff's
patented invention, and from offering or advertising so to do, and from aiding and abetting or in
any way contributing to the infringement of said patent;
3. Ordering that each and all of the infringing tiles, engravings, castings and devices, which are in
the possession or under the control of defendants be delivered to plaintiff;
4. Ordering the defendants to jointly and severally pay to the plaintiff the following sums of money,
to wit:
(a) P10,020.99 by way of actual damages;
(b) P50,000.00 by way of moral damages;
(c) P5,000.00 by way of exemplary damages;
(d) P5,000.00 by way of attorney's fees and
(e) costs of suit. 5
The defendant Domiciano Aguas appealed to the Court of Appeals, assigning the following
errors. 6
I
THE TRIAL COURT ERRED IN NOT HOLDING THAT PLAINTIFF'S PATENT FOR THE
'PROCESS OF MAKING MOSAIC PRE-CAST TILE' IS INVALID BECAUSE SAID
ALLEGED PROCESS IS NOT AN INVENTION OR DISCOVERY AS THE SAME HAS
ALREADY LONG BEEN USED BY TILE MANUFACTURERS BOTH ABROAD AND IN
THIS COUNTRY.
II
THE TRIAL COURT ERRED IN HOLDING THAT THE PATENT OF PLAINTIFF IS
VALID BECAUSE IT IS AN IMPROVEMENT OR THE AGE-OLD TILE MAKING
SYSTEM.
III
THE TRIAL COURT ERRED IN NOT ORDERING THE CANCELLATION OF
PLAINTIFF-APPELLEE'S LETTERS PATENT NO. 658, EXHIBIT L, IN ACCORDANCE
WITH THE PERTINENT PROVISIONS OF THE PATENT LAW, REPUBLIC ACT 165.
IV
THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT DOMICIANO A.
AGUAS IS GUILTY OF INFRINGEMENT DESPITE THE FACT THAT PLAINTIFF'S
PATENT IS NOT A VALID ONE.
V contractor, purchased from plaintiff, tiles shaped out of these moulds at the back of which was
THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT COULD
NEVER BE GUILTY OF INFRINGEMENT OF PLAINTIFF'S PATENT BECAUSE EVEN
IN MATTERS NOT PATENTED BY THE PLAINTIFF - LIKE THE COMPOSITION AND
PROPORTION OF INGREDIENTS USED AND THE STRUCTURAL DESIGNS OF THE
MOULD AND THE TILE PRODUCED - THAT OF THE DEFENDANT ARE
DIFFERENT.
VI
THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN
HOLDING THE DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR
DAMAGES, AND ATTORNEY'S FEES.
On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with the
modification that plaintiff-appellee's award of moral damages was reduced to P3,000.00. 7
The petitioner assigns the following errors supposedly committed by the Court of Appeals:
It is now respectfully submitted that the Court of Appeals committed the following errors involving
questions of law, to wit:
First error. — When it did not conclude that the letters patent of the respondent although entitled
on the cover page as a patent for improvements, was in truth and in fact, on the basis of the body
of the same, a patent for the old and non-patentable process of making mosaic pre-cast tiles;
Second error. — When it did not conclude from the admitted facts of the case, particularly the
contents of the letters patent, Exh. L and the pieces of physical evidence introduced consisting of
samples of the tiles and catalouges, that the alleged improvements introduced by the respondent in
the manufacture of mosaic pre-cast tiles are not patentable, the same being not new, useful and
inventive.
Third error. — As a corollary, when it sentenced the herein petitioner to pay the damages
enumerated in the decision of the lower court (Record on Appeal, pp. 74-75), as confirmed by it
(the Court of Appeals), but with the modification that the amount of P50,000.00 moral damages
was reduced to P3,000.00. 8
The facts, as found by the Court of Appeals, are:
The basic facts borne out by the record are to the effect that on December 1, 1959 plaintiff-appellee
filed a patent application with the Philippine Patent Office, and on May 5, 1960, said office issued
in his favor Letters Patent No. 658 for a "new and useful improvement in the process of making
mosaic pre-cast tiles" (Exh, "L"); that defendant F.H. Aquino & Sons engraved the moulds
embodying plaintiff's patented improvement for the manufacture of pre-cast tiles, plaintiff
furnishing said defendant the actual model of the tiles in escayola and explained to said engraver
the plans, specifications and the details of the engravings as he wanted them to be made, including
an explanation of the lip width, artistic slope of easement and critical depth of the engraving that
plaintiff wanted for his moulds; that engraver Enrique Aquino knew that the moulds he was
engraving for plaintiff were the latter's very own, which possession the new features and
characteristics covered by plaintiff's parent; that defendant Aguas personally, as a building
imprinted plaintiff's patent number (Exhs., "A" to "E"); that subsequently, through a representative,
Mr. Leonardo, defendant Aguas requested Aquino to make engravings of the same type and bearing
the characteristics of plaintiff's moulds; that Mr. Aquino knew that the moulds he was asked to
engrave for defendant Aguas would be used to produce cement tiles similar to plaintiff's; that the
moulds which F.H. Aquino & Sons eventually engraved for Aguas and for which it charged Aguas
double the rate it charged plaintiff De Leon, contain the very same characteristic features of
plaintiff's mould and that Aguas used these moulds in the manufacture of his tiles which he actually
put out for sale to the public (Exhs. "1" to "3" and Exhs. "A" to "E"); that both plaintiff's and
defendant Aguas' tiles are sculptured pre-cast wall tiles intended as a new feature of construction
and wag ornamentation substantially Identical to each other in size, easement, lip width and critical
depth of the deepest depression; and that the only significant difference between plaintiff's mould
and that engraved by Aquino for Aguas is that, whereas plaintiff's mould turns out tiles 4 x 4 inches
in size, defendant Aguas' mould is made to fit a 4-1/4 x 4-1/4 inch tile. 9
The patent right of the private respondent expired on May 5, 1977. 10 The errors will be discuss
only to determine the right of said private respondent to damages.
The petitioner questioned the validity of the patent of the private respondent, Conrado G. de Leon,
on the ground that the process, subject of said patent, is not an invention or discovery, or an
improvement of the old system of making tiles. It should be noted that the private respondent does
not claim to be the discoverer or inventor of the old process of tile-making. He only claims to have
introduced an improvement of said process. In fact, Letters Patent No. 658 was issued by the
Philippine Patent Office to the private respondent, Conrado G. de Leon, to protect his rights as
the inventor of "an alleged new and useful improvement in the process of making mosaic pre-cast
tiles." 11 Indeed, Section 7, Republic Act No. 165, as amended provides: "Any invention of a new
and useful machine, manufactured product or substance, process, or an improvement of the
foregoing, shall be patentable.
The Court of Appeals found that the private respondent has introduced an improvement in the
process of tile-making because:
... we find that plaintiff-appellee has introduced an improvement in the process of tile-making,
which proceeds not merely from mechanical skill, said improvement consisting among other things,
in the new critical depth, lip width, easement and field of designs of the new tiles. The improved
lip width of appellee's tiles ensures the durability of the finished product preventing the flaking off
of the edges. The easement caused by the inclination of the protrusions of the patented moulds is
for the purpose of facilitating the removal of the newly processed tile from the female die.
Evidently, appellee's improvement consists in the solution to the old critical problem by making
the protrusions on his moulds attain an optimum height, so that the engraving thereon would be
deep enough to produce tiles for sculptured and decorative purposes, strong optimum thickness of
appellee's new tiles of only 1/8 of an inch at the deepest easement (Exhs. "D" and "D-1") is a most
critical feature, suggestive of discovery and inventiveness, especially considering that, despite said
thinness, the freshly formed tile remains strong enough for its intended purpose.
While it is true that the matter of easement, lip width, depth, protrusions and depressions are known
to some sculptors, still, to be able to produce a new and useful wall tile, by using them all together,
amounts to an invention. More so, if the totality of all these features are viewed in combination
with the Ideal composition of cement, sodium silicate and screened fine sand.
By using his improved process, plaintiff has succeeded in producing a new product - a concrete
sculptured tile which could be utilized for walling and decorative purposes. No proof was adduced
to show that any tile of the same kind had been produced by others before appellee. Moreover, it
appears that appellee has been deriving considerable profit from his manufacture and sale of such
tiles. This commercial success is evidence of patentability (Walker on Patents, Dellers Edition, Vol.
I, p. 237). 12
The validily of the patent issued by the Philippines Patent Office in favor of the private respondent
and the question over the inventiveness, novelty and usefulness of the improved process therein
specified and described are matters which are better determined by the Philippines Patent Office.
The technical staff of the Philippines Patent Office, composed of experts in their field, have, by the
issuance of the patent in question, accepted the thinness of the private respondent's new tiles as a
discovery. There is a presumption that the Philippines Patent Office has correctly determined the
patentability of the improvement by the private respondent of the process in question.
Anent this matter, the Court of Appeals said:
Appellant has not adduced evidence sufficient to overcome the above established legal presumption
of validity or to warrant reversal of the findings of the lower court relative to the validity of the
patent in question. In fact, as we have already pointed out, the clear preponderance of evidence
bolsters said presumption of validity of appellee's patent. There is no indication in the records of
this case and this Court is unaware of any fact, which would tend to show that concrete wall tiles
similar to those produced by appellee had ever been made by others before he started
manufacturing the same. In fact, during the trial, appellant was challenged by appellee to present a
tile of the same kind as those produced by the latter, from any earlier source but, despite the fact
that appellant had every chance to do so, he could not present any. There is, therefore, no concrete
proof that the improved process of tile-making described in appellee's patent was used by, or known
to, others previous to his discovery thereof. 13
The contention of the petitioner Aguas that the letters patent of de Leon was actually a patent for
the old and non-patentable process of making mosaic pre-cast tiles is devoid of merit. De Leon
never claimed to have invented the process of tile-making. The Claims and Specifications of Patent
No. 658 show that although some of the steps or parts of the old process of tile making were
described therein, there were novel and inventive features mentioned in the process. Some of the
novel features of the private respondent's improvements are the following: critical depth, with
corresponding easement and lip width to such degree as leaves the tile as thin as 1/8 of an inch at
its thinnest portion, Ideal composition of cement and fine river sand, among other ingredients that
makes possible the production of tough and durable wall tiles, though thin and light; the engraving
of deep designs in such a way as to make the tiles decorative, artistic and suitable for wall
ornamentation, and the fact that the tiles can be mass produced in commercial quantities and can
be conveniently stock-piled, handled and packed without any intolerable incidence of breakages. 14
The petitioner also contends that the improvement of respondent is not patentable because it is not
new, useful and inventive. This contention is without merit.
The records disclose that de Leon's process is an improvement of the old process of tile making.
The tiles produced from de Leon's process are suitable for construction and ornamentation, which
previously had not been achieved by tiles made out of the old process of tile making. De Leon's
invention has therefore brought about a new and useful kind of tile. The old type of tiles were
usually intended for floors although there is nothing to prevent one from using them for walling
purposes. These tiles are neither artistic nor ornamental. They are heavy and massive.
The respondent's improvement is indeed inventive and goes beyond the exercise of mechanical
skill. He has introduced a new kind of tile for a new purpose. He has improved the old method of
making tiles and pre-cast articles which were not satisfactory because of an intolerable number of
breakages, especially if deep engravings are made on the tile. He has overcome the problem of
producing decorative tiles with deep engraving, but with sufficient durability. 15 Durability inspite
of the thinness and lightness of the tile, is assured, provided that a certain critical depth is maintained
in relation to the dimensions of the tile. 16
The petitioner also claims that changing the design from embossed to engraved tiles is neither new
nor inventive because the Machuca Tile Factory and the Pomona Tile Manufacturing Company
have been manufacturing decorative wall tiles that are embossed as well as engraved; 17 that these
tiles have also depth, lip width, easement and field of designs; 18 and that the private respondent
had copied some designs of Pomona. 19
The Machuca tiles are different from that of the private respondent. The designs are embossed and
not engraved as claimed by the petitioner. There may be depressions but these depressions are too
shallow to be considered engraved. Besides, the Machuca tiles are heavy and massive.
There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles are made of
ceramics. 20 The process involved in making cement tiles is different from ceramic tiles. Cement
tiles are made with the use of water, while in ceramics fire is used. As regards the allegation of the
petitioner that the private respondent copied some designs of Pomona, suffice it to say that what
is in issue here is the process involved in tile making and not the design.
In view of the foregoing, this Court finds that Patent No. 658 was legally issued, the process and/or
improvement being patentable.
Both the trial court and the Court of Appeals found as a fact that the petitioner Domiciano A.
Aguas did infringe de Leon's patent. There is no showing that this case falls under one of the
exceptions when this Court may overrule the findings of fact of the Court of Appeals. The only
issue then to be resolved is the amount of damages that should be paid by Aguas.
In its decision the Court of Appeals affirmed the amount of damages awarded by the lower court
with the modification that the respondent is only entitled to P3,000.00 moral damages. 21
The lower court awarded the following damages: 22
a) P10,020.99 by way of actual damages;
b) P50,000.00 by way of moral damages;
prejudicial acts against plaintiff justify the assessment of moral damages in plaintiff's favor, though
we do not believe the amount of P50,000.00 awarded by the lower court is warranted by the
circumstances. We feel that said amount should be reduced to P3,000.00 by way of compensating
appellee for his moral suffering. "Willful injury to property may be a legal ground for awarding
moral damages if the court should find that, under the circumstances such damages are justly due"
(Art. 2219 NCC).
There is no reason to reduce the amount of damages and attorneys fees awarded by the trial court
as modified by the Court of Appeals.
WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed from is
hereby affirmed, without pronouncement as to costs.
SO ORDERED.

c) P5,000.00 by way of exemplary damages;

d) P5,000.00 by way of attomey's fees and

e) Costs of suit

because:

An examination of the books of defendant Aguas made before a Commissioner reveals that during
the period that Aguas was manufacturing and selling tiles similar to plaintiff's, he made a gross
income of P3,340.33, which can be safely be considered the amount by which he enriched himself
when he infringed plaintiff's patent. Under Sec. 42 of the Patent Law any patentee whose rights
have been infringed is entitled to damages which, according to the circumstances of the case may
be in a sum above the amount found as actual damages sustained provided the award does not
exceed three times the amount of such actual damages. Considering the wantonness of the
infringement committed by the defendants who knew all the time about the existence of plaintiff's
patent, the Court feels there is reason to grant plaintiff maximum damages in the sum of P10,020.99.
And in order to discourage patent infringements and to give more teeth to the provisions of the
patent law thus promoting a stronger public policy committed to afford greater incentives and
protection to inventors, the Court hereby awards plaintiff exemplary damages in the sum of
P5,000.00 to be paid jointly and severally by defendants. Considering the status of plaintiff as a
reputable businessman, and owner of the likewise reputed House of Pre-Cast, he is entitled to an
award of moral damages in the sum of P50,000.00. 23

In reducing the amount of moral damages the Court of Appeals said:

As regards the question of moral damages it has been shown that as a result of the unlawful acts of
infringment committed by defendants, plaintiff was unstandably very sad; he worried and became
nervous and lost concentration on his work in connection with his tile business (pp. 28, 30, t.s.n.,
Feb. 28, 1964). In addition, plaintiff's character and reputation have been unnecessarily put in
question because defendants, by their acts of infringement have created a doubt or suspicion in the
public mind concerning the truth and honesty of plaintiff's advertisements and public
announcements of his valid patent. Necessarily, said acts of defendants have caused plaintiff
considerable mental suffering, considering especially, the fact that he staked everything on his pre-
cast tile business (p. 36, t.s.n., Id.) The wantonness and evident bad faith characterizing defendants'
 G.R. No. 113388 September 5, 1997 from UNITED FOUNDRY. Petitioner also presented in evidence her own model of an LPG
burner called "Ransome" burner marked Exh. "L," which was allegedly manufactured in 1974 or
ANGELITA MANZANO, petitioner, 1975 and sold by her in the course of her business operation in the name of BESCO METAL.
vs. Petitioner claimed that this "Ransome" burner (Exh. "L") had the same configuration and
COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to NEW UNITED mechanism as that of the model which was patented in favor of private respondent Melecia
FOUNDRY MANUFACTURING CORPORATION, respondents. Madolaria. Also presented by petitioner was a burner cup of an imported "Ransome" burner marked
Exh "M" which was allegedly existing even before the patent application of private respondent.
BELLOSILLO, J.:
Petitioner presented two (2) other witnesses, namely, her husband Ong Bun Tua and Fidel
The primary purpose of the patent system is not the reward of the individual but the advancement
Francisco. Ong testified that he worked as a helper in the UNITED FOUNDRY from 1965 to
of the arts and sciences. The function of a patent is to add to the sum of useful knowledge and one
1970 where he helped in the casting of LPG burners with the same form, configuration and
of the purposes of the patent system is to encourage dissemination of information concerning
mechanism as that of the model covered by the Letters Patent issued to private respondent.
discoveries and inventions. This is a matter which is properly within the competence of the Patent
Francisco testified that he had been employed with the Manila Gas Corporation from 1930 to 1941
Office the official action of which has the presumption of correctness and may not be interfered
and from 1952 up to 1969 where he retired as supervisor and that Manila Gas Corporation imported
with in the absence of new evidence carrying thorough conviction that the Office has erred. Since
"Ransome" burners way back in 1965 which were advertised through brochures to promote their
the Patent Office is an expert body preeminently qualified to determine questions of patentability,
sale.
its findings must be accepted if they are consistent with the evidence, with doubts as to patentability
resolved in favor of the Patent Office.1 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
Petitioner Angelita Manzano filed with the Philippine Patent Office on 19 February 1982 an action
foundry, machine and buffing section; that in his early years with the company, UNITED
for the cancellation of Letters Patent No. UM-4609 for a gas burner registered in the name of
FOUNDRY was engaged in the manufacture of different kinds of gas stoves as well as burners
respondent Melecia Madolaria who subsequently assigned the letters patent to New United Foundry
based on sketches and specifications furnished by customers; that the company manufactured early
and Manufacturing Corporation (UNITED FOUNDRY, for brevity). Petitioner alleged that (a) the
models of single-piece types of burners where the mouth and throat were not detachable; that in
utility model covered by the letters patent, in this case, an LPG gas burner, was not inventive, new
the latter part of 1978 respondent Melecia Madolaria confided in him that complaints were being
or useful; (b) the specification of the letters patent did not comply with the requirements of Sec.
brought to her attention concerning the early models being manufactured; that he was then
14, RA No. 165, as amended; (c) respondent Melecia Madolaria was not the original, true and actual
instructed by private respondent to cast several experimental models based on revised sketches and
inventor nor did she derive her rights from the original, true and actual inventor of the utility model
specifications; that private respondent again made some innovations; that after a few months,
covered by the letters patent; and, (d) the letters patent was secured by means of fraud or
private respondent discovered the solution to all the defects of the earlier models and, based on her
misrepresentation. In support of her petition for cancellation petitioner further alleged that (a) the
latest sketches and specifications, he was able to cast several models incorporating the additions to
utility model covered by the letters patent of respondent had been known or used by others in the
the innovations introduced in the models. Various tests were conducted on the latest model in the
Philippines for more than one (1) year before she filed her application for letters patent on 9
presence and under the supervision of Melecia Madolaria and they obtained perfect results. Rolando
December 1979; (b) the products which were produced in accordance with the utility model covered
Madolaria testified that private respondent decided to file her application for utility model patent
by the letters patent had been in public use or on sale in the Philippines for more than one (1) year
in December 1979.
before the application for patent therefor was filed.
On 7 July 1986 the Director of Patents Cesar C. Sandiego issued Decision No. 86-56 denying the
Petitioner presented the following documents which she correspondingly marked as exhibits: (a)
petition for cancellation and holding that the evidence of petitioner was not able to establish
affidavit of petitioner alleging the existence of prior art, marked Exh. "A;" (b) a brochure distributed
convincingly that the patented utility model of private respondent was anticipated. Not one of the
by Manila Gas Corporation disclosing a pictorial representation of Ransome Burner made by
various pictorial representations of business clearly and convincingly showed that the devices
Ransome Torch and Burner Company, USA, marked Exh. "D;" and, (c) a brochure distributed by
presented by petitioner was identical or substantially identical with the utility model of the
Esso Gasul or Esso Standard Eastern, Inc., of the Philippines showing a picture of another similar
respondent. The decision also stated that even assuming that the brochures depicted clearly each
burner with top elevation view and another perspective view of the same burner, marked Exh. "E."
and every element of the patented gas burner device so that the prior art and patented device
Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a helper in the became identical although in truth they were not, they could not serve as anticipatory bars for the
UNITED FOUNDRY where respondent Melecia Madolaria used to be affiliated with from 1965 reason that they were undated. The dates when they were distributed to the public were not
to 1970; that Ong helped in the casting of an LPG burner which was the same utility model of a indicated and, therefore, were useless prior art references. The records and evidence also do not
burner for which Letters Patent No. UM-4609 was issued, and that after her husband's separation support the petitioner's contention that Letters Patent No. UM-4609 was obtained by means of
from the shop she organized Besco Metal Manufacturing (BESCO METAL, for brevity) for the fraud and/or misrepresentation. No evidence whatsoever was presented by petitioner to show that
casting of LPG burners one of which had the configuration, form and component parts similar to the then applicant Melecia Madolaria withheld with intent to deceive material facts which, if
those being manufactured by UNITED FOUNDRY. Petitioner presented in evidence an alleged disclosed, would have resulted in the refusal by the Philippine Patent Office to issue the Letters
model of an LPG burner marked Exh. "K" and covered by the Letters Patent of respondent, and Patent under inquiry.
testified that it was given to her in January 1982 by one of her customers who allegedly acquired it
Petitioner elevated the decision of the Director of Patents to the Court of Appeals which on 15
October 1993 affirmed the decision of the Director of Patents. Hence, this petition for review
on certiorari alleging that the Court of Appeals erred (a) in relying on imaginary differences which
in actuality did not exist between the model of private respondent covered by Letters Patent No.
UM-4609 and the previously known model of Esso Standard Eastern, Inc., and Manila Gas
Corporation, making such imaginary differences grounded entirely on speculation, surmises and
conjectures; (b) in rendering judgment based on misapprehension of facts; (c) in relying mainly on
the testimony of private respondent's sole witness Rolando Madolaria; and, (d) in not cancelling
Letters Patent No. UM-4609 in the name of private respondent.
Petitioner submits that the differences cited by the Court of Appeals between the utility model of
private respondent and the models of Manila Gas Corporation and Esso Standard Eastern, Inc.,
are more imaginary than real. She alleges that based on Exhs. "E," "E-1," "F" and "F-1" or the
brochures of Manila Gas Corporation and Esso Standard Eastern, Inc., presented by petitioner, the
cup-shaped burner mouth and threaded hole on the side are shown to be similar to the utility model
of private respondent. The exhibits also show a detachable burner mouth having a plurality of
upwardly existing undulations adopted to act as gas passage when the cover is attached to the top
of said cup-shaped mouth all of which are the same as those in the patented model. Petitioner also
denies as substantial difference the short cylindrical tube of the burner mouth appearing in the
brochures of the burners being sold by Manila Gas Corporation and the long cylindered tube of
private respondent's model of the gas burner.
Petitioner argues that the actual demonstration made during the hearing disclosed the similarities
in form, operation and mechanism and parts between the utility model of private respondent and
those depicted in the brochures. The findings of the Patent Office and the Court of Appeals that
the brochures of Manila Gas Corporation and Esso Standard Eastern, Inc., are undated cannot
overcome the fact of their circulation before private respondent filed her application for utility
model patent. Petitioner thus asks this Court to take judicial notice of the fact that Esso Standard
Eastern, Inc., disappeared before 1979 and reappeared only during the Martial Law years as
Petrophil Corporation. Petitioner also emphasizes that the brochures indicated the telephone
number of Manila Gas Corporation as 5-79-81 which is a five (5) numbered telephone number
existing before 1975 because telephones in Metro Manila started to have six (6) numbers only after
that year.
Petitioner further contends that the utility model of private respondent is absolutely similar to the
LPG burner being sold by petitioner in 1975 and 1976, and also to the "Ransome" burner depicted
in the old brochures of Manila Gas Corporation and Esso Standard Eastern, Inc., fabricated by
Ransome Torch and Burner Company of Oakland, California, USA, especially when considered
through actual physical examination, assembly and disassembly of the models of petitioner and
private respondent. Petitioner faults the Court of Appeals for disregarding the testimonies of Ong
Bun Tua and Fidel Francisco for their failure to produce documents on the alleged importation by
Manila Gas Corporation of "Ransome" burners in 1965 which had the same configuration, form
and mechanism as that of the private 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
Petitioner has failed to show compelling grounds for a reversal of the findings and conclusions of
the Patent Office and the Court of Appeals.
The alleged failure of the Director of Patents and the Court of Appeals to accord evidentiary weight
to the testimonies of the witnesses of petitioner showing anticipation is not a justification to grant
the petition. Pursuant to the requirement of clear and convincing evidence to overthrow the
presumption of validity of a patent, it has been held that oral testimony to show anticipation is open
to suspicion and if uncorroborated by cogent evidence, as what occurred in this case, it may be held
insufficient.9
Finally, petitioner would want this Court to review all over again the evidence she presented before
the Patent Office. She argues that contrary to the decision of the Patent Office and the Court of
Appeals, the evidence she presented clearly proves that the patented model of private respondent
is no longer new and, therefore, fraud attended the acquisition of patent by private respondent.
It has been held that the question on priority of invention is one of fact. Novelty and utility are
likewise questions of fact. The validity of patent is decided on the basis of factual inquiries. Whether
evidence presented comes within the scope of prior art is a factual issue to be resolved by the Patent
Office.10 There is question of fact when the doubt or difference arises as to the truth or falsehood
of alleged facts or when the query necessarily invites calibration of the whole evidence considering
mainly the credibility of witnesses, existence and relevance of specific surrounding circumstances,
their relation to each other and to the whole and the probabilities of the situation.11
Time and again we have held that it is not the function of the Supreme Court to analyze or weigh
all over again the evidence and credibility of witnesses presented before the lower tribunal or office.
The Supreme Court is not a trier of facts. Its jurisdiction is limited to reviewing and revising errors
of law imputed to the lower court, its findings of fact being conclusive and not reviewable by this
Court.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals affirming that of
the Philippine Patent Office is AFFIRMED. Costs against petitioner.
SO ORDERED.

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.
 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 10 before respondent Court of Appeals raising as grounds the following:
a. Petitioner has no cause of action for infringement against private respondent, the latter not having
any patent for the aerial fuze which it claims to have invented and developed and allegedly infringed
by private respondent;
b. the case being an action for cancellation or invalidation of private 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. 115106 March 15, 1996
ROBERTO L. DEL ROSARIO, petitioner,
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 certiorari proceeding; (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 said control
panel, a first loud speaker fitted inside said first compartment of such first casing and connected to
the output of said transistorized amplifier circuit; the improvement wherein said control panel being
removably fitted to said first cubical casing and further comprises a set of tape recorder and tape
player mounted on the vertical section of said control panel and said recorder and player are likewise
connected to said transistorized amplifier circuit; a second cubical casing having an opening at its
rear, said second cubical casing having (being?) provided with a vertical partition therein defining a
rear compartment and a front compartment, said rear compartment being provided with a door
and enclosing therein a set of tape racks and said front compartment serving as loud speaker baffle,
said second cubical casing being adapted to said first cubical casing so that said first and second
casings are secured together in compact and portable form; and a second loud speaker fitted inside
said front compartment of said casing and connected to the output of said amplifier circuit.9
The terms of both Letters Patents were extended for another five (5) years each, the first beginning
2 June 1988 and the second, 14 November 1991.
The Patent Law expressly acknowledges that any new model of implements or tools of any
industrial product even if not possessed of the quality of invention but which is of practical utility
is entitled to a patent for utility model. 10 Here, there is no dispute that the letters patent issued to
petitioner are for utility models of audio equipment.
In issuing, reissuing or withholding patents and extensions thereof, the Director of Patents
determines whether the patent is new and whether the machine or device is the proper subject of
patent. In passing on an application, the Director decides not only questions of law but also
questions of fact, i.e. whether there has been a prior public use or sale of the article sought to be
patented. 11 Where petitioner introduces the patent in evidence, if it is in due form, it affords
a prima facie presumption of its correctness and validity. The decision of the Director of Patents
in granting the patent is always presumed to be correct, and the burden then shifts to respondent
to overcome this presumption by competent evidence. 12
Under Sec. 55 of The Patent Law a utility model shall not be considered "new" if before the
application for a patent it has been publicly known or publicly used in this country or has been
described in a printed publication or publications circulated within the country, or if it is
substantially similar to any other utility model so known, used or described within the country.
Respondent corporation failed to present before the trial court competent evidence that the utility
models covered by the Letters Patents issued to petitioner were not new. This is evident from the
testimony of Janito Cua, President of respondent Janito Corporation, during the hearing on the
issuance of the injunction, to wit —
Q. Mr. Cua, you testified that there are (sic) so many other companies which already have (sic) the
sing-along system even before the patent application of Mr. del Rosario and as a matter of fact you
mentioned Sanyo, Sony and Sharp, is that right?
A. Musicmate and Asahi.
Q. Now do you recall that your lawyer filed with this Honorable Court an Urgent Motion to Lift
Temporary Restraining Order of this Honorable Court. I am sure you were the one who provided
him with the information about the many other companies selling the sing-along system, is that
right? These 18 which you enumerated here.
A. More than that because. . . .
Q. Now you will agree with me that in your statement Sharp you put the date as 1985 agreed?
A. No.
Q. You mean your lawyer was wrong when he put the word Sharp 1985?
A. Maybe I informed him already.
xxx xxx xxx
Q. You mean your lawyer was wrong in alleging to this Court that Sharp manufactured and sold
(in) 1985 as found in the Urgent Motion?
A. Since it is urgent it is more or less.
Q. The same also with Sanyo 1985 which you put, more or less?
A. Sanyo is wrong.
Q. It is not 1985?
A. Sanyo is 1979 I think.
Q. So this is also wrong. Panasonic 1986 is also wrong? A. I have the product.

A. Panasonic I think. Q. But you have not brought the product in (sic) this Honorable Court, right?

Q. So you don't think this is also correct. A. No. 13

A. The date? As may be gleaned herein, the rights of petitioner as a patentee have been sufficiently established,
contrary to the findings and conclusions of respondent Court of Appeals. Consequently, under Sec.
Q. So you don't think also that this allegation here that they manufactured in 1986 is correct? 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
A. Wrong. Earlier.
territory of the Philippines for the term of the patent, and such making, using or selling by any
Q. National by Precision Electronic 1986 this is also wrong? person without authorization of the patentee constitutes infringement of his patent.

A. I think earlier. Petitioner established before the trial court that respondent Janito Corporation was manufacturing
a similar sing-along system bearing the trademark miyata which infringed his patented models. He
Q. So that means all your allegations here from 2 to 5 are wrong? OK. By Philipps Philippines 1986, also alleged that both his own patented audio equipment and respondent's sing-along system were
this is also correct or wrong? 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
A. More or less. We said more or less. speaker baffle, both containing a transistorized amplifier circuit capable of being operated from
Q. Nakabutshi by Asahi Electronics that is also wrong? 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
A. No that is 1979. 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
Q. Electone by DICO 1989 is this correct or wrong?
Respondent Janito Corporation denied that there was any violation of petitioner's patent rights, and
A. Correct. More or less. 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,
Q. Skylers 1985 is that correct or wrong?
and completely disregarded Utility Model No. 6237 which improved on the first. As described by
A. It is more or less because it is urgent. We don't have time to exact the date. respondent corporation, 15 these differences are —

Q. Musicmate of G.A. Yupangco 1981 this is more or less? You are not also sure? First. Under Utility Model 5269, the unit is a substantially cubical casing with a window at its rear
and upper corner fitted with slightly inclined control panel, while the miyata equipment is a
A. 95% sure. substantially rectangular casing with panel vertically positioned.

Q. Now you are sure 1981.
A. This one because. . . .
Q. Mr. Witness so you are now trying to tell this Honorable Court that all your 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?
A. More or less.
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.
A. No I don't have it because. . . .
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 miyata equipment 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.

Q. No I am satisfied with your answer. Now Mr. Witness, you don't also have a proof that Akai Fourth. Under Utility Model 5269, 4 printed circuits are placed inside the compartment of its casing
instrument that you said was also in the market before 1982? You don't have any written proof, any attached to the vertical partition wall, while in the miyata, the 7 printed circuit boards (PCB) are
advertisement? 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.

SO ORDERED.

GR. No. 126627 August 14, 2003
SMITH KLINE BECKMAN CORPORATION, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and TRYCO PHARMA
CORPORATION, Respondents.
DECISION
CARPIO-MORALES, J.:
Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the
state of Pennsylvania, United States of America (U.S.) and licensed to do business in the Philippines,
filed on October 8, 1976, as assignee, before the Philippine Patent Office (now Bureau of Patents,
Trademarks and Technology Transfer) an application for patent over an invention entitled
"Methods and Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5
Propylthio-2-Benzimidazole Carbamate." The application bore Serial No. 18989.
On September 24, 1981, Letters Patent No. 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 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.
When the language of its claims is clear and distinct, the patentee is bound thereby and may not
claim anything beyond them.17 And so are the courts bound which may not add to or detract from
the claims matters not expressed or necessarily implied, nor may they enlarge the patent beyond the
scope of that which the inventor claimed and the patent office allowed, even if the patentee may
have been entitled to something more than the words it had chosen would include.18
It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561 is not
determinative of Albendazole’s non-inclusion in the claims of the patent. While Albendazole is
admittedly a chemical compound that exists by a name different from that covered in petitioner’s
letters patent, the language of Letter Patent No. 14561 fails to yield anything at all regarding
Albendazole. And no extrinsic evidence had been adduced to prove that Albendazole inheres in
petitioner’s patent in spite of its omission therefrom or that the meaning of the claims of the patent
embraces the same.
While petitioner concedes that the mere literal wordings of its patent cannot establish private
respondent’s infringement, it urges this Court to apply the doctrine of equivalents.
The doctrine of equivalents provides that an infringement also takes place when a device
appropriates a prior invention by incorporating its innovative concept and, although with some
modification and change, performs substantially the same function in substantially the same way to
achieve substantially the same result.19 Yet again, a scrutiny of petitioner’s evidence fails to
convince this Court 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
than an erroneous conviction of the righteousness of his cause.29 There exists no evidence on
record indicating that petitioner was moved by malice in suing private respondent.
This Court, however, grants private respondent temperate or moderate damages in the amount of
₱20,000.00 which it finds reasonable under the circumstances, it having suffered some pecuniary
loss the amount of which cannot, from the nature of the case, be established with certainty.30

The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with
patentee having the burden to show that all three components of such equivalency test are met.22 MODIFICATION. The award of actual or compensatory damages and attorney’s fees to private
respondent, Tryco Pharma Corporation, is DELETED; instead, it is hereby awarded the amount
As stated early on, petitioner’s evidence fails to explain how Albendazole is in every essential detail of P20,000.00 as temperate or moderate damages.
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 SO ORDERED.
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."24 What 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 attorney’s fees to
private respondent anchored on Article 2208 (2) of the Civil Code, private respondent having been
allegedly forced to litigate as a result of petitioner’s suit. Even if a claimant is compelled to litigate
with third persons or to incur expenses to protect its rights, still attorney’s fees may not be awarded
where no sufficient showing of bad faith could be reflected in a party’s persistence in a case other
 G.R. No. 167715 November 17, 2010
PHIL PHARMAWEALTH, INC., Petitioner,
vs.
PFIZER, INC. and PFIZER (PHIL.) INC., Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari seeking to annul and set aside the Resolutions
dated January 18, 20051 and April 11, 20052 by the Court of Appeals (CA) in CA-G.R. SP No.
82734.
The instant case arose from a Complaint3 for patent infringement filed against petitioner Phil
Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with the Bureau
of Legal Affairs of the Intellectual Property Office (BLA-IPO). The Complaint alleged as follows:
xxxx
6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (the "Patent") which was
issued by this Honorable Office on July 16, 1987. The patent is valid until July 16, 2004. The claims
of this Patent are directed to "a method of increasing the effectiveness of a beta-lactam antibiotic
in a mammalian subject, which comprises co-administering to said subject a beta-lactam antibiotic
effectiveness increasing amount of a compound of the formula IA." The scope of the claims of the
Patent extends to a combination of penicillin such as ampicillin sodium and beta-lactam antibiotic
like sulbactam sodium.
7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium (hereafter "Sulbactam
Ampicillin"). Ampicillin sodium is a specific example of the broad beta-lactam antibiotic disclosed
and claimed in the Patent. It is the compound which efficacy is being enhanced by co-administering
the same with sulbactam sodium. Sulbactam sodium, on the other hand, is a specific compound of
the formula IA disclosed and claimed in the Patent.
8. Pfizer is marketing Sulbactam Ampicillin under the brand name "Unasyn." Pfizer's "Unasyn"
products, which come in oral and IV formulas, are covered by Certificates of Product Registration
("CPR") issued by the Bureau of Food and Drugs ("BFAD") under the name of complainants. The
sole and exclusive distributor of "Unasyn" products in the Philippines is Zuellig Pharma
Corporation, pursuant to a Distribution Services Agreement it executed with Pfizer Phils. on
January 23, 2001.
9. Sometime in January and February 2003, complainants came to know that respondent [herein
petitioner] submitted bids for the supply of Sulbactam Ampicillin to several hospitals without the
consent of complainants and in violation of the complainants' intellectual property rights. x x x
xxxx
10. Complainants thus wrote the above hospitals and demanded that the latter immediately cease
and desist from accepting bids for the supply [of] Sulbactam Ampicillin or awarding the same to
entities other than complainants. Complainants, in the same letters sent through undersigned
counsel, also demanded that respondent immediately withdraw its bids to supply Sulbactam
Ampicillin.
11. In gross and evident bad faith, respondent and the hospitals named in paragraph 9 hereof,
willfully ignored complainants' just, plain and valid demands, refused to comply therewith and
continued to infringe the Patent, all to the damage and prejudice of complainants. As registered
owner of the Patent, Pfizer is entitled to protection under Section 76 of the IP Code.
x x x x4
Respondents prayed for permanent injunction, damages and the forfeiture and impounding of the
alleged infringing products. They also asked for the issuance of a temporary restraining order and a
preliminary injunction that would prevent herein petitioner, its agents, representatives and assigns,
from importing, distributing, selling or offering the subject product for sale to any entity in the
Philippines.
In an Order5 dated July 15, 2003 the BLA-IPO issued a preliminary injunction which was effective
for ninety days from petitioner's receipt of the said Order.
Prior to the expiration of the ninety-day period, respondents filed a Motion for Extension of Writ
of Preliminary Injunction6 which, however, was denied by the BLA-IPO in an Order7 dated
October 15, 2003.
Respondents filed a Motion for Reconsideration but the same was also denied by the BLA-IPO in
a Resolution8 dated January 23, 2004.
Respondents then filed a special civil action for certiorari with the CA assailing the October 15,
2003 and January 23, 2004 Resolutions of the BLA-IPO. Respondents also prayed for the issuance
of a preliminary mandatory injunction for the reinstatement and extension of the writ of preliminary
injunction issued by the BLA-IPO.
While the case was pending before the CA, respondents filed a Complaint9 with the Regional Trial
Court (RTC) of Makati City for infringement and unfair competition with damages against herein
petitioner. In said case, respondents prayed for the issuance of a temporary restraining order and
preliminary injunction to prevent herein petitioner from importing, distributing, selling or offering
for sale sulbactam ampicillin products to any entity in the Philippines. Respondents asked the trial
court that, after trial, judgment be rendered awarding damages in their favor and making the
injunction permanent.
On August 24, 2004, the RTC of Makati City issued an Order10 directing the issuance of a
temporary restraining order conditioned upon respondents' filing of a bond.
In a subsequent Order11 dated April 6, 2005, the same RTC directed the issuance of a writ of
preliminary injunction "prohibiting and restraining [petitioner], its agents, representatives and
assigns from importing, distributing or selling Sulbactam Ampicillin products to any entity in the
Philippines."
Meanwhile, on November 16, 2004, petitioner filed a Motion to Dismiss12 the petition filed with
the CA on the ground of forum shopping, contending that the case filed with the RTC has the same
objective as the petition filed with the CA, which is to obtain an injunction prohibiting petitioner
from importing, distributing and selling Sulbactam Ampicillin products.
On January 18, 2005, the CA issued its questioned Resolution13 approving the bond posted by
respondents pursuant to the Resolution issued by the appellate court on March 23, 2004 which
directed the issuance of a temporary restraining order conditioned upon the filing of a bond. On
even date, the CA issued a temporary restraining order14 which prohibited petitioner "from
importing, distributing, selling or offering for sale Sulbactam Ampicillin products to any hospital or
to any other entity in the Philippines, or from infringing Pfizer Inc.'s Philippine Patent No. 21116
and impounding all the sales invoices and other documents evidencing sales by [petitioner] of
Sulbactam Ampicillin products."
On February 7, 2005, petitioner again filed a Motion to Dismiss15 the case for being moot and
academic, contending that respondents' patent had already lapsed. In the same manner, petitioner
also moved for the reconsideration of the temporary restraining order issued by the CA on the same
basis that the patent right sought to be protected has been extinguished due to the lapse of the
patent license and on the ground that the CA has no jurisdiction to review the order of the BLA-
IPO as said jurisdiction is vested by law in the Office of the Director General of the IPO.
On April 11, 2005, the CA rendered its presently assailed Resolution denying the Motion to
Dismiss, dated November 16, 2004, and the motion for reconsideration, as well as Motion to
Dismiss, both dated February 7, 2005.
Hence, the present petition raising the following issues:
a) Can an injunctive relief be issued based on an action of patent infringement when the patent
allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the
Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly different causes of
action and yet pray for the same relief?16
In the first issue raised, petitioner argues that respondents' exclusive right to monopolize the subject
matter of the patent exists only within the term of the patent. Petitioner claims that since
respondents' patent expired on July 16, 2004, the latter no longer possess any right of monopoly
and, as such, there is no more basis for the issuance of a restraining order or injunction against
petitioner insofar as the disputed patent is concerned.
The Court agrees.
Section 37 of Republic Act No. (RA) 165,17 which was the governing law at the time of the issuance
of respondents' patent, provides:
Section 37. Rights of patentees. A patentee shall have the exclusive right to make, use and sell
the patented machine, article or product, and to use the patented process for the purpose of industry
or commerce, throughout the territory of the Philippines for the term of the patent; and such
making, using, or selling by any person without the authorization of the patentee constitutes
infringement of the patent.18
It is clear from the above-quoted provision of law that the exclusive right of a patentee to make,
use and sell a patented product, article or process exists only during the term of the patent. In the
instant case, Philippine Letters Patent No. 21116, which was the basis of respondents in filing their
complaint with the BLA-IPO, was issued on July 16, 1987. This fact was admitted by respondents
themselves in their complaint. They also admitted that the validity of the said patent is until July 16,
2004, which is in conformity with Section 21 of RA 165, providing that the term of a patent shall
be seventeen (17) years from the date of issuance thereof. Section 4, Rule 129 of the Rules of Court
provides that an admission, verbal or written, made by a party in the course of the proceedings in
the same case, does not require proof and that the admission may be contradicted only by showing
that it was made through palpable mistake or that no such admission was made. In the present case,
there is no dispute as to respondents' admission that the term of their patent expired on July 16,
2004. Neither is there evidence to show that their admission was made through palpable mistake.
Hence, contrary to the pronouncement of the CA, there is no longer any need to present evidence
on the issue of expiration of respondents' patent.
On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004, respondents
no longer possess the exclusive right to make, use and sell the articles or products covered by
Philippine Letters Patent No. 21116.
Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of a writ of
preliminary injunction, viz:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists
in restraining the commission or continuance of the acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts complained of during
the litigation would probably work injustice to the applicant; or
(c) That a party, court, or agency or a person is doing, threatening, or attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the judgment
ineffectual.
In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide that if the
matter is of extreme urgency and the applicant will suffer grave injustice and irreparable injury, a
temporary restraining order may be issued ex parte.
From the foregoing, it can be inferred that two requisites must exist to warrant the issuance of an
injunctive relief, namely: (1) the existence of a clear and unmistakable right that must be protected;
and (2) an urgent and paramount necessity for the writ to prevent serious damage.19
In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution approving
the bond filed by respondents, the latter no longer had a right that must be protected, considering
that Philippine Letters Patent No. 21116 which was issued to them already expired on July 16, 2004.
Hence, the issuance by the CA of a temporary restraining order in favor of the respondents is not
proper.
In fact, the CA should have granted petitioner's motion to dismiss the petition for certiorari filed
before it as the only issue raised therein is the propriety of extending the writ of preliminary
injunction issued by the BLA-IPO. Since the patent which was the basis for issuing the injunction,
was no longer valid, any issue as to the propriety of extending the life of the injunction was already
rendered moot and academic.
As to the second issue raised, the Court, is not persuaded by petitioner's argument that, pursuant
to the doctrine of primary jurisdiction, the Director General of the IPO and not the CA has
jurisdiction to review the questioned Orders of the Director of the BLA-IPO.
It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual Property Code of
the Philippines, which is the presently prevailing law, the Director General of the IPO exercises
exclusive appellate jurisdiction over all decisions rendered by the Director of the BLA-IPO.
However, what is being questioned before the CA is not a decision, but an interlocutory order of
the BLA-IPO denying respondents' motion to extend the life of the preliminary injunction issued
in their favor.
RA 8293 is silent with respect to any remedy available to litigants who intend to question an
interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and
Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property
Rights simply provides that interlocutory orders shall not be appealable. The said Rules and
Regulations do not prescribe a procedure within the administrative machinery to be followed in
assailing orders issued by the BLA-IPO pending final resolution of a case filed with them. Hence,
in the absence of such a remedy, the provisions of the Rules of Court shall apply in a suppletory
manner, as provided under Section 3, Rule 1 of the same Rules and Regulations. Hence, in the
present case, respondents correctly resorted to the filing of a special civil action for certiorari with
the CA to question the assailed Orders of the BLA-IPO, as they cannot appeal therefrom and they
have no other plain, speedy and adequate remedy in the ordinary course of law. This is consistent
with Sections 120 and 4,21 Rule 65 of the Rules of Court, as amended.
In the first place, respondents' act of filing their complaint originally with the BLA-IPO is already
in consonance with the doctrine of primary jurisdiction.
This Court has held that:
[i]n cases involving specialized disputes, the practice has been to refer the same to an administrative
agency of special competence in observance of the doctrine of primary jurisdiction. The Court has
ratiocinated that it cannot or will not determine a controversy involving a question which is within
the jurisdiction of the administrative tribunal prior to the resolution of that question by the
administrative tribunal, where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the administrative tribunal to determine
technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the
premises of the regulatory statute administered. The objective of the doctrine of primary jurisdiction
is to guide a court in determining whether it should refrain from exercising its jurisdiction until after
an administrative agency has determined some question or some aspect of some question arising in
the proceeding before the court. It applies where the claim is originally cognizable in the courts and
comes into play whenever enforcement of the claim requires the resolution of issues which, under
a regulatory scheme, has been placed within the special competence of an administrative body; in
such case, the judicial process is suspended pending referral of such issues to the administrative
body for its view.22
Based on the foregoing, the Court finds that respondents' initial filing of their complaint with the
BLA-IPO, instead of the regular courts, is in keeping with the doctrine of primary jurisdiction owing
to the fact that the determination of the basic issue of whether petitioner violated respondents'
patent rights requires the exercise by the IPO of sound administrative discretion which is based on
the agency's special competence, knowledge and experience.
However, the propriety of extending the life of the writ of preliminary injunction issued by the
BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within the
jurisdiction of the said administrative agency, particularly that of its Director General. The
resolution of this issue which was raised before the CA does not demand the exercise by the IPO
of sound administrative discretion requiring special knowledge, experience and services in
determining technical and intricate matters of fact. It is settled that one of the exceptions to the
doctrine of primary jurisdiction is where the question involved is purely legal and will ultimately
have to be decided by the courts of justice.23 This is the case with respect to the issue raised in the
petition filed with the CA.
Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations do not provide
for a procedural remedy to question interlocutory orders issued by the BLA-IPO. In this regard, it
bears to reiterate that the judicial power of the courts, as provided for under the Constitution,
includes the authority of the courts to determine in an appropriate action the validity of the acts of
the political departments.24 Judicial power also includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and enforceable, and to
determine whether or not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the Government.25 Hence, the CA,
and not the IPO Director General, has jurisdiction to determine whether the BLA-IPO committed
grave abuse of discretion in denying respondents' motion to extend the effectivity of the writ of
preliminary injunction which the said office earlier issued.
Lastly, petitioner avers that respondents are guilty of forum shopping for having filed separate
actions before the IPO and the RTC praying for the same relief.
The Court agrees.
Forum shopping is defined as the act of a party against whom an adverse judgment has been
rendered in one forum, of seeking another (and possibly favorable) opinion in another forum (other
than by appeal or the special civil action of certiorari), or the institution of two (2) or more actions
or proceedings grounded on the same cause on the supposition that one or the other court would
make a favorable disposition.26
The elements of forum shopping are: (a) identity of parties, or at least such parties that represent
the same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs
being founded on the same facts; (c) identity of the two preceding particulars, such that any
judgment rendered in the other action will, regardless of which party is successful, amount to res
judicata in the action under consideration.27
There is no question as to the identity of parties in the complaints filed with the IPO and the RTC.
Respondents argue that they cannot be held guilty of forum shopping because their complaints are
based on different causes of action as shown by the fact that the said complaints are founded on
violations of different patents.
The Court is not persuaded.
Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or omission by which a
party violates a right of another. In the instant case, respondents' cause of action in their complaint
filed with the IPO is the alleged act of petitioner in importing, distributing, selling or offering for
sale Sulbactam Ampicillin products, acts that are supposedly violative of respondents' right to the
exclusive sale of the said products which are covered by the latter's patent. However, a careful
reading of the complaint filed with the RTC of Makati City would show that respondents have the
same cause of action as in their complaint filed with the IPO. They claim that they have the exclusive
right to make, use and sell Sulbactam Ampicillin products and that petitioner violated this right.
Thus, it does not matter that the patents upon which the complaints were based are different. The
fact remains that in both complaints the rights violated and the acts violative of such rights are
identical.
In fact, respondents seek substantially the same reliefs in their separate complaints with the IPO
and the RTC for the purpose of accomplishing the same objective.
It is settled by this Court in several cases that the filing by a party of two apparently different actions
but with the same objective constitutes forum shopping.28 The Court discussed this species of
forum shopping as follows:
Very simply stated, the original complaint in the court a quo which gave rise to the instant petition
was filed by the buyer (herein private respondent and his predecessors-in-interest) against the seller
(herein petitioners) to enforce the alleged perfected sale of real estate. On the other hand, the
complaint in the Second Case seeks to declare such purported sale involving the same real property
"as unenforceable as against the Bank," which is the petitioner herein. In other words, in the Second
Case, the majority stockholders, in representation of the Bank, are seeking to accomplish what the
Bank itself failed to do in the original case in the trial court. In brief, the objective or the relief being
sought, though worded differently, is the same, namely, to enable the petitioner Bank to escape
from the obligation to sell the property to respondent.29
In Danville Maritime, Inc. v. Commission on Audit,30 the Court ruled as follows:
In the attempt to make the two actions appear to be different, petitioner impleaded different
respondents therein – PNOC in the case before the lower court and the COA in the case before
this Court and sought what seems to be different reliefs. Petitioner asks this Court to set aside the
questioned letter-directive of the COA dated October 10, 1988 and to direct said body to approve
the Memorandum of Agreement entered into by and between the PNOC and petitioner, while in
the complaint before the lower court petitioner seeks to enjoin the PNOC from conducting a
rebidding and from selling to other parties the vessel "T/T Andres Bonifacio," and for an extension
of time for it to comply with the paragraph 1 of the memorandum of agreement and damages. One
can see that although the relief prayed for in the two (2) actions are ostensibly different, the ultimate
objective in both actions is the same, that is, the approval of the sale of vessel in favor of petitioner,
and to overturn the letter directive of the COA of October 10, 1988 disapproving the sale.31
In the instant case, the prayer of respondents in their complaint filed with the IPO is as follows:
A. Immediately upon the filing of this action, issue an ex parte order (a) temporarily restraining
respondent, its agents, representatives and assigns from importing, distributing, selling or offering
for sale Sulbactam Ampicillin products to the hospitals named in paragraph 9 of this Complaint or
to any other entity in the Philippines, or from otherwise infringing Pfizer Inc.'s Philippine Patent
No. 21116; and (b) impounding all the sales invoices and other documents evidencing sales by
respondent of Sulbactam Ampicillin products.
B. After hearing, issue a writ of preliminary injunction enjoining respondent, its agents,
representatives and assigns from importing, distributing, selling or offering for sale Sulbactam
Ampicillin products to the hospitals named in paragraph 9 of the Complaint or to any other entity
in the Philippines, or from otherwise infringing Pfizer Inc.'s Philippine Patent No. 21116; and
C. After trial, render judgment:
(i) declaring that respondent has infringed Pfizer Inc.'s Philippine Patent No. 21116 and that
respondent has no right whatsoever over complainant's patent;
(ii) ordering respondent to pay complainants the following amounts:
(a) at least ₱1,000,000.00 as actual damages;
(b) ₱700,000.00 as attorney's fees and litigation expenses;
(d) ₱1,000,000.00 as exemplary damages; and
(d) costs of this suit.
(iii) ordering the condemnation, seizure or forfeiture of respondent's infringing goods or products,
wherever they may be found, including the materials and implements used in the commission of
infringement, to be disposed of in such manner as may be deemed appropriate by this Honorable
Office; and
(iv) making the injunction permanent.32
In an almost identical manner, respondents prayed for the following in their complaint filed with
the RTC:
(a) Immediately upon the filing of this action, issue an ex parte order:
(1) temporarily restraining Pharmawealth, its agents, representatives and assigns from importing,
distributing, selling or offering for sale infringing sulbactam ampicillin products to various
government and private hospitals or to any other entity in the Philippines, or from otherwise
infringing Pfizer Inc.'s Philippine Patent No. 26810.
(2) impounding all the sales invoices and other documents evidencing sales by pharmawealth of
sulbactam ampicillin products; and
(3) disposing of the infringing goods outside the channels of commerce.
(b) After hearing, issue a writ of preliminary injunction:
(1) enjoining Pharmawealth, its agents, representatives and assigns from importing, distributing,
selling or offering for sale infringing sulbactam ampicillin products to various government hospitals
or to any other entity in the Philippines, or from otherwise infringing Patent No. 26810;
(2) impounding all the sales invoices and other documents evidencing sales by Pharmawealth of
sulbactam ampicillin products; and
(3) disposing of the infringing goods outside the channels of commerce.
(c) After trial, render judgment:
(1) finding Pharmawealth to have infringed Patent No. 26810 and declaring Pharmawealth to have
no right whatsoever over plaintiff's patent;
(2) ordering Pharmawealth to pay plaintiffs the following amounts:
(i) at least ₱3,000,000.00 as actual damages;
(ii) ₱500,000.00 as attorney's fees and ₱1,000,000.00 as litigation expenses;

(iii) ₱3,000,000.00 as exemplary damages; and

(iv) costs of this suit.

(3) ordering the condemnation, seizure or forfeiture of Pharmawealth's infringing goods or

products, wherever they may be found, including the materials and implements used in the
commission of infringement, to be disposed of in such manner as may be deemed appropriate by
this Honorable Court; and

(4) making the injunction permanent.33

It is clear from the foregoing that the ultimate objective which respondents seek to achieve in their
separate complaints filed with the RTC and the IPO, is to ask for damages for the alleged violation
of their right to exclusively sell Sulbactam Ampicillin products and to permanently prevent or
prohibit petitioner from selling said products to any entity. Owing to the substantial identity of
parties, reliefs and issues in the IPO and RTC cases, a decision in one case will necessarily amount
to res judicata in the other action.

It bears to reiterate that what is truly important to consider in determining whether forum shopping
exists or not is the vexation caused the courts and parties-litigant by a party who asks different
courts and/or administrative agencies to rule on the same or related causes and/or to grant the
same or substantially the same reliefs, in the process creating the possibility of conflicting decisions
being rendered by the different fora upon the same issue.341avvphi1

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

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

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

Civil Case No. 04-754, filed with the Regional Trial Court of Makati City, Branch 138, is
likewise DISMISSED on the ground of litis pendentia.

SO ORDERED.

G.R. No. 97343 September 13, 1993

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

SO ORDERED.
 G.R. No. 82542 September 29, 1988
BARRY JOHN PRICE, JOHN WATSON CLITHERON and JOHN BRADSHAW,
Assignors to ALLEN & HANBURYS, LTD., petitioners,
vs.
UNITED LABORATORIES, respondent.
Castillo, Laman, Tan & Pantaleon Law Offices for petitioners.
Teodoro B. Pison for respondent.
GRIÑO-AQUINO, J.:
The petitioners are the owners-assignees of Philippine Patent No. 13540 which was granted to them
on June 26,1980 for a pharmaceutical compound known as "aminoalkyl furan derivatives." On
October 1, 1982, respondent United Laboratories, Inc. (or UNILAB) filed in the Philippine Patent
Office a petition Inter Partes Case No. 1683, "United Laboratories, Inc. versus Barry John Price,
John Watson CLITHERON and John Bradshaw, assignors to Allen & Hanburys Ltd.') for the
issuance of a compulsory license to use the patented compound in its own brands of medicines and
pharmaceuticals and to sell, distribute, or otherwise dispose of such medicines or pharmaceutical
preparations in the country. The petition further alleged that the patent relates to medicine and that
petitioner, which has had long experience in the business of manufacturing and selling
pharmaceutical products, possesses the capability to use the subject compound in the manufacture
of a useful product or of making dosage formulations containing the said compound.
After the hearing, the Philippine Patent Office rendered a decision on June 2, 1986, granting
UNILAB a compulsory license subject to ten (1 0) terms and conditions No. 3 of which provides
as follows:
3. By virtue of this license, petitioner shall pay the respondent a royalty on all license products
containing the patented substance made and sold by the Petitioner in the amount equivalent to
TWO AND ONE HALF (2.5) PER CENT OF THE NET SALES in Philippine currency. The
terms 'net sales' means the gross billed for the product pertaining to Letters Patent No. 13540 less-
a) Transportation charges or allowances, if any, included in such amount;
b) Trade, quantity or cash discounts and broker's or agent's or distributor's commissions, if any,
allowed or paid;
c) Credits or allowances, if any, given or made on account with reflection or return of the product
previously delivered; and
d) Any tax, excise or government charge included in such amount, or measured by the production,
sale, transportation, use or delivery of the products.
In case Petitioner's product containing the patented substance shall contain one or more active
ingredients as admixed product, the royalty to be paid shall be determined in accordance with the
following formula:
Net Sales on Value of
Admixed Product Patented Substance
Royalty = _______________ x 0.025 x ___________________
(Value of Pa Value of
tended Substance) Active Ingredients
4. The royalties shall be computed after the end of each calendar quarter for all goods containing
the patented substance herein involved, made and sold during the preceding quarter and to be paid
by the Petitioner at its place of business on or before the thirtieth day of the month following the
end of each calendar quarter. Payments should be made to Respondent's authorized representative
in the Philippines; (pp. 35-36, Rollo.)
The patentees appealed the decision to the Court of Appeals (CA-G.R. No. SP-09308) which
dismissed the appeal on December 4, 1 987. They have come to his Court praying for a review of
the Appellate Court's decision on the grounds that it erred:
1. in upholding the Director's unilateral determination of the terms and conditions of the
compulsory license, without affording the parties an opportunity to negotiate the terms and
conditions freely and by themselves;
2. in finding that the respondent possess the legally required capability to make use of the
petitioner's patented compound in the manufacture of a useful product;
3. in affirming the Director's award of the entire patent to the respondent, when only one claim of
the patent was controverted and
4. in considering evidence that UNILABs capability to use the compound was acquired after, not
before, filing its petition for compulsory licensing.
The first assignment of error has no merit. The terms and conditions of the compulsory license
were fixed by the Director of Patents after a hearing and careful consideration of the evidence of
the parties and in default of an agreement between them as to the terms of the license. This he is
authorized to do under Section 36 of Republic Act No. 165 which provides:
Sec. 36. GRANT OF LICENSE.—If the Director finds that a case for the grant of license under
Section 34, hereof made out, he may order the grant of an appropriate license and in default of
agreement among the parties as to the terms and conditions of the license he shall fix the terms and
conditions of the license in the order.
The order of the Director granting a license under this Chapter, when final, shall operate as a deed
granting a- license executed by the patentee and the other patties in interest.
and under Section 35 of P.D. 1263, amending portions of Republic Act No.165 which reads:
Sec. 35. GRANT OF LICENSE.—(1)If the Director finds that a case for the grant of a license
under Sec. 34 hereof has been made out, he shall within one hundred eighty (180) days from the
date the petition was filed, order the grant of an appropriate license. The order shall state the terms
and conditions of the license which he himself must fix in default of an agreement on the matter
manifested or submitted by the parties during the hearing.
The Court of Appeals found that the 2.5% royalty fixed by the Director of Patents 'is just and
reasonable.' We quote its observations hereunder:
Respondent-appellant contends further that the 2.5% royalty rate is unfair to respondent-appellant
as to amount to an undue deprivation of its property right. We do not hold this view. The royalty
rate of 2.5% provided for by the Director of Patents is reasonable. Paragraph 3, Section 35-B,
Republic Act No. 165, as amended by Presidential Decree No. 1263, provides:
(3) A compulsory license shall only be granted subject to the payment of adequate royalties
commensurate with the extent to which the invention is worked. However, royalty payments shall
not exceed five per cent (5%) of the net wholesale price (as defined in Section 33-A) of the products
manufactured under the license. If the product, substance, or process subject of the compulsory
license is involved in an industrial project approved by the Board of Investments, the royalty payable
to the patentee or patentees shall not exceed three per cent (3%) of the net wholesale price (as
defined in Section 34-A) of the patented commodity and/or commodity manufactured under the
patented process; the same rule of royalty shall be paid whenever two or more patents are involved,
which royalty shall be distributed to the patentees in rates proportional to the extent of commercial
use by the licensee giving preferential values to the holder of the oldest subsisting product patent.
Thus, said provision grants to the Director of Patents the use of his sound discretion in fixing the
percentage for the royalty rate and We find that the Director of Patents committed no abuse of this
discretion. Also, there is always a presumption of regularity in the performance of one's official
duties.
and procedures to ensure the quality of its products. Even if it were true, as alleged by the patentee
(although it is denied by UNILAB), that its capability to use the patented compound was only
acquired after the petition for compulsory licensing had been filed, the important thing is that such
capability was proven to exist during the hearing of the petition.
The patented invention in this case relates to medicine and is necessary for public health as it can
be used as component in the manufacture of anti-ulcer medicine. The Director of Patents did not
err in granting a compulsory license over the entire patented invention for there is no law requiring
that the license be limited to a specific embodiment of the invention, or, to a particular claim. The
invention in this case relates to new aminoalkyl derivatives which have histamine H2 blocking
activity, having the general formula (I) and physiologically acceptable salts, Noxides and dehydrates
thereof. The compound ranitidine hydrochloride named in Claim 45 is also covered by General
Claim I and several other sub-generic claims. Therefore, a license for Claim 45 alone would not be
fully comprehensive. In any event, since the petitioner will be paid royalties on the sales of any
products the licensee may manufacture using any or all of the patented compounds, the petitioner
cannot complain of a deprivation of property rights without just compensation.
WHEREFORE, the petition for review is denied for lack of merit.

Moreover, what UNILAB has with the compulsory license is the bare right to use the patented
chemical compound in the manufacture of a special product, without any technical assistance from
herein respondent-appellant. Besides, the special product to be manufactured by UNILAB will only
be used, distributed, and disposed locally. Therefore, the royalty rate of 2.5% is just and reasonable.
(pp. 10-11, CA Decision, pp. 44-45, Rollo)

Furthermore, as pointed out in the respondent's comment on the petition, Identical terms and
conditions had been prescribed for the grant of compulsory license in a good number of patent
cases (United Laboratories, Inc. vs. Boehringer Ingelhelm, GMBH, IPC 929, July 27, 1981; United
Laboratories, Inc. vs. Bristol-Myers Company, IPC 1179, Aug. 20, 1981; United Laboratories, Inc.
vs. E.R. Squibb & Sons, Inc., IPC 1349, Sept. 30, 1981; United Laboratories, Inc. vs. Helmut Weber,
et al., IPC 949, Dec. 13,1982; Oceanic Pharmacal Inc. vs. Gruppo Lepetit S.A. IPC 1549, Dec. 21,
1982; United Laboratories. Inc. vs. Boehringer Ingelheim, IPC 1185, June 8, 1983; United
Laboratories, Inc. vs. Pfizer Corp., IPC 1184, June 10,, 1983; Doctors Pharmaceuticals, Inc. vs.
Maggi, et al., July 11, 1983; Drugmaker's Laboratories v. Herningen et al., IPC 1679, September
22,1983; Superior Pharmacraft Inc. vs. Maggi, et al., IPC 1759, January 10, 1984; United
Laboratories, Inc. vs. Van Gelder et al., IPC 1627, June 29, 1984; Drugmaker's Laboratories, Inc.
vs. Janssen Pharmaceutical N.V. IPC 1555, August 27,1984; United Laboratories Inc. vs. Graham
John Durant et al., IPC 1731, August 14, 1987; United Laboratories, Inc. vs. Albert Anthony Carr,
IPC 1906, August 31, 1987).

The Director's finding that UNILAB has the capability to use the patented compound in the
manufacture of an anti-ulcer pharmaceutical preparation is a factual finding which is supported by
substantial evidence, hence, the Court of Appeals did not commit a reversible error in affirming it
(Philippine Nut Industry, Inc. vs. Standard Brands, Inc., 65 SCRA 575; Sy Ching vs. Gaw Liu 44
SCRA 143; De Gala Sison vs. Manalo, 8 SCRA 595; Goduco vs. Court of Appeals, 14 SCRA 282;
Ramos vs. Pepsi-Cola Bottling Company of the P.I., 19 SCRA 289. Of indubitable relevance to this
point is the evidence that UNILAB has been engaged in the business of manufacturing drugs and
pharmaceutical products for the past thirty (30) years, that it is the leading drug manufacturer in the
country, that it has the necessary equipment and technological expertise for the development of
solid dosage forms or for tablet, capsule, and liquid preparations, and that it maintains standards