ANGEL VARGAS vs F. M. YAPTICO & CO. (Ltd.

)
G.R. No. 14101, September 24, 1919

Facts:

Plaintiff Angel Vargas, a farmer, was issued patents by the United States Patent Office for
his so-called invention of an improved adjustable plow with the use his own native plow. A
certified copy of the patent was filed in the Division of Patents, Copyrights, and Trademarks
of the Executive Bureau, Government of the Philippine Islands.

Defendant F. M. Yaptico & Co. (Ltd.), a firm engaged in the foundry business in Iloilo City,
was a manufacturer of plow parts. It produced points, shares, shoes, and heel pieces in a
considerable amount adapted to replace worn-out parts of the Vargas plow.

Vargas filed a case in the Court of First Instance of Iloilo to enjoin the alleged infringement
of his U.S. Patent by the defendant F. M Yaptico & Co. (Ltd.), and to recover the damages
suffered by reason of this infringement, to which the court issued the preliminary injunction
prayed for.

The defendant denied the allegations and defended that the patent lacked novelty or
invention, that there was no priority of ideas or device in the principle and construction of
the plow, and that the plow, whose manufacture it was sought to have enjoined by the
plaintiff, had already been in public use for more than two years before the application of the
plaintiff for his patent.

The trial judge rendered judgment in favor of the defendant, declaring null and without effect
the patent in question and dismissing the suit with costs against the plaintiff. Hence, the
plaintiff appealed said judgment.

Issues:

1. Whether the patented invention is void for lack of novelty and invention?

2. Whether the patent is invalid considering that the plow had already been in public use for
over two years prior to the application for a patent.

Ruling:

1. Yes, the patent if void. The Supreme Court affirmed the trial courts conclusion that the
plow of the plaintiff is not different from the native plow, except in the material, in the form,
in the weight and the grade of the result, the said differences giving it neither a new function
nor a new result distinct from the function and the result obtained from the native plow. Also,
its production does not presuppose the exercise of the inventive faculty but merely of
mechanical skill, which does not give a right to a patent of an invention under the provisions
of the Patent Law.

2. Yes, the patent is void. Under the provisions of the statute, an inventor's creation must
not have been in public use or on sale in the United States (and the Philippine Islands) for
more than two years prior to his application.

Further, it was proved that the invention was used in public at Iloilo by others than Vargas,
the inventor, more than two years before the application for the patent thus, the patent is
invalid.











































CASE DIGEST: CARLOS GSELL vs. VALERIANO VELOSO YAP-JUE
FACTS:

The principal case to which these proceedings are ancillary, was an action to enjoin
infringement of a patented process for manufacture of curved handles for canes, parasols,
and umbrellas. In that case, plaintiff established his title to a valid patent covering the
process in question, and obtained against this defendant a judgment, granting a perpetual
injunction restraining its infringement, which judgment was affirmed by this Court on appeal.
The order was couched in the following terms:

It is ordered that the defendant abstain from manufacturing canes and umbrellas with a
curved handle by means of a lamp or blowpipe fed with mineral oil or petroleum, which
process was protected by patent no. 19288, issued in favor of Henry Gsell, and by him
transferred to Carlos Gsell.

Thereafter the defendant continued to manufacture curved cane handles for walking
sticks and umbrellas by a process in all respects identical with that used by the plaintiff
under his patent, except only that he substituted for a lamp fed with petroleum or mineral oil,
a lamp fed with alcohol.

The trial court found the defendant not guilty of contempt as charged; and this
court, on appeal, held that The violation, if there has been any, was not of such a character
that it could be made patent by the mere annunciation of the acts performed by the
defendant, which are alleged to constitute the said violation. Consequently, the contempt
with which the accused is charged has not been fully and satisfactorily proved, and the
order appealed from should accordingly be affirmed in so far as it holds that the defendant
is not guilty of contempt.

Substantially, the same question is submitted in these new proceedings as that
submitted in the former case.

ISSUE:

Whether the use of a patented process by a third person, without license or authority
therefore, constitutes an infringement when the alleged infringer has substituted in lieu of
some unessential part of the patented process a well-known mechanical equivalent.

HELD:

Counsel for plaintiff invokes the doctrine of mechanical equivalents in support of
his contention, and indeed that doctrine is applicable to the facts of the case. This doctrine
is founded upon sound rules of reason and logic, and unless restrained or modified by law
in particular jurisdiction, is of universal application, so that it matters not whether a patent be
issued by one sovereignty or another, the doctrine may properly be invoked to protect the
patentee from colorable invasions of his patent under the guise of a substitution of some
part of his invention by some well-known mechanical equivalent.

The use of a process in all respects identical with a process protected by a valid
patent, save only that a well-known mechanical equivalent is substituted in lieu of some
particular part of the patented process is an infringement upon the rights of the owner of the
patent, which will be enjoined in appropriate proceeding, and the use of such process, after
the order enjoining its use has been issued, is a contempt, under the provision of section
172 of the Code of Civil Procedure.










































PATRICK HENRY FRANK and WILLIAM HENRY GOHN vs. CONSTANCIO BENITO
G.R. No. L-27793, March 15, 1928

FACTS: Plaintiffs are the owners of a patent covering hemp-stripping machine No. 1519579
issued to them by the United States Patent Office and duly registered in the Bureau of
Commerce and Industry of the Philippine Islands under the provisions of Act No. 2235

Plaintiffs allege that the defendant manufactured a hemp-stripping machine in which,
without authority from the plaintiffs, and has embodied and used such spindles and their
method of application and use, and is exhibiting his machine to the public for the purpose of
inducing its purchase. Frank and Gohn stress that use by the Benito of such spindles and
the principle of their application to the stripping of hemp is in violation of, and in conflict with,
plaintiffs' patent, together with its conditions and specifications.

Plaintiffs assert the violation of infringement upon the patent granted to Frank & Gohn, and
requested that an action for injunction and damages be instituted against Benito.

Respondent on the other hand contends that it had no prior knowledge of the prior
existence of the hemp-stripping invention of the plaintiffs nor had any intent to imitate the
Franks product. Likewise, the defendant contended that the facts alleged therein do not
constitute a cause of action, that it is ambiguous and vague. The lower court rendered
judgment in favor of the plaintiffs, to which was later affirmed by the appellate court.

HELD: As a rule, the burden of proof to substantiate a charge of infringement is with the
plaintiff. Where, however, the plaintiff introduces the patent in evidence, if it is in due form, it
affords a prima facie presumption of its correctness and validity. The decision of the
Commissioner of Patents in granting the patent is always presumed to be correct. The
burden the shifts to the defendant to overcome by competent evidence this legal
presumption.

The patent in the case at bar, having been introduced in evidence, affords a prima facie
presumption of its correctness and validity. Hence, this is not a case of a conflict between
two different patents. In the recent of Temco Electric Motor Co. vs. Apco Mfg. Co., decided
by the Supreme Court of the United States ruled an improper cannot appropriate the basic
patent of another, and if he does so without license is an infringer, and may be used as
such. It is well established that an improver cannot appropriate the basic patent of another
and that the improver without a license is an infringer and may be sued as such.





Vargas vs. chua















































Tobacco vs. director

ATC et al filed before the Philippine Patent Office concerning the use of trade mark and trade name.
ATC et al challenged the validity of Rule 168 of the Revised Rules of Practice before the Philippine
Patent Office in Trademark Cases as amended, authorizing the Director of Patents to designate any
ranking official of said office to hear inter partes proceedings. Said Rule likewise provides that all
judgments determining the merits of the case shall be personally and directly prepared by the
Director and signed by him. These proceedings refer to the hearing of opposition to the registration
of a mark or trade name, interference proceeding instituted for the purpose of determining the
question of priority of adoption and use of a trade-mark, trade name or service-mark, and
cancellation of registration of a trade-mark or trade name pending at the Patent Office. Petitioners
filed their objections to the authority of the hearing officers to hear their cases, alleging that the
amendment of the Rule is illegal and void because under the law the Director must personally hear
and decide inter partes case. Said objections were overruled by the Director of Patents, hence, the
present petition for mandamus, to compel the Director of Patents to personally hear the cases of
petitioners, in lieu of the hearing officers.
ISSUE: Whether or not the hearing done by hearing officers are within due process.
HELD: The SC ruled that the power to decide resides solely in the administrative agency vested by
law, this does not preclude a delegation of the power to hold a hearing on the basis of which the
decision of the administrative agency will be made. The rule that requires an administrative officer to
exercise his own judgment and discretion does not preclude him from utilizing, as a matter of
practical administrative procedure, the aid of subordinates to investigate and report to him the facts,
on the basis of which the officer makes his decisions. It is sufficient that the judgment and
discretion finally exercised are those of the officer authorized by law. Neither does due process of
law nor the requirements of fair hearing require that the actual taking of testimony be before the
same officer who will make the decision in the case. As long as a party is not deprived of his right to
present his own case and submit evidence in support thereof, and the decision is supported by the
evidence in the record, there is no question that the requirements of due process and fair trial are
fully met. In short, there is no abnegation of responsibility on the part of the officer concerned as
the actual decision remains with and is made by said officer. It is, however, required that to give
the substance of a hearing, which is for the purpose of making determinations upon evidence the
officer who makes the determinations must consider and appraise the evidence which justifies
them.















UNIVERSAL FOOD CORPORATION VS. CA
33 SCRA 1

FACTS:
This is a petition for certiorari by the UFC against
the CA decision of February 13, 1968 declaring the BILL
OF ASSIGNMENT rescinded, ordering UFC to return to
Magdalo Francisco his Mafran sauce trademark and to pay
his monthly salary of P300.00 from Dec. 1, 1960 until the
return to him of said trademark and formula.

In 1938, plaintiff Magdalo V. Francisco, Sr.
discovered a formula for the manufacture of a food
seasoning (sauce) derived from banana fruits popularly
known as MAFRAN sauce. It was used commercially since
1942, and in the same year plaintiff registered his
trademark in his name as owner and inventor with the
Bureau of Patents. However, due to lack of sufficient
capital to finance the expansion of the business, in 1960,
said plaintiff secured the financial assistance of Tirso T.
Reyes who, after a series of negotiations, formed with
others defendant Universal Food Corporation eventually
leading to the execution on May 11, 1960 of the
aforequoted "Bill of Assignment" (Exhibit A or 1).

On May 31, 1960, Magdalo Francisco entered into
contract with UFC stipulating among other things that he
be the Chief Chemist and Second Vice-President of UFC
and shall have absolute control and supervision over the
laboratory assistants and personnel and in the purchase
and safekeeping of the chemicals used in the preparation
of said Mafran sauce and that said positions are permanent
in nature.

In line with the terms and conditions of the Bill of
Assignment, Magdalo Francisco was appointed Chief
Chemist with a salary of P300.00 a month. Magdalo
Francisco kept the formula of the Mafran sauce secret to
himself. Thereafter, however, due to the alleged scarcity
and high prices of raw materials, on November 28, 1960,
Secretary-Treasurer Ciriaco L. de Guzman of UFC issued a
Memorandum duly approved by the President and General
Manager Tirso T. Reyes that only Supervisor Ricardo
Francisco should be retained in the factory and that the
salary of plaintiff Magdalo V. Francisco, Sr., should be
stopped for the time being until the corporation should
resume its operation. On December 3, 1960, President and
General Manager Tirso T. Reyes, issued a memorandum to
Victoriano Francisco ordering him to report to the factory
and produce "Mafran Sauce" at the rate of not less than
100 cases a day so as to cope with the orders of the
corporation's various distributors and dealers, and with
instructions to take only the necessary daily employees
without employing permanent employees. Again, on
December 6, 1961, another memorandum was issued by
the same President and General Manager instructing the
Assistant Chief Chemist Ricardo Francisco, to recall all
daily employees who are connected in the production of
Mafran Sauce and also some additional daily employees
for the production of Porky Pops. On December 29, 1960,
another memorandum was issued by the President and
General Manager instructing Ricardo Francisco, as Chief
Chemist, and Porfirio Zarraga, as Acting Superintendent,
to produce Mafran Sauce and Porky Pops in full swing
starting January 2, 1961 with further instructions to hire
daily laborers in order to cope with the full blast operation.
Magdalo V. Francisco, Sr. received his salary as Chief
Chemist in the amount of P300.00 a month only until his
services were terminated on November 30, 1960. On
January 9 and 16, 1961, UFC, acting thru its President and
General Manager, authorized Porfirio Zarraga and Paula
de Bacula to look for a buyer of the corporation including
its trademarks, formula and assets at a price of not less
than P300,000.00. Due to these successive memoranda,
without plaintiff Magdalo V. Francisco, Sr. being recalled
back to work, he filed the present action on February 14,
1961. Then in a letter dated March 20, 1961, UFC requested
said plaintiff to report for duty, but the latter declined the
request because the present action was already filed in
court.

ISSUES:
1. Was the Bill of Assignment really one that
involves transfer of the formula for Mafran sauce itself?
2. Was petitioners contention that Magdalo
Francisco is not entitled to rescission valid?

RULING:

1. No. Certain provisions of the bill would lead
one to believe that the formula itself was transferred. To
quote, the respondent patentee "assign, transfer and
convey all its property rights and interest over said
Mafran trademark and formula for MAFRAN SAUCE
unto the Party of the Second Part," and the last
paragraph states that such "assignment, transfer and
conveyance is absolute and irrevocable (and) in no case
shall the PARTY OF THE First Part ask, demand or sue
for the surrender of its rights and interest over said
MAFRAN trademark and mafran formula."

However, a perceptive analysis of the entire
instrument and the language employed therein would lead
one to the conclusion that what was actually ceded and
transferred was only the use of the Mafran sauce formula.
This was the precise intention of the parties.

The SC had the following reasons to back up the
above conclusion. First, royalty was paid by UFC to
Magdalo Francisco. Second, the formula of said Mafran
sauce was never disclosed to anybody else. Third, the Bill
acknowledged the fact that upon dissolution of said Corporation, the patentee rights and interests of
said
trademark shall automatically revert back to Magdalo
Francisco. Fourth, paragraph 3 of the Bill declared only
the transfer of the use of the Mafran sauce and not the
formula itself which was admitted by UFC in its answer.
Fifth, the facts of the case undeniably show that what was
transferred was only the use. Finally, our Civil Code allows
only the least transmission of right, hence, what better
way is there to show the least transmission of right of the
transfer of the use of the transfer of the formula itself.

2. No. Petitioners contention that Magdalo
Franciscos petition for rescission should be denied
because under Article 1383 of the Civil Code of the
Philippines rescission can not be demanded except when
the party suffering damage has no other legal means to
obtain reparation, was of no merit because it is predicated
on a failure to distinguish between a rescission for breach
of contract under Article 1191 of the Civil Code and a
rescission by reason of lesion or economic prejudice, under
Article 1381, et seq. This was a case of reciprocal
obligation. Article 1191 may be scanned without disclosing
anywhere that the action for rescission thereunder was
subordinated to anything other than the culpable breach of
his obligations by the defendant. Hence, the reparation of
damages for the breach was purely secondary. Simply put,
unlike Art. 1383, Art. 1191 allows both the rescission and
the payment for damages. Rescission is not given to the
party as a last resort, hence, it is not subsidiary in nature.



PARKE DAVIS and COMPANY vs. DOCTORS' PHARMACEUTICALS, INC., ET AL.
G.R. No. L-22221, August 31, 1965

FACTS:

Parke Davies and Company is an owner of a Patent entitled "Process for the
Manufacturing of Antibiotics" (Letters Patent No. 50) which was issued by the Philippine Patent
Office on February 9, 1950. The patent relates to a chemical compound represented by a
formula commonly called chloramphenicol. The patent contains ten claims, nine of which are
process claims, and the other is a product claim to the chemical substance chloramphenicol.

Doctors Pharmaceuticals Inc. requested that it be granted a voluntary license to
manufacture and produce our own brand of medicine, containing chloramphenicol, and to use,
sell, distribute, or otherwise dispose of the same in the Philippines under such terms and
conditions as may be deemed reasonable and mutually satisfactory, which Parke Davies
declined.

Doctors Pharmaceuticals Inc. filed a petition with the Director of Patents requesting the
Director to grant a compulsory license. After careful evaluation and hearings, the Director
granted the request of Doctors Pharmaceuticals.

ISSUE:

Is the decision of the Director of Patents in granting Doctors Pharmaceutical Inc.
compulsory license to use the substance chloramphenicol,valid?

HELD:

Yes the decision of the Director of Patents in granting Doctors Pharmaceutical Inc.
compulsory license to use the substance chloramphenicol is valid. The Supreme Court says that
patents issued to foods and medicines are not exclusive so as not to prevent the building up of
patent monopolies. Public benefit is foremost. The Court dismissed the contention of Parke
Davies that the Director of Patents erred in granting compulsory license. The decision appealed
from is affirmed, with costs against petitioner.