IPL Class Atty.

Vera, Assignments for September 30 and August 7, 2014: Assignment

for September 30 and October 7, 2014
ASSIGNMENT FOR SEPTEMBER 30, 2014
Continuation of Trademarks
False Designation
Sec. 169
Espiritu, et. al. vs. Petron Corporation, G.R. No. 170891, November 24, 2009
Criminal Penalties
Sec. 170
Manolo Samson vs. Caterpillar, G.R. No. 169882, August 12, 2007
Levis Strauss vs. Tony Lim, G.R. No. 162311, December 4, 2008
Sketchers, USA vs. Inter Pacific Industrial, G.R. NO. 164321, March 23, 2011
PATENTS
Definitions
Sec. 20 & 21
Restrictions
Sec. 22
Patentability
Subject Matter
Diamond vs. Chakrabarty, 447 US 303 LINK
Novelty
Sec. 23
Rosaire vs. National Lead Co., 218 F.2d 72 LINK
Inventive Step
Sec 26
Aguas vs. De Leon, G.R. No. L-32160, January 30, 1982
Industrial Applicability

Sec. 27
Brenner vs. Manson, 383 US 519 LINK
Juicy Whip vs. Orange Bang, 185 F.3d 1364 LINK
Enablement
Priority
Sec. 31
Application
Secs. 32 to 39
Duration
Sec. 54
Cancellation
Sec. 61
Manzano vs. CA & Madolaria, G.R. No. G.R. No. 113388. September 5, 1997

SECOND DIVISION
MANUEL C. ESPIRITU, JR., AUDIE G.R. No. 170891
LLONA, FREIDA F. ESPIRITU,
CARLO F. ESPIRITU, RAFAEL F.
ESPIRITU, ROLANDO M. MIRABUNA,
HERMILYN A. MIRABUNA, KIM
ROLAND A. MIRABUNA, KAYE
ANN A. MIRABUNA, KEN RYAN A.
MIRABUNA, JUANITO P. DE
CASTRO, GERONIMA A. ALMONITE
and MANUEL C. DEE, who are the
officers and directors of BICOL GAS
REFILLING PLANT CORPORATION,
Petitioners,
Present:
Carpio, J., Chairperson,
Leonardo-De Castro,
Brion,
Del Castillo, and
Abad, JJ.

- versus -

PETRON CORPORATION and

CARMEN J. DOLOIRAS, doing
business under the name KRISTINA
PATRICIA ENTERPRISES,
Respondents.

Promulgated:
November 24, 2009

x ---------------------------------------------------------------------------------------- x

DECISION
ABAD, J.:

This case is about the offense or offenses that arise from the reloading of the
liquefied petroleum gas cylinder container of one brand with the liquefied
petroleum gas of another brand.
The Facts and the Case
Respondent Petron Corporation (Petron) sold and distributed liquefied
petroleum gas (LPG) in cylinder tanks that carried its trademark
Gasul.[1] Respondent Carmen J. Doloiras owned and operated Kristina Patricia
Enterprises (KPE), the exclusive distributor of Gasul LPGs in the whole of
Sorsogon.[2] Jose Nelson Doloiras (Jose) served as KPEs manager.
Bicol Gas Refilling Plant Corporation (Bicol Gas) was also in the business
of selling and distributing LPGs in Sorsogon but theirs carried the trademark
Bicol Savers Gas. Petitioner Audie Llona managed Bicol Gas.
In the course of trade and competition, any given distributor of LPGs at
times acquired possession of LPG cylinder tanks belonging to other distributors
operating in the same area. They called these captured cylinders. According to
Jose, KPEs manager, in April 2001 Bicol Gas agreed with KPE for the swapping
of captured cylinders since one distributor could not refill captured cylinders
with its own brand of LPG. At one time, in the course of implementing this
arrangement, KPEs Jose visited the Bicol Gas refilling plant. While there, he
noticed several Gasul tanks in Bicol Gas possession. He requested a swap but
Audie Llona of Bicol Gas replied that he first needed to ask the permission of the
Bicol Gas owners. That permission was given and they had a swap involving
around 30 Gasul tanks held by Bicol Gas in exchange for assorted tanks held by
KPE.
KPEs Jose noticed, however, that Bicol Gas still had a number of Gasul
tanks in its yard. He offered to make a swap for these but Llona declined, saying
the Bicol Gas owners wanted to send those tanks to Batangas. Later Bicol Gas told
Jose that it had no more Gasul tanks left in its possession. Jose observed on almost
a daily basis, however, that Bicol Gas trucks which plied the streets of the
province carried a load of Gasul tanks. He noted that KPEs volume of sales
dropped significantly from June to July 2001.

On August 4, 2001 KPEs Jose saw a particular Bicol Gas truck on

the Maharlika Highway. While the truck carried mostly Bicol Savers LPG tanks, it
had on it one unsealed 50-kg Gasul tank and one 50-kg Shellane tank. Jose
followed the truck and when it stopped at a store, he asked the driver, Jun Leorena,
and the Bicol Gas sales representative, Jerome Misal, about the Gasul tank in their
truck. They said it was empty but, when Jose turned open its valve, he noted that it
was not. Misal and Leorena then admitted that the Gasul and Shellane tanks on
their truck belonged to a customer who had them filled up by Bicol Gas. Misal
then mentioned that his manager was a certain Rolly Mirabena.
Because of the above incident, KPE filed a complaint [3] for violations of
Republic Act (R.A.) 623 (illegally filling up registered cylinder tanks), as
amended, and Sections 155 (infringement of trade marks) and 169.1 (unfair
competition) of the Intellectual Property Code (R.A. 8293). The complaint
charged the following: Jerome Misal, Jun Leorena, Rolly Mirabena, Audie Llona,
and several John and Jane Does, described as the directors, officers, and
stockholders of Bicol Gas. These directors, officers, and stockholders were
eventually identified during the preliminary investigation.
Subsequently, the provincial prosecutor ruled that there was probable cause
only for violation of R.A. 623 (unlawfully filling up registered tanks) and that only
the four Bicol Gas employees, Mirabena, Misal, Leorena, and petitioner Llona,
could be charged. The charge against the other petitioners who were the
stockholders and directors of the company was dismissed.
Dissatisfied, Petron and KPE filed a petition for review with the Office of
the Regional State Prosecutor, Region V, which initially denied the petition but
partially granted it on motion for reconsideration. The Office of the Regional State
Prosecutor ordered the filing of additional informations against the four employees
of Bicol Gas for unfair competition. It ruled, however, that no case for trademark
infringement was present. The Secretary of Justice denied the appeal of Petron and
KPE and their motion for reconsideration.
Undaunted, Petron and KPE filed a special civil action for certiorari with
the Court of Appeals[4] but the Bicol Gas employees and stockholders concerned

opposed it, assailing the inadequacy in its certificate of non-forum shopping, given
that only Atty. Joel Angelo C. Cruz signed it on behalf of Petron. In its
Decision[5] dated October 17, 2005, the Court of Appeals ruled, however, that Atty.
Cruzs certification constituted sufficient compliance. As to the substantive aspect
of the case, the Court of Appeals reversed the Secretary of Justices ruling. It held
that
unfair
competition
does not
necessarily absorb trademark
infringement. Consequently, the court ordered the filing of additional charges of
trademark infringement against the concerned Bicol Gas employees as well.
Since the Bicol Gas employees presumably acted under the direct order and
control of its owners, the Court of Appeals also ordered the inclusion of the
stockholders of Bicol Gas in the various charges, bringing to 16 the number of
persons to be charged, now including petitioners Manuel C. Espiritu, Jr., Freida F.
Espiritu, Carlo F. Espiritu, Rafael F. Espiritu, Rolando M. Mirabuna, Hermilyn A.
Mirabuna, Kim Roland A. Mirabuna, Kaye Ann A. Mirabuna, Ken Ryan A.
Mirabuna, Juanito P. de Castro, Geronima A. Almonite, and Manuel C. Dee
(together with Audie Llona), collectively, petitioners Espiritu, et al. The court
denied the motion for reconsideration of these employees and stockholders in its
Resolution dated January 6, 2006, hence, the present petition for review [6] before
this Court.
The Issues Presented
The petition presents the following issues:
1.
Whether or not the certificate of non-forum shopping that
accompanied the petition filed with the Court of Appeals, signed only
by Atty. Cruz on behalf of Petron, complied with what the rules
require;
2.
Whether or not the facts of the case warranted the filing
of charges against the Bicol Gas people for:
a)
Filling up the LPG tanks registered to
another manufacturer without the latters consent in
violation of R.A. 623, as amended;

b)
Trademark infringement consisting in Bicol
Gas use of a trademark that is confusingly similar to
Petrons registered Gasul trademark in violation of
section 155 also of R.A. 8293; and
c)
Unfair competition consisting in passing off
Bicol Gas-produced LPGs for Petron-produced Gasul
LPG in violation of Section 168.3 of R.A. 8293.
The Courts Rulings
First. Petitioners Espiritu, et al. point out that the certificate of non-forum
shopping that respondents KPE and Petron attached to the petition they filed with
the Court of Appeals was inadequate, having been signed only by Petron, through
Atty. Cruz.
But, while procedural requirements such as that of submittal of a certificate
of non-forum shopping cannot be totally disregarded, they may be deemed
substantially complied with under justifiable circumstances.[7] One of these
circumstances is where the petitioners filed a collective action in which they share
a common interest in its subject matter or raise a common cause of action. In such
a case, the certification by one of the petitioners may be deemed sufficient.[8]
Here, KPE and Petron shared a common cause of action against petitioners
Espiritu, et al., namely, the violation of their proprietary rights with respect to the
use of Gasul tanks and trademark. Furthermore, Atty. Cruz said in his certification
that he was executing it for and on behalf of the Corporation, and co-petitioner
Carmen J. Doloiras.[9] Thus, the object of the requirement to ensure that a party
takes no recourse to multiple forums was substantially achieved. Besides, the
failure of KPE to sign the certificate of non-forum shopping does not render the
petition defective with respect to Petron which signed it through Atty. Cruz.[10] The
Court of Appeals, therefore, acted correctly in giving due course to the petition
before it.
Second. The Court of Appeals held that under the facts of the case, there is
probable cause that petitioners Espiritu, et al. committed all three crimes: (a)

illegally filling up an LPG tank registered to Petron without the latters consent in
violation of R.A. 623, as amended; (b) trademark infringement which consists in
Bicol Gas use of a trademark that is confusingly similar to Petrons registered
Gasul trademark in violation of Section 155 of R.A. 8293; and (c) unfair
competition which consists in petitioners Espiritu, et al. passing off Bicol Gasproduced LPGs for Petron-produced Gasul LPG in violation of Section 168.3 of
R.A. 8293.
Here, the complaint adduced at the preliminary investigation shows that the
one 50-kg Petron Gasul LPG tank found on the Bicol Gas truck belonged to [a
Bicol Gas] customer who had the same filled up by BICOL GAS. [11] In other
words, the customer had that one Gasul LPG tank brought to Bicol Gas for refilling
and the latter obliged.
R.A. 623, as amended,[12] punishes any person who, without the written
consent of the manufacturer or seller of gases contained in duly registered steel
cylinders or tanks, fills the steel cylinder or tank, for the purpose of sale, disposal
or trafficking, other than the purpose for which the manufacturer or seller
registered the same. This was what happened in this case, assuming the allegations
of KPEs manager to be true. Bicol Gas employees filled up with their firms gas
the tank registered to Petron and bearing its mark without the latters written
authority. Consequently, they may be prosecuted for that offense.
But, as for the crime of trademark infringement, Section 155 of R.A. 8293
(in relation to Section 170[13]) provides that it is committed by any person who
shall, without the consent of the owner of the registered mark:
1.
Use in commerce any reproduction, counterfeit, copy or colorable
imitation of a registered mark or the same container or a dominant feature thereof
in connection with the sale, offering for sale, distribution, advertising of any
goods or services including other preparatory steps necessary to carry out the sale
of any goods or services on or in connection with which such use is likely to
cause confusion, or to cause mistake, or to deceive; or
2.
Reproduce, counterfeit, copy or colorably imitate a registered mark
or a dominant feature thereof and apply such reproduction, counterfeit, copy or
colorable imitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used in commerce upon or in connection with the

sale, offering for sale, distribution, or advertising of goods or services on or in

connection with which such use is likely to cause confusion, or to cause mistake,
or to deceive.

KPE and Petron have to show that the alleged infringer, the responsible
officers and staff of Bicol Gas, used Petrons Gasul trademark or a confusingly
similar trademark on Bicol Gas tanks with intent to deceive the public and defraud
its competitor as to what it is selling. [14] Examples of this would be the acts of an
underground shoe manufacturer in Malabon producing Nike branded rubber
shoes or the acts of a local shirt company with no connection to La Coste,
producing and selling shirts that bear the stitched logos of an open-jawed alligator.
Here, however, the allegations in the complaint do not show that Bicol Gas
painted on its own tanks Petrons Gasul trademark or a confusingly similar version
of the same to deceive its customers and cheat Petron. Indeed, in this case, the one
tank bearing the mark of Petron Gasul found in a truck full of Bicol Gas tanks was
a genuine Petron Gasul tank, more of a captured cylinder belonging to
competition. No proof has been shown that Bicol Gas has gone into the business
of distributing imitation Petron Gasul LPGs.
As to the charge of unfair competition, Section 168.3 (a) of R.A. 8293 (also
in relation to Section 170) describes the acts constituting the offense as follows:
168.3. In particular, and without in any way limiting the scope of
protection against unfair competition, the following shall be deemed guilty of
unfair competition:

(a)
Any person, who is selling his goods and
gives 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 to believe 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, or any subsequent

vendor of such goods or any agent of any vendor engaged

in selling such goods with a like purpose;

Essentially, what the law punishes is the act of giving ones goods the
general appearance of the goods of another, which would likely mislead the buyer
into believing that such goods belong to the latter. Examples of this would be the
act of manufacturing or selling shirts bearing the logo of an alligator, similar in
design to the open-jawed alligator in La Coste shirts, except that the jaw of the
alligator in the former is closed, or the act of a producer or seller of tea bags with
red tags showing the shadow of a black dog when his competitor is producing or
selling popular tea bags with red tags showing the shadow of a black cat.
Here, there is no showing that Bicol Gas has been giving its LPG tanks the
general appearance of the tanks of Petrons Gasul. As already stated, the truckfull
of Bicol Gas tanks that the KPE manager arrested on a road in Sorsogon just
happened to have mixed up with them one authentic Gasul tank that belonged to
Petron.
The only point left is the question of the liability of the stockholders and
members of the board of directors of Bicol Gas with respect to the charge of
unlawfully filling up a steel cylinder or tank that belonged to Petron. The Court of
Appeals ruled that they should be charged along with the Bicol Gas employees
who were pointed to as directly involved in overt acts constituting the offense.
Bicol Gas is a corporation. As such, it is an entity separate and distinct from
the persons of its officers, directors, and stockholders. It has been held, however,
that corporate officers or employees, through whose act, default or omission the
corporation commits a crime, may themselves be individually held answerable for
the crime.[15]
Jose claimed in his affidavit that, when he negotiated the swapping of
captured cylinders with Bicol Gas, its manager, petitioner Audie Llona, claimed
that he would be consulting with the owners of Bicol Gas about it. Subsequently,
Bicol Gas declined the offer to swap cylinders for the reason that the owners
wanted to send their captured cylinders to Batangas. The Court of Appeals seized
on this as evidence that the employees of Bicol Gas acted under the direct orders of

its owners and that the owners of Bicol Gas have full control of the operations of
the business.[16]
The owners of a corporate organization are its stockholders and they are to
be distinguished from its directors and officers. The petitioners here, with the
exception of Audie Llona, are being charged in their capacities as stockholders of
Bicol Gas. But the Court of Appeals forgets that in a corporation, the management
of its business is generally vested in its board of directors, not its stockholders.
[17]
Stockholders are basically investors in a corporation. They do not have a hand
in running the day-to-day business operations of the corporation unless they are at
the same time directors or officers of the corporation. Before a stockholder may be
held criminally liable for acts committed by the corporation, therefore, it must be
shown that he had knowledge of the criminal act committed in the name of the
corporation and that he took part in the same or gave his consent to its commission,
whether by action or inaction.
The finding of the Court of Appeals that the employees could not have
committed the crimes without the consent, [abetment], permission, or participation
of the owners of Bicol Gas [18] is a sweeping speculation especially since, as
demonstrated above, what was involved was just one Petron Gasul tank found in a
truck filled with Bicol Gas tanks. Although the KPE manager heard petitioner
Llona say that he was going to consult the owners of Bicol Gas regarding the offer
to swap additional captured cylinders, no indication was given as to which Bicol
Gas stockholders Llona consulted. It would be unfair to charge all the stockholders
involved, some of whom were proved to be minors. [19] No evidence was presented
establishing the names of the stockholders who were charged with running the
operations of Bicol Gas. The complaint even failed to allege who among the
stockholders sat in the board of directors of the company or served as its officers.
The Court of Appeals of course specifically mentioned petitioner
stockholder Manuel C. Espiritu, Jr. as the registered owner of the truck that the
KPE manager brought to the police for investigation because that truck carried a
tank of Petron Gasul. But the act that R.A. 623 punishes is the unlawful filling up
of registered tanks of another. It does not punish the act of transporting such
tanks. And the complaint did not allege that the truck owner connived with those
responsible for filling up that Gasul tank with Bicol Gas LPG.

WHEREFORE, the Court REVERSES and SETS ASIDE the Decision of

the Court of Appeals in CA-G.R. SP 87711 dated October 17, 2005 as well as its
Resolution dated January 6, 2006, the Resolutions of the Secretary of Justice dated
March 11, 2004 and August 31, 2004, and the Order of the Office of the Regional
State
Prosecutor,
Region
V,
dated
February
19,
2003. The
Court REINSTATES the Resolution of the Office of the Provincial Prosecutor of
Sorsogon in I.S. 2001-9231 (inadvertently referred in the Resolution itself as I.S.
2001-9234), dated February 26, 2002. The names of petitioners Manuel C.
Espiritu, Jr., Freida F. Espititu, Carlo F. Espiritu, Rafael F. Espiritu, Rolando M.
Mirabuna, Hermilyn A. Mirabuna, Kim Roland A. Mirabuna, Kaye Ann A.
Mirabuna, Ken Ryan A. Mirabuna, Juanito P. De Castro, Geronima A. Almonite
and Manuel C. Dee are ORDERED excluded from the charge.
SO ORDERED.

THIRD DIVISION
MANOLO P. SAMSON,
Petitioner,

G.R. No. 169882

Present:

- versus -

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:

CATERPILLAR, INC.,
Respondent.

September 12, 2007

x---------------------------- ---------------------x
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the Amended Decision[1] dated 8 August 2005, rendered by the
Court of Appeals in CA-G.R. SP No. 80532, (1) reversing its Decision, [2] dated 13
December 2004, in which it set aside the Order dated 31 January 2003 of Branch
211 of the Mandaluyong Regional Trial Court (RTC), dismissing Criminal Case
No. MC02-5019 filed against petitioner Manolo P. Samson (Samson) for violation
of Republic Act No. 8293, otherwise known as the Intellectual Property Code of
the Philippines, specifically Section 168.3(a) on Unfair Competition, Section 123.1
(e) and Section 131.3 on registration of trademarks, in relation to Section 170
thereof; and (2) directing the Mandaluyong RTC to conduct an independent
assessment of whether the Motion to Withdraw Information filed by the state
prosecutor is warranted.
Samson is the owner of retail outlets within the Philippines, which sell,
among other things, footwear, clothing, bags and other similar items, bearing the
mark Caterpillar and Cat. Samson registered the aforementioned marks for
shoes, slippers, sandals and boots with the Bureau of Patents, Trademarks &
Technology Transfer (whose functions are presently exercised by Intellectual
Property Office) in 1997.[3]
Caterpillar is a foreign corporation, primarily in the business of
manufacturing equipment used in construction, mining, road building and
agricultural industries. Since the 1960s, however, it had expanded its product line
to clothing and, since 1988, to footwear. Caterpillar alleges that it is a widely
known brand name and that its products are being internationally distributed.[4]

As early as 26 July 2000, Branch 56 of the Makati RTC, issued Search

Warrants No. 00-022 to No. 00-032 against establishments owned by
Samson. This led to the seizure of various retail items such as footwear, clothing,
accessories, andleatherware for Unfair Competition under the Intellectual Property
Code. Caterpillar filed criminal complaints before the Department of Justice
(DOJ). In addition, Caterpillar filed a civil action on 31 July 2000, heard before
Branch 90 of the Quezon City RTC for Unfair Competition, Damages and
Cancellation of Trademark with an Application for a Temporary Restraining Order
and/or Writ of Preliminary Injunction docketed as Civil Case No. Q-00-41445.[5]
Since Samson allegedly continued to sell and distribute merchandise which
bore the disputed Caterpillar marks, Caterpillar sought the issuance of another
set of search warrants against Samson. On 18 December 2000, Branch 172 of the
Valenzuela RTC in Search Warrants No. 12-V-00 to No. 37-V-00 issued 26 writs of
search warrants under which various clothing items were seized by National
Bureau of Investigation (NBI) agents as evidence of violations of the law on unfair
competition.
On 23 January 2001, Caterpillar, through its legal counsel, filed 26 criminal
complaints against Samson before the DOJ, for alleged violations of Section
168.3(a) on Unfair Competition, Section 123.1(e) and Section 131.3 on registration
of trademarks, in relation to Section 170 of the Intellectual Property Code.[6]
The complaints were docketed as I.S. Nos. 2001-42 to 2001-67 and assigned
to State Prosecutor Zenaida Lim of the Task Force on Anti-Intellectual Property
Piracy. But before the determination by the DOJ on whether Samson should be
criminally charged with Unfair Competition, the Valenzuela RTC already issued an
Order, dated 26 June 2001, quashing the search warrants issued in Search Warrants
No. 12-V-00 to No. 37-V-00.[7]
The DOJ, through State Prosecutor Lim, subsequently issued a Joint
Resolution, dated 28 September 2001, recommending that Samson be criminally
charged with unfair competition under Section 168.3(a), in relation to Section
131.1, 123.1 and 170 of the Intellectual Property Code. Resulting from the said
Resolution, Criminal Case No. MC02-5019 was filed with the MandaluyongRTC.
[8]

Samson filed a Petition for Review of the foregoing Joint Resolution, with
the Secretary of Justice. His petition was granted. In a Resolution dated 13
January 2003, the Acting Secretary of Justice, Merceditas Gutierrez, recommended
the withdrawal of the criminal informations filed against Samson before various
courts on the ground that there was lack of probable cause. Caterpillar filed a
Motion for Reconsideration, which was denied by Acting Secretary of Justice
Gutierrez on 25 September 2003. An appeal questioning the DOJ Resolution
dated 13 January 2003 of Acting Secretary of Justice Gutierrez was filed by
Caterpillar before the Court of Appeals docketed as CA-G.R. No. 79937.[9]
Meanwhile, pursuant to
Secretary of Justice Gutierrez,
Withdraw
Information
in
the Mandaluyong RTC. On 31
Order granting the withdrawal
text of the said Decision reads:

the Resolution dated 13 January 2003 of Acting

State Prosecutor Lim filed an Ex Parte Motion to
Criminal
Case
No. MC02-5019
before
January 2003, the Mandaluyong RTC issued an
of the Information against Samson. [10] The entire

This refers to the Ex-Parte Motion to Withdraw Information filed

on January 31, 2003 by State Prosecution Zenaida M. Lim of the
Department of Justice in connection with Resolution No. 011, Series of
2003, dated January 13, 2003 of the Acting Secretary of Justice
Ma.Merceditas N. Gutierrez reversing and setting aside the resolution of
said
state
prosecutor
and
directed
the
Chief
State
Prosecutor Jovencito R. Zuoto withdraw the informations filed in this
court against Manolo Samson.
WHEREFORE, finding the said motion to be in order and it
appearing that accused has not yet been arraigned and therefore the court
has not yet acquired jurisdiction over the subject accused, the court
hereby grants the withdrawal of the information in the above-entitled
case as it is hereby ordered withdrawn form the record files of the
court. [11]

Caterpillar filed a Motion for Reconsideration, which was denied by

the Mandaluyong RTC in an Order dated 27 August 2003:

For resolution is a Motion for Reconsideration of the order of the

court dated January 31, 2003 granting the withdrawal of the information
from the record files of the court, filed on February 21, 2003, by the
plaintiff in the above-entitled case.
Hearing on the motion together with the opposition thereto was held
after which, the same was submitted for resolution.
After the court examined with great care the bases advanced by
both parties in the aforesaid motion, the court was unable to find any
cogent justification to overturn or set aside its previous order, there being
no new issues raised and the same are rehash of its previous pleadings.
WHEREFORE, premises considered, plaintiffs Motion for
Reconsideration is hereby DENIED.[12]

Caterpillar filed with the Court of Appeals a Petition for Certiorari under
Rule 65 of the Rules of Court, assailing the Order dated 31 January 2003 of
the Mandaluyong RTC, docketed as CA-G.R. SP No. 80532. The Court of
Appeals, in a Decision dated13 December 2004, dismissed the Petition on the
ground that Caterpillar lacked the legal standing to question the proceedings
involving the criminal aspect of the case, and that its participation is limited only to
the recovery of civil liability. The appellate court also took into account the denial
by the Acting Secretary of Justice Gutierrez of Caterpillars Motion for
Reconsideration of her order to withdraw the Informations against Samson and,
thus, ruled that this rendered the case moot and academic.[13]
Caterpillar filed a Motion for Reconsideration of the aforementioned
Decision rendered by the Court of Appeals. In its Amended Decision dated 8
August 2005, the Court of Appeals reversed its earlier ruling and declared that
the Mandaluyong RTC gravely abused its discretion when it merely relied on the
Resolution, dated 13 January 2003 of Acting Secretary of Justice Gutierrez in
ordering the withdrawal of the information filed before it without making an
independent assessment of the case.[14] In thedispositive portion of its Amended
Decision, the Court of Appeals ruled that:

WHEREFORE, in view [of] the foregoing rationications, the

petitioners Motion for Reconsideration is hereby GRANTED. The
decision of this Court dated 13 December 2004, as well as the assailed
orders of the respondent court dated 31 January 2003 and 27 August
2003 are hereby REVERSED and SET ASIDE.
The respondent court is hereby ordered to CONDUCT an
independent assessment of whether the motion to withdraw information
filed by the state prosecutor is warranted under the circumstances
obtaining in the case. [15]

Samson filed with the Court of Appeals a Motion for Reconsideration of the
Amended Decision, dated 8 August 2005, which was denied on 27 September
2005. Hence, the present Petition, where he is raising the following issues:
I
THE COURT OF APPEALS GROSSLY ERRED IN RULING THAT
THE RESPONDENT JUDGE IN CA-G.R. NO. SP 80532 FAILED IN
HER BOUNDEN DUTY TO DETERMINE THE MERITS OF THE
PROSECUTIONS EX-PARTE MOTION TO WITHDRAW; and
II
THE COURT OF APPEALS LIKEWISE ERRED IN IGNORING ITS
OWN DECISION FINDING RESPONDENT CATERPILLAR, INC.,
AS PRIVATE COMPLAINANT, BEREFT OF AUTHORITY TO
ASSAIL THE STATE PROSECUTORS EX-PARTE MOTION TO
WITHDRAW THE INFORMATION BECAUSE THE CRIMINAL
ASPECT OF A CRIMINAL CASE IS UNDER THE DIRECTION AND
CONTROL OF THE PROSECUTION AND, CONSEQUENTLY,
PRIVATE COMPLAINANT HAS NO BUSINESS WHATSEOEVER
IN THE PROCEEDINGS. [16]

Before discussing the merits of the Petition at bar, this Court notes that on 15
February 2005, the Court of Appeals rendered a Decision in CA-G.R. SP No.
79937 in favor of Caterpillar. To recall, this was the petition filed by Caterpillar to
assail the Resolution of Acting Secretary of Justice Gutierrez dated 13 January
2003, directing the Chief State Prosecutor to cause the withdrawal

ofInformations against Samson. The appellate court reversed said Resolution and
pronounced that sufficient probable cause existed to justify the filing
of Informations against Samson. Thus, it
ordered the re-filing of
[17]
the Informations before the proper trial courts.
In its Decision in CA-G.R. SP No. 79937, the Court of Appeals held that the
withdrawal of the Informations against Samson, predicated on the quashal of the
search warrants, was a manifest error. Consistent with the doctrine laid out
in Solid Triangle Sales Corporation v. The Sheriff of RTC, Quezon City, Branch 93,
[18]
the appellate court ruled that the earlier finding of probable cause against
Samson was not affected by the quashal of the warrants since independent
evidence gathered by the NBI from the 24 test-buy operations it conducted in 1999
is sufficient to support such finding. It reiterated the findings of State Prosecutor
Lim:
Respondents use of depictions of heavy machinery and equipment,
such as tractors, to market his products, would verily show that he is
passing off his products as those of Caterpillars xxx. Meanwhile, the
similarity in the appearance of the goods manufactured or sold by
respondent with those of Caterpillars footwear products would
demonstrate that he is passing off his product as those of genuine
Caterpillar footwear products. Accordingly, where the similarity in the
appearance of the goods as packed and offered for sale is so striking, this
fact shows intent on the part of defendant to deceive the public and
defraud plaintiff out of his trade. The intent to deceive may be inferred
from the similarity of the goods as packed and offered for sale, and an
action will lie to restrain such unfair competition and for damages.
x x x[19].

On appeal docketed as G.R. No. 169199, this Court ruled that the Court of Appeals
did not commit any reversible error.
By sustaining the Decision of the Court of Appeals in said case, this Court,
in a Resolution dated 17 October 2005, had already ruled that probable cause exists
for the re-filing of a criminal case against Samson for unfair competition under the
Intellectual Property Code. Samson filed a Motion for Reconsideration of this
Courts Resolution, which was denied with finality on 20 March 2006. Entry of

judgment was already made in said case on 18 April 2006; hence, rendering said
judgment final and executory. The repeated confirmation of the finding of
probable cause against Samson, which this Court cannot now overturn, effectively
and decisively determines the issues in this petition.
The findings of the Court of Appeals in CA-G.R. SP No. 79937, affirmed by
this Court in G.R. No. 169199, have rendered the present petition moot and
academic. It is a rule that is unanimously observed that courts of justice will take
cognizance only ofjusticiable controversies wherein actual and not merely
hypothetical issues are involved.[20] A case becomes moot and academic when
there is no more actual controversy between the parties and no useful purpose can
be served in passing upon the merits. [21] Since this Court, in affirming the said
Decision of the Court of Appeals, already found it imperative for the Chief State
Prosecutor to re-file the Informations against Samson for unfair competition,
Criminal Case No. MC02-5019 should be re-opened and heard by
theMandaluyong RTC. The rendering of a decision on the merits of this case
would be of no practical value. Hence, this case is dismissible.[22]
IN VIEW OF THE FOREGOING, the instant Petition is DENIED and the
assailed Amended Decision of the Court of Appeals in CA-G.R. SP No. 80532,
promulgated on 8 August 2005, is AFFIRMED WITH MODIFICATION. The
Order of the Court of Appeals in C.A.-G.R. SP No. 80532 directing Branch 211 of
the Mandaluyong Regional Trial Court to conduct an independent assessment is
REVERSED. This Court ORDERS Branch 211 of the Mandaluyong Regional
Trial Court to re-open and hear Criminal Case No. MC02-5019. Costs against the
petitioner.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION
LEVI STRAUSS (PHILS.), INC.,
Petitioner,

G.R. No. 162311

Present:

- versus -

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
Promulgated:

TONY LIM,
Respondent.

December 4, 2008

x--------------------------------------------------x
DECISION
REYES, R.T., J.:
THE remedy of a party desiring to elevate to the appellate court an adverse
resolution of the Secretary of Justice is a petition for certiorari under Rule 65. A
Rule 43 petition for review is a wrong mode of appeal.[1]
During preliminary investigation, the prosecutor is vested with authority and
discretion to determine if there is sufficient evidence to justify the filing of an
information. If he finds probable cause to indict the respondent for a criminal
offense, it is his duty to file the corresponding information in court. However, it is
equally his duty not to prosecute when after an investigation, the evidence adduced
is
not
sufficient
to
establish
a prima
facie case.
[2]

Before the Court is a petition for review on certiorari[3] of the Decision[4] and
Resolution[5] of the Court of Appeals (CA), affirming the resolutions of the
Department of Justice (DOJ) finding that there is no probable cause to indict
respondent Tony Lim, a.k.a. Antonio Guevarra, for unfair competition.
The Facts
Petitioner Levi Strauss (Phils.), Inc. is a duly-registered domestic
corporation. It is a wholly-owned subsidiary of Levi Strauss & Co. (LS & Co.)
a Delaware, USA company.
In 1972, LS & Co. granted petitioner a non-exclusive license to use its
registered trademarks and trade names [6] for the manufacture and sale of various
garment products, primarily pants, jackets, and shirts, in the Philippines.
[7]
Presently, it is the only company that has authority to manufacture, distribute,
and sell products bearing the LEVIS trademarks or to use such trademarks in
the Philippines. These trademarks are registered

in over 130 countries, including the Philippines,[8] and were first used in
commerce in the Philippines in 1946.[9]
Sometime in 1995, petitioner lodged a complaint [10] before the Inter-Agency
Committee on Intellectual Property Rights, alleging that a certain establishment
in Metro Manila was manufacturing garments using colorable imitations of the
LEVIS trademarks.[11] Thus, surveillance was conducted on the premises of
respondent Tony Lim, doing business under the name Vogue Traders Clothing
Company.[12] The investigation revealed that respondent was engaged in the
manufacture, sale, and distribution of products similar to those of petitioner and
under the brand name LIVES.[13]
On December 13, 1995, operatives of the Philippine National Police (PNP)
Criminal Investigation Unit[14] served search warrants[15] on respondents premises
at 1042 and 1082 Carmen Planas Street, Tondo, Manila. As a result, several
items[16] were seized from the premises.[17]

The PNP Criminal Investigation Command (PNP CIC) then filed a

complaint[18] against respondent before the DOJ for unfair competition [19] under the
old Article 189 of the Revised Penal Code, prior to its repeal by Section 239 of
Republic Act (RA) No. 8293.[20] The PNP CIC claimed that a confusing
similarity could be noted between petitioners LEVIs jeans and respondents
LIVES denim jeans and pants.
In his counter-affidavit,[21] respondent alleged, among others, that
(1) his
products bearing the LIVES brand name are not fake LEVIS garments; (2)
LIVES is a registered trademark, [22] while the patch pocket design for LIVES
pants has copyright registration,[23] thus conferring legal protection on his own
intellectual property rights, which stand on equal footing as LEVIS; (3)
confusing similarity, the central issue in the trademark cancellation
proceedings[24] lodged by petitioner, is a prejudicial question that complainant, the
police, and the court that issued the search warrants cannot determine without
denial of due process or encroachment on the jurisdiction of the agencies
concerned; and (4) his goods are not clothed with an appearance which is likely to
deceive the ordinary purchaser exercising ordinary care.[25]

In its reply-affidavit, petitioner maintained that there is likelihood of

confusion between the competing products because: (1) a slavish imitation of
petitioners arcuate trademark has been stitched on the backpocket of LIVES
jeans; (2) the appearance of the mark 105 on respondents product is obviously a
play on petitioners 501 trademark; (3) the appearance of the word/phrase
LIVES and LIVES ORIGINAL JEANS is confusingly similar to petitioners
LEVIS trademark; (4) a red tab, made of fabric, attached at the left seam of the
right backpocket of petitioners standard five-pocket jeans, also appears at the
same place on LIVES jeans; (5) the patch used on LIVES jeans (depicting
three men on each side attempting to pull apart a pair of jeans) obviously thrives on
petitioners own patch showing two horses being whipped by two men in an
attempt to tear apart a pair of jeans; and (6) LEVIS jeans are packaged and sold
with carton tickets, which are slavishly copied by respondent in his own carton
ticket bearing the marks LIVES, 105, the horse mark, and basic features of
petitioners ticket designs, such as two red arrows curving and pointing outward,
the arcuate stitching pattern, and a rectangular portion with intricate border
orientation.[26]
DOJ Rulings
On October 8, 1996, Prosecution Attorney Florencio D. Dela Cruz
recommended the dismissal[27] of the complaint. The prosecutor agreed with
respondent that his products are not clothed with an appearance which is likely to
deceive the ordinary purchaser exercising ordinary care. The recommendation was
approved by Assistant Chief State Prosecutor Lualhati R. Buenafe.
On appeal, then DOJ Secretary Teofisto Guingona affirmed the prosecutors
dismissal of the complaint on January 9, 1998.[28] Prescinding from the basic
rule that to be found guilty of unfair competition, a person shall, by imitation or
any unfair device, induce the public to believe that his goods are those of another,
Secretary Guingona stated:

In the case at bar, complainant has not shown that anyone was
actually deceived by respondent. Respondents product, which bears the
trademark LIVEs, has an entirely different spelling and meaning with
the trademark owned by complainant which is LEVIs. Complainants
trademark comes from a Jewish name while that of respondent is merely
an adjective word. Both, when read and pronounced, would resonate
different sounds. While respondents LIVEs trademark may appear
similar, such could not have been intended by the respondent to deceive
since he had the same registered with the appropriate government
agencies. Granting arguendo, that respondents trademark or products
possessed similar characteristics with the trademark and products of
complainant, on that score alone, without evidence or proof that such
was a device of respondent to deceive the public to the damage of
complainant no unfair competition is committed. [29]

On February 13, 1998, petitioner filed a motion for reconsideration of

Secretary Guingonas resolution, alleging, among others, that only a likelihood of
confusion is required to sustain a charge of unfair competition. It also submitted
the results of a consumer survey[30] involving a comparison of petitioners and
respondents products.
On June 5, 1998, Justice Secretary Silvestre Bello III, Guingonas successor,
granted petitioners motion and directed the filing of an information against
respondent.[31]
WHEREFORE, our resolution dated 9 January 1998 is hereby
reversed and set aside. You are directed to file an information for unfair
competition under Article 189 of the Revised Penal Code, as amended,
against respondent Tony Lim. Report the action taken thereon within ten
(10) days from receipt hereof.[32]

Secretary Bello reasoned that under Article 189 of the Revised Penal Code,
as amended, exact similarity of the competing products is not required. However,
Justice Guingonas resolution incorrectly dwelt on the specific differences in the
details of the products.[33] Secretary Bellos own factual findings revealed:

x x x [I]t is not difficult to discern that respondent gave his

products the general appearance as that of the product of the
complainant. This was established by the respondents use of the
complainants arcuate backpocket design trademark; the 105 mark which
apparently is a spin-off of the 501 mark of the complainant; the patch
which was clearly patterned after that of the complainants two horse
patch design trademark; the red tab on the right backpocket; the
wordings which were crafted to look similar with the Levis trademark of
the complainant; and even the packaging. In appropriating himself the
general appearance of the product of the complainant, the respondent
clearly intended to deceive the buying public. Verily, any person who
shall employ deception or any other means contrary to good faith by
which he shall pass of the goods manufactured by him or in which he
deals, or his business, or services for those of the one having established
good will shall guilty of unfair competition.
Respondents registration of his trademark can not afford him any
remedy. Unfair competition may still be prosecuted despite such
registration.[34] (Citation omitted)

Respondent then filed his own motion for reconsideration of

the Bello resolution. On May 7, 1999, new DOJ Secretary Serafin Cuevas granted
respondents motion and ordered the dismissal of the charges against him.[35]
CA Disposition
Dissatisfied with the DOJ rulings, petitioner sought recourse with the CA via
a petition for review under Rule 43 of the 1997 Rules of Civil
Procedure. On October 17, 2003, the appellate court affirmed the dismissal of the
unfair competition complaint.
WHEREFORE, premises considered, the petition for review is
DENIED and is accordingly DISMISSED for lack of merit.
SO ORDERED.[36]

The CA pointed out that to determine the likelihood of confusion, mistake or

deception, all relevant factors and circumstances should be taken into
consideration, such as the circumstances under which the goods are

sold, the class of purchasers, and the actual occurrence or absence of

confusion.[37]
Thus, the existence of some similarities between LIVES jeans and
LEVIS garments would not ipso facto equate to fraudulent intent on the part of
respondent. The CA noted that respondent used affirmative and precautionary
distinguishing features in his products for differentiation. The appellate court
considered the spelling and pronunciation of the marks; the difference in the
designs of the back pockets; the dissimilarity between the carton tickets; and the
pricing and sale of petitioners products in upscale exclusive specialty shops. The
CA also disregarded the theory of post-sale confusion propounded by petitioner,
relying instead on the view that the probability of deception must be determined at
the point of sale.[38]
Issues
Petitioner submits that the CA committed the following errors:
I.
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT
ACTUAL CONFUSION IS NECESSARY TO SUSTAIN A CHARGE
OF UNFAIR COMPETITION, AND THAT THERE MUST BE
DIRECT EVIDENCE OR PROOF OF INTENT TO DECEIVE THE
PUBLIC.
II.
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT
RESPONDENTS LIVES JEANS DO NOT UNFAIRLY
COMPETEWITH LEVIS JEANS AND/OR THAT THERE IS NO
POSSIBILITY THAT THE FORMER WILL BE CONFUSED FOR
THE LATTER, CONSIDERING THAT RESPONDENTS LIVES
JEANS BLATANTLY COPY OR COLORABLY IMITATE NO LESS
THAN SIX (6) TRADEMARKS OF LEVIS JEANS.
III.
THE COURT OF APPEALS GRAVELY ERRED IN DISREGARDING
THE EVIDENCE ON RECORD, CONSISTING OF THE
SCIENTIFICALLY CONDUCTED MARKET SURVEY AND THE

AFFIDAVIT OF THE EXPERT WITNESS ON THE RESULTS

THEREOF,
WHICH SHOW THAT
RESPONDENTS
LIVES
JEANS ARE, IN FACT, BEING CONFUSED FOR LEVIS JEANS.
IV.
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT
THE ISSUE OF CONFUSION SHOULD ONLY BE DETERMINED
AT THE POINT OF SALE.
V.
THE COURT OF APPEALS GRAVELY ERRED IN FAILING TO
DIRECT THE SECRETARY OF JUSTICE TO CAUSE THE
FILING OF THE APPROPRIATE INFORMATION IN COURT
AGAINST THE RESPONDENT.[39] (Underscoring supplied)

Our Ruling
In essence, petitioner asks this Court to determine if probable cause exists to
charge respondent with the crime of unfair competition under Article 189(1) of the
Revised Penal Code, prior to its repeal by Section 239 of RA No. 8293.
However, that is a factual issue[40] the resolution of which is improper in a
Rule 45 petition.[41] The only legal issue left for the Court to determine is whether
the issue of confusion should be determined only at the point of sale.
Nonetheless, there is sufficient reason for this Court to dismiss this petition
merely by looking at the procedural avenue petitioner used to have the DOJ
resolutions reviewed by the CA.
Petitioner filed with the CA a petition for review under Rule 43 of the 1997
Rules of Civil Procedure.[42] Rule 43 governs all appeals from [the Court of Tax
Appeals and] quasi-judicial bodies to the CA. Its Section 1 provides:

Section 1. Scope. This Rule shall apply to appeals from

[judgments or final orders of the Court of Tax Appeals and from] awards,
judgments, final orders or resolutions of or authorized by any quasi-

judicial agency in the exercise of its quasi-judicial functions. Among

these agencies are the Civil Service Commission, Central Board of
Assessment
Appeals,
Securities
and
Exchange
Commission, Office of the President, Land Registration Authority,
Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National Electrification
Administration, Energy Regulatory Board, National Telecommunications
Commission, Department of Agrarian Reform under Republic Act No.
6657, Government Service Insurance System, Employees Compensation
Commission, Agricultural Inventions Board, Insurance Commission,
Philippine Atomic Energy Commission, Board of Investments,
Construction Industry Arbitration Commission, and voluntary arbitrators
authorized by law.[43]

Clearly, the DOJ is not one of the agencies enumerated in Section 1 of Rule
43 whose awards, judgments, final orders, or resolutions may be appealed to the
CA.
The Court has consistently ruled that the filing with the CA of a petition
for review under Rule 43 to question the Justice Secretarys resolution regarding
the determination of probable cause is an improper remedy.[44]
Under the 1993 Revised Rules on Appeals from Resolutions in Preliminary
Investigations or Reinvestigations,[45] the resolution of the investigating prosecutor
is subject to appeal to the Justice Secretary [46] who, under the Revised
Administrative Code, exercises the power of control and supervision over said
Investigating Prosecutor; and who may affirm, nullify, reverse, or modify the
ruling of such prosecutor.[47] If the appeal is dismissed, and after the subsequent
motion for reconsideration is resolved, a party has no more appeal or other remedy
available in the ordinary course of law.[48] Thus, the Resolution of the Justice
Secretary affirming, modifying or reversing the resolution of the Investigating
Prosecutor is final.[49]
There being no more appeal or other remedy available in the ordinary course
of law, the remedy of the aggrieved party is to file a petition for certiorari under
Rule 65. Thus, while the CA may review the resolution of the Justice Secretary,
it may do so only in a petition for certiorari under Rule 65 of the 1997 Rules

of Civil Procedure, solely on the ground that the Secretary of Justice committed
grave abuse of discretion amounting to excess or lack of jurisdiction.[50]
Verily, when respondent filed a petition for review under Rule 43 instead of
a petition for certiorari under Rule 65, the CA should have
dismissed it outright. However, the appellate court chose to determine if DOJ
Secretaries Guingona and Cuevas correctly determined the absence of probable
cause.
Now, even if We brush aside technicalities and consider the petition for
review filed with the CA as one under Rule 65, the petition must fail just the same.
While the resolution of the Justice Secretary may be reviewed by the
Court, it is not empowered to substitute its judgment for that of the executive
branch when there is no grave abuse of discretion.[51]
Courts are without power to directly decide matters over which full
discretionary authority has been delegated to the legislative or executive branch of
the government.[52] The determination of probable cause is one

such matter because that authority has been given to the executive branch,
through the DOJ.[53]
It bears stressing that the main function of a government prosecutor is to
determine the existence of probable cause and to file the corresponding
information should he find it to be so. [54] Thus, the decision whether or not to
dismiss the criminal complaint against respondent is necessarily dependent on the
sound discretion of the investigating prosecutor and ultimately, that of the
Secretary of Justice.[55]
A prosecutor, by the nature of his office, is under no compulsion to file a
particular criminal information where he is not convinced that he has evidence to
prop up its averments, or that the evidence at hand points to a different conclusion.
This is not to discount the possibility of the commission of abuses on the part of
the prosecutor. But this Court must recognize that a prosecutor should not be
unduly compelled to work against his conviction. Although the power and
prerogative of the prosecutor to determine whether or not the evidence at hand is
sufficient to form a reasonable belief that a person committed an offense is not
absolute but subject to judicial review, it would be embarrassing for him to be
compelled to prosecute a case when he is in no position to do so, because in his
opinion he does not have the necessary evidence to secure a conviction, or he is not
convinced of the merits of the case.[56]
In finding that respondents goods were not clothed with an appearance
which is likely to deceive the ordinary purchaser exercising ordinary care, the
investigating prosecutor exercised the discretion lodged in him by law. He found
that:

First, the LIVES mark of the respondents goods is spelled and

pronounced differently from the LEVIS mark of the complainant.
Second, the backpocket design allegedly copied by the respondent
from the registered arcuate design of the complainant, appears to be
different in view of the longer curved arms that stretch deep downward
to a point of convergence where the stitches form a rectangle. The
arcuate design for complainant LEVIs jeans form a diamond instead.

And assuming arguendo that there is similarity in the design of

backpockets between the respondents goods and that of the
complainant, this alone does not establish that respondents jeans were
intended to copy the complainants goods and pass them off as the
latters products as this design is simple and may not be said to be
strikingly distinct absent the other LEVIS trademark such as the prints
on the button, rivets, tags and the like. x x x Further, the presence of
accessories bearing Levis trademark was not established as there were
no such accessories seized from the respondent and instead genuine
LIVES hangtags, button and patches were confiscated during the search
of latters premises.
Second, the design of the patches attached to the backpockets of
the respondents goods depicts three men on either side of a pair of jeans
attempting to pull apart said jeans, while the goods manufactured by
complainant with patches also attached at the right backpockets depicts
two horses being whipped by two men in an attempt to tear apart a pair
of jeans. It is very clear therefore that the design of the backpocket
patches by the respondent is different from that of the complainant, in
the former the men were trying to pull apart the pants while in the latter
horses are the ones doing the job. Obviously, there is a great difference
between a man and a horse and this will naturally not escape the eyes of
an ordinary purchaser.
Third, the manner by which Levis jeans are packed and sold with
carton tickets attached to the products cannot be appropriated solely by
complainant to the exclusion of all other manufacturers of same class. It
frequently happens that goods of a particular class are labeled by all
manufacturer[s] in a common manner. In cases of that sort, no
manufacturer may appropriate for himself the method of labeling or
packaging [of] his merchandise and then enjoin other merchants from
using it. x x x.
Fourth, evidence shows that there is a copyright registration
issued by the National Library over the backpocket design of the
respondent. And this copyright registration gives the respondent the right
to use the same in his goods x x x.[57]

The determination of probable cause is part of the discretion granted to the

investigating prosecutor and ultimately, the Secretary of Justice. Courts are not
empowered to substitute their own judgment for that of the executive branch.[58]

The courts duty in an appropriate case is confined to a determination of

whether the assailed executive or judicial determination of probable cause was
done without or in excess of jurisdiction or with grave abuse of discretion
amounting to want of jurisdiction.[59] For grave abuse of discretion to prosper as a
ground for certiorari, it must be demonstrated that the lower court or tribunal has
exercised its power in an arbitrary and despotic manner, by reason of passion or
personal hostility, and it must be patent and gross as would amount to an evasion
or to a unilateral refusal to perform the duty enjoined or to act in contemplation of
law.[60]
In the case at bar, no grave abuse of discretion on the part of the DOJ was
shown. Petitioner merely harps on the error committed by the DOJ and the CA in
arriving at their factual finding that there is no confusing similarity between
petitioners and respondents products. While it is possible that the investigating
prosecutor and Secretaries Guingona and Cuevas erroneouslyexercised their
discretion when they found that unfair competition was not committed, this by
itself does not render their acts amenable to correction and annulment by the
extraordinary remedy of certiorari. There must be a showing of grave abuse of
discretion amounting to lack or excess of jurisdiction.[61]
We are disinclined to find that grave of abuse of discretion was
committed when records show that the finding of no probable cause is
supported by the evidence, law, and jurisprudence.
Generally, unfair competition consists in employing deception or any other
means contrary to good faith by which any person shall pass off the goods
manufactured by him or in which he deals, or his business, or services

for those of the one having established goodwill, or committing any acts
calculated to produce such result.[62]
The elements of unfair competition under Article 189(1) [63] of the Revised
Penal Code are:
(a) That the offender gives his goods the general appearance of the
goods of another manufacturer or dealer;
(b) That the general appearance is shown in the (1) goods themselves,
or in the (2) wrapping of their packages, or in the (3) device or
words therein, or in (4) any other feature of their appearance;
(c) That the offender offers to sell or sells those goods or gives other
persons a chance or opportunity to do the same with a like purpose;
and
(d) That there is actual intent to deceive the public or defraud a
competitor.[64]

All these elements must be proven.[65] In finding that probable cause for
unfair competition does not exist, the investigating prosecutor and Secretaries
Guingona and Cuevas arrived at the same conclusion that there is insufficient
evidence to prove all the elements of the crime that would allow them to secure a
conviction.
Secretary Guingona discounted the element of actual intent to deceive by
taking into consideration the differences in spelling, meaning, and phonetics
between LIVES and LEVIS, as well as the fact that respondent had
registered his own mark.[66] While it is true that there may be unfair competition
even if the competing mark is registered in the Intellectual Property Office, it is
equally true that the same may show prima facie good faith.
[67]
Indeed, registration does not negate unfair competition where the goods are
packed or offered for sale and passed off as those of complainant. [68] However, the
marks registration, coupled with the stark differences between the competing
marks, negate the existence of actual intent to deceive, in this particular case.
For his part, Justice Cuevas failed to find the possibility of confusion and of
intent to deceive the public, relying on Emerald Garment Manufacturing
Corporation v. Court of Appeals.[69] In Emerald, the Court explained that

since maong pants or jeans are not inexpensive, the casual buyer is more
cautious and discerning and would prefer to mull over his purchase, making
confusion and deception less likely.
We cannot subscribe to petitioners stance that Emerald Garment cannot
apply because there was only one point of comparison, i.e., LEE as it appears in
Emerald Garments STYLISTIC MR. LEE. Emerald Garment is instructive in
explaining the attitude of the buyer when it comes to products that are not
inexpensive, such as jeans. In fact, the Emerald Garment rationale is supported
by Del Monte Corporation v. Court of Appeals,[70] where the Court explained that
the attitude of the purchaser is determined by the cost of the goods. There is no
reason not to apply the rationale in those cases here even if only by analogy.
The rule laid down in Emerald Garment and Del Monte is consistent
with Asia Brewery, Inc. v. Court of Appeals,[71] where the Court held that in
resolving cases of infringement and unfair competition, the courts should take into
consideration severalfactors which would affect its conclusion, to wit: the age,
training and education of the usual purchaser, the nature and cost of the article,
whether the article is bought for immediate consumption and also the conditions
under which it is usually purchased.[72]
Petitioner argues that the element of intent to deceive may be inferred from
the similarity of the goods or their appearance. [73] The argument is specious on two
fronts. First, where the similarity in the appearance of the goods as packed and
offered for sale is so striking, intent to deceive may be inferred. [74] However, as
found by the investigating prosecutor and the DOJ Secretaries, striking similarity
between the competing goods is not present.
Second, the confusing similarity of the goods was precisely in issue during
the preliminary investigation. As such, the element of intent to
deceive could not arise without the investigating prosecutors or the DOJ
Secretarys finding that such confusing similarity exists. Since confusing
similarity was not found, the element of fraud or deception could not be inferred.
We cannot sustain Secretary Bellos opinion that to establish probable cause,
it is enough that the respondent gave to his product the general appearance of the

product[75] of petitioner. It bears stressing that that is only one element of unfair
competition. All others must be shown to exist. More importantly, the likelihood
of confusion exists not only if there is confusing similarity. It should also be likely
to cause confusion or mistake or deceive purchasers. [76] Thus, the CA correctly
ruled that the mere fact that some resemblance can be pointed out between the
marks used does not in itself prove unfair competition. [77] To reiterate, the
resemblance must be such as is likely to deceive the ordinary purchaser exercising
ordinary care.[78]
The consumer survey alone does not equate to actual confusion. We note
that the survey was made by showing the interviewees actual samples of
petitioners and respondents respective products, approximately five feet
away from them. From that distance, they were asked to identify the jeans brand
and state the reasons for thinking so.[79] This method discounted the possibility
that the ordinary intelligent buyer would be able to closely scrutinize, and even fit,
the jeans to determine if they were LEVIS or not. It also ignored that a
consumer would consider the price of the competing goods when choosing a brand
of jeans. It is undisputed that LIVES jeans are priced much lower than
LEVIS.
The Courts observations in Emerald Garment are illuminating on this score:
First, the products involved in the case at bar are, in the main,
various kinds of jeans. x x x Maong pants or jeans are not
inexpensive. Accordingly, the casual buyer is predisposed to be more
cautious and discriminating in and would prefer to mull over his
purchase. Confusion and deception, then, is less likely. In Del Monte
Corporation v. Court of Appeals, we noted that:
Among these, what essentially determines the
attitudes of the purchaser, specifically his inclination to be
cautious, is the cost of the goods. To be sure, a person who
buys a box of candies will not exercise as much care as one
who buys an expensive watch. As a general rule, an
ordinary buyer does not exercise as much prudence in
buying an article for which he pays a few centavos as he
does in purchasing a more valuable thing. Expensive and
valuable items are normally bought only after
deliberate,
comparative
and
analytical

investigation. But mass products, low priced articles in

wide use, and matters of everyday purchase requiring
frequent replacement are bought by the casual consumer
without great care.[80] (Emphasis supplied)

We find no reason to go beyond the point of sale to determine if there is

probable cause for unfair competition. The CA observations along this line are
worth restating:
We also find no basis to give weight to petitioners contention that
the post sale confusion that might be triggered by the perceived
similarities between the two products must be considered in the action
for unfair competition against respondent.
No inflexible rule can be laid down as to what will constitute
unfair competition. Each case is, in the measure, a law unto itself.
Unfair competition is always a question of fact. The question to be
determined in every case is whether or not, as a matter of fact, the name
or mark used by the defendant has previously come to indicate and
designate plaintiffs goods, or, to state it in another way, whether
defendant, as a matter of fact, is, by his conduct, passing off defendants
goods as plaintiffs goods or his business as plaintiffs business. The
universal test question is whether the public is likely to be deceived.
In the case before us, we are of the view that the probability of
deception must be tested at the point of sale since it is at this point that
the ordinary purchaser mulls upon the product and is likely to buy the
same under the belief that he is buying another. The test of fraudulent
simulation is to be found in the likelihood of deception, or the possibility
of deception of some persons in some measure acquainted with an
established design and desirous of purchasing the commodity with which
that design has been associated.[81]

In sum, absent a grave abuse of discretion on the part of the executive

branch tasked with the determination of probable cause during preliminary
investigation, We cannot nullify acts done in the exercise of the executive officers
discretion. Otherwise, We shall violate the principle that the purpose of a
preliminary investigation is to secure the innocent against hasty, malicious and
oppressive prosecution, and to protect him from an open and public accusation of

crime, from the trouble, expense and anxiety of a public trial, and also to protect
the State from useless and expensive trials.[82]
WHEREFORE, the petition is DENIED and the appealed Decision of the
Court of Appeals AFFIRMED.
SO ORDERED.

Republic of the Philippines

SUPREME COURTBaguio City
SECOND DIVISION
G.R. No. 164321

March 23, 2011

SKECHERS, U.S.A., INC., Petitioner,

vs.
INTER PACIFIC INDUSTRIAL TRADING CORP., and/or INTER PACIFIC TRADING CORP. and/or
STRONG SPORTS GEAR CO., LTD., and/or STRONGSHOES WAREHOUSE and/or STRONG
FASHION SHOES TRADING and/or TAN TUAN HONG and/or VIOLETA T. MAGAYAGA and/or
JEFFREY R. MORALES and/or any of its other proprietor/s, directors, officers, employees
and/or occupants of its premises located at S-7, Ed & Joe's Commercial Arcade, No. 153
Quirino Avenue, Paraaque City, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
TRENDWORKS INTERNATIONAL CORPORATION, Petitioner-Intervenor,
vs.
INTER PACIFIC INDUSTRIAL TRADING CORP. and/or INTER PACIFIC TRADING CORP. and/or
STRONG SPORTS GEAR CO., LTD., and/or STRONGSHOES WAREHOUSE and/or STRONG
FASHION SHOES TRADING and/or TAN TUAN HONG and/or VIOLETA T. MAGAYAGA and/or
JEFFREY R. MORALES and/or any of its other proprietor/s, directors, officers, employees
and/or occupants of its premises located at S-7, Ed & Joe's Commercial Arcade, No. 153
Quirino Avenue, Paraaque City, Respondents.
RESOLUTION
PERALTA, J.:
For resolution are the twin Motions for Reconsideration1 filed by petitioner and petitioner-intervenor
from the Decision rendered in favor of respondents, dated November 30, 2006.
At the outset, a brief narration of the factual and procedural antecedents that transpired and led to
the filing of the motions is in order.

The present controversy arose when petitioner filed with Branch 24 of the Regional Trial Court (RTC)
of Manila an application for the issuance of search warrants against an outlet and warehouse
operated by respondents for infringement of trademark under Section 155, in relation to Section 170
of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines. 2 In
the course of its business, petitioner has registered the trademark "SKECHERS" 3 and the trademark
"S" (within an oval design)4 with the Intellectual Property Office (IPO).
Two search warrants5 were issued by the RTC and were served on the premises of respondents. As
a result of the raid, more than 6,000 pairs of shoes bearing the "S" logo were seized.
Later, respondents moved to quash the search warrants, arguing that there was no confusing
similarity between petitioners "Skechers" rubber shoes and its "Strong" rubber shoes.
On November 7, 2002, the RTC issued an Order6 quashing the search warrants and directing the
NBI to return the seized goods. The RTC agreed with respondents view that Skechers rubber shoes
and Strong rubber shoes have glaring differences such that an ordinary prudent purchaser would not
likely be misled or confused in purchasing the wrong article.
Aggrieved, petitioner filed a petition for certiorari7 with the Court of Appeals (CA) assailing the RTC
Order. On November 17, 2003, the CA issued a Decision8 affirming the ruling of the RTC.
Subsequently, petitioner filed the present petition 9 before this Court which puts forth the following
assignment of errors:
A. WHETHER THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
IN CONSIDERING MATTERS OF DEFENSE IN A CRIMINAL TRIAL FOR TRADEMARK
INFRINGEMENT IN PASSING UPON THE VALIDITY OF THE SEARCH WARRANT WHEN
IT SHOULD HAVE LIMITED ITSELF TO A DETERMINATION OF WHETHER THE TRIAL
COURT COMMITTED GRAVE ABUSE OF DISCRETION IN QUASHING THE SEARCH
WARRANTS.
B. WHETHER THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
IN FINDING THAT RESPONDENTS ARE NOT GUILTY OF TRADEMARK INFRINGEMENT
IN THE CASE WHERE THE SOLE TRIABLE ISSUE IS THE EXISTENCE OF PROBABLE
CAUSE TO ISSUE A SEARCH WARRANT.10
In the meantime, petitioner-intervenor filed a Petition-in-Intervention 11 with this Court claiming to be
the sole licensed distributor of Skechers products here in the Philippines.
On November 30, 2006, this Court rendered a Decision12 dismissing the petition.
Both petitioner and petitioner-intervenor filed separate motions for reconsideration.
In petitioners motion for reconsideration, petitioner moved for a reconsideration of the earlier
decision on the following grounds:
(a) THIS HONORABLE COURT MUST RE-EXAMINE THE FACTS OF THIS CASE DUE TO
THE SIGNIFICANCE AND REPERCUSSIONS OF ITS DECISION.
(b) COMMERCIAL QUANTITIES OF THE SEIZED ITEMS WITH THE UNAUTHORIZED
REPRODUCTIONS OF THE "S" TRADEMARK OWNED BY PETITIONER WERE

INTENDED FOR DISTRIBUTION IN THE PHILIPPINE MARKET TO THE DETRIMENT OF

PETITIONER RETURNING THE GOODS TO RESPONDENTS WILL ADVERSELY
AFFECT THE GOODWILL AND REPUTATION OF PETITIONER.
(c) THE SEARCH WARRANT COURT AND THE COURT OF APPEALS BOTH ACTED
WITH GRAVE ABUSE OF DISCRETION.
(d) THE SEARCH WARRANT COURT DID NOT PROPERLY RE-EVALUATE THE
EVIDENCE PRESENTED DURING THE SEARCH WARRANT APPLICATION
PROCEEDINGS.
(e) THE SOLID TRIANGLE CASE IS NOT APPLICABLE IN THIS CASE, AS IT IS BASED
ON A DIFFERENT FACTUAL MILIEU. PRELIMINARY FINDING OF GUILT (OR ABSENCE
THEREOF) MADE BY THE SEARCH WARRANT COURT AND THE COURT OF APPEALS
WAS IMPROPER.
(f) THE SEARCH WARRANT COURT OVERSTEPPED ITS DISCRETION. THE LAW IS
CLEAR. THE DOMINANCY TEST SHOULD BE USED.
(g) THE COURT OF APPEALS COMMITTED ERRORS OF JURISDICTION.13
On the other hand, petitioner-intervenors motion for reconsideration raises the following errors for
this Courts consideration, to wit:
(a) THE COURT OF APPEALS AND THE SEARCH WARRANT COURT ACTED
CONTRARY TO LAW AND JURISPRUDENCE IN ADOPTING THE ALREADY-REJECTED
HOLISTIC TEST IN DETERMINING THE ISSUE OF CONFUSING SIMILARITY;
(b) THE COURT OF APPEALS AND THE SEARCH WARRANT COURT ACTED
CONTRARY TO LAW IN HOLDING THAT THERE IS NO PROBABLE CAUSE FOR
TRADEMARK INFRINGEMENT; AND
(c) THE COURT OF APPEALS SANCTIONED THE TRIAL COURTS DEPARTURE FROM
THE USUAL AND ACCEPTED COURSE OF JUDICIAL PROCEEDINGS WHEN IT UPHELD
THE QUASHAL OF THE SEARCH WARRANT ON THE BASIS SOLELY OF A FINDING
THAT THERE IS NO CONFUSING SIMILARITY.14
A perusal of the motions submitted by petitioner and petitioner-intervenor would show that the
primary issue posed by them dwells on the issue of whether or not respondent is guilty of trademark
infringement.
After a thorough review of the arguments raised herein, this Court reconsiders its earlier decision.
The basic law on trademark, infringement, and unfair competition is Republic Act (R.A.) No. 8293.
Specifically, Section 155 of R.A. No. 8293 states:
Remedies; Infringement. Any person who shall, without the consent of the owner of the registered
mark:
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered
mark or the same container or a dominant feature thereof in connection with the sale, offering for

sale, distribution, advertising of any goods or services including other preparatory steps necessary to
carry out the sale of any goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall
be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts stated in Subsection
155.1 or this subsection are committed regardless of whether there is actual sale of goods or
services using the infringing material.15
The essential element of infringement under R.A. No. 8293 is that the infringing mark is likely to
cause confusion. In determining similarity and likelihood of confusion, jurisprudence has developed
tests the Dominancy Test and the Holistic or Totality Test. The Dominancy Test focuses on the
similarity of the prevalent or dominant features of the competing trademarks that might cause
confusion, mistake, and deception in the mind of the purchasing public. Duplication or imitation is not
necessary; neither is it required that the mark sought to be registered suggests an effort to imitate.
Given more consideration are the aural and visual impressions created by the marks on the buyers
of goods, giving little weight to factors like prices, quality, sales outlets, and market segments. 16
In contrast, the Holistic or Totality Test necessitates a consideration of the entirety of the marks as
applied to the products, including the labels and packaging, in determining confusing similarity. The
discerning eye of the observer must focus not only on the predominant words, but also on the other
features appearing on both labels so that the observer may draw conclusion on whether one is
confusingly similar to the other.17
Relative to the question on confusion of marks and trade names, jurisprudence has noted two (2)
types of confusion, viz.: (1) confusion of goods (product confusion), where the ordinarily prudent
purchaser would be induced to purchase one product in the belief that he was purchasing the other;
and (2) confusion of business (source or origin confusion), where, although the goods of the parties
are different, the product, the mark of which registration is applied for by one party, is such as might
reasonably be assumed to originate with the registrant of an earlier product, and the public would
then be deceived either into that belief or into the belief that there is some connection between the
two parties, though inexistent. 18
Applying the Dominancy Test to the case at bar, this Court finds that the use of the stylized "S" by
respondent in its Strong rubber shoes infringes on the mark already registered by petitioner with the
IPO. While it is undisputed that petitioners stylized "S" is within an oval design, to this Courts mind,
the dominant feature of the trademark is the stylized "S," as it is precisely the stylized "S" which
catches the eye of the purchaser. Thus, even if respondent did not use an oval design, the mere fact
that it used the same stylized "S", the same being the dominant feature of petitioners trademark,
already constitutes infringement under the Dominancy Test.
This Court cannot agree with the observation of the CA that the use of the letter "S" could hardly be
considered as highly identifiable to the products of petitioner alone. The CA even supported its
conclusion by stating that the letter "S" has been used in so many existing trademarks, the most
popular of which is the trademark "S" enclosed by an inverted triangle, which the CA says is
identifiable to Superman. Such reasoning, however, misses the entire point, which is that respondent
had used a stylized "S," which is the same stylized "S" which petitioner has a registered trademark

for. The letter "S" used in the Superman logo, on the other hand, has a block-like tip on the upper
portion and a round elongated tip on the lower portion. Accordingly, the comparison made by the CA
of the letter "S" used in the Superman trademark with petitioners stylized "S" is not appropriate to
the case at bar.
Furthermore, respondent did not simply use the letter "S," but it appears to this Court that based on
the font and the size of the lettering, the stylized "S" utilized by respondent is the very same stylized
"S" used by petitioner; a stylized "S" which is unique and distinguishes petitioners trademark.
Indubitably, the likelihood of confusion is present as purchasers will associate the respondents use
of the stylized "S" as having been authorized by petitioner or that respondents product is connected
with petitioners business.
Both the RTC and the CA applied the Holistic Test in ruling that respondent had not infringed
petitioners trademark. For its part, the RTC noted the following supposed dissimilarities between the
shoes, to wit:
1. The mark "S" found in Strong Shoes is not enclosed in an "oval design."
2. The word "Strong" is conspicuously placed at the backside and insoles.
3. The hang tags and labels attached to the shoes bears the word "Strong" for respondent
and "Skechers U.S.A." for private complainant;
4. Strong shoes are modestly priced compared to the costs of Skechers Shoes. 19
While there may be dissimilarities between the appearances of the shoes, to this Courts mind such
dissimilarities do not outweigh the stark and blatant similarities in their general features. As can be
readily observed by simply comparing petitioners Energy20 model and respondents Strong21 rubber
shoes, respondent also used the color scheme of blue, white and gray utilized by petitioner. Even
the design and "wavelike" pattern of the midsole and outer sole of respondents shoes are very
similar to petitioners shoes, if not exact patterns thereof. At the side of the midsole near the heel of
both shoes are two elongated designs in practically the same location. Even the outer soles of both
shoes have the same number of ridges, five at the back and six in front. On the side of respondents
shoes, near the upper part, appears the stylized "S," placed in the exact location as that of the
stylized "S" on petitioners shoes. On top of the "tongue" of both shoes appears the stylized "S" in
practically the same location and size. Moreover, at the back of petitioners shoes, near the heel
counter, appears "Skechers Sport Trail" written in white lettering. However, on respondents shoes
appears "Strong Sport Trail" noticeably written in the same white lettering, font size, direction and
orientation as that of petitioners shoes. On top of the heel collar of petitioners shoes are two
grayish-white semi-transparent circles. Not surprisingly, respondents shoes also have two grayishwhite semi-transparent circles in the exact same location.
lihpwa1

Based on the foregoing, this Court is at a loss as to how the RTC and the CA, in applying the holistic
test, ruled that there was no colorable imitation, when it cannot be any more clear and apparent to
this Court that there is colorable imitation. The dissimilarities between the shoes are too trifling and
frivolous that it is indubitable that respondents products will cause confusion and mistake in the
eyes of the public. Respondents shoes may not be an exact replica of petitioners shoes, but the
features and overall design are so similar and alike that confusion is highly likely.
1avvphi1

In Converse Rubber Corporation v. Jacinto Rubber & Plastic Co., Inc., 22 this Court, in a case for
unfair competition, had opined that even if not all the details are identical, as long as the general

appearance of the two products are such that any ordinary purchaser would be deceived, the
imitator should be liable, to wit:
From said examination, We find the shoes manufactured by defendants to contain, as found by the
trial court, practically all the features of those of the plaintiff Converse Rubber Corporation and
manufactured, sold or marketed by plaintiff Edwardson Manufacturing Corporation, except for their
respective brands, of course. We fully agree with the trial court that "the respective designs, shapes,
the colors of the ankle patches, the bands, the toe patch and the soles of the two products are
exactly the same ... (such that) at a distance of a few meters, it is impossible to distinguish
"Custombuilt" from "Chuck Taylor." These elements are more than sufficient to serve as basis for a
charge of unfair competition. Even if not all the details just mentioned were identical, with the general
appearances alone of the two products, any ordinary, or even perhaps even a not too perceptive and
discriminating customer could be deceived, and, therefore, Custombuilt could easily be passed off
for Chuck Taylor. Jurisprudence supports the view that under such circumstances, the imitator must
be held liable. x x x23
Neither can the difference in price be a complete defense in trademark infringement. In McDonalds
Corporation v. L.C. Big Mak Burger. Inc.,24 this Court held:
Modern law recognizes that the protection to which the owner of a trademark is entitled is not limited
to guarding his goods or business from actual market competition with identical or similar products of
the parties, but extends to all cases in which the use by a junior appropriator of a trade-mark or
trade-name is likely to lead to a confusion of source, as where prospective purchasers would be
misled into thinking that the complaining party has extended his business into the field (see 148 ALR
56 et seq; 53 Am. Jur. 576) or is in any way connected with the activities of the infringer; or when it
forestalls the normal potential expansion of his business (v. 148 ALR 77, 84; 52 Am. Jur. 576, 577). x
x x25
Indeed, the registered trademark owner may use its mark on the same or similar products, in
different segments of the market, and at different price levels depending on variations of the
products for specific segments of the market.26 The purchasing public might be mistaken in thinking
that petitioner had ventured into a lower market segment such that it is not inconceivable for the
public to think that Strong or Strong Sport Trail might be associated or connected with petitioners
brand, which scenario is plausible especially since both petitioner and respondent manufacture
rubber shoes.
Withal, the protection of trademarks as intellectual property is intended not only to preserve the
goodwill and reputation of the business established on the goods bearing the mark through actual
use over a period of time, but also to safeguard the public as consumers against confusion on these
goods.27 While respondents shoes contain some dissimilarities with petitioners shoes, this Court
cannot close its eye to the fact that for all intents and purpose, respondent had deliberately
attempted to copy petitioners mark and overall design and features of the shoes. Let it be
remembered, that defendants in cases of infringement do not normally copy but only make colorable
changes.28 The most successful form of copying is to employ enough points of similarity to confuse
the public, with enough points of difference to confuse the courts.29
WHEREFORE, premises considered, the Motion for Reconsideration is GRANTED. The Decision
dated November 30, 2006 is RECONSIDERED and SET ASIDE.
SO ORDERED.

U.S. Supreme Court

DIAMOND v. CHAKRABARTY, 447 U.S. 303 (1980)
447 U.S. 303
DIAMOND, COMMISSIONER OF PATENTS AND TRADEMARKS v. CHAKRABARTY.
CERTIORARI TO THE UNITED STATES COURT OF CUSTOMS AND PATENT APPEALS.
No. 79-136.
Argued March 17, 1980.
Decided June 16, 1980.
Title 35 U.S.C. 101 provides for the issuance of a patent to a person who invents or discovers "any" new
and useful "manufacture" or "composition of matter." Respondent filed a patent application relating to his
invention of a human-made, genetically engineered bacterium capable of breaking down crude oil, a
property which is possessed by no naturally occurring bacteria. A patent examiner's rejection of the patent
application's claims for the new bacteria was affirmed by the Patent Office Board of Appeals on the
ground that living things are not patentable subject matter under 101. The Court of Customs and Patent
Appeals reversed, concluding that the fact that micro-organisms are alive is without legal significance for
purposes of the patent law.
Held:
A live, human-made micro-organism is patentable subject matter under 101. Respondent's microorganism constitutes a "manufacture" or "composition of matter" within that statute. Pp. 308-318.
(a) In choosing such expansive terms as "manufacture" and "composition of matter," modified by the
comprehensive "any," Congress contemplated that the patent laws should be given wide scope, and the
relevant legislative history also supports a broad construction. While laws of nature, physical phenomena,
and abstract ideas are not patentable, respondent's claim is not to a hitherto unknown natural
phenomenon, but to a nonnaturally occurring manufacture or composition of matter - a product of
human ingenuity "having a distinctive name, character [and] use." Hartranft v. Wiegmann,121 U.S. 609,
615 . Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 , distinguished. Pp. 308-310.
(b) The passage of the 1930 Plant Patent Act, which afforded patent protection to certain asexually
reproduced plants, and the 1970 Plant Variety Protection Act, which authorized protection for certain
sexually reproduced plants but excluded bacteria from its protection, does not evidence congressional
understanding that the terms "manufacture" or "composition of matter" in 101 do not include living
things. Pp. 310-314. [447 U.S. 303, 304]
(c) Nor does the fact that genetic technology was unforeseen when Congress enacted 101 require the
conclusion that micro-organisms cannot qualify as patentable subject matter until Congress expressly

authorizes such protection. The unambiguous language of 101 fairly embraces respondent's invention.
Arguments against patentability under 101, based on potential hazards that may be generated by genetic
research, should be addressed to the Congress and the Executive, not to the Judiciary. Pp. 314-318.
596 F.2d 952, affirmed.
BURGER, C. J., delivered the opinion of the Court, in which STEWART, BLACKMUN, REHNQUIST, and
STEVENS, JJ., joined. BRENNAN, J., filed a dissenting opinion, in which WHITE, MARSHALL, and
POWELL, JJ., joined, post, p. 318.
Deputy Solicitor General Wallace argued the cause for petitioner. With him on the brief were Solicitor
General McCree, Assistant Attorney General Shenefield, Harriet S. Shapiro, Robert B. Nicholson, Frederic
Freilicher, and Joseph F. Nakamura.
Edward F. McKie, Jr., argued the cause for respondent. With him on the brief were Leo I. MaLossi,
William E. Schuyler, Jr., and Dale H. Hoscheit. *
[ Footnote * ] Leonard S. Rubenstein filed a brief for the Peoples Business Commission as amicus curiae
urging reversal.
Briefs of amici curiae urging affirmance were filed by George W. Whitney, Bruce M. Collins, and Karl F.
Jorda for the American Patent Law Association, Inc.; by Thomas D. Kiley for Genentech, Inc.; by Jerome
G. Lee, William F. Dudine, Jr., and Paul H. Heller for the New York Patent Law Association, Inc.; by Peter
R. Taft, Joseph A. Keyes, Jr., and Sheldon Elloit Steinbach for Dr. Leroy E. Hood et al.; and by Lorance L.
Greenlee for Dr. George Pieczenik.
Briefs of amici curiae were filed by William I. Althen for the American Society for Microbiology; by
Donald R. Dunner for the Pharmaceutical Manufacturers Association; by Edward S. Irons, Mary Helen
Sears, and Donald Reidhaar for the Regents of the University of California; and by Cornell D. Cornish, pro
se. [447 U.S. 303, 305]
MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to determine whether a live, human-made micro-organism is patentable subject
matter under 35 U.S.C. 101.

I
In 1972, respondent Chakrabarty, a microbiologist, filed a patent application, assigned to the General
Electric Co. The application asserted 36 claims related to Chakrabarty's invention of "a bacterium from
the genus Pseudomonas containing therein at least two stable energy-generating plasmids, each of said
plasmids providing a separate hydrocarbon degradative pathway." 1 This human-made, genetically
engineered bacterium is capable of breaking down multiple components of crude oil. Because of this
property, which is possessed by no naturally occurring bacteria, Chakrabarty's invention is believed to
have significant value for the treatment of oil spills. 2

Chakrabarty's patent claims were of three types: first, process claims for the method of producing the
bacteria; [447 U.S. 303, 306] second, claims for an inoculum comprised of a carrier material floating on
water, such as straw, and the new bacteria; and third, claims to the bacteria themselves. The patent
examiner allowed the claims falling into the first two categories, but rejected claims for the bacteria. His
decision rested on two grounds: (1) that micro-organisms are "products of nature," and (2) that as living
things they are not patentable subject matter under 35 U.S.C. 101.
Chakrabarty appealed the rejection of these claims to the Patent Office Board of Appeals, and the Board
affirmed the examiner on the second ground. 3 Relying on the legislative history of the 1930 Plant Patent
Act, in which Congress extended patent protection to certain asexually reproduced plants, the Board
concluded that 101 was not intended to cover living things such as these laboratory created microorganisms.
The Court of Customs and Patent Appeals, by a divided vote, reversed on the authority of its prior decision
in In re Bergy, 563 F.2d 1031, 1038 (1977), which held that "the fact that microorganisms . . . are alive . . .
[is] without legal significance" for purposes of the patent law. 4 Subsequently, we granted the Acting
Commissioner of Patents and Trademarks' petition for certiorari in Bergy, vacated the judgment, and
remanded the case "for further consideration in light of Parker v. Flook, 437 U.S. 584(1978)." 438 U.S.
902 (1978). The Court of Customs and Patent Appeals then vacated its judgment in Chakrabarty and
consolidated the case with Bergy for reconsideration. After re-examining both cases in the light of our
holding in Flook, that court, with one dissent, reaffirmed its earlier judgments. 596 F.2d 952 (1979). [447
U.S. 303, 307]
The Commissioner of Patents and Trademarks again sought certiorari, and we granted the writ as to both
Bergy and Chakrabarty. 444 U.S. 924 (1979). Since then, Bergy has been dismissed as moot, 444 U.S.
1028 (1980), leaving only Chakrabarty for decision.

II
The Constitution grants Congress broad power to legislate to "promote the Progress of Science and useful
Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective
Writings and Discoveries." Art. I, 8, cl. 8. The patent laws promote this progress by offering inventors
exclusive rights for a limited period as an incentive for their inventiveness and research efforts. Kewanee
Oil Co. v. Bicron Corp., 416 U.S. 470, 480 -481 (1974); Universal Oil Co. v. Globe Co.,322 U.S. 471,
484 (1944). The authority of Congress is exercised in the hope that "[t]he productive effort thereby
fostered will have a positive effect on society through the introduction of new products and processes of
manufacture into the economy, and the emanations by way of increased employment and better lives for
our citizens." Kewanee, supra, at 480.
The question before us in this case is a narrow one of statutory interpretation requiring us to construe 35
U.S.C. 101, which provides:
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of
matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the
conditions and requirements of this title."

Specifically, we must determine whether respondent's micro-organism constitutes a "manufacture" or

"composition of matter" within the meaning of the statute. 5 [447 U.S. 303, 308]

III
In cases of statutory construction we begin, of course, with the language of the statute. Southeastern
Community College v. Davis, 442 U.S. 397, 405 (1979). And "unless otherwise defined, words will be
interpreted as taking their ordinary, contemporary, common meaning." Perrin v. United States, 444 U.S.
37, 42 (1979). We have also cautioned that courts "should not read into the patent laws limitations and
conditions which the legislature has not expressed." United States v. Dubilier Condenser Corp., 289 U.S.
178, 199 (1933).
Guided by these canons of construction, this Court has read the term "manufacture" in 101 in accordance
with its dictionary definition to mean "the production of articles for use from raw or prepared materials by
giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by
machinery." American Fruit Growers, Inc. v. Brogdex Co., 283 U.S. 1, 11(1931). Similarly, "composition of
matter" has been construed consistent with its common usage to include "all compositions of two or more
substances and . . . all composite articles, whether they be the results of chemical union, or of mechanical
mixture, or whether they be gases, fluids, powders or solids." Shell Development Co. v. Watson, 149 F.
Supp. 279, 280 (DC 1957) (citing 1 A. Deller, Walker on Patents 14, p. 55 (1st ed. 1937)). In choosing such
expansive terms as "manufacture" and "composition of matter," modified by the comprehensive "any,"
Congress plainly contemplated that the patent laws would be given wide scope.
The relevant legislative history also supports a broad construction. The Patent Act of 1793, authored by
Thomas Jefferson, defined statutory subject matter as "any new and useful art, machine, manufacture, or
composition of matter, or any new or useful improvement [thereof]." Act of Feb. 21, 1793, 1, 1 Stat. 319.
The Act embodied Jefferson's philosophy that "ingenuity should receive a liberal encouragement." [447
U.S. 303, 309] 5 Writings of Thomas Jefferson 75-76 (Washington ed. 1871). See Graham v. John Deere
Co., 383 U.S. 1, 7 -10 (1966). Subsequent patent statutes in 1836, 1870 and 1874 employed this same
broad language. In 1952, when the patent laws were recodified, Congress replaced the word "art" with
"process," but otherwise left Jefferson's language intact. The Committee Reports accompanying the 1952
Act inform us that Congress intended statutory subject matter to "include anything under the sun that is
made by man." S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6
(1952). 6
This is not to suggest that 101 has no limits or that it embraces every discovery. The laws of nature,
physical phenomena, and abstract ideas have been held not patentable. See Parker v. Flook, 437 U.S.
584 (1978); Gottschalk v. Benson, 409 U.S. 63, 67 (1972); Funk Brothers Seed Co. v. Kalo Inoculant
Co., 333 U.S. 127, 130 (1948); O'Reilly v. Morse, 15 How. 62, 112-121 (1854); Le Roy v. Tatham, 14 How.
156, 175 (1853). Thus, a new mineral discovered in the earth or a new plant found in the wild is not
patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2.; nor could
Newton have patented the law of gravity. Such discoveries are "manifestations of . . . nature, free to all
men and reserved exclusively to none." Funk, supra, at 130.

Judged in this light, respondent's micro-organism plainly qualifies as patentable subject matter. His claim
is not to a hitherto unknown natural phenomenon, but to a nonnaturally occurring manufacture or
composition of matter - a product of human ingenuity "having a distinctive name, character [and][447
U.S. 303, 310] use." Hartranft v. Wiegmann, 121 U.S. 609, 615 (1887). The point is underscored
dramatically by comparison of the invention here with that in Funk. There, the patentee had discovered
that there existed in nature certain species of root-nodule bacteria which did not exert a mutually
inhibitive effect on each other. He used that discovery to produce a mixed culture capable of inoculating
the seeds of leguminous plants. Concluding that the patentee had discovered "only some of the handiwork
of nature," the Court ruled the product nonpatentable:
"Each of the species of root-nodule bacteria contained in the package infects the same group of
leguminous plants which it always infected. No species acquires a different use. The combination of
species produces no new bacteria, no change in the six species of bacteria, and no enlargement of the
range of their utility. Each species has the same effect it always had. The bacteria perform in their natural
way. Their use in combination does not improve in any way their natural functioning. They serve the ends
nature originally provided and act quite independently of any effort of the patentee."333 U.S., at 131 .
Here, by contrast, the patentee has produced a new bacterium with markedly different characteristics
from any found in nature and one having the potential for significant utility. His discovery is not nature's
handiwork, but his own; accordingly it is patentable subject matter under 101.

IV
Two contrary arguments are advanced, neither of which we find persuasive.

(A)
The petitioner's first argument rests on the enactment of the 1930 Plant Patent Act, which afforded patent
protection to certain asexually reproduced plants, and the 1970 Plant [447 U.S. 303, 311] Variety
Protection Act, which authorized protection for certain sexually reproduced plants but excluded bacteria
from its protection. 7 In the petitioner's view, the passage of these Acts evidences congressional
understanding that the terms "manufacture" or "composition of matter" do not include living things; if
they did, the petitioner argues, neither Act would have been necessary.
We reject this argument. Prior to 1930, two factors were thought to remove plants from patent protection.
The first was the belief that plants, even those artificially bred, were products of nature for purposes of the
patent law. This position appears to have derived from the decision of the Patent Office in Ex parte
Latimer, 1889 Dec. Com. Pat. 123, in which a patent claim for fiber found in the needle of the Pinus
australis was rejected. The Commissioner reasoned that a contrary result would permit "patents [to] be
obtained upon the trees of the forest and the plants of the earth, which of course would be unreasonable
and impossible." Id., at 126. The Latimer case, it seems, came to "se[t] forth the general stand taken in
these matters" that plants were natural products not subject to patent protection. Thorne, Relation of
Patent Law to Natural Products, 6 J. Pat. Off. Soc. 23, 24 [447 U.S. 303, 312] (1923). 8 The second
obstacle to patent protection for plants was the fact that plants were thought not amenable to the "written
description" requirement of the patent law. See 35 U.S.C. 112. Because new plants may differ from old
only in color or perfume, differentiation by written description was often impossible. See Hearings on H.

R. 11372 before the House Committee on Patents, 71st Cong., 2d Sess., 7 (1930) (memorandum of Patent
Commissioner Robertson).
In enacting the Plant Patent Act, Congress addressed both of these concerns. It explained at length its
belief that the work of the plant breeder "in aid of nature" was patentable invention. S. Rep. No. 315, 71st
Cong., 2d Sess., 6-8 (1930); H. R. Rep. No. 1129, 71st Cong., 2d Sess., 7-9 (1930). And it relaxed the
written description requirement in favor of "a description . . . as complete as is reasonably possible." 35
U.S.C. 162. No Committee or Member of Congress, however, expressed the broader view, now urged by
the petitioner, that the terms "manufacture" or "composition of matter" exclude living things. The sole
support for that position in the legislative history of the 1930 Act is found in the conclusory statement of
Secretary of Agriculture Hyde, in a letter to the Chairmen of the House and Senate Committees
considering the 1930 Act, that "the patent laws . . . at the present time are understood to cover only
inventions or discoveries in the field of inanimate nature." See S. Rep. No. 315, supra, at Appendix A; H.
R. Rep. No. 1129, supra, at Appendix A. Secretary Hyde's opinion, however, is not entitled to controlling
weight. His views were solicited on the administration of the new law and not on the scope of
patentable [447 U.S. 303, 313] subject matter - an area beyond his competence. Moreover, there is
language in the House and Senate Committee Reports suggesting that to the extent Congress considered
the matter it found the Secretary's dichotomy unpersuasive. The Reports observe:
"There is a clear and logical distinction between the discovery of a new variety of plant and of certain
inanimate things, such, for example, as a new and useful natural mineral. The mineral is created wholly by
nature unassisted by man. . . . On the other hand, a plant discovery resulting from cultivation is unique,
isolated, and is not repeated by nature, nor can it be reproduced by nature unaided by man. . . ." S. Rep.
No. 315, supra, at 6; H. R. Rep. No. 1129, supra, at 7 (emphasis added).
Congress thus recognized that the relevant distinction was not between living and inanimate things, but
between products of nature, whether living or not, and human-made inventions. Here, respondent's
micro-organism is the result of human ingenuity and research. Hence, the passage of the Plant Patent Act
affords the Government no support.
Nor does the passage of the 1970 Plant Variety Protection Act support the Government's position. As the
Government acknowledges, sexually reproduced plants were not included under the 1930 Act because
new varieties could not be reproduced true-to-type through seedlings. Brief for Petitioner 27, n. 31. By
1970, however, it was generally recognized that true-to-type reproduction was possible and that plant
patent protection was therefore appropriate. The 1970 Act extended that protection. There is nothing in
its language or history to suggest that it was enacted because 101 did not include living things.
In particular, we find nothing in the exclusion of bacteria from plant variety protection to support the
petitioner's position. See n. 7, supra. The legislative history gives no reason for this exclusion. As the Court
of Customs and [447 U.S. 303, 314] Patent Appeals suggested, it may simply reflect congressional
agreement with the result reached by that court in deciding In re Arzberger, 27 C. C. P. A. (Pat.) 1315, 112
F.2d 834 (1940), which held that bacteria were not plants for the purposes of the 1930 Act. Or it may
reflect the fact that prior to 1970 the Patent Office had issued patents for bacteria under 101. 9 In any
event, absent some clear indication that Congress "focused on [the] issues . . . directly related to the one
presently before the Court," SEC v. Sloan, 436 U.S. 103, 120 -121 (1978), there is no basis for reading into

its actions an intent to modify the plain meaning of the words found in 101. See TVA v. Hill, 437 U.S. 153,
189 -193 (1978); United States v. Price, 361 U.S. 304, 313 (1960).

(B)
The petitioner's second argument is that micro-organisms cannot qualify as patentable subject matter
until Congress expressly authorizes such protection. His position rests on the fact that genetic technology
was unforeseen when Congress enacted 101. From this it is argued that resolution of the patentability of
inventions such as respondent's should be left to Congress. The legislative process, the petitioner argues,
is best equipped to weigh the competing economic, social, and scientific considerations involved, and to
determine whether living organisms produced by genetic engineering should receive patent protection. In
support of this position, the petitioner relies on our recent holding in Parker v. Flook, 437 U.S. 584 (1978),
and the statement that the judiciary "must proceed cautiously when . . . asked to extend [447 U.S. 303,
315] patent rights into areas wholly unforeseen by Congress." Id., at 596.
It is, of course, correct that Congress, not the courts, must define the limits of patentability; but it is
equally true that once Congress has spoken it is "the province and duty of the judicial department to say
what the law is." Marbury v. Madison, 1 Cranch 137, 177 (1803). Congress has performed its constitutional
role in defining patentable subject matter in 101; we perform ours in construing the language Congress
has employed. In so doing, our obligation is to take statutes as we find them, guided, if ambiguity appears,
by the legislative history and statutory purpose. Here, we perceive no ambiguity. The subject-matter
provisions of the patent law have been cast in broad terms to fulfill the constitutional and statutory goal of
promoting "the Progress of Science and the useful Arts" with all that means for the social and economic
benefits envisioned by Jefferson. Broad general language is not necessarily ambiguous when
congressional objectives require broad terms.
Nothing in Flook is to the contrary. That case applied our prior precedents to determine that a "claim for
an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter
under 101." 437 U.S., at 595 , n. 18. The Court carefully scrutinized the claim at issue to determine
whether it was precluded from patent protection under "the principles underlying the prohibition against
patents for `ideas' or phenomena of nature." Id., at 593. We have done that here. Flook did not announce
a new principle that inventions in areas not contemplated by Congress when the patent laws were enacted
are unpatentable per se.
To read that concept into Flook would frustrate the purposes of the patent law. This Court frequently has
observed that a statute is not to be confined to the "particular application[s] . . . contemplated by the
legislators." Barr v. United States, 324 U.S. 83, 90 (1945). Accord, Browder v. United States, 312 U.S. 335,
339 (1941); Puerto Rico v. Shell Co., [447 U.S. 303, 316] 302 U.S. 253, 257 (1937). This is especially true
in the field of patent law. A rule that unanticipated inventions are without protection would conflict with
the core concept of the patent law that anticipation undermines patentability. See Graham v. John Deere
Co., 383 U.S., at 12 -17. Mr. Justice Douglas reminded that the inventions most benefiting mankind are
those that "push back the frontiers of chemistry, physics, and the like." Great A. & P. Tea Co. v.
Supermarket Corp., 340 U.S. 147, 154 (1950) (concurring opinion). Congress employed broad general
language in drafting 101 precisely because such inventions are often unforeseeable. 10

To buttress his argument, the petitioner, with the support of amicus, points to grave risks that may be
generated by research endeavors such as respondent's. The briefs present a gruesome parade of horribles.
Scientists, among them Nobel laureates, are quoted suggesting that genetic research may pose a serious
threat to the human race, or, at the very least, that the dangers are far too substantial to permit such
research to proceed apace at this time. We are told that genetic research and related technological
developments may spread pollution and disease, that it may result in a loss of genetic diversity, and that
its practice may tend to depreciate the value of human life. These arguments are forcefully, even
passionately, presented; they remind us that, at times, human ingenuity seems unable to control fully the
forces it creates - that, with Hamlet, it is sometimes better "to bear those ills we have than fly to others
that we know not of."
It is argued that this Court should weigh these potential hazards in considering whether respondent's
invention is [447 U.S. 303, 317] patentable subject matter under 101. We disagree. The grant or denial of
patents on micro-organisms is not likely to put an end to genetic research or to its attendant risks. The
large amount of research that has already occurred when no researcher had sure knowledge that patent
protection would be available suggests that legislative or judicial fiat as to patentability will not deter the
scientific mind from probing into the unknown any more than Canute could command the tides. Whether
respondent's claims are patentable may determine whether research efforts are accelerated by the hope of
reward or slowed by want of incentives, but that is all.
What is more important is that we are without competence to entertain these arguments - either to brush
them aside as fantasies generated by fear of the unknown, or to act on them. The choice we are urged to
make is a matter of high policy for resolution within the legislative process after the kind of investigation,
examination, and study that legislative bodies can provide and courts cannot. That process involves the
balancing of competing values and interests, which in our democratic system is the business of elected
representatives. Whatever their validity, the contentions now pressed on us should be addressed to the
political branches of the Government, the Congress and the Executive, and not to the courts. 11 [447 U.S.
303, 318]
We have emphasized in the recent past that "[o]ur individual appraisal of the wisdom or unwisdom of a
particular [legislative] course . . . is to be put aside in the process of interpreting a statute." TVA v. Hill,437
U.S., at 194 . Our task, rather, is the narrow one of determining what Congress meant by the words it used
in the statute; once that is done our powers are exhausted. Congress is free to amend 101 so as to exclude
from patent protection organisms produced by genetic engineering. Cf. 42 U.S.C. 2181 (a), exempting
from patent protection inventions "useful solely in the utilization of special nuclear material or atomic
energy in an atomic weapon." Or it may choose to craft a statute specifically designed for such living
things. But, until Congress takes such action, this Court must construe the language of 101 as it is. The
language of that section fairly embraces respondent's invention.
Accordingly, the judgment of the Court of Customs and Patent Appeals is
Affirmed.

Footnotes
[ Footnote 1 ] Plasmids are hereditary units physically separate from the chromosomes of the cell. In prior
research, Chakrabarty and an associate discovered that plasmids control the oil degradation abilities of
certain bacteria. In particular, the two researchers discovered plasmids capable of degrading camphor and
octane, two components of crude oil. In the work represented by the patent application at issue here,
Chakrabarty discovered a process by which four different plasmids, capable of degrading four different oil
components, could be transferred to and maintained stably in a single Pseudomonas bacterium, which
itself has no capacity for degrading oil.
[ Footnote 2 ] At present, biological control of oil spills requires the use of a mixture of naturally occurring
bacteria, each capable of degrading one component of the oil complex. In this way, oil is decomposed into
simpler substances which can serve as food for aquatic life. However, for various reasons, only a portion
of any such mixed culture survives to attack the oil spill. By breaking down multiple components of oil,
Chakrabarty's micro-organism promises more efficient and rapid oil-spill control.
[ Footnote 3 ] The Board concluded that the new bacteria were not "products of nature," because
Pseudomonas bacteria containing two or more different energy-generating plasmids are not naturally
occurring.
[ Footnote 4 ] Bergy involved a patent application for a pure culture of the micro-organism Streptomyces
vellosus found to be useful in the production of lincomycin, an antibiotic.
[ Footnote 5 ] This case does not involve the other "conditions and requirements" of the patent laws, such
as novelty and nonobviousness. 35 U.S.C. 102, 103.
[ Footnote 6 ] This same language was employed by P. J. Federico, a principal draftsman of the 1952
recodification, in his testimony regarding that legislation: "[U]nder section 101 a person may have
invented a machine or a manufacture, which may include anything under the sun that is made by
man. . . ." Hearings on H. R. 3760 before Subcommittee No. 3 of the House Committee on the Judiciary,
82d Cong., 1st Sess., 37 (1951).
[ Footnote 7 ] The Plant Patent Act of 1930, 35 U.S.C. 161, provides in relevant part:
"Whoever invents or discovers and asexually reproduces any distinct and new variety of plant, including
cultivated sports, mutants, hybrids, and newly found seedlings, other than a tuber propogated plant or a
plant found in an uncultivated state, may obtain a patent therefor. . . ."
The Plant Variety Protection Act of 1970, provides in relevant part:
"The breeder of any novel variety of sexually reproduced plant (other than fungi, bacteria, or first
generation hybrids) who has so reproduced the variety, or his successor in interest, shall be entitled to
plant variety protection therefor. . . ." 84 Stat. 1547, 7 U.S.C. 2402 (a).
See generally, 3 A. Deller, Walker on Patents, ch. IX (2d ed. 1964); R. Allyn, The First Plant Patents
(1934).

[ Footnote 8 ] Writing three years after the passage of the 1930 Act, R. Cook, Editor of the Journal of
Heredity, commented: "It is a little hard for plant men to understand why [Art. I, 8] of the Constitution
should not have been earlier construed to include the promotion of the art of plant breeding. The reason
for this is probably to be found in the principle that natural products are not patentable." Florists
Exchange and Horticultural Trade World, July 15, 1933, p. 9.
[ Footnote 9 ] In 1873, the Patent Office granted Louis Pasteur a patent on "yeast, free from organic germs
of disease, as an article of manufacture." And in 1967 and 1968, immediately prior to the passage of the
Plant Variety Protection Act, that Office granted two patents which, as the petitioner concedes, state
claims for living micro-organisms. See Reply Brief for Petitioner 3, and n. 2.
[ Footnote 10 ] Even an abbreviated list of patented inventions underscores the point: telegraph (Morse,
No. 1,647); telephone (Bell, No. 174,465); electric lamp (Edison, No. 223,898); airplane (the Wrights, No.
821,393); transistor (Bardeen & Brattain, No. 2,524,035); neutronic reactor (Fermi & Szilard, No.
2,708,656); laser (Schawlow & Townes, No. 2,929,922). See generally Revolutionary Ideas, Patents &
Progress in America, United States Patent and Trademark Office (1976).
[ Footnote 11 ] We are not to be understood as suggesting that the political branches have been laggard in
the consideration of the problems related to genetic research and technology. They have already taken
action. In 1976, for example, the National Institutes of Health released guidelines for NIH-sponsored
genetic research which established conditions under which such research could be performed. 41 Fed.
Reg. 27902. In 1978 those guidelines were revised and relaxed. 43 Fed. Reg. 60080, 60108, 60134. And
Committees of the Congress have held extensive hearings on these matters. See, e. g., Hearings on Genetic
Engineering before the Subcommittee on Health of the Senate Committee on Labor and Public Welfare,
94th Cong., 1st Sess. (1975); Hearings before the Subcommittee on Science, Technology, and Space of the
Senate Committee on Commerce, Science, and Transportation, 95th Cong., 1st Sess. (1977); Hearings on
H. R. 4759 et al. before the Subcommittee on Health and the Environment of the [447 U.S. 303,
318] House Committee on Interstate and Foreign Commerce, 95th Cong., 1st Sess. (1977).
MR. JUSTICE BRENNAN, with whom MR. JUSTICE WHITE, MR. JUSTICE MARSHALL, and MR.
JUSTICE POWELL join, dissenting.
I agree with the Court that the question before us is a narrow one. Neither the future of scientific research,
nor even the ability of respondent Chakrabarty to reap some monopoly profits from his pioneering work,
is at stake. Patents on the processes by which he has produced and employed the new living organism are
not contested. The only question we need decide is whether Congress, exercising its authority under Art. I,
8, of the Constitution, intended that he be able to secure a monopoly on the living organism itself, no
matter how produced or how used. Because I believe the Court has misread the applicable legislation, I
dissent. [447 U.S. 303, 319]
The patent laws attempt to reconcile this Nation's deep-seated antipathy to monopolies with the need to
encourage progress. Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 530 -531 (1972); Graham v.
John Deere Co., 383 U.S. 1, 7 -10 (1966). Given the complexity and legislative nature of this delicate task,
we must be careful to extend patent protection no further than Congress has provided. In particular, were

there an absence of legislative direction, the courts should leave to Congress the decisions whether and
how far to extend the patent privilege into areas where the common understanding has been that patents
are not available. 1 Cf. Deepsouth Packing Co. v. Laitram Corp., supra.
In this case, however, we do not confront a complete legislative vacuum. The sweeping language of the
Patent Act of 1793, as re-enacted in 1952, is not the last pronouncement Congress has made in this area.
In 1930 Congress enacted the Plant Patent Act affording patent protection to developers of certain
asexually reproduced plants. In 1970 Congress enacted the Plant Variety Protection Act to extend
protection to certain new plant varieties capable of sexual reproduction. Thus, we are not dealing - as the
Court would have it - with the routine problem of "unanticipated inventions." Ante, at 316. In these two
Acts Congress has addressed the general problem of patenting animate inventions and has chosen
carefully limited language granting protection to some kinds of discoveries, but specifically excluding
others. These Acts strongly evidence a congressional limitation that excludes bacteria from
patentability. 2 [447 U.S. 303, 320]
First, the Acts evidence Congress' understanding, at least since 1930, that 101 does not include living
organisms. If newly developed living organisms not naturally occurring had been patentable under 101,
the plants included in the scope of the 1930 and 1970 Acts could have been patented without new
legislation. Those plants, like the bacteria involved in this case, were new varieties not naturally
occurring. 3 Although the Court, ante, at 311, rejects this line of argument, it does not explain why the Acts
were necessary unless to correct a pre-existing situation. 4 I cannot share the Court's implicit assumption
that Congress was engaged in either idle exercises or mere correction of the public record when it enacted
the 1930 and 1970 Acts. And Congress certainly thought it was doing something significant. The
Committee Reports contain expansive prose about the previously unavailable benefits to be derived from
extending patent protection to plants. 5 H. R. [447 U.S. 303, 321] Rep. No. 91-1605, pp. 1-3 (1970); S.
Rep. No. 315, 71st Cong., 2d Sess., 1-3 (1930). Because Congress thought it had to legislate in order to
make agricultural "human-made inventions" patentable and because the legislation Congress enacted is
limited, it follows that Congress never meant to make items outside the scope of the legislation patentable.
Second, the 1970 Act clearly indicates that Congress has included bacteria within the focus of its
legislative concern, but not within the scope of patent protection. Congress specifically excluded bacteria
from the coverage of the 1970 Act. 7 U.S.C. 2402 (a). The Court's attempts to supply explanations for this
explicit exclusion ring hollow. It is true that there is not mention in the legislative history of the exclusion,
but that does not give us license to invent reasons. The fact is that Congress, assuming that animate
objects as to which it had not specifically legislated could not be patented, excluded bacteria from the set
of patentable organisms.
The Court protests that its holding today is dictated by the broad language of 101, which cannot "be
confined to the `particular application[s] . . . contemplated by the legislators.'" Ante, at 315, quoting Barr
v. United States, 324 U.S. 83, 90 (1945). But as I have shown, the Court's decision does not follow the
unavoidable implications of the statute. Rather, it extends the patent system to cover living material [447
U.S. 303, 322] even though Congress plainly has legislated in the belief that 101 does not encompass
living organisms. It is the role of Congress, not this Court, to broaden or narrow the reach of the patent

laws. This is especially true where, as here, the composition sought to be patented uniquely implicates
matters of public concern.
[ Footnote 1 ] I read the Court to admit that the popular conception, even among advocates of agricultural
patents, was that living organisms were unpatentable. See ante, at 311-312, and n. 8.
[ Footnote 2 ] But even if I agreed with the Court that the 1930 and 1970 Acts were not dispositive. I
would dissent. This case presents even more cogent reasons than Deepsouth Packing Co. not to extend the
patent monopoly in the face of uncertainty. At the very least, these Acts are signs of legislative attention to
the problems of patenting living organisms, but they give [447 U.S. 303, 320] no affirmative indication of
congressional intent that bacteria be patentable. The caveat of Parker v. Flook, 437 U.S. 584, 596 (1978),
an admonition to "proceed cautiously when we are asked to extend patent rights into areas wholly
unforeseen by Congress," therefore becomes pertinent. I should think the necessity for caution is that
much greater when we are asked to extend patent rights into areas Congress has foreseen and considered
but has not resolved.
[ Footnote 3 ] The Court refers to the logic employed by Congress in choosing not to perpetuate the
"dichotomy" suggested by Secretary Hyde. Ante, at 313. But by this logic the bacteria at issue here are
distinguishable from a "mineral . . . created wholly by nature" in exactly the same way as were the new
varieties of plants. If a new Act was needed to provide patent protection for the plants, it was equally
necessary for bacteria. Yet Congress rovided for patents on plants but not on these bacteria. In short,
Congress decided to make only a subset of animate "human-made inventions," "ibid., patentable.
[ Footnote 4 ] If the 1930 Act's only purpose were to solve the technical problem of description referred to
by the Court, ante, at 312, most of the Act, and in particular its limitation to asexually reproduced plants,
would have been totally unnecessary.
[ Footnote 5 ] Secretary Hyde's letter was not the only explicit indication in the legislative history of these
Acts that Congress was acting on the assumption that legislation was necessary to make living organisms
patentable. The Senate Judiciary Committee Report on the 1970 Act states the Committee's
understanding that patent protection extended no further than the explicit provisions of these Acts:
"Under the patent law, patent protection is limited to those varieties of plants which reproduce asexually,
that is, by such methods as grafting or budding. No protection is available to those varieties of plants
which reproduce sexually, that is, generally by seeds." S. Rep. No. 91-1246, p. 3 (1970).
Similarly, Representative Poage, speaking for the 1970 Act, after noting the protection accorded asexually
developed plants, stated that "for plants produced from seed, there has been no such protection." 116
Cong. Rec. 40295 (1970). [447 U.S. 303, 323]

218 F.2d 72

104 U.S.P.Q. 100

Esme E. ROSAIRE, Appellant,
v.
BAROID SALES DIVISION, NATIONAL LEAD COMPANY, Appellee.
No. 15035.

United States Court of Appeals, Fifth Circuit.

Jan. 7, 1955.
Rehearing Denied Feb. 8, 1955.
Earl Babcock, Duncan, Okl., Lawrence P. Gwin, Houston, Tex., for appellant.
Harry R. Pugh, Jr., New York City, Frank Burruss Pugsley, Houston, Tex., Henry R. Ashton, New York City,
Garrett R. Tucker, Jr., Houston, Tex., Baker, Botts, Andrews & Shepherd, Houston, Tex., of counsel, for
appellee.
Before HOLMES and TUTTLE, Circuit Judges, and ALLRED, District Judge.
TUTTLE, Circuit Judge.
1
In this suit for patent infringement there is presented to us for determination the correctness of the
judgment of the trial court, based on findings of fact and conclusions of law, holding that the two
patents involved in the litigation were invalid and void and that furthermore there had been no
infringement by defendant. 120 F.Supp. 20.
2
The Rosaire and Horvitz patents relate to methods of prospecting for oil or other hydrocarbons. The
inventions are based upon the assumption that gases have emanated from deposits of hydrocarbons
which have been trapped in the earth and that these emanations have modified the surrounding rock.
The methods claimed involve the steps of taking a number of samples of soil from formations which
are not themselves productive of hydrocarbons, either over a horizontal area or vertically down a well
bore, treating each sample, as by grinding and heating in a closed vessel, to cause entrained or
absorbed hydrocarbons therein to evolve as a gas, quantitatively measuring the amount of

hydrocarbon gas so evolved from each sample, and correlating the measurements with the locations
from which the samples were taken.
3
Plaintiff claims that in 1936 he and Horvitz invented this new method of prospecting for oil. In due
course the two patents in suit, Nos. 2,192,525 and 2,324,085, were issued thereon. Horvitz assigned
his interest to Rosaire.
4
Appellant alleged that appellee Baroid began infringing in 1947; that he learned of this in 1949 and
asked Baroid to take a license, but no license agreement was worked out, and this suit followed,
seeking an injunction and an accounting.
5
In view of the fact that the trial court's judgment that the patents were invalid, would of course dispose
of the matter if correct, we turn our attention to this issue. Appellee's contention is that the judgment of
the trial court in this respect should be supported on two principal grounds. The first is that the prior
art, some of which was not before the patent office, anticipated the two patents; the second is that
work carried on by one Teplitz for the Gulf Oil Corporation invalidated both patents by reason of the
relevant provisions of the patent laws which state that an invention is not patentable if it 'was known or
used by others in this country' before the patentee's invention thereof, 35 U.S.C.A. 102(a). Appellee
contends that Teplitz and his coworkers knew and extensively used in the field the same alleged
inventions before any date asserted by Rosaire and Horvitz.
6
On this point appellant himself in his brief admits that 'Teplitz conceived of the idea of extracting and
quantitatively measuring entrained or absorbed gas from the samples of rock, rather than relying upon
the free gas in the samples. We do not deny that Teplitz conceived of the methods of the patents in
suit.' And further appellant makes the following admission: 'We admit that the Teplitz-Gulf work was
done before Rosaire and Horvitz conceived of the inventions. We will show, however, that Gulf did not
apply for patent until 1939, did not publish Teplitz's ideas, and did not otherwise give the public the
benefit of the experimental work.'
7
Appellant poses what it claims to be the main issue as follows: 'The main question before the court on
this appeal is: Does the earlier experiment by Gulf invalidate the patents in suit? The District Court has
held that it does. We contend that it does not.'

8
We shall discuss these points in the order of importance that the parties themselves seem to place on
them.
9
In support of their respective positions, both appellant and appellee stress the language in our opinion
in the case of Pennington v. National Supply Co., 5 Cir., 95 F.2d 291, 294, where, speaking through
Judge Holmes, we said:
10
'Appellant insists that the court erred in considering the prior use of the Texas machine, because that
machine was abandoned by the Texas Company and was not successful until modified and rebuilt. As
to this, it does not appear that the Texas machine was a failure, since it drilled three wells for the Texas
Company, which was more than was usually accomplished by the rotary drilling machines then in use.
11
'An unsuccessful experiment which is later abandoned does not negative novelty in a new and
successful device, T. H. Symington Co. v. National Malleable Castings Co., 250 U.S. 383, 386, 39
S.Ct. 542, 63 L.Ed. 1045; Clark Thread Co. v. Willimantic Linen Co., 140 U.S. 481, 489, 11 S.Ct. 846,
35 L.Ed. 521. Nevertheless, the existence and operation of a machine, abandoned after its completion
and sufficient use to demonstrate its practicability, is evidence that the same ideas incorporated in a
later development along the same line do not amount to invention. Corona Cord Tire Co. v. Dovan
Chemical Corporation, 276 U.S. 358, 48 S.Ct. 380, 72 L.Ed. 610; Jones v. Sykes Metal Lath & Roofing
Co., 6 Cir., 254 F. 91. If the prior machine does not anticipate, it would not have done so if it had been
neither unsuccessful nor abandoned. Novelty is ascribed to new things, without regard to the
successful and continued use of old things. Correlatively, it is denied to old things, without regard to
the circumstances which caused their earlier applications to be unsatisfactory or their use to be
abandoned. Cf. Pickering v. McCullough, 104 U.S. 310, 26 L.Ed. 749; Merrimac Mattress Mfg. Co. v.
Feldman, C.C., 133 F. 64; Van Epps v. United Box Board & Paper Co., 2 Cir., 143 F. 869.'
12
The question as to whether the work of Teplitz was 'an unsuccessful experiment,' as claimed by
appellant, or was a successful trial of the method in question and a reduction of that method to actual
practice, as contended by appellee, is, of course, a question of fact. On this point the trial court made
the following finding of fact:
13
'4.

14
'I find as a fact, by clear and substantial proof beyond a reasonable doubt, that Abraham J. Teplitz and
his coworkers with Gulf Oil Corporation and its Research Department during 1935 and early 1936,
before any date claimed by Rosaire, spent more than a year in the oil fields and adjacent territory
around Palestine, Texas, taking and analyzing samples both over an area and down drill holes, exactly
as called for in the claims of the patents which Rosaire and Horvitz subsequently applied for and
which are here in suit.
15
'This Teplitz work was a successful and adequate field trial of the prospecting method involved and a
reduction to practice of that method. The work was performed in the field under ordinary conditions
without any deliberate attempt at concealment or effort to exclude the public and without any
instructions of secrecy to the employees performing the work.'
16
As we view it, if the court's findings of fact are correct then under the statute as construed by the
courts, we must affirm the finding of the trial court that appellee's patents were invalid. Buser v.
Novelty Tufting Machine Co., 6 Cir., 151 F. 478, 493; Electrol, Inc., v. Merrell & Co., Inc., 8 Cir., 39 F.2d
873; Corona Cord Tire Co. v. Dovan Chemical Corporation, 276 U.S. 358, 48 S.Ct. 380, 72 L.Ed. 610.
As to the finding of fact we are to affirm unless we conclude that it is 'clearly erroneous.' Rule 52,
Fed.Rules Civ.Proc., 28 U.S.C.A.
17
A close analysis of the evidence on which the parties rely to resolve this question clearly demonstrates
that there was sufficient evidence to sustain the finding of the trial court that there was more here than
an unsuccessful or incomplete experiment. It is clear that the work was not carried forward, but that
appears to be a result of two things: (1) that the geographical area did not lend itself properly to the
test, and (2) that the 'entire gas prospecting program was therefore suspended in September of 1936,
in order that the accumulated information might be thoroughly reviewed.' It will be noted that the
program was not suspended to test the worth of the method but to examine the data that was
produced by use of the method involved. The above quotation came from one of the recommendations
at the end of Teplitz's report, and was introduced on behalf of the appellant himself.
18
Expert testimony presented by witnesses Rogers, Eckhardt and Weaver supported appellee's
contention.
19

With respect to the argument advanced by appellant that the lack of publication of Teplitz's work
deprived an alleged infringer of the defense of prior use, we find no case which constrains us to hold
that where such work was done openly and in the ordinary course of the activities of the employer, a
large producing company in the oil industry, the statute is to be so modified by construction as to
require some affirmative act to bring the work to the attention of the public at large.
20
While there is authority for the proposition that one of the basic principles underlying the patent laws is
the enrichment of the art, and that a patent is given to encourage disclosure of inventions, no case we
have found requires a holding that, under the circumstances that attended the work of Teplitz, the fact
of public knowledge must be shown before it can be urged to invalidate a subsequent patent. The case
of Corona Cord Tire Co. v. Dovan Chemical Corporation, supra, is authority for the opposing view, that
taken by the court below. In that case the Supreme Court said:
21
'In 1916, while with the Norwalk Company, Kratz prepared D.P.G. and demonstrated its utility as a
rubber accelerator by making test slabs of vulcanized or cured rubber with its use. Every time that he
produced such a slab he recorded his test in cards which he left with the Norwalk Company and kept a
duplicate of his own. * * * This work was known to, and was participated in, by his associate in the
Norwalk Company, his immediate superior and the chief chemist of the company, Dr. Russell, who fully
confirms Kratz's records and statement.' Corona Cord Tire Co. v. Dovan Chemical Corporation, 276
U.S. 358, 378, 379, 48 S.Ct. 380, 386, 72 L.Ed. 610.
22
The court further states in the Corona case at page 382 of 276 U.S., at page 387 of 48 S.Ct.:
23
'But, even if we ignore this evidence of Kratz's actual use of D.P.G. in these rubber inner tubes which
were sold, what he did at Norwalk, supported by the evidence of Dr. Russell, his chief, and by the
indubitable records that are not challenged, leaves no doubt in our minds that he did discover in 1916
the strength of D.P.G. as an accelerator as compared with the then known accelerators, and that he
then demonstrated it by a reduction of it to practice in production of cured or vulcanized rubber.
24
'This constitutes priority in this case.'
25

This same principle underlies the decision of the Court of Appeals for the Second Circuit in the case of
United Chromium v. General Motors Corporation, 85 F.2d 577, and in the Seventh Circuit in United
Chromium v. Kohler Co., 159 F.2d 979.
26
The other basis of appellee's attack on appellant's patents was the disclosures in the Graf article,
which was published in Germany in September, 1935. This article was not considered by the Patent
Office and the patents were therefore greatly weakened and they lack the presumption of validity that
would otherwise exist. While there was disputed expert testimony on the point, there was ample
support both from the oral evidence and from a reading of the Graf article itself to warrant the court's
finding of fact No. 3 that the patents in suit had been anticipated by this publication.
27
In connection with the presumption of validity in such a case see R. Hoe & Co. v. Goss Printing Press
Co., 2 Cir., 30 F.2d 271; National Electric Products Corp. v. Grossman, 2 Cir., 70 F.2d 257; Boynton v.
Chicago Hardward Foundry Co., 7 Cir., 77 F.2d 799.
28
Concluding, as we do, that the trial court correctly held that patents invalid, it is not necessary to
consider the question of infringement. The judgment of the trial court is affirmed.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
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.
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
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. 7475), 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 contractor, purchased from plaintiff, tiles
shaped out of these moulds at the back of which was imprinted plaintiff's patent
number (Exhs., "A" to "E"); that subsequently, through a representative, Mr.
Leonardo, defendant Aguas requested Aquino to make engravings of the same type
and bearing the characteristics of plaintiff's moulds; that Mr. Aquino knew that the
moulds he was asked to engrave for defendant Aguas would be used to produce
cement tiles similar to plaintiff's; that the moulds which F.H. Aquino & Sons eventually
engraved for Aguas and for which it charged Aguas double the rate it charged plaintiff
De Leon, contain the very same characteristic features of plaintiff's mould and that
Aguas used these moulds in the manufacture of his tiles which he actually put out for
sale to the public (Exhs. "1" to "3" and Exhs. "A" to "E"); that both plaintiff's and
defendant Aguas' tiles are sculptured pre-cast wall tiles intended as a new feature of
construction and wag ornamentation substantially Identical to each other in size,
easement, lip width and critical depth of the deepest depression; and that the only
significant difference between plaintiff's mould and that engraved by Aquino for
Aguas is that, whereas plaintiff's mould turns out tiles 4 x 4 inches in size, defendant
Aguas' mould is made to fit a 4-1/4 x 4-1/4 inch tile. 9
The patent right of the private respondent expired on May 5, 1977.
determine the right of said private respondent to damages.

10

The errors will be discuss only to

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 tilemaking, which proceeds not merely from mechanical skill, said improvement
consisting among other things, in the new critical depth, lip width, easement and field

of designs of the new tiles. The improved lip width of appellee's tiles ensures the
durability of the finished product preventing the flaking off of the edges. The
easement caused by the inclination of the protrusions of the patented moulds is for
the purpose of facilitating the removal of the newly processed tile from the female
die. Evidently, appellee's improvement consists in the solution to the old critical
problem by making the protrusions on his moulds attain an optimum height, so that
the engraving thereon would be deep enough to produce tiles for sculptured and
decorative purposes, strong optimum thickness of appellee's new tiles of only 1/8 of
an inch at the deepest easement (Exhs. "D" and "D-1") is a most critical feature,
suggestive of discovery and inventiveness, especially considering that, despite said
thinness, the freshly formed tile remains strong enough for its intended purpose.
While it is true that the matter of easement, lip width, depth, protrusions and
depressions are known to some sculptors, still, to be able to produce a new and
useful wall tile, by using them all together, amounts to an invention. More so, if the
totality of all these features are viewed in combination with the Ideal composition of
cement, sodium silicate and screened fine sand.
By using his improved process, plaintiff has succeeded in producing a new product a concrete sculptured tile which could be utilized for walling and decorative purposes.
No proof was adduced to show that any tile of the same kind had been produced by
others before appellee. Moreover, it appears that appellee has been deriving
considerable profit from his manufacture and sale of such tiles. This commercial
success is evidence of patentability (Walker on Patents, Dellers Edition, Vol. I, p.
237). 12
The validily of the patent issued by the Philippines Patent Office in favor of the private respondent
and the question over the inventiveness, novelty and usefulness of the improved process therein
specified and described are matters which are better determined by the Philippines Patent Office.
The technical staff of the Philippines Patent Office, composed of experts in their field, have, by the
issuance of the patent in question, accepted the thinness of the private respondent's new tiles as a
discovery. There is a presumption that the Philippines Patent Office has correctly determined the
patentability of the improvement by the private respondent of the process in question.
Anent this matter, the Court of Appeals said:
Appellant has not adduced evidence sufficient to overcome the above established
legal presumption of validity or to warrant reversal of the findings of the lower court
relative to the validity of the patent in question. In fact, as we have already pointed
out, the clear preponderance of evidence bolsters said presumption of validity of
appellee's patent. There is no indication in the records of this case and this Court is
unaware of any fact, which would tend to show that concrete wall tiles similar to
those produced by appellee had ever been made by others before he started
manufacturing the same. In fact, during the trial, appellant was challenged by
appellee to present a tile of the same kind as those produced by the latter, from any
earlier source but, despite the fact that appellant had every chance to do so, he could
not present any. There is, therefore, no concrete proof that the improved process of
tile-making described in appellee's patent was used by, or known to, others previous
to his discovery thereof. 13
The contention of the petitioner Aguas that the letters patent of de Leon was actually a patent for the
old and non-patentable process of making mosaic pre-cast tiles is devoid of merit. De Leon never

claimed to have invented the process of tile-making. The Claims and Specifications of Patent No.
658 show that although some of the steps or parts of the old process of tile making were described
therein, there were novel and inventive features mentioned in the process. Some of the novel
features of the private respondent's improvements are the following: critical depth, with
corresponding easement and lip width to such degree as leaves the tile as thin as 1/8 of an inch at
its thinnest portion, Ideal composition of cement and fine river sand, among other ingredients that
makes possible the production of tough and durable wall tiles, though thin and light; the engraving of
deep designs in such a way as to make the tiles decorative, artistic and suitable for wall
ornamentation, and the fact that the tiles can be mass produced in commercial quantities and can be
conveniently stock-piled, handled and packed without any intolerable incidence of breakages. 14
The petitioner also contends that the improvement of respondent is not patentable because it is not
new, useful and inventive. This contention is without merit.
The records disclose that de Leon's process is an improvement of the old process of tile making.
The tiles produced from de Leon's process are suitable for construction and ornamentation, which
previously had not been achieved by tiles made out of the old process of tile making. De Leon's
invention has therefore brought about a new and useful kind of tile. The old type of tiles were usually
intended for floors although there is nothing to prevent one from using them for walling purposes.
These tiles are neither artistic nor ornamental. They are heavy and massive.
The respondent's improvement is indeed inventive and goes beyond the exercise of mechanical skill.
He has introduced a new kind of tile for a new purpose. He has improved the old method of making
tiles and pre-cast articles which were not satisfactory because of an intolerable number of
breakages, especially if deep engravings are made on the tile. He has overcome the problem of
producing decorative tiles with deep engraving, but with sufficient durability. 15 Durability inspite of the
thinness and lightness of the tile, is assured, provided that a certain critical depth is maintained in relation
to the dimensions of the tile. 16
The petitioner also claims that changing the design from embossed to engraved tiles is neither new
nor inventive because the Machuca Tile Factory and the Pomona Tile Manufacturing Company have
been manufacturing decorative wall tiles that are embossed as well as engraved; 17 that these tiles
have also depth, lip width, easement and field of designs; 18 and that the private respondent had copied
some designs of Pomona. 19
The Machuca tiles are different from that of the private respondent. The designs are embossed and
not engraved as claimed by the petitioner. There may be depressions but these depressions are too
shallow to be considered engraved. Besides, the Machuca tiles are heavy and massive.
There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles are made of
ceramics. 20The process involved in making cement tiles is different from ceramic tiles. Cement tiles are
made with the use of water, while in ceramics fire is used. As regards the allegation of the petitioner that
the private respondent copied some designs of Pomona, suffice it to say that what is in issue here is the
process involved in tile making and not the design.
In view of the foregoing, this Court finds that Patent No. 658 was legally issued, the process and/or
improvement being patentable.
Both the trial court and the Court of Appeals found as a fact that the petitioner Domiciano A. Aguas
did infringe de Leon's patent. There is no showing that this case falls under one of the exceptions
when this Court may overrule the findings of fact of the Court of Appeals. The only issue then to be
resolved is the amount of damages that should be paid by Aguas.

In its decision the Court of Appeals affirmed the amount of damages awarded by the lower court with
the modification that the respondent is only entitled to P3,000.00 moral damages. 21
The lower court awarded the following damages:

22

a) P10,020.99 by way of actual damages;

b) P50,000.00 by way of moral damages;
c) P5,000.00 by way of exemplary damages;
d) P5,000.00 by way of attomey's fees and
e) Costs of suit
because:
An examination of the books of defendant Aguas made before a Commissioner
reveals that during the period that Aguas was manufacturing and selling tiles similar
to plaintiff's, he made a gross income of P3,340.33, which can be safely be
considered the amount by which he enriched himself when he infringed plaintiff's
patent. Under Sec. 42 of the Patent Law any patentee whose rights have been
infringed is entitled to damages which, according to the circumstances of the case
may be in a sum above the amount found as actual damages sustained provided the
award does not exceed three times the amount of such actual damages. Considering
the wantonness of the infringement committed by the defendants who knew all the
time about the existence of plaintiff's patent, the Court feels there is reason to grant
plaintiff maximum damages in the sum of P10,020.99. And in order to discourage
patent infringements and to give more teeth to the provisions of the patent law thus
promoting a stronger public policy committed to afford greater incentives and
protection to inventors, the Court hereby awards plaintiff exemplary damages in the
sum of P5,000.00 to be paid jointly and severally by defendants. Considering the
status of plaintiff as a reputable businessman, and owner of the likewise reputed
House of Pre-Cast, he is entitled to an award of moral damages in the sum of
P50,000.00. 23
In reducing the amount of moral damages the Court of Appeals said:
As regards the question of moral damages it has been shown that as a result of the
unlawful acts of infringment committed by defendants, plaintiff was unstandably very
sad; he worried and became nervous and lost concentration on his work in
connection with his tile business (pp. 28, 30, t.s.n., Feb. 28, 1964). In addition,
plaintiff's character and reputation have been unnecessarily put in question because
defendants, by their acts of infringement have created a doubt or suspicion in the
public mind concerning the truth and honesty of plaintiff's advertisements and public
announcements of his valid patent. Necessarily, said acts of defendants have caused
plaintiff considerable mental suffering, considering especially, the fact that he staked
everything on his pre-cast tile business (p. 36, t.s.n., Id.) The wantonness and
evident bad faith characterizing defendants' prejudicial acts against plaintiff justify the
assessment of moral damages in plaintiff's favor, though we do not believe the
amount of P50,000.00 awarded by the lower court is warranted by the

circumstances. We feel that said amount should be reduced to P3,000.00 by way of

compensating appellee for his moral suffering. "Willful injury to property may be a
legal ground for awarding moral damages if the court should find that, under the
circumstances such damages are justly due" (Art. 2219 NCC).
There is no reason to reduce the amount of damages and attorneys fees awarded by the trial court
as modified by the Court of Appeals.
WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed from is
hereby affirmed, without pronouncement as to costs.
SO ORDERED.

BRENNER v. MANSON, 383 U.S. 519 (1966)

383 U.S. 519
BRENNER, COMMISSIONER OF PATENTS v. MANSON.
CERTIORARI TO THE UNITED STATES COURT OF CUSTOMS AND PATENT APPEALS.
No. 58.
Argued November 17, 1965.
Decided March 21, 1966.
In December 1957 Ringold and Rosenkranz applied for a patent on an allegedly novel process for making
certain steroids, claiming priority as of December 1956. A patent issued thereon in 1959. In January 1960
respondent filed an application to patent the same process, asserting that he had discovered it prior to
December 1956, and requesting that an "interference" be declared to test the issue of priority.
Respondent's application was denied by a Patent Office examiner, the Board of Appeals affirming, for
failure "to disclose any utility for" the compound produced by the process. The Court of Customs and
Patent Appeals (CCPA) reversed, holding that "where a claimed process produces a known product it is
not necessary to show utility for the product" as long as it is not detrimental to the public interest. Held:
1. This Court has jurisdiction under 28 U.S.C. 1256 to review upon petition of the Commissioner of
Patents patent decisions of the CCPA. Pp. 523-528.
2. The Patent Office properly may refuse to declare an "interference" on the ground that the application
therefor fails to disclose a prima facie case of patentability. P. 528, n. 12.
3. The practical utility of the compound produced by a chemical process is an essential element in
establishing a prima facie case for the patentability of the process. Pp. 528-536.
(a) One may patent only that which is useful. Pp. 528-529, 535.

(b) Respondent has not provided any basis for overturning the determination of the Patent Office that the
utility requirement was not satisfied in this case by reference to the alleged utility of an adjacent
homologue. Pp. 531-532.
(c) The requirement that a chemical process be useful is not satisfied by a showing that the compound
yielded belongs to a class of compounds which scientists are screening for possible uses. Pp. 532-536.[383
U.S. 519, 520]
(d) Nor is the utility requirement for chemical processes satisfied by a showing that the process works, i.
e., yields the intended product. Pp. 532-536.
52 C. C. P. A. (Pat.) 739, 333 F.2d 234, reversed.
Paul Bender argued the cause for petitioner, pro hac vice, by special leave of Court. With him on the brief
were Solicitor General Marshall, Assistant Attorney General Douglas, Sherman L. Cohn and Edward
Berlin.
Dean Laurence argued the cause for respondent. With him on the brief were Herbert I. Sherman and John
L. White.
W. Brown Morton, Jr., and Ellsworth H. Mosher filed a brief for the American Patent Law Association, as
amicus curiae, urging affirmance.
MR. JUSTICE FORTAS delivered the opinion of the Court.
This case presents two questions of importance to the administration of the patent laws: First, whether
this Court has certiorari jurisdiction, upon petition of the Commissioner of Patents, to review decisions of
the Court of Customs and Patent Appeals; and second, whether the practical utility of the compound
produced by a chemical process is an essential element in establishing a prima facie case for the
patentability of the process. The facts are as follows:
In December 1957, Howard Ringold and George Rosenkranz applied for a patent on an allegedly novel
process for making certain known steroids. 1 They claimed [383 U.S. 519, 521] priority as of December
17, 1956, the date on which they had filed for a Mexican patent. United States Patent No. 2,908,693 issued
late in 1959.
In January 1960, respondent Manson, a chemist engaged in steroid research, filed an application to
patent precisely the same process described by Ringold and Rosenkranz. He asserted that it was he who
had discovered the process, and that he had done so before December 17, 1956. Accordingly, he requested
that an "interference" be declared in order to try out the issue of priority between his claim and that of
Ringold and Rosenkranz. 2
A Patent Office examiner denied Manson's application, and the denial was affirmed by the Board of
Appeals within the Patent Office. The ground for rejection was the failure "to disclose any utility for" the
chemical compound produced by the process. Letter of Examiner, dated May 24, 1960. This omission was
not [383 U.S. 519, 522] cured, in the opinion of the Patent Office, by Manson's reference to an article in

the November 1956 issue of the Journal of Organic Chemistry, 21 J. Org. Chem. 1333-1335, which
revealed that steroids of a class which included the compound in question were undergoing screening for
possible tumor-inhibiting effects in mice, and that a homologue 3 adjacent to Manson's steroid had
proven effective in that role. Said the Board of Appeals, "It is our view that the statutory requirement of
usefulness of a product cannot be presumed merely because it happens to be closely related to another
compound which is known to be useful."
The Court of Customs and Patent Appeals (hereinafter CCPA) reversed, Chief Judge Worley dissenting. 52
C. C. P. A. (Pat.) 739, 745, 333 F.2d 234, 237-238. The court held that Manson was entitled to a
declaration of interference since "where a claimed process produces a known product it is not necessary to
show utility for the product," so long as the product "is not alleged to be detrimental to the public
interest." Certiorari was granted, 380 U.S. 971 , to resolve this running dispute over what constitutes
"utility" in chemical process claims, 4 as well as to answer the question concerning our certiorari
jurisdiction. [383 U.S. 519, 523]

I.
Section 1256 of Title 28 U.S.C. (1964 ed.), enacted in 1948, provides that "Cases in the Court of Customs
and Patent Appeals may be reviewed by the Supreme Court by writ of certiorari." This unqualified
language would seem to foreclose any challenge to our jurisdiction in the present case. Both the
Government 5 and the respondent urge that we have certiorari jurisdiction over patent decisions of the
CCPA, although the latter would confine our jurisdiction to those petitions filed by dissatisfied applicants
and would deny the Commissioner of Patents the right to seek certiorari. 6 This concert of opinion does
not settle the basic question because jurisdiction cannot be conferred by consent of the parties. The doubt
that does exist stems from a decision of this [383 U.S. 519, 524] Court, rendered in January 1927, in
Postum Cereal Co. v. California Fig Nut Co., 272 U.S. 693 , which has been widely interpreted as
precluding certiorari jurisdiction over patent and trademark decisions of the CCPA.
Postum, however, was based upon a statutory scheme materially different from the present one. Postum
involved a proceeding in the Patent Office to cancel a trademark. The Commissioner of Patents rejected
the application. An appeal was taken to the then Court of Appeals for the District of Columbia, which in
1927 exercised the jurisdiction later transferred to the CCPA. Under the statutory arrangement in effect at
the time, the judgment of the Court of Appeals was not definitive because it was not an order to the Patent
Office determinative of the controversy. A subsequent bill in equity could be brought in the District Court
and it was possible that a conflicting adjudication could thus be obtained. On this basis, the Court held
that it could not review the decision of the Court of Appeals. It held that the conclusion of the Court of
Appeals was an "administrative decision" rather than a "judicial judgment": "merely an instruction to the
Commissioner of Patents by a court which is made part of the machinery of the Patent Office for
administrative purposes." 272 U.S., at 698 -699. Therefore, this Court concluded, the proceeding in the
Court of Appeals - essentially administrative in nature - was neither case nor controversy within the
meaning of Article III of the Constitution. Congress might confer such "administrative" tasks upon the
courts of the District of Columbia, wrote Chief Justice Taft, but it could not empower this Court to
participate therein.

Congress soon amended the statutory scheme. In March of 1927 it provided that an action in the District
Court was to be alternative and not cumulative to appellate review, that it could not be maintained to
overcome [383 U.S. 519, 525] an adjudication in the Court of Appeals. 7 In 1929 Congress transferred
appellate jurisdiction over the Commissioner's decisions from the Court of Appeals to what had been the
Court of Customs Appeals and was now styled the Court of Customs and Patent Appeals. 8 Whereas the
Court of Appeals had been empowered to take additional evidence and to substitute its judgment for that
of the Commissioner, the CCPA was confined to the record made in the Patent Office. 9 Compare Federal
Communications Comm'n v. Pottsville Broadcasting Co., 309 U.S. 134, 144 -145. Despite these changes,
however, Postum had acquired a life of its own. It continued to stand in the way of attempts to secure
review here of CCPA decisions respecting the Commissioner of Patents. See, e. g., McBride v. Teeple, 311
U.S. 649 , denying certiorari for "want of jurisdiction" on the authority of Postum. 10
This was the background against which Congress, in its 1948 codification of statutes pertaining to the
judiciary, enacted 1256, blandly providing in unqualified language for review on certiorari of "[c]ases in
the Court of Customs and Patent Appeals." Nothing in the legislative materials relating to the statute,
except its language, is of assistance to us in the resolution of the present problem: Did the statutory
changes which followed [383 U.S. 519, 526] Postum mean that a patent decision by the CCPA was a
"judicial" determination reviewable by this Court under Article III? And, if so, was 1256 intended to create
such jurisdiction?
Assistance came with the 1958 revision of the Judicial Code. Congress there declared the CCPA "a court
established under article III . . .," that is, a constitutional court exercising judicial rather than
administrative power. 28 U.S.C. 211 (1964 ed.). In 1962 this Court addressed itself to the nature and status
of the CCPA. Glidden Co. v. Zdanok, 370 U.S. 530 , raised the question whether a judge of the CCPA was
an Article III judge, capable of exercising federal judicial power. In answering that question in the
affirmative, MR. JUSTICE HARLAN'S opinion, for three of the seven Justices participating, expressly left
open the question whether 1256 conferred certiorari jurisdiction over patent and trademark cases decided
in the CCPA, 370 U.S., at 578 n. 49. It suggested, however, that Postum might be nothing more than a
museum piece. The opinion noted that Postum "must be taken to be limited to the statutory scheme in
existence before" 1929. 370 U.S., at 579 . The concurring opinion of MR. JUSTICE CLARK, in which THE
CHIEF JUSTICE joined, did not reflect any difference on this point.
Thus, the decision sought to be reviewed is that of an Article III court. It is "judicial" in character. It is not
merely an instruction to the Commissioner or part of the "administrative machinery" of the Patent Office.
It is final and binding in the usual sense. 11 In sum, Postum [383 U.S. 519, 527] has no vitality in the
present setting, and there remains no constitutional bar to our jurisdiction.
Having arrived at this conclusion, we have no difficulty in giving full force and effect to the generality of
the language in 1256. It would be entirely arbitrary for us to assume, despite the statutory language, that
Congress in 1948 intended to enshrine Postum - dependent as it was upon a statutory scheme
fundamentally altered in 1927 and 1929 - as a hidden exception to the sweep of 1256. The contrary is more
plausible: that by using broad and unqualified language, Congress intended our certiorari jurisdiction
over CCPA cases to be as broad as the Constitution permits.

This conclusion is reinforced by reference to the anomalous consequences which would result were we to
adopt a contrary view of 1256. Determinations of the Patent Office may be challenged either by appeal to
the CCPA or by suit instituted in the United States District Court for the District of Columbia. 35 U.S.C.
145, 28 U.S.C. 1542 (1964 ed.). Where the latter route is elected, the decision obtained may be reviewed in
the Court of Appeals for the District of Columbia Circuit, and ultimately in this Court upon writ of
certiorari. Hoover Co. v. Coe, 325 U.S. 79 . It would be strange indeed if corresponding certiorari
jurisdiction did not exist where the alternative route was elected. Were that so, in the event of conflict
between the CCPA and the courts of the District of Columbia, resolution by this Court would be achievable
only if the litigants chose to proceed through the latter. Obviously, the orderly administration both of our
certiorari jurisdiction and of the patent laws requires that ultimate review be available in this Court,
regardless of the route chosen by the litigants. [383 U.S. 519, 528]
We therefore conclude that 1256 authorizes the grant of certiorari in the present case. We now turn to the
merits. 12

II.
Our starting point is the proposition, neither disputed nor disputable, that one may patent only that which
is [383 U.S. 519, 529] "useful." In Graham v. John Deere Co., ante, p. 1, at 5-10, we have reviewed the
history of the requisites of patentability, and it need not be repeated here. Suffice it to say that the concept
of utility has maintained a central place in all of our patent legislation, beginning with the first patent law
in 1790 13 and culminating in the present law's provision that
"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of
matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the
conditions and requirements of this title." 14
As is so often the case, however, a simple, everyday word can be pregnant with ambiguity when applied to
the facts of life. That this is so is demonstrated by the present conflict between the Patent Office and the
CCPA over how the test is to be applied to a chemical process which yields an already known product
whose utility - other than as a possible object of scientific inquiry - has not yet been evidenced. It was not
long ago that agency and court seemed of one mind on the question. In Application of Bremner, 37 C. C. P.
A. (Pat.) 1032, 1034, 182 F.2d 216, 217, the court affirmed rejection by the Patent Office of both process
and product claims. It noted that "no use for the products claimed to be developed by the processes had
been shown in the specification." It held that "It was never intended that a patent be granted upon a
product, or a process producing a product, unless such product be useful." Nor was this new doctrine in
the court. See Thomas v. Michael, 35 C. C. P. A. (Pat.) 1036, 1038-1039, 166 F.2d 944, 946-947. [383 U.S.
519, 530]
The Patent Office has remained steadfast in this view. The CCPA, however, has moved sharply away from
Bremner. The trend began in Application of Nelson, 47 C. C. P. A. (Pat.) 1031, 280 F.2d 172. There, the
court reversed the Patent Office's rejection of a claim on a process yielding chemical intermediates "useful
to chemists doing research on steroids," despite the absence of evidence that any of the steroids thus
ultimately produced were themselves "useful." The trend has accelerated, 15culminating in the present
case where the court held it sufficient that a process produces the result intended and is not "detrimental
to the public interest." 52 C. C. P. A. (Pat.), at 745, 333 F.2d, at 238.

It is not remarkable that differences arise as to how the test of usefulness is to be applied to chemical
processes. Even if we knew precisely what Congress meant in 1790 when it devised the "new and useful"
phraseology and in subsequent re-enactments of the test, we should have difficulty in applying it in the
context of contemporary chemistry where research is as comprehensive as man's grasp and where little or
nothing is wholly beyond the pale of "utility" - if that word is given its broadest reach.
Respondent does not - at least in the first instance - rest upon the extreme proposition, advanced by the
court below, that a novel chemical process is patentable so long [383 U.S. 519, 531] as it yields the
intended product 16 and so long as the product is not itself "detrimental." Nor does he commit the
outcome of his claim to the slightly more conventional proposition that any process is "useful" within the
meaning of 101 if it produces a compound whose potential usefulness is under investigation by serious
scientific researchers, although he urges this position, too, as an alternative basis for affirming the
decision of the CCPA. Rather, he begins with the much more orthodox argument that his process has a
specific utility which would entitle him to a declaration of interference even under the Patent Office's
reading of 101. The claim is that the supporting affidavits filed pursuant to Rule 204 (b), by reference to
Ringold's 1956 article, reveal that an adjacent homologue of the steroid yielded by his process has been
demonstrated to have tumor-inhibiting effects in mice, and that this discloses the requisite utility. We do
not accept any of these theories as an adequate basis for overriding the determination of the Patent Office
that the "utility" requirement has not been met.
Even on the assumption that the process would be patentable were respondent to show that the steroid
produced had a tumor-inhibiting effect in mice, 17 we would [383 U.S. 519, 532] not overrule the Patent
Office finding that respondent has not made such a showing. The Patent Office held that, despite the
reference to the adjacent homologue, respondent's papers did not disclose a sufficient likelihood that the
steroid yielded by his process would have similar tumor-inhibiting characteristics. Indeed, respondent
himself recognized that the presumption that adjacent homologues have the same utility18 has been
challenged in the steroid field because of "a greater known unpredictability of compounds in that
field." 19 In these circumstances and in this technical area, we would not overturn the finding of the
Primary Examiner, affirmed by the Board of Appeals and not challenged by the CCPA.
The second and third points of respondent's argument present issues of much importance. Is a chemical
process "useful" within the meaning of 101 either (1) because it works - i. e., produces the intended
product? or (2) because the compound yielded belongs to a class of compounds now the subject of serious
scientific investigation? These contentions present the basic problem for our adjudication. Since we find
no specific assistance in the legislative materials underlying 101, we are remitted to an analysis of the
problem in light of the general intent of Congress, the purposes of the patent system, and the implications
of a decision one way or the other.
In support of his plea that we attenuate the requirement of "utility," respondent relies upon Justice
Story's [383 U.S. 519, 533] well-known statement that a "useful" invention is one "which may be applied
to a beneficial use in society, in contradistinction to an invention injurious to the morals, health, or good
order of society, or frivolous and insignificant" 20 - and upon the assertion that to do so would encourage
inventors of new processes to publicize the event for the benefit of the entire scientific community, thus
widening the search for uses and increasing the fund of scientific knowledge. Justice Story's language

sheds little light on our subject. Narrowly read, it does no more than compel us to decide whether the
invention in question is "frivolous and insignificant" - a query no easier of application than the one built
into the statute. Read more broadly, so as to allow the patenting of any invention not positively harmful to
society, it places such a special meaning on the word "useful" that we cannot accept it in the absence of
evidence that Congress so intended. There are, after all, many things in this world which may not be
considered "useful" but which, nevertheless, are totally without a capacity for harm.
It is true, of course, that one of the purposes of the patent system is to encourage dissemination of
information concerning discoveries and inventions. 21 And it may be that inability to patent a process to
some extent discourages disclosure and leads to greater secrecy than would otherwise be the case. The
inventor of the process, or the corporate organization by which he is employed, has some incentive to
keep the invention [383 U.S. 519, 534] secret while uses for the product are searched out. However, in
light of the highly developed art of drafting patent claims so that they disclose as little useful information
as possible - while broadening the scope of the claim as widely as possible - the argument based upon the
virtue of disclosure must be warily evaluated. Moreover, the pressure for secrecy is easily exaggerated, for
if the inventor of a process cannot himself ascertain a "use" for that which his process yields, he has every
incentive to make his invention known to those able to do so. Finally, how likely is disclosure of a patented
process to spur research by others into the uses to which the product may be put? To the extent that the
patentee has power to enforce his patent, there is little incentive for others to undertake a search for uses.
Whatever weight is attached to the value of encouraging disclosure and of inhibiting secrecy, we believe a
more compelling consideration is that a process patent in the chemical field, which has not been
developed and pointed to the degree of specific utility, creates a monopoly of knowledge which should be
granted only if clearly commanded by the statute. Until the process claim has been reduced to production
of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise
delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer
power to block off whole areas of scientific development, 22 without compensating benefit to the public.
The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent
monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a
process is refined and developed to this point - where specific benefit [383 U.S. 519, 535] exists in
currently available form - there is insufficient justification for permitting an applicant to engross what
may prove to be a broad field.
These arguments for and against the patentability of a process which either has no known use or is useful
only in the sense that it may be an object of scientific research would apply equally to the patenting of the
product produced by the process. Respondent appears to concede that with respect to a product, as
opposed to a process, Congress has struck the balance on the side of non-patentability unless "utility" is
shown. Indeed, the decisions of the CCPA are in accord with the view that a product may not be patented
absent a showing of utility greater than any adduced in the present case. 23 We find absolutely no warrant
for the proposition that although Congress intended that no patent be granted on a chemical compound
whose sole "utility" consists of its potential role as an object of use-testing, a different set of rules was
meant to apply to the process which yielded the unpatentable product. 24 That proposition seems to us

little more than an attempt to evade the impact of the rules which concededly govern patentability of the
product itself.
This is not to say that we mean to disparage the importance of contributions to the fund of scientific
information [383 U.S. 519, 536] short of the invention of something "useful," or that we are blind to the
prospect that what now seems without "use" may tomorrow command the grateful attention of the public.
But a patent is not a hunting license. It is not a reward for the search, but compensation for its successful
conclusion. "[A] patent system must be related to the world of commerce rather than to the realm of
philosophy. . . ." 25
The judgment of the CCPA is
Reversed.
MR. JUSTICE DOUGLAS, while acquiescing in Part I of the Court's opinion, dissents on the merits of the
controversy for substantially the reasons stated by MR. JUSTICE HARLAN.

Footnotes
[ Footnote 1 ] The applicants described the products of their process as "2-methyl dihydrotestosterone
derivatives and esters thereof as well as 2-methyl dihydrotestosterone derivatives having a C-17 lower
alkyl group. The products of the process of the present invention have a useful high anabolic-androgenic
ratio and are especially valuable for treatment of those ailments where anabolic or antiestrogenic effect
together with a lesser androgenic effect is desired."
[ Footnote 2 ] 35 U.S.C. 135 (1964 ed.) provides: "Whenever an application is made for a patent which, in
the opinion of the Commissioner, would interfere with any pending application, or with any unexpired
patent, he shall give notice thereof . . . . The question of priority of invention shall be determined by a
board of patent interferences . . . whose decision, if adverse to the claim of an applicant, shall constitute
the final refusal by the Patent Office of the claims involved, and the Commissioner may issue a patent to
the applicant who is adjudged the prior inventor. . . ." Patent Office Rule 204 (b), 37 CFR 1.204 (b),
provides: "When the filing date or effective filing date of an applicant is subsequent to the filing date of a
patentee, the applicant, before an interference will be declared, shall file an affidavit that he made the
invention in controversy in this country, before the filing date of the patentee . . . and, when required, the
applicant shall file an affidavit . . . setting forth facts which would prima facie entitle him to an award of
priority relative to the filing date of the patentee." Judge Thurman Arnold has provided an irreverent
description of the way patent claims, including "interferences," are presented to the Patent Office. See
Monsanto Chemical Co. v. Coe, 79 U.S. App. D.C. 155, 145 F.2d 18.
[ Footnote 3 ] "A homologous series is a family of chemically related compounds, the composition of
which varies from member to member by CH2. (one atom of carbon and two atoms of hydrogen). . . .
Chemists knowing the properties of one member of a series would in general know what to expect in
adjacent members." Application of Henze, 37 C. C. P. A. (Pat.) 1009, 1014, 181 F.2d 196, 200-201. See also
In re Hass, 31 C. C. P. A. (Pat.) 895, 901, 141 F.2d 122, 125; Application of Norris, 37 C. C. P. A. (Pat.) 876,
179 F.2d 970; Application of Jones, 32 C. C. P. A. (Pat.) 1020, 149 F.2d 501. With respect to the inferior
predictability of steroid homologues, see, infra, p. 532.

[ Footnote 4 ] In addition to the clear conflict between the Patent Office and the CCPA, there arguably
exists one between the CCPA and the Court of Appeals for the District of Columbia. See Petrocarbon[383
U.S. 519, 523] Limited v. Watson, 101 U.S. App. D.C. 214, 247 F.2d 800, cert. denied, 355 U.S. 955 . But
see Application of Szwarc, 50 C. C. P. A. (Pat.) 1571, 1576-1583, 319 F.2d 277, 281-286.
[ Footnote 5 ] The present case is the first in which the Government has taken the position that 1256
confers jurisdiction upon this Court to review patent decisions in the CCPA. Prior to Glidden Co. v.
Zdanok, 370 U.S. 530 , the Government was of the view that the Court lacked jurisdiction. See, e. g., the
Brief in Opposition in Dalton v. Marzall, No. 87, O. T. 1951, cert. denied, 342 U.S. 818 . After the decision
in Glidden, discussed infra, at 526, the Government conceded the issue was a close one. See, e. g., Brief in
Opposition in In re Gruschwitz, No. 579, O. T. 1963, cert. denied, 375 U.S. 967 .
[ Footnote 6 ] We find no warrant for this curious limitation either in the statutory language or in the
legislative history of 1256. Nor do we find persuasive the circumstance that the Commissioner may not
appeal adverse decisions of the Board of Appeals. 35 U.S.C. 141, 142, and 145 (1964 ed.). As a member of
the Board and the official responsible for selecting the membership of its panels, 35 U.S.C. 7 (1964 ed.),
the Commissioner may be appropriately considered as bound by Board determinations. No such
consideration operates to prevent his seeking review of adverse decisions rendered by the CCPA.
[ Footnote 7 ] Act of March 2, 1927, c. 273, 11, 44 Stat. 1335, 1336. See Glidden Co. v. Zdanok, supra, at
572-579; Kurland & Wolfson, Supreme Court Review of the Court of Customs and Patent Appeals, 18 Geo.
Wash. L. Rev. 192 (1950). This remains the law. 35 U.S.C. 141, 145.
[ Footnote 8 ] Act of March 2, 1929, c. 488, 45 Stat. 1475.
[ Footnote 9 ] See Kurland & Wolfson, op. cit. supra, n. 7, at 196.
[ Footnote 10 ] Apart from Postum, until enactment of 1256 in 1948 there existed no statutory basis for
jurisdiction in these cases. See Robertson & Kirkham, Jurisdiction of the Supreme Court of the United
States, 251 (Wolfson & Kurland ed. 1951).
[ Footnote 11 ] This is not to say that a CCPA determination that an applicant is entitled to a patent
precludes a contrary result in a subsequent infringement suit, any more than issuance of a patent by the
Patent Office or the decision in an earlier infringement action against a different "infringer" has that
effect. See, e. g., Graham v. John Deere Co., ante, p. 1, at 4. We review decisions of the District [383 U.S.
519, 527] Court under 35 U.S.C. 145 although these are subject to the same measure of readjudication in
infringement suits. See Hoover Co. v. Coe, 325 U.S. 79 .
[ Footnote 12 ] Respondent and the amicus curiae take a different view than does the Government of
precisely what the issue on the merits is. They argue that the issue of "patentability" is not properly before
us, that the issue actually presented is whether the Primary Examiner in the Patent Office has authority
under Rule 204 (b) himself to evaluate the sufficiency of affidavits submitted under that Rule. Both the
Board of Appeals and the CCPA rejected this view and focused instead on the question of what averments
satisfy the statutory requirement that a claimed chemical process be "useful." We agree. First, the issue of
"patentability" cannot be foreclosed by the circumstance that the Patent Office - which, according to

counsel for respondent, processes some 1,800 claims and issues 700 patents each week - has already
issued a patent to Ringold and Rosenkranz who asserted in their claim that their process yielded useful
products. See note 1, supra. Second, there is no basis for the proposition that even where an applicant for
an interference presents a claim which on its face is unpatentable, a complicated and frequently lengthy
factual inquiry into priority of invention must inexorably take place. On the contrary, Rule 201 (a), 37 CFR
1.201 (a), defines an interference proceeding as one involving "two or more parties claiming substantially
the same patentable invention and may be instituted as soon as it is determined that common patentable
subject matter is claimed . . . ." (Emphasis supplied.) See Application of Rogoff, 46 C. C. P. A. (Pat.) 733,
739, 261 F.2d 601, 606: "The question as to patentability of claims to an applicant must be determined
before any question of interference arises and claims otherwise unpatentable to an applicant cannot be
allowed merely in order to set up an interference." See also Wirkler v. Perkins, 44 C. C. P. A. (Pat.) 1005,
1008, 245 F.2d 502, 504. Cf. Glass v. De Roo, 44 C. C. P. A. (Pat.) 723, 239 F.2d 402. The current version
of Rule 203 (a), 37 CFR 1.203 (a), makes it explicit that the examiner, "[b]efore the declaration of
interference," must determine the patentability of the claim as to each party. See also Rule 237, 37 CFR
1.237.
[ Footnote 13 ] See Act of April 10, 1790, c. 7, 1 Stat. 109; Act of Feb. 21, 1793, c. 11, 1 Stat. 318; Act of July
4, 1836, c. 357, 5 Stat. 117; Act of July 8, 1870, c. 230, 16 Stat. 198; Rev. Stat. 4886 (1874).
[ Footnote 14 ] 35 U.S.C. 101 (1964 ed.).
[ Footnote 15 ] Thus, in Application of Wilke, 50 C. C. P. A. (Pat.) 964, 314 F.2d 558, the court reversed a
Patent Office denial of a process claim, holding that 35 U.S.C. 112 (1964 ed.) was satisfied even though the
specification recited only the manner in which the process was to be used and not any use for the products
thereby yielded. See also Application of Adams, 50 C. C. P. A. (Pat.) 1185, 316 F.2d 476. In Application of
Szwarc, 50 C. C. P. A. (Pat.) 1571, 319 F.2d 277, the court acknowledged that its view of the law respecting
utility of chemical processes had changed since Bremner. See generally, Note, The Utility Requirement in
the Patent Law, 53 Geo. L. J. 154, 175-181 (1964).
[ Footnote 16 ] Respondent couches the issue in terms of whether the process yields a "known" product.
We fail to see the relevance of the fact that the product is "known," save to the extent that references to a
compound in scientific literature suggest that it might be a subject of interest and possible investigation.
[ Footnote 17 ] In light of our disposition of the case, we express no view as to the patentability of a
process whose sole demonstrated utility is to yield a product shown to inhibit the growth of tumors in
laboratory animals. See Application of Hitchings, 52 C. C. P. A. (Pat.) 1141, 342 F.2d 80; Application of
Bergel, 48 C. C. P. A. (Pat.) 1102, 292 F.2d 955; cf. Application of Dodson, 48 C. C. P. A. (Pat.) 1125, 292
F.2d 943; Application of Krimmel, 48 C. C. P. A. (Pat.) 1116, 292 F.2d 948. For a Patent Office view, see
Marcus, The Patent Office and Pharmaceutical Invention, 47 J. Pat. Off. Soc. 669, 673-676 (1965).
[ Footnote 18 ] See n. 3, supra.
[ Footnote 19 ] See respondent's letter requesting amendment, dated July 21, 1960, Record, pp. 20-23. See
also Application of Adams, 50 C. C. P. A. (Pat.) 1185, 1190, 316 F.2d 476, 479-480 (concurring-dissenting

opinion). In the present case, the Board of Appeals found support in the Ringold article itself for the view
that "minor changes in the structure of a steroid may produce profound changes in its biological activity."
Record, p. 52.
[ Footnote 20 ] Note on the Patent Laws, 3 Wheat. App. 13, 24. See also Justice Story's decisions on circuit
in Lowell v. Lewis, 15 Fed. Cas. 1018 (No. 8568) (C. C. D. Mass.), and Bedford v. Hunt, 3 Fed. Cas. 37 (No.
1217) (C. C. D. Mass.).
[ Footnote 21 ] "As a reward for inventions and to encourage their disclosure, the United States offers a
seventeen-year monopoly to an inventor who refrains from keeping his invention a trade secret."
Universal Oil Prods. Co. v. Globe Oil & Ref. Co., 322 U.S. 471, 484 .
[ Footnote 22 ] See Monsanto Chemical Co. v. Coe, 79 U.S. App. D.C. 155, 158-161, 145 F.2d 18, 21-24.
[ Footnote 23 ] See, e. g., the decision below, 52 C. C. P. A. (Pat.), at 744, 333 F.2d, at 237. See also
Application of Bergel, 48 C. C. P. A. (Pat.), at 1105, 292 F.2d, at 958. Cf. Application of Nelson, 47 C. C. P.
A. (Pat.), at 1043-1044, 280 F.2d, at 180-181; Application of Folkers, 52 C. C. P. A. (Pat.) 1269, 344 F.2d
970.
[ Footnote 24 ] The committee reports which preceded enactment of the 1952 revision of the patent laws
disclose no intention to create such a dichotomy, and in fact provide some evidence that the contrary was
assumed. Sen. Rep. No. 1979, Committee on the Judiciary, 82d Cong., 2d Sess., 5, 17; H. R. Rep. No. 1923,
Committee on the Judiciary, 82d Cong., 2d Sess., 6, 17. Cf. Hoxie, A Patent Attorney's View, 47 J. Pat. Off.
Soc. 630, 636 (1965).
[ Footnote 25 ] Application of Ruschig, 52 C. C. P. A. (Pat.) 1238, 1245, 343 F.2d 965, 970 (Rich, J.). See
also, Katz v. Horni Signal Mfg. Corp., 145 F.2d 961 (C. A. 2d Cir.).
MR. JUSTICE HARLAN, concurring in part and dissenting in part.
While I join the Court's opinion on the issue of certiorari jurisdiction, I cannot agree with its resolution of
the important question of patentability.
Respondent has contended that a workable chemical process, which is both new and sufficiently
nonobvious to satisfy the patent statute, is by its existence alone a contribution to chemistry and "useful"
as the statute employs that term. 1 Certainly this reading of "useful" in the statute is within the scope of
the constitutional grant, which states only that "[t]o promote the Progress of Science and useful Arts," the
exclusive right to "Writings and Discoveries" may be secured for limited times to those who produce them.
Art. I, 8. Yet the patent statute is somewhat differently worded and is on [383 U.S. 519, 537] its face open
both to respondent's construction and to the contrary reading given it by the Court. In the absence of
legislative history on this issue, we are thrown back on policy and practice. Because I believe that the
Court's policy arguments are not convincing and that past practice favors the respondent, I would reject
the narrow definition of "useful" and uphold the judgment of the Court of Customs and Patent Appeals
(hereafter CCPA).

The Court's opinion sets out about half a dozen reasons in support of its interpretation. Several of these
arguments seem to me to have almost no force. For instance, it is suggested that "[u]ntil the process claim
has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly
are not capable of precise delineation" (p. 534, ante) and "[i]t may engross a vast, unknown, and perhaps
unknowable area" (p. 534, ante). I fail to see the relevance of these assertions; process claims are not
disallowed because the products they produce may be of "vast" importance nor, in any event, does
advance knowledge of a specific product use provide much safeguard on this score or fix "metes and
bounds" precisely since a hundred more uses may be found after a patent is granted and greatly enhance
its value.
The further argument that an established product use is part of "[t]he basic quid pro quo" (p. 534, ante)
for the patent or is the requisite "successful conclusion" (p. 536, ante) of the inventor's search appears to
beg the very question whether the process is "useful" simply because it facilitates further research into
possible product uses. The same infirmity seems to inhere in the Court's argument that chemical products
lacking immediate utility cannot be distinguished for present purposes from the processes which create
them, that respondent appears to concede and the CCPA holds that [383 U.S. 519, 538] the products are
nonpatentable, and that therefore the processes are nonpatentable. Assuming that the two classes cannot
be distinguished, a point not adequately considered in the briefs, and assuming further that the CCPA has
firmly held such products nonpatentable, 2 this permits us to conclude only that the CCPA is wrong either
as to the products or as to the processes and affords no basis for deciding whether both or neither should
be patentable absent a specific product use.
More to the point, I think, are the Court's remaining, prudential arguments against patentability: namely,
that disclosure induced by allowing a patent is partly undercut by patent-application drafting techniques,
that disclosure may occur without granting a patent, and that a patent will discourage others from
inventing uses for the product. How far opaque drafting may lessen the public benefits resulting from the
issuance of a patent is not shown by any evidence in this case but, more important, the argument operates
against all patents and gives no reason for singling out the class involved here. The thought that these
inventions may be more likely than most to be disclosed even if patents are not allowed may have more
force; but while empirical study of the industry might reveal that chemical researchers would behave in
this fashion, the abstractly logical choice for them seems to me to maintain secrecy until a product use can
be discovered. As to discouraging the search by [383 U.S. 519, 539] others for product uses, there is no
doubt this risk exists but the price paid for any patent is that research on other uses or improvements may
be hampered because the original patentee will reap much of the reward. From the standpoint of the
public interest the Constitution seems to have resolved that choice in favor of patentability.
What I find most troubling about the result reached by the Court is the impact it may have on chemical
research. Chemistry is a highly interrelated field and a tangible benefit for society may be the outcome of a
number of different discoveries, one discovery building upon the next. To encourage one chemist or
research facility to invent and disseminate new processes and products may be vital to progress, although
the product or process be without "utility" as the Court defines the term, because that discovery permits
someone else to take a further but perhaps less difficult step leading to a commercially useful item. In my

view, our awareness in this age of the importance of achieving and publicizing basic research should lead
this Court to resolve uncertainties in its favor and uphold the respondent's position in this case.
This position is strengthened, I think, by what appears to have been the practice of the Patent Office
during most of this century. While available proof is not conclusive, the commentators seem to be in
agreement that until Application of Bremner, 37 C. C. P. A. (Pat.) 1032, 182 F.2d 216, in 1950, chemical
patent applications were commonly granted although no resulting end use was stated or the statement
was in extremely broad terms. 3 Taking this to be true, Bremner represented [383 U.S. 519, 540] a
deviation from established practice which the CCPA has now sought to remedy in part only to find that the
Patent Office does not want to return to the beaten track. If usefulness was typically regarded as inherent
during a long and prolific period of chemical research and development in this country, surely this is
added reason why the Court's result should not be adopted until Congress expressly mandates it,
presumably on the basis of empirical data which this Court does not possess.
Fully recognizing that there is ample room for disagreement on this problem when, as here, it is reviewed
in the abstract, I believe the decision below should be affirmed.
[ Footnote 1 ] The statute in pertinent part is set out in the Court's opinion, p. 529, ante.
[ Footnote 2 ] Any concession by respondent would hardly be controlling on an issue of this general
importance, but I am less clear than the Court that such a concession exists. See, e. g., Brief for
Respondent, p. 53. As to the CCPA, it is quite true that that court purports in the very case under review
and in others to distinguish product patents, although its actual practice may be somewhat less firm. See
Application of Adams, 50 C. C. P. A. (Pat.) 1185, 316 F.2d 476, Application of Nelson, 47 C. C. P. A. (Pat.)
1031, 280 F.2d 172.
[ Footnote 3 ] See, e. g., the statement of a Patent Office Examiner-in-Chief: "Until recently it was also
rather common to get patents on chemical compounds in cases where no use was indicated for the
claimed compounds or in which a very broad indication or suggestion as [383 U.S. 519, 540] to use was
included in the application. [Bremner and another later ruling] . . . have put an end to this practice."
Wolffe, Adequacy of Disclosure as Regards Specific Embodiment and Use of Invention, 41 J. Pat. Off. Soc.
61, 66 (1959). The Government's brief in this case is in accord: "[I]t was apparently assumed by the Patent
Office [prior to 1950] . . . that chemical compounds were necessarily useful . . . and that specific inquiry
beyond the success of the process was therefore unnecessary . . . ." Brief for the Commissioner, p. 25. See
also Cohen & Schwartz, Do Chemical Intermediates Have Patentable Utility? 29 Geo. Wash. L. Rev. 87, 91
(1960); Note, 53 Geo. L. J. 154, 183 (1964); 14 Am. U. L. Rev. 78 (1964). [383 U.S. 519, 541]

185 F.3d 1364 (Fed. Cir. 1999)

JUICY WHIP, INC., Plaintiff-Appellant,
v.
ORANGE BANG, INC. and UNIQUE BEVERAGE DISPENSERS, INC.,
Defendants-Appellees.

98-1379

United States Court of Appeals for the Federal Circuit

DECIDED: August 6. 1999
Appealed from: United States District Court for the Central District of California Judge Audrey B.
CollinsErnie L. Brooks, Brooks & Kushman, P.C., of Southfield, Michigan, argued for plaintiff-appellant.
With him on the brief were Frank A. Angileri, William G. Abbatt, and John E. Nemazi.
Michael A. Painter, Isaacman, Kaufman & Painter, of Beverly Hills, California, argued for defendantsappellees.
Before RICH,1 SCHALL, and BRYSON, Circuit Judges.
BRYSON, Circuit Judge.
1
The district court in this case held a patent invalid for lack of utility on the ground that the patented
invention was designed to deceive customers by imitating another product and thereby increasing
sales of a particular good. We reverse and remand.
2
* Juicy Whip, Inc., is the assignee of United States Patent No. 5,575,405, which is entitled "Post-Mix
Beverage Dispenser With an Associated Simulated Display of Beverage." A "post-mix" beverage
dispenser stores beverage syrup concentrate and water in separate locations until the beverage is
ready to be dispensed. The syrup and water are mixed together immediately before the beverage is
dispensed, which is usually after the consumer requests the beverage. In contrast, in a "pre-mix"
beverage dispenser, the syrup concentrate and water are pre-mixed and the beverage is stored in a
display reservoir bowl until it is ready to be dispensed. The display bowl is said to stimulate impulse
buying by providing the consumer with a visual beverage display. A pre-mix display bowl, however, has
a limited capacity and is subject to contamination by bacteria. It therefore must be refilled and cleaned
frequently.
3
The invention claimed in the '405 patent is a post-mix beverage dispenser that is designed to look like
a pre-mix beverage dispenser. The claims require the post-mix dispenser to have a transparent bowl
that is filled with a fluid that simulates the appearance of the dispensed beverage and is resistant to
bacterial growth. The claims also require that the dispenser create the visual impression that the bowl
is the principal source of the dispensed beverage, although in fact the beverage is mixed immediately
before it is dispensed, as in conventional post-mix dispensers.
4

Claim 1 is representative of the claims at issue. It reads as follows:

5
In a post-mix beverage dispenser of the type having an outlet for discharging beverage components in
predetermined proportions to provide a serving of dispensed beverage, the improvement which
comprises:
6
a transparent bowl having no fluid connection with the outlet and visibly containing a quantity of fluid;
7
said fluid being resistant to organic growth and simulating the appearance of the dispensed beverage;
8
said bowl being positioned relative to the outlet to create the visual impression that said bowl is the
reservoir and principal source of the dispensed beverage from the outlet; and
9
said bowl and said quantity of fluid visible within said bowl cooperating to create the visual impression
that multiple servings of the dispensed beverage are stored within said bowl.
10
Juicy Whip sued defendants Orange Bang, Inc., and Unique Beverage Dispensers, Inc., (collectively,
"Orange Bang") in the United States District Court for the Central District of California, alleging that
they were infringing the claims of the '405 patent. Orange Bang moved for summary judgment of
invalidity, and the district court granted Orange Bang's motion on the ground that the invention lacked
utility and thus was unpatentable under 35 U.S.C. 101.
11
The court concluded that the invention lacked utility because its purpose was to increase sales by
deception, i.e., through imitation of another product. The court explained that the purpose of the
invention "is to create an illusion, whereby customers believe that the fluid contained in the bowl is the
actual beverage that they are receiving, when of course it is not." Although the court acknowledged
Juicy Whip's argument that the invention provides an accurate representation of the dispensed
beverage for the consumer's benefit while eliminating the need for retailers to clean their display
bowls, the court concluded that those claimed reasons for the patent's utility "are not independent of
its deceptive purpose, and are thus insufficient to raise a disputed factual issue to present to a jury."
The court further held that the invention lacked utility because it "improves the prior art only to the
extent that it increases the salability of beverages dispensed from post-mix dispensers"; an invention
lacks utility, the court stated, if it confers no benefit to the public other than the opportunity for making
a product more salable. Finally, the court ruled that the invention lacked utility because it "is merely an
imitation of the pre-mix dispenser," and thus does not constitute a new and useful machine.

II
12
Section 101 of the Patent Act of 1952, 35 U.S.C. 101, provides that "[w]hoever invents or discovers
any new and useful process, machine, manufacture, or composition of matter, or any new and useful
improvement thereof," may obtain a patent on the invention or discovery. The threshold of utility is not
high: An invention is "useful" under section 101 if it is capable of providing some identifiable benefit.
See Brenner v. Manson, 383 U.S. 519, 534 (1966); Brooktree Corp. v. Advanced Micro Devices,
Inc., 977 F.2d 1555, 1571 (Fed. Cir. 1992) ("To violate 101 the claimed device must be totally
incapable of achieving a useful result"); Fuller v. Berger, 120 F. 274, 275 (7th Cir. 1903) (test for utility
is whether invention "is incapable of serving any beneficial end").
13
To be sure, since Justice Story's opinion in Lowell v. Lewis, 15 F. Cas. 1018 (C.C.D. Mass. 1817), it
has been stated that inventions that are "injurious to the well-being, good policy, or sound morals of
society" are unpatentable. As examples of such inventions, Justice Story listed "a new invention to
poison people, or to promote debauchery, or to facilitate private assassination." Id. at 1019. Courts
have continued to recite Justice Story's formulation, see Tol-o-matic, Inc. v. Proma Produkt-Und
Marketing Gesellschaft m.b.H., 945 F.2d 1546, 1552-53, 20 USPQ 1332, 1338 (Fed. Cir. 1991); In re
Nelson, 280 F.2d 172, 178-79, 126 USPQ 242, 249 (CCPA 1960), but the principle that inventions are
invalid if they are principally designed to serve immoral or illegal purposes has not been applied
broadly in recent years. For example, years ago courts invalidated patents on gambling devices on the
ground that they were immoral, see e.g., Brewer v. Lichtenstein, 278 F. 512 (7th Cir. 1922); Schultze v.
Holtz, 82 F. 448 (N.D. Cal. 1897); National Automatic Device Co. v. Lloyd, 40 F. 89 (N.D. Ill. 1889), but
that is no longer the law, see In re Murphy, 200 USPQ 801 (PTO Bd. App. 1977).
14
In holding the patent in this case invalid for lack of utility, the district court relied on two Second Circuit
cases dating from the early years of this century, Rickard v. Du Bon, 103 F. 868 (2d Cir. 1900), and
Scott & Williams, Inc. v. Aristo Hosiery Co., 7 F.2d 1003 (2d Cir. 1925). In the Rickard case, the court
held invalid a patent on a process for treating tobacco plants to make their leaves appear spotted. At
the time of the invention, according to the court, cigar smokers considered cigars with spotted
wrappers to be of superior quality, and the invention was designed to make unspotted tobacco leaves
appear to be of the spotted -- and thus more desirable -- type. The court noted that the invention did
not promote the burning quality of the leaf or improve its quality in any way; "the only effect, if not the
only object, of such treatment, is to spot the tobacco, and counterfeit the leaf spotted by natural
causes." Id. at 869.
15
The Aristo Hosiery case concerned a patent claiming a seamless stocking with a structure on the back
of the stocking that imitated a seamed stocking. The imitation was commercially useful because at the
time of the invention many consumers regarded seams in stockings as an indication of higher quality.
The court noted that the imitation seam did not "change or improve the structure or the utility of the
article," and that the record in the case justified the conclusion that true seamed stockings were
superior to the seamless stockings that were the subject of the patent. See Aristo Hosiery, 7 F.2d at

1004. "At best," the court stated, "the seamless stocking has imitation marks for the purposes of
deception, and the idea prevails that with such imitation the article is more salable." Id. That was not
enough, the court concluded, to render the invention patentable.
16
We decline to follow Rickard and Aristo Hosiery, as we do not regard them as representing the correct
view of the doctrine of utility under the Patent Act of 1952. The fact that one product can be altered to
make it look like another is in itself a specific benefit sufficient to satisfy the statutory requirement of
utility.
17
It is not at all unusual for a product to be designed to appear to viewers to be something it is not. For
example, cubic zirconium is designed to simulate a diamond, imitation gold leaf is designed to imitate
real gold leaf, synthetic fabrics are designed to simulate expensive natural fabrics, and imitation
leather is designed to look like real leather. In each case, the invention of the product or process that
makes such imitation possible has "utility" within the meaning of the patent statute, and indeed there
are numerous patents directed toward making one product imitate another. See, e.g., U.S. Pat. No.
5,762,968 (method for producing imitation grill marks on food without using heat); U.S. Pat. No.
5,899,038 (laminated flooring imitating wood); U.S. Pat. No. 5,571,545 (imitation hamburger). Much of
the value of such products resides in the fact that they appear to be something they are not. Thus, in
this case the claimed post-mix dispenser meets the statutory requirement of utility by embodying the
features of a post-mix dispenser while imitating the visual appearance of a pre-mix dispenser.
18
The fact that customers may believe they are receiving fluid directly from the display tank does not
deprive the invention of utility. Orange Bang has not argued that it is unlawful to display a
representation of the beverage in the manner that fluid is displayed in the reservoir of the invention,
even though the fluid is not what the customer will actually receive. Moreover, even if the use of a
reservoir containing fluid that is not dispensed is considered deceptive, that is not by itself sufficient to
render the invention unpatentable. The requirement of "utility" in patent law is not a directive to the
Patent and Trademark Office or the courts to serve as arbiters of deceptive trade practices. Other
agencies, such as the Federal Trade Commission and the Food and Drug Administration, are assigned
the task of protecting consumers from fraud and deception in the sale of food products. Cf. In re
Watson, 517 F.2d 465, 474-76, 186 USPQ 11, 19 (CCPA 1975) (stating that it is not the province of the
Patent Office to determine, under section 101, whether drugs are safe). As the Supreme Court put the
point more generally, "Congress never intended that the patent laws should displace the police powers
of the States, meaning by that term those powers by which the health, good order, peace and general
welfare of the community are promoted." Webber v. Virginia, 103 U.S. 344, 347-48 (1880).
19
Of course, Congress is free to declare particular types of inventions unpatentable for a variety of
reasons, including deceptiveness. Cf. 42 U.S.C. 2181(a) (exempting from patent protection
inventions useful solely in connection with special nuclear material or atomic weapons). Until such
time as Congress does so, however, we find no basis in section 101 to hold that inventions can be

ruled unpatentable for lack of utility simply because they have the capacity to fool some members of
the public. The district court therefore erred in holding that the invention of the '405 patent lacks utility
because it deceives the public through imitation in a manner that is designed to increase product
sales.
20
REVERSED and REMANDED.
NOTES:
1
Circuit Judge Rich heard oral argument in this case but died on June 9, 1999. This case was decided by
the remaining judges in accordance with Federal Circuit Rule 47.11.

[G.R. No. 113388. September 5, 1997]

ANGELITA MANZANO, petitioner, vs. COURT OF APPEALS, and

MELECIA MADOLARIA, as Assignor to NEW UNITED FOUNDRY
MANUFACTURING CORPORATION, respondents.
DECISION
BELLOSILLO, J.:

The primary purpose of the patent system is not the reward of the
individual but the advancement of the arts and sciences. The function of a
patent is to add to the sum of useful knowledge and one of the purposes of
the patent system is to encourage dissemination of information concerning
discoveries and inventions. This is a matter which is properly within the
competence of the Patent Office the official action of which has the
presumption of correctness and may not be interfered with in the absence of
new evidence carrying thorough conviction that the Office has erred. Since
the Patent Office is an expert body preeminently qualified to determine
questions of patentability, its findings must be accepted if they are consistent
with the evidence, with doubts as to patentability resolved in favor of the
Patent Office.
[1]

Petitioner Angelita Manzano filed with the Philippine Patent Office on 19

February 1982 an action for the cancellation of Letters Patent No. UM-4609
for a gas burner registered in the name of respondent Melecia Madolaria who
subsequently assigned the letters patent to New United Foundry and
Manufacturing Corporation (UNITED FOUNDRY, for brevity). Petitioner
alleged that (a) the utility model covered by the letters patent, in this case, an
LPG gas burner, was not inventive, new or useful; (b) the specification of the
letters patent did not comply with the requirements of Sec. 14, RA No. 165, as
amended; (c) respondent Melecia Madolaria was not the original, true and
actual inventor nor did she derive her rights from the original, true and actual
inventor of the utility model covered by the letters patent; and, (d) the letters
patent was secured by means of fraud or misrepresentation. In support of her
petition for cancellation petitioner further alleged that (a) the utility model
covered by the letters patent of respondent had been known or used by others
in the Philippines for more than one (1) year before she filed her application
for letters patent on 9 December 1979; (b) the products which were produced
in accordance with the utility model covered by the letters patent had been in
public use or on sale in the Philippines for more than one (1) year before the
application for patent therefor was filed.
Petitioner presented the following documents which she correspondingly
marked as exhibits: (a) affidavit of petitioner alleging the existence of prior art,
marked Exh. A; (b) a brochure distributed by Manila Gas Corporation
disclosing a pictorial representation of Ransome Burner made by Ransome
Torch and Burner Company, USA, marked Exh. D; and, (c) a brochure
distributed by Esso Gasul or Esso Standard Eastern, Inc., of the Philippines
showing a picture of another similar burner with top elevation view and
another perspective view of the same burner, marked Exh. E.
Testifying for herself petitioner narrated that her husband Ong Bun Tua
worked as a helper in the UNITED FOUNDRY where respondent Melecia
Madolaria used to be affiliated with from 1965 to 1970; that Ong helped in the
casting of an LPG burner which was the same utility model of a burner for
which Letters Patent No. UM-4609 was issued, and that after her husbands
separation from the shop she organized Besco Metal Manufacturing (BESCO
METAL, for brevity) for the casting of LPG burners one of which had the
configuration, form and component parts similar to those being manufactured
by UNITED FOUNDRY. Petitioner presented in evidence an alleged model of
an LPG burner marked Exh. K and covered by the Letters Patent of
respondent, and testified that it was given to her in January 1982 by one of
her customers who allegedly acquired it from UNITED FOUNDRY. Petitioner
also presented in evidence her own model of an LPG burner called

Ransome burner marked Exh. L, which was allegedly manufactured in

1974 or 1975 and sold by her in the course of her business operation in the
name of BESCO METAL. Petitioner claimed that this Ransome burner (Exh.
L) had the same configuration and mechanism as that of the model which
was patented in favor of private respondent Melecia Madolaria. Also
presented by petitioner was a burner cup of an imported Ransome burner
marked Exh M which was allegedly existing even before the patent
application of private respondent.
Petitioner presented two (2) other witnesses, namely, her husband Ong
Bun Tua and Fidel Francisco. Ong testified that he worked as a helper in the
UNITED FOUNDRY from 1965 to 1970 where he helped in the casting of LPG
burners with the same form, configuration and mechanism as that of the
model covered by the Letters Patent issued to private respondent. Francisco
testified that he had been employed with the Manila Gas Corporation from
1930 to 1941 and from 1952 up to 1969 where he retired as supervisor and
that Manila Gas Corporation imported Ransome burners way back in 1965
which were advertised through brochures to promote their sale.
Private respondent, on the other hand, presented only one witness,
Rolando Madolaria, who testified, among others, that he was the General
Supervisor of the UNITED FOUNDRY in the foundry, machine and buffing
section; that in his early years with the company, UNITED FOUNDRY was
engaged in the manufacture of different kinds of gas stoves as well as burners
based on sketches and specifications furnished by customers; that the
company manufactured early models of single-piece types of burners where
the mouth and throat were not detachable; that in the latter part of 1978
respondent Melecia Madolaria confided in him that complaints were being
brought to her attention concerning the early models being manufactured; that
he was then instructed by private respondent to cast several experimental
models based on revised sketches and specifications; that private respondent
again made some innovations; that after a few months, private respondent
discovered the solution to all the defects of the earlier models and, based on
her latest sketches and specifications, he was able to cast several models
incorporating the additions to the innovations introduced in the
models. Various tests were conducted on the latest model in the presence
and under the supervision of Melecia Madolaria and they obtained perfect
results. Rolando Madolaria testified that private respondent decided to file her
application for utility model patent in December 1979.
On 7 July 1986 the Director of Patents Cesar C. Sandiego issued Decision
No. 86-56 denying the petition for cancellation and holding that the evidence
of petitioner was not able to establish convincingly that the patented utility

model of private respondent was anticipated. Not one of the various pictorial
representations of business clearly and convincingly showed that the devices
presented by petitioner was identical or substantially identical with the utility
model of the respondent. The decision also stated that even assuming that
the brochures depicted clearly each and every element of the patented gas
burner device so that the prior art and patented device became identical
although in truth they were not, they could not serve as anticipatory bars for
the reason that they were undated. The dates when they were distributed to
the public were not indicated and, therefore, were useless prior art
references. The records and evidence also do not support the petitioners
contention that Letters Patent No. UM-4609 was obtained by means of fraud
and/or misrepresentation. No evidence whatsoever was presented by
petitioner to show that the then applicant Melecia Madolaria withheld with
intent to deceive material facts which, if disclosed, would have resulted in the
refusal by the Philippine Patent Office to issue the Letters Patent under
inquiry.
Petitioner elevated the decision of the Director of Patents to the Court of
Appeals which on 15 October 1993 affirmed the decision of the Director of
Patents. Hence, this petition for review on certiorari alleging that the Court of
Appeals erred (a) in relying on imaginary differences which in actuality did not
exist between the model of private respondent covered by Letters Patent No.
UM-4609 and the previously known model of Esso Standard Eastern, Inc.,
and Manila Gas Corporation, making such imaginary differences grounded
entirely on speculation, surmises and conjectures; (b) in rendering judgment
based on misapprehension of facts; (c) in relying mainly on the testimony of
private respondents sole witness Rolando Madolaria; and, (d) in not canceling
Letters Patent No. UM-4609 in the name of private respondent.
Petitioner submits that the differences cited by the Court of Appeals
between the utility model of private respondent and the models of Manila Gas
Corporation and Esso Standard Eastern, Inc., are more imaginary than
real. She alleges that based on Exhs. E, E-1, F and F-1 or the
brochures of Manila Gas Corporation and Esso Standard Eastern, Inc.,
presented by petitioner, the cup-shaped burner mouth and threaded hole on
the side are shown to be similar to the utility model of private respondent. The
exhibits also show a detachable burner mouth having a plurality of upwardly
existing undulations adopted to act as gas passage when the cover is
attached to the top of said cup-shaped mouth all of which are the same as
those in the patented model. Petitioner also denies as substantial difference
the short cylindrical tube of the burner mouth appearing in the brochures of

the burners being sold by Manila Gas Corporation and the long cylindered
tube of private respondents model of the gas burner.
Petitioner argues that the actual demonstration made during the hearing
disclosed the similarities in form, operation and mechanism and parts
between the utility model of private respondent and those depicted in the
brochures. The findings of the Patent Office and the Court of Appeals that the
brochures of Manila Gas Corporation and Esso Standard Eastern, Inc., are
undated cannot overcome the fact of their circulation before private
respondent filed her application for utility model patent. Petitioner thus asks
this Court to take judicial notice of the fact that Esso Standard Eastern, Inc.,
disappeared before 1979 and reappeared only during the Martial Law years
as Petrophil Corporation. Petitioner also emphasizes that the brochures
indicated the telephone number of Manila Gas Corporation as 5-79-81 which
is a five (5) numbered telephone number existing before 1975 because
telephones in Metro Manila started to have six (6) numbers only after that
year.
Petitioner further contends that the utility model of private respondent is
absolutely similar to the LPG burner being sold by petitioner in 1975 and
1976, and also to the Ransome burner depicted in the old brochures of
Manila Gas Corporation and Esso Standard Eastern, Inc., fabricated by
Ransome Torch and Burner Company of Oakland, California, USA, especially
when considered through actual physical examination, assembly and
disassembly of the models of petitioner and private respondent. Petitioner
faults the Court of Appeals for disregarding the testimonies of Ong Bun Tua
and Fidel Francisco for their failure to produce documents on the alleged
importation by Manila Gas Corporation of Ransome burners in 1965 which
had the same configuration, form and mechanism as that of the private
respondents patented model.
Finally, it is argued that the testimony of private respondents lone witness
Rolando Madolaria should not have been given weight by the Patent Office
and the Court of Appeals because it contained mere after-thoughts and
pretensions.
We cannot sustain petitioner. Section 7 of RA No. 165, as amended,
which is the law on patents, expressly provides Sec. 7. Inventions patentable. Any invention of a new and useful machine,
manufactured product or substance, process or an improvement of any of the
foregoing, shall be patentable.
Further, Sec. 55 of the same law provides -

Sec. 55. Design patents and patents for utility models. - (a) Any new, original and
ornamental design for an article of manufacture and (b) any new model of implements
or tools or of any industrial product or of part of the same, which does not possess the
quality of invention, but which is of practical utility by reason of its form,
configuration, construction or composition, may be protected by the author thereof,
the former by a patent for a design and the latter by a patent for a utility model, in the
same manner and subject to the same provisions and requirements as relate to patents
for inventions insofar as they are applicable except as otherwise herein provided.
The element of novelty is an essential requisite of the patentability of an
invention or discovery. If a device or process has been known or used by
others prior to its invention or discovery by the applicant, an application for a
patent therefor should be denied; and if the application has been granted, the
court, in a judicial proceeding in which the validity of the patent is drawn in
question, will hold it void and ineffective. 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.
[2]

[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. 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.
[4]

[5]

As found by the Director of Patents, the standard of evidence sufficient to

overcome the presumption of legality of the issuance of UM-4609 to
respondent Madolaria was not legally met by petitioner in her action for the
cancellation of the patent. Thus the Director of Patents explained his reasons
for the denial of the petition to cancel private respondents patent Scrutiny of Exhs. D and E readily reveals that the utility model (LPG Burner) is
not anticipated. Not one of the various pictorial representations of burners clearly and
convincingly show that the device presented therein is identical or substantially
identical in construction with the aforesaid utility model. It is relevant and material to

state that in determining whether novelty or newness is negatived by any prior art,
only one item of the prior art may be used at a time. For anticipation to occur, the
prior art must show that each element is found either expressly or described or under
principles of inherency in a single prior art reference or that the claimed invention was
probably known in a single prior art device or practice. (Kalman v. Kimberly
Clark, 218 USPQ 781, 789)
Even assuming gratia arguendi that the aforesaid brochures do depict clearly on all
fours each and every element of the patented gas burner device so that the prior art
and the said patented device become identical, although in truth they are not, they
cannot serve as anticipatory bars for the reason that they are undated. The dates when
they were distributed to the public were not indicated and, therefore, they are useless
prior art references.
xxxx
Furthermore, and more significantly, the model marked Exh. K does not show
whether or not it was manufactured and/or cast before the application for the issuance
of patent for the LPG burner was filed by Melecia Madolaria.
With respect to Exh. L, petitioner claimed it to be her own model of LPG burner
allegedly manufactured sometime in 1974 or 1975 and sold by her in the course of her
business operation in the name of Besco Metal Manufacturing, which burner was
denominated as Ransome burner
xxxx
But a careful examination of Exh. L would show that it does not bear the word
Ransome which is the burner referred to as the product being sold by the
Petitioner. This is not the way to prove that Exh. L anticipates Letters Patent No.
UM-4609 through Exhs. C and D. Another factor working against the
Petitioners claims is that an examination of Exh. L would disclose that there is no
indication of the time or date it was manufactured. This Office, thus has no way of
determining whether Exh. L was really manufactured before the filing of the
aforesaid application which matured into Letters Patent No. UM-4609, subject matter
of the cancellation proceeding.
At this juncture, it is worthwhile to point out that petitioner also presented Exh. M
which is the alleged burner cup of an imported Ransome burner. Again, this Office
finds the same as unreliable evidence to show anticipation. It observed that there is no
date indicated therein as to when it was manufactured and/or imported before the
filing of the application for issuance of patent of the subject utility model. What is

more, some component parts of Exh. M are missing, as only the cup was presented
so that the same could not be compared to the utility model (subject matter of this
case) which consists of several other detachable parts in combination to form the
complete LPG burner.
xxxx
It must likewise be pointed out that Ong Bun Tua testified on the brochures allegedly
of Manila Gas and of Esso Gasul marked Exhs. E and F and on the alleged fact
that Manila Gas Corporation was importing from the United States Ransome
burners. But the same could not be given credence since he himself admitted during
cross- examination that he has never been connected with Manila Gas
Corporation. He could not even present any importation papers relating to the alleged
imported ransome burners. Neither did his wife.
[6]

The above findings and conclusions of the Director of Patent were

reiterated and affirmed by the Court of Appeals.
[7]

The validity of the patent issued by the Philippine Patent Office in favor of
private respondent and the question over the inventiveness, novelty and
usefulness of the improved model of the LPG burner are matters which are
better determined by the Patent Office. The technical staff of the Philippine
Patent Office composed of experts in their field has by the issuance of the
patent in question accepted private respondents model of gas burner as a
discovery. There is a presumption that the Office has correctly determined the
patentability of the model and such action must not be interfered with in the
absence of competent evidence to the contrary.
[8]

The rule is settled that the findings of fact of the Director of Patents,
especially when affirmed by the Court of Appeals, are conclusive on this Court
when supported by substantial evidence. Petitioner has failed to show
compelling grounds for a reversal of the findings and conclusions of the
Patent Office and the Court of Appeals.
The alleged failure of the Director of Patents and the Court of Appeals to
accord evidentiary weight to the testimonies of the witnesses of petitioner
showing anticipation is not a justification to grant the petition. Pursuant to the
requirement of clear and convincing evidence to overthrow the presumption of
validity of a patent, it has been held that oral testimony to show anticipation is
open to suspicion and if uncorroborated by cogent evidence, as what occurred
in this case, it may be held insufficient.
[9]

Finally, petitioner would want this Court to review all over again the
evidence she presented before the Patent Office. She argues that contrary to

the decision of the Patent Office and the Court of Appeals, the evidence she
presented clearly proves that the patented model of private respondent is no
longer new and, therefore, fraud attended the acquisition of patent by private
respondent.
It has been held that the question on priority of invention is one of
fact. Novelty and utility are likewise questions of fact. The validity of patent is
decided on the basis of factual inquiries. Whether evidence presented comes
within the scope of prior art is a factual issue to be resolved by the Patent
Office. 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.
[10]

[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.