First case

Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the state of
Pennsylvania, United States of America (U.S.) and licensed to do business in the Philippines, filed on
October 8, 1976, as assignee, before the Philippine Patent Office
an application for patent over an invention entitled Methods and Compositions for Producing Biphasic
Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate.

On September 24 1981 Letters Patent No. 14561 [1] for the aforesaid invention was issued to petitioner for a
term of seventeen (17) years.

The letters patent provides in its claims [2] that the patented invention consisted of a new compound named
methyl 5 propylthio-2-benzimidazole carbamate and the methods or compositions utilizing the compound
as an active ingredient in fighting infections caused by gastrointestinal parasites and lungworms in animals
such as swine, sheep, cattle, goats, horses, and even pet animals.

Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures, distributes and
sells veterinary products including Impregon, a drug that has Albendazole for its active ingredient and is
claimed to be effective against gastro-intestinal roundworms, lungworms, tapeworms and fluke infestation
in carabaos, cattle and goats.

Petitioner sued private respondent for infringement of patent and unfair competition before the Caloocan
City Regional Trial Court (RTC).[3]

Because of the manufacturing, seeling of respondent of Albendazole, it infringes the patent of petitioner

Trial court ruled in favor of the respondent due to the fact that the patent of petitioner is null and void for
being in violation of the Patent law ( 7, 9, 15)

CA affirmed trial court

o

respondent was not liable for any infringement of the patent of petitioner in light of the latters
failure to show that Albendazole is the same as the compound subject of Letters Patent No. 14561

The appellate court, however, declared that Letters Patent No. 14561 was not void as it sustained
petitioners explanation that Patent Application Serial No. 18989 which was filed on October 8,
1976 was a divisional application of Patent Application Serial No. 17280 filed on June 17, 1975
with the Philippine Patent Office, well within one year from petitioners filing on June 19, 1974

Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent Application
Serial No. 18989 was deemed filed on June 17, 1995 or still within one year from the filing of a
patent application abroad in compliance with the one-year rule under Section 15 of the Patent Law

Issue: Whether or not the respondent committed patent infringement

Held: NO

Petitioner argues that under the doctrine of equivalents for determining patent infringement, Albendazole,
the active ingredient it alleges was appropriated by private respondent for its drug Impregon, is
substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered by its patent since both
of them are meant to combat worm or parasite infestation in animals.

Petitioner adds that the two substances substantially do the same function in substantially the same way to
achieve the same results, thereby making them truly identical.

The burden of proof to substantiate a charge for patent infringement rests on the plaintiff. [16] In the case at
bar, petitioners evidence consists primarily of its Letters Patent No. 14561, and the testimony of Dr.
Orinion, its general manager in the Philippines for its Animal Health Products Division

From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions thereof, no
mention is made of the compound Albendazole

When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim
anything beyond them.[17]

While Albendazole is admittedly a chemical compound that exists by a name different from that covered in
petitioners letters patent, the language of Letter Patent No. 14561 fails to yield anything at all regarding
Albendazole

The doctrine of equivalents provides that an infringement also takes place when a device appropriates a
prior invention by incorporating its innovative concept and, although with some modification and change,
performs substantially the same function in substantially the same way to achieve substantially the same
resul
o

, a scrutiny of petitioners evidence fails to convince this Court of the substantial sameness of
petitioners patented compound and Albendazole

the principle or mode of operation must be the same or substantially the same

The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the patentee
having the burden to show that all three components of such equivalency test are met.[22]

As stated early on, petitioners evidence fails to explain how Albendazole is in every essential detail
identical to methyl 5 propylthio-2-benzimidazole carbamate

nothing more is asserted and accordingly substantiated regarding the method or means by which
Albendazole weeds out parasites in animals, thus giving no information on whether that method is
substantially the same as the manner by which petitioners compound works

What this only means is that petitioners methyl 5 propylthio-2-benzimidazole carbamate is an invention
distinct from the other inventions claimed in the original application divided out, Albendazole being one of
those other inventions.

2nd case
Facts:

Petitioner is the assignee of Letters Patent No. 12207 covering the pharmaceutical product Cimetidine,
which relates to derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl thiourea, ureas or
guanadines.\

On August 21, 1989, private respondent filed with the BPTTT a petition for compulsory license to
manufacture and produce its own brand of medicines using Cimetidine. Private respondent invoked Section
34 (1) (e) of Republic Act No. 165,[3] (the Patent Law) the law then governing patents, which states that an
application for the grant of a compulsory license under a particular patent may be filed with the BPTTT at
any time after the lapse of two (2) years from the date of grant of such patent, if the patented invention or
article relates to food or medicine, or manufactured substances which can be used as food or medicine, or is
necessary for public health or public safety

Petitioner opposed the petition for compulsory license, arguing that the private respondent had no cause of
action and failed to allege how it intended to work the patented product. Petitioner further stated that its
manufacture, use and sales of Cimetidine satisfied the needs of the Philippine market, hence, there was no
need to grant a compulsory license to private respondent to manufacture, use and sell the same. Finally,
petitioner also claimed that the grant of a compulsory license to private respondent would not promote
public safety and that the latter was only motivated by pecuniary gain

the BPTTT rendered a decision directing the issuance of a compulsory license to private respondent to use,
manufacture and sell in the Philippines its own brand of pharmaceutical products
containing Cimetidine and ordered the payment by private respondent to petitioner of royalties at the rate of
2.5% of net sales in Philippine currency

CA affirmed BPTTT
o

In affirming the decision of the BPTTT, the appellate court held that the grant of a compulsory
license to private respondent for the manufacture and use of Cimetidine is in accord with the
Patent Law since the patented product is medicinal in nature, and therefore necessary for the
promotion of public health and safety

It explained further that the provisions of the Patent Law permitting the grant of a compulsory
license are intended not only to give a chance to others to supply the public with the quantity of
the patented article but especially to prevent the building up of patent monopolies

Issue: Whether or not the private respondent can be issued a compulsory license to make and sell products
containing Cimetidine
Held:
YES

The Court of Appeals did not err in affirming the validity of the grant by the BPTTT of a compulsory
license to private respondent for the use, manufacture and sale of Cimetidine. The said grant is in accord
with Section 34 of the Patent Law which provides:

Grounds for Compulsory Licensing.(1) Any person may apply to the Director for the grant of a license
under a particular patent at any time after the expiration of two years from the date of the grant of
the patent, under any of the following circumstances:
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(e) If the patented invention or article relates to food or medicine or manufactured

substances which can be used as food or medicine, or is necessary for public health or public
safety.

(2) In any of the above cases, a compulsory license shall be granted to the petitioner provided
that he has proved his capability to work the patented product or to make use of the
patented product in the manufacture of a useful product, or to employ the patented process.

The grant of the compulsory license satisfies the requirements of the foregoing provision. More than ten
years have passed since the patent for Cimetidine was issued to petitioner and its predecessors-in-interest,
and the compulsory license applied for by private respondent is for the use, manufacture and sale of a
medicinal product.

Neither does the Court agree with petitioner that the grant of the compulsory license to private respondent
was erroneous because the same would lead the public to think that the Cimetidine is the invention of
private respondent and not of petitioner

as the appellate court pointed out in the assailed decision, by the grant of the compulsory license, private
respondent as licensee explicitly acknowledges that petitioner is the source of the patented
product Cimetidine.

There is likewise no basis for the allegation that the grant of a compulsory license to private respondent
results in the deprivation of petitioners property without just compensation. It must be pointed out that as
owner of Letters Patent No. 12207, petitioner had already enjoyed exclusive rights to manufacture, use and
sell Cimetidine for at least two years from its grant in November, 1978. Even if other entities like private
respondent are subsequently allowed to manufacture, use and sell the patented invention by virtue of a
compulsory license, petitioner as owner of the patent would still receive remuneration for the use of such
product in the form of royalties.

(3) A compulsory license shall only be granted subject to the payment of adequate royalties
commensurate with the extent to which the invention is worked. However, royalty payments shall not
exceed five percent (5%) of the net wholesale price

Under the aforequoted provisions, in the absence of any agreement between the parties with respect to a
compulsory license, the Director of the BPTTT may fix the terms thereof, including the rate of the royalty
payable to the licensor. The law explicitly provides that the rate of royalty shall not exceed five percent
(5%) of the net wholesale price.

There was thus no error on the part of the Court of Appeals in affirming the royalty rate fixed by the
Director of the BPTTT, since it was not shown that the latter erred or abused his discretion in prescribing
said rate