G.R. No.

L-32160 January 30, 1982

DOMICIANO A. AGUAS, petitioner,

vs.
CONRADO G. DE LEON and COURT OF APPEALS, respondents.

FERNANDEZ, J.:

This is a petition for certiorari to review the decision of the Court of Appeals in CA G.R. NO. 37824-R
entitled "Conrado G. de Leon, plaintiff-appelle vs. Dominciano Aguas and F.H. Aquino and Sons,
defendants-appellants," the dispositive portion of which reads:

WHEREFORE, with the modification that plintiff-applee's award of moral damages is

hereby redured to P3,000.00, the appealed judgment is hereby affirmed, in all othe
respects, with costs against appellants. 1

On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal at Quezon City a
complaint for infringement of patent against Domiciano A. Aguas and F. H. Aquino and Sons alleging that
being the original first and sole inventor of certain new and useful improvements in the process of making
mosaic pre-cast tiles, he lawfully filed and prosecuted an application for Philippine patent, and having
complied in all respects with the statute and the rules of the Philippine Patent Office, Patent No. 658 was
lawfully granted and issued to him; that said invention was new, useful, not known or used by others in
this country before his invention thereof, not patented or described in any printed publication anywhere
before his invention thereof, or more than one year prior to his application for patent thereof, not patented
in any foreign country by him or his legal representatives on application filed more than one year prior to
his application in this country; that plaintiff has the exclusive license to make, use and sell throughout the
Philippines the improvements set forth in said Patent No. 658; that the invention patented by said Patent
No. 658 is of great utility and of great value to plaintiff and of great benefit to the public who has
demanded and purchased tiles embodying the said invention in very large quantities and in very rapidly
increasing quant ies; that he has complied with the Philippine statues relating to marking patented tiles
sold by him; that the public has in general acknowledged the validity of said Patent No. 658, and has
respected plaintiff's right therein and thereunder; that the defendant Domiciano A. Aguas infringed Letters
of Patent No. 658 by making, using and selling tiles embodying said patent invention and that defendant F.
H. Aquino & Sons is guilty of infringement by making and furnishing to the defendant Domiciano A. Aguas
the engravings, castings and devices designed and intended of tiles embodying plaintiff;s patented
invention; that he has given direct and personal notice to the defendants of their said acts of infringement
and requested them to desist, but nevertheless, defendants have refused and neglected to desist and
have disregarded such request, and continue to so infringe causing great and irreparable damage to
plaintiff; that if the aforesaid infringement is permitted to continue, further losses and damages and
irreparable injury will be sustained by the plaintiff; that there is an urgent need for the immediate issuance
of a preliminary injunction; that as a result of the defendants' wrongful conduct, plaintiff has suffered and
the defendants are liable to pay him, in addition to actual damages and loss of profits which would be
determined upon proper accounting, moral and exemplary or corrective damages in the sum of
P90,000.00; that plaintiff has been compelled to go to court for the protection and enforcement of his and
to engage the service of counsel, thereby incurring attorney's fees and expenses of litigation in the sum of
P5,000.00. 2

On April 14, 1962, an order granting the plaintiff's petition for a Writ of Preliminary Injunction was issued. 3

On May 23, 1962, the defendant Domiciano A. Aguas filed his answer denying the allegations of the
plaintiff and alleging that: the plaintiff is neither the original first nor sole inventor of the improvements in
the process of making mosaic pre-cast tiles, the same having been used by several tile-making factories in
the Philippines and abroad years before the alleged invention by de Leon; that Letters Patent No. 658 was
unlawfully acquired by making it appear in the application in relation thereto that the process is new and
that the plaintiff is the owner of the process when in truth and in fact the process incorporated in the
patent application has been known and used in the Philippines by almost all tile makers long before the
alleged use and registration of patent by plaintiff Conrado G. de Leon; that the registration of the alleged
invention did not confer any right on the plaintiff because the registration was unlawfully secured and was
a result of the gross misrepresentation on the part of the plaintiff that his alleged invention is a new and
inventive process; that the allegation of the plaintiff that Patent No. 658 is of great value to plaintiff and of
great benefit to the public is a mere conclusion of the plaintiff, the truth being that a) the invention of
plaintiff is neither inventive nor new, hence, it is not patentable, b) defendant has been granted valid
patents (Patents No. 108, 109, 110 issued on December 21, 1961) on designs for concrete decorative wall
tiles; and c) that he can not be guilty of infringement because his products are different from those of the
plaintiff.4

The trial court rendered a decision dated December 29, 1965, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the

defendants:

1. Declaring plaintiff's patent valid and infringed:

2. Granting a perpetual injunction restraining defendants, their officers, agents,

employees, associates, confederates, and any and all persons acting under their
authority from making and/or using and/or vending tiles embodying said patented
invention or adapted to be used in combination embodying the same, and from
making, manufacturing, using or selling, engravings, castings and devises designed
and intended for use in apparatus for the making of tiles embodying plaintiff's
patented invention, and from offering or advertising so to do, and from aiding and
abetting or in any way contributing to the infringement of said patent;

3. Ordering that each and all of the infringing tiles, engravings, castings and devices,
which are in the possession or under the control of defendants be delivered to
plaintiff;

4. Ordering the defendants to jointly and severally pay to the plaintiff the following
sums of money, to wit:

(a) P10,020.99 by way of actual damages;

(b) P50,000.00 by way of moral damages;

(c) P5,000.00 by way of exemplary damages;

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

(e) costs of suit. 5

The defendant Domiciano Aguas appealed to the Court of Appeals, assigning the following errors. 6

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.

THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT COULD NEVER BE
GUILTY OF INFRINGEMENT OF PLAINTIFF'S PATENT BECAUSE EVEN IN MATTERS NOT
PATENTED BY THE PLAINTIFF - LIKE THE COMPOSITION AND PROPORTION OF
INGREDIENTS USED AND THE STRUCTURAL DESIGNS OF THE MOULD AND THE TILE
PRODUCED - THAT OF THE DEFENDANT ARE DIFFERENT.

VI

THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN HOLDING THE
DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR DAMAGES, AND ATTORNEY'S
FEES.

On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with the modification that
plaintiff-appellee's award of moral damages was reduced to P3,000.00. 7

The petitioner assigns the following errors supposedly committed by the Court of Appeals:

It is now respectfully submitted that the Court of Appeals committed the following
errors involving questions of law, to wit:

First error. When it did not conclude that the letters patent of the respondent
although entitled on the cover page as a patent for improvements, was in truth and
in fact, on the basis of the body of the same, a patent for the old and non-patentable
process of making mosaic pre-cast tiles;

Second error. When it did not conclude from the admitted facts of the case,
particularly the contents of the letters patent, Exh. L and the pieces of physical
evidence introduced consisting of samples of the tiles and catalouges, that the
alleged improvements introduced by the respondent in the manufacture of mosaic
pre-cast tiles are not patentable, the same being not new, useful and inventive.

Third error. As a corollary, when it sentenced the herein petitioner to pay the
damages enumerated in the decision of the lower court (Record on Appeal, pp. 74-
75), as confirmed by it (the Court of Appeals), but with the modification that the
amount of P50,000.00 moral damages was reduced to P3,000.00. 8

The facts, as found by the Court of Appeals, are:

The basic facts borne out by the record are to the effect that on December 1, 1959
plaintiff-appellee filed a patent application with the Philippine Patent Office, and on
May 5, 1960, said office issued in his favor Letters Patent No. 658 for a "new and
useful improvement in the process of making mosaic pre-cast tiles" (Exh, "L"); that
defendant F.H. Aquino & Sons engraved the moulds embodying plaintiff's patented
improvement for the manufacture of pre-cast tiles, plaintiff furnishing said defendant
 the actual model of the tiles in escayola and explained to said engraver the plans,
specifications and the details of the engravings as he wanted them to be made,
including an explanation of the lip width, artistic slope of easement and critical depth
of the engraving that plaintiff wanted for his moulds; that engraver Enrique Aquino
knew that the moulds he was engraving for plaintiff were the latter's very own, which
possession the new features and characteristics covered by plaintiff's parent; that
defendant Aguas personally, as a building 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. 10

The errors will be discuss only to
determine the right of said private respondent to damages.

The petitioner questioned the validity of the patent of the private respondent, Conrado G. de Leon, on the
ground that the process, subject of said patent, is not an invention or discovery, or an improvement of the
old system of making tiles. It should be noted that the private respondent does not claim to be the
discoverer or inventor of the old process of tile-making. He only claims to have introduced an improvement
of said process. In fact, Letters Patent No. 658 was issued by the Philippine Patent Office to the private
respondent, Conrado G. de Leon, to protect his rights as the inventor of "an alleged new and useful
improvement in the process of making mosaic pre-cast tiles." 11 Indeed, Section 7, Republic Act No. 165, as
amended provides: "Any invention of a new and useful machine, manufactured product or substance,
process, or an improvement of the foregoing, shall be patentable.

The Court of Appeals found that the private respondent has introduced an improvement in the process of
tile-making because:

... we find that plaintiff-appellee has introduced an improvement in the process of

tile-making, which proceeds not merely from mechanical skill, said improvement
consisting among other things, in the new critical depth, lip width, easement and
field of designs of the new tiles. The improved lip width of appellee's tiles ensures the
durability of the finished product preventing the flaking off of the edges. The
easement caused by the inclination of the protrusions of the patented moulds is for
the purpose of facilitating the removal of the newly processed tile from the female
die. Evidently, appellee's improvement consists in the solution to the old critical
problem by making the protrusions on his moulds attain an optimum height, so that
the engraving thereon would be deep enough to produce tiles for sculptured and
decorative purposes, strong optimum thickness of appellee's new tiles of only 1/8 of
an inch at the deepest easement (Exhs. "D" and "D-1") is a most critical feature,
suggestive of discovery and inventiveness, especially considering that, despite said
thinness, the freshly formed tile remains strong enough for its intended purpose.

While it is true that the matter of easement, lip width, depth, protrusions and
depressions are known to some sculptors, still, to be able to produce a new and
useful wall tile, by using them all together, amounts to an invention. More so, if the
totality of all these features are viewed in combination with the Ideal composition of
cement, sodium silicate and screened fine sand.
 By using his improved process, plaintiff has succeeded in producing a new product - a
concrete sculptured tile which could be utilized for walling and decorative purposes.
No proof was adduced to show that any tile of the same kind had been produced by
others before appellee. Moreover, it appears that appellee has been deriving
considerable profit from his manufacture and sale of such tiles. This commercial
success is evidence of patentability (Walker on Patents, Dellers Edition, Vol. I, p.
237). 12

The validily of the patent issued by the Philippines Patent Office in favor of the private respondent and the
question over the inventiveness, novelty and usefulness of the improved process therein specified and
described are matters which are better determined by the Philippines Patent Office. The technical staff of
the Philippines Patent Office, composed of experts in their field, have, by the issuance of the patent in
question, accepted the thinness of the private respondent's new tiles as a discovery. There is a
presumption that the Philippines Patent Office has correctly determined the patentability of the
improvement by the private respondent of the process in question.

Anent this matter, the Court of Appeals said:

Appellant has not adduced evidence sufficient to overcome the above established
legal presumption of validity or to warrant reversal of the findings of the lower court
relative to the validity of the patent in question. In fact, as we have already pointed
out, the clear preponderance of evidence bolsters said presumption of validity of
appellee's patent. There is no indication in the records of this case and this Court is
unaware of any fact, which would tend to show that concrete wall tiles similar to
those produced by appellee had ever been made by others before he started
manufacturing the same. In fact, during the trial, appellant was challenged by
appellee to present a tile of the same kind as those produced by the latter, from any
earlier source but, despite the fact that appellant had every chance to do so, he
could not present any. There is, therefore, no concrete proof that the improved
process of tile-making described in appellee's patent was used by, or known to,
others previous to his discovery thereof. 13

The contention of the petitioner Aguas that the letters patent of de Leon was actually a patent for the old
and non-patentable process of making mosaic pre-cast tiles is devoid of merit. De Leon never claimed to
have invented the process of tile-making. The Claims and Specifications of Patent No. 658 show that
although some of the steps or parts of the old process of tile making were described therein, there were
novel and inventive features mentioned in the process. Some of the novel features of the private
respondent's improvements are the following: critical depth, with corresponding easement and lip width to
such degree as leaves the tile as thin as 1/8 of an inch at its thinnest portion, Ideal composition of cement
and fine river sand, among other ingredients that makes possible the production of tough and durable wall
tiles, though thin and light; the engraving of deep designs in such a way as to make the tiles decorative,
artistic and suitable for wall ornamentation, and the fact that the tiles can be mass produced in
commercial quantities and can be conveniently stock-piled, handled and packed without any intolerable
incidence of breakages. 14

The petitioner also contends that the improvement of respondent is not patentable because it is not new,
useful and inventive. This contention is without merit.

The records disclose that de Leon's process is an improvement of the old process of tile making. The tiles
produced from de Leon's process are suitable for construction and ornamentation, which previously had
not been achieved by tiles made out of the old process of tile making. De Leon's invention has therefore
brought about a new and useful kind of tile. The old type of tiles were usually intended for floors although
there is nothing to prevent one from using them for walling purposes. These tiles are neither artistic nor
ornamental. They are heavy and massive.

The respondent's improvement is indeed inventive and goes beyond the exercise of mechanical skill. He
has introduced a new kind of tile for a new purpose. He has improved the old method of making tiles and
pre-cast articles which were not satisfactory because of an intolerable number of breakages, especially if
deep engravings are made on the tile. He has overcome the problem of producing decorative tiles with
deep engraving, but with sufficient durability. 15 Durability inspite of the thinness and lightness of the tile,
is assured, provided that a certain critical depth is maintained in relation to the dimensions of the tile. 16

The petitioner also claims that changing the design from embossed to engraved tiles is neither new nor
inventive because the Machuca Tile Factory and the Pomona Tile Manufacturing Company have been
manufacturing decorative wall tiles that are embossed as well as engraved; 17 that these tiles have also
depth, lip width, easement and field of designs; 18 and that the private respondent had copied some
designs of Pomona. 19

The Machuca tiles are different from that of the private respondent. The designs are embossed and not
engraved as claimed by the petitioner. There may be depressions but these depressions are too shallow to
be considered engraved. Besides, the Machuca tiles are heavy and massive.

There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles are made of
ceramics. 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.

Makasiar, Guerrero, Melencio-Herrera and Plana, JJ., concur.

Teehankee, J., took no part.

G.R. No. 14101 September 24, 1919

ANGEL VARGAS, plaintiff-appellant,

vs.
F. M. YAPTICO & CO. (Ltd.), defendant-appellee.

Charles C. Cohn for appellants .

John Bordman for appellee.

MALCOLM, J.:

Rude wooden implements for tilling the soil have been in use in the Philippines, possibly not since the
Israelites "went down to sharpen every man his share and his coulter," but certainly for many years. Iron
plows called "Urquijo" and "Pony" have latterly been the vogue.

Angel Vargas, a farmer acquainted with local conditions and alive to the commercial possibilities, took it
upon himself to produce, with the native plow as the model, an improved, adjustable plow. On July 22,
1910, he made application for a United States patent to cover his so-called invention. On March 12, 1912,
letters patent were issued by the United States Patent Office in favor of Vargas .On April 24, 1912, a
certified copy of the patent was filed in the Division of Patents, Copyrights, and Trademarks of the
Executive Bureau, Government of the Philippine Islands. The patent and its registry was also published in
the newspaper, El Tiempo.

Since 1910, Vargas has engaged in the manufacture of these plows in the city of Iloilo, Philippine Islands.
On the plows there was first stamped the words "Patent Applied For," later after the patent had been
granted, changed to "Patented Mar. 12, 1912." Ninety per cent of the plows in use in the Visayas (Iloilo and
vicinity) are said to be Vargas plows.

During this same period, the firm of F. M. Yaptico & Co. (Ltd.), was engaged in the foundry business in the
City of Iloilo. It openly held itself out as a manufacturer of plow parts. It has in fact produced points, shares,
shoes, and heel pieces in a considerable amount adapted to replace worn-out parts of the Vargas plow.

Such was the existing situation when, in the early part of 1918, the owner of the patent, and thus the
proper party to institute judicial proceedings, began action in the Court of First Instance of Iloilo to enjoin
the alleged infringement of U.S. Patent No. 1020232 by the defendant F. M Yaptico & Co. (Ltd.), and to
recover the damages suffered by reason of this infringement. The court issued the preliminary injunction
as prayed for. The defendant, in addition to a general denial, alleged, as special defenses, that the patent
lacked novelty or invention, that there was no priority of ideas or device in the principle and construction
of the plow, and that the plow, whose manufacture it was sought to have enjoined by the plaintiff, had
already been in public use for more than two years before the application of the plaintiff for his patent. The
parties subsequently entered into a stipulation that the court should first resolve the question of whether
or not there had been an infraction of the patent, reserving the resultant question of damages for later
decision. After the taking of evidence, including the presentation of exhibits, the trial judge, the Honorable
Antonio Villareal, in a very exhaustive and learned decision, rendered judgment in favor of the defendant
and against the plaintiff, declaring null and without effect the patent in question and dismissing the suit
with costs against the plaintiff .The preliminary injunction theretofore issued was dissolved.

From this judgment the plaintiff has appealed, specifying five errors. The principal assignment No. 1 is, that
the trial court erred in finding that the patented invention of the plaintiff is lacking in novelty and
invention. Defendant, in reply, relies on three propositions, namely: (1) The judgment of the trial court in
finding the patent granted plaintiff void for lack of novelty and invention should be affirmed; (2) The patent
granted plaintiff is void from the public use of his plow for over two years prior to his application for a
patent, and (3) If the patent is valid, there has been no contributory infringement by defendant.

Before resolving these rival contentions, we should have before us the relevant law. Act No. 2235 of the
Philippine Legislature, enacted on February 10, 1913, in effect makes the United States Patent Laws
applicable in the Philippine Islands. It provides that "owners of patents, including design patents, which
have been issued or may hereafter be issued, duly registered in the United States Patent Office under the
laws of the United States relating to the grant of patents, shall receive in the Philippine Islands the
protection accorded them in the United States under said laws." (Sec. 1.) Turning to the United States
Patent Laws, we find the Act of Congress of March 3, 1897, amendatory of section 4886 of the United
States Revised Statutes, reading as follows:

Any person who has invented or discovered any new and useful art, machine, manufacture,
or composition of matter, or any new an useful improvements thereof, not known or used by
others in this country, before his invention or discovery thereof, and not patented or
described in any printed publication in this or any foreign country, before his invention or
discovery thereof, or more than two years prior to his application, and not in public use or on
sale in this country for more than two years prior to his application, unless the same is
proved to have been abandoned, may upon payment of the fees required by law, and other
due proceeding had, obtain a patent therefor. (29 Stat. L., 692, 7 Fed .Stat. Ann. [2d Ed.], p.
23.)

When a patent is sought to be enforced, "the question of invention, novelty, or prior use, and each of
them, are open to judicial examination." The burden of proof to substantiate a charge of infringement is
with the plaintiff. Where, however, the plaintiff introduces the patent in evidence, if it is in due form, it
affords a prima faciepresumption of its correctness and validity. The decision of the Commissioner of
Patents in granting the patent is always presumed to be correct. The burden then shifts to the defendant to
overcome by competent evidence this legal presumption .With all due respect, therefore, for the critical
and expert examination of the invention by the United States Patent Office, the question of the validity of
the patent is one for judicial determination, and since a patent has been submitted, the exact question is
whether the defendant has assumed the burden of proof as to anyone of his defenses. (See Agawan Co. vs.
Jordan [1869], 7 Wall., 583; Blanchard vs .Putnam [1869], 8 Wall., 420; Seymour vs. Osborne [1871], 11
Wall., 516; Reckendorfer vs. Faber [1876], 92 U.S., 347; 20 R. C. L., 1112, 1168, 1169.)

As herein before stated, the defendant relies on three special defenses. One such defense, on which the
judgment of the lower court is principally grounded, and to which appellant devotes the major portion of
his vigorous argument, concerns the element of novelty, invention, or discovery, that gives existence to
the right to a patent. On this point the trial court reached the conclusion that "the patented plow of the
plaintiff, Exhibit D, is not different from the native plow, Exhibit 2, except in the material, in the form, in the
weight and the grade of the result, the said differences giving it neither a new function nor a new result
distinct from the function and the result obtained from the native plow; consequently, its production does
not presuppose the exercise of the inventive faculty but merely of mechanical skill, which does not give a
right to a patent of an invention under the provisions of the Patent Law." In thus finding, the court may
have been right, since the Vargas plow does not appear to be such a "combination" as contains a novel
assemblage of parts exhibiting invention. (See Stimpson vs. Woodman [1870], 10 Wall., 117 rollers;
Hicks vs. Kelsey [1874], 20 Wall., 353 stoves; Washburn & Moen Mfg. Co. vs. Beat 'Em All Barbed Wire
Co. [1892], 143 U.S., 275 barbed wire; Lynch vs .Dryden [1873], C. D., 73 walking cultivators;
Torrey vs. Hancock [1910], 184 Fed., 61 rotary plows.)

A second line of defense relates to the fact that defendant has never made a complete Vargas plow, but
only points, shares, shoes, and heel pieces, to serve as repairs. Defendant's contention is, that in common
with other foundries, he has for years cast large numbers of plow points and shares suitable for use either
on the native wooden plow, or on the Vargas plow. A difference has long been recognized between
repairing and reconstructing a machine. If, for instance, partial injuries, whether they occur from accident
or from wear and tear, to a machine for agricultural purposes, are made this is only re-fitting the machine
for use, and thus permissible. (Wilson vs. Simpson [1850], 9 How., 109.) Even under the more rigorous
doctrine of Leeds & Catlin Co. vs. Victor Talking Machine Co. ([1909], 213 U.S., 325), it may be possible
that all the defendant has done is to manufacture and sell isolated parts to be used to replace worn-out
parts.

The third defense is, that under the provisions of the statute, an inventor's creation must not have been in
public use or on sale in the United States (and the Philippine Islands) for more than two years prior to his
application .Without, therefore, committing ourselves as to the first two defenses, we propose to base our
decision on the one just suggested as more easily disposing of the case. (See 20 R. C. L., 1140-1142.) We
do so with full consciousness of the doubt which arose in the mind of the trial court, but with the belief that
since it has been shown that the invention was used in public at Iloilo by others than Vargas, the inventor,
more than two years before the application for the patent, the patent is invalid.

Although we have spent some time in arriving at this point, yet having reached it, the question in the case
is single and can be brought to a narrow compass. Under the English Statute of Monopolies (21 Jac. Ch., 3),
and under the United States Patent Act of February 21, 1793, later amended to be as herein quoted, it was
always the rule, as stated by Lord Coke, Justice Story and other authorities, that to entitle a man to a
patent, the invention must be new to the world. (Pennock and Sellers vs. Dialogue [1829], 2 Pet., 1.) As
said by the United States Supreme Court, "it has been repeatedly held by this court that a single instance
of public use of the invention by a patentee for more than two years before the date of his application for
his patent will be fatal to the validity of the patentwhen issued." (Worley vs. Lower Tobacco Co .[1882], 104
U. S., 340; McClurg vs. Kingsland [1843], I How., 202; Consolidated Fruit Jar Co. vs. Wright [1877], 94 U. S.,
92; Egbert vs. Lippmann [1881], 104 U. S., 333; Coffin vs. Ogden [1874], 18 Wall., 120; Manning vs. Cape
Ann Isinglass and Glue Co. [1883], 108 U. S., 462; Andrews vs. Hovey [1887], 123 U. S., 267; Campbell vs.
City of New York [1881], 1 L. R. A., 48.)

On the facts, we think the testimony shows such a public use of the Vargas plow as to render the patent
invalid Nicolas Roces, a farmer, testified that he had bought twenty Vargas plows, of which Exhibit 5 was
one, in December, 1907; and Exhibit 5, the court found, was a plow completely identical with that for
which the plaintiff had received a patent. The minor exception, and this in itself corroborative of Roces'
testimony, is that the handle of plow Exhibit 5 is marked with the letters "A V" and not with the words
"Patent Applied For" or "Patented Mar.12, 1912." Salvador Lizarraga, a clerk in a business house, testified
that he had received plows similar to Exhibits D, 5, and 4, for sale on commission on May, 1908, from
Bonifacio Araneta, partner of Vargas in the plow business. Ko Pao Ko, a blacksmith, testified that he had
made fifty plow frames in 1905 for Vargas and Araneta, of which Exhibit 4 is one; Exhibit 4, the court
found, is a plow identical with that patented by Vargas, but without share and mould-board. Alfred Berwin,
an employee in the office of Attorney John Bordman, testified that on September 21, 1908, he had
knowledge of a transaction wherein Vargas and Araneta desired to obtain money to invest in a plow
factory. George Ramon Saul, a mechanic of the "Taller Visayas" of Strachan and MacMurray, testified that
he had made Vargas plow points and shares of the present form upon order of Araneta and Vargas in 1906
and 1907 .William MacMurray, proprietor of the "Taller Visayas," corroborated the evidence of the witness
Saul by the exhibition of the account against Vargas and Araneta wherein, under date of December 13,
1906, appears the item "12 new soft steel plow shares forged and bored for rivets as per sample." Against
all this, was the testimony of the plaintiff Angel Vargas who denied that Saul could have been seen the
Vargas plow in 1907 and 1907, who denied that Roces purchased the Vargas plow in 1907, who denied that
Lizarraga could have acted as an agent to sell two plows in November, 1908, who denied any
remembrance of the loan mentioned by Berwin as having been negotiated in September, 1908, who
denied that Ko Pao Ko made fifty plows one of which is Exhibit 4, for Araneta and Vargas in 1905. Plaintiff
introduced his books to substantiate his oral testimony .It is hardly believable that five or six witnesses for
the defense would deliberately perjure themselves under oath. One might, but that all together, of
different nationalities, would enter into such a conspiracy, is to suppose the improbable.

Tested by the principles which go to make the law, we think a preponderance of the evidence is to the
effect that for more than two years before the application for the original letters patent, or before July 22,
1908, there was, by the consent and allowance of Vargas, a public use of the invention covered by them.

To conclude, we are not certain but that appellee has proved every one of his defenses. We are certain that
he has at least demonstrated the public use of the Vargas plow over two years prior to the application for a
patent. Such being the case, although on a different ground, we must sustain the judgment of the lower
court, without prejudice to the determination of the damages resulting from the granting of the injunction,
with the costs of this instance against the appellant. So ordered.

Arellano, C.J. Torres, Johnson, Araullo, Street, Avancea and Moir, JJ., concur.

G.R. No. L-27004 August 16, 1983

PARKE, DAVIS & COMPANY, petitioner,

vs.
DOCTOR'S PHARMACEUTICALS, INC. and TIBURCIO S. EVALLE, in his capacity as Director of
Patents,respondents.

Salcedo, Del Rosario, Bito, Misa & Lozada Law Office for petitioner.

The Solicitor General for respondents.

RESOLUTION

TEEHANKEE, Acting C.J.:

In G.R. No. L-22221, 1 which involved the same parties in the instant case, the Court affirmed, in a decision
dated August 31, 1965 respondent Director of Patents decision rendered on November 15, 1963 in Inter
Partes Case No. 181 ordering petitioner Parke Davis & Co. to grant respondent Doctor's Pharmaceuticals,
Inc. a license to manufacture. use and sell in the Philippines its own products containing petitioner's
chemical called "chloramphenicol."
The dispositive portion of respondent official's decision reads:

Wherefore, the Respondent-Patentee is hereby ordered to grant the Petitioner a license

under Letters Patent No. 50. The parties hereto are hereby ordered to submit to me, within
THIRTY (30) days from their receipt of a copy of this decision a licensing agreement, and in
default thereof, they may submit within the same period their respective proposals, It must
be shown that the negotiations as to the terms and conditions thereof have been made
between the parties, and if there are points of disagreement I shall fix such terms and
conditions.

If, within the said period, no licensing agreement is filed or no negotiations therefor
transpires between the parties, I shall issue the licensing agreement in such terms and
conditions as may be just and reasonable under the circumstances.

Under Section 36 of Republic Act 165 (Patent Law), the Director of Patents is authorized, in case the parties
failed to submit a licensing agreement, to fix the terms and conditions of the license. Thus, after the
Court's decision in G.R. No. L-22221 became final and executory, without the parties submitting a licensing
agreement, the Director of Patents, in a resolution dated March 25, 1966, and amended on November 25,
1966, issued a license in favor of respondent company under petitioner's Letters Patent No. 50 for the
patented chemical "chloramphenicol", fixing the terms and conditions thereof and declaring that the
license should take effect immediately. The license provides, among others, that respondent company
should pay petitioner Parke, Davis & Co., a royalty, on all licensed products containing "chloramphenicol"
made and sold by respondent company in an amount equivalent to Eight Percent (8%) of the net sales
which petitioner company now claims as grossly inadequate and proposes that it be increased to 15%.
Petitioner insists that the fixing of the royalty rate by the Director of Patents is arbitrary and without any
support in evidence pointing out that the prevailing rate for compulsory licensing on the net sales of
medicines containing the patented article is 15% and 18% of the selling price. In asking for a 15% royalty
rate, petitioner alleges that it is the same rate prevailing in two compulsory licenses for patents on
medicine in Great Britain, and that in the case of J.R. Geigy S.A.'s Patent in Canada, the rate of 12 1/2 %
based on net sales was allowed. On the other hand respondent company points out that in a licensing
agreement between Collett & Co. of Norway and Lexal Laboratories of the Philippines, royalties of 5% on a
vitamin preparation and 7%, on a pharmaceutical pellet based on net sales, were agreed upon.

It is settled that findings of fact of administrative bodies will not be interfered with by courts of justice in
the absence of a grave abuse of discretion on the part of said bodies or unless the aforementioned findings
are not supported by substantial evidence. 2

The Court finds no abuse of discretion on the part of respondent Director of Patents considering that in
fixing the royalty rate he made a compromise on the rate proposed by petitioner and those prevailing in
other countries. The 8% royalty rate is midway between the rates in Canada and Norway. In developing
countries like the Philippines, liberal treatment in trade relations should be afforded to local industry for as
reasoned out by respondent company, "it is so difficult to compete with the industrial giants of the drug
industry, among them being the petitioner herein, that it always is necessary that the local drug
companies should sell at much lower (than) the prices of said foreign drug entities." 3

The Court agrees with then Solicitor General, now retired Justice Antonio P. Barredo and then Asst. Solicitor
General Pacifico de Castro, now Justice of the Supreme Court, that the 8% royalty rate is reasonable
"considering that Doctor's Pharmaceutical, Inc. is a small manufacturing venture compared with Parke,
Davis & Company, Inc. which is a subsidiary of the huge mother firm, Parke, Davis & Company of Michigan,
U.S.A." (Annex D, Petition for Review). If Doctor's is making sufficient profit to justify an increase of royalty
later, Parke, Davis & Co., Inc. can easily demand an increase, considering that the latter has access to the
books and records of the former. 4

The Solicitor General correctly states that "there is no showing that Parke, Davis & Co., Inc. would tend to
suffer business losses by the imposition of the 8 % royalty nor does it appear that it would cause other
effects on the saleability of the antibiotics and consequently the health of the consuming public by the
imposition of 8 %." 5
Petitioner's argument that respondent Director of Patents has no authority to declare that the resolution
containing the licensing agreement "shall take effect immediately" is untenable for any award, order or
decision of the Patent Office is immediately executory. This is clear from the provisions of Sec. 4, Rule 44 of
the Rules of Court which provides that appeal shall not stay the award, order or decision of the Public
Service Commission, the Patent Office, and the Agricultural Inventions Board. Moreover, the resolution of
respondent official was issued only after the herein parties failed to submit a licensing agreement and had
left the same to the discretion of the Director of Patents. 6 As correctly argued by the Solicitor General "to
hold that said Amended Resolution could not be made effectively would open the door for interminable
litigation, thus rendering nugatory said compulsory licensing agreement sanctioned by the Director of
Patents, as any implementing condition imposed therein could be the subject of litigation."

At any rate, the letter patent granted to petitioner on the particular process was to expire after seventeen
years, and having been granted on February 9, 1950, the same already expired on February 9, 1967.

WHEREFORE, the instant petition is hereby dismissed and the questioned resolution of the Director of
Patents is hereby affirmed in all respects. No costs.

Melencio-Herrera, Plana, Vasquez, Relova and Gutierrez, Jr., JJ., concur.

[G.R. No. 148222. August 15, 2003]

PEARL & DEAN (PHIL.), INCORPORATED, petitioner, vs. SHOEMART, INCORPORATED, and NORTH
EDSA MARKETING, INCORPORATED, respondents.

DECISION

CORONA, J.:

In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl &
Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision [1] of the Court of Appeals reversing the October
31, 1996 decision[2] of the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516 which
declared private respondents Shoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI) liable for
infringement of trademark and copyright, and unfair competition.

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals[3] contained a summary of this dispute:

Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising
display units simply referred to as light boxes. These units utilize specially printed posters sandwiched
between plastic sheets and illuminated with back lights. Pearl and Dean was able to secure a Certificate of
Copyright Registration dated January 20, 1981 over these illuminated display units. The advertising light
boxes were marketed under the trademark Poster Ads. The application for registration of the trademark
was filed with the Bureau of Patents, Trademarks and Technology Transfer on June 20, 1983, but was
approved only on September 12, 1988, per Registration No. 41165. From 1981 to about 1988, Pearl and
Dean employed the services of Metro Industrial Services to manufacture its advertising displays.

Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease
and installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under construction
at that time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. On
September 11, 1985, Pearl and Deans General Manager, Rodolfo Vergara, submitted for signature the
contracts covering SM Cubao and SM Makati to SMIs Advertising Promotions and Publicity Division
Manager, Ramonlito Abano. Only the contract for SM Makati, however, was returned signed. On October 4,
1985, Vergara wrote Abano inquiring about the other contract and reminding him that their agreement for
installation of light boxes was not only for its SM Makati branch, but also for SM Cubao. SMI did not bother
to reply.

Instead, in a letter dated January 14, 1986, SMIs house counsel informed Pearl and Dean that it was
rescinding the contract for SM Makati due to non-performance of the terms thereof. In his reply dated
February 17, 1986, Vergara protested the unilateral action of SMI, saying it was without basis. In the same
letter, he pushed for the signing of the contract for SM Cubao.

Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to fabricate
its display units, offered to construct light boxes for Shoemarts chain of stores. SMI approved the proposal
and ten (10) light boxes were subsequently fabricated by Metro Industrial for SMI. After its contract with
Metro Industrial was terminated, SMI engaged the services of EYD Rainbow Advertising Corporation to
make the light boxes. Some 300 units were fabricated in 1991.These were delivered on a staggered basis
and installed at SM Megamall and SM City.

Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed at
SM City and in the fastfood section of SM Cubao. Upon investigation, Pearl and Dean found out that aside
from the two (2) reported SM branches, light boxes similar to those it manufactures were also installed in
two (2) other SM stores. It further discovered that defendant-appellant North Edsa Marketing Inc. (NEMI),
through its marketing arm, Prime Spots Marketing Services, was set up primarily to sell advertising space
in lighted display units located in SMIs different branches. Pearl and Dean noted that NEMI is a sister
company of SMI.

In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and NEMI
enjoining them to cease using the subject light boxes and to remove the same from SMIs establishments. It
also demanded the discontinued use of the trademark Poster Ads, and the payment to Pearl and Dean of
compensatory damages in the amount of Twenty Million Pesos (P20,000,000.00).

Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224) light boxes
and NEMI took down its advertisements for Poster Ads from the lighted display units in SMIs
stores. Claiming that both SMI and NEMI failed to meet all its demands, Pearl and Dean filed this instant
case for infringement of trademark and copyright, unfair competition and damages.

In denying the charges hurled against it, SMI maintained that it independently developed its poster panels
using commonly known techniques and available technology, without notice of or reference to Pearl and
Deans copyright. SMI noted that the registration of the mark Poster Ads was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word Poster Ads is a generic term
which cannot be appropriated as a trademark, and, as such, registration of such mark is invalid. It also
stressed that Pearl and Dean is not entitled to the reliefs prayed for in its complaint since its advertising
display units contained no copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that Pearl and
Dean had no cause of action against it and that the suit was purely intended to malign SMIs good
name. On this basis, SMI, aside from praying for the dismissal of the case, also counterclaimed for moral,
actual and exemplary damages and for the cancellation of Pearl and Deans Certification of Copyright
Registration No. PD-R-2558 dated January 20, 1981 and Certificate of Trademark Registration No. 4165
dated September 12, 1988.

NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor having
engaged in the business of advertising. It repleaded SMIs averments, admissions and denials and prayed
for similar reliefs and counterclaims as SMI.

The RTC of Makati City decided in favor of P & D:

Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of copyright
under Section 2 of PD 49, as amended, and infringement of trademark under Section 22 of RA No. 166, as
amended, and are hereby penalized under Section 28 of PD 49, as amended, and Sections 23 and 24 of RA
166, as amended. Accordingly, defendants are hereby directed:

(1) to pay plaintiff the following damages:

(a) actual damages - P16,600,000.00,

representing profits

derived by defendants

as a result of infringe-

ment of plaintiffs copyright

from 1991 to 1992

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00

(d) attorneys fees - P1,000,000.00

plus

(e) costs of suit;

(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which were
fabricated by Metro Industrial Services and EYD Rainbow Advertising Corporation;

(3) to deliver, under oath, to the National Library, all filler-posters using the trademark Poster Ads,
for destruction; and

(4) to permanently refrain from infringing the copyright on plaintiffs light boxes and its trademark
Poster Ads.

Defendants counterclaims are hereby ordered dismissed for lack of merit.

SO ORDERED.[4]

On appeal, however, the Court of Appeals reversed the trial court:

Since the light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial
illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable class
O work, we have to agree with SMI when it posited that what was copyrighted were the technical drawings
only, and not the light boxes themselves, thus:

42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like plaintiff-
appellants will not extend to the actual object. It has so been held under jurisprudence, of which the
leading case is Baker vs. Selden(101 U.S. 841 (1879). In that case, Selden had obtained a copyright
protection for a book entitled Seldens Condensed Ledger or Bookkeeping Simplified which purported to
explain a new system of bookkeeping. Included as part of the book were blank forms and illustrations
consisting of ruled lines and headings, specially designed for use in connection with the system explained
in the work. These forms showed the entire operation of a day or a week or a month on a single page, or
on two pages following each other. The defendant Baker then produced forms which were similar to the
forms illustrated in Seldens copyrighted books. The Court held that exclusivity to the actual forms is not
extended by a copyright. The reason was that to grant a monopoly in the underlying art when no
examination of its novelty has ever been made would be a surprise and a fraud upon the public; that is the
province of letters patent, not of copyright. And that is precisely the point. No doubt aware that its alleged
original design would never pass the rigorous examination of a patent application, plaintiff-appellant
fought to foist a fraudulent monopoly on the public by conveniently resorting to a copyright registration
which merely employs a recordal system without the benefit of an in-depth examination of novelty.

The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge Authority [43 F. Supp.
298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright over an unpublished drawing entitled
Bridge Approach the drawing showed a novel bridge approach to unsnarl traffic congestion. The defendant
constructed a bridge approach which was alleged to be an infringement of the new design illustrated in
plaintiffs drawings. In this case it was held that protection of the drawing does not extend to the
unauthorized duplication of the object drawn because copyright extends only to the description or
expression of the object and not to the object itself. It does not prevent one from using the drawings to
construct the object portrayed in the drawing.

In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v. Maddox, 379
F. 2d 84, it was held that there is no copyright infringement when one who, without being authorized, uses
a copyrighted architectural plan to construct a structure. This is because the copyright does not extend to
the structures themselves.

In fine, we cannot find SMI liable for infringing Pearl and Deans copyright over the technical drawings of
the latters advertising display units.

xxx xxx xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate Court that the
protective mantle of the Trademark Law extends only to the goods used by the first user as specified in the
certificate of registration, following the clear mandate conveyed by Section 20 of Republic Act 166, as
amended, otherwise known as the Trademark Law, which reads:

SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a mark
or trade-name shall be prima facie evidence of the validity of the registration, the registrants ownership of
the mark or trade-name, and of the registrants exclusive right to use the same in connection with the
goods, business or services specified in the certificate, subject to any conditions and limitations stated
therein. (underscoring supplied)

The records show that on June 20, 1983, Pearl and Dean applied for the registration of the trademark
Poster Ads with the Bureau of Patents, Trademarks, and Technology Transfer. Said trademark was recorded
in the Principal Register on September 12, 1988 under Registration No. 41165 covering the following
products: stationeries such as letterheads, envelopes and calling cards and newsletters.

With this as factual backdrop, we see no legal basis to the finding of liability on the part of the defendants-
appellants for their use of the words Poster Ads, in the advertising display units in suit. Jurisprudence has
interpreted Section 20 of the Trademark Law as an implicit permission to a manufacturer to venture into
the production of goods and allow that producer to appropriate the brand name of the senior registrant on
goods other than those stated in the certificate of registration.The Supreme Court further emphasized the
restrictive meaning of Section 20 when it stated, through Justice Conrado V. Sanchez, that:

Really, if the certificate of registration were to be deemed as including goods not specified therein, then a
situation may arise whereby an applicant may be tempted to register a trademark on any and all goods
which his mind may conceive even if he had never intended to use the trademark for the said goods. We
believe that such omnibus registration is not contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Deans registered trademark and
defendants-appellants Poster Ads design, as well as the parallel use by which said words were used in the
parties respective advertising copies, we cannot find defendants-appellants liable for infringement of
trademark. Poster Ads was registered by Pearl and Dean for specific use in its stationeries, in contrast to
defendants-appellants who used the same words in their advertising display units. Why Pearl and Dean
limited the use of its trademark to stationeries is simply beyond us. But, having already done so, it must
stand by the consequence of the registration which it had caused.

xxx xxx xxx

We are constrained to adopt the view of defendants-appellants that the words Poster Ads are a simple
contraction of the generic term poster advertising. In the absence of any convincing proof that Poster Ads
has acquired a secondary meaning in this jurisdiction, we find that Pearl and Deans exclusive right to the
use of Poster Ads is limited to what is written in its certificate of registration, namely, stationeries.

Defendants-appellants cannot thus be held liable for infringement of the trademark Poster Ads.

There being no finding of either copyright or trademark infringement on the part of SMI and NEMI, the
monetary award granted by the lower court to Pearl and Dean has no leg to stand on.

xxx xxx xxx

WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and another is
rendered DISMISSING the complaint and counterclaims in the above-entitled case for lack of merit. [5]

Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the following
errors for the Courts consideration:

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT INFRINGEMENT

WAS COMMITTED BY RESPONDENTS SM AND NEMI;

B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO INFRINGEMENT OF PEARL &
DEANS TRADEMARK POSTER ADS WAS COMMITTED BY RESPONDENTS SM AND NEMI;

C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF THE TRIAL COURT,
DESPITE THE LATTERS FINDING, NOT DISPUTED BY THE HONORABLE COURT OF APPEALS,
THAT SM WAS GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING CONTRACTS WITH
PEARL & DEAN.

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING RESPONDENTS SM AND NEMI
LIABLE TO PEARL & DEAN FOR ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEYS FEES
AND COSTS OF SUIT.[6]

ISSUES

In resolving this very interesting case, we are challenged once again to put into proper perspective
four main concerns of intellectual property law patents, copyrights, trademarks and unfair competition
arising from infringement of any of the first three. We shall focus then on the following issues:

(1) if the engineering or technical drawings of an advertising display unit (light box) are granted
copyright protection (copyright certificate of registration) by the National Library, is the light box
depicted in such engineering drawings ipso facto also protected by such copyright?

(2) or should the light box be registered separately and protected by a patent issued by the
Bureau of Patents Trademarks and Technology Transfer (now Intellectual Property Office) in
addition to the copyright of the engineering drawings?
 (3) can the owner of a registered trademark legally prevent others from using such trademark if it
is a mere abbreviation of a term descriptive of his goods, services or business?

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioner P & Ds complaint was that SMI infringed on its copyright over the light boxes when SMI had
the units manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously, petitioners
position was premised on its belief that its copyright over the engineering drawings extended ipso facto to
the light boxes depicted or illustrated in said drawings. In ruling that there was no copyright infringement,
the Court of Appeals held that the copyright was limited to the drawings alone and not to the light box
itself. We agree with the appellate court.

First, petitioners application for a copyright certificate as well as Copyright Certificate No. PD-R2588
issued by the National Library on January 20, 1981 clearly stated that it was for a class O work under
Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the statute then prevailing. Said
Section 2 expressly enumerated the works subject to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of
the following works:

xxxxxxxxx

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;

xxxxxxxxx

Although petitioners copyright certificate was entitled Advertising Display Units (which depicted the
box-type electrical devices), its claim of copyright infringement cannot be sustained.

Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the
rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and conditions specified in the statute. [7] Accordingly, it can
cover only the works falling within the statutory enumeration or description. [8]

P & D secured its copyright under the classification class O work. This being so, petitioners copyright
protection extended only to the technical drawings and not to the light box itself because the latter was
not at all in the category of prints, pictorial illustrations, advertising copies, labels, tags and box
wraps. Stated otherwise, even as we find that P & D indeed owned a valid copyright, the same could have
referred only to the technical drawings within the category of pictorial illustrations. It could not have
possibly stretched out to include the underlying light box. The strict application[9] of the laws enumeration
in Section 2 prevents us from giving petitioner even a little leeway, that is, even if its copyright certificate
was entitled Advertising Display Units. What the law does not include, it excludes, and for the good reason:
the light box was not a literary or artistic piece which could be copyrighted under the copyright law. And no
less clearly, neither could the lack of statutory authority to make the light box copyrightable be remedied
by the simplistic act of entitling the copyright certificate issued by the National Library as Advertising
Display Units.

In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public without license from
P & D, then no doubt they would have been guilty of copyright infringement. But this was not the
case. SMIs and NEMIs acts complained of by P & D were to have units similar or identical to the light box
illustrated in the technical drawings manufactured by Metro and EYD Rainbow Advertising, for leasing out
to different advertisers.Was this an infringement of petitioners copyright over the technical drawings? We
do not think so.

During the trial, the president of P & D himself admitted that the light box was neither a literary not an
artistic work but an engineering or marketing invention. [10] Obviously, there appeared to be some confusion
regarding what ought or ought not to be the proper subjects of copyrights, patents and trademarks. In the
leading case of Kho vs. Court of Appeals,[11] we ruled that these three legal rights are completely distinct
and separate from one another, and the protection afforded by one cannot be used interchangeably to
cover items or works that exclusively pertain to the others:

Trademark, copyright and patents are different intellectual property rights that cannot be interchanged
with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a stamped or marked container of goods. In
relation thereto, a trade name means the name or designation identifying or distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic workswhich are original intellectual
creations in the literary and artistic domain protected from the moment of their creation. Patentable
inventions, on the other hand, refer to any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

This brings us to the next point: if, despite its manufacture and commercial use of the light
boxes without license from petitioner, private respondents cannot be held legally liable for infringement of
P & Ds copyright over its technical drawings of the said light boxes, should they be liable instead for
infringement of patent? We do not think so either.

For some reason or another, petitioner never secured a patent for the light boxes. It therefore acquired
no patent rights which could have protected its invention, if in fact it really was. And because it had no
patent, petitioner could not legally prevent anyone from manufacturing or commercially using the
contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,[12] we held that there can be no
infringement of a patent until a patent has been issued, since whatever right one has to the invention
covered by the patent arises alone from the grant of patent. x x x (A)n inventor has no common law right
to a monopoly of his invention. He has the right to make use of and vend his invention, but if he voluntarily
discloses it, such as by offering it for sale, the world is free to copy and use it with impunity. A patent,
however, gives the inventor the right to exclude all others. As a patentee, he has the exclusive right of
making, selling or using the invention. [13] On the assumption that petitioners advertising units were
patentable inventions, petitioner revealed them fully to the public by submitting the engineering drawings
thereof to the National Library.

To be able to effectively and legally preclude others from copying and profiting from the invention, a
patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to
bring new designs and technologies into the public domain through disclosure. [14] Ideas, once disclosed to
the public without the protection of a valid patent, are subject to appropriation without significant restraint.
[15]

On one side of the coin is the public which will benefit from new ideas; on the other are the inventors
who must be protected. As held in Bauer & Cie vs. ODonnel,[16] The act secured to the inventor the
exclusive right to make use, and vend the thing patented, and consequently to prevent others from
exercising like privileges without the consent of the patentee. It was passed for the purpose of encouraging
useful invention and promoting new and useful inventions by the protection and stimulation given to
inventive genius, and was intended to secure to the public, after the lapse of the exclusive privileges
granted the benefit of such inventions and improvements.

The law attempts to strike an ideal balance between the two interests:

(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure
of new useful and non-obvious advances in technology and design, in return for the exclusive right to
practice the invention for a number of years. The inventor may keep his invention secret and reap its fruits
indefinitely. In consideration of its disclosure and the consequent benefit to the community, the patent is
granted. An exclusive enjoyment is guaranteed him for 17 years, but upon the expiration of that period,
the knowledge of the invention inures to the people, who are thus enabled to practice it and profit by its
use.[17]

The patent law has a three-fold purpose: first, patent law seeks to foster and reward invention; second,
it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice
the invention once the patent expires; third, the stringent requirements for patent protection seek to
ensure that ideas in the public domain remain there for the free use of the public. [18]

It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth
investigation is required because in rewarding a useful invention, the rights and welfare of the community
must be fairly dealt with and effectively guarded. To that end, the prerequisites to obtaining a patent are
strictly observed and when a patent is issued, the limitations on its exercise are equally strictly
enforced. To begin with, a genuine invention or discovery must be demonstrated lest in the constant
demand for new appliances, the heavy hand of tribute be laid on each slight technological advance in art.
[19]

There is no such scrutiny in the case of copyrights nor any notice published before its grant to the
effect that a person is claiming the creation of a work. The law confers the copyright from the moment of
creation[20] and the copyright certificate is issued upon registration with the National Library of a sworn ex-
parte claim of creation.

Therefore, not having gone through the arduous examination for patents, the petitioner cannot
exclude others from the manufacture, sale or commercial use of the light boxes on the sole basis of its
copyright certificate over the technical drawings.

Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office
(IPO) to scrutinize the light boxs eligibility as a patentable invention. The irony here is that, had petitioner
secured a patent instead, its exclusivity would have been for 17 years only. But through the simplified
procedure of copyright-registration with the National Library without undergoing the rigor of defending the
patentability of its invention before the IPO and the public the petitioner would be protected for 50
years. This situation could not have been the intention of the law.

In the oft-cited case of Baker vs. Selden[21], the United States Supreme Court held that only the
expression of an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the
copyright of a book which expounded on a new accounting system he had developed. The publication
illustrated blank forms of ledgers utilized in such a system. The defendant reproduced forms similar to
those illustrated in the plaintiffs copyrighted book. The US Supreme Court ruled that:

There is no doubt that a work on the subject of book-keeping, though only explanatory of well known
systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x. But there is a
clear distinction between the books, as such, and the art, which it is, intended to illustrate. The mere
statement of the proposition is so evident that it requires hardly any argument to support it. The same
distinction may be predicated of every other art as well as that of bookkeeping. A treatise on the
composition and use of medicines, be they old or new; on the construction and use of ploughs or watches
or churns; or on the mixture and application of colors for painting or dyeing; or on the mode of drawing
lines to produce the effect of perspective, would be the subject of copyright; but no one would contend
that the copyright of the treatise would give the exclusive right to the art or manufacture described
therein. The copyright of the book, if not pirated from other works, would be valid without regard to the
novelty or want of novelty of its subject matter. The novelty of the art or thing described or explained has
nothing to do with the validity of the copyright. To give to the author of the book an exclusive
property in the art described therein, when no examination of its novelty has ever been
officially made, would be a surprise and a fraud upon the public. That is the province of letters
patent, not of copyright. The claim to an invention of discovery of an art or manufacture must
be subjected to the examination of the Patent Office before an exclusive right therein can be
obtained; and a patent from the government can only secure it.
The difference between the two things, letters patent and copyright, may be illustrated by reference to the
subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of great value in
the healing art. If the discoverer writes and publishes a book on the subject (as regular
physicians generally do), he gains no exclusive right to the manufacture and sale of the
medicine; he gives that to the public. If he desires to acquire such exclusive right, he must
obtain a patent for the mixture as a new art, manufacture or composition of matter. He may
copyright his book, if he pleases; but that only secures to him the exclusive right of printing
and publishing his book. So of all other inventions or discoveries.

The copyright of a book on perspective, no matter how many drawings and illustrations it may contain,
gives no exclusive right to the modes of drawing described, though they may never have been known or
used before. By publishing the book without getting a patent for the art, the latter is given to the public.

xxx

Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book intended
to convey instruction in the art, any person may practice and use the art itself which he has described and
illustrated therein. The use of the art is a totally different thing from a publication of the book
explaining it. The copyright of a book on bookkeeping cannot secure the exclusive right to make, sell and
use account books prepared upon the plan set forth in such book.Whether the art might or might not have
been patented, is a question, which is not before us. It was not patented, and is open and free to the use of
the public. And, of course, in using the art, the ruled lines and headings of accounts must necessarily be
used as incident to it.

The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas
produced by the peculiar nature of the art described in the books, which have been made the subject of
copyright. In describing the art, the illustrations and diagrams employed happened to correspond more
closely than usual with the actual work performed by the operator who uses the art. x x x The
description of the art in a book, though entitled to the benefit of copyright, lays no foundation
for an exclusive claim to the art itself. The object of the one is explanation; the object of the
other is use. The former may be secured by copyright. The latter can only be secured, if it can
be secured at all, by letters patent. (underscoring supplied)

ON THE ISSUE OF TRADEMARK INFRINGEMENT

This issue concerns the use by respondents of the mark Poster Ads which petitioners president said
was a contraction of poster advertising. P & D was able to secure a trademark certificate for it, but one
where the goods specified were stationeries such as letterheads, envelopes, calling cards and newsletters.
[22]
Petitioner admitted it did not commercially engage in or market these goods. On the contrary, it dealt in
electrically operated backlit advertising units and the sale of advertising spaces thereon, which, however,
were not at all specified in the trademark certificate.

Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate Appellate
Court,[23] where we, invoking Section 20 of the old Trademark Law, ruled that the certificate of registration
issued by the Director of Patents can confer (upon petitioner) the exclusive right to use its own
symbol only to those goods specified in the certificate, subject to any conditions and limitations specified
in the certificate x x x. One who has adopted and used a trademark on his goods does not prevent the
adoption and use of the same trademark by others for products which are of a different description.
[24]
Faberge, Inc. was correct and was in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of
Appeals.[25]

Assuming arguendo that Poster Ads could validly qualify as a trademark, the failure of P & D to secure
a trademark registration for specific use on the light boxes meant that there could not have been any
trademark infringement since registration was an essential element thereof.

ON THE ISSUE OF UNFAIR COMPETITION

 If at all, the cause of action should have been for unfair competition, a situation which was possible
even if P & D had no registration. [26] However, while the petitioners complaint in the RTC also cited unfair
competition, the trial court did not find private respondents liable therefor. Petitioner did not appeal this
particular point; hence, it cannot now revive its claim of unfair competition.

But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair
competition.

By the nature of things, there can be no unfair competition under the law on copyrights although it is
applicable to disputes over the use of trademarks. Even a name or phrase incapable of appropriation as a
trademark or tradename may, by long and exclusive use by a business (such that the name or phrase
becomes associated with the business or product in the mind of the purchasing public), be entitled to
protection against unfair competition. [27] In this case, there was no evidence that P & Ds use of Poster Ads
was distinctive or well-known. As noted by the Court of Appeals, petitioners expert witnesses himself had
testified that Poster Ads was too generic a name. So it was difficult to identify it with any company,
honestly speaking.[28] This crucial admission by its own expert witness that Poster Ads could not be
associated with P & D showed that, in the mind of the public, the goods and services carrying the
trademark Poster Ads could not be distinguished from the goods and services of other entities.

This fact also prevented the application of the doctrine of secondary meaning. Poster Ads was generic
and incapable of being used as a trademark because it was used in the field of poster advertising, the very
business engaged in by petitioner. Secondary meaning means that a word or phrase originally incapable of
exclusive appropriation with reference to an article in the market (because it is geographically or otherwise
descriptive) might nevertheless have been used for so long and so exclusively by one producer with
reference to his article that, in the trade and to that branch of the purchasing public, the word or phrase
has come to mean that the article was his property. [29] The admission by petitioners own expert witness
that he himself could not associate Poster Ads with petitioner P & D because it was too generic definitely
precluded the application of this exception.

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

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

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

SO ORDERED.

Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

G.R. No. L-4720 January 19, 1909

CARLOS GSELL, plaintiff-appellee,

vs.
VALERIANO VELOSO YAP-JUE, defendant-appellant.

Chicote and Miranda, for appellant.

Haussermann and Cohn, for appellee.

CARSON, J.:
This an appeal from a final order of the Court of First Instance of the city of Manila, in contempt
proceedings prosecuted under the provisions of section 172 of the Code of Civil Procedure. The principal
case to which these proceedings are ancillary, was an action to enjoin infringement of a patented process
for the manufacture of curved handles for canes, parasols, and umbrellas. In that case plaintiff established
his title to a valid patent covering the process in question, and obtained against this defendant a
judgment, granting a perpetual injunction restraining its infringement, which judgment was affirmed by
this court on appeal (6 Phil. Rep., 143.) The order was couched in the following terms:

It is ordered that the defendant abstain from manufacturing canes and umbrellas with a
curved handle by means of a lamp or blowpipe fed with mineral oil or petroleum, which
process was protected by patent No. 19228, issued in favor of Henry Gsell, and by him
transferred to Carlos Gsell

and the process therein mentioned is fully described in the following statement which accompanied the
application for the patent:

After the canes have been cut for cane or umbrella handles, the outsides are thoroughly
cleaned. This operation having been performed, they are then trimmed and the interior
cleaned by means of a gimlet of about 15 centimeters in length operated by a wheel, by
means of which the knots inside are broken. There is then introduced to a depth of about 15
centimeters a piece of very clean bamboo, which completely fills the hole made by the
gimlet, thereby giving to the cane the necessary strength to resist the heat of the lamp or
blowpipe without breaking or cracking.

This operation having been performed, the cane, the end of which is attached to a fixed
point, is given the shape of a hook or some other form by means of fire and pressure. Once
the cane has been shaped as desired, it is allowed to cool, and is then cleaned, varnished,
and ornamented at will.

This industry requires skillful, handiwork, owing to the great risk engendered by the
treatment of such fragile material as a light cane. On the other hand, however, it affords
large profits to the workman.

NOTE. The patent applied for shall be for the industrial product "cane handles for walking
sticks and umbrellas, curved by means of a small lamp or blowpipe, fed by petroleum or
mineral fuel."

Thereafter the defendant continued to manufacture curved cane handled for walking sticks and umbrellas
by a process in all respectes identical with that used by the plaintiff under his patent, except only that he
be substituted for a lamp fed with petroleum or mineral oil, lamp fed with alcohol, as appears from a
stipulation entered into between plaintiff and defendant in the following terms:

The plaintiff and defendant agree upon the fact that the defendant has used and is still using
a process for curving handles of canes and umbrellas identical with that described in the
application for the patent by the plaintiff with the exception that he has substituted for the
lamp fed with all other lamp fed with alcohol.

Contempt proceedings were instituted against the defendant in the month of February, 1904, the plaintiff
in the original action alleging that the

Defendant in disobediencce of the judgment of the same was and is now engaged in the
unlawful manufacture of umbrella handles by the identical process described in and
protected said patent, No. 19228, or a process so like the patented process as to be
indistinguishable.

The trial court found the defendant "not guilty" of contempt as charged; and this court, on appeal, held
that a character that it could be made patent by the mere annunciation of the acts performed by the
defendant, which are alleged to constitute the said violation. These acts were not clearly and manifestly
contrary to the precise terms of the prohibition. According to the express language of the judgment, the
prohibition is against the manufacture of canes and umbrellas with curved handles by means of the use of
a cool or mineral oil-burning lamp or blowpipe and the parties have stipulated that the defendant did not
use a coal or mineral oil-burning lamp but an alcohol-burning lamp.

The question, however, arises as to whether that prohibition included the substitution of
alcohol for coal or mineral oil. In more abstract and general terms, the appellant propounds
this question in his brief, as follows: "The question presented by this appeal is whether or
not the use of a patented process by a third person, without license or authority therefor,
constitutes an infringement when the alleged infringer has substituted in lieu of
some unessential part of the patented process a well-known mechanical equivalent." It has
seen that by its very terms this question implies in the present case the existence of two
fundamental facts which must first be duly established, viz: (1) That the use of the lamp fed
with petroleum or mineral oil was an unessential part of the patented process the use of
which by the accused was prohibited by the said judgment; and (2) that alcohol is an
equivalent and proper substitute, well known as such, for mineral oil or petroleum in
connection with the said process. The appellant has failed to affirmatively establish either of
these two essential facts. He has merely assumed their existence, without proving the same,
thus begging the whole question. Consequently the contempt with which the accused is
charged has not been fully and satisfactorily proved, and the order appealed from should
accordingly be affirmed in so far as it holds that the defendant is not guilty of contempt. (7
Phil. Rep., 130).

Thereafter the plaintiff continued the use of the patented process, save only for the substitutions of a lamp
fed by alcohol for a lamp fed by petroleum or mineral oil, and new proceedings were instituted under the
provisions of section 172 for the purpose of enforcing the original injunction above cited. Substantially the
same question is submitted in these new proceedings as that submitted in the former case, but at the trial
of this case testimony was introduced which, in our opinion, leaves no room for doubt, first, that alcohol is
an equivalent or substitute, well known as such at the time when the patent was issued, for mineral oil or
petroleum, in connection with blast lamps or blowpipes such as that which plaintiff uses in the patented
process, and, second, that the use of a blast lamp or blowpipe fed with petroleum or mineral oil, rather
than one fed with alcohol, is an unessential part of the patented process the use of which was prohibited
by the said judgment.

It was clearly proven at the trial, that kerosene and alcohol blast lamps are agencies for producing and
applying heat, well known throughout the world long prior to 1906, the date of the issue of the patent; that
it is and for many years has been known that one may for all ordinary purposes be used in the place of the
other, and especially for the purpose of applying heat in the manner described in the patent; that the only
consideration which determines the employment of one in place of the other is the convenience of the user
and the question of relative cost; and that the principle upon which both lamps work is substantially
identical, the only difference in construction being occasioned by the application of this principle to oils of
different physical and chemical composition.

The plaintiff does not and can not claim a patent upon the particular lamp used by him. The patent,
however, gives him the exclusive right to the use of "la lamparilla o soplete, alimentada de petroleo o
esencia mineral" (the small lamp or blowpipe fed with petroleum or mineral oil) in manufacturing curved
handles for umbrellas and canes, to which reference is made in the above-cited descriptive statement and
annexed note. "The small lamp or blowpipe" mentioned in the descriptive statement and annexed note
which accompanied the application for the patent, evidently referred to the design of a blast lamp which
was attached thereto; and in our opinion both plaintiff and defendant make use of a blast lamp
substantially similar, in principle and design, to that referred to in the descriptive statement and the
annexed note, for the exclusive use of which in the manufacture of curved handles, plaintiff holds a patent.
True, defendant's blast lamp is fed with alcohol, and its shape varies in unimportant details, for the
purpose of accommodating the principle, by which the flame is secured, to the different physical and
chemical composition of the fuel used therein; but the principle on which it works, its mode of application,
and its general design distinguish it in no essential particular from that used by the plaintiff. If the original
design accompanying the statement had shown a blast lamp made of brass or delf, he would be a reckless
advocate who would claim that the patent might lawfully be evaded by the use of a lamp made of iron or
tin; or if the original design had shown a blast lamp 6 inches high with a nozzle 4 inches long it would
hardly be seriously contended that the use of lamp 8 inches high with a nozzle 3 inches long would protect
the ingenious individual, who in all other respects borrowed the patented process, from the consequences
of an action for damages for infringement. But in the light of the evidence of record in this case, the
reasoning upon which these hypothetical claims should be rejected applies with equal force to the
contentions of the defendant, the ground for the rejection of the claims in each case being the same, and
resting on the fact that unessential changes, which do not affect the principle of the blast lamp used in the
patented process, or the mode of application of heat authorized by the patent, are not sufficient to support
a contention that the process in one case is in any essential particular different from that used in the other.

Counsel for plaintif invokes the doctrine of "mechanical equivalents" in support of his contention, and
indeed that doctrine is strikingly applicable to the facts in this case. This doctrine is founded upon sound
rules of reason and logic, and unless restrained or modified by law in particular jurisdiction, is of universal
application, so that it matters not whether a patent be issued by one sovereignty or another, the doctrine
may properly be invoked to protect the patentee from colorable invasions of his patent under the guise of
substitution of some part of his invention by some well known mechanical equivalent. Our attention has
not been called to any provision of the patent law of Spain, which denies to patentees thereunder the just
and equitable protection of the doctrine; and indeed a patent law which failed to recognize this doctrine
would afford scant protection to inventors, for it is difficult if not impossible to conceive an invention, which
is incapable of alteration or change in some unessential part, so as to bring that part outside of the
express terms of any form of language which might be used in granting a patent for the invention; and has
been well said by counsel for plaintiff, human ingenuity would be taxed beyond its powers in preparing a
grant of a patent so comprehensive in its terms, "as to include within the express terms of its detailed
description every possible alternative of form, size, shape, material, location, color, weight, etc., of every
wheel, rod, bolt, nut, screw, plate, and other component parts of an invention."

The following citations from various decisions of the Federal Courts of the United States illustrate the
application of the doctrine in that jurisdiction, and clearly point the way to the proper solution of the
questions involved in the case at bar:

Can the defendant have the right of infringement, by substituting in lieu of some parts of the
combination well-known mechanical equivalents? I am quite clear that be can not, both on
principle and authority. It is not to be disputed that the inventor of an ordinary machine is,
by his letters patent, protected against all mere formal alterations and against the
substitution of mere mechanical equivalents. Why should not the inventor of a new
combination receive the same protection? If he can not, then will his patent not be worth the
parchment on which it is written.

If no one can be held to infringe a patent for a combination unless he uses all the parts of
the combination and the identical machinery as that of the patentee, then will no patent for
a combination be infringed; for certainly no one capable of operating a machine can be
incapable of adopting some formal alteration in the machinery, or of substituting mechanical
equivalents. No one infringes a patent for a combination who does not employ all of the
ingredients of the combination; but if he employs all the ingredients, or adopts mere formal
alterations, or substitutes, for one ingredient another which was well known at the date of
the patent as a proper substitute for the one withdrawn, and which performs substantially
the same function as the one withdrawn, he does infringe. (King vs. Louisville Cement Co.,
Fed. Cas., 7798.)

Bona fide inventors of a combination are as much entitled to equivalents as the inventors
other patentable improvements; by which is meant that a patentee in such a case may
substitute another ingredient for any one of the ingredients of his invention, if the ingredient
substituted performs the same function as the one omitted and as well known at the date of
his patent as a proper substitute for the one omitted in the patented combination. Apply that
rule and it is clear that an alteration in a patented combination which merely substitutes
another old ingredient for one of the ingredients in the patented combination, is an
infringement of the patent, if the substitute performs the same function and was well known
at the date of the patent as a proper substitute for the omitted ingredient. (Gould vs. Rees,
82 U.S., 187, 194.)

Mere formal alterations in a combination in letters patent are no defense to the charge of
infringement and the withdrawal of one ingredient from the same and the substitution of
another which was well known at the date of the patent as a proper substitute for the one
 withdrawn is a mere formal alteration of the combination if the ingredient substituted
performs substantially the same function as the one withdrawn.

Bona fide inventors of a combination are as much entitled to suppress every other
combination of the same ingredients to produce the same result, not substantially different
from what they have invented and caused to be patented as to any other class of inventors.
All alike have the right to suppress every colorable invasion of that which is secured to them
by letters patent. (Seymour vs. Osborne, 78 U.S., 516, 556.)

A claim for the particular means and mode of operation described in the specification
extends, by operation of law, to the equivalent of such means not equivalent simply
because the same result is thereby produced but equivalent as being substantially the
same device in structure, arrangement and mode of operation. (Burden vs. Corning, Fed.
Cas., 2143. Gottfried vs. Philip Best Brewing Co., Fed. Cas., 5633.)

An equivalent device is such as a mechanic of ordinary skill in construction of similar

machinery, having the forms, specifications and machine before him, could substitute in the
place of the mechanism described without the exercise of the inventive faculty.
(Burden vs. Corning, supra.)

All the elements of the invention in this case are old, and the rule in such cases, as before
explained, undoubtedly is that a purpose can not invoke the doctrine of equivalents to
suppress all other improvements of the old machine, but he is entitled to treat everyone as
an infringer who makes, uses, or vends his patented improvement without any other change
than the employment of a substitute for one of its elements, well known as such at the date
of his invention, and which any constructor acquainted with the art will know how to comply.
The reason for the qualification of the rule as stated is, that such change that is, the mere
substitution of a well- known element for another where it appears that the substituted
element was well known as a usual substitute for the element left out is merely a formal
one, and nothing better than a colorable evasion of the patent. (Union Sugar Refining
Co. vs. Matthieson, Fed. Cas., 14399.)

Counsel for the defendant insists that, under Spanish law, none of the steps of the process described in the
descriptive statement, save those mentioned in the "note" thereto attached are included in the patent, and
that the patent rights secured thereunder are strictly limited to the precise language of the "note"
attached to the descriptive statement; while counsel for plaintiff appears to think that the language of the
patent covers any process or device whereby wood or cane may be bent or curved by the use of heat. But
for the purpose of this decision it is not necessary to consider these questions, further than to hold, as we
do, that under the doctrine of equivalents, the language of the note in the descriptive statement applies to
the operation of applying heat for the purpose of curving handles or canes and umbrellas by means of a
blast lamp fed with alcohol, as well as by means of a blast lamp fed with petroleum or mineral oil; and the
defendant having admitted the fact that he applied heat for the purpose of curving handles for canes and
umbrellas by means of a blast lamp fed with alcohol, he must be deemed to have contempt of violating the
terms and the injunction issued in the principal case, wherein plaintiff was declared the owner of the
patent in question, and defendant enjoined from its infringement.

The argument of counsel for defendant and appellant, based on the theory that the questions herein
discussed and decided to have been heretofore settled by this court, and that the subject-matter of this
proceeding is res adjudicata between the parties thereto is sufficiently refuted by the simple reading of the
decision of this court in the case relied upon. (Gsell vs. Veloso, 7 Phil. Rep., 130.)

The judgment of the lower court should be and is hereby affirmed, with the costs of this instance against
the appellant.

Arellano, C.J., Torres, Mapa, Willard, and Tracey, JJ., concur.

 [G. R. No. 126627. August 14, 2003]

SMITH KLINE BECKMAN CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and
TRYCO PHARMA CORPORATION, respondents.

DECISION
CARPIO-MORALES, J.:

Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the state
of Pennsylvania, United States of America (U.S.) and licensed to do business in the Philippines, filed on
October 8, 1976, as assignee, before the Philippine Patent Office (now Bureau of Patents, Trademarks and
Technology Transfer) an application for patent over an invention entitled Methods and Compositions for
Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate. The
application bore Serial No. 18989.
On September 24, 1981, Letters Patent No. 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] It claimed that its patent covers or includes the substance
Albendazole such that private respondent, by manufacturing, selling, using, and causing to be sold and
used the drug Impregon without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No.
14561[4] as well as committed unfair competition under Article 189, paragraph 1 of the Revised Penal Code
and Section 29 of Republic Act No. 166 (The Trademark Law) for advertising and selling as its own the drug
Impregon although the same contained petitioners patented Albendazole. [5]
On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining order against
private respondent enjoining it from committing acts of patent infringement and unfair competition. [6] A
writ of preliminary injunction was subsequently issued.[7]
Private respondent in its Answer [8] averred that Letters Patent No. 14561 does not cover the substance
Albendazole for nowhere in it does that word appear; that even if the patent were to include Albendazole,
such substance is unpatentable; that the Bureau of Food and Drugs allowed it to manufacture and market
Impregon with Albendazole as its known ingredient; that there is no proof that it passed off in any way its
veterinary products as those of petitioner; that Letters Patent No. 14561 is null and void, the application
for the issuance thereof having been filed beyond the one year period from the filing of an application
abroad for the same invention covered thereby, in violation of Section 15 of Republic Act No. 165 (The
Patent Law); and that petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such amount of actual damages as
may be proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary damages; and P150,000.00 in
attorneys fees.
Finding for private respondent, the trial court rendered a Decision dated July 23, 1991, [9] the dispositive
portion of which reads:

WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is hereby, DISMISSED. The Writ
of injunction issued in connection with the case is hereby ordered DISSOLVED.

The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby declared null and
void for being in violation of Sections 7, 9 and 15 of the Patents Law.

Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby directed to cancel
Letters Patent No. 14561 issued to the plaintiff and to publish such cancellation in the Official Gazette.

Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual damages and
P100,000.00 attorneys fees as prayed for in its counterclaim but said amount awarded to defendant is
subject to the lien on correct payment of filing fees.

SO ORDERED. (Underscoring supplied)

On appeal, the Court of Appeals, by Decision of April 21, 1995, [10] upheld the trial courts finding that
private 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. Noting
petitioners admission of the issuance by the U.S. of a patent for Albendazole in the name of Smith Kline
and French Laboratories which was petitioners former corporate name, the appellate court considered the
U.S. patent as implying that Albendazole is different from methyl 5 propylthio-2-benzimidazole
carbamate. It likewise found that private respondent was not guilty of deceiving the public by
misrepresenting that Impregon is its product.
The appellate court, however, declared that Letters Patent No. 14561 was not void as it sustained
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 of its Foreign Application Priority
Data No. 480,646 in the U.S. covering the same compound subject of Patent Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent Application Serial
No. 18989 was deemed filed on June 17, 1995 or still within one year from the filing of a patent application
abroad in compliance with the one-year rule under Section 15 of the Patent Law. And it rejected the
submission that the compound in Letters Patent No. 14561 was not patentable, citing the jurisprudentially
established presumption that the Patent Offices determination of patentability is correct. Finally, it ruled
that petitioner established itself to be the one and the same assignee of the patent notwithstanding
changes in its corporate name. Thus the appellate court disposed:
WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that
the orders for the nullification of Letters Patent No. 14561 and for its cancellation
are deleted therefrom.

SO ORDERED.

Petitioners motion for reconsideration of the Court of Appeals decision having been denied [11] the
present petition for review on certiorari[12] was filed, assigning as errors the following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT ALBENDAZOLE, THE ACTIVE
INGREDIENT IN TRYCOS IMPREGON DRUG, IS INCLUDED IN PETITIONERS LETTERS PATENT NO.
14561, AND THAT CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.
 II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE RESPONDENT TRYCO
PHARMA CORPORATION P330,000.00 ACTUAL DAMAGES AND P100,000.00 ATTORNEYS FEES.
Petitioner argues that under the doctrine of equivalents for determining patent infringement,
Albendazole, the active ingredient it alleges was appropriated by private respondent for its drug Impregon,
is substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered by its patent since
both of them are meant to combat worm or parasite infestation in animals. It cites the unrebutted
testimony of its witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical formula in Letters Patent
No. 14561 refers to the compound Albendazole. Petitioner adds that the two substances substantially do
the same function in substantially the same way to achieve the same results, thereby making them truly
identical. Petitioner thus submits that the appellate court should have gone beyond the literal wordings
used in Letters Patent No. 14561, beyond merely applying the literal infringement test, for in spite of the
fact that the word Albendazole does not appear in petitioners letters patent, it has ably shown by evidence
its sameness with methyl 5 propylthio-2-benzimidazole carbamate.
Petitioner likewise points out that its application with the Philippine Patent Office on account of which it
was granted Letters Patent No. 14561 was merely a divisional application of a prior application in the U. S.
which granted a patent for Albendazole. Hence, petitioner concludes that both methyl 5 propylthio-2-
benzimidazole carbamate and the U.S.-patented Albendazole are dependent on each other and mutually
contribute to produce a single result, thereby making Albendazole as much a part of Letters Patent No.
14561 as the other substance is.
Petitioner concedes in its Sur-Rejoinder [13] that although methyl 5 propylthio-2-benzimidazole
carbamate is not identical with Albendazole, the former is an improvement or improved version of the
latter thereby making both substances still substantially the same.
With respect to the award of actual damages in favor of private respondent in the amount
of P330,000.00 representing lost profits, petitioner assails the same as highly speculative and conjectural,
hence, without basis.It assails too the award of P100,000.00 in attorneys fees as not falling under any of
the instances enumerated by law where recovery of attorneys fees is allowed.
In its Comment,[14] private respondent contends that application of the doctrine of equivalents would
not alter the outcome of the case, Albendazole and methyl 5 propylthio-2-benzimidazole carbamate being
two different compounds with different chemical and physical properties. It stresses that the existence of a
separate U.S. patent for Albendazole indicates that the same and the compound in Letters Patent No.
14561 are different from each other; and that since it was on account of a divisional application that the
patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by definition of a divisional
application, such a compound is just one of several independent inventions alongside Albendazole under
petitioners original patent application.
As has repeatedly been held, only questions of law may be raised in a petition for review on certiorari
before this Court. Unless the factual findings of the appellate court are mistaken, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the findings culled by the
court of origin,[15] this Court does not review them.
From an examination of the evidence on record, this Court finds nothing infirm in the appellate courts
conclusions with respect to the principal issue of whether private respondent committed patent
infringement to the prejudice of petitioner.
The burden of proof to substantiate a charge for patent infringement rests on the plaintiff. [16] In the
case at bar, 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, by which it sought to
show that its patent for the compound methyl 5 propylthio-2-benzimidazole carbamate also covers the
substance Albendazole.
From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions thereof, no
mention is made of the compound Albendazole. All that the claims disclose are: the covered invention, that
is, the compound methyl 5 propylthio-2-benzimidazole carbamate; the compounds being anthelmintic but
nontoxic for animals or its ability to destroy parasites without harming the host animals; and the patented
methods, compositions or preparations involving the compound to maximize its efficacy against certain
kinds of parasites infecting specified animals.
When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim
anything beyond them.[17] And so are the courts bound which may not add to or detract from the claims
matters not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that
which the inventor claimed and the patent office allowed, even if the patentee may have been entitled to
something more than the words it had chosen would include. [18]
It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561 is not
determinative of Albendazoles non-inclusion in the claims of the patent. While Albendazole is admittedly a
chemical compound that exists by a name different from that covered in petitioners letters patent, the
language of Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And no extrinsic
evidence had been adduced to prove that Albendazole inheres in petitioners patent in spite of its omission
therefrom or that the meaning of the claims of the patent embraces the same.
While petitioner concedes that the mere literal wordings of its patent cannot establish private
respondents infringement, it urges this Court to apply the doctrine of equivalents.
The doctrine of equivalents provides that an infringement also takes place when a device appropriates
a prior invention by incorporating its innovative concept and, although with some modification and change,
performs substantially the same function in substantially the same way to achieve substantially the same
result.[19] Yet again, a scrutiny of petitioners evidence fails to convince this Court of the substantial
sameness of petitioners patented compound and Albendazole. While both compounds have the effect of
neutralizing parasites in animals, identity of result does not amount to infringement of patent unless
Albendazole operates in substantially the same way or by substantially the same means as the patented
compound, even though it performs the same function and achieves the same result.[20] In other
words, the principle or mode of operationmust be the same or substantially the same.[21]
The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the
patentee having the burden to show that all three components of such equivalency test are met. [22]
As stated early on, petitioners evidence fails to explain how Albendazole is in every essential detail
identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the fact that Albendazole is an
anthelmintic agent like methyl 5 propylthio-2-benzimidazole carbamate, nothing more is asserted and
accordingly substantiated regarding the method or means by which Albendazole weeds out parasites in
animals, thus giving no information on whether that method is substantially the same as the manner by
which petitioners compound works. The testimony of Dr. Orinion lends no support to petitioners cause, he
not having been presented or qualified as an expert witness who has the knowledge or expertise on the
matter of chemical compounds.
As for the concept of divisional applications proffered by petitioner, it comes into play when two or
more inventions are claimed in a single application but are of such a nature that a single patent may not
be issued for them. [23] The applicant thus is required to divide, that is, to limit the claims to whichever
invention he may elect, whereas those inventions not elected may be made the subject of separate
applications which are called divisional applications. [24] What this only means is that 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. Otherwise, methyl 5
propylthio-2-benzimidazole carbamate would not have been the subject of a divisional application if a
single patent could have been issued for it as well as Albendazole.
The foregoing discussions notwithstanding, this Court does not sustain the award of actual damages
and attorneys fees in favor of private respondent. The claimed actual damages of P330,000.00
representing lost profits or revenues incurred by private respondent as a result of the issuance of the
injunction against it, computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for
eleven months, were supported by the testimonies of private respondents President [25] and Executive Vice-
President that the average monthly sale of Impregon was P100,000.00 and that sales plummeted to zero
after the issuance of the injunction. [26] While indemnification for actual or compensatory damages covers
not only the loss suffered (damnum emergens) but also profits which the obligee failed to obtain (lucrum
cessans or ganacias frustradas), it is necessary to prove the actual amount of damages with a reasonable
degree of certainty based on competent proof and on the best evidence obtainable by the injured party.
[27]
The testimonies of private respondents officers are not the competent proof or best evidence obtainable
to establish its right to actual or compensatory damages for such damages also require presentation of
documentary evidence to substantiate a claim therefor. [28]
In the same vein, this Court does not sustain the grant by the appellate court of attorneys fees to
private respondent anchored on Article 2208 (2) of the Civil Code, private respondent having been
allegedly forced to litigate as a result of petitioners suit. Even if a claimant is compelled to litigate with
third persons or to incur expenses to protect its rights, still attorneys fees may not be awarded where no
sufficient showing of bad faith could be reflected in a partys persistence in a case other than an erroneous
conviction of the righteousness of his cause. [29] There exists no evidence on record indicating that
petitioner was moved by malice in suing private respondent.
This Court, however, grants private respondent temperate or moderate damages in the amount
of P20,000.00 which it finds reasonable under the circumstances, it having suffered some pecuniary loss
the amount of which cannot, from the nature of the case, be established with certainty. [30]
WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with
MODIFICATION. The award of actual or compensatory damages and attorneys fees to private respondent,
Tryco Pharma Corporation, is DELETED; instead, it is hereby awarded the amount of P20,000.00 as
temperate or moderate damages.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Corona, JJ., concur.

G.R. No. L-27793 March 15, 1928

PATRICK HENRY FRANK and WILLIAM HENRY GOHN, plaintiff-appellees,

vs.
CONSTANCIO BENITO, defendant-appellant.

Abad Santos, Camus, Delgado and Recto for appellant.

J. W. Ferrier for appellees.

STATEMENT

Plaintiffs allege that they are the owners of a patent covering hemp-stripping machine No. 1519579 issued
to them by the United States Patent Office of December 16, 1924, and duly registered in the Bureau of
Commerce and Industry of the Philippine Islands under the provisions of Act No. 2235 of the Philippine
Legislature on March 17, 1925. That the important feature of the machine "is a spindle upon which the
hemp to be stripped is wound in the process of stripping." That plaintiffs have for some time been
manufacturing the machine under the patent. That the defendant manufactured a hemp-stripping machine
in which, without authority from the plaintiffs, he has embodied and used such spindles and their method
of application and use, and is exhibiting his machine to the public for the purpose of inducing its purchase.
That the use by the defendant of such spindles and the principle of their application to the stripping of
hemp is in violation of, and in conflict with, plaintiffs' patent, together with its conditions and
specifications. That the defendant's machine is an infringement upon the patent granted the plaintiffs, and
plaintiffs pray for an injunction that the defendant be required to account to plaintiffs for any profits he
may have made by reason of such infringement, and for a temporary injunction restraining him in the
manufacture of other machines of the same kind of its exhibition, and that upon the final hearing, the
injunction be made permanent.

The defendant demurred to the complaint upon the ground that the facts alleged therein do not constitute
a cause of action, that it is ambiguous and vague, and that it was error to make William Henry Gohn
plaintiff.

After the demurrer was overruled, the defendant filed an answer in which he denied all of the material
allegations of the complaint, except those which are hereinafter admitted, and as a special defense
alleges:

First. That the defendant has never had at any time nor does he have any knowledge of any
suppose invention of the plaintiffs of whatever kind of hemp-stripping machine, whether patented
or not, which has circulated or not in the Philippine Islands for the sale thereof or its private
exploitation.
 Second. That not having had any knowledge of any kind of hemp-stripping machine supposed to
have been invented by the plaintiffs, it never occurred to the defendant to imitate the unknown
invention of the plaintiffs.

Third. That the hemp-stripping machine of the plaintiffs, known as "La Constancia," patent of which
is duly registered, has its characteristics and original invention belonging to the defendant which
consist of two pinions with horizontal grooves which form the tool for extracting the fibers between
a straight knife upon another which is cylindrical and provided with teeth and on the center of said
two pinions there is a flying wheel its transmission belt connecting it with the motor.

As a counterclaim, the defendant alleges:

First. That he reproduces in this paragraph each and every allegation contained in the preceding
special defense, as though the same were literally copied here.

Second. That by the filing of the complaint of the plaintiffs and the issuance, as a consequence
thereof, of a writ of injunction in this case, unduly obtained by the said plaintiffs through false and
fraudulent representations, the defendant has suffered damages in the sum of five thousand pesos
(P5,000), Philippine currency.

Wherefore, the defendant prays this court that he be absolved from the herein complaint, and that
the plaintiffs be ordered jointly and severally to pay the sum of five thousand pesos (P5,000),
Philippine currency, as damages, with legal interest thereon from the filing of this action until fully
paid; with the costs of this case, as well as any other remedy that may be proper in law and equity.

The lower court rendered judgment in legal effect granting the plaintiffs the injunction prayed for in their
complaint, and absolving them from defendant's counterclaim, and judgment against the defendant for
costs.

The defendant's motion for a new trial was overruled, and on appeal, he contends that the court erred in
holding the same spindles used by the parties in this case, though different in material and form, have the
same utility and efficiency and that they are the same, and in finding that spindles used by the defendant
are an imitation of those of the plaintiffs, and in finding that the defendant infringed upon plaintiffs' patent,
and in not rendering judgment against the plaintiffs, requiring them to pay defendant P5,000 as damages,
and in enjoining the appellant from the manufacture, use and sale of this hemp-stripping machine.

JOHNS, J.:

It is conceded that on December 16, 1924, the United States Patent Office issued to the plaintiffs the
patent in question No. 1519579, and it was duly registered in the Bureau of Commerce and Industry of the
Philippine Islands on March 17, 1925. After such registration the patent laws, as they exist in the United
States for such patent, are then applied to and are in force and effect in the Philippine Islands. (Vargas vs.
F. M. Yaptico & Co., 40 Phil., 195.) In the instant case, the original patent is in evidence, and that decision
further holds that:

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

That is to say, the patent, which in the instant case is in due form, having been introduced in
evidence, "affords a prima facie presumption of its correctness and validity." Hence, this is not a
case of a conflict between two different patents. In the recent of Temco Electric Motor Co. vs. Apco
Mfg. Co., decided by the Supreme Court of the United States on January 3, 1928, Advance Sheet No.
5, p. 192, the syllabus says:
 An improper cannot appropriate the basic patent of another, and if he does so without license is an
infringer, and may be used as such.

And on page 195 of the opinion, it is said:

It is well established that an improver cannot appropriate the basic patent of another and that the
improver without a license is an infringer and may be sued as such.

Citing a number of Federal decisions.

The plans and specifications upon which the patent was issued recite:

Our invention relates to hemp stripping machines and it consists in the combinations, constructions
and arrangements herein described and claimed.

An object of our invention is to provide a machine affording facilities whereby the operation of
stripping hemp leaves may be accomplished mechanically, thereby obviating the strain incident to
the performance of hemp stripping operations manually.

And on page 3 of the application for patent, it is said:

Obviously, our invention is susceptible of embodiment in forms other than the illustrated herein and
we therefore consider as our own all modifications of the form of device herein disclosed which
fairly fall within the spirit and scope of our invention as claimed.

We claim:

1. In a hemp stripping machine, a stripping head having a supporting portion on which the hemp
leaves may rest and having also an upright bracket portion, a lever of angular formation pivotally
attached substantially at the juncture of the arms thereof of the bracket portion of the stripping
head, whereby one arm of the lever overlies the supporting portion of the stripping head, a blade
carried by said one arm of the lever for cooperating with said supporting, means connected with the
other arm of the lever and actuating the latter to continously urge the blade toward said supporting
portion of the stripping head, and a rotatable spindle positioned adjacent to said stripping head,
said spindle being adapted to be engaged by hemp leaves extending across said supporting portion
of the stripping head underneath said blade and being operable to draw said hemp leaves in the
direction of their length between said supporting portion of the stripping head and said blade.

2. In a hemp stripping machine, a stripping head having a horizontal table portion, a rest supported
upon said table portion, a stripping knife supported upon the table for movement into and out of
position to cooperate with the rest to strip hemp leaves drawn between the knife and the rest, and
power driven means adapted to be engaged with said hemp leaves and to pull the latter between
the knife and rest, said power driven means including a rotating spindle, said spindle being free at
one end and tapering regularly toward its free end.

3. In a hemp stripping machine, a stripping head having a horizontal table portion and an upright
bracket portion a rest holder adjustably on the table portion, a rest resiliently supported by the
holder, a knife carrying lever of angular formation and being pivotally attached substantially at the
juncture of the arms thereof to the bracket portion of the stripping head, whereby one arm of the
lever overlies the rest, a blade adjustably supported on said one arm, for cooperating with said rest
and gravity means connected with the other arm of the lever and actuating the latter to continously
urge the blade toward the rest.

The spindle upon which the patent was obtained, together with the spindle upon which the defendant
relies are exhibits in the record and were before the court at the time this case was argued. The spindle of
the plaintiffs was made of wood, conical in shape and with a smooth surface. That of the defendant was
somewhat similar in shape, but was made of metal with rough surface, and the defendant claims that his
spindle was more effective and would do better work than that of the plaintiffs. Be that as it may, the
plaintiffs have a patent for their machine, and the defendant does not have a patent, and the basic
principle of plaintiffs' patent is the spindle upon which they rely, together with its specified manner and
mode of operation, and in the final analysis, it must be conceded that the basic principle of the spindle
upon which the defendant relies is founded upon the basic principle of the spindle for which the plaintiffs
have a patent. Assuming, without deciding, that the defendant's spindle is an improvement upon and is a
better spindle than that of the plaintiffs, yet, under the authority above cited, the defendant had no legal
right to appropriate the basic principle upon which the plaintiffs obtained their patent. The plaintiffs having
obtained their patent, which was duly registered in the Philippines Islands, the defendant cannot infringe
upon its basic principle.

The defendant contends that the basic principle of the spindle was a very old one in mechanics, and that
there was nothing new or novel in the application of it by the plaintiffs. Be that as it may, the plaintiffs
applied for and obtained their patent with its specifications which are attached to, and made part of, the
patent, and the proof is conclusive that the defendant is infringing upon the basic principle of the spindle
as it is defined and specified in plaintiffs' patent.

The judgment of the lower court is affirmed, with costs. So ordered.

Johnson, Malcolm, Villamor, Ostrand, Romualdez and Villa-Real, JJ., concur.

G.R. No. L-20354 July 28, 1969

GERARDO SAMSON, JR., petitioner,

vs.
FELIPE TARROZA and DIRECTOR OF PATENTS, respondents.

Hermenegildo V. Lopez for petitioner.

Isaac S. Puno, Jr. for respondent Felipe Tarroza.
Office of the Solicitor General for respondent Director of Patents.

FERNANDO, J.:

With the statutory recognition of patentability based on the "practical utility" concept 1 thus rendering clear
that a patent is not solely to be earned under the "flash of genius" theory, 2 this petition for the cancellation
of a utility model patent for a Side Tilting-Dumping Wheelbarrow granted to respondent Felipe A. Tarroza
was correctly denied by respondent Director of Patents. Petitioner Gerardo Samson, Jr., himself the grantee
of a utility model patent for a Dumping and Detachable Wheelbarrow, lacked any legal justification for such
a plea. So respondent Director ruled. Not satisfied, petitioner elevated the matter to us for review. There is
no reason why a different outcome is to be expected. His appeal must fail.

Petitioner was, on May 22, 1958, awarded Utility Model Patent No. 27 for the above type of wheelbarrow
which, as noted in the decision, "consists of a wheeled carriage base and an upper pivoted and detachable
carrying tray. The carriage base is comprised of a wheel and two equal lengths of continuous pipes bent to
provide wheel forks at the front and at the rear to support the back portion of the tray, with the ends of the
pipes being adopted as the carrying handles for the wheelbarrow. The two pipes thus bent are joined
together by cross braces in the front and at the rear. The tray is removably pivoted at its front end through
hook catches at its bottom corners, to the forward cross brace, and its rear end rests solidly over the rear
portion of the legs. To dump the load the user pulls a dumping handle at the back end to cause the tray to
pivot upwardly about the front brace to a position of about 45 degrees with the horizontal and with its front
end panel being supported by the wheel." 3

Respondent's Side Tilting-Dumping Wheelbarrow, on the other hand, consists "of a wheeled carriage made
of tubular frames essentially as in petitioner's. Welded transversely to the parallel frames are two brackets
provided with holes designed to complement similar holes on brackets provided on the tray. The brackets
on the tray are so placed that with the provision of a bolt through the openings the tray may be tilted
approximately 170 degrees to the left or to the right of the wheelbarrow with its axis running longitudinally
through the center of the bottom face of the tray." 4

There is an express recognition under the Patent Law, as already noted, that any new model of implements
or tools or of any industrial product even if not possessed of the quality of invention but which is of
"practical utility" is entitled to a "patent for a utility model." From the above description of the side tilting-
dumping wheelbarrow, the product of respondent's ingenuity and industry, it is quite apparent that it has a
place in the market and possesses what the statute refers to as "practical utility." The requirement
explicitly set forth in the statute has thus been met. Respondent Tarroza is entitled to its benefits. The
grant to him of a patent for a utility model is in accordance with law. There was no reason, therefore, for its
cancellation. So it was held by the Director of Patents. That decision as already noted should stand.

Moreover, in appeals from a decision of the Director of Patents, only questions of law may be reviewed,
findings of facts being conclusive unless unsupported by substantial evidence. So it was decided in Che v.
Philippines Patent Office. 5 As was emphasized in Bagano v. Director of Patents: "It is almost trite to state
here that in cases of the nature as the one at bar, only questions of law are to be raised in order that this
Court could exercise its appellate jurisdiction and review the decision." 6 The above well-settled doctrines
suffice to demonstrate that this petition for review, as noted at the outset, is without merit. It was not error
then, to reiterate, for the respondent Director of Patents to deny the cancellation of the utility patent
granted respondent Tarroza. To borrow from the language of the Che opinion: "Even on the sole issue
alone, the petition for review must fail."

Another alleged error was imputed to respondent Director of Patents. It would find fault with his failing to
hold that respondent Tarroza "was not the true and actual" author of the mechanical contrivance for which
he was granted a utility model patent. This is what the appealed decision has to say on this point:
"Petitioner's theory with respect to the second ground for cancellation, to wit: that respondent is not the
true and actual inventor or designer of the utility model is premised on the fact that because of the
proximity of the two, the petitioner and the respondent being brothers-in-law, and living in adjoining
residential lots, the latter has had ample time and opportunity to observe and copy the former's
wheelbarrow. But the testimonial evidence thus presented is not clear, satisfactory, and free from doubt, in
the face of allegations to the contrary by the respondent." 7 The futility of such an assignment of error is
thus apparent. Again, it is factual in character. It is not for us, as noted above, to review or revise the
same, there being no showing of a lack of substantial evidence in support thereof.

WHEREFORE, the decision of April 13, 1962 of respondent Director of Patents denying the petition for the
cancellation of Utility Model Letters Patent No. 62 in favor of respondent Tarroza is hereby affirmed. With
costs against petitioner.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Capistrano, Teehankee and
Barredo, JJ., concur.1wph1.t

G.R. No. 115106 March 15, 1996

ROBERTO L. DEL ROSARIO, petitioner,

vs.
COURT OF APPEALS AND JANITO CORPORATION, respondents.

BELLOSILLO, J.:p
Roberto del Rosario petitions this Court to review the decision of the Court of Appeals 1 which set aside the
order of the Regional Trial Court of Makati granting a writ of preliminary injunction in his favor.

The antecedents: On 18 January 1993 petitioner filed a complaint for patent infringement against private
respondent Janito Corporation. 2 Roberto L. del Rosario alleged that he was a patentee of an audio
equipment and improved audio equipment commonly known as the sing-along System or karaoke under
Letters Patent No. UM-5269 dated 2 June 1983 as well as Letters Patent No. UM-6237 dated 14 November
1986 issued by the Director of Patents. The effectivity of both Letters Patents was for five (5) years and
was extended for another five (5) years starting 2 June 1988 and 14 November 1991, respectively. He
described his sing-along system as a handy multi-purpose compact machine which incorporates an
amplifier speaker, one or two tape mechanisms, optional tuner or radio and microphone mixer with
features to enhance one's voice, such as the echo or reverb to stimulate an opera hall or a studio sound,
with the whole system enclosed in one cabinet casing.

In the early part of 1990 petitioner learned that private respondent was manufacturing a sing-along
system bearing the trademark miyata or miyata karaoke substantially similar if not identical to the sing-
along system covered by the patents issued in his favor. Thus he sought from .the trial court the issuance
of a writ of preliminary injunction to enjoin private respondent, its officers and everybody elsewhere acting
on its behalf, from using, selling and advertising the miyata or miyata karaoke brand, the injunction to be
made permanent after trial, and praying for damages, attorney's fees and costs of suit.

On 5 February 1993 the trial court temporarily restrained private respondent from manufacturing, using
and/or selling and advertising the miyata sing-along system or any sing-along system substantially
identical to the sing-along system patented by petitioner until further orders.

On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on the basis of its
finding that petitioner was a holder of a utility model patent for a sing-along system and that without his
approval and consent private respondent was admittedly manufacturing and selling its own sing-along
system under the brand name miyata which was substantially similar to the patented utility mode 3 of
petitioner.

Private respondent assailed the order of 24 February 1993 directing the issuance of the writ by way of a
petition for certiorari with prayer for the issuance of a writ of preliminary injunction and a temporary
restraining order before respondent Court of Appeals.

On 15 November 1993 respondent appellate court granted the writ and set aside the questioned order of
the trial court. It expressed the view that there was no infringement of the patents of petitioner by the fact
alone that private respondent had manufactured the miyata karaoke or audio system, and that
the karaoke system was a universal product manufactured, advertised and marketed in most countries of
the world long before the patents were issued to petitioner. The motion to reconsider the grant of the writ
was denied; 4 hence, the instant petition for review.

This petition alleges that: (a) it was improper for the Court of Appeals to consider questions of fact in
a certiorariproceeding; (b) the Court of Appeals erred in taking judicial notice of private respondent's self-
serving presentation of facts; (c) the Court of Appeals erred in disregarding the findings of fact of the trial
court; and, (d) there was no basis for the Court of Appeals to grant a writ of preliminary injunction in favor
of private respondent.5

Petitioner argues that in a certiorari proceeding questions of fact are not generally permitted the inquiry
being limited essentially to whether the tribunal has acted without or in excess of jurisdiction or with grave
abuse of discretion; that respondent court should not have disturbed but respected instead the factual
findings of the trial court; that the movant has a clear legal right to be protected and that there is a
violation of such right by private respondent. Thus, petitioner herein claims, he has satisfied the legal
requisites to justify the order of the trial court directing the issuance of the writ of injunction. On the other
hand, in the absence of a patent to justify the manufacture and sale by private respondent of sing-along
systems, it is not entitled to the injunctive relief granted by respondent appellate court.
The crux of the controversy before us hinges on whether respondent Court of Appeals erred in finding the
trial court to have committed grave abuse of discretion in enjoining private respondent from
manufacturing, selling and advertising the miyata karaoke brand sing-along system for being substantially
similar if not identical to the audio equipment covered by letters patent issued to petitioner.

Injunction is a preservative remedy for the protection of substantive rights or interests. It is not a cause of
action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the
existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or
continuous irremediable injury to some of the parties before their claims can be thoroughly investigated
and advisedly adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard of compensation. The application of the writ
rests upon an alleged existence of an emergency or of a special reason for such an order before the case
can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that
the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and
that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction
is reasonably necessary to protect the legal rights of plaintiff pending the litigation. 6

A preliminary injunction may be granted at any time after the commencement of the action and before
judgment when it is established that the defendant is doing, threatens, or is about to do, or is procuring or
suffering to be done, some act probably in violation of the plaintiff's rights. Thus, there are only two
requisites to be satisfied if an injunction is to issue, namely, the existence of the right to be protected, and
that the facts against which the injunction is to be directed are violative of said right. 7

For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must
be a present right, a legal right which must be shown to be clear and positive.

In this regard Sec. 55 of R.A. 165 as amended, known as The Patent Law, provides

Sec. 55. Design patents and patents for utility models. (a) Any new, original, and
ornamental design for an article of manufacture and (b) new model or implements or tools
or of any industrial product or of part of the same, which does not possess the quality of
invention but which is of practical utility by reason of its form, configuration, construction or
composition, may be protected by the author thereof, the former by a patent for a design
and the latter by a patent for a utility model, in the same manner and subject to the same
provisions and requirements as relate to patents for inventions insofar as they are
applicable, except as otherwise herein provide . . . .

Admittedly, petitioner is a holder of Letters Patent No. UM-5629 dated 2 June 1985 issued for a term of five
(5) years from the grant of a Utility Model herein described

The construction of an audio equipment comprising a substantially cubical casing having a

window at its rear and upper corner fitted with a slightly inclined control panel, said cubical
(casing) having a vertical partition wall therein defining a rear compartment and a front
compartment, and said front compartment serving as a speaker baffle; a transistorized
amplifier circuit having an echo section and writhed in at least the printed circuit boards
placed inside said rear compartment of said casing and attached to said vertical partition
wall, said transistorized amplifier circuit capable of being operated from outside, through
various controls mounted on said control panel of such casing; a loud speaker fitted inside
said front compartment of said casing and connected to the output of the main audio
amplifier section of said transistorized amplifier circuit and a tape player mounted on the top
wall of said casing and said tape player being connected in conventional manner to said
transistorized amplifier circuit. 8

Again, on 14 November 1986 petitioner was granted Letters Patent No. UM-6237 for a term of five (5)
years from the grant of a Utility Model described as
 In an audio equipment consisting of a first cubical casing having an opening at its rear and
upper rear portion and a partition therein forming a rear compartment and a front
compartment serving as a loud speaker baffle, a control panel formed by vertical and
horizontal sections, a transistorized amplifier circuit wired in at least two printed circuit
boards attached at the back of said control panel, a first loud speaker fitted inside said first
compartment of such first casing and connected to the output of said transistorized amplifier
circuit; the improvement wherein said control panel being removably fitted to said first
cubical casing and further comprises a set of tape recorder and tape player mounted on the
vertical section of said control panel and said recorder and player are likewise connected to
said transistorized amplifier circuit; a second cubical casing having an opening at its rear,
said second cubical casing having (being?) provided with a vertical partition therein defining
a rear compartment and a front compartment, said rear compartment being provided with a
door and enclosing therein a set of tape racks and said front compartment serving as loud
speaker baffle, said second cubical casing being adapted to said first cubical casing so that
said first and second casings are secured together in compact and portable form; and a
second loud speaker fitted inside said front compartment of said casing and connected to
the output of said amplifier circuit. 9

The terms of both Letters Patents were extended for another five (5) years each, the first beginning 2 June
1988 and the second, 14 November 1991.

The Patent Law expressly acknowledges that any new model of implements or tools of any industrial
product even if not possessed of the quality of invention but which is of practical utility is entitled to a
patent for utility model. 10 Here, there is no dispute that the letters patent issued to petitioner are for utility
models of audio equipment.

In issuing, reissuing or withholding patents and extensions thereof, the Director of Patents determines
whether the patent is new and whether the machine or device is the proper subject of patent. In passing
on an application, the Director decides not only questions of law but also questions of fact, i.e. whether
there has been a prior public use or sale of the article sought to be patented. 11 Where petitioner
introduces the patent in evidence, if it is in due form, it affords a prima facie presumption of its correctness
and validity. The decision of the Director of Patents in granting the patent is always presumed to be
correct, and the burden then shifts to respondent to overcome this presumption by competent evidence. 12

Under Sec. 55 of The Patent Law a utility model shall not be considered "new" if before the application for
a patent it has been publicly known or publicly used in this country or has been described in a printed
publication or publications circulated within the country, or if it is substantially similar to any other utility
model so known, used or described within the country. Respondent corporation failed to present before the
trial court competent evidence that the utility models covered by the Letters Patents issued to petitioner
were not new. This is evident from the testimony of Janito Cua, President of respondent Janito Corporation,
during the hearing on the issuance of the injunction, to wit

Q. Mr. Cua, you testified that there are (sic) so many other companies which
already have (sic) the sing-along system even before the patent application of
Mr. del Rosario and as a matter of fact you mentioned Sanyo, Sony and Sharp,
is that right?

A. Musicmate and Asahi.

Q. Now do you recall that your lawyer filed with this Honorable Court an
Urgent Motion to Lift Temporary Restraining Order of this Honorable Court. I
am sure you were the one who provided him with the information about the
many other companies selling the sing-along system, is that right? These 18
which you enumerated here.

A. More than that because. . . .

Q. Now you will agree with me that in your statement Sharp you put the date
as 1985 agreed?

A. No.

Q. You mean your lawyer was wrong when he put the word Sharp 1985?

A. Maybe I informed him already.

xxx xxx xxx

Q. You mean your lawyer was wrong in alleging to this Court that Sharp
manufactured and sold (in) 1985 as found in the Urgent Motion?

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

Q. The same also with Sanyo 1985 which you put, more or less?

A. Sanyo is wrong.

Q. It is not 1985?

A. Sanyo is 1979 I think.

Q. So this is also wrong. Panasonic 1986 is also wrong?

A. Panasonic I think.

Q. So you don't think this is also correct.

A. The date?

Q. So you don't think also that this allegation here that they manufactured in
1986 is correct?

A. Wrong. Earlier.

Q. National by Precision Electronic 1986 this is also wrong?

A. I think earlier.

Q. So that means all your allegations here from 2 to 5 are wrong? OK. By
Philipps Philippines 1986, this is also correct or wrong?

A. More or less. We said more or less.

Q. Nakabutshi by Asahi Electronics that is also wrong?

A. No that is 1979.

Q. Electone by DICO 1989 is this correct or wrong?

A. Correct. More or less.

 Q. Skylers 1985 is that correct or wrong?

A. It is more or less because it is urgent. We don't have time to exact the date.

Q. Musicmate of G.A. Yupangco 1981 this is more or less? You are not also
sure?

A. 95% sure.

Q. Now you are sure 1981.

A. This one because. . . .

Q. Mr. Witness so you are now trying to tell this Honorable Court that all your
allegations here of the dates in this Urgent Motion except for Musicmate which
you are only 95% sure they are all wrong or they are also more or less or not
sure, is that right?

A. More or less.

Q. Now do you have any proof, any advertisement, anything in writing that
would show that all these instruments are in the market, do you have it.

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

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

A. I have the product.

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

A. No. 13

As may be gleaned herein, the rights of petitioner as a patentee have been sufficiently established,
contrary to the findings and conclusions of respondent Court of Appeals. Consequently, under Sec. 37 of
The Patent law, petitioner as a patentee shall have the exclusive right to make, use and sell the patented
machine, article or product for the purpose of industry or commerce, throughout the territory of the
Philippines for the term of the patent, and such making, using or selling by any person without
authorization of the patentee constitutes infringement of his patent.

Petitioner established before the trial court that respondent Janito Corporation was manufacturing a similar
sing-along system bearing the trademark miyata which infringed his patented models. He also alleged that
both his own patented audio equipment and respondent's sing-along system were constructed in a casing
with a control panel, the casing having a vertical partition wall defining the rear compartment from the
front compartment, with the front compartment consisting of a loud speaker baffle, both containing a
transistorized amplifier circuit capable of being operated from outside through various controls mounted
on the control panel, and that both had loud speakers fitted inside the front compartment of the casing
and connected to the output of the main audio amplifier section both having a tape recorder and a tape
player mounted on the control panel with the tape recorder and tape player being both connected to the
transistorized amplifier circuit. 14

Respondent Janito Corporation denied that there was any violation of petitioner's patent rights, and cited
the differences between its miyata equipment and petitioner's audio equipment. But, it must be
emphasized, respondent only confined its comparison to the first model, Utility Model No. 5269, and
completely disregarded Utility Model No. 6237 which improved on the first. As described by respondent
corporation, 15 these differences are

First. Under Utility Model 5269, the unit is a substantially cubical casing with a window at its
rear and upper corner fitted with slightly inclined control panel, while the miyata equipment
is a substantially rectangular casing with panel vertically positioned.

Second. Under Utility Model 5269, the cubical casing has a vertical partition wall defining a
rear compartment and a front compartment serving as a speaker baffle, while
the miyata equipment has no rear compartment and front compartment in its rectangular
casing; it has only a front compartment horizontally divided into 3 compartments like a 3-
storey building, the 1st compartment being a kit, the 2nd also the speaker, and the 3rd are
kits.

Third. Under Utility Model No. 5269, a transistorized amplifier circuit with an echo section
wired in at least 2 printed circuit boards is placed inside the rear compartment of the casing
and attached to the vertical partition wall, the printed circuit board having 1 amplifier and 1
echo, while in the miyataequipment the amplifier is mainly IC (Integrated Circuit) powered
with 8 printed circuit boards almost all of which are IC controlled, with 1 amplifier with power
supply, 1 main tuner, 1 equalizer (3-band), 1 IC controlled volume control, 1 echo IC, 1 tape
pream, 1 instrument and 1 wireless microphone.

Fourth. Under Utility Model 5269, 4 printed circuits are placed inside the compartment of its
casing attached to the vertical partition wall, while in the miyata, the 7 printed circuit boards
(PCB) are attached to the front panel and 1 attached to the horizontal divider.

Fifth. Under Utility Model 5269, there are various controls mounted on the control panel of
the casing, while in miyata, the various controls are all separated from the printed circuit
boards and the various controls are all attached thereto.

Sixth. Under Utility Model 5269, a loud speaker fitted inside the front compartment of the
casing is connected to the output of the main audio amplifier section of the transistorized
amplifier circuit, while in miyata, there is no other way but to use 2 loud speakers connected
to the amplifier.

Seventh. Under Utility Model 5269, a tape player is mounted on the top wall of the casing,
while inmiyata, 2 tape players are used mounted side by side at the front.

It is elementary that a patent may be infringed where the essential or substantial features of the patented
invention are taken or appropriated, or the device, machine or other subject matter alleged to infringe is
substantially identical with the patented invention. In order to infringe a patent, a machine or device must
perform the same function, or accomplish the same result by identical or substantially identical means and
the principle or mode of operation must be substantially the same. 16

It may be noted that respondent corporation failed to present before the trial court a clear, competent and
reliable comparison between its own model and that of petitioner, and disregarded completely petitioner's
utility Model No. 6237 which improved on his first patented model. Notwithstanding the differences cited
by respondent corporation, it did not refute and disprove the allegations of petitioner before the trial court
that: (a) both are used by a singer to sing and amplify his voice; (b) both are used to sing with a minus-one
or multiplex tapes, or that both are used to play minus-one or standard cassette tapes for singing or for
listening to; (c) both are used to sing with a minus-one tape and multiplex tape and to record the singing
and the accompaniment; (d) both are used to sing with live accompaniment and to record the same; (e)
both are used to enhance the voice of the singer using echo effect, treble, bass and other controls; (g) both
are equipped with cassette tape decks which are installed with one being used for playback and the other,
for recording the singer and the accompaniment, and both may also be used to record a speaker's voice or
instrumental playing, like the guitar and other instruments; (h) both are
encased in a box-like cabinets; and, (i) both can be used with one or more microphones. 17

Clearly, therefore, both petitioner's and respondent's models involve substantially the same modes of
operation and produce substantially the same if not identical results when used.

In view thereof, we find that petitioner had established before the trial court prima facie proof of violation
of his rights as patentee to justify the issuance of a writ of preliminary injunction in his favor during the
pendency of the main suit for damages resulting from the alleged infringement.

WHEREFORE, the Decision of the Court of Appeals dated 15 November 1993 is REVERSED and SET ASIDE
and the Order of the trial court dated 24 February 1993 granting petitioner the writ of injunction is
REINSTATED.

The trial court is directed to continue with the proceedings on the main action pending before it in order to
resolve with dispatch the issues therein presented.

SO ORDERED.

Padilla, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.