.R.

L-45101 November 28, 1986

ROSARIO C. MAGUAN (formerly ROSARIO C. TAN), petitioner,

vs.
THE HONORABLE COURT OF APPEALS and SUSANA LUCHAN, respondents.

Ambrosio Padilla Law Offices for petitioner.

Submitted on December 9, 1977 for Our decision is this petition for review on
certiorari of the two Resolutions of the Court of Appeals, the first dated July 6, 1976,
setting aside its Decision of February 16, 1976 in CA-G.R. No. SP-04706, titled
"SUSANA LUCHAN v. Hon. HONRADO, et al." wherein it ruled for the dismissal of the
petition for lack of merit and at the same time nullifying the writ of preliminary
injunction it had previously issued; and the second, dated November 4, 1976,
denying the motion for reconsideration of the first resolution above-mentioned.

Petitioner is doing business under the firm name and style of SWAN
MANUFACTURING" while private respondent is likewise doing business under the
firm name and style of "SUSANA LUCHAN POWDER PUFF MANUFACTURING."

It is undisputed that petitioner is a patent holder of powder puff namely:

1. UM-423 (extended and/or renewed under Extension No. UM-109 for a period
of 5 years from October 6, 1971)

2. UM-450 (extended and/or renewed under Extension No. UM110 for a period
of 5 years from January 26, 1972)

3. UM 1184, for a period of 5years fromApril 5, 1974.(Petition, Rollo, pp. 6-7).

In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86), petitioner informed private
respondent that the powder puffs the latter is manufacturing and selling to various
enterprises particularly those in the cosmetics industry, resemble Identical or
substantially Identical powder puffs of which the former is a patent holder under
Registration Certification Nos. Extension UM-109, Extension UM-110 and Utility
Model No. 1184; petitioner explained such production and sale constitute
infringement of said patents and therefore its immediate discontinuance is
demanded, otherwise it will be compelled to take judicial action. (Rollo, pp. 7-8).

Private respondent replied stating that her products are different and countered
that petitioner's patents are void because the utility models applied for were not
new and patentable and the person to whom the patents were issued was not the
true and actual author nor were her rights derived from such author. (Taken from
allegations in the Answer, par. 4, Rollo, p. 93). And on July 25, 1974, private
respondent assailed the validity of the patents involved and filed with the Philippine
Patent Office petitions for cancellation of (1) Utility Model Letter Patent Extension
No. UM-109 (Inter Partes Case No. 838, Susana Luchan v. Rosario C. Tan), (2) Utility
Model Letters Patent No. UM-1184 (Inter Partes Case No. 839, Susana Luchan v.
Rosario C. Tan), (3) Utility Model Letters Patent Extension No. UM-110 (Inter Partes
Case No. 840, Susana Luchan v. Rosario C. Tan. (Taken from allegations in the
Answer, par. 10, Rollo, pp. 94-95).

In view thereof, petitioner, on August 24, 1974, filed a complaint for damages with
injunction and preliminary injunction against private respondent with the then
Court of First Instance of Rizal, Pasig Branch, docketed as Civil Case No. 19908, for
infringing the aforesaid letters patent, and prayed, among others, that a writ of
preliminary injunction be immediately issued (Complaint, Rollo, p. 90).

In her answer, private respondent alleged that the products she is manufacturing
and offering for sale are not Identical, or even only substantially Identical to the
products covered by petitioner's patents and, by way of affirmative defenses, further
alleged that petitioner's patents in question are void on the following grounds:

(1) at the time of filing of application for the patents involved, the utility models
applied for were not new and patentable under Sec. 55 of R.A. 165, as amended by
R.A. 864; and

(2) the person to whom the patents were issued was not the true and actual
author of the utility models applied for, and neither did she derive her rights from
any true and actual author of these utility models.

for the following reasons:

(a) since years prior to the filing of applications for the patents involved, powder
puffs of the kind applied for were then already existing and publicly being sold in the
market; both in the Philippines and abroad; and

(b) applicant's claims in her applications, of "construction" or process of

manufacturing the utility models applied for, with respect to UM-423 and UM-450,
were but a complicated and impractical version of an old, simple one which has been
well known to the cosmetics industry since years previous to her filing of
applications, and which belonged to no one except to the general public; and with
respect to UM1184; her claim in her application of a unitary powder puff, was but an
limitation of a product well known to the cosmetics industry since years previous to
her firing of application, and which belonged to no one except to the general public;
(Answer, Rollo, pp. 93-94).

On September 18, 1974, the trial court issued an Order (Annex "K", Rollo, p. 125)
granting the preliminary injunction prayed for by petitioner. Consequently, the
corresponding writ was subsequently issued (Annex "K-1", Rollo, p. 131) enjoining
the herein private respondent (then defendant) and all other persons employed by
her, her agents, servants and employees from directly or indirectly manufacturing,
making or causing to be made, selling or causing to be sold, or using or causing to be
used in accordance with, or embodying the utility models of the Philippine Patent
Office Utility Model Letters Patent Nos. 423 (Extension No. UM-109), No. 450
(Extension No. UM-110), and Utility Model No. 1184 or from infringement upon or
violating said letters patent in any way whatsoever (Annex " K-1 ", Rollo, p. 131).

Private respondent questioned the propriety of the trial court's issuance of the Writ
of Preliminary Injunction arguing that since there is still a pending cancellation
proceedings before the Philippine Patent Office concerning petitioner's patents, such
cannot be the basis for preliminary injunction (Motion for Reconsideration, Rollo, p.
132).

In an Order dated September 11, 1975, the trial court denied private respondent's
motion for reconsideration (Annex "N", Rollo, p. 142).

In challenging these Orders private respondent filed a petition for certiorari with the
respondent court on September 29, 1975 (Annex "D", Rollo, pp. 148-171) reiterating
among other things the invalidity of petitioner's patents and prayed that the trial
court be restrained from enforcing or continuing to enforce the following:

(1) Order dated September 18, 1974, granting the preliminary injunction;

(2) Writ of preliminary injunction dated September 18, 1974; and

(3) Order dated September 11, 1974 denying petitioner's motion petition for
reconsideration.

On October 15, 1975, the Writ of Preliminary Injunction was issued by the
respondent Court of Appeals as follows:

NOW, THEREFORE, you, respondents, and/or any person/persons acting on your

stead, are hereby ENJOINED to RESTRAIN from enforcing or continuing to enforce,
the proceedings complained of in the petition to wit: 1) Order dated September 18,
1974, granting the preliminary injunction; 2) Writ of Preliminary Injunction dated
September 18, 1974; and Order dated September 11, 1975, denying petitioner's
motion for reconsideration, all issued in connection with Civil Case No. 19908,
UNTIL FURTHER ORDERS FROM THIS COURT. (Annex "P", Rollo, p. 1.73)

On February 16, 1976, respondent court promulgated a decision the dispositive

portion of which reads:
WHEREFORE, finding no merit in the herein petition, the same is hereby dismissed
and the preliminary injunction previously issued by this Court is hereby set aside,
with costs.

SO ORDERED. (CA Decision, Rollo, p. 189).

ln said decision respondent court stated that in disposing of the petition it tackled
only the issue of whether the court a quo acted with grave abuse of discretion in
issuing the challenged orders. It made clear the question of whether the patents
have been infringed or not was not determined considering the court a quo has yet
to decide the case on the merits (Ibid., p. 186).

Feeling aggrieved, private respondent moved to reconsider the afore-mentioned

Decision based on the following grounds:

THAT THIS HONORABLE COURT ERRED IN NOT APPRECIATING THE EXISTENCE OF

A FAIR QUESTION OF INVALIDITY OF PRIVATE RESPONDENT'S PATENTS.

II

THAT THIS HONORABLE COURT ERRED IN NOT REJECTING THE THEORY OF

RESPONDENT JUDGE THAT HE HAS NO JURISDICTION TO INVALIDATE THE
PATENTS UPON GROUND OF LACK OF NOVELTY OF THE PRODUCTS PATENTED.
(Motion for Reconsideration, Rollo, p. 190).

Reviewing on reconsideration, respondent court gave weight to private respondent's

allegation that the latter's products are not identical or even only substantially
identical to the products covered by petitioner's patents. Said court noticed that
contrary to the lower courts position that the court a quo had no jurisdiction to
determine the question of invalidity of the patents, Section 45 and 46 of the Patent
Law allow the court to make a finding on the validity or invalidity of patents and in
the event there exists a fair question of its invalidity, the situation calls for a denial of
the writ of preliminary injunction pending the evaluation of the evidence presented
(Rollo, pp. 218-226). Thus, finding the lower court's position to have been opposed
to Patent Law, respondent court considered it a grave abuse of discretion when the
court a quo issued the writ being questioned without looking into the defenses
alleged by herein private respondent. Further, it considered the remedy of appeal,
under the circumstances, to be inadequate.

Thus, on July 6, 1976, respondent court made a complete turnabout from its original
decision and promulgated a Resolution, the dispositive portion of which reads:
WHEREFORE, our decision is hereby set aside. The writ of certiorari is ordered
issued. Accordingly, the challenged orders, Exhibit H and H-1 and the order denying
the motion for reconsideration (Annex "K", Petition), are hereby set aside. The writ
of preliminary injunction previously ordered by this Court and ordered lifted by the
Decision now being set aside is hereby reinstated and made permanent. Without
pronouncement as to costs.

SO ORDERED. (CA Resolution, Rollo, p. 226).

In a Resolution dated November 4, 1976, respondent court, not persuaded by the

grounds embodied in the motion for reconsideration filed by herein petitioner
(Annex "V ", Rollo, p. 227), denied the same for lack of merit, thereby maintaining
the same stand it took in its July 6, 1976 Resolution (Rollo, p. 281). Hence, this
petition.

On December 3, 1976, without giving due course to the petition, this Court required
respondent to file her Comment (Rollo, p. 290) which was filed on December 16,
1976 (Rollo, pp. 291-316). Thereafter, petitioner filed her Reply (Rollo, p. 323) and
on May 30, 1977, the petition was given due course (Rollo, p. 345). Petitioner filed
her brief on July 14, 1977 (Rollo, p. 351) while private respondent filed her brief on
August 25, 1977 (Rollo, p. 359). Thereafter, petitioner having failed to file reply brief,
the Court resolved to declare the case submitted for decision on December 9, 1977
(Rollo, p. 359).

The assignment of errors raised by the petitioner in this case (Rollo, pp. 15-16) may
be reduced to three main issues:

(1) Whether or not in an action for infringement the Court a quo had jurisdiction
to determine the invalidity of the patents at issue which invalidity was still pending
consideration in the patent office.

(2) Whether or not the Court a quo committed grave abuse of discretion in the
issuance of a writ of preliminary injunction.

(3) Whether or not certiorari is the proper remedy.

The first issue has been laid to rest in a number of cases where the Court ruled that
"When a patent is sought to be enforced, the questions of invention, novelty or prior
use, and each of them, are open to judicial examination." (Vargas v. F.M. Yaptico & Co.
40 Phil. 199 [1919]; Vargas v. Chua, 57 Phil. 790-791 [1933]; Frank and Gohn v.
Kosuyana 59 Phil. 207 [1933]).

Under the present Patent Law, there is even less reason to doubt that the trial court
has jurisdiction to declare the patents in question invalid. A patentee shall have the
exclusive right to make, use and sell the patented article or product and the making,
using, or selling by any person without the authorization of the patentee constitutes
infringement of the patent (Sec. 37, R.A. 165). Any patentee whose rights have been
infringed upon may bring an action before the proper CFI now (RTC) and to secure
an injunction for the protection of his rights (Sec. 42, R.A. 165). Defenses in an action
for infringement are provided for in Section 45 of the same law which in fact were
availed of by private respondent in this case. Then, as correctly stated by respondent
Court of Appeals, this conclusion is reinforced by Sec. 46 of the same law which
provides that if the Court shall find the patent or any claim thereof invalid, the
Director shall on certification of the final judgment ... issue an order cancelling the
patent or the claims found invalid and shall publish a notice thereof in the Official
Gazette." Upon such certification, it is ministerial on the part of the patent office to
execute the judgment. (Rollo, pp. 221-222).

II.

The burden of proof to substantiate a charge of infringement is with the plaintiff. But
where the plaintiff introduces the patent in evidence, and the same is in due form,
there is created a prima facie presumption of its correctness and validity. The
decision of the Commissioner (now Director) of Patent in granting the patent is
presumed to be correct. The burden of going forward with the evidence (burden of
evidence) then shifts to the defendant to overcome by competent evidence this legal
presumption.

The question then in the instant case is whether or not the evidence introduced by
private respondent herein is sufficient to overcome said presumption.

After a careful review of the evidence consisting of 64 exhibits and oral testimonies
of five witnesses presented by private respondents before the Court of First Instance
before the Order of preliminary injunction was issued as well as those presented by
the petitioner, respondent Court of Appeals was satisfied that there is a prima facie
showing of a fair question of invalidity of petitioner's patents on the ground of lack
of novelty. As pointed out by said appellate court said evidence appeared not to have
been considered at all by the court a quo for alleged lack of jurisdiction, on the
mistaken notion that such question in within the exclusive jurisdiction of the patent
office.

It has been repeatedly held that an invention must possess the essential elements of
novelty , originality and precedence and for the patentee to be entitled to protection,
the invention must be new to the world. Accordingly, a single instance of public use
of the invention by a patentee for more than two years (now for more than one year
only under Sec. 9 of the Patent Law) before the date of his application for his patent,
will be fatal to, the validity of the patent when issued. (Frank, et al. v. Kosuyama
Vargas v. F.M. Yaptico & Co. and Vargas v. Chua, et al., supra).

The law provides:

SEC. 9. Invention not considered new or patentable. An invention shall not be
considered new or capable of being patented if it was known or used by others in
the Philippines before the invention thereof by the inventor named in an application
for patent for the invention; or if it was patented or described in any printed
publication in the Philippines or any foreign country more than one year before the
application for a patent therefor; or if it had been in public use or on sale in the
Philippines for more than one year before the application for a patent therefor; or if
it is the subject matter of a validity issued patent in the Philippines granted on an
application filed before the filing of the application for patent therefor.

Thus, more specifically, under American Law from which our Patent Law was
derived (Vargas v. F.M. Yaptico & Co. supra) it is generally held that in patent cases a
preliminary injunction will not issue for patent infringement unless the validity of
the patent is clear and beyond question. The issuance of letters patent, standing
alone, is not sufficient to support such drastic relief (8 Deller's Walker on Patents p.
406). In cases of infringement of patent no preliminary injunction will be granted
unless the patent is valid and infringed beyond question and the record conclusively
proves the defense is sham. (Ibid., p. 402)

In the same manner, under our jurisprudence, as a general rule because of the
injurious consequences a writ of injunction may bring, the right to the relief
demanded must be clear and unmistakable. (Sangki v. Comelec, 21 SCRA 1392;
December 26, 1967) and the dissolution of the writ is proper where applicant has
doubtful title to the disputed property. (Ramos v. C.A., 95 SCRA 359).

III.

It will be noted that the validity of petitioner's patents is in question for want of
novelty. Private respondent contends that powder puffs Identical in appearance with
that covered by petitioner's patents existed and were publicly known and used as
early as 1963 long before petitioner was issued the patents in question. (List of
Exhibits, Rollo, pp. 194-199). As correctly observed by respondent Court of Appeals,
"since sufficient proofs have been introduced in evidence showing a fair question of
the invalidity of the patents issued for such models, it is but right that the evidence
be looked into, evaluated and determined on the merits so that the matter of
whether the patents issued were in fact valid or not may be resolved." (Rollo, pp.
286-287).

All these notwithstanding, the trial court nonetheless issued the writ of preliminary
injunction which under the circumstances should be denied.

For failure to determine first the validity of the patents before aforesaid issuance of
the writ, the trial court failed to satisfy the two requisites necessary if an injunction
is to issue, namely: the existence of the right to be protected and the violation of said
right. (Buayan Cattle Co., Inc. v. Quintillan, 128 SCRA 276).

Under the above established principles, it appears obvious that the trial court
committed a grave abuse of discretion which makes certiorari the appropriate
remedy.

As found by respondent Court of Appeals, the injunctive order of the trial court is of
so general a tenor that petitioner may be totally barred from the sale of any kind of
powder puff. Under the circumstances, respondent appellate court is of the view
that ordinary appeal is obviously inadequate. (Rollo, p. 288). A parallel was drawn
from a decision of the Supreme Court in the case of Sanchez v. Hon. Court of Appeals,
69 SCRA 328 [1976] where the First Division of the Supreme Court ruled that "The
prerogative writ of certiorari may be applied for by proper petition notwithstanding
the existence of the regular remedy of an appeal in due cause when among other
reasons, the broader interests of justice so require or an ordinary appeal is not an
adequate remedy."

Private respondent maintains the position that the resolutions sought to be

appealed from had long become final and executory for failure of Hon. Reynaldo P.
Honrado, the trial court judge, to appeal by certiorari from the resolutions of
respondent Court of Appeals. (Rollo, pp. 291-292).

Such contention is untenable.

There is no dispute that petitioner has seasonably petitioned. On the other hand, it is
elementary that the trial judge is a mere nominal party as clearly provided in Section
5, Rule 65 of the Revised Rules of Court where it shall be the duty of such person or
persons interested in sustaining the proceedings in court, "to appear and defend,
both in his or their own behalf and in behalf of the court or judge affected by the
proceedings."

Relative thereto "the judge whose order is under attack is merely a nominal party;
wherefore, a judge in his official capacity should not be made to appear as a party
seeking reversal of a decision that is unfavorable to the action taken by him." (Hon.
Alcasid v. Samson, 102 Phil. 735-736; Tarona v. Sayo, 67 SCRA 508, 524; Lim Se v.
Argel, 70 SCRA 378).

As to petitioner's claim of prescription, private respondent's contention that such

refers to the filing of petitions for cancellation in the Patent Office under Sec. 28 of
the Patent Law and not to a defense against an action for infringement under Sec. 45
thereof which may be raised anytime, is evident under aforesaid law.

PREMISES CONSIDERED, the assailed resolutions of the Court of Appeals are hereby
AFFIRMED.
SO ORDERED.

G.R. No. 161295 June 29, 2005

JESSIE G. CHING, petitioner,

vs.
WILLIAM M. SALINAS, SR., WILLIAM M. SALINAS, JR., JOSEPHINE L. SALINAS,
JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE, JOHN ERIC I. SALINAS, NOEL
M. YABUT (Board of Directors and Officers of WILAWARE PRODUCT
CORPORATION), respondents.

This petition for review on certiorari assails the Decision1 and Resolution2 of the
Court of Appeals (CA) in CA-G.R. SP No. 70411 affirming the January 3, 2002 and
February 14, 2002 Orders3 of the Regional Trial Court (RTC) of Manila, Branch 1,
which quashed and set aside Search Warrant Nos. 01-2401 and 01-2402 granted in
favor of petitioner Jessie G. Ching.

Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co., the
maker and manufacturer of a Utility Model, described as "Leaf Spring Eye Bushing
for Automobile" made up of plastic.

On September 4, 2001, Ching and Joseph Yu were issued by the National Library
Certificates of Copyright Registration and Deposit of the said work described therein
as "Leaf Spring Eye Bushing for Automobile."4

On September 20, 2001, Ching requested the National Bureau of Investigation (NBI)
for police/investigative assistance for the apprehension and prosecution of illegal
manufacturers, producers and/or distributors of the works.5

After due investigation, the NBI filed applications for search warrants in the RTC of
Manila against William Salinas, Sr. and the officers and members of the Board of
Directors of Wilaware Product Corporation. It was alleged that the respondents
therein reproduced and distributed the said models penalized under Sections 177.1
and 177.3 of Republic Act (R.A.) No. 8293. The applications sought the seizure of the
following:

a.) Undetermined quantity of Leaf spring eye bushing for automobile that are made
up of plastic polypropylene;
b.) Undetermined quantity of Leaf spring eye bushing for automobile that are made
up of polyvinyl chloride plastic;

c.) Undetermined quantity of Vehicle bearing cushion that is made up of polyvinyl

chloride plastic;

d.) Undetermined quantity of Dies and jigs, patterns and flasks used in the
manufacture/fabrication of items a to d;

e.) Evidences of sale which include delivery receipts, invoices and official receipts.6

The RTC granted the application and issued Search Warrant Nos. 01-2401 and 01-
2402 for the seizure of the aforecited articles.7 In the inventory submitted by the
NBI agent, it appears that the following articles/items were seized based on the
search warrants:

Leaf Spring eye bushing

a) Plastic Polypropylene

- C190 27 }

- C240 rear 40 }

- C240 front 41 } BAG 1

b) Polyvinyl Chloride Plastic

- C190 13 }

c) Vehicle bearing cushion

- center bearing cushion 11 }

Budder for C190 mold 8 }

Diesel Mold

a) Mold for spring eye bushing rear 1 set

b) Mold for spring eye bushing front 1 set

c) Mold for spring eye bushing for C190 1 set

d) Mold for C240 rear 1 piece of the set

e) Mold for spring eye bushing for L300 2 sets

f) Mold for leaf spring eye bushing C190 with metal 1 set

g) Mold for vehicle bearing cushion 1 set8

The respondents filed a motion to quash the search warrants on the following
grounds:

2. The copyright registrations were issued in violation of the Intellectual Property

Code on the ground that:

a) the subject matter of the registrations are not artistic or literary;

b) the subject matter of the registrations are spare parts of automobiles meaning
there (sic) are original parts that they are designed to replace. Hence, they are not
original.9

The respondents averred that the works covered by the certificates issued by the
National Library are not artistic in nature; they are considered automotive spare
parts and pertain to technology. They aver that the models are not original, and as
such are the proper subject of a patent, not copyright.10

In opposing the motion, the petitioner averred that the court which issued the
search warrants was not the proper forum in which to articulate the issue of the
validity of the copyrights issued to him. Citing the ruling of the Court in Malaloan v.
Court of Appeals,11 the petitioner stated that a search warrant is merely a judicial
process designed by the Rules of Court in anticipation of a criminal case. Until his
copyright was nullified in a proper proceeding, he enjoys rights of a registered
owner/holder thereof.

On January 3, 2002, the trial court issued an Order12 granting the motion, and
quashed the search warrant on its finding that there was no probable cause for its
issuance. The court ruled that the work covered by the certificates issued to the
petitioner pertained to solutions to technical problems, not literary and artistic as
provided in Article 172 of the Intellectual Property Code.

His motion for reconsideration of the order having been denied by the trial courts
Order of February 14, 2002, the petitioner filed a petition for certiorari in the CA,
contending that the RTC had no jurisdiction to delve into and resolve the validity of
the copyright certificates issued to him by the National Library. He insisted that his
works are covered by Sections 172.1 and 172.2 of the Intellectual Property Code.
The petitioner averred that the copyright certificates are prima facie evidence of its
validity, citing the ruling of the United States Court of Appeals in Wildlife Express
Corporation v. Carol Wright Sales, Inc.13 The petitioner asserted that the
respondents failed to adduce evidence to support their motion to quash the search
warrants. The petitioner noted that respondent William Salinas, Jr. was not being
honest, as he was able to secure a similar copyright registration of a similar product
from the National Library on January 14, 2002.

On September 26, 2003, the CA rendered judgment dismissing the petition on its
finding that the RTC did not commit any grave abuse of its discretion in issuing the
assailed order, to wit:

It is settled that preliminarily, there must be a finding that a specific offense must
have been committed to justify the issuance of a search warrant. In a number of
cases decided by the Supreme Court, the same is explicitly provided, thus:

"The probable cause must be in connection with one specific offense, and the judge
must, before issuing the warrant, personally examine in the form of searching
questions and answers, in writing and under oath, the complainant and any witness
he may produce, on facts personally known to them and attach to the record their
sworn statements together with any affidavit submitted.

"In the determination of probable cause, the court must necessarily resolve whether
or not an offense exists to justify the issuance or quashal of the search warrant."

In the instant case, the petitioner is praying for the reinstatement of the search
warrants issued, but subsequently quashed, for the offense of Violation of Class
Designation of Copyrightable Works under Section 177.1 in relation to Section 177.3
of Republic Act 8293, when the objects subject of the same, are patently not
copyrightable.

It is worthy to state that the works protected under the Law on Copyright are:
literary or artistic works (Sec. 172) and derivative works (Sec. 173). The Leaf Spring
Eye Bushing and Vehicle Bearing Cushion fall on neither classification. Accordingly,
if, in the first place, the item subject of the petition is not entitled to be protected by
the law on copyright, how can there be any violation?14

The petitioners motion for reconsideration of the said decision suffered the same
fate. The petitioner forthwith filed the present petition for review on certiorari,
contending that the revocation of his copyright certificates should be raised in a
direct action and not in a search warrant proceeding.

The petitioner posits that even assuming ex argumenti that the trial court may
resolve the validity of his copyright in a proceeding to quash a search warrant for
allegedly infringing items, the RTC committed a grave abuse of its discretion when it
declared that his works are not copyrightable in the first place. He claims that R.A.
No. 8293, otherwise known as the Intellectual Property Code of the Philippines,
which took effect on January 1, 1998, provides in no uncertain terms that copyright
protection automatically attaches to a work by the sole fact of its creation,
irrespective of its mode or form of expression, as well as of its content, quality or
purpose.15 The law gives a non-inclusive definition of "work" as referring to original
intellectual creations in the literary and artistic domain protected from the moment
of their creation; and includes original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial design and other works of
applied art under Section 172.1(h) of R.A. No. 8293.lawphil.net

As such, the petitioner insists, notwithstanding the classification of the works as

either literary and/or artistic, the said law, likewise, encompasses works which may
have a bearing on the utility aspect to which the petitioners utility designs were
classified. Moreover, according to the petitioner, what the Copyright Law protects is
the authors intellectual creation, regardless of whether it is one with utilitarian
functions or incorporated in a useful article produced on an industrial scale.

The petitioner also maintains that the law does not provide that the intended use or
use in industry of an article eligible for patent bars or invalidates its registration
under the Law on Copyright. The test of protection for the aesthetic is not beauty
and utility, but art for the copyright and invention of original and ornamental design
for design patents.16 In like manner, the fact that his utility designs or models for
articles of manufacture have been expressed in the field of automotive parts, or
based on something already in the public domain does not automatically remove
them from the protection of the Law on Copyright.17

The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293 which gives the
same presumption to an affidavit executed by an author who claims copyright
ownership of his work.

The petitioner adds that a finding of probable cause to justify the issuance of a
search warrant means merely a reasonable suspicion of the commission of the
offense. It is not equivalent to absolute certainty or a finding of actual and positive
cause.18 He assists that the determination of probable cause does not concern the
issue of whether or not the alleged work is copyrightable. He maintains that to
justify a finding of probable cause in the issuance of a search warrant, it is enough
that there exists a reasonable suspicion of the commission of the offense.

The petitioner contends that he has in his favor the benefit of the presumption that
his copyright is valid; hence, the burden of overturning this presumption is on the
alleged infringers, the respondents herein. But this burden cannot be carried in a
hearing on a proceeding to quash the search warrants, as the issue therein is
whether there was probable cause for the issuance of the search warrant. The
petitioner concludes that the issue of probable cause should be resolved without
invalidating his copyright.
In their comment on the petition, the respondents aver that the work of the
petitioner is essentially a technical solution to the problem of wear and tear in
automobiles, the substitution of materials, i.e., from rubber to plastic matter of
polyvinyl chloride, an oil resistant soft texture plastic material strong enough to
endure pressure brought about by the vibration of the counter bearing and thus
brings bushings. Such work, the respondents assert, is the subject of copyright
under Section 172.1 of R.A. No. 8293. The respondents posit that a technical solution
in any field of human activity which is novel may be the subject of a patent, and not
of a copyright. They insist that the certificates issued by the National Library are
only certifications that, at a point in time, a certain work was deposited in the said
office. Furthermore, the registration of copyrights does not provide for automatic
protection. Citing Section 218.2(b) of R.A. No. 8293, the respondents aver that no
copyright is said to exist if a party categorically questions its existence and legality.
Moreover, under Section 2, Rule 7 of the Implementing Rules of R.A. No. 8293, the
registration and deposit of work is not conclusive as to copyright outlay or the time
of copyright or the right of the copyright owner. The respondents maintain that a
copyright exists only when the work is covered by the protection of R.A. No. 8293.

The petition has no merit.

The RTC had jurisdiction to delve into and resolve the issue whether the petitioners
utility models are copyrightable and, if so, whether he is the owner of a copyright
over the said models. It bears stressing that upon the filing of the application for
search warrant, the RTC was duty-bound to determine whether probable cause
existed, in accordance with Section 4, Rule 126 of the Rules of Criminal Procedure:

SEC. 4. Requisite for issuing search warrant. A search warrant shall not issue but
upon probable cause in connection with one specific offense to be determined
personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and, particularly, describing the
place to be searched and the things to be seized.

In Solid Triangle Sales Corporation v. The Sheriff of RTC QC, Br. 93,19 the Court held
that in the determination of probable cause, the court must necessarily resolve
whether or not an offense exists to justify the issuance of a search warrant or the
quashal of one already issued by the court. Indeed, probable cause is deemed to
exist only where facts and circumstances exist which could lead a reasonably
cautious and prudent man to believe that an offense has been committed or is being
committed. Besides, in Section 3, Rule 126 of the Rules of Criminal Procedure, a
search warrant may be issued for the search and seizure of personal property (a)
subject of the offense; (b) stolen or embezzled and other proceeds or fruits of the
offense; or (c) used or intended to be used as the means of committing an offense.

The RTC is mandated under the Constitution and Rules of Criminal Procedure to
determine probable cause. The court cannot abdicate its constitutional obligation by
refusing to determine whether an offense has been committed.20 The absence of
probable cause will cause the outright nullification of the search warrant.21

For the RTC to determine whether the crime for infringement under R.A. No. 8293 as
alleged in an application is committed, the petitioner-applicant was burdened to
prove that (a) respondents Jessie Ching and Joseph Yu were the owners of
copyrighted material; and (b) the copyrighted material was being copied and
distributed by the respondents. Thus, the ownership of a valid copyright is
essential.22

Ownership of copyrighted material is shown by proof of originality and

copyrightability. By originality is meant that the material was not copied, and
evidences at least minimal creativity; that it was independently created by the
author and that it possesses at least same minimal degree of creativity.23 Copying is
shown by proof of access to copyrighted material and substantial similarity between
the two works.24 The applicant must thus demonstrate the existence and the
validity of his copyright because in the absence of copyright protection, even original
creation may be freely copied.25

By requesting the NBI to investigate and, if feasible, file an application for a search
warrant for infringement under R.A. No. 8293 against the respondents, the
petitioner thereby authorized the RTC (in resolving the application), to delve into
and determine the validity of the copyright which he claimed he had over the utility
models. The petitioner cannot seek relief from the RTC based on his claim that he
was the copyright owner over the utility models and, at the same time, repudiate the
courts jurisdiction to ascertain the validity of his claim without running afoul to the
doctrine of estoppel.

To discharge his burden, the applicant may present the certificate of registration
covering the work or, in its absence, other evidence.26 A copyright certificate
provides prima facie evidence of originality which is one element of copyright
validity. It constitutes prima facie evidence of both validity and ownership27 and the
validity of the facts stated in the certificate.28 The presumption of validity to a
certificate of copyright registration merely orders the burden of proof. The applicant
should not ordinarily be forced, in the first instance, to prove all the multiple facts
that underline the validity of the copyright unless the respondent, effectively
challenging them, shifts the burden of doing so to the applicant.29 Indeed, Section
218.2 of R.A. No. 8293 provides:

218.2. In an action under this Chapter:

(a) Copyright shall be presumed to subsist in the work or other subject matter to
which the action relates if the defendant does not put in issue the question whether
copyright subsists in the work or other subject matter; and
(b) Where the subsistence of the copyright is established, the plaintiff shall be
presumed to be the owner of the copyright if he claims to be the owner of the
copyright and the defendant does not put in issue the question of his ownership.

A certificate of registration creates no rebuttable presumption of copyright validity

where other evidence in the record casts doubt on the question. In such a case,
validity will not be presumed.30

To discharge his burden of probable cause for the issuance of a search warrant for
violation of R.A. No. 8293, the petitioner-applicant submitted to the RTC Certificate
of Copyright Registration Nos. 2001-197 and 2001-204 dated September 3, 2001
and September 4, 2001, respectively, issued by the National Library covering work
identified as Leaf Spring Eye Bushing for Automobile and Vehicle Bearing Cushion
both classified under Section 172.1(h) of R.A. No. 8293, to wit:

SEC. 172. Literary and Artistic Works. 172.1. Literary and artistic works,
hereinafter referred to as "works," are original intellectual creations in the literary
and artistic domain protected from the moment of their creation and shall include in
particular:

...

(h) Original ornamental designs or models for articles of manufacture, whether or

not registrable as an industrial design, and other works of applied art.

Related to the provision is Section 171.10, which provides that a "work of applied
art" is an artistic creation with utilitarian functions or incorporated in a useful
article, whether made by hand or produced on an industrial scale.

But, as gleaned from the specifications appended to the application for a copyright
certificate filed by the petitioner, the said Leaf Spring Eye Bushing for Automobile is
merely a utility model described as comprising a generally cylindrical body having a
co-axial bore that is centrally located and provided with a perpendicular flange on
one of its ends and a cylindrical metal jacket surrounding the peripheral walls of
said body, with the bushing made of plastic that is either polyvinyl chloride or
polypropylene.31 Likewise, the Vehicle Bearing Cushion is illustrated as a bearing
cushion comprising a generally semi-circular body having a central hole to secure a
conventional bearing and a plurality of ridges provided therefore, with said cushion
bearing being made of the same plastic materials.32 Plainly, these are not literary or
artistic works. They are not intellectual creations in the literary and artistic domain,
or works of applied art. They are certainly not ornamental designs or one having
decorative quality or value.

It bears stressing that the focus of copyright is the usefulness of the artistic design,
and not its marketability. The central inquiry is whether the article is a work of
art.33 Works for applied art include all original pictorials, graphics, and sculptural
works that are intended to be or have been embodied in useful article regardless of
factors such as mass production, commercial exploitation, and the potential
availability of design patent protection.34

As gleaned from the description of the models and their objectives, these articles are
useful articles which are defined as one having an intrinsic utilitarian function that
is not merely to portray the appearance of the article or to convey information.
Indeed, while works of applied art, original intellectual, literary and artistic works
are copyrightable, useful articles and works of industrial design are not.35 A useful
article may be copyrightable only if and only to the extent that such design
incorporates pictorial, graphic, or sculptural features that can be identified
separately from, and are capable of existing independently of the utilitarian aspects
of the article.

We agree with the contention of the petitioner (citing Section 171.10 of R.A. No.
8293), that the authors intellectual creation, regardless of whether it is a creation
with utilitarian functions or incorporated in a useful article produced on an
industrial scale, is protected by copyright law. However, the law refers to a "work of
applied art which is an artistic creation." It bears stressing that there is no copyright
protection for works of applied art or industrial design which have aesthetic or
artistic features that cannot be identified separately from the utilitarian aspects of
the article.36 Functional components of useful articles, no matter how artistically
designed, have generally been denied copyright protection unless they are separable
from the useful article.37

In this case, the petitioners models are not works of applied art, nor artistic works.
They are utility models, useful articles, albeit with no artistic design or value. Thus,
the petitioner described the utility model as follows:

LEAF SPRING EYE BUSHING FOR AUTOMOBILE

Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile are

made of hard rubber. These rubber bushings after a time, upon subjecting them to so
much or intermittent pressure would eventually wore (sic) out that would cause the
wobbling of the leaf spring.

The primary object of this utility model, therefore, is to provide a leaf-spring eye
bushing for automobile that is made up of plastic.

Another object of this utility model is to provide a leaf-spring eye bushing for
automobiles made of polyvinyl chloride, an oil resistant soft texture plastic or
polypropylene, a hard plastic, yet both causes cushion to the leaf spring, yet strong
enough to endure pressure brought about by the up and down movement of said leaf
spring.
Yet, an object of this utility model is to provide a leaf-spring eye bushing for
automobiles that has a much longer life span than the rubber bushings.

Still an object of this utility model is to provide a leaf-spring eye bushing for
automobiles that has a very simple construction and can be made using simple and
ordinary molding equipment.

A further object of this utility model is to provide a leaf-spring eye bushing for
automobile that is supplied with a metal jacket to reinforce the plastic eye bushing
when in engaged with the steel material of the leaf spring.

These and other objects and advantages will come to view and be understood upon
a reading of the detailed description when taken in conjunction with the
accompanying drawings.

Figure 1 is an exploded perspective of a leaf-spring eye bushing according to the

present utility model;

Figure 2 is a sectional view taken along line 2-2 of Fig. 1;

Figure 3 is a longitudinal sectional view of another embodiment of this utility model;

Figure 4 is a perspective view of a third embodiment; and

Figure 5 is a sectional view thereof.

Referring now to the several views of the drawings wherein like reference numerals
designated same parts throughout, there is shown a utility model for a leaf-spring
eye bushing for automobile generally designated as reference numeral 10.

Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11 having a

co-axial bore 12 centrally provided thereof.

As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a

perpendicular flange 13 on one of its ends and a cylindrical metal jacket 14
surrounding the peripheral walls 15 of said body 11. When said leaf-spring bushing
10 is installed, the metal jacket 14 acts with the leaf-spring eye (not shown), which
is also made of steel or cast steel. In effect, the bushing 10 will not be directly in
contact with steel, but rather the metal jacket, making the life of the bushing 10
longer than those without the metal jacket.

In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl

chloride, an oil resistant soft texture plastic or a hard polypropylene plastic, both are
capable to endure the pressure applied thereto, and, in effect, would lengthen the
life and replacement therefor.

Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of said
bushing 10 is insertably provided with a steel tube 17 to reinforce the inner portion
thereof. This steel tube 17 accommodates or engages with the leaf-spring bolt (not
shown) connecting the leaf spring and the automobiles chassis.

Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10 is
elongated and cylindrical as to its construction. Said another embodiment is also
made of polypropylene or polyvinyl chloride plastic material. The steel tube 17 and
metal jacket 14 may also be applied to this embodiment as an option thereof.38

VEHICLE BEARING CUSHION

Known bearing cushions inserted to bearing housings for vehicle propeller shafts
are made of hard rubber. These rubber bushings after a time, upon subjecting them
to so much or intermittent pressure would eventually be worn out that would cause
the wobbling of the center bearing.

The primary object of this utility model therefore is to provide a vehicle-bearing

cushion that is made up of plastic.

Another object of this utility model is to provide a vehicle bearing cushion made of
polyvinyl chloride, an oil resistant soft texture plastic material which causes cushion
to the propellers center bearing, yet strong enough to endure pressure brought
about by the vibration of the center bearing.

Yet, an object of this utility model is to provide a vehicle-bearing cushion that has a
much longer life span than rubber bushings.

Still an object of this utility model is to provide a vehicle bearing cushion that has a
very simple construction and can be made using simple and ordinary molding
equipment.

These and other objects and advantages will come to view and be understood upon
a reading of the detailed description when taken in conjunction with the
accompanying drawings.

Figure 1 is a perspective view of the present utility model for a vehicle-bearing

cushion; and

Figure 2 is a sectional view thereof.

Referring now to the several views of the drawing, wherein like reference numeral
designate same parts throughout, there is shown a utility model for a vehicle-
bearing cushion generally designated as reference numeral 10.

Said bearing cushion 10 comprises of a generally semi-circular body 11, having

central hole 12 to house a conventional bearing (not shown). As shown in Figure 1,
said body 11 is provided with a plurality of ridges 13 which serves reinforcing
means thereof.

The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture oil and
chemical resistant plastic material which is strong, durable and capable of enduring
severe pressure from the center bearing brought about by the rotating movement of
the propeller shaft of the vehicle.39

A utility model is a technical solution to a problem in any field of human activity

which is new and industrially applicable. It may be, or may relate to, a product, or
process, or an improvement of any of the aforesaid.40 Essentially, a utility model
refers to an invention in the mechanical field. This is the reason why its object is
sometimes described as a device or useful object.41 A utility model varies from an
invention, for which a patent for invention is, likewise, available, on at least three
aspects: first, the requisite of "inventive step"42 in a patent for invention is not
required; second, the maximum term of protection is only seven years43 compared
to a patent which is twenty years,44 both reckoned from the date of the application;
and third, the provisions on utility model dispense with its substantive
examination45 and prefer for a less complicated system.

Being plain automotive spare parts that must conform to the original structural
design of the components they seek to replace, the Leaf Spring Eye Bushing and
Vehicle Bearing Cushion are not ornamental. They lack the decorative quality or
value that must characterize authentic works of applied art. They are not even
artistic creations with incidental utilitarian functions or works incorporated in a
useful article. In actuality, the personal properties described in the search warrants
are mechanical works, the principal function of which is utility sans any aesthetic
embellishment.

Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing Cushion as
included in the catch-all phrase "other literary, scholarly, scientific and artistic
works" in Section 172.1(a) of R.A. No. 8293. Applying the principle of ejusdem
generis which states that "where a statute describes things of a particular class or
kind accompanied by words of a generic character, the generic word will usually be
limited to things of a similar nature with those particularly enumerated, unless there
be something in the context of the state which would repel such inference,"46 the
Leaf Spring Eye Bushing and Vehicle Bearing Cushion are not copyrightable, being
not of the same kind and nature as the works enumerated in Section 172 of R.A. No.
8293.
No copyright granted by law can be said to arise in favor of the petitioner despite the
issuance of the certificates of copyright registration and the deposit of the Leaf
Spring Eye Bushing and Vehicle Bearing Cushion. Indeed, in Joaquin, Jr. v. Drilon47
and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,48 the Court ruled
that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or
independent right granted by the statute, and not simply a pre-existing right
regulated by it. Being a statutory grant, the rights are only such as the statute
confers, and may be obtained and enjoyed only with respect to the subjects and by
the persons, and on terms and conditions specified in the statute. Accordingly, it can
cover only the works falling within the statutory enumeration or description.

That the works of the petitioner may be the proper subject of a patent does not
entitle him to the issuance of a search warrant for violation of copyright laws. In Kho
v. Court of Appeals49 and Pearl & Dean (Phil.), Incorporated v. Shoemart,
Incorporated,50 the Court ruled that "these copyright and patent rights are
completely distinct and separate from one another, and the protection afforded by
one cannot be used interchangeably to cover items or works that exclusively pertain
to the others." The Court expounded further, thus:

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

The petitioner cannot find solace in the ruling of the United States Supreme Court in
Mazer v. Stein51 to buttress his petition. In that case, the artifacts involved in that
case were statuettes of dancing male and female figures made of semi-vitreous
china. The controversy therein centered on the fact that although copyrighted as
"works of art," the statuettes were intended for use and used as bases for table
lamps, with electric wiring, sockets and lampshades attached. The issue raised was
whether the statuettes were copyright protected in the United States, considering
that the copyright applicant intended primarily to use them as lamp bases to be
made and sold in quantity, and carried such intentions into effect. At that time, the
Copyright Office interpreted the 1909 Copyright Act to cover works of artistic
craftsmanship insofar as their form, but not the utilitarian aspects, were concerned.
After reviewing the history and intent of the US Congress on its copyright legislation
and the interpretation of the copyright office, the US Supreme Court declared that
the statuettes were held copyrightable works of art or models or designs for works
of art. The High Court ruled that:

"Works of art (Class G) (a) In General. This class includes works of artistic
craftsmanship, in so far as their form but not their mechanical or utilitarian aspects
are concerned, such as artistic jewelry, enamels, glassware, and tapestries, as well as
all works belonging to the fine arts, such as paintings, drawings and sculpture. "

So we have a contemporaneous and long-continued construction of the statutes by

the agency charged to administer them that would allow the registration of such a
statuette as is in question here.52

The High Court went on to state that "[t]he dichotomy of protection for the aesthetic
is not beauty and utility but art for the copyright and the invention of original and
ornamental design for design patents." Significantly, the copyright office
promulgated a rule to implement Mazer to wit:

[I]f "the sole intrinsic function of an article is its utility, the fact that the work is
unique and attractively shaped will not qualify it as a work of art."

In this case, the bushing and cushion are not works of art. They are, as the petitioner
himself admitted, utility models which may be the subject of a patent.

IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of
merit. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No.
70411 are AFFIRMED. Search Warrant Nos. 01-2401 and 01-2402 issued on October
15, 2001 are ANNULLED AND SET ASIDE. Costs against the petitioner.

SO ORDERED.

G. R. No. 126627 August 14, 2003

SMITH KLINE BECKMAN CORPORATION, Petitioner,

vs.
THE HONORABLE COURT OF APPEALS and TRYCO PHARMA CORPORATION,
Respondents.

Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of

the laws of the state of Pennsylvania, United States of America (U.S.) and licensed to
do business in the Philippines, filed on October 8, 1976, as assignee, before the
Philippine Patent Office (now Bureau of Patents, Trademarks and Technology
Transfer) an application for patent over an invention entitled "Methods and
Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5
Propylthio-2-Benzimidazole Carbamate." The application bore Serial No. 18989.

On September 24, 1981, Letters Patent No. 145611 for the aforesaid invention was
issued to petitioner for a term of seventeen (17) years.

The letters patent provides in its claims2 that the patented invention consisted of a
new compound named methyl 5 propylthio-2-benzimidazole carbamate and the
methods or compositions utilizing the compound as an active ingredient in fighting
infections caused by gastrointestinal parasites and lungworms in animals such as
swine, sheep, cattle, goats, horses, and even pet animals.

Tryco Pharma Corporation (private respondent) is a domestic corporation that

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

Petitioner sued private respondent for infringement of patent and unfair

competition before the Caloocan City Regional Trial Court (RTC).3 It claimed that its
patent covers or includes the substance Albendazole such that private respondent,
by manufacturing, selling, using, and causing to be sold and used the drug Impregon
without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No.
145614 as well as committed unfair competition under Article 189, paragraph 1 of
the Revised Penal Code and Section 29 of Republic Act No. 166 (The Trademark
Law) for advertising and selling as its own the drug Impregon although the same
contained 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 Answer8 averred that Letters Patent No. 14561 does not
cover the substance Albendazole for nowhere in it does that word appear; that even
if the patent were to include Albendazole, such substance is unpatentable; that the
Bureau of Food and Drugs allowed it to manufacture and market Impregon with
Albendazole as its known ingredient; that there is no proof that it passed off in any
way its veterinary products as those of petitioner; that Letters Patent No. 14561 is
null and void, the application for the issuance thereof having been filed beyond the
one year period from the filing of an application abroad for the same invention
covered thereby, in violation of Section 15 of Republic Act No. 165 (The Patent Law);
and that petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such amount of
actual damages as may be proven; 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
denied11 the present petition for review on certiorari12 was filed, assigning as
errors the following:

I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT ALBENDAZOLE,

THE ACTIVE INGREDIENT IN 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-Rejoinder13 that although methyl 5 propylthio-2-

benzimidazole carbamate is not identical with Albendazole, the former is an
improvement or improved version of the latter thereby making both substances still
substantially the same.

With respect to the award of actual damages in favor of private respondent in the
amount of 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 operation must 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.1a wphi1

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 President25 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.