FIRST DIVISION
exhibits: (a) affidavit of petitioner alleging the existence of prior art, marked Exh. A; (b) a
[G.R. No. 113388. September 5, 1997]
ANGELITA MANZANO, petitioner, vs. COURT OF APPEALS, and MELECIA MADOLARIA, as
Assignor to NEW UNITED FOUNDRY MANUFACTURING
CORPORATION, respondents.
DECISION
BELLOSILLO, J.:
The primary purpose of the patent system is not the reward of the individual but the
advancement of the arts and sciences. The function of a patent is to add to the sum of useful
knowledge and one of the purposes of the patent system is to encourage dissemination of
information concerning discoveries and inventions. This is a matter which is properly within
the competence of the Patent Office the official action of which has the presumption of
correctness and may not be interfered with in the absence of new evidence carrying thorough
conviction that the Office has erred.Since the Patent Office is an expert body preeminently
qualified to determine questions of patentability, its findings must be accepted if they are
consistent with the evidence, with doubts as to patentability resolved in favor of the Patent
Office.[1]
Petitioner Angelita Manzano filed with the Philippine Patent Office on 19 February 1982
an action for the cancellation of Letters Patent No. UM-4609 for a gas burner registered in the
name of respondent Melecia Madolaria who subsequently assigned the letters patent to New
United Foundry and Manufacturing Corporation (UNITED FOUNDRY, for brevity). Petitioner
alleged that (a) the utility model covered by the letters patent, in this case, an LPG gas burner,
was not inventive, new or useful; (b) the specification of the letters patent did not comply
with the requirements of Sec. 14, RA No. 165, as amended; (c) respondent Melecia Madolaria
was not the original, true and actual inventor nor did she derive her rights from the original,
true and actual inventor of the utility model covered by the letters patent; and, (d) the letters
patent was secured by means of fraud or misrepresentation. In support of her petition for
cancellation petitioner further alleged that (a) the utility model covered by the letters patent
of respondent had been known or used by others in the Philippines for more than one (1) year
before she filed her application for letters patent on 9 December 1979; (b) the products which
were produced in accordance with the utility model covered by the letters patent had been in
public use or on sale in the Philippines for more than one (1) year before the application for
patent therefor was filed.
Petitioner presented the following documents which she correspondingly marked as
brochure distributed by Manila Gas Corporation disclosing a pictorial representation of
Ransome Burner made by Ransome Torch and Burner Company, USA, marked Exh. D; and, (c)
a brochure distributed by Esso Gasul or Esso Standard Eastern, Inc., of the Philippines showing
a picture of another similar burner with top elevation view and another perspective view of
the same burner, marked Exh. E.
Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a
helper in the UNITED FOUNDRY where respondent Melecia Madolaria used to be affiliated
with from 1965 to 1970; that Ong helped in the casting of an LPG burner which was the same
utility model of a burner for which Letters Patent No. UM-4609 was issued, and that after her
husbands separation from the shop she organized Besco Metal Manufacturing (BESCO METAL,
for brevity) for the casting of LPG burners one of which had the configuration, form and
component parts similar to those being manufactured by UNITED FOUNDRY. Petitioner
presented in evidence an alleged model of an LPG burner marked Exh. K and covered by the
Letters Patent of respondent, and testified that it was given to her in January 1982 by one of
her customers who allegedly acquired it from UNITED FOUNDRY. Petitioner also presented in
evidence her own model of an LPG burner called Ransome burner marked Exh. L, which was
allegedly manufactured in 1974 or 1975 and sold by her in the course of her business
operation in the name of BESCO METAL.Petitioner claimed that this Ransome burner (Exh. L)
had the same configuration and mechanism as that of the model which was patented in favor
of private respondent Melecia Madolaria. Also presented by petitioner was a burner cup of an
imported Ransome burner marked Exh M which was allegedly existing even before the patent
application of private respondent.
Petitioner presented two (2) other witnesses, namely, her husband Ong Bun Tua and
Fidel Francisco. Ong testified that he worked as a helper in the UNITED FOUNDRY from 1965
to 1970 where he helped in the casting of LPG burners with the same form, configuration and
mechanism as that of the model covered by the Letters Patent issued to private
respondent. Francisco testified that he had been employed with the Manila Gas Corporation
from 1930 to 1941 and from 1952 up to 1969 where he retired as supervisor and that Manila
Gas Corporation imported Ransome burners way back in 1965 which were advertised through
brochures to promote their sale.
Private respondent, on the other hand, presented only one witness, Rolando
Madolaria, who testified, among others, that he was the General Supervisor of the UNITED
FOUNDRY in the foundry, machine and buffing section; that in his early years with the
company, UNITED FOUNDRY was engaged in the manufacture of different kinds of gas stoves
as well as burners based on sketches and specifications furnished by customers; that the
company manufactured early models of single-piece types of burners where the mouth and
throat were not detachable; that in the latter part of 1978 respondent Melecia Madolaria
confided in him that complaints were being brought to her attention concerning the early
models being manufactured; that he was then instructed by private respondent to cast several
experimental models based on revised sketches and specifications; that private respondent
again made some innovations; that after a few months, private respondent discovered the
solution to all the defects of the earlier models and, based on her latest sketches and
specifications, he was able to cast several models incorporating the additions to the
innovations introduced in the models. Various tests were conducted on the latest model in the
presence and under the supervision of Melecia Madolaria and they obtained perfect results.
Rolando Madolaria testified that private respondent decided to file her application for utility
model patent in December 1979.
On 7 July 1986 the Director of Patents Cesar C. Sandiego issued Decision No. 86-56
denying the petition for cancellation and holding that the evidence of petitioner was not able
to establish convincingly that the patented utility model of private respondent was
anticipated. Not one of the various pictorial representations of business clearly and
convincingly showed that the devices presented by petitioner was identical or substantially
identical with the utility model of the respondent. The decision also stated that even assuming
that the brochures depicted clearly each and every element of the patented gas burner device
so that the prior art and patented device became identical although in truth they were not,
they could not serve as anticipatory bars for the reason that they were undated. The dates
when they were distributed to the public were not indicated and, therefore, were useless
prior art references. The records and evidence also do not support the petitioners contention
that Letters Patent No. UM-4609 was obtained by means of fraud and/or
misrepresentation. No evidence whatsoever was presented by petitioner to show that the
then applicant Melecia Madolaria withheld with intent to deceive material facts which, if
disclosed, would have resulted in the refusal by the Philippine Patent Office to issue the
Letters Patent under inquiry.
Petitioner elevated the decision of the Director of Patents to the Court of Appeals
which on 15 October 1993 affirmed the decision of the Director of Patents. Hence, this
petition for review on certiorari alleging that the Court of Appeals erred (a) in relying on
imaginary differences which in actuality did not exist between the model of private
respondent covered by Letters Patent No. UM-4609 and the previously known model of Esso
Standard Eastern, Inc., and Manila Gas Corporation, making such imaginary differences
grounded entirely on speculation, surmises and conjectures; (b) in rendering judgment based
on misapprehension of facts; (c) in relying mainly on the testimony of private respondents
sole witness Rolando Madolaria; and, (d) in not canceling Letters Patent No. UM-4609 in the
name of private respondent.
Petitioner submits that the differences cited by the Court of Appeals between the
utility model of private respondent and the models of Manila Gas Corporation and Esso
Standard Eastern, Inc., are more imaginary than real. She alleges that based on Exhs. E, E-1, F
and F-1 or the brochures of Manila Gas Corporation and Esso Standard Eastern, Inc.,
presented by petitioner, the cup-shaped burner mouth and threaded hole on the side are
shown to be similar to the utility model of private respondent. The exhibits also show a
detachable burner mouth having a plurality of upwardly existing undulations adopted to act as
gas passage when the cover is attached to the top of said cup-shaped mouth all of which are
the same as those in the patented model. Petitioner also denies as substantial difference the
short cylindrical tube of the burner mouth appearing in the brochures of the burners being
sold by Manila Gas Corporation and the long cylindered tube of private respondents model of
the gas burner.
Petitioner argues that the actual demonstration made during the hearing disclosed the
similarities in form, operation and mechanism and parts between the utility model of private
respondent and those depicted in the brochures. The findings of the Patent Office and the
Court of Appeals that the brochures of Manila Gas Corporation and Esso Standard Eastern,
Inc., are undated cannot overcome the fact of their circulation before private respondent filed
her application for utility model patent. Petitioner thus asks this Court to take judicial notice
of the fact that Esso Standard Eastern, Inc., disappeared before 1979 and reappeared only
during the Martial Law years as Petrophil Corporation. Petitioner also emphasizes that the
brochures indicated the telephone number of Manila Gas Corporation as 5-79-81 which is a
five (5) numbered telephone number existing before 1975 because telephones in Metro
Manila started to have six (6) numbers only after that year.
Petitioner further contends that the utility model of private respondent is absolutely
similar to the LPG burner being sold by petitioner in 1975 and 1976, and also to the Ransome
burner depicted in the old brochures of Manila Gas Corporation and Esso Standard Eastern,
Inc., fabricated by Ransome Torch and Burner Company of Oakland, California, USA, especially
when considered through actual physical examination, assembly and disassembly of the
models of petitioner and private respondent. Petitioner faults the Court of Appeals for
disregarding the testimonies of Ong Bun Tua and Fidel Francisco for their failure to produce
documents on the alleged importation by Manila Gas Corporation of Ransome burners in
1965 which had the same configuration, form and mechanism as that of the private
respondents patented model.
Finally, it is argued that the testimony of private respondents lone witness Rolando
Madolaria should not have been given weight by the Patent Office and the Court of Appeals
because it contained mere after-thoughts and pretensions.
We cannot sustain petitioner. Section 7 of RA No. 165, as amended, which is the law on
patents, expressly provides -
Sec. 7. Inventions patentable. Any invention of a new and useful machine, manufactured
product or substance, process or an improvement of any of the foregoing, shall be patentable.
Further, Sec. 55 of the same law provides -
Sec. 55. Design patents and patents for utility models. - (a) Any new, original and ornamental
design for an article of manufacture and (b) any new model of implements or tools or of any
industrial product or of part of the same, which does not possess the quality of invention, but
which is of practical utility by reason of its form, configuration, construction or composition,
may be protected by the author thereof, the former by a patent for a design and the latter by
a patent for a utility model, in the same manner and subject to the same provisions and
requirements as relate to patents for inventions insofar as they are applicable except as
otherwise herein provided.
The element of novelty is an essential requisite of the patentability of an invention or
discovery. If a device or process has been known or used by others prior to its invention or
discovery by the applicant, an application for a patent therefor should be denied; and if the
application has been granted, the court, in a judicial proceeding in which the validity of the
patent is drawn in question, will hold it void and ineffective.[2] It has been repeatedly held that
an invention must possess the essential elements of novelty, originality and precedence, and
for the patentee to be entitled to the protection the invention must be new to the world. [3]
In issuing Letters Patent No. UM-4609 to Melecia Madolaria for an LPG Burner on 22
July 1981, the Philippine Patent Office found her invention novel and patentable. The issuance
of such patent creates a presumption which yields only to clear and cogent evidence that the
patentee was the original and first inventor. The burden of proving want of novelty is on him
who avers it and the burden is a heavy one which is met only by clear and satisfactory proof
which overcomes every reasonable doubt. [4] Hence, a utility model shall not be considered
new if before the application for a patent it has been publicly known or publicly used in this
country or has been described in a printed publication or publications circulated within the
country, or if it is substantially similar to any other utility model so known, used or described
within the country.[5]
As found by the Director of Patents, the standard of evidence sufficient to overcome
the presumption of legality of the issuance of UM-4609 to respondent Madolaria was not
legally met by petitioner in her action for the cancellation of the patent. Thus the Director of
Patents explained his reasons for the denial of the petition to cancel private respondents
patent -
Scrutiny of Exhs. D and E readily reveals that the utility model (LPG Burner) is not
anticipated. Not one of the various pictorial representations of burners clearly and
convincingly show that the device presented therein is identical or substantially identical in
construction with the aforesaid utility model. It is relevant and material to state that in
determining whether novelty or newness is negatived by any prior art, only one item of the
prior art may be used at a time. For anticipation to occur, the prior art must show that each
element is found either expressly or described or under principles of inherency in a single
prior art reference or that the claimed invention was probably known in a single prior art
device or practice. (Kalman v. Kimberly Clark, 218 USPQ 781, 789)
Even assuming gratia arguendi that the aforesaid brochures do depict clearly on all fours each
and every element of the patented gas burner device so that the prior art and the said
patented device become identical, although in truth they are not, they cannot serve as
anticipatory bars for the reason that they are undated. The dates when they were distributed
to the public were not indicated and, therefore, they are useless prior art references.
xxxx
Furthermore, and more significantly, the model marked Exh. K does not show whether or not
it was manufactured and/or cast before the application for the issuance of patent for the LPG
burner was filed by Melecia Madolaria.
With respect to Exh. L, petitioner claimed it to be her own model of LPG burner allegedly
manufactured sometime in 1974 or 1975 and sold by her in the course of her business
operation in the name of Besco Metal Manufacturing, which burner was denominated as
Ransome burner
xxxx
But a careful examination of Exh. L would show that it does not bear the word Ransome which
is the burner referred to as the product being sold by the Petitioner. This is not the way to
prove that Exh. L anticipates Letters Patent No. UM-4609 through Exhs. C and D. Another
factor working against the Petitioners claims is that an examination of Exh. L would disclose
that there is no indication of the time or date it was manufactured.This Office, thus has no
way of determining whether Exh. L was really manufactured before the filing of the aforesaid
application which matured into Letters Patent No. UM-4609, subject matter of the
cancellation proceeding.
At this juncture, it is worthwhile to point out that petitioner also presented Exh. M which is
the alleged burner cup of an imported Ransome burner. Again, this Office finds the same as
unreliable evidence to show anticipation. It observed that there is no date indicated therein as
to when it was manufactured and/or imported before the filing of the application for issuance
of patent of the subject utility model. What is more, some component parts of Exh. M are
missing, as only the cup was presented so that the same could not be compared to the utility
model (subject matter of this case) which consists of several other detachable parts in
combination to form the complete LPG burner.
xxxx
It must likewise be pointed out that Ong Bun Tua testified on the brochures allegedly of
Manila Gas and of Esso Gasul marked Exhs. E and F and on the alleged fact that Manila Gas
Corporation was importing from the United States Ransome burners. But the same could not
be given credence since he himself admitted during cross- examination that he has never
been connected with Manila Gas Corporation. He could not even present any importation
papers relating to the alleged imported ransome burners. Neither did his wife.[6]
The above findings and conclusions of the Director of Patent were reiterated and
affirmed by the Court of Appeals.[7]
The validity of the patent issued by the Philippine Patent Office in favor of private
respondent and the question over the inventiveness, novelty and usefulness of the improved
model of the LPG burner are matters which are better determined by the Patent Office. The
technical staff of the Philippine Patent Office composed of experts in their field has by the
issuance of the patent in question accepted private respondents model of gas burner as a
discovery. There is a presumption that the Office has correctly determined the patentability of
the model[8] and such action must not be interfered with in the absence of competent
evidence to the contrary.
The rule is settled that the findings of fact of the Director of Patents, especially when
affirmed by the Court of Appeals, are conclusive on this Court when supported by substantial
evidence.Petitioner has failed to show compelling grounds for a reversal of the findings and
conclusions of the Patent Office and the Court of Appeals.
 The alleged failure of the Director of Patents and the Court of Appeals to accord
evidentiary weight to the testimonies of the witnesses of petitioner showing anticipation is
not a justification to grant the petition. Pursuant to the requirement of clear and convincing
evidence to overthrow the presumption of validity of a patent, it has been held that oral
testimony to show anticipation is open to suspicion and if uncorroborated by cogent evidence,
as what occurred in this case, it may be held insufficient.[9]
Finally, petitioner would want this Court to review all over again the evidence she
presented before the Patent Office. She argues that contrary to the decision of the Patent
Office and the Court of Appeals, the evidence she presented clearly proves that the patented
model of private respondent is no longer new and, therefore, fraud attended the acquisition
of patent by private respondent.
It has been held that the question on priority of invention is one of fact. Novelty and
utility are likewise questions of fact. The validity of patent is decided on the basis of factual
inquiries.Whether evidence presented comes within the scope of prior art is a factual issue to
be resolved by the Patent Office.[10] There is question of fact when the doubt or difference
arises as to the truth or falsehood of alleged facts or when the query necessarily invites
calibration of the whole evidence considering mainly the credibility of witnesses, existence
and relevance of specific surrounding circumstances, their relation to each other and to the
whole and the probabilities of the situation.[11]
Time and again we have held that it is not the function of the Supreme Court to analyze
or weigh all over again the evidence and credibility of witnesses presented before the lower
tribunal or office. The Supreme Court is not a trier of facts. Its jurisdiction is limited to
reviewing and revising errors of law imputed to the lower court, its findings of fact being
conclusive and not reviewable by this Court.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals affirming
that of the Philippine Patent Office is AFFIRMED. Costs against petitioner.
SO ORDERED.
THIRD DIVISION
[G.R. No. 148222. August 15, 2003.]
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner, v. 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.chanrob1es virtua1 1aw 1ibrary
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals 3 contained a summary of this
dispute:jgc:chanrobles.com.ph
"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 contacts 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 (a) actual damages P16,600,000.00,
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 representing profits
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 derived by defendants
located in SMIs different branches. Pearl and Dean noted that NEMI is a sister company of
SMI. as a result of infringement

In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both of plaintiffs copyright
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 from 1991 to 1992
Ads," and the payment to Pearl and Dean of compensatory damages in the amount of Twenty
Million Pesos (P20,000,000.00). (b) moral damages P1,000.000.00

Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (c) exemplary damages P1,000,000.00
(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, (d) attorneys fees P1,000,000.00
Pearl and Dean filed this instant case for infringement of trademark and copyright, unfair
competition and damages. plus

In denying the charges hurled against it, SMI maintained that it independently developed its (e) costs of suit;
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 (2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which
Ads" was only for stationeries such as letterheads, envelopes, and the like. Besides, according were fabricated by Metro Industrial Services and EYD Rainbow Advertising Corporation;
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 (3) to deliver, under oath, to the National Library, all filler-posters using the trademark "Poster
entitled to the reliefs prayed for in its complaint since its advertising display units contained Ads", for destruction; and
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. (4) to permanently refrain from infringing the copyright on plaintiffs light boxes and its
On this basis, SMI, aside from praying for the dismissal of the case, also counterclaimed for trademark "Poster Ads" .
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 Defendants counterclaims are hereby ordered dismissed for lack of merit.
of Trademark Registration No. 4165 dated September 12, 1988.
SO ORDERED. 4
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 On appeal, however, the Court of Appeals reversed the trial court:chanrob1es virtual 1aw
and denials and prayed for similar reliefs and counterclaims as SMI."cralaw virtua1aw library library

The RTC of Makati City decided in favor of P & D:chanrob1es virtual 1aw library 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
Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of a copyrightable class "O" work, we have to agree with SMI when it posited that what was
copyright under Section 2 of PD 49, as amended, and infringement of trademark under copyrighted were the technical drawings only, and not the light boxes themselves,
Section 22 of RA No. 166, as amended, and are hereby penalized under Section 28 of PD 49, thus:chanrob1es virtual 1aw library
as amended, and Sections 23 and 24 of RA 166, as amended. Accordingly, defendants are
hereby directed:chanrob1es virtual 1aw library 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
(1) to pay plaintiff the following damages:chanrob1es virtual 1aw library jurisprudence, of which the leading case is Baker v. 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 v. Selden was likewise applied in Muller v. 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.
x x x
The Supreme Court trenchantly held in Faberge, Incorporated v. 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:chanrob1es virtual 1aw library
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." (Emphasis 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:chanrob1es
virtual 1aw library
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.
x x x
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.
x x x 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
WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and the copyright was limited to the drawings alone and not to the light box itself. We agree with
another is rendered DISMISSING the complaint and counterclaims in the above-entitled case the appellate court.
for lack of merit. 5
First, petitioners application for a copyright certificate as well as Copyright Certificate No.
Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the PD-R2588 issued by the National Library on January 20, 1981 clearly stated that it was for a
following errors for the Courts consideration:chanrob1es virtual 1aw library 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
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT copyright:chanrob1es virtual 1aw library
INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND NEMI;
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO INFRINGEMENT OF PEARL respect to any of the following works:chanrob1es virtual 1aw library
& DEANS TRADEMARK "POSTER ADS" WAS COMMITTED BY RESPONDENTS SM AND NEMI;
x x x
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 (O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
CONTRACTS WITH PEARL & DEAN.
x x x
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
Although petitioners copyright certificate was entitled "Advertising Display Units" (which
depicted the box-type electrical devices), its claim of copyright infringement cannot be
ISSUES
sustained.
In resolving this very interesting case, we are challenged once again to put into proper
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory
perspective four main concerns of intellectual property law patents, copyrights, trademarks
grant, the rights are limited to what the statute confers. It may be obtained and enjoyed only
and unfair competition arising from infringement of any of the first three. We shall focus then
with respect to the subjects and by the persons, and on terms and conditions specified in the
on the following issues:chanrob1es virtual 1aw library
statute. 7 Accordingly, it can cover only the works falling within the statutory enumeration or
description. 8
(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
P & D secured its copyright under the classification class "O" work. This being so, petitioners
the light box depicted in such engineering drawings ipso facto also protected by such
copyright protection extended only to the technical drawings and not to the light box itself
copyright?
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
(2) or should the light box be registered separately and protected by a patent issued by the
owned a valid copyright, the same could have referred only to the technical drawings within
Bureau of Patents Trademarks and Technology Transfer (now Intellectual Property Office) in
the category of "pictorial illustrations." It could not have possibly stretched out to include the
addition to the copyright of the engineering drawings?
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
(3) can the owner of a registered trademark legally prevent others from using such trademark
"Advertising Display Units." What the law does not include, it excludes, and for the good
if it is a mere abbreviation of a term descriptive of his goods, services or business?
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
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
light box copyrightable be remedied by the simplistic act of entitling the copyright certificate
issued by the National Library as "Advertising Display Units."cralaw virtua1aw library
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.
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public without a patent system is to bring new designs and technologies into the public domain through
license from P & D, then no doubt they would have been guilty of copyright infringement. But disclosure. 14 Ideas, once disclosed to the public without the protection of a valid patent, are
this was not the case. SMIs and NEMIs acts complained of by P & D were to have units similar subject to appropriation without significant restraint. 15
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 On one side of the coin is the public which will benefit from new ideas; on the other are the
petitioners copyright over the technical drawings? We do not think so. inventors who must be protected. As held in Bauer & Cie v. ODonnel, 16 "The act secured to
the inventor the exclusive right to make use, and vend the thing patented, and consequently
During the trial, the president of P & D himself admitted that the light box was neither a to prevent others from exercising like privileges without the consent of the patentee. It was
literary nor an artistic work but an "engineering or marketing invention." 10 Obviously, there passed for the purpose of encouraging useful invention and promoting new and useful
appeared to be some confusion regarding what ought or ought not to be the proper subjects inventions by the protection and stimulation given to inventive genius, and was intended to
of copyrights, patents and trademarks. In the leading case of Kho v. Court of Appeals, 11 we secure to the public, after the lapse of the exclusive privileges granted the benefit of such
ruled that these three legal rights are completely distinct and separate from one another, and inventions and improvements."cralaw virtua1aw library
the protection afforded by one cannot be used interchangeably to cover items or works that
exclusively pertain to the others:chanrob1es virtual 1aw library The law attempts to strike an ideal balance between the two interests:jgc:chanrobles.com.ph

Trademark, copyright and patents are different intellectual property rights that cannot be "(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation
interchanged with one another. A trademark is any visible sign capable of distinguishing the and disclosure of new useful and non-obvious advances in technology and design, in return
goods (trademark) or services (service mark) of an enterprise and shall include a stamped or for the exclusive right to practice the invention for a number of years. The inventor may keep
marked container of goods. In relation thereto, a trade name means the name or designation his invention secret and reap its fruits indefinitely. In consideration of its disclosure and the
identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to consequent benefit to the community, the patent is granted. An exclusive enjoyment is
literary and artistic works which are original intellectual creations in the literary and artistic guaranteed him for 17 years, but upon the expiration of that period, the knowledge of the
domain protected from the moment of their creation. Patentable inventions, on the other invention inures to the people, who are thus enabled to practice it and profit by its use." 17
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 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
ON THE ISSUE OF PATENT INFRINGEMENT 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
This brings us to the next point: if, despite its manufacture and commercial use of the light there for the free use of the public." 18
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 It is only after an exhaustive examination by the patent office that a patent is issued. Such an
they be liable instead for infringement of patent? We do not think so either. 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
For some reason or another, petitioner never secured a patent for the light boxes. It therefore prerequisites to obtaining a patent are strictly observed and when a patent is issued, the
acquired no patent rights which could have protected its invention, if in fact it really was. And limitations on its exercise are equally strictly enforced. To begin with, a genuine invention or
because it had no patent, petitioner could not legally prevent anyone from manufacturing or discovery must be demonstrated lest in the constant demand for new appliances, the heavy
commercially using the contraption. In Creser Precision Systems, Inc. v. Court of Appeals, 12 hand of tribute be laid on each slight technological advance in art." 19
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 There is no such scrutiny in the case of copyrights nor any notice published before its grant to
patent. . . . (A)n inventor has no common law right to a monopoly of his invention. He has the the effect that a person is claiming the creation of a work. The law confers the copyright from
right to make use of and vend his invention, but if he voluntarily discloses it, such as by the moment of creation 20 and the copyright certificate is issued upon registration with the
offering it for sale, the world is free to copy and use it with impunity. A patent, however, gives National Library of a sworn ex-parte claim of creation.
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 Therefore, not having gone through the arduous examination for patents, the petitioner
were patentable inventions, petitioner revealed them fully to the public by submitting the cannot exclude others from the manufacture, sale or commercial use of the light boxes on the
engineering drawings thereof to the National Library. sole basis of its copyright certificate over the technical drawings.

To be able to effectively and legally preclude others from copying and profiting from the Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent
invention, a patent is a primordial requirement. No patent, no protection, The ultimate goal of 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 v. 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:jgc:chanrobles.com.ph
"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. . . . . 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.
x x x ON
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. . . . 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."
(Emphasis 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. v. 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 . . . . 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 v. Court of Appeals.25cralaw:red
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.
THE ISSUE OF UNFAIR COMPETITION
If at all, the cause of action should have been for unfair competition, a situation which was PARKE, DAVIS & COMPANY, Plaintiff-Appellant, v. DOCTORS PHARMACEUTICALS, INC. and
possible even if P & D had no registration. 26 However, while the petitioners complaint in the V-LAB DRUGHOUSE CORPORATION, Defendants-Appellees.
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 Ross, Salcedo, Del Rosario Bito and Misa, for Plaintiff-Appellant.
of unfair competition.
Manuel J. N. Serapio for Defendants-Appellees.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of
unfair competition. SYNOPSIS

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.
In a complaint for damages for infringement of patent and unfair competition, plaintiff alleged
that it was the owner of Letters Patent Nos. 50 and 279 covering the products known as
Chloramphenicol" and "Chloramphenicol Palmitate", respectively, and that defendant
pharmaceutical company had used "Chloramphenicol Palmitate" in its medicine called
"Venimicetin Suspension" ; had deceived the public by representing that said medicine
contained "Chloramphenicol" when in fact it contained "Chloramphenicol Palmitate", an
entirely different substance; and had misrepresented itself to be the plaintiffs compulsory
licensee for said product, while its co-defendant had acted as its distributor. Defendants
moved to dismiss the complaint alleging that defendant pharmaceutical company is a
compulsory licensee of "Chloramphenicol." Premised on the assumption that
"Chloramphenicol" and "Chloramphenicol Palmitate" are the same substance, the trial Court
granted the motion on the ground of failure to state a cause of action.chanroblesvirtual|
awlibrary
On appeal, the Supreme Court held that the trial court has erred in dismissing the complaint
on the ground of failure to state a cause of action, because instead of hypothetically assuming
the truth of the factual allegations of the complaint, which is automatic in resolving a motion
to dismiss on the said ground, it has ruled against their veracity.
Appealed order set aside and complaint reinstated.
SYLLABUS

All told, the Court finds no reversible error committed by the Court of Appeals when it 1. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; DISMISSAL ON GROUND OF FAILURE TO STATE
reversed the Regional Trial Court of Makati City.chanrob1es virtua1 1aw library A CAUSE OF ACTION; RULE THAT TRUTH OF FACTUAL ALLEGATIONS OF COMPLAINT MUST BE
ASSUMED; NOT FOLLOWED IN CASE AT BAR. It is axiomatic that in resolving a motion to
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated dismiss a complaint on the ground of failure to state a cause of action, the court should
May 22, 2001 is AFFIRMED in toto. hypothetically assume the truth of the factual allegations of the complaint (except allegations
of facts the falsity of which the court may take judicial notice of) and determine whether on
SO ORDERED. the basis thereof, the complainant is entitled to the relief demanded. Thus, in the case at bar,
it was error for the lower court to dismiss the complaint for damages for infringement of
patent and for unfair competition on the ground of failure to state a cause of action, because
SECOND DIVISION instead of assuming the truth of the factual allegations of the complaint that
"Chloramphenicol" and "Chloramphenicol Palmitate" are two different substances, the lower
[G.R. No. L-27361. May 29, 1981.] court ruled against its veracity by stating that "Chloramphenicol" and "Chloramphenicol
Palmitate" are the same, and consequently concluded that the complaint states no cause of
action.
2. ID.; ID.; ID.; ID.; ID.; APPLICATION OF RULE IN CASE AT BAR WOULD NECESSARILY LEAD TO
CONCLUSION THAT COMPLAINT STATES A CAUSE OF ACTION. Had the lower court in the
case at bar applied the formula established in resolving a motion to dismiss on the ground of
failure to state a cause of action and hypothetically assumed as true, for the purpose of the
motion to dismiss, the allegations in the complaint that "Chloramphenicol" and
"Chloramphenicol Palmitate" are entirely different substances and that "Venimicetin
Suspension actually contains "Chloramphenicol Palmitate" and not "Chloramphenicol" as
indicated in its package and label, it would have concluded that the complaint states a cause
of action for infringement of patent and unfair competition. Defendants would then be guilty,
under Sections 37 and 42 of Republic Act No. 165, of infringing of patent and selling, causing
to be sold, using and causing to be used "Chloramphenicol Palmitate" without consent or
authority of the plaintiff as the holder of Letters Patent No. 279, Claim 4 of which allegedly
covers said substance. Likewise, the defendants, under Section 29 of Republic Act No. 166,
would be guilty of unfair competition by falsely stating that defendant pharmaceutical
companys medicine called "Venimicetin Suspension" contains "Chloramphenicol" when in
fact it actually contains "Chloramphenicol Palmitate", and that it is covered by a compulsory
license from the plaintiff.
3. ID.; EVIDENCE; JUDICIAL NOTICE; ASSUMED FACT IN CASE AT BAR NOT PROPER THEREFOR.
The trial courts assumption that "Chloramphenicol" (the substance covered by Letters
Patent No. 50) and "Chloramphenicol Palmitate" (the substance covered by Letters Patent No.
279) are the same, contrary to plaintiffs allegation in its complaint that "Chloramphenicol"
and "Chloramphenicol Palmitate" are two different substances, is clearly an error considering
that the said assumed fact cannot qualify as something which the court could take judicial
notice of nor was it competent to so find in the absence of evidence formally presented to
that effect. The existence of two patents separately covering said substances simply militates
against said factual assumption and requires the presentation of evidence sufficient to
convince the court that said substances are indeed the same.
DECISION
ABAD SANTOS, J.:
This is an appeal from the order of the Court of First Instance of Rizal dated August 22, 1966,
in Civil Case No. C-712, dismissing, on the ground of lack of cause of action, the complaint for
damages for infringement of patent and unfair competition, with preliminary injunction, filed
by the herein appellant against the herein appellees.chanroblesvirtual|awlibrary
On May 5, 1966, Parke, Davis & Company filed with the Court of First Instance of Rizal,
Caloocan City Branch, the said Complaint with Preliminary Injunction against Doctors
Pharmaceuticals, Inc., otherwise referred to as defendant No. 1, and V-Lab Drughouse
Corporation, otherwise referred to as defendant No. 2, alleging, among others, that plaintiff is
a foreign corporation organized and existing under the laws of the State of Michigan, U.S.A.,
with principal office situated in Detroit, Michigan, U.S.A.; that the laws of the United States of
America allow corporate or juristic citizens of the Philippines to file in said country, actions for
infringement of patents and for unfair competition; that defendants 1 and 2 are corporations
organized and existing under the laws of the Philippines with offices respectively located at
354-B San Diego Street, Grace Park, Caloocan City and 126 Gen. Evangelista Street, Caloocan
City; that on March 21, 1957, Letters Patent No. 279 was legally issued to plaintiff by the
Patent Office of the Republic of the Philippines for an invention entitled "Therapeutically
Valuable Esters and Method for Obtaining the Same" ; that since that date, plaintiff has been
and still is, the owner of said Letters Patent No. 279 which is still in force in the Philippines;
that defendant No. 1 has knowingly infringed and is still knowingly infringing Claim 4 of said
Letters Patent No. 279 of plaintiff by selling, causing to be sold, using or causing to be used,
"Chloramphenicol Palmitate", the substance covered by said Claim 4 of said plaintiffs Letters
Patent No. 279, under the name "Venimicetin Suspension", willfully and without the consent
or authorization of plaintiff; that defendant No. 2 has, likewise, knowingly infringed and is still
knowingly infringing Claim 4 of said Letters Patent No. 279 by acting as distributor of
defendant No. 1 of the latters medicine called "Venimicetin Suspension" which contains
"Chlorampenicol Palmitate" ; that plaintiff, through its wholly-owned local subsidiary, Parke,
Davis & Company, Inc., a domestic corporation with main office at Mandaluyong, Rizal, has at
great expense, established a market and a continuing demand for "Chloramphenicol
Palmitate" in the Philippines and has for many years sold and is still selling this product in the
Philippines; that defendants have derived unlawful gains and profits from the aforesaid
infringement to the great and irreparable injury, damage and prejudice of plaintiff, and have
deprived plaintiff of legitimate returns which plaintiff would have otherwise received had it
not been for defendants infringing acts; that defendants, in advertising and selling the
medicine of defendant No. 1 called "Venimicetin Suspension" have falsely and deceptively
concealed that the same contains "Chloramphenicol Palmitate" and falsely and deceptively
represented the same to contain "Chloramphenicol" ; that "Chloramphenicol" and
"Chloramphenicol Palmitate" are entirely different substances; that defendants, in advertising
and selling "Venimicetin Suspension", have falsely and deceptively used plaintiffs name and
represented that defendant No. 1 holds a license from plaintiff for said medicine with, inter
alia, the following words:jgc:chanrobles.com.ph
"First Compulsory Licensee in the Philippines by Parke-Davis Company Detroit, Michigan,
U.S.A." ;
that plaintiff has never granted defendant No. 1 any kind of license for any product; that
defendant No. 1 has not even applied for a compulsory license under plaintiffs Letters Patent
No. 279, the only patent which covers "Chloramphenicol Palmitate" ; that the compulsory
licensing case between plaintiff and defendant No. 1 in the Philippine Patent Office (Inter
Partes Case No. 181) dealt with plaintiffs Letters Patent No. 50 (which covers
"Chloramphenicol") and not with plaintiffs Letters Patent No. 279 (which covers
"Chloramphenicol Palmitate"); that the resolution of the Director of Patents fixing the terms
and conditions of the compulsory license for "Chloramphenicol" has not yet become final as
the same is still subject to a pending motion for reconsideration; that even if said resolution
does become final, the compulsory license will not cover defendants "Venimicetin
Suspension" which actually contains "Chloramphenicol Palmitate" and, therefore, defendants
statement will still be false and misleading; and that defendants use of the aforesaid false
statement is designed to induce persons to purchase and physicians to prescribe the use of
"Venimicetin Suspension" in the mistaken belief that it is identical with the "Chloramphenicol
Palmitate" product manufactured and sold in the Philippines by plaintiffs subsidiary or that
the active ingredient in said product has been obtained from plaintiff and/or that said product
has been made under the supervision or control of plaintiff thereby causing damage or loss
to plaintiff. On the basis of the foregoing allegations, the plaintiff prayed, among others, that
defendants be enjoined from performing the acts complained of as infringement of patent
and unfair competition and to pay the plaintiff all damages due thereto by reason of said acts.
On May 6, 1966, the Court of First Instance issued an order which, among others, temporarily
restrained the defendants "from directly or indirectly selling, using, causing to be sold or
causing to be used any Chloramphenicol Palmitate not manufactured by plaintiff or plaintiffs
wholly-owned subsidiary, Parke, Davis & Company, Inc." Alleging that the defendants have not
complied with such order, the plaintiff filed on May 24, 1966, a motion to punish defendants
for contempt.
Before the court could act on the plaintiffs motion for contempt, the defendants filed a
Motion to Dismiss, dated May 25, 1966, alleging, among others, that the complaint states no
cause of action against them since defendant No. 1 "was granted a compulsory license to
manufacture, use and sell its own brands of medicinal preparation containing
chloramphenicol."
On June 17, 1966, the plaintiff filed its Opposition to Motion to Dismiss controverting, among
others, defendants contention that the complaint states no cause of action. Plaintiff pointed
out that the defendants have confused the substance which is the subject matter of the
complaint, namely, "Chloramphenicol Palmitate", with the substance covered by the
compulsory licensing case, namely, "Chloramphenicol", and the Letters Patent subject of the
complaint, namely, Letters Patent No. 279, with the Letters Patent subject of the compulsory
licensing case, namely, Letters Patent No. 50.
On June 27, 1966, the defendants filed their Reply to Opposition alleging, among others, that
in advertising and selling their product "Venimicetin Suspension," never do they state that the
same contains "Chloramphenicol Palmitate." They pointed out that even in the annexes of
plaintiffs complaint (consisting of the packages and labels allegedly used by the defendants in
said product), only the substance "Chloramphenicol" is stated showing that the substance
involved is "Chloramphenicol and not "Chloramphenicol Palmitate."
On July 5, 1966, the plaintiff filed its Rejoinder to Reply to Opposition stating, among others,
that while the packages and labels of defendants "Venimicetin Suspension" indicate that the
same contains "Chloramphenicol", the truth of the matter is that said product does not
contain said substance but the substance covered by Letters Patent No. 279, namely,
"Chloramphenicol Palmitate." This, plaintiff pointed out, is expressly alleged in the complaint;
thus, applying the rule that a motion to dismiss hypothetically admits the truth of the
allegations of the complaint, defendants are guilty of (1) infringement of patent, by selling,
causing to be sold, using or causing to be used "Chloramphenicol Palmitate" in their medicine
called "Venimicetin Suspension", and (2) unfair competition, by concealing that said medicine
contains "Chloramphenicol", and, by deceiving and misleading the purchasers who are made
to believe that "Venimicetin Suspension" is covered by a compulsory license from the plaintiff.
On the basis of the foregoing pleadings, the Court of First Instance of Rizal issued the order
dated August 22, 1966, which dismissed the complaint on the ground of lack of cause of
action, to wit:chanrob1es virtual 1aw library
x x x
"After a careful consideration of the arguments for and against the motion to dismiss, and in
view of the fact that the substance covered by Letters Patent No. 50 and Letters Patent No.
279 is the same and that is, the substance known as Chloramphenicol, because while under
Letters Patent No. 50, the substance is referred to as Chloramphenicol, in Letters Patent No.
279, THE SUBSTANCE HAS BEEN DENOMINATED AS Chloramphenicol Palmitate yet it is the
opinion of the Court that Chloramphenicol and Chloramphenicol Palmitate are the same,
the difference being merely in the taste, and this Court to state that there was infringement of
Patent with respect to Letters Patent No. 279 would be tantamount to preventing the
defendant, Doctors Pharmaceuticals, Inc., from exercising the right granted it by Letters
Patent No. 50. It would further render nugatory the decision of the Director of Patents,
affirmed by the Supreme Court, granting the defendant, Doctors Pharmaceuticals, Inc., the
right to use and import Chloramphenicol.
"The defendant, V-Lab Drughouse Corporation being merely a sales representative of the
defendant, Doctors Pharmaceuticals, Inc., and the Court being of the opinion that there is no
cause of action with respect to the principal defendant, is likewise of the opinion that there is
no cause of action with respect to the defendant, V-Lab Drughouse Corporation.
"It is likewise the opinion of this Court that there is no cause of action for unfair competition
because a perusal of the records of this case will show that under paragraph 7 of the
Resolution of the Director of Patents, Annex "C" of the Motion to Dismiss, the petitioner
(Doctors Pharmaceuticals, Inc.) shall adopt and use its own trademarks or labels on all its
products containing Chloramphenicol under license from Parke, Davis, & Co., Inc., of Michigan,
U.S.A.
"The claim of the plaintiff that the representation:chanrob1es virtual 1aw library
First Compulsory Licensee in the Philippines by Parke-Davis Company, Detroit, Michigan,
U.S.A.
is false and has a definite tendency to deceive possible purchasers and distort the facts is not
well-taken in view of the above-mentioned (Par. 7) of the Resolution of the Director of
Patents.
"WHEREFORE, finding the ground of lack of cause of action to be well-taken, this case is
ordered DISMISSED, without pronouncement as to costs. The restraining order heretofore
issued is hereby lifted and set aside. Having reached the above conclusion, the Court will no
longer pass upon the issue of contempt.
"SO ORDERED."cralaw virtua1aw library
Hence, the present appeal.
We are thus tasked with the resolution of the issue of whether or not the lower court
correctly dismissed the complaint for damages for infringement of patent and unfair
competition on the ground of failure to state a cause of action.
It is axiomatic that in resolving a motion to dismiss a complaint on the ground of failure to
state a cause of action, the court should hypothetically assume the truth of the factual
allegations of the complaint (except allegations of facts the falsity of which the court may take
judicial notice of) and determine whether on the basis thereof, the complainant is entitled to
the relief demanded. Had the lower court applied the foregoing formula, it would not have
dismissed, on the ground of failure to state a cause of action, the complaint for damages for
infringement of patent and unfair competition. For, instead of hypothetically assuming the
truth of the factual allegations of the complaint, the lower court had ruled against their
veracity and consequently concluded that the complaint states no cause of action.
"SEC. 42. CIVIL ACTION FOR INFRINGEMENT . Any patentee, or anyone possessing any right,
title or interest in and to the patented invention, whose rights have been infringed, may bring
a civil action before the proper Court of First Instance, to recover from the infringer damages
sustained by reason of the infringement and to secure an injunction for the protection of his
rights."cralaw virtua1aw library
Likewise, the defendants would be guilty of unfair competition by falsely stating that
defendant No. 1s medicine called "Venimicetin Suspension" contains "Chloramphenicol"
when in fact it actually contains "Chloramphenicol Palmitate", and that it is covered by a
compulsory license from the plaintiff. Section 29 of R.A. No. 166 provides, inter
alia:jgc:chanrobles.com.ph
"In particular, and without in any way limiting the scope of unfair competition, the following
shall be deemed guilty of unfair competition:chanrob1es virtual 1aw library
x x x

As can be gleaned from the appealed order, the pertinent portions of which We have "(c) Any person who shall make any false statement in the course of trade. . ."cralaw
heretofore quoted, the lower court premised its ruling that there is no cause of action for virtua1aw library
infringement of patent on the assumption that "Chloramphenicol" (the substance covered by
Letters Patent No. 50) and "Chloramphenicol Palmitate" (the substance covered by Letters Clearly, the lower court erred in dismissing, on the ground of failure to state a cause of action,
Patent No. 279) are the same. Thus, instead of hypothetically assuming the truth of the the complaint for damages for infringement of patent and unfair competition.
plaintiffs allegation that "Chloramphenicol" and "Chloramphenicol Palmitate" are two
different substances, the lower court had ruled against its veracity. This is clearly an error WHEREFORE, the appealed order of dismissal is hereby set aside and the complaint for
considering that the said assumed fact cannot qualify as something which the court could take damages for infringement of patent and unfair competition reinstated. Without
judicial notice of nor was it competent to so find in the absence of evidence formally pronouncement as to costs.
presented to that effect. The existence of two patents separately covering said substances
simply militates against said factual assumption and requires the presentation of evidence SO ORDERED.
sufficient to convince the court that said substances are indeed the same.
EN BANC
Had the lower court hypothetically assumed as true, for the purpose of the motion to dismiss,
the allegations in the complaint that "Chloramphenicol" and "Chloramphenicol Palmitate" are [G.R. No. 4720. January 19, 1909. ]
entirely different substances and that "Venimicetin Suspension" actually contains
"Chloramphenicol Palmitate" and not "Chloramphenicol" as indicated in its package and label, CARLOS GSELL, Plaintiff-Appellee, v. VALERIANO VELOSO YAP-JUE, Defendant-Appellant.
it necessarily would have to conclude that the complaint states causes of action for
infringement of patent and for unfair competition. For defendants would then be guilty of Chicote & Miranda, for Appellant.
infringement of patent by selling, causing to be sold, using and causing to be used
"Chloramphenicol Palmitate", without the consent or authority of the plaintiff as the holder of Haussermann Cohn, for Appellee.
Letters Patent No. 279, Claim 4 of which allegedly covers said substance. Sections 37 and 42 of
R.A. No. 165 provide:jgc:chanrobles.com.ph SYLLABUS

"SEC. 37. RIGHTS OF PATENTEES. A patentee shall have the exclusive right to make, use and
1. INFRINGEMENT OF PATENTS; PROCESS OF MANUFACTURE. The manufacture of cane
sell the patented machine, article or product, and to use the patented process for the purpose
handles for walking sticks and umbrellas by a process identical with plaintiffs patented
of industry or commerce, throughout territory of the Philippines for the term of the patent;
process therefor, save only for the substitution of a blast lamp or blowpipe fed by alcohol, for
and such making, using or selling by any person without the authorization of the patentee,
a blast lamp or blowpipe fed by petroleum or mineral fuel, in applying heat for the purpose of
constitutes infringement of the patent." (Italics supplied.).
curving such handles, is an infringement upon the patented process. "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
2. ID.; ID.; INJUNCTION; CONTEMPT. The use of a process in all respects identical with a profits to the workman.
process protected by a valid patent, save only that a well-known mechanical equivalent is
substituted in lieu of some particular part of the patented process, is an infringement upon "NOTE. The patent applied for shall be for the industrial product cane handles for walking
the rights of the owner of the patent, which will be enjoined in appropriate proceeding and sticks and umbrellas, curved by means or a small lamp or blowpipe, fed by petroleum or
the use of such process, after the order enjoining its use has been issued, is a "contempt," mineral fuel."
under the provisions of section 172 of the Code of Civil Procedure.
Thereafter the defendant continued to manufacture curved cane handles for walking sticks
and umbrellas by a process in all respects identical with with that used by the plaintiff under
DECISION his patent, except only that he substituted for a lamp fed with petroleum or mineral oil, a
lamp fed with alcohol, as appears from a stipulation entered into between plaintiff and
defendant in the following terms:jgc:chanrobles.com.ph

CARSON, J. :
This is 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:jgc:chanrobles.com.ph
"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 " by the mere annunciation of the acts performed by the defendant, which are alleged to
and the process therein mentioned is fully described in the following statement which
accompanied the application for the patent:jgc:chanrobles.com.ph
"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 attach d 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.
"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 oil another lamp fed with alcohol."cralaw virtua1aw library
Contempt proceedings were instituted against the defendant in the month of February, 1904,
the plaintiff in the original action alleging that the "Defendant in disobedience 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 by said patent, No. 19228, or a
process so like the patented process as to be indistinguishable."cralaw virtua1aw library
The trial court found the defendant "not guilty" of contempt as charged; and this court, on
appeal, held that
"The violation, if there has been any, was not of such a character that it could be made patent
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 within curved handles by
means of the use of a coal or mineral 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 is 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
for 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
substitution 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, which 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, defendants 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 a 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 plaintiff 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 a particular jurisdiction, is of universal application, so that it matters not whether a
patent be issued by one sovereignty or another, the doctrine may properly be invoked to
protect the patentee from colorable invasions of his patent under the guise of a substitution
of some part of his invention by some well-known mechanical equivalent. 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 as 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."cralaw virtua1aw library
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:jgc:chanrobles.com.ph
"Can the defendant have the right of infringement, by substituting in lieu of some of the parts
of the combination well-known mechanical equivalents? I am quite clear that he 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 v. Louisville Cement Co., Fed.
Cas., 7798.) Counsel for 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
"Bona fide inventors of a combination are as much entitled to equivalents as the inventors of are included in the patent, and that the patent rights secured thereunder are strictly limited
other patentable improvements; by which is meant that a patentee in such a case may to the precise language of the "note" attached to the descriptive statement; while counsel for
substitute another ingredient for any one of the ingredients of his invention, if the ingredient plaintiff appears to think that the language of the patent covers any process or device
substituted performs the same function as the one omitted and was well known at the date of whereby wood or cane may be bent or curved by the use of heat. But for the purpose of this
his patent as a proper substitute for the one omitted in the patented combination. Apply that decision it is not necessary to consider these questions, further than to hold, as w e do, that
rule and it is clear that an alteration in a patented combination which merely substitutes under the doctrine of equivalents, the language of the note in the descriptive statement
another old ingredient for one of the ingredients in the patented combination, is an applies to the operation of applying heat for the purpose of curving handles for canes and
infringement of the patent, if the substitute performs the same function and was well known umbrellas by means of a blast lamp fed with alcohol, as well as by means of a blast lamp fed
at the date of the patent as a proper substitute for the omitted ingredient." (Gould v. Rees, 82 with petroleum or mineral oil; and the defendant having admitted the fact that he applied
U. S., 187, 194.) 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 infringed plaintiffs patent, and to have been guilty
"Mere formal alterations in a combination in letters patent are no defense to the charge of of a contempt in violating the terms of the injunction issued in the principal case, wherein
infringement and the withdrawal of one ingredient from the same and the substitution of plaintiff was declared the owner of the patent in question, and defendant enjoined from its
another which was well known at the date of the patent as a proper substitute for the one infringement.
withdrawn is a mere formal alteration of the combination if the ingredient substituted
performs substantially the same function as the one withdrawn. The argument of counsel for defendant and appellant, based on the theory that the questions
herein discussed and decided have been heretofore settled by this court, and that the subject-
"Bona fide inventors of a combination are as much entitled to suppress every other matter of this proceeding is res adjudicata between the parties thereto is sufficiently refuted
combination of the same ingredients to produce the same result, not substantially different by the simple reading of the decision of this court in the case relied upon. (Gsell v. Veloso, 7
from what they have invented and caused to be patented as any other class of inventors. All Phil. Rep., 130.)
alike have the right to suppress every colorable invasion of that which is secured to them by
letters patent." (Seymour v. Osborne, 78 U. S., 516, 556.) The judgment of the lower court should be and is hereby affirmed, with the costs of this
instance against the Appellant.
"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 SYLLABUS
because the same result is thereby produced but equivalent as being substantially the
same device in structure, arrangement and mode of operation." (Burden v. Corning, Fed. Cas., 1. PROPERTY; PATENTS; LAW. Act No. 2235 of the Philippine Legislature, enacted on
2143. Gottfried v. Philip Best Brewing Co., Fed. Cas., 5633.) February 10, 1913, in effect makes the United States Patent Laws applicable in the Philippine
Islands.
"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 2. ID.; ID.; VALIDITY; JUDICIARY. When a patent is sought to be enforced, "the questions of
place of the mechanism described without the exercise of the inventive faculty." (Burden v. invention, novelty, or prior use, and each of them, are open to judicial examination."cralaw
Corning, supra.) virtua1aw library

"All the elements of the invention in this case are old, and the rule in such cases, as before
explained, undoubtedly is that a Patentee 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 and other change
than the employment of a substitute for one of its elements, well known as such at the date
of his intention, and which any constructor acquainted with the art will know how to employ.
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 letter than a colorable evasion of the patent." (Union Sugar Refining Co. v.
Matthieson, Fed. Cas., 14399.)
3. ID.; ID.; ID.; ID.; BURDEN OF PROOF. 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 then shifts to the defendant to overcome by competent
evidence this legal presumption.
4 ID.; ID.; ID.; "VARGAS PLOW;" NOVELTY INVENTION, OR DISCOVERY In order to give
existence to the right to a patent the element of novelty, invention, or discovery must be
shown.

5. ID.; ID.; ID.; ID.; REPAIRS. 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 refitting the
machine for use, and thus permissible.
6. ID.; ID.; ID.; ID.; PUBLIC USE OR SALE. To entitle patent, the invention must be new to the
world.
7. ID.; ID.; ID.; ID.; ID. Under the provisions of the statute, an inventors 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.
8. ID.; ID.; ID.; ID.; ID. 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 patent when issued.
9. ID.; ID.; ID.; ID.; ID. Held: That since a preponderance of the evidence ,is to the effect that
for more than two years before the application for the original letters patent there was, by the
consent and allowance of the plaintiff, a public use of the invention covered by them, namely,
of the so-called "Vargas Plow," the patent is void.
DECISION
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:jgc:chanrobles.com.ph
"Any person who has invented or discovered any new and useful art, machine, manufacture,
or composition of matter, or any new and 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 are 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 questions 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 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 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. v. Jordan [1869], 7 Wall., 583; Blanchard v. Putnam [186g], 8 Wall.,
420; Seymour v. Osborne [1871], 11 Wall., 516; Reckendorfer v. Faber [1876], 92 U. S., 347; 20
R. C. L., 1112, 1168, 1169.)
As hereinbefore 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 v. Woodman [1870], 10 Wall., 117 rollers; Hicks v. Kesley [1874],
18 Wall., 674 wagons; Hails v. Wormer [1874], 20 Wall., 353 stoves; Washburn & Moen
Mfg. Co. v. Beat "Em All Barbed Wire Co. [1892], 143 U. S., 275 barbed wire; Lynch v.
Dryden [1873], C. D., 73 walking cultivators; Torrey v. 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. Defendants
contention is that in common with other foundaries, he has for four years cast large numbers
of plow points and shares suitable for the use of either on the native wooden plow or on the
Vargas plow. A differences has long been recognized between repairing and constructing 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 v. Simpson [1850], 9 How., 109.) Even under the more
rigorous doctrine of Leeds & Catlin Co. v. Victor Talking Machine Co. ([1909], 213 U. S. 325), it
may be possible that all the defendants 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 inventors 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 v. 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 patent when issued." (Worley v.
Lower Tobacco Co. [1882], 104 U. S., 340; McClurg v. Kingsland [1843], 1 How., 202;
Consolidated Fruit Jar Co. v. Wright [1877], 94 U. S., 92; Egbert v. Lippmann [1881], 104 U. S.,
333; Coffin v. Ogden [1874], 18 Wall., 120; Manning v. Cape Ann Isinglass and Glue Co. [1883],
108 U. S., 462; Andrews v. Hovey [1887], 123 U. S., 267; Campbell v. City of New York [1888], 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 in 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 31, 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 seen the Vargas plow in 1906 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.
Petition dismissed.
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 SYLLABUS
use of the invention covered by them.

To conclude, we are not certain but that appellee has proved every one of his defenses. We
1. COMMERCIAL LAW; PATENT LAW (REPUBLIC ACT NO. 165); MATTERS PATENTABLE
are certain that he has at least demonstrated the public use of the Vargas plow over two years
THEREUNDER; A CASE OF; IMPROVEMENT OF THE OLD PROCESS OF TILE-MAKING IN CASE AT
prior to the application for a patent. Such being the case, although on a different ground, we
BAR. Under Section 7, Republic Act No. 165, as amended, "Any invention of a new and
must sustain the judgment of the lower court, without prejudice to the determination of the
useful machine, manufactured product or substance, process or an improvement of the
damages resulting from the granting of the injunction, with the costs of this instance against
foregoing, shall be patentable." In the case at bar, the contention of the petitioner that the
the appellant. So ordered.
letters-patent of private respondent was actually a patent for the old and non-patentable
process of making mosaic precast tiles is devoid of merit. It should be noted that private
FIRST DIVISION
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.
[G.R. No. L-32160. January 30, 1982.]
658 was issued by the Philippines Patent Office to the private respondent, to protect his rights
as the inventor of "an alleged new and useful improvement in the process of making mosaic
DOMICIANO A. AGUAS, Petitioner, v. CONRADO G. DE LEON and COURT OF
precast tiles."cralaw virtua1aw library
APPEALS,Respondents.
2. ID.; ID.; PATENTS; VALIDITY BETTER DETERMINED BY THE PHILIPPINES PATENT OFFICE.
Estanislao Fernandez for Petitioner.
The validity 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
Cecilia P. de Leon for Respondents.
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
SYNOPSIS
experts in their field, have, by the issuance of the patent in question, accepted the thinness of
the private respondents new tiles as a discovery. There is a presumption that the Philippines
Private respondent, who had been granted and issued Letters Patent No. 658 by the Patent Office has correctly determined the patentability of the improvement by the private
Philippines Patent Office for his invention of certain new and useful improvements in the respondent of the process in question.
process of making mosaic pre-cast tiles, filed a complaint for infringement of patent against
petitioner Domiciano Aguas and F. H. Aquino & Sons. Petitioner Aguas, in his answer, alleged 3. ID.; ID.; ID.; WHAT CONSTITUTES A PATENTABLE PROCESS AND/OR IMPROVEMENT; CASE AT
that respondents patent was unlawfully secured through misrepresentations as the latters BAR. Petitioners contention that the improvement of respondent is not patentable
invention is neither inventive nor new and hence not patentable; and that he cannot be held because it is not new and useful and inventive is without merit, where the records disclose
guilty of infringement because his products, which had been duly patented, were different that private respondents process is an improvement of the old process of tile-making and
from those of the private Respondent. The trial court, finding respondents patent valid and that such improvement is indeed inventive and goes beyond the exercise of mechanical skill
infringed, ordered petitioner Aguas and F. H. Aquino & Sons to pay respondent jointly and by which private respondent has introduced a new kind of tile for a new purpose.
severally actual, moral and exemplary damages and attorneys fees. Petitioner appealed to the
Court of Appeals questioning the validity of the patent issued by the Philippines Patent Office 4. REMEDIAL LAW; APPEAL; FINALITY OF THE FINDINGS OF FACT OF THE TRIAL COURT AND OF
and the patentability of respondents tile-making process. The Appellate Court, however, THE COURT OF APPEALS; CASE AT BAR, NOT AN EXCEPTION. Both the trial court and the
sustained the trial courts decision but greatly reduced the award of moral damages. Court of Appeals found as a fact that the petitioner did infringe private respondents patent.
Meanwhile, private respondents patent right expired, hence, in this petition, only the right of There is no showing that this case falls under one of the exceptions when this Court may
said private respondent to damages will be determined. overrule the findings of fact of the Court of Appeals.

The Supreme Court, affirming the decision of the trial court as modified by the Court of 5. COMMERCIAL LAW; PATENT LAW (REPUBLIC ACT NO. 165); PATENTS; DAMAGES AWARDED
Appeals, held that petitioners evidence has not overcome the legal presumption on the UNDER SECTION 42 OF THE PATENT LAW; SUSTAINED IN CASE AT BAR. The Supreme Court
validity of respondents patent; and that based on the records, respondents process is an finds no reason to reduce the amount of damages and attorneys fee awarded by the trial
improvement of the old process of tile-making, hence, patentable. court under Sec. 42 of the Patent Law which are as follows; (a) P10,020.99 by way of actual
damages; (b) P50,000 by way of moral damages which was reduced by the Court of Appeals to
P3,000 by way of compensating appellee for his moral suffering; (c) P5,000 by way of
exemplary damages; (d) P5,000 by way of attorneys fees and (e) costs of suit.
DECISION
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-appellee v. Domiciano Aguas and F. H. Aquino
and Sons, defendants-appellants," the dispositive portion of which
reads:jgc:chanrobles.com.ph
"WHEREFORE, with the modification that plaintiff-appellees award of moral damages is
hereby reduced to P3,000.00, the appealed judgment is hereby affirmed, in all other respects,
with costs against appellants." 1 of the process when in truth and in fact the process incorporated in the patent application has
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 Philippines 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 therefor, 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 Letters
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
quantities; that he has complied with the Philippine statutes 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 plaintiffs right therein and thereunder; that the defendant Domiciano A.
Aguas infringed Letters of Patent No. 658 by making, using and selling tiles embodying said
patented 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 for use and actually used in apparatus for the making of tiles
embodying plaintiffs 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 patent rights as against the defendants act of
infringement and to engage the services of counsel, thereby incurring attorneys fees and
expenses of litigation in the sum of P5,000.00. 2
On April 14, 1962, an order granting the plaintiffs 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
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:chanrobles law library : red
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the
defendants:jgc:chanrobles.com.ph
"1. Declaring plaintiffs 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 devices designed and intended for use in apparatus for the making of
tiles embodying plaintiffs 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;
"THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT COULD NEVER BE GUILTY
"4. Ordering the defendants to jointly and severally pay to the plaintiff the following sums of OF INFRINGEMENT OF PLAINTIFFS PATENT BECAUSE EVEN IN MATTERS NOT PATENTED BY
money, to wit:chanrob1es virtual 1aw library 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
(a) P10,020.99 by way of actual damages; ARE DIFFERENT.

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

(c) P5,000.00 by way of exemplary damages

"THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN HOLDING THE
(d) P5,000.00 by way of attorneys fees and (e) costs of suit." 5 DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR DAMAGES, AND ATTORNEYS
FEES."cralaw virtua1aw library
The defendant Domiciano Aguas appealed to the Court of Appeals, assigning the following
errors. 6 On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with the
modification that plaintiff-appellees award of moral damages was reduced to P3,000.00. 7
"I
The petitioner assigns the following errors supposedly committed by the Court of
Appeals:jgc:chanrobles.com.ph
"THE TRIAL COURT ERRED IN NOT HOLDING THAT PLAINTIFFS PATENT FOR THE PROCESS OF
MAKING MOSAIC PRE-CAST TILE IS INVALID BECAUSE SAID ALLEGED PROCESS IS NOT AN "It is now respectfully submitted that the Court of Appeals committed the following errors
INVENTION OR DISCOVERY AS THE SAME HAS ALREADY LONG BEEN USED BY TILE involving questions of law, to wit:jgc:chanrobles.com.ph
MANUFACTURERS BOTH ABROAD AND IN THIS COUNTRY.
"First error. When it did not conclude that the letters patent of the respondent although
"II 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;
"THE TRIAL COURT ERRED IN NOT HOLDING THAT THE PATENT OF PLAINTIFF IS VALID BECAUSE
IT IS AN IMPROVEMENT OF THE AGE-OLD TILE MAKING SYSTEM. "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 catalogues, that the alleged improvements introduced
"III
by the respondent in the manufacture of mosaic pre-cast tiles are not patentable, the same
being not new, useful and inventive.
"THE TRIAL COURT ERRED IN NOT ORDERING THE CANCELLATION OF PLAINTIFF-APPELLEES
"Third error. As a corollary, when it sentenced the herein petitioner to pay the damages
LETTERS PATENT NO. 658, EXHIBIT L, IN ACCORDANCE WITH THE PERTINENT PROVISIONS OF
enumerated in the decision of the lower court (Record on Appeal, pp. 74-75), as confirmed by
THE PATENT LAW, REPUBLIC ACT 165.
it (the Court of Appeals), but with the modification that the amount of P50,000.00 moral
damages was reduced to P3,000." 8
"IV
The facts, as found by the Court of Appeals, are:jgc:chanrobles.com.ph

"THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT DOMICIANO A. AGUAS IS GUILTY OF
INFRINGEMENT DESPITE THE FACT THAT PLAINTIFFS PATENT IS NOT A VALID ONE.
"V
"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 plaintiffs patented improvement for the manufacture of
pre-cast tiles, plaintiff furnishing said defendant the actual model of the said 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 latters very own, which
possessed the new features and characteristics covered by plaintiffs patent; that defendant
Aguas personally, as a building contractor, purchased from plaintiff, tiles shaped out of these
moulds at the back of which was imprinted plaintiffs 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 plaintiffs 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 plaintiffs; 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 plaintiffs 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 Exh "A" to "E"); that both plaintiffs and defendant Aguas tiles
are sculptured pre-cast wall tiles intended as a new feature of construction and wall
ornamentation substantially identical to each other in size, easement, lip width and critica
depth of the deepest depression; and that the only significant difference between plaintiffs
mould and that engraved by Aquino for Aguas is that, whereas plaintiffs mould turns out tiles
4 x 4 inches in size, defendant Aguas mould is made to 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
discussed only to determine the right of said private respondent to
damages.chanrobles.com.ph : virtual law library
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."cralaw virtua1aw library
The Court of Appeals found that the private respondent has introduced an improvement in
the process of tile-making because:jgc:chanrobles.com.ph
". . . 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 appellees 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, appellees 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 enough, notwithstanding the deep engravings, to be utilized for
walling purposes. The optimum thickness of appellees 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 validity 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 respondents 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:jgc:chanrobles.com.ph
"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 appellees 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 appellees 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 and/or improvement being patentable.chanrobles virtual lawlibrary
process. Some of the novel features of the private respondents improvements are the
following: critical depth, with corresponding easement and lip width to such degree as leaves Both the trial court and the Court of Appeals found as a fact that the petitioner Domiciano A.
the tile as thin as 1/8 of an inch at its thinnest portion, ideal composition of cement and fine Aguas did infringe de Leons patent. There is no showing that this case falls under one of the
river sand, among other ingredients that makes possible the production of tough and durable exceptions when this Court may overrule the findings of fact of the Court of Appeals. The only
wall tiles, though thin and light; the engraving of deep designs in such a way as to make the issue then to be resolved is the amount of damages that should be paid by Aguas.
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 stockpiled, handled and In its decision the Court of Appeals affirmed the amount of damages awarded by the lower
packed without any intolerable incidence of breakages. 14 court with the modification that the respondent is only entitled to P3,000.00 moral damages:
21
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 lower court awarded the following damages: 22

The records disclose that de Leons process is an improvement of the old process of tile- a) P10,020.99 by way of actual damages;
making. The tiles produced from de Leons process are suitable for construction and
ornamentation, which previously had not been achieved by tiles made out of the old process b) P50,000.00 by way of moral damages;
of tile-making. De Leons 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 c) P5,000.00 by way of exemplary damages;
from using them for walling purposes. These tiles are neither artistic nor ornamental. They are
heavy and massive. d) P5,000.00 by way of attorneys fees and

The respondents 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 precast 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 Leons tiles. The Pomona tiles are
made of ceramics. 20 The 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
e) Costs of suit
because:jgc:chanrobles.com.ph
"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 plaintiffs, he made
a gross income of P3,340.33, which can safely be considered the amount by which he
enriched himself when he infringed plaintiffs 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 plaintiffs 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:jgc:chanrobles.com.ph
"As regards the question of moral damages it has been shown that as a result of the unlawful
acts of infringement committed by defendants, plaintiff was understandably 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, plaintiffs character and reputation
have been unnecessarily put in question because defendants, by their acts of infringement Petitioner is doing business under the firm name and style of "SWAN MANUFACTURING"
have created a doubt or suspicion in the public mind concerning the truth and honesty of while private respondent is likewise doing business under the firm name and style of "SUSANA
plaintiffs advertisements and public announcements of his valid patent. Necessarily, said acts LUCHAN POWDER PUFF MANUFACTURING."cralaw virtua1aw library
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 It is undisputed that petitioner is a patent holder of powder puff namely:chanrob1es virtual
and evident bad faith characterizing defendants prejudicial acts against plaintiff justify the 1aw library
assessment of moral damages in plaintiffs 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 1. UM 423 (extended and/or renewed under Extension No. UM-109 for a period of 5 years
amount should be reduced to P3,000.00 by way of compensating appellee for his moral from October 6, 1971)
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 2. UM 450 (extended and/or renewed under Extension No. UM-110 for a period of 5 years
NCC)."cralaw virtua1aw library from January 26, 1972)

There is no reason to reduce the amount of damages and attorneys fees awarded by the trial 3. UM - 1184, for a period of 5 years from April 5, 1974. (Petition, Rollo, pp. 6-7).
court as modified by the Court of Appeals.
In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86), petitioner informed private
WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed from is respondent that the powder puffs the latter is manufacturing and selling to various
hereby affirmed, without pronouncement as to costs. 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
SO ORDERED. 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.
SECOND DIVISION 7-8).

[G.R. No. L-45101. November 28, 1986.] Private respondent replied stating that her products are different and countered that
petitioners patents are void because the utility models applied for were not new and
ROSARIO C. MAGUAN (formerly ROSARIO C. TAN), Petitioner, v. THE HONORABLE COURT OF patentable and the person to whom the patents were issued was not the true and actual
APPEALS and SUSANA LUCHAN, Respondents. 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
Ambrosio Padilla Law Offices for petitioner. 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,
DECISION 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).

PARAS, J.:
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.
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
petitioners patents and, by way of affirmative defenses, further alleged that petitioners
patents in question are void on the following grounds:chanrob1es virtual 1aw library

(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 (3) Order dated September 11, 1974 denying petitioners motion for reconsideration.

(2) the person to whom the patents were issued was not the true and actual author of the On October 15, 1975, the Writ of Preliminary Injunction was issued by the respondent Court
utility models applied for, and neither did she derive her rights from any true and actual of Appeals as follows:jgc:chanrobles.com.ph
author of these utility models.
"NOW, THEREFORE, you, Respondents, and/or any person/persons acting on your stead, are
for the following reasons:chanrob1es virtual 1aw library 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
(a) since years prior to the filing of applications for the patents involved, powder puffs of the preliminary injunction; 2) Writ of Preliminary Injunction dated September 18, 1974; and Order
kind applied for were then already existing and publicly being sold in the market; both in the dated September 11, 1976, denying petitioners motion for reconsideration, all issued in
Philippines and abroad; and connection with Civil Case No. 19908, UNTIL FURTHER ORDERS FROM THIS COURT." (Annex
"P", Rollo, p. 173)
(b) applicants 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 On February 16, 1976, respondent court promulgated a decision the dispositive portion of
impractical version of an old, simple one which has been well known to the cosmetics industry which reads:jgc:chanrobles.com.ph
since years previous to her filing of applications, and which belonged to no one except to the
general public: and with respect to UM-1184; her claim, in her application of a unitary powder "WHEREFORE, finding no merit in the herein petition, the same is hereby dismissed and the
puff, was but an imitation of a product well known to the cosmetics industry since years preliminary injunction previously issued by this Court is hereby set aside, with costs.
previous to her filing of application, and which belonged to no one except to the general
public; (Answer, Rollo, pp. 93-94). "SO ORDERED." (CA Decision, Rollo, p. 189).

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 courts issuance of the Writ of
Preliminary Injunction arguing that since there is still a pending cancellation proceedings
before the Philippine Patent Office concerning petitioners patents, such cannot be the basis
for preliminary injunction (Motion for Reconsideration, Rollo, p. 132).
In 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:chanrob1es virtual 1aw library
I
THAT THIS HONORABLE COURT ERRED IN NOT APPRECIATING THE EXISTENCE OF A FAIR
QUESTION OF INVALIDITY OF PRIVATE RESPONDENTS PATENTS.

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

In challenging these Orders private respondent filed a petition for certiorari with the
THAT THIS HONORABLE COURT ERRED IN NOT REJECTING THE THEORY OF RESPONDENT
respondent court on September 29, 1975 (Annex "D", Rollo, pp. 148-171) reiterating among
JUDGE THAT HE HAS NO JURISDICTION TO INVALIDATE THE PATENTS UPON GROUND OF LACK
other things the invalidity of petitioners patents and prayed that the trial court be restrained
OF NOVELTY OF THE PRODUCTS PATENTED. (Motion for Reconsideration, Rollo, p. 190).
from enforcing or continuing to enforce the following:chanrob1es virtual 1aw library
Reviewing on reconsideration, respondent court gave weight to private respondents
(1) Order dated September 18, 1974, granting the preliminary injunction;
allegation that the latters products are not identical or even only substantially identical to the
products covered by petitioners patents. Said court noticed that contrary to the lower courts
(2) Writ of preliminary injunction dated September 18, 1974; and
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 patent is sought to be enforced, the questions of invention, novelty or prior use, and each of
or invalidity of patents and in the event there exists a fair question of its invalidity, the them, are open to judicial examination." (Vargas v. F.M. Yaptico & Co. 40 Phil. 199 [1919];
situation calls for a denial of the writ of preliminary injunction pending the evaluation of the Vargas v. Chua, 57 Phil. 790-791 [1933]; Frank and Gohn v. Kosuyana, 59 Phil. 207 [1933].
evidence presented (Rollo, pp. 218-226). Thus, finding the lower courts position to have been
opposed to Patent Law, respondent court considered it a grave abuse of discretion when the Under the present Patent Law, there is even less reason to doubt that the trial court has
court a quo issued the writ being questioned without looking into the defenses alleged by jurisdiction to declare the patents in question invalid. A patentee shall have the exclusive right
herein private Respondent. Further, it considered the remedy of appeal, under the to make, use and sell the patented article or product and the making, using, or selling by any
circumstances, to be inadequate. 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
Thus, on July 6, 1976, respondent court made a complete turnabout from its original decision the proper CFI now (RTC) and to secure an injunction for the protection of his rights (Sec. 42,
and promulgated a Resolution, the dispositive portion of which reads:jgc:chanrobles.com.ph 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
"WHEREFORE, our decision is hereby set aside. The writ of certiorari is ordered issued. by respondent Court of Appeals, this conclusion is reinforced by Sec. 46 of the same law which
Accordingly, the challenged orders, Exhibit H and H-1 and the order denying the motion for provides that if the Court "shall find the patent or any claim thereof invalid, the Director shall
reconsideration (Annex "K", Petition), are hereby set aside. The writ of preliminary injunction on certification of the final judgment . . . issue an order cancelling the patent or the claims
previously ordered by this Court and ordered lifted by the Decision now being set aside is found invalid and shall publish a notice thereof in the Official Gazette." Upon such
hereby reinstated and made permanent. Without pronouncement as to costs. certification, it is ministerial on the part of the patent office to execute the judgment. (Rollo,
pp. 221-222).
"SO ORDERED." (CA Resolution, Rollo, p. 226).
II.
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 The burden of proof to substantiate a charge of infringement is with the plaintiff. But where
6, 1976 Resolution (Rollo, p. 281). 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
Hence, this petition. (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
On December 3, 1976, without giving due course to the petition, this Court required competent evidence this legal presumption.
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 The question then in the instant case is whether or not the evidence introduced by private
petition was given due course (Rollo, p. 345). Petitioner filed her brief on July 14, 1977 (Rollo, respondent herein is sufficient to overcome said presumption.chanrobles law library : red
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 After a careful review of the evidence consisting of 64 exhibits and oral testimonies of five
decision on December 9, 1977 (Rollo, p. 359). witnesses presented by private respondents before the Court of First Instance before the
Order of preliminary injunction was issued as well as those prosecuted by the petitioner,
The assignment of errors raised by the petitioner in this case (Rollo, pp. 15-16) may be respondent Court of Appeals was satisfied that there is a prima facie showing of a fair
reduced to three main issues:chanrob1es virtual 1aw library question of invalidity of petitioners 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
(1) Whether or not in an action for infringement the Court a quo had jurisdiction to determine a quo for alleged lack of jurisdiction, on the mistaken notion that such question in within the
the invalidity of the patents at issue which invalidity was still pending consideration in the exclusive jurisdiction of the patent office.
patent office.
It has been repeatedly held that an invention must possess the essential elements of novelty,
(2) Whether or not the Court a quo committed grave abuse of discretion in the issuance of a originality and precedence and for the patentee to be entitled to protection, the invention
writ of preliminary injunction. 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
(3) Whether or not certiorari is the proper remedy. 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.
The first issue has been laid to rest in a number of cases where the Court ruled that "When a
Chua, Et Al., supra). Inc. v. Quintillan, 128 SCRA 276).

The law provides:jgc:chanrobles.com.ph
"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."cralaw
virtua1aw library
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 Dellers Walker on Patents p. 406). In cases of infringement of patent no 291-292).
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)
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."cralaw virtua1aw library
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.
Such contention is untenable.

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 petitioners patents is in question for want of novelty.
Private respondent contends that powder puffs identical in appearance with that covered by
petitioners 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.
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."cralaw virtua1aw
library
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 petitioners claim of prescription, private respondents 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.chanroblesvirtualawlibrary
PREMISES CONSIDERED, the assailed resolutions of the Court of Appeals are hereby
AFFIRMED.
SO ORDERED.

For failure to determine first the validity of the patents before aforesaid issuance of the writ, THIRD DIVISION
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., [G.R. No. 126627. August 14, 2003.]
SMITH KLINE BECKMAN CORPORATION, Petitioner, v. 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.chanrob1es virtua1 1aw 1ibrary
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 Impregon
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.chanrob1es virtua1 1aw 1ibrary
Finding for private respondent, the trial court rendered a Decision dated July 23, 1991, 9 the
dispositive portion of which reads:chanrob1es virtual 1aw library
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. (Emphasis 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
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:chanrob1es virtual 1aw library
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.chanrob1es virtua1 1aw 1ibrary
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:chanrob1es virtual 1aw library
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.chanrob1es virtua1 1aw 1ibrary
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
oncertiorari 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.chanrobles virtual law library
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.
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.chanrob1es virtua1 1aw 1ibrary
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.

As for the concept of divisional applications proffered by petitioner, it comes into play when EN BANC
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, [G.R. No. L-4234. May 21, 1952.]
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." ABBOT LABORATORIES, Petitioner, v. HON. CELEDONIO AGRAVA, Director of
24 What this only means is that petitioners methyl 5 propylthio-2-benzimidazole carbamate is Patents,Respondent.
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- Gilberto Neri for Petitioner.
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. First Assistant Solicitor General Ruperto Kapunan Jr., and Solicitor Pacifico P. de Castro
for Respondent.
SYLLABUS
1. PATENTS; APPLICATION FOR PATENT BASED ON RECIPROCITY GOOD UP TO FEBRUARY 28,
1948. Since section 76 of Republic Act 165 known as the Philippine Patent Law, is a
reciprocity measure, it is logical that if priority rights are not accorded to Filipinos in the
United States after February 29, 1948, an American who makes application here in June 1948
can not assert nor claim that at that time reciprocal privileges were extended to Filipinos in his
country. The law clearly speaks of reciprocal privileges, and when Filipinos receive no
preferences in the U.S. or any other foreign country, there is no reciprocal privileges to
consider. Reciprocity is never a one-sided affair.
not expired on the eight day of December, nineteen hundred and forty-one, are extended
until the first day of July, nineteen hundred and forty-eight, in favor of the citizens or subjects
of countries which have extended, or which now extend, or which within said period ending
the first day of July, nineteen hundred and forty-eight, shall extend substantially reciprocal
privileges to citizens of the Philippines."cralaw virtua1aw library
The Patent Office, argues the petitioner, has changed the above date, July 1, 1948 to February
29, 1948, even though it has no power to "alter and much less shorten the period expressly
set by our Legislature as found in section 76."cralaw virtua1aw library
The Director of Patents reasons out that inasmuch as Filipinos may enjoy in the United States
priority rights similar to those granted by section 76, only up to February 29, 1948, therefore
American citizens may invoke in the Philippines priority rights only up to February 29, 1948.

Explaining his position said officer quotes a note of the U. S. Secretary of State dated February
DECISION 12, 1948 to the Philippine Ambassador, and the latters reply thereto dated August 23, 1948.
Both notes declare that, in the matter of priority patent rights, the deadline for Filipinos in the
U. S. and for Americans in the Philippines is February 29, 1948.
BENGZON, J.:
This exchange of correspondence called "executive agreement" gave ground to petitioners
main proposition in this instance that the Executive Branch of our government has absolutely
Abbot Laboratories, a Philippine corporation, has appealed from the decision of the Director no power to abridge or curtail the period expressly fixed in section 76, that such executive
of Patents disallowing Patent Application Serial No. 77 on an invention relating to a medical agreement is illegal and that consequently, in applying it respondent committed reversible
preparation better known as "Tridione." The review is expressly authorized by Chapter XIII of error.
Rep. Act No. 165 known as the Philippine Patent Law.
The notes exchanged between the diplomatic representatives of the two nations are as
The application for patent was submitted in June 1948 by Abbot Laboratories of Illinois, U. S. follows:jgc:chanrobles.com.ph
A. and it represented that the invention was the same as that involved in three applications
filed in the United States Patent Office by the inventor Marvin A. Spielman, (assignor of "NOTE OF THE UNITED STATES SECRETARY OF STATE, DATED FEBRUARY 12, 1948, TO THE
applicant) to wit: Application Serial No. 403,073 filed July 18, 1941; Application Serial No. AMBASSADOR OF THE PHILIPPINES.
630,994 filed November 26, 1945; and Application Serial No. 779,424 filed October 11, 1947,
the last two applications merely modifying the preceding one. And it made the specific ". . . the question of the war-caused delay in the use of the right of priority arises. Section 76
request that pursuant to the provisions of Section 76 of the local Patent Law, priority rights be of the Philippine Patent Law extends the right of priority for the filing of patents which
granted by virtue of the above United States Patent applications. accrued during the war period on a reciprocal basis with countries according substantially the
same privileges to citizens of the Philippines. The Boykin Act (United States Public Law 690,
The appellee Director of Patents denied the request for priority on the ground that it had 79th Congress) contains substantially the same provisions and, upon a statement by the
been filed out of time, i.e., after February 28, 1948. appropriate Philippine officials indicating that Section 76 of the Philippine Patent Law is
applicable to citizens of the United States, the United States Patent Office could apply Section
Contending that the deadline was July 1, 1948 - and not February 28, 1948 the Abbot 1 of the Boykin Act to citizens of the Philippines. It should be noted, however, that the present
Laboratories, a subsidiary of the applicant, interposed this appeal. expiration date of the extension of the right of priority under the Boykin Act is February 29,
1948. Unless a further extension of time is provided for by Congressional action, benefits of
Root-cause of the controversy is section 76, fully quoted below for the Act will apply only to cases filed before February 29, 1948."cralaw virtua1aw library
convenience:jgc:chanrobles.com.ph
"NOTE OF THE AMBASSADOR OF THE PHILIPPINES, DATED AUGUST 23, 1948, TO THE UNITED
"SEC. 76. Certain priority rights for filing application extended. The rights of priority STATES SECRETARY OF STATE
provided by section nine, Chapter II; section fifteen, Chapter III; and section fifty-six, Chapter
XII hereof for the filing of applications for patent for inventions and designs, which rights had "I am pleased to inform Your Excellency that my Government has instructed me to convey to
your Government that the following text of the 3rd indorsement of the Director of the
Philippines Patent Office, dated May 26, 1948 and concurred in by the Department of
Commerce and Industry of my Government, represents the official position of the Philippine
Government on the matter:chanrob1es virtual 1aw library
x x x may invoke priority rights on or before July 1, 1948 provided that Filipinos in their countries
"In view of the statement of the Honorable, the Secretary of State of the United States that
the United States Patent Office could consider the United States Boykin Act (which grants to
foreigners substantially the same patent prior rights as those which Section 76 of the
Philippine Patent Law accords to foreigners) applicable to citizens of the Philippines up to
February 29, 1948, the Philippines Patent Office will likewise regard Section 76 of the
Philippine Patent Law (Republic Act No. 165) applicable to citizens of the United States whose
patent applications were received at the Philippine Patent Office between June 20, 1947 and
February 29, 1948, both dates inclusive."cralaw virtua1aw library
"It is the understanding of my Government that the aforesaid note of February 12, 1948 of the
Department of States, as reiterated by its note of August 4, 1948, and this note signifying my
Governments assent thereto shall constitute an agreement between the Republic of the
Philippines and the United States on patent."cralaw virtua1aw library
We find it unnecessary to delve into the question whether an official agreement between the
diplomatic representative of this country and the corresponding official of another may have
the effect of amending our statutes enacted prior to such agreement, because it is our opinion
that the above notes do not change any part of section 76, nor abridge the period therein
established. They merely constitute an interpretation or application of said provision in so far
as Americans and Filipinos are concerned interpretation which appears to be in accordance
with law.
The first letter, in effect, declares that, under the laws of the United States, Filipinos could be
granted priority rights similar to those mentioned in section 76, provided their applications
are filed on or before February 29, 1948. The second letter, answers that pursuant to such
statement, the Philippine Government will grant Americans priority rights if applied for not
later than February 29, 1948.
We must assume that the United States Secretary of State correctly stated the American law.
Was the Philippine law properly read in the reply communication? We believe it was, because
section 76 being essentially a reciprocity measure, it is no more than logical to conclude that if
priority rights are not accorded Filipinos in the United States after February 29, 1948, an
American who makes application here in June 1948 can not assert nor claim that at that time
reciprocal privileges are extended to Filipinos in his country. There is no reason to suppose
that the Legislature intended to give foreigners here preferential privileges in 1948 provided
that their respective countries have given to Filipinos priority rights at any time, at some
period in the past, e.g. in 1940-1941. The law clearly speaks of reciprocal privileges, and when
Filipinos receive no preferences in the United States or any other foreign country, there is no
reciprocal privilege to consider. Reciprocity is never a one- sided affair.
It is true that the sections says "subjects of countries which have extended or which now
extend or which within said period ending July 1, 1948 shall extend." It is also true that the
United States "has extended" in its literal sense. Yet it is believed that the employment of the
three tenses of the verb "extend" merely conveyed the legislative idea that foreigners here
enjoy similar rights, no matter when the law granting such right in their country was approved
whether before Republic Act 165, or at the same time, or afterwards.
In other words July 1, 1948 is the expiry date fixed by the Legislature beyond which the
Director of Patents may not award priority rights to foreigners. The law does not imply that
before that day he necessarily has to grant priority rights to any foreigners who can establish
that sometime in the past this government had granted similar concessions to Philippine
citizens, irrespective of whether at the time of such foreigners application, Filipinos are
actually afforded reciprocal privileges of priority in his own country.
Contrary to appellants contention, in this case there was no alteration of the statutory limit.
The Director of Patents merely declared that Abbott Laboratories of Illinois could not invoke
section 76 in June 1948, because at that time Filipinos in the United States could not acquire
patent priority rights therein.
A subordinate issue discussed by the appellant relates to respondents holding that under
section 9 of Act 165 the invention is unpatentable by reason of its having been previously
published in the August 1944 number of the journal of the American Chemical Society.
Because the appellants argument under this heading is premised on the alleged right to
priority-which, as we find, does not exist - the point requires no further elucidation.
Having found for respondent on the main controversy, we deem it unnecessary to resolve the
procedural question raised by the Solicitor-General regarding petitioners personality to
prosecute this appeal.
Wherefore, the decision of the Director of Patents denying the request for priority is affirmed.
Costs against petitioner.
G.R. L-24919 January 28, 1980
JAMES HOWARD BOOTHE and JOHN MORTON, II, petitioners,
vs.
THE DIRECTOR OF PATENTS, respondent.
Picazo & Agcaoili for petition.
Office of the Solicitor General for respondent.
MELENCIO-HERRERA, J.:
Sought to be reviewed herein is the Decision of the Director of Patents, dated December 9,
1964, denying priority rights under section 15 of our Patent Law (Republic Act No. 165) to
petitioners, as foreign applicants for Letters Patent, for their invention of "Chemotherapeutic
Materials and Methods of Preparing the same.
Petitioners James Howard Boothe and John Morton II, chemists, citizens and residents of the
United States, claim to be the inventors of a new antibiotic designated as "tetracycline", a new
derivative of chlortetracycline (popularly known as "aureomycin")
On February 19, 1954, petitioners applied for Letters Patent covering said invention to
respondent Director of Patents claiming the right of priority granted to foreign applicants
under section 15 of the Patent Law (RA 165). Receipt of petitioners' application was
acknowledged by respondent Director on March 6, 1954.
On April 14, 1954, petitioners filed with respondent Director a legalized copy of their
Application for Letters Patent in the United States for the same invention (U.S. Serial No.
342556). Said legalized copy indicated that the application in the United States was filed on
March 16, 1963. 1 This latter date is of crucial importance to petitioners' cause under section
15 of the Patent Law, which provides that:
Section 15. Application previously filed abroad. An application for
patent for an invention filed in this country by any person who has
previously regularly filed an application for a patent for the same
invention in a foreign country, which by treaty, convention or law
affords similar privileges to citizens of the Philippines, shall have the
same force and effect as the same application would have if filed in this
country on the date on which the application for patent for the same
invention was first filed in such foreign country: Provided, That the
application in this country is filed within twelve months from the
earliest date on which such foreign application was filed and a certified
copy of the foreign application together with a translation thereof into
English, if not in the English language, is filed within six months from
the date of filing in the Philippines, unless the Director for good cause
shown shall extend the time for filing such certified copy: And provided,
further, that no patent shall be granted on an application for patent for
an invention which had been patented or described in a printed
publication in this or any foreign country more than one year before the
date of the actual filing of the application in this country, or which had
been in public use or sale in this country for more than one year prior to
such filing.
Under the foregoing provision, petitioners would be entitled to the priority date of March 16,
1953 if their application is considered filed in the Philippines as of March 5, 1954, since the
latter date would fall within the one-year period prior to March 5, 1954.
On February 7, 1958, petitioners informed respondent Director that in interference
proceedings in the United States, Letters Patent for a similar invention as theirs was awarded
to Pfizer and Co., which had filed its application ahead and that they failed to obtain any U.S.
patent for their own invention. Petitioners, however, observed and requested:
In the Philippines, however, the situation is at least the reverse. Pfizer
and Co. did not file or else filed an application after the above
application has already been filed. The said above application therefore
is good and valid.
We request, therefore, that the present application be granted on the
basis of the claims originally filed. 2
On August 5, 1959, in Paper No. 6, 3 Patent Examiner, Lydia Nueva Espaa, rejected all of
petitioners' claims in view of "Philippine Patent No. 254 November 29, 1956", apparently
referring to a local Patent obtained by Pfizer and Co., presumably covering the same
invention. Additionally, petitioners were advised that the "Specification" they had submitted
was "incomplete" and that responsive action should be filed them four months from date of
mailing, which was also August 5, 1959. Paper No. 6 precipitated a series of communications
between the aforementioned Patent Examiner and petitioners, who apparently failed to meet
the deadline of four months for filing their responsive action.
On October 9, 1961, petitioners requested for clarification of Paper No. 6, particularly as to
why their Specification was considered incomplete.
In response, Supervising Patent Examiner Nelia de Castro informed petitioners as follows:
With respect to applicant's request for clarification as to the meaning of
the second to the last sentence contained in Paper 6, attention is called
to the fact that the specification which was originally filed is incomplete
and not in accordance with Rule 62 of the Revised Rules. Said
specification ends on Page 9 with the incomplete sentence "The
refractive indices of this crystalline phase were found
 It appears from further from a comparison between the submitted 9 which can be freely amended or rectified at a later date. If this can be
pages of the specification and 2 pages of the claims on one hand and done legally, the restrictive provisions of section 15 will be nullified. 7
the corresponding pages of the legalized copy of the U.S. application on
the other that the present application does not correspond with the
Adversely affected, petitioners appealed to dent Director of Patents.
said certified copy of the U.S. Application. The present application
cannot therefore be granted priority date under section 15 are
requested by applicant. 4 In their Brief filed with respondent Directors petitioners prayed for 1) revocation of the of the
Chief Patent Examiner, 8 2) admission of their Specification submitted on July 3, 1962; and 3)
allowance of their application on the merits.
On July 3, 1962, petitioners submitted two complete copies of the Specification, which
included nine additional pages, and reiterated their request for priority right in the
Philippines. 5 On December 9, 1964, respondent Director rendered the questioned Decision, the dispositive
portion of which reads:
On October 2, 1962, Chief Patent Examiner Nicanor Mapili issued Paper No. 20 rejecting the
additional nine pages of Specification submitted by petitioners, and ruling: WHEREFORE, the appeal is hereby sustained. The additional pages to
the specification are hereby admitted, but the application shall not be
extended priority rights under section 15 of the Patent Law. Let the
xxx xxx xxx
filing date of this application be changed from March 5, 1954 to April
14, 1954. The application is hereby remanded to the Chief Patent
The filing of the alleged complete copy Of the specification is an Examiner for proper action and for further examination on the merits. 9
attempt to effect a remedy to the previous finding of incompleteness as
stated in the 2nd to the last paragraph of Office Action mailed Aug. 5,
In reaching the foregoing conclusion, respondent Director opined that the portions
1959, marked Paper 6. This cannot be allowed inasmuch as 9 pages of
subsequently supplied in the local application are not new matter a comparison between the
new matter are actually proposed to be added to the specification.
foreign and local applications showed that the foreign application included the missing
portions of the local one. However, respondent Direct qualified that petitioners' application
This action is made final for purpose of appeal 6 may be considered complete only on April 14, 1954 when the certified copy of the foreign
application was submitted. Consequently, the instant application is to be considered an
ordinary application, not entitled to the right of priority granted by section 15 of the Patent
Petitioners moved for reconsideration on the ground that their application falls under the
Law, inasmuch as said application was not complete within the meaning of Rules 47 and 48 of
exception provided for in Rule 47 of the Revised Rules of Practice in Patent Cases in that the
the Revised Rules of Practice in Patent Case when first filed on March 5, 1954.
missing nine pages submitted by them are not really new matter but a mere "minor
informality."
Petitioners filed a Motion for Partial Reconsideration of the above-mentioned Decision
questioning that portion of respondent Director's ruling barring them from entitlement to the
On February 5, 1963, Chief Patent Examiner Mapili issued Paper No. 22 denying petitioners'
right of priority under section 15 of the Patent Law contending that their appeal centered
Motion for Reconsideration and the findings of Examiner de Castro as follows:
merely on the issue of whether or not the additional nine pages of Specification they had
submitted should be treated as new matter.
The basis of the examiner's finding is applicant's verification on file,
exclusive of what is in an alleged corresponding application in the US as
On June 10, 1965, respondent Director denied reconsideration for lack of merit, and
evidenced by a certified copy of record. The only use of such certified a
explained:
copy is to give proof to an earlier filing date as provided for such section
15 of the Patent Law and to use the inventors' oath therein to complete
the form requirements relative to his application in a dance with the ... It should be emphasized that under Rule 262 (b) of the Revised Rules
provisions of section 13(3) of the same law. of Practice in Patent Cases, it is stated that should the Director have any
knowledge of any ground not involved in the appeal for rejecting any
claim, he may include in his decision a statement to that effect with his
The provisions of section 15 of the Patent Law, under which the present
reasons for so holding, which statement shall constitute a rejection of
application was filed, provides for a for filing. This deadline cannot be
the claim. Priority claims are covered by the rule: 10
extended directly or indirectly by the filing of an imperfect application
On June 11, 1965, petitioners filed a Second Motion for reconsideration on the ground that
priority rights are governed by convention and treaty, while invention claims are governed
exclusively by the Statute and Rules of Practice. Respondent Director denied that Motion for
lack of merit on August 24, 1965.
Hence, this recourse.
On January 9, 1967, we deemed the case submitted for decision, after petitioners had filed
their Brief on February 12, 1966, and respondent Director, through the Solicitor General, his
Brief on June 9, 1966.
On June 9, 1968, Republic Act No. 5434 was enacted providing that final Orders and Decisions
of the Director of Patents in ex parte and inter partes proceedings are appealable to the Court
of Appeals. Since no provision for retroactivity exists in said Act this Tribunal has resolved to
retain jurisdiction over this case.
Petitioners maintain before this Court that:
RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT
PETITIONERS' APPLICATION, SERIAL NO. 952, MAY NOT BE TREATED AS
FILED UNDER SECTION 15 AS AMENDED, OF REPUBLIC ACT NO. 165
KNOWN AS THE PATENT LAW.
and in support thereof stress that:
1) The Director had no jurisdiction to decide the question of whether or
not the Philippine Application should be treated as filed under Section
15 of the Act;
2) The Director had no jurisdiction to decide the question of whether or
not the Philippine Application was incomplete under Rules 47 and 48 of
the Revised Rules of Practice in Patent Cases;
3) The Director misconstrued and misapplied Rules 47 and 48 of the
Rules;
4) The Director misconstrued and misapplied Rule 262 (b) of the Rules.
For resolution, therefore, are the following issues: the scope of the powers of the Director of
Patents in cases appealed to him and the correctness of his application of Rules 47, 48 and
262(b) of the Revised Rules of Practice in Patent Cases.
The facts unfolded call for an affirmance of respondent Director's rulings.
Explicit in Rule 262 of the Revised Rules of Practice in Patent Cases is the power and authority
of respondent Director to decide petitioners' appeal in the manner that he did, and we quote:
262. Decision by the Director. (a) The Director, in his decision, may
affirm or reverse the decision of the Principal Examiner in whole or in
part on the ground and on the claims specified by the Examiner. The
affirmance of the rejection of a claim on any of the grounds specified
constitutes a general affirmance of the decision of the Principal
Examiner on that claim, except as to any ground specifically reversed.
(b) Should the Director have knowledge of any grounds not involved in
the appeal for rejecting any claim he may include in his decision a
statement to that effect with his reasons for so holding which statement
shall constitute a rejection of the claims. ...
In other words, respondent Director is empowered to consider grounds which may have come
to his knowledge other than those specifically raised in an appeal He need not confine himself
only to issues invoked. Besides, the question of new matter is inextricably linked with the right
of priority on which petitioners have anchored their application. As early as Paper No.
18, supra, the Supervising Patent Examiner had concluded that inasmuch as the submitted
pages did not correspond with the certified copy of the U.S. application, "the present
application cannot therefore be granted priority date under section 16 as requested by
applicant." Again, in Paper No. 22,supra, the Chief Patent Examiner made mention of
petitioner' imperfect application and the fact that the deadline for filinf required by section 15
of the Patent Law cannot be extended directly or indirectly otherwise "the restrictive
provisions of section 15 will be nullified."
It is also far-fetched for petitioners to claim that in ruling on petitioners' right of priority,
respondent Director had contravened Rule 254 of the Revised Rules of Practice in Patent
cases, which provides that the Director of Patents exercises no direct control, direction and
supervision over the Principal Examiner and the Executive Examiner. What respondent
Director exercised was his authority to review the decisions of Patent Examiners, as explicitly
provided for in the last paragraph of the same Rules 254, as follows:
xxx xxx xxx
The only supervision which the Director of Patent may lawfully exercise
over the Principal Examiners and the Executive Examiner is a general
supervision, exercised through a review of the recommendations they
may make for the grant of a patent, and through a review of their
decision by petition and appeal.
Similarly untenable is petitioners' contention that respondent Director had misconstrued and application, an invention disclosed in a previously filed application must be described within
misapplied Rules 47 and 48 of the Revised Rules of Practice in Patent Cases. The said Rules the instant application in such a manner as to enable one skilled in the art to use the same for
provide: a legally adequate utility. 13

47. Application accepted and filed for examination only w hen All told, we sustain respondent Director's findings in the absence of error or abuse of power
complete An application for an invention patent will not be accepted or lack of jurisdiction or grave abuse of discretion. 14 We have held that in the absence of
and placed upon the files for examination until all its required parts, arbitrariness, and provided they are supported by substantial evidence, as in this case, the
complying with the rules relating thereto are received except that conclusions reached by the Director of Patents are to be accorded respect and must be
'certain minor informalities may be waived subject to subsequent upheld. 15
correction, whenever required.
WHEREFORE, we hereby affirm the Decision of respondent Director of Patents dated
If the papers and parts are incomplete, or so defective that they cannot December 9, 1964.
be accepted as a complete application for examination, the applicant
will be notified; the papers will be held four months for completion and
SO ORDERED.
if not by then completed, will be stored as an abandoned incomplete
application and eventually destroyed or otherwise disposed of.
LOTHAR SCHUARTZ, FRIEDEL VERDERBERG, UDOLF KUEHNE, DIETER FISCHER, JOHN
BERNARD WATKINS, HARRY GREAVES, CHEN WOO CHIN, YOSHIMI IWASAKI, FABIO CARLI,
48. Serial number and filing date of application Complete
MORTIMER THOMPSON, MALCOLM JOHN LAW, MICHIBAZU OCHI, KENJI SHIGEMATSU, ENI
applications are numbered in regular order, and the applicant win be
SHINOZAKI, ROBERT CABI-AKMAN, ARTHUR SPRENGER, REMY SIMOND and HEINRICH
informed of the serial number and filing date of the application by a
EVBERGGER, Petitioners, v. THE HONORABLE COURT OF APPEALS (SPECIAL FIFTH DIVISION)
filing receipt. The filing date of the applicant is the, date on which the
and THE BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER,Respondents.
complete application, acceptable for placing on the files for
examination, is received in the Patent Office; or the date on which the
RESOLUTION
last part completing such application is received, in the case of an
incomplete or defective application completed within four months. The
Executive Examiner shall be in charge of fixing the filing date and serial
number of an application. PARDO, J.:

Under the aforecited provisions, it is imperative that the application be complete in order that
it may be accepted. It is essential to the validity of Letters Patent that the specifications be Petitioners appeal via certiorari from the decision 1 of the Court of Appeals dismissing their
full, definite, and specific. 11 The purpose of requiring a definite and accurate description of appeal from the resolution of the Director of Patents that denied with finality their petition for
the process is to apprise the public of what the patentee claims as his invention, to inform the revival of patent applications.chanrobles.com : chanrobles.com.ph
Courts as to what they are called upon to construe, and to convey to competing
manufacturers and dealers information of exactly what they are bound to avoid. 12 On different dates, petitioners applied to the Bureau of Patents, Trademarks and Technology
Transfer for registration of patents. They hired the law firm Siguion Reyna, Montecillo and
Ongsiako to process their patent applications in the Philippines, respectively identified as
The specification which petitioners submitted on March 5, 1954 was far from complete. That follows:chanrob1es virtual 1aw library
defect was one of substance and not merely one of form. What petitioners claimed as their
invention was not completely determinable therefrom. Petitioners' application could be Applicant Serial No.
deemed as complete only on July 2, 1963 when they submitted the additional pages on the
Specifications and Claims. Respondent Director, therefore, did not err in converting
petitioners' application into an ordinary application filed on April 14, 1954, not only for their (1) Michibazu Ochi, Kenji Shigematsu and 23354 2
having failed to complete their application within the four-month period provided for by Rules
47 and 48, Revised Rules of Practice in Patent Cases, and as required of them by Paper No. 6, Eni Shinozaki- Issuance of letters patent
but also for their having failed to file a complete application within twelve months from March
16, 1953, the date of the foreign application For, to be entitled to the filing date of the patent for "Hackling Drum Room or Chamber
at the Self-Feeding Equipment for Copper-Laminated Base Material for Printed

Threshing of Upper Hackling System" Circuit Boards"

(2) Robert Cabi-Akman, Arthur Sprenger 29630 3 (9) Malcolm John Law- Issuance of letters 32050 10

and Remy Simond-Issuance of letters patent for "Electrodeposition of Chromium and

patent for "Colour Value Measurement" Chromium Bearing Alloys." 11

Petitioners patent applications lacked certain requirements and the Bureau informed the law
(3) Heinrich Evbergger- Issuance of letters 29898 4
firm about it, through correspondences called Office Actions. As petitioners law firm did not
respond to these office actions within the prescribed time, notices of abandonment were sent
patent for "Tool for Moulding the Top Past
on the following dates:chanrob1es virtual 1aw library
of a Plastic Container"
Serial Nos. Date of Office Action Date of Abandonment

(4) Mortimer Thompson- Issuance of 30112 5

letters patent for "Tamper Evident Closures

and Packages"

(5) Yoshimi Iwasaki- Issuance of letters 30548 6

patent for "Method Generation for Hot Gas

by Incinerators"

(6) John Bernard Watkins, Harry Greaves 30819 7

and Chen Woo Chin- Issuance of letters

patent for "Preservation Composition"

(7) Fabio Carli- Issuance of letters patent 31968 8

for "Pharmaceutical Compositions"

(8) Lothar Schuartz, Friedel Verderberg, 31974 9

Rudolf Kuehne, and Dieter Fischer- Issuance

of letters patent for "Process for Producing

(1) 23354 March 20, 1987 July 21, 1987
For Serial No. 29898, the applicant abandoned his application, for which reason no petition for
(2) 29630 June 18, 1986 October 21, 1986 revival was filed. 13

(3) 29898 June 11, 1987 June 22, 1987 On January 31, 1991, Director Luis M. Duka, Jr. of the Bureau of Patents denied all the
petitions for revival because they were filed out of time. The dispositive portion specifically
(4) 30112 June 3, 1987 August 6, 1987 provides:jgc:chanrobles.com.ph

(5) 30548 June 10, 1987 August 18, 1987 "WHEREFORE, in consideration of the foregoing premises, all the petitions for revival of the
above-captioned abandoned applications bearing Serial Nos. 23354, 29630, 29898, 30112,
(6) 30819 January 28, 1987 July 28, 1987 30548, 30819, 31968, 31974, and 32050, are hereby denied and no further petitions nor
requests for reconsideration hereof shall be entertained hereafter.
(7) 31968 January 14, 1987 July 15, 1987
"SO ORDERED.chanroblesvirtuallawlibrary
(8) 31974 July 23, 1987 September 24, 1987
"Makati, Metro Manila, Philippines, this 31st day of January 1991.
(9) 32050 March 31, 1987 June 1, 1987 12
LUIS M. DUKA, JR.
On December 7, 1987, two employees of the law firm, George Bangkas and Rafael Rosas were
dismissed from employment. Prior to the dismissal, these employees worked with the patent Director III" 14
group of the law firm and had the duty, among others, of getting the firms letters and
correspondence from the Bureau of Patents. On February 14, 1991, petitioners appealed the above resolution of the Bureau of Patents to
the Court of Appeals. 15
Immediately after their dismissal, the law firm conducted an inventory of all the documents
entrusted to them. It was then that the firm learned about the notices of abandonment. On August 13, 1992, the Court of Appeals dismissed the consolidated appeal for being filed
beyond the 15-day reglementary period to appeal. There was an unreasonable delay before
Thereafter, Petitioners, through the law firm, filed with the Bureau of Patents separate the petitions to revive applications were filed. Moreover, petitioners patent applications
petitions for revival of the patent applications on the following dates:chanrob1es virtual 1aw could not be a proper subject of a consolidated appeal because they covered separate and
library distinct subjects and had been treated by the Bureau of Patents as separate and individual
applications. Specifically the decision provides:jgc:chanrobles.com.ph
Serial Nos. Date Petition Filed
"WHEREFORE, for reasons above stated and in the light of the applicable law on the matter,
this petition for review on appeal from the order/decision of the Director of Bureau of Patents
(1) 23354 March 3, 1988
is hereby DISMISSED with costs against the appellants.
(2) 29630 March 3, 1988
SO ORDERED." 16
(3) 30122 January 15, 1988/February 29, 1988
On September 14, 1992, petitioners moved for reconsideration of the Court of Appeals
decision, which the court denied on January 7, 1994. The appellate court found no cogent
(4) 30548 January 25, 1988/March 1, 1988
reason to justify the reversal or modification of its decision. 17
(5) 30819 May 27, 1988/July 15, 1988
Aggrieved, petitioners filed the instant petition for review on certiorari. 18
(6) 31968 January 21, 1988/March 1, 1988
At issue is the validity of the Court of Appeals dismissal of the consolidated appeal of
petitioners from the Director of Patents denial of the revival of their patent applications.
(7) 31974 March 14, 1988
Petitioners contend that the Court of Appeals committed grave abuse of discretion when it
(8) 32050 March 17, 1988
held that the consolidated appeal was filed out of time. They were appealing from the
resolution of the Director of Patents dated January 31, 1991, which denied the petition for
revival of the patent applications. They received a copy of the resolution, through their patent
attorneys, on February 7, 1991, and filed the consolidated appeal seven (7) days after, or on
February 14, 1991. According to petitioners, these dates clearly established that their appeal
was seasonably filed.
The contention is not meritorious. If the facts above-mentioned were the sole basis of
determining whether the appeal was filed on time, petitioners argument would be correct.
However, petitioners lost sight of the fact that the petition could not be granted because of
laches. Prior to the filing of the petition for revival of the patent application with the Bureau of
Patents, an unreasonable period of time had lapsed due to the negligence of petitioners
counsel. By such inaction, petitioners were deemed to have forfeited their right to revive their
applications for patent.
This petition for review on certiorari assails the decision[1]. The decision of the Court of
Appeals was penned by Justice Gloria C. Paras and concurred in by Justice Salome A. Montoya
and Justice Hector L. Hofilea.
1 of the Court of Appeals dated November 9, 1994 in C.A.-G.R. SP. No. 34425 entitled
Floro International Corp. vs. Hon. Tirso D.C Cruz and Creser Precision System, Inc., the
dispositive portion of which reads:
WHEREFORE, THE PETITION IS HEREBY GRANTED. THE COMPLAINT FOR INJUNCTION AND
DAMAGES, CIVIL CASE NO. 93-1856 BEFORE THE RESPONDENT JUDGE IS HEREBY ORDERED
DISMISSED AND HIS ORDERS THEREIN OF DECEMBER 29, 1993 AND MAY 11, 1994 ARE
ORDERED SET ASIDE.

Facts show that the patent attorneys appointed to follow up the applications for patent Private respondent is a domestic corporation engaged in the manufacture, production,
registration had been negligent in complying with the rules of practice prescribed by the distribution and sale of military armaments, munitions, airmunitions and other similar
Bureau of Patents. The firm had been notified about the abandonment as early as June 1987, materials.[2]
but it was only after December 7, 1987, when their employees Bangkas and Rosas had been On January 23, 1990, private respondent was granted by the Bureau of Patents,
dismissed, that they came to know about it. This clearly showed that petitioners counsel had Trademarks and Technology Transfer (BPTTT), a Letters Patent No. UM-6938 [3] covering an
been remiss in the handling of their clients applications. 19 aerial fuze which was published in the September-October 1990, Vol. III, No. 5 issue of the
Bureau of Patents Official Gazette.[4]
"A lawyers fidelity to the cause of his client requires him to be ever mindful of the
responsibilities that should be expected of him. A lawyer shall not neglect a legal matter Sometime in November 1993, private respondent, through its president, Mr. Gregory
entrusted to him." 20 In the instant case, petitioners patent attorneys not only failed to take Floro, Jr., discovered that petitioner submitted samples of its patented aerial fuze to the
notice of the notices of abandonment, but they failed to revive the application within the Armed Forces of the Philippines (AFP) for testing. He learned that petitioner was claiming the
four-month period, as provided in the rules of practice in patent cases. These applications are aforesaid aerial fuze as its own and planning to bid and manufacture the same commercially
deemed forfeited upon the lapse of such period. 21 without license or authority from private respondent. To protect its right, private respondent
on December 3, 1993, sent a letter [5] to petitioner advising it fro its existing patent and its
Hence, we can not grant the present petition. 22 The Court of Appeals did not err or gravely rights thereunder, warning petitioner of a possible court action and/or application for
abuse its discretion in dismissing the petition for review. injunction, should it proceed with the scheduled testing by the military on December 7, 1993.

WHEREFORE, the Court DENIES the petition for lack of merit. The Court AFFIRMS the decision In response to private respondents demand, petitioner filed on December 8, 1993 a
of the Court of Appeals in CA-G.R. SP No. 24175. complaint[6] for injunction and damages arising from the alleged infringement before the
Regional Trial Court of Quezon City, Branch 88. The complaint alleged, among others: that
No costs. petitioner is the first, true and actual inventor of an aerial fuze denominated as Fuze, PDR 77
CB4 which is developed as early as December 1981 under the Self-Reliance Defense Posture
SO ORDERED.chanrobles.com : chanrobles.com.ph Program (SRDP) of the AFP; that sometime in 1986, petitioner began supplying the AFP with
the said aerial fuze; that private respondents aerial fuze is identical in every respect to the
petitioners fuze; and that the only difference between the two fuzes are miniscule and merely
CRESER PRECISION SYSTEMS, INC., petitioner, vs. COURT OF APPEALS AND FLORO cosmetic in nature. Petitioner prayed that a temporary restraining order and/or writ of
INTERNATIONAL CORP., respondents. preliminary injunction be issued enjoining private respondent including any and all persons
acting on its behalf from manufacturing, marketing and/or profiting therefrom, and/or from
DECISION performing any other act in connection therewith or tending to prejudice and deprive it of any
rights, privileges and benefits to which it is duly entitled as the first, true and actual inventor
MARTINEZ, J.: of the aerial fuze.

On December 10, 1993, the trial court issued a temporary restraining order. Thereafter,
hearings were held on the application of petitioner for the issuance of a writ of preliminary
injunction, with both parties presenting their evidence. After the hearings, the trial court
directed the parties to submit their respective memoranda in support of their positions.
On December 27, 1993, private respondent submitted its memorandum [7] alleging that
petitioner has no cause of action to file a complaint of infringement against it since it has no
patent for the aerial fuze which it claims to have invented; that petitioners available remedy is
to file a petition for cancellation of patent before the Bureau of Patents; that private
respondent as the patent holder cannot be stripped of its property right over the
patented aerial fuze consisting of the exclusive right to manufacture, use and sell the same
and that it stands to suffer irreparable damage and injury if it is enjoined from the exercise of
its property right over its patent.
On December 29, 1993, the trial court issued an Order [8] granting the issuance of a writ
of preliminary injunction against private respondent the dispositive portion of which reads:
WHEREFORE, plaintiffs application for the issuance of a writ of preliminary injunction is
granted and, upon posting of the corresponding bond by plaintiff in the amount of PHP
200,000.00, let the writ of preliminary injunction be issued by the branch Clerk of this Court
enjoining the defendant and any and all persons acting on its behalf or by and under its
authority, from manufacturing, marketing and/or selling aerial fuzes identical, to those of
plaintiff, and from profiting therefrom, and/or from performing any other act in connection
therewith until further orders from this Court.
Private respondent moved for reconsideration but this was denied by the trial courts in
its Order[9] of May 11, 1994, pertinent portions of which read:
For resolution before this Court is the Motion for Reconsideration filed by the defendant and
the plaintiffs Opposition thereto. The Court finds no sufficient cause to reconsider its order
dated December 29, 1993. During the hearing for the issuance of the preliminary injunction,
the plaintiff has amply proven its entitlement to the relief prayed for. It is undisputed that the
plaintiff has developed its aerial fuze way back in 1981 while the defendant began
manufacturing the same only in 1987. Thus, it is only logical to conclude that it was the
plaintiffs aerial fuze that was copied or imitated which gives the plaintiff the right to have the
defendant enjoined from manufacturing, marketing and/or selling aerial fuzes identical to
those of the plaintiff, and from profiting therefrom and/or performing any other act in
connection therewith until further orders from this Court. With regards to the defendants
assertion that an action for infringement may only be brought by anyone possessing right, title
or interest to the patented invention, (Section 42, RA 165) qualified by Section 10, RA 165 to
include only the first true and actual inventor, his heirs, legal representatives to assignees, this
court finds the foregoing to be untenable. Sec. 10 merely enumerates the persons who may
have an invention patented which does not necessarily limit to these persons the right to
institute an action for infringement. Defendant further contends that the order in issue is
disruptive of the status quo. On the contrary, the order issued by the Court in effect
maintained the status quo. The last actual , peaceable uncontested status existing prior to this
controversy was the plaintiff manufacturing and selling its own aerial fuzes PDR 77 CB4 which
was ordered stopped through the defendants letter. With issuance of the order, the
operations of the plaintiff continue. Lastly, this court believes that the defendant will not
suffer irreparable injury by virtue of said order. The defendants claim is primarily hinged on its
patent (Letters Patent No. UM-6983) the validity of which is being questioned in this case.
WHEREFORE, premises considered, the Motion for Reconsideration is hereby denied for lack
of merit.
SO ORDERED.
Aggrieved, private respondent on June 27, 1994, filed a petition for certiorari,
mandamus and prohibition[10]before respondent Court of Appeals raising as grounds the
following:
a. Petitioner has no cause of action for infringement against private respondent,
the latter not having any patent for the aerial fuze which it claims to
have invented and developed and allegedly infringed by private
respondent;
b. The case being an action for cancellation or invalidation of private
respondents Letters Patent over its own aerial fuze, the proper venue is
the Office of the Director of Patents;
c. The trial court acted in grave abuse of discretion and or in excess of
jurisdiction in finding that petitioner has fully established its clear title
or right to preliminary injunction;
d. The trial court acted in grave abuse of discretion and/or in excess of
jurisdiction in granting the preliminary injunction, it being disruptive of
the status quo; and
e. The trial court acted in grave abuse of discretion and/or in excess of
jurisdiction in granting the preliminary injunction thereby depriving
private respondent of its property rights over the patented aerial fuze
and cause it irreparable damages.
On November 9, 1994, the respondent court rendered the now assailed decision
reversing the trial courts Order of December 29, 1993 and dismissing the complaint filed by
petitioner.
The motion for reconsideration was also denied on January 17, 1995.[11] Hence, this
present petition.
It is petitioners contention that it can file, under Section 42 of the Patent Law (R.A.
165), an action for infringement not as a patentee but as an entity in possession of a right,
title or interest in and to the patented invention. It advances the theory that while the
absence of a patent may prevent one from lawfully suing another for infringement of said
patent, such absence does not bar the first true and actual inventor of the patented invention
from suing another who was granted a patent in a suit for declaratory or injunctive relief
recognized under American patent laws. This remedy, petitioner points out, may be likened to
a civil action for infringement under Section 42 of the Philippine Patent Law.
We find the above arguments untenable.
Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:
SECTION. 42. Civil action for infringement. Any patentee, or anyone possessing any right, title
or interest in and to the patented invention, whose rights have been infringed, may bring a
civil action before the proper Court of First Instance (now Regional Trial court), to recover
from the infringer damages sustained by reason of the infringement and to secure an
injunction for the protection of his right. x x x
Under the aforequoted law, only the patentee or his successors-in-interest may file an
action for infringement. The phrase anyone possessing any right, title or interest in and to the
patented invention upon which petitioner maintains its present suit, refers only to the
patentees successors-in-interest, assignees or grantees since actions for infringement of
patent may be brought in the name of the person or persons interested, whether as patentee,
assignees or grantees, of the exclusive right. [12] Moreover, 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. [13] In short, a person or entity who has not
been granted letters patent over an invention and has not acquired any right or title thereto
either as assignee or as licensee, has no cause of action for infringement because the right to
maintain an infringement suit depends on the existence of the patent.[14]
Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis or
cause of action to institute the petition for injunction and damages arising from the alleged
infringement by private respondent. While petitioner claims to be the first inventor of
the aerial fuze, still it has no right of property over the same upon which it can maintain a suit
unless it obtains a patent therefor. Under American jurisprudence, and inventor has no
common-law right to a monopoly of his invention. He has the right to make, use and vend his
own 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, using or selling the invention. [15]
Further, the remedy of declaratory judgment or injunctive suit on patent invalidity
relied upon by petitioner cannot be likened to the civil action for infringement under Section
42 of the Patent Law. The reason for this is that the said remedy is available only to the patent
holder or his successors-in-interest. Thus, anyone who has no patent over an invention but
claims to have a right or interest thereto can not file an action for declaratory judgment or
injunctive suit which is not recognized in this jurisdiction. Said person, however, is not left
without any remedy. He can, under Section 28 of the aforementioned law, file a petition for
cancellation of the patent within three (3) years from the publication of said patent with the
Director of Patents and raise as ground therefor that the person to whom the patent was
issued is not the true and actual inventor. Hence, petitioners remedy is not to file an action for
injunction or infringement but to file a petition for cancellation of private respondent patent.
Petitioner however failed to do so. As such, it can not now assail or impugn the validity of the
private respondents letters patent by claiming that it is the true and actual inventor of
the aerial fuze.
Thus, as correctly ruled by the respondent Court of Appeals in its assailed
decision: since the petitioner (private respondent herein) is the patentee of the disputed
invention embraced by letters of patent UM No. 6938 issued to it on January 23, 1990 by the
Bureau of Patents, it has in its favor not only the presumption of validity of its patent, but that
of a legal and factual first and true inventor of the invention.
In the case of Aguas vs. De Leon,[16] we stated that:
The validity of the patent issued by the Philippine Patent Office in favor of the private
respondent and the question over the investments, novelty and usefulness of the improved
process therein specified and described are matters which are better determined by 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 respondents new tiles as a discovery.
There is a presumption that the Philippine Patent Office has correctly determined the
patentability of the improvement by the private respondent of the process in question.
In fine, in the absence of error or abuse of power or lack or jurisdiction or grave abuse
of discretion, we sustain the assailed decision of the respondent Court of Appeal.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
SECOND DIVISION
[G.R. NO. 149907 : April 16, 2009]
ROMA DRUG and ROMEO RODRIGUEZ, as Proprietor of ROMA DRUG, Petitioners, v. THE
REGIONAL TRIAL COURT OF GUAGUA, PAMPANGA, THE PROVINCIAL PROSECUTOR OF
PAMPANGA, BUREAU OF FOOD & DRUGS (BFAD) and GLAXO SMITHKLINE, Respondents.
DECISION
TINGA, J.:
On 14 August 2000, a team composed of the National Bureau of Investigation (NBI) operatives
and inspectors of the Bureau of Food and Drugs (BFAD) conducted a raid on petitioner Roma
Drug, a duly registered sole proprietorship of petitioner Romeo Rodriguez (Rodriguez)
operating a drug store located at San Matias, Guagua, Pampanga. The raid was conducted
pursuant to a search warrant 1issued by the Regional Trial Court (RTC), Branch 57, Angeles City.
The raiding team seized several imported medicines, including Augmentin (375mg.) tablets,
Orbenin (500mg.) capsules, Amoxil (250mg.) capsules and Ampiclox (500mg.). 2 It appears that
Roma Drug is one of six drug stores which were raided on or around the same time upon the
request of SmithKline Beecham Research Limited (SmithKline), a duly registered corporation
which is the local distributor of pharmaceutical products manufactured by its parent London-
based corporation. The local SmithKline has since merged with Glaxo Wellcome Phil. Inc to
form Glaxo SmithKline, private respondent in this case. The seized medicines, which were
manufactured by SmithKline, were imported directly from abroad and not purchased through
the local SmithKline, the authorized Philippine distributor of these products.
The NBI subsequently filed a complaint against Rodriguez for violation of Section 4 (in relation
to Sections 3 and 5) of Republic Act No. 8203, also known as the Special Law on Counterfeit
Drugs (SLCD), with the Office of the Provincial Prosecutor in San Fernando, Pampanga. The
section prohibits the sale of counterfeit drugs, which under Section 3(b)(3), includes "an
unregistered imported drug product." The term "unregistered" signifies the lack of registration
with the Bureau of Patent, Trademark and Technology Transfer of a trademark, tradename or
other identification mark of a drug in the name of a natural or juridical person, the process of
which is governed under Part III of the Intellectual Property Code.
In this case, there is no doubt that the subject seized drugs are identical in content with their
Philippine-registered counterparts. There is no claim that they were adulterated in any way or
mislabeled at least. Their classification as "counterfeit" is based solely on the fact that they
were imported from abroad and not purchased from the Philippine-registered owner of the
patent or trademark of the drugs.
During preliminary investigation, Rodriguez challenged the constitutionality of the SLCD.
However, Assistant Provincial Prosecutor Celerina C. Pineda skirted the challenge and issued a
Resolution dated 17 August 2001 recommending that Rodriguez be charged with violation of
Section 4(a) of the SLCD. The recommendation was approved by Provincial Prosecutor Jesus Y.
Manarang approved the recommendation.3
Hence, the present Petition for Prohibition questing the RTC-Guagua Pampanga and the
Provincial Prosecutor to desist from further prosecuting Rodriguez, and that Sections 3(b)(3),
4 and 5 of the SLCD be declared unconstitutional. In gist, Rodriguez asserts that the
challenged provisions contravene three provisions of the Constitution. The first is the equal
protection clause of the Bill of Rights. The two other provisions are Section 11, Article XIII,
which mandates that the State make "essential goods, health and other social services
available to all the people at affordable cost;" and Section 15, Article II, which states that it is
the policy of the State "to protect and promote the right to health of the people and instill
health consciousness among them."
Through its Resolution dated 15 October 2001, the Court issued a temporary restraining order
enjoining the RTC from proceeding with the trial against Rodriguez, and the BFAD, the NBI and
Glaxo Smithkline from prosecuting the petitioners.4
Glaxo Smithkline and the Office of the Solicitor General (OSG) have opposed the petition, the
latter in behalf of public respondents RTC, Provincial Prosecutor and Bureau of Food and
Drugs (BFAD). On the constitutional issue, Glaxo Smithkline asserts the rule that the SLCD is
presumed constitutional, arguing that both Section 15, Article II and Section 11, Article XIII
"are not self-executing provisions, the disregard of which can give rise to a cause of action in
the courts." It adds that Section 11, Article XIII in particular cannot be work "to the oppression
and unlawful of the property rights of the legitimate manufacturers, importers or distributors,
who take pains in having imported drug products registered before the BFAD." Glaxo
Smithkline further claims that the SLCD does not in fact conflict with the aforementioned
constitutional provisions and in fact are in accord with constitutional precepts in favor of the
people's right to health.
The Office of the Solicitor General casts the question as one of policy wisdom of the law that
is, beyond the interference of the judiciary. 5 Again, the presumption of constitutionality of
statutes is invoked, and the assertion is made that there is no clear and unequivocal breach of
the Constitution presented by the SLCD.
II.
The constitutional aspect of this petition raises obviously interesting questions. However, such
questions have in fact been mooted with the passage in 2008 of Republic Act No. 9502, also
known as the "Universally Accessible Cheaper and Quality Medicines Act of 2008".6
Section 7 of Rep. Act No. 9502 amends Section 72 of the Intellectual Property Code in that the
later law unequivocally grants third persons the right to import drugs or medicines whose
patent were registered in the Philippines by the owner of the product:
Sec. 7. Section 72 of Republic Act No. 8293, otherwise known as the Intellectual Property
Code of the Philippines, is hereby amended to read as follows:
"Sec. 72. Limitations of Patent Rights. - The owner of a patent has no right to prevent third
parties from performing, without his authorization, the acts referred to in Section 71 hereof in
the following circumstances:
"72.1. Using a patented product which has been put on the market in the Philippines by the
owner of the product, or with his express consent, insofar as such use is performed after that
product has been so put on the said market: Provided, That, with regard to drugs and
medicines, the limitation on patent rights shall apply after a drug or medicine has been
introduced in the Philippines or anywhere else in the world by the patent owner, or by any
party authorized to use the invention: Provided, further, That the right to import the drugs
and medicines contemplated in this section shall be available to any government agency or
any private third party;
"72.2. Where the act is done privately and on a non-commercial scale or for a non-commercial
purpose: Provided, That it does not significantly prejudice the economic interests of the
owner of the patent;
"72.3. Where the act consists of making or using exclusively for experimental use of the
invention for scientific purposes or educational purposes and such other activities directly
related to such scientific or educational experimental use;
"72.4. In the case of drugs and medicines, where the act includes testing, using, making or
selling the invention including any data related thereto, solely for purposes reasonably related
to the development and submission of information and issuance of approvals by government
regulatory agencies required under any law of the Philippines or of another country that
regulates the manufacture, construction, use or sale of any product: Provided, That, in order
to protect the data submitted by the original patent holder from unfair commercial use
provided in Article 39.3 of the Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS Agreement), the Intellectual Property Office, in consultation with the
appropriate government agencies, shall issue the appropriate rules and regulations necessary
therein not later than one hundred twenty (120) days after the enactment of this law;
"72.5. Where the act consists of the preparation for individual cases, in a pharmacy or by a
medical professional, of a medicine in accordance with a medical shall apply after a drug or
medicine has been introduced in the Philippines or anywhere else in the world by the patent
owner, or by any party authorized to use the invention: Provided, further, That the right to
import the drugs and medicines contemplated in this section shall be available to any
government agency or any private third party; xxx7
The unqualified right of private third parties such as petitioner to import or possess
"unregistered imported drugs" in the Philippines is further confirmed by the "Implementing
Rules to Republic Act No. 9502" promulgated on 4 November 2008. 8 The relevant provisions
thereof read:
Rule 9. Limitations on Patent Rights. The owner of a patent has no right to prevent third
parties from performing, without his authorization, the acts referred to in Section 71 of the IP
Code as enumerated hereunder:
(i) Introduction in the Philippines or Anywhere Else in the World.
Using a patented product which has been put on the market in the Philippines by the owner
of the product, or with his express consent, insofar as such use is performed after that
product has been so put on the said market: Provided, That, with regard to drugs and
medicines, the limitation on patent rights shall apply after a drug or medicine has been
introduced in the Philippines or anywhere else in the world by the patent owner, or by any
party authorized to use the invention: Provided, further, That the right to import the drugs
and medicines contemplated in this section shall be available to any government agency or
any private third party. (72.1)chanrobles virtual law library
The drugs and medicines are deemed introduced when they have been sold or offered for sale
anywhere else in the world. (n)
It may be that Rep. Act No. 9502 did not expressly repeal any provision of the SLCD. However,
it is clear that the SLCO's classification of "unregistered imported drugs" as "counterfeit
drugs," and of corresponding criminal penalties therefore are irreconcilably in the imposition
conflict with Rep. Act No. 9502 since the latter indubitably grants private third persons the
unqualified right to import or otherwise use such drugs. Where a statute of later date, such as
Rep. Act No. 9502, clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject that intention must be given effect. 9 When a subsequent enactment
covering a field of operation coterminus with a prior statute cannot by any reasonable
construction be given effect while the prior law remains in operative existence because of
irreconcilable conflict between the two acts, the latest legislative expression prevails and the
prior law yields to the extent of the conflict. 10 Irreconcilable inconsistency between two laws
embracing the same subject may exist when the later law nullifies the reason or purpose of
the earlier act, so that the latter loses all meaning and function. 11 Legis posteriors priores
contrarias abrogant.
For the reasons above-stated, the prosecution of petitioner is no longer warranted and the
quested writ of prohibition should accordingly be issued.
III.
Had the Court proceeded to directly confront the constitutionality of the assailed provisions of
the SLCD, it is apparent that it would have at least placed in doubt the validity of the
provisions. As written, the law makes a criminal of any person who imports an unregistered
drug regardless of the purpose, even if the medicine can spell life or death for someone in the
Philippines. It does not accommodate the situation where the drug is out of stock in the
Philippines, beyond the reach of a patient who urgently depends on it. It does not allow
husbands, wives, children, siblings, parents to import the drug in behalf of their loved ones
too physically ill to travel and avail of the meager personal use exemption allotted by the law.
It discriminates, at the expense of health, against poor Filipinos without means to travel
abroad to purchase less expensive medicines in favor of their wealthier brethren able to do
so. Less urgently perhaps, but still within the range of constitutionally protected behavior, it
deprives Filipinos to choose a less expensive regime for their health care by denying them a
plausible and safe means of purchasing medicines at a cheaper cost.
The absurd results from this far-reaching ban extends to implications that deny the basic
decencies of humanity. The law would make criminals of doctors from abroad on medical
missions of such humanitarian organizations such as the International Red Cross, the
International Red Crescent, Medicin Sans Frontieres, and other
like-minded groups who necessarily bring their own pharmaceutical drugs when they embark PHIL PHARMAWEALTH, INC., G.R. No. 167715
on their missions of mercy. After all, they are disabled from invoking the bare "personal use" Petitioner,
exemption afforded by the SLCD. Present:

CARPIO, J., Chairperson,

Even worse is the fact that the law is not content with simply banning, at civil costs, the
- versus - NACHURA,
importation of unregistered drugs. It equates the importers of such drugs, many of whom
PERALTA,
motivated to do so out of altruism or basic human love, with the malevolents who would alter
ABAD, and
or counterfeit pharmaceutical drugs for reasons of profit at the expense of public safety. Note
MENDOZA, JJ.
that the SLCD is a special law, and the traditional treatment of penal provisions of special laws
is that of malum prohibitum or punishable regardless of motive or criminal intent. For a law
Promulgated:
that is intended to help save lives, the SLCD has revealed itself as a heartless, soulless
PFIZER, INC. and PFIZER (PHIL.) INC.,
legislative piece.
Respondents. November 17, 2010

The challenged provisions of the SLCD apparently proscribe a range of constitutionally

permissible behavior. It is laudable that with the passage of Rep. Act No. 9502, the State has
reversed course and allowed for a sensible and compassionate approach with respect to the
importation of pharmaceutical drugs urgently necessary for the people's constitutionally-
recognized right to health.

WHEREFORE, the petition is GRANTED in part. A writ of prohibition is hereby ISSUED

commanding respondents from prosecuting petitioner Romeo Rodriguez for violation of
x--------------------------------------------------x
Section 4 or Rep. Act No. 8203. The Temporary Restraining Order dated 15 October 2001 is
hereby made PERMANENT. No pronouncements as to costs.
DECISION
SO ORDERED.

Republic of the Philippines PERALTA, J.:

Supreme Court
Manila
Before the Court is a petition for review on certiorari seeking to annul and set aside the
SECOND DIVISION
Resolutions dated January 18, 2005[1] and April 11, 2005[2] by the Court of Appeals (CA) in CA-

G.R. SP No. 82734.

The instant case arose from a Complaint [3] for patent infringement filed against petitioner Phil

Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with the

Bureau of Legal Affairs of the Intellectual Property Office (BLA-IPO). The Complaint alleged as

follows:
xxxx
6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 x x x x[4]
(the Patent) which was issued by this Honorable Office on July 16, 1987.
The patent is valid until July 16, 2004. The claims of this Patent are Respondents prayed for permanent injunction, damages and the forfeiture and impounding of
directed to a method of increasing the effectiveness of a beta-lactam
antibiotic in a mammalian subject, which comprises co-administering to the alleged infringing products. They also asked for the issuance of a temporary restraining
said subject a beta-lactam antibiotic effectiveness increasing amount of
order and a preliminary injunction that would prevent herein petitioner, its agents,
a compound of the formula IA. The scope of the claims of the Patent
extends to a combination of penicillin such as ampicillin sodium and representatives and assigns, from importing, distributing, selling or offering the subject
beta-lactam antibiotic like sulbactam sodium.
product for sale to any entity in the Philippines.
7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium
(hereafter Sulbactam Ampicillin). Ampicillin sodium is a specific example In an Order[5] dated July 15, 2003 the BLA-IPO issued a preliminary injunction which was
of the broad beta-lactam antibiotic disclosed and claimed in the Patent.
It is the compound which efficacy is being enhanced by co-administering effective for ninety days from petitioner's receipt of the said Order.
the same with sulbactam sodium. Sulbactam sodium, on the other
hand, is a specific compound of the formula IA disclosed and claimed in
the Patent.
Prior to the expiration of the ninety-day period, respondents filed a Motion for Extension of
8. Pfizer is marketing Sulbactam Ampicillin under the brand name
Writ of Preliminary Injunction[6] which, however, was denied by the BLA-IPO in an
Unasyn. Pfizer's Unasyn products, which come in oral and IV formulas,
are covered by Certificates of Product Registration (CPR) issued by the Order[7] dated October 15, 2003.
Bureau of Food and Drugs (BFAD) under the name of complainants. The
sole and exclusive distributor of Unasyn products in the Philippines is
Zuellig Pharma Corporation, pursuant to a Distribution Services
Agreement it executed with Pfizer Phils. on January 23, 2001. Respondents filed a Motion for Reconsideration but the same was also denied by the BLA-IPO

9. Sometime in January and February 2003, complainants came to know in a Resolution[8] dated January 23, 2004.
that respondent [herein petitioner] submitted bids for the supply of
Sulbactam Ampicillin to several hospitals without the consent of
complainants and in violation of the complainants' intellectual property
Respondents then filed a special civil action for certiorari with the CA assailing the October 15,
rights. x x x
xxxx 2003 and January 23, 2004 Resolutions of the BLA-IPO. Respondents also prayed for the

10. Complainants thus wrote the above hospitals and demanded that issuance of a preliminary mandatory injunction for the reinstatement and extension of the
the latter immediately cease and desist from accepting bids for the
supply [of] Sulbactam Ampicillin or awarding the same to entities other writ of preliminary injunction issued by the BLA-IPO.
than complainants. Complainants, in the same letters sent through
undersigned counsel, also demanded that respondent immediately
withdraw its bids to supply Sulbactam Ampicillin.
While the case was pending before the CA, respondents filed a Complaint [9] with the Regional
11. In gross and evident bad faith, respondent and the hospitals named Trial Court (RTC) of Makati City for infringement and unfair competition with damages against
in paragraph 9 hereof, willfully ignored complainants' just, plain and
valid demands, refused to comply therewith and continued to infringe herein petitioner. In said case, respondents prayed for the issuance of a temporary restraining
the Patent, all to the damage and prejudice of complainants. As
registered owner of the Patent, Pfizer is entitled to protection under order and preliminary injunction to prevent herein petitioner from importing, distributing,
Section 76 of the IP Code.
selling or offering for sale sulbactam ampicillin products to any entity in the
Philippines. Respondents asked the trial court that, after trial, judgment be rendered awarding
damages in their favor and making the injunction permanent.
On August 24, 2004, the RTC of Makati City issued an Order [10]
directing the issuance of a
temporary restraining order conditioned upon respondents' filing of a bond.
In a subsequent Order[11] dated April 6, 2005, the same RTC directed the issuance of a writ of
preliminary injunction prohibiting and restraining [petitioner], its agents, representatives and
assigns from importing, distributing or selling Sulbactam Ampicillin products to any entity in
the Philippines.
Meanwhile, on November 16, 2004, petitioner filed a Motion to Dismiss [12]
the petition filed
with the CA on the ground of forum shopping, contending that the case filed with the RTC has
the same objective as the petition filed with the CA, which is to obtain an injunction
prohibiting petitioner from importing, distributing and selling Sulbactam Ampicillin products.
On January 18, 2005, the CA issued its questioned Resolution[13] approving the bond posted by
respondents pursuant to the Resolution issued by the appellate court on March 23, 2004
which directed the issuance of a temporary restraining order conditioned upon the filing of a
bond. On even date, the CA issued a temporary restraining order [14] which prohibited
petitioner from importing, distributing, selling or offering for sale Sulbactam Ampicillin
products to any hospital or to any other entity in the Philippines, or from infringing Pfizer
Inc.'s Philippine Patent No. 21116 and impounding all the sales invoices and other documents
evidencing sales by [petitioner] of Sulbactam Ampicillin products.
On February 7, 2005, petitioner again filed a Motion to Dismiss [15] the case for being moot and
academic, contending that respondents' patent had already lapsed. In the same manner,
petitioner also moved for the reconsideration of the temporary restraining order issued by the
CA on the same basis that the patent right sought to be protected has been extinguished due
to the lapse of the patent license and on the ground that the CA has no jurisdiction to review
the order of the BLA-IPO as said jurisdiction is vested by law in the Office of the Director
General of the IPO.
On April 11, 2005, the CA rendered its presently assailed Resolution denying the Motion to
Dismiss, dated November 16, 2004, and the motion for reconsideration, as well as Motion to
Dismiss, both dated February 7, 2005.
Hence, the present petition raising the following issues:
a) Can an injunctive relief be issued based on an action of patent
infringement when the patent allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director
of Legal Affairs of the Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two
seemingly different causes of action and yet pray for the same relief?[16]
In the first issue raised, petitioner argues that respondents' exclusive right to monopolize the
subject matter of the patent exists only within the term of the patent. Petitioner claims that
since respondents' patent expired on July 16, 2004, the latter no longer possess any right of
monopoly and, as such, there is no more basis for the issuance of a restraining order or
injunction against petitioner insofar as the disputed patent is concerned.
The Court agrees.
Section 37 of Republic Act No. (RA) 165,[17] which was the governing law at the time of the
issuance of respondents' patent, provides:
Section 37. Rights of patentees. A patentee shall have the exclusive
right to make, use and sell the patented machine, article or product, and
to use the patented process 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 the
authorization of the patentee constitutes infringement of the patent. [18]
It is clear from the above-quoted provision of law that the exclusive right of a patentee to
make, use and sell a patented product, article or process exists only during the term of the
patent. In the instant case, Philippine Letters Patent No. 21116, which was the basis of
respondents in filing their complaint with the BLA-IPO, was issued on July 16, 1987. This fact
was admitted by respondents themselves in their complaint. They also admitted that the
validity of the said patent is until July 16, 2004, which is in conformity with Section 21 of RA
165, providing that the term of a patent shall be seventeen (17) years from the date of
issuance thereof. Section 4, Rule 129 of the Rules of Court provides that an admission, verbal
or written, made by a party in the course of the proceedings in the same case, does not
require proof and that the admission may be contradicted only by showing that it was made
through palpable mistake or that no such admission was made. In the present case, there is
no dispute as to respondents' admission that the term of their patent expired on July 16,
2004. Neither is there evidence to show that their admission was made through palpable
mistake. Hence, contrary to the pronouncement of the CA, there is no longer any need to
present evidence on the issue of expiration of respondents' patent.
On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004,
respondents no longer possess the exclusive right to make, use and sell the articles or
products covered by Philippine Letters Patent No. 21116.
Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of a writ
of preliminary injunction, viz:
(a) That the applicant is entitled to the relief demanded, and
the whole or part of such relief consists in restraining the commission or
continuance of the acts complained of, or in requiring the performance
of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of
the act or acts complained of during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, or agency or a person is doing,
threatening, or attempting to do, or is procuring or suffering to be done,
some act or acts probably in violation of the rights of the applicant
respecting the subject of the action or proceeding, and tending to
render the judgment ineffectual.
In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide that if
the matter is of extreme urgency and the applicant will suffer grave injustice and irreparable
injury, a temporary restraining order may be issued ex parte.
From the foregoing, it can be inferred that two requisites must exist to warrant the issuance of
an injunctive relief, namely: (1) the existence of a clear and unmistakable right that must be
protected; and (2) an urgent and paramount necessity for the writ to prevent serious damage.
[19]
In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution
approving the bond filed by respondents, the latter no longer had a right that must be
protected, considering that Philippine Letters Patent No. 21116 which was issued to them
already expired on July 16, 2004. Hence, the issuance by the CA of a temporary restraining
order in favor of the respondents is not proper.
In fact, the CA should have granted petitioner's motion to dismiss the petition
for certiorari filed before it as the only issue raised therein is the propriety of extending the
writ of preliminary injunction issued by the BLA-IPO. Since the patent which was the basis for
issuing the injunction, was no longer valid, any issue as to the propriety of extending the life of
the injunction was already rendered moot and academic.
As to the second issue raised, the Court, is not persuaded by petitioner's argument that,
pursuant to the doctrine of primary jurisdiction, the Director General of the IPO and not the
CA has jurisdiction to review the questioned Orders of the Director of the BLA-IPO.
It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual Property
Code of the Philippines, which is the presently prevailing law, the Director General of the IPO
exercises exclusive appellate jurisdiction over all decisions rendered by the Director of the
BLA-IPO. However, what is being questioned before the CA is not a decision, but an
interlocutory order of the BLA-IPO denying respondents' motion to extend the life of the
preliminary injunction issued in their favor.
RA 8293 is silent with respect to any remedy available to litigants who intend to question an
interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and
Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property
Rights simply provides that interlocutory orders shall not be appealable. The said Rules and
Regulations do not prescribe a procedure within the administrative machinery to be followed
in assailing orders issued by the BLA-IPO pending final resolution of a case filed with them.
Hence, in the absence of such a remedy, the provisions of the Rules of Court shall apply in a
suppletory manner, as provided under Section 3, Rule 1 of the same Rules and Regulations.
Hence, in the present case, respondents correctly resorted to the filing of a special civil action
for certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot
appeal therefrom and they have no other plain, speedy and adequate remedy in the ordinary
course of law. This is consistent with Sections 1[20] and 4,[21] Rule 65 of the Rules of Court, as
amended.
In the first place, respondents' act of filing their complaint originally with the BLA-IPO is
already in consonance with the doctrine of primary jurisdiction.
This Court has held that:
[i]n cases involving specialized disputes, the practice has been to refer
the same to an administrative agency of special competence in
observance of the doctrine of primary jurisdiction. The Court has
ratiocinated that it cannot or will not determine a controversy involving
a question which is within the jurisdiction of the administrative tribunal
prior to the resolution of that question by the administrative tribunal,
where the question demands the exercise of sound administrative
discretion requiring the special knowledge, experience and services of
the administrative tribunal to determine technical and intricate matters
of fact, and a uniformity of ruling is essential to comply with the
premises of the regulatory statute administered. The objective of the
doctrine of primary jurisdiction is to guide a court in determining
whether it should refrain from exercising its jurisdiction until after an
administrative agency has determined some question or some aspect of
some question arising in the proceeding before the court. It applies
where the claim is originally cognizable in the courts and comes into
play whenever enforcement of the claim requires the resolution of
issues which, under a regulatory scheme, has been placed within the
special competence of an administrative body; in such case, the judicial
process is suspended pending referral of such issues to the
administrative body for its view.[22]
 whether the BLA-IPO committed grave abuse of discretion in denying respondents' motion to

extend the effectivity of the writ of preliminary injunction which the said office earlier issued.
Based on the foregoing, the Court finds that respondents' initial filing of their complaint with
Lastly, petitioner avers that respondents are guilty of forum shopping for having filed separate
the BLA-IPO, instead of the regular courts, is in keeping with the doctrine of primary
actions before the IPO and the RTC praying for the same relief.
jurisdiction owing to the fact that the determination of the basic issue of whether petitioner

violated respondents' patent rights requires the exercise by the IPO of sound administrative
The Court agrees.
discretion which is based on the agency's special competence, knowledge and experience.

However, the propriety of extending the life of the writ of preliminary injunction issued by the
Forum shopping is defined as the act of a party against whom an adverse judgment has been
BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within the
rendered in one forum, of seeking another (and possibly favorable) opinion in another forum
jurisdiction of the said administrative agency, particularly that of its Director General. The
(other than by appeal or the special civil action of certiorari), or the institution of two (2) or
resolution of this issue which was raised before the CA does not demand the exercise by the
more actions or proceedings grounded on the same cause on the supposition that one or the
IPO of sound administrative discretion requiring special knowledge, experience and services in
other court would make a favorable disposition.[26]
determining technical and intricate matters of fact. It is settled that one of the exceptions to

the doctrine of primary jurisdiction is where the question involved is purely legal and will
The elements of forum shopping are: (a) identity of parties, or at least such parties that
ultimately have to be decided by the courts of justice. [23] This is the case with respect to the
represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed
issue raised in the petition filed with the CA.
for, the reliefs being founded on the same facts; (c) identity of the two preceding particulars,

such that any judgment rendered in the other action will, regardless of which party is
Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations do not
successful, amount to res judicata in the action under consideration.[27]
provide for a procedural remedy to question interlocutory orders issued by the BLA-IPO. In

this regard, it bears to reiterate that the judicial power of the courts, as provided for under the
There is no question as to the identity of parties in the complaints filed with the IPO and the
Constitution, includes the authority of the courts to determine in an appropriate action the
RTC.
validity of the acts of the political departments. [24] Judicial power also includes the duty of the

courts of justice to settle actual controversies involving rights which are legally demandable
Respondents argue that they cannot be held guilty of forum shopping because their
and enforceable, and to determine whether or not there has been a grave abuse of discretion
complaints are based on different causes of action as shown by the fact that the said
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
complaints are founded on violations of different patents.
Government.[25] Hence, the CA, and not the IPO Director General, has jurisdiction to determine
The Court is not persuaded.

Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or omission by
which a party violates a right of another. In the instant case, respondents' cause of action in
their complaint filed with the IPO is the alleged act of petitioner in importing, distributing,
selling or offering for sale Sulbactam Ampicillin products, acts that are supposedly violative of
respondents' right to the exclusive sale of the said products which are covered by the latter's
patent. However, a careful reading of the complaint filed with the RTC of Makati City would
show that respondents have the same cause of action as in their complaint filed with the IPO.
They claim that they have the exclusive right to make, use and sell Sulbactam Ampicillin
products and that petitioner violated this right. Thus, it does not matter that the patents upon
which the complaints were based are different. The fact remains that in both complaints the
rights violated and the acts violative of such rights are identical.
In fact, respondents seek substantially the same reliefs in their separate complaints with the
IPO and the RTC for the purpose of accomplishing the same objective.
In the instant case, the prayer of respondents in their complaint filed with the IPO is as
follows:
It is settled by this Court in several cases that the filing by a party of two apparently different
actions but with the same objective constitutes forum shopping. [28] The Court discussed this
species of forum shopping as follows:
Very simply stated, the original complaint in the court a
quo which gave rise to the instant petition was filed by the
buyer (herein private respondent and his predecessors-in-
interest) against the seller (herein petitioners) to enforce the
alleged perfected sale of real estate. On the other hand, the
complaint in the Second Case seeks to declare such purported
sale involving the same real property as unenforceable as
against the Bank, which is the petitioner herein. In other
words, in the Second Case, the majority stockholders, in
representation of the Bank, are seeking to accomplish what the
Bank itself failed to do in the original case in the trial court. In
brief, the objective or the relief being sought, though worded
differently, is the same, namely, to enable the petitioner Bank
to escape from the obligation to sell the property to
respondent.[29]
In Danville Maritime, Inc. v. Commission on Audit,[30] the Court ruled as follows:
In the attempt to make the two actions appear to be different,
petitioner impleaded different respondents therein PNOC in the case
before the lower court and the COA in the case before this Court and
sought what seems to be different reliefs. Petitioner asks this Court to
set aside the questioned letter-directive of the COA dated October 10,
1988 and to direct said body to approve the Memorandum of
Agreement entered into by and between the PNOC and petitioner, while
in the complaint before the lower court petitioner seeks to enjoin the
PNOC from conducting a rebidding and from selling to other parties the
vessel T/T Andres Bonifacio, and for an extension of time for it to comply
with the paragraph 1 of the memorandum of agreement and
damages. One can see that although the relief prayed for in the two (2)
actions are ostensibly different, the ultimate objective in both actions
is the same, that is, the approval of the sale of vessel in favor of
petitioner, and to overturn the letter directive of the COA of October
10, 1988 disapproving the sale.[31]
A. Immediately upon the filing of this action, issue an ex parte order (a)
temporarily restraining respondent, its agents, representatives and
assigns from importing, distributing, selling or offering for sale
Sulbactam Ampicillin products to the hospitals named in paragraph 9 of
this Complaint or to any other entity in the Philippines, or from
otherwise infringing Pfizer Inc.'s Philippine Patent No. 21116; and (b)
impounding all the sales invoices and other documents evidencing sales
by respondent of Sulbactam Ampicillin products.
B. After hearing, issue a writ of preliminary injunction enjoining
respondent, its agents, representatives and assigns from importing,
distributing, selling or offering for sale Sulbactam Ampicillin products to
the hospitals named in paragraph 9 of the Complaint or to any other
entity in the Philippines, or from otherwise infringing Pfizer Inc.'s
Philippine Patent No. 21116; and
 (3) disposing of the infringing goods
C. After trial, render judgment: outside the channels of
commerce.
(i) declaring that respondent has
infringed Pfizer Inc.'s Philippine (b) After hearing, issue a writ of preliminary injunction:
Patent No. 21116 and that
respondent has no right whatsoever (1) enjoining Pharmawealth, its
over complainant's patent; agents, representatives and
assigns from importing,
(ii) ordering respondent to pay complainants the following amounts: distributing, selling or
offering for sale infringing
(a) at least P1,000,000.00 as actual damages; sulbactam ampicillin
(b) P700,000.00 as attorney's fees and litigation expenses; products to various
(d) P1,000,000.00 as exemplary damages; and government hospitals or to
(d) costs of this suit. any other entity in the
(iii) ordering the condemnation, seizure or Philippines, or from
forfeiture of respondent's infringing goods or otherwise infringing Patent
products, wherever they may be found, including No. 26810;
the materials and implements used in the
commissionof infringement, to be disposed of in (2) impounding all the sales invoices
such manner as may be deemed appropriate by and other documents evidencing sales
this Honorable Office; and by Pharmawealth of sulbactam
ampicillin products; and
(iv) making the injunction permanent.[32]
(3) disposing of the infringing goods outside the channels
of commerce.
In an almost identical manner, respondents prayed for the following in their complaint filed
(c) After trial, render judgment:
with the RTC:
(a) Immediately upon the filing of this action, issue an ex (1) finding Pharmawealth to have
parte order: infringed Patent No. 26810 and
declaring Pharmawealth to have no
(1) temporarily restraining Pharmawealth, its agents, right whatsoever over plaintiff's
representatives and assigns from importing, distributing, patent;
selling or offering for sale infringing sulbactam
ampicillin products to various government and (2) ordering Pharmawealth to pay
private hospitals or to any other entity in the Philippines, plaintiffs the following amounts:
or from otherwise infringing Pfizer Inc.'s Philippine Patent (i) at least P3,000,000.00 as
No. 26810. actual damages;
(ii) P500,000.00 as attorney's fees and P1,000,000.00 as
(2) impounding all the sales invoices litigation expenses;
and other documents (iii) P3,000,000.00 as
evidencing sales by exemplary
pharmawealth of damages; and
sulbactam ampicillin (iv) costs of this suit.
products; and (3) ordering the condemnation,
seizure or forfeiture of
Pharmawealth's
 infringing goods or
products, wherever they case, the Court finds that respondents did not deliberately violate the rule on non-forum
may be found, including
the materials and shopping. Respondents may not be totally blamed for erroneously believing that they can file
implements used in the
separate actions simply on the basis of different patents. Moreover, in the suit filed with the
commission of
infringement, to be RTC of Makati City, respondents were candid enough to inform the trial court of the pendency
disposed of in such
manner as may be of the complaint filed with the BLA-IPO as well as the petition for certiorari filed with the CA.
deemed appropriate by
this Honorable Court; and On these bases, only Civil Case No. 04-754 should be dismissed on the ground of litis

(4) making the injunction permanent.[33] pendentia.

It is clear from the foregoing that the ultimate objective which respondents seek to achieve in WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions of the Court of

their separate complaints filed with the RTC and the IPO, is to ask for damages for the alleged Appeals, dated January 18, 2005 and April 11, 2005, in CA-G.R. No. 82734,

violation of their right to exclusively sell Sulbactam Ampicillin products and to permanently areREVERSED and SET ASIDE. The petition for certiorari filed with the Court of Appeals

prevent or prohibit petitioner from selling said products to any entity.Owing to the substantial is DISMISSED for being moot and academic.

identity of parties, reliefs and issues in the IPO and RTC cases, a decision in one case will
FIRST DIVISION
necessarily amount to res judicata in the other action.
[G.R. No. 38010. December 21, 1933.]

It bears to reiterate that what is truly important to consider in determining whether forum PATRICK HENRY FRANK and WILLIAM HENRY GOHN, Plaintiffs-Appellants, v. G.
KOSUYAMA,Defendant-Appellee.
shopping exists or not is the vexation caused the courts and parties-litigant by a party who
J. W. Ferrier for Appellants.
asks different courts and/or administrative agencies to rule on the same or related causes
Pablo Lorenzo for Appellee.
and/or to grant the same or substantially the same reliefs, in the process creating the

possibility of conflicting decisions being rendered by the different fora upon the same issue.[34] SYLLABUS

1. PATIENT; ESSENTIAL ELEMENTS. Strictly speaking, the hemp stripping machine of the
Thus, the Court agrees with petitioner that respondents are indeed guilty of forum shopping. plaintiffs does not constitute an invention on the ground that it lacks the element of novelty,
originality and precedence (48 C. J., sec. 101, p. 97, and sec. 102, p. 98).

Jurisprudence holds that if the forum shopping is not considered willful and deliberate, the
subsequent case shall be dismissed without prejudice, on the ground of either litis
pendentia or res judicata.[35] However, if the forum shopping is willful and deliberate, both (or
2. ID.; KNOWLEDGE AND USE BY THE PUBLIC. Before the plaintiffs herein obtained their
patent, they themselves had already publicly used the same kind of machine for many
months, at least, and, various other machines, having in general, the same characteristics and
important parts as that of the said plaintiffs, were known in the Province of Davao.

all, if there are more than two) actions shall be dismissed with prejudice. [36] In the present 3. ID.; ANNULMENT. Notwithstanding all the facts herein stated, the trial court did not
annul the plaintiffs patent and the defendant herein insists that the patent in question should
be declared null and void. In view of the nature of the action brought by the plaintiffs,
annulment does not lie in the absence of a cross-complaint to that effect.
4. ID.; INFRINGEMENT. The defendant cannot be made civilly liable for alleged infringement
of the patent on which the action is based on the ground that the machines manufactured
and sold by him did not have any essential part unknown to the public in the Province of
Davao at the time the plaintiffs applied for and obtained their patent for improved abaca
stripping machines.
5. APPLICABILITY OF THE DOCTRINE OF "STARE DECISIS." The doctrine laid down in the case
of Frank and Gohn v. Benito (51 Phil., 712), to the effect that the defendant therein had
actually infringed upon the patent of the therein plaintiffs cannot be invoked in this case. It is
true that the then plaintiffs in the former and those in the latter case are the same but the
defendant therein did not set up the special defenses as alleged by the herein defendant.
Furthermore, the plaintiffs therein had only confined themselves to presenting the patent, or
rather, a copy thereof, wherein mention of the "spindle" was made, and this court took for
granted their claim that it was one of the essential characteristics thereof which had been
imitated or copied by the therein defendant.
DECISION
IMPERIAL, J.:
Patent No. 1519579 (Exhibit 117) on improvement in hemp stripping machines, issued by the
United States Patent Office on December 16, 1924, and registered in the Bureau of Commerce
and Industry of the Philippine Islands on March 17, 1925, was the origin of this action brought
by the plaintiffs herein who prayed that judgment be rendered against the defendant,
ordering him thereby to refrain immediately from the manufacture and sale off machines
similar to the one covered by the patent; to render an accounting of the profits realized from
the manufacture and sale of the machines in question; that in case of refusal or failure to
render such accounting, the defendant be ordered to pay the plaintiffs the sum of P60 as
profit on each machine manufactured or sold by him; that upon approval of the required
bond, said defendant be restrained from continuing the manufacture and sale of the same
kind of machines; that after the trial the preliminary injunction issued therein be declared
permanent; and, lastly, that the said defendant be sentenced to pay the costs and whatever
damages the plaintiffs might be able to prove therein. The action therefore was based upon
alleged infringement by the defendant of the rights patent through the manufacture and sale
by the former of machines similar to that covered by the aforesaid patent.
The plaintiffs appealed from the judgment rendered by the trial court dismissing their
complaint, with costs, as well as the defendants counterclaim of P10,000. The defendant did
not appeal.
In their amended complaint, the plaintiffs alleged that their hemp stripping machines, for
which they obtained a patent, have the following characteristics: "A stripping head, a
horizontal table, a stripping knife supported upon such table, a tapering spindle, a rest holder
adjustably secured on the table portion, a lever and means of compelling the knife to close
upon the table, a pallet or rest in the bottom of the table, a resilient cushion under such pallet
or rest." In spite of the fact that they filed an amended complaint from which the "spindle or
conical drum, which was the only characteristic feature of the machine mentioned in the
original complaint, was eliminated, the plaintiffs insisted that the said part constitutes the
essential differences between the machine in question and other machines and it was the
principal consideration upon which their patent was issued. The said plaintiffs sustained their
contention on this point even in their printed brief and memorandum filed in this appeal.
During the trial, both parties presented voluminous evidence from which the trial court
arrived at the following conclusions:jgc:chanrobles.com.ph
"In considering their machine the plaintiffs did nothing but improve, to a certain degree, those
that were already in vogue and in actual use in hemp producing provinces. It cannot be said
that they have invented the spindle inasmuch as this was already known since the year 1909
or 1910. Neither can it be said that they have invented the stripping knife and the contrivance
which controls the movement and pressure thereof on the ground that stripping knives
together with their control sets were already in actual use in the different stripping machines
long before their machines appeared. Neither can it be said that they invented the flywheel
because that part or piece thereof, so essential in every machine from time immemorial, was
already known and actually employed in hemp stripping machines such as those of Riesgo
(Exhibit 4-A), Crumb (Exhibit 1-A), Icsiar (Exhibit A-Suzara), Browne (Exhibit 28-A), McFie, etc.,
all of which were in use for the benefit of hemp long before the appearance of the plaintiffs
machines in the market. Much less can it be said that they invented the pedal to raise the
knife in order to allow the hemp to be stripped to pass under it, on the ground that the use of
such contrivance has, likewise, been known since the invention of the most primitive of hemp
stripping machines.
"On the other hand, although the plaintiffs alleged in their original complaint that the
principal and important feature of said machine is a spindle upon which the hemp to be
stripped is wound in the process of stripping, nevertheless, in their amended complaint of
March 3, 1928, which was filed after a portion of the evidence therein had already been
submitted and it was known that the use of the spindle was nothing new, they still made the
allegations appearing in paragraph 3 of their said amended complaint and reproduced on
pages 2, 3, 4 and 5 hereof, copying the same from the application which they filed with the
United States Patent Office, under which they obtained their patent in question. The aforesaid
application clearly shows that what they applied for was not a patent for a pioneer or primary
invention but only for some new and useful improvement in hemp stripping machines."
We have carefully reviewed the evidence presented and have had the opportunity of
ascertaining the truth of the conclusions above stated. We agree with the trial court that,
strictly speaking, the hemp stripping machine of the plaintiffs does not constitute an invention
on the ground that it lacks the elements of novelty, originality and precedence (48 C. J., sec.
101, p. 97, and sec. 102, p. 98). In fact, before the plaintiffs herein obtained their patent, they
themselves had already publicly used the same kind of machine for some months, at least, hemp stripping machines, the judgment appealed from is hereby affirmed, with costs against
and, various other machines, having in general, the same characteristics and important parts the plaintiffs-appellants. So ordered.
as that of the said plaintiffs, were known in the Province of Davao. Machines known as Molo,
Riesgo, Crumb, Icsiar, Browne and McFie were already known in that locality and used by the
owners of hemp plantations before the machine of the plaintiffs came into existence. It may [G.R. No. 134217. May 11, 2000.]
also be noted that Adrian de Icsiar applied for a patent on an invention which resulted in the
rejection by the United States Patent Office of the plaintiffs original application for a patent KENNETH ROY SAVAGE/K ANGELIN EXPORT TRADING, owned and managed by GEMMA
on the so-called "spindle" or conical drum which was then in actual use in the Dringman and DEMORAL-SAVAGE, Petitioners, v. JUDGE APRONIANO B. TAYPIN, Presiding Judge, RTC-BR.
Icsiar hemp stripping machines. 12, Cebu City, CEBU PROVINCIAL PROSECUTORS OFFICE, NATIONAL BUREAU OF
INVESTIGATION, Region VII, Cebu City, JUANITA NG MENDOZA, MENDCO DEVELOPMENT
Notwithstanding the foregoing facts, the trial court did not decree the annulment of the CORPORATION, ALFREDO SABJON and DANTE SOSMENA, Respondents.
plaintiffs patent and the herein defendant-appellee insists that the patent in question should
be declared null and void. We are of the opinion that it would be improper and untimely to DECISION
render a similar judgment, in view of the nature of the action brought by the plaintiffs and in
the absence of a cross-complaint to that effect. For the purposes of this appeal, suffice it to
hold that the defendant is not civilly liable for alleged infringement of the patent in question. BELLOSILLO, J.:
In the light of sound logic, the plaintiffs cannot insists that the "spindle" was a patented
invention on the ground that said part of the machine was voluntarily omitted by them from
their application, as evidenced by the photographic copy thereof (Exhibit 41) wherein it Petitioners KENNETH ROY SAVAGE and K ANGELIN EXPORT TRADING, owned and managed by
likewise appears that the patent on Improved Hemp Stripping Machines was issued minus the GEMMA DEMORAL-SAVAGE, seek to nullify the search warrant issued by respondent Judge
"spindle" in question. Were we to stress to this part of the machine, we would be giving the Aproniano B. Taypin of the Regional Trial Court, Br. 12, Cebu City, which resulted in the seizure
patent obtained by the plaintiffs a wider range than it actually has, which is contrary to the of certain pieces of wrought iron furniture from the factory of petitioners located in Biasong,
principles of interpretation in matters to patents. Talisay, Cebu. Their motion to quash the search warrant was denied by respondent Judge as
well as their motion to reconsider the denial. Hence, this petition
In support of their claim the plaintiffs invoke the doctrine laid down by this court in the case for certiorari.chanrobles.com.ph:red
of Frank and Gohn v. Benito (51 Phil., 712), wherein it was held that the therein defendant
really infringed upon the patent of the therein plaintiffs. It may be noted that the plaintiffs in The antecedent facts: Acting on a complaint lodged by private respondent Eric Ng Mendoza,
the former and those in the latter case are the same and that the patent then involved is the president and general manager of Mendco Development Corporation (MENDCO), 1
very same one upon which the present action of the plaintiffs is based. The above-cited case, Supervising Agent Jose Ermie Monsanto of the National Bureau of Investigation (NBI) filed an
however, cannot be invoked as a precedent to justify a judgment in favor of the plaintiffs- application for search warrant with the Regional Trial Court of Cebu City. 2 The application
appellants on the ground that the facts in one case are entirely different from those in the sought the authorization to search the premises of K Angelin Export International located in
other. In the former case the defendant did not set up the same special defenses as those Biasong, Talisay, Cebu, and to seize the pieces of wrought iron furniture found therein which
alleged by the herein defendant in his answer and the plaintiffs therein confined themselves were allegedly the object of unfair competition involving design patents, punishable under
to presenting the patent, or rather a copy thereof, wherein the "spindle was mentioned, and Art. 189 of the Revised Penal Code as amended. The assailed Search Warrant No. 637-10-
this court took for granted their claim that it was one of the essential characteristics thereof 1697-12 was issued by respondent Judge on 16 October 1997 and executed in the afternoon
which was imitated or copied by the then defendant. Thus it came to pass that the "spindle" of the following day by NBI agents. 3 Seized from the factory were several pieces of furniture,
in question was insistently mentioned in the decision rendered on appeal as the essential part indicated in the Inventory Sheet attached to the Return of Search Warrant and all items seized
of the plaintiffs machine allegedly imitated by the then defendant. In the case under have remained in NBI custody up to the present. 4
consideration, it is obvious that the "spindle" is not an integral part of the machine patented
by the plaintiffs on the ground that it was eliminated from their patent inasmuch as it was On 30 October 1997 petitioners moved to quash the search warrant alleging that: (a) the
expressly excluded in their application, as evidenced by the aforesaid Exhibit 41. crime they were accused of did not exist; (b) the issuance of the warrant was not based on
probable cause; (c) the judge failed to ask the witnesses searching questions; and, (d) the
Wherefore, reiterating that the defendant cannot be held civilly liable for alleged infringement warrant did not particularly describe the things to be seized. 5
of the patent upon which the present action is based on the ground that there is no essential
part of the machine manufactured and sold by him, which was unknown to the public in the On 10 November 1997 petitioners filed a Supplemental Motion to Quash where they
Province of Davao at the time the plaintiffs applied for an obtained their patent for improved additionally alleged that the assailed warrant was applied for without a certification against
forum shopping. 6 On 30 January 1998 respondent Judge denied the Motion to Quash and the
Supplemental Motion to Quash. 7 On 2 March 1998 petitioners moved to reconsider the
denial of their motion to quash and alleged substantially the same grounds found in their
original Motion to Quash but adding thereto two (2) new grounds, namely: (a) respondent
court has no jurisdiction over the subject-matter; and, (b) respondent court failed to
"substantiate" the order sought to be reconsidered. 8 The denial of their last motion 9
prompted petitioners to come to this Court.
The principal issues that must be addressed in this petition are: (a) questions involving
jurisdiction over the offense; (b) the need for a certification of non-forum shopping; and, (c)
the existence of the crime
Petitioners claim that respondent trial court had no jurisdiction over the offense since it was
not designated as a special court for Intellectual Property Rights (IPR), citing in support
thereof Supreme Court Administrative Order No. 113-95 designating certain branches of the
Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in Cities as Special
Courts for IPR. The courts enumerated therein are mandated to try and decide violations of
IPR including Art. 189 of the Revised Penal Code committed within their respective territorial
jurisdictions. The sala of Judge Benigno G. Gaviola of the RTC-Br. 9, Cebu City, was designated
Special Court for IPR for the 7th Judicial Region. 10 Subsequently Supreme Court
Administrative Order No. 104-96 was issued providing that jurisdiction over all violations of
IPR was thereafter confined to the Regional Trial Courts. 11
The authority to issue search warrants was not among those mentioned in the administrative
orders. But the Court has consistently ruled that a search warrant is merely a process issued
by the court in the exercise of its ancillary jurisdiction and not a criminal action which it may
entertain pursuant to its original jurisdiction. 12 The authority to issue search warrants is
inherent in all courts and may be effected outside their territorial jurisdiction. 13 In the instant
case, the premises searched located in Biasong, Talisay, Cebu, are well within the territorial
jurisdiction of the respondent court. 14
Petitioners apparently misconstrued the import of the designation of Special Courts for IPR.
Administrative Order No. 113-95 merely specified which court could "try and decide" cases
involving violations of IPR. It did not, and could not, vest exclusive jurisdiction with regard to
all matters (including the issuance of search warrants and other judicial processes) in any one
court. Jurisdiction is conferred upon courts by substantive law; in this case, BP Blg. 129, and
not by a procedural rule, much less by an administrative order. 15 The power to issue search
warrants for violations of IPR has not been exclusively vested in the courts enumerated in
Supreme Court Administrative Order No. 113-95.
Petitioners next allege that the application for a search warrant should have been dismissed
outright since it was not accompanied by a certification of non-forum shopping, citing as
authority therefor Washington Distillers, Inc. v. Court of Appeals. 16 In that case, we sustained
the quashal of the search warrant because the applicant had been guilty of forum shopping as
private respondent sought a search warrant from the Manila Regional Trial Court only after he
was denied by the courts of Pampanga. The instant case differs significantly, for here there is
no allegation of forum-shopping, only failure to acquire a certification against forum-
shopping. The Rules of Court as amended requires such certification only from initiatory
pleadings, omitting any mention of "applications." 17 In contrast, Supreme Court Circular 04-
94, the old rule on the matter, required such certification even from "applications." Our ruling
in Washington Distillers required no such certification from applications for search warrants.
Hence, the absence of such certification will not result in the dismissal of an application for
search warrant.chanrobles virtual lawlibrary
The last question to be resolved is whether unfair competition involving design patents
punishable under Art. 189 of the Revised Penal Code exists in this case. Prosecutor Ivan
Herrero seems to agree as he filed the corresponding Information against petitioners on 17
March 1998. 18 However, since the IPR Code took effect on 1 January 1998 any discussion
contrary to the view herein expressed would be pointless. The repealing clause of the Code
provides
All Acts and parts of Acts inconsistent herewith, more particularly, Republic Act No 165, as
amended; Republic Act No 166, as amended; and Articles 188 and 189 of the Revised Penal
Code; Presidential Decree No 49, including Presidential Decree 285, as amended, are hereby
repealed (Emphasis ours) 19
The issue involving the existence of "unfair competition" as a felony involving design patents,
referred to in Art. 189 of the Revised Penal Code, has been rendered moot and academic by
the repeal of the article.
The search warrant cannot even be issued by virtue of a possible violation of the IPR Code.
The assailed acts specifically alleged were the manufacture and fabrication of wrought iron
furniture similar to that patented by MENDCO, without securing any license or patent for the
same, for the purpose of deceiving or defrauding .Mendco and the buying public. 20 The Code
defines "unfair competition" thus
168.2 Any person who shall employ deception or any other means contrary to good faith by
which he shall pass off the goods manufactured by him or in which he deals, or his business,
or services for those of the one having established such goodwill, or shall commit any acts
calculated to produce said result, shall be guilty of unfair competition, and shall be subject to
an action therefor.
168.3 In particular, and without in any way limiting the scope of protection against unfair
competition, the following shall be deemed guilty of unfair competition:chanrob1es virtual
1aw library
(a) Any person who is selling his goods and gives them the general appearance of goods of
another manufacturer or dealer, either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words thereon, or in any other feature
of their appearance which would be likely to influence purchasers to believe that the goods
offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer,
or who otherwise clothes the goods with such appearance as shall deceive the public and
defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent
of any vendor engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs any other means calculated to
induce the false belief that such person is offering the services of another who has identified
such services in the mind of the public; orchanrobles virtua| |aw |ibrary the Supplemental Motion to Quash dated 10 November 1997 filed by petitioners, as well as
the Order dated 8 April 1998 denying petitioners Motion for Reconsideration dated 2 March
(c) Any person who shall make any false statement in the course of trade or who shall commit 1998, is SET ASIDE. Search Warrant No. 637-10-1697-12 issued on 16 October 1997 is
any other act contrary to good faith of a nature calculated to discredit goods, businesses or ANNULLED and SET ASIDE, and respondents are ordered to return to petitioners the property
services of another. 21 seized by virtue of the illegal search warrant.

There is evidently no mention of any crime of "unfair competition" involving design patents in SO ORDERED.
the controlling provisions on Unfair Competition. It is therefore unclear whether the crime
exists at all, for the enactment of RA 8293 did not result in the reenactment of Art. 189 of the
Revised Penal Code. In the face of this ambiguity, we must strictly construe the statute against FIRST DIVISION
the State and liberally in favor of the accused, 22 for penal statutes cannot be enlarged or
extended by intendment, implication or any equitable consideration. 23 Respondents invoke [G.R. No. L-82542. September 29, 1988.]
jurisprudence to support their contention that unfair competition" exists in this case. 24
However, we are prevented from applying these principles, along with the new provisions on BARRY JOHN PRICE, JOHN WATSON CLITHERON and JOHN BRADSHAW, Assignors to ALLEN &
Unfair Competition found in the IPR Code, to the alleged acts of the petitioners, for such acts HANBURYS, LTD., Petitioners, v. UNITED LABORATORIES, Respondent.
constitute patent infringement as defined by the same Code
Castillo, Laman, Tan & Pantaleon Law Offices, for Petitioners.
SECTION 76. Civil Action for Infringement. 76.1. The making, using, offering for sale, selling,
or importing a patented product or a product obtained directly or indirectly from a patented Teodoro B. Pison for Respondent.
process, or the use of a patented process without authorization of the patentee constitutes
patent infringement.25cralaw:red
SYLLABUS
Although this case traces its origins to the year 1997 or before the enactment of the IPR Code,
we are constrained to invoke the provisions of the Code. Article 22 of the Revised Penal Code
provides that penal laws shall be applied retrospectively, if such application would be
beneficial to the accused. 26 Since the IPR Code effectively obliterates the possibility of any 1. COMMERCIAL LAW; PATENTS LAW; ISSUANCE OF COMPULSORY LICENSE; PROPER AFTER A
criminal liability attaching to the acts alleged, then that Code must be applied here. HEARING AND CAREFUL CONSIDERATION OF THE EVIDENCE OF THE PARTIES AND IN DEFAULT
OF AN AGREEMENT BETWEEN THEM AS TO THE TERMS OF THE LICENSE. Under Section 36
In the issuance of search warrants, the Rules of Court requires a finding of probable cause in of Republic Act No. 105 and under Section 35 of P.D. No. 12 63, the terms and conditions of
connection with one specific offense to be determined personally by the judge after the compulsory license may be filed by the Director of Patents after a hearing and careful
examination of the complainant and the witnesses he may produce, and particularly consideration of the evidence of the parties and in default of an agreement between them as
describing the place to be searched and the things to be seized. 27 Hence, since there is no to the terms of the license.
crime to speak of, the search warrant does not even begin to fulfill these stringent
requirements and is therefore defective on its face. The nullity of the warrant renders moot 2. ID.; ID.; ID.; FACTUAL FINDINGS OF DIRECTOR WHEN SUPPORTER BY SUBSTANTIAL EVIDENT,
and academic the other issues raised in petitioners Motion to Quash and Motion for NOT DISTURBED ON APPEAL. The Directors finding that UNILAB has the capability to use
Reconsideration. Since the assailed search warrant is null and void, all property seized by the patented compound in the manufacture of an anti-ulcer pharmaceutical preparation is a
virtue thereof should be returned to petitioners in accordance with established jurisprudence. factual finding which is supported by substantial evidence, hence, the Court of Appeals did
28 not commit a reversible error in affirming it (Philippine Nut Industry, Inc. v. Standard Brands,
Inc., 65 SCRA 575; and other cited).
In petitioners Reply with Additional Information they allege that the trial court denied their
motion to transfer their case to a Special Court for IPR. We have gone through the records and 3. ID.; ID.; CAPABILITY TO USE PATENTED COMPOUND SHOULD EXIST DURING THE HEARING
we fail to find any trace of such motion or even a copy of the order denying it. All that appears OF PETITION FOR COMPULSORY LICENSING. Of indubitable relevance to this point is the
in the records is a copy of an order granting a similar motion filed by a certain Minnie Dayon evidence that UNILAB has been engaged in the business of manufacturing drugs and
with regard to Search Warrant No. 639-10-1697-12. 29 This attachment being immaterial we pharmaceutical products for the past thirty (30) years, that it is the leading drug manufacturer
shall give it no further attention. in the country, that it has the necessary equipment and technological expertise for the
development of solid dosage forms or for tablet, capsule, and liquid preparations, and that it
WHEREFORE, the Order of the Regional Trial Court, Br. 12, Cebu City, dated 30 January 1998, maintains standards and procedures to ensure the quality of its products. Even if it were true,
denying the Motion to Quash Search Warrant No. 637-10-1697-12 dated 30 October 1997 and as alleged by the patentee (although it is denied by UNILAB), that its capability to use the
patented compound was only acquired after the petition for compulsory licensing had been The terms net sales means the gross billed for the product pertaining to Letters Patent No.
filed, the important thing is that such capability was proven to exist during the hearing of the 13540 less
petition.
a) Transportation charges or allowances, if any, included in such amount;
4. ID.; ID.; GRANT OF A COMPULSORY LICENSE OVER ENTIRE PATENTED INVENTION, UPHELD;
THERE IS NO LAW REQUIRING THAT LICENSE BE LIMITED TO A SPECIFIC EMBODIMENT OF THE b) Trade, quantity or cash discounts and brokers or agents or distributors commissions, if
INVENTION, OR TO A PARTICULAR CLAIM. The patented invention in this case relates to any, allowed or paid;
medicine and is necessary for public health as it can be used as component in the
manufacture of anti-ulcer medicine. The Director of Patents did not err in granting a c) Credits or allowances, if any, given or made on account with reflection or return of the
compulsory license over the entire patented invention for there is no law requiring that the product previously delivered; and
license be limited to a specific embodiment of the invention, or, to a particular claim.
d) Any tax, excise or government charge included in such amount, or measured by the
5. CONSTITUTIONAL LAW; BILL OF RIGHTS; JUST COMPENSATION; NOT VIOLATED WHERE production, sale, transportation, use or delivery of the products.
THERE IS PAYMENT OF ROYALTIES ON SALES OF ANY PRODUCTS THE LICENSEE MAY
MANUFACTURE USING ANY OF ALL OF PATENTED COMPOUNDS. In any event, since the "In case Petitioners product containing the patented substance shall contain one or more
petitioner will be paid royalties on the sales of any products the licensee may manufacture active ingredients as admixed product, the royalty to be paid shall be determined in
using any or all of the patented compounds, the petitioner cannot complain of a deprivation accordance with the following formula:chanrob1es virtual 1aw library
of property rights without just compensation.
Net Sales on Value of

DECISION Admixed Product Patented Substance

Royalty = _______ x 0.025 x _______

GRIO-AQUINO, J.: (Value of Patended Substance) Value of

Active Ingredients
The petitioners are the owners-assignees of Philippine Patent No. 13540 which was granted to
them on June 26, 1980 for a pharmaceutical compound known as "aminoalkyl furan "4. The royalties shall be computed after the end of each calendar quarter for all goods
derivatives." On October 1, 1982, respondent United Laboratories, Inc. (or UNILAB) filed in the containing the patented substance herein involved, made and sold during the preceding
Philippine Patent Office a petition (Inter Partes Case No. 1683, "United Laboratories, Inc. quarter and to be paid by the Petitioner at its place of business on or before the thirtieth day
versus Barry John Price, John Watson Clitheron and John Bradshaw, assignors to Allen & of the month following the end of each calendar quarter. Payments should be made to
Hanburys Ltd.") for the issuance of a compulsory license to use the patented compound in its Respondents authorized representative in the Philippines;" (pp. 35-36, Rollo.).
own brands of medicines and pharmaceuticals and to sell, distribute, or otherwise dispose of
such medicines or pharmaceutical preparations in the country. The petition further alleged The patentees appealed the decision to the Court of Appeals (CA-G.R. No. SP-09308) which
that the patent relates to medicine and that petitioner, which has had long experience in the dismissed the appeal on December 4, 1987. They have come to his Court praying for a review
business of manufacturing and selling pharmaceutical products, possesses the capability to of the Appellate Courts decision on the grounds that it erred:chanrob1es virtual 1aw library
use the subject compound in the manufacture of a useful product or of making dosage
formulations containing the said compound.chanrobles virtual lawlibrary 1. in upholding the Directors unilateral determination of the terms and conditions of the
compulsory license, without affording the parties an opportunity to negotiate the terms and
After the hearing, the Philippine Patent Office rendered a decision on June 2, 1986, granting conditions freely and by themselves;
UNILAB a compulsory license subject to ten (10) terms and conditions No. 3 of which provides
as follows:jgc:chanrobles.com.ph 2. in finding that the respondent possesses the legally required capability to make use of the
petitioners patented compound in the manufacture of a useful product;
"3. By virtue of this license, petitioner shall pay the respondent a royalty on all license
products containing the patented substance made and sold by the Petitioner in the amount 3. in affirming the Directors award of the entire patent to the respondent, when only one
equivalent to TWO AND ONE HALF (2.5) PER CENT OF THE NET SALES in Philippine currency. claim of the patent was controverted; and
4. in considering evidence that UNILABs capability to use the compound was acquired after,
not before, filing its petition for compulsory licensing. Thus, said provision grants to the Director of Patents the use of his sound discretion in fixing
the percentage for the royalty rate and We find that the Director of Patents committed no
The first assignment of error has no merit. The terms and conditions of the compulsory abuse of this discretion. Also, there is always a presumption of regularity in the performance
license were fixed by the Director of Patents after a hearing and careful consideration of the of ones official duties.
evidence of the parties and in default of an agreement between them as to the terms of the
license. This he is authorized to do under Section 36 of Republic Act No. 165 which "Moreover, what UNILAB has with the compulsory license is the bare right to use the patented
provides:jgc:chanrobles.com.ph chemical compound in the manufacture of a special product, without any technical assistance
from herein respondent-appellant. Besides, the special product to be manufactured by
"Sec. 36. GRANT OF LICENSE. If the Director finds that a case for the grant of license under UNILAB will only be used, distributed, and disposed locally. Therefore, the royalty rate of 2.5%
Section 34 hereof has been made out, he may order the grant of an appropriate license and in is just and reasonable." (pp. 10-11, CA Decision, pp. 44-45, Rollo).
default of agreement among the parties as to the terms and conditions of the license he shall
fix the terms and conditions of the license in the order. Furthermore, as pointed out in the respondents comment on the petition, identical terms
and conditions had been prescribed for the grant of compulsory license in a good number of
"The order of the Director granting a license under this Chapter when final, shall operate as a patent cases (United Laboratories, Inc. v. Boehringer Ingelheim, GMBH, IPC 929, July 27, 1981;
deed granting a license executed by the patentee and the other parties in interest."cralaw United Laboratories, Inc. v. Bristol-Myers Company, IPC 1179, Aug. 20, 1981; United
virtua1aw library Laboratories, Inc. v. E.R. Squibb & Sons, Inc., IPC 1349, Sept. 30, 1981; United Laboratories,
Inc. v. Helmut Weber, Et Al., IPC 949, Dec. 13, 1982; Oceanic Pharmacal, Inc. v. Gruppo Lepetit
and under Section 35 of P.D. 1263, amending portions of Republic Act No. 165 which S.A., IPC 1549, Dec. 21, 1982; United Laboratories. Inc. v. Boehringer Ingelheim, IPC 1185,
reads:jgc:chanrobles.com.ph June 8, 1983; United Laboratories, Inc. v. Pfizer Corp., IPC 1184, June 10, 1983; Doctors
Pharmaceuticals, Inc. v. Maggi, Et Al., July 11, 1983; Drugmakers Laboratories v. Herningen, Et
"Sec. 35. GRANT OF LICENSE. (1) If the Director finds that a case for the grant of a license Al., IPC 1679, September 22, 1983; Superior Pharmacraft, Inc. v. Maggi, Et Al., IPC 1759,
under Sec. 34 hereof has been made out, he shall, within one hundred eighty (180) days from January 10, 1984; United Laboratories, Inc. v. Van Gelder, Et Al., IPC 1627, June 29, 1984;
the date the petition was filed, order the grant of an appropriate license. The order shall state Drugmakers Laboratories, Inc. v. Janssen Pharmaceutical N.V., IPC 1555, August 27, 1984;
the terms and conditions of the license which he himself must fix in default of an agreement United Laboratories Inc. v. Graham John Durant, Et Al., IPC 1731, August 14, 1987; United
on the matter manifested or submitted by the parties during the hearing."cralaw virtua1aw Laboratories, Inc. v. Albert Anthony Carr, IPC 1906, August 31, 1987).cralawnad
library
The Directors finding that UNILAB has the capability to use the patented compound in the
The Court of Appeals found that the 2.5% royalty fixed by the Director of Patents "is just and manufacture of an anti-ulcer pharmaceutical preparation is a factual finding which is
reasonable." We quote its observations hereunder:jgc:chanrobles.com.ph supported by substantial evidence, hence, the Court of Appeals did not commit a reversible
error in affirming it (Philippine Nut Industry, Inc. v. Standard Brands, Inc., 65 SCRA 575; Sy
"Respondent-appellant contends further that the 2.5% royalty rate is unfair to respondent- Ching v. Gaw Liu, 44 SCRA 143; De Gala Sison v. Manalo, 8 SCRA 595; Goduco v. Court of
appellant as to amount to an undue deprivation of its property right. We do not hold this Appeals, 14 SCRA 282; Ramos v. Pepsi-Cola Bottling Company of the P.I., 19 SCRA 289. Of
view. The royalty rate of 2.5% provided for by the Director of Patents is reasonable. Paragraph indubitable relevance to this point is the evidence that UNILAB has been engaged in the
3, Section 35-B, Republic Act No. 165, as amended by Presidential Decree No. 1263, business of manufacturing drugs and pharmaceutical products for the past thirty (30) years,
provides:chanrob1es virtual 1aw library that it is the leading drug manufacturer in the country, that it has the necessary equipment
and technological expertise for the development of solid dosage forms or for tablet, capsule,
(3) A compulsory license shall only be granted subject to the payment of adequate royalties and liquid preparations, and that it maintains standards and procedures to ensure the quality
commensurate with the extent to which the invention is worked. However, royalty payments of its products. Even if it were true, as alleged by the patentee (although it is denied by
shall not exceed five per cent (5%) of the net wholesale price (as defined in Section 33-A) of UNILAB), that its capability to use the patented compound was only acquired after the
the products manufactured under the license. If the product, substance, or process subject of petition for compulsory licensing had been filed, the important thing is that such capability
the compulsory license is involved in an industrial project approved by the Board of was proven to exist during the hearing of the petition.
Investments, the royalty payable to the patentee or patentees shall not exceed three per cent
(3%) of the net wholesale price (as defined in Section 34-A) of the patented commodity and or The patented invention in this case relates to medicine and is necessary for public health as it
commodity manufactured under the patented process; the same rule of royalty shall be paid can be used as component in the manufacture of anti-ulcer medicine. The Director of Patents
whenever two or more patents are involved, which royalty shall be distributed to the did not err in granting a compulsory license over the entire patented invention for there is no
patentees in rates proportional to the extent of commercial use by the licensee giving law requiring that the license be limited to a specific embodiment of the invention, or, to a
preferential values to the holder of the oldest subsisting product patent. particular claim. The invention in this case relates to new aminoalkyl derivatives which have
histamine H2 blocking activity, having the general formula (I) and physiologically acceptable
salts, N-oxides and hydrates thereof. The compound ranitidine hydrochloride named in Claim
45 is also covered by General Claim I and several other sub-generic claims. Therefore, a license
for Claim 45 alone would not be fully comprehensive. In any event, since the petitioner will be
paid royalties on the sales of any products the licensee may manufacture using any or all of
the patented compounds, the petitioner cannot complain of a deprivation of property rights
without just compensation.chanrobles law library
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

WHEREFORE, the petition for review is denied for lack of merit.

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
SO ORDERED.
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
Republic of the Philippines the right of the wheelbarrow with its axis running longitudinally through the center of the
SUPREME COURT bottom face of the tray." 4
Manila
There is an express recognition under the Patent Law, as already noted, that any new model of
EN BANC 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
G.R. No. L-20354 July 28, 1969
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
GERARDO SAMSON, JR., petitioner, statute has thus been met. Respondent Tarroza is entitled to its benefits. The grant to him of a
vs. patent for a utility model is in accordance with law. There was no reason, therefore, for its
FELIPE TARROZA and DIRECTOR OF PATENTS, respondents. cancellation. So it was held by the Director of Patents. That decision as already noted should
stand.
Hermenegildo V. Lopez for petitioner.
Isaac S. Puno, Jr. for respondent Felipe Tarroza. Moreover, in appeals from a decision of the Director of Patents, only questions of law may be
Office of the Solicitor General for respondent Director of Patents. 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
FERNANDO, J.: 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
With the statutory recognition of patentability based on the "practical utility" concept 1 thus that this petition for review, as noted at the outset, is without merit. It was not error then, to
rendering clear that a patent is not solely to be earned under the "flash of genius" reiterate, for the respondent Director of Patents to deny the cancellation of the utility patent
theory, 2 this petition for the cancellation of a utility model patent for a Side Tilting-Dumping granted respondent Tarroza. To borrow from the language of the Che opinion: "Even on the
Wheelbarrow granted to respondent Felipe A. Tarroza was correctly denied by respondent sole issue alone, the petition for review must fail."
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 Another alleged error was imputed to respondent Director of Patents. It would find fault with
review. There is no reason why a different outcome is to be expected. His appeal must fail. 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
Petitioner was, on May 22, 1958, awarded Utility Model Patent No. 27 for the above type of ground for cancellation, to wit: that respondent is not the true and actual inventor or designer
wheelbarrow which, as noted in the decision, "consists of a wheeled carriage base and an of the utility model is premised on the fact that because of the proximity of the two, the
upper pivoted and detachable carrying tray. The carriage base is comprised of a wheel and petitioner and the respondent being brothers-in-law, and living in adjoining residential lots,
two equal lengths of continuous pipes bent to provide wheel forks at the front and at the rear 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.