Case Digest: Pharmawealth vs. Pfizer (Patent Infringement)
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December 19, 2010
Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer (Phil.), Inc. G.R. No. 167715, 17
November 2010
by: Alpheus D. Macalalad
Facts: Pfizer is the registered owner of a patent pertaining to Sulbactam Ampicillin. It
is marketed under the brand name “Unasyn.” Sometime in January and February
2003, Pfizer discovered that Pharmawealth submitted bids for the supply of
Sulbactam Ampicillin to several hospitals without the Pfizer’s consent. Pfizer then
demanded that the hospitals cease and desist from accepting such bids. Pfizer also
demanded that Pharmawealth immediately withdraw its bids to supply Sulbactam
Ampicillin. Pharmawealth and the hospitals ignored the demands.
Pfizer then filed a complaint for patent infringement with a prayer for permanent
injunction and forfeiture of the infringing products. A preliminary injunction effective for
90 days was granted by the IPO’s Bureau of Legal Affairs (IPO-BLA). Upon
expiration, a motion for extension filed by Pfizer was denied. Pfizer filed a Special
Civil Action for Certiorari in the Court of Appeals (CA) assailing the denial.
While the case was pending in the CA, Pfizer filed with the Regional Trial Court of
Makati (RTC) a complaint for infringement and unfair competition, with a prayer for
injunction. The RTC issued a temporary restraining order, and then a preliminary
injunction.
Pharmawealth filed a motion to dismiss the case in the CA, on the ground of forum
shopping. Nevertheless, the CA issued a temporary restraining order. Pharmawealth
again filed a motion to dismiss, alleging that the patent, the main basis of the case,
had already lapsed, thus making the case moot, and that the CA had no jurisdiction to
review the order of the IPO-BLA because this was granted to the Director General.
The CA denied all the motions. Pharmawealth filed a petition for review on Certiorari
with the Supreme Court.
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?
Held:
a) No. The provision of R.A. 165, from which the Pfizer’s patent was based, clearly
states that "[the] 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.
Clearly, the patentee’s exclusive rights exist only during the term of the patent. Since
the patent was registered on 16 July 1987, it expired, in accordance with the
provisions of R.A. 165, after 17 years, or 16 July 2004. Thus, after 16 July 2004,
Pfizer no longer possessed the exclusive right to make, use, and sell the products
covered by their patent. The CA was wrong in issuing a temporary restraining order
after the cut-off date.
b) According to IP Code, the Director General of the IPO exercises exclusive
jurisdiction over decisions of the IPO-BLA. The question in the CA concerns an
interlocutory order, and not a decision. Since the IP Code and the Rules and
Regulations are bereft of any remedy regarding interlocutory orders of the IPO-BLA,
the only remedy available to Pfizer is to apply the Rules and Regulations suppletorily.
Under the Rules, a petition for certiorari to the CA is the proper remedy. This is
consistent with the Rules of Court. Thus, the CA had jurisdiction.
c) Yes. Forum shopping is defined as the act of a party against whom an adverse
judgment has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum (other than by appeal or the special civil action of
certiorari), or the institution of two (2) or more actions or proceedings grounded on the
same cause on the supposition that one or the other court would make a favorable
disposition.
The elements of forum shopping are: (a) identity of parties, or at least such parties
that represent the same interests in both actions; (b) identity of rights asserted and
reliefs prayed 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 successful, amount to res judicata in the action under
consideration. This instance meets these elements.
The parties are clearly identical. In both the complaints in the BLA-IPO and RTC, the
rights allegedly violated and the acts allegedly violative of such rights are identical,
regardless of whether the patents on which the complaints were based are different.
In both cases, the ultimate objective of Pfizer was to ask for damages and to
permanently prevent Pharmawealth from selling the contested products. Relevantly,
the Supreme Court has decided that the filing of two actions with the same objective,
as in this instance, constitutes forum shopping.
Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC
cases, a decision in one case will necessarily amount to res judicata in the other
action.
The judgment of the lower court is affirmed, with costs. So ordered.
 ATRICK HENRY FRANK and WILLIAM HENRY GOHN vs. CONSTANCIO
BENITO
G.R. No. L-27793, March 15, 1928
FACTS: Plaintiffs are the owners of a patent covering hemp-stripping machine No.
1519579 issued to them by the United States Patent Office and duly registered in the
Bureau of Commerce and Industry of the Philippine Islands under the provisions of
Act No. 2235
Plaintiffs allege that the defendant manufactured a hemp-stripping machine in which,
without authority from the plaintiffs, and has embodied and used such spindles and
their method of application and use, and is exhibiting his machine to the public for
the purpose of inducing its purchase. Frank and Gohn stress that use by the Benito of
such spindles and the principle of their application to the stripping of hemp is in
violation of, and in conflict with, plaintiffs' patent, together with its conditions and
specifications.
Plaintiffs assert the violation of infringement upon the patent granted to Frank &
Gohn, and requested that an action for injunction and damages be instituted against
Benito.
Respondent on the other hand contends that it had no prior knowledge of the prior
existence of the hemp-stripping invention of the plaintiffs nor had any intent to
imitate the Frank’s product. Likewise, the defendant contended that the facts alleged
therein do not constitute a cause of action, that it is ambiguous and vague. The lower
court rendered judgment in favor of the plaintiffs, to which was later affirmed by the
appellate court.
HELD: As a rule, the burden of proof to substantiate a charge of infringement is
with the plaintiff. Where, however, the plaintiff introduces the patent in evidence, if
it is in due form, it affords a prima facie presumption of its correctness and validity.
The decision of the Commissioner of Patents in granting the patent is always
presumed to be correct. The burden the shifts to the defendant to overcome by
competent evidence this legal presumption.
The patent in the case at bar, having been introduced in evidence, affords a prima
facie presumption of its correctness and validity. Hence, this is not a case of a
conflict between two different patents. In the recent of Temco Electric Motor Co. vs.
Apco Mfg. Co., decided by the Supreme Court of the United States ruled “an
improper cannot appropriate the basic patent of another, and if he does so without
license is an infringer, and may be used as such. It is well established that an
improver cannot appropriate the basic patent of another and that the improver
without a license is an infringer and may be sued as such.”
Arellano, C.J., Torres, Mapa, Willard, and Tracey, JJ., concur.
CASE DIGEST: CARLOS GSELL vs. VALERIANO VELOSO YAP-JUE
FACTS:
The principal case to which these proceedings are ancillary, was an action to
enjoin infringement of a patented process for 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. The order was couched in the
following terms:
“It is ordered that the defendant abstain from manufacturing canes and umbrellas
with a curved handle by means of a lamp or blowpipe fed with mineral oil or
petroleum, which process was protected by patent no. 19288, issued in favor of
Henry Gsell, and by him transferred to Carlos Gsell”.
Thereafter the defendant continued to manufacture curved cane handles for
walking sticks and umbrellas by a process in all respects identical with that used by
the plaintiff under his patent, except only that he substituted for a lamp fed with
petroleum or mineral oil, a lamp fed with alcohol.
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 by the mere annunciation of the acts
performed by the defendant, which are alleged to constitute the said violation.
Consequently, the contempt with which the accused is charged has not been fully
and satisfactorily proved, and the order appealed from should accordingly be
affirmed in so far as it holds that the defendant is not guilty of contempt.
Substantially, the same question is submitted in these new proceedings as that
submitted in the former case.
ISSUE:
Whether the use of a patented process by a third person, without license or
authority therefore, constitutes an infringement when the alleged infringer has
substituted in lieu of some unessential part of the patented process a well-known
mechanical equivalent.
HELD:
Counsel for plaintiff invokes the doctrine of “mechanical equivalents” in
support of his contention, and indeed that doctrine is applicable to the facts of the
case. This doctrine is founded upon sound rules of reason and logic, and unless
restrained or modified by law in particular jurisdiction, is of universal application, so
that it matters not whether a patent be issued by one sovereignty or another, the
doctrine may properly be invoked to protect the patentee from colorable invasions of
his patent under the guise of a substitution of some part of his invention by some
well-known mechanical equivalent.
The use of a process in all respects identical with a 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 the rights of
the owner of the patent, which will be enjoined in appropriate proceeding, and the
use of such process, after the order enjoining its use has been issued, is a “contempt”,
under the provision of section 172 of the Code of Civil Procedure.
abuses which might result from the exercise of the exclusive rights conferred by the
patent. An example provided of possible abuses is “failure to work;” however, as
such, is merely supplied by way of an example, it is plain that the treaty does not
preclude the inclusion of other forms of categories of abuses. The legislative intent in
the grant of a compulsory license was not only to afford others an opportunity to
provide the public with the quantity of the patented product, but also to prevent the
growth of monopolies. Certainly, the growth of monopolies was among the abuses
which Section A, Article 5 of the Convention foresaw, and which our Congress
likewise wished to prevent in enacting.

368 SCRA 9 – Mercantile Law – Law on Intellectual Property – Law on

Patents – Compulsory License

In August 1989, Danlex Research Laboratories petitioned before Bureau of Patents,

Trademarks and Technology Transfer (BPTTT) that it may be granted a compulsory
license for the use and manufacture of the pharmaceutical product Cimetidine.
Cimetidine is useful as an antihistamine and in the treatment of ulcers. Cimetidine is
originally patented to Smith Kline and French Laboratories, Ltd. in 1978, and the
said patent is still in force at the time of application by Danlex Research.
The BPTTT granted the application of Danlex Research together with a provision
that Danlex Research should be paying 2.5% of the net wholesale price as royalty
payment to Smith Kline. This was affirmed by the Court of Appeals.
Smith Kline assailed the grant as it argued, among others, that the same is an invalid
exercise of police power because there is no overwhelming public necessity for such
grant considering that Smith Kline is able to provide an adequate supply of it to
satisfy the needs of the Philippine market; that a provision in the Philippine Patent
Laws is violative of the Paris Convention to which the Philippines is a signatory.
To explain the second contention, Smith Kline states that the Paris Convention only
allows compulsory licensing if the original licensee (patent holder) has failed to
work on the patent; that therefore, the provision in the Philippine Patent Laws which
adds other grounds for the granting of compulsory license i.e. monopoly, is invalid
and contrary to the Paris Convention.
ISSUE: Whether or not Smith Kline is correct.
HELD: No. The granting is a valid exercise of police power. Cimetidine is
medicinal in nature, and therefore necessary for the promotion of public health and
safety.
On the second contention, Section A(2) of Article 5 [of the Paris Convention]
unequivocally and explicitly respects the right of member countries to adopt
legislative measures to provide for the grant of compulsory licenses to prevent
 G.R. No. 118708. February 2, 1998]
The court finds the argument of the petitioner untenable. Section 42 of the Law on
Patent (RA 165) provides that only the patentee or his successors-in-interest may file
an action against infringement. What the law contemplates in the phrase “anyone
CRESER PRECISION SYSTEMS, INC., petitioner, vs. COURT OF APPEALS possessing any right, title or interest in and to the patented invention” refers only to
AND FLORO INTERNATIONAL CORP., respondents. the patentee’s successors-in-interest, assignees or grantees since the action on patent
infringement may be brought only in the name of the person granted with the patent.
DECISION There can be no infringement of a patent until a patent has been issued since the right
one has over the invention covered by the patent arises from the grant of the patent
Facts: alone. Therefore, a person who has not been granted letter of patent over an
invention has not acquired right or title over the invention and thus has no cause of
Respondent was granted by the Bureau of Patents, Trademarks and Technology action for infringement. Petitioner admitted to have no patent over his
invention. Respondent’s aerial fuze is covered by letter of patent issued by the
Transfer (BPTTT) a Letter of patent for its aerial fuze on January 23, 1990.
Bureau of Patents thus it has in his favor not only the presumption of validity of its
Sometime in 1993, respondent discovered that the petitioner submitted samples of its patent but that of a legal and factual first and true inventor of the invention.
patented aerial fuze to the AFP for testing claiming to be his own. To Email ThisBlogThis!Share to TwitterShare to FacebookShare to Pinterest
protect its right, respondent sent letter of warning to petitioner on a possible court
action should it proceed its testing by the AFP. In response the petitioner filed a
complaint for injunction and damages arising from alleged infringement before the
RTC asserting that it is the true and actual inventor of the aerial fuze which it
developed on 1981 under the Self Reliance Defense Posture Program of the AFP. It
has been supplying the military of the aerial fuze since then and that the fuze of the
respondent is similar as that of the petitioner. Petitioner prayed for restraining order
and injunction from marketing, manufacturing and profiting from the said invention
by the respondent. The trial court ruled in favor of the petitioner citing the fact that it
was the first to develop the aerial fuze since 1981 thsu it concludes that it is the
petitioner’s aerial fuze that was copied by the respondent. Moreover, the claim
of respondent is solely based on its letter of patent which validity is being
questioned. On appeal, respondent argued that the petitioner has no cause of action
since he has no right to assert there being no patent issued to his aerial fuze. The
Court of Appeals reversed the decision of the trial court dismissing the complaint of
the petitioner. It was the contention of the petitioner that it can file under Section 42
of the Patent Law an action for infringement not as a patentee but as an entity in
possession of a right, title or interest to the patented invention. It theorizes that while
the absence of a patent prevents one from lawfully suing another for infringement of
said patent, such absence does not bar the true and actual inventor of the patented
invention from suing another in the same nature as a civil action for infringement.

ssue:

Whether or not the petitioner has the right to assail the validity of the patented work
of the respondent?

Ruling: