G.R. No.

148222 August 15, 2003

PEARL & DEAN (PHIL.), INCORPORATED, Petitioner,
vs.
SHOEMART, INCORPORATED, and NORTH EDSA MARKETING, INCORPORATED, Respondents.
D E C I S I O N
CORONA, J .:
In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl & Dean
(Phil.) Inc. (P & D) assails the May 22, 2001 decision
1
of the Court of Appeals reversing the October 31, 1996
decision
2
of the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516 which declared private
respondents Shoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI) liable for infringement of trademark
and copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals
3
contained a summary of this dispute:
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising
display units simply referred to as light boxes. These units utilize specially printed posters sandwiched between
plastic sheets and illuminated with back lights. Pearl and Dean was able to secure a Certificate of Copyright
Registration dated January 20, 1981 over these illuminated display units. The advertising light boxes were
marketed under the trademark "Poster Ads". The application for registration of the trademark was filed with the
Bureau of Patents, Trademarks and Technology Transfer on June 20, 1983, but was approved only on
September 12, 1988, per Registration No. 41165. From 1981 to about 1988, Pearl and Dean employed the
services of Metro Industrial Services to manufacture its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and
installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under construction at that
time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. On
September 11, 1985, Pearl and Deans General Manager, Rodolfo Vergara, submitted for signature the
contracts covering SM Cubao and SM Makati to SMIs Advertising Promotions and Publicity Division Manager,
Ramonlito Abano. Only the contract for SM Makati, however, was returned signed. On October 4, 1985,
Vergara wrote Abano inquiring about the other contract and reminding him that their agreement for installation
of light boxes was not only for its SM Makati branch, but also for SM Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMIs house counsel informed Pearl and Dean that it was
rescinding the contract for SM Makati due to non-performance of the terms thereof. In his reply dated February
17, 1986, Vergara protested the unilateral action of SMI, saying it was without basis. In the same letter, he
pushed for the signing of the contract for SM Cubao.
Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to fabricate its
display units, offered to construct light boxes for Shoemarts chain of stores. SMI approved the proposal and
ten (10) light boxes were subsequently fabricated by Metro Industrial for SMI. After its contract with Metro
Industrial was terminated, SMI engaged the services of EYD Rainbow Advertising Corporation to make the
light boxes. Some 300 units were fabricated in 1991. These were delivered on a staggered basis and installed
at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed at SM
City and in the fastfood section of SM Cubao. Upon investigation, Pearl and Dean found out that aside from the
two (2) reported SM branches, light boxes similar to those it manufactures were also installed in two (2) other
SM stores. It further discovered that defendant-appellant North Edsa Marketing Inc. (NEMI), through its
marketing arm, Prime Spots Marketing Services, was set up primarily to sell advertising space in lighted
display units located in SMIs different branches. Pearl and Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and NEMI
enjoining them to cease using the subject light boxes and to remove the same from SMIs establishments. It
also demanded the discontinued use of the trademark "Poster Ads," and the payment to Pearl and Dean of
compensatory damages in the amount of Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224) light boxes
and NEMI took down its advertisements for "Poster Ads" from the lighted display units in SMIs stores.
Claiming that both SMI and NEMI failed to meet all its demands, Pearl and Dean filed this instant case for
infringement of trademark and copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently developed its poster panels
using commonly known techniques and available technology, without notice of or reference to Pearl and
Deans copyright. SMI noted that the registration of the mark "Poster Ads" was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word "Poster Ads" is a generic term which
cannot be appropriated as a trademark, and, as such, registration of such mark is invalid. It also stressed that
Pearl and Dean is not entitled to the reliefs prayed for in its complaint since its advertising display units
contained no copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that Pearl and Dean had no
cause of action against it and that the suit was purely intended to malign SMIs good name. On this basis, SMI,
aside from praying for the dismissal of the case, also counterclaimed for moral, actual and exemplary damages
and for the cancellation of Pearl and Deans Certification of Copyright Registration No. PD-R-2558 dated
January 20, 1981 and Certificate of Trademark Registration No. 4165 dated September 12, 1988.
NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor having
engaged in the business of advertising. It repleaded SMIs averments, admissions and denials and prayed for
similar reliefs and counterclaims as SMI."
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of copyright under
Section 2 of PD 49, as amended, and infringement of trademark under Section 22 of RA No. 166, as amended,
and are hereby penalized under Section 28 of PD 49, as amended, and Sections 23 and 24 of RA 166, as
amended. Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:
(a) actual damages - P16,600,000.00,
representing profits
derived by defendants
as a result of infringe-
ment of plaintiffs copyright
from 1991 to 1992
(b) moral damages - P1,000.000.00
(c) exemplary damages - P1,000,000.00
(d) attorneys fees - P1,000,000.00
plus
(e) costs of suit;
(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which were
fabricated by Metro Industrial Services and EYD Rainbow Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the trademark "Poster Ads", for
destruction; and
(4) to permanently refrain from infringing the copyright on plaintiffs light boxes and its trademark
"Poster Ads".
Defendants counterclaims are hereby ordered dismissed for lack of merit.
SO ORDERED.
4

On appeal, however, the Court of Appeals reversed the trial court:
Since the light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial
illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable class "O"
work, we have to agree with SMI when it posited that what was copyrighted were the technical drawings only,
and not the light boxes themselves, thus:
42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like plaintiff-
appellants will not extend to the actual object. It has so been held under jurisprudence, of which the leading
case is Baker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a copyright protection for a
book entitled "Seldens Condensed Ledger or Bookkeeping Simplified" which purported to explain a new
system of bookkeeping. Included as part of the book were blank forms and illustrations consisting of ruled lines
and headings, specially designed for use in connection with the system explained in the work. These forms
showed the entire operation of a day or a week or a month on a single page, or on two pages following each
other. The defendant Baker then produced forms which were similar to the forms illustrated in Seldens
copyrighted books. The Court held that exclusivity to the actual forms is not extended by a copyright. The
reason was that "to grant a monopoly in the underlying art when no examination of its novelty has ever been
made would be a surprise and a fraud upon the public; that is the province of letters patent, not of copyright."
And that is precisely the point. No doubt aware that its alleged original design would never pass the rigorous
examination of a patent application, plaintiff-appellant fought to foist a fraudulent monopoly on the public by
conveniently resorting to a copyright registration which merely employs a recordal system without the benefit of
an in-depth examination of novelty.
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge Authority [43 F. Supp.
298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright over an unpublished drawing entitled
"Bridge Approach the drawing showed a novel bridge approach to unsnarl traffic congestion". The defendant
constructed a bridge approach which was alleged to be an infringement of the new design illustrated in
plaintiffs drawings. In this case it was held that protection of the drawing does not extend to the unauthorized
duplication of the object drawn because copyright extends only to the description or expression of the object
and not to the object itself. It does not prevent one from using the drawings to construct the object portrayed in
the drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v. Maddox, 379
F. 2d 84, it was held that there is no copyright infringement when one who, without being authorized, uses a
copyrighted architectural plan to construct a structure. This is because the copyright does not extend to the
structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Deans copyright over the technical drawings of the
latters advertising display units.
xxx xxx xxx
The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate Court that the
protective mantle of the Trademark Law extends only to the goods used by the first user as specified in the
certificate of registration, following the clear mandate conveyed by Section 20 of Republic Act 166, as
amended, otherwise known as the Trademark Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a mark or
trade-name shall be prima facie evidence of the validity of the registration, the registrants ownership of the
mark or trade-name, and of the registrants exclusive right to use the same in connection with the goods,
business or services specified in the certificate, subject to any conditions and limitations stated therein."
(underscoring supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the registration of the trademark "Poster
Ads" with the Bureau of Patents, Trademarks, and Technology Transfer. Said trademark was recorded in the
Principal Register on September 12, 1988 under Registration No. 41165 covering the following products:
stationeries such as letterheads, envelopes and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the part of the defendants-
appellants for their use of the words "Poster Ads", in the advertising display units in suit. Jurisprudence has
interpreted Section 20 of the Trademark Law as "an implicit permission to a manufacturer to venture into the
production of goods and allow that producer to appropriate the brand name of the senior registrant on goods
other than those stated in the certificate of registration." The Supreme Court further emphasized the restrictive
meaning of Section 20 when it stated, through Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods not specified therein, then a
situation may arise whereby an applicant may be tempted to register a trademark on any and all goods which
his mind may conceive even if he had never intended to use the trademark for the said goods. We believe that
such omnibus registration is not contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Deans registered trademark and
defendants-appellants "Poster Ads" design, as well as the parallel use by which said words were used in the
parties respective advertising copies, we cannot find defendants-appellants liable for infringement of
trademark. "Poster Ads" was registered by Pearl and Dean for specific use in its stationeries, in contrast to
defendants-appellants who used the same words in their advertising display units. Why Pearl and Dean limited
the use of its trademark to stationeries is simply beyond us. But, having already done so, it must stand by the
consequence of the registration which it had caused.
xxx xxx xxx
We are constrained to adopt the view of defendants-appellants that the words "Poster Ads" are a simple
contraction of the generic term poster advertising. In the absence of any convincing proof that "Poster Ads" has
acquired a secondary meaning in this jurisdiction, we find that Pearl and Deans exclusive right to the use of
"Poster Ads" is limited to what is written in its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark "Poster Ads".
There being no finding of either copyright or trademark infringement on the part of SMI and NEMI, the
monetary award granted by the lower court to Pearl and Dean has no leg to stand on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and another is
rendered DISMISSING the complaint and counterclaims in the above-entitled case for lack of merit.
5

Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the following errors for
the Courts consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT
INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO INFRINGEMENT OF
PEARL & DEANS TRADEMARK "POSTER ADS" WAS COMMITTED BY RESPONDENTS SM AND
NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF THE TRIAL
COURT, DESPITE THE LATTERS FINDING, NOT DISPUTED BY THE HONORABLE COURT OF
APPEALS, THAT SM WAS GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING
CONTRACTS WITH PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING RESPONDENTS SM AND
NEMI LIABLE TO PEARL & DEAN FOR ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEYS
FEES AND COSTS OF SUIT.
6

ISSUES
In resolving this very interesting case, we are challenged once again to put into proper perspective four main
concerns of intellectual property law patents, copyrights, trademarks and unfair competition arising from
infringement of any of the first three. We shall focus then on the following issues:
(1) if the engineering or technical drawings of an advertising display unit (light box) are granted
copyright protection (copyright certificate of registration) by the National Library, is the light box
depicted in such engineering drawings ipso facto also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent issued by the Bureau of
Patents Trademarks and Technology Transfer (now Intellectual Property Office) in addition to the
copyright of the engineering drawings?
(3) can the owner of a registered trademark legally prevent others from using such trademark if it is a
mere abbreviation of a term descriptive of his goods, services or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & Ds complaint was that SMI infringed on its copyright over the light boxes when SMI had the
units manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously, petitioners position
was premised on its belief that its copyright over the engineering drawings extended ipso facto to the light
boxes depicted or illustrated in said drawings. In ruling that there was no copyright infringement, the Court of
Appeals held that the copyright was limited to the drawings alone and not to the light box itself. We agree with
the appellate court.
First, petitioners application for a copyright certificate as well as Copyright Certificate No. PD-R2588 issued
by the National Library on January 20, 1981 clearly stated that it was for a class "O" work under Section 2
(O) of PD 49 (The Intellectual Property Decree) which was the statute then prevailing. Said Section 2 expressly
enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of the
following works:
x x x x x x x x x
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
x x x x x x x x x
Although petitioners copyright certificate was entitled "Advertising Display Units" (which depicted the box-type
electrical devices), its claim of copyright infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the rights are
limited to what the statute confers. It may be obtained and enjoyed only with respect to the subjects and by the
persons, and on terms and conditions specified in the statute.
7
Accordingly, it can cover only the works falling
within the statutory enumeration or description.
8

P & D secured its copyright under the classification class "O" work. This being so, petitioners copyright
protection extended only to the technical drawings and not to the light box itself because the latter was not at
all in the category of "prints, pictorial illustrations, advertising copies, labels, tags and box wraps." Stated
otherwise, even as we find that P & D indeed owned a valid copyright, the same could have referred only to the
technical drawings within the category of "pictorial illustrations." It could not have possibly stretched out to
include the underlying light box. The strict application
9
of the laws enumeration in Section 2 prevents us from
giving petitioner even a little leeway, that is, even if its copyright certificate was entitled "Advertising Display
Units." What the law does not include, it excludes, and for the good reason: the light box was not a literary or
artistic piece which could be copyrighted under the copyright law. And no less clearly, neither could the lack of
statutory authority to make the light box copyrightable be remedied by the simplistic act of entitling the
copyright certificate issued by the National Library as "Advertising Display Units."
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public without license from P & D,
then no doubt they would have been guilty of copyright infringement. But this was not the case. SMIs and
NEMIs acts complained of by P & D were to have units similar or identical to the light box illustrated in the
technical drawings manufactured by Metro and EYD Rainbow Advertising, for leasing out to different
advertisers. Was this an infringement of petitioners copyright over the technical drawings? We do not think so.
During the trial, the president of P & D himself admitted that the light box was neither a literary not an artistic
work but an "engineering or marketing invention."
10
Obviously, there appeared to be some confusion regarding
what ought or ought not to be the proper subjects of copyrights, patents and trademarks. In the leading case
ofKho vs. Court of Appeals,
11
we ruled that these three legal rights are completely distinct and separate from
one another, and the protection afforded by one cannot be used interchangeably to cover items or works that
exclusively pertain to the others:
Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one
another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services (service
mark) of an enterprise and shall include a stamped or marked container of goods. In relation thereto, a trade
name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a
copyright is confined to literary and artistic works which are original intellectual creations in the literary and
artistic domain protected from the moment of their creation. Patentable inventions, on the other hand, refer to
any technical solution of a problem in any field of human activity which is new, involves an inventive step and is
industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial use of the light boxes without
license from petitioner, private respondents cannot be held legally liable for infringement of P & Ds copyright
over its technical drawings of the said light boxes, should they be liable instead for infringement of patent? We
do not think so either.
For some reason or another, petitioner never secured a patent for the light boxes. It therefore acquired no
patent rights which could have protected its invention, if in fact it really was. And because it had no patent,
petitioner could not legally prevent anyone from manufacturing or commercially using the contraption.
In Creser Precision Systems, Inc. vs. Court of Appeals,
12
we held that "there can be no infringement of a patent
until a patent has been issued, since whatever right one has to the invention covered by the patent arises
alone from the grant of patent. x x x (A)n inventor has no common law right to a monopoly of his invention. He
has the right to make use of and vend his invention, but if he voluntarily discloses it, such as by offering it for
sale, the world is free to copy and use it with impunity. A patent, however, gives the inventor the right to
exclude all others. As a patentee, he has the exclusive right of making, selling or using the invention.
13
On the
assumption that petitioners advertising units were patentable inventions, petitioner revealed them fully to the
public by submitting the engineering drawings thereof to the National Library.
To be able to effectively and legally preclude others from copying and profiting from the invention, a patent is a
primordial requirement. No patent, no protection. The ultimate goal of a patent system is to bring new designs
and technologies into the public domain through disclosure.
14
Ideas, once disclosed to the public without the
protection of a valid patent, are subject to appropriation without significant restraint.
15

On one side of the coin is the public which will benefit from new ideas; on the other are the inventors who must
be protected. As held in Bauer & Cie vs. ODonnel,
16
"The act secured to the inventor the exclusive right to
make use, and vend the thing patented, and consequently to prevent others from exercising like privileges
without the consent of the patentee. It was passed for the purpose of encouraging useful invention and
promoting new and useful inventions by the protection and stimulation given to inventive genius, and was
intended to secure to the public, after the lapse of the exclusive privileges granted the benefit of such
inventions and improvements."
The law attempts to strike an ideal balance between the two interests:
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure of
new useful and non-obvious advances in technology and design, in return for the exclusive right to practice the
invention for a number of years. The inventor may keep his invention secret and reap its fruits indefinitely. In
consideration of its disclosure and the consequent benefit to the community, the patent is granted. An
exclusive enjoyment is guaranteed him for 17 years, but upon the expiration of that period, the knowledge of
the invention inures to the people, who are thus enabled to practice it and profit by its use."
17

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

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

There is no such scrutiny in the case of copyrights nor any notice published before its grant to the effect that a
person is claiming the creation of a work. The law confers the copyright from the moment of creation
20
and the
copyright certificate is issued upon registration with the National Library of a sworn ex-parte claim of creation.
Therefore, not having gone through the arduous examination for patents, the petitioner cannot exclude others
from the manufacture, sale or commercial use of the light boxes on the sole basis of its copyright certificate
over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office (IPO) to
scrutinize the light boxs eligibility as a patentable invention. The irony here is that, had petitioner secured a
patent instead, its exclusivity would have been for 17 years only. But through the simplified procedure of
copyright-registration with the National Library without undergoing the rigor of defending the patentability of
its invention before the IPO and the public the petitioner would be protected for 50 years. This situation
could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden
21
, the United States Supreme Court held that only the expression of
an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the copyright of a book which
expounded on a new accounting system he had developed. The publication illustrated blank forms of ledgers
utilized in such a system. The defendant reproduced forms similar to those illustrated in the plaintiffs
copyrighted book. The US Supreme Court ruled that:
"There is no doubt that a work on the subject of book-keeping, though only explanatory of well known systems,
may be the subject of a copyright; but, then, it is claimed only as a book. x x x. But there is a clear distinction
between the books, as such, and the art, which it is, intended to illustrate. The mere statement of the
proposition is so evident that it requires hardly any argument to support it. The same distinction may be
predicated of every other art as well as that of bookkeeping. A treatise on the composition and use of
medicines, be they old or new; on the construction and use of ploughs or watches or churns; or on the mixture
and application of colors for painting or dyeing; or on the mode of drawing lines to produce the effect of
perspective, would be the subject of copyright; but no one would contend that the copyright of the treatise
would give the exclusive right to the art or manufacture described therein. The copyright of the book, if not
pirated from other works, would be valid without regard to the novelty or want of novelty of its subject matter.
The novelty of the art or thing described or explained has nothing to do with the validity of the copyright. To
give to the author of the book an exclusive property in the art described therein, when no examination
of its novelty has ever been officially made, would be a surprise and a fraud upon the public. That is
the province of letters patent, not of copyright. The claim to an invention of discovery of an art or
manufacture must be subjected to the examination of the Patent Office before an exclusive right
therein can be obtained; and a patent from the government can only secure it.
The difference between the two things, letters patent and copyright, may be illustrated by reference to the
subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of great value in the
healing art. If the discoverer writes and publishes a book on the subject (as regular physicians
generally do), he gains no exclusive right to the manufacture and sale of the medicine; he gives that to
the public. If he desires to acquire such exclusive right, he must obtain a patent for the mixture as a
new art, manufacture or composition of matter. He may copyright his book, if he pleases; but that only
secures to him the exclusive right of printing and publishing his book. So of all other inventions or
discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives no
exclusive right to the modes of drawing described, though they may never have been known or used before.
By publishing the book without getting a patent for the art, the latter is given to the public.
x x x
Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book intended to
convey instruction in the art, any person may practice and use the art itself which he has described and
illustrated therein. The use of the art is a totally different thing from a publication of the book explaining
it. The copyright of a book on bookkeeping cannot secure the exclusive right to make, sell and use account
books prepared upon the plan set forth in such book. Whether the art might or might not have been patented,
is a question, which is not before us. It was not patented, and is open and free to the use of the public. And, of
course, in using the art, the ruled lines and headings of accounts must necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas
produced by the peculiar nature of the art described in the books, which have been made the subject of
copyright. In describing the art, the illustrations and diagrams employed happened to correspond more closely
than usual with the actual work performed by the operator who uses the art. x x x The description of the art
in a book, though entitled to the benefit of copyright, lays no foundation for an exclusive claim to the
art itself. The object of the one is explanation; the object of the other is use. The former may be
secured by copyright. The latter can only be secured, if it can be secured at all, by letters
patent." (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark "Poster Ads" which petitioners president said was a
contraction of "poster advertising." P & D was able to secure a trademark certificate for it, but one where the
goods specified were "stationeries such as letterheads, envelopes, calling cards and newsletters."
22
Petitioner
admitted it did not commercially engage in or market these goods. On the contrary, it dealt in electrically
operated backlit advertising units and the sale of advertising spaces thereon, which, however, were not at all
specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate Appellate
Court,
23
where we, invoking Section 20 of the old Trademark Law, ruled that "the certificate of registration
issued by the Director of Patents can confer (upon petitioner) the exclusive right to use its own symbol only to
those goods specified in the certificate, subject to any conditions and limitations specified in the certificate x x
x. One who has adopted and used a trademark on his goods does not prevent the adoption and use of the
same trademark by others for products which are of a different description."
24
Faberge, Inc. was correct and
was in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.
25

Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure of P & D to secure a
trademark registration for specific use on the light boxes meant that there could not have been any trademark
infringement since registration was an essential element thereof.1wphi1
ON THE ISSUE OF UNFAIR COMPETITION
If at all, the cause of action should have been for unfair competition, a situation which was possible even if P &
D had no registration.
26
However, while the petitioners complaint in the RTC also cited unfair competition, the
trial court did not find private respondents liable therefor. Petitioner did not appeal this particular point; hence, it
cannot now revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair competition.
By the nature of things, there can be no unfair competition under the law on copyrights although it is applicable
to disputes over the use of trademarks. Even a name or phrase incapable of appropriation as a trademark or
tradename may, by long and exclusive use by a business (such that the name or phrase becomes associated
with the business or product in the mind of the purchasing public), be entitled to protection against unfair
competition.
27
In this case, there was no evidence that P & Ds use of "Poster Ads" was distinctive or well-
known. As noted by the Court of Appeals, petitioners expert witnesses himself had testified that " Poster Ads
was too generic a name. So it was difficult to identify it with any company, honestly speaking."
28
This crucial
admission by its own expert witness that "Poster Ads" could not be associated with P & D showed that, in the
mind of the public, the goods and services carrying the trademark "Poster Ads" could not be distinguished from
the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary meaning. "Poster Ads" was generic and
incapable of being used as a trademark because it was used in the field of poster advertising, the very
business engaged in by petitioner. "Secondary meaning" means that a word or phrase originally incapable of
exclusive appropriation with reference to an article in the market (because it is geographically or otherwise
descriptive) might nevertheless have been used for so long and so exclusively by one producer with reference
to his article that, in the trade and to that branch of the purchasing public, the word or phrase has come to
mean that the article was his property.
29
The admission by petitioners own expert witness that he himself could
not associate "Poster Ads" with petitioner P & D because it was "too generic" definitely precluded the
application of this exception.
Having discussed the most important and critical issues, we see no need to belabor the rest.
All told, the Court finds no reversible error committed by the Court of Appeals when it reversed the Regional
Trial Court of Makati City.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated May 22, 2001 is
AFFIRMED in toto. SO ORDERED.

G.R. No. L-32160 January 30, 1982
DOMICIANO A. AGUAS, petitioner,
vs.
CONRADO G. DE LEON and COURT OF APPEALS, respondents.

FERNANDEZ, J .:
This is a petition for certiorari to review the decision of the Court of Appeals in CA G.R. NO. 37824-R entitled
"Conrado G. de Leon, plaintiff-appelle vs. Dominciano Aguas and F.H. Aquino and Sons, defendants-
appellants," the dispositive portion of which reads:
WHEREFORE, with the modification that plintiff-applee's award of moral damages is hereby
redured to P3,000.00, the appealed judgment is hereby affirmed, in all othe respects, with costs
against appellants.
1

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

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

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

The trial court rendered a decision dated December 29, 1965, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the defendants:
1. Declaring plaintiff's patent valid and infringed:
2. Granting a perpetual injunction restraining defendants, their officers, agents, employees,
associates, confederates, and any and all persons acting under their authority from making
and/or using and/or vending tiles embodying said patented invention or adapted to be used in
combination embodying the same, and from making, manufacturing, using or selling,
engravings, castings and devises designed and intended for use in apparatus for the making of
tiles embodying plaintiff's patented invention, and from offering or advertising so to do, and from
aiding and abetting or in any way contributing to the infringement of said patent;
3. Ordering that each and all of the infringing tiles, engravings, castings and devices, which are
in the possession or under the control of defendants be delivered to plaintiff;
4. Ordering the defendants to jointly and severally pay to the plaintiff the following sums of
money, to wit:
(a) P10,020.99 by way of actual damages;
(b) P50,000.00 by way of moral damages;
(c) P5,000.00 by way of exemplary damages;
(d) P5,000.00 by way of attorney's fees and
(e) costs of suit.
5

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

I
THE TRIAL COURT ERRED IN NOT HOLDING THAT PLAINTIFF'S PATENT FOR THE
'PROCESS OF MAKING MOSAIC PRE-CAST TILE' IS INVALID BECAUSE SAID ALLEGED
PROCESS IS NOT AN INVENTION OR DISCOVERY AS THE SAME HAS ALREADY LONG
BEEN USED BY TILE MANUFACTURERS BOTH ABROAD AND IN THIS COUNTRY.
II
THE TRIAL COURT ERRED IN HOLDING THAT THE PATENT OF PLAINTIFF IS VALID
BECAUSE IT IS AN IMPROVEMENT OR THE AGE-OLD TILE MAKING SYSTEM.
III
THE TRIAL COURT ERRED IN NOT ORDERING THE CANCELLATION OF PLAINTIFF-
APPELLEE'S LETTERS PATENT NO. 658, EXHIBIT L, IN ACCORDANCE WITH THE
PERTINENT PROVISIONS OF THE PATENT LAW, REPUBLIC ACT 165.
IV
THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT DOMICIANO A. AGUAS IS
GUILTY OF INFRINGEMENT DESPITE THE FACT THAT PLAINTIFF'S PATENT IS NOT A
VALID ONE.
V
THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT COULD NEVER BE
GUILTY OF INFRINGEMENT OF PLAINTIFF'S PATENT BECAUSE EVEN IN MATTERS NOT
PATENTED BY THE PLAINTIFF - LIKE THE COMPOSITION AND PROPORTION OF
INGREDIENTS USED AND THE STRUCTURAL DESIGNS OF THE MOULD AND THE TILE
PRODUCED - THAT OF THE DEFENDANT ARE DIFFERENT.
VI
THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN HOLDING THE
DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR DAMAGES, AND ATTORNEY'S
FEES.
On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with the modification that
plaintiff-appellee's award of moral damages was reduced to P3,000.00.
7

The petitioner assigns the following errors supposedly committed by the Court of Appeals:
It is now respectfully submitted that the Court of Appeals committed the following errors
involving questions of law, to wit:
First error. When it did not conclude that the letters patent of the respondent although entitled
on the cover page as a patent for improvements, was in truth and in fact, on the basis of the
body of the same, a patent for the old and non-patentable process of making mosaic pre-cast
tiles;
Second error. When it did not conclude from the admitted facts of the case, particularly the
contents of the letters patent, Exh. L and the pieces of physical evidence introduced consisting
of samples of the tiles and catalouges, that the alleged improvements introduced by the
respondent in the manufacture of mosaic pre-cast tiles are not patentable, the same being not
new, useful and inventive.
Third error. As a corollary, when it sentenced the herein petitioner to pay the damages
enumerated in the decision of the lower court (Record on Appeal, pp. 74-75), as confirmed by it
(the Court of Appeals), but with the modification that the amount of P50,000.00 moral damages
was reduced to P3,000.00.
8

The facts, as found by the Court of Appeals, are:
The basic facts borne out by the record are to the effect that on December 1, 1959 plaintiff-
appellee filed a patent application with the Philippine Patent Office, and on May 5, 1960, said
office issued in his favor Letters Patent No. 658 for a "new and useful improvement in the
process of making mosaic pre-cast tiles" (Exh, "L"); that defendant F.H. Aquino & Sons
engraved the moulds embodying plaintiff's patented improvement for the manufacture of pre-
cast tiles, plaintiff furnishing said defendant the actual model of the tiles in escayola and
explained to said engraver the plans, specifications and the details of the engravings as he
wanted them to be made, including an explanation of the lip width, artistic slope of easement
and critical depth of the engraving that plaintiff wanted for his moulds; that engraver Enrique
Aquino knew that the moulds he was engraving for plaintiff were the latter's very own, which
possession the new features and characteristics covered by plaintiff's parent; that defendant
Aguas personally, as a building contractor, purchased from plaintiff, tiles shaped out of these
moulds at the back of which was imprinted plaintiff's patent number (Exhs., "A" to "E"); that
subsequently, through a representative, Mr. Leonardo, defendant Aguas requested Aquino to
make engravings of the same type and bearing the characteristics of plaintiff's moulds; that Mr.
Aquino knew that the moulds he was asked to engrave for defendant Aguas would be used to
produce cement tiles similar to plaintiff's; that the moulds which F.H. Aquino & Sons eventually
engraved for Aguas and for which it charged Aguas double the rate it charged plaintiff De Leon,
contain the very same characteristic features of plaintiff's mould and that Aguas used these
moulds in the manufacture of his tiles which he actually put out for sale to the public (Exhs. "1"
to "3" and Exhs. "A" to "E"); that both plaintiff's and defendant Aguas' tiles are sculptured pre-
cast wall tiles intended as a new feature of construction and wag ornamentation substantially
Identical to each other in size, easement, lip width and critical depth of the deepest depression;
and that the only significant difference between plaintiff's mould and that engraved by Aquino for
Aguas is that, whereas plaintiff's mould turns out tiles 4 x 4 inches in size, defendant Aguas'
mould is made to fit a 4-1/4 x 4-1/4 inch tile.
9

The patent right of the private respondent expired on May 5, 1977.
10
The errors will be discuss only to
determine the right of said private respondent to damages.
The petitioner questioned the validity of the patent of the private respondent, Conrado G. de Leon, on the
ground that the process, subject of said patent, is not an invention or discovery, or an improvement of the old
system of making tiles. It should be noted that the private respondent does not claim to be the discoverer or
inventor of the old process of tile-making. He only claims to have introduced an improvement of said process.
In fact, Letters Patent No. 658 was issued by the Philippine Patent Office to the private respondent, Conrado
G. de Leon, to protect his rights as the inventor of "an alleged new and useful improvement in the process of
making mosaic pre-cast tiles."
11
Indeed, Section 7, Republic Act No. 165, as amended provides: "Any
invention of a new and useful machine, manufactured product or substance, process, or an improvement of the
foregoing, shall be patentable.
The Court of Appeals found that the private respondent has introduced an improvement in the process of tile-
making because:
... we find that plaintiff-appellee has introduced an improvement in the process of tile-making,
which proceeds not merely from mechanical skill, said improvement consisting among other
things, in the new critical depth, lip width, easement and field of designs of the new tiles. The
improved lip width of appellee's tiles ensures the durability of the finished product preventing the
flaking off of the edges. The easement caused by the inclination of the protrusions of the
patented moulds is for the purpose of facilitating the removal of the newly processed tile from
the female die. Evidently, appellee's improvement consists in the solution to the old critical
problem by making the protrusions on his moulds attain an optimum height, so that the
engraving thereon would be deep enough to produce tiles for sculptured and decorative
purposes, strong optimum thickness of appellee's new tiles of only 1/8 of an inch at the deepest
easement (Exhs. "D" and "D-1") is a most critical feature, suggestive of discovery and
inventiveness, especially considering that, despite said thinness, the freshly formed tile remains
strong enough for its intended purpose.
While it is true that the matter of easement, lip width, depth, protrusions and depressions are
known to some sculptors, still, to be able to produce a new and useful wall tile, by using them all
together, amounts to an invention. More so, if the totality of all these features are viewed in
combination with the Ideal composition of cement, sodium silicate and screened fine sand.
By using his improved process, plaintiff has succeeded in producing a new product - a concrete
sculptured tile which could be utilized for walling and decorative purposes. No proof was
adduced to show that any tile of the same kind had been produced by others before appellee.
Moreover, it appears that appellee has been deriving considerable profit from his manufacture
and sale of such tiles. This commercial success is evidence of patentability (Walker on Patents,
Dellers Edition, Vol. I, p. 237).
12

The validily of the patent issued by the Philippines Patent Office in favor of the private respondent and the
question over the inventiveness, novelty and usefulness of the improved process therein specified and
described are matters which are better determined by the Philippines Patent Office. The technical staff of the
Philippines Patent Office, composed of experts in their field, have, by the issuance of the patent in question,
accepted the thinness of the private respondent's new tiles as a discovery. There is a presumption that the
Philippines Patent Office has correctly determined the patentability of the improvement by the private
respondent of the process in question.
Anent this matter, the Court of Appeals said:
Appellant has not adduced evidence sufficient to overcome the above established legal
presumption of validity or to warrant reversal of the findings of the lower court relative to the
validity of the patent in question. In fact, as we have already pointed out, the clear
preponderance of evidence bolsters said presumption of validity of appellee's patent. There is
no indication in the records of this case and this Court is unaware of any fact, which would tend
to show that concrete wall tiles similar to those produced by appellee had ever been made by
others before he started manufacturing the same. In fact, during the trial, appellant was
challenged by appellee to present a tile of the same kind as those produced by the latter, from
any earlier source but, despite the fact that appellant had every chance to do so, he could not
present any. There is, therefore, no concrete proof that the improved process of tile-making
described in appellee's patent was used by, or known to, others previous to his discovery
thereof.
13

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

The petitioner also contends that the improvement of respondent is not patentable because it is not new, useful
and inventive. This contention is without merit.
The records disclose that de Leon's process is an improvement of the old process of tile making. The tiles
produced from de Leon's process are suitable for construction and ornamentation, which previously had not
been achieved by tiles made out of the old process of tile making. De Leon's invention has therefore brought
about a new and useful kind of tile. The old type of tiles were usually intended for floors although there is
nothing to prevent one from using them for walling purposes. These tiles are neither artistic nor ornamental.
They are heavy and massive.
The respondent's improvement is indeed inventive and goes beyond the exercise of mechanical skill. He has
introduced a new kind of tile for a new purpose. He has improved the old method of making tiles and pre-cast
articles which were not satisfactory because of an intolerable number of breakages, especially if deep
engravings are made on the tile. He has overcome the problem of producing decorative tiles with deep
engraving, but with sufficient durability.
15
Durability inspite of the thinness and lightness of the tile, is assured,
provided that a certain critical depth is maintained in relation to the dimensions of the tile.
16

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

The Machuca tiles are different from that of the private respondent. The designs are embossed and not
engraved as claimed by the petitioner. There may be depressions but these depressions are too shallow to be
considered engraved. Besides, the Machuca tiles are heavy and massive.
There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles are made of
ceramics.
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 and/or
improvement being patentable.
Both the trial court and the Court of Appeals found as a fact that the petitioner Domiciano A. Aguas did infringe
de Leon's patent. There is no showing that this case falls under one of the exceptions when this Court may
overrule the findings of fact of the Court of Appeals. The only issue then to be resolved is the amount of
damages that should be paid by Aguas.
In its decision the Court of Appeals affirmed the amount of damages awarded by the lower court with the
modification that the respondent is only entitled to P3,000.00 moral damages.
21

The lower court awarded the following damages:
22

a) P10,020.99 by way of actual damages;
b) P50,000.00 by way of moral damages;
c) P5,000.00 by way of exemplary damages;
d) P5,000.00 by way of attomey's fees and
e) Costs of suit
because:
An examination of the books of defendant Aguas made before a Commissioner reveals that
during the period that Aguas was manufacturing and selling tiles similar to plaintiff's, he made a
gross income of P3,340.33, which can be safely be considered the amount by which he
enriched himself when he infringed plaintiff's patent. Under Sec. 42 of the Patent Law any
patentee whose rights have been infringed is entitled to damages which, according to the
circumstances of the case may be in a sum above the amount found as actual damages
sustained provided the award does not exceed three times the amount of such actual damages.
Considering the wantonness of the infringement committed by the defendants who knew all the
time about the existence of plaintiff's patent, the Court feels there is reason to grant plaintiff
maximum damages in the sum of P10,020.99. And in order to discourage patent infringements
and to give more teeth to the provisions of the patent law thus promoting a stronger public policy
committed to afford greater incentives and protection to inventors, the Court hereby awards
plaintiff exemplary damages in the sum of P5,000.00 to be paid jointly and severally by
defendants. Considering the status of plaintiff as a reputable businessman, and owner of the
likewise reputed House of Pre-Cast, he is entitled to an award of moral damages in the sum of
P50,000.00.
23

In reducing the amount of moral damages the Court of Appeals said:
As regards the question of moral damages it has been shown that as a result of the unlawful
acts of infringment committed by defendants, plaintiff was unstandably very sad; he worried and
became nervous and lost concentration on his work in connection with his tile business (pp. 28,
30, t.s.n., Feb. 28, 1964). In addition, plaintiff's character and reputation have been
unnecessarily put in question because defendants, by their acts of infringement have created a
doubt or suspicion in the public mind concerning the truth and honesty of plaintiff's
advertisements and public announcements of his valid patent. Necessarily, said acts of
defendants have caused plaintiff considerable mental suffering, considering especially, the fact
that he staked everything on his pre-cast tile business (p. 36, t.s.n., Id.) The wantonness and
evident bad faith characterizing defendants' prejudicial acts against plaintiff justify the
assessment of moral damages in plaintiff's favor, though we do not believe the amount of
P50,000.00 awarded by the lower court is warranted by the circumstances. We feel that said
amount should be reduced to P3,000.00 by way of compensating appellee for his moral
suffering. "Willful injury to property may be a legal ground for awarding moral damages if the
court should find that, under the circumstances such damages are justly due" (Art. 2219 NCC).
There is no reason to reduce the amount of damages and attorneys fees awarded by the trial court as modified
by the Court of Appeals.
WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed from is hereby affirmed,
without pronouncement as to costs.
SO ORDERED.

G.R. No. 14101 September 24, 1919
ANGEL VARGAS, plaintiff-appellant,
vs.
F. M. YAPTICO & CO. (Ltd.), defendant-appellee.
Charles C. Cohn for appellants .
John Bordman for appellee.
MALCOLM, J .:
Rude wooden implements for tilling the soil have been in use in the Philippines, possibly not since the
Israelites "went down to sharpen every man his share and his coulter," but certainly for many years. Iron plows
called "Urquijo" and "Pony" have latterly been the vogue.
Angel Vargas, a farmer acquainted with local conditions and alive to the commercial possibilities, took it upon
himself to produce, with the native plow as the model, an improved, adjustable plow. On July 22, 1910, he
made application for a United States patent to cover his so-called invention. On March 12, 1912, letters patent
were issued by the United States Patent Office in favor of Vargas .On April 24, 1912, a certified copy of the
patent was filed in the Division of Patents, Copyrights, and Trademarks of the Executive Bureau, Government
of the Philippine Islands. The patent and its registry was also published in the newspaper, El Tiempo.
Since 1910, Vargas has engaged in the manufacture of these plows in the city of Iloilo, Philippine Islands. On
the plows there was first stamped the words "Patent Applied For," later after the patent had been granted,
changed to "Patented Mar. 12, 1912." Ninety per cent of the plows in use in the Visayas (Iloilo and vicinity) are
said to be Vargas plows.
During this same period, the firm of F. M. Yaptico & Co. (Ltd.), was engaged in the foundry business in the City
of Iloilo. It openly held itself out as a manufacturer of plow parts. It has in fact produced points, shares, shoes,
and heel pieces in a considerable amount adapted to replace worn-out parts of the Vargas plow.
Such was the existing situation when, in the early part of 1918, the owner of the patent, and thus the proper
party to institute judicial proceedings, began action in the Court of First Instance of Iloilo to enjoin the alleged
infringement of U.S. Patent No. 1020232 by the defendant F. M Yaptico & Co. (Ltd.), and to recover the
damages suffered by reason of this infringement. The court issued the preliminary injunction as prayed for. The
defendant, in addition to a general denial, alleged, as special defenses, that the patent lacked novelty or
invention, that there was no priority of ideas or device in the principle and construction of the plow, and that the
plow, whose manufacture it was sought to have enjoined by the plaintiff, had already been in public use for
more than two years before the application of the plaintiff for his patent. The parties subsequently entered into
a stipulation that the court should first resolve the question of whether or not there had been an infraction of the
patent, reserving the resultant question of damages for later decision. After the taking of evidence, including
the presentation of exhibits, the trial judge, the Honorable Antonio Villareal, in a very exhaustive and learned
decision, rendered judgment in favor of the defendant and against the plaintiff, declaring null and without effect
the patent in question and dismissing the suit with costs against the plaintiff .The preliminary injunction
theretofore issued was dissolved.
From this judgment the plaintiff has appealed, specifying five errors. The principal assignment No. 1 is, that the
trial court erred in finding that the patented invention of the plaintiff is lacking in novelty and invention.
Defendant, in reply, relies on three propositions, namely: (1) The judgment of the trial court in finding the patent
granted plaintiff void for lack of novelty and invention should be affirmed; (2) The patent granted plaintiff is void
from the public use of his plow for over two years prior to his application for a patent, and (3) If the patent is
valid, there has been no contributory infringement by defendant.
Before resolving these rival contentions, we should have before us the relevant law. Act No. 2235 of the
Philippine Legislature, enacted on February 10, 1913, in effect makes the United States Patent Laws
applicable in the Philippine Islands. It provides that "owners of patents, including design patents, which have
been issued or may hereafter be issued, duly registered in the United States Patent Office under the laws of
the United States relating to the grant of patents, shall receive in the Philippine Islands the protection accorded
them in the United States under said laws." (Sec. 1.) Turning to the United States Patent Laws, we find the Act
of Congress of March 3, 1897, amendatory of section 4886 of the United States Revised Statutes, reading as
follows:
Any person who has invented or discovered any new and useful art, machine, manufacture, or
composition of matter, or any new an useful improvements thereof, not known or used by others in this
country, before his invention or discovery thereof, and not patented or described in any printed
publication in this or any foreign country, before his invention or discovery thereof, or more than two
years prior to his application, and not in public use or on sale in this country for more than two years
prior to his application, unless the same is proved to have been abandoned, may upon payment of the
fees required by law, and other due proceeding had, obtain a patent therefor. (29 Stat. L., 692, 7 Fed
.Stat. Ann. [2d Ed.], p. 23.)
When a patent is sought to be enforced, "the question of invention, novelty, or prior use, and each of them, are
open to judicial examination." The burden of proof to substantiate a charge of infringement is with the plaintiff.
Where, however, the plaintiff introduces the patent in evidence, if it is in due form, it affords a prima
faciepresumption of its correctness and validity. The decision of the Commissioner of Patents in granting the
patent is always presumed to be correct. The burden then shifts to the defendant to overcome by competent
evidence this legal presumption .With all due respect, therefore, for the critical and expert examination of the
invention by the United States Patent Office, the question of the validity of the patent is one for judicial
determination, and since a patent has been submitted, the exact question is whether the defendant has
assumed the burden of proof as to anyone of his defenses. (See Agawan Co. vs. Jordan [1869], 7 Wall., 583;
Blanchard vs .Putnam [1869], 8 Wall., 420; Seymour vs. Osborne [1871], 11 Wall., 516; Reckendorfer vs.
Faber [1876], 92 U.S., 347; 20 R. C. L., 1112, 1168, 1169.)
As herein before stated, the defendant relies on three special defenses. One such defense, on which the
judgment of the lower court is principally grounded, and to which appellant devotes the major portion of his
vigorous argument, concerns the element of novelty, invention, or discovery, that gives existence to the right to
a patent. On this point the trial court reached the conclusion that "the patented plow of the plaintiff, Exhibit D, is
not different from the native plow, Exhibit 2, except in the material, in the form, in the weight and the grade of
the result, the said differences giving it neither a new function nor a new result distinct from the function and
the result obtained from the native plow; consequently, its production does not presuppose the exercise of the
inventive faculty but merely of mechanical skill, which does not give a right to a patent of an invention under
the provisions of the Patent Law." In thus finding, the court may have been right, since the Vargas plow does
not appear to be such a "combination" as contains a novel assemblage of parts exhibiting invention.
(See Stimpsonvs. Woodman [1870], 10 Wall., 117 rollers; Hicks vs. Kelsey [1874], 20 Wall., 353 stoves;
Washburn & Moen Mfg. Co. vs. Beat 'Em All Barbed Wire Co. [1892], 143 U.S., 275 barbed wire;
Lynch vs .Dryden [1873], C. D., 73 walking cultivators; Torrey vs. Hancock [1910], 184 Fed., 61 rotary
plows.)
A second line of defense relates to the fact that defendant has never made a complete Vargas plow, but only
points, shares, shoes, and heel pieces, to serve as repairs. Defendant's contention is, that in common with
other foundries, he has for years cast large numbers of plow points and shares suitable for use either on the
native wooden plow, or on the Vargas plow. A difference has long been recognized between repairing and
reconstructing a machine. If, for instance, partial injuries, whether they occur from accident or from wear and
tear, to a machine for agricultural purposes, are made this is only re-fitting the machine for use, and thus
permissible. (Wilson vs. Simpson [1850], 9 How., 109.) Even under the more rigorous doctrine of Leeds &
Catlin Co. vs. Victor Talking Machine Co. ([1909], 213 U.S., 325), it may be possible that all the defendant has
done is to manufacture and sell isolated parts to be used to replace worn-out parts.
The third defense is, that under the provisions of the statute, an inventor's creation must not have been in
public use or on sale in the United States (and the Philippine Islands) for more than two years prior to his
application .Without, therefore, committing ourselves as to the first two defenses, we propose to base our
decision on the one just suggested as more easily disposing of the case. (See 20 R. C. L., 1140-1142.) We do
so with full consciousness of the doubt which arose in the mind of the trial court, but with the belief that since it
has been shown that the invention was used in public at Iloilo by others than Vargas, the inventor, more than
two years before the application for the patent, the patent is invalid.
Although we have spent some time in arriving at this point, yet having reached it, the question in the case is
single and can be brought to a narrow compass. Under the English Statute of Monopolies (21 Jac. Ch., 3), and
under the United States Patent Act of February 21, 1793, later amended to be as herein quoted, it was always
the rule, as stated by Lord Coke, Justice Story and other authorities, that to entitle a man to a patent, the
invention must be new to the world. (Pennock and Sellers vs. Dialogue [1829], 2 Pet., 1.) As said by the United
States Supreme Court, "it has been repeatedly held by this court that a single instance of public use of the
invention by a patentee for more than two years before the date of his application for his patent will be fatal to
the validity of the patent when issued." (Worley vs. Lower Tobacco Co .[1882], 104 U. S., 340; McClurg vs.
Kingsland [1843], I How., 202; Consolidated Fruit Jar Co. vs. Wright [1877], 94 U. S., 92; Egbert vs. Lippmann
[1881], 104 U. S., 333; Coffin vs. Ogden [1874], 18 Wall., 120; Manning vs. Cape Ann Isinglass and Glue Co.
[1883], 108 U. S., 462; Andrews vs. Hovey [1887], 123 U. S., 267; Campbell vs. City of New York [1881], 1 L.
R. A., 48.)
On the facts, we think the testimony shows such a public use of the Vargas plow as to render the patent invalid
Nicolas Roces, a farmer, testified that he had bought twenty Vargas plows, of which Exhibit 5 was one, in
December, 1907; and Exhibit 5, the court found, was a plow completely identical with that for which the plaintiff
had received a patent. The minor exception, and this in itself corroborative of Roces' testimony, is that the
handle of plow Exhibit 5 is marked with the letters "A V" and not with the words "Patent Applied For" or
"Patented Mar.12, 1912." Salvador Lizarraga, a clerk in a business house, testified that he had received plows
similar to Exhibits D, 5, and 4, for sale on commission on May, 1908, from Bonifacio Araneta, partner of Vargas
in the plow business. Ko Pao Ko, a blacksmith, testified that he had made fifty plow frames in 1905 for Vargas
and Araneta, of which Exhibit 4 is one; Exhibit 4, the court found, is a plow identical with that patented by
Vargas, but without share and mould-board. Alfred Berwin, an employee in the office of Attorney John
Bordman, testified that on September 21, 1908, he had knowledge of a transaction wherein Vargas and
Araneta desired to obtain money to invest in a plow factory. George Ramon Saul, a mechanic of the "Taller
Visayas" of Strachan and MacMurray, testified that he had made Vargas plow points and shares of the present
form upon order of Araneta and Vargas in 1906 and 1907 .William MacMurray, proprietor of the "Taller
Visayas," corroborated the evidence of the witness Saul by the exhibition of the account against Vargas and
Araneta wherein, under date of December 13, 1906, appears the item "12 new soft steel plow shares forged
and bored for rivets as per sample." Against all this, was the testimony of the plaintiff Angel Vargas who denied
that Saul could have been seen the Vargas plow in 1907 and 1907, who denied that Roces purchased the
Vargas plow in 1907, who denied that Lizarraga could have acted as an agent to sell two plows in November,
1908, who denied any remembrance of the loan mentioned by Berwin as having been negotiated in
September, 1908, who denied that Ko Pao Ko made fifty plows one of which is Exhibit 4, for Araneta and
Vargas in 1905. Plaintiff introduced his books to substantiate his oral testimony .It is hardly believable that five
or six witnesses for the defense would deliberately perjure themselves under oath. One might, but that all
together, of different nationalities, would enter into such a conspiracy, is to suppose the improbable.
Tested by the principles which go to make the law, we think a preponderance of the evidence is to the effect
that for more than two years before the application for the original letters patent, or before July 22, 1908, there
was, by the consent and allowance of Vargas, a public use of the invention covered by them.
To conclude, we are not certain but that appellee has proved every one of his defenses. We are certain that he
has at least demonstrated the public use of the Vargas plow over two years prior to the application for a patent.
Such being the case, although on a different ground, we must sustain the judgment of the lower court, without
prejudice to the determination of the damages resulting from the granting of the injunction, with the costs of this
instance against the appellant. So ordered.

G.R. No. L-38010 December 21, 1933
PATRICK HENRY FRANK and WILLIAM HENRY GOHN, plaintiffs-appellants,
vs.
G. KOSUYAMA, defendant-appellee.
J.W. Ferrier for appellants.
Pablo Lorenzo for appellee.

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 the
judgment be rendered against the defendant, ordering him thereby to refrain immediately from the manufacture
and sale of 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 defendants 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 and privileges acquired by the plaintiffs over the aforesaid 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 cost, as
well as the defendant's counterclaim of P10,000. The defendant did not appeal.
In their amended complaint, the plaintiff 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 tappering 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 palletor 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 difference between the machine in
question and other machines and that 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:
In constructing their machine the plaintiffs did nothing but improve, to a certain degree, those that were
already in vogue and in actual us 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 it can
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 machine appeared. Neither can it be said
that they invented the fly wheel 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 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, 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. 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 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 on the so called "spindle" or conical drum which was then in actual use in the Dringman and Icsiar hemp
stripping machines.
Notwithstanding the foregoing facts, the trial court did not decree the annulment of the 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 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.
In the light of sound logic, the plaintiffs cannot insist 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 likewise appears that the patent on Improved Hemp Stripping
Machines was issued minus the "spindle" in question. Were we to stress to this part of the machine, we would
be giving the patent obtained by the plaintiffs a wider range than it actually has, which is contrary to the
principles of interpretation in matters relating to patents.
In support of their claim the plaintiffs invoke the doctrine laid down by this court in the case of Frank and
Gohnvs. 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 former and those of the latter case are the
same and that the patent then involved is the very same one upon which the present action of the plaintiffs is
based. The above-cited case, however, cannot be invoked as a precedent to justify a judgment in favor of the
plaintiffs-appellants on the ground that the facts in one case entirely different from those in the other. In the
former case the defendant did not set up the same special defenses as those alleged by the herein defendant
in his answer and the plaintiffs therein confined themselves to presenting the patent, or rather a copy thereof,
wherein the "spindle" was mentioned, and this court took for granted their claim that it was one of the essential
characteristics thereof which was imitated or copied by the then defendant. Thus it came to pass that the
"spindle" in question was insistently mentioned in the decision rendered on appeal as the essential part of the
plaintiffs' machine allegedly imitated by the then defendant. In the case under 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 expressly excluded in their application, as evidenced by the
aforesaid Exhibit 41.
Wherefore, reiterating that the defendant cannot be held civilly liable for alleged infringement 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 Province of Davao at the time the
plaintiffs applied for and obtained their patent for improved hemp stripping machines, the judgment appealed
from is hereby affirmed, with the costs against the plaintiffs-appellants. So ordered.

G.R. No. 118708 February 2, 1998
CRESER PRECISION SYSTEMS, INC., petitioner,
vs.
COURT OF APPEALS AND FLORO INTERNATIONAL CORP., respondents.

MARTINEZ, J .:
This petition for review on certiorari assails the decision
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.
Private respondent is a domestic corporation engaged in the manufacture, production, distribution and sale of
military armaments, munitions, airmunitions and other similar materials.
2

On January 23, 1990, private respondent was granted by the Bureau of Patents, Trademarks and Technology
Transfer (BPTTT), a Letters Patent No. UM-6938
3
covering an aerial fuze which was published in the
September-October-1990, Vol. III, No. 5 issue of the Bureau of Patent's Official Gazette.
4

Sometime in November 1993, private respondent, through its president, Mr. Gregory Floro, Jr., discovered that
petitioner submitted samples of its patented aerial fuze to the Armed Forces of the Philippines (AFP) for
testing. He learned that petitioner was claiming the aforesaid aerial fuze as its own and planning to bid and
manufacture the same commercially 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 of its existing patent and its
rights thereunder, warning petitioner of a possible court action and/or application for injunction, should it
proceed with the scheduled testing by the military on December 7, 1993.
In response to private respondent's demand, petitioner filed on December 8, 1993 a 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 petitioner is the first, true and actual inventor of an aerial fuze
denominated as "Fuze, PDR 77 CB4" which it developed as early as December 1981 under the Self-Reliance
Defense Posture Program (SRDP) of the AFP; that sometime in 1986, petitioner began supplying the AFP with
the said aerial fuze; that private respondent's aerial fuze is identical in every respect to the petitioner's fuze;
and that the only difference between the two fuzes are miniscule and merely cosmetic in nature. Petitioner
prayed that a temporary restraining order and/or writ of 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 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 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 for infringement against it since it has no patent for the aerial fuze which it claims to
have invented; that petitioner's 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
patentedaerial 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 rights 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 court 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
plaintiff's 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 plaintiff's 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 defendant's 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 Sec. 10, RA 165 to include only "the first true and actual inventor, his
heirs, legal representatives or 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 defendant's letter. With the
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 defendant's 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 respondent's 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
patentedaerial fuze and cause it irreparable damages.
On November 9, 1994, the respondent court rendered the now assailed decision reversing the trial court's
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 petitioner's 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:
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 (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. . . .
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 patentee's 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 as 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 light 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, an 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, petitioner's
remedy is not to file an action for injunction or infringement but to file a petition for cancellation of private
respondent's patent. Petitioner however failed to do so. As such, it can not now assail or impugn the validity of
the private respondent's 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. The technical Staff of the Philippines Patent Office, composed of
experts in their field, have, by the issuance of the patent in question, accepted the thinness of
the private respondent's new tiles as a discovery. There is a presumption that the 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 of 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.

G.R. No. 149907 April 16, 2009
ROMA DRUG and ROMEO RODRIGUEZ, as Proprietor of ROMA DRUG, Petitioners,
vs.
THE REGIONAL TRIAL COURT OF GUAGUA, PAMPANGA, THE PROVINCIAL PROSECUTOR OF
PAMPANGA, BUREAU OF FOOD & DRUGS (BFAD) and GLAXO SMITHKLINE, Respondents.
D E C I S I O N
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
1
issued 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 peoples 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;
xxx
7

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)1avvphi1
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 SLCOs 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 on their missions
of mercy. After all, they are disabled from invoking the bare "personal use" exemption afforded by the SLCD.
Even worse is the fact that the law is not content with simply banning, at civil costs, the importation of
unregistered drugs. It equates the importers of such drugs, many of whom motivated to do so out of altruism or
basic human love, with the malevolents who would alter or counterfeit pharmaceutical drugs for reasons of
profit at the expense of public safety. Note that the SLCD is a special law, and the traditional treatment of penal
provisions of special laws is that of malum prohibitumor punishable regardless of motive or criminal intent. For
a law that is intended to help save lives, the SLCD has revealed itself as a heartless, soulless legislative piece.
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 peoples 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 Section 4 or Rep. Act No. 8203. The
Temporary Restraining Order dated 15 October 2001 is hereby made PERMANENT. No pronouncements as
to costs.
SO ORDERED.

G.R. No. L-1816 April 17, 1906
CARLOS GSELL, plaintiff-appellee,
vs.
VALERIANO VELOSO YAP-JUE, defendant-appellant.
Chicote, Miranda and Sierra, for appellant.
Coudert Brothers, for appellee.
JOHNSON, J .:
This was an action by the plaintiff to recover of the defendant damages for the infringement of a certain patent
issued by the Spanish Government to the assignor of the plaintiff.
An examination of the evidence adduced during the trial shows that upon the 17th day of June, 1896, Henry
Alfred Gsell presented a petition to the "Spanish Government to be granted a patent for manufacturing
umbrella and cane handles, which patent was as follows:
Descriptive statement which accompanies the application for patent of invention for the industrial
product 'handles for canes and umbrellas, curred by means of a small lamp or blowpipe, fed buy
petroleum or mineral fuel.'
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 fifteen 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 fifteen
centimeters a piece of very clean: bamboo, which completely fills the hole made by the gimlet,
thereby giving to the cane necessary strength to resist the heat of the lamp or blowpipe without
breaking or cracking.
This operation having been performed, the cane, the end of which is attached to a fixed point, is
given the shape of a hook or some other form by means of fire and pressure. Once the cane
has been shaped desired, it is allowed to cool, and is then cleaned, varnished, and ornamented
at will.
This industry requires skillful handiwork, owing to the great risk engendered by the treatment of
such fragile material as a light cane. On the other hand, however, it affords large profits to the
workman.
NOTE. The patent applied for shall be for the industrial product 'cane handles for walking
sticks and umbrellas, curved by means of a small lamp or blowpipe, fed by petroleum or mineral
fuel.'
Madrid, June 17, 1896.
Which petition was granted in the following decree:
Whereas Mr. Henry Alfred Gsell, of ............. has filed under date of the 17th of June, 1896, in
the civil government of Madrid, an application for a patent of an invention, consisting of a
process for curving handles for canes and umbrellas by means of a lamp or blowpipe fed by
petroleum or mineral fuel.
He having complied with the provisions of the law of July 30, 1878, the undersiged by virtue of
the power conferred upon him by article 4 of the royal decree of July 30, 1887, issues by order
of his excellency the minister of the interior, in favor of said party, the present patent of invention
which guarantees to him the Peninsula and adjacent islands, for the term of vein ...... from the
date of the present title, the exclusive right to the exploitation of the said industry, in the form
described in the statement attached to ........ He may extend it to the colonies, provided he
complies with the provisions of article 2 of the royal decree of May 14, 1880.
Of this patent the division of industry and registration of industrial property ............ shall make a
record to be forwarded to the minister of the interior; and it is provided that the same shall expire
and shall be null and void if the interested party should fail to pay to the said division, and in
............ section 14 of the law, the annual fees prescribed in article 13, and fails to show to the
chief of the same division within the fixed time of ............ from this date, which has been put in
practice in Spain, the object of the patent, establishing a new industry in the country. Madrid, 28
............, 1896.
(Signed) FEDERICO COBO DE GUZMAN.
Seal of division of industry and registration of industrial and commercial property.
Recorded in book 25, page 111, under No. 19228.
OFFICE OF THE COLONIES.
Article 2 of the royal decree of May 14, 1880, complied with.
Madrid, October 31, 1896.
The chief of the division:
(Signed) TOMAS LUCEO.
[SEAL]
By virtue of this patent Henry Alfred Gsell was granted the exclusive right to use the same in the
Philippine Islands for a period of twenty years. On May 1, 1899, Henry Alfred Gsell transferred the said
patent and the exclusive right to use the same to the plaintiff herein.
The evidence clearly shows that the defendant was manufacturing umbrella and cane handles bag the
same method as that used by the plaintiff, under and by virtue of his said patent.
Under the treaty of Paris the United States Government undertook to protect citizens of the Philippine
Islands in their rights secured by copyrights, patents, etc., from the Spanish Government, in the
following language:
ART. 13. The rights of property secured by copyrights and patents acquired by Spaniards in the
Island of Cuba, and in Porto Rico, the Philippines, and other ceded territories, at the time of the
exchange of the ratifications of this treaty, shall continue to be respected. Spanish scientific,
literary, and artistic works not subversive of public order in the territories in question shall
continue to be admitted free of duty into such territories, for a period of ten years, to be
reckoned from the date of the exchange of the ratifications of this treaty.
By virtue of the foregoing provisions of said treaty, Circular No. 12, Division of Customs and Insular
Affairs, dated Washington, D. C., April 11, 1899, was issued by the Assistant Secretary of War and is
as follows:
In territory subject to military government by the military forces of the United States, owners of
patents, including design patents, which have been issued or which may hereafter be issued,
and owners of trade-marks, prints, and labels, duly registered in the United States Patent Office,
under the laws of the United States relating to the grant of patents and the registration of trade-
marks, prints, and labels, shall receive the protection accorded them in the United States under
said laws; and an infringement of the rights secured by lawful issue of a patent or by registration
of a trade-mark, print, or label shall subject the person or party guilty of such infringement to the
liability created and imposed by the laws of the United States relating to said matters: Provided,
That a duly certified copy of the patents or of the certificate of registration of the trade-mark,
print, or label shall be filed in the office of the Governor-General of the Island wherein such
protection is desired: And provided further, That the rights of property in patents and trade-mark,
secured in the Islands of Cuba, Porto Rico, the Philippines, and other ceded territory to persons
under the Spanish laws shall be respected in said territory the same as if such laws were in full
force and effect.
(Signed) G. D. MEIKLEJOHN,
Assistant Secretary of War.
Circular No. 21, Division of Customs and Insular Affairs, dated Washington, D. C., June 1, 1899,
as amended by Circular No. 34 of the same Department, dated September 25, 1899, required
the holds of patents in the insular possessions of the United States to file with the proper
authorities a certified copy of a patent or a certificate of registration, etc.
In a letter dated Manila, P. I., August 12, 1899, George P. Ahern, captain, Ninth Infantry United
States Army, who was then in charge of the Office of Patent, Copyrights, and Trade-Marks,
which letter was directed to the plaintiff herein, said:
I have the honor to hand you herewith nine patents, namely (among others was
mentioned the patent here in question), now legally held by you, which have been
granted under the Spanish law.
Said patent right will be protected by the United States authorities in these Islands,
pursuant to Circular No. 12, Division of Customs and Insular Affairs, War Department,
Washington, D. C., April 11, 1899.
"Provided further, That the rights of property in patents and trade-marks secured
in the Islands of Cuba, Porto Rico, the Philippines, and other ceded territory to
persons under the Spanish laws shall be respected in said territory the same as if
such laws were in full force and effect."
On the 29th on January, 1900, Capt. George P. Ahern, who was then in charge of the Office of
Patents, Copyrights, and Trade-Marks, addressed the following letter to the plaintiff herein:
MANILA, P. I.
SIR: This is to certify, in reply to your request of December 20, 1899, and pursuant to the
provisions of Spanish law, and by virtue of the duties as prescribed for the undersigned in
General Orders, No. 24, office of the United States military governor in the Philippine Islands,
Manila, P. I., June 26, 1899, an inspection was made of your factory in Calle San Pedro, Manila,
by the undersigned officer on the 26th day of January, 1900, patent number 19228, granted H.
A. Gsell, Madrid, Spain, September 28, 1896, transferred to Carlos Gsell, May 1, 1899, for an
exclusive privilege of twenty years of a process for curving sticks and umbrella handles.
A careful inspection was made of the process as per the specifications accompanying said
patent, and all of said specifications and process were found to be in operation as required by
law.
(Signed) GEORGE P. AHERN,
Captain, Ninth United States Infantry,
In Charge of Office.
At the close of the trial, and after the evidence had all been introduced, the lower court gave the plaintiff
permission to amend his complaint, and also gave the defendant an opportunity to file an amended
answer. The court granted this permission to amend the original complaint under and by virtue of the
provisional of section 110 of the Code of Procedure in Civil Actions. This order of the court was
excepted to on the part of the defendant. Said section 110 provides that
The court shall, in furtherance of justice, and on such terms, if any, as may be proper, allow a
party to amend any pleading or proceeding and at any stage of the action, in either the Court of
First Instance or the Supreme Court, by adding or striking out the name of any party, either
plaintiff or defendant, or by correcting a mistake in the name of a party, or s mistaken or
inadequate allegation or description in any other respect, so that the actual merits of the
controversy may speedily be determined, without regard to technicalities, and in the most
expeditious and inexpensive manner. The court may also, upon like terms, allow an answer or
other pleading to be made after the time limited by the rules of the court for filing the same.
Orders of the court upon the matters provided in this section shall be made upon motion filed in
court, and after notice to the adverse party, and an opportunity to be heard.
We are of the opinion that this section justified the court in allowing the amendment.
The appellant assigned several other errors alleged to have been committed by the inferior court, some
of which we deem unnecessary to be considered here in the decision of this cause. The trial court, in
his decision, stated that there were but two questions at issue: First, Did the Government issue to
plaintiff's assignor the patent which covers the process in question? And second, Did the defendant
infringe upon that process?
An examination of the evidence adduced during the trial shows clearly that the Government of Spain
did, upon the 28th day of September, 1896, grant to the plaintiff's assignor the patent in question, giving
to him the exclusive right to use the name for a period of twenty years from that date. The evidence
also shows clearly that the defendant used, and had been using, the same process for the manufacture
of walking sticks and umbrella handle, the exclusive right to which had been granted to, the plaintiff's
assignor. The evidence also shows that the original grantee of the patent, Henry Alfred Gsell, had duly
transferred to the plaintiff herein, and that the plaintiff herein thereby succeeded to all of the right
granted in said letter patent.
The lower court made no finding as to the damages suffered by the plaintiff by reason to-the unlawful
use by the defendant of the said patent.
From all of the evidence adduced during the trial of said cause, we are convinced that the judgment to
the inferior court should be affirmed with costs. After the expiration of twenty days let a judgment be
entered perpetually enjoining the defendant, his attorneys, agents, and representatives of whatever
character, from the use of the process for manufacture of walking sticks and umbrella handles, the
exclusive right to the manufacture of which was granted to plaintiff's assignor on the 28th day
September, 1896. So ordered.

G.R. No. L-1952 December 6, 1906
CARLOS GSELL, plaintiff-appellant,
vs.
VALERIANO VELOSO YAP-JUE, defendant-appellee.
Coudert Brothers for appellant.
Chicote, Miranda and Sierra for appellee.


MAPA, J .:
In an action between the plaintiff and the defendant herein judgment was rendered in the court below on the
11th of December, 1903, the adjudging part of which is as follows: "It is ordered that the defendant (the
accused in these proceedings) abstain from manufacturing canes and umbrellas with a curved handle by
means of lamp or blowpipe fed with mineral oil petroleum, which process was protected by patent No. 19228,
issued in favor of Henry Gsell, and by him transferred to Carlos Gsell." In the month of February, 1904, the
plaintiff presented a petition alleging that on "the 8th of the said month, and some time prior to that date, the
defendant in obedience of the aforesaid judgment, and in violation of the same, was and is now engaged in the
unlawful manufacture of umbrella handles by the identical process so like the patent process as to be
indistinguishable," and accordingly asked the court to punish the accused for contempt and to order the latter
to indemnify the plaintiff as damages in the sum of $1,000, United States, currency, and to pay the costs.
The parties having appeared in open court and stipulated that "the defendant had used, and was still using, as
a process for curving canes and umbrella handles, the same process described in the memoir which
accompanied the patent, with the exception that he has substituted for an oil an alcohol-burning lamp."
The court considering that the plaintiff had only the exclusive right to the use of the coal or mineral oil-burning
lamp, held that the defendant was not guilty of contempt, to which decision of the court the plaintiff duly
excepted.
Patent No. 19228, referred to in the judgment of the 11th of December, 1903, does not appear in the bill of
exceptions. Such these are contempt proceedings for the disobedience of said judgment, we should have
before us the patent in order to determine whether there was any actual disobedience of the order of the court.
It is evident that the accused had not committed any direct violation, plain and manifest, of the prohibition
imposed upon him in the judgment. The violation, if there has been any, was not of such a character that it
could be made patent by the mere enunciation of the acts performed by the defendant, which are alleged to
constitute the said violation. These acts were not clearly and manifestly contrary to the precise terms of the
prohibition. According to the express language of the judgment, the prohibition is against the manufacture of
canes and umbrellas with curved handles by blowpipe, and the parties have stipulated that the defendant did
not use acoal 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 a
lieu of some unessential part of the patented process a well-known mechanical equivalent." It is seen that by it
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 unessential part of the
patented process the use of which by the accused was prohibited by the said judgment; and (2) that alcohol is
equivalent and proper substitute, well known as such, for mineral oil petroleum in connection with the said
process. The appellant has failed to affirmatively establish either of these two essential facts. He has merely
assumed their existence, without proving the same, thus begging the whole question. Consequently the
contempt with which the accused is charged has not been fully and satisfactorily proved, and the order
appealed from should accordingly be affirmed in so far as it holds that the defendant is not guilty of contempt.
Having reached this conclusion, it is unnecessary for us to pass upon plaintiff's prayer for a preliminary
injunction, as the same is based upon the alleged infringement of the patent upon which these proceedings for
contempt were based.
The order of the court below is hereby affirmed, with the costs of this instance against the appellant. After the
expiration of twenty days let judgment be entered in accordance herewith, and ten days thereafter the case be
remanded to the court below for execution. So ordered.

G.R. No. L-4720 January 19, 1909
CARLOS GSELL, plaintiff-appellee,
vs.
VALERIANO VELOSO YAP-JUE, defendant-appellant.
Chicote and Miranda, for appellant.
Haussermann and Cohn, for appellee.
CARSON, J .:
This an appeal from a final order of the Court of First Instance of the city of Manila, in contempt proceedings
prosecuted under the provisions of section 172 of the Code of Civil Procedure. The principal case to which
these proceedings are ancillary, was an action to enjoin infringement of a patented process for the
manufacture of curved handles for canes, parasols, and umbrellas. In that case plaintiff established his title to
a valid patent covering the process in question, and obtained against this defendant a judgment, granting a
perpetual injunction restraining its infringement, which judgment was affirmed by this court on appeal (6 Phil.
Rep., 143.) The order was couched in the following terms:
It is ordered that the defendant abstain from manufacturing canes and umbrellas with a curved handle
by means of a lamp or blowpipe fed with mineral oil or petroleum, which process was protected by
patent No. 19228, issued in favor of Henry Gsell, and by him transferred to Carlos Gsell
and the process therein mentioned is fully described in the following statement which accompanied the
application for the patent:
After the canes have been cut for cane or umbrella handles, the outsides are thoroughly cleaned. This
operation having been performed, they are then trimmed and the interior cleaned by means of a gimlet
of about 15 centimeters in length operated by a wheel, by means of which the knots inside are broken.
There is then introduced to a depth of about 15 centimeters a piece of very clean bamboo, which
completely fills the hole made by the gimlet, thereby giving to the cane the necessary strength to resist
the heat of the lamp or blowpipe without breaking or cracking.
This operation having been performed, the cane, the end of which is attached to a fixed point, is given
the shape of a hook or some other form by means of fire and pressure. Once the cane has been
shaped as desired, it is allowed to cool, and is then cleaned, varnished, and ornamented at will.
This industry requires skillful, handiwork, owing to the great risk engendered by the treatment of such
fragile material as a light cane. On the other hand, however, it affords large profits to the workman.
NOTE. The patent applied for shall be for the industrial product "cane handles for walking sticks and
umbrellas, curved by means of a small lamp or blowpipe, fed by petroleum or mineral fuel."
Thereafter the defendant continued to manufacture curved cane handled for walking sticks and umbrellas by a
process in all respectes identical with that used by the plaintiff under his patent, except only that he be
substituted for a lamp fed with petroleum or mineral oil, lamp fed with alcohol, as appears from a stipulation
entered into between plaintiff and defendant in the following terms:
The plaintiff and defendant agree upon the fact that the defendant has used and is still using a process
for curving handles of canes and umbrellas identical with that described in the application for the patent
by the plaintiff with the exception that he has substituted for the lamp fed with all other lamp fed with
alcohol.
Contempt proceedings were instituted against the defendant in the month of February, 1904, the plaintiff in the
original action alleging that the
Defendant in disobediencce of the judgment of the same was and is now engaged in the unlawful
manufacture of umbrella handles by the identical process described in and protected said patent, No.
19228, or a process so like the patented process as to be indistinguishable.
The trial court found the defendant "not guilty" of contempt as charged; and this court, on appeal, held that a
character that it could be made patent by the mere annunciation of the acts performed by the defendant, which
are alleged to constitute the said violation. These acts were not clearly and manifestly contrary to the precise
terms of the prohibition. According to the express language of the judgment, the prohibition is against the
manufacture of canes and umbrellas with curved handles by means of the use of a cool or mineral oil-burning
lamp or blowpipe and the parties have stipulated that the defendant did not use a coal or mineral oil-burning
lamp but an alcohol-burning lamp.
The question, however, arises as to whether that prohibition included the substitution of alcohol for coal
or mineral oil. In more abstract and general terms, the appellant propounds this question in his brief, as
follows: "The question presented by this appeal is whether or not the use of a patented process by a
third person, without license or authority therefor, constitutes an infringement when the alleged infringer
has substituted in lieu of some unessential part of the patented process a well-known mechanical
equivalent." It has seen that by its very terms this question implies in the present case the existence of
two fundamental facts which must first be duly established, viz: (1) That the use of the lamp fed with
petroleum or mineral oil was an unessential part of the patented process the use of which by the
accused was prohibited by the said judgment; and (2) that alcohol is an equivalent and proper
substitute, well known as such, for mineral oil or petroleum in connection with the said process. The
appellant has failed to affirmatively establish either of these two essential facts. He has merely
assumed their existence, without proving the same, thus begging the whole question. Consequently the
contempt with which the accused is charged has not been fully and satisfactorily proved, and the order
appealed from should accordingly be affirmed in so far as it holds that the defendant is not guilty of
contempt. (7 Phil. Rep., 130).
Thereafter the plaintiff continued the use of the patented process, save only for the substitutions of a lamp fed
by alcohol for a lamp fed by petroleum or mineral oil, and new proceedings were instituted under the provisions
of section 172 for the purpose of enforcing the original injunction above cited. Substantially the same question
is submitted in these new proceedings as that submitted in the former case, but at the trial of this case
testimony was introduced which, in our opinion, leaves no room for doubt, first, that alcohol is an equivalent or
substitute, well known as such at the time when the patent was issued, for mineral oil or petroleum, in
connection with blast lamps or blowpipes such as that which plaintiff uses in the patented process, and,
second, that the use of a blast lamp or blowpipe fed with petroleum or mineral oil, rather than one fed with
alcohol, is an unessential part of the patented process the use of which was prohibited by the said judgment.
It was clearly proven at the trial, that kerosene and alcohol blast lamps are agencies for producing and
applying heat, well known throughout the world long prior to 1906, the date of the issue of the patent; that it is
and for many years has been known that one may for all ordinary purposes be used in the place of the other,
and especially for the purpose of applying heat in the manner described in the patent; that the only
consideration which determines the employment of one in place of the other is the convenience of the user and
the question of relative cost; and that the principle upon which both lamps work is substantially identical, the
only difference in construction being occasioned by the application of this principle to oils of different physical
and chemical composition.
The plaintiff does not and can not claim a patent upon the particular lamp used by him. The patent, however,
gives him the exclusive right to the use of "la lamparilla o soplete, alimentada de petroleo o esencia mineral"
(the small lamp or blowpipe fed with petroleum or mineral oil) in manufacturing curved handles for umbrellas
and canes, to which reference is made in the above-cited descriptive statement and annexed note. "The small
lamp or blowpipe" mentioned in the descriptive statement and annexed note which accompanied the
application for the patent, evidently referred to the design of a blast lamp which was attached thereto; and in
our opinion both plaintiff and defendant make use of a blast lamp substantially similar, in principle and design,
to that referred to in the descriptive statement and the annexed note, for the exclusive use of which in the
manufacture of curved handles, plaintiff holds a patent. True, defendant's blast lamp is fed with alcohol, and its
shape varies in unimportant details, for the purpose of accommodating the principle, by which the flame is
secured, to the different physical and chemical composition of the fuel used therein; but the principle on which
it works, its mode of application, and its general design distinguish it in no essential particular from that used by
the plaintiff. If the original design accompanying the statement had shown a blast lamp made of brass or delf,
he would be a reckless advocate who would claim that the patent might lawfully be evaded by the use of a
lamp made of iron or tin; or if the original design had shown a blast lamp 6 inches high with a nozzle 4 inches
long it would hardly be seriously contended that the use of lamp 8 inches high with a nozzle 3 inches long
would protect the ingenious individual, who in all other respects borrowed the patented process, from the
consequences of an action for damages for infringement. But in the light of the evidence of record in this case,
the reasoning upon which these hypothetical claims should be rejected applies with equal force to the
contentions of the defendant, the ground for the rejection of the claims in each case being the same, and
resting on the fact that unessential changes, which do not affect the principle of the blast lamp used in the
patented process, or the mode of application of heat authorized by the patent, are not sufficient to support a
contention that the process in one case is in any essential particular different from that used in the other.
Counsel for plaintif invokes the doctrine of "mechanical equivalents" in support of his contention, and indeed
that doctrine is strikingly applicable to the facts in this case. This doctrine is founded upon sound rules of
reason and logic, and unless restrained or modified by law in particular jurisdiction, is of universal application,
so that it matters not whether a patent be issued by one sovereignty or another, the doctrine may properly be
invoked to protect the patentee from colorable invasions of his patent under the guise of substitution of some
part of his invention by some well known mechanical equivalent. Our attention has not been called to any
provision of the patent law of Spain, which denies to patentees thereunder the just and equitable protection of
the doctrine; and indeed a patent law which failed to recognize this doctrine would afford scant protection to
inventors, for it is difficult if not impossible to conceive an invention, which is incapable of alteration or change
in some unessential part, so as to bring that part outside of the express terms of any form of language which
might be used in granting a patent for the invention; and has been well said by counsel for plaintiff, human
ingenuity would be taxed beyond its powers in preparing a grant of a patent so comprehensive in its terms, "as
to include within the express terms of its detailed description every possible alternative of form, size, shape,
material, location, color, weight, etc., of every wheel, rod, bolt, nut, screw, plate, and other component parts of
an invention."
The following citations from various decisions of the Federal Courts of the United States illustrate the
application of the doctrine in that jurisdiction, and clearly point the way to the proper solution of the questions
involved in the case at bar:
Can the defendant have the right of infringement, by substituting in lieu of some parts of the
combination well-known mechanical equivalents? I am quite clear that be can not, both on principle and
authority. It is not to be disputed that the inventor of an ordinary machine is, by his letters patent,
protected against all mere formal alterations and against the substitution of mere mechanical
equivalents. Why should not the inventor of a new combination receive the same protection? If he can
not, then will his patent not be worth the parchment on which it is written.
If no one can be held to infringe a patent for a combination unless he uses all the parts of the
combination and the identical machinery as that of the patentee, then will no patent for a combination
be infringed; for certainly no one capable of operating a machine can be incapable of adopting some
formal alteration in the machinery, or of substituting mechanical equivalents. No one infringes a patent
for a combination who does not employ all of the ingredients of the combination; but if he employs all
the ingredients, or adopts mere formal alterations, or substitutes, for one ingredient another which was
well known at the date of the patent as a proper substitute for the one withdrawn, and which performs
substantially the same function as the one withdrawn, he does infringe. (King vs. Louisville Cement Co.,
Fed. Cas., 7798.)
Bona fide inventors of a combination are as much entitled to equivalents as the inventors other
patentable improvements; by which is meant that a patentee in such a case may substitute another
ingredient for any one of the ingredients of his invention, if the ingredient substituted performs the same
function as the one omitted and as well known at the date of his patent as a proper substitute for the
one omitted in the patented combination. Apply that rule and it is clear that an alteration in a patented
combination which merely substitutes another old ingredient for one of the ingredients in the patented
combination, is an infringement of the patent, if the substitute performs the same function and was well
known at the date of the patent as a proper substitute for the omitted ingredient. (Gould vs. Rees, 82
U.S., 187, 194.)
Mere formal alterations in a combination in letters patent are no defense to the charge of infringement
and the withdrawal of one ingredient from the same and the substitution of another which was well
known at the date of the patent as a proper substitute for the one withdrawn is a mere formal alteration
of the combination if the ingredient substituted performs substantially the same function as the one
withdrawn.
Bona fide inventors of a combination are as much entitled to suppress every other combination of the
same ingredients to produce the same result, not substantially different from what they have invented
and caused to be patented as to any other class of inventors. All alike have the right to suppress every
colorable invasion of that which is secured to them by letters patent. (Seymour vs. Osborne, 78 U.S.,
516, 556.)
A claim for the particular means and mode of operation described in the specification extends, by
operation of law, to the equivalent of such means not equivalent simply because the same result is
thereby produced but equivalent as being substantially the same device in structure, arrangement
and mode of operation. (Burden vs. Corning, Fed. Cas., 2143. Gottfried vs. Philip Best Brewing Co.,
Fed. Cas., 5633.)
An equivalent device is such as a mechanic of ordinary skill in construction of similar machinery, having
the forms, specifications and machine before him, could substitute in the place of the mechanism
described without the exercise of the inventive faculty. (Burden vs. Corning, supra.)
All the elements of the invention in this case are old, and the rule in such cases, as before explained,
undoubtedly is that a purpose can not invoke the doctrine of equivalents to suppress all other
improvements of the old machine, but he is entitled to treat everyone as an infringer who makes, uses,
or vends his patented improvement without any other change than the employment of a substitute for
one of its elements, well known as such at the date of his invention, and which any constructor
acquainted with the art will know how to comply. The reason for the qualification of the rule as stated is,
that such change that is, the mere substitution of a well- known element for another where it
appears that the substituted element was well known as a usual substitute for the element left out is
merely a formal one, and nothing better than a colorable evasion of the patent. (Union Sugar Refining
Co. vs. Matthieson, Fed. Cas., 14399.)
Counsel for the defendant insists that, under Spanish law, none of the steps of the process described in the
descriptive statement, save those mentioned in the "note" thereto attached are included in the patent, and that
the patent rights secured thereunder are strictly limited to the precise language of the "note" attached to the
descriptive statement; while counsel for plaintiff appears to think that the language of the patent covers any
process or device whereby wood or cane may be bent or curved by the use of heat. But for the purpose of this
decision it is not necessary to consider these questions, further than to hold, as we do, that under the doctrine
of equivalents, the language of the note in the descriptive statement applies to the operation of applying heat
for the purpose of curving handles or canes and umbrellas by means of a blast lamp fed with alcohol, as well
as by means of a blast lamp fed with petroleum or mineral oil; and the defendant having admitted the fact that
he applied heat for the purpose of curving handles for canes and umbrellas by means of a blast lamp fed with
alcohol, he must be deemed to have contempt of violating the terms and the injunction issued in the principal
case, wherein plaintiff was declared the owner of the patent in question, and defendant enjoined from its
infringement.
The argument of counsel for defendant and appellant, based on the theory that the questions herein discussed
and decided to have been heretofore settled by this court, and that the subject-matter of this proceeding is res
adjudicata between the parties thereto is sufficiently refuted by the simple reading of the decision of this court
in the case relied upon. (Gsell vs. Veloso, 7 Phil. Rep., 130.)
The judgment of the lower court should be and is hereby affirmed, with the costs of this instance against the
appellant.

G.R. No. 97343 September 13, 1993
PASCUAL GODINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SPECIAL FOURTH DIVISION and SV-AGRO ENTERPRISES,
INC.,respondents.
Jesus S. Anonat for petitioner.
Arturo M. Alinio for private respondent.
ROMERO, J .:
Through this petition for review in certiorari of a decision of the Court of Appeals affirming the decision of the
trial court, petitioner Pascual Godines seeks to reverse the adverse decision of the Court a quo that he was
liable for infringement of patent and unfair competition. The dispositive portion of the assailed decision is
hereby quoted to wit:
WHEREFORE, with the elimination of the award for attorney's fees, the judgment appealed from
is hereby AFFIRMED, with costs against appellant.
1

The patent involved in this case is Letters Patent No. UM-2236 issued by the Philippine Patent Office to one
Magdalena S. Villaruz on July 15, 1976. It covers a utility model for a hand tractor or power tiller, the main
components of which are the following: "(1) a vacuumatic house float; (2) a harrow with adjustable operating
handle; (3) a pair of paddy wheels; (4) a protective water covering for the engine main drive; (5) a transmission
case; (6) an operating handle; (7) an engine foundation on the top midportion of the vacuumatic housing float
to which the main engine drive is detachedly installed; (8) a frontal frame extension above the quarter
circularly shaped water covering hold (sic) in place the transmission case; (9) a V-belt connection to the engine
main drive with transmission gear through the pulley, and (10) an idler pulley installed on the engine
foundation."
2
The patented hand tractor works in the following manner: "the engine drives the transmission
gear thru the V-belt, a driven pulley and a transmission shaft. The engine drives the transmission gear by
tensioning of the V-belt which is controlled by the idler pulley. The V-belt drives the pulley attached to the
transmission gear which in turn drives the shaft where the paddy wheels are attached. The operator handles
the hand tractor through a handle which is inclined upwardly and supported by a pair of substanding pipes and
reinforced by a U-shaped G.I. pipe at the V-shaped end."
3

The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein private respondent,
from Magdalena Villaruz, its chairman and president, by virtue of a Deed of Assignment executed by the latter
in its favor. On October 31, 1979, SV-Agro Industries caused the publication of the patent in Bulletin Today, a
newspaper of general circulation.
In accordance with the patent, private respondent manufactured and sold the patented power tillers with the
patent imprinted on them. In 1979, SV-Agro Industries suffered a decline of more than 50% in sales in its
Molave, Zamboanga del Sur branch. Upon investigation, it discovered that power tillers similar to those
patented by private respondent were being manufactured and sold by petitioner herein. Consequently, private
respondent notified Pascual Godines about the existing patent and demanded that the latter stop selling and
manufacturing similar power tillers. Upon petitioner's failure to comply with the demand, SV-Agro Industries
filed before the Regional Trial Court a complaint for infringement of patent and unfair competition.
After trial, the court held Pascual Godines liable for infringement of patent and unfair competition. The
dispositive portion of the decision reads as follows:
WHEREFORE, premises considered, JUDGMENT is hereby rendered in favor of the plaintiff
SV-Agro Industries Enterprises, Inc., and against defendant Pascual Godines:
1. Declaring the writ of preliminary injunction issued by this Court against defendant as
permanent;
2. Ordering defendant Pascual Godines to pay plaintiff the sum of Fifty Thousand Pesos
(P50,000.00) as damages to its business reputation and goodwill, plus the further sum of Eighty
Thousand Pesos (P80,000.00) for unrealized profits during the period defendant was
manufacturing and selling copied or imitation floating power tiller;
3. Ordering the defendant to pay the plaintiff, the further sum of Eight Thousand Pesos
(P8,000.00) as reimbursement of attorney's fees and other expenses of litigation; and to pay the
costs of the suit.
SO ORDERED.
4

The decision was affirmed by the appellate court.
Thereafter, this petition was filed. Petitioner maintains the defenses which he raised before the trial and
appellate courts, to wit: that he was not engaged in the manufacture and sale of the power tillers as he made
them only upon the special order of his customers who gave their own specifications; hence, he could not be
liable for infringement of patent and unfair competition; and that those made by him were different from those
being manufactured and sold by private respondent.
We find no merit in his arguments. The question of whether petitioner was manufacturing and selling power
tillers is a question of fact better addressed to the lower courts. In dismissing the first argument of petitioner
herein, the Court of Appeals quoted the findings of the court, to wit:
It is the contention of defendant that he did not manufacture or make imitations or copies of
plaintiff's turtle power tiller as what he merely did was to fabricate his floating power tiller upon
specifications and designs of those who ordered them. However, this contention appears
untenable in the light of the following circumstances: 1) he admits in his Answer that he has
been manufacturing power tillers or hand tractors, selling and distributing them long before
plaintiff started selling its turtle power tiller in Zamboanga del Sur and Misamis Occidental,
meaning that defendant is principally a manufacturer of power tillers, not upon specification and
design of buyers, but upon his own specification and design; 2) it would be unbelievable that
defendant would fabricate power tillers similar to the turtle power tillers of plaintiff upon
specifications of buyers without requiring a job order where the specification and designs of
those ordered are specified. No document was (sic) ever been presented showing such job
orders, and it is rather unusual for defendant to manufacture something without the specification
and designs, considering that he is an engineer by profession and proprietor of the Ozamis
Engineering shop. On the other hand, it is also highly unusual for buyers to order the fabrication
of a power tiller or hand tractor and allow defendant to manufacture them merely based on their
verbal instructions. This is contrary to the usual business and manufacturing practice. This is not
only time consuming, but costly because it involves a trial and error method, repeat jobs and
material wastage. Defendant judicially admitted two (2) units of the turtle power tiller sold by him
to Policarpio Berondo.
5

Of general acceptance is the rule imbedded in our jurisprudence that ". . . the jurisdiction of the Supreme Court
in cases brought to it from the Court of Appeals in a petition for certiorari under Rule 45 of the Rules of Court is
limited to the review of errors of law, and that said appellate court's findings of fact are conclusive upon this
Court."
6

The fact that petitioner herein manufactured and sold power tillers without patentee's authority has been
established by the courts despite petitioner's claims to the contrary.
The question now arises: Did petitioner's product infringe upon the patent of private respondent?
Tests have been established to determine infringement. These are (a) literal infringement; and (b) the doctrine
of equivalents.
7
In using literal infringement as a test, ". . . resort must be had, in the first instance, to the words
of the claim. If accused matter clearly falls within the claim, infringement is made out and that is the end of
it."
8
To determine whether the particular item falls within the literal meaning of the patent claims, the court must
juxtapose the claims of the patent and the accused product within the overall context of the claims and
specifications, to determine whether there is exact identity of all material elements.
9

The trial court made the following observation:
Samples of the defendant's floating power tiller have been produced and inspected by the court
and compared with that of the turtle power tiller of the plaintiff (see Exhibits H to H-28). In
appearance and form, both the floating power tillers of the defendant and the turtle power tiller
of the plaintiff are virtually the same. Defendant admitted to the Court that two (2) of the power
inspected on March 12, 1984, were manufactured and sold by him (see TSN, March 12, 1984,
p. 7). The three power tillers were placed alongside with each other. At the center was the turtle
power tiller of plaintiff, and on both sides thereof were the floating power tillers of defendant
(Exhibits H to H-2). Witness Rodrigo took photographs of the same power tillers (front, side, top
and back views for purposes of comparison (see Exhibits H-4 to H-28). Viewed from any
perspective or angle, the power tiller of the defendant is identical and similar to that of the turtle
power tiller of plaintiff in form, configuration, design and appearance. The parts or components
thereof are virtually the same. Both have the circularly-shaped vacuumatic housing float, a
paddy in front, a protective water covering, a transmission box housing the transmission gears,
a handle which is V-shaped and inclined upwardly, attached to the side of the vacuumatic
housing float and supported by the upstanding G.I. pipes and an engine base at the top
midportion of the vacuumatic housing float to which the engine drive may be attached. In
operation, the floating power tiller of the defendant operates also in similar manner as the turtle
power tiller of plaintiff. This was admitted by the defendant himself in court that they are
operating on the same principles. (TSN, August 19, 1987, p. 13)
10

Moreover, it is also observed that petitioner also called his power tiller as a floating power tiller. The patent
issued by the Patent Office referred to a "farm implement but more particularly to a turtle hand tractor having a
vacuumatic housing float on which the engine drive is held in place, the operating handle, the harrow housing
with its operating handle and the paddy wheel protective covering."
11
It appears from the foregoing
observation of the trial court that these claims of the patent and the features of the patented utility model were
copied by petitioner. We are compelled to arrive at no other conclusion but that there was infringement.
Petitioner's argument that his power tillers were different from private respondent's is that of a drowning man
clutching at straws.
Recognizing that the logical fallback position of one in the place of defendant is to aver that his product is
different from the patented one, courts have adopted the doctrine of equivalents which recognizes that minor
modifications in a patented invention are sufficient to put the item beyond the scope of literal
infringement.
12
Thus, according to this doctrine, "(a)n infringement also occurs when a device appropriates a
prior invention by incorporating its innovative concept and, albeit with some modification and change, performs
substantially the same function in substantially the same way to achieve substantially the same result."
13
The
reason for the doctrine of equivalents is that to permit the imitation of a patented invention which does not copy
any literal detail would be to convert the protection of the patent grant into a hollow and useless thing. Such
imitation would leave room for indeed encourage the unscrupulous copyist to make unimportant and
insubstantial changes and substitutions in the patent which, though adding nothing, would be enough to take
the copied matter outside the claim, and hence outside the reach of the law.
14

In this case, the trial court observed:
Defendant's witness Eduardo Caete, employed for 11 years as welder of the Ozamis
Engineering, and therefore actually involved in the making of the floating power tillers of
defendant tried to explain the difference between the floating power tillers made by the
defendant. But a careful examination between the two power tillers will show that they will
operate on the same fundamental principles. And, according to establish jurisprudence, in
infringement of patent, similarities or differences are to be determined, not by the names of
things, but in the light of what elements do, and substantial, rather than technical, identity in the
test. More specifically, it is necessary and sufficient to constitute equivalency that the same
function can be performed in substantially the same way or manner, or by the same or
substantially the same, principle or mode of operation; but where these tests are satisfied, mere
differences of form or name are immaterial. . . .
15

It also stated:
To establish an infringement, it is not essential to show that the defendant adopted the device or
process in every particular; Proof of an adoption of the substance of the thing will be sufficient.
"In one sense," said Justice Brown, "it may be said that no device can be adjudged an
infringement that does not substantially correspond with the patent. But another construction,
which would limit these words to exact mechanism described in the patent, would be so
obviously unjust that no court could be expected to adopt it. . . .
The law will protect a patentee against imitation of his patent by other forms and proportions. If
two devices do the same work in substantially the same way, and accomplish substantially the
same result, they are the same, even though they differ in name, form, or shape.
16

We pronounce petitioner liable for infringement in accordance with Section 37 of Republic Act No. 165, as
amended, providing, inter alia:
Sec. 37. Right 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 terms of the patent; and
such making, using, or selling by any person without the authorization of the Patentee
constitutes infringement of the patent. (Emphasis ours)
As far as the issue regarding unfair competition is concerned, suffice it to say that Republic Act No. 166, as
amended, provides, inter alia:
Sec. 29. Unfair competition, rights and remedies. . . .
xxx xxx xxx
In particular, and without in any way limiting the scope of unfair competition, the following shall
be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give 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 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. . . .
xxx xxx xxx
Considering the foregoing, we find no reversible error in the decision of the Court of Appeals affirming with
modification the decision of the trial court.
WHEREFORE, premises considered, the decision of the Court of Appeals is hereby AFFIRMED and this
petition DENIED for lack of merit.

G. R. No. 126627 August 14, 2003
SMITH KLINE BECKMAN CORPORATION, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and TRYCO PHARMA CORPORATION, Respondents.
D E C I S I O N
CARPIO-MORALES, J .:
Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the state of
Pennsylvania, United States of America (U.S.) and licensed to do business in the Philippines, filed on October
8, 1976, as assignee, before the Philippine Patent Office (now Bureau of Patents, Trademarks and Technology
Transfer) an application for patent over an invention entitled "Methods and Compositions for Producing
Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate." The application bore
Serial No. 18989.
On September 24, 1981, Letters Patent No. 14561
1
for the aforesaid invention was issued to petitioner for a
term of seventeen (17) years.
The letters patent provides in its claims
2
that the patented invention consisted of a new compound named
methyl 5 propylthio-2-benzimidazole carbamate and the methods or compositions utilizing the compound as an
active ingredient in fighting infections caused by gastrointestinal parasites and lungworms in animals such as
swine, sheep, cattle, goats, horses, and even pet animals.
Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures, distributes and
sells veterinary products including Impregon, a drug that has Albendazole for its active ingredient and is
claimed to be effective against gastro-intestinal roundworms, lungworms, tapeworms and fluke infestation in
carabaos, cattle and goats.
Petitioner sued private respondent for infringement of patent and unfair competition before the Caloocan City
Regional Trial Court (RTC).
3
It claimed that its patent covers or includes the substance Albendazole such that
private respondent, by manufacturing, selling, using, and causing to be sold and used the drug Impregon
without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No. 14561
4
as well as committed
unfair competition under Article 189, paragraph 1 of the Revised Penal Code and Section 29 of Republic Act
No. 166 (The Trademark Law) for advertising and selling as its own the drug Impregon although the same
contained petitioners patented Albendazole.
5

On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining order against private
respondent enjoining it from committing acts of patent infringement and unfair competition.
6
A writ of
preliminary injunction was subsequently issued.
7

Private respondent in its Answer
8
averred that Letters Patent No. 14561 does not cover the substance
Albendazole for nowhere in it does that word appear; that even if the patent were to include Albendazole, such
substance is unpatentable; that the Bureau of Food and Drugs allowed it to manufacture and market Impregon
with Albendazole as its known ingredient; that there is no proof that it passed off in any way its veterinary
products as those of petitioner; that Letters Patent No. 14561 is null and void, the application for the issuance
thereof having been filed beyond the one year period from the filing of an application abroad for the same
invention covered thereby, in violation of Section 15 of Republic Act No. 165 (The Patent Law); and that
petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such amount of actual damages as may be
proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary damages; and P150,000.00 in attorneys
fees.
Finding for private respondent, the trial court rendered a Decision dated July 23, 1991,
9
the dispositive portion
of which reads:
WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is hereby, DISMISSED. The Writ
of injunction issued in connection with the case is hereby ordered DISSOLVED.
The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby declared null and void for
being in violation of Sections 7, 9 and 15 of the Patents Law.
Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby directed to cancel Letters
Patent No. 14561 issued to the plaintiff and to publish such cancellation in the Official Gazette.
Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual damages and
P100,000.00 attorneys fees as prayed for in its counterclaim but said amount awarded to defendant is subject
to the lien on correct payment of filing fees.
SO ORDERED. (Underscoring supplied)
On appeal, the Court of Appeals, by Decision of April 21, 1995,
10
upheld the trial courts finding that private
respondent was not liable for any infringement of the patent of petitioner in light of the latters failure to show
that Albendazole is the same as the compound subject of Letters Patent No. 14561. Noting petitioners
admission of the issuance by the U.S. of a patent for Albendazole in the name of Smith Kline and French
Laboratories which was petitioners former corporate name, the appellate court considered the U.S. patent as
implying that Albendazole is different from methyl 5 propylthio-2-benzimidazole carbamate. It likewise found
that private respondent was not guilty of deceiving the public by misrepresenting that Impregon is its product.
The appellate court, however, declared that Letters Patent No. 14561 was not void as it sustained petitioners
explanation that Patent Application Serial No. 18989 which was filed on October 8, 1976 was a divisional
application of Patent Application Serial No. 17280 filed on June 17, 1975 with the Philippine Patent Office, well
within one year from petitioners filing on June 19, 1974 of its Foreign Application Priority Data No. 480,646 in
the U.S. covering the same compound subject of Patent Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent Application Serial No.
18989 was deemed filed on June 17, 1995 or still within one year from the filing of a patent application abroad
in compliance with the one-year rule under Section 15 of the Patent Law. And it rejected the submission that
the compound in Letters Patent No. 14561 was not patentable, citing the jurisprudentially established
presumption that the Patent Offices determination of patentability is correct. Finally, it ruled that petitioner
established itself to be the one and the same assignee of the patent notwithstanding changes in its corporate
name. Thus the appellate court disposed:
WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that the orders for the
nullification of Letters Patent No. 14561 and for its cancellation are deleted therefrom.
SO ORDERED.
Petitioners motion for reconsideration of the Court of Appeals decision having been denied
11
the present
petition for review on certiorari
12
was filed, assigning as errors the following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT ALBENDAZOLE, THE
ACTIVE INGREDIENT IN TRYCOS "IMPREGON" DRUG, IS INCLUDED IN PETITIONERS LETTERS
PATENT NO. 14561, AND THAT CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT
INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE RESPONDENT
TRYCO PHARMA CORPORATION P330,000.00 ACTUAL DAMAGES AND P100,000.00
ATTORNEYS FEES.
Petitioner argues that under the doctrine of equivalents for determining patent infringement, Albendazole, the
active ingredient it alleges was appropriated by private respondent for its drug Impregon, is substantially the
same as methyl 5 propylthio-2-benzimidazole carbamate covered by its patent since both of them are meant to
combat worm or parasite infestation in animals. It cites the "unrebutted" testimony of its witness Dr. Godofredo
C. Orinion (Dr. Orinion) that the chemical formula in Letters Patent No. 14561 refers to the compound
Albendazole. Petitioner adds that the two substances substantially do the same function in substantially the
same way to achieve the same results, thereby making them truly identical. Petitioner thus submits that the
appellate court should have gone beyond the literal wordings used in Letters Patent No. 14561, beyond merely
applying the literal infringement test, for in spite of the fact that the word Albendazole does not appear in
petitioners letters patent, it has ably shown by evidence its sameness with methyl 5 propylthio-2-
benzimidazole carbamate.
Petitioner likewise points out that its application with the Philippine Patent Office on account of which it was
granted Letters Patent No. 14561 was merely a divisional application of a prior application in the U. S. which
granted a patent for Albendazole. Hence, petitioner concludes that both methyl 5 propylthio-2-benzimidazole
carbamate and the U.S.-patented Albendazole are dependent on each other and mutually contribute to
produce a single result, thereby making Albendazole as much a part of Letters Patent No. 14561 as the other
substance is.
Petitioner concedes in its Sur-Rejoinder
13
that although methyl 5 propylthio-2-benzimidazole carbamate is not
identical with Albendazole, the former is an improvement or improved version of the latter thereby making both
substances still substantially the same.
With respect to the award of actual damages in favor of private respondent in the amount of P330,000.00
representing lost profits, petitioner assails the same as highly speculative and conjectural, hence, without
basis. It assails too the award of P100,000.00 in attorneys fees as not falling under any of the instances
enumerated by law where recovery of attorneys fees is allowed.
In its Comment,
14
private respondent contends that application of the doctrine of equivalents would not alter
the outcome of the case, Albendazole and methyl 5 propylthio-2-benzimidazole carbamate being two different
compounds with different chemical and physical properties. It stresses that the existence of a separate U.S.
patent for Albendazole indicates that the same and the compound in Letters Patent No. 14561 are different
from each other; and that since it was on account of a divisional application that the patent for methyl 5
propylthio-2-benzimidazole carbamate was issued, then, by definition of a divisional application, such a
compound is just one of several independent inventions alongside Albendazole under petitioners original
patent application.
As has repeatedly been held, only questions of law may be raised in a petition for review on certiorari before
this Court. Unless the factual findings of the appellate court are mistaken, absurd, speculative, conjectural,
conflicting, tainted with grave abuse of discretion, or contrary to the findings culled by the court of origin,
15
this
Court does not review them.
From an examination of the evidence on record, this Court finds nothing infirm in the appellate courts
conclusions with respect to the principal issue of whether private respondent committed patent infringement to
the prejudice of petitioner.
The burden of proof to substantiate a charge for patent infringement rests on the plaintiff.
16
In the case at bar,
petitioners evidence consists primarily of its Letters Patent No. 14561, and the testimony of Dr. Orinion, its
general manager in the Philippines for its Animal Health Products Division, by which it sought to show that its
patent for the compound methyl 5 propylthio-2-benzimidazole carbamate also covers the substance
Albendazole.
From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions thereof, no mention
is made of the compound Albendazole. All that the claims disclose are: the covered invention, that is, the
compound methyl 5 propylthio-2-benzimidazole carbamate; the compounds being anthelmintic but nontoxic for
animals or its ability to destroy parasites without harming the host animals; and the patented methods,
compositions or preparations involving the compound to maximize its efficacy against certain kinds of parasites
infecting specified animals.
When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim
anything beyond them.
17
And so are the courts bound which may not add to or detract from the claims matters
not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that which the
inventor claimed and the patent office allowed, even if the patentee may have been entitled to something more
than the words it had chosen would include.
18

It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561 is not
determinative of Albendazoles non-inclusion in the claims of the patent. While Albendazole is admittedly a
chemical compound that exists by a name different from that covered in petitioners letters patent, the
language of Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And no extrinsic
evidence had been adduced to prove that Albendazole inheres in petitioners patent in spite of its omission
therefrom or that the meaning of the claims of the patent embraces the same.
While petitioner concedes that the mere literal wordings of its patent cannot establish private respondents
infringement, it urges this Court to apply the doctrine of equivalents.
The doctrine of equivalents provides that an infringement also takes place when a device appropriates a prior
invention by incorporating its innovative concept and, although with some modification and change, performs
substantially the same function in substantially the same way to achieve substantially the same result.
19
Yet
again, a scrutiny of petitioners evidence fails to convince this Court of the substantial sameness of petitioners
patented compound and Albendazole. While both compounds have the effect of neutralizing parasites in
animals, identity of result does not amount to infringement of patent unless Albendazole operates in
substantially the same way or by substantially the same means as the patented compound, even though it
performs the same function and achieves the same result.
20
In other words, the principle or mode of
operation must be the same or substantially the same.
21

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

As stated early on, petitioners evidence fails to explain how Albendazole is in every essential detail identical to
methyl 5 propylthio-2-benzimidazole carbamate. Apart from the fact that Albendazole is an anthelmintic agent
like methyl 5 propylthio-2-benzimidazole carbamate, nothing more is asserted and accordingly substantiated
regarding the method or means by which Albendazole weeds out parasites in animals, thus giving no
information on whether that method is substantially the same as the manner by which petitioners compound
works. The testimony of Dr. Orinion lends no support to petitioners cause, he not having been presented or
qualified as an expert witness who has the knowledge or expertise on the matter of chemical compounds.
As for the concept of divisional applications proffered by petitioner, it comes into play when two or more
inventions are claimed in a single application but are of such a nature that a single patent may not be issued
for them.
23
The applicant thus is required "to divide," that is, to limit the claims to whichever invention he may
elect, whereas those inventions not elected may be made the subject of separate applications which are called
"divisional applications."
24
What this only means is that petitioners methyl 5 propylthio-2-benzimidazole
carbamate is an invention distinct from the other inventions claimed in the original application divided out,
Albendazole being one of those other inventions. Otherwise, methyl 5 propylthio-2-benzimidazole carbamate
would not have been the subject of a divisional application if a single patent could have been issued for it as
well as Albendazole.1wphi1
The foregoing discussions notwithstanding, this Court does not sustain the award of actual damages and
attorneys fees in favor of private respondent. The claimed actual damages of P330,000.00 representing lost
profits or revenues incurred by private respondent as a result of the issuance of the injunction against it,
computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for eleven months, were
supported by the testimonies of private respondents President
25
and Executive Vice-President that the
average monthly sale of Impregon was P100,000.00 and that sales plummeted to zero after the issuance of
the injunction.
26
While indemnification for actual or compensatory damages covers not only the loss suffered
(damnum emergens) but also profits which the obligee failed to obtain (lucrum cessans or ganacias
frustradas), it is necessary to prove the actual amount of damages with a reasonable degree of certainty based
on competent proof and on the best evidence obtainable by the injured party.
27
The testimonies of private
respondents officers are not the competent proof or best evidence obtainable to establish its right to actual or
compensatory damages for such damages also require presentation of documentary evidence to substantiate
a claim therefor.
28

In the same vein, this Court does not sustain the grant by the appellate court of attorneys fees to private
respondent anchored on Article 2208 (2) of the Civil Code, private respondent having been allegedly forced to
litigate as a result of petitioners suit. Even if a claimant is compelled to litigate with third persons or to incur
expenses to protect its rights, still attorneys fees may not be awarded where no sufficient showing of bad faith
could be reflected in a partys persistence in a case other than an erroneous conviction of the righteousness of
his cause.
29
There exists no evidence on record indicating that petitioner was moved by malice in suing private
respondent.
This Court, however, grants private respondent temperate or moderate damages in the amount of P20,000.00
which it finds reasonable under the circumstances, it having suffered some pecuniary loss the amount of which
cannot, from the nature of the case, be established with certainty.
30

WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION. The
award of actual or compensatory damages and attorneys fees to private respondent, Tryco Pharma
Corporation, is DELETED; instead, it is hereby awarded the amount of P20,000.00 as temperate or moderate
damages.
SO ORDERED.

G.R. No. L-27361 May 29, 1981
PARKE, DAVIS & COMPANY, plaintiff-appellant,
vs.
DOCTORS' PHARMACEUTICALS, INC. and V-LAB DRUGHOUSE CORPORATION, defendants-appellees.

ABAD SANTOS, J .:1wph1.t
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.
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 respectivrely 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 plaintiff's 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 investigation Claim 4 of said letters Patent No. 279 by acting as distributor of defendant No. 1 of
the latter's medicine called "Venimicetin Suspension" which contains "Chloramphenicol 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 deprive plaintiff of legitimate returns
which plaintiff would have otherwise would have falsely and deseptively concealed that the same contains
"Chloramphenicol" and "Chloramphenicol Palmitate" are entirely different substances; that defendants,
advertising and selling "Venimicetin Suspension", have falsely and deceptively use plaintiffs name and
represented that defendant No. 1 holds a license from plaintiff for said medicine with, inter alia, the following
words: 1wph1.t
First Compulsory License 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 plaintiff's 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 plaintiff's Letters Patent No. 50 (which covers
"Chloramphenicol") and not with plaintiff's 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 plaintiff's 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 plaintiff's 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 plaintiff's 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 plaintiff's 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 Cloramphenicol and not
"Chloramphenicol Palmitate".
On July 5, 1966, the plaintiff filed its Rejoinder to Reply to Opposition alleging 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 contains said substance but the
subtance covered by letters Patents 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 trade 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: 1wph1.t
xxx xxx xxx
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 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 owntrademarks 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:
First Compulsory License 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. 1wph1.t
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.
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.
As can be gleaned from the appealed order, the pertinent portions of which We have heretofore quoted, the
lower court premised its ruling that there is no cause of action for infringement of patent on the 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. Thus, instead of hypothetically assuming the truth
of the plaintiff's allegation that "Chloramphenicol" and "Chloramphenicol Palmitate are two different
substances, the lower court had ruled against its veracity. This 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.
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 entirely different substances and
that "Venimicetin Suspension" actually contains "Chloramphenicol Palmitate" and not "Chloramphenicol" as
indicated in its package and label, 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 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 Letters Patent No. 279, Claim 4 of which allegedly covers
said substance. Sections 37 and 42 of R.A. No. 165 provide:1wph1.t
SEC. 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. (Emphasis supplied.)
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 infringed,
damages sustained by reason of the infringement and to secure an injunction for the protection
of his rights.
Likewise, the defendants would be guilty of unfair competition by falsely stating that defendant No. l's 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;1wph1.t
In particular, and without in any way limiting the scope of unfair competition, the following shall
be deemed guilty of unfair competition:
xxx xxx xxx
(c) Any person who shall make any false statement in the course of trade ... .
Clearly, the lower court erred in dismissing, on the ground of failure to state a cause of action, the complaint for
damages for infringement of patent and unfair competition.
WHEREFORE, the appealed order of dismissal is hereby set aside and the complaint for damages for
infringement of patent and unfair competition is hereby reinstated. Without pronouncement as costs.

G.R. No. 167715 November 17, 2010
PHIL PHARMAWEALTH, INC., Petitioner,
vs.
PFIZER, INC. and PFIZER (PHIL.) INC., Respondents.
D E C I S I O N
PERALTA, J .:
Before the Court is a petition for review on certiorari seeking to annul and set aside the 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:
x x x x
6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (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 directed to "a method of increasing the effectiveness of a beta-lactam antibiotic in a
mammalian subject, which comprises co-administering to said subject a beta-lactam antibiotic
effectiveness increasing amount of 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 beta-lactam antibiotic like
sulbactam sodium.
7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium (hereafter "Sulbactam
Ampicillin"). Ampicillin sodium is a specific example of the broad beta-lactam antibiotic disclosed and
claimed in the Patent. It is the compound which efficacy is being enhanced by co-administering 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.
8. Pfizer is marketing Sulbactam Ampicillin under the brand name "Unasyn." Pfizer's "Unasyn"
products, which come in oral and IV formulas, are covered by Certificates of Product Registration
("CPR") issued by the 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.
9. Sometime in January and February 2003, complainants came to know 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 rights. x x x
x x x x
10. Complainants thus wrote the above hospitals and demanded that the latter immediately cease and
desist from accepting bids for the supply [of] Sulbactam Ampicillin or awarding the same to entities
other than complainants. Complainants, in the same letters sent through undersigned counsel, also
demanded that respondent immediately withdraw its bids to supply Sulbactam Ampicillin.
11. In gross and evident bad faith, respondent and the hospitals named in paragraph 9 hereof, willfully
ignored complainants' just, plain and valid demands, refused to comply therewith and continued to
infringe the Patent, all to the damage and prejudice of complainants. As registered owner of the Patent,
Pfizer is entitled to protection under Section 76 of the IP Code.
x x x x
4

Respondents prayed for permanent injunction, damages and the forfeiture and impounding of the alleged
infringing products. They also asked for the issuance of a temporary restraining order and a preliminary
injunction that would prevent herein petitioner, its agents, representatives and assigns, from importing,
distributing, selling or offering the subject product for sale to any entity in the Philippines.
In an Order
5
dated July 15, 2003 the BLA-IPO issued a preliminary injunction which was effective for ninety
days from petitioner's receipt of the said Order.
Prior to the expiration of the ninety-day period, respondents filed a Motion for Extension of Writ of Preliminary
Injunction
6
which, however, was denied by the BLA-IPO in an Order
7
dated October 15, 2003.
Respondents filed a Motion for Reconsideration but the same was also denied by the BLA-IPO in a
Resolution
8
dated January 23, 2004.
Respondents then filed a special civil action for certiorari with the CA assailing the October 15, 2003 and
January 23, 2004 Resolutions of the BLA-IPO. Respondents also prayed for the issuance of a preliminary
mandatory injunction for the reinstatement and extension of the writ of preliminary injunction issued by the
BLA-IPO.
While the case was pending before the CA, respondents filed a Complaint
9
with the Regional Trial Court (RTC)
of Makati City for infringement and unfair competition with damages against herein petitioner. In said case,
respondents prayed for the issuance of a temporary restraining order and preliminary injunction to prevent
herein petitioner from importing, distributing, 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:
l 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

Based on the foregoing, the Court finds that respondents' initial filing of their complaint with the BLA-IPO,
instead of the regular courts, is in keeping with the doctrine of primary 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 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 BLA-IPO in the
exercise of its quasi-judicial power is no longer a matter that falls within the jurisdiction of the said
administrative agency, particularly that of its Director General. The resolution of this issue which was raised
before the CA does not demand the exercise by the IPO of sound administrative discretion requiring special
knowledge, experience and services in 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
ultimately have to be decided by the courts of justice.
23
This is the case with respect to the issue raised in the
petition filed with the CA.
Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations do not 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 Constitution, includes the authority of the courts
to determine in an appropriate action the 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 and enforceable, and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.
25
Hence, the CA, and not the IPO Director General, has jurisdiction to determine 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.
Lastly, petitioner avers that respondents are guilty of forum shopping for having filed separate actions before
the IPO and the RTC praying for the same relief.
The Court agrees.
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.
26

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.
27

There is no question as to the identity of parties in the complaints filed with the IPO and the RTC.
Respondents argue that they cannot be held guilty of forum shopping because their complaints are based on
different causes of action as shown by the fact that the said complaints are founded on violations of different
patents.
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.
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

In the instant case, the prayer of respondents in their complaint filed with the IPO is as follows:
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
C. After trial, render judgment:
(i) declaring that respondent has infringed Pfizer Inc.'s Philippine Patent No. 21116 and that
respondent has no right whatsoever over complainant's patent;
(ii) ordering respondent to pay complainants the following amounts:
(a) at least P1,000,000.00 as actual damages;
(b) P700,000.00 as attorney's fees and litigation expenses;
(d) P1,000,000.00 as exemplary damages; and
(d) costs of this suit.
(iii) ordering the condemnation, seizure or forfeiture of respondent's infringing goods or
products, wherever they may be found, including the materials and implements used in the
commission of infringement, to be disposed of in such manner as may be deemed appropriate
by this Honorable Office; and
(iv) making the injunction permanent.
32

In an almost identical manner, respondents prayed for the following in their complaint filed with the RTC:
(a) Immediately upon the filing of this action, issue an ex parte order:
(1) temporarily restraining Pharmawealth, its agents, representatives and assigns from
importing, distributing, selling or offering for sale infringing sulbactam ampicillin products to
various government and private hospitals or to any other entity in the Philippines, or from
otherwise infringing Pfizer Inc.'s Philippine Patent No. 26810.
(2) impounding all the sales invoices and other documents evidencing sales by pharmawealth of
sulbactam ampicillin products; and
(3) disposing of the infringing goods outside the channels of commerce.
(b) After hearing, issue a writ of preliminary injunction:
(1) enjoining Pharmawealth, its agents, representatives and assigns from importing, distributing,
selling or offering for sale infringing sulbactam ampicillin products to various government
hospitals or to any other entity in the Philippines, or from otherwise infringing Patent No. 26810;
(2) impounding all the sales invoices and other documents evidencing sales by Pharmawealth
of sulbactam ampicillin products; and
(3) disposing of the infringing goods outside the channels of commerce.
(c) After trial, render judgment:
(1) finding Pharmawealth to have infringed Patent No. 26810 and declaring Pharmawealth to
have no right whatsoever over plaintiff's patent;
(2) ordering Pharmawealth to pay plaintiffs the following amounts:
(i) at least P3,000,000.00 as actual damages;
(ii) P500,000.00 as attorney's fees and P1,000,000.00 as litigation expenses;
(iii) P3,000,000.00 as exemplary damages; and
(iv) costs of this suit.
(3) ordering the condemnation, seizure or forfeiture of Pharmawealth's infringing goods or
products, wherever they may be found, including the materials and implements used in the
commission of infringement, to be disposed of in such manner as may be deemed appropriate
by this Honorable Court; and
(4) making the injunction permanent.
33

It is clear from the foregoing that the ultimate objective which respondents seek to achieve in their separate
complaints filed with the RTC and the IPO, is to ask for damages for the alleged violation of their right to
exclusively sell Sulbactam Ampicillin products and to permanently prevent or prohibit petitioner from selling
said products to any entity. 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.
It bears to reiterate that what is truly important to consider in determining whether forum shopping exists or not
is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrative
agencies to rule on the same or related causes 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
1avvphi1
Thus, the Court agrees with petitioner that respondents are indeed guilty of forum shopping.
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 all, if there are more than two) actions shall be dismissed with
prejudice.
36
In the present case, the Court finds that respondents did not deliberately violate the rule on non-
forum shopping. Respondents may not be totally blamed for erroneously believing that they can file separate
actions simply on the basis of different patents. Moreover, in the suit filed with the RTC of Makati City,
respondents were candid enough to inform the trial court of the pendency of the complaint filed with the BLA-
IPO as well as the petition for certiorari filed with the CA. On these bases, only Civil Case No. 04-754 should
be dismissed on the ground of litis pendentia.
WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions of the Court of Appeals, dated
January 18, 2005 and April 11, 2005, in CA-G.R. No. 82734, are REVERSED and SET ASIDE. The petition for
certiorari filed with the Court of Appeals is DISMISSED for being moot and academic.
Civil Case No. 04-754, filed with the Regional Trial Court of Makati City, Branch 138, is
likewise DISMISSED on the ground of litis pendentia.
SO ORDERED.

G.R. No. L-20354 July 28, 1969
GERARDO SAMSON, JR., petitioner,
vs.
FELIPE TARROZA and DIRECTOR OF PATENTS, respondents.
Hermenegildo V. Lopez for petitioner.
Isaac S. Puno, Jr. for respondent Felipe Tarroza.
Office of the Solicitor General for respondent Director of Patents.
FERNANDO, J .:
With the statutory recognition of patentability based on the "practical utility" concept
1
thus rendering clear that
a patent is not solely to be earned under the "flash of genius" theory,
2
this petition for the cancellation of a
utility model patent for a Side Tilting-Dumping Wheelbarrow granted to respondent Felipe A. Tarroza was
correctly denied by respondent Director of Patents. Petitioner Gerardo Samson, Jr., himself the grantee of a
utility model patent for a Dumping and Detachable Wheelbarrow, lacked any legal justification for such a plea.
So respondent Director ruled. Not satisfied, petitioner elevated the matter to us for review. There is no reason
why a different outcome is to be expected. His appeal must fail.
Petitioner was, on May 22, 1958, awarded Utility Model Patent No. 27 for the above type of wheelbarrow
which, as noted in the decision, "consists of a wheeled carriage base and an upper pivoted and detachable
carrying tray. The carriage base is comprised of a wheel and two equal lengths of continuous pipes bent to
provide wheel forks at the front and at the rear to support the back portion of the tray, with the ends of the
pipes being adopted as the carrying handles for the wheelbarrow. The two pipes thus bent are joined together
by cross braces in the front and at the rear. The tray is removably pivoted at its front end through hook catches
at its bottom corners, to the forward cross brace, and its rear end rests solidly over the rear portion of the legs.
To dump the load the user pulls a dumping handle at the back end to cause the tray to pivot upwardly about
the front brace to a position of about 45 degrees with the horizontal and with its front end panel being
supported by the wheel."
3

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

There is an express recognition under the Patent Law, as already noted, that any new model of implements or
tools or of any industrial product even if not possessed of the quality of invention but which is of "practical
utility" is entitled to a "patent for a utility model." From the above description of the side tilting-dumping
wheelbarrow, the product of respondent's ingenuity and industry, it is quite apparent that it has a place in the
market and possesses what the statute refers to as "practical utility." The requirement explicitly set forth in the
statute has thus been met. Respondent Tarroza is entitled to its benefits. The grant to him of a patent for a
utility model is in accordance with law. There was no reason, therefore, for its cancellation. So it was held by
the Director of Patents. That decision as already noted should stand.
Moreover, in appeals from a decision of the Director of Patents, only questions of law may be reviewed,
findings of facts being conclusive unless unsupported by substantial evidence. So it was decided in Che v.
Philippines Patent Office.
5
As was emphasized in Bagano v. Director of Patents: "It is almost trite to state here
that in cases of the nature as the one at bar, only questions of law are to be raised in order that this Court
could exercise its appellate jurisdiction and review the decision."
6
The above well-settled doctrines suffice to
demonstrate that this petition for review, as noted at the outset, is without merit. It was not error then, to
reiterate, for the respondent Director of Patents to deny the cancellation of the utility patent granted respondent
Tarroza. To borrow from the language of the Che opinion: "Even on the sole issue alone, the petition for review
must fail."
Another alleged error was imputed to respondent Director of Patents. It would find fault with his failing to hold
that respondent Tarroza "was not the true and actual" author of the mechanical contrivance for which he was
granted a utility model patent. This is what the appealed decision has to say on this point: "Petitioner's theory
with respect to the second ground for cancellation, to wit: that respondent is not the true and actual inventor or
designer of the utility model is premised on the fact that because of the proximity of the two, the petitioner and
the respondent being brothers-in-law, and living in adjoining residential lots, the latter has had ample time and
opportunity to observe and copy the former's wheelbarrow. But the testimonial evidence thus presented is not
clear, satisfactory, and free from doubt, in the face of allegations to the contrary by the respondent."
7
The
futility of such an assignment of error is thus apparent. Again, it is factual in character. It is not for us, as noted
above, to review or revise the same, there being no showing of a lack of substantial evidence in support
thereof.
WHEREFORE, the decision of April 13, 1962 of respondent Director of Patents denying the petition for the
cancellation of Utility Model Letters Patent No. 62 in favor of respondent Tarroza is hereby affirmed. With costs
against petitioner.

G.R. No. L-24112 July 23, 1974
ONG SHIAO KONG and CU WU KIAM, petitioners,
vs.
THE DIRECTOR OF PATENTS and PESSUMAL TOLARAM, respondents.
C.M. Diokno for petitioners. Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General
Pacifico P. de Castro and Solicitor Celso P. Ylagan for respondent Director of Patents. Rafael R. Lasam for
private respondent.

CASTRO, J .:
The petitioners Ong Shiao Kong and Cu Wu Kiam (hereinafter referred to as the petitioners) seek a reversal of
the decision of the Director of Patents in Inter Partes Case No. 248 cancelling letters patent No. UM-135
issued in their favor. They contend (1) that a hearing officer of the Philippines Patent Office has no authority (a)
to hear cases filed with that office, (b) to compel the petitioners to testify as adverse witnesses, and (c) to
receive evidence on a matter not raised. in the respondent's petition for cancellation of the letters patent issued
to the petitioners; (2) that Cu Wu Kiam, contrary to the findings of the Director of Patents, is a co-maker of the
utility model (water heater) in dispute, and that even if he were not, this fact is not sufficient to warrant the
cancellation of the letters patent; and (3) that the evidence does not support the conclusion that the utility
model of the respondent Pessumal Tolaram (hereinafter referred to as the respondent) "dominates" that of the
petitioners.
It appears that on November 20, 1961 the respondent filed a petition for cancellation of letters patent UM-135
issued by the Philippines Patent Office to the petitioners for a "flash water heater" upon the ground, among
others, that the respondent's previously patented utility model (UM-66) of an "instant water heater" is
substantially similar to that of the petitioners. At the hearing held below, the hearing officer, over the objection
of the petitioners, ruled that the latter may be utilized by the respondent as adverse witnesses. The subsequent
testimony of the petitioners disclosed that Cu Wu Kiam, contrary to what was stated in their patent application,
was merely a financier, not a co-maker, of the article for which the petitioners sought and were able to obtain
letters patent.
On February 11, 1964, the director of Patents rendered a decision cancelling UM-135 on the ground that
"under the great weight of (American) case law, if several persons obtained a joint patent for what was
invented solely by one of them, that patent is void." On January 18, 1965 the Director of Patents amended his
decision by holding further that the Ong-Cu model embodied the novel features of the respondent's model "in
so far as it concerns the construction and arrangement of the electrodes or steel plates" through which water is
heated, and that consequently the respondent has the right to exclude others from making, using and vending
a water heater embodying his novel construction. On February 4, 1965 the petitioners filed the present petition
for review. Thereafter the Court gave due course to the petition, and issued a writ of preliminary injunction
enjoining the Director of Patents from enforcing his decision pending appeal.
On March 24, 1966 the case was submitted for decision.
On June 17, 1974 we required the parties to show cause why the instant petition should not be dismissed for
being moot and academic due to the expiration of the respective terminal periods prescribed for the allegedly
conflicting letters patent by section 58 of R.A. 165, as amended, which recites:
Sec. 58. Term and extension thereof. The term of the design patent and of the patent for a
utility model shall be five years from the date of the grant thereof.
Before the expiration of the five-year term, upon payment of the required fee, or within a further
time thereafter not to exceed six months upon payment of the surcharge, the owner of the
design patent or of a patent for a utility model may apply for an extension for an additional five
years. The application for extension must be accompanied by an affidavit showing that the
design or the model is in commercial or industrial use in the Philippines or satisfactorily
explaining non-use. In a similar manner an extension for a third five-year period may be
obtained.
We also required the Director of Patents to submit a certification on the current, status of the letters patent in
question. In compliance, the Director of Patents certified the following:
(a) Letters Patent No. UM-66 issued on September 24, 1959 to Pessumal Tolaram for 'instant
water heater' has EXPIRED on September 24, 1969 for failure of the Patentee to file an
application for extension for additional five (5) years, six (6) months before September 24, 1969
or three (3) months after the said date, and
(b) Letters Patent No. UM-135 issued on July 6, 1964 to Ong Shiao Kong and Cu Wu Kiam for
'flash water heater' has also EXPIRED on July 6, 1969 for failure to file an application for
extension for additional five (5) years, six months before July 6, 1969 or three months after the
said date, as required by Section 58 of Republic Act 165, as amended.
The respondent has manifested agreement that the present petition should be dismissed. The petitioners have
failed to file any manifestation within the period of time given to them.
It being clear from the foregoing certification of the Director of Patents that the respective lifetime periods of the
allegedly conflicting letters patent of the petitioners and the respondent have already expired, and that neither
the respondent nor the petitioners have applied for extension of their respective letters patent, the Court is of
the view that a resolution of the issues raised by the instant petition would serve no useful purpose and this
case should now be declared moot.
ACCORDINGLY, the instant petition is dismissed, and the writ of preliminary injunction heretofore issued is
hereby dissolved. No costs.

G.R. No. 115106 March 15, 1996
ROBERTO L. DEL ROSARIO, petitioner,
vs.
COURT OF APPEALS AND JANITO CORPORATION, respondents.

BELLOSILLO, J .:p
Roberto del Rosario petitions this Court to review the decision of the Court of Appeals
1
which set aside the
order of the Regional Trial Court of Makati granting a writ of preliminary injunction in his favor.
The antecedents: On 18 January 1993 petitioner filed a complaint for patent infringement against private
respondent Janito Corporation.
2
Roberto L. del Rosario alleged that he was a patentee of an audio equipment
and improved audio equipment commonly known as the sing-along System or karaoke under Letters Patent
No. UM-5269 dated 2 June 1983 as well as Letters Patent No. UM-6237 dated 14 November 1986 issued by
the Director of Patents. The effectivity of both Letters Patents was for five (5) years and was extended for
another five (5) years starting 2 June 1988 and 14 November 1991, respectively. He described his sing-along
system as a handy multi-purpose compact machine which incorporates an amplifier speaker, one or two tape
mechanisms, optional tuner or radio and microphone mixer with features to enhance one's voice, such as the
echo or reverb to stimulate an opera hall or a studio sound, with the whole system enclosed in one cabinet
casing.
In the early part of 1990 petitioner learned that private respondent was manufacturing a sing-along system
bearing the trademark miyata or miyata karaoke substantially similar if not identical to the sing-along system
covered by the patents issued in his favor. Thus he sought from .the trial court the issuance of a writ of
preliminary injunction to enjoin private respondent, its officers and everybody elsewhere acting on its behalf,
from using, selling and advertising the miyata or miyata karaoke brand, the injunction to be made permanent
after trial, and praying for damages, attorney's fees and costs of suit.
On 5 February 1993 the trial court temporarily restrained private respondent from manufacturing, using and/or
selling and advertising the miyata sing-along system or any sing-along system substantially identical to the
sing-along system patented by petitioner until further orders.
On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on the basis of its
finding that petitioner was a holder of a utility model patent for a sing-along system and that without his
approval and consent private respondent was admittedly manufacturing and selling its own sing-along system
under the brand name miyata which was substantially similar to the patented utility mode
3
of petitioner.
Private respondent assailed the order of 24 February 1993 directing the issuance of the writ by way of a
petition for certiorari with prayer for the issuance of a writ of preliminary injunction and a temporary restraining
order before respondent Court of Appeals.
On 15 November 1993 respondent appellate court granted the writ and set aside the questioned order of the
trial court. It expressed the view that there was no infringement of the patents of petitioner by the fact alone
that private respondent had manufactured the miyata karaoke or audio system, and that the karaoke system
was a universal product manufactured, advertised and marketed in most countries of the world long before the
patents were issued to petitioner. The motion to reconsider the grant of the writ was denied;
4
hence, the
instant petition for review.
This petition alleges that: (a) it was improper for the Court of Appeals to consider questions of fact in
acertiorari proceeding; (b) the Court of Appeals erred in taking judicial notice of private respondent's self-
serving presentation of facts; (c) the Court of Appeals erred in disregarding the findings of fact of the trial court;
and, (d) there was no basis for the Court of Appeals to grant a writ of preliminary injunction in favor of private
respondent.
5

Petitioner argues that in a certiorari proceeding questions of fact are not generally permitted the inquiry being
limited essentially to whether the tribunal has acted without or in excess of jurisdiction or with grave abuse of
discretion; that respondent court should not have disturbed but respected instead the factual findings of the
trial court; that the movant has a clear legal right to be protected and that there is a violation of such right by
private respondent. Thus, petitioner herein claims, he has satisfied the legal requisites to justify the order of the
trial court directing the issuance of the writ of injunction. On the other hand, in the absence of a patent to justify
the manufacture and sale by private respondent of sing-along systems, it is not entitled to the injunctive relief
granted by respondent appellate court.
The crux of the controversy before us hinges on whether respondent Court of Appeals erred in finding the trial
court to have committed grave abuse of discretion in enjoining private respondent from manufacturing, selling
and advertising the miyata karaoke brand sing-along system for being substantially similar if not identical to the
audio equipment covered by letters patent issued to petitioner.
Injunction is a preservative remedy for the protection of substantive rights or interests. It is not a cause of
action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the
existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or
continuous irremediable injury to some of the parties before their claims can be thoroughly investigated and
advisedly adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard of compensation. The application of the writ
rests upon an alleged existence of an emergency or of a special reason for such an order before the case can
be regularly heard, and the essential conditions for granting such temporary injunctive relief are that the
complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on
the entire showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably
necessary to protect the legal rights of plaintiff pending the litigation.
6

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

For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must be a
present right, a legal right which must be shown to be clear and positive.
In this regard Sec. 55 of R.A. 165 as amended, known as The Patent Law, provides
Sec. 55. Design patents and patents for utility models. (a) Any new, original, and ornamental
design for an article of manufacture and (b) new model or implements or tools or of any
industrial product or of part of the same, which does not possess the quality of invention but
which is of practical utility by reason of its form, configuration, construction or composition, may
be protected by the author thereof, the former by a patent for a design and the latter by a patent
for a utility model, in the same manner and subject to the same provisions and requirements as
relate to patents for inventions insofar as they are applicable, except as otherwise herein
provide . . . .
Admittedly, petitioner is a holder of Letters Patent No. UM-5629 dated 2 June 1985 issued for a term of five (5)
years from the grant of a Utility Model herein described
The construction of an audio equipment comprising a substantially cubical casing having a
window at its rear and upper corner fitted with a slightly inclined control panel, said cubical
(casing) having a vertical partition wall therein defining a rear compartment and a front
compartment, and said front compartment serving as a speaker baffle; a transistorized amplifier
circuit having an echo section and writhed in at least the printed circuit boards placed inside
said rear compartment of said casing and attached to said vertical partition wall, said
transistorized amplifier circuit capable of being operated from outside, through various controls
mounted on said control panel of such casing; a loud speaker fitted inside said front
compartment of said casing and connected to the output of the main audio amplifier section of
said transistorized amplifier circuit and a tape player mounted on the top wall of said casing and
said tape player being connected in conventional manner to said transistorized amplifier circuit.
8

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

The terms of both Letters Patents were extended for another five (5) years each, the first beginning 2 June
1988 and the second, 14 November 1991.
The Patent Law expressly acknowledges that any new model of implements or tools of any industrial product
even if not possessed of the quality of invention but which is of practical utility is entitled to a patent for utility
model.
10
Here, there is no dispute that the letters patent issued to petitioner are for utility models of audio
equipment.
In issuing, reissuing or withholding patents and extensions thereof, the Director of Patents determines whether
the patent is new and whether the machine or device is the proper subject of patent. In passing on an
application, the Director decides not only questions of law but also questions of fact, i.e. whether there has
been a prior public use or sale of the article sought to be patented.
11
Where petitioner introduces the patent in
evidence, if it is in due form, it affords a prima facie presumption of its correctness and validity. The decision of
the Director of Patents in granting the patent is always presumed to be correct, and the burden then shifts to
respondent to overcome this presumption by competent evidence.
12

Under Sec. 55 of The Patent Law a utility model shall not be considered "new" if before the application for a
patent it has been publicly known or publicly used in this country or has been described in a printed publication
or publications circulated within the country, or if it is substantially similar to any other utility model so known,
used or described within the country. Respondent corporation failed to present before the trial court competent
evidence that the utility models covered by the Letters Patents issued to petitioner were not new. This is
evident from the testimony of Janito Cua, President of respondent Janito Corporation, during the hearing on
the issuance of the injunction, to wit
Q. Mr. Cua, you testified that there are (sic) so many other companies which
already have (sic) the sing-along system even before the patent application of
Mr. del Rosario and as a matter of fact you mentioned Sanyo, Sony and Sharp, is
that right?
A. Musicmate and Asahi.
Q. Now do you recall that your lawyer filed with this Honorable Court an Urgent
Motion to Lift Temporary Restraining Order of this Honorable Court. I am sure
you were the one who provided him with the information about the many other
companies selling the sing-along system, is that right? These 18 which you
enumerated here.
A. More than that because. . . .
Q. Now you will agree with me that in your statement Sharp you put the date as
1985 agreed?
A. No.
Q. You mean your lawyer was wrong when he put the word Sharp 1985?
A. Maybe I informed him already.
xxx xxx xxx
Q. You mean your lawyer was wrong in alleging to this Court that Sharp
manufactured and sold (in) 1985 as found in the Urgent Motion?
A. Since it is urgent it is more or less.
Q. The same also with Sanyo 1985 which you put, more or less?
A. Sanyo is wrong.
Q. It is not 1985?
A. Sanyo is 1979 I think.
Q. So this is also wrong. Panasonic 1986 is also wrong?
A. Panasonic I think.
Q. So you don't think this is also correct.
A. The date?
Q. So you don't think also that this allegation here that they manufactured in
1986 is correct?
A. Wrong. Earlier.
Q. National by Precision Electronic 1986 this is also wrong?
A. I think earlier.
Q. So that means all your allegations here from 2 to 5 are wrong? OK. By
Philipps Philippines 1986, this is also correct or wrong?
A. More or less. We said more or less.
Q. Nakabutshi by Asahi Electronics that is also wrong?
A. No that is 1979.
Q. Electone by DICO 1989 is this correct or wrong?
A. Correct. More or less.
Q. Skylers 1985 is that correct or wrong?
A. It is more or less because it is urgent. We don't have time to exact the date.
Q. Musicmate of G.A. Yupangco 1981 this is more or less? You are not also
sure?
A. 95% sure.
Q. Now you are sure 1981.
A. This one because. . . .
Q. Mr. Witness so you are now trying to tell this Honorable Court that all your
allegations here of the dates in this Urgent Motion except for Musicmate which
you are only 95% sure they are all wrong or they are also more or less or not
sure, is that right?
A. More or less.
Q. Now do you have any proof, any advertisement, anything in writing that would
show that all these instruments are in the market, do you have it.
A. No I don't have it because. . . .
Q. No I am satisfied with your answer. Now Mr. Witness, you don't also have a
proof that Akai instrument that you said was also in the market before 1982? You
don't have any written proof, any advertisement?
A. I have the product.
Q. But you have not brought the product in (sic) this Honorable Court, right?
A. No.
13

As may be gleaned herein, the rights of petitioner as a patentee have been sufficiently established, contrary to
the findings and conclusions of respondent Court of Appeals. Consequently, under Sec. 37 of The Patent law,
petitioner as a patentee shall have the exclusive right to make, use and sell the patented machine, article or
product for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the
patent, and such making, using or selling by any person without authorization of the patentee constitutes
infringement of his patent.
Petitioner established before the trial court that respondent Janito Corporation was manufacturing a similar
sing-along system bearing the trademark miyata which infringed his patented models. He also alleged that
both his own patented audio equipment and respondent's sing-along system were constructed in a casing with
a control panel, the casing having a vertical partition wall defining the rear compartment from the front
compartment, with the front compartment consisting of a loud speaker baffle, both containing a transistorized
amplifier circuit capable of being operated from outside through various controls mounted on the control panel,
and that both had loud speakers fitted inside the front compartment of the casing and connected to the output
of the main audio amplifier section both having a tape recorder and a tape player mounted on the control panel
with the tape recorder and tape player being both connected to the transistorized amplifier circuit.
14

Respondent Janito Corporation denied that there was any violation of petitioner's patent rights, and cited the
differences between its miyata equipment and petitioner's audio equipment. But, it must be emphasized,
respondent only confined its comparison to the first model, Utility Model No. 5269, and completely disregarded
Utility Model No. 6237 which improved on the first. As described by respondent corporation,
15
these
differences are
First. Under Utility Model 5269, the unit is a substantially cubical casing with a window at its rear
and upper corner fitted with slightly inclined control panel, while the miyata equipment is a
substantially rectangular casing with panel vertically positioned.
Second. Under Utility Model 5269, the cubical casing has a vertical partition wall defining a rear
compartment and a front compartment serving as a speaker baffle, while the miyata equipment
has no rear compartment and front compartment in its rectangular casing; it has only a front
compartment horizontally divided into 3 compartments like a 3-storey building, the 1st
compartment being a kit, the 2nd also the speaker, and the 3rd are kits.
Third. Under Utility Model No. 5269, a transistorized amplifier circuit with an echo section wired
in at least 2 printed circuit boards is placed inside the rear compartment of the casing and
attached to the vertical partition wall, the printed circuit board having 1 amplifier and 1 echo,
while in the miyataequipment the amplifier is mainly IC (Integrated Circuit) powered with 8
printed circuit boards almost all of which are IC controlled, with 1 amplifier with power supply, 1
main tuner, 1 equalizer (3-band), 1 IC controlled volume control, 1 echo IC, 1 tape pream, 1
instrument and 1 wireless microphone.
Fourth. Under Utility Model 5269, 4 printed circuits are placed inside the compartment of its
casing attached to the vertical partition wall, while in the miyata, the 7 printed circuit boards
(PCB) are attached to the front panel and 1 attached to the horizontal divider.
Fifth. Under Utility Model 5269, there are various controls mounted on the control panel of the
casing, while in miyata, the various controls are all separated from the printed circuit boards and
the various controls are all attached thereto.
Sixth. Under Utility Model 5269, a loud speaker fitted inside the front compartment of the casing
is connected to the output of the main audio amplifier section of the transistorized amplifier
circuit, while in miyata, there is no other way but to use 2 loud speakers connected to the
amplifier.
Seventh. Under Utility Model 5269, a tape player is mounted on the top wall of the casing, while
inmiyata, 2 tape players are used mounted side by side at the front.
It is elementary that a patent may be infringed where the essential or substantial features of the patented
invention are taken or appropriated, or the device, machine or other subject matter alleged to infringe is
substantially identical with the patented invention. In order to infringe a patent, a machine or device must
perform the same function, or accomplish the same result by identical or substantially identical means and the
principle or mode of operation must be substantially the same.
16

It may be noted that respondent corporation failed to present before the trial court a clear, competent and
reliable comparison between its own model and that of petitioner, and disregarded completely petitioner's utility
Model No. 6237 which improved on his first patented model. Notwithstanding the differences cited by
respondent corporation, it did not refute and disprove the allegations of petitioner before the trial court that: (a)
both are used by a singer to sing and amplify his voice; (b) both are used to sing with a minus-one or multiplex
tapes, or that both are used to play minus-one or standard cassette tapes for singing or for listening to; (c) both
are used to sing with a minus-one tape and multiplex tape and to record the singing and the accompaniment;
(d) both are used to sing with live accompaniment and to record the same; (e) both are used to enhance the
voice of the singer using echo effect, treble, bass and other controls; (g) both are equipped with cassette tape
decks which are installed with one being used for playback and the other, for recording the singer and the
accompaniment, and both may also be used to record a speaker's voice or instrumental playing, like the guitar
and other instruments; (h) both are
encased in a box-like cabinets; and, (i) both can be used with one or more microphones.
1
7
Clearly, therefore, both petitioner's and respondent's models involve substantially the same modes of operation
and produce substantially the same if not identical results when used.
In view thereof, we find that petitioner had established before the trial court prima facie proof of violation of his
rights as patentee to justify the issuance of a writ of preliminary injunction in his favor during the pendency of
the main suit for damages resulting from the alleged infringement.
WHEREFORE, the Decision of the Court of Appeals dated 15 November 1993 is REVERSED and SET ASIDE
and the Order of the trial court dated 24 February 1993 granting petitioner the writ of injunction is
REINSTATED.
The trial court is directed to continue with the proceedings on the main action pending before it in order to
resolve with dispatch the issues therein presented.
SO ORDERED.

G.R. No. 121267 October 23, 2001
SMITH KLINE & FRENCH LABORATORIES, LTD. plaintiff-appellee,
vs.
COURT OF APPEALS and DANLEX RESEARCH LABORATORIES, INC., defendant-appellant.
KAPUNAN, J .:
This petition for review on certiorari assails the Decision dated January 27, 1995 of the Court of Appeals in CA-
G.R. SP No. 33770
1
which affirmed the decision of the Bureau of Patents, Trademarks and Technology
Transfer (BPTTT) granting a compulsory license to private respondent Danlex Research Laboratories for the
use of the pharmaceutical product Cimetidine. Likewise assailed is the July 25, 1995 Resolution of the Court of
Appeals denying the motion for reconsideration filed by petitioner Smith Kline and French Laboratories, Ltd.
Petitioner is the assignee of Letters Patent No. 12207 covering the pharmaceutical product Cimetidine, which
relates to derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl thiourea, ureas or guanadines.
Said patent was issued by the BPTTT to Graham John Durant, John Collin Emmett and Robin Genellin on
November 29, 1978.
2

On August 21, 1989, private respondent filed with the BPTTT a petition for compulsory license to manufacture
and produce its own brand of medicines using Cimetidine. Private respondent invoked Section 34 (1) (e) of
Republic Act No. 165,
3
(the Patent Law) the law then governing patents, which states that an application for
the grant of a compulsory license under a particular patent may be filed with the BPTTT at any time after the
lapse of two (2) years from the date of grant of such patent, if the patented invention or article relates to food or
medicine, or manufactured substances which can be used as food or medicine, or is necessary for public
health or public safety.
4
The petition for compulsory license stated that Cimetidine is useful as an antihistamine
and in the treatment of ulcers, and that private respondent is capable of using the patented product in the
manufacture of a useful product.
5

Petitioner opposed the petition for compulsory license, arguing that the private respondent had no cause of
action and failed to allege how it intended to work the patented product. Petitioner further stated that its
manufacture, use and sales of Cimetidine satisfied the needs of the Philippine market, hence, there was no
need to grant a compulsory license to private respondent to manufacture, use and sell the same. Finally,
petitioner also claimed that the grant of a compulsory license to private respondent would not promote public
safety and that the latter was only motivated by pecuniary gain.
6

After both parties were heard, the BPTTT rendered a decision directing the issuance of a compulsory license
to private respondent to use, manufacture and sell in the Philippines its own brand of pharmaceutical products
containing Cimetidine and ordered the payment by private respondent to petitioner of royalties at the rate of
2.5% of net sales in Philippine currency.
7

Petitioner thereafter filed with the Court of Appeals a petition for review of the decision of the BPTTT, raising
the following arguments: (1) the BPTTT's decision is violative of the Paris Convention for the Protection of
Industrial Property; (2) said decision is an invalid exercise of police power; (3) the rate of royalties payable to
petitioner as fixed by the BPTTT was rendered without factual basis and amounts to an expropriation of private
property without just compensation; (4) the petition for compulsory license should have been dismissed by the
BPTTT for failure to prove the jurisdictional requirement of publication.
8

On January 27, 1995, the Court of Appeals promulgated its Decision, the dispositive portion of which states:
WHEREFORE, the petition is DENIED, and the decision of the Bureau of Patents, Trademarks and
Technology Transfer is hereby AFFIRMED, with costs against the Petitioner.
SO ORDERED.
9

In affirming the decision of the BPTTT, the appellate court held that the grant of a compulsory license to private
respondent for the manufacture and use of Cimetidine is in accord with the Patent Law since the patented
product is medicinal in nature, and therefore necessary for the promotion of public health and safety.
10
It
explained further that the provisions of the Patent Law permitting the grant of a compulsory license are
intended not only to give a chance to others to supply the public with the quantity of the patented article but
especially to prevent the building up of patent monopolies.
11
Neither did the appellate court find the royalty rate
of 2.5% of net sales fixed by the BPTTT unreasonable, considering that what was granted under the
compulsory license is only the right to manufacture Cimetidine, without any technical assistance from
petitioner, and royalty rates identical to that fixed by the BPTTT have been prescribed for the grant of
compulsory license in a good number of patent cases.
12
The Court of Appeals also ruled that contrary to
petitioner's claim, private respondent complied with the requirement of publication under the Patent Law and
had submitted proof of such compliance.
13

Not satisfied with the appellate court's decision, petitioner filed a motion for reconsideration thereof as well as a
motion for the issuance of a temporary restraining order against private respondent's sister company, Montreal
Pharmaceutical, Inc. to refrain from marketing a product similar to Cimetidine, but both motions were denied by
the Court of Appeals in its Resolution of July 25, 1995.
14

Petitioner thus filed the present petition on September 15, 1995, with the following assignment of errors:
I. The respondent Court erred in upholding the validity of the decision of public respondent BPTTT
which is an arbitrary exercise of police power and is violative of international law.
II. The respondent Court erred in holding that compulsory licensing will not create a confusion that the
patented product is the brainchild of private respondent Danlex and not of petitioner.
III.Assuming that the grant of compulsory license is in order, the respondent Court still erred in holding
that the BPTTT decision fixing the royalty at 2.5% of the net wholesale price in peso does not amount
to expropriation of private property without just compensation.
IV.The respondent Court erred in finding that the jurisdictional requirement of publication in a
newspaper of general circulation for three (3) consecutive weeks has been complied with by private
respondent Danlex.
15

While petitioner concedes that the State in the exercise of police power may regulate the manufacture and use
of medicines through the enactment and implementation of pertinent laws, it states that such exercise is valid
only if the means employed are reasonably necessary for the accomplishment of the purpose and if not unduly
oppressive.
16
According to petitioner, the grant of a compulsory license to private respondent is an invalid
exercise of police power since it was not shown that there is an overwhelming public necessity for such grant,
considering that petitioner is able to provide an adequate supply of i to satisfy the needs of the Philippine
market. Petitioner also claims that the grant of a compulsory license to private respondent unjustly deprives it
of a reasonable return on its investment.
17
It argues further that the provisions of the Patent Law on
compulsory licensing contravene the Convention of Paris for the Protection of Industrial Property
18
(Paris
Convention), which allegedly permits the granting of a compulsory license over a patented product only to
prevent abuses which might result from the exercise of the exclusive rights conferred by the patent,
19
or on the
ground of failure to work or insufficient working of the patented product, within four years from the date of filing
of the patent application or three years from the date of grant of the patent, whichever expires last.
20
Petitioner
opines that the inclusion of grounds for the grant of a compulsory license in Section 34 of the Patent Law other
than those provided under the Paris Convention constitutes a violation of the Philippines' obligation to adhere
to the provisions of said treaty.
21

It is also contended by petitioner that the grant of a compulsory license to private respondent will allow the
latter to liberally manufacture and sell medicinal products containing Cimetidine without even extending to
petitioner due recognition for pioneering the development and worldwide acceptance of said invention, and will
unreasonably dilute petitioner's right over the patent.
22

Petitioner likewise asseverates that the rate of royalty fixed by the BPTTT at 2.5% of net sales is grossly
inadequate, taking into consideration its huge investments of money, time and other resources in the research
and development, as well as marketing of Cimetidine. It is further alleged that such rate has no factual basis
since the appellate court and the BPTTT relied solely on analogous cases and did not explain how such rate
was arrived at.
23

Lastly, petitioner claims that the appellate court erred in ruling that private respondent had complied with the
requirement of publication of the notice of the filing of the petition for compulsory license because private
respondent failed to formally offer in evidence copies of the notice of filing of the petition and notice of the date
of hearing thereof as published and the affidavits of publication thereof. Thus, it says, the BPTTT did not
properly acquire jurisdiction over the petition for compulsory license.
24

In its Comment to the Petition, private respondent adopted the reasoning of the Court of Appeals in the
assailed decision and prayed that the petition be denied for lack of merit.
25

The petition has no merit.
The Court of Appeals did not err in affirming the validity of the grant by the BPTTT of a compulsory license to
private respondent for the use, manufacture and sale of Cimetidine. The said grant is in accord with Section 34
of the Patent Law which provides:
Grounds for Compulsory Licensing. (1) Any person may apply to the Director for the grant of a
license under a particular patent at any time after the expiration of two years from the date of
the grant of the patent, under any of the following circumstances:
(a) If the patented invention is not being worked within the Philippines on a commercial scale, although
capable of being so worked, without satisfactory reason;
(b) If the demand of the patented article in the Philippines is not being met to an adequate extent and
on reasonable terms;
(c) If, by reason of refusal of the patentee to grant a license or licenses on reasonable terms, or by
reason of the conditions attached by the patentee to licensee or to the purchase, lease or use of the
patented article or working of the patented process or machine for production, the establishment of any
new trade or industry in the Philippines is prevented, or the trade or industry therein is unduly
restrained;
(d) If the working of the invention within the country is being prevented or hindered by the importation of
the patented article;
(e) If the patented invention or article relates to food or medicine or manufactured substances
which can be used as food or medicine, or is necessary for public health or public safety.
(2) In any of the above cases, a compulsory license shall be granted to the petitioner provided
that he has proved his capability to work the patented product or to make use of the patented
product in the manufacture of a useful product, or to employ the patented process.
(3) The term "worked" or "working" as used in this section means the manufacture and sale of the
patented article, of patented machine, or the application of the patented process for production, in or by
means of a definite and substantial establishment or organization in the Philippines and on a scale
which is reasonable and adequate under the circumstances. Importation shall not constitute "working".
(Emphasis supplied.)
The grant of the compulsory license satisfies the requirements of the foregoing provision. More than ten years
have passed since the patent for Cimetidine was issued to petitioner and its predecessors-in-interest, and the
compulsory license applied for by private respondent is for the use, manufacture and sale of a medicinal
product. Furthermore, both the appellate court and the BPTTT found that private respondent had the capability
to work Cimetidine or to make use thereof in the manufacture of a useful product.
Petitioner's contention that Section 34 of the Patent Law contravenes the Paris Convention because the former
provides for grounds for the grant of a compulsory license in addition to those found in the latter, is likewise
incorrect. Article 5, Section A(2) of the Paris Convention states:
Each country of the union shall have the right to take legislative measures providing for the grant of
compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights
conferred by the patent, for example, failure to work.
26

This issue has already been resolved by this Court in the case of Smith Kline & French Laboratories, Ltd. vs.
Court of Appeals,
27
where petitioner herein questioned the BPTTT's grant of a compulsory license to Doctors
Pharmaceuticals, Inc. also for the manufacture, use and sale of Cimetidine. We found no inconsistency
between Section 34 and the Paris Convention and held that:
It is thus clear that 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 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.
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to the Convention,
fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the explanatory note of Bill
No. 1156 which eventually became R.A. No. 165, 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 [Congressional Record, House of Representatives,
12 May 957, 998]. 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 R.A. No.
165.
28
(Emphasis supplied.)
Neither does the Court agree with petitioner that the grant of the compulsory license to private respondent was
erroneous because the same would lead the public to think that the Cimetidine is the invention of private
respondent and not of petitioner. Such fears are unfounded since, as the appellate court pointed out in the
assailed decision, by the grant of the compulsory license, private respondent as licensee explicitly
acknowledges that petitioner is the source of the patented product Cimetidine.
29
Even assuming arguendo that
such confusion may indeed occur, the disadvantage is far outweighed by the benefits resulting from the grant
of the compulsory license, such as an increased supply of pharmaceutical products containing Cimetidine, and
the consequent reduction in the prices thereof.
30

There is likewise no basis for the allegation that the grant of a compulsory license to private respondent results
in the deprivation of petitioner's property without just compensation. It must be pointed out that as owner of
Letters Patent No. 12207, petitioner had already enjoyed exclusive rights to manufacture, use and
sellCimetidine for at least two years from its grant in November, 1978. Even if other entities like private
respondent are subsequently allowed to manufacture, use and sell the patented invention by virtue of a
compulsory license, petitioner as owner of the patent would still receive remuneration for the use of such
product in the form of royalties.
Anent the perceived inadequacy of the royalty awarded to petitioner, the Court of Appeals correctly held that
the rate of 2.5% of net wholesale price fixed by the Director of the BPTTT is in accord with the Patent Law.
Said law provides:
Sec. 35. Grant of License.(1) If the Director finds that a case for the grant of a license under Section
34 hereof has been made out, he shall, within one hundred eighty days from the date the petition was
filed, order the grant of an appropriate license. The order shall state the terms and conditions of the
license which he himself must fix in default of an agreement on the matter manifested or
submitted by the parties during the hearing.
x x x
Section 35-B. Terms and Conditions of Compulsory License. (1) A compulsory license shall be non-
exclusive, but this shall be without prejudice to the licensee's right to oppose an application for such a
new license.
(2) The terms and conditions of a compulsory license, fixed in accordance with Section 35, may contain
obligations and restrictions both for the licensee and for the registered owner of the patent.
(3) A compulsory license shall only be granted subject to the payment of adequate royalties
commensurate with the extent to which the invention is worked. However, royalty payments
shall not exceed five percent (5%) of the net wholesale price (as defined in Section 33-A) of the
products manufactured under the license. If the product, substance, or process subject of the
compulsory license is involved in an industrial project approved by the Board of Investments, the royalty
payable to the patentee or patentees shall not exceed three percent (3%) of the net wholesale price (as
defined in Section 33-A) of the patented commodity/and or commodity manufactured under the
patented process; the same rate of royalty shall be paid whenever two or more patents are involved;
which royalty shall be distributed to the patentees in rates proportional to the extent of commercial use
by the licensee giving preferential values to the holder of the oldest subsisting product patent.
x x x
Under the aforequoted provisions, in the absence of any agreement between the parties with respect to a
compulsory license, the Director of the BPTTT may fix the terms thereof, including the rate of the royalty
payable to the licensor. The law explicitly provides that the rate of royalty shall not exceed five percent (5%) of
the net wholesale price.
The Court agrees with the appellate court's ruling that the rate of royalty payments fixed by the Director of the
BPTTT is reasonable. The appellate court, citing Price vs. United Laboratories,
31
ruled as such, considering
that the compulsory license awarded to private respondent consists only of the bare right to use the patented
invention in the manufacture of another product, without any technical assistance from the
licensor.
32
Furthermore, this Court had earlier noted in the Price case that identical royalty rates have been
prescribed by the Director of the BPTTT in numerous patent cases.
33

There was thus no error on the part of the Court of Appeals in affirming the royalty rate fixed by the Director of
the BPTTT, since it was not shown that the latter erred or abused his discretion in prescribing said rate. The
rule is that factual findings of administrative bodies, which are considered as experts in their respective fields,
are accorded not only respect but even finality if the same are supported by substantial evidence.
34

Finally, as to the alleged lack of jurisdiction of the BPTTT over the petition filed by private respondent for failure
to comply with the publication requirement under Section 35-F of R.A. No. 165, the Court holds that petitioner
is estopped from questioning the same since it did not raise the issue of lack of jurisdiction at the earliest
possible opportunity, i.e., during the hearings before the BPTTT.
35
The Court notes that petitioner raised this
contention for the first time when it appealed the case to the appellate court.
WHEREFORE, the petition is hereby DENIED for lack of merit and the Decision of the Court of Appeals is
hereby AFFIRMED.
SO ORDERED.