FIRST DIVISION

[G.R. No. L-32160. January 30, 1982.]

DOMICIANO A. AGUAS, petitioner, vs. CONRADO G.
DE LEON and COURT OF APPEALS, respondents.
Estanislao Fernandez for petitioner.
Cecilia P. de Leon for respondents.
SYNOPSIS
Private respondent, who had been granted and issued Letters Patent No. 658 by the
Philippines Patent Office for his invention of certain new and useful improvements in
the process of making mosaic pre-cast tiles, filed a complaint for infringement of patent
against petitioner Domiciano Aguas and F. H. Aquino & Sons. Petitioner Aguas, in his
answer, alleged that respondent's patent was unlawfully secured through
misrepresentations as the latter's invention is neither inventive nor new and hence not
patentable; and that he cannot be held guilty of infringement because his products,
which had been duly patented, were different from those of the private respondent. The
trial court, finding respondent's patent valid and infringed, ordered petitioner Aguas
and F. H. Aquino & Sons to pay respondent jointly and severally actual, moral and
exemplary damages and attorney's fees. Petitioner appealed to the Court of Appeals
questioning the validity of the patent issued by the Philippines Patent Office and the
patentability of respondent's tile-making process. The Appellate Court, however,
sustained the trial court's decision but greatly reduced the award of moral damages.
Meanwhile, private respondent's patent right expired, hence, in this petition, only the
right of said private respondent to damages will be determined.
The Supreme Court, affirming the decision of the trial court as modified by the Court
of Appeals, held that petitioner's evidence has not overcome the legal presumption on
the validity of respondent's patent; and that based on the records, respondent's process
is an improvement of the old process of tile-making, hence, patentable.
Petition dismissed.
SYLLABUS
1. COMMERCIAL LAW; PATENT LAW (REPUBLIC ACT NO. 165); MATTERS
PATENTABLE THEREUNDER; A CASE OF; IMPROVEMENT OF THE OLD
PROCESS OF TILE-MAKING IN CASE AT BAR. Under Section 7, Republic Act
No. 165, as amended, "Any invention of a new and useful machine, manufactured
product or substance, process or an improvement of the foregoing, shall be patentable."
In the case at bar, the contention of the petitioner that the letters-patent of private
respondent was actually a patent for the old and non-patentable process of making
mosaic precast tiles is devoid of merit. It should be noted that private 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 Philippines Patent Office to the private respondent, to protect his
rights as the inventor of "an alleged new and useful improvement in the process of
making mosaic precast tiles."
2. ID.; ID.; PATENTS; VALIDITY BETTER DETERMINED BY THE
PHILIPPINES PATENT OFFICE. The validity of the patent issued by the
Philippines Patent Office in favor of the private respondent and the question over the
inventiveness, novelty and usefulness of the improved process therein specified and
described are matters which are better determined by the Philippines Patent Office. The
technical staff of the Philippines Patent Office, composed of experts in their field,
have, by the issuance of the patent in question, accepted the thinness of the private
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.
3. ID.; ID.; ID.; WHAT CONSTITUTES A PATENTABLE PROCESS AND/OR
IMPROVEMENT; CASE AT BAR. Petitioner's contention that the improvement of
respondent is not patentable because it is not new and useful and inventive is without
merit, where the records disclose that private respondent's process is an improvement
of the old process of tile-making and that such improvement is indeed inventive and
goes beyond the exercise of mechanical skill by which private respondent has
introduced a new kind of tile for a new purpose.
4. REMEDIAL LAW; APPEAL; FINALITY OF THE FINDINGS OF FACT OF THE
TRIAL COURT AND OF THE COURT OF APPEALS; CASE AT BAR, NOT AN
EXCEPTION. Both the trial court and the Court of Appeals found as a fact that the
petitioner did infringe private respondent'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.
5. COMMERCIAL LAW; PATENT LAW (REPUBLIC ACT NO. 165); PATENTS;
DAMAGES AWARDED UNDER SECTION 42 OF THE PATENT LAW;
SUSTAINED IN CASE AT BAR. The Supreme Court finds no reason to reduce the
amount of damages and attorneys fee awarded by the trial court under Sec. 42 of the
Patent Law which are as follows; (a) P10,020.99 by way of actual damages; (b)
P50,000 by way of moral damages which was reduced by the Court of Appeals to
P3,000 by way of compensating appellee for his moral suffering; (c) P5,000 by way of
exemplary damages; (d) P5,000 by way of attorney's fees and (e) costs of suit.
||| (Aguas v. De Leon, G.R. No. L-32160, January 30, 1982)

SECOND DIVISION
[G.R. No. 118708. February 2, 1998.]
CRESER PRECISION SYSTEMS, INC., petitioner, vs.
COURT OF APPEALS AND FLORO
INTERNATIONAL CORP., respondents.
Benjamin C. Santos & Ofelia Calcetas-Santos Law Offices and Santos Parungao
Aquino & Santos Law Offices for petitioner.
Quasha Ancheta Pea & Nolasco for private respondent.
SYNOPSIS
This is a petition for review on certiorari filed by Creser Precision Systems, Inc.,
assailing the decision of the Court of Appeals in C.A.-G.R. SP No. 34425 dismissing
the complaint for injunction and damages filed against herein private respondent. The
records of the case reveal that private respondent was granted by the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT) a Letters Patent No. UM-6938
covering an aerial fuse that was published in the Bureau of Patent's Official Gazette.
That sometime in November 1993, private respondent discovered that herein petitioner
submitted samples of private respondent's patented aerial fuse to the Armed Forces of
the Philippines (AFP) for testing. To protect its right, private respondent sent a letter to
petitioner advising it of its existing patent and its rights thereunder, and warned
petitioner of a possible court action should it go on with the testing. In response,
petitioner filed a complaint for injunction and damages before the Regional Trial Court
of Quezon City, and on December 29, 1993, the court a quo issued an order granting
the issuance of a writ of preliminary injunction against private respondent. Herein
respondent moved for reconsideration but this was denied by said court. Aggrieved,
respondent filed a petition for certiorari, mandamus and prohibition in the Court of
Appeals, and on November 9 1994, it rendered a decision reversing the trial court's
order and dismissing the complaint filed by petitioner. Hence, the present petition.
TADaCH
The Supreme Court ruled that the petition is not meritorious. Section 42 of R.A. 165,
otherwise known as the Patent Law, explicitly provides that only the patentee or his
successors-in-interest may filed an action for infringement. Petitioner admits it has no
patent over its aerial fuze. Therefore, it has no legal standing or cause of action to
institute the petition for injunction and damages arising from the alleged infringement
by private respondent. In fine, the Court upheld and sustained the decision of
respondent Court of Appeals, in the absence of error or abuse of power or lack of
jurisdiction or grave abuse of discretion. In view thereof, the decision of the Court of
Appeals is affirmed.
SYLLABUS
1. COMMERCIAL LAW; PHILIPPINE PATENT LAW (R.A. 165); ONLY THE
PATENTEE OR HIS SUCCESSORS-IN-INTEREST CAN FILE AN ACTION FOR
INFRINGEMENT. Section 42 of R.A. 165, otherwise known as the Patent Law,
explicitly provides . . . that 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 same of the person or persons interested,
whether as patentee, assignees, or as grantees, of the exclusive right. 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. In
short, a person or entity who has not been granted letters patent over an invention and
has not acquired any right or title thereto either as assignee or as licensee, has no cause
of action for infringement because the right to maintain an infringement suit depends
on the existence of the patent.
2. ID.; ID.; PETITION FOR INJUNCTION AND DAMAGES ARISING FROM THE
ALLEGED INFRINGEMENT, NO LEGAL BASIS OR CAUSE OF ACTION IF
PETITIONER HAS NO PATENT OVER ITS INVENTION; CASE AT BAR.
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.
3. ID.; ID.; ID.; ACTION FOR DECLARATORY JUDGMENT OF INJUNCTIVE
SUIT FILED BY A PARTY WHO HAS NO PATENT OVER AN INVENTION BUT
CLAIMS TO HAVE A RIGHT OF INTEREST, NOT RECOGNIZED IN THIS
JURISDICTION; PROPER REMEDY; CASE AT BAR. 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. aSTECA
4. ID.; ID.; PATENTEE 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. 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."
||| (Creser Precision Systems, Inc. v. Court of Appeals, G.R. No. 118708, February 02,
1998)

FIRST DIVISION
[G.R. No. 115106. March 15, 1996.]
ROBERTO L. DEL ROSARIO, petitioner, vs. COURT
OF APPEALS AND JANITO CORPORATION,
respondents.
Quisumbing Torres & Evangelista for petitioner.
J.P. Villanueva & Associates for private respondent.
SYLLABUS
Del Rosario was granted a patent for his innovation called the Minus One karaoke.
The patent was issued in June 1988 for five years and was renewed in November 1991
for another five years as there were improvement introduced to his minus one
karaoke. In 1993, while the patent was still effective, Del Rosario sued Janito
Corporation, a Japanese company owned by Janito Cua, for allegedly infringing upon
the patent of Del Rosario. Del Rosario alleged that Janito was manufacturing a sing-
along system under the brand miyata karaoke which is substantially if not identical to
his minus one karaoke. The lower court ruled in favor of Del Rosario but the Court
of Appeals ruled that there was no infringement because the karaoke system was a
universal product manufactured, advertised and marketed all over the world long
before Del Rosario was issued his patents.
ISSUE: Whether or not the Court of Appeals erred in its ruling.
HELD: Yes. 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. Here,
there is no dispute that the letters patent issued to Del Rosario are for utility models of
audio equipment. 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. In the
case at bar, miyata karaoke was proven to have substantial if not identical functionality
as that of the minus one karaoke which was covered by the second patent issued to Del
Rosario. Further, Janito failed to present competent evidence that will show that Del
Rosarios innovation is not new.
1. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION; ITS NATURE.
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 for 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.
2. ID.; ID.; ID.; WHEN INJUNCTION MAY BE GRANTED; REQUISITES FOR ITS
ISSUANCE. 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. 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.
3. COMMERCIAL LAW; THE PATENT LAW; WHEN A UTILITY MODEL IS
NOT CONSIDERED "NEW" UNDER SECTION 55 OF THE PATENT LAW.
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.
4. ID.; ID.; WHEN ANY NEW MODEL OF IMPLEMENTS OR TOOLS IS
ENTITLED TO A PATENT FOR UTILITY MODEL. 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.
5. ID.; ID.; RIGHTS OF A PATENTEE UNDER SECTION 37 OF THE PATENT
LAW. 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.
6. ID.; ID.; WHAT CONSTITUTES AN INFRINGEMENT OF A PATENT. 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 patent 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.
7. ID.; PETITIONER HAD SUFFICIENTLY ESTABLISHED A PRIMA FACIE
PROOF OF VIOLATION OF HIS RIGHTS AS PATENTEE. 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; (f) 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, (g) both are encased in box-like cabinets; and (h) both can be used with
one or more microphones. 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.
||| (Del Rosario v. Court of Appeals, G.R. No. 115106, March 15, 1996)

FIRST DIVISION
[G.R. No. 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.
SYLLABUS

Patent on improvement in hemp stripping machines, issued by the United States Patent
Office and registered in the Bureau of Commerce and Industry of the Philippine, 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
concluded that 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.

ISSUE:
Whether there is an infringement on the patents

HELD:
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 Gohn vs. 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.

1. PATIENT; ESSENTIAL ELEMENTS. Strictly speaking, the
hemp stripping machine of the plaintiffs does not constitute an invention on the
ground that it lacks the element of novelty, originality and precedence (48 C. J.,
sec. 101, p. 97, and sec. 102, p. 98).
2. ID.; KNOWLEDGE AND USE BY THE PUBLIC. Before the
plaintiffs herein obtained their patent, they themselves had already publicly used
the same kind of machine for many months, at least, and, various other machines,
having in general, the same characteristics and important parts as that of the said
plaintiffs, were known in the Province of Davao.
3. ID.; ANNULMENT. Notwithstanding all the facts herein
stated, the trial court did not annul the plaintiffs' patent and the defendant herein
insists that the patent in question should be declared null and void. In view of the
nature of the action brought by the plaintiffs, annulment does not lie in the
absence of a cross-complaint to that effect.
4. ID.; INFRINGEMENT. The defendant cannot be made civilly
liable for alleged infringement of the patent on which the action is based on the
ground that the machines manufactured and sold by him did not have any
essential part unknown to the public in the Province of Davao at the time the
plaintiffs applied for and obtained their patent for improved abaca stripping
machines.
5. APPLICABILITY OF THE DOCTRINE OF "STARE DECISIS".
The doctrine laid down in the case of Frank and Gohn vs. Benito (51 Phil.,
712), to the effect that the defendant therein had actually infringed upon the
patent of the therein plaintiffs cannot be invoked in this case. It is true that the
then plaintiffs in the former and those in the latter case are the same but the
defendant therein did not set up the special defenses as alleged by the herein
defendant. Furthermore, the plaintiffs therein had only confined themselves to
presenting the patent, or rather, a copy thereof, wherein mention of the "spindle"
was made, and this court took for granted their claim that it was one of the
essential characteristics thereof which had been imitated or copied by the therein
defendant.
||| (Frank v. G. Kosuyama, G.R. No. 38010, December 21, 1933)

THIRD DIVISION
[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.
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.
SYLLABUS
1. REMEDIAL LAW; APPEAL; APPELLATE COURT'S FINDINGS OF FACT
CONCLUSIVE UPON SUPREME COURT. 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."
2. COMMERCIAL LAW; PATENT LAW (REPUBLIC ACT NO. 165); TESTS TO
DETERMINE INFRINGEMENT; LITERAL INFRINGEMENT TEST, EXPLAINED;
DOCTRINE OF EQUIVALENTS, CONSTRUED; CASE AT BAR. Tests have
been established to determine infringement. These are (a) literal infringement; and (b)
the doctrine of equivalents. 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." 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 . . . 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." It
appears from the 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. . . . 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. 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." 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.
EN BANC
[G.R. No. 4720. January 19, 1909.]
CARLOS GSELL, plaintiff-appellee, vs. VALERIANO
VELOSO YAP-JUE, defendant-appellant.
Chicote & Miranda, for appellant.
Haussermann Cohn, for appellee.
The principal case to which these proceedings are ancillary, was an action to enjoin
infringement of a patented process for manufacture of curved handles for canes,
parasols, and umbrellas. In that case, plaintiff established his title to a valid patent
covering the process in question, and obtained against this defendant a judgment,
granting a perpetual injunction restraining its infringement, which judgment was
affirmed by this Court on appeal. The order was couched in the following terms:

It is ordered that the defendant abstain from manufacturing canes and umbrellas with
a curved handle by means of a lamp or blowpipe fed with mineral oil or petroleum,
which process was protected by patent no. 19288, issued in favor of Henry Gsell, and
by him transferred to Carlos Gsell.

Thereafter the defendant continued to manufacture curved cane handles for
walking sticks and umbrellas by a process in all respects identical with that used by the
plaintiff under his patent, except only that he substituted for a lamp fed with petroleum
or mineral oil, a lamp fed with alcohol.

The trial court found the defendant not guilty of contempt as charged; and
this court, on appeal, held that The violation, if there has been any, was not of such a
character that it could be made patent by the mere annunciation of the acts performed
by the defendant, which are alleged to constitute the said violation. Consequently, the
contempt with which the accused is charged has not been fully and satisfactorily
proved, and the order appealed from should accordingly be affirmed in so far as it
holds that the defendant is not guilty of contempt.

Substantially, the same question is submitted in these new proceedings as that
submitted in the former case.

ISSUE:

Whether the use of a patented process by a third person, without license or
authority therefore, constitutes an infringement when the alleged infringer has
substituted in lieu of some unessential part of the patented process a well-known
mechanical equivalent.

HELD:

Counsel for plaintiff invokes the doctrine of mechanical equivalents in
support of his contention, and indeed that doctrine is applicable to the facts of the case.
This doctrine is founded upon sound rules of reason and logic, and unless restrained or
modified by law in particular jurisdiction, is of universal application, so that it matters
not whether a patent be issued by one sovereignty or another, the doctrine may
properly be invoked to protect the patentee from colorable invasions of his patent under
the guise of a substitution of some part of his invention by some well-known
mechanical equivalent.

The use of a process in all respects identical with a process protected by a valid
patent, save only that a well-known mechanical equivalent is substituted in lieu of
some particular part of the patented process is an infringement upon the rights of the
owner of the patent, which will be enjoined in appropriate proceeding, and the use of
such process, after the order enjoining its use has been issued, is a contempt, under
the provision of section 172 of the Code of Civil Procedure.
SYLLABUS
1. INFRINGEMENT OF PATENTS; PROCESS OF
MANUFACTURE. The manufacture of cane handles for walking sticks and
umbrellas by a process identical with plaintiff's patented process therefor, save
only for the substitution of a blast lamp or blowpipe fed by alcohol, for a blast
lamp or blowpipe fed by petroleum or mineral fuel, in applying heat for the
purpose of curving such handles, is an infringement upon the patented process.
2. ID.; ID.; INJUNCTION; CONTEMPT. The use of a process in
all respects identical with a process protected by a valid patent, save only that a
well-known mechanical equivalent is substituted in lieu of some particular part of
the patented process, is an infringement upon the rights of the owner of the
patent, which will be enjoined in appropriate proceeding and the use of such
process, after the order enjoining its use has been issued, is a "contempt," under
the provisions of section 172 of the Code of Civil Procedure.

FIRST DIVISION
[G.R. No. 1816. April 17, 1906.]
CARLOS GSELL, plaintiff-appellee, vs. VALERIANO
VELOSO YAP-JUE, defendant-appellant.
Chicote, Miranda & Sierra, for appellant.
Coudert Brothers, for appellee.
SYLLABUS
1. PATENT, INFRINGEMENT OF. Under the treaty of Paris it
became the duty of the American Government to protect the holders of patents,
copyrights, and trade-marks which had been issued to residents of the Philippine
Islands during the Spanish regime.
D E C I S I O N
JOHNSON, J p:
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, cured 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 undersigned 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.
FIRST DIVISION
[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 & Sierra, for appellee.
SYLLABUS
CONTEMPT. Held, That under the facts stated in the opinion the
accused was not guilty of contempt.
D E C I S I O N
MAPA, J p:
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 means of
the use of a coal 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 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.

FIRST DIVISION
[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.
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.
R E S O L U T I O N
CASTRO, J p:
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.

SECOND DIVISION
[G.R. No. L-27361. May 29, 1981.]
PARKE, DAVIS & COMPANY, plaintiff-appellant, vs.
DOCTORS' PHARMACEUTICALS, INC. and V-LAB
DRUGHOUSE CORPORATION, defendants-appellees.
Ross, Salcedo, Del Rosario Bito and Misa for plaintiff-appellant.
Manuel J. N. Serapio for defendants-appellees.
SYNOPSIS
In a complaint for damages for infringement of patent and unfair competition, plaintiff
alleged that it was the owner of Letters Patent Nos. 50 and 279 covering the products
known as 'Chloramphenicol" and "Chloramphenicol Palmitate", respectively, and that
defendant pharmaceutical company had used "Chloramphenicol Palmitate" in its
medicine called "Venimicetin Suspension"; had deceived the public by representing
that said medicine contained "Chloramphenicol" when in fact it contained
"Chloramphenicol Palmitate", an entirely different substance; and had misrepresented
itself to be the plaintiff's compulsory licensee for said product, while its co-defendant
had acted as its distributor. Defendants moved to dismiss the complaint alleging that
defendant pharmaceutical company is a compulsory licensee of "Chloramphenicol."
Premised on the assumption that "Chloramphenicol" and "Chloramphenicol Palmitate"
are the same substance, the trial Court granted the motion on the ground of failure to
state a cause of action. cdtai
On appeal, the Supreme Court held that the trial court has erred in dismissing the
complaint on the ground of failure to state a cause of action, because instead of
hypothetically assuming the truth of the factual allegations of the complaint, which is
automatic in resolving a motion to dismiss on the said ground, it has ruled against their
veracity.
Appealed order set aside and complaint reinstated.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; DISMISSAL ON GROUND
OF FAILURE TO STATE A CAUSE OF ACTION; RULE THAT TRUTH OF
FACTUAL ALLEGATIONS OF COMPLAINT MUST BE ASSUMED; NOT
FOLLOWED IN CASE AT BAR. It is axiomatic that in resolving a motion to
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. Thus, in the case at bar, it was error for the lower court to dismiss the
complaint for damages for infringement of patent and for unfair competition on the
ground of failure to state a cause of action, because instead of assuming the truth of the
factual allegations of the complaint that "Chloramphenicol" and "Chloramphenicol
Palmitate" are two different substances, the lower court ruled against its veracity by
stating that "Chloramphenicol" and "Chloramphenicol Palmitate" are the same, and
consequently concluded that the complaint states no cause of action.
2. ID.; ID.; ID.; ID.; ID.; APPLICATION OF RULE IN CASE AT BAR WOULD
NECESSARILY LEAD TO CONCLUSION THAT COMPLAINT STATES A
CAUSE OF ACTION. Had the lower court in the case at bar applied the formula
established in resolving a motion to dismiss on the ground of failure to state a cause of
action and hypothetically assumed as true, for the purpose of the motion to dismiss, the
allegations in the complaint that "Chloramphenicol" and "Chloramphenicol Palmitate"
are entirely different substances and that "Venimicetin Suspension'' actually contains
"Chloramphenicol Palmitate" and not "Chloramphenicol" as indicated in its package
and label, it would have concluded that the complaint states a cause of action for
infringement of patent and unfair competition. Defendants would then be guilty, under
Sections 37 and 42 of Republic Act No. 165, of infringing of patent and selling,
causing to be sold, using and causing to be used "Chloramphenicol Palmitate" without
consent or authority of the plaintiff as the holder of Letters Patent No. 279, Claim 4 of
which allegedly covers said substance. Likewise, the defendants, under Section 29 of
Republic Act No. 166, would be guilty of unfair competition by falsely stating that
defendant pharmaceutical company'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.
3. ID.; EVIDENCE; JUDICIAL NOTICE; ASSUMED FACT IN CASE AT BAR
NOT PROPER THEREFOR. The trial court's assumption that "Chloramphenicol"
(the substance covered by Letters Patent No. 50) and "Chloramphenicol Palmitate" (the
substance covered by Letters Patent No. 279) are the same, contrary to plaintiff's
allegation in its complaint that "Chloramphenicol" and "Chloramphenicol Palmitate"
are two different substances, is clearly an error considering that the said assumed fact
cannot qualify as something which the court could take judicial notice of nor was it
competent to so find in the absence of evidence formally presented to that effect. The
existence of two patents separately covering said substances simply militates against
said factual assumption and requires the presentation of evidence sufficient to convince
the court that said substances are indeed the same.

THIRD DIVISION
[G.R. No. 148222. August 15, 2003.]
PEARL & DEAN (PHIL.), INCORPORATED,
petitioner, vs. SHOEMART, INCORPORATED, and
NORTH EDSA MARKETING, INCORPORATED,
respondents.
Rilloraza Africa De Ocampo & Africa for petitioner.
Poblador Bautista & Reyes for ShoeMart.
Gonzales Batiller Bilog & Associates for North Edsa Mktg., Inc.
SYNOPSIS
Petitioner Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of
advertising display units simply referred to as light boxes. Pearl and Dean was able to
secure a Certificate of Copyright Registration over the illuminated display units.
Sometime in 1985, Pearl and Dean negotiated with respondent 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. Only the contract for SM
Makati, however, was returned signed. However, in 1986, SMI rescinded the contract
for SM Makati due to non-performance of the terms thereof. 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. It further discovered that respondent North
Edsa Marketing Inc. (NEMI) is a sister company of SMI and was set up primarily to
sell advertising space in lighted display units located in SMI's different branches. In the
light of its discoveries, Pearl and Dean, sent a letter to both SMI and NEMI enjoining
them to cease using the subject light boxes and to remove the same from SMI's
establishments and the payment to Pearl and Dean of compensatory damages in the
amount of Twenty Million Pesos (P20,000,000.00). Claiming that both SMI and NEMI
failed to meet all its demands, Pearl and Dean filed a case for infringement of
trademark and copyright, unfair competition and damages. The Regional Trial Court of
Makati ruled in favor of Pearl and Dean. On appeal, however, the Court of Appeals
reversed the trial court. The appellate court upheld SMI when it posited that what was
copyrighted were the technical drawings only, and not the light boxes themselves, and
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 copyrightable under the law. Hence, the present petition.
The Supreme Court affirmed the decision of the Court of Appeals and denied the
petition. According to the Court, petitioner Pearl & Dean secured its copyright under
the classification class "O" work or under Section 2 (O) of P.D. 49. As such,
petitioner's 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." While 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 of the law's enumeration in
Section 2 of PD 49 prevented the Court 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. The Court
also ruled that petitioner could not legally prevent anyone from manufacturing or
commercially using its invention for the main reason that it never secured a patent for
it. The Court emphasized that to be able to effectively and legally preclude others from
copying and profiting from an 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. Ideas, once disclosed to the
public without the protection of a valid patent, are subject to appropriation without
significant restraint.
SYLLABUS
1. MERCANTILE LAW; INTELLECTUAL PROPERTY LAW (P.D. 49);
PETITIONER'S 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,
PICTORIALS ILLUSTRATIONS, ADVERTISING COPIES, LABELS, TAGS AND
BOX WRAPS" UNDER SECTION 2, (O) OF THE LAW. Petitioner's 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: . . . (O) Prints, pictorial illustrations,
advertising copies, labels, tags, and box wraps; . . . Although petitioner's 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. Accordingly, it can cover only the works falling within the statutory
enumeration or description. P & D secured its copyright under the classification class
"O" work. This being so, petitioner's 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 of the law's 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."
2. ID.; ID.; SINCE PETITIONER NEVER SECURED A PATENT OVER THE
LIGHT BOXES, IT THEREFORE ACQUIRED NO PATENT RIGHTS WHICH
COULD HAVE PROTECTED ITS INVENTION; NO PATENT, NO PROTECTION;
CASE AT BAR. 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, 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. . . . (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. On the assumption that
petitioner's 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. Ideas, once disclosed to the public without the
protection of a valid patent, are subject to appropriation without significant restraint.
3. ID.; ID.; NOT HAVING UNDERGONE THE STRINGENT REQUIREMENTS
AND EXHAUSTIVE EXAMINATION FOR PATENTS, 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. 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." 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." 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 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.

4. ID.; ID.; PETITIONER'S FAILURE TO SECURE A TRADEMARK
REGISTRATION FOR SPECIFIC USE ON THE LIGHT BOXES MEANT THAT
THERE COULD NOT HAVE BEEN ANY TRADEMARK INFRINGEMENT SINCE
REGISTRATION WAS AN ESSENTIAL ELEMENT THEREOF. The Court of
Appeals correctly cited Faberge Inc. vs. Intermediate Appellate Court, where we,
invoking Section 20 of the old Trademark Law, ruled that "the certificate of
registration issued by the Director of Patents can confer (upon petitioner) the exclusive
right to use its own symbol only to those goods specified in the certificate, subject to
any conditions and limitations specified in the certificate . . . One who has adopted and
used a trademark on his goods does not prevent the adoption and use of the same
trademark by others or products which are of a different description. " Faberge, Inc.
was correct and was in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of
Appeals. 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.
5. ID.; ID.; NO UNFAIR COMPETITION UNDER THE LAW ON COPYRIGHTS.
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. However, while the petitioner's
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. In this case, there was no evidence, that P & D's use of "Poster Ads" was
distinctive or well-known. As noted by the Court of Appeals, petitioner's 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." 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.
6. ID.; ID.; DOCTRINE OF SECONDARY MEANING; NOT APPLICABLE IN
CASE AT BAR. 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. The admission by petitioner's 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.

SECOND DIVISION
[G.R. No. 167715. November 17, 2010.]
PHIL PHARMAWEALTH, INC., petitioner, vs.
PFIZER, INC. and PFIZER (PHIL.) INC., respondents.
DECISION
PERALTA, J p:
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. TcADCI
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:
xxx xxx xxx
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. . .
.
xxx xxx xxx
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. IcEACH
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.
xxx xxx xxx 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. DaACIH
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? CAaEDH
b)What tribunal has jurisdiction to review the decisions of
the Director of Legal Affairs of the Intellectual Property
Office?
c)Is there forum shopping when a party files two actions
with two seemingly different causes of action and yet pray
for the same relief? 16
In the first issue raised, petitioner argues that respondents' exclusive right to
monopolize the subject matter of the patent exists only within the term of the patent.
Petitioner claims that since respondents' patent expired on July 16, 2004, the latter no
longer possess any right of monopoly and, as such, there is no more basis for the
issuance of a restraining order or injunction against petitioner insofar as the disputed
patent is concerned.
The Court agrees.
Section 37 of Republic Act No. (RA) 165, 17 which was the governing law at the time
of the issuance of respondents' patent, provides:
Section 37.Rights of patentees. A patentee shall have the
exclusive right to make, use and sell the patented machine,
article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of
the Philippines for the term of the patent; and such
making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the
patent. 18
It is clear from the above-quoted provision of law that the exclusive right of a patentee
to make, use and sell a patented product, article or process exists only during the term
of the patent. In the instant case, Philippine Letters Patent No. 21116, which was the
basis of respondents in filing their complaint with the BLA-IPO, was issued on July 16,
1987. This fact was admitted by respondents themselves in their complaint. They also
admitted that the validity of the said patent is until July 16, 2004, which is in
conformity with Section 21 of RA 165, providing that the term of a patent shall be
seventeen (17) years from the date of issuance thereof. Section 4, Rule 129 of the Rules
of Court provides that an admission, verbal or written, made by a party in the course of
the proceedings in the same case, does not require proof and that the admission may be
contradicted only by showing that it was made through palpable mistake or that no
such admission was made. In the present case, there is no dispute as to respondents'
admission that the term of their patent expired on July 16, 2004. Neither is there
evidence to show that their admission was made through palpable mistake. Hence,
contrary to the pronouncement of the CA, there is no longer any need to present
evidence on the issue of expiration of respondents' patent. HIACEa
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 ESHcTD
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. EcAHDT
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. EACTSH
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. cdasia
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 cTAaDC
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 aDIHCT
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 IASEca
(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 cDCaHA
(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
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. IEcaHS
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.

SECOND DIVISION
[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 p:
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. DEScaT
The NBI subsequently filed a complaint against Rodriguez for violation of Section 4
(in relation to Sections 3 and 5) of Republic Act No. 8203, also known as the Special
Law on Counterfeit Drugs (SLCD), with the Office of the Provincial Prosecutor in San
Fernando, Pampanga. The section prohibits the sale of counterfeit drugs, which under
Section 3 (b) (3), includes "an unregistered imported drug product." The term
"unregistered" signifies the lack of registration with the Bureau of Patent, Trademark
and Technology Transfer of a trademark, tradename or other identification mark of a
drug in the name of a natural or juridical person, the process of which is governed
under Part III of the Intellectual Property Code.
In this case, there is no doubt that the subject seized drugs are identical in content with
their Philippine-registered counterparts. There is no claim that they were adulterated in
any way or mislabeled at least. Their classification as "counterfeit" is based solely on
the fact that they were imported from abroad and not purchased from the Philippine-
registered owner of the patent or trademark of the drugs.
During preliminary investigation, Rodriguez challenged the constitutionality of the
SLCD. However, Assistant Provincial Prosecutor Celerina C. Pineda skirted the
challenge and issued a Resolution dated 17 August 2001 recommending that Rodriguez
be charged with violation of Section 4 (a) of the SLCD. The recommendation was
approved by Provincial Prosecutor Jesus Y. Manarang * approved the
recommendation. 3
Hence, the present Petition for Prohibition questing the RTC-Guagua Pampanga and
the Provincial Prosecutor to desist from further prosecuting Rodriguez, and that
Sections 3 (b) (3), 4 and 5 of the SLCD be declared unconstitutional. In gist, Rodriguez
asserts that the challenged provisions contravene three provisions of the Constitution.
The first is the equal protection clause of the Bill of Rights. The two other provisions
are Section 11, Article XIII, which mandates that the State make "essential goods,
health and other social services available to all the people at affordable cost;" and
Section 15, Article II, which states that it is the policy of the State "to protect and
promote the right to health of the people and instill health consciousness among them."
Through its Resolution dated 15 October 2001, the Court issued a temporary
restraining order enjoining the RTC from proceeding with the trial against Rodriguez,
and the BFAD, the NBI and Glaxo Smithkline from prosecuting the petitioners. 4
Glaxo Smithkline and the Office of the Solicitor General (OSG) have opposed the
petition, the latter in behalf of public respondents RTC, Provincial Prosecutor and
Bureau of Food and Drugs (BFAD). On the constitutional issue, Glaxo Smithkline
asserts the rule that the SLCD is presumed constitutional, arguing that both Section 15,
Article II and Section 11, Article XIII "are not self-executing provisions, the disregard
of which can give rise to a cause of action in the courts." It adds that Section 11,
Article XIII in particular cannot be work * "to the oppression and unlawful of the
property rights of the legitimate manufacturers, importers or distributors, who take
pains in having imported drug products registered before the BFAD." Glaxo
Smithkline further claims that the SLCD does not in fact conflict with the
aforementioned constitutional provisions and in fact are in accord with constitutional
precepts in favor of the people's right to health. CHDTEA
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;
DCISAE
"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; * . . . 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) TCHEDA

The drugs and medicines are deemed introduced when they
have been sold or offered for sale anywhere else in the
world. (n)
It may be that Rep. Act No. 9502 did not expressly repeal any provision of the SLCD.
However, it is clear that the SLCO's classification of "unregistered imported drugs" as
"counterfeit drugs", and of corresponding criminal penalties therefore are
irreconcilably in the imposition conflict with Rep. Act No. 9502 since the latter
indubitably grants private third persons the unqualified right to import or otherwise use
such drugs. Where a statute of later date, such as Rep. Act No. 9502, clearly reveals an
intention on the part of the legislature to abrogate a prior act on the subject that
intention must be given effect. 9 When a subsequent enactment covering a field of
operation coterminus with a prior statute cannot by any reasonable construction be
given effect while the prior law remains in operative existence because of
irreconcilable conflict between the two acts, the latest legislative expression prevails
and the prior law yields to the extent of the conflict. 10 Irreconcilable inconsistency
between two laws embracing the same subject may exist when the later law nullifies
the reason or purpose of the earlier act, so that the latter loses all meaning and function.
11 Legis posteriors * priores contrarias abrogant.
For the reasons above-stated, the prosecution of petitioner is no longer warranted and
the quested writ of prohibition should accordingly be issued.
III.
Had the Court proceeded to directly confront the constitutionality of the assailed
provisions of the SLCD, it is apparent that it would have at least placed in doubt the
validity of the provisions. As written, the law makes a criminal of any person who
imports an unregistered drug regardless of the purpose, even if the medicine can spell
life or death for someone in the Philippines. It does not accommodate the situation
where the drug is out of stock in the Philippines, beyond the reach of a patient who
urgently depends on it. It does not allow husbands, wives, children, siblings, parents to
import the drug in behalf of their loved ones too physically ill to travel and avail of the
meager personal use exemption allotted by the law. It discriminates, at the expense of
health, against poor Filipinos without means to travel abroad to purchase less
expensive medicines in favor of their wealthier brethren able to do so. Less urgently
perhaps, but still within the range of constitutionally protected behavior, it deprives
Filipinos to choose a less expensive regime for their health care by denying them a
plausible and safe means of purchasing medicines at a cheaper cost.
The absurd results from this far-reaching ban extends to implications that deny the
basic decencies of humanity. The law would make criminals of doctors from abroad on
medical missions of such humanitarian organizations such as the International Red
Cross, the International Red Crescent, Medicin Sans Frontieres, and other like-minded
groups who necessarily bring their own pharmaceutical drugs when they embark on
their missions of mercy. After all, they are disabled from invoking the bare "personal
use" exemption afforded by the SLCD. cATDIH
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 prohibitum or
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 people's
constitutionally-recognized right to health.
WHEREFORE, the petition is GRANTED in part. A writ of prohibition is hereby
ISSUED commanding respondents from prosecuting petitioner Romeo Rodriguez for
violation of 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.

EN BANC
[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.
Solicitor General for respondent Director of Patents.
SYLLABUS
1. POLITICAL LAW; PATENT LAW; PATENT FOR UTILITY MODEL, WHEN
PROPER. There is an express recognition under the Patent Law 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 utility model."
2. ID.; ID.; ID.; GRANT OF PATENT IN CASE AT BAR, PROPER. Where from
the 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 been met, and 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.
3. ID.; ID.; APPEAL FROM DECISION OF DIRECTOR OF PATENTS TO
SUPREME COURT; FINDINGS OF FACT, CONCLUSIVE. 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.
4. ID.; ID.; ID.; WHETHER OR NOT RESPONDENT WAS TRUE AND ACTUAL
AUTHOR OF MECHANICAL DEVICE, A QUESTION OF FACT. The argument
that respondent was not "the true and actual author" of the mechanical contrivance is
factual in character. It is not for this Court to review or reverse the same, there being no
showing of a lack of substantial evidence in support thereof.
D E C I S I O N
FERNANDO, J p:
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 susbstantial
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.

FIRST DIVISION
[G.R. No. 121267. October 23, 2001.]
SMITH KLINE & FRENCH LABORATORIES, LTD.
plaintiff-appellee, vs. COURT OF APPEALS and
DANLEX RESEARCH LABORATORIES, INC.,
defendant-appellants.
Sapalo & Velez Law Office for plaintiff-appellee.
Sioson Sandiego & Associates for defendant-appellant.
SYNOPSIS
Petitioner Smith Kline & French Laboratories, Ltd. is the assignee of Letters Patent
No. 12207 covering the pharmaceutical product Cimetidine. Said patent was issued by
the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) to Graham John
Durant, John Collin Emmett and Robin Genellin on November 29, 1978. Private
respondent Danlex Research Laboratories, Inc., filed with the BPTTT a petition for
compulsory license to manufacture and produce its own brand of medicines using
Cimetidine. Petitioner opposed the petition for compulsory license, arguing that private
respondent had no cause of action and failed to allege how it intended to work the
patented product. 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. Petitioner thereafter
filed with the Court of Appeals a petition for review of the decision of the BPTTT. 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. 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.
Petitioner filed the present petition alleging that respondent appellate court erred in
upholding the validity of the decision of public respondent BPTTT.
The Supreme Court denied the petition for lack of merit. The grant of the compulsory
license to respondent satisfied the requirements of Section 34 of the Patent Law. 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 and is necessary
for public health or public safety. Furthermore, both the appellate court and the BPTTT
found that private respondent had satisfied the requirement that the applicant must
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. The
Court also found the rate of royalty payments fixed by the Director of the BPTTT
reasonable 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.
SYLLABUS
1. MERCANTILE LAW; PATENT LAW; GROUNDS FOR THE GRANT OF
COMPULSORY LICENSING; PRESENT IN CASE AT BAR. 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.
2. ID.; ID.; ID.; NO INCONSISTENCY BETWEEN SECTION 34 OF THE PATENT
LAW AND THE PARIS CONVENTION. 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. This issue has
already been resolved by this Court in the case of Smith Kline & French Laboratories,
Ltd. vs. Court of Appeals, 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. SATDEI
3. ID.; ID.; ID.; GRANT OF COMPULSORY LICENSE TO PRIVATE
RESPONDENT WILL NOT RESULT IN THE DEPRIVATION OF PETITIONER'S
PROPERTY WITHOUT JUST COMPENSATION. 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 sell Cimetidine 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.
4. ID.; ID.; ID.; THE RATE OF 2.5% OF NET WHOLESALE PRICE FIXED BY
THE DIRECTOR OF THE BUREAU OF PATENTS, TRADEMARKS AND
TECHNOLOGY TRANSFER IS IN ACCORD WITH THE PATENT LAW AND
CONSIDERED REASONABLE. 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.
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, 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. 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.

THIRD DIVISION
[G.R. No. 126627. August 14, 2003.]
SMITH KLINE BECKMAN CORPORATION,
petitioner, vs. THE HONORABLE COURT OF
APPEALS and TRYCO PHARMA CORPORATION,
respondents.
Sapalo and Velez for petitioner.
Eduardo J Marino, Jr. for respondents.
SYNOPSIS
Petitioner, the registered patent holder of Letters Patent No. 14561, filed a complaint
for infringement of patent against private respondent alleging that private respondent
appropriated for its drug Impregon, the active ingredient of Albendazole, which is
substantially the same as Methyl 5 Propylthio-2-Benzimidazole Carbamate covered by
petitioner's patent since both of them are meant to combat worm or parasite infestation
in animals. Petitioner also pointed out that its application for a patent in 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. Both the trial court and the CA held that the respondent was not liable for
any infringement of the patent of petitioner in light of the latter's failure to show that
Albendazole is the same as the compound subject of Letters Patent No. 14561.
The Supreme Court affirmed the assailed decision with modification. The Court held
that petitioner's evidence failed to show the substantial sameness of petitioner's
patented compound and Albendazole. While both compounds have the effect of
neutralizing parasites in animals, the identity of result does not amount to infringement
of patent unless Albendazole operates in substantially the same way as the patented
compound, even though it performs the same function or the same result. As for the
concept of divisional applications proffered by petitioner, what this only means is that
petitioner's Methyl 5 Prophylthio-2-Benzimidazole Carbamate is an invention distinct
from the other inventions claimed in the original application divided out, Albendazole
being one of those other inventions. Otherwise, Methyl 5 Propylthio-2-Benzimidazole
Carbamate would not have been the subject of a divisional application if a single patent
could have been issued for it as well as Albendazole. The Supreme Court did not award
actual damages because no documentary evidence was presented to substantiate private
respondent's claim therefore. Neither did the Court award attorney's fees because there
was no evidence indicating that petitioner was moved by malice in suing private
respondent. The Court, however, awarded private respondent P20,000.00 temperate or
moderate damages, it having suffered some pecuniary loss the amount of which cannot,
by the nature of the case, be established with certainty.
SYLLABUS
1. COMMERCIAL LAW; PATENT LAW; INFRINGEMENT; DOCTRINE OF
EQUIVALENTS; TAKES PLACE WHEN A DEVICE APPROPRIATES A PRIOR
INVENTION BY DOING SUBSTANTIALLY THE SAME FUNCTION IN
SUBSTANTIALLY THE SAME WAY; CASE AT BAR NOT A CASE OF. 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. Yet again, a
scrutiny of petitioner's evidence fails to convince this Court of the substantial sameness
of petitioner's 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. In other words, the principle or mode of
operation must be the same or substantially the same. 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. As stated
early on, petitioner's 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
petitioner's compound works. The testimony of Dr. Orinion lends no support to
petitioner's cause, he not having been presented or qualified as an expert witness who
has the knowledge or expertise on the matter of chemical compounds.
2. ID.; ID.; ID.; CONCEPT OF DIVISIONAL APPLICATIONS, EXPLAINED;
CASE AT BAR. 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. 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." What this only means is that
petitioner's 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.
3. CIVIL LAW; CIVIL CODE; DAMAGES; ACTUAL DAMAGES, ATTORNEY'S
FEES, TEMPERATE DAMAGES; AWARD THEREOF, WHEN PROPER; CASE
AT BAR. This Court does not sustain the award of actual damages and attorney's
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 respondent's President 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. 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. The testimonies of
private respondent's 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. In the same
vein, this Court does not sustain the grant by the appellate court of attorney's 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 petitioner's suit. Even if a
claimant is compelled to litigate with third persons or to incur expenses to protect its
rights, still attorney's fees may not be awarded where no sufficient showing of bad faith
could be reflected in a party's persistence in a case other than an erroneous conviction
of the righteousness of his cause. 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.

FIRST DIVISION
[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.
SYLLABUS
1. PROPERTY; PATENTS; 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.
2. ID.; ID.; VALIDITY; JUDICIARY. When a patent is sought to
be enforced, "the questions of invention, novelty, or prior use, and each of them,
are open to judicial examination."
3. ID.; ID.; ID.; ID.; BURDEN OF PROOF. The burden of proof
to substantiate a charge of infringement is with the plaintiff. Where, however, the
plaintiff introduces the patent in evidence, if it is in due form, it affords a prima
facie presumption of its correctness and validity. The decision of the
Commissioner of Patents in granting the patent is always presumed to be correct.
The burden then shifts to the defendant to overcome by competent evidence this
legal presumption.
4 ID.; ID.; ID.; "VARGAS PLOW;" NOVELTY INVENTION, OR
DISCOVERY In order to give existence to the right to a patent the element of
novelty, invention, or discovery must be shown.
5. ID.; ID.; ID.; ID.; REPAIRS. A difference has long been
recognized between repairing and reconstructing a machine. If, for instance,
partial injuries, whether they occur from accident or from wear and tear, to a
machine for agricultural purposes are made, this is only refitting the machine for
use, and thus permissible.
6. ID.; ID.; ID.; ID.; PUBLIC USE OR SALE. To entitle patent,
the invention must be new to the world.
7. ID.; ID.; ID.; ID.; ID. Under the provisions of the statute, an
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.
8. ID.; ID.; ID.; ID.; ID. A single instance of public use of the
invention by a patentee for more than two years before the date of his application
for his patent will be fatal to the validity of the patent when issued.
9. ID.; ID.; ID.; ID.; ID. Held: That since a preponderance of the
evidence ,is to the effect that for more than two years before the application for
the original letters patent there was, by the consent and allowance of the plaintiff,
a public use of the invention covered by them, namely, of the so-called "Vargas
Plow," the patent is void.
D E C I S I O N
MALCOLM, J p:
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 and useful improvements
thereof, not known or used by others in this country. before
his invention or discovery thereof, and not patented or
described in any printed publication in this or any foreign
country, before his invention or discovery thereof, or more
than two years prior to his application, and not in public use
are on sale in this country for more than two years prior to
his application, unless the same is proved to have been
abandoned, may, upon payment of the fees required by law,
and other due proceeding had, obtain a patent therefor." (29
Stat. L., 692, 7 Fed. Stat. Ann. [2d Ed.], p. 23.)
When a patent is sought to be enforced, "the questions of invention,
novelty, or prior use, and each of them, are open to judicial examination." The
burden of proof to substantiate a charge of infringement is with the plaintiff.
Where, however, the plaintiff introduces the patent in evidence, if it is in due
form, it affords a prima facie presumption of its correctness and validity. The
decision of the Commissioner of Patents in granting the patent is always
presumed to be correct. The burden then shifts to the defendant to overcome by
competent evidence this legal presumption. With all due respect, therefore, for
the critical and expert examination of the invention by the United States Patent
Office, the question of the validity of the patent is one for judicial determination,
and since a patent has been submitted, the exact question is whether the
defendant has assumed the burden of proof as to anyone of his defenses. (See
Agawan Co. vs. Jordan [1869], 7 Wall., 583; Blanchard vs. Putnam [186g], 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 hereinbefore stated, the defendant relies on three special defenses.
One such defense, on which the judgment of the lower court is principally
grounded, and to which appellant devotes the major portion of his vigorous
argument, concerns the element of novelty, invention, or discovery, that gives
existence to the right to a patent. On this point the trial court reached the
conclusion that "the patented plow of the plaintiff, Exhibit D, is not different
from the native plow, Exhibit 2, except in the material, in the form, in the weight
and the grade of the result, the said differences giving it neither a new function
nor a new result distinct from the function and the result obtained from the native
plow; consequently, its production does not presuppose the exercise of the
inventive faculty but merely of mechanical skill, which does not give a right to a
patent of an invention under the provisions of the Patent Law." In thus finding,
the court may have been right, since the Vargas plow does not appear to be such
a ":combination" as contains a novel assemblage of parts exhibiting invention.
(See Stimpson vs. Woodman [1870], 10 Wall., 117 rollers; Hicks vs. Kesley
[1874], 18 Wall., 674 wagons; Hails vs. Wormer [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 foundaries,
he has for four years cast large numbers of plow points and shares suitable for the
use of either on the native wooden plow or on the Vargas plow. A differences has
long been recognized between repairing and constructing a machine. If, for
instance, partial injuries, whether they occur from accident or from wear and tear,
to a machine for agricultural purposes are made this is only re-fitting the machine
for use, and thus permissible. (Wilson 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 defendants
has done is to manufacture and sell isolated parts to be used to replace worn-out
parts.
The third defense is, that under the provisions of the statute, an
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], 1 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 [1888], 1 L. R. A., 48.)
On the facts, we think the testimony shows such a public use of the
Vargas plow as to render the patent invalid. Nicolas Roces, a farmer, testified
that he had bought twenty Vargas plows, of which Exhibit 5 was one, in
December, 1907; and Exhibit 5, the court found, was a plow completely identical
with that for which the plaintiff had received a patent. The minor exception, and
this in itself corroborative of Roces' testimony, is, that the handle of plow Exhibit
5 is marked with the letters "A V" and not with the words "Patent Applied For"
or "Patented Mar. 12, 1912." Salvador Lizarraga, a clerk in a business house,
testified that he had received plows similar to Exhibits D, 5, and 4, for sale on
commission in May, 1908, from Bonifacio Araneta, partner of Vargas in the
plow business. Ko Pao Ko, a blacksmith, testified that he had made fifty plow
frames in 1905 for Vargas and Araneta, of which Exhibit 4 is one; Exhibit 4, the
court found, is a plow identical with that patented by Vargas, but without share
and mould-board. Alfred Berwin, an employee in the office of Attorney John
Bordman, testified that on September 21, 1908, he had knowledge of a
transaction wherein Vargas and Araneta desired to obtain money to invest in a
plow factory. George Ramon Saul, a mechanic of the "Taller Visayas" of
Strachan and MacMurray, testified that he had made Vargas plow points and
shares of the present form upon order of Araneta and Vargas in 1906 and 1907.
William MacMurray, proprietor of the "Taller Visayas," corroborated the
evidence of the witness Saul by the exhibition of the account against Vargas and
Araneta wherein, under date of December 31, 1906, appears the item "12 new
soft steel plow shares forged and bored for rivets as per sample." Against all this,
was the testimony of the plaintiff Angel Vargas who denied that Saul could have
seen the Vargas plow in 1906 and 1907, who denied that Roces purchased the
Vargas plow in 1907, who denied that Lizarraga could have acted as an agent to
sell two plows in November, 1908, who denied any remembrance of the loan
mentioned by Berwin as having been negotiated in September, 1908, who denied
that Ko Pao Ko made fifty plows one of which is Exhibit 4, for Araneta and
Vargas in 1905. Plaintiff introduced his books to substantiate his oral testimony.
It is hardly believable that five or six witnesses for the defense would
deliberately perjure themselves under oath. One might, but that all together, of
different nationalities, would enter into such a conspiracy, is to suppose the
improbable.
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.