G.R. No.

97343 September 13, 1993

PASCUAL GODINES, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, SPECIAL FOURTH DIVISION and SV-
AGRO ENTERPRISES, INC.,respondents.

Jesus S. Anonat for petitioner.

Arturo M. Alinio for private respondent.

ROMERO, J.:

Through this petition for review in certiorari of a decision of the Court of Appeals
affirming the decision of the trial court,

WHEREFORE, with the elimination of the award for attorney's fees, the
judgment appealed from is hereby AFFIRMED, with costs against
appellant. 1

FACTS:

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 mid portion 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."

The patented hand tractor works in the following manner: "the engine drives the
transmission gear thru the V-belt, a driven pulley and a transmission shaft. The
engine drives the transmission gear by tensioning of the V-belt which is
controlled by the idler pulley. The V-belt drives the pulley attached to the
transmission gear which in turn drives the shaft where the paddy wheels are
attached. The operator handles the hand tractor through a handle which is
inclined upwardly and supported by a pair of substanding pipes and reinforced by
a U-shaped G.I. pipe at the V-shaped end." 3

The above mentioned patent was acquired by SV-Agro Industries

Enterprises, Inc., herein private respondent, from Magdalena Villaruz, its
chairman and president, by virtue of a Deed of Assignment executed by the
latter in its favor. On October 31, 1979, SV-Agro Industries caused the
publication of the patent in Bulletin Today, a newspaper of general circulation.

In accordance with the patent, private respondent manufactured and sold the
patented power tillers with the patent imprinted on them.

In 1979, SV-Agro Industries suffered a decline of more than 50% in sales in

its Molave, Zamboanga del Sur branch. Upon investigation, it discovered that
power tillers similar to those patented by private respondent were being
manufactured and sold by petitioner herein.

Consequently, private respondent notified Pascual Godines about the existing

patent and demanded that the latter stop selling and manufacturing similar
power tillers. Upon petitioner's failure to comply with the demand, SV-Agro
Industries filed before the Regional Trial Court a complaint for infringement
of patent and unfair competition.
After trial, the court held Pascual Godines liable for infringement of patent and
unfair competition. The dispositive portion of the decision reads as follows:

WHEREFORE, premises considered, JUDGMENT is hereby rendered in

favor of the plaintiff SV-Agro Industries Enterprises, Inc., and against
defendant Pascual Godines:

1. Declaring the writ of preliminary injunction issued by this Court

against defendant as permanent;

2. Ordering defendant Pascual Godines to pay plaintiff the sum of Fifty

Thousand Pesos (P50,000.00) as damages to its business reputation
and goodwill, plus the further sum of Eighty Thousand Pesos
(P80,000.00) for unrealized profits during the period defendant was
manufacturing and selling copied or imitation floating power tiller;

3. Ordering the defendant to pay the plaintiff, the further sum of Eight
Thousand Pesos (P8,000.00) as reimbursement of attorney's fees and
other expenses of litigation; and to pay the costs of the suit.

SO ORDERED. 4

The decision was affirmed by the appellate court.

Thereafter, this petition was filed. Petitioner maintains the defenses which he raised
before the trial and appellate courts, to wit: that he was not engaged in the
manufacture and sale of the power tillers as he made them only upon the special
order of his customers who gave their own specifications; hence, he could not be
liable for infringement of patent and unfair competition; and that those made by him
were different from those being manufactured and sold by private respondent.

We find no merit in his arguments. The question of whether petitioner was

manufacturing and selling power tillers is a question of fact better addressed to the
lower courts. In dismissing the first argument of petitioner herein, the Court of Appeals
quoted the findings of the court, to wit:

It is the contention of defendant that he did not manufacture or make

imitations or copies of plaintiff's turtle power tiller as what he merely did
was to fabricate his floating power tiller upon specifications and
designs of those who ordered them.

However, this contention appears untenable in the light of the following

circumstances: 1) he admits in his Answer that he has been manufacturing
power tillers or hand tractors, selling and distributing them long before
plaintiff started selling its turtle power tiller in Zamboanga del Sur and
Misamis Occidental, meaning that defendant is principally a manufacturer
of power tillers, not upon specification and design of buyers, but upon his
own specification and design;

2) it would be unbelievable that defendant would fabricate power tillers similar to

the turtle power tillers of plaintiff upon specifications of buyers without requiring
a job order where the specification and designs of those ordered are
specified. No document was (sic) ever been presented showing such job orders,
and it is rather unusual for defendant to manufacture something without the
specification and designs, considering that he is an engineer by profession
and proprietor of the Ozamis Engineering shop. On the other hand, it is also
highly unusual for buyers to order the fabrication of a power tiller or hand tractor
and allow defendant to manufacture them merely based on their verbal
instructions. This is contrary to the usual business and manufacturing
practice. This is not only time consuming, but costly because it involves a
trial and error method, repeat jobs and material wastage.

Defendant judicially admitted two (2) units of the turtle power tiller sold by him to
Policarpio Berondo. 5
Of general acceptance is the rule imbedded in our jurisprudence that ". . . the
jurisdiction of the Supreme Court in cases brought to it from the Court of Appeals in a
petition for certiorari under Rule 45 of the Rules of Court is limited to the review of
errors of law, and that said appellate court's findings of fact are conclusive upon this
Court." 6

The fact that petitioner herein manufactured and sold power tillers without patentee's
authority has been established by the courts despite petitioner's claims to the contrary.

ISSUE: Did petitioner's product infringe upon the patent of private respondent?

RULING: 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." 8 To
determine whether the particular item falls within the literal meaning of the patent
claims, the court must juxtapose the claims of the patent and the accused product
within the overall context of the claims and specifications, to determine whether
there is exact identity of all material elements. 9

The trial court made the following observation:

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

Moreover, it is also observed that petitioner also called his power tiller as a
floating power tiller. The patent issued by the Patent Office referred to a "farm
implement but more particularly to a turtle hand tractor having a vacuumatic housing
float on which the engine drive is held in place, the operating handle, the harrow
11
housing with its operating handle and the paddy wheel protective covering." It appears
from the foregoing observation of the trial court that these claims of the patent
and the features of the patented utility model were copied by petitioner. We are
compelled to arrive at no other conclusion but that there was infringement.

Petitioner's argument that his power tillers were different from private
respondent's is that of a drowning man clutching at straws.

Recognizing that the logical fallback position of one in the place of defendant is to aver
that his product is different from the patented one, courts have adopted the doctrine of
equivalents which recognizes that minor modifications in a patented invention
12
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
13
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. 14

In this case, the trial court observed:

Defendant's witness Eduardo Caete, employed for 11 years as welder of

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

It also stated:

To establish an infringement, it is not essential to show that the defendant

adopted the device or process in every particular; Proof of an adoption of
 the substance of the thing will be sufficient. "In one sense," said Justice
Brown, "it may be said that no device can be adjudged an infringement
that does not substantially correspond with the patent. But another
construction, which would limit these words to exact mechanism described
in the patent, would be so obviously unjust that no court could be
expected to adopt it. . . .

The law will protect a patentee against imitation of his patent by other
forms and proportions. If two devices do the same work in substantially
the same way, and accomplish substantially the same result, they are the
16
same, even though they differ in name, form, or shape.

We pronounce petitioner liable for infringement in accordance with Section 37 of

Republic Act No. 165, as amended, providing, inter alia:

Sec. 37. Right of Patentees. A patentee shall have the exclusive right to
make, use and sell the patented machine, article or product, and to use
the patented process for the purpose of industry or commerce, throughout
the territory of the Philippines for the terms of the patent; and such
making, using, or selling by any person without the authorization of the
Patentee constitutes infringement of the patent. (Emphasis ours)

As far as the issue regarding unfair competition is concerned, suffice it to say that
Republic Act No. 166, as amended, provides, inter alia:

Sec. 29. Unfair competition, rights and remedies. . . .

xxx xxx xxx

In particular, and without in any way limiting the scope of unfair

competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general
appearance of goods of another manufacturer or dealer, either as to the
 goods themselves or in the wrapping of the packages in which they are
contained, or the devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers that the goods
offered are those of a manufacturer or dealer other than the actual
manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and defraud another of his
legitimate trade. . . .

xxx xxx xxx

Considering the foregoing, we find no reversible error in the decision of the Court of
Appeals affirming with modification the decision of the trial court.

WHEREFORE, premises considered, the decision of the Court of Appeals is hereby

AFFIRMED and this petition DENIED for lack of merit.

G. R. No. 126627 August 14, 2003

SMITH KLINE BECKMAN CORPORATION, Petitioner,

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

DECISION

CARPIO-MORALES, J.:

FACTS:

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

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

On September 24, 1981, Letters Patent No. 14561 1 for the aforesaid invention
was issued to petitioner for a term of seventeen (17) years.

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

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

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

Petitioner sued private respondent for infringement of patent and unfair

competition before the Caloocan City Regional Trial Court (RTC). 3 It claimed
that its patent covers or includes the substance Albendazole such that
private respondent, by manufacturing, selling, using, and causing to be
sold and used the drug Impregon without its authorization, infringed
Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No. 14561 4 as well as committed
unfair competition under Article 189, paragraph 1 of the Revised Penal Code and
Section 29 of Republic Act No. 166 (The Trademark Law) for advertising and
selling as its own the drug Impregon although the same contained petitioners
patented Albendazole.5
 On motion of petitioner, Branch 125 of the Caloocan RTC issued a
temporary restraining order against private respondent enjoining it from
committing acts of patent infringement and unfair competition. 6 A writ of
preliminary injunction was subsequently issued. 7

Private respondent in its Answer8 averred that Letters Patent No. 14561 does
not cover the substance Albendazole for nowhere in it does that word
appear; that even if the patent were to include Albendazole, such substance
is unpatentable; that the Bureau of Food and Drugs allowed it to
manufacture and market Impregon with Albendazole as its known
ingredient; that there is no proof that it passed off in any way its veterinary
products as those of petitioner; that Letters Patent No. 14561 is null and void,
the application for the issuance thereof having been filed beyond the one
year period from the filing of an application abroad for the same invention
covered thereby, in violation of Section 15 of Republic Act No. 165 (The
Patent Law); and that petitioner is not the registered patent holder.

Private respondent lodged a Counterclaim against petitioner for such amount of

actual damages as may be proven; P1,000,000.00 in moral
damages; P300,000.00 in exemplary damages; and P150,000.00 in attorneys
fees.

Finding for private respondent, the trial court rendered a Decision dated July 23,
1991,9 the dispositive portion of which reads:

COMPLAINT DISMISSED SA RTC!!!!! WHEREFORE, in view of the foregoing,

plaintiffs complaint should be, as it is hereby, DISMISSED. The Writ of
injunction issued in connection with the case is hereby ordered
DISSOLVED.
 The Letters Patent No. 14561 issued by the then Philippine Patents Office is
hereby declared null and void for being in violation of Sections 7, 9 and 15 of
the Patents Law.

Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is

hereby directed to cancel Letters Patent No. 14561 issued to the plaintiff and to
publish such cancellation in the Official Gazette.

Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual

damages and P100,000.00 attorneys fees as prayed for in its counterclaim but said
amount awarded to defendant is subject to the lien on correct payment of filing fees.

SO ORDERED. (Underscoring supplied)

On appeal, the Court of Appeals, by Decision of April 21, 1995, 10 upheld the trial
courts finding that private respondent was not liable for any infringement of the
patent of petitioner in light of the latters failure to show that Albendazole is the
same as the compound subject of Letters Patent No. 14561. Noting petitioners
admission of the issuance by the U.S. of a patent for Albendazole in the name of Smith
Kline and French Laboratories which was petitioners former corporate name, the
appellate court considered the U.S. patent as implying that Albendazole is different
from methyl 5 propylthio-2-benzimidazole carbamate. It likewise found that private
respondent was not guilty of deceiving the public by misrepresenting that Impregon is its
product.

The appellate court, however, declared that Letters Patent No. 14561 was not void as
it sustained petitioners explanation that Patent Application Serial No. 18989
which was filed on October 8, 1976 was a divisional application of Patent
Application Serial No. 17280 filed on June 17, 1975 with the Philippine Patent Office,
well within one year from petitioners filing on June 19, 1974 of its Foreign
Application Priority Data No. 480,646 in the U.S. covering the same compound
subject of Patent Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent
Application Serial No. 18989 was deemed filed on June 17, 1995 or still within one
year from the filing of a patent application abroad in compliance with the one-year
rule under Section 15 of the Patent Law. And it rejected the submission that the
compound in Letters Patent No. 14561 was not patentable, citing the jurisprudentially
established presumption that the Patent Offices determination of patentability is correct.
Finally, it ruled that petitioner established itself to be the one and the same
assignee of the patent notwithstanding changes in its corporate name. Thus the
appellate court disposed:

DECISION NG RTC AFFIRMED WITH SOME MODIFICATIONS HINDI DAW VOID

YUNG PATENT!!!!!!!!!WHEREFORE, the judgment appealed from is AFFIRMED with
the MODIFICATION that the orders for the nullification of Letters Patent No. 14561
and for its cancellation are deleted therefrom.

SO ORDERED.

Petitioners motion for reconsideration of the Court of Appeals decision having

been denied11 the present petition for review on certiorari 12 was filed, assigning as
errors the following:

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

ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCOS "IMPREGON" DRUG,
IS INCLUDED IN PETITIONERS LETTERS PATENT NO. 14561, AND THAT
CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.

II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE

RESPONDENT TRYCO PHARMA CORPORATION P330,000.00 ACTUAL
DAMAGES AND P100,000.00 ATTORNEYS FEES.

Petitioner argues that under the doctrine of equivalents for determining patent
infringement, Albendazole, the active ingredient it alleges was appropriated by private
respondent for its drug Impregon, is substantially the same as methyl 5 propylthio-2-
benzimidazole carbamate covered by its patent since both of them are meant to
combat worm or parasite infestation in animals. It cites the "unrebutted" testimony of
its witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical formula in
Letters Patent No. 14561 refers to the compound Albendazole. Petitioner adds that
the two substances substantially do the same function in substantially the same
way to achieve the same results, thereby making them truly identical. Petitioner
thus submits that the appellate court should have gone beyond the literal wordings used
in Letters Patent No. 14561, beyond merely applying the literal infringement test, for in
spite of the fact that the word Albendazole does not appear in petitioners letters patent,
it has ably shown by evidence its sameness with methyl 5 propylthio-2-benzimidazole
carbamate.

Petitioner likewise points out that its application with the Philippine Patent Office on
account of which it was granted Letters Patent No. 14561 was merely a divisional
application of a prior application in the U. S. which granted a patent for
Albendazole. Hence, petitioner concludes that both methyl 5 propylthio-2-
benzimidazole carbamate and the U.S.-patented Albendazole are dependent on
each other and mutually contribute to produce a single result, thereby making
Albendazole as much a part of Letters Patent No. 14561 as the other substance is.

Petitioner concedes in its Sur-Rejoinder13 that although methyl 5 propylthio-

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

With respect to the award of actual damages in favor of private respondent in the
amount of P330,000.00 representing lost profits, petitioner assails the same as highly
speculative and conjectural, hence, without basis. It assails too the award
of P100,000.00 in attorneys fees as not falling under any of the instances enumerated
by law where recovery of attorneys fees is allowed.
In its Comment,14 private respondent contends that application of the doctrine of
equivalents would not alter the outcome of the case, Albendazole and methyl 5
propylthio-2-benzimidazole carbamate being two different compounds with different
chemical and physical properties. It stresses that the existence of a separate U.S.
patent for Albendazole indicates that the same and the compound in Letters Patent No.
14561 are different from each other; and that since it was on account of a divisional
application that the patent for methyl 5 propylthio-2-benzimidazole carbamate was
issued, then, by definition of a divisional application, such a compound is just one of
several independent inventions alongside Albendazole under petitioners original patent
application.

As has repeatedly been held, only questions of law may be raised in a petition for
review on certiorari before this Court. Unless the factual findings of the appellate court
are mistaken, absurd, speculative, conjectural, conflicting, tainted with grave abuse of
discretion, or contrary to the findings culled by the court of origin, 15 this Court does not
review them.

From an examination of the evidence on record, this Court finds nothing infirm in the
appellate courts conclusions with respect to the principal issue of whether private
respondent committed patent infringement to the prejudice of petitioner.

The burden of proof to substantiate a charge for patent infringement rests on the
plaintiff.16 In the case at bar, petitioners evidence consists primarily of its Letters
Patent No. 14561, and the testimony of Dr. Orinion, its general manager in the
Philippines for its Animal Health Products Division, by which it sought to show that its
patent for the compound methyl 5 propylthio-2-benzimidazole carbamate also
covers the substance Albendazole.

From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other
portions thereof, no mention is made of the compound Albendazole. All that the
claims disclose are: the covered invention, that is, the compound methyl 5
propylthio-2-benzimidazole carbamate; the compounds being anthelmintic but
nontoxic for animals or its ability to destroy parasites without harming the host
animals; and the patented methods, compositions or preparations involving the
compound to maximize its efficacy against certain kinds of parasites infecting
specified animals.

When the language of its claims is clear and distinct, the

patentee is bound thereby and may not claim anything
beyond them.17 And so are the courts bound which may not add to or detract from
the claims matters not expressed or necessarily implied, nor may they enlarge the
patent beyond the scope of that which the inventor claimed and the patent office
allowed, even if the patentee may have been entitled to something more than the words
it had chosen would include.18

It bears stressing that the mere absence of the word Albendazole in Letters
Patent No. 14561 is not determinative of Albendazoles non-inclusion in the
claims of the patent. While Albendazole is admittedly a chemical compound that exists
by a name different from that covered in petitioners letters patent, the language of
Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And no
extrinsic evidence had been adduced to prove that Albendazole inheres in petitioners
patent in spite of its omission therefrom or that the meaning of the claims of the patent
embraces the same.

While petitioner concedes that the mere literal wordings of its patent cannot establish
private respondents infringement, it urges this Court to apply the doctrine of
equivalents.

The doctrine of equivalents provides that an infringement also takes place when a
device appropriates a prior invention by incorporating its innovative concept and,
although with some modification and change, performs substantially the same function
in substantially the same way to achieve substantially the same result. 19 Yet again, a

scrutiny of petitioners evidence fails to convince this Court of the

substantial sameness of petitioners patented compound and
Albendazole. While both compounds have the effect of neutralizing parasites in
animals,identity of result does not amount to infringement of patent unless Albendazole
operates in substantially the same way or by substantially the same means as the
patented compound, even though it performs the same function and achieves the same
result.20 In other words, the principle or mode of operation must be the same or
substantially the same.21

The doctrine of equivalents thus requires satisfaction of the function-means-and-result

test, the patentee having the burden to show that all three components of such
equivalency test are met.22

As stated early on, petitioners evidence fails to explain how Albendazole is in

every essential detail identical to methyl 5 propylthio-2-benzimidazole carbamate.
Apart from the fact that Albendazole is an anthelmintic agent like methyl 5
propylthio-2-benzimidazole carbamate, nothing more is asserted and accordingly
substantiated regarding the method or means by which Albendazole weeds out
parasites in animals, thus giving no information on whether that method is
substantially the same as the manner by which petitioners compound works. The
testimony of Dr. Orinion lends no support to petitioners cause, he not having been
presented or qualified as an expert witness who has the knowledge or expertise on the
matter of chemical compounds.

As for the concept of divisional applications proffered by petitioner, it comes into play
when two or more inventions are claimed in a single application but are of such a nature
that a single patent may not be issued for them.23 The applicant thus is required "to
divide," that is, to limit the claims to whichever invention he may elect, whereas those
inventions not elected may be made the subject of separate applications which are
called "divisional applications."24 What this only means is that petitioners methyl 5
propylthio-2-benzimidazole carbamate is an invention distinct from the other inventions
claimed in the original application divided out, Albendazole being one of those other
inventions. Otherwise, methyl 5 propylthio-2-benzimidazole carbamate would not have
been the subject of a divisional application if a single patent could have been issued for
it as well as Albendazole.1wphi1

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

SO ORDERED.

G.R. No. 167715 November 17, 2010

PHIL PHARMAWEALTH, INC., Petitioner,

vs.
PFIZER, INC. and PFIZER (PHIL.) INC., Respondents.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari seeking to annul and set aside the
Resolutions dated January 18, 20051 and April 11, 20052 by the Court of Appeals (CA) in
CA-G.R. SP No. 82734.

The instant case arose from a Complaint3 for patent infringement filed against petitioner
Phil Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc.,
with the Bureau of Legal Affairs of the Intellectual Property Office (BLA-IPO). The
Complaint alleged as follows:

xxxx

6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (the
"Patent") which was issued by this Honorable Office on July 16, 1987. The
patent is valid until July 16, 2004. The claims of this Patent are directed to
"a method of increasing the effectiveness of a beta-lactam antibiotic in a
mammalian subject, which comprises co-administering to said subject a
beta-lactam antibiotic effectiveness increasing amount of a compound of
the formula IA." The scope of the claims of the Patent extends to a combination
of penicillin such as ampicillin sodium and beta-lactam antibiotic like sulbactam
sodium.

7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium

(hereafter "Sulbactam Ampicillin"). Ampicillin sodium is a specific example of
the broad beta-lactam antibiotic disclosed and claimed in the Patent. It is the
compound which efficacy is being enhanced by co-administering the same with
sulbactam sodium. Sulbactam sodium, on the other hand, is a specific
compound of the formula IA disclosed and claimed in the Patent.

8. Pfizer is marketing Sulbactam Ampicillin under the

brand name "Unasyn." Pfizer's "Unasyn"
products, which come in oral and IV formulas, are covered by Certificates
of Product Registration ("CPR") issued by the Bureau of Food and Drugs
("BFAD") under the name of complainants. The sole and exclusive distributor

of "Unasyn" products in the Philippines is Zuellig Pharma

Corporation, pursuant to a Distribution Services Agreement it executed
with Pfizer Phils. on January 23, 2001.

9. Sometime in January and February 2003, complainants came to know that

respondent [herein petitioner] submitted bids for the supply of Sulbactam
Ampicillin to several hospitals without the consent of complainants and in
violation of the complainants' intellectual property rights. x x x

xxxx
 10. Complainants thus wrote the above hospitals and demanded that the
latter immediately cease and desist from accepting bids for the supply [of]
Sulbactam Ampicillin or awarding the same to entities other than
complainants. Complainants, in the same letters sent through undersigned
counsel, also demanded that respondent immediately withdraw its bids to
supply Sulbactam Ampicillin.

11. In gross and evident bad faith, respondent and the hospitals named in
paragraph 9 hereof, willfully ignored complainants' just, plain and valid
demands, refused to comply therewith and continued to infringe the Patent,
all to the damage and prejudice of complainants. As registered owner of the
Patent, Pfizer is entitled to protection under Section 76 of the IP Code.

x x x x4

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 Order5 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 Injunction6 which, however, was denied by the
BLA-IPO in an Order7 dated October 15, 2003.

Respondents filed a Motion for Reconsideration but the same was also denied by
the BLA-IPO in a Resolution8dated January 23, 2004.

Respondents then filed a special civil action for certiorari with the CA assailing the
October 15, 2003 and January 23, 2004 Resolutions of the BLA-IPO. Respondents
also prayed for the issuance of a preliminary mandatory injunction for the reinstatement
and extension of the writ of preliminary injunction issued by the BLA-IPO.

While the case was pending before the CA, respondents filed a Complaint 9 with
the Regional Trial Court (RTC) of Makati City for infringement and unfair
competition with damages against herein petitioner. In said case, respondents prayed
for the issuance of a temporary restraining order and preliminary injunction to prevent
herein petitioner from importing, distributing, selling or offering for sale sulbactam
ampicillin products to any entity in the Philippines. Respondents asked the trial court
that, after trial, judgment be rendered awarding damages in their favor and making the
injunction permanent.

On August 24, 2004, the RTC of Makati City issued an Order10 directing the
issuance of a temporary restraining order conditioned upon respondents' filing of
a bond.

In a subsequent Order11 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 order14 which prohibited petitioner "from importing, distributing, selling or
offering for sale Sulbactam Ampicillin products to any hospital or to any other entity in
the Philippines, or from infringing Pfizer Inc.'s Philippine Patent No. 21116 and
impounding all the sales invoices and other documents evidencing sales by [petitioner]
of Sulbactam Ampicillin products."

On February 7, 2005, petitioner again filed a Motion to Dismiss 15 the case for
being moot and academic, contending that respondents' patent had already
lapsed. In the same manner, petitioner also moved for the reconsideration of the
temporary restraining order issued by the CA on the same basis that the patent right
sought to be protected has been extinguished due to the lapse of the patent
license and on the ground that the CA has no jurisdiction to review the order of
the BLA-IPO as said jurisdiction is vested by law in the Office of the Director
General of the IPO.

On April 11, 2005, the CA rendered its presently assailed Resolution denying the Motion
to Dismiss, dated November 16, 2004, and the motion for reconsideration, as well as
Motion to Dismiss, both dated February 7, 2005.

Hence, the present petition raising the following

issues:

a) Can an injunctive relief be issued based on an action of patent infringement

when the patent allegedly infringed has already lapsed?

b) What tribunal has jurisdiction to review the decisions of the Director of Legal
Affairs of the Intellectual Property Office?

c) Is there forum shopping when a party files two actions with two seemingly
different causes of action and yet pray for the same relief? 16

In the first issue raised, petitioner argues that respondents' exclusive right to
monopolize the subject matter of the patent exists only within the term of the patent.
Petitioner claims that since respondents' patent expired on July 16, 2004, the latter no
longer possess any right of monopoly and, as such, there is no more basis for the
issuance of a restraining order or injunction against petitioner insofar as the disputed
patent is concerned.

The Court agrees.

Section 37 of Republic Act No. (RA) 165,17 which was the governing law at the
time of the issuance of respondents' patent, provides:

Section 37. Rights of patentees. A patentee shall have the exclusive right to make,
use and sell the patented machine, article or product, and to use the patented process
for the purpose of industry or commerce, throughout the territory of the Philippines for
the term of the patent; and such making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the patent. 18

It is clear from the above-quoted provision of law that the exclusive right of a patentee to
make, use and sell a patented product, article or process exists only during the term of
the patent. In the instant case, Philippine Letters Patent No. 21116, which was the basis
of respondents in filing their complaint with the BLA-IPO, was issued on July 16,
1987. This fact was admitted by respondents themselves in their complaint. They also
admitted that the validity of the said patent is until July 16, 2004, which is in
conformity with Section 21 of RA 165, providing that the term of a patent shall be
seventeen (17) years from the date of issuance thereof. Section 4, Rule 129 of the
Rules of Court provides that an admission, verbal or written, made by a party in the
course of the proceedings in the same case, does not require proof and that the
admission may be contradicted only by showing that it was made through palpable
mistake or that no such admission was made. In the present case, there is no dispute
as to respondents' admission that the term of their patent expired on July 16,
2004. Neither is there evidence to show that their admission was made through
palpable mistake. Hence, contrary to the pronouncement of the CA, there is no longer
any need to present evidence on the issue of expiration of respondents' patent.
On the basis of the foregoing, the Court agrees with petitioner that after July 16,
2004, respondents no longer possess the exclusive right to make, use and sell
the articles or products covered by Philippine Letters Patent No. 21116.

Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of
a writ of preliminary injunction, viz:

(a) That the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the acts
complained of, or in requiring the performance of an act or acts, either for a
limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts

complained of during the litigation would probably work injustice to the applicant;
or

(c) That a party, court, or agency or a person is doing, threatening, or attempting

to do, or is procuring or suffering to be done, some act or acts probably in
violation of the rights of the applicant respecting the subject of the action or
proceeding, and tending to render the judgment ineffectual.

In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide
that if the matter is of extreme urgency and the applicant will suffer grave injustice and
irreparable injury, a temporary restraining order may be issued ex parte.

From the foregoing, it can be inferred that two requisites must exist to warrant the
issuance of an injunctive relief, namely: (1) the existence of a clear and unmistakable
right that must be protected; and (2) an urgent and paramount necessity for the writ to
prevent serious damage.19

In the instant case, it is clear that when the CA issued its January 18, 2005
Resolution approving the bond filed by respondents, the latter no longer had a
right that must be protected, considering that Philippine Letters Patent No. 21116
which was issued to them already expired on July 16, 2004. Hence, the issuance
by the CA of a temporary restraining order in favor of the respondents is not
proper.

In fact, the CA should have granted petitioner's motion to dismiss the petition for
certiorari filed before it as the only issue raised therein is the propriety of extending the
writ of preliminary injunction issued by the BLA-IPO. Since the patent which was the
basis for issuing the injunction, was no longer valid, any issue as to the propriety of
extending the life of the injunction was already rendered moot and academic.

As to the second issue raised, the Court, is not persuaded by petitioner's argument that,
pursuant to the doctrine of primary jurisdiction, the Director General of the IPO and not
the CA has jurisdiction to review the questioned Orders of the Director of the BLA-IPO.

It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual
Property Code of the Philippines, which is the presently prevailing law, the
Director General of the IPO exercises exclusive appellate jurisdiction over all
decisions rendered by the Director of the BLA-IPO. However, what is being
questioned before the CA is not a decision, but an interlocutory order of the BLA-
IPO denying respondents' motion to extend the life of the preliminary injunction
issued in their favor.

RA 8293 is silent with respect to any remedy available to litigants who intend to question
an interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the
Rules and Regulations on Administrative Complaints for Violation of Laws Involving
Intellectual Property Rights simply provides that interlocutory orders shall not be
appealable. The said Rules and Regulations do not prescribe a procedure within the
administrative machinery to be followed in assailing orders issued by the BLA-IPO
pending final resolution of a case filed with them. Hence, in the absence of such a
remedy, the provisions of the Rules of Court shall apply in a suppletory manner, as
provided under Section 3, Rule 1 of the same Rules and Regulations. Hence, in the
present case, respondents correctly resorted to the filing of a special civil action for
certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot
appeal therefrom and they have no other plain, speedy and adequate remedy in the
ordinary course of law. This is consistent with Sections 1 20 and 4,21 Rule 65 of the Rules
of Court, as amended.