1
FIRST DIVISION
[G.R. No. 113388. September 5, 1997]
ANGELITA MANZANO, petitioner, vs. COURT OF APPEALS,
and MELECIA MADOLARIA, as Assignor to NEW
UNITED FOUNDRY MANUFACTURING
CORPORATION, respondents.
DECISION
BELLOSILLO, J.:
The primary purpose of the patent system is not the reward
of the individual but the advancement of the arts and
sciences. The function of a patent is to add to the sum of useful
knowledge and one of the purposes of the patent system is to
encourage dissemination of information concerning discoveries
and inventions. This is a matter which is properly within the
competence of the Patent Office the official action of which has
the presumption of correctness and may not be interfered with
in the absence of new evidence carrying thorough conviction
that the Office has erred. Since the Patent Office is an expert
body preeminently qualified to determine questions of
patentability, its findings must be accepted if they are consistent
with the evidence, with doubts as to patentability resolved in
favor of the Patent Office.[1]
Petitioner Angelita Manzano filed with the Philippine
Patent Office on 19 February 1982 an action for the cancellation
of Letters Patent No. UM-4609 for a gas burner registered in the
name of respondent Melecia Madolaria who subsequently
assigned the letters patent to New United Foundry and
Manufacturing Corporation (UNITED FOUNDRY, for
brevity). Petitioner alleged that (a) the utility model covered by
the letters patent, in this case, an LPG gas burner, was not
inventive, new or useful; (b) the specification of the letters patent
did not comply with the requirements of Sec. 14, RA No. 165, as
amended; (c) respondent Melecia Madolaria was not the
original, true and actual inventor nor did she derive her rights
from the original, true and actual inventor of the utility model
covered by the letters patent; and, (d) the letters patent was
secured by means of fraud or misrepresentation. In support of
her petition for cancellation petitioner further alleged that (a) the
utility model covered by the letters patent of respondent had
been known or used by others in the Philippines for more than
one (1) year before she filed her application for letters patent on
9 December 1979; (b) the products which were produced in
accordance with the utility model covered by the letters patent
had been in public use or on sale in the Philippines for more than
one (1) year before the application for patent therefor was filed.
Petitioner presented the following documents which she
correspondingly marked as exhibits: (a) affidavit of petitioner
alleging the existence of prior art, marked Exh. A; (b) a brochure
distributed by Manila Gas Corporation disclosing a pictorial
representation of Ransome Burner made by Ransome Torch
and Burner Company, USA, marked Exh. D; and, (c) a brochure
distributed by Esso Gasul or Esso Standard Eastern, Inc., of the
Philippines showing a picture of another similar burner with top
elevation view and another perspective view of the same burner,
marked Exh. E.
Testifying for herself petitioner narrated that her husband
Ong Bun Tua worked as a helper in the UNITED FOUNDRY
where respondent Melecia Madolaria used to be affiliated with
from 1965 to 1970; that Ong helped in the casting of an LPG
burner which was the same utility model of a burner for which
Letters Patent No. UM-4609 was issued, and that after her
husbands separation from the shop she organized Besco Metal
Manufacturing (BESCO METAL, for brevity) for the casting of
LPG burners one of which had the configuration, form and
component parts similar to those being manufactured by
UNITED FOUNDRY. Petitioner presented in evidence an
alleged model of an LPG burner marked Exh. K and covered by
the Letters Patent of respondent, and testified that it was given
to her in January 1982 by one of her customers who allegedly
acquired it from UNITED FOUNDRY. Petitioner also presented
in evidence her own model of an LPG burner called Ransome
burner marked Exh. L, which was allegedly manufactured in
1974 or 1975 and sold by her in the course of her business
operation in the name of BESCO METAL. Petitioner claimed
that this Ransome burner (Exh. L) had the same configuration
and mechanism as that of the model which was patented in favor
of private respondent Melecia Madolaria. Also presented by
petitioner was a burner cup of an imported Ransome burner
marked Exh M which was allegedly existing even before the
patent application of private respondent.
Petitioner presented two (2) other witnesses, namely, her
husband Ong Bun Tua and Fidel Francisco. Ong testified that
he worked as a helper in the UNITED FOUNDRY from 1965 to
1970 where he helped in the casting of LPG burners with the
same form, configuration and mechanism as that of the model
covered by the Letters Patent issued to private
respondent.Francisco testified that he had been employed with
the Manila Gas Corporation from 1930 to 1941 and from 1952
up to 1969 where he retired as supervisor and that Manila Gas
Corporation imported Ransome burners way back in 1965 which
were advertised through brochures to promote their sale.
Private respondent, on the other hand, presented only one
witness, Rolando Madolaria, who testified, among others, that
he was the General Supervisor of the UNITED FOUNDRY in the
foundry, machine and buffing section; that in his early years with
the company, UNITED FOUNDRY was engaged in the
manufacture of different kinds of gas stoves as well as burners
based on sketches and specifications furnished by customers;
that the company manufactured early models of single-piece
types of burners where the mouth and throat were not
detachable; that in the latter part of 1978 respondent Melecia
Madolaria confided in him that complaints were being brought to
her attention concerning the early models being manufactured;
that he was then instructed by private respondent to cast several
experimental models based on revised sketches and
specifications; that private respondent again made some
innovations; that after a few months, private respondent
discovered the solution to all the defects of the earlier models
and, based on her latest sketches and specifications, he was
able to cast several models incorporating the additions to the
innovations introduced in the models. Various tests were
conducted on the latest model in the presence and under the
supervision of Melecia Madolaria and they obtained perfect
results. Rolando Madolaria testified that private respondent
decided to file her application for utility model patent in
December 1979.
On 7 July 1986 the Director of Patents Cesar C. Sandiego
issued Decision No. 86-56 denying the petition for cancellation
and holding that the evidence of petitioner was not able to
establish convincingly that the patented utility model of private
respondent was anticipated. Not one of the various pictorial
representations of business clearly and convincingly showed
that the devices presented by petitioner was identical or
substantially identical with the utility model of the
respondent. The decision also stated that even assuming that
the brochures depicted clearly each and every element of the
patented gas burner device so that the prior art and patented
device became identical although in truth they were not, they
could not serve as anticipatory bars for the reason that they were
undated. The dates when they were distributed to the public
were not indicated and, therefore, were useless prior art
references. The records and evidence also do not support the
petitioners contention that Letters Patent No. UM-4609 was
obtained by means of fraud and/or misrepresentation. No
evidence whatsoever was presented by petitioner to show that
the then applicant Melecia Madolaria withheld with intent to
deceive material facts which, if disclosed, would have resulted

in the refusal by the Philippine Patent Office to issue the Letters
Patent under inquiry.
Petitioner elevated the decision of the Director of Patents
to the Court of Appeals which on 15 October 1993 affirmed the
decision of the Director of Patents. Hence, this petition for
review on certiorari alleging that the Court of Appeals erred (a)
in relying on imaginary differences which in actuality did not exist
between the model of private respondent covered by Letters
Patent No. UM-4609 and the previously known model of Esso
Standard Eastern, Inc., and Manila Gas Corporation, making
such imaginary differences grounded entirely on speculation,
surmises and conjectures; (b) in rendering judgment based on
misapprehension of facts; (c) in relying mainly on the testimony
of private respondents sole witness Rolando Madolaria; and, (d)
in not canceling Letters Patent No. UM-4609 in the name of
private respondent.
Petitioner submits that the differences cited by the Court of
Appeals between the utility model of private respondent and the
models of Manila Gas Corporation and Esso Standard Eastern,
Inc., are more imaginary than real. She alleges that based on
Exhs. E, E-1, F and F-1 or the brochures of Manila Gas
Corporation and Esso Standard Eastern, Inc., presented by
petitioner, the cup-shaped burner mouth and threaded hole on
the side are shown to be similar to the utility model of private
respondent. The exhibits also show a detachable burner mouth
having a plurality of upwardly existing undulations adopted to act
as gas passage when the cover is attached to the top of said
cup-shaped mouth all of which are the same as those in the
patented model. Petitioner also denies as substantial difference
the short cylindrical tube of the burner mouth appearing in the
brochures of the burners being sold by Manila Gas Corporation
and the long cylindered tube of private respondents model of the
gas burner.
Petitioner argues that the actual demonstration made
during the hearing disclosed the similarities in form, operation
and mechanism and parts between the utility model of private
respondent and those depicted in the brochures. The findings of
the Patent Office and the Court of Appeals that the brochures of
Manila Gas Corporation and Esso Standard Eastern, Inc., are
undated cannot overcome the fact of their circulation before
private respondent filed her application for utility model
patent. Petitioner thus asks this Court to take judicial notice of
the fact that Esso Standard Eastern, Inc., disappeared before
1979 and reappeared only during the Martial Law years as
Petrophil Corporation. Petitioner also emphasizes that the
brochures indicated the telephone number of Manila Gas
Corporation as 5-79-81 which is a five (5) numbered telephone
number existing before 1975 because telephones in Metro
Manila started to have six (6) numbers only after that year.
Petitioner further contends that the utility model of private
respondent is absolutely similar to the LPG burner being sold by
petitioner in 1975 and 1976, and also to the Ransome burner
depicted in the old brochures of Manila Gas Corporation and
Esso Standard Eastern, Inc., fabricated by Ransome Torch and
Burner Company of Oakland, California, USA, especially when
considered through actual physical examination, assembly and
disassembly of the models of petitioner and private
respondent. Petitioner faults the Court of Appeals for
disregarding the testimonies of Ong Bun Tua and Fidel
Francisco for their failure to produce documents on the alleged
importation by Manila Gas Corporation of Ransome burners in
1965 which had the same configuration, form and mechanism
as that of the private respondents patented model.
Finally, it is argued that the testimony of private
respondents lone witness Rolando Madolaria should not have
been given weight by the Patent Office and the Court of Appeals
because it contained mere after-thoughts and pretensions.
We cannot sustain petitioner. Section 7 of RA No. 165, as
amended, which is the law on patents, expressly provides -
2
Sec. 7. Inventions patentable. Any invention of a new and useful
machine, manufactured product or substance, process or an
improvement of any of the foregoing, shall be patentable.
Further, Sec. 55 of the same law provides -
Sec. 55. Design patents and patents for utility models. - (a) Any
new, original and ornamental design for an article of
manufacture and (b) any new model of implements or tools or of
any industrial product or of part of the same, which does not
possess the quality of invention, but which is of practical utility
by reason of its form, configuration, construction or composition,
may be protected by the author thereof, the former by a patent
for a design and the latter by a patent for a utility model, in the
same manner and subject to the same provisions and
requirements as relate to patents for inventions insofar as they
are applicable except as otherwise herein provided.
The element of novelty is an essential requisite of the
patentability of an invention or discovery. If a device or process
has been known or used by others prior to its invention or
discovery by the applicant, an application for a patent therefor
should be denied; and if the application has been granted, the
court, in a judicial proceeding in which the validity of the patent
is drawn in question, will hold it void and ineffective. [2] It has
been repeatedly held that an invention must possess the
essential elements of novelty, originality and precedence, and
for the patentee to be entitled to the protection the invention
must be new to the world.[3]
In issuing Letters Patent No. UM-4609 to Melecia
Madolaria for an LPG Burner on 22 July 1981, the Philippine
Patent Office found her invention novel and patentable. The
issuance of such patent creates a presumption which yields only
to clear and cogent evidence that the patentee was the original
and first inventor. The burden of proving want of novelty is on
him who avers it and the burden is a heavy one which is met
only by clear and satisfactory proof which overcomes every
reasonable doubt.[4] Hence, a utility model shall not be
considered new if before the application for a patent it has been
publicly known or publicly used in this country or has been
described in a printed publication or publications circulated
within the country, or if it is substantially similar to any other
utility model so known, used or described within the country. [5]
As found by the Director of Patents, the standard of
evidence sufficient to overcome the presumption of legality of
the issuance of UM-4609 to respondent Madolaria was not
legally met by petitioner in her action for the cancellation of the
patent. Thus the Director of Patents explained his reasons for
the denial of the petition to cancel private respondents patent -
Scrutiny of Exhs. D and E readily reveals that the utility model
(LPG Burner) is not anticipated. Not one of the various pictorial
representations of burners clearly and convincingly show that
the device presented therein is identical or substantially identical
in construction with the aforesaid utility model. It is relevant and
material to state that in determining whether novelty or newness
is negatived by any prior art, only one item of the prior art may
be used at a time. For anticipation to occur, the prior art must
show that each element is found either expressly or described
or under principles of inherency in a single prior art reference or
that the claimed invention was probably known in a single prior
art device or practice. (Kalman v. Kimberly Clark, 218 USPQ
781, 789)
Even assuming gratia arguendi that the aforesaid brochures do
depict clearly on all fours each and every element of the
patented gas burner device so that the prior art and the said
patented device become identical, although in truth they are not,
they cannot serve as anticipatory bars for the reason that they
are undated. The dates when they were distributed to the public
were not indicated and, therefore, they are useless prior art
references.
xxxx

Furthermore, and more significantly, the model marked Exh. K
does not show whether or not it was manufactured and/or cast
before the application for the issuance of patent for the LPG
burner was filed by Melecia Madolaria.
With respect to Exh. L, petitioner claimed it to be her own model
of LPG burner allegedly manufactured sometime in 1974 or
1975 and sold by her in the course of her business operation in
the name of Besco Metal Manufacturing, which burner was
denominated as Ransome burner
xxxx
But a careful examination of Exh. L would show that it does not
bear the word Ransome which is the burner referred to as the
product being sold by the Petitioner. This is not the way to prove
that Exh. L anticipates Letters Patent No. UM-4609 through
Exhs. C and D. Another factor working against the Petitioners
claims is that an examination of Exh. L would disclose that there
is no indication of the time or date it was manufactured. This
Office, thus has no way of determining whether Exh. L was really
manufactured before the filing of the aforesaid application which
matured into Letters Patent No. UM-4609, subject matter of the
cancellation proceeding.
At this juncture, it is worthwhile to point out that petitioner also
presented Exh. M which is the alleged burner cup of an imported
Ransome burner. Again, this Office finds the same as unreliable
evidence to show anticipation. It observed that there is no date
indicated therein as to when it was manufactured and/or
imported before the filing of the application for issuance of patent
of the subject utility model. What is more, some component
parts of Exh. M are missing, as only the cup was presented so
that the same could not be compared to the utility model (subject
matter of this case) which consists of several other detachable
parts in combination to form the complete LPG burner.
xxxx
It must likewise be pointed out that Ong Bun Tua testified on the
brochures allegedly of Manila Gas and of Esso Gasul marked
Exhs. E and F and on the alleged fact that Manila Gas
Corporation was importing from the United States Ransome
burners. But the same could not be given credence since he
himself admitted during cross- examination that he has never
been connected with Manila Gas Corporation. He could not
even present any importation papers relating to the alleged
imported ransome burners. Neither did his wife.[6]
The above findings and conclusions of the Director of
Patent were reiterated and affirmed by the Court of Appeals. [7]
The validity of the patent issued by the Philippine Patent
Office in favor of private respondent and the question over the
inventiveness, novelty and usefulness of the improved model of
the LPG burner are matters which are better determined by the
Patent Office. The technical staff of the Philippine Patent Office
composed of experts in their field has by the issuance of the
patent in question accepted private respondents model of gas
burner as a discovery. There is a presumption that the Office
has correctly determined the patentability of the model[8] and
such action must not be interfered with in the absence of
competent evidence to the contrary.
The rule is settled that the findings of fact of the Director of
Patents, especially when affirmed by the Court of Appeals, are
conclusive on this Court when supported by substantial
evidence. Petitioner has failed to show compelling grounds for a
reversal of the findings and conclusions of the Patent Office and
the Court of Appeals.
The alleged failure of the Director of Patents and the Court
of Appeals to accord evidentiary weight to the testimonies of the
witnesses of petitioner showing anticipation is not a justification
to grant the petition. Pursuant to the requirement of clear and
convincing evidence to overthrow the presumption of validity of
a patent, it has been held that oral testimony to show anticipation
is open to suspicion and if uncorroborated by cogent evidence,
as what occurred in this case, it may be held insufficient.[9]
3
Finally, petitioner would want this Court to review all over
again the evidence she presented before the Patent Office. She
argues that contrary to the decision of the Patent Office and the
Court of Appeals, the evidence she presented clearly proves
that the patented model of private respondent is no longer new
and, therefore, fraud attended the acquisition of patent by
private respondent.
It has been held that the question on priority of invention is
one of fact. Novelty and utility are likewise questions of fact. The
validity of patent is decided on the basis of factual
inquiries.Whether evidence presented comes within the scope
of prior art is a factual issue to be resolved by the Patent
Office.[10] There is question of fact when the doubt or difference
arises as to the truth or falsehood of alleged facts or when the
query necessarily invites calibration of the whole evidence
considering mainly the credibility of witnesses, existence and
relevance of specific surrounding circumstances, their relation
to each other and to the whole and the probabilities of the
situation.[11]
Time and again we have held that it is not the function of
the Supreme Court to analyze or weigh all over again the
evidence and credibility of witnesses presented before the lower
tribunal or office. The Supreme Court is not a trier of facts. Its
jurisdiction is limited to reviewing and revising errors of law
imputed to the lower court, its findings of fact being conclusive
and not reviewable by this Court.
WHEREFORE, the Petition is DENIED. The Decision of
the Court of Appeals affirming that of the Philippine Patent Office
is AFFIRMED. Costs against petitioner.
SO ORDERED.
Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.
G.R. No. L-32160 January 30, 1982
DOMICIANO A. AGUAS, petitioner,
vs.
CONRADO G. DE LEON and COURT OF
APPEALS, respondents.
FERNANDEZ, J.:
This is a petition for certiorari to review the decision of the Court
of Appeals in CA G.R. NO. 37824-R entitled "Conrado G. de
Leon, plaintiff-appelle vs. Dominciano Aguas and F.H. Aquino
and Sons, defendants-appellants," the dispositive portion of
which reads:
WHEREFORE, with the modification that
plintiff-applee's award of moral damages is
hereby redured to P3,000.00, the appealed
judgment is hereby affirmed, in all othe
respects, with costs against appellants. 1
On April 14, 1962, Conrado G. de Leon filed in the Court of First
Instance of Rizal at Quezon City a complaint for infringement of
patent against Domiciano A. Aguas and F. H. Aquino and Sons
alleging that being the original first and sole inventor of certain
new and useful improvements in the process of making mosaic
pre-cast tiles, he lawfully filed and prosecuted an application for
Philippine patent, and having complied in all respects with the
statute and the rules of the Philippine Patent Office, Patent No.
658 was lawfully granted and issued to him; that said invention
was new, useful, not known or used by others in this country
before his invention thereof, not patented or described in any
printed publication anywhere before his invention thereof, or
more than one year prior to his application for patent thereof, not
patented in any foreign country by him or his legal
representatives on application filed more than one year prior to
his application in this country; that plaintiff has the exclusive
license to make, use and sell throughout the Philippines the
improvements set forth in said Patent No. 658; that the invention
patented by said Patent No. 658 is of great utility and of great
 4

value to plaintiff and of great benefit to the public who has embodying said patented invention or
demanded and purchased tiles embodying the said invention in adapted to be used in combination
very large quantities and in very rapidly increasing quant ies; embodying the same, and from making,
that he has complied with the Philippine statues relating to manufacturing, using or selling, engravings,
marking patented tiles sold by him; that the public has in general castings and devises designed and intended
acknowledged the validity of said Patent No. 658, and has for use in apparatus for the making of tiles
respected plaintiff's right therein and thereunder; that the embodying plaintiff's patented invention, and
defendant Domiciano A. Aguas infringed Letters of Patent No. from offering or advertising so to do, and from
658 by making, using and selling tiles embodying said patent aiding and abetting or in any way contributing
invention and that defendant F. H. Aquino & Sons is guilty of to the infringement of said patent;
infringement by making and furnishing to the defendant 3. Ordering that each and all of the infringing
Domiciano A. Aguas the engravings, castings and devices tiles, engravings, castings and devices, which
designed and intended of tiles embodying plaintiff;s patented are in the possession or under the control of
invention; that he has given direct and personal notice to the defendants be delivered to plaintiff;
defendants of their said acts of infringement and requested them 4. Ordering the defendants to jointly and
to desist, but nevertheless, defendants have refused and severally pay to the plaintiff the following
neglected to desist and have disregarded such request, and sums of money, to wit:
continue to so infringe causing great and irreparable damage to (a) P10,020.99 by way of actual damages;
plaintiff; that if the aforesaid infringement is permitted to (b) P50,000.00 by way of moral damages;
continue, further losses and damages and irreparable injury will (c) P5,000.00 by way of exemplary damages;
be sustained by the plaintiff; that there is an urgent need for the (d) P5,000.00 by way of attorney's fees and
immediate issuance of a preliminary injunction; that as a result (e) costs of suit. 5
of the defendants' wrongful conduct, plaintiff has suffered and The defendant Domiciano Aguas appealed to the Court of
the defendants are liable to pay him, in addition to actual Appeals, assigning the following errors. 6
damages and loss of profits which would be determined upon I
proper accounting, moral and exemplary or corrective damages THE TRIAL COURT ERRED IN NOT
in the sum of P90,000.00; that plaintiff has been compelled to HOLDING THAT PLAINTIFF'S PATENT FOR
go to court for the protection and enforcement of his and to THE 'PROCESS OF MAKING MOSAIC PRE-
engage the service of counsel, thereby incurring attorney's fees CAST TILE' IS INVALID BECAUSE SAID
and expenses of litigation in the sum of P5,000.00. 2 ALLEGED PROCESS IS NOT AN
On April 14, 1962, an order granting the plaintiff's petition for a INVENTION OR DISCOVERY AS THE
Writ of Preliminary Injunction was issued. 3 SAME HAS ALREADY LONG BEEN USED
On May 23, 1962, the defendant Domiciano A. Aguas filed his BY TILE MANUFACTURERS BOTH
answer denying the allegations of the plaintiff and alleging that: ABROAD AND IN THIS COUNTRY.
the plaintiff is neither the original first nor sole inventor of the II
improvements in the process of making mosaic pre-cast tiles, THE TRIAL COURT ERRED IN HOLDING
the same having been used by several tile-making factories in THAT THE PATENT OF PLAINTIFF IS
the Philippines and abroad years before the alleged invention by VALID BECAUSE IT IS AN IMPROVEMENT
de Leon; that Letters Patent No. 658 was unlawfully acquired by OR THE AGE-OLD TILE MAKING SYSTEM.
making it appear in the application in relation thereto that the III
process is new and that the plaintiff is the owner of the process THE TRIAL COURT ERRED IN NOT
when in truth and in fact the process incorporated in the patent ORDERING THE CANCELLATION OF
application has been known and used in the Philippines by PLAINTIFF-APPELLEE'S LETTERS
almost all tile makers long before the alleged use and PATENT NO. 658, EXHIBIT L, IN
registration of patent by plaintiff Conrado G. de Leon; that the ACCORDANCE WITH THE PERTINENT
registration of the alleged invention did not confer any right on PROVISIONS OF THE PATENT LAW,
the plaintiff because the registration was unlawfully secured and REPUBLIC ACT 165.
was a result of the gross misrepresentation on the part of the IV
plaintiff that his alleged invention is a new and inventive process; THE TRIAL COURT ERRED IN HOLDING
that the allegation of the plaintiff that Patent No. 658 is of great THAT DEFENDANT DOMICIANO A. AGUAS
value to plaintiff and of great benefit to the public is a mere IS GUILTY OF INFRINGEMENT DESPITE
conclusion of the plaintiff, the truth being that a) the invention of THE FACT THAT PLAINTIFF'S PATENT IS
plaintiff is neither inventive nor new, hence, it is not patentable, NOT A VALID ONE.
b) defendant has been granted valid patents (Patents No. 108, V
109, 110 issued on December 21, 1961) on designs for concrete THE TRIAL COURT ERRED IN NOT
decorative wall tiles; and c) that he can not be guilty of HOLDING THAT THE DEFENDANT COULD
infringement because his products are different from those of NEVER BE GUILTY OF INFRINGEMENT OF
the plaintiff. 4 PLAINTIFF'S PATENT BECAUSE EVEN IN
The trial court rendered a decision dated December 29, 1965, MATTERS NOT PATENTED BY THE
the dispositive portion of which reads: PLAINTIFF - LIKE THE COMPOSITION AND
WHEREFORE, judgment is hereby rendered PROPORTION OF INGREDIENTS USED
in favor of plaintiff and against the defendants: AND THE STRUCTURAL DESIGNS OF THE
1. Declaring plaintiff's patent valid and MOULD AND THE TILE PRODUCED - THAT
infringed: OF THE DEFENDANT ARE DIFFERENT.
2. Granting a perpetual injunction restraining VI
defendants, their officers, agents, employees, THE TRIAL COURT ERRED IN NOT
associates, confederates, and any and all DISMISSING THE COMPLAINT AND IN
persons acting under their authority from HOLDING THE DEFENDANT, INSTEAD OF
making and/or using and/or vending tiles

THE PLAINTIFF, LIABLE FOR DAMAGES,
AND ATTORNEY'S FEES.
On August 5, 1969, the Court of Appeals affirmed the decision
of the trial court, with the modification that plaintiff-appellee's
award of moral damages was reduced to P3,000.00. 7
The petitioner assigns the following errors supposedly
committed by the Court of Appeals:
It is now respectfully submitted that the Court
of Appeals committed the following errors
involving questions of law, to wit:
First error. When it did not conclude that
the letters patent of the respondent although
entitled on the cover page as a patent for
improvements, was in truth and in fact, on the
basis of the body of the same, a patent for the
old and non-patentable process of making
mosaic pre-cast tiles;
Second error. When it did not conclude
from the admitted facts of the case,
particularly the contents of the letters patent,
Exh. L and the pieces of physical evidence
introduced consisting of samples of the tiles
and catalouges, that the alleged
improvements introduced by the respondent
in the manufacture of mosaic pre-cast tiles
are not patentable, the same being not new,
useful and inventive.
Third error. As a corollary, when it
sentenced the herein petitioner to pay the
damages enumerated in the decision of the
lower court (Record on Appeal, pp. 74-75), as
confirmed by it (the Court of Appeals), but
with the modification that the amount of
P50,000.00 moral damages was reduced to
P3,000.00. 8
The facts, as found by the Court of Appeals, are:
The basic facts borne out by the record are to
the effect that on December 1, 1959 plaintiff-
appellee filed a patent application with the
Philippine Patent Office, and on May 5, 1960,
said office issued in his favor Letters Patent
No. 658 for a "new and useful improvement in
the process of making mosaic pre-cast tiles"
(Exh, "L"); that defendant F.H. Aquino & Sons
engraved the moulds embodying plaintiff's
patented improvement for the manufacture of
pre-cast tiles, plaintiff furnishing said
defendant the actual model of the tiles in
escayola and explained to said engraver the
plans, specifications and the details of the
engravings as he wanted them to be made,
including an explanation of the lip width,
artistic slope of easement and critical depth of
the engraving that plaintiff wanted for his
moulds; that engraver Enrique Aquino knew
that the moulds he was engraving for plaintiff
were the latter's very own, which possession
the new features and characteristics covered
by plaintiff's parent; that defendant Aguas
personally, as a building contractor,
purchased from plaintiff, tiles shaped out of
these moulds at the back of which was
imprinted plaintiff's patent number (Exhs., "A"
to "E"); that subsequently, through a
representative, Mr. Leonardo, defendant
Aguas requested Aquino to make engravings
of the same type and bearing the
characteristics of plaintiff's moulds; that Mr.
Aquino knew that the moulds he was asked to
5
engrave for defendant Aguas would be used
to produce cement tiles similar to plaintiff's;
that the moulds which F.H. Aquino & Sons
eventually engraved for Aguas and for which
it charged Aguas double the rate it charged
plaintiff De Leon, contain the very same
characteristic features of plaintiff's mould and
that Aguas used these moulds in the
manufacture of his tiles which he actually put
out for sale to the public (Exhs. "1" to "3" and
Exhs. "A" to "E"); that both plaintiff's and
defendant Aguas' tiles are sculptured pre-cast
wall tiles intended as a new feature of
construction and wag ornamentation
substantially Identical to each other in size,
easement, lip width and critical depth of the
deepest depression; and that the only
significant difference between plaintiff's
mould and that engraved by Aquino for Aguas
is that, whereas plaintiff's mould turns out tiles
4 x 4 inches in size, defendant Aguas' mould
is made to fit a 4-1/4 x 4-1/4 inch tile. 9
The patent right of the private respondent expired on May 5,
1977. 10 The errors will be discuss only to determine the right of
said private respondent to damages.
The petitioner questioned the validity of the patent of the private
respondent, Conrado G. de Leon, on the ground that the
process, subject of said patent, is not an invention or discovery,
or an improvement of the old system of making tiles. It should
be noted that the private respondent does not claim to be the
discoverer or inventor of the old process of tile-making. He only
claims to have introduced an improvement of said process. In
fact, Letters Patent No. 658 was issued by the Philippine Patent
Office to the private respondent, Conrado G. de Leon, to protect
his rights as the inventor of "an alleged new and useful
improvement in the process of making mosaic pre-cast
tiles." 11Indeed, Section 7, Republic Act No. 165, as amended
provides: "Any invention of a new and useful machine,
manufactured product or substance, process, or an
improvement of the foregoing, shall be patentable.
The Court of Appeals found that the private respondent has
introduced an improvement in the process of tile-making
because:
... we find that plaintiff-appellee has
introduced an improvement in the process of
tile-making, which proceeds not merely from
mechanical skill, said improvement consisting
among other things, in the new critical depth,
lip width, easement and field of designs of the
new tiles. The improved lip width of appellee's
tiles ensures the durability of the finished
product preventing the flaking off of the
edges. The easement caused by the
inclination of the protrusions of the patented
moulds is for the purpose of facilitating the
removal of the newly processed tile from the
female die. Evidently, appellee's
improvement consists in the solution to the
old critical problem by making the protrusions
on his moulds attain an optimum height, so
that the engraving thereon would be deep
enough to produce tiles for sculptured and
decorative purposes, strong optimum
thickness of appellee's new tiles of only 1/8 of
an inch at the deepest easement (Exhs. "D"
and "D-1") is a most critical feature,
suggestive of discovery and inventiveness,
especially considering that, despite said

thinness, the freshly formed tile remains
strong enough for its intended purpose.
While it is true that the matter of easement, lip
width, depth, protrusions and depressions are
known to some sculptors, still, to be able to
produce a new and useful wall tile, by using
them all together, amounts to an invention.
More so, if the totality of all these features are
viewed in combination with the Ideal
composition of cement, sodium silicate and
screened fine sand.
By using his improved process, plaintiff has
succeeded in producing a new product - a
concrete sculptured tile which could be
utilized for walling and decorative purposes.
No proof was adduced to show that any tile of
the same kind had been produced by others
before appellee. Moreover, it appears that
appellee has been deriving considerable
profit from his manufacture and sale of such
tiles. This commercial success is evidence of
patentability (Walker on Patents, Dellers
Edition, Vol. I, p. 237). 12
The validily of the patent issued by the Philippines Patent Office
in favor of the private respondent and the question over the
inventiveness, novelty and usefulness of the improved process
therein specified and described are matters which are better
determined by the Philippines Patent Office. The technical staff
of the Philippines Patent Office, composed of experts in their
field, have, by the issuance of the patent in question, accepted
the thinness of the private respondent's new tiles as a discovery.
There is a presumption that the Philippines Patent Office has
correctly determined the patentability of the improvement by the
private respondent of the process in question.
Anent this matter, the Court of Appeals said:
Appellant has not adduced evidence
sufficient to overcome the above established
legal presumption of validity or to warrant
reversal of the findings of the lower court
relative to the validity of the patent in
question. In fact, as we have already pointed
out, the clear preponderance of evidence
bolsters said presumption of validity of
appellee's patent. There is no indication in the
records of this case and this Court is unaware
of any fact, which would tend to show that
concrete wall tiles similar to those produced
by appellee had ever been made by others
before he started manufacturing the same. In
fact, during the trial, appellant was challenged
by appellee to present a tile of the same kind
as those produced by the latter, from any
earlier source but, despite the fact that
appellant had every chance to do so, he could
not present any. There is, therefore, no
concrete proof that the improved process of
tile-making described in appellee's patent
was used by, or known to, others previous to
his discovery thereof. 13
The contention of the petitioner Aguas that the letters patent of
de Leon was actually a patent for the old and non-patentable
process of making mosaic pre-cast tiles is devoid of merit. De
Leon never claimed to have invented the process of tile-making.
The Claims and Specifications of Patent No. 658 show that
although some of the steps or parts of the old process of tile
making were described therein, there were novel and inventive
features mentioned in the process. Some of the novel features
of the private respondent's improvements are the following:
critical depth, with corresponding easement and lip width to such
6
degree as leaves the tile as thin as 1/8 of an inch at its thinnest
portion, Ideal composition of cement and fine river sand, among
other ingredients that makes possible the production of tough
and durable wall tiles, though thin and light; the engraving of
deep designs in such a way as to make the tiles decorative,
artistic and suitable for wall ornamentation, and the fact that the
tiles can be mass produced in commercial quantities and can be
conveniently stock-piled, handled and packed without any
intolerable incidence of breakages. 14
The petitioner also contends that the improvement of
respondent is not patentable because it is not new, useful and
inventive. This contention is without merit.
The records disclose that de Leon's process is an improvement
of the old process of tile making. The tiles produced from de
Leon's process are suitable for construction and ornamentation,
which previously had not been achieved by tiles made out of the
old process of tile making. De Leon's invention has therefore
brought about a new and useful kind of tile. The old type of tiles
were usually intended for floors although there is nothing to
prevent one from using them for walling purposes. These tiles
are neither artistic nor ornamental. They are heavy and massive.
The respondent's improvement is indeed inventive and goes
beyond the exercise of mechanical skill. He has introduced a
new kind of tile for a new purpose. He has improved the old
method of making tiles and pre-cast articles which were not
satisfactory because of an intolerable number of breakages,
especially if deep engravings are made on the tile. He has
overcome the problem of producing decorative tiles with deep
engraving, but with sufficient durability. 15 Durability inspite of
the thinness and lightness of the tile, is assured, provided that a
certain critical depth is maintained in relation to the dimensions
of the tile. 16
The petitioner also claims that changing the design from
embossed to engraved tiles is neither new nor inventive
because the Machuca Tile Factory and the Pomona Tile
Manufacturing Company have been manufacturing decorative
wall tiles that are embossed as well as engraved; 17 that these
tiles have also depth, lip width, easement and field of
designs; 18 and that the private respondent had copied some
designs of Pomona. 19
The Machuca tiles are different from that of the private
respondent. The designs are embossed and not engraved as
claimed by the petitioner. There may be depressions but these
depressions are too shallow to be considered engraved.
Besides, the Machuca tiles are heavy and massive.
There is no similarity between the Pomona Tiles and de Leon's
tiles. The Pomona tiles are made of ceramics. 20The process
involved in making cement tiles is different from ceramic tiles.
Cement tiles are made with the use of water, while in ceramics
fire is used. As regards the allegation of the petitioner that the
private respondent copied some designs of Pomona, suffice it
to say that what is in issue here is the process involved in tile
making and not the design.
In view of the foregoing, this Court finds that Patent No. 658 was
legally issued, the process and/or improvement being
patentable.
Both the trial court and the Court of Appeals found as a fact that
the petitioner Domiciano A. Aguas did infringe de Leon's patent.
There is no showing that this case falls under one of the
exceptions when this Court may overrule the findings of fact of
the Court of Appeals. The only issue then to be resolved is the
amount of damages that should be paid by Aguas.
In its decision the Court of Appeals affirmed the amount of
damages awarded by the lower court with the modification that
the respondent is only entitled to P3,000.00 moral damages. 21
The lower court awarded the following damages: 22
a) P10,020.99 by way of actual damages;
b) P50,000.00 by way of moral damages;
c) P5,000.00 by way of exemplary damages;

d) P5,000.00 by way of attomey's fees and
e) Costs of suit
because:
An examination of the books of defendant
Aguas made before a Commissioner reveals
that during the period that Aguas was
manufacturing and selling tiles similar to
plaintiff's, he made a gross income of
P3,340.33, which can be safely be considered
the amount by which he enriched himself
when he infringed plaintiff's patent. Under
Sec. 42 of the Patent Law any patentee
whose rights have been infringed is entitled to
damages which, according to the
circumstances of the case may be in a sum
above the amount found as actual damages
sustained provided the award does not
exceed three times the amount of such actual
damages. Considering the wantonness of the
infringement committed by the defendants
who knew all the time about the existence of
plaintiff's patent, the Court feels there is
reason to grant plaintiff maximum damages in
the sum of P10,020.99. And in order to
discourage patent infringements and to give
more teeth to the provisions of the patent law
thus promoting a stronger public policy
committed to afford greater incentives and
protection to inventors, the Court hereby
awards plaintiff exemplary damages in the
sum of P5,000.00 to be paid jointly and
severally by defendants. Considering the
status of plaintiff as a reputable businessman,
and owner of the likewise reputed House of
Pre-Cast, he is entitled to an award of moral
damages in the sum of P50,000.00. 23
In reducing the amount of moral damages the Court of Appeals
said:
As regards the question of moral damages it
has been shown that as a result of the
unlawful acts of infringment committed by
defendants, plaintiff was unstandably very
sad; he worried and became nervous and lost
concentration on his work in connection with
his tile business (pp. 28, 30, t.s.n., Feb. 28,
1964). In addition, plaintiff's character and
reputation have been unnecessarily put in
question because defendants, by their acts of
infringement have created a doubt or
suspicion in the public mind concerning the
truth and honesty of plaintiff's advertisements
and public announcements of his valid patent.
Necessarily, said acts of defendants have
caused plaintiff considerable mental
suffering, considering especially, the fact that
he staked everything on his pre-cast tile
business (p. 36, t.s.n., Id.) The wantonness
and evident bad faith characterizing
defendants' prejudicial acts against plaintiff
justify the assessment of moral damages in
plaintiff's favor, though we do not believe the
amount of P50,000.00 awarded by the lower
court is warranted by the circumstances. We
feel that said amount should be reduced to
P3,000.00 by way of compensating appellee
for his moral suffering. "Willful injury to
property may be a legal ground for awarding
moral damages if the court should find that,
7
under the circumstances such damages are
justly due" (Art. 2219 NCC).
There is no reason to reduce the amount of damages and
attorneys fees awarded by the trial court as modified by the
Court of Appeals.
WHEREFORE, the decision of the Court of Appeals in CA G.R.
No. 37824-R appealed from is hereby affirmed, without
pronouncement as to costs.
SO ORDERED.
G.R. L-45101 November 28, 1986
ROSARIO C. MAGUAN (formerly ROSARIO C.
TAN), petitioner,
vs.
THE HONORABLE COURT OF APPEALS and SUSANA
LUCHAN, respondents.
Ambrosio Padilla Law Offices for petitioner.
PARAS, J.:p
Submitted on December 9, 1977 for Our decision is this
petition for review on certiorari of the two Resolutions of
the Court of Appeals, the first dated July 6, 1976, setting
aside its Decision of February 16, 1976 in CA-G.R. No. SP-
04706, titled "SUSANA LUCHAN v. Hon. HONRADO, et
al." wherein it ruled for the dismissal of the petition for lack
of merit and at the same time nullifying the writ of
preliminary injunction it had previously issued; and the
second, dated November 4, 1976, denying the motion for
reconsideration of the first resolution above-mentioned.
Petitioner is doing business under the firm name and style
of SWAN MANUFACTURING" while private respondent is
likewise doing business under the firm name and style of
"SUSANA LUCHAN POWDER PUFF MANUFACTURING."
It is undisputed that petitioner is a patent holder of powder
puff namely:
1. UM-423 (extended
and/or renewed under
Extension No. UM-109 for
a period of 5 years from
October 6, 1971)
2. UM-450 (extended
and/or renewed under
Extension No. UM110 for
a period of 5 years from
January 26, 1972)
3. UM 1184, for a period
of 5years fromApril 5,
1974.(Petition, Rollo, pp.
6-7).
In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86),
petitioner informed private respondent that the powder
puffs the latter is manufacturing and selling to various
enterprises particularly those in the cosmetics industry,
resemble Identical or substantially Identical powder puffs
of which the former is a patent holder under Registration
Certification Nos. Extension UM-109, Extension UM-110 and
Utility Model No. 1184; petitioner explained such
production and sale constitute infringement of said patents
and therefore its immediate discontinuance is demanded,
otherwise it will be compelled to take judicial action. (Rollo,
pp. 7-8).
Private respondent replied stating that her products are
different and countered that petitioner's patents are void
because the utility models applied for were not new and
patentable and the person to whom the patents were issued
was not the true and actual author nor were her rights
derived from such author. (Taken from allegations in the
Answer, par. 4, Rollo, p. 93). And on July 25, 1974, private
respondent assailed the validity of the patents involved and
filed with the Philippine Patent Office petitions for

cancellation of (1) Utility Model Letter Patent Extension No.
UM-109 (Inter Partes Case No. 838, Susana Luchan v.
Rosario C. Tan), (2) Utility Model Letters Patent No. UM-1184
(Inter Partes Case No. 839, Susana Luchan v. Rosario C.
Tan), (3) Utility Model Letters Patent Extension No. UM-110
(Inter Partes Case No. 840, Susana Luchan v. Rosario C.
Tan. (Taken from allegations in the Answer, par. 10, Rollo,
pp. 94-95).
In view thereof, petitioner, on August 24, 1974, filed a
complaint for damages with injunction and preliminary
injunction against private respondent with the then Court
of First Instance of Rizal, Pasig Branch, docketed as Civil
Case No. 19908, for infringing the aforesaid letters patent,
and prayed, among others, that a writ of preliminary
injunction be immediately issued (Complaint, Rollo, p. 90).
In her answer, private respondent alleged that the products
she is manufacturing and offering for sale are not Identical,
or even only substantially Identical to the products covered
by petitioner's patents and, by way of affirmative defenses,
further alleged that petitioner's patents in question are void
on the following grounds:
(1) at the time of filing of
application for the
patents involved, the
utility models applied for
were not new and
patentable under Sec. 55
of R.A. 165, as amended
by R.A. 864; and
(2) the person to whom
the patents were issued
was not the true and
actual author of the utility
models applied for, and
neither did she derive her
rights from any true and
actual author of these
utility models.
for the following reasons:
(a) since years prior to
the filing of applications
for the patents involved,
powder puffs of the kind
applied for were then
already existing and
publicly being sold in the
market; both in the
Philippines and abroad;
and
(b) applicant's claims in
her applications, of
"construction" or
process of
manufacturing the utility
models applied for, with
respect to UM-423 and
UM-450, were but a
complicated and
impractical version of an
old, simple one which
has been well known to
the cosmetics industry
since years previous to
her filing of applications,
and which belonged to
no one except to the
general public; and with
respect to UM1184; her
claim in her application
8
of a unitary powder puff,
was but an limitation of a
product well known to
the cosmetics industry
since years previous to
her firing of application,
and which belonged to
no one except to the
general public; (Answer,
Rollo, pp. 93-94).
On September 18, 1974, the trial court issued an Order
(Annex "K", Rollo, p. 125) granting the preliminary
injunction prayed for by petitioner. Consequently, the
corresponding writ was subsequently issued (Annex "K-1",
Rollo, p. 131) enjoining the herein private respondent (then
defendant) and all other persons employed by her, her
agents, servants and employees from directly or indirectly
manufacturing, making or causing to be made, selling or
causing to be sold, or using or causing to be used in
accordance with, or embodying the utility models of the
Philippine Patent Office Utility Model Letters Patent Nos.
423 (Extension No. UM-109), No. 450 (Extension No. UM-
110), and Utility Model No. 1184 or from infringement upon
or violating said letters patent in any way whatsoever
(Annex " K-1 ", Rollo, p. 131).
Private respondent questioned the propriety of the trial
court's issuance of the Writ of Preliminary Injunction
arguing that since there is still a pending cancellation
proceedings before the Philippine Patent Office concerning
petitioner's patents, such cannot be the basis for
preliminary injunction (Motion for Reconsideration, Rollo,
p. 132).
In an Order dated September 11, 1975, the trial court denied
private respondent's motion for reconsideration (Annex
"N", Rollo, p. 142).
In challenging these Orders private respondent filed a
petition for certiorari with the respondent court on
September 29, 1975 (Annex "D", Rollo, pp. 148-171)
reiterating among other things the invalidity of petitioner's
patents and prayed that the trial court be restrained from
enforcing or continuing to enforce the following:
(1) Order dated
September 18, 1974,
granting the preliminary
injunction;
(2) Writ of preliminary
injunction dated
September 18, 1974; and
(3) Order dated
September 11, 1974
denying petitioner's
motion petition for
reconsideration.
On October 15, 1975, the Writ of Preliminary Injunction was
issued by the respondent Court of Appeals as follows:
NOW, THEREFORE, you, respondents,
and/or any person/persons acting on your
stead, are hereby ENJOINED to RESTRAIN
from enforcing or continuing to enforce,
the proceedings complained of in the
petition to wit: 1) Order dated September
18, 1974, granting the preliminary
injunction; 2) Writ of Preliminary
Injunction dated September 18, 1974; and
Order dated September 11, 1975, denying
petitioner's motion for reconsideration, all
issued in connection with Civil Case No.
19908, UNTIL FURTHER ORDERS FROM
THIS COURT. (Annex "P", Rollo, p. 1.73)

On February 16, 1976, respondent court promulgated a
decision the dispositive portion of which reads:
WHEREFORE, finding no merit in the
herein petition, the same is hereby
dismissed and the preliminary injunction
previously issued by this Court is hereby
set aside, with costs.
SO ORDERED. (CA Decision, Rollo, p.
189).
ln said decision respondent court stated that in disposing
of the petition it tackled only the issue of whether the
court a quo acted with grave abuse of discretion in issuing
the challenged orders. It made clear the question of whether
the patents have been infringed or not was not determined
considering the court a quohas yet to decide the case on
the merits (Ibid., p. 186).
Feeling aggrieved, private respondent moved to reconsider
the afore-mentioned Decision based on the following
grounds:
I Comment (Rollo, p. 290) which was filed on December 16,
THAT THIS HONORABLE
COURT ERRED IN NOT
APPRECIATING THE
EXISTENCE OF A FAIR
QUESTION OF
INVALIDITY OF PRIVATE
RESPONDENT'S
PATENTS.
II
THAT THIS HONORABLE
COURT ERRED IN NOT
REJECTING THE
THEORY OF
RESPONDENT JUDGE
THAT HE HAS NO
JURISDICTION TO
INVALIDATE THE
PATENTS UPON
GROUND OF LACK OF
NOVELTY OF THE
PRODUCTS PATENTED.
(Motion for
Reconsideration, Rollo,
p. 190).
Reviewing on reconsideration, respondent court gave
weight to private respondent's allegation that the latter's
products are not identical or even only substantially
identical to the products covered by petitioner's patents.
Said court noticed that contrary to the lower courts position
that the court a quo had no jurisdiction to determine the
question of invalidity of the patents, Section 45 and 46 of
the Patent Law allow the court to make a finding on the
validity or invalidity of patents and in the event there exists
a fair question of its invalidity, the situation calls for a denial
of the writ of preliminary injunction pending the evaluation
of the evidence presented (Rollo, pp. 218-226). Thus,
finding the lower court's position to have been opposed to
Patent Law, respondent court considered it a grave abuse
of discretion when the court a quo issued the writ being
questioned without looking into the defenses alleged by
herein private respondent. Further, it considered the
remedy of appeal, under the circumstances, to be
inadequate.
Thus, on July 6, 1976, respondent court made a complete
turnabout from its original decision and promulgated a
Resolution, the dispositive portion of which reads:
WHEREFORE, our decision is hereby set
aside. The writ of certiorari is ordered
issued. Accordingly, the challenged
9
orders, Exhibit H and H-1 and the order
denying the motion for reconsideration
(Annex "K", Petition), are hereby set aside.
The writ of preliminary injunction
previously ordered by this Court and
ordered lifted by the Decision now being
set aside is hereby reinstated and made
permanent. Without pronouncement as to
costs.
SO ORDERED. (CA Resolution, Rollo, p.
226).
In a Resolution dated November 4, 1976, respondent court,
not persuaded by the grounds embodied in the motion for
reconsideration filed by herein petitioner (Annex "V ",
Rollo, p. 227), denied the same for lack of merit, thereby
maintaining the same stand it took in its July 6, 1976
Resolution (Rollo, p. 281). Hence, this petition.
On December 3, 1976, without giving due course to the
petition, this Court required respondent to file her
1976 (Rollo, pp. 291-316). Thereafter, petitioner filed her
Reply (Rollo, p. 323) and on May 30, 1977, the petition was
given due course (Rollo, p. 345). Petitioner filed her brief on
July 14, 1977 (Rollo, p. 351) while private respondent filed
her brief on August 25, 1977 (Rollo, p. 359). Thereafter,
petitioner having failed to file reply brief, the Court resolved
to declare the case submitted for decision on December 9,
1977 (Rollo, p. 359).
The assignment of errors raised by the petitioner in this
case (Rollo, pp. 15-16) may be reduced to three main
issues:
(1) Whether or not in an
action for infringement
the Court a quo had
jurisdiction to determine
the invalidity of the
patents at issue which
invalidity was still
pending consideration in
the patent office.
(2) Whether or not the
Court a quo committed
grave abuse of discretion
in the issuance of a writ
of preliminary injunction.
(3) Whether or not
certiorari is the proper
remedy.
The first issue has been laid to rest in a number of cases
where the Court ruled that "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."
(Vargas v. F.M. Yaptico & Co. 40 Phil. 199 [1919]; Vargas v.
Chua, 57 Phil. 790-791 [1933]; Frank and Gohn v. Kosuyana
59 Phil. 207 [1933]).
Under the present Patent Law, there is even less reason to
doubt that the trial court has jurisdiction to declare the
patents in question invalid. A patentee shall have the
exclusive right to make, use and sell the patented article or
product and the making, using, or selling by any person
without the authorization of the patentee constitutes
infringement of the patent (Sec. 37, R.A. 165). Any patentee
whose rights have been infringed upon may bring an action
before the proper CFI now (RTC) and to secure an
injunction for the protection of his rights (Sec. 42, R.A. 165).
Defenses in an action for infringement are provided for in
Section 45 of the same law which in fact were availed of by
private respondent in this case. Then, as correctly stated by
respondent Court of Appeals, this conclusion is reinforced

by Sec. 46 of the same law which provides that if the Court
shall find the patent or any claim thereof invalid, the
Director shall on certification of the final judgment ... issue
an order cancelling the patent or the claims found invalid
and shall publish a notice thereof in the Official Gazette."
Upon such certification, it is ministerial on the part of the
patent office to execute the judgment. (Rollo, pp. 221-222).
II.
The burden of proof to substantiate a charge of
infringement is with the plaintiff. But where the plaintiff
introduces the patent in evidence, and the same is in due
form, there is created a prima facie presumption of its
correctness and validity. The decision of the Commissioner
(now Director) of Patent in granting the patent is presumed
to be correct. The burden of going forward with the
evidence (burden of evidence) then shifts to the defendant
to overcome by competent evidence this legal
presumption.
The question then in the instant case is whether or not the
evidence introduced by private respondent herein is
sufficient to overcome said presumption.
After a careful review of the evidence consisting of 64
exhibits and oral testimonies of five witnesses presented
by private respondents before the Court of First Instance
before the Order of preliminary injunction was issued as
well as those presented by the petitioner, respondent Court
of Appeals was satisfied that there is a prima facie showing
of a fair question of invalidity of petitioner's patents on the
ground of lack of novelty. As pointed out by said appellate
court said evidence appeared not to have been considered
at all by the court a quo for alleged lack of jurisdiction, on
the mistaken notion that such question in within the
exclusive jurisdiction of the patent office.
It has been repeatedly held that an invention must possess
the essential elements of novelty , originality and
precedence and for the patentee to be entitled to protection,
the invention must be new to the world. Accordingly, a
single instance of public use of the invention by a patentee
for more than two years (now for more than one year only
under Sec. 9 of the Patent Law) before the date of his
application for his patent, will be fatal to, the validity of the
patent when issued. (Frank, et al. v. Kosuyama Vargas v.
F.M. Yaptico & Co. and Vargas v. Chua, et al., supra).
The law provides:
SEC. 9. Invention not considered new or
patentable. An invention shall not be
considered new or capable of being
patented if it was known or used by others
in the Philippines before the invention
thereof by the inventor named in an
application for patent for the invention; or
if it was patented or described in any
printed publication in the Philippines or
any foreign country more than one year
before the application for a patent
therefor; or if it had been in public use or
on sale in the Philippines for more than
one year before the application for a
patent therefor; or if it is the subject matter
of a validity issued patent in the
Philippines granted on an application filed
before the filing of the application for
patent therefor.
Thus, more specifically, under American Law from which
our Patent Law was derived (Vargas v. F.M. Yaptico &
Co. supra) it is generally held that in patent cases a
preliminary injunction will not issue for patent infringement
unless the validity of the patent is clear and beyond
question. The issuance of letters patent, standing alone, is
10
not sufficient to support such drastic relief (8 Deller's
Walker on Patents p. 406). In cases of infringement of patent
no preliminary injunction will be granted unless the patent
is valid and infringed beyond question and the record
conclusively proves the defense is sham. (Ibid., p. 402)
In the same manner, under our jurisprudence, as a general
rule because of the injurious consequences a writ of
injunction may bring, the right to the relief demanded must
be clear and unmistakable. (Sangki v. Comelec, 21 SCRA
1392; December 26, 1967) and the dissolution of the writ is
proper where applicant has doubtful title to the disputed
property. (Ramos v. C.A., 95 SCRA 359).
III.
It will be noted that the validity of petitioner's patents is in
question for want of novelty. Private respondent contends
that powder puffs Identical in appearance with that covered
by petitioner's patents existed and were publicly known and
used as early as 1963 long before petitioner was issued the
patents in question. (List of Exhibits, Rollo, pp. 194-199). As
correctly observed by respondent Court of Appeals, "since
sufficient proofs have been introduced in evidence
showing a fair question of the invalidity of the patents
issued for such models, it is but right that the evidence be
looked into, evaluated and determined on the merits so that
the matter of whether the patents issued were in fact valid
or not may be resolved." (Rollo, pp. 286-287).
All these notwithstanding, the trial court nonetheless
issued the writ of preliminary injunction which under the
circumstances should be denied.
For failure to determine first the validity of the patents
before aforesaid issuance of the writ, the trial court failed
to satisfy the two requisites necessary if an injunction is to
issue, namely: the existence of the right to be protected and
the violation of said right. (Buayan Cattle Co., Inc. v.
Quintillan, 128 SCRA 276).
Under the above established principles, it appears obvious
that the trial court committed a grave abuse of discretion
which makes certiorari the appropriate remedy.
As found by respondent Court of Appeals, the injunctive
order of the trial court is of so general a tenor that petitioner
may be totally barred from the sale of any kind of powder
puff. Under the circumstances, respondent appellate court
is of the view that ordinary appeal is obviously inadequate.
(Rollo, p. 288). A parallel was drawn from a decision of the
Supreme Court in the case of Sanchez v. Hon. Court of
Appeals, 69 SCRA 328 [1976] where the First Division of the
Supreme Court ruled that "The prerogative writ of certiorari
may be applied for by proper petition notwithstanding the
existence of the regular remedy of an appeal in due cause
when among other reasons, the broader interests of justice
so require or an ordinary appeal is not an adequate
remedy."
Private respondent maintains the position that the
resolutions sought to be appealed from had long become
final and executory for failure of Hon. Reynaldo P. Honrado,
the trial court judge, to appeal by certiorari from the
resolutions of respondent Court of Appeals. (Rollo, pp. 291-
292).
Such contention is untenable.
There is no dispute that petitioner has seasonably
petitioned. On the other hand, it is elementary that the trial
judge is a mere nominal party as clearly provided in Section
5, Rule 65 of the Revised Rules of Court where it shall be
the duty of such person or persons interested in sustaining
the proceedings in court, "to appear and defend, both in his
or their own behalf and in behalf of the court or judge
affected by the proceedings."
Relative thereto "the judge whose order is under attack is
merely a nominal party; wherefore, a judge in his official

capacity should not be made to appear as a party seeking
reversal of a decision that is unfavorable to the action taken
by him." (Hon. Alcasid v. Samson, 102 Phil. 735-736; Tarona
v. Sayo, 67 SCRA 508, 524; Lim Se v. Argel, 70 SCRA 378).
As to petitioner's claim of prescription, private
respondent's contention that such refers to the filing of
petitions for cancellation in the Patent Office under Sec. 28
of the Patent Law and not to a defense against an action for
infringement under Sec. 45 thereof which may be raised
anytime, is evident under aforesaid law.
PREMISES CONSIDERED, the assailed resolutions of the
Court of Appeals are hereby AFFIRMED.
SO ORDERED.
G.R. No. 97343 September 13, 1993
PASCUAL GODINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SPECIAL
FOURTH DIVISION and SV-AGRO ENTERPRISES,
INC., respondents.
Jesus S. Anonat for petitioner.
Arturo M. Alinio for private respondent.
ROMERO, J.:
Through this petition for review in certiorari of a decision of the
Court of Appeals affirming the decision of the trial court,
petitioner Pascual Godines seeks to reverse the adverse
decision of the Court a quo that he was liable for infringement of
patent and unfair competition. The dispositive portion of the
assailed decision is hereby quoted to wit:
WHEREFORE, with the elimination of the
award for attorney's fees, the judgment
appealed from is hereby AFFIRMED, with
costs against appellant.1
The patent involved in this case is Letters Patent No. UM-2236
issued by the Philippine Patent Office to one Magdalena S.
Villaruz on July 15, 1976. It covers a utility model for a hand
tractor or power tiller, the main components of which are the
following: "(1) a vacuumatic house float; (2) a harrow with
adjustable operating handle; (3) a pair of paddy wheels; (4) a
protective water covering for the engine main drive; (5) a
transmission case; (6) an operating handle; (7) an engine
foundation on the top midportion of the vacuumatic housing float
to which the main engine drive is detachedly installed; (8) a
frontal frame extension above the quarter circularly shaped
water covering hold (sic) in place the transmission case; (9) a V-
belt connection to the engine main drive with transmission gear
through the pulley, and (10) an idler pulley installed on the
engine foundation."2 The patented hand tractor works in the
following manner: "the engine drives the transmission gear thru
the V-belt, a driven pulley and a transmission shaft. The engine
drives the transmission gear by tensioning of the V-belt which is
controlled by the idler pulley. The V-belt drives the pulley
attached to the transmission gear which in turn drives the shaft
where the paddy wheels are attached. The operator handles the
hand tractor through a handle which is inclined upwardly and
supported by a pair of substanding pipes and reinforced by a U-
shaped G.I. pipe at the V-shaped end."3
The above mentioned patent was acquired by SV-Agro
Industries Enterprises, Inc., herein private respondent, from
Magdalena Villaruz, its chairman and president, by virtue of a
Deed of Assignment executed by the latter in its favor. On
October 31, 1979, SV-Agro Industries caused the publication of
the patent in Bulletin Today, a newspaper of general circulation.
In accordance with the patent, private respondent manufactured
and sold the patented power tillers with the patent imprinted on
them. In 1979, SV-Agro Industries suffered a decline of more
than 50% in sales in its Molave, Zamboanga del Sur branch.
Upon investigation, it discovered that power tillers similar to
those patented by private respondent were being manufactured
and sold by petitioner herein. Consequently, private respondent
11
notified Pascual Godines about the existing patent and
demanded that the latter stop selling and manufacturing similar
power tillers. Upon petitioner's failure to comply with the
demand, SV-Agro Industries filed before the Regional Trial
Court a complaint for infringement of patent and unfair
competition.
After trial, the court held Pascual Godines liable for infringement
of patent and unfair competition. The dispositive portion of the
decision reads as follows:
WHEREFORE, premises considered,
JUDGMENT is hereby rendered in favor of
the plaintiff SV-Agro Industries Enterprises,
Inc., and against defendant Pascual Godines:
1. Declaring the writ of preliminary injunction
issued by this Court against defendant as
permanent;
2. Ordering defendant Pascual Godines to
pay plaintiff the sum of Fifty Thousand Pesos
(P50,000.00) as damages to its business
reputation and goodwill, plus the further sum
of Eighty Thousand Pesos (P80,000.00) for
unrealized profits during the period defendant
was manufacturing and selling copied or
imitation floating power tiller;
3. Ordering the defendant to pay the plaintiff,
the further sum of Eight Thousand Pesos
(P8,000.00) as reimbursement of attorney's
fees and other expenses of litigation; and to
pay the costs of the suit.
SO ORDERED.4
The decision was affirmed by the appellate court.
Thereafter, this petition was filed. Petitioner maintains the
defenses which he raised before the trial and appellate courts,
to wit: that he was not engaged in the manufacture and sale of
the power tillers as he made them only upon the special order
of his customers who gave their own specifications; hence, he
could not be liable for infringement of patent and unfair
competition; and that those made by him were different from
those being manufactured and sold by private respondent.
We find no merit in his arguments. The question of whether
petitioner was manufacturing and selling power tillers is a
question of fact better addressed to the lower courts. In
dismissing the first argument of petitioner herein, the Court of
Appeals quoted the findings of the court, to wit:
It is the contention of defendant that he did not
manufacture or make imitations or copies of
plaintiff's turtle power tiller as what he merely
did was to fabricate his floating power tiller
upon specifications and designs of those who
ordered them. However, this contention
appears untenable in the light of the following
circumstances: 1) he admits in his Answer
that he has been manufacturing power tillers
or hand tractors, selling and distributing them
long before plaintiff started selling its turtle
power tiller in Zamboanga del Sur and
Misamis Occidental, meaning that defendant
is principally a manufacturer of power tillers,
not upon specification and design of buyers,
but upon his own specification and design; 2)
it would be unbelievable that defendant would
fabricate power tillers similar to the turtle
power tillers of plaintiff upon specifications of
buyers without requiring a job order where the
specification and designs of those ordered
are specified. No document was (sic) ever
been presented showing such job orders, and
it is rather unusual for defendant to
manufacture something without the

specification and designs, considering that he
is an engineer by profession and proprietor of
the Ozamis Engineering shop. On the other
hand, it is also highly unusual for buyers to
order the fabrication of a power tiller or hand
tractor and allow defendant to manufacture
them merely based on their verbal
instructions. This is contrary to the usual
business and manufacturing practice. This is
not only time consuming, but costly because
it involves a trial and error method, repeat
jobs and material wastage. Defendant
judicially admitted two (2) units of the turtle
power tiller sold by him to Policarpio
Berondo.5
Of general acceptance is the rule imbedded in our jurisprudence
that ". . . the jurisdiction of the Supreme Court in cases brought
to it from the Court of Appeals in a petition for certiorari under
Rule 45 of the Rules of Court is limited to the review of errors of
law, and that said appellate court's findings of fact are
conclusive upon this Court."6
The fact that petitioner herein manufactured and sold power
tillers without patentee's authority has been established by the
courts despite petitioner's claims to the contrary.
The question now arises: Did petitioner's product infringe upon
the patent of private respondent?
Tests have been established to determine infringement. These
are (a) literal infringement; and (b) the doctrine of
equivalents.7 In using literal infringement as a test, ". . . resort
must be had, in the first instance, to the words of the claim. If
accused matter clearly falls within the claim, infringement is
made out and that is the end of it."8 To determine whether the
particular item falls within the literal meaning of the patent
claims, the court must juxtapose the claims of the patent and the
accused product within the overall context of the claims and
specifications, to determine whether there is exact identity of all
material elements.9
The trial court made the following observation:
Samples of the defendant's floating power
tiller have been produced and inspected by
the court and compared with that of the turtle
power tiller of the plaintiff (see Exhibits H to
H-28). In appearance and form, both the
floating power tillers of the defendant and the
turtle power tiller of the plaintiff are virtually
the same. Defendant admitted to the Court
that two (2) of the power inspected on March
12, 1984, were manufactured and sold by him
(see TSN, March 12, 1984, p. 7). The three
power tillers were placed alongside with each
other. At the center was the turtle power tiller
of plaintiff, and on both sides thereof were the
floating power tillers of defendant (Exhibits H
to H-2). Witness Rodrigo took photographs of
the same power tillers (front, side, top and
back views for purposes of comparison (see
Exhibits H-4 to H-28). Viewed from any
perspective or angle, the power tiller of the
defendant is identical and similar to that of the
turtle power tiller of plaintiff in form,
configuration, design and appearance. The
parts or components thereof are virtually the
same. Both have the circularly-shaped
vacuumatic housing float, a paddy in front, a
protective water covering, a transmission box
housing the transmission gears, a handle
which is V-shaped and inclined upwardly,
attached to the side of the vacuumatic
housing float and supported by the
12
upstanding G.I. pipes and an engine base at
the top midportion of the vacuumatic housing
float to which the engine drive may be
attached. In operation, the floating power tiller
of the defendant operates also in similar
manner as the turtle power tiller of plaintiff.
This was admitted by the defendant himself in
court that they are operating on the same
principles. (TSN, August 19, 1987, p. 13) 10
Moreover, it is also observed that petitioner also called his power
tiller as a floating power tiller. The patent issued by the Patent
Office referred to a "farm implement but more particularly to a
turtle hand tractor having a vacuumatic housing float on which
the engine drive is held in place, the operating handle, the
harrow housing with its operating handle and the paddy wheel
protective covering." 11 It appears from the foregoing
observation of the trial court that these claims of the patent and
the features of the patented utility model were copied by
petitioner. We are compelled to arrive at no other conclusion but
that there was infringement.
Petitioner's argument that his power tillers were different from
private respondent's is that of a drowning man clutching at
straws.
Recognizing that the logical fallback position of one in the place
of defendant is to aver that his product is different from the
patented one, courts have adopted the doctrine of equivalents
which recognizes that minor modifications in a patented
invention are sufficient to put the item beyond the scope of literal
infringement. 12 Thus, according to this doctrine, "(a)n
infringement also occurs when a device appropriates a prior
invention by incorporating its innovative concept and, albeit with
some modification and change, performs substantially the same
function in substantially the same way to achieve substantially
the same result." 13 The reason for the doctrine of equivalents is
that to permit the imitation of a patented invention which does
not copy any literal detail would be to convert the protection of
the patent grant into a hollow and useless thing. Such imitation
would leave room for indeed encourage the unscrupulous
copyist to make unimportant and insubstantial changes and
substitutions in the patent which, though adding nothing, would
be enough to take the copied matter outside the claim, and
hence outside the reach of the law. 14
In this case, the trial court observed:
Defendant's witness Eduardo Caete,
employed for 11 years as welder of the
Ozamis Engineering, and therefore actually
involved in the making of the floating power
tillers of defendant tried to explain the
difference between the floating power tillers
made by the defendant. But a careful
examination between the two power tillers will
show that they will operate on the same
fundamental principles. And, according to
establish jurisprudence, in infringement of
patent, similarities or differences are to be
determined, not by the names of things, but in
the light of what elements do, and substantial,
rather than technical, identity in the test. More
specifically, it is necessary and sufficient to
constitute equivalency that the same function
can be performed in substantially the same
way or manner, or by the same or
substantially the same, principle or mode of
operation; but where these tests are satisfied,
mere differences of form or name are
immaterial. . . . 15
It also stated:
To establish an infringement, it is not
essential to show that the defendant adopted

the device or process in every particular;
Proof of an adoption of the substance of the
thing will be sufficient. "In one sense," said
Justice Brown, "it may be said that no device
can be adjudged an infringement that does
not substantially correspond with the patent.
But another construction, which would limit
these words to exact mechanism described in
the patent, would be so obviously unjust that
no court could be expected to adopt it. . . .
The law will protect a patentee against
imitation of his patent by other forms and
proportions. If two devices do the same work
in substantially the same way, and
accomplish substantially the same result, they
are the same, even though they differ in
name, form, or shape. 16
We pronounce petitioner liable for infringement in accordance
with Section 37 of Republic Act No. 165, as amended,
providing, inter alia:
Sec. 37. Right of Patentees. A patentee
shall have the exclusive right to make, use
and sell the patented machine, article or
product, and to use the patented process for
the purpose of industry or commerce,
throughout the territory of the Philippines for
the terms of the patent; and such making,
using, or selling by any person without the
authorization of the Patentee constitutes
infringement of the patent. (Emphasis ours)
As far as the issue regarding unfair competition is concerned,
suffice it to say that Republic Act No. 166, as amended,
provides, inter alia:
Sec. 29. Unfair competition, rights and
remedies. . . .
xxx xxx xxx
In particular, and without in any way limiting
the scope of unfair competition, the following
shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall
give them the general appearance of goods of
another manufacturer or dealer, either as to
the goods themselves or in the wrapping of
the packages in which they are contained, or
the devices or words thereon, or in any other
feature of their appearance, which would be
likely to influence purchasers that the goods
offered are those of a manufacturer or dealer
other than the actual manufacturer or dealer,
or who otherwise clothes the goods with such
appearance as shall deceive the public and
defraud another of his legitimate trade. . . .
xxx xxx xxx
Considering the foregoing, we find no reversible error in the
decision of the Court of Appeals affirming with modification the
decision of the trial court.
WHEREFORE, premises considered, the decision of the Court
of Appeals is hereby AFFIRMED and this petition DENIED for
lack of merit.
FIRST DIVISION
[G.R. No. 113407. July 12, 2000]
LOTHAR SCHUARTZ, FRIEDEL VERDERBERG, UDOLF
KUEHNE, DIETER FISCHER, JOHN BERNARD
WATKINS, HARRY GREAVES, CHEN WOO CHIN,
YOSHIMI IWASAKI, FABIO CARLI, MORTIMER
THOMPSON, MALCOLM JOHN LAW, MICHIBAZU
OCHI, KENJI SHIGEMATSU, ENI SHINOZAKI,
ROBERT CABI-AKMAN, ARTHUR SPRENGER,
13
REMY SIMOND and HEINRICH EVBERGGER,
petitioners, vs. THE HONORABLE COURT OF
APPEALS (SPECIAL FIFTH DIVISION) and THE
BUREAU OF PATENTS, TRADEMARKS AND
TECHNOLOGY TRANSFER, respondents.
RESOLUTION
PARDO, J.:
Petitioners appeal via certiorari from the decision[1]of the Court
of Appeals dismissing their appeal from the resolution of the
Director of Patents that denied with finality their petition for
revival of patent applications.
On different dates, petitioners applied to the Bureau of
Patents, Trademarks and Technology Transfer for registration
of patents. They hired the law firm Siguion Reyna, Montecillo
and Ongsiako to process their patent applications in the
Philippines, respectively identified as follows:
Applicant Serial No.
(1) Michibazu Ochi, Kenji Shigematsu and 23354[2]
Eni Shinozaki- Issuance of letters patent
for Hackling Drum Room or Chamber
at the Self-Feeding Equipment for
Threshing of Upper Hackling System
(2) Robert Cabi-Akman, Arthur Sprenger 29630[3]
and Remy Simond- Issuance of letters
patent for Colour Value Measurement
(3) Heinrich Evbergger- Issuance of letters 29898[4]
patent for Tool for Moulding the Top Past
of a Plastic Container
(4) Mortimer Thompson- Issuance of 30112[5]
letters patent for Tamper Evident Closures
and Packages
(5) Yoshimi Iwasaki- Issuance of letters 30548[6]
patent for Method Generation for Hot Gas
by Incinerators
(6 )John Bernard Watkins, Harry Greaves 30819[7]
and Chen Woo Chin- Issuance of letters
patent for Preservation Composition
(7) Fabio Carli- Issuance of letters patent 31968[8]
for Pharmaceutical Compositions
(8) Lothar Schuartz, Friedel Verderberg, 31974[9]
Rudolf Kuehne, and Dieter Fischer- Issuance
of letters patent for Process for Producing
Copper-Laminated Base Material for Printed
Circuit Boards
(9) Malcolm John Law- Issuance of letters 32050[10]
patent for Electrodeposition of Chromium and
Chromium Bearing Alloys. [11]
Petitioners patent applications lacked certain requirements
and the Bureau informed the law firm about it, through
correspondences called Office Actions. As petitioners law firm
did not respond to these office actions within the prescribed
time, notices of abandonment were sent on the following dates:
Serial Nos. Date of Office Action Date of Abandonment
(1) 23354 March 20, 1987 July 21, 1987
(2) 29630 June 18, 1986 October 21, 1986
(3) 29898 June 11, 1987 June 22, 1987
(4) 30112 June 3, 1987 August 6, 1987
(5) 30548 June 10, 1987 August 18, 1987
(6) 30819 January 28, 1987 July 28, 1987
(7) 31968 January 14, 1987 July 15, 1987
(8) 31974 July 23, 1987 September 24, 1987
(9) 32050 March 31, 1987 June 1, 1987[12]
On December 7, 1987, two employees of the law firm,
George Bangkas and Rafael Rosas were dismissed from
employment. Prior to the dismissal, these employees worked
with the patent group of the law firm and had the duty, among
others, of getting the firms letters and correspondence from the
Bureau of Patents.

Immediately after their dismissal, the law firm conducted
an inventory of all the documents entrusted to them. It was then
that the firm learned about the notices of abandonment.
Thereafter, petitioners, through the law firm, filed with the
Bureau of Patents separate petitions for revival of the patent
applications on the following dates:
Serial Nos. Date Petition Filed
(1) 23354 March 3, 1988
(2) 29630 March 3, 1988
(3) 30122 January 15, 1988/February 29, 1988
(4) 30548 January 25, 1988/March 1, 1988
(5) 30819 May 27, 1988/July 15, 1988
(6) 31968 January 21, 1988/March 1, 1988
(7) 31974 March 14, 1988
(8) 32050 March 17, 1988
For Serial No. 29898, the applicant abandoned his application,
for which reason no petition for revival was filed.[13]
On January 31, 1991, Director Luis M. Duka, Jr. of the
Bureau of Patents denied all the petitions for revival because
they were filed out of time. The dispositive portion specifically
provides:
WHEREFORE, in consideration of the foregoing premises, all
the petitions for revival of the above-captioned abandoned
applications bearing Serial Nos. 23354, 29630, 29898, 30112,
30548, 30819, 31968, 31974, and 32050, are hereby denied
and no further petitions nor requests for reconsideration hereof
shall be entertained hereafter.
SO ORDERED.
Makati, Metro Manila, Philippines, this 31st day of January 1991.
UIS M. DUKA, JR.
Director III [14]
On February 14, 1991, petitioners appealed the above
resolution of the Bureau of Patents to the Court of Appeals. [15]
On August 13, 1992, the Court of Appeals dismissed the
consolidated appeal for being filed beyond the 15-day
reglementary period to appeal. There was an unreasonable
delay before the petitions to revive applications were filed.
Moreover, petitioners patent applications could not be a proper
subject of a consolidated appeal because they covered separate
and distinct subjects and had been treated by the Bureau of
Patents as separate and individual applications. Specifically the
decision provides:
WHEREFORE, for reasons above stated and in the light of the
applicable law on the matter, this petition for review on appeal
from the order/decision of the Director of Bureau of Patents is
hereby DISMISSED with costs against the appellants.
SO ORDERED. [16]
On September 14, 1992, petitioners moved for reconsideration
of the Court of Appeals decision, which the court denied on
January 7, 1994. The appellate court found no cogent reason to
justify the reversal or modification of its decision. [17]
Aggrieved, petitioners filed the instant petition for review
on certiorari.[18]
At issue is the validity of the Court of Appeals dismissal of
the consolidated appeal of petitioners from the Director of
Patents denial of the revival of their patent applications.
Petitioners contend that the Court of Appeals committed
grave abuse of discretion when it held that the consolidated
appeal was filed out of time. They were appealing from the
resolution of the Director of Patents dated January 31, 1991,
which denied the
petition for revival of the patent applications. They received a
copy of the resolution, through their patent attorneys, on
February 7, 1991, and filed the consolidated appeal seven (7)
days after, or on February 14, 1991. According to petitioners,
these dates clearly established that their appeal was seasonably
filed.
14
The contention is not meritorious. If the facts above-
mentioned were the sole basis of determining whether the
appeal was filed on time, petitioners argument would be
correct.However, petitioners lost sight of the fact that the petition
could not be granted because of laches. Prior to the filing of the
petition for revival of the patent application with the Bureau
ofPatents, an unreasonable period of time had lapsed due to the
negligence of petitioners counsel. By such inaction, petitioners
were deemed to have forfeited their right to revive their
applications for patent.
Facts show that the patent attorneys appointed to follow up the
applications for patent registration had been negligent in
complying with the rules of practice prescribed by the Bureau of
Patents. The firm had been notified about the abandonment as
early as June 1987, but it was only after December 7, 1987,
when their employees Bangkas and Rosas had been dismissed,
that they came to know about it. This clearly showed that
petitioners counsel had been remiss in the handling of their
clients applications.[19]
A lawyers fidelity to the cause of his client requires him to be
ever mindful of the responsibilities that should be expected of
him. A lawyer shall not neglect a legal matter entrusted to
him.[20]In the instant case, petitioners patent attorneys not only
failed to take notice of the notices of abandonment, but they
failed to revive the application within the four-month period, as
provided in the rules of practice in patent cases. These
applications are deemed forfeited upon the lapse of such
period.[21]
Hence, we can not grant the present petition. [22] The Court of
L
Appeals did not err or gravely abuse its discretion in dismissing
the petition for review.
WHEREFORE, the Court DENIES the petition for lack of
merit. The Court AFFIRMS the decision of the Court of Appeals
in CA-G. R. SP No. 24175.
No costs.
SECOND DIVISION
[G.R. No. 118708. February 2, 1998]
CRESER PRECISION SYSTEMS, INC., petitioner,
vs. COURT OF APPEALS AND FLORO
INTERNATIONAL CORP., respondents.
DECISION
MARTINEZ, J.:
This petition for review on certiorari assails the decision[1].
The decision of the Court of Appeals was penned by Justice
Gloria C. Paras and concurred in by Justice Salome A. Montoya
and Justice Hector L. Hofilea.
1 of the Court of Appeals dated November 9, 1994 in C.A.-
G.R. SP. No. 34425 entitled Floro International Corp. vs. Hon.
Tirso D.C Cruz and Creser Precision System, Inc., the
dispositive portion of which reads:
WHEREFORE, THE PETITION IS HEREBY GRANTED. THE
COMPLAINT FOR INJUNCTION AND DAMAGES, CIVIL CASE
NO. 93-1856 BEFORE THE RESPONDENT JUDGE IS
HEREBY ORDERED DISMISSED AND HIS ORDERS
THEREIN OF DECEMBER 29, 1993 AND MAY 11, 1994 ARE
ORDERED SET ASIDE.
Private respondent is a domestic corporation engaged in
the manufacture, production, distribution and sale of military
armaments, munitions, airmunitions and other similar
materials.[2]
On January 23, 1990, private respondent was granted by
the Bureau of Patents, Trademarks and Technology Transfer
(BPTTT), a Letters Patent No. UM-6938[3] covering an aerial
fuze which was published in the September-October 1990, Vol.
III, No. 5 issue of the Bureau of Patents Official Gazette.[4]
Sometime in November 1993, private respondent, through
its president, Mr. Gregory Floro, Jr., discovered that petitioner
submitted samples of its patented aerial fuze to the Armed
Forces of the Philippines (AFP) for testing. He learned that

petitioner was claiming the aforesaid aerial fuze as its own and
planning to bid and manufacture the same commercially without
license or authority from private respondent. To protect its right,
private respondent on December 3, 1993, sent a letter [5] to
petitioner advising it fro its existing patent and its rights
thereunder, warning petitioner of a possible court action and/or
application for injunction, should it proceed with the scheduled
testing by the military on December 7, 1993.
In response to private respondents demand, petitioner filed
on December 8, 1993 a complaint[6] for injunction and damages
arising from the alleged infringement before the Regional Trial
Court of Quezon City, Branch 88. The complaint alleged, among
others: that petitioner is the first, true and actual inventor of an
aerial fuze denominated as Fuze, PDR 77 CB4 which is
developed as early as December 1981 under the Self-Reliance
Defense Posture Program (SRDP) of the AFP; that sometime in
1986, petitioner began supplying the AFP with the said aerial
fuze; that private respondents aerial fuze is identical in every
respect to the petitioners fuze; and that the only difference
between the two fuzes are miniscule and merely cosmetic in
nature. Petitioner prayed that a temporary restraining order
and/or writ of preliminary injunction be issued enjoining private
respondent including any and all persons acting on its behalf
from manufacturing, marketing and/or profiting therefrom,
and/or from performing any other act in connection therewith or
tending to prejudice and deprive it of any rights, privileges and
benefits to which it is duly entitled as the first, true and actual
inventor of the aerial fuze.
On December 10, 1993, the trial court issued a temporary
restraining order. Thereafter, hearings were held on the
application of petitioner for the issuance of a writ of preliminary
injunction, with both parties presenting their evidence. After the
hearings, the trial court directed the parties to submit their
respective memoranda in support of their positions.
On December 27, 1993, private respondent submitted its
memorandum[7] alleging that petitioner has no cause of action to
file a complaint of infringement against it since it has no patent
for the aerial fuze which it claims to have invented; that
petitioners available remedy is to file a petition for cancellation
of patent before the Bureau of Patents; that private respondent
as the patent holder cannot be stripped of its property right over
the patented aerial fuze consisting of the exclusive right to
manufacture, use and sell the same and that it stands to suffer
irreparable damage and injury if it is enjoined from the exercise
of its property right over its patent.
On December 29, 1993, the trial court issued an
Order[8] granting the issuance of a writ of preliminary injunction
against private respondent the dispositive portion of which
reads:
WHEREFORE, plaintiffs application for the issuance of a writ of
preliminary injunction is granted and, upon posting of the
corresponding bond by plaintiff in the amount of PHP
200,000.00, let the writ of preliminary injunction be issued by the
branch Clerk of this Court enjoining the defendant and any and
all persons acting on its behalf or by and under its authority, from
manufacturing, marketing and/or selling aerial fuzes identical, to
those of plaintiff, and from profiting therefrom, and/or from
performing any other act in connection therewith until further
orders from this Court.
Private respondent moved for reconsideration but this was
denied by the trial courts in its Order[9] of May 11, 1994, pertinent
portions of which read:
For resolution before this Court is the Motion for
Reconsideration filed by the defendant and the plaintiffs
Opposition thereto. The Court finds no sufficient cause to
reconsider its order dated December 29, 1993. During the
hearing for the issuance of the preliminary injunction, the plaintiff
has amply proven its entitlement to the relief prayed for. It is
undisputed that the plaintiff has developed its aerial fuze way
15
back in 1981 while the defendant began manufacturing the
same only in 1987. Thus, it is only logical to conclude that it was
the plaintiffs aerial fuze that was copied or imitated which gives
the plaintiff the right to have the defendant enjoined from
manufacturing, marketing and/or selling aerial fuzes identical to
those of the plaintiff, and from profiting therefrom and/or
performing any other act in connection therewith until further
orders from this Court. With regards to the defendants assertion
that an action for infringement may only be brought by anyone
possessing right, title or interest to the patented invention,
(Section 42, RA 165) qualified by Section 10, RA 165 to include
only the first true and actual inventor, his heirs, legal
representatives to assignees, this court finds the foregoing to be
untenable. Sec. 10 merely enumerates the persons who may
have an invention patented which does not necessarily limit to
these persons the right to institute an action for infringement.
Defendant further contends that the order in issue is disruptive
of the status quo. On the contrary, the order issued by the Court
in effect maintained the status quo. The last actual , peaceable
uncontested status existing prior to this controversy was the
plaintiff manufacturing and selling its own aerial fuzes PDR 77
CB4 which was ordered stopped through the defendants letter.
With issuance of the order, the operations of the plaintiff
continue. Lastly, this court believes that the defendant will not
suffer irreparable injury by virtue of said order. The defendants
claim is primarily hinged on its patent (Letters Patent No. UM-
6983) the validity of which is being questioned in this case.
WHEREFORE, premises considered, the Motion for
Reconsideration is hereby denied for lack of merit.
SO ORDERED.
Aggrieved, private respondent on June 27, 1994, filed a
petition for certiorari, mandamus and prohibition[10]before
respondent Court of Appeals raising as grounds the following:
a. Petitioner has no cause of action for infringement
against private respondent, the latter not
having any patent for the aerial fuze which it
claims to have invented and developed and
allegedly infringed by private respondent;
b. The case being an action for cancellation or
invalidation of private respondents Letters
Patent over its own aerial fuze, the proper
venue is the Office of the Director of Patents;
c. The trial court acted in grave abuse of discretion
and or in excess of jurisdiction in finding that
petitioner has fully established its clear title or
right to preliminary injunction;
d. The trial court acted in grave abuse of discretion
and/or in excess of jurisdiction in granting the
preliminary injunction, it being disruptive of
the status quo; and
e. The trial court acted in grave abuse of discretion
and/or in excess of jurisdiction in granting the
preliminary injunction thereby depriving
private respondent of its property rights over
the patented aerial fuze and cause it
irreparable damages.
On November 9, 1994, the respondent court rendered the
now assailed decision reversing the trial courts Order of
December 29, 1993 and dismissing the complaint filed by
petitioner.
The motion for reconsideration was also denied on
January 17, 1995.[11] Hence, this present petition.
It is petitioners contention that it can file, under Section 42
of the Patent Law (R.A. 165), an action for infringement not as a
patentee but as an entity in possession of a right, title or interest
in and to the patented invention. It advances the theory that
while the absence of a patent may prevent one from lawfully
suing another for infringement of said patent, such absence
does not bar the first true and actual inventor of the patented

invention from suing another who was granted a patent in a suit
for declaratory or injunctive relief recognized under American
patent laws. This remedy, petitioner points out, may be likened
to a civil action for infringement under Section 42 of the
Philippine Patent Law.
We find the above arguments untenable.
Section 42 of R.A. 165, otherwise known as the Patent
Law, explicitly provides:
SECTION. 42. Civil action for infringement. Any patentee, or
anyone possessing any right, title or interest in and to the
patented invention, whose rights have been infringed, may bring
a civil action before the proper Court of First Instance (now
Regional Trial court), to recover from the infringer damages
sustained by reason of the infringement and to secure an
injunction for the protection of his right. x x x
Under the aforequoted law, only the patentee or his
successors-in-interest may file an action for infringement. The
phrase anyone possessing any right, title or interest in and to
the patented invention upon which petitioner maintains its
present suit, refers only to the patentees successors-in-interest,
assignees or grantees since actions for infringement of patent
may be brought in the name of the person or persons interested,
whether as patentee, assignees or grantees, of the exclusive
right.[12] Moreover, there can be no infringement of a patent until
a patent has been issued, since whatever right one has to the
invention covered by the patent arises alone from the grant of
patent.[13] In short, a person or entity who has not been granted
letters patent over an invention and has not acquired any right
or title thereto either as assignee or as licensee, has no cause
of action for infringement because the right to maintain an
infringement suit depends on the existence of the patent. [14]
Petitioner admits it has no patent over its aerial fuze.
Therefore, it has no legal basis or cause of action to institute the
petition for injunction and damages arising from the alleged
infringement by private respondent. While petitioner claims to be
the first inventor of the aerial fuze, still it has no right of property
over the same upon which it can maintain a suit unless it obtains
a patent therefor. Under American jurisprudence, and inventor
has no common-law right to a monopoly of his invention. He has
the right to make, use and vend his own invention, but if he
voluntarily discloses it, such as by offering it for sale, the world
is free to copy and use it with impunity. A patent, however, gives
the inventor the right to exclude all others. As a patentee, he has
the exclusive right of making, using or selling the invention.[15]
Further, the remedy of declaratory judgment or injunctive
suit on patent invalidity relied upon by petitioner cannot be
likened to the civil action for infringement under Section 42 of
the Patent Law. The reason for this is that the said remedy is
available only to the patent holder or his successors-in-interest.
Thus, anyone who has no patent over an invention but claims to
have a right or interest thereto can not file an action for
declaratory judgment or injunctive suit which is not recognized
in this jurisdiction. Said person, however, is not left without any
remedy. He can, under Section 28 of the aforementioned law,
file a petition for cancellation of the patent within three (3) years
from the publication of said patent with the Director of Patents
and raise as ground therefor that the person to whom the patent
was issued is not the true and actual inventor. Hence, petitioners
remedy is not to file an action for injunction or infringement but
to file a petition for cancellation of private respondent patent.
Petitioner however failed to do so. As such, it can not now assail
or impugn the validity of the private respondents letters patent
by claiming that it is the true and actual inventor of the aerial
fuze.
Thus, as correctly ruled by the respondent Court of
Appeals in its assailed decision: since the petitioner (private
respondent herein) is the patentee of the disputed invention
embraced by letters of patent UM No. 6938 issued to it on
January 23, 1990 by the Bureau of Patents, it has in its favor not
16
only the presumption of validity of its patent, but that of a legal
and factual first and true inventor of the invention.
In the case of Aguas vs. De Leon,[16] we stated that:
The validity of the patent issued by the Philippine Patent Office
in favor of the private respondent and the question over the
investments, novelty and usefulness of the improved process
therein specified and described are matters which are better
determined by the Philippines patent Office, composed of
experts in their field, have, by the issuance of the patent in
question, accepted the thinness of the private respondents new
tiles as a discovery. There is a presumption that the Philippine
Patent Office has correctly determined the patentability of the
improvement by the private respondent of the process in
question.
In fine, in the absence of error or abuse of power or lack or
jurisdiction or grave abuse of discretion, we sustain the assailed
decision of the respondent Court of Appeal.
WHEREFORE, the decision of the Court of Appeals is
hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.
[G.R. No. L-1952. December 6, 1906. ]
CARLOS GSELL, Plaintiff-Appellant, v. 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.
DECISION
MAPA, J. :
In an action between the plaintiff and the defendant herein
judgment was rendered in the court below on the 11th of
December, 1903, the adjudging part of which is as follows: "It is
ordered that the defendant (the accused in these proceedings)
abstain from manufacturing canes and umbrellas with a curved
handle by means of lamp or blowpipe fed with mineral oil
petroleum, which process was protected by patent No. 19228,
issued in favor of Henry Gsell, and by him transferred to Carlos
Gsell." In the month of February, 1904, the plaintiff presented a
petition alleging that on "the 8th of the said month, and some
time prior to that date, the defendant in obedience of the
aforesaid judgment, and in violation of the same, was and is now
engaged in the unlawful manufacture of umbrella handles by the
identical process so like the patent process as to be
indistinguishable," and accordingly asked the court to punish the
accused for contempt and to order the latter to indemnify the
plaintiff as damages in the sum of $1,000, United States,
currency, and to pay the costs.
The parties having appeared in open court and stipulated that
"the defendant had used, and was still using, as a process for
curving canes and umbrella handles, the same process
described in the memoir which accompanied the patent, with the
exception that he has substituted for an oil an alcohol-burning
lamp."cralaw virtua1aw library
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 plaintiffs 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.
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.
DECISION
CARPIO-MORALES, J.:
Smith Kline Beckman Corporation (petitioner), a
corporation existing by virtue of the laws of the state of
Pennsylvania, United States of America (U.S.) and licensed to
do business in the Philippines, filed on October 8, 1976, as
17
assignee, before the Philippine Patent Office (now Bureau of
Patents, Trademarks and Technology Transfer) an application
for patent over an invention entitled Methods and Compositions
for Producing Biphasic Parasiticide Activity Using Methyl 5
Propylthio-2-Benzimidazole Carbamate. The application bore
Serial No. 18989.
On September 24, 1981, Letters Patent No. 14561[1] for
the aforesaid invention was issued to petitioner for a term of
seventeen (17) years.
The letters patent provides in its claims [2] that the patented
invention consisted of a new compound named methyl 5
propylthio-2-benzimidazole carbamate and the methods or
compositions utilizing the compound as an active ingredient in
fighting infections caused by gastrointestinal parasites and
lungworms in animals such as swine, sheep, cattle, goats,
horses, and even pet animals.
Tryco Pharma Corporation (private respondent) is a
domestic corporation that manufactures, distributes and sells
veterinary products including Impregon, a drug that has
Albendazole for its active ingredient and is claimed to be
effective against gastro-intestinal roundworms, lungworms,
tapeworms and fluke infestation in carabaos, cattle and goats.
Petitioner sued private respondent for infringement of
patent and unfair competition before the Caloocan City Regional
Trial Court (RTC).[3] It claimed that its patent covers or includes
the substance Albendazole such that private respondent, by
manufacturing, selling, using, and causing to be sold and used
the drug Impregon without its authorization, infringed Claims 2,
3, 4, 7, 8 and 9 of Letters Patent No. 14561[4] as well as
committed unfair competition under Article 189, paragraph 1 of
the Revised Penal Code and Section 29 of Republic Act No. 166
(The Trademark Law) for advertising and selling as its own the
drug Impregon although the same contained petitioners
patented Albendazole.[5]
On motion of petitioner, Branch 125 of the Caloocan RTC
issued a temporary restraining order against private respondent
enjoining it from committing acts of patent infringement and
unfair competition.[6] A writ of preliminary injunction was
subsequently issued.[7]
Private respondent in its Answer[8] averred that Letters
Patent No. 14561 does not cover the substance Albendazole for
nowhere in it does that word appear; that even if the patent were
to include Albendazole, such substance is unpatentable; that the
Bureau of Food and Drugs allowed it to manufacture and market
Impregon with Albendazole as its known ingredient; that there is
no proof that it passed off in any way its veterinary products as
those of petitioner; that Letters Patent No. 14561 is null and void,
the application for the issuance thereof having been filed beyond
the one year period from the filing of an application abroad for
the same invention covered thereby, in violation of Section 15 of
Republic Act No. 165 (The Patent Law); and that petitioner is not
the registered patent holder.
Private respondent lodged a Counterclaim against
petitioner for such amount of actual damages as may be
proven; P1,000,000.00 in moral damages; P300,000.00 in
exemplary damages; and P150,000.00 in attorneys fees.
Finding for private respondent, the trial court rendered a
Decision dated July 23, 1991,[9] the dispositive portion of which
reads:
WHEREFORE, in view of the foregoing, plaintiffs complaint
should be, as it is hereby, DISMISSED. The Writ of injunction
issued in connection with the case is hereby ordered
DISSOLVED.
The Letters Patent No. 14561 issued by the then Philippine
Patents Office is hereby declared null and void for being in
violation of Sections 7, 9 and 15 of the Patents Law.
Pursuant to Sec. 46 of the Patents Law, the Director of Bureau
of Patents is hereby directed to cancel Letters Patent No.

14561 issued to the plaintiff and to publish such cancellation in
the Official Gazette.
Defendant Tryco Pharmaceutical Corporation is hereby
awarded P330,000.00 actual damages and P100,000.00
attorneys fees as prayed for in its counterclaim but said amount
awarded to defendant is subject to the lien on correct payment
of filing fees.
SO ORDERED. (Underscoring supplied)
On appeal, the Court of Appeals, by Decision of April 21,
1995,[10] upheld the trial courts finding that private respondent
was not liable for any infringement of the patent of petitioner in
light of the latters failure to show that Albendazole is the same
as the compound subject of Letters Patent No. 14561. Noting
petitioners admission of the issuance by the U.S. of a patent for
Albendazole in the name of Smith Kline and French
Laboratories which was petitioners former corporate name, the
appellate court considered the U.S. patent as implying that
Albendazole is different from methyl 5 propylthio-2-
benzimidazole carbamate. It likewise found that private
respondent was not guilty of deceiving the public by
misrepresenting that Impregon is its product.
The appellate court, however, declared that Letters Patent
No. 14561 was not void as it sustained petitioners explanation
that Patent Application Serial No. 18989 which was filed on
October 8, 1976 was a divisional application of Patent
Application Serial No. 17280 filed on June 17, 1975 with the
Philippine Patent Office, well within one year from petitioners
filing on June 19, 1974 of its Foreign Application Priority Data
No. 480,646 in the U.S. covering the same compound subject of
Patent Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court of
Appeals thus ruled that Patent Application Serial No. 18989 was
deemed filed on June 17, 1995 or still within one year from the
filing of a patent application abroad in compliance with the one-
year rule under Section 15 of the Patent Law. And it rejected the
submission that the compound in Letters Patent No. 14561 was
not patentable, citing the jurisprudentially established
presumption that the Patent Offices determination of
patentability is correct. Finally, it ruled that petitioner established
itself to be the one and the same assignee of the patent
notwithstanding changes in its corporate name. Thus the
appellate court disposed:
WHEREFORE, the judgment
appealed from is AFFIRMED with
the MODIFICATION that the
orders for the nullification of
Letters Patent No. 14561 and for
its cancellation are deleted
therefrom.
SO ORDERED.
Petitioners motion for reconsideration of the Court of
Appeals decision having been denied[11] the present petition for
review on certiorari[12] was filed, assigning as errors the
following:
I. THE COURT OF APPEALS GRAVELY ERRED IN
NOT FINDING THAT ALBENDAZOLE, THE
ACTIVE INGREDIENT IN TRYCOS IMPREGON
DRUG, IS INCLUDED IN PETITIONERS
LETTERS PATENT NO. 14561, AND THAT
CONSEQUENTLY TRYCO IS ANSWERABLE
FOR PATENT INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN
AWARDING TO PRIVATE RESPONDENT TRY
CO 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
18
its drug Impregon, is substantially the same as methyl 5
propylthio-2-benzimidazole carbamate covered by its patent
since both of them are meant to combat worm or parasite
infestation in animals. It cites the unrebutted testimony of its
witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical
formula in Letters Patent No. 14561 refers to the compound
Albendazole.Petitioner adds that the two substances
substantially do the same function in substantially the same way
to achieve the same results, thereby making them truly
identical. Petitioner thus submits that the appellate court should
have gone beyond the literal wordings used in Letters Patent
No. 14561, beyond merely applying the literal infringement test,
for in spite of the fact that the word Albendazole does not appear
in petitioners letters patent, it has ably shown by evidence its
sameness with methyl 5 propylthio-2-benzimidazole carbamate.
Petitioner likewise points out that its application with the
Philippine Patent Office on account of which it was granted
Letters Patent No. 14561 was merely a divisional application of
a prior application in the U. S. which granted a patent for
Albendazole. Hence, petitioner concludes that both methyl 5
propylthio-2-benzimidazole carbamate and the U.S.-patented
Albendazole are dependent on each other and mutually
contribute to produce a single result, thereby making
Albendazole as much a part of Letters Patent No. 14561 as the
other substance is.
Petitioner concedes in its Sur-Rejoinder[13] that although
methyl 5 propylthio-2-benzimidazole carbamate is not identical
with Albendazole, the former is an improvement or improved
version of the latter thereby making both substances still
substantially the same.
With respect to the award of actual damages in favor of
private respondent in the amount of P330,000.00 representing
lost profits, petitioner assails the same as highly speculative and
conjectural, hence, without basis. It assails too the award
of P100,000.00 in attorneys fees as not falling under any of the
instances enumerated by law where recovery of attorneys fees
is allowed.
In its Comment,[14] private respondent contends that
application of the doctrine of equivalents would not alter the
outcome of the case, Albendazole and methyl 5 propylthio-2-
benzimidazole carbamate being two different compounds with
different chemical and physical properties. It stresses that the
existence of a separate U.S. patent for Albendazole indicates
that the same and the compound in Letters Patent No. 14561
are different from each other; and that since it was on account
of a divisional application that the patent for methyl 5 propylthio-
2-benzimidazole carbamate was issued, then, by definition of a
divisional application, such a compound is just one of several
independent inventions alongside Albendazole under
petitioners original patent application.
As has repeatedly been held, only questions of law may be
raised in a petition for review on certiorari before this
Court. Unless the factual findings of the appellate court are
mistaken, absurd, speculative, conjectural, conflicting, tainted
with grave abuse of discretion, or contrary to the findings culled
by the court of origin,[15] this Court does not review them.
From an examination of the evidence on record, this Court
finds nothing infirm in the appellate courts conclusions with
respect to the principal issue of whether private respondent
committed patent infringement to the prejudice of petitioner.
The burden of proof to substantiate a charge for patent
infringement rests on the plaintiff.[16] In the case at bar,
petitioners evidence consists primarily of its Letters Patent No.
14561, and the testimony of Dr. Orinion, its general manager in
the Philippines for its Animal Health Products Division, by which
it sought to show that its patent for the compound methyl 5
propylthio-2-benzimidazole carbamate also covers the
substance Albendazole.

From a reading of the 9 claims of Letters Patent No. 14561
in relation to the other portions thereof, no mention is made of
the compound Albendazole. All that the claims disclose are:the
covered invention, that is, the compound methyl 5 propylthio-2-
benzimidazole carbamate; the compounds being anthelmintic
but nontoxic for animals or its ability to destroy parasites without
harming the host animals; and the patented methods,
compositions or preparations involving the compound to
maximize its efficacy against certain kinds of parasites infecting
specified animals.
When the language of its claims is clear and distinct, the
patentee is bound thereby and may not claim anything beyond
them.[17] And so are the courts bound which may not add to or
detract from the claims matters not expressed or necessarily
implied, nor may they enlarge the patent beyond the scope of
that which the inventor claimed and the patent office allowed,
even if the patentee may have been entitled to something more
than the words it had chosen would include.[18]
It bears stressing that the mere absence of the word
Albendazole in Letters Patent No. 14561 is not determinative of
Albendazoles non-inclusion in the claims of the patent. While
Albendazole is admittedly a chemical compound that exists by a
name different from that covered in petitioners letters patent, the
language of Letter Patent No. 14561 fails to yield anything at all
regarding Albendazole. And no extrinsic evidence had been
adduced to prove that Albendazole inheres in petitioners patent
in spite of its omission therefrom or that the meaning of the
claims of the patent embraces the same.
While petitioner concedes that the mere literal wordings of
its patent cannot establish private respondents infringement, it
urges this Court to apply the doctrine of equivalents.
The doctrine of equivalents provides that an infringement
also takes place when a device appropriates a prior invention by
incorporating its innovative concept and, although with some
modification and change, performs substantially the same
function in substantially the same way to achieve substantially
the same result.[19] Yet again, a scrutiny of petitioners evidence
fails to convince this Court of the substantial sameness of
petitioners patented compound and Albendazole. While both
compounds have the effect of neutralizing parasites in
animals, identity of result does not amount to infringement of
patent unless Albendazole operates in substantially the same
way or by substantially the same means as the patented
compound, even though it performs the same function and
achieves the same result.[20] In other words, the principle or
mode of operation must be the same or substantially the
same.[21]
The doctrine of equivalents thus requires satisfaction of
the function-means-and-result test, the patentee having the
burden to show that all three components of such equivalency
test are met.[22]
As stated early on, petitioners evidence fails to explain how
Albendazole is in every essential detail identical to methyl 5
propylthio-2-benzimidazole carbamate. Apart from the fact that
Albendazole is an anthelmintic agent like methyl 5 propylthio-2-
benzimidazole carbamate, nothing more is asserted and
accordingly substantiated regarding the method or means by
which Albendazole weeds out parasites in animals, thus giving
no information on whether that method is substantially the same
as the manner by which petitioners compound works. The
testimony of Dr. Orinion lends no support to petitioners cause,
he not having been presented or qualified as an expert witness
who has the knowledge or expertise on the matter of chemical
compounds.
As for the concept of divisional applications proffered by
petitioner, it comes into play when two or more inventions are
claimed in a single application but are of such a nature that a
single patent may not be issued for them. [23] The applicant thus
is required to divide, that is, to limit the claims to whichever
19
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.
The foregoing discussions notwithstanding, this Court
does not sustain the award of actual damages and attorneys
fees in favor of private respondent. The claimed actual damages
of P330,000.00 representing lost profits or revenues incurred by
private respondent as a result of the issuance of the injunction
against it, computed at the rate of 30% of its
alleged P100,000.00 monthly gross sales for eleven months,
were supported by the testimonies of private respondents
President[25] and Executive Vice-President that the average
monthly sale of Impregon was P100,000.00 and that sales
plummeted to zero after the issuance of the injunction. [26] While
indemnification for actual or compensatory damages covers not
only the loss suffered (damnum emergens) but also profits
which the obligee failed to obtain (lucrum cessans or ganacias
frustradas), it is necessary to prove the actual amount of
damages with a reasonable degree of certainty based on
competent proof and on the best evidence obtainable by the
injured party.[27] The testimonies of private respondents officers
are not the competent proof or best evidence obtainable to
establish its right to actual or compensatory damages for such
damages also require presentation of documentary evidence to
substantiate a claim therefor.[28]
In the same vein, this Court does not sustain the grant by
the appellate court of attorneys fees to private respondent
anchored on Article 2208 (2) of the Civil Code, private
respondent having been allegedly forced to litigate as a result of
petitioners suit. Even if a claimant is compelled to litigate with
third persons or to incur expenses to protect its rights, still
attorneys fees may not be awarded where no sufficient showing
of bad faith could be reflected in a partys persistence in a case
other than an erroneous conviction of the righteousness of his
cause.[29]There exists no evidence on record indicating that
petitioner was moved by malice in suing private respondent.
This Court, however, grants private respondent temperate
or moderate damages in the amount of P20,000.00 which it
finds reasonable under the circumstances, it having suffered
some pecuniary loss the amount of which cannot, from the
nature of the case, be established with certainty. [30]
WHEREFORE, the assailed decision of the Court of
Appeals is hereby AFFIRMED with MODIFICATION. The award
of actual or compensatory damages and attorneys fees to
private respondent, Tryco Pharma Corporation, is DELETED;
instead, it is hereby awarded the amount of P20,000.00 as
temperate or moderate damages.
SO ORDERED.
SECOND DIVISION
PEOPLE OF THE PHILIPPINES, G.R. No. 152950
HON. LOURDES F. GATBALITE,
Presiding Judge, Branch 56,
Regional Trial Court, Angeles
City and ATTY. BENNIE NICDAO,
Special Prosecutor, Special
Operative Group, Economic
Intelligence & Investigation
Bureau,

SECOND SET:
People vs Choi, Aug 3, 2006
CORONA, J.:
This petition for review on certiorari [1] seeks the reversal of the
decision[2] of the Court of Appeals (CA) dated April 10, 2002 in
CA-G.R. SP No. 59587, the dispositive portion of which read:
WHEREFORE, the petition for
certiorari and prohibition is
GRANTED. Search Warrant No. 99-17 is
deemed NULL and VOID and SET ASIDE.
Respondent ATTY. BENNY NICDAO is
prohibited from using in evidence the articles
seized by virtue of Search Warrant No. 99-17
in Crim. Case No. I.S. No. 99-8116.
SO ORDERED.[3]
The factual antecedents follow.
On April 27, 1999, Mario P. Nieto, Intelligence
Operative of the Economic Intelligence and Investigation
Bureau, Department of Finance, applied for a search warrant
with the Regional Trial Court (RTC) of Angeles City, Pampanga,
Branch 56,[4] against respondent Christopher Choi for violation
of Section 168, paragraphs 2 and 3 (a) and (c), in relation to
Section 169 of RA 8293,[5] also known as the Intellectual
Property Code.[6]
After examination of the applicant and his witnesses,
namely, Max Cavalera and David Lee Sealey, Judge Lourdes F.
Gatbalite issued Search Warrant No. 99-17 dated April 27, 1999
worded as follows:
TO ANY PEACE OFFICER:
G r e e t i n g s:
It appearing to the satisfaction of the
undersigned, after examining under oath in
the form of searching and probing questions,
the applicant, MARIO P. NIETO, Intelligence
Operative, Economic Intelligence
Investigation Bureau, Department of
Finance, and his witnesses Max Cavalera
and David Lee Sealey that there are good
and sufficient reasons to believe that
Christopher Choi of No. 25-13 Columbia
Street, Carmenville Subd., Angeles City has
in his possession, control and
custody [r]eams and packs of fake Marlboro
Red Cigarettes, as well as cardboard cases
of fake Marlboro Red Cigarettes (each
cardboard case contains two (2) [m]aster
[c]ases of Marlboro and each [m]aster case
contains fifty (50) reams) being distributed,
kept and sold thereat in violation of Section
168, par. 2 and 3 (a) and (c) in relation to
Section 169 of R.A. 8293;
You are hereby commanded to make an
immediate search at anytime of the day or
night of the above-premises and forthwith
seize and take possession of the
aforedescribed items found at the
residence/warehouse of Christopher Choi at
No. 25-13 Columbia Street, Carmenville
Subd., Angeles City.
20
THEREFORE, seize and bring the said
articles to the undersigned to be dealt with in
accordance with law.
You are hereby further directed to submit a
return within ten (10) days from today.
Given under my hand this 27th day of April,
1999 at Angeles City, Philippines.[7]
The search was conducted on the same date.[8]
On May 12, 1999, respondent filed a motion to quash
search warrant[9] and a supplemental motion to quash[10] on
June 22, 1999. Both were denied by Judge Gatbalite in an order
dated November 29, 1999.[11] Reconsideration was likewise
denied.[12]
On June 19, 2000, respondent filed a petition for
certiorari and prohibition[13] before the CA. He alleged that
Judge Gatbalite committed grave abuse of discretion in refusing
to quash the search warrant, arguing that probable cause was
not sufficiently established as the examination conducted was
not probing and exhaustive and the warrant did not particularly
describe the place to be searched. Respondent also prayed that
Atty. Bennie Nicdao[14] be prohibited from using as evidence the
articles seized by virtue of the search warrant. This was granted
by the CA in a decision dated April 10, 2002.
According to the CA, in determining whether there was
probable cause to believe that the cigarettes purchased by Nieto
were fake and in violation of RA 8293,[15] Judge Gatbalite failed
to ask searching and probing questions of witness David Lee
Sealey.[16] The examination of Sealey went this way:
Court:
Q There was testimony here given by Mr.
Mario Nieto and Max Cavalera, that
fake Marlboro cigarettes bought by
them from Michael Chua,
Christopher Choi and Johnny
Chang were turned over to you for
examination, is that correct?
A Yes, your Honor.
Q After the same had been turned over to
you, what did you do with the said
merchandise, if you did anything?
A I examined the sample of cigarettes and
their packaging bearing the
Marlboro Trade Marks which were
suspected to be produc[ed] and
manufactured by La Suerte or [with]
the permission of Philip Morris.
Q What was the result of your examination?
A Based on the packaging of the packs, the
color of the box and the printing on
the front side of the packs and the
cigarettes themselves, I concluded
that they are counterfeit or
unauthorized product[s].
Q Do you have any knowledge of this person
named Christopher Choi?
A None, your Honor.

Q There is an affidavit here marked as
exhibit, executed by one David Lee
Sealey, do you know this David Lee
Sealey?
A Yes, your Honor, I am the one.
Q Whose signature is this appearing on the
printed name David Lee Sealey?
A This is my signature, your Honor.
Q Do you affirm and confirm other contents
of this affidavit?
A Yes, your Honor.
Court:
Thats all.[17]
In addition, the CA ruled that Judge Gatbalite
committed grave abuse of discretion when she merely relied on
the conclusion of Sealey that the cigarettes he received from
Nieto were fake. She should have at least required Sealey to
present the alleged fake Marlboro cigarettes and the genuine
ones for comparison, instead of relying on his testimony alone.
The CA reasoned that this was an absolute requirement under
the Supreme Court ruling in 20th Century Fox Film Corporation
v. Court of Appeals.[18]
Hence, this petition.
The People of the Philippines aver that the CA erred in
finding that Judge Gatbalite committed grave abuse of discretion
in issuing the search warrant allegedly because she failed to
determine probable cause pursuant to Sections 4 and 5 of Rule
126 of the Rules of Court.[19] The People assail the finding of the
CA that, in issuing the search warrant, Judge Gatbalite
purportedly did not comply strictly with the requirement to
determine the existence of probable cause by personally
examining the applicant and his witnesses through searching
questions and answers.The People also assert that the CA
erred in applying the doctrine in 20th Century Fox Film
Corporation[20] since it had already been superseded
by Columbia Pictures, Inc. v. Court of Appeals.[21]
We rule for the People of the Philippines.
Sections 4 and 5 of Rule 126 state:
Sec. 4. Requisites for issuing search
warrant. A search warrant shall not issue
except upon probable cause in connection
with one specific offense to be determined
personally by the judge after examination
under oath or affirmation of the complainant
and the witnesses he may produce, and
particularly describing the place to be
searched and the things to be seized which
may be anywhere in the Philippines.
Sec. 5. Examination of complainant;
record. The judge must, before issuing the
warrant, personally examine in the form of
searching questions and answers, in writing
and under oath, the complainant and the
witnesses he may produce on facts
personally known to them and attach to the
record their sworn statements, together with
the affidavits submitted.
21
According to the foregoing provisions, a search warrant can be
issued only upon a finding of probable cause. Probable cause
means such facts and circumstances which would lead a
reasonably discreet and prudent man to believe that an offense
has been committed and that the objects sought in connection
with the offense are in the place sought to be searched.[22] The
determination of the existence of probable cause requires the
following:
(1) the judge must examine the complainant
and his witnesses personally;
(2) the examination must be under oath and
(3) the examination must be reduced in writing
in the form of searching questions and
answers.[23]
The searching questions propounded to the applicant
and the witnesses depend largely on the discretion of the judge.
Although there is no hard-and-fast rule governing how a judge
should conduct his examination, it is axiomatic that the
examination must be probing and exhaustive, not merely
routinary, general, peripheral, perfunctory or pro-forma.[24] The
judge must not simply rehash the contents of the affidavit but
must make his own inquiry on the intent and justification of the
application.[25] The questions should not merely be repetitious of
the averments stated in the affidavits or depositions of the
applicant and the witnesses.[26] If the judge fails to determine
probable cause by personally examining the applicant and his
witnesses in the form of searching questions before issuing a
search warrant, grave abuse of discretion is committed.[27]
The determination of probable cause does not call for
the application of rules and standards of proof that a judgment
of conviction requires after trial on the merits. As the term
implies, probable cause is concerned with probability, not
absolute or even moral certainty. The standards of judgment
are those of a reasonably prudent man, not the exacting
calibrations of a judge after a full-blown trial.[28] No law or rule
states that probable cause requires a specific kind of
evidence. No formula or fixed rule for its determination
exists.[29] Probable cause is determined in the light of conditions
obtaining in a given situation.[30] The entirety of the questions
propounded by the court and the answers thereto must be
considered by the judge.[31]
In this case, aside from the testimony of Sealey,
petitioner judge also heard the testimony of applicant Nieto:
Q: In connection with Search Warrant 99-17,
are you the same Mario Nieto who
is the applicant in this application
for search warrant filed today April
27, 1999?
A: Yes, your Honor.
Q: Do you know this Christopher Choi
referred to herein?
A: Yes, your Honor.
Q: Why do you know him?
A: He was introduced to us by Michael Chua,
your Honor.
Q: As what?
A: As the supplier for the goods.
Q: Subject of the application?
A: Yes, your Honor, in violation of Section
169 of R.A. 8293.

Q: How did you know him?
A: When I was conducting a test-buy
operation against Mr. Michael
Chua, Mr. Michael Chua told me
that the bulk of supply if we need
more supply we can get from the
source, a certain Christopher Choi,
who lives in the same village and
who is actually the supplier for the
entire region.
Q: Where did you see him. This Christopher
Choi?
A: I went to his house, your Honor.
Q: Where?
A: At No. 25-13 Columbia St., Carmenville
Subd., Angeles City, Pampanga.
Q: Upon arriving at the place what did you
do?
A: Upon arriving at the place, your Honor, I
introduced myself as the one who
was referred by a certain Michael
Chua who is interested in buying
the Marlboro cigarettes from him
and he accommodated me and
showed me the sample that he has
and I was able to procure the
samples from him, the samples that
like what we did to the others were
inspected by certain Mr. David Lee
Sealey, the representative and
authority from the Philip Morris.
Q: Did you actually buy those samples?
A: Yes, your Honor, I got the samples form
Mr. Christopher Choi and I
submitted them to Mr. David Lee
Sealey.
Q: How many Marlboro cigarettes did you
buy?
A: We bought only one ream, P17.00 per
pack.
Q: Do you know from what particular place
the house of Christopher Choi did
he got (sic) those samples?
A: The volume stocks were found inside the
house, they are almost everywhere
in the house of Christopher Choi.
Q: There is a sketch here attached to your
application, can you point it out
here?
A: Yes, your Honor, at the warehouse, in the
storage room as shown in the lay
out of the house, it is adjacent to the
residential house as shown in the
sketch.
Q: You went to the warehouse?
A: We were shown [the] entire area by the
supplier, Christopher Choi. As a
matter of fact he was trying to show
22
us how much volume he has and
his capacity to supply.[32]
Max Cavalera, a witness who accompanied Nieto
during the test-buy operation,[33] also testified:
Q How about this Christopher Choi?
A As Ive said earlier, he was one of those
identified by the informant storing
and selling counterfeit Marlboro
cigarettes, so on April 22, 1999 we
conducted a surveillance and we
were able to confirm that the said
cigarettes are being stored at the
subject place.
Q At what place?
A At 25-13 Columbia St., Carmenville Subd.,
Angeles City. On April 23, 1999 at
about 8:30 p.m., Mario Nieto and I
again went to the subject place to
conduct a test-buy operation. [A]fter
Mr. Choi had been convinced of our
intention to buy cigarettes from him,
he brought us to his warehouse
where he showed to us several
cardboard cases of Marlboro
cigarettes.[34]
Given the foregoing testimonies and applying the
established standards in determining probable cause, we
cannot say that Judge Gatbalite committed grave abuse of
discretion in issuing the search warrant. Her questions were
sufficiently probing, not at all superficial and perfunctory.The
testimonies were consistent with each other and the narration of
facts was credible. The testimonies and other evidence on
record constituted adequate bases to establish probable cause
that the alleged offense had been committed.
Since probable cause is dependent largely on the
opinion and findings of the judge who conducted the
examination and who had the opportunity to question the
applicant and his witnesses,[35] the findings of the judge deserve
great weight. The reviewing court can overturn such findings
only upon proof that the judge disregarded the facts before him
or ignored the clear dictates of reason.[36] We thus find no
reason to disturb Judge Gatbalites findings.
Furthermore, as correctly pointed out by
petitioners, 20th Century Fox Film Corporation, insofar as it
required the presentation of the master tapes for comparison
with the pirated copies for a search warrant to issue, had already
been superseded by Columbia Pictures, Inc. v. Court of
Appeals:
More to the point, it is felt that the
reasonableness of the added requirement
in 20th Century Fox calling for the production
of the master tapes of the copyrighted films
for determination of probable cause in
copyright infringement cases needs revisiting
and clarification.
xxx xxx xxx
In fine, the
supposed pronunciamento in said case

regarding the necessity for the presentation of
the master tapes of the copyrighted films for
the validity of search warrants should at most
be understood to merely serve as a guidepost
in determining the existence of probable
cause in copyright infringement cases where
there is doubt as to the true nexus between
the master tape and the pirated copies. An
objective and careful reading of the decision
in said case could lead to no other conclusion
than that said directive was hardly
intended to be a sweeping and inflexible
requirement in all or similar copyright
infringement cases. Judicial dicta should
always be construed within the factual matrix
of their parturition, otherwise a careless
interpretation thereof could unfairly fault the
writer with the vice of overstatement and the
reader with the fallacy of undue
generalization.
xxx xxx xxx
It is evidently incorrect to
suggest, as the ruling in 20th Century Fox
may appear to do, that in copyright
infringement cases, the presentation of
master tapes of the copyrighted films is
always necessary to meet the requirement
of probable cause and that, in the absence
thereof, there can be no finding of
probable cause for the issuance of a
search warrant. It is true that such master
tapes are object evidence, with the merit that
in this class of evidence the ascertainment of
the controverted fact is made through
demonstrations involving the direct use of the
senses of the presiding magistrate. Such
auxiliary procedure, however, does not rule
out the use of testimonial or documentary
evidence, depositions, admissions or other
classes of evidence tending to prove
the factum probandum, especially where the
production in court of object evidence would
result in delay, inconvenience or expenses
out of proportion to its evidentiary value.
xxx xxx xxx
Accordingly, to restrict the exercise
of discretion by a judge by adding a particular
requirement (the presentation of master
tapes, as intimated by 20th Century Fox) not
provided nor implied in the law for a finding
of probable cause is beyond the realm of
judicial competence or statesmanship. It
serves no purpose but to stultify and constrict
the judicious exercise of a courts
prerogatives and to denigrate the judicial
duty of determining the existence of probable
cause to a mere ministerial or mechanical
function.There is, to repeat, no law or rule
which requires that the existence of probable
cause is or should be determined solely by a
specific kind of evidence. Surely, this could
not have been contemplated by the framers
of the Constitution, and we do not believe
that the Court intended the statement
in 20th Century Fox regarding master tapes
23
as the dictum for all seasons and reasons in
infringement cases.[37] (emphasis supplied)
It is obvious that 20th Century Fox Film
Corporation should not be applied to the present case since this
involves the offense of unfair competition and not copyright
infringement. More importantly, as pronounced by the Court
in Columbia Pictures, Inc., the judges exercise of discretion
should not be unduly restricted by adding a requirement that is
not sanctioned by law.
WHEREFORE, the petition is hereby GRANTED. The
assailed decision of the Court of Appeals dated April 10, 2002
in CA-G.R. SP No. 59587 is REVERSED and SET
ASIDE. Judgment is hereby rendered declaring Search Warrant
No. 99-17 as VALID.
SO ORDERED.
FIRST DIVISION
[G.R. No. 144309. November 23, 2001]
SOLID TRIANGLE SALES CORPORATION and ROBERT
SITCHON, petitioners, vs. THE SHERIFF OF RTC
QC, Branch 93; SANLY CORPORATION, ERA
RADIO AND ELECTRICAL SUPPLY, LWT CO.,
INCORPORATED; ROD CASTRO, VICTOR TUPAZ
and the PEOPLE OF THE
PHILIPPINES, respondents.
DECISION
KAPUNAN, J.:
The petition at bar stems from two cases, Search Warrant
Case No. Q-3324 (99) before Branch 93 of the Quezon City
Regional Trial Court (RTC), and Civil Case No. Q-93-37206 for
damages and injunctions before Branch 91 of the same court.
The facts are set forth in the Decision of the Court of
Appeals dated July 6, 1999:
x x x on January 28, 1999, Judge Apolinario D. Bruselas, Jr.,
Presiding Judge of RTC, Branch 93, Quezon City, upon
application of the Economic Intelligence and Investigation
Bureau (EIIB), issued Search Warrant No. 3324 (99) against
Sanly Corporation (Sanly), respondent, for violation of Section
168 of R.A. No. 8293 (unfair competition).
By virtue of Search Warrant No. 3324 (99), EIIB agents seized
451 boxes of Mitsubishi photographic color paper from
respondent Sanly. xxx
Forthwith, Solid Triangle, through Robert Sitchon, its Marketing
and Communication Manager, filed with the Office of the City
Prosecutor, Quezon City, an affidavit complaint for unfair
competition against the members of the Board of Sanly and LWT
Co., Inc. (LWT), docketed as I.S. No. 1-99-2870.
Sitchon alleged that ERA Radio and Electrical Supply (ERA),
owned and operated by LWT, is in conspiracy with Sanly in
selling and/or distributing Mitsubishi brand photo paper to the
damage and prejudice of Solid Triangle, [which claims to be the
sole and exclusive distributor thereof, pursuant to an agreement
with the Mitsubishi Corporation].
On February 4, 1999, petitioner Solid Triangle filed with Judge
Bruselas sala an urgent ex parte motion for the transfer of
custody of the seized Mitsubishi photo color paper stored in the
office of EIIB.
On February 8, 1999, respondents Sanly, LWT and ERA moved
to quash the search warrant which was denied by Judge
Bruselas in an order dated March 5, 1999.
The said respondents filed a motion for reconsideration which
was granted by Judge Bruselas in the first assailed order of
March 18, 1999. Respondent Judge held that there is doubt
whether the act complained of (unfair competition) is criminal in
nature.

Petitioner Solid Triangle filed a motion for reconsideration
contending that the quashal of the search warrant is not proper
considering the pendency of the preliminary investigation in I.S.
No. 1-99-2870 for unfair competition wherein the seized items
will be used as evidence.
On March 26, 1999, Judge Bruselas issued the second assailed
order denying Solid Triangles motion for reconsideration.
On March 29, 1999, petitioner Solid Triangle filed with Branch
91 of the same Court, presided by Judge Lita S. Tolentino-
Genilo, Civil Case No. Q-99-37206 for damages and injunction
with prayer for writs of preliminary injunction and
attachment. Impleaded as defendants were Sanly, LWT and
ERA.
On March 30, 1999, the defendants filed their opposition to the
application for the issuance of writs of injunction and
attachment.
On March 31, 1999, Judge Genilo denied petitioners application
for a preliminary attachment on the ground that the application
is not supported with an affidavit by the applicant, through its
authorized officer, who personally knows the facts.
Meanwhile, on April 20, 1999, Judge Bruselas issued the third
assailed order, the dispositive portion of which reads:
WHEREFORE, the foregoing premises considered, the court
directs
1) EIIB, Mr. Robert Sitchon and Solid Triangle Sales
Corporation to divulge and report to the court the exact location
of the warehouse where the goods subject of this proceeding
are presently kept within seventy-two hours from receipt hereof;
2) Mr. Rober Sitchon and Solid Triangle Sales Corporation to
appear and show cause why they should not be held in contempt
of court for failure to obey a lawful order of the court at a hearing
for the purpose on 12 May 1999 at 8:30 oclock in the morning;
3) The Deputy Sheriff of this Court to take custody of the seized
goods and cause their delivery to the person from whom the
goods were seized without further lost [sic] of time;
Let a copy of this order be served by personal service upon Mr.
Robert Sitchon and Solid Triangle Sales Corporation. Serve
copies also to EIIB and the respondents Rod Castro and Sanly
Corporation.
SO ORDERED.[1]
Alleging grave abuse of discretion, petitioners questioned
before the Court of Appeals the orders of Branch 93 of the
Quezon City RTC granting private respondents motion for
reconsideration and denying that of petitioners, as well as the
order dated April 20, 1999 directing petitioners to, among other
things, show cause why they should not be held in
contempt. Petitioners also assailed the order of the Quezon City
RTC, Branch 91 denying their application for a writ of
attachment. Upon the filing of the petition on April 26, 1999, the
Court of Appeals issued a temporary restraining order to prevent
Judge Bruselas from implementing the Order dated April 20,
1999.
On July 6, 1999, the Court of Appeals rendered judgment
initially granting certiorari. It held that the quashing of the
warrant deprived the prosecution of vital evidence to determine
probable cause.
Admittedly, the City Prosecutor of Quezon City has filed a
complaint for unfair competition against private respondents and
that the undergoing preliminary investigation is in progress. In
the said proceedings, the prosecution inevitably will present the
seized items to establish a prima facie case of unfair
competition against private respondents.
Considering that Judge Bruselas quashed the search warrant,
he practically deprived the prosecution of its evidence so vital in
establishing the existence of probable cause.
Petitioners reliance on Vlasons Enterprises Corporation vs.
Court of Appeals [155 SCRA 186 (1987).] is in order. Thus:
The proceeding for the seizure of property in virtue of a search
warrant does not end with the actual taking of the property by
24
the proper officers and its delivery, usually constructive, to the
court. The order for the issuance of the warrant is not a final one
and cannot constitute res judicata (Cruz vs. Dinglasan, 83 Phil.
333). Such an order does not ascertain and adjudicate the
permanent status or character of the seized property. By its very
nature, it is provisional, interlocutory (Marcelo vs. de Guzman,
114 SCRA 657). It is merely the first step in the process to
determine the character and title of the property. That
determination is done in the criminal action involving the crime
or crimes in connection with which the search warrant was
issued. Hence, such a criminal action should be prosecuted, or
commenced if not yet instituted, and prosecuted. The outcome
of the criminal action will dictate the disposition of the seized
property.[2]
The appellate court further ruled that the affidavit of merits is not
necessary for the order of preliminary attachment to issue
considering that the petition itself is under oath:
The denial was based on the ground that the application is not
supported by an affidavit of the applicant corporation, through
its authorized officer, who personally knows the facts.
We cannot go along with respondent judges theory. In Consul
vs. Consul [17 SCRA 667 (1996)], the Supreme Court held:
Affidavit of merits has a known purpose: Courts and parties
should not require the machinery of justice to grind anew, if the
prospects of a different conclusion cannot be reasonably
reached should relief from judgment be granted. We look back
at the facts here. The petition for relief is verified by petitioner
himself. The merits of petitioners case are apparent in the
recitals of the petition. Said petition is under oath.That oath, we
believe, elevates the petition to the same category as a separate
affidavit. To require defendant to append an affidavit of merits to
his verified petition, to the circumstances, is to compel him to do
the unnecessary. Therefore, the defect pointed by the court
below is one of forms, not of substance. Result: Absence of a
separate affidavit is of de minimis importance.[3]
Upon motion by respondents, however, the Court of
Appeals reversed itself. In its Amendatory Decision, the
appellate court held that there was no probable cause for the
issuance of the search warrant.Accordingly, the evidence
obtained by virtue of said warrant was inadmissible in the
preliminary investigation.
x x x Under Sections 168 and 170 of R.A. 8293 (the Intellectual
Property Code), there is unfair competition if the alleged
offender has given to his goods the general appearance of the
goods of another manufacturer or dealer and sells or passes
them off as goods of that manufacturer or dealer in order to
deceive or defraud the general public or the legitimate
trader. Also, if he makes false statements in the course of trade
to discredit the goods, business, or services of another.
Undisputedly, the seized goods from Sanly are genuine and not
mere imitations. This is admitted by petitioners in their
application for a search warrant and supporting affidavits,
Annexes A to D, inclusive, in their April 27, 1999 Submission of
Annexes to this Court. It bears stressing that there is no showing
or allegation that Sanly has presented, sold, or passed off its
photographic paper as goods which come from Solid
Triangle. There is no attempt on its part to deceive.
Both Sanly and Solid Triangle sell genuine Mitsubishi
products. Solid Triangle acquires its goods from Japan on the
basis of its exclusive distributorship with Mitsubishi
Corporation. While Sanly buys its goods from Hongkong,
claiming it is a parallel importer, not an unfair competitor. As
defined, a parallel importer is one which imports, distributes, and
sells genuine products in the market, independently of an
exclusive distributorship or agency agreement with the
manufacturer. And, this is precisely what Sanly states as its
commercial status.
Records show that Sanly sold its photographic paper purchased
from Hongkong without altering its appearance. It is distributed

in the same Mitsubishi box with its logo and distinguishing marks
as marketed in Japan. The same brown paper with the
Mitsubishi seal is wrapped around its products. Copies of the
importation documents and the certification on imports issued
by the Philippine government recognized Societe Generale d
Surveillance (SGS) were appended to the motion to quash
search warrant.
Thus, on factual basis, the real dispute is actually between Solid
Triangle and the manufacturer Mitsubishi. If Solid Triangle feels
aggrieved, it should sue Mitsubishi for damages, if at all for
breach of its distributorship. But that is between them.
Certainly, there is here no probable cause to justify the issuance
of a search warrant based on a criminal action for unfair
competition.
Therefore, since there is no probable cause for unfair
competition in this case, then the quashal of the search warrant
by respondent Judge Bruselas is valid. This being the case,
there is merit in the motion for reconsideration.
In ascertaining the legality of a search warrant and the validity
of the search and seizure conducted by the EIIB agents by virtue
of the warrant, it is essential that a crime has been committed or
is being committed and that the things seized are fruits of the
crime or the means by which it is committed.
The validity of a search and seizure is of constitutional
dimensions. The right to privacy and the sanctity of a persons
house, papers and effects against unreasonable searches and
seizures are not only ancient.They are also zealously protected.
xxx
Solid Triangle contends that the quashal of the search warrant
deprived it of its right to prove a prima facie case of unfair
competition in the preliminary investigation. We initially agreed
with it.
While Solid Triangle has the right to present every single piece
of evidence it can gather and muster, however, it has no right to
prove its case through the use of illegally seized evidence
secured in derogation of a constitutionally guaranteed right.
The constitutional provision that any evidence obtained in
violation of the provision against unreasonable searches and
seizures shall be inadmissible for any purpose in any
proceeding finds application here.The goods seized without
probable cause are fruits of the poisonous tree and cannot be
used for the purpose of proving unfair competition during
preliminary investigation proceedings.
The case of Vlasons Enterprises Corporation vs. Court of
Appeals does not apply since it involved a different set of facts
and issues.
On the contrary, it is the case of People vs. Court of Appeals
[216 SCRA 101 (1992)] that governs, where the Supreme Court
ruled that with the quashal of the search warrant, the seized
goods could not be used as evidence for any purpose, in any
proceeding.[4]
As regards the preliminary attachment, the appellate court
found that there was no ground for the issuance of the writ
because:
x x x Sanly does not deny that it sells Mitsubishi photographic
color paper. But there is no showing that it attempts to depart
from country, defraud Solid Triangle or the buying public,
conceal or dispose of unjustly detained personal property, or
commit any of the acts provided in Rule 57 of the 1997 Rules of
Civil Procedure as grounds for the issuance of a writ of
preliminary attachment.[5]
Petitioners moved for reconsideration but the same was
denied by the Court of Appeals in its Resolution dated August 4,
2000.
In assailing the Amendatory Decision of the Court of
Appeals, petitioners argue that:
I.
THE JUDGE WHO ISSUED A SEARCH WARRANT THAT
HAS ALREADY BEEN IMPLEMENTED CANNOT QUASH
25
THE WARRANT ANYMORE, AT LEAST WITHOUT
WAITING FOR THE FINDINGS OF THE CITY
PROSECUTOR WHO HAS THE EXCLUSIVE
JURISDICTION TO DETERMINE PROBABLE CAUSE.
II.
IN THE PARALLEL IMPORTATION EFFECTED BY THE
RESPONDENTS WITH DECEIT AND BAD FAITH,
THERE EXISTS PROBABLE CAUSE THAT THE CRIME
OF UNFAIR COMPETITION UNDER THE
INTELLECTUAL PROPERTY CODE HAS BEEN
COMMITTED BY THE RESPONDENTS.
III.
PETITIONERS APPLICATION FOR A WRIT OF
ATTACHMENT CANNOT BE DENIED ON THE GROUND
THAT AN AFFIDAVIT OF MERITS IS NOT APPENDED
TO THE COMPLAINT, AS THE COURT OF APPEALS
HAS ALREADY RULED, AND ON THE GROUND THAT
THERE IS NO JUSTIFICATION FOR IT BECAUSE THE
QUESTIONS PERTINENT THERETO ARE NOT
BEFORE THE COURT OF APPEALS BUT BEFORE THE
TRIAL COURT.
IV.
PETITIONERS CANNOT BE HELD LIABLE FOR
CONTEMPT IN NOT RETURNING THE GOODS
SUBJECT OF THE SEARCH WARRANT
NOTWITHSTANDING THE REFUSAL OF THE COURT
OF APPEALS TO RULE ON THIS POINT FURTHER
WHICH IS A GRIEVOUS ERROR TO THE PREJUDICE
OF THE PETITIONERS.[6]
Petitioners contend that the Constitution does not
authorize the judge to reverse himself and quash the warrant,
especially after goods had been seized pursuant to the search
warrant, and the prosecution is poised to push forward with the
goods as evidence.[7] In finding that doubt exists that a crime has
been committed, it is argued that the judge trench[ed] upon the
prerogative and duty of the city prosecutor.[8]
The contention has no merit.
It is undisputed that only judges have the power to issue
search warrants.[9] This function is exclusively judicial. Article III
of the Constitution unequivocally states:
Sec. 2. The right of the people to be secure in their persons,
houses, papers, and effects against unreasonable searches and
seizures of whatever nature and for any purpose shall be
inviolable, and no search warrant or warrant of arrest shall issue
except upon probable cause to be determined personally by the
judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly
describing the place to be searched and the persons or things
to be seized. [Emphasis supplied.]
Inherent in the courts power to issue search warrants is the
power to quash warrants already issued. In this connection, this
Court has ruled that the motion to quash should be filed in the
court that issued the warrant unless a criminal case has already
been instituted in another court, in which case, the motion
should be filed with the latter.[10] The ruling has since been
incorporated in Rule 126 of the Revised Rules of Criminal
Procedure:
Sec. 14. Motion to quash a search warrant or to suppress
evidence; where to file. A motion to quash a search warrant
and/or to suppress evidence obtained thereby may be filed in
and acted upon only by the court where the action has been
instituted. If no criminal action has been instituted, the motion
may be filed in and resolved by the court that issued the search
warrant. However, if such court failed to resolve the motion and
a criminal case is subsequently filed in another court, the motion
shall be resolved by the latter court.
In the determination of probable cause, the court must
necessarily resolve whether or not an offense exists to justify the

issuance or quashal of the search warrant. Prior to the revision
of December 1, 2000, Rule 126 of the Rules of Court provided:
Sec. 3. Requisites for issuing search warrant. A search warrant
shall not issue but upon probable cause in connection with one
specific offense to be determined personally by the judge after
examination under oath or affirmation of the complainant and
the witnesses he may produce, and particularly describing the
place to be searched and the things to be seized. [Emphasis
supplied.][11]
Note that probable cause is defined as:
xxx the existence of such facts and circumstances which could
lead a reasonably discreet and prudent man to believe that an
offense has been committed and that the item(s), article(s) or
object(s) sought in connection with said offense or subject to
seizure and destruction by law is in the place to be searched.[12]
In Kenneth Roy Savage/K Angelin Export Trading vs.
Taypin,[13] the Court was confronted with a search warrant that
was issued purportedly in connection with unfair competition
involving design patents. The Court held that the alleged crime
is not punishable under Article 189 of the Revised Penal Code,
and accordingly, quashed the search warrant issued for the non-
existent crime.
In the issuance of search warrants, the Rules of Court requires
a finding of probable cause in connection with one specific
offense to be determined personally by the judge after
examination of the complainant and the witnesses he may
produce, and particularly describing the place to be searched
and the things to be seized. Hence, since there is no crime to
speak of, the search warrant does not even begin to fulfill these
stringent requirements and is therefore defective on its face. x x
x.
A preliminary investigation, by definition, also requires a
finding by the authorized officer of the commission of a
crime. Previous to the 2000 revision, Section 1 of Rule 112 of
the Rules of Court defined a preliminary investigation as an
inquiry or proceeding to determine whether there is sufficient
ground to engender a well-founded belief that a
crime cognizable by the Regional Trial Court has been
committed and the respondent is probably guilty thereof, and
should be held for trial.[14]
Section 2 of the same Rule enumerates who may conduct
preliminary investigations:
Sec. 2. Officers authorized to conduct preliminary
investigations. The following may conduct preliminary
investigations:
(a) Provincial or city fiscals and their assistants;
(b) Judges of the Municipal Trial Courts and
Municipal Circuit Trial Courts;
(c) National and Regional state prosecutors; and
(d) Such other officers as may be authorized by law.
Their authority to conduct preliminary investigations shall
include all crimes cognizable by the proper court in their
respective territorial jurisdictions.[15]
The determination of probable cause during a preliminary
investigation has been described as an executive function.[16]
The proceedings for the issuance/quashal of a search
warrant before a court on the one hand, and the preliminary
investigation before an authorized officer on the other, are
proceedings entirely independent of each other. One is not
bound by the others finding as regards the existence of a
crime. The purpose of each proceeding differs from the
other. The first is to determine whether a warrant should issue
or be quashed, and the second, whether an information should
be filed in court.
When the court, in determining probable cause for issuing
or quashing a search warrant, finds that no offense has been
committed, it does not interfere with or encroach upon the
proceedings in the preliminary investigation. The court does not
oblige the investigating officer not to file an information for the
26
courts ruling that no crime exists is only for purposes of issuing
or quashing the warrant. This does not, as petitioners would like
to believe, constitute a usurpation of the executive
function. Indeed, to shirk from this duty would amount to an
abdication of a constitutional obligation.
The effect of the quashal of the warrant on the ground that
no offense has been committed is to render the evidence
obtained by virtue of the warrant inadmissible for any purpose in
any proceeding, including the preliminary investigation. Article
III of the Constitution provides:
Sec. 3. (1) x x x.
(2) Any evidence obtained in violation of this or the preceding
section [Section 2] shall be inadmissible for any purpose in any
proceeding.
It may be true that, as a result of the quashal of the warrant, the
private complainant is deprived of vital evidence to establish his
case, but such is the inevitable consequence.
Nevertheless, the inadmissibility of the evidence obtained
through an illegal warrant does not necessarily render the
preliminary investigation academic. The preliminary
investigation and the filing of the information may still proceed if,
because of other (admissible) evidence, there exists sufficient
ground to engender a well-founded belief that a crime has been
committed and the respondent is probably guilty thereof, and
should be held for trial. The finding by the court that no crime
exists does not preclude the authorized officer conducting the
preliminary investigation from making his own determination that
a crime has been committed and that probable cause exists for
purposes of filing the information.
Petitioners also argue that Section 14, Rule 126 of the
Revised Rules of Criminal Procedure, supra, while intended to
resolve conflicts of responsibility between courts, does not
expressly cover the situation where the criminal complaint is
pending with the prosecutor. In such a case, petitioners submit,
the public prosecutor should be allowed to resolve the question
of whether or not probable cause exists.[17]
The Court finds this interpretation too contrived. Section
14, Rule 126 precisely covers situations like the one at
bar. Section 14 expressly provides that a motion to quash a
search warrant and/or to suppress evidence obtained thereby
may be filed in and acted upon only by the court where the action
has been instituted. Under the same section, the court which
issued the search warrant may be prevented from resolving a
motion to quash or suppress evidence only when a criminal case
is subsequently filed in another court, in which case, the motion
is to be resolved by the latter court. It is therefore puerile to
argue that the court that issued the warrant cannot entertain
motions to suppress evidence while a preliminary investigation
is ongoing. Such erroneous interpretation would place a person
whose property has been seized by virtue of an invalid warrant
without a remedy while the goods procured by virtue thereof are
subject of a preliminary investigation.
We now turn to the question of whether the facts, as
presented before the trial court, constitute an offense.
Private respondents are alleged to have committed unfair
competition in violation of Section 168 of the Intellectual
Property Code, which states:
SEC. 168. Unfair Competition, Rights, Regulation and
Remedies. 168.1 A person who has identified in the mind of the
public goods he manufactures or deals in, his business or
services from those of others, whether or not a registered mark
is employed, has a property right in the goodwill of the said
goods, business or services so identified, which will be protected
in the same manner as other property rights.
168.2 Any person who shall employ deception or any other
means contrary to good faith by which he shall pass off the
goods manufactured by him or in which he deals, or his
business, or services for those of the one having established
such goodwill, or who shall commit any acts calculated to

produce said result, shall be guilty of unfair competition, and
shall be subject to an action therefor.
168.3 In particular, and without in any way limiting the scope of
protection against unfair competition, the following shall be
deemed guilty of unfair competition:
(a) Any person, who is selling his goods and gives them the
general appearance of goods of another manufacturer or dealer,
either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which would
be likely to influence purchasers to believe that the goods
offered are those of a manufacturer or dealer, other than the
actual manufacturer or dealer, or who otherwise clothes the
goods with such appearance as shall deceive the public and
defraud another of his legitimate trade, or any subsequent
vendor of such goods or any agent of any vendor engaged in
selling such goods with a lie purpose;
(b) Any person who by any artifice, or device, or who employs
any other means calculated to induce the false belief that such
person is offering the service of another who has identified such
services in the mind of the public; or
(c) Any person who shall make any false statement in the course
of trade or who shall commit any other act contrary to good faith
of a nature calculated to discredit the goods, business or
services of another.
168.4 The remedies provided by Sections 156, 157 and 161
shall apply mutatis mutandis.
The same law, in Section 170, provides the penalty for violation
of Section 168:
SEC. 170. Penalties. Independent of the civil and administrative
sanctions imposed by law, a criminal penalty of imprisonment
from two (2) years to five (5) years and a fine ranging from Fifty
thousand pesos (50,000) to Two hundred thousand pesos
(200,000), shall be imposed on any person who is found guilty
of committing any of the acts mentioned in Section 155, Section
168 and Subsection 169.1.
Petitioners submit that the importation of even genuine
goods can constitute a crime under the Intellectual Property
Code so long as fraud or deceit is present. The intent to deceive
in this case, according to petitioners, is patent from the following
undisputed facts:
(a) Before marketing its product, the respondents totally
obliterated and erased the Emulsion Number and Type that was
printed on the box/carton of the product because of which the
source of the goods can no longer be traced.
(b) Respondents even covered the boxes with newspapers to
conceal true identity.
(c) Being also engaged in the sale of photo equipments [sic] and
having had the occasion of participating in the same exhibit with
petitioner Solid Triangle several times already, respondents
certainly knew that petitioner Solid Triangle is the sole and
exclusive importer and distributor of Mitsubishi Photo Paper.
(d) Two agents of the EIIB were also able to confirm from a
salesgirl of respondents that substantial quantity of stocks of
Mitsubishi Photo Paper are available at respondents store and
that the products are genuine, as they are duly authorized to sell
and distribute it to interested customers.
(e) No better proof of unfair competition is the seizure of the
goods, 451 boxes of Mitsubishi photographic color paper. [18]
Petitioners further expound:
47. We may categorize the acts of the respondents
as underground sales and marketing of genuine goods,
undermining the property rights of petitioner Solid Triangle. The
Court of Appeals itself recognized the rights of a dealer. The
acts of the respondents were made to appropriate unjustly the
goodwill of petitioner Solid Triangle, and goodwill is protected by
the law on unfair competition.
48. Petitioner Solid Triangle has established a trade or business
in which it had acquired goodwill and reputation that will be
27
protected, and so, to permit respondents to continue importing
and distributing Mitsubishi Photo Paper, would be to
countenance the unlawful appropriation of the benefit of a
goodwill which petitioner Solid Triangle has acquired and permit
the respondent to grab the reputation or goodwill of the business
of another.
49. x x x petitioners have a valid cause to complain against
respondents for the criminal violation of the Intellectual Property
Law when the latter made it appear that they were duly
authorized to sell or distribute Mitsubishi Photo Paper in the
Philippines, when in truth and in fact they were not, and when
they were hiding their importation from the petitioners by such
acts as removing the Emulsion Number and Type and covering
the boxes with old newspapers.[19]
We disagree with petitioners and find that the evidence
presented before the trial court does not prove unfair
competition under Section 168 of the Intellectual Property
Code. Sanly Corporation did not pass off the subject goods as
that of another. Indeed, it admits that the goods are genuine
Mitsubishi photographic paper, which it purchased from a
supplier in Hong Kong.[20] Petitioners also allege that private
respondents made it appear that they were duly authorized to
sell or distribute Mitsubishi Photo Paper in the Philippines.
Assuming that this act constitutes a crime, there is no proof to
establish such an allegation.
We agree with petitioners, however, that the Court of
Appeals went beyond the issues when it ruled that there were
no grounds for the issuance of an order of preliminary
attachment. The only issue raised with respect to the preliminary
attachment was whether the application for the writ should have
been denied because the same was not supported by an
affidavit of the applicant corporation, through its authorized
officer, who personally knows the facts. Whether there are
sufficient grounds to justify the order is a matter best left to the
trial court, which apparently has yet to hear the matter. Thus, we
sustain the Court of Appeals original decision holding that an
affidavit of merit is not necessary since the petition is verified by
an authorized officer who personally knows the facts.
Similarly premature is whether petitioners failure to return
the goods to respondents constituted indirect contempt. The
assailed order dated April 20, 1999 was a show cause
order. Before any hearing on the order could be held, petitioners
promptly filed a petition for certiorari. Clearly, the trial court had
yet to rule on the matter, and for this Court now to hold
petitioners act contemptuous would preempt said court.
WHEREFORE, the petition is GRANTED IN PART. The
Amendatory Decision of the Court of Appeals dated March 31,
2000, as well as its Resolution dated August 4, 2000,
is AFFIRMED insofar as it holds that (1) the Quezon City
Regional Trial Court, Branch 93, has the power to determine the
existence of a crime in quashing a search warrant and, (2) the
evidence does not support a finding that the crime of unfair
competition has been committed by respondents;
and REVERSED insofar as it holds that (1) there are no grounds
to warrant the issuance of a writ of preliminary attachment and
(2) petitioners are guilty of contempt. The case is remanded for
further proceedings to the courts of origin, namely, Branch 91 of
RTC, Quezon City for resolution of the application for a writ of
attachment, and Branch 93 of the same court for resolution of
the application to cite petitioners for contempt.
Petitioners are ordered to return to respondent Sanly
Corporation the 451 boxes of Mitsubishi photographic color
paper seized by virtue of Search Warrant No. 3324 (99) issued
by the Quezon City Regional Trial Court, Branch 93.
SO ORDERED.
G.R. No. 169156 February 15, 2007
SONY COMPUTER ENTERTAINMENT, INC., Petitioner,
vs.
RIGHT FUTURE TECHNOLOGIES, INC., Respondent.

DECISION
CARPIO MORALES, J.:
On application of Inspector Rommel G. Macatlang of the
Philippine National Police, after a complaint was received from
petitioner, Sony Computer Entertainment, Inc. (SCEI), eight
search warrants1 for copyright and trademark infringement, of
which Search Warrant Nos. 05-6336 and 05-6337 are relevant
to the present case, were issued by the Manila Regional Trial
Court (RTC) Executive Judge Antonio M. Eugenio, Jr. following
which a raid was conducted on the premises of respondent,
Bright Future Technologies, Inc. (BFTI), on April 1, 2005. Seized
during the raid were the following items:
eight replicating machines
five bonding machines
four printing machines
seven polycarbonate dryers
one table for silk screen
ten moulds
two shredder machines
one color blue centroller
one dryer machine
92 boxes of assorted colors of paint
600 pieces of counterfeit Sony Playstation DVDs
285 boxes of blank CDs
eight boxes of white blank CDs
nine boxes of AL targets
two boxes of sputtering targets
18 gallons of UV bonding adhesive
four gallons of DVD bondage
21 gallons of phothum chemicals
four gallons of CPS mesh prep, and
nine gallons of CD lacquer.2
BFTI subsequently filed on April 5, 2005 before Branch 24 of the
RTC Manila presided by Judge Eugenio an Urgent Motion to
Quash and/or to Exclude or Suppress Evidence and Return
Seized Articles,3 alleging as follows, quoted verbatim:
1. The searching team entered the premises and
conducted the search without any witness in violation
of the Rules of Court;
2. The raiding team planted evidence of 600 compact
discs at the scene while no witnesses were present;
3. Certification against forum shopping prescribed by
law was not executed;
4. For search warrant to be valid, the master tapes
must be presented;
5. The statement made by the affiants in their joint-
affidavit in support of the application for the search
warrant were false and perjurious;
6. No probable cause exists for the issuance of the
warrant;
7. The search conducted was illegal;
8. The place to be searched was not described with
particularity;
9. No bond was posted by the applicant.41awphi1.net
SCEI filed an Opposition5 to the motion, to which BFTI filed a
Reply,6 the latter arguing that SCEI had no personality to
represent the People of the Philippines in the case and to file the
opposition to the motion because SCEIs agents were mere
witnesses of the applicant for the issuance of the search
warrants.7
On April 11, 2005, acting on a Very Urgent Motion to Inhibit 8 filed
by SCEI to which BFTI interposed its objection, Judge Eugenio
"voluntarily inhibited" himself from the case. 9 The case was
thereafter raffled to Branch 21 of the Manila RTC, presided by
Judge Amor A. Reyes.10
In the meantime or on April 14, 2005, SCEI, through counsel,
filed with the Department of Justice Task Force on Anti-
Intellectual Property Piracy a complaint-affidavit against the
directors and officers of BFTI.11
28
By Order12 dated April 18, 2005, the RTC denied BFTIs motion
to quash the warrants, it finding that they were regularly issued
and implemented, and that a bond is not required in the
application for their issuance.
BFTI filed a Motion for Reconsideration13 of the denial of its
motion to quash. It also filed joint motions "for the inhibition of
the Honorable Judge Amor Reyes," "for reconsideration of the
order of voluntary inhibition dated April 11, 2005," and "for the
return of the case to the executive judge."14
In an Order dated May 20, 2005, Judge Reyes transmitted the
records of the case to the Executive Judge pursuant to A.M. No.
03-8-02.15 The case was then re-raffled to Branch 8 of the
Manila RTC, presided by Judge Felixberto T. Olalia, Jr. 16
In addressing the issue of SCEIs personality to appear in the
proceedings, the RTC held that it would treat SCEIs counsel as
"an officer of [the] Court to argue the other side, so to speak, for
the clarification of issues related to search and seizure cases
and to arrive at a better conclusion and resolution of issues in
this case."17
The RTC, however, found that the two-witness rule under
Section 8 of Rule 126 which provides:
SEC. 8. Search of house, room, or premises to be made in
presence of two witnesses. No search of a house, room or any
other premise shall be made except in the presence of the lawful
occupant thereof or any member of his family or in the absence
of the latter, two witnesses of sufficient age and discretion
residing in the same locality. (Underscoring supplied),
was violated and that the searching teams use of a bolt cutter
to open the searched premises was unnecessary, hence, it
granted BFTIs Motion for Reconsideration of its April 18, 2005
Order by Order of August 8, 2005.18
BFTI subsequently filed on August 9, 2005 an Ex Parte Motion
to Return Seized Articles19 which the RTC granted, by Order of
August 10, 2005, subject to the filing of a bond. 20 BFTI filed the
required bond alright,21 and the seized items were turned over
to its custody.22
Hence, arose SCEIs present Petition for Review on Certiorari
under Rule 4523 which assails the August 8 and August 10, 2005
Orders of the court a quo, contending that the RTC erred
(1) . . . when it disregarded [its] clear right . . . to appear
and participate as a private complainant in the search
warrant proceedings;
(2) . . . when it granted respondents Motion to Quash
based on questions of alleged irregularities by the
peace officers in enforcing the search warrants.
(a) . . . when it ruled that the use of the bolt
cutter violated Section 7 of Rule 126.
(b) . . . when it ruled that the enforcement of
the search warrant violated the two-witness
rule provided in Section 8 of Rule 126;
[3] . . . when it ordered the immediate release of the
seized property prior to the finality of the order
quashing the search warrants.
(a) . . . when it released the seized properties
by virtue of the filing of a bond by the
respondent.24
The issue of whether a private complainant, like SCEI, has the
right to participate in search warrant proceedings was
addressed in the affirmative in United Laboratories, Inc. v.
Isip:25lawphil.net
. . . [A] private individual or a private corporation complaining to
the NBI or to a government agency charged with the
enforcement of special penal laws, such as the BFAD,
may appear, participate and file pleadings in the search warrant
proceedings to maintain, inter alia, the validity of the search
warrant issued by the court and the admissibility of the
properties seized in anticipation of a criminal case to be filed;
such private party may do so in collaboration with the NBI or
such government agency. The party may file an opposition to a
 29

motion to quash the search warrant issued by the court, or a The August 8, 2005 Order of the Regional Trial Court of Manila,
motion for the reconsideration of the court order granting such Branch 8 granting the Urgent Motion to Quash filed by
motion to quash.26 (Emphasis and underscoring supplied) respondent, Bright Future Technologies, Inc., is AFFIRMED.
When SCEI then opposed BFTIs Urgent Motion to The August 10, 2005 Order granting the Ex Parte Motion to
Quash and/or to Suppress or Exclude Evidence and Return Return Seized Articles filed by respondent is AFFIRMED, with
Seized Articles (emphasis supplied), the RTC correctly the MODIFICATION that the portion requiring respondent to file
recognized the participation of SCEI in the proceedings. a bond is SET ASIDE. Let the bond then filed by respondent
As for the use of a bolt cutter to gain access to the premises of be CANCELLED.
BFTI, it was, under the circumstances, reasonable, contrary to SO ORDERED.
the RTCs finding that it was unnecessary. For, as the RTC itself
found, after the members of the searching team introduced
themselves to the security guards of BFTI and showed them the
search warrants, the guards refused to receive the warrants and
to open the premises, they claiming that "they are not in control
of the case."27 The conditions required under Section 7 of Rule
126 were thus complied with:
The officer, if refused admittance to the place of directed
search after giving notice of his purpose and authority,
may break open any outer or inner door or window of a house
or any part of a house or anything therein to execute the warrant
or liberate himself or any person lawfully aiding him when
unlawfully detained therein. (Underscoring supplied)
The RTCs finding that the two-witness rule governing the
execution of search warrant was not complied with, which rule
is mandatory to ensure regularity in the execution of the search
warrant,28 is in order, however.
Observed the RTC:
At this point, it is worthy of note [sic] the two statements issued
by Barangay Police Subrino P. de Castro and Gaudencio A.
Masambique who affirmed in their testimonies in Court that, to
wit:
xxxx
3. Noong ako ay makarating sa nasabing lugar nadatnan ko ang
mga pulis at mga miyembro ng Raiding Team na nasa loob na
ng gusali ng Bright Future at nagsisiyasat sa mga gamit at
makinaryang naroroon. Pagkatapos ay nilapitan ako ng isang
pulis at ipinatanggap sa akin ang nasabing search warrant.
The police were already searching ("nagsisiyasat") the area of
respondent BFTI in clear violation of the two-witness rule
provided for by Section 8 of Rule 126. These statements of the
two Barangay Police ostensibly arriving late while a search was
going on was corroborated by Insp. Macatlangs testimony that
the Barangay officials arrived at about 11:30 PM to 12
AM.29 (Underscoring supplied)
The RTC did not thus err in ordering the quashal of the search
warrants.
SCEI insists, however, that the searching team waited for the
arrival of the barangay officials who were summoned to witness
the search,30 and that "[e]ven when the enforcing officers were
moving towards the actual BFTI premises . . . they
were accompanied at all times by one of the security guards on
duty until the barangay officials arrived." 31SCEIs position raises
an issue of fact which is not proper for consideration in a petition
for review on certiorari before this Court under Rule 45, which is
supposed to cover only issues of law.32 In any event, a security
guard may not be considered a "lawful occupant" or "a member
of [the lawful occupants] family" under the earlier quoted
Section 8 of Rule 126.
As the two-witness rule was not complied with, the objects
seized during the April 1, 2005 search are inadmissible in
evidence. Their return, on motion of BFTI, was thus in order. 33
A final word. The RTC order requiring BFTI to file a bond to
ensure the return of the seized items should the Department of
Justice find probable cause against it in I.S. No. 2005-315, SCEI
v. Anthony Bryan B. Sy, et al., has no basis in law. Besides, the
seized items being inadmissible in evidence, it would serve no
purpose to ensure their return.
WHEREFORE, the petition is DENIED.