[43] Sonic Steel Industries, Inc. v. Atty. Chua (Recio) a. Sonic Steel Industries, Inc.
(complainant) → corporation doing
July 17, 2013 | PERALTA, J. | Canon 10, Rule 10.01 business as a manufacturer and distributor of zinc and aluminum-zinc coated metal sheets known in the market as Superzinc and Superlume. PETITIONER: SONIC STEEL INDUSTRIES, INC. b. Atty. Chua (respondent) → VP, Corporate Legal Counsel, and RESPONDENTS: ATTY. NONNATUS P. CHUA Assistant Corp Secretary of Steel Corporation (STEELCORP) c. STEELCORP → petitioner in another case where Sonic Steel is SUMMARY: STEELCORP filed before the DOJ a complaint for violation of the defendant [inaaway si Sonic Steel]. the Intellectual Property Code against Sonic Steel Industries, Inc. STEELCORP d. BIEC International, Inc. → grantor of Patent No. 16269 to alleged that Sonic Steel’s product, “SUPERLUME” can only be manufactured STEELCORP. using the same technical information and registered patent used by 2. The controversy arose when STEELCORP applied for a Search Warrant in STEELCORP, and that both the technical information and patent has been RTC-Cavite against complainant, Sonic Steel Industries. Sonic Steel’s exclusively licensed to STEELCORP. Sonic Steel, on the other hand, contended properties were seized. that STEELCORP’s patent is already expired, and that Atty. Chua, in refusing to 3. A week later, STEELCORP filed before the DOJ a complaint for violation provide a copy of the alleged exclusive patent granted to STEELCORP, of Sec. 168 (Unfair Competition, Rights, Regulation and Remedies) of the deliberately misled the Court into believing that STEELCORP still has the Intellectual Property Code against Sonic Steel. [this actual issue isn’t that exclusive licensee rights to the subject patent. WoN Atty. Chua deliberately important but just in case he asks] misled the Court. - YES. because Atty Chua did not disclose that the Patent a. The acts of Sonic Steel of storing, selling, retailing, distributing, No. 16269 had already expired. The Court found that under the Technical importing, dealing with or otherwise disposing of “SUPERLUME” Information and Patent License Agreement between STEELCORP and BIEC metal sheet products which are similarly coated with International, Inc., the terms technical information and patent are SEPARATE aluminum-zinc alloy and cannot be produced without utilizing AND DISTINCT. At the time of the application for a search warrant against the same basic technical information AND the registered Sonic Steel, the patent had already expired; thus, all STEELCORP has licensee patent used by STEELCORP to manufacture “GALVALUME” rights over currently is the technical information, NOT the patent. In a transcript metal sheet products, the ENTIRE PROCESS of which has been of the hearing during the application for a search warrant, every time the RTC lawfully and exclusively licensed to STEELCORP by BIEC Judge would ask STEELCORP’s VP whether he had the subject patent, Atty. International, Inc., constitute unfair competition. Chua would quickly interrupt and state, “We reserve the right to present it, your b. [Basically, STEELCORP is saying that Sonic Steel has a product Honor.” By continuously refusing to present the Patent WHILE KNOWING called “SUPERLUME” which is made using the same technical FULLY WELL that the Patent is already expired, Atty. Chua DELIBERATELY information and patent as STEELCORP. The latter is saying na MISLED the Court into thinking that STEELCORP still had licensee rights over bawal yung ginagawa ng Sonic Steel, because STEELCORP owns both the technical information and the patent. This is contrary to Canons 10 and the license to BOTH the technical information AND patent.] 10.01 which state that a lawyer owes candor and good faith to the Courts, and 4. Sonic Steel, in its defense, argues: that a lawyer shall do no falsehood or mislead the Court. All things considered, a. That STEELCORP’s patent has already expired. Atty. Chua was SUSPENDED for 6 months. b. That in the hearing for the application for a search warrant, STEELCORP’s counsel, Atty. Chua, in refusing to provide a copy DOCTRINE: Candor in all their dealings is the very essence of a practitioner’s of the alleged exclusive patent granted to STEELCORP, honorable membership in the legal profession. Lawyers are required to act with deliberately misled the Court into believing that STEELCORP the highest standard of truthfulness, fair play and nobility in the conduct of still has the exclusive licensee rights to the subject patent when, litigation and in their relations with their clients, the opposing parties, the other in fact, it was already expired. counsels and the courts. They are bound by their oath to speak the truth and to 5. The following is a portion of the transcript during the hearing for the search conduct themselves according to the best of their knowledge and discretion, and warrant.: with fidelity to the courts and their clients. a. “Judge Sadang of RTC-Cavite (directed to the VP of STEELCORP): You also state that Steel Corporation owns a patent FACTS: exclusively licensed to Steel Corporation by BIEC International, 1. PARTIES: Inc. Do you have document to show that? ATTY. CHUA: We reserve the presentation of the trademark 4. Verily, the Code of Professional Responsibility enjoins lawyers from license, your Honor.” committing or consenting to any falsehood in court or from allowing b. “Q: [Philippine Patent No. 16269], do you have a document the courts to be misled by any artifice. Moreover, they are obliged to regarding that? observe the rules of procedure and not to misuse them to defeat the VP of STEELCORP: Yes, your Honor. It is in the office. ends of justice. ATTY. CHUA: We reserve the right to present it, your 5. In the present case, it appears that in the application for a search warrant, Honor.” Atty. Chua claimed or made it appear that STEELCORP was the licensee of 6. Atty. Chua counters that he never made an allegation or reservation that the technical information and Philippine Patent No. 16269 at that time. STEELCORP owned Philippine Patent No. 16269. He asserts that he a. Under the Technical Information and Patent License Agreement merely reserved the right to present the trademark license exclusively between STEELCORP and BIEC International, Inc., the terms licensed to STEELCORP. Atty. Chua further argues that even technical information and patent are SEPARATE AND STEELCORP’s complaint merely stated that STEELCORP is the exclusive DISTINCT. licensee of the subject patent, and nowhere does the complaint allege that it b. In the Complaint filed by STEELCORP in DOJ, STEELCORP owns the said patent. claimed that it was the licensee of BOTH technical information 7. IBP’s Commission on Bar Discipline: recommended to suspend Atty. Chua and Patent No. 16269. from the practice of law for 3 months. c. HOWEVER, the IBP found out that Patent No. 16269 had 8. IBP Board of Governors: Adopted the recommendation of Commission on already long expired at the time of the filing of the complaint. In Bar Discipline, but modified the suspension to 6 months. other words, STEELCORP now only has rights as a licensee of the technical information, and NOT the patent anymore. ISSUE: 6. It also would appear that Atty. Chua was wanting in candor as regards his 1. WoN Atty. Chua deliberately misled the Court. - YES. because Atty Chua dealings with the lower court. In the transcript of the hearing for a search did not disclose that the Patent No. 16269 had already expired. warrant [SEE FACT #5], Atty. Chua was quick to interrupt and manifest his client’s reservation to present the subject license when asked by the RULING: WHEREFORE, premises considered, respondent Atty. Nonnatus P. Chua judge. is hereby SUSPENDED from the practice of law for six (6) months with a. Atty. Chua was equally swift to end Judge Sadang’s inquiry over ADMONITION that a repetition of the same or similar act in the future will be dealt the patent by reserving the right to present the same at another with more severely. time. While it is not the Commission’s province to dwell with suppositions and hypotheses, it is well within its powers to make RATIO: reasonable inferences from established facts. Issue 1: Atty. Chua violated Canons 1 and 10. 7. Given that Patent No. 16269 had been in expiry for more than five (5) 1. We affirm in toto the findings and recommendations of the IBP. years when Judge Sadang propounded his questions, it logically 2. Pertinent provisions of the CPR: appears that Atty. Chua, in making such reservations in open court, a. Canon 1 – A lawyer shall uphold the Constitution, obey the laws of was trying to conceal from the former the fact of the patent’s expiration the land and promote respect for the law and legal process. so as to facilitate the grant of the search warrant in favor of b. Rule 1.01 – A lawyer shall not engage in unlawful, dishonest and STEELCORP. This is contrary to the exacting standards of conduct immoral or deceitful conduct. required from a member of the Bar. c. Canon 10 – A lawyer owes candor, fairness and good faith to 8. Indeed, the practice of law is not a right but merely a privilege bestowed the court. upon by the State upon those who show that they possess, and continue to d. Rule 10.01 – A lawyer shall do no falsehood, nor consent to the possess, the qualifications required by law for the conferment of such doing of any in Court, nor shall he mislead or allow the Court privilege. to be misled by an artifice. a. One of those requirements is the observance of honesty and 3. Lawyers are officers of the court, called upon to assist in the administration candor. Candor in all their dealings is the very essence of a of justice. They act as vanguards of our legal system, protecting and practitioner’s honorable membership in the legal profession. upholding truth and the rule of law. They are expected to act with honesty Lawyers are required to act with the highest standard of in all their dealings, especially with the court. truthfulness, fair play and nobility in the conduct of litigation and in their relations with their clients, the opposing parties, the other counsels and the courts. They are bound by their oath to speak the truth and to conduct themselves according to the best of their knowledge and discretion, and with fidelity to the courts and their clients. 9. From the foregoing, it is clear that Atty Chua violated Canons 1 and 10 and Rules 1.01 and 10.01. 10. Thus, even at the risk of jeopardizing the probability of prevailing on STEELCORP’s application for a search warrant, Atty. Chua should have informed the court of the patent’s expiration so as to allow the latter to make an informed decision given all available and pertinent facts.