Intellectual Property Law – The Law on Patents
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.
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 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
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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)
Intellectual Property Law – The Law on Patents
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
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
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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 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 Comment (Rollo, p. 290) which was filed on December 16, 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
Intellectual Property Law – The Law on Patents
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
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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 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).
Intellectual Property Law – The Law on Patents
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
4
 Intellectual Property Law – The Law on Patents
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.

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

Tested by the principles which go to make the law, we think a preponderance of the
evidence is to the effect that for more than two years before the application for the original
letters patent, or before July 22, 1908, there was, by the consent and allowance of Vargas,
a public use of the invention covered by them.

To conclude, we are not certain but that appellee has proved every one of his defenses.
We are certain that he has at least demonstrated the public use of the Vargas plow over
two years prior to the application for a patent. Such being the case, although on a different
ground, we must sustain the judgment of the lower court, without prejudice to the
determination of the damages resulting from the granting of the injunction, with the costs
of this instance against the appellant. So ordered.

8

G.R. No. L-36650 January 27, 1933
ANGEL VARGAS, plaintiff-appellee, vs. PETRONILA CHUA, ET AL., defendants-
appellants.
The defendants Petronila Chua, Coo Pao and Coo Teng Hee, appeal from the judgment
of the Court of First Instance of Manila, the dispositive part of which reads as follows:
Wherefore judgment is rendered in favor of the plaintiff and against the defendants,
ordering each and every one of them, their agents, mandatories and attorneys, to
henceforth abstain from making, manufacturing, selling or offering for a sale plows
of the type of those manufactured by the plaintiff, and particularly plows of the
model of Exhibits B, B-1 and B-2, and to render to the plaintiff a detailed accounting
of the profits obtained by them from the manufacture and sale of said type of plows
within thirty (30) days from the date of the receipt by them of notice of this decision,
with costs against all of the defendants.
Angel Vargas, the plaintiff herein, brought this action to restrain the appellants and the
other defendant entity, Cham Samco & Sons, their agents and mandatories, from
continuing the manufacture and sale of plows similar to his plow described in his patent
No. 1,507,530 issued by the United States Patent Office on September 2, 1924; and to
compel all of said defendants, after rendering an accounting of the profits obtained by them
from the sale of said plows from September 2, 1924, to pay him damages equivalent to
double the amount of such profits.
It appears from the bill of exceptions that Cham Samco & Sons did not appeal.
In addition to the evidence presented, the parties submitted the following stipulation of
facts:
The parties agree on the following facts:
1. That the plaintiff, Angel Vargas, is of age and a resident of the municipality of
Iloilo, Iloilo, Philippine Islands.
2. That the defendant, Petronila Chua, is also of age, and is married to Coo Pao
alias Coo Paoco, and resides in Iloilo.
3. That the defendant, Coo Teng Hee, is also of age and a resident of Iloilo, and is
the sole owner of the business known as Coo Kun & Sons Hardware Co.
established in Iloilo.
Intellectual Property Law – The Law on Patents
4. That the defendant, Cham Samco & Sons, is a commercial partnership duly
organized under the laws of the Philippine Islands, with their principal office in the
City of Manila, and that the defendants Cham Samco, Cham Siong E, Cham Ai
Chia and Lee Cham Say, all of age and residents of the City of Manila, are the
partners of the firm Cham Samco & Sons.
5. The parties take for granted that the complaint in this case is amended in the
sense that it includes Coo Paoco as party defendant in his capacity as husband of
the defendant, Petronila Chua, with Attorney Jose F. Orozco also representing
him, and that he renounces his rights to receive summons in this case by
reproducing the answer of his codefendant, Petronila Chua.
6. That the plaintiff is the registered owner and possessor of United States Patent
No. 1,507,530 on certain plow improvements, issued by the United States Patent
Office on September 2, 1924, a certified copy of which was registered in the
Bureau of Commerce and industry of the Government of the Philippine Islands on
October 17, 1924. A certified copy of said patent is attached to this stipulation of
facts as Exhibit A.
7. That the plaintiff is now and has been engaged, since the issuance of his patent,
in the manufacture and sale of plows of the kind, type and design covered by the
aforementioned patent, said plows being of different sizes and numbered in
accordance therewith from 1 to 5.
8. That, since the filing of the complaint to date, the defendant, Petronila Chua,
has been manufacturing and selling plows of the kind, type and design represented
by Exhibits B, B-1 and B-2, of different sizes, designated by Nos. 2, 4 and 5.
9. That, since the filing of the complaint to date, the defendant, Coo Teng Hee,
doing business in Iloilo under the name of Coo Kun & Sons Hardware Co., has
been obtaining his plows, of the form and size of Exhibits B, B-1 and B-2, from the
defendant Petronila Chua.
10. Without prejudice to the plaintiff's right to ask the defendants to render an
accounting in case the court deem it proper, the parties agree that the defendant
Coo Teng Hee, doing business under the name of Coo Kun & Sons Hardware Co.,
has been selling to his customers in his store on J. Ma. Basa Street in Iloilo, plows
of the kind, type and design represented by Exhibits B, B-1 and B-2, having bought
said plows from his codefendant, Petronila Chua, who manufactures them in her
factory on Iznart Street, Iloilo.
9

11. That, according to the invoices marked Exhibits C and C-2 dated March 13,
1928, and June 19, 1928, respectively, the defendant Cham Samco & Sons, on
the dates mentioned, had, in the ordinary course of business, bought of its
codefendant Coo Kun & Sons Hardware Co., 90 plows of the form, type and design
of Exhibits B, B-1 and B-2 which it has been selling in its store on Sto. Cristo Street,
Manila.
12. That the same defendant Cham Samco & Sons, in the ordinary course of
business, bought on March 17, 1928, of the store "El Progreso" owned by Yao Ki
& Co., of Iloilo, a lot of 50 plows, of the form, type and design of Exhibit B-1, as
shown by Invoice C-1, and that it has been selling them in its store on Sto. Cristo
St., Manila.
13. That, on September 19, 1928, the defendant Cham Samco & Sons, sold in its
store on Sto. Cristo St., Manila, the plow Exhibit B-1, for the sale of which invoice
Exhibit D was issued.
14. That, on December 20, 1927, the plaintiff herein, through his attorneys
Paredes, Buencamino & Yulo, sent by registered mail to the herein defendant, Coo
Kun & Sons Hardware Co., at Iloilo, the original of the letter Exhibit E, which was
received by it on September 28, 1927, according to the receipt marked Exhibit E-
1 attached hereto.
15. That the plows manufactured by the plaintiff in accordance with his patent,
Exhibit A, are commonly known to the trade in Iloilo, as well as in other parts of the
Philippines, as "Arados Vargas", and that the plaintiff is the sole manufacturer of
said plows. A sample of these plows is presented as Exhibit F.
16. That the document, Exhibit 1-Chua, is a certified copy of the amended
complaint, the decision of the Court of First Instance of Iloilo and that of the
Supreme Court (R. G. No. 14101) in civil case No. 3044 of Iloilo, entitled "Angel
Vargas", plaintiff, vs. F. M. Yaptico & Co., Ltd., defendant", and that Exhibit 2-Chua
et al. is a certified copy of Patent No. 1,020,232, to which the aforementioned
complaint and decision refer, issued in favor of Angel Vargas by the United States
Patent Office on March 12, 1912, and that Exhibit 3-Chua et al., represents the
plow manufactured by Angel Vargas in accordance with his Patent marked Exhibit
2-Chua et al.
The appellants assign the following errors:
FIRST ERROR
Intellectual Property Law – The Law on Patents
The trial court erred in declaring that the Vargas plow, Exhibit F (covered by Patent
No. 1,507,530) is distinct from the old model Vargas plow, Exhibit 2-Chua, covered
by the former Patent No. 1,020,232, which had been declared null and void by this
court.
SECOND ERROR
The trial court erred in mistaking the improvement on the plow for the plow itself.
THIRD ERROR
The trial court erred in rendering judgment in favor of the plaintiff and against the
defendants.
FOURTH ERROR
The trial court erred in not dismissing the complaint with costs against the plaintiff.
The evidence shows that Exhibit F is the kind of plows the plaintiff, Angel Vargas,
manufactures, for which Patent No. 1,507,530, Exhibit A, was issued in his favor. Exhibits
B, B-1 and B-2 are samples of the plows which the herein appellants, Coo Pao and
Petronila Chua, have been manufacturing since 1918, and Exhibit 3-Chua represents the
plow for which, on March 12, 1912, the appellee obtained a patent from the United States
Patent Office, which was declared null and void by the Supreme Court in the case
of Vargas vs. F. M. Yap Tico & Co. (40 Phil., 195).
With these facts in view, the principal and perhaps the only question we are called upon
to decide is whether the plow, Exhibit F, constitutes a real invention or an improvement for
which a patent may be obtained, or if, on the contrary, it is substantially the same plow
represented by Exhibit 3-Chua the patent for which was declared null and void in the
aforementioned case of Vargas vs. F. M. Yaptico & Co., supra.
We have carefully examined all the plows presented as exhibits as well as the designs of
those covered by the patent, and we are convinced that no substantial difference exists
between the plow, Exhibit F, and the plow, Exhibit 3-Chua which was originally patented
by the appellee, Vargas. The only difference noted by us is the suppression of the bolt and
the three holes on the metal strap attached to the handle bar. These holes and bolt with
its nut were suppressed in Exhibit F in which the beam is movable as in the original plow.
The members of this court, with the plows in view, arrived at the conclusion that not only
is there no fundamental difference between the two plows but no improvement whatever
has been made on the latest model, for the same working and movement of the beam
existed in the original model with the advantage, perhaps, that its graduation could be
10

carried through with more certainty by the use of the bolt which as has already been stated,
was adjustable and movable.
As to the fact, upon which much emphasis was laid, that deeper furrows can be made with
the new model, we have seen that the same results can be had with the old implement.
In view of the foregoing, we are firmly convinced that the appellee is not entitled to the
protection he seeks for the simple reason that his plow, Exhibit F, does not constitute an
invention in the legal sense, and because, according to the evidence, the same type of
plows had been manufactured in this country and had been in use in many parts of the
Philippine Archipelago, especially in the Province of Iloilo, long before he obtained his last
patent.
In the above mentioned case of Vargas vs. F. M. Yaptico & Co., we said:
Intellectual Property Law – The Law on Patents
Egbert vs.Lippmann [1881], 104 U. S., 333; Coffin vs. Ogden [1874], 18 Wall., 120;
Manning vs. Cape Ann Isinglass and Glue Co. [1883], 108 U. S., 462;
Andrews vs. Hovey [1887], 123 U. S., 267; Campbell vs. City of New York [1888],
1 L. R. A., 48.)
We repeat that in view of the evidence presented, and particularly of the examination we
have made of the plows, we cannot escape the conclusion that the plow upon which the
appellee's contention is based, does not constitute an invention and, consequently, the
privilege invoked by him is untenable and the patent acquired by him should be declared
ineffective.
The judgment appealed from is hereby reversed and the appellants are absolved from the
complaint, with costs of this instance against the appellee. So ordered.

When a patent is sought to be enforced, "the questions of invention, novelty, or

prior use, and each of them, are open to judicial examination." The burden of proof
to substantiate a charge of infringement is with the plaintiff. Where, however, the
plaintiff introduces the patent in evidence, if it is the due form, it affords a prima
facie presumption of its correctness and validity. The decision of the Commissioner
of Patents in granting the patent is always presumed to be correct. The burden
then shifts to the defendant to overcome by competent evidence this legal
presumption. With all due respects, therefore, for the critical and expert
examination of the invention by the United States Patent Office, the question of the
validity of the patent is one for judicial determination, and since a patent has been
submitted, the exact question is whether the defendant has assumed the burden
of proof as to anyone of his defenses. (See Agawan Co. vs. Jordan [1869], 7 Wall.,
583; Blanchard vs. Putnam [1869], 8 Wall., 420; Seymour vs. Osborne [1871], 11
Wall., 516; Reckendorfer vs.Faber [1876], 92 U. S., 347; 20 R. C. L., 1112, 1168,
1169.)

Although we spent some time in arriving at this point, yet, having reached it, the
question in the case is single and can be brought to a narrow compass. Under the
English Statute of Monopolies (21 Jac. Ch., 3), and under the United States Patent
Act of February 21, 1793, later amended to be as herein quoted, it was always the
rule, as stated by Lord Coke, Justice Story and other authorities, that to entitle a
man to a patent, the invention must be new to the world. (Pennock and
Sellers vs. Dialogue [1829], 2 Pet., 1.) As said by the United States Supreme
Court, "it has been repeatedly held by this court that a single instance of public use
of the invention by a patentee of more than two years before the date of his
application for his patent will be fatal to the validity of the patent when issued."
(Worley vs. Lower Tobacco Co. [1882], 104 U. S., 340; McClurg vs.Kingsland
[1843], 1 How., 202; Consolidated Fruit Jar Co. vs. Wright [1877], 94 U. S., 92;
11

G.R. No. L-38010 December 21, 1933
PATRICK HENRY FRANK and WILLIAM HENRY GOHN, plaintiffs-appellants, vs. G.
KOSUYAMA, defendant-appellee.
Patent No. 1519579 (Exhibit 117) on improvement in hemp stripping machines, issued by
the United States Patent Office on December 16,1924, and registered in the Bureau of
Commerce and Industry of the Philippine Islands on March 17,1925, was the origin of this
action brought by the plaintiffs herein who prayed that the judgment be rendered against
the defendant, ordering him thereby to refrain immediately from the manufacture and sale
of machines similar to the one covered by the patent: to render an accounting of the profits
realized from the manufacture and sale of the machines in question; that in case of refusal
or failure to render such accounting, the defendants be ordered to pay the plaintiffs the
sum of P60 as profit on each machine manufactured or sold by him; that upon approval of
the required bond, said defendant be restrained from continuing the manufacture and sale
of the same kind of machines; that after the trial the preliminary injunction issued therein
be declared permanent and, lastly, that the said defendant be sentenced to pay the costs
and whatever damages the plaintiffs might be able to prove therein. The action therefore
was based upon alleged infringement by the defendant of the rights and privileges
acquired by the plaintiffs over the aforesaid patent through the manufacture and sale by
the former of machines similar to that covered by the aforesaid patent.
The plaintiffs appealed from the judgment rendered by the trial court dismissing their
complaint, with cost, as well as the defendant's counterclaim of P10,000. The defendant
did not appeal.
In their amended complaint, the plaintiff alleged that their hemp stripping machines, for
which they obtained a patent, have the following characteristics: "A stripping head, a
horizontal table, a stripping knife supported upon such table, a tappering spindle, a rest
holder adjustably secured on the table portion, a lever and means of compelling the knife
to close upon the table, a pallet or rest in the bottom of the table, a resilient cushion under
such palletor rest." In spite of the fact that they filed an amended complaint from which the
"spindle" or conical drum, which was the only characteristic feature of the machine
mentioned in the original complaint, was eliminated, the plaintiffs insisted that the said part
constitutes the essential difference between the machine in question and other machines
and that it was the principal consideration upon which their patent was issued. The said
plaintiffs sustained their contention on this point even in their printed brief and
memorandum filed in this appeal.
During the trial, both parties presented voluminous evidence from which the trial court
arrived at the following conclusions:
In constructing their machine the plaintiffs did nothing but improve, to a certain
degree, those that were already in vogue and in actual us in hemp producing
Intellectual Property Law – The Law on Patents
provinces. It cannot be said that they have invented the "spindle" inasmuch as this
was already known since the year 1909 or 1910. Neither it can be said that they
have invented the stripping knife and the contrivance which controls the movement
and pressure thereof on the ground that stripping knives together with their control
sets were already in actual use in the different stripping machines long before their
machine appeared. Neither can it be said that they invented the fly wheel because
that part or piece thereof, so essential in every machine from time immemorial,
was already known and actually employed in hemp stripping machines such as
those of Riesgo (Exhibit 4-A), Crumb (Exhibit 1-A), Icsiar (Exhibit A-Suzara),
Browne (Exhibit 28-A), McFie, etc., all of which were in use for the benefit of hemp
long before the appearance of the plaintiffs' machines in the market. Much less
can it be said that they invented the pedal to raise the knife in order to allow the
hemp to be stripped to pass under it, on the ground that the use of such contrivance
has, likewise, been known since the invention of the most primitive of hemp
stripping machines.
On the other hand, although the plaintiffs alleged in their original complaint that
"the principal and important feature of said machine is a spindle upon which the
hemp to be stripped is wound in the process of stripping," nevertheless, in their
amended complaint of March 3, 1928, which was filed after a portion of the
evidence therein had already been submitted and it was known that the use of the
spindle was nothing new, they still made the allegations appearing in paragraph 3
of their said amended complaint and reproduced on pages 2,3,4 and 5 hereof,
copying the same from the application which they filed with the United States
Patent Office, under which they obtained their patent in question. The aforesaid
application clearly shows that what they applied for was not a patent for a "pioneer
or primary invention" but only for some "new and useful improvement in hemp
stripping machines."
We have carefully reviewed the evidence presented and have had the opportunity of
ascertaining the truth of the conclusions above stated. We agree with the trial court that,
strictly speaking, the hemp stripping machine of the plaintiffs does not constitute an
invention on the ground that it lacks the elements of novelty, originality and precedence
(48 C.J., sec. 101, p. 97, and 102, p. 98). In fact, before the plaintiffs herein obtained their
patent, they themselves had already publicly used the same kind of machine for some
months, at least, and, various other machines, having in general, the same characteristics
and important parts as that of the said plaintiffs, were known in the Province of Davao.
Machines known as Molo, Riesgo, Crumb, Icsiar, Browne and McFie were already known
in that locality and used by the owners of hemp plantations before the machine of the
plaintiffs came into existence. It may also be noted that Adrian de Icsiar applied for a patent
on an invention which resulted in the rejection by the United States Patent Office of the
plaintiffs' original application for a patent on the so called "spindle" or conical drum which
was then in actual use in the Dringman and Icsiar hemp stripping machines.
12
 Intellectual Property Law – The Law on Patents
Notwithstanding the foregoing facts, the trial court did not decree the annulment of the
plaintiffs' patent and the herein defendant-appellee insists that the patent in question
should be declared null and void. We are of the opinion that it would be improper and
untimely to render a similar judgment, in view of the nature of the action brought by the
plaintiffs and in the absence of a cross-complaint to that effect. For the purposes of this
appeal, suffice it to hold that the defendant is not civilly liable for alleged infringement of
the patent in question.

In the light of sound logic, the plaintiffs cannot insist that the "spindle" was a patented
invention on the ground that said part of the machine was voluntarily omitted by them from
their application, as evidenced by the photographic copy thereof (Exhibit 41) wherein it
likewise appears that the patent on Improved Hemp Stripping Machines was issued minus
the "spindle" in question. Were we to stress to this part of the machine, we would be giving
the patent obtained by the plaintiffs a wider range than it actually has, which is contrary to
the principles of interpretation in matters relating to patents.

In support of their claim the plaintiffs invoke the doctrine laid down by this court in the case
of Frank and Gohn vs. Benito (51 Phil., 712), wherein it was held that the therein defendant
really infringed upon the patent of the therein plaintiffs. It may be noted that the plaintiffs
in the former and those of the latter case are the same and that the patent then involved
is the very same one upon which the present action of the plaintiffs is based. The above-
cited case, however, cannot be invoked as a precedent to justify a judgment in favor of the
plaintiffs-appellants on the ground that the facts in one case entirely different from those
in the other. In the former case the defendant did not set up the same special defenses as
those alleged by the herein defendant in his answer and the plaintiffs therein confined
themselves to presenting the patent, or rather a copy thereof, wherein the "spindle" was
mentioned, and this court took for granted their claim that it was one of the essential
characteristics thereof which was imitated or copied by the then defendant. Thus it came
to pass that the "spindle" in question was insistently mentioned in the decision rendered
on appeal as the essential part of the plaintiffs' machine allegedly imitated by the then
defendant. In the case under consideration, it is obvious that the "spindle" is not an integral
part of the machine patented by the plaintiffs on the ground that it was eliminated from
their patent inasmuch as it was expressly excluded in their application, as evidenced by
the aforesaid Exhibit 41.

Wherefore, reiterating that the defendant cannot be held civilly liable for alleged
infringement of the patent upon which the present action is based on the ground that there
is no essential part of the machine manufactured and sold by him, which was unknown to
the public in the Province of Davao at the time the plaintiffs applied for and obtained their
patent for improved hemp stripping machines, the judgment appealed from is hereby
affirmed, with the costs against the plaintiffs-appellants. So ordered.

13

G.R. No. L-32160 January 30, 1982
DOMICIANO A. AGUAS, petitioner, vs. CONRADO G. DE LEON and COURT OF
APPEALS, respondents.
This is a petition for certiorari to review the decision of the Court of Appeals in CA G.R.
NO. 37824-R entitled "Conrado G. de Leon, plaintiff-appelle vs. Dominciano Aguas and
F.H. Aquino and Sons, defendants-appellants," the dispositive portion of which reads:
WHEREFORE, with the modification that plintiff-applee's award of moral damages
is hereby redured to P3,000.00, the appealed judgment is hereby affirmed, in all
othe respects, with costs against appellants. 1
On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal at Quezon
City a complaint for infringement of patent against Domiciano A. Aguas and F. H. Aquino and
Sons alleging that being the original first and sole inventor of certain new and useful
improvements in the process of making mosaic pre-cast tiles, he lawfully filed and prosecuted
an application for Philippine patent, and having complied in all respects with the statute and
the rules of the Philippine Patent Office, Patent No. 658 was lawfully granted and issued to
him; that said invention was new, useful, not known or used by others in this country before his
invention thereof, not patented or described in any printed publication anywhere before his
invention thereof, or more than one year prior to his application for patent thereof, not patented
in any foreign country by him or his legal representatives on application filed more than one
year prior to his application in this country; that plaintiff has the exclusive license to make, use
and sell throughout the Philippines the improvements set forth in said Patent No. 658; that the
invention patented by said Patent No. 658 is of great utility and of great value to plaintiff and of
great benefit to the public who has demanded and purchased tiles embodying the said
invention in very large quantities and in very rapidly increasing quant ies; that he has complied
with the Philippine statues relating to marking patented tiles sold by him; that the public has in
general acknowledged the validity of said Patent No. 658, and has respected plaintiff's right
therein and thereunder; that the defendant Domiciano A. Aguas infringed Letters of Patent No.
658 by making, using and selling tiles embodying said patent invention and that defendant F.
H. Aquino & Sons is guilty of infringement by making and furnishing to the defendant Domiciano
A. Aguas the engravings, castings and devices designed and intended of tiles embodying
plaintiff;s patented invention; that he has given direct and personal notice to the defendants of
their said acts of infringement and requested them to desist, but nevertheless, defendants have
refused and neglected to desist and have disregarded such request, and continue to so infringe
causing great and irreparable damage to plaintiff; that if the aforesaid infringement is permitted
to continue, further losses and damages and irreparable injury will be sustained by the plaintiff;
that there is an urgent need for the immediate issuance of a preliminary injunction; that as a
result of the defendants' wrongful conduct, plaintiff has suffered and the defendants are liable
to pay him, in addition to actual damages and loss of profits which would be determined upon
proper accounting, moral and exemplary or corrective damages in the sum of P90,000.00; that
plaintiff has been compelled to go to court for the protection and enforcement of his and to
engage the service of counsel, thereby incurring attorney's fees and expenses of litigation in
the sum of P5,000.00. 2
Intellectual Property Law – The Law on Patents
On April 14, 1962, an order granting the plaintiff's petition for a Writ of Preliminary Injunction
was issued. 3
On May 23, 1962, the defendant Domiciano A. Aguas filed his answer denying the
allegations of the plaintiff and alleging that: the plaintiff is neither the original first nor sole
inventor of the improvements in the process of making mosaic pre-cast tiles, the same
having been used by several tile-making factories in the Philippines and abroad years
before the alleged invention by de Leon; that Letters Patent No. 658 was unlawfully
acquired by making it appear in the application in relation thereto that the process is new
and that the plaintiff is the owner of the process when in truth and in fact the process
incorporated in the patent application has been known and used in the Philippines by
almost all tile makers long before the alleged use and registration of patent by plaintiff
Conrado G. de Leon; that the registration of the alleged invention did not confer any right
on the plaintiff because the registration was unlawfully secured and was a result of the
gross misrepresentation on the part of the plaintiff that his alleged invention is a new and
inventive process; that the allegation of the plaintiff that Patent No. 658 is of great value to
plaintiff and of great benefit to the public is a mere conclusion of the plaintiff, the truth being
that a) the invention of plaintiff is neither inventive nor new, hence, it is not patentable, b)
defendant has been granted valid patents (Patents No. 108, 109, 110 issued on December
21, 1961) on designs for concrete decorative wall tiles; and c) that he can not be guilty of
infringement because his products are different from those of the plaintiff. 4
The trial court rendered a decision dated December 29, 1965, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the
defendants:
1. Declaring plaintiff's patent valid and infringed:
2. Granting a perpetual injunction restraining defendants, their officers, agents,
employees, associates, confederates, and any and all persons acting under their
authority from making and/or using and/or vending tiles embodying said patented
invention or adapted to be used in combination embodying the same, and from
making, manufacturing, using or selling, engravings, castings and devises
designed and intended for use in apparatus for the making of tiles embodying
plaintiff's patented invention, and from offering or advertising so to do, and from
aiding and abetting or in any way contributing to the infringement of said patent;
3. Ordering that each and all of the infringing tiles, engravings, castings and
devices, which are in the possession or under the control of defendants be
delivered to plaintiff;
14
 Intellectual Property Law – The Law on Patents
4. Ordering the defendants to jointly and severally pay to the plaintiff the following THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT DOMICIANO A.
sums of money, to wit: AGUAS IS GUILTY OF INFRINGEMENT DESPITE THE FACT THAT
PLAINTIFF'S PATENT IS NOT A VALID ONE.
(a) P10,020.99 by way of actual damages;
V
(b) P50,000.00 by way of moral damages;
THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT COULD
(c) P5,000.00 by way of exemplary damages; NEVER BE GUILTY OF INFRINGEMENT OF PLAINTIFF'S PATENT BECAUSE
EVEN IN MATTERS NOT PATENTED BY THE PLAINTIFF - LIKE THE
(d) P5,000.00 by way of attorney's fees and COMPOSITION AND PROPORTION OF INGREDIENTS USED AND THE
STRUCTURAL DESIGNS OF THE MOULD AND THE TILE PRODUCED - THAT
OF THE DEFENDANT ARE DIFFERENT.
(e) costs of suit. 5
VI
The defendant Domiciano Aguas appealed to the Court of Appeals, assigning the following
errors. 6
THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN
I HOLDING THE DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR
DAMAGES, AND ATTORNEY'S FEES.
THE TRIAL COURT ERRED IN NOT HOLDING THAT PLAINTIFF'S PATENT
FOR THE 'PROCESS OF MAKING MOSAIC PRE-CAST TILE' IS INVALID On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with the
BECAUSE SAID ALLEGED PROCESS IS NOT AN INVENTION OR DISCOVERY modification that plaintiff-appellee's award of moral damages was reduced to P3,000.00. 7
AS THE SAME HAS ALREADY LONG BEEN USED BY TILE MANUFACTURERS
BOTH ABROAD AND IN THIS COUNTRY. The petitioner assigns the following errors supposedly committed by the Court of Appeals:

II It is now respectfully submitted that the Court of Appeals committed the following
errors involving questions of law, to wit:
THE TRIAL COURT ERRED IN HOLDING THAT THE PATENT OF PLAINTIFF IS
VALID BECAUSE IT IS AN IMPROVEMENT OR THE AGE-OLD TILE MAKING First error. — When it did not conclude that the letters patent of the respondent
SYSTEM. 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
III process of making mosaic pre-cast tiles;

THE TRIAL COURT ERRED IN NOT ORDERING THE CANCELLATION OF
PLAINTIFF-APPELLEE'S LETTERS PATENT NO. 658, EXHIBIT L, IN
ACCORDANCE WITH THE PERTINENT PROVISIONS OF THE PATENT LAW,
REPUBLIC ACT 165.
IV
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
15

The facts, as found by the Court of Appeals, are:
The basic facts borne out by the record are to the effect that on December 1, 1959
plaintiff-appellee filed a patent application with the Philippine Patent Office, and on
May 5, 1960, said office issued in his favor Letters Patent No. 658 for a "new and
useful improvement in the process of making mosaic pre-cast tiles" (Exh, "L"); that
defendant F.H. Aquino & Sons engraved the moulds embodying plaintiff's patented
improvement for the manufacture of pre-cast tiles, plaintiff furnishing said
defendant the actual model of the tiles in escayola and explained to said engraver
the plans, specifications and the details of the engravings as he wanted them to
be made, including an explanation of the lip width, artistic slope of easement and
critical depth of the engraving that plaintiff wanted for his moulds; that engraver
Enrique Aquino knew that the moulds he was engraving for plaintiff were the latter's
very own, which possession the new features and characteristics covered by
plaintiff's parent; that defendant Aguas personally, as a building contractor,
purchased from plaintiff, tiles shaped out of these moulds at the back of which was
imprinted plaintiff's patent number (Exhs., "A" to "E"); that subsequently, through a
representative, Mr. Leonardo, defendant Aguas requested Aquino to make
engravings of the same type and bearing the characteristics of plaintiff's moulds;
that Mr. Aquino knew that the moulds he was asked to engrave for defendant
Aguas would be used to produce cement tiles similar to plaintiff's; that the moulds
which F.H. Aquino & Sons eventually engraved for Aguas and for which it charged
Aguas double the rate it charged plaintiff De Leon, contain the very same
characteristic features of plaintiff's mould and that Aguas used these moulds in the
manufacture of his tiles which he actually put out for sale to the public (Exhs. "1"
to "3" and Exhs. "A" to "E"); that both plaintiff's and defendant Aguas' tiles are
sculptured pre-cast wall tiles intended as a new feature of construction and wag
ornamentation substantially Identical to each other in size, easement, lip width and
critical depth of the deepest depression; and that the only significant difference
between plaintiff's mould and that engraved by Aquino for Aguas is that, whereas
plaintiff's mould turns out tiles 4 x 4 inches in size, defendant Aguas' mould is made
to fit a 4-1/4 x 4-1/4 inch tile. 9
The patent right of the private respondent expired on May 5, 1977. 10 The errors will be
discuss only to determine the right of said private respondent to damages.
The petitioner questioned the validity of the patent of the private respondent, Conrado G.
de Leon, on the ground that the process, subject of said patent, is not an invention or
discovery, or an improvement of the old system of making tiles. It should be noted that the
private respondent does not claim to be the discoverer or inventor of the old process of
tile-making. He only claims to have introduced an improvement of said process. In fact,
Letters Patent No. 658 was issued by the Philippine Patent Office to the private
respondent, Conrado G. de Leon, to protect his rights as the inventor of "an alleged new
Intellectual Property Law – The Law on Patents
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
16

the thinness of the private respondent's new tiles as a discovery. There is a presumption
that the Philippines Patent Office has correctly determined the patentability of the
improvement by the private respondent of the process in question.
Anent this matter, the Court of Appeals said:
Appellant has not adduced evidence sufficient to overcome the above established
legal presumption of validity or to warrant reversal of the findings of the lower court
relative to the validity of the patent in question. In fact, as we have already pointed
out, the clear preponderance of evidence bolsters said presumption of validity of
appellee's patent. There is no indication in the records of this case and this Court
is unaware of any fact, which would tend to show that concrete wall tiles similar to
those produced by appellee had ever been made by others before he started
manufacturing the same. In fact, during the trial, appellant was challenged by
appellee to present a tile of the same kind as those produced by the latter, from
any earlier source but, despite the fact that appellant had every chance to do so,
he could not present any. There is, therefore, no concrete proof that the improved
process of tile-making described in appellee's patent was used by, or known to,
others previous to his discovery thereof. 13
The contention of the petitioner Aguas that the letters patent of de Leon was actually a
patent for the old and non-patentable process of making mosaic pre-cast tiles is devoid of
merit. De Leon never claimed to have invented the process of tile-making. The Claims and
Specifications of Patent No. 658 show that although some of the steps or parts of the old
process of tile making were described therein, there were novel and inventive features
mentioned in the process. Some of the novel features of the private respondent's
improvements are the following: critical depth, with corresponding easement and lip width
to such degree as leaves the tile as thin as 1/8 of an inch at its thinnest portion, Ideal
composition of cement and fine river sand, among other ingredients that makes possible
the production of tough and durable wall tiles, though thin and light; the engraving of deep
designs in such a way as to make the tiles decorative, artistic and suitable for wall
ornamentation, and the fact that the tiles can be mass produced in commercial quantities
and can be conveniently stock-piled, handled and packed without any intolerable incidence
of breakages. 14
The petitioner also contends that the improvement of respondent is not patentable
because it is not new, useful and inventive. This contention is without merit.
The records disclose that de Leon's process is an improvement of the old process of tile
making. The tiles produced from de Leon's process are suitable for construction and
ornamentation, which previously had not been achieved by tiles made out of the old
process of tile making. De Leon's invention has therefore brought about a new and useful
kind of tile. The old type of tiles were usually intended for floors although there is nothing
Intellectual Property Law – The Law on Patents
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,
16
provided that a certain critical depth is maintained in relation to the dimensions of the tile.
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
17
 Intellectual Property Law – The Law on Patents
a) P10,020.99 by way of actual damages; 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'
b) P50,000.00 by way of moral damages; 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
c) P5,000.00 by way of exemplary damages; 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
d) P5,000.00 by way of attomey's fees and
court should find that, under the circumstances such damages are justly due" (Art.
2219 NCC).
e) Costs of suit
There is no reason to reduce the amount of damages and attorneys fees awarded by the
because: trial court as modified by the Court of Appeals.

An examination of the books of defendant Aguas made before a Commissioner WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed
reveals that during the period that Aguas was manufacturing and selling tiles from is hereby affirmed, without pronouncement as to costs.
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
SO ORDERED.
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

18

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.
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
Intellectual Property Law – The Law on Patents
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 husband's 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.
19

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 petitioner's 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 respondent's
sole witness Rolando Madolaria; and, (d) in not cancelling 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
respondent's 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
Intellectual Property Law – The Law on Patents
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 respondent's patented model.
Finally, it is argued that the testimony of private respondent's 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 —
Sec. 7. Inventians 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.
20

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 respondent's
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.
Intellectual Property Law – The Law on Patents
xxx xxx xxx
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
xxx xxx xxx
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
Petitioner's 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.
xxx xxx xxx
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
21
 Intellectual Property Law – The Law on Patents
The above findings and conclusions of the Director of Patent were reiterated and affirmed reviewing and revising errors of law imputed to the lower court, its findings of fact being
by the Court of Appeals.7 conclusive and not reviewable by this Court.

The validity of the patent issued by the Philippine Patent Office in favor of private WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals affirming that
respondent and the question over the inventiveness, novelty and usefulness of the of the Philippine Patent Office is AFFIRMED. Costs against petitioner.
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 SO ORDERED.
has by the issuance of the patent in question accepted private respondent's model of gas
burner as a discovery. There is a presumption that the Office has correctly determined the
patentability of the model8 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

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

22

G.R. L-24919 January 28, 1980
JAMES HOWARD BOOTHE and JOHN MORTON, II, petitioners, vs. THE DIRECTOR
OF PATENTS, respondent.
Sought to be reviewed herein is the Decision of the Director of Patents, dated December
9, 1964, denying priority rights under section 15 of our Patent Law (Republic Act No. 165)
to petitioners, as foreign applicants for Letters Patent, for their invention of
"Chemotherapeutic Materials and Methods of Preparing the same.
Petitioners James Howard Boothe and John Morton II, chemists, citizens and residents of
the United States, claim to be the inventors of a new antibiotic designated as "tetracycline",
a new derivative of chlortetracycline (popularly known as "aureomycin")
On February 19, 1954, petitioners applied for Letters Patent covering said invention to
respondent Director of Patents claiming the right of priority granted to foreign applicants
under section 15 of the Patent Law (RA 165). Receipt of petitioners' application was
acknowledged by respondent Director on March 6, 1954.
On April 14, 1954, petitioners filed with respondent Director a legalized copy of their
Application for Letters Patent in the United States for the same invention (U.S. Serial No.
342556). Said legalized copy indicated that the application in the United States was filed
on March 16, 1963. 1 This latter date is of crucial importance to petitioners' cause under
section 15 of the Patent Law, which provides that:
Section 15. Application previously filed abroad. — An application for patent for an
invention filed in this country by any person who has previously regularly filed an
application for a patent for the same invention in a foreign country, which by treaty,
convention or law affords similar privileges to citizens of the Philippines, shall have
the same force and effect as the same application would have if filed in this country
on the date on which the application for patent for the same invention was first filed
in such foreign country: Provided, That the application in this country is filed within
twelve months from the earliest date on which such foreign application was filed
and a certified copy of the foreign application together with a translation thereof
into English, if not in the English language, is filed within six months from the date
of filing in the Philippines, unless the Director for good cause shown shall extend
the time for filing such certified copy: And provided, further, that no patent shall be
granted on an application for patent for an invention which had been patented or
described in a printed publication in this or any foreign country more than one year
before the date of the actual filing of the application in this country, or which had
been in public use or sale in this country for more than one year prior to such filing.
Intellectual Property Law – The Law on Patents
Under the foregoing provision, petitioners would be entitled to the priority date of March
16, 1953 if their application is considered filed in the Philippines as of March 5, 1954, since
the latter date would fall within the one-year period prior to March 5, 1954.
On February 7, 1958, petitioners informed respondent Director that in interference
proceedings in the United States, Letters Patent for a similar invention as theirs was
awarded to Pfizer and Co., which had filed its application ahead and that they failed to
obtain any U.S. patent for their own invention. Petitioners, however, observed and
requested:
In the Philippines, however, the situation is at least the reverse. Pfizer and Co. did
not file or else filed an application after the above application has already been
filed. The said above application therefore is good and valid.
We request, therefore, that the present application be granted on the basis of the
claims originally filed. 2
On August 5, 1959, in Paper No. 6, 3 Patent Examiner, Lydia Nueva España, rejected all
of petitioners' claims in view of "Philippine Patent No. 254 — November 29, 1956",
apparently referring to a local Patent obtained by Pfizer and Co., presumably covering the
same invention. Additionally, petitioners were advised that the "Specification" they had
submitted was "incomplete" and that responsive action should be filed them four months
from date of mailing, which was also August 5, 1959. Paper No. 6 precipitated a series of
communications between the aforementioned Patent Examiner and petitioners, who
apparently failed to meet the deadline of four months for filing their responsive action.
On October 9, 1961, petitioners requested for clarification of Paper No. 6, particularly as
to why their Specification was considered incomplete.
In response, Supervising Patent Examiner Nelia de Castro informed petitioners as follows:
With respect to applicant's request for clarification as to the meaning of the second
to the last sentence contained in Paper 6, attention is called to the fact that the
specification which was originally filed is incomplete and not in accordance with
Rule 62 of the Revised Rules. Said specification ends on Page 9 with the
incomplete sentence "The refractive indices of this crystalline phase were found
—
It appears from further from a comparison between the submitted 9 pages of the
specification and 2 pages of the claims on one hand and the corresponding pages
of the legalized copy of the U.S. application on the other that the present
application does not correspond with the said certified copy of the U.S. Application.
23

The present application cannot therefore be granted priority date under section 15
are requested by applicant. 4
On July 3, 1962, petitioners submitted two complete copies of the Specification, which
included nine additional pages, and reiterated their request for priority right in the
Philippines. 5
On October 2, 1962, Chief Patent Examiner Nicanor Mapili issued Paper No. 20 rejecting
the additional nine pages of Specification submitted by petitioners, and ruling:
xxx xxx xxx
The filing of the alleged complete copy Of the specification is an attempt to effect
a remedy to the previous finding of incompleteness as stated in the 2nd to the last
paragraph of Office Action mailed Aug. 5, 1959, marked Paper 6. This cannot be
allowed inasmuch as 9 pages of new matter are actually proposed to be added to
the specification.
This action is made final for purpose of appeal 6
Petitioners moved for reconsideration on the ground that their application falls under the
exception provided for in Rule 47 of the Revised Rules of Practice in Patent Cases in that
the missing nine pages submitted by them are not really new matter but a mere "minor
informality."
On February 5, 1963, Chief Patent Examiner Mapili issued Paper No. 22 denying
petitioners' Motion for Reconsideration and the findings of Examiner de Castro as follows:
The basis of the examiner's finding is applicant's verification on file, exclusive of
what is in an alleged corresponding application in the US as evidenced by a
certified copy of record. The only use of such certified a copy is to give proof to an
earlier filing date as provided for such section 15 of the Patent Law and to use the
inventors' oath therein to complete the form requirements relative to his application
in a dance with the provisions of section 13(3) of the same law.
The provisions of section 15 of the Patent Law, under which the present application
was filed, provides for a for filing. This deadline cannot be extended directly or
indirectly by the filing of an imperfect application which can be freely amended or
rectified at a later date. If this can be done legally, the restrictive provisions of
section 15 will be nullified. 7
Adversely affected, petitioners appealed to dent Director of Patents.
Intellectual Property Law – The Law on Patents
In their Brief filed with respondent Directors petitioners prayed for 1) revocation of the of
the Chief Patent Examiner, 8 2) admission of their Specification submitted on July 3, 1962;
and 3) allowance of their application on the merits.
On December 9, 1964, respondent Director rendered the questioned Decision, the
dispositive portion of which reads:
WHEREFORE, the appeal is hereby sustained. The additional pages to the
specification are hereby admitted, but the application shall not be extended priority
rights under section 15 of the Patent Law. Let the filing date of this application be
changed from March 5, 1954 to April 14, 1954. The application is hereby remanded
to the Chief Patent Examiner for proper action and for further examination on the
merits. 9
In reaching the foregoing conclusion, respondent Director opined that the portions
subsequently supplied in the local application are not new matter a comparison between
the foreign and local applications showed that the foreign application included the missing
portions of the local one. However, respondent Direct qualified that petitioners' application
may be considered complete only on April 14, 1954 when the certified copy of the foreign
application was submitted. Consequently, the instant application is to be considered an
ordinary application, not entitled to the right of priority granted by section 15 of the Patent
Law, inasmuch as said application was not complete within the meaning of Rules 47 and
48 of the Revised Rules of Practice in Patent Case when first filed on March 5, 1954.
Petitioners filed a Motion for Partial Reconsideration of the above-mentioned Decision
questioning that portion of respondent Director's ruling barring them from entitlement to
the right of priority under section 15 of the Patent Law contending that their appeal
centered merely on the issue of whether or not the additional nine pages of Specification
they had submitted should be treated as new matter.
On June 10, 1965, respondent Director denied reconsideration for lack of merit, and
explained:
... It should be emphasized that under Rule 262 (b) of the Revised Rules of Practice
in Patent Cases, it is stated that should the Director have any knowledge of any
ground not involved in the appeal for rejecting any claim, he may include in his
decision a statement to that effect with his reasons for so holding, which statement
shall constitute a rejection of the claim. Priority claims are covered by the rule: 10
On June 11, 1965, petitioners filed a Second Motion for reconsideration on the ground that
priority rights are governed by convention and treaty, while invention claims are governed
24

exclusively by the Statute and Rules of Practice. Respondent Director denied that Motion
for lack of merit on August 24, 1965.
Hence, this recourse.
On January 9, 1967, we deemed the case submitted for decision, after petitioners had filed
their Brief on February 12, 1966, and respondent Director, through the Solicitor General,
his Brief on June 9, 1966.
On June 9, 1968, Republic Act No. 5434 was enacted providing that final Orders and
Decisions of the Director of Patents in ex parte and inter partes proceedings are
appealable to the Court of Appeals. Since no provision for retroactivity exists in said Act
this Tribunal has resolved to retain jurisdiction over this case.
Petitioners maintain before this Court that:
RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT
PETITIONERS' APPLICATION, SERIAL NO. 952, MAY NOT BE TREATED AS
FILED UNDER SECTION 15 AS AMENDED, OF REPUBLIC ACT NO. 165
KNOWN AS THE PATENT LAW.
and in support thereof stress that:
1) The Director had no jurisdiction to decide the question of whether or not the
Philippine Application should be treated as filed under Section 15 of the Act;
2) The Director had no jurisdiction to decide the question of whether or not the
Philippine Application was incomplete under Rules 47 and 48 of the Revised Rules
of Practice in Patent Cases;
3) The Director misconstrued and misapplied Rules 47 and 48 of the Rules;
4) The Director misconstrued and misapplied Rule 262 (b) of the Rules.
For resolution, therefore, are the following issues: the scope of the powers of the Director
of Patents in cases appealed to him and the correctness of his application of Rules 47, 48
and 262(b) of the Revised Rules of Practice in Patent Cases.
The facts unfolded call for an affirmance of respondent Director's rulings.
Intellectual Property Law – The Law on Patents
Explicit in Rule 262 of the Revised Rules of Practice in Patent Cases is the power and
authority of respondent Director to decide petitioners' appeal in the manner that he did,
and we quote:
262. Decision by the Director. — (a) The Director, in his decision, may affirm or
reverse the decision of the Principal Examiner in whole or in part on the ground
and on the claims specified by the Examiner. The affirmance of the rejection of a
claim on any of the grounds specified constitutes a general affirmance of the
decision of the Principal Examiner on that claim, except as to any ground
specifically reversed.
(b) Should the Director have knowledge of any grounds not involved in the appeal
for rejecting any claim he may include in his decision a statement to that effect with
his reasons for so holding which statement shall constitute a rejection of the claims.
...
In other words, respondent Director is empowered to consider grounds which may have
come to his knowledge other than those specifically raised in an appeal He need not
confine himself only to issues invoked. Besides, the question of new matter is inextricably
linked with the right of priority on which petitioners have anchored their application. As
early as Paper No. 18, supra, the Supervising Patent Examiner had concluded that
inasmuch as the submitted pages did not correspond with the certified copy of the U.S.
application, "the present application cannot therefore be granted priority date under section
16 as requested by applicant." Again, in Paper No. 22, supra, the Chief Patent Examiner
made mention of petitioner' imperfect application and the fact that the deadline for filinf
required by section 15 of the Patent Law cannot be extended directly or indirectly otherwise
"the restrictive provisions of section 15 will be nullified."
It is also far-fetched for petitioners to claim that in ruling on petitioners' right of priority,
respondent Director had contravened Rule 254 of the Revised Rules of Practice in Patent
cases, which provides that the Director of Patents exercises no direct control, direction
and supervision over the Principal Examiner and the Executive Examiner. What
respondent Director exercised was his authority to review the decisions of Patent
Examiners, as explicitly provided for in the last paragraph of the same Rules 254, as
follows:
xxx xxx xxx
The only supervision which the Director of Patent may lawfully exercise over the
Principal Examiners and the Executive Examiner is a general supervision,
exercised through a review of the recommendations they may make for the grant
of a patent, and through a review of their decision by petition and appeal.
25

Similarly untenable is petitioners' contention that respondent Director had misconstrued
and misapplied Rules 47 and 48 of the Revised Rules of Practice in Patent Cases. The
said Rules provide:
47. Application accepted and filed for examination only w hen complete — An
application for an invention patent will not be accepted and placed upon the files
for examination until all its required parts, complying with the rules relating thereto
are received except that 'certain minor informalities may be waived subject to
subsequent correction, whenever required.
If the papers and parts are incomplete, or so defective that they cannot be
accepted as a complete application for examination, the applicant will be notified;
the papers will be held four months for completion and if not by then completed,
will be stored as an abandoned incomplete application and eventually destroyed
or otherwise disposed of.
Intellectual Property Law – The Law on Patents
previously filed application must be described within the instant application in such a
manner as to enable one skilled in the art to use the same for a legally adequate utility. 13
All told, we sustain respondent Director's findings in the absence of error or abuse of power
or lack of jurisdiction or grave abuse of discretion. 14 We have held that in the absence of
arbitrariness, and provided they are supported by substantial evidence, as in this case, the
conclusions reached by the Director of Patents are to be accorded respect and must be
upheld. 15
WHEREFORE, we hereby affirm the Decision of respondent Director of Patents dated
December 9, 1964.
SO ORDERED.

48. Serial number and filing date of application — Complete applications are
numbered in regular order, and the applicant win be informed of the serial number
and filing date of the application by a filing receipt. The filing date of the applicant
is the, date on which the complete application, acceptable for placing on the files
for examination, is received in the Patent Office; or the date on which the last part
completing such application is received, in the case of an incomplete or defective
application completed within four months. The Executive Examiner shall be in
charge of fixing the filing date and serial number of an application.

Under the aforecited provisions, it is imperative that the application be complete in order
that it may be accepted. It is essential to the validity of Letters Patent that the specifications
be full, definite, and specific. 11 The purpose of requiring a definite and accurate description
of the process is to apprise the public of what the patentee claims as his invention, to
inform the Courts as to what they are called upon to construe, and to convey to competing
manufacturers and dealers information of exactly what they are bound to avoid. 12

The specification which petitioners submitted on March 5, 1954 was far from complete.
That defect was one of substance and not merely one of form. What petitioners claimed
as their invention was not completely determinable therefrom. Petitioners' application
could be deemed as complete only on July 2, 1963 when they submitted the additional
pages on the Specifications and Claims. Respondent Director, therefore, did not err in
converting petitioners' application into an ordinary application filed on April 14, 1954, not
only for their having failed to complete their application within the four-month period
provided for by Rules 47 and 48, Revised Rules of Practice in Patent Cases, and as
required of them by Paper No. 6, but also for their having failed to file a complete
application within twelve months from March 16, 1953, the date of the foreign application
For, to be entitled to the filing date of the patent application, an invention disclosed in a
26

G.R. No. 148222 August 15, 2003
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner, vs. SHOEMART,
INCORPORATED, and NORTH EDSA MARKETING, INCORPORATED, Respondents.
In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner
Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision1 of the Court of Appeals
reversing the October 31, 1996 decision2 of the Regional Trial Court of Makati, Branch 133,
in Civil Case No. 92-516 which declared private respondents Shoemart Inc. (SMI) and
North Edsa Marketing Inc. (NEMI) liable for infringement of trademark and copyright, and
unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals3 contained a summary of this dispute:
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture
of advertising display units simply referred to as light boxes. These units utilize specially
printed posters sandwiched between plastic sheets and illuminated with back lights. Pearl
and Dean was able to secure a Certificate of Copyright Registration dated January 20,
1981 over these illuminated display units. The advertising light boxes were marketed under
the trademark "Poster Ads". The application for registration of the trademark was filed with
the Bureau of Patents, Trademarks and Technology Transfer on June 20, 1983, but was
approved only on September 12, 1988, per Registration No. 41165. From 1981 to about
1988, Pearl and Dean employed the services of Metro Industrial Services to manufacture
its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc.
(SMI) for the lease and installation of the light boxes in SM City North Edsa. Since SM City
North Edsa was under construction at that time, SMI offered as an alternative, SM Makati
and SM Cubao, to which Pearl and Dean agreed. On September 11, 1985, Pearl and
Dean’s General Manager, Rodolfo Vergara, submitted for signature the contracts covering
SM Cubao and SM Makati to SMI’s Advertising Promotions and Publicity Division
Manager, Ramonlito Abano. Only the contract for SM Makati, however, was returned
signed. On October 4, 1985, Vergara wrote Abano inquiring about the other contract and
reminding him that their agreement for installation of light boxes was not only for its SM
Makati branch, but also for SM Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMI’s house counsel informed Pearl and Dean
that it was rescinding the contract for SM Makati due to non-performance of the terms
thereof. In his reply dated February 17, 1986, Vergara protested the unilateral action of
SMI, saying it was without basis. In the same letter, he pushed for the signing of the
contract for SM Cubao.
Intellectual Property Law – The Law on Patents
Two years later, Metro Industrial Services, the company formerly contracted by Pearl and
Dean to fabricate its display units, offered to construct light boxes for Shoemart’s chain of
stores. SMI approved the proposal and ten (10) light boxes were subsequently fabricated
by Metro Industrial for SMI. After its contract with Metro Industrial was terminated, SMI
engaged the services of EYD Rainbow Advertising Corporation to make the light boxes.
Some 300 units were fabricated in 1991. These were delivered on a staggered basis and
installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes
were installed at SM City and in the fastfood section of SM Cubao. Upon investigation,
Pearl and Dean found out that aside from the two (2) reported SM branches, light boxes
similar to those it manufactures were also installed in two (2) other SM stores. It further
discovered that defendant-appellant North Edsa Marketing Inc. (NEMI), through its
marketing arm, Prime Spots Marketing Services, was set up primarily to sell advertising
space in lighted display units located in SMI’s different branches. Pearl and Dean noted
that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to
both SMI and NEMI enjoining them to cease using the subject light boxes and to remove
the same from SMI’s establishments. It also demanded the discontinued use of the
trademark "Poster Ads," and the payment to Pearl and Dean of compensatory damages
in the amount of Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four
(224) light boxes and NEMI took down its advertisements for "Poster Ads" from the lighted
display units in SMI’s stores. Claiming that both SMI and NEMI failed to meet all its
demands, Pearl and Dean filed this instant case for infringement of trademark and
copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently developed
its poster panels using commonly known techniques and available technology, without
notice of or reference to Pearl and Dean’s copyright. SMI noted that the registration of the
mark "Poster Ads" was only for stationeries such as letterheads, envelopes, and the like.
Besides, according to SMI, the word "Poster Ads" is a generic term which cannot be
appropriated as a trademark, and, as such, registration of such mark is invalid. It also
stressed that Pearl and Dean is not entitled to the reliefs prayed for in its complaint since
its advertising display units contained no copyright notice, in violation of Section 27 of P.D.
49. SMI alleged that Pearl and Dean had no cause of action against it and that the suit
was purely intended to malign SMI’s good name. On this basis, SMI, aside from praying
for the dismissal of the case, also counterclaimed for moral, actual and exemplary
damages and for the cancellation of Pearl and Dean’s Certification of Copyright
Registration No. PD-R-2558 dated January 20, 1981 and Certificate of Trademark
Registration No. 4165 dated September 12, 1988.
27

NEMI, for its part, denied having manufactured, installed or used any advertising display
units, nor having engaged in the business of advertising. It repleaded SMI’s averments,
admissions and denials and prayed for similar reliefs and counterclaims as SMI."
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable for
infringement of copyright under Section 2 of PD 49, as amended, and infringement of
trademark under Section 22 of RA No. 166, as amended, and are hereby penalized under
Section 28 of PD 49, as amended, and Sections 23 and 24 of RA 166, as amended.
Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:
(a) actual damages - ₱16,600,000.00, representing profits derived by
defendants as a result of infringement of plaintiff’s copyright from 1991 to
1992
(b) moral damages - ₱1,000.000.00
(c) exemplary damages - ₱1,000,000.00
(d) attorney’s fees - ₱1,000,000.00
plus
(e) costs of suit;
(2) to deliver, under oath, for impounding in the National Library, all light boxes of
SMI which were fabricated by Metro Industrial Services and EYD Rainbow
Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the
trademark "Poster Ads", for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiff’s light boxes and
its trademark "Poster Ads".
Defendants’ counterclaims are hereby ordered dismissed for lack of merit.
SO ORDERED.4
Intellectual Property Law – The Law on Patents
On appeal, however, the Court of Appeals reversed the trial court:
Since the light boxes cannot, by any stretch of the imagination, be considered as either
prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly
classified as a copyrightable class "O" work, we have to agree with SMI when it posited
that what was copyrighted were the technical drawings only, and not the light boxes
themselves, thus:
42. When a drawing is technical and depicts a utilitarian object, a copyright over the
drawings like plaintiff-appellant’s will not extend to the actual object. It has so been held
under jurisprudence, of which the leading case is Baker vs. Selden (101 U.S. 841 (1879).
In that case, Selden had obtained a copyright protection for a book entitled "Selden’s
Condensed Ledger or Bookkeeping Simplified" which purported to explain a new system
of bookkeeping. Included as part of the book were blank forms and illustrations consisting
of ruled lines and headings, specially designed for use in connection with the system
explained in the work. These forms showed the entire operation of a day or a week or a
month on a single page, or on two pages following each other. The defendant Baker then
produced forms which were similar to the forms illustrated in Selden’s copyrighted books.
The Court held that exclusivity to the actual forms is not extended by a copyright. The
reason was that "to grant a monopoly in the underlying art when no examination of its
novelty has ever been made would be a surprise and a fraud upon the public; that is the
province of letters patent, not of copyright." And that is precisely the point. No doubt aware
that its alleged original design would never pass the rigorous examination of a patent
application, plaintiff-appellant fought to foist a fraudulent monopoly on the public by
conveniently resorting to a copyright registration which merely employs a recordal system
without the benefit of an in-depth examination of novelty.
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge
Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright
over an unpublished drawing entitled "Bridge Approach – the drawing showed a novel
bridge approach to unsnarl traffic congestion". The defendant constructed a bridge
approach which was alleged to be an infringement of the new design illustrated in plaintiff’s
drawings. In this case it was held that protection of the drawing does not extend to the
unauthorized duplication of the object drawn because copyright extends only to the
description or expression of the object and not to the object itself. It does not prevent one
from using the drawings to construct the object portrayed in the drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes,
Inc. v. Maddox, 379 F. 2d 84, it was held that there is no copyright infringement when one
who, without being authorized, uses a copyrighted architectural plan to construct a
structure. This is because the copyright does not extend to the structures themselves.
28

In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright over the
technical drawings of the latter’s advertising display units.
xxx xxx xxx
The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate
Court that the protective mantle of the Trademark Law extends only to the goods used by
the first user as specified in the certificate of registration, following the clear mandate
conveyed by Section 20 of Republic Act 166, as amended, otherwise known as the
Trademark Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of
registration of a mark or trade-name shall be prima facie evidence of the validity of the
registration, the registrant’s ownership of the mark or trade-name, and of the registrant’s
exclusive right to use the same in connection with the goods, business or
services specified in the certificate, subject to any conditions and limitations stated
therein." (underscoring supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the registration of
the trademark "Poster Ads" with the Bureau of Patents, Trademarks, and Technology
Transfer. Said trademark was recorded in the Principal Register on September 12, 1988
under Registration No. 41165 covering the following products: stationeries such as
letterheads, envelopes and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the part of
the defendants-appellants for their use of the words "Poster Ads", in the advertising display
units in suit. Jurisprudence has interpreted Section 20 of the Trademark Law as "an implicit
permission to a manufacturer to venture into the production of goods and allow that
producer to appropriate the brand name of the senior registrant on goods other than those
stated in the certificate of registration." The Supreme Court further emphasized the
restrictive meaning of Section 20 when it stated, through Justice Conrado V. Sanchez,
that:
Really, if the certificate of registration were to be deemed as including goods not specified
therein, then a situation may arise whereby an applicant may be tempted to register a
trademark on any and all goods which his mind may conceive even if he had never
intended to use the trademark for the said goods. We believe that such omnibus
registration is not contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Dean’s registered
trademark and defendants-appellants’ "Poster Ads" design, as well as the parallel use by
which said words were used in the parties’ respective advertising copies, we cannot find
Intellectual Property Law – The Law on Patents
defendants-appellants liable for infringement of trademark. "Poster Ads" was registered by
Pearl and Dean for specific use in its stationeries, in contrast to defendants-appellants who
used the same words in their advertising display units. Why Pearl and Dean limited the
use of its trademark to stationeries is simply beyond us. But, having already done so, it
must stand by the consequence of the registration which it had caused.
xxx xxx xxx
We are constrained to adopt the view of defendants-appellants that the words "Poster Ads"
are a simple contraction of the generic term poster advertising. In the absence of any
convincing proof that "Poster Ads" has acquired a secondary meaning in this jurisdiction,
we find that Pearl and Dean’s exclusive right to the use of "Poster Ads" is limited to what
is written in its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark "Poster
Ads".
There being no finding of either copyright or trademark infringement on the part of SMI and
NEMI, the monetary award granted by the lower court to Pearl and Dean has no leg to
stand on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and SET
ASIDE, and another is rendered DISMISSING the complaint and counterclaims in the
above-entitled case for lack of merit.5
Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning
the following errors for the Court’s consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND
NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
INFRINGEMENT OF PEARL & DEAN’S TRADEMARK "POSTER ADS" WAS
COMMITTED BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
AWARD OF THE TRIAL COURT, DESPITE THE LATTER’S FINDING, NOT
DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS
29

GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING CONTRACTS
WITH PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL,
MORAL & EXEMPLARY DAMAGES, ATTORNEY’S FEES AND COSTS OF
SUIT.6
ISSUES
In resolving this very interesting case, we are challenged once again to put into proper
perspective four main concerns of intellectual property law — patents, copyrights,
trademarks and unfair competition arising from infringement of any of the first three. We
shall focus then on the following issues:
(1) if the engineering or technical drawings of an advertising display unit (light box)
are granted copyright protection (copyright certificate of registration) by the
National Library, is the light box depicted in such engineering drawings ipso facto
also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent
issued by the Bureau of Patents Trademarks and Technology Transfer (now
Intellectual Property Office) — in addition to the copyright of the engineering
drawings?
(3) can the owner of a registered trademark legally prevent others from using such
trademark if it is a mere abbreviation of a term descriptive of his goods, services
or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & D’s complaint was that SMI infringed on its copyright over the light boxes
when SMI had the units manufactured by Metro and EYD Rainbow Advertising for its own
account. Obviously, petitioner’s position was premised on its belief that its copyright over
the engineering drawings extended ipso facto to the light boxes depicted or illustrated in
said drawings. In ruling that there was no copyright infringement, the Court of Appeals held
that the copyright was limited to the drawings alone and not to the light box itself. We agree
with the appellate court.
First, petitioner’s application for a copyright certificate — as well as Copyright Certificate
No. PD-R2588 issued by the National Library on January 20, 1981 — clearly stated that it
was for a class "O" work under Section 2 (O) of PD 49 (The Intellectual Property Decree)
Intellectual Property Law – The Law on Patents
which was the statute then prevailing. Said Section 2 expressly enumerated the works
subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with
respect to any of the following works:
xxx xxx xxx
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
xxx xxx xxx
Although petitioner’s copyright certificate was entitled "Advertising Display Units" (which
depicted the box-type electrical devices), its claim of copyright infringement cannot be
sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory
grant, the rights are limited to what the statute confers. It may be obtained and enjoyed
only with respect to the subjects and by the persons, and on terms and conditions specified
in the statute.7 Accordingly, it can cover only the works falling within the statutory
enumeration or description.8
P & D secured its copyright under the classification class "O" work. This being so,
petitioner’s copyright protection extended only to the technical drawings and not to the light
box itself because the latter was not at all in the category of "prints, pictorial illustrations,
advertising copies, labels, tags and box wraps." Stated otherwise, even as we find that P
& D indeed owned a valid copyright, the same could have referred only to the technical
drawings within the category of "pictorial illustrations." It could not have possibly stretched
out to include the underlying light box. The strict application9 of the law’s enumeration in
Section 2 prevents us from giving petitioner even a little leeway, that is, even if its copyright
certificate was entitled "Advertising Display Units." What the law does not include, it
excludes, and for the good reason: the light box was not a literary or artistic piece which
could be copyrighted under the copyright law. And no less clearly, neither could the lack
of statutory authority to make the light box copyrightable be remedied by the simplistic act
of entitling the copyright certificate issued by the National Library as "Advertising Display
Units."
In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the public without
license from P & D, then no doubt they would have been guilty of copyright infringement.
But this was not the case. SMI’s and NEMI’s acts complained of by P & D were to have
units similar or identical to the light box illustrated in the technical drawings manufactured
30

by Metro and EYD Rainbow Advertising, for leasing out to different advertisers. Was this
an infringement of petitioner’s copyright over the technical drawings? We do not think so.
During the trial, the president of P & D himself admitted that the light box was neither a
literary not an artistic work but an "engineering or marketing invention."10 Obviously, there
appeared to be some confusion regarding what ought or ought not to be the proper
subjects of copyrights, patents and trademarks. In the leading case of Kho vs. Court of
Appeals,11 we ruled that these three legal rights are completely distinct and separate from
one another, and the protection afforded by one cannot be used interchangeably to cover
items or works that exclusively pertain to the others:
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing
the goods (trademark) or services (service mark) of an enterprise and shall include a
stamped or marked container of goods. In relation thereto, a trade name means the name
or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a
copyright is confined to literary and artistic works which are original intellectual creations
in the literary and artistic domain protected from the moment of their creation. Patentable
inventions, on the other hand, refer to any technical solution of a problem in any field of
human activity which is new, involves an inventive step and is industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial use of the light
boxes without license from petitioner, private respondents cannot be held legally liable for
infringement of P & D’s copyright over its technical drawings of the said light boxes, should
they be liable instead for infringement of patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light boxes. It
therefore acquired no patent rights which could have protected its invention, if in fact it
really was. And because it had no patent, petitioner could not legally prevent anyone from
manufacturing or commercially using the contraption. In Creser Precision Systems, Inc.
vs. Court of Appeals,12 we held that "there can be no infringement of a patent until a patent
has been issued, since whatever right one has to the invention covered by the patent
arises alone from the grant of patent. x x x (A)n inventor has no common law right to a
monopoly of his invention. He has the right to make use of and vend his invention, but if
he voluntarily discloses it, such as by offering it for sale, the world is free to copy and use
it with impunity. A patent, however, gives the inventor the right to exclude all others. As a
patentee, he has the exclusive right of making, selling or using the invention.13 On the
assumption that petitioner’s advertising units were patentable inventions, petitioner
revealed them fully to the public by submitting the engineering drawings thereof to the
National Library.
Intellectual Property Law – The Law on Patents
To be able to effectively and legally preclude others from copying and profiting from the
invention, a patent is a primordial requirement. No patent, no protection. The ultimate goal
of a patent system is to bring new designs and technologies into the public domain through
disclosure.14 Ideas, once disclosed to the public without the protection of a valid patent, are
subject to appropriation without significant restraint.15
On one side of the coin is the public which will benefit from new ideas; on the other are the
inventors who must be protected. As held in Bauer & Cie vs. O’Donnel,16 "The act secured
to the inventor the exclusive right to make use, and vend the thing patented, and
consequently to prevent others from exercising like privileges without the consent of the
patentee. It was passed for the purpose of encouraging useful invention and promoting
new and useful inventions by the protection and stimulation given to inventive genius, and
was intended to secure to the public, after the lapse of the exclusive privileges granted the
benefit of such inventions and improvements."
The law attempts to strike an ideal balance between the two interests:
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the
creation and disclosure of new useful and non-obvious advances in technology and
design, in return for the exclusive right to practice the invention for a number of years. The
inventor may keep his invention secret and reap its fruits indefinitely. In consideration of
its disclosure and the consequent benefit to the community, the patent is granted. An
exclusive enjoyment is guaranteed him for 17 years, but upon the expiration of that period,
the knowledge of the invention inures to the people, who are thus enabled to practice it
and profit by its use."17
The patent law has a three-fold purpose: "first, patent law seeks to foster and reward
invention; second, it promotes disclosures of inventions to stimulate further innovation and
to permit the public to practice the invention once the patent expires; third, the stringent
requirements for patent protection seek to ensure that ideas in the public domain remain
there for the free use of the public."18
It is only after an exhaustive examination by the patent office that a patent is issued. Such
an in-depth investigation is required because "in rewarding a useful invention, the rights
and welfare of the community must be fairly dealt with and effectively guarded. To that
end, the prerequisites to obtaining a patent are strictly observed and when a patent is
issued, the limitations on its exercise are equally strictly enforced. To begin with, a genuine
invention or discovery must be demonstrated lest in the constant demand for new
appliances, the heavy hand of tribute be laid on each slight technological advance in art."19
There is no such scrutiny in the case of copyrights nor any notice published before its grant
to the effect that a person is claiming the creation of a work. The law confers the copyright
31

from the moment of creation and the copyright certificate is issued upon registration with
20
the National Library of a sworn ex-parte claim of creation.
Therefore, not having gone through the arduous examination for patents, the petitioner
cannot exclude others from the manufacture, sale or commercial use of the light boxes on
the sole basis of its copyright certificate over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent
office (IPO) to scrutinize the light box’s eligibility as a patentable invention. The irony here
is that, had petitioner secured a patent instead, its exclusivity would have been for 17 years
only. But through the simplified procedure of copyright-registration with the National Library
— without undergoing the rigor of defending the patentability of its invention before the
IPO and the public — the petitioner would be protected for 50 years. This situation could
not have been the intention of the law.
In the oft-cited case of Baker vs. Selden21 , the United States Supreme Court held that only
the expression of an idea is protected by copyright, not the idea itself. In that case, the
plaintiff held the copyright of a book which expounded on a new accounting system he had
developed. The publication illustrated blank forms of ledgers utilized in such a system. The
defendant reproduced forms similar to those illustrated in the plaintiff’s copyrighted book.
The US Supreme Court ruled that:
"There is no doubt that a work on the subject of book-keeping, though only explanatory of
well known systems, may be the subject of a copyright; but, then, it is claimed only as a
book. x x x. But there is a clear distinction between the books, as such, and the art, which
it is, intended to illustrate. The mere statement of the proposition is so evident that it
requires hardly any argument to support it. The same distinction may be predicated of
every other art as well as that of bookkeeping. A treatise on the composition and use of
medicines, be they old or new; on the construction and use of ploughs or watches or
churns; or on the mixture and application of colors for painting or dyeing; or on the mode
of drawing lines to produce the effect of perspective, would be the subject of copyright; but
no one would contend that the copyright of the treatise would give the exclusive right to
the art or manufacture described therein. The copyright of the book, if not pirated from
other works, would be valid without regard to the novelty or want of novelty of its subject
matter. The novelty of the art or thing described or explained has nothing to do with the
validity of the copyright. To give to the author of the book an exclusive property in the
art described therein, when no examination of its novelty has ever been officially
made, would be a surprise and a fraud upon the public. That is the province of letters
patent, not of copyright. The claim to an invention of discovery of an art or
manufacture must be subjected to the examination of the Patent Office before an
exclusive right therein can be obtained; and a patent from the government can only
secure it.
Intellectual Property Law – The Law on Patents
The difference between the two things, letters patent and copyright, may be illustrated by
reference to the subjects just enumerated. Take the case of medicines. Certain mixtures
are found to be of great value in the healing art. If the discoverer writes and publishes
a book on the subject (as regular physicians generally do), he gains no exclusive
right to the manufacture and sale of the medicine; he gives that to the public. If he
desires to acquire such exclusive right, he must obtain a patent for the mixture as
a new art, manufacture or composition of matter. He may copyright his book, if he
pleases; but that only secures to him the exclusive right of printing and publishing
his book. So of all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it
may contain, gives no exclusive right to the modes of drawing described, though they may
never have been known or used before. By publishing the book without getting a patent
for the art, the latter is given to the public.
xxx
Now, whilst no one has a right to print or publish his book, or any material part thereof, as
a book intended to convey instruction in the art, any person may practice and use the art
itself which he has described and illustrated therein. The use of the art is a totally
different thing from a publication of the book explaining it. The copyright of a book on
bookkeeping cannot secure the exclusive right to make, sell and use account books
prepared upon the plan set forth in such book. Whether the art might or might not have
been patented, is a question, which is not before us. It was not patented, and is open and
free to the use of the public. And, of course, in using the art, the ruled lines and headings
of accounts must necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a
confusion of ideas produced by the peculiar nature of the art described in the books, which
have been made the subject of copyright. In describing the art, the illustrations and
diagrams employed happened to correspond more closely than usual with the actual work
performed by the operator who uses the art. x x x The description of the art in a book,
though entitled to the benefit of copyright, lays no foundation for an exclusive claim
to the art itself. The object of the one is explanation; the object of the other is use.
The former may be secured by copyright. The latter can only be secured, if it can be
secured at all, by letters patent." (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark "Poster Ads" which petitioner’s
president said was a contraction of "poster advertising." P & D was able to secure a
trademark certificate for it, but one where the goods specified were "stationeries such as
letterheads, envelopes, calling cards and newsletters."22 Petitioner admitted it did not
32

commercially engage in or market these goods. On the contrary, it dealt in electrically
operated backlit advertising units and the sale of advertising spaces thereon, which,
however, were not at all specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs.
Intermediate Appellate Court,23where we, invoking Section 20 of the old Trademark Law,
ruled that "the certificate of registration issued by the Director of Patents can confer (upon
petitioner) the exclusive right to use its own symbol only to those goods specified in the
certificate, subject to any conditions and limitations specified in the certificate x x x. One
who has adopted and used a trademark on his goods does not prevent the adoption and
use of the same trademark by others for products which are of a
different description."24 Faberge, Inc. was correct and was in fact recently reiterated
in Canon Kabushiki Kaisha vs. Court of Appeals.25
Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure of P
& D to secure a trademark registration for specific use on the light boxes meant that there
could not have been any trademark infringement since registration was an essential
element thereof. 1âwphi1
Intellectual Property Law – The Law on Patents
This fact also prevented the application of the doctrine of secondary meaning. "Poster Ads"
was generic and incapable of being used as a trademark because it was used in the field
of poster advertising, the very business engaged in by petitioner. "Secondary meaning"
means that a word or phrase originally incapable of exclusive appropriation with reference
to an article in the market (because it is geographically or otherwise descriptive) might
nevertheless have been used for so long and so exclusively by one producer with
reference to his article that, in the trade and to that branch of the purchasing public, the
word or phrase has come to mean that the article was his property.29 The admission by
petitioner’s own expert witness that he himself could not associate "Poster Ads" with
petitioner P & D because it was "too generic" definitely precluded the application of this
exception.
Having discussed the most important and critical issues, we see no need to belabor the
rest.
All told, the Court finds no reversible error committed by the Court of Appeals when it
reversed the Regional Trial Court of Makati City.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals
ON THE ISSUE OF UNFAIR COMPETITION dated May 22, 2001 is AFFIRMED in toto.

If at all, the cause of action should have been for unfair competition, a situation which was SO ORDERED.
possible even if P & D had no registration.26 However, while the petitioner’s complaint in
the RTC also cited unfair competition, the trial court did not find private respondents liable
therefor. Petitioner did not appeal this particular point; hence, it cannot now revive its claim
of unfair competition.

But even disregarding procedural issues, we nevertheless cannot hold respondents guilty
of unfair competition.

By the nature of things, there can be no unfair competition under the law on copyrights
although it is applicable to disputes over the use of trademarks. Even a name or phrase
incapable of appropriation as a trademark or tradename may, by long and exclusive use
by a business (such that the name or phrase becomes associated with the business or
product in the mind of the purchasing public), be entitled to protection against unfair
competition.27 In this case, there was no evidence that P & D’s use of "Poster Ads" was
distinctive or well-known. As noted by the Court of Appeals, petitioner’s expert witnesses
himself had testified that " ‘Poster Ads’ was too generic a name. So it was difficult to identify
it with any company, honestly speaking."28 This crucial admission by its own expert witness
that "Poster Ads" could not be associated with P & D showed that, in the mind of the public,
the goods and services carrying the trademark "Poster Ads" could not be distinguished
from the goods and services of other entities.

33

G.R. No. 167715 November 17, 2010
PHIL PHARMAWEALTH, INC., Petitioner, vs. PFIZER, INC. and PFIZER (PHIL.)
INC., Respondents.
Before the Court is a petition for review on certiorari seeking to annul and set aside the
Resolutions dated January 18, 20051 and April 11, 20052 by the Court of Appeals (CA) in
CA-G.R. SP No. 82734.
The instant case arose from a Complaint3 for patent infringement filed against petitioner
Phil Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with
the Bureau of Legal Affairs of the Intellectual Property Office (BLA-IPO). The Complaint
alleged as follows:
xxxx
6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (the
"Patent") which was issued by this Honorable Office on July 16, 1987. The patent
is valid until July 16, 2004. The claims of this Patent are directed to "a method of
increasing the effectiveness of a beta-lactam antibiotic in a mammalian subject,
which comprises co-administering to said subject a beta-lactam antibiotic
effectiveness increasing amount of a compound of the formula IA." The scope of
the claims of the Patent extends to a combination of penicillin such as ampicillin
sodium and beta-lactam antibiotic like sulbactam sodium.
7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium (hereafter
"Sulbactam Ampicillin"). Ampicillin sodium is a specific example of the broad beta-
lactam antibiotic disclosed and claimed in the Patent. It is the compound which
efficacy is being enhanced by co-administering the same with sulbactam sodium.
Sulbactam sodium, on the other hand, is a specific compound of the formula IA
disclosed and claimed in the Patent.
8. Pfizer is marketing Sulbactam Ampicillin under the brand name "Unasyn."
Pfizer's "Unasyn" products, which come in oral and IV formulas, are covered by
Certificates of Product Registration ("CPR") issued by the Bureau of Food and
Drugs ("BFAD") under the name of complainants. The sole and exclusive
distributor of "Unasyn" products in the Philippines is Zuellig Pharma Corporation,
pursuant to a Distribution Services Agreement it executed with Pfizer Phils. on
January 23, 2001.
9. Sometime in January and February 2003, complainants came to know that
respondent [herein petitioner] submitted bids for the supply of Sulbactam Ampicillin
Intellectual Property Law – The Law on Patents
to several hospitals without the consent of complainants and in violation of the
complainants' intellectual property rights. x x x
xxxx
10. Complainants thus wrote the above hospitals and demanded that the latter
immediately cease and desist from accepting bids for the supply [of] Sulbactam
Ampicillin or awarding the same to entities other than complainants. Complainants,
in the same letters sent through undersigned counsel, also demanded that
respondent immediately withdraw its bids to supply Sulbactam Ampicillin.
11. In gross and evident bad faith, respondent and the hospitals named in
paragraph 9 hereof, willfully ignored complainants' just, plain and valid demands,
refused to comply therewith and continued to infringe the Patent, all to the damage
and prejudice of complainants. As registered owner of the Patent, Pfizer is entitled
to protection under Section 76 of the IP Code.
x x x x4
Respondents prayed for permanent injunction, damages and the forfeiture and
impounding of the alleged infringing products. They also asked for the issuance of a
temporary restraining order and a preliminary injunction that would prevent herein
petitioner, its agents, representatives and assigns, from importing, distributing, selling or
offering the subject product for sale to any entity in the Philippines.
In an Order5 dated July 15, 2003 the BLA-IPO issued a preliminary injunction which was
effective for ninety days from petitioner's receipt of the said Order.
Prior to the expiration of the ninety-day period, respondents filed a Motion for Extension of
Writ of Preliminary Injunction6 which, however, was denied by the BLA-IPO in an
Order7 dated October 15, 2003.
Respondents filed a Motion for Reconsideration but the same was also denied by the BLA-
IPO in a Resolution8dated January 23, 2004.
Respondents then filed a special civil action for certiorari with the CA assailing the October
15, 2003 and January 23, 2004 Resolutions of the BLA-IPO. Respondents also prayed for
the issuance of a preliminary mandatory injunction for the reinstatement and extension of
the writ of preliminary injunction issued by the BLA-IPO.
While the case was pending before the CA, respondents filed a Complaint9 with the
Regional Trial Court (RTC) of Makati City for infringement and unfair competition with
34

damages against herein petitioner. In said case, respondents prayed for the issuance of a
temporary restraining order and preliminary injunction to prevent herein petitioner from
importing, distributing, selling or offering for sale sulbactam ampicillin products to any entity
in the Philippines. Respondents asked the trial court that, after trial, judgment be rendered
awarding damages in their favor and making the injunction permanent.
On August 24, 2004, the RTC of Makati City issued an Order10 directing the issuance of a
temporary restraining order conditioned upon respondents' filing of a bond.
In a subsequent Order11 dated April 6, 2005, the same RTC directed the issuance of a writ
of preliminary injunction "prohibiting and restraining [petitioner], its agents, representatives
and assigns from importing, distributing or selling Sulbactam Ampicillin products to any
entity in the Philippines."
Meanwhile, on November 16, 2004, petitioner filed a Motion to Dismiss12 the petition filed
with the CA on the ground of forum shopping, contending that the case filed with the RTC
has the same objective as the petition filed with the CA, which is to obtain an injunction
prohibiting petitioner from importing, distributing and selling Sulbactam Ampicillin products.
On January 18, 2005, the CA issued its questioned Resolution13 approving the bond
posted by respondents pursuant to the Resolution issued by the appellate court on March
23, 2004 which directed the issuance of a temporary restraining order conditioned upon
the filing of a bond. On even date, the CA issued a temporary restraining order14 which
prohibited petitioner "from importing, distributing, selling or offering for sale Sulbactam
Ampicillin products to any hospital or to any other entity in the Philippines, or from infringing
Pfizer Inc.'s Philippine Patent No. 21116 and impounding all the sales invoices and other
documents evidencing sales by [petitioner] of Sulbactam Ampicillin products."
On February 7, 2005, petitioner again filed a Motion to Dismiss15 the case for being moot
and academic, contending that respondents' patent had already lapsed. In the same
manner, petitioner also moved for the reconsideration of the temporary restraining order
issued by the CA on the same basis that the patent right sought to be protected has been
extinguished due to the lapse of the patent license and on the ground that the CA has no
jurisdiction to review the order of the BLA-IPO as said jurisdiction is vested by law in the
Office of the Director General of the IPO.
On April 11, 2005, the CA rendered its presently assailed Resolution denying the Motion
to Dismiss, dated November 16, 2004, and the motion for reconsideration, as well as
Motion to Dismiss, both dated February 7, 2005.
Hence, the present petition raising the following issues:
Intellectual Property Law – The Law on Patents
a) Can an injunctive relief be issued based on an action of patent infringement
when the patent allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal
Affairs of the Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly
different causes of action and yet pray for the same relief?16
In the first issue raised, petitioner argues that respondents' exclusive right to monopolize
the subject matter of the patent exists only within the term of the patent. Petitioner claims
that since respondents' patent expired on July 16, 2004, the latter no longer possess any
right of monopoly and, as such, there is no more basis for the issuance of a restraining
order or injunction against petitioner insofar as the disputed patent is concerned.
The Court agrees.
Section 37 of Republic Act No. (RA) 165,17 which was the governing law at the time of the
issuance of respondents' patent, provides:
Section 37. Rights of patentees. A patentee shall have the exclusive right to make, use
and sell the patented machine, article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of the Philippines for the term
of the patent; and such making, using, or selling by any person without the authorization
of the patentee constitutes infringement of the patent.18
It is clear from the above-quoted provision of law that the exclusive right of a patentee to
make, use and sell a patented product, article or process exists only during the term of the
patent. In the instant case, Philippine Letters Patent No. 21116, which was the basis of
respondents in filing their complaint with the BLA-IPO, was issued on July 16, 1987. This
fact was admitted by respondents themselves in their complaint. They also admitted that
the validity of the said patent is until July 16, 2004, which is in conformity with Section 21
of RA 165, providing that the term of a patent shall be seventeen (17) years from the date
of issuance thereof. Section 4, Rule 129 of the Rules of Court provides that an admission,
verbal or written, made by a party in the course of the proceedings in the same case, does
not require proof and that the admission may be contradicted only by showing that it was
made through palpable mistake or that no such admission was made. In the present case,
there is no dispute as to respondents' admission that the term of their patent expired on
July 16, 2004. Neither is there evidence to show that their admission was made through
palpable mistake. Hence, contrary to the pronouncement of the CA, there is no longer any
need to present evidence on the issue of expiration of respondents' patent.
35

On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004,
respondents no longer possess the exclusive right to make, use and sell the articles or
products covered by Philippine Letters Patent No. 21116.
Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of a
writ of preliminary injunction, viz:
(a) That the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the acts
complained of, or in requiring the performance of an act or acts, either for a limited
period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant;
or
(c) That a party, court, or agency or a person is doing, threatening, or attempting
to do, or is procuring or suffering to be done, some act or acts probably in violation
of the rights of the applicant respecting the subject of the action or proceeding, and
tending to render the judgment ineffectual.
In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide that
if the matter is of extreme urgency and the applicant will suffer grave injustice and
irreparable injury, a temporary restraining order may be issued ex parte.
From the foregoing, it can be inferred that two requisites must exist to warrant the issuance
of an injunctive relief, namely: (1) the existence of a clear and unmistakable right that must
be protected; and (2) an urgent and paramount necessity for the writ to prevent serious
damage.19
In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution
approving the bond filed by respondents, the latter no longer had a right that must be
protected, considering that Philippine Letters Patent No. 21116 which was issued to them
already expired on July 16, 2004. Hence, the issuance by the CA of a temporary restraining
order in favor of the respondents is not proper.
In fact, the CA should have granted petitioner's motion to dismiss the petition for certiorari
filed before it as the only issue raised therein is the propriety of extending the writ of
preliminary injunction issued by the BLA-IPO. Since the patent which was the basis for
issuing the injunction, was no longer valid, any issue as to the propriety of extending the
life of the injunction was already rendered moot and academic.
Intellectual Property Law – The Law on Patents
As to the second issue raised, the Court, is not persuaded by petitioner's argument that,
pursuant to the doctrine of primary jurisdiction, the Director General of the IPO and not the
CA has jurisdiction to review the questioned Orders of the Director of the BLA-IPO.
It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual Property
Code of the Philippines, which is the presently prevailing law, the Director General of the
IPO exercises exclusive appellate jurisdiction over all decisions rendered by the Director
of the BLA-IPO. However, what is being questioned before the CA is not a decision, but
an interlocutory order of the BLA-IPO denying respondents' motion to extend the life of the
preliminary injunction issued in their favor.
RA 8293 is silent with respect to any remedy available to litigants who intend to question
an interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules
and Regulations on Administrative Complaints for Violation of Laws Involving Intellectual
Property Rights simply provides that interlocutory orders shall not be appealable. The said
Rules and Regulations do not prescribe a procedure within the administrative machinery
to be followed in assailing orders issued by the BLA-IPO pending final resolution of a case
filed with them. Hence, in the absence of such a remedy, the provisions of the Rules of
Court shall apply in a suppletory manner, as provided under Section 3, Rule 1 of the same
Rules and Regulations. Hence, in the present case, respondents correctly resorted to the
filing of a special civil action for certiorari with the CA to question the assailed Orders of
the BLA-IPO, as they cannot appeal therefrom and they have no other plain, speedy and
adequate remedy in the ordinary course of law. This is consistent with Sections 1 20 and
4,21 Rule 65 of the Rules of Court, as amended.
In the first place, respondents' act of filing their complaint originally with the BLA-IPO is
already in consonance with the doctrine of primary jurisdiction.
This Court has held that:
[i]n cases involving specialized disputes, the practice has been to refer the same to an
administrative agency of special competence in observance of the doctrine of primary
jurisdiction. The Court has ratiocinated that it cannot or will not determine a controversy
involving a question which is within the jurisdiction of the administrative tribunal prior to the
resolution of that question by the administrative tribunal, where the question demands the
exercise of sound administrative discretion requiring the special knowledge, experience
and services of the administrative tribunal to determine technical and intricate matters of
fact, and a uniformity of ruling is essential to comply with the premises of the regulatory
statute administered. The objective of the doctrine of primary jurisdiction is to guide a court
in determining whether it should refrain from exercising its jurisdiction until after an
administrative agency has determined some question or some aspect of some question
arising in the proceeding before the court. It applies where the claim is originally cognizable
in the courts and comes into play whenever enforcement of the claim requires the
36

resolution of issues which, under a regulatory scheme, has been placed within the special
competence of an administrative body; in such case, the judicial process is suspended
pending referral of such issues to the administrative body for its view.22
Based on the foregoing, the Court finds that respondents' initial filing of their complaint
with the BLA-IPO, instead of the regular courts, is in keeping with the doctrine of primary
jurisdiction owing to the fact that the determination of the basic issue of whether petitioner
violated respondents' patent rights requires the exercise by the IPO of sound
administrative discretion which is based on the agency's special competence, knowledge
and experience.
However, the propriety of extending the life of the writ of preliminary injunction issued by
the BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within
the jurisdiction of the said administrative agency, particularly that of its Director General.
The resolution of this issue which was raised before the CA does not demand the exercise
by the IPO of sound administrative discretion requiring special knowledge, experience and
services in determining technical and intricate matters of fact. It is settled that one of the
exceptions to the doctrine of primary jurisdiction is where the question involved is purely
legal and will ultimately have to be decided by the courts of justice.23 This is the case with
respect to the issue raised in the petition filed with the CA.
Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations do
not provide for a procedural remedy to question interlocutory orders issued by the BLA-
IPO. In this regard, it bears to reiterate that the judicial power of the courts, as provided for
under the Constitution, includes the authority of the courts to determine in an appropriate
action the validity of the acts of the political departments.24 Judicial power also includes
the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.25 Hence, the CA, and not the IPO Director
General, has jurisdiction to determine whether the BLA-IPO committed grave abuse of
discretion in denying respondents' motion to extend the effectivity of the writ of preliminary
injunction which the said office earlier issued.
Lastly, petitioner avers that respondents are guilty of forum shopping for having filed
separate actions before the IPO and the RTC praying for the same relief.
The Court agrees.
Forum shopping is defined as the act of a party against whom an adverse judgment has
been rendered in one forum, of seeking another (and possibly favorable) opinion in another
forum (other than by appeal or the special civil action of certiorari), or the institution of two
Intellectual Property Law – The Law on Patents
(2) or more actions or proceedings grounded on the same cause on the supposition that
one or the other court would make a favorable disposition.26
The elements of forum shopping are: (a) identity of parties, or at least such parties that
represent the same interests in both actions; (b) identity of rights asserted and reliefs
prayed for, the reliefs being founded on the same facts; (c) identity of the two preceding
particulars, such that any judgment rendered in the other action will, regardless of which
party is successful, amount to res judicata in the action under consideration.27
There is no question as to the identity of parties in the complaints filed with the IPO and
the RTC.
Respondents argue that they cannot be held guilty of forum shopping because their
complaints are based on different causes of action as shown by the fact that the said
complaints are founded on violations of different patents.
The Court is not persuaded.
Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or omission by
which a party violates a right of another. In the instant case, respondents' cause of action
in their complaint filed with the IPO is the alleged act of petitioner in importing, distributing,
selling or offering for sale Sulbactam Ampicillin products, acts that are supposedly violative
of respondents' right to the exclusive sale of the said products which are covered by the
latter's patent. However, a careful reading of the complaint filed with the RTC of Makati
City would show that respondents have the same cause of action as in their complaint filed
with the IPO. They claim that they have the exclusive right to make, use and sell Sulbactam
Ampicillin products and that petitioner violated this right. Thus, it does not matter that the
patents upon which the complaints were based are different. The fact remains that in both
complaints the rights violated and the acts violative of such rights are identical.
In fact, respondents seek substantially the same reliefs in their separate complaints with
the IPO and the RTC for the purpose of accomplishing the same objective.
It is settled by this Court in several cases that the filing by a party of two apparently different
actions but with the same objective constitutes forum shopping.28 The Court discussed this
species of forum shopping as follows:
Very simply stated, the original complaint in the court a quo which gave rise to the instant
petition was filed by the buyer (herein private respondent and his predecessors-in-interest)
against the seller (herein petitioners) to enforce the alleged perfected sale of real estate.
On the other hand, the complaint in the Second Case seeks to declare such purported
sale involving the same real property "as unenforceable as against the Bank," which is the
37

petitioner herein. In other words, in the Second Case, the majority stockholders, in
representation of the Bank, are seeking to accomplish what the Bank itself failed to do in
the original case in the trial court. In brief, the objective or the relief being sought, though
worded differently, is the same, namely, to enable the petitioner Bank to escape from the
obligation to sell the property to respondent.29
In Danville Maritime, Inc. v. Commission on Audit,30 the Court ruled as follows:
In the attempt to make the two actions appear to be different, petitioner impleaded different
respondents therein – PNOC in the case before the lower court and the COA in the case
before this Court and sought what seems to be different reliefs. Petitioner asks this Court
to set aside the questioned letter-directive of the COA dated October 10, 1988 and to direct
said body to approve the Memorandum of Agreement entered into by and between the
PNOC and petitioner, while in the complaint before the lower court petitioner seeks to
enjoin the PNOC from conducting a rebidding and from selling to other parties the vessel
"T/T Andres Bonifacio," and for an extension of time for it to comply with the paragraph 1
of the memorandum of agreement and damages. One can see that although the relief
prayed for in the two (2) actions are ostensibly different, the ultimate objective in both
actions is the same, that is, the approval of the sale of vessel in favor of petitioner, and to
overturn the letter directive of the COA of October 10, 1988 disapproving the sale.31
In the instant case, the prayer of respondents in their complaint filed with the IPO is as
follows:
A. Immediately upon the filing of this action, issue an ex parte order (a) temporarily
restraining respondent, its agents, representatives and assigns from importing,
distributing, selling or offering for sale Sulbactam Ampicillin products to the
hospitals named in paragraph 9 of this Complaint or to any other entity in the
Philippines, or from otherwise infringing Pfizer Inc.'s Philippine Patent No. 21116;
and (b) impounding all the sales invoices and other documents evidencing sales
by respondent of Sulbactam Ampicillin products.
B. After hearing, issue a writ of preliminary injunction enjoining respondent, its
agents, representatives and assigns from importing, distributing, selling or offering
for sale Sulbactam Ampicillin products to the hospitals named in paragraph 9 of
the Complaint or to any other entity in the Philippines, or from otherwise infringing
Pfizer Inc.'s Philippine Patent No. 21116; and
C. After trial, render judgment:
Intellectual Property Law – The Law on Patents
(i) declaring that respondent has infringed Pfizer Inc.'s Philippine Patent
No. 21116 and that respondent has no right whatsoever over complainant's
patent;
(ii) ordering respondent to pay complainants the following amounts:
(a) at least ₱1,000,000.00 as actual damages;
(b) ₱700,000.00 as attorney's fees and litigation expenses;
(d) ₱1,000,000.00 as exemplary damages; and
(d) costs of this suit.
(iii) ordering the condemnation, seizure or forfeiture of respondent's
infringing goods or products, wherever they may be found, including the
materials and implements used in the commission of infringement, to be
disposed of in such manner as may be deemed appropriate by this
Honorable Office; and
(iv) making the injunction permanent.32
In an almost identical manner, respondents prayed for the following in their complaint filed
with the RTC:
(a) Immediately upon the filing of this action, issue an ex parte order:
(1) temporarily restraining Pharmawealth, its agents, representatives and
assigns from importing, distributing, selling or offering for sale infringing
sulbactam ampicillin products to various government and private hospitals
or to any other entity in the Philippines, or from otherwise infringing Pfizer
Inc.'s Philippine Patent No. 26810.
(2) impounding all the sales invoices and other documents evidencing
sales by pharmawealth of sulbactam ampicillin products; and
(3) disposing of the infringing goods outside the channels of commerce.
(b) After hearing, issue a writ of preliminary injunction:
38

(1) enjoining Pharmawealth, its agents, representatives and assigns from
importing, distributing, selling or offering for sale infringing sulbactam
ampicillin products to various government hospitals or to any other entity
in the Philippines, or from otherwise infringing Patent No. 26810;
(2) impounding all the sales invoices and other documents evidencing
sales by Pharmawealth of sulbactam ampicillin products; and
(3) disposing of the infringing goods outside the channels of commerce.
(c) After trial, render judgment:
(1) finding Pharmawealth to have infringed Patent No. 26810 and declaring
Pharmawealth to have no right whatsoever over plaintiff's patent;
(2) ordering Pharmawealth to pay plaintiffs the following amounts:
(i) at least ₱3,000,000.00 as actual damages;
(ii) ₱500,000.00 as attorney's fees and ₱1,000,000.00 as litigation
expenses;
(iii) ₱3,000,000.00 as exemplary damages; and
(iv) costs of this suit.
(3) ordering the condemnation, seizure or forfeiture of Pharmawealth's
infringing goods or products, wherever they may be found, including the
materials and implements used in the commission of infringement, to be
disposed of in such manner as may be deemed appropriate by this
Honorable Court; and
(4) making the injunction permanent.33
It is clear from the foregoing that the ultimate objective which respondents seek to achieve
in their separate complaints filed with the RTC and the IPO, is to ask for damages for the
alleged violation of their right to exclusively sell Sulbactam Ampicillin products and to
permanently prevent or prohibit petitioner from selling said products to any entity. Owing
to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a
decision in one case will necessarily amount to res judicata in the other action.
Intellectual Property Law – The Law on Patents
It bears to reiterate that what is truly important to consider in determining whether forum
shopping exists or not is the vexation caused the courts and parties-litigant by a party who
asks different courts and/or administrative agencies to rule on the same or related causes
and/or to grant the same or substantially the same reliefs, in the process creating the
possibility of conflicting decisions being rendered by the different fora upon the same
issue.34
1avvphi 1
Thus, the Court agrees with petitioner that respondents are indeed guilty of forum
shopping.
Jurisprudence holds that if the forum shopping is not considered willful and deliberate, the
subsequent case shall be dismissed without prejudice, on the ground of either litis
pendentia or res judicata.35 However, if the forum shopping is willful and deliberate, both
(or all, if there are more than two) actions shall be dismissed with prejudice.36 In the present
case, the Court finds that respondents did not deliberately violate the rule on non-forum
shopping. Respondents may not be totally blamed for erroneously believing that they can
file separate actions simply on the basis of different patents. Moreover, in the suit filed with
the RTC of Makati City, respondents were candid enough to inform the trial court of the
pendency of the complaint filed with the BLA-IPO as well as the petition for certiorari filed
with the CA. On these bases, only Civil Case No. 04-754 should be dismissed on the
ground of litis pendentia.
WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions of the Court
of Appeals, dated January 18, 2005 and April 11, 2005, in CA-G.R. No. 82734,
are REVERSED and SET ASIDE. The petition for certiorari filed with the Court of Appeals
is DISMISSED for being moot and academic.
Civil Case No. 04-754, filed with the Regional Trial Court of Makati City, Branch 138, is
likewise DISMISSED on the ground of litis pendentia.
SO ORDERED.
39

G.R. No. 149907 April 16, 2009
ROMA DRUG and ROMEO RODRIGUEZ, as Proprietor of ROMA
DRUG, Petitioners, vs. THE REGIONAL TRIAL COURT OF GUAGUA, PAMPANGA,
THE PROVINCIAL PROSECUTOR OF PAMPANGA, BUREAU OF FOOD & DRUGS
(BFAD) and GLAXO SMITHKLINE, Respondents.
On 14 August 2000, a team composed of the National Bureau of Investigation (NBI)
operatives and inspectors of the Bureau of Food and Drugs (BFAD) conducted a raid on
petitioner Roma Drug, a
duly registered sole proprietorship of petitioner Romeo Rodriguez (Rodriguez) operating a
drug store located at San Matias, Guagua, Pampanga. The raid was conducted pursuant
to a search warrant1 issued by the Regional Trial Court (RTC), Branch 57, Angeles City.
The raiding team seized several imported medicines, including Augmentin (375mg.)
tablets, Orbenin (500mg.) capsules, Amoxil (250mg.) capsules and Ampiclox (500mg.).2 It
appears that Roma Drug is one of six drug stores which were raided on or around the
same time upon the request of SmithKline Beecham Research Limited (SmithKline), a duly
registered corporation which is the local distributor of pharmaceutical products
manufactured by its parent London-based corporation. The local SmithKline has since
merged with Glaxo Wellcome Phil. Inc to form Glaxo SmithKline, private respondent in this
case. The seized medicines, which were manufactured by SmithKline, were imported
directly from abroad and not purchased through the local SmithKline, the authorized
Philippine distributor of these products.
The NBI subsequently filed a complaint against Rodriguez for violation of Section 4 (in
relation to Sections 3 and 5) of Republic Act No. 8203, also known as the Special Law on
Counterfeit Drugs (SLCD), with the Office of the Provincial Prosecutor in San Fernando,
Pampanga. The section prohibits the sale of counterfeit drugs, which under Section
3(b)(3), includes "an unregistered imported drug product." The term "unregistered"
signifies the lack of registration with the Bureau of Patent, Trademark and Technology
Transfer of a trademark, tradename or other identification mark of a drug in the name of a
natural or juridical person, the process of which is governed under Part III of the Intellectual
Property Code.
In this case, there is no doubt that the subject seized drugs are identical in content with
their Philippine-registered counterparts. There is no claim that they were adulterated in
any way or mislabeled at least. Their classification as "counterfeit" is based solely on the
fact that they were imported from abroad and not purchased from the Philippine-registered
owner of the patent or trademark of the drugs.
During preliminary investigation, Rodriguez challenged the constitutionality of the SLCD.
However, Assistant Provincial Prosecutor Celerina C. Pineda skirted the challenge and
issued a Resolution dated 17 August 2001 recommending that Rodriguez be charged with
Intellectual Property Law – The Law on Patents
violation of Section 4(a) of the SLCD. The recommendation was approved by Provincial
Prosecutor Jesus Y. Manarang approved the recommendation.3
Hence, the present Petition for Prohibition questing the RTC-Guagua Pampanga and the
Provincial Prosecutor to desist from further prosecuting Rodriguez, and that Sections
3(b)(3), 4 and 5 of the SLCD be declared unconstitutional. In gist, Rodriguez asserts that
the challenged provisions contravene three provisions of the Constitution. The first is the
equal protection clause of the Bill of Rights. The two other provisions are Section 11, Article
XIII, which mandates that the State make "essential goods, health and other social
services available to all the people at affordable cost;" and Section 15, Article II, which
states that it is the policy of the State "to protect and promote the right to health of the
people and instill health consciousness among them."
Through its Resolution dated 15 October 2001, the Court issued a temporary restraining
order enjoining the RTC from proceeding with the trial against Rodriguez, and the BFAD,
the NBI and Glaxo Smithkline from prosecuting the petitioners.4
Glaxo Smithkline and the Office of the Solicitor General (OSG) have opposed the petition,
the latter in behalf of public respondents RTC, Provincial Prosecutor and Bureau of Food
and Drugs (BFAD). On the constitutional issue, Glaxo Smithkline asserts the rule that the
SLCD is presumed constitutional, arguing that both Section 15, Article II and Section 11,
Article XIII "are not self-executing provisions, the disregard of which can give rise to a
cause of action in the courts." It adds that Section 11, Article XIII in particular cannot be
work "to the oppression and unlawful of the property rights of the legitimate manufacturers,
importers or distributors, who take pains in having imported drug products registered
before the BFAD." Glaxo Smithkline further claims that the SLCD does not in fact conflict
with the aforementioned constitutional provisions and in fact are in accord with
constitutional precepts in favor of the people’s right to health.
The Office of the Solicitor General casts the question as one of policy wisdom of the law
that is, beyond the interference of the judiciary.5 Again, the presumption of constitutionality
of statutes is invoked, and the assertion is made that there is no clear and unequivocal
breach of the Constitution presented by the SLCD.
II.
The constitutional aspect of this petition raises obviously interesting questions. However,
such questions have in fact been mooted with the passage in 2008 of Republic Act No.
9502, also known as the "Universally Accessible Cheaper and Quality Medicines Act of
2008".6
40

Section 7 of Rep. Act No. 9502 amends Section 72 of the Intellectual Property Code in
that the later law unequivocally grants third persons the right to import drugs or medicines
whose patent were registered in the Philippines by the owner of the product:
Sec. 7. Section 72 of Republic Act No. 8293, otherwise known as the Intellectual Property
Code of the Philippines, is hereby amended to read as follows:
"Sec. 72. Limitations of Patent Rights. – The owner of a patent has no right to prevent third
parties from performing, without his authorization, the acts referred to in Section 71 hereof
in the following circumstances:
"72.1. Using a patented product which has been put on the market in the Philippines by
the owner of the product, or with his express consent, insofar as such use is performed
after that product has been so put on the said market: Provided, That, with regard to
drugs and medicines, the limitation on patent rights shall apply after a drug or
medicine has been introduced in the Philippines or anywhere else in the world by
the patent owner, or by any party authorized to use the invention: Provided,
further, That the right to import the drugs and medicines contemplated in this
section shall be available to any government agency or any private third party;
"72.2. Where the act is done privately and on a non-commercial scale or for a non-
commercial purpose: Provided, That it does not significantly prejudice the
economic interests of the owner of the patent;
"72.3. Where the act consists of making or using exclusively for experimental use
of the invention for scientific purposes or educational purposes and such other
activities directly related to such scientific or educational experimental use;
"72.4. In the case of drugs and medicines, where the act includes testing, using,
making or selling the invention including any data related thereto, solely for
purposes reasonably related to the development and submission of information
and issuance of approvals by government regulatory agencies required under any
law of the Philippines or of another country that regulates the manufacture,
construction, use or sale of any product: Provided, That, in order to protect the
data submitted by the original patent holder from unfair commercial use provided
in Article 39.3 of the Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS Agreement), the Intellectual Property Office, in consultation with the
appropriate government agencies, shall issue the appropriate rules and
regulations necessary therein not later than one hundred twenty (120) days after
the enactment of this law;
Intellectual Property Law – The Law on Patents
"72.5. Where the act consists of the preparation for individual cases, in a pharmacy
or by a medical professional, of a medicine in accordance with a medical shall
apply after a drug or medicine has been introduced in the Philippines or anywhere
else in the world by the patent owner, or by any party authorized to use the
invention: Provided, further, That the right to import the drugs and medicines
contemplated in this section shall be available to any government agency or any
private third party; xxx7
The unqualified right of private third parties such as petitioner to import or possess
"unregistered imported drugs" in the Philippines is further confirmed by the "Implementing
Rules to Republic Act No. 9502" promulgated on 4 November 2008.8 The relevant
provisions thereof read:
Rule 9. Limitations on Patent Rights. The owner of a patent has no right to prevent third
parties from performing, without his authorization, the acts referred to in Section 71 of the
IP Code as enumerated hereunder:
(i) Introduction in the Philippines or Anywhere Else in the World.
Using a patented product which has been put on the market in the Philippines by the owner
of the product, or with his express consent, insofar as such use is performed after that
product has been so put on the said market: Provided, That, with regard to drugs and
medicines, the limitation on patent rights shall apply after a drug or medicine has been
introduced in the Philippines or anywhere else in the world by the patent owner, or by any
party authorized to use the invention: Provided, further, That the right to import the drugs
and medicines contemplated in this section shall be available to any government agency
or any private third party. (72.1)
1avv phi 1
The drugs and medicines are deemed introduced when they have been sold or offered for
sale anywhere else in the world. (n)
It may be that Rep. Act No. 9502 did not expressly repeal any provision of the SLCD.
However, it is clear that the SLCO’s classification of "unregistered imported drugs" as
"counterfeit drugs," and of corresponding criminal penalties therefore are irreconcilably in
the imposition conflict with Rep. Act No. 9502 since the latter indubitably grants private
third persons the unqualified right to import or otherwise use such drugs. Where a statute
of later date, such as Rep. Act No. 9502, clearly reveals an intention on the part of the
legislature to abrogate a prior act on the subject that intention must be given effect.9 When
a subsequent enactment covering a field of operation coterminus with a prior statute
cannot by any reasonable construction be given effect while the prior law remains in
operative existence because of irreconcilable conflict between the two acts, the latest
legislative expression prevails and the prior law yields to the extent of the
conflict.10 Irreconcilable inconsistency between two laws embracing the same subject may
41
 Intellectual Property Law – The Law on Patents
exist when the later law nullifies the reason or purpose of the earlier act, so that the latter has reversed course and allowed for a sensible and compassionate approach with respect
loses all meaning and function.11 Legis posteriors priores contrarias abrogant. to the importation of pharmaceutical drugs urgently necessary for the people’s
constitutionally-recognized right to health.
For the reasons above-stated, the prosecution of petitioner is no longer warranted and the
quested writ of prohibition should accordingly be issued. WHEREFORE, the petition is GRANTED in part. A writ of prohibition is hereby ISSUED
commanding respondents from prosecuting petitioner Romeo Rodriguez for violation of
III. Section 4 or Rep. Act No. 8203. The Temporary Restraining Order dated 15 October 2001
is hereby made PERMANENT. No pronouncements as to costs.
Had the Court proceeded to directly confront the constitutionality of the assailed provisions
of the SLCD, it is apparent that it would have at least placed in doubt the validity of the SO ORDERED.
provisions. As written, the law makes a criminal of any person who imports an unregistered
drug regardless of the purpose, even if the medicine can spell life or death for someone in
the Philippines. It does not accommodate the situation where the drug is out of stock in
the Philippines, beyond the reach of a patient who urgently depends on it. It does not allow
husbands, wives, children, siblings, parents to import the drug in behalf of their loved ones
too physically ill to travel and avail of the meager personal use exemption allotted by the
law. It discriminates, at the expense of health, against poor Filipinos without means to
travel abroad to purchase less expensive medicines in favor of their wealthier brethren
able to do so. Less urgently perhaps, but still within the range of constitutionally protected
behavior, it deprives Filipinos to choose a less expensive regime for their health care by
denying them a plausible and safe means of purchasing medicines at a cheaper cost.

The absurd results from this far-reaching ban extends to implications that deny the basic
decencies of humanity. The law would make criminals of doctors from abroad on medical
missions of such humanitarian organizations such as the International Red Cross, the
International Red Crescent, Medicin Sans Frontieres, and other

like-minded groups who necessarily bring their own pharmaceutical drugs when they
embark on their missions of mercy. After all, they are disabled from invoking the bare
"personal use" exemption afforded by the SLCD.

Even worse is the fact that the law is not content with simply banning, at civil costs, the
importation of unregistered drugs. It equates the importers of such drugs, many of whom
motivated to do so out of altruism or basic human love, with the malevolents who would
alter or counterfeit pharmaceutical drugs for reasons of profit at the expense of public
safety. Note that the SLCD is a special law, and the traditional treatment of penal
provisions of special laws is that of malum prohibitum–or punishable regardless of motive
or criminal intent. For a law that is intended to help save lives, the SLCD has revealed itself
as a heartless, soulless legislative piece.

The challenged provisions of the SLCD apparently proscribe a range of constitutionally

permissible behavior. It is laudable that with the passage of Rep. Act No. 9502, the State

42
 Intellectual Property Law – The Law on Patents
G.R. No. L-27793 March 15, 1928 which is cylindrical and provided with teeth and on the center of said two pinions
PATRICK HENRY FRANK and WILLIAM HENRY GOHN, plaintiff-appellees, vs. there is a flying wheel its transmission belt connecting it with the motor.
CONSTANCIO BENITO, defendant-appellant.
As a counterclaim, the defendant alleges:
Plaintiffs allege that they are the owners of a patent covering hemp-stripping machine No.
1519579 issued to them by the United States Patent Office of December 16, 1924, and First. That he reproduces in this paragraph each and every allegation contained in
duly registered in the Bureau of Commerce and Industry of the Philippine Islands under the preceding special defense, as though the same were literally copied here.
the provisions of Act No. 2235 of the Philippine Legislature on March 17, 1925. That the
important feature of the machine "is a spindle upon which the hemp to be stripped is wound Second. That by the filing of the complaint of the plaintiffs and the issuance, as a
in the process of stripping." That plaintiffs have for some time been manufacturing the consequence thereof, of a writ of injunction in this case, unduly obtained by the
machine under the patent. That the defendant manufactured a hemp-stripping machine in said plaintiffs through false and fraudulent representations, the defendant has
which, without authority from the plaintiffs, he has embodied and used such spindles and suffered damages in the sum of five thousand pesos (P5,000), Philippine currency.
their method of application and use, and is exhibiting his machine to the public for the
purpose of inducing its purchase. That the use by the defendant of such spindles and the
Wherefore, the defendant prays this court that he be absolved from the herein
principle of their application to the stripping of hemp is in violation of, and in conflict with,
complaint, and that the plaintiffs be ordered jointly and severally to pay the sum of
plaintiffs' patent, together with its conditions and specifications. That the defendant's
five thousand pesos (P5,000), Philippine currency, as damages, with legal interest
machine is an infringement upon the patent granted the plaintiffs, and plaintiffs pray for an
thereon from the filing of this action until fully paid; with the costs of this case, as
injunction that the defendant be required to account to plaintiffs for any profits he may have
well as any other remedy that may be proper in law and equity.
made by reason of such infringement, and for a temporary injunction restraining him in the
manufacture of other machines of the same kind of its exhibition, and that upon the final
hearing, the injunction be made permanent. The lower court rendered judgment in legal effect granting the plaintiffs the injunction
prayed for in their complaint, and absolving them from defendant's counterclaim, and
judgment against the defendant for costs.
The defendant demurred to the complaint upon the ground that the facts alleged therein
do not constitute a cause of action, that it is ambiguous and vague, and that it was error to
make William Henry Gohn plaintiff. The defendant's motion for a new trial was overruled, and on appeal, he contends that the
court erred in holding the same spindles used by the parties in this case, though different
in material and form, have the same utility and efficiency and that they are the same, and
After the demurrer was overruled, the defendant filed an answer in which he denied all of
in finding that spindles used by the defendant are an imitation of those of the plaintiffs, and
the material allegations of the complaint, except those which are hereinafter admitted, and
in finding that the defendant infringed upon plaintiffs' patent, and in not rendering judgment
as a special defense alleges:
against the plaintiffs, requiring them to pay defendant P5,000 as damages, and in enjoining
the appellant from the manufacture, use and sale of this hemp-stripping machine.
First. That the defendant has never had at any time nor does he have any
knowledge of any suppose invention of the plaintiffs of whatever kind of hemp-
stripping machine, whether patented or not, which has circulated or not in the
Philippine Islands for the sale thereof or its private exploitation.

Second. That not having had any knowledge of any kind of hemp-stripping
machine supposed to have been invented by the plaintiffs, it never occurred to the
defendant to imitate the unknown invention of the plaintiffs.
Third. That the hemp-stripping machine of the plaintiffs, known as "La Constancia,"
patent of which is duly registered, has its characteristics and original invention
belonging to the defendant which consist of two pinions with horizontal grooves
which form the tool for extracting the fibers between a straight knife upon another
JOHNS, J.:
It is conceded that on December 16, 1924, the United States Patent Office issued to the
plaintiffs the patent in question No. 1519579, and it was duly registered in the Bureau of
Commerce and Industry of the Philippine Islands on March 17, 1925. After such
registration the patent laws, as they exist in the United States for such patent, are then
applied to and are in force and effect in the Philippine Islands. (Vargas vs. F. M. Yaptico &
43

Co., 40 Phil., 195.) In the instant case, the original patent is in evidence, and that decision
further holds that:
The burden of proof to substantiate a charge of infringement is with the plaintiff.
Where, however, the plaintiff introduces the patent in evidence, if it is in due form,
it affords a prima facie presumption of its correctness and validity. The decision of
the Commissioner of Patents in granting the patent is always presumed to be
correct. The burden the shifts to the defendant to overcome by competent
evidence this legal presumption.
That is to say, the patent, which in the instant case is in due form, having been
introduced in evidence, "affords a prima facie presumption of its correctness and
validity." Hence, this is not a case of a conflict between two different patents. In
the recent of Temco Electric Motor Co. vs. Apco Mfg. Co., decided by the Supreme
Court of the United States on January 3, 1928, Advance Sheet No. 5, p. 192, the
syllabus says:
An improper cannot appropriate the basic patent of another, and if he does so
without license is an infringer, and may be used as such.
And on page 195 of the opinion, it is said:
It is well established that an improver cannot appropriate the basic patent of
another and that the improver without a license is an infringer and may be sued as
such.
Citing a number of Federal decisions.
The plans and specifications upon which the patent was issued recite:
Our invention relates to hemp stripping machines and it consists in the
combinations, constructions and arrangements herein described and claimed.
An object of our invention is to provide a machine affording facilities whereby the
operation of stripping hemp leaves may be accomplished mechanically, thereby
obviating the strain incident to the performance of hemp stripping operations
manually.
And on page 3 of the application for patent, it is said:
Obviously, our invention is susceptible of embodiment in forms other than the
illustrated herein and we therefore consider as our own all modifications of the form
Intellectual Property Law – The Law on Patents
of device herein disclosed which fairly fall within the spirit and scope of our
invention as claimed.
We claim:
1. In a hemp stripping machine, a stripping head having a supporting portion on
which the hemp leaves may rest and having also an upright bracket portion, a lever
of angular formation pivotally attached substantially at the juncture of the arms
thereof of the bracket portion of the stripping head, whereby one arm of the lever
overlies the supporting portion of the stripping head, a blade carried by said one
arm of the lever for cooperating with said supporting, means connected with the
other arm of the lever and actuating the latter to continously urge the blade toward
said supporting portion of the stripping head, and a rotatable spindle positioned
adjacent to said stripping head, said spindle being adapted to be engaged by hemp
leaves extending across said supporting portion of the stripping head underneath
said blade and being operable to draw said hemp leaves in the direction of their
length between said supporting portion of the stripping head and said blade.
2. In a hemp stripping machine, a stripping head having a horizontal table portion,
a rest supported upon said table portion, a stripping knife supported upon the table
for movement into and out of position to cooperate with the rest to strip hemp
leaves drawn between the knife and the rest, and power driven means adapted to
be engaged with said hemp leaves and to pull the latter between the knife and rest,
said power driven means including a rotating spindle, said spindle being free at
one end and tapering regularly toward its free end.
3. In a hemp stripping machine, a stripping head having a horizontal table portion
and an upright bracket portion a rest holder adjustably on the table portion, a rest
resiliently supported by the holder, a knife carrying lever of angular formation and
being pivotally attached substantially at the juncture of the arms thereof to the
bracket portion of the stripping head, whereby one arm of the lever overlies the
rest, a blade adjustably supported on said one arm, for cooperating with said rest
and gravity means connected with the other arm of the lever and actuating the
latter to continously urge the blade toward the rest.
The spindle upon which the patent was obtained, together with the spindle upon which the
defendant relies are exhibits in the record and were before the court at the time this case
was argued. The spindle of the plaintiffs was made of wood, conical in shape and with a
smooth surface. That of the defendant was somewhat similar in shape, but was made of
metal with rough surface, and the defendant claims that his spindle was more effective
and would do better work than that of the plaintiffs. Be that as it may, the plaintiffs have a
patent for their machine, and the defendant does not have a patent, and the basic principle
of plaintiffs' patent is the spindle upon which they rely, together with its specified manner
44
 Intellectual Property Law – The Law on Patents
and mode of operation, and in the final analysis, it must be conceded that the basic
principle of the spindle upon which the defendant relies is founded upon the basic principle
of the spindle for which the plaintiffs have a patent. Assuming, without deciding, that the
defendant's spindle is an improvement upon and is a better spindle than that of the
plaintiffs, yet, under the authority above cited, the defendant had no legal right to
appropriate the basic principle upon which the plaintiffs obtained their patent. The plaintiffs
having obtained their patent, which was duly registered in the Philippines Islands, the
defendant cannot infringe upon its basic principle.

The defendant contends that the basic principle of the spindle was a very old one in
mechanics, and that there was nothing new or novel in the application of it by the plaintiffs.
Be that as it may, the plaintiffs applied for and obtained their patent with its specifications
which are attached to, and made part of, the patent, and the proof is conclusive that the
defendant is infringing upon the basic principle of the spindle as it is defined and specified
in plaintiffs' patent.

The judgment of the lower court is affirmed, with costs. So ordered.

45

G.R. No. L-4720 January 19, 1909
CARLOS GSELL, plaintiff-appellee, vs. VALERIANO VELOSO YAP-JUE, defendant-
appellant.
This an appeal from a final order of the Court of First Instance of the city of Manila, in
contempt proceedings prosecuted under the provisions of section 172 of the Code of Civil
Procedure. The principal case to which these proceedings are ancillary, was an action to
enjoin infringement of a patented process for the manufacture of curved handles for canes,
parasols, and umbrellas. In that case plaintiff established his title to a valid patent covering
the process in question, and obtained against this defendant a judgment, granting a
perpetual injunction restraining its infringement, which judgment was affirmed by this court
on appeal (6 Phil. Rep., 143.) The order was couched in the following terms:
It is ordered that the defendant abstain from manufacturing canes and umbrellas
with a curved handle by means of a lamp or blowpipe fed with mineral oil or
petroleum, which process was protected by patent No. 19228, issued in favor of
Henry Gsell, and by him transferred to Carlos Gsell —
and the process therein mentioned is fully described in the following statement which
accompanied the application for the patent:
After the canes have been cut for cane or umbrella handles, the outsides are
thoroughly cleaned. This operation having been performed, they are then trimmed
and the interior cleaned by means of a gimlet of about 15 centimeters in length
operated by a wheel, by means of which the knots inside are broken. There is then
introduced to a depth of about 15 centimeters a piece of very clean bamboo, which
completely fills the hole made by the gimlet, thereby giving to the cane the
necessary strength to resist the heat of the lamp or blowpipe without breaking or
cracking.
This operation having been performed, the cane, the end of which is attached to a
fixed point, is given the shape of a hook or some other form by means of fire and
pressure. Once the cane has been shaped as desired, it is allowed to cool, and is
then cleaned, varnished, and ornamented at will.
This industry requires skillful, handiwork, owing to the great risk engendered by
the treatment of such fragile material as a light cane. On the other hand, however,
it affords large profits to the workman.
NOTE. — The patent applied for shall be for the industrial product "cane handles
for walking sticks and umbrellas, curved by means of a small lamp or blowpipe,
fed by petroleum or mineral fuel."
Intellectual Property Law – The Law on Patents
Thereafter the defendant continued to manufacture curved cane handled for walking sticks
and umbrellas by a process in all respectes identical with that used by the plaintiff under
his patent, except only that he be substituted for a lamp fed with petroleum or mineral oil,
lamp fed with alcohol, as appears from a stipulation entered into between plaintiff and
defendant in the following terms:
The plaintiff and defendant agree upon the fact that the defendant has used and
is still using a process for curving handles of canes and umbrellas identical with
that described in the application for the patent by the plaintiff with the exception
that he has substituted for the lamp fed with all other lamp fed with alcohol.
Contempt proceedings were instituted against the defendant in the month of February,
1904, the plaintiff in the original action alleging that the —
Defendant in disobediencce of the judgment of the same was and is now engaged
in the unlawful manufacture of umbrella handles by the identical process described
in and protected said patent, No. 19228, or a process so like the patented process
as to be indistinguishable.
The trial court found the defendant "not guilty" of contempt as charged; and this court, on
appeal, held that — a character that it could be made patent by the mere annunciation of
the acts performed by the defendant, which are alleged to constitute the said violation.
These acts were not clearly and manifestly contrary to the precise terms of the prohibition.
According to the express language of the judgment, the prohibition is against the
manufacture of canes and umbrellas with curved handles by means of the use of a cool or
mineral oil-burning lamp or blowpipe and the parties have stipulated that the defendant did
not use a coal or mineral oil-burning lamp but an alcohol-burning lamp.
The question, however, arises as to whether that prohibition included the
substitution of alcohol for coal or mineral oil. In more abstract and general terms,
the appellant propounds this question in his brief, as follows: "The question
presented by this appeal is whether or not the use of a patented process by a third
person, without license or authority therefor, constitutes an infringement when the
alleged infringer has substituted in lieu of some unessential part of the patented
process a well-known mechanical equivalent." It has seen that by its very terms
this question implies in the present case the existence of two fundamental facts
which must first be duly established, viz: (1) That the use of the lamp fed with
petroleum or mineral oil was an unessential part of the patented process the use
of which by the accused was prohibited by the said judgment; and (2) that alcohol
is an equivalent and proper substitute, well known as such, for mineral oil or
petroleum in connection with the said process. The appellant has failed to
affirmatively establish either of these two essential facts. He has merely assumed
their existence, without proving the same, thus begging the whole question.
46

Consequently the contempt with which the accused is charged has not been fully
and satisfactorily proved, and the order appealed from should accordingly be
affirmed in so far as it holds that the defendant is not guilty of contempt. (7 Phil.
Rep., 130).
Thereafter the plaintiff continued the use of the patented process, save only for the
substitutions of a lamp fed by alcohol for a lamp fed by petroleum or mineral oil, and new
proceedings were instituted under the provisions of section 172 for the purpose of
enforcing the original injunction above cited. Substantially the same question is submitted
in these new proceedings as that submitted in the former case, but at the trial of this case
testimony was introduced which, in our opinion, leaves no room for doubt, first, that alcohol
is an equivalent or substitute, well known as such at the time when the patent was issued,
for mineral oil or petroleum, in connection with blast lamps or blowpipes such as that which
plaintiff uses in the patented process, and, second, that the use of a blast lamp or blowpipe
fed with petroleum or mineral oil, rather than one fed with alcohol, is an unessential part of
the patented process the use of which was prohibited by the said judgment.
It was clearly proven at the trial, that kerosene and alcohol blast lamps are agencies for
producing and applying heat, well known throughout the world long prior to 1906, the date
of the issue of the patent; that it is and for many years has been known that one may for
all ordinary purposes be used in the place of the other, and especially for the purpose of
applying heat in the manner described in the patent; that the only consideration which
determines the employment of one in place of the other is the convenience of the user and
the question of relative cost; and that the principle upon which both lamps work is
substantially identical, the only difference in construction being occasioned by the
application of this principle to oils of different physical and chemical composition.
The plaintiff does not and can not claim a patent upon the particular lamp used by him.
The patent, however, gives him the exclusive right to the use of "la lamparilla o soplete,
alimentada de petroleo o esencia mineral" (the small lamp or blowpipe fed with petroleum
or mineral oil) in manufacturing curved handles for umbrellas and canes, to which
reference is made in the above-cited descriptive statement and annexed note. "The small
lamp or blowpipe" mentioned in the descriptive statement and annexed note which
accompanied the application for the patent, evidently referred to the design of a blast lamp
which was attached thereto; and in our opinion both plaintiff and defendant make use of a
blast lamp substantially similar, in principle and design, to that referred to in the descriptive
statement and the annexed note, for the exclusive use of which in the manufacture of
curved handles, plaintiff holds a patent. True, defendant's blast lamp is fed with alcohol,
and its shape varies in unimportant details, for the purpose of accommodating the
principle, by which the flame is secured, to the different physical and chemical composition
of the fuel used therein; but the principle on which it works, its mode of application, and its
general design distinguish it in no essential particular from that used by the plaintiff. If the
original design accompanying the statement had shown a blast lamp made of brass or
Intellectual Property Law – The Law on Patents
delf, he would be a reckless advocate who would claim that the patent might lawfully be
evaded by the use of a lamp made of iron or tin; or if the original design had shown a blast
lamp 6 inches high with a nozzle 4 inches long it would hardly be seriously contended that
the use of lamp 8 inches high with a nozzle 3 inches long would protect the ingenious
individual, who in all other respects borrowed the patented process, from the
consequences of an action for damages for infringement. But in the light of the evidence
of record in this case, the reasoning upon which these hypothetical claims should be
rejected applies with equal force to the contentions of the defendant, the ground for the
rejection of the claims in each case being the same, and resting on the fact that unessential
changes, which do not affect the principle of the blast lamp used in the patented process,
or the mode of application of heat authorized by the patent, are not sufficient to support a
contention that the process in one case is in any essential particular different from that
used in the other.
Counsel for plaintif invokes the doctrine of "mechanical equivalents" in support of his
contention, and indeed that doctrine is strikingly applicable to the facts in this case. This
doctrine is founded upon sound rules of reason and logic, and unless restrained or
modified by law in particular jurisdiction, is of universal application, so that it matters not
whether a patent be issued by one sovereignty or another, the doctrine may properly be
invoked to protect the patentee from colorable invasions of his patent under the guise of
substitution of some part of his invention by some well known mechanical equivalent. Our
attention has not been called to any provision of the patent law of Spain, which denies to
patentees thereunder the just and equitable protection of the doctrine; and indeed a patent
law which failed to recognize this doctrine would afford scant protection to inventors, for it
is difficult if not impossible to conceive an invention, which is incapable of alteration or
change in some unessential part, so as to bring that part outside of the express terms of
any form of language which might be used in granting a patent for the invention; and has
been well said by counsel for plaintiff, human ingenuity would be taxed beyond its powers
in preparing a grant of a patent so comprehensive in its terms, "as to include within the
express terms of its detailed description every possible alternative of form, size, shape,
material, location, color, weight, etc., of every wheel, rod, bolt, nut, screw, plate, and other
component parts of an invention."
The following citations from various decisions of the Federal Courts of the United States
illustrate the application of the doctrine in that jurisdiction, and clearly point the way to the
proper solution of the questions involved in the case at bar:
Can the defendant have the right of infringement, by substituting in lieu of some
parts of the combination well-known mechanical equivalents? I am quite clear that
be can not, both on principle and authority. It is not to be disputed that the inventor
of an ordinary machine is, by his letters patent, protected against all mere formal
alterations and against the substitution of mere mechanical equivalents. Why
47

should not the inventor of a new combination receive the same protection? If he
can not, then will his patent not be worth the parchment on which it is written.
If no one can be held to infringe a patent for a combination unless he uses all the
parts of the combination and the identical machinery as that of the patentee, then
will no patent for a combination be infringed; for certainly no one capable of
operating a machine can be incapable of adopting some formal alteration in the
machinery, or of substituting mechanical equivalents. No one infringes a patent for
a combination who does not employ all of the ingredients of the combination; but
if he employs all the ingredients, or adopts mere formal alterations, or substitutes,
for one ingredient another which was well known at the date of the patent as a
proper substitute for the one withdrawn, and which performs substantially the same
function as the one withdrawn, he does infringe. (King vs. Louisville Cement Co.,
Fed. Cas., 7798.)
Bona fide inventors of a combination are as much entitled to equivalents as the
inventors other patentable improvements; by which is meant that a patentee in
such a case may substitute another ingredient for any one of the ingredients of his
invention, if the ingredient substituted performs the same function as the one
omitted and as well known at the date of his patent as a proper substitute for the
one omitted in the patented combination. Apply that rule and it is clear that an
alteration in a patented combination which merely substitutes another old
ingredient for one of the ingredients in the patented combination, is an infringement
of the patent, if the substitute performs the same function and was well known at
the date of the patent as a proper substitute for the omitted ingredient.
(Gould vs. Rees, 82 U.S., 187, 194.)
Mere formal alterations in a combination in letters patent are no defense to the
charge of infringement and the withdrawal of one ingredient from the same and the
substitution of another which was well known at the date of the patent as a proper
substitute for the one withdrawn is a mere formal alteration of the combination if
the ingredient substituted performs substantially the same function as the one
withdrawn.
Bona fide inventors of a combination are as much entitled to suppress every other
combination of the same ingredients to produce the same result, not substantially
different from what they have invented and caused to be patented as to any other
class of inventors. All alike have the right to suppress every colorable invasion of
that which is secured to them by letters patent. (Seymour vs. Osborne, 78 U.S.,
516, 556.)
A claim for the particular means and mode of operation described in the
specification extends, by operation of law, to the equivalent of such means — not
Intellectual Property Law – The Law on Patents
equivalent simply because the same result is thereby produced — but equivalent
as being substantially the same device in structure, arrangement and mode of
operation. (Burden vs. Corning, Fed. Cas., 2143. Gottfried vs. Philip Best Brewing
Co., Fed. Cas., 5633.)
An equivalent device is such as a mechanic of ordinary skill in construction of
similar machinery, having the forms, specifications and machine before him, could
substitute in the place of the mechanism described without the exercise of the
inventive faculty. (Burden vs. Corning, supra.)
All the elements of the invention in this case are old, and the rule in such cases,
as before explained, undoubtedly is that a purpose can not invoke the doctrine of
equivalents to suppress all other improvements of the old machine, but he is
entitled to treat everyone as an infringer who makes, uses, or vends his patented
improvement without any other change than the employment of a substitute for
one of its elements, well known as such at the date of his invention, and which any
constructor acquainted with the art will know how to comply. The reason for the
qualification of the rule as stated is, that such change — that is, the mere
substitution of a well- known element for another — where it appears that the
substituted element was well known as a usual substitute for the element left out
— is merely a formal one, and nothing better than a colorable evasion of the patent.
(Union Sugar Refining Co. vs. Matthieson, Fed. Cas., 14399.)
Counsel for the defendant insists that, under Spanish law, none of the steps of the process
described in the descriptive statement, save those mentioned in the "note" thereto
attached are included in the patent, and that the patent rights secured thereunder are
strictly limited to the precise language of the "note" attached to the descriptive statement;
while counsel for plaintiff appears to think that the language of the patent covers any
process or device whereby wood or cane may be bent or curved by the use of heat. But
for the purpose of this decision it is not necessary to consider these questions, further than
to hold, as we do, that under the doctrine of equivalents, the language of the note in the
descriptive statement applies to the operation of applying heat for the purpose of curving
handles or canes and umbrellas by means of a blast lamp fed with alcohol, as well as by
means of a blast lamp fed with petroleum or mineral oil; and the defendant having admitted
the fact that he applied heat for the purpose of curving handles for canes and umbrellas
by means of a blast lamp fed with alcohol, he must be deemed to have contempt of
violating the terms and the injunction issued in the principal case, wherein plaintiff was
declared the owner of the patent in question, and defendant enjoined from its infringement.
The argument of counsel for defendant and appellant, based on the theory that the
questions herein discussed and decided to have been heretofore settled by this court, and
that the subject-matter of this proceeding is res adjudicata between the parties thereto is
48
 Intellectual Property Law – The Law on Patents
sufficiently refuted by the simple reading of the decision of this court in the case relied
upon. (Gsell vs. Veloso, 7 Phil. Rep., 130.)

The judgment of the lower court should be and is hereby affirmed, with the costs of this
instance against the appellant.

49

G. R. No. 126627 August 14, 2003
SMITH KLINE BECKMAN CORPORATION, Petitioner, vs. THE HONORABLE COURT
OF APPEALS and TRYCO PHARMA CORPORATION, Respondents.
Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws
of the state of Pennsylvania, United States of America (U.S.) and licensed to do business
in the Philippines, filed on October 8, 1976, as assignee, before the Philippine Patent
Office (now Bureau of Patents, Trademarks and Technology Transfer) an application for
patent over an invention entitled "Methods and Compositions for Producing Biphasic
Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate." The
application bore Serial No. 18989.
On September 24, 1981, Letters Patent No. 145611 for the aforesaid invention was issued
to petitioner for a term of seventeen (17) years.
The letters patent provides in its claims2 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. 145614 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 petitioner’s patented Albendazole.5
On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining
order against private respondent enjoining it from committing acts of patent infringement
and unfair competition.6 A writ of preliminary injunction was subsequently issued.7
Private respondent in its Answer8 averred that Letters Patent No. 14561 does not cover the
substance Albendazole for nowhere in it does that word appear; that even if the patent
Intellectual Property Law – The Law on Patents
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; ₱1,000,000.00 in moral damages; ₱300,000.00 in exemplary
damages; and ₱150,000.00 in attorney’s 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, plaintiff’s 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 attorney’s 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 court’s
finding that private respondent was not liable for any infringement of the patent of petitioner
in light of the latter’s failure to show that Albendazole is the same as the compound subject
of Letters Patent No. 14561. Noting petitioner’s admission of the issuance by the U.S. of
a patent for Albendazole in the name of Smith Kline and French Laboratories which was
petitioner’s 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.
50

The appellate court, however, declared that Letters Patent No. 14561 was not void as it
sustained petitioner’s 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
petitioner’s 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 Office’s 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.
Petitioner’s motion for reconsideration of the Court of Appeals’ decision having been
denied11 the present petition for review on certiorari12 was filed, assigning as errors the
following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT
ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCO’S "IMPREGON" DRUG,
IS INCLUDED IN PETITIONER’S LETTERS PATENT NO. 14561, AND THAT
CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE
RESPONDENT TRYCO PHARMA CORPORATION P330,000.00 ACTUAL
DAMAGES AND P100,000.00 ATTORNEY’S FEES.
Petitioner argues that under the doctrine of equivalents for determining patent
infringement, Albendazole, the active ingredient it alleges was appropriated by private
respondent for its drug Impregon, is substantially the same as methyl 5 propylthio-2-
benzimidazole carbamate covered by its patent since both of them are meant to combat
worm or parasite infestation in animals. It cites the "unrebutted" testimony of its witness
Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical formula in Letters Patent No.
14561 refers to the compound Albendazole. Petitioner adds that the two substances
Intellectual Property Law – The Law on Patents
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 petitioner’s letters patent, it has ably shown by evidence
its sameness with methyl 5 propylthio-2-benzimidazole carbamate.
Petitioner likewise points out that its application with the Philippine Patent Office on
account of which it was granted Letters Patent No. 14561 was merely a divisional
application of a prior application in the U. S. which granted a patent for Albendazole.
Hence, petitioner concludes that both methyl 5 propylthio-2-benzimidazole carbamate and
the U.S.-patented Albendazole are dependent on each other and mutually contribute to
produce a single result, thereby making Albendazole as much a part of Letters Patent No.
14561 as the other substance is.
Petitioner concedes in its Sur-Rejoinder13 that although methyl 5 propylthio-2-
benzimidazole carbamate is not identical with Albendazole, the former is an improvement
or improved version of the latter thereby making both substances still substantially the
same.
With respect to the award of actual damages in favor of private respondent in the amount
of ₱330,000.00 representing lost profits, petitioner assails the same as highly speculative
and conjectural, hence, without basis. It assails too the award of ₱100,000.00 in attorney’s
fees as not falling under any of the instances enumerated by law where recovery of
attorney’s 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 petitioner’s 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.
51

From an examination of the evidence on record, this Court finds nothing infirm in the
appellate court’s 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, petitioner’s 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 compound’s 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 Albendazole’s 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 petitioner’s 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 petitioner’s 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 respondent’s 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 petitioner’s
evidence fails to convince this Court of the substantial sameness of petitioner’s patented
compound and Albendazole. While both compounds have the effect of neutralizing
Intellectual Property Law – The Law on Patents
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, petitioner’s evidence fails to explain how Albendazole is in every
essential detail identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the
fact that Albendazole is an anthelmintic agent like methyl 5 propylthio-2-benzimidazole
carbamate, nothing more is asserted and accordingly substantiated regarding the method
or means by which Albendazole weeds out parasites in animals, thus giving no information
on whether that method is substantially the same as the manner by which petitioner’s
compound works. The testimony of Dr. Orinion lends no support to petitioner’s cause, he
not having been presented or qualified as an expert witness who has the knowledge or
expertise on the matter of chemical compounds.
As for the concept of divisional applications proffered by petitioner, it comes into play when
two or more inventions are claimed in a single application but are of such a nature that a
single patent may not be issued for them.23 The applicant thus is required "to divide," that
is, to limit the claims to whichever invention he may elect, whereas those inventions not
elected may be made the subject of separate applications which are called "divisional
applications."24What this only means is that petitioner’s methyl 5 propylthio-2-
benzimidazole carbamate is an invention distinct from the other inventions claimed in the
original application divided out, Albendazole being one of those other inventions.
Otherwise, methyl 5 propylthio-2-benzimidazole carbamate would not have been the
subject of a divisional application if a single patent could have been issued for it as well as
Albendazole. 1âwphi1
The foregoing discussions notwithstanding, this Court does not sustain the award of actual
damages and attorney’s fees in favor of private respondent. The claimed actual damages
of ₱330,000.00 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
₱100,000.00 monthly gross sales for eleven months, were supported by the testimonies
of private respondent’s President25 and Executive Vice-President that the average monthly
sale of Impregon was ₱100,000.00 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
52
 Intellectual Property Law – The Law on Patents
evidence obtainable by the injured party. The testimonies of private respondent’s officers
27

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 attorney’s
fees to private respondent anchored on Article 2208 (2) of the Civil Code, private
respondent having been allegedly forced to litigate as a result of petitioner’s suit. Even if a
claimant is compelled to litigate with third persons or to incur expenses to protect its rights,
still attorney’s fees may not be awarded where no sufficient showing of bad faith could be
reflected in a party’s persistence in a case other than an erroneous conviction of the
righteousness of his cause.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 ₱20,000.00 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 attorney’s 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.

53

G.R. No. 118708 February 2, 1998
CRESER PRECISION SYSTEMS, INC., petitioner, vs. COURT OF APPEALS AND
FLORO INTERNATIONAL CORP., respondents.
This petition for review on certiorari assails the decision 1 of the Court of Appeals dated
November 9, 1994 in C.A.-G.R. SP No. 34425 entitled "Floro International Corp. vs. Hon.
Tirso D.C Cruz and Creser Precision System, Inc.", the dispositive portion of which reads:
WHEREFORE, THE PETITION IS HEREBY GRANTED. THE
COMPLAINT FOR INJUNCTION AND DAMAGES, CIVIL CASE NO. 93-
1856 BEFORE THE RESPONDENT JUDGE IS HEREBY ORDERED
DISMISSED AND HIS ORDERS THEREIN OF DECEMBER 29, 1993
AND MAY 11, 1994 ARE ORDERED SET ASIDE.
Private respondent is a domestic corporation engaged in the manufacture, production,
distribution and sale of military armaments, munitions, airmunitions and other similar
materials. 2
On January 23, 1990, private respondent was granted by the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT), a Letters Patent No. UM-69383 covering
an aerial fuze which was published in the September-October-1990, Vol. III, No. 5 issue
of the Bureau of Patent's Official Gazette.4
Sometime in November 1993, private respondent, through its president, Mr. Gregory Floro,
Jr., discovered that petitioner submitted samples of its patented aerial fuze to the Armed
Forces of the Philippines (AFP) for testing. He learned that petitioner was claiming the
aforesaid aerial fuze as its own and planning to bid and manufacture the same
commercially without license or authority from private respondent. To protect its right,
private respondent on December 3, 1993, sent a letter5 to petitioner advising it of its
existing patent and its rights thereunder, warning petitioner of a possible court action
and/or application for injunction, should it proceed with the scheduled testing by the military
on December 7, 1993.
In response to private respondent's demand, petitioner filed on December 8, 1993 a
complaint6 for injunction and damages arising from the alleged infringement before the
Regional Trial Court of Quezon City, Branch 88. The complaint alleged, among others:
that petitioner is the first, true and actual inventor of an aerial fuze denominated as "Fuze,
PDR 77 CB4" which it developed as early as December 1981 under the Self-Reliance
Defense Posture Program (SRDP) of the AFP; that sometime in 1986, petitioner began
supplying the AFP with the said aerial fuze; that private respondent's aerial fuze is identical
in every respect to the petitioner's fuze; and that the only difference between the two fuzes
are miniscule and merely cosmetic in nature. Petitioner prayed that a temporary restraining
order and/or writ of preliminary injunction be issued enjoining private respondent including
Intellectual Property Law – The Law on Patents
any and all persons acting on its behalf from manufacturing, marketing and/or profiting
therefrom, and/or from performing any other act in connection therewith or tending to
prejudice and deprive it of any rights, privileges and benefits to which it is duly entitled as
the first, true and actual inventor of the aerial fuze.
On December 10, 1993, the trial court issued a temporary restraining order. Thereafter,
hearings were held on the application of petitioner for the issuance of a writ of preliminary
injunction, with both parties presenting their evidence. After the hearings, the trial court
directed the parties to submit their respective memoranda in support of their positions.
On December 27, 1993, private respondent submitted its memorandum 7 alleging that
petitioner has no cause of action to file a complaint for infringement against it since it has
no patent for the aerial fuze which it claims to have invented; that petitioner's available
remedy is to file a petition for cancellation of patent before the Bureau of Patents; that
private respondent as the patent holder cannot be stripped of its property right over the
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 rights over its patent.
On December 29, 1993, the trial court issued an Order 8 granting the issuance of a writ of
preliminary injunction against private respondent the dispositive portion of which reads:
WHEREFORE, plaintiffs application for the issuance of a writ of preliminary
injunction is granted and, upon posting of the corresponding bond by
plaintiff in the amount of PHP 200,000.00, let the writ of preliminary
injunction be issued by the branch Clerk of this Court enjoining the
defendant and any and all persons acting on its behalf or by and under its
authority, from manufacturing, marketing and/or selling aerial
fuzes identical, to those of plaintiff, and from profiting therefrom, and/or
from performing any other act in connection therewith until further orders
from this Court.
Private respondent moved for reconsideration but this was denied by the trial court in its
Order9 of May 11, 1994, pertinent portions of which read:
For resolution before this Court is the Motion for Reconsideration filed by
the defendant and the plaintiff's Opposition thereto. The Court finds no
sufficient cause to reconsider its order dated December 29, 1993. During
the hearing for the issuance of the preliminary injunction, the plaintiff has
amply proven its entitlement to the relief prayed for. It is undisputed that
the plaintiff has developed its aerial fuze way back in 1981 while the
defendant began manufacturing the same only in 1987. Thus, it is only
logical to conclude that it was the plaintiff's aerial fuze that was copied or
54

imitated which gives the plaintiff the right to have the defendant enjoined
"from manufacturing, marketing and/or selling aerial fuzes identical to
those of the plaintiff, and from profiting therefrom and/or performing any
other act in connection therewith until further orders from this Court." With
regards to the defendant's assertion that an action for infringement may
only be brought by "anyone possessing right, title or interest to the
patented invention," (Section 42, RA 165) qualified by Sec. 10, RA 165 to
include only "the first true and actual inventor, his heirs, legal
representatives or assignees, "this court finds the foregoing to be
untenable. Sec. 10 merely enumerates the persons who may have an
invention patented which does not necessarily limit to these persons the
right to institute an action for infringement. Defendant further contends that
the order in issue is disruptive of the status quo. On the contrary, the order
issued by the Court in effect maintained the status quo. The last actual,
peaceable uncontested status existing prior to this controversy was the
plaintiff manufacturing and selling its own aerial fuzes PDR 77 CB4 which
was ordered stopped through the defendant's letter. With the issuance of
the order, the operations of the plaintiff continue. Lastly, this court believes
that the defendant will not suffer irreparable injury by virtue of said order.
The defendant's claim is primarily hinged on its patent (Letters Patent No.
UM-6983) the validity of which is being questioned in this case.
WHEREFORE, premises considered, the Motion for Reconsideration is
hereby denied for lack of merit.
SO ORDERED.
Aggrieved, private respondent on June 27, 1994, filed a petition for certiorari,
mandamus and prohibition 10before respondent Court of Appeals raising as grounds the
following:
a. Petitioner has no cause of action for infringement against private
respondent, the latter not having any patent for the aerial fuze which it
claims to have invented and developed and allegedly infringed by private
respondent;
b. the case being an action for cancellation or invalidation of private
respondent's Letters Patent over its own aerial fuze, the proper venue is
the Office of the Director of Patents;
c. The trial court acted in grave abuse of discretion and/or in excess of
jurisdiction in finding that petitioner has fully established its clear title or
right to preliminary injunction;
Intellectual Property Law – The Law on Patents
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 court's Order of December 29, 1993 and dismissing the complaint filed by
petitioner.
The motion for reconsideration was also denied on January 17, 1995. 11 Hence, this
present petition.
It is petitioner's contention that it can file, under Section 42 of the Patent Law (R.A. 165),
an action for infringement not as a patentee but as an entity in possession of a right, title
or interest in and to the patented invention. It advances the theory that while the absence
of a patent may prevent one from lawfully suing another for infringement of said patent,
such absence does not bar the first true and actual inventor of the patented invention from
suing another who was granted a patent in a suit for declaratory or injunctive relief
recognized under American patent laws. This remedy, petitioner points out, may be likened
to a civil action for infringement under Section 42 of the Philippine Patent Law.
We find the above arguments untenable.
Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:
Sec. 42. Civil action for infringement. — Any patentee, or anyone
possessing any right, title or interest in and to the patented invention,
whose rights have been infringed, may bring a civil action before the proper
Court of First Instance (now Regional Trial court), to recover from the
infringer damages sustained by reason of the infringement and to secure
an injunction for the protection of his right. . . .
Under the aforequoted law, only the patentee or his successors-in-interest may file an
action for infringement. The phrase "anyone possessing any right, title or interest in and to
the patented invention" upon which petitioner maintains its present suit, refers only to the
patentee's successors-in-interest, assignees or grantees since actions for infringement of
patent may be brought in the name of the person or persons interested, whether as
patentee, assignees, or as grantees, of the exclusive right. 12 Moreover, there can be no
55

infringement of a patent until a patent has been issued, since whatever right one has to
the invention covered by the patent arises alone from the grant of patent. 13 In short, a
person or entity who has not been granted letters patent over an invention and has not
acquired any light or title thereto either as assignee or as licensee, has no cause of action
for infringement because the right to maintain an infringement suit depends on the
existence of the patent. 14
Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis or
cause of action to institute the petition for injunction and damages arising from the alleged
infringement by private respondent. While petitioner claims to be the first inventor of
the aerial fuze, still it has no right of property over the same upon which it can maintain a
suit unless it obtains a patent therefor. Under American jurisprudence, an inventor has no
common-law right to a monopoly of his invention. He has the right to make, use and vend
his own invention, but if he voluntarily discloses it, such as by offering it for sale, the world
is free to copy and use it with impunity. A patent, however, gives the inventor the right to
exclude all others. As a patentee, he has the exclusive right of making, using or selling the
invention. 15
Intellectual Property Law – The Law on Patents
usefulness of the improved process therein specified and described are
matters which are better determined by the Philippines Patent Office. The
technical Staff of the Philippines Patent Office, composed of experts in
their field, have, by the issuance of the patent in question, accepted the
thinness of the private respondent's new tiles as a discovery. There is a
presumption that the Philippine Patent Office has correctly determined the
patentability of the improvement by the private respondent of the process
in question.
In fine, in the absence of error or abuse of power or lack of jurisdiction or grave abuse of
discretion, we sustain the assailed decision of the respondent Court of Appeal.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No
pronouncement as to costs.
SO ORDERED.

Further, the remedy of declaratory judgment or injunctive suit on patent invalidity relied
upon by petitioner cannot be likened to the civil action for infringement under Section 42
of the Patent Law. The reason for this is that the said remedy is available only to the patent
holder or his successors-in-interest. Thus, anyone who has no patent over an invention
but claims to have a right or interest thereto can not file an action for declaratory judgment
or injunctive suit which is not recognized in this jurisdiction. Said person, however, is not
left without any remedy. He can, under Section 28 of the aforementioned law, file a petition
for cancellation of the patent within three (3) years from the publication of said patent with
the Director of Patents and raise as ground therefor that the person to whom the patent
was issued is not the true and actual inventor. Hence, petitioner's remedy is not to file an
action for injunction or infringement but to file a petition for cancellation of private
respondent's patent. Petitioner however failed to do so. As such, it can not now assail or
impugn the validity of the private respondent's letters patent by claiming that it is the true
and actual inventor of the aerial fuze.

Thus, as correctly ruled by the respondent Court of Appeals in its assailed decision: "since
the petitioner (private respondent herein) is the patentee of the disputed invention
embraced by letters of patent UM No. 6938 issued to it on January 23, 1990 by the Bureau
of Patents, it has in its favor not only the presumption of validity of its patent, but that of a
legal and factual first and true inventor of the invention."

In the case of Aguas vs. De Leon, 16 we stated that:

The validity of the patent issued by the Philippine Patent Office in favor of
the private respondent and the question over the investments, novelty and
56
Intellectual Property Law – The Law on Patents

57