G.R. No.
113388 September 5, 1997 her application for letters patent on 9 December 1979; (b) the products which
ANGELITA MANZANO, petitioner,
vs.
COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to NEW UNITED
FOUNDRY MANUFACTURING CORPORATION, respondents.
BELLOSILLO, J.:
The primary purpose of the patent system is not the reward of the individual
but the advancement of the arts and sciences. The function of a patent is to
add to the sum of useful knowledge and one of the purposes of the patent
system is to encourage dissemination of information concerning discoveries
and inventions. This is a matter which is properly within the competence of
the Patent Office the official action of which has the presumption of
correctness and may not be interfered with in the absence of new evidence
carrying thorough conviction that the Office has erred. Since the Patent Office
is an expert body preeminently qualified to determine questions of
patentability, its findings must be accepted if they are consistent with the
evidence, with doubts as to patentability resolved in favor of the Patent
Office.1
Petitioner Angelita Manzano filed with the Philippine Patent Office on 19
February 1982 an action for the cancellation of Letters Patent No. UM-4609
for a gas burner registered in the name of respondent Melecia Madolaria who
subsequently assigned the letters patent to New United Foundry and
Manufacturing Corporation (UNITED FOUNDRY, for brevity). Petitioner
alleged that (a) the utility model covered by the letters patent, in this case,
an LPG gas burner, was not inventive, new or useful; (b) the specification of
the letters patent did not comply with the requirements of Sec. 14, RA No.
165, as amended; (c) respondent Melecia Madolaria was not the original, true
and actual inventor nor did she derive her rights from the original, true and
actual inventor of the utility model covered by the letters patent; and, (d) the
letters patent was secured by means of fraud or misrepresentation. In
support of her petition for cancellation petitioner further alleged that (a) the
utility model covered by the letters patent of respondent had been known or
used by others in the Philippines for more than one (1) year before she filed
1
were produced in accordance with the utility model covered by the letters
patent had been in public use or on sale in the Philippines for more than one
(1) year before the application for patent therefor was filed.
Petitioner presented the following documents which she correspondingly
marked as exhibits: (a) affidavit of petitioner alleging the existence of prior
art, marked Exh. "A;" (b) a brochure distributed by Manila Gas Corporation
disclosing a pictorial representation of Ransome Burner made by Ransome
Torch and Burner Company, USA, marked Exh. "D;" and, (c) a brochure
distributed by Esso Gasul or Esso Standard Eastern, Inc., of the Philippines
showing a picture of another similar burner with top elevation view and
another perspective view of the same burner, marked Exh. "E."
Testifying for herself petitioner narrated that her husband Ong Bun Tua
worked as a helper in the UNITED FOUNDRY where respondent Melecia
Madolaria used to be affiliated with from 1965 to 1970; that Ong helped in
the casting of an LPG burner which was the same utility model of a burner for
which Letters Patent No. UM-4609 was issued, and that after her 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.
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
2
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 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.
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

3
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.
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
4
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
The above findings and conclusions of the Director of Patent were reiterated
and affirmed by the Court of Appeals.7
The validity of the patent issued by the Philippine Patent Office in favor of
private respondent and the question over the inventiveness, novelty and
usefulness of the improved model of the LPG burner are matters which are
better determined by the Patent Office. The technical staff of the Philippine
Patent Office composed of experts in their field has by the issuance of the
patent in question accepted private 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 imputed to the lower court, its findings of fact being conclusive and not
in the absence of competent evidence to the contrary. reviewable by this Court.

The rule is settled that the findings of fact of the Director of Patents, WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals
especially when affirmed by the Court of Appeals, are conclusive on this Court affirming that of the Philippine Patent Office is AFFIRMED. Costs against
when supported by substantial evidence. Petitioner has failed to show petitioner.
compelling grounds for a reversal of the findings and conclusions of the
SO ORDERED.
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 reviewing and revising errors of law

5
G.R. L-45101 November 28, 1986
ROSARIO C. MAGUAN (formerly ROSARIO C. TAN), petitioner,
vs.
THE HONORABLE COURT OF APPEALS and SUSANA LUCHAN, respondents.
Ambrosio Padilla Law Offices for petitioner.
PARAS, J.:p
Submitted on December 9, 1977 for Our decision is this petition for review
on certiorari of the two Resolutions of the Court of Appeals, the first dated
July 6, 1976, setting aside its Decision of February 16, 1976 in CA-G.R. No. SP-
04706, titled "SUSANA LUCHAN v. Hon. HONRADO, et al." wherein it ruled for
the dismissal of the petition for lack of merit and at the same time nullifying
the writ of preliminary injunction it had previously issued; and the second,
dated November 4, 1976, denying the motion for reconsideration of the first
resolution above-mentioned.
Petitioner is doing business under the firm name and style of SWAN
MANUFACTURING" while private respondent is likewise doing business under
the firm name and style of "SUSANA LUCHAN POWDER PUFF
MANUFACTURING."
It is undisputed that petitioner is a patent holder of powder puff namely:
1. UM-423 (extended and/or renewed under Extension No. UM-109 for a
period of 5 years from October 6, 1971)
2. UM-450 (extended and/or renewed under Extension No. UM110 for a
period of 5 years from January 26, 1972)
3. UM 1184, for a period of 5years fromApril 5, 1974.(Petition, Rollo, pp. 6-
7).
In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86), petitioner informed
private respondent that the powder puffs the latter is manufacturing and
selling to various enterprises particularly those in the cosmetics industry,
resemble Identical or substantially Identical powder puffs of which the
former is a patent holder under Registration Certification Nos. Extension UM-
6
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 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-
7
171) reiterating among other things the invalidity of petitioner's patents and
prayed that the trial court be restrained from enforcing or continuing to
enforce the following:
(1) Order dated September 18, 1974, granting the preliminary injunction;
(2) Writ of preliminary injunction dated September 18, 1974; and
(3) Order dated September 11, 1974 denying petitioner's motion petition for
reconsideration.
On October 15, 1975, the Writ of Preliminary Injunction was issued by the
respondent Court of Appeals as follows:
NOW, THEREFORE, you, respondents, and/or any person/persons acting on
your stead, are hereby ENJOINED to RESTRAIN from enforcing or continuing
to enforce, the proceedings complained of in the petition to wit: 1) Order
dated September 18, 1974, granting the preliminary injunction; 2) Writ of
Preliminary Injunction dated September 18, 1974; and Order dated
September 11, 1975, denying petitioner's motion for reconsideration, all
issued in connection with Civil Case No. 19908, UNTIL FURTHER ORDERS
FROM THIS COURT. (Annex "P", Rollo, p. 1.73)
On February 16, 1976, respondent court promulgated a decision the
dispositive portion of which reads:
WHEREFORE, finding no merit in the herein petition, the same is hereby
dismissed and the preliminary injunction previously issued by this Court is
hereby set aside, with costs.
SO ORDERED. (CA Decision, Rollo, p. 189).
ln said decision respondent court stated that in disposing of the petition it
tackled only the issue of whether the court a quo acted with grave abuse of
discretion in issuing the challenged orders. It made clear the question of
whether the patents have been infringed or not was not determined
considering the court a quo has 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 In a Resolution dated November 4, 1976, respondent court, not persuaded
THAT THIS HONORABLE COURT ERRED IN NOT APPRECIATING THE EXISTENCE
OF A FAIR QUESTION OF INVALIDITY OF PRIVATE RESPONDENT'S PATENTS.
II
THAT THIS HONORABLE COURT ERRED IN NOT REJECTING THE THEORY OF
RESPONDENT JUDGE THAT HE HAS NO JURISDICTION TO INVALIDATE THE
PATENTS UPON GROUND OF LACK OF NOVELTY OF THE PRODUCTS
PATENTED. (Motion for Reconsideration, Rollo, p. 190).
Reviewing on reconsideration, respondent court gave weight to private
respondent's allegation that the latter's products are not identical or even
only substantially identical to the products covered by petitioner's patents.
Said court noticed that contrary to the lower courts position that the court a
quo had no jurisdiction to determine the question of invalidity of the patents,
Section 45 and 46 of the Patent Law allow the court to make a finding on the
validity or invalidity of patents and in the event there exists a fair question of
its invalidity, the situation calls for a denial of the writ of preliminary
injunction pending the evaluation of the evidence presented (Rollo, pp. 218-
226). Thus, finding the lower court's position to have been opposed to Patent
Law, respondent court considered it a grave abuse of discretion when the
court a quo issued the writ being questioned without looking into the
defenses alleged by herein private respondent. Further, it considered the
remedy of appeal, under the circumstances, to be inadequate.
Thus, on July 6, 1976, respondent court made a complete turnabout from its
original decision and promulgated a Resolution, the dispositive portion of
which reads:
WHEREFORE, our decision is hereby set aside. The writ of certiorari is ordered
issued. Accordingly, the challenged 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).
8
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 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,
9
a single instance of public use of the invention by a patentee for more than
two years (now for more than one year only under Sec. 9 of the Patent Law)
before the date of his application for his patent, will be fatal to, the validity
of the patent when issued. (Frank, et al. v. Kosuyama Vargas v. F.M. Yaptico
& Co. and Vargas v. Chua, et al., supra).
The law provides:
SEC. 9. Invention not considered new or patentable. An invention shall not
be considered new or capable of being patented if it was known or used by
others in the Philippines before the invention thereof by the inventor named
in an application for patent for the invention; or if it was patented or
described in any printed publication in the Philippines or any foreign country
more than one year before the application for a patent therefor; or if it had
been in public use or on sale in the Philippines for more than one year before
the application for a patent therefor; or if it is the subject matter of a validity
issued patent in the Philippines granted on an application filed before the
filing of the application for patent therefor.
Thus, more specifically, under American Law from which our Patent Law was
derived (Vargas v. F.M. Yaptico & Co. supra) it is generally held that in patent
cases a preliminary injunction will not issue for patent infringement unless
the validity of the patent is clear and beyond question. The issuance of letters
patent, standing alone, is 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 Such contention is untenable.
publicly known and used as early as 1963 long before petitioner was issued
There is no dispute that petitioner has seasonably petitioned. On the other
the patents in question. (List of Exhibits, Rollo, pp. 194-199). As correctly
hand, it is elementary that the trial judge is a mere nominal party as clearly
observed by respondent Court of Appeals, "since sufficient proofs have been
provided in Section 5, Rule 65 of the Revised Rules of Court where it shall be
introduced in evidence showing a fair question of the invalidity of the patents
the duty of such person or persons interested in sustaining the proceedings
issued for such models, it is but right that the evidence be looked into,
in court, "to appear and defend, both in his or their own behalf and in behalf
evaluated and determined on the merits so that the matter of whether the
of the court or judge affected by the proceedings."
patents issued were in fact valid or not may be resolved." (Rollo, pp. 286-
287). 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
All these notwithstanding, the trial court nonetheless issued the writ of
as a party seeking reversal of a decision that is unfavorable to the action taken
preliminary injunction which under the circumstances should be denied.
by him." (Hon. Alcasid v. Samson, 102 Phil. 735-736; Tarona v. Sayo, 67 SCRA
For failure to determine first the validity of the patents before aforesaid 508, 524; Lim Se v. Argel, 70 SCRA 378).
issuance of the writ, the trial court failed to satisfy the two requisites
As to petitioner's claim of prescription, private respondent's contention that
necessary if an injunction is to issue, namely: the existence of the right to be
such refers to the filing of petitions for cancellation in the Patent Office under
protected and the violation of said right. (Buayan Cattle Co., Inc. v. Quintillan,
Sec. 28 of the Patent Law and not to a defense against an action for
128 SCRA 276).
infringement under Sec. 45 thereof which may be raised anytime, is evident
Under the above established principles, it appears obvious that the trial court under aforesaid law.
committed a grave abuse of discretion which makes certiorari the
PREMISES CONSIDERED, the assailed resolutions of the Court of Appeals are
appropriate remedy.
hereby AFFIRMED.
As found by respondent Court of Appeals, the injunctive order of the trial
SO ORDERED.
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).

10
G.R. No. L-32160 January 30, 1982
DOMICIANO A. AGUAS, petitioner,
vs.
CONRADO G. DE LEON and COURT OF APPEALS, respondents.
FERNANDEZ, J.:
This is a petition for certiorari to review the decision of the Court of Appeals
in CA G.R. NO. 37824-R entitled "Conrado G. de Leon, plaintiff-appelle vs.
Dominciano Aguas and F.H. Aquino and Sons, defendants-appellants," the
dispositive portion of which reads:
WHEREFORE, with the modification that plintiff-applee's award of moral
damages is hereby redured to P3,000.00, the appealed judgment is hereby
affirmed, in all othe respects, with costs against appellants. 1
On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of
Rizal at Quezon City a complaint for infringement of patent against Domiciano
A. Aguas and F. H. Aquino and Sons alleging that being the original first and
sole inventor of certain new and useful improvements in the process of
making mosaic pre-cast tiles, he lawfully filed and prosecuted an application
for Philippine patent, and having complied in all respects with the statute and
the rules of the Philippine Patent Office, Patent No. 658 was lawfully granted
and issued to him; that said invention was new, useful, not known or used by
others in this country before his invention thereof, not patented or described
in any printed publication anywhere before his invention thereof, or more
than one year prior to his application for patent thereof, not patented in any
foreign country by him or his legal representatives on application filed more
than one year prior to his application in this country; that plaintiff has the
exclusive license to make, use and sell throughout the Philippines the
improvements set forth in said Patent No. 658; that the invention patented
by said Patent No. 658 is of great utility and of great 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
11
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
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;
4. Ordering the defendants to jointly and severally pay to the plaintiff the
following sums of money, to wit:
(a) P10,020.99 by way of actual damages;
(b) P50,000.00 by way of moral damages;
(c) P5,000.00 by way of exemplary damages;
(d) P5,000.00 by way of attorney's fees and
12
(e) costs of suit. 5
The defendant Domiciano Aguas appealed to the Court of Appeals, assigning
the following errors. 6
I
THE TRIAL COURT ERRED IN NOT HOLDING THAT PLAINTIFF'S PATENT FOR
THE 'PROCESS OF MAKING MOSAIC PRE-CAST TILE' IS INVALID BECAUSE SAID
ALLEGED PROCESS IS NOT AN INVENTION OR DISCOVERY AS THE SAME HAS
ALREADY LONG BEEN USED BY TILE MANUFACTURERS BOTH ABROAD AND IN
THIS COUNTRY.
II
THE TRIAL COURT ERRED IN HOLDING THAT THE PATENT OF PLAINTIFF IS
VALID BECAUSE IT IS AN IMPROVEMENT OR THE AGE-OLD TILE MAKING
SYSTEM.
III
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
THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT DOMICIANO A.
AGUAS IS GUILTY OF INFRINGEMENT DESPITE THE FACT THAT PLAINTIFF'S
PATENT IS NOT A VALID ONE.
V
THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT COULD
NEVER BE GUILTY OF INFRINGEMENT OF PLAINTIFF'S PATENT BECAUSE EVEN
IN MATTERS NOT PATENTED BY THE PLAINTIFF - LIKE THE COMPOSITION AND
PROPORTION OF INGREDIENTS USED AND THE STRUCTURAL DESIGNS OF THE
MOULD AND THE TILE PRODUCED - THAT OF THE DEFENDANT ARE
DIFFERENT.
VI
THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN
HOLDING THE DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR
DAMAGES, AND ATTORNEY'S FEES.
On August 5, 1969, the Court of Appeals affirmed the decision of the trial
court, with the modification that plaintiff-appellee's award of moral damages
was reduced to P3,000.00. 7
The petitioner assigns the following errors supposedly committed by the
Court of Appeals:
It is now respectfully submitted that the Court of Appeals committed the
following errors involving questions of law, to wit:
First error. When it did not conclude that the letters patent of the
respondent although entitled on the cover page as a patent for
improvements, was in truth and in fact, on the basis of the body of the same,
a patent for the old and non-patentable process of making mosaic pre-cast
tiles;
Second error. When it did not conclude from the admitted facts of the
case, particularly the contents of the letters patent, Exh. L and the pieces of
physical evidence introduced consisting of samples of the tiles and
catalouges, that the alleged improvements introduced by the respondent in
the manufacture of mosaic pre-cast tiles are not patentable, the same being
not new, useful and inventive.
Third error. As a corollary, when it sentenced the herein petitioner to pay
the damages enumerated in the decision of the lower court (Record on
Appeal, pp. 74-75), as confirmed by it (the Court of Appeals), but with the
modification that the amount of P50,000.00 moral damages was reduced to
P3,000.00. 8
The facts, as found by the Court of Appeals, are:
The basic facts borne out by the record are to the effect that on December 1,
1959 plaintiff-appellee filed a patent application with the Philippine Patent
Office, and on May 5, 1960, said office issued in his favor Letters Patent No.
658 for a "new and useful improvement in the process of making mosaic pre-
cast tiles" (Exh, "L"); that defendant F.H. Aquino & Sons engraved the moulds
13
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 of such tiles. This commercial success is evidence of patentability (Walker on
private respondent, Conrado G. de Leon, to protect his rights as the inventor Patents, Dellers Edition, Vol. I, p. 237). 12
of "an alleged new and useful improvement in the process of making mosaic
The validily of the patent issued by the Philippines Patent Office in favor of
pre-cast tiles." 11 Indeed, Section 7, Republic Act No. 165, as amended
the private respondent and the question over the inventiveness, novelty and
provides: "Any invention of a new and useful machine, manufactured product
usefulness of the improved process therein specified and described are
or substance, process, or an improvement of the foregoing, shall be
matters which are better determined by the Philippines Patent Office. The
patentable.
technical staff of the Philippines Patent Office, composed of experts in their
The Court of Appeals found that the private respondent has introduced an field, have, by the issuance of the patent in question, accepted the thinness
improvement in the process of tile-making because: of the private respondent's new tiles as a discovery. There is a presumption
that the Philippines Patent Office has correctly determined the patentability
... we find that plaintiff-appellee has introduced an improvement in the
of the improvement by the private respondent of the process in question.
process of tile-making, which proceeds not merely from mechanical skill, said
improvement consisting among other things, in the new critical depth, lip Anent this matter, the Court of Appeals said:
width, easement and field of designs of the new tiles. The improved lip width
Appellant has not adduced evidence sufficient to overcome the above
of appellee's tiles ensures the durability of the finished product preventing
established legal presumption of validity or to warrant reversal of the findings
the flaking off of the edges. The easement caused by the inclination of the
of the lower court relative to the validity of the patent in question. In fact, as
protrusions of the patented moulds is for the purpose of facilitating the
we have already pointed out, the clear preponderance of evidence bolsters
removal of the newly processed tile from the female die. Evidently, appellee's
said presumption of validity of appellee's patent. There is no indication in the
improvement consists in the solution to the old critical problem by making
records of this case and this Court is unaware of any fact, which would tend
the protrusions on his moulds attain an optimum height, so that the
to show that concrete wall tiles similar to those produced by appellee had
engraving thereon would be deep enough to produce tiles for sculptured and
ever been made by others before he started manufacturing the same. In fact,
decorative purposes, strong optimum thickness of appellee's new tiles of only
during the trial, appellant was challenged by appellee to present a tile of the
1/8 of an inch at the deepest easement (Exhs. "D" and "D-1") is a most critical
same kind as those produced by the latter, from any earlier source but,
feature, suggestive of discovery and inventiveness, especially considering
despite the fact that appellant had every chance to do so, he could not
that, despite said thinness, the freshly formed tile remains strong enough for
present any. There is, therefore, no concrete proof that the improved process
its intended purpose.
of tile-making described in appellee's patent was used by, or known to, others
While it is true that the matter of easement, lip width, depth, protrusions and previous to his discovery thereof. 13
depressions are known to some sculptors, still, to be able to produce a new
The contention of the petitioner Aguas that the letters patent of de Leon was
and useful wall tile, by using them all together, amounts to an invention.
actually a patent for the old and non-patentable process of making mosaic
More so, if the totality of all these features are viewed in combination with
pre-cast tiles is devoid of merit. De Leon never claimed to have invented the
the Ideal composition of cement, sodium silicate and screened fine sand.
process of tile-making. The Claims and Specifications of Patent No. 658 show
By using his improved process, plaintiff has succeeded in producing a new that although some of the steps or parts of the old process of tile making
product - a concrete sculptured tile which could be utilized for walling and were described therein, there were novel and inventive features mentioned
decorative purposes. No proof was adduced to show that any tile of the same in the process. Some of the novel features of the private respondent's
kind had been produced by others before appellee. Moreover, it appears that improvements are the following: critical depth, with corresponding easement
appellee has been deriving considerable profit from his manufacture and sale and lip width to such degree as leaves the tile as thin as 1/8 of an inch at its

14
thinnest portion, Ideal composition of cement and fine river sand, among
other ingredients that makes possible the production of tough and durable
wall tiles, though thin and light; the engraving of deep designs in such a way
as to make the tiles decorative, artistic and suitable for wall ornamentation,
and the fact that the tiles can be mass produced in commercial quantities and
can be conveniently stock-piled, handled and packed without any intolerable
incidence of breakages. 14
The petitioner also contends that the improvement of respondent is not
patentable because it is not new, useful and inventive. This contention is
without merit.
The records disclose that de Leon's process is an improvement of the old
process of tile making. The tiles produced from de Leon's process are suitable
for construction and ornamentation, which previously had not been achieved
by tiles made out of the old process of tile making. De Leon's invention has
therefore brought about a new and useful kind of tile. The old type of tiles
were usually intended for floors although there is nothing to prevent one
from using them for walling purposes. These tiles are neither artistic nor
ornamental. They are heavy and massive.
The respondent's improvement is indeed inventive and goes beyond the
exercise of mechanical skill. He has introduced a new kind of tile for a new
purpose. He has improved the old method of making tiles and pre-cast
articles which were not satisfactory because of an intolerable number of
breakages, especially if deep engravings are made on the tile. He has
overcome the problem of producing decorative tiles with deep engraving, but
with sufficient durability. 15 Durability inspite of the thinness and lightness
of the tile, is assured, provided that a certain critical depth is maintained in
relation to the dimensions of the tile. 16
The petitioner also claims that changing the design from embossed to
engraved tiles is neither new nor inventive because the Machuca Tile Factory
and the Pomona Tile Manufacturing Company have been manufacturing
decorative wall tiles that are embossed as well as engraved; 17 that these
tiles have also depth, lip width, easement and field of designs; 18 and that
the private respondent had copied some designs of Pomona. 19
15
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. 20 The process involved in making
cement tiles is different from ceramic tiles. Cement tiles are made with the
use of water, while in ceramics fire is used. As regards the allegation of the
petitioner that the private respondent copied some designs of Pomona,
suffice it to say that what is in issue here is the process involved in tile making
and not the design.
In view of the foregoing, this Court finds that Patent No. 658 was legally
issued, the process and/or improvement being patentable.
Both the trial court and the Court of Appeals found as a fact that the
petitioner Domiciano A. Aguas did infringe de Leon's patent. There is no
showing that this case falls under one of the exceptions when this Court may
overrule the findings of fact of the Court of Appeals. The only issue then to
be resolved is the amount of damages that should be paid by Aguas.
In its decision the Court of Appeals affirmed the amount of damages awarded
by the lower court with the modification that the respondent is only entitled
to P3,000.00 moral damages. 21
The lower court awarded the following damages: 22
a) P10,020.99 by way of actual damages;
b) P50,000.00 by way of moral damages;
c) P5,000.00 by way of exemplary damages;
d) P5,000.00 by way of attomey's fees and
e) Costs of suit
because:
An examination of the books of defendant Aguas made before a
Commissioner reveals that during the period that Aguas was manufacturing
and selling tiles similar to plaintiff's, he made a gross income of P3,340.33, damages if the court should find that, under the circumstances such damages
which can be safely be considered the amount by which he enriched himself are justly due" (Art. 2219 NCC).
when he infringed plaintiff's patent. Under Sec. 42 of the Patent Law any
There is no reason to reduce the amount of damages and attorneys fees
patentee whose rights have been infringed is entitled to damages which,
awarded by the trial court as modified by the Court of Appeals.
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 WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R
three times the amount of such actual damages. Considering the wantonness appealed from is hereby affirmed, without pronouncement as to costs.
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 SO ORDERED.
grant plaintiff maximum damages in the sum of P10,020.99. And in order to
discourage patent infringements and to give more teeth to the provisions of
the patent law thus promoting a stronger public policy committed to afford
greater incentives and protection to inventors, the Court hereby awards
plaintiff exemplary damages in the sum of P5,000.00 to be paid jointly and
severally by defendants. Considering the status of plaintiff as a reputable
businessman, and owner of the likewise reputed House of Pre-Cast, he is
entitled to an award of moral damages in the sum of P50,000.00. 23

In reducing the amount of moral damages the Court of Appeals said:

As regards the question of moral damages it has been shown that as a result
of the unlawful acts of infringment committed by defendants, plaintiff was
unstandably very sad; he worried and became nervous and lost concentration
on his work in connection with his tile business (pp. 28, 30, t.s.n., Feb. 28,
1964). In addition, plaintiff's character and reputation have been
unnecessarily put in question because defendants, by their acts of
infringement have created a doubt or suspicion in the public mind concerning
the truth and honesty of plaintiff's advertisements and public
announcements of his valid patent. Necessarily, said acts of defendants have
caused plaintiff considerable mental suffering, considering especially, the fact
that he staked everything on his pre-cast tile business (p. 36, t.s.n., Id.) The
wantonness and evident bad faith characterizing defendants' prejudicial acts
against plaintiff justify the assessment of moral damages in plaintiff's favor,
though we do not believe the amount of P50,000.00 awarded by the lower
court is warranted by the circumstances. We feel that said amount should be
reduced to P3,000.00 by way of compensating appellee for his moral
suffering. "Willful injury to property may be a legal ground for awarding moral

16
G.R. No. L-36650 January 27, 1933
ANGEL VARGAS, plaintiff-appellee,
vs.
PETRONILA CHUA, ET AL., defendants-appellants.
Jose F. Orozco for appellants.
Jose Yulo for appellee.
IMPERIAL, J.:
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:
17
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.
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.
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
18
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
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 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:
19
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; 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.

20
[G.R. No. 38010. December 21, 1933.] plaintiffs cannot be invoked in this case. It is true that the then plaintiffs in
the former and those in the latter case are the same but the defendant
PATRICK HENRY FRANK and WILLIAM HENRY GOHN, Plaintiffs-Appellants, v. therein did not set up the special defenses as alleged by the herein
G. KOSUYAMA, Defendant-Appellee. defendant. Furthermore, the plaintiffs therein had only confined themselves
to presenting the patent, or rather, a copy thereof, wherein mention of the
J. W. Ferrier for Appellants. "spindle" was made, and this court took for granted their claim that it was
one of the essential characteristics thereof which had been imitated or
Pablo Lorenzo for Appellee. copied by the therein defendant.

SYLLABUS
DECISION
1. PATIENT; ESSENTIAL ELEMENTS. Strictly speaking, the hemp stripping
machine of the plaintiffs does not constitute an invention on the ground that
it lacks the element of novelty, originality and precedence (48 C. J., sec. 101,
p. 97, and sec. 102, p. 98). IMPERIAL, J.:

2. ID.; KNOWLEDGE AND USE BY THE PUBLIC. Before the plaintiffs herein
obtained their patent, they themselves had already publicly used the same
kind of machine for many months, at least, and, various other machines,
having in general, the same characteristics and important parts as that of the
said plaintiffs, were known in the Province of Davao.
3. ID.; ANNULMENT. Notwithstanding all the facts herein stated, the trial
court did not annul the plaintiffs patent and the defendant herein insists that
the patent in question should be declared null and void. In view of the nature
of the action brought by the plaintiffs, annulment does not lie in the absence
of a cross-complaint to that effect.
4. ID.; INFRINGEMENT. The defendant cannot be made civilly liable for
alleged infringement of the patent on which the action is based on the ground
that the machines manufactured and sold by him did not have any essential
part unknown to the public in the Province of Davao at the time the plaintiffs
applied for and obtained their patent for improved abaca stripping machines.
5. APPLICABILITY OF THE DOCTRINE OF "STARE DECISIS." The doctrine laid
down in the case of Frank and Gohn v. Benito (51 Phil., 712), to the effect that
the defendant therein had actually infringed upon the patent of the therein
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 judgment be rendered against the
defendant, ordering him thereby to refrain immediately from the
manufacture and sale off 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 defendant 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 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

21
dismissing their complaint, with costs, as well as the defendants
counterclaim of P10,000. The defendant did not appeal.
In their amended complaint, the plaintiffs 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 tapering 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 pallet or 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 differences between the machine in question and
other machines and 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:jgc:chanrobles.com.ph
"In considering their machine the plaintiffs did nothing but improve, to a
certain degree, those that were already in vogue and in actual use in hemp
producing provinces. It cannot be said that they have invented the spindle
inasmuch as this was already known since the year 1909 or 1910. Neither can
it 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 machines appeared.
Neither can it be said that they invented the flywheel 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
22
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 sec. 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.
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, Wherefore, reiterating that the defendant cannot be held civilly liable for
in view of the nature of the action brought by the plaintiffs and in the absence alleged infringement of the patent upon which the present action is based on
of a cross-complaint to that effect. For the purposes of this appeal, suffice it the ground that there is no essential part of the machine manufactured and
to hold that the defendant is not civilly liable for alleged infringement of the sold by him, which was unknown to the public in the Province of Davao at the
patent in question. time the plaintiffs applied for an obtained their patent for improved hemp
stripping machines, the judgment appealed from is hereby affirmed, with
In the light of sound logic, the plaintiffs cannot insists that the "spindle" was costs against the plaintiffs-appellants. So ordered.
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 to patents.

In support of their claim the plaintiffs invoke the doctrine laid down by this
court in the case of Frank and Gohn v. 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
in 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
are 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.

23
G.R. No. L-4572 May 22, 1953
DOLORITO M. FELICIANO and MAXIMO B. TAPINIO, applicants-appellees.
MELITON D ALBAA, petitioner-appellant,
vs.
THE DIRECTOR OF PATENT, respondent-appelle.
Meliton D. Albaa in his own behalf.
Office of the Solicitor General Pompeyo Diaz and Solicitor Pacifico P. de
Castro for respondent and appellee.
PADILLA, J.:
An application for patent was filed with the Patent Office.
Pending examination of the application, Meliton D. Albaa filed a motion to
intervene claiming that the applicant-inventors had "sold and/or bartered
and assigned to him their right to contract or deal the sale of their invention
called Fel-Tap Meter Guard and Detector to or though the Corporation that
they were then organizing under his direction and to fix and decide on the
purchase price of it to at least P200,000 in installments cash and P300,000 in
shares of stock of said Corporation . . ." and praying that applicant-inventor
Maximo D. Tapinio be compelled to sign a contract (Appendix I) and, together
with the other applicant-inventor Dolorito M. Feliciano who had already
signed it, to acknowledge it and another contract (Appendix II) before a
notary public, to have both contracts recorded in the Patent Office and in the
Office of the Register of Deeds, and that the patent for the invention be
issued in his name and in the name of the inventors.
The motion was denied on the ground under the provisions of the Patent Law
(Republic Act No. 165) the Director of Patents has no jurisdiction or power to
decide the question submitted to him.
The movant filed an amended motion to intervene claiming "that he is the
assignee of inventors Dolorito M. Feliciano and Maximo Tapinio of the
undivided part interest in the invention for whose letter-patent the named
petitioners Dolorito M. Feliciano and Maximo Tapinio are herein applying."
The amended motion was denied on the ground that the assignment made
to the movant is not one of exclusive right to make, use the sell1 the electrical
24
contrivance for which a patent is applied for; that it is just an authority to act
as the selling agent for the inventors of the patent, if granted, and the
invention covered thereby and to receive compensation therefor; and that
not being entitled to have his name included as one of the patentees, if
patent for the invention be granted, the movant has no right to intervene in
the proceedings for the grant of the patent.
An exception to and a motion for reconsideration of the proceeding order
were noted and denied.
From the orders denying his motions to intervene the movant has appealed.2
What the appellant attempted to secure by his motion to intervene is clearly
beyond the jurisdiction and authority of the Director of Patents to grant.
Despite the amendment to the first motion to the intervene by which he
claims assignment of the invention, still it remains that the alleged
assignment is not the invention but it is an agreement whereby he is to act as
selling agent for the inventors of the patent (if granted) and of the invention
covered thereby and to receive compensation therefor. This finding of the
Director of Patents is supported by the following clauses found in the contract
(Appendix I): "We (the inventors) . . . hereby declare and ratify that both of
us are the co-inventors and joint fifty-fifty owners of the "Fel-Tap Electric
Meter Guard & Detector' . . . ." "We are now organizing a Corporation under
the direction of Mr. Albaa (Meliton D. Albaa) to exploit and industrialize
the invention . . . which we promise hereby to sell to said Corporation with
its letter-patent . . . except the Royalty Right of the same, . . . ." "For and in
consideration of the monetary and other helps (help) that said Mr. Meliton
D. Albaa . . . has rendered and is rendering us . . . of approaching, interesting
and looking for subscribers and prayers to the capital stocks (stock) of said
Corporation to be . . . we hereby promise and actually pay to said Mr. Albaa
in installment fifty thousand pesos (P50,000) of said P200,000 installments
cash purchase price . . . ." The above quoted terms and stipulations of the
executory contract clearly show that it was not an assignment of the
invention and the patent applied for.
Assignments of patents and inventions covered thereby may be recorded in
books and records kept for the purpose in the Patent Office is presented in
due form;3 but the appellant does not ask for the registration of the alleged
agreement between him and the inventors, because as it is not in due form it
cannot be recorded, but prays that the Director of Patents compel applicant-
inventor Maximo B. Tapinio to sign the contract executed and signed by the
other applicant-inventor Dolorito M. Feliciano on 14 March 1950 (Appendix
I) and both applicant-inventors to acknowledge it and another document
which by all indication refers to the minutes of a meeting of the organizers of
the Manufacturing Corporation held on 30 March 1950, before a notary
public, and then to have both documents recorded in the Patent Office and
in the office of the Registrar of Deeds. Under the provisions of the Patent Law
(Republic Act No. 165), the Director of Patent has no power and authority to
compel the applicant-inventors to do what the appellant is asking them to
perform. What the appellant asked the Director Patents to do for him is
essentially a judicial function which would require the determination or
finding by a court of competent jurisdiction as to whether there was a
meeting of the minds of the contracting parties before it could compel the
applicant-inventors to perform what the appellant prays the court to order
them to do. Aside from want of authority and power, the Director of Patent
lacks the means to make such determination and finding which would be
necessary before he could act on the appellant's motion.

The orders appealed from are affirmed, with costs against the appellant.

25
G.R. L-24919 January 28, 1980
JAMES HOWARD BOOTHE and JOHN MORTON, II, petitioners,
vs.
THE DIRECTOR OF PATENTS, respondent.
Picazo & Agcaoili for petition.
Office of the Solicitor General for respondent.
MELENCIO-HERRERA, J.:
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
26
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.
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 Espaa,
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 6. This cannot be allowed inasmuch as 9 pages of new matter are actually
mailing, which was also August 5, 1959. Paper No. 6 precipitated a series of proposed to be added to the specification.
communications between the aforementioned Patent Examiner and
This action is made final for purpose of appeal 6
petitioners, who apparently failed to meet the deadline of four months for
filing their responsive action. Petitioners moved for reconsideration on the ground that their application
falls under the exception provided for in Rule 47 of the Revised Rules of
On October 9, 1961, petitioners requested for clarification of Paper No. 6,
Practice in Patent Cases in that the missing nine pages submitted by them are
particularly as to why their Specification was considered incomplete.
not really new matter but a mere "minor informality."
In response, Supervising Patent Examiner Nelia de Castro informed
On February 5, 1963, Chief Patent Examiner Mapili issued Paper No. 22
petitioners as follows:
denying petitioners' Motion for Reconsideration and the findings of Examiner
With respect to applicant's request for clarification as to the meaning of the de Castro as follows:
second to the last sentence contained in Paper 6, attention is called to the
The basis of the examiner's finding is applicant's verification on file, exclusive
fact that the specification which was originally filed is incomplete and not in
of what is in an alleged corresponding application in the US as evidenced by
accordance with Rule 62 of the Revised Rules. Said specification ends on Page
a certified copy of record. The only use of such certified a copy is to give proof
9 with the incomplete sentence "The refractive indices of this crystalline
to an earlier filing date as provided for such section 15 of the Patent Law and
phase were found
to use the inventors' oath therein to complete the form requirements relative
It appears from further from a comparison between the submitted 9 pages of to his application in a dance with the provisions of section 13(3) of the same
the specification and 2 pages of the claims on one hand and the law.
corresponding pages of the legalized copy of the U.S. application on the other
The provisions of section 15 of the Patent Law, under which the present
that the present application does not correspond with the said certified copy
application was filed, provides for a for filing. This deadline cannot be
of the U.S. Application. The present application cannot therefore be granted
extended directly or indirectly by the filing of an imperfect application which
priority date under section 15 are requested by applicant. 4
can be freely amended or rectified at a later date. If this can be done legally,
On July 3, 1962, petitioners submitted two complete copies of the the restrictive provisions of section 15 will be nullified. 7
Specification, which included nine additional pages, and reiterated their
Adversely affected, petitioners appealed to dent Director of Patents.
request for priority right in the Philippines. 5
In their Brief filed with respondent Directors petitioners prayed for 1)
On October 2, 1962, Chief Patent Examiner Nicanor Mapili issued Paper No.
revocation of the of the Chief Patent Examiner, 8 2) admission of their
20 rejecting the additional nine pages of Specification submitted by
Specification submitted on July 3, 1962; and 3) allowance of their application
petitioners, and ruling:
on the merits.
xxx xxx xxx
On December 9, 1964, respondent Director rendered the questioned
The filing of the alleged complete copy Of the specification is an attempt to Decision, the dispositive portion of which reads:
effect a remedy to the previous finding of incompleteness as stated in the
WHEREFORE, the appeal is hereby sustained. The additional pages to the
2nd to the last paragraph of Office Action mailed Aug. 5, 1959, marked Paper
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

27
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 exclusively by the Statute and Rules of
Practice. Respondent Director denied that Motion for lack of merit on August
24, 1965.
Hence, this recourse.
28
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.
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
29
grant of a patent, and through a review of their decision by petition and
appeal.
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.
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 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.

30
G.R. No. L-22221 August 31, 1965
PARKE, DAVIS and COMPANY, petitioner,
vs.
DOCTORS' PHARMACEUTICALS, INC., ET AL., respondents.
Ross, Selph and Carrascoso for petitioner.
Manuel Serapio, Jr., for respondent Doctors' Pharmaceuticals, Inc.
Solicitor General for respondent Director of Patents.
BAUTISTA ANGELO, J.:
Parke Davis & Company, petitioner herein, is a foreign corporation organized
and existing under the laws of the State of Michigan, U.S.A., with principal
office in the City of Detroit, and as such is the owner of a patent entitled
"Process for the Manufacturing of Antibiotics" (Letters Patent No. 50) which
was issued by the Philippine Patent Office on February 9, 1950. The patent
relates to a chemical compound represented by a formula commonly called
chloramphenicol. The patent contains ten claims, nine of which are process
claims, and the other is a product claim to the chemical substance
chloramphenicol.
Respondent Doctors' Pharmaceuticals, Inc., on the other hand, is a domestic
corporation duly organized under our Corporation Law with principal office
situated in Caloocan City. On October 9, 1959, its general manager wrote a
letter to Parke Davis & Company requesting that it be granted a voluntary
license "to manufacture and produce our own brand of medicine, containing
chloramphenicol, and to use, sell, distribute, or otherwise dispose of the
same in the Philippines under such terms and conditions as may be deemed
reasonable and mutually satisfactory," to which Parke Davis & Company
replied requesting information concerning the facilities and plans for the
manufacture of chloramphenicol of Doctors' Pharmaceuticals, Inc. The latter
answered saying that it did not intend to manufacture chloramphenicol itself
but its purpose was merely to use it in its own brand of medicinal
preparations, emphasizing that its request for license was based on an
express provision of the Philippine law which has reference to patents that
had been in existence for more than three years from their dates of issue.
Hence, it reiterated its request that said license be granted under such terms
and conditions as may be reasonable and mutually satisfactory.
31
As apparently Parke Davis & Company was not inclined to grant the request
for a voluntary license, Doctors' Pharmaceuticals, Inc. filed on March 11, 1960
a petition with the Director of Patents, which was later amended, praying that
it be granted a compulsory license under Letters Patent No. 50 granted to
Parke Davis & Company based on the following grounds: (1) the patented
invention relates to medicine and is necessary for public health and safety;
(2) Parke Davis & Company is unwilling to grant petitioner a voluntary license
under said patent by reason of which the production and manufacture of
needed medicine containing chloramphenicol has been unduly restrained to
a certain extent that it is becoming a monopoly; (3) the demand for medicine
containing chloramphenicol is not being met to an adequate extent and on
reasonable prices; and (4) the patented invention is not being worked in the
Philippines on a commercial scale. In its petition, Doctors' Pharmaceuticals,
Inc. prayed that it be authorized to manufacture, use, and sell its own
products containing chloramphenicol as well as choose its own brand or
trademark.
Parke Davis & Company filed a written opposition setting up the following
affirmative defenses: (1) a compulsory license may only be issued to one who
will work the patent and respondent does not intend to work it itself but
merely to import the patented product; (2) respondent has not requested
any license to work the patented invention in the Philippines; (3) respondent
is not competent to work the patented invention; (4) to grant respondent the
requested license would be against public interest and would only serve its
monetary interest; and (6) the patented invention is not necessary for public
health and safety.
At the hearing held on November 14, 1962, respondent abandoned the
second, third and fourth grounds of its petition and confined itself merely to
the first ground, to wit: that the patented invention relates to medicine and
is necessary for public health and safety. Then, after the parties had
presented oral and documentary evidence and submitted memoranda in
support of their contentions, the Director of Patents rendered on November
15, 1963 his decision granting to respondent the license prayed for. The
following is the dispositive part of the decision:
WHEREFORE, the Respondent-Patentee is hereby ordered to grant the
Petitioner a license under Letters Patent No. 50. The parties hereto are
hereby ordered to submit to me, within THIRTY (30) days from their receipt
of a copy of this decision a licensing agreement, and in default thereof, they
may submit within the same period their respective proposals. It must be
shown that negotiations as to the terms and conditions thereof have been
made between the parties, and if there are points of disagreement I shall fix
such terms and conditions.
If, within the said period, no licensing agreement is filed or no negotiations
therefor transpires between the parties, I shall issue the licensing agreement
in such terms and conditions as may be just and reasonable under the
circumstances.
In due time, Parke Davis & Company interposed the present petition for
review.
In this appeal, Parke, Davis & Company imputes to the Director of Patents
eleven errors which may be briefly stated as follows:
1. Respondent has not proven the ground relied upon by it in its petition;
2. Respondent Doctors' Pharmaceuticals, Inc. has no intention to work the
patent but merely to import the patented article chloramphenicol;
3. Petitioner's invention is being worked in the Philippines;
4. Respondent is not competent to work petitioner's patented invention, that
is, to manufacture chloramphenicol and sell the same in the Philippines;
5. The grant of the license is against public interest;
6. The license requested by respondent will not serve any legitimate purpose;
7. Respondent is not competent to use the license requested;
8. The theory that a compulsory license under a patented invention, after the
expiration of three years after the grant of the letters patent, may be granted
to one who petitions for a license, is erroneous;
9. Respondent Director of Patents cannot issue an in personam order against
petitioner to grant the licence;
10. Respondent Director of Patents erred in not considering the defenses
interposed by petitioner to the application for license; and
32
11. Respondent Director of Patents erred in rendering his decision ordering
petitioner to grant a compulsory license to co-respondent Doctors'
Pharmaceuticals, Inc.
As may be gleaned from the errors above pointed out, the principal issue
raised by petitioner boils down to whether or not the Director of Patents
gravely abused his discretion in ordering the grant of compulsory license to
respondent under Section 34(d) of Republic Act No. 165 for the manufacture
of preparations containing chloramphenicol under Letters Patent No. 50
issued to petitioner despite the written objection interposed against it by the
latter based on the ground therein enumerated.
The pertinent statutory provisions that govern the issues raised herein are
found in Chapter VIII of Republic Act No. 165, as amended, which for ready
reference are hereunder quoted:
CHAPTER VIII. Compulsory Licensing
SEC. 34. Grounds for compulsory license. Any person may apply to the
Director for the grant of a license under a particular patent at any time after
the expiration of three years from the date of the grant of the patent, under
any of the following circumstances:
(a) If the patented invention is not being worked within the Philippines on a
commercial scale, although capable of being so worked, without satisfactory
reason;
(b) If the demand for the patented article in the Philippines is not being met
to an adequate extent and on reasonable terms, without satisfactory reason;
(c) If by reason of the refusal of the patentee to grant a license or licenses on
reasonable terms, or by reason of the conditions attached by the patentee to
licenses or to the purchase, lease or use of the patented article or working of
the patented process or machine of production the establishment of any new
trade or industry in the Philippines is prevented, or the trade or industry
therein is unduly restrained; or
(d) If the patented invention relates to food or medicine or is necessary for
public health or public safety.
The term "worked" or "working" as used in this section means the
manufacture and sale of a patented article, or the carrying on of a patented
process or the use of a patented machine for production, in or by means of a
definite and substantial establishment or organization in the Philippines and
on a scale which is adequate and reasonable under the circumstances.
SEC. 35. Notice and hearing. Upon the filing of a petition under section
thirty-four hereof, notice shall be given in the same manner and form as that
provided in section thirty-one, Chapter VII hereof.
SEC. 36. Grant of license. If The Director finds that a case for the grant of a
license under section thirty-four hereof has been made out, he may order the
grant of an appropriate license and in default of an agreement among the
parties as to the terms and conditions of the license he shall fix the terms and
conditions of the license in the order.
The order of the Director granting a license under this Chapter, when final,
shall operate as a deed granting a license executed by the patentee and the
other parties in interest.
A cursory reading of the provisions above-quoted will reveal that any person
may apply for the grant of a license under any of the circumstances stated in
Section 34 (a), (b), (c) or (d), which are in the disjunctive, showing that any of
the circumstances thus enumerated would be sufficient to support the grant,
as evidenced by the use of the particle "or" between paragraphs (c) and (d).
As may be noted, each of these circumstances stands alone and is
independent of the others. And from them we can see that in order that any
person may be granted a license under a particular patented invention
relating to medicine under Section 34(d), it is sufficient that the application
be made after the expiration of three years from the date of the grant of the
patent and that the Director should find that a case for granting such license
has been made out. Since in the instant case it is admitted by petitioner that
the chemical substance chloramphenicol is a medicine, while Letters Patent
No. 50 covering said substance were granted to Parke Davis & Company on
February 9, 1950, and the instant application for license under said patent
was only filed in 1960, verily the period that had elapsed then is more than
three years, and so the conditions for the grant of the license had been
fulfilled. We find, therefore, no error in the decision of the Director of Patents
on this aspect of the controversy.
33
The claim that respondent has not proven the ground it relies upon in its
petition to the effect that chloramphenicol is not only a medicine but is
indispensable to public health and safety is not quite correct, for the main
reliance of respondent is on the fact that chloramphenicol is an invention that
is related to medicine and as such it comes under Section 34(d) of Republic
Act 165. Respondent does not predicate its claim on the fact that invention is
necessary for public health or public safety, although either ground is
recognized as valid in itself for the grant of a license under said Section 34(d).
Indeed, it is sufficient that the invention be related to medicine. It is not
required that it be at the same time necessary for public health or public
safety. Moreover, the claim of petitioner that the word "necessary" means
"indispensable" does not hold water, for necessity admits of many degrees,
as it is clearly explained in Bouvier's Law Dictionary. 1
But, even if we assume that the patented invention is not only related to
medicine but to one that is also indispensable or necessary to public health
and public safety, here we can say that both conditions are present, since
according to Dr. Leon V. Picache, who testified in this case, the substance
chloramphenicol is one that constitutes an effective cure for gastro-enteritis
diseases, while the inventor's own specifications attest that chloramphenicol
is a "therapeutic agent notably in the case of shigella pradysenteria.
Chloramphenicol is much more active than streptomycin" and "is the first
antibiotic exhibiting a high degree of activity against gram negative bacteria
which is therapeutically effective upon oral administration" (Exhibit 6). Again,
Dr. Querbral-Greaga in the June, 1961 issue of the Scientific Digest, a
publication of the Manila Medical Society, affirmed that antibiotics like
chloramphenicol have played a very important role in the control of diarrhea-
enteritis which is the third most rampant killer of infants in this country.
The claim that a compulsory license cannot be granted to respondent
because the latter does not intend to work the patented invention itself but
merely to import it has also no legal nor factual basis. In the first place,
Section 34 of Republic Act No. 165 does not require the petitioner of a license
to work the patented invention if the invention refers to medicine, for the
term "worked" or "working" used in said section does not apply to the
circumstance mentioned in subsection (d), which relates to medicine or to
one necessary for public health and public safety. Indeed, the Director of
Patents has already correctly stated in previous cases that, in its strict sense,
the term "worked" or "working" mentioned in the last paragraph of Section might redound to the benefit of the public in general as it will increase the
34 of the Patent Law "has no applicability to those cited patented matters supply of medicines in our country containing chloramphenicol thereby
and the qualification of the petitioner to work the invention is immaterial, it reducing substantially the price of this drug.
being not a condition precedent before any person may apply for the grant
We find no merit in the contention that the Director of Patents erred in
of the license." In the second place, it is not the intention of respondent to
ordering the grant of the patent to respondent for the simple reason that the
work or manufacture the patented invention itself but merely to manufacture
application does not automatically entitle the person applying to such a grant
its brand of medicinal preparations containing such substance. And even if it
as was done by said Director. Though in substance such is the effect of the
be required that respondent should work itself the invention that it intends
grant, it cannot however be said that the Director of Patents automatically
to use in the manufacture of its own brand of medicinal preparations said
ordered the grant of the license for it was only after hearing and a careful
respondent would not be found wanting for it is staffed with adequate and
consideration of the evidence that he ordered the grant. In fact, the decision
competent personnel and technicians; it has several laboratories where
states that the Director has carefully weighed the evidence of the parties and
medicines are prepared for safety and quality; it is equipped with machines
the arguments in support of their contentions and that it was only after
for subdividing antibiotics; and it has capsule-filling machines and adequate
analyzing the same that he became convinced of the right of respondent to
personnel and facilities to test the quality of chloramphenicol.
the compulsory license he prayed for.
Finally, we may add that it is not a valid ground to refuse the license applied
Finally, with regard to the contention that petitioner is entitled to the
for the fact that the patentee is working the invention and as such has the
exclusive use of the invention for a term which under the law extends to 17
exclusive right to the invention for a term of 17 years (Sections 20 & 21,
years, suffice it for us to quote what the Director of Patents says on this point:
Republic Act 165) as claimed in the third assignment of error, the reason for
it being that the provision permitting the grant of compulsory license is The right to exclude others from the manufacturing, using, or vending an
intended not only to give a chance to others to supply the public with the invention relating to food or medicine should be conditioned to allowing any
quantity of the patented article but especially to prevent the building up of person to manufacture, use, or vend the same after a period of three years
patent monopolies. 2 from the date of the grant of the letters patent. After all, the patentee is not
entirely deprived of any proprietary right. In act, he has been given the period
The point is raised that the grant of the license is against public interest for it
of three years of complete monopoly over the patent. Compulsory licensing
would force Parke, Davis & Company to close or stop manufacturing the
of a patent on food or medicine without regard to the other conditions
patented invention which would thereby adversely affect local employment
imposed in Section 34 is not an undue deprivation of proprietary interests
and prejudice technology and chemical manufacturing and cut off the local
over a patent right because the law sees to it that even after three years of
supply of medicinal products. It should be noted, however, that respondent
complete monopoly something is awarded to the inventor in the form of a
does not intend to compete with petitioner in the manufacture of
bilateral and workable licensing agreement and a reasonable royalty to be
chloramphenicol for it would either obtain the same from petitioner or would
agreed upon by the parties and in default of such agreement, the Director of
import whatever it may need in the manufacture of its own brand of
Patents may fix the terms and conditions of the license. (See Sec. 36, Rep. Act
medicinal preparations. But even assuming that the consequence the
No. 165)
petitioner has envisioned may come true if the license is granted, still that
should not stand in the way of the grant for that is in line with an express WHEREFORE, the decision appealed from is affirmed, with costs against
provision of our law. The grant of such license may work disadvantage on petitioner.
petitioner but the law must be observed until modified or repealed. On the
other hand, there is the advantage that the importation of chloramphenicol

34
G.R. No. 167715 November 17, 2010
PHIL PHARMAWEALTH, INC., Petitioner,
vs.
PFIZER, INC. and PFIZER (PHIL.) INC., Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari seeking to annul and set
aside the Resolutions dated January 18, 20051 and April 11, 20052 by the
Court of Appeals (CA) in CA-G.R. SP No. 82734.
The instant case arose from a Complaint3 for patent infringement filed
against petitioner Phil Pharmawealth, Inc. by respondent companies, Pfizer,
Inc. and Pfizer (Phil.), Inc., with the Bureau of Legal Affairs of the Intellectual
Property Office (BLA-IPO). The Complaint alleged as follows:
xxxx
6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (the
"Patent") which was issued by this Honorable Office on July 16, 1987. The
patent is valid until July 16, 2004. The claims of this Patent are directed to "a
method of increasing the effectiveness of a beta-lactam antibiotic in a
mammalian subject, which comprises co-administering to said subject a beta-
lactam antibiotic effectiveness increasing amount of a compound of the
formula IA." The scope of the claims of the Patent extends to a combination
of penicillin such as ampicillin sodium and beta-lactam antibiotic like
sulbactam sodium.
7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium
(hereafter "Sulbactam Ampicillin"). Ampicillin sodium is a specific example of
the broad beta-lactam antibiotic disclosed and claimed in the Patent. It is the
compound which efficacy is being enhanced by co-administering the same
with sulbactam sodium. Sulbactam sodium, on the other hand, is a specific
compound of the formula IA disclosed and claimed in the Patent.
8. Pfizer is marketing Sulbactam Ampicillin under the brand name "Unasyn."
Pfizer's "Unasyn" products, which come in oral and IV formulas, are covered
by Certificates of Product Registration ("CPR") issued by the Bureau of Food
35
and Drugs ("BFAD") under the name of complainants. The sole and exclusive
distributor of "Unasyn" products in the Philippines is Zuellig Pharma
Corporation, pursuant to a Distribution Services Agreement it executed with
Pfizer Phils. on January 23, 2001.
9. Sometime in January and February 2003, complainants came to know that
respondent [herein petitioner] submitted bids for the supply of Sulbactam
Ampicillin to several hospitals without the consent of complainants and in
violation of the complainants' intellectual property rights. x x x
xxxx
10. Complainants thus wrote the above hospitals and demanded that the
latter immediately cease and desist from accepting bids for the supply [of]
Sulbactam Ampicillin or awarding the same to entities other than
complainants. Complainants, in the same letters sent through undersigned
counsel, also demanded that respondent immediately withdraw its bids to
supply Sulbactam Ampicillin.
11. In gross and evident bad faith, respondent and the hospitals named in
paragraph 9 hereof, willfully ignored complainants' just, plain and valid
demands, refused to comply therewith and continued to infringe the Patent,
all to the damage and prejudice of complainants. As registered owner of the
Patent, Pfizer is entitled to protection under Section 76 of the IP Code.
x x x x4
Respondents prayed for permanent injunction, damages and the forfeiture
and impounding of the alleged infringing products. They also asked for the
issuance of a temporary restraining order and a preliminary injunction that
would prevent herein petitioner, its agents, representatives and assigns, from
importing, distributing, selling or offering the subject product for sale to any
entity in the Philippines.
In an Order5 dated July 15, 2003 the BLA-IPO issued a preliminary injunction
which was effective for ninety days from petitioner's receipt of the said
Order.
Prior to the expiration of the ninety-day period, respondents filed a Motion
for Extension of Writ of Preliminary Injunction6 which, however, was denied
by the BLA-IPO in an Order7 dated October 15, 2003.
Respondents filed a Motion for Reconsideration but the same was also
denied by the BLA-IPO in a Resolution8 dated January 23, 2004.
Respondents then filed a special civil action for certiorari with the CA assailing
the October 15, 2003 and January 23, 2004 Resolutions of the BLA-IPO.
Respondents also prayed for the issuance of a preliminary mandatory
injunction for the reinstatement and extension of the writ of preliminary
injunction issued by the BLA-IPO.
While the case was pending before the CA, respondents filed a Complaint9
with the Regional Trial Court (RTC) of Makati City for infringement and unfair
competition with damages against herein petitioner. In said case,
respondents prayed for the issuance of a temporary restraining order and
preliminary injunction to prevent herein petitioner from importing,
distributing, selling or offering for sale sulbactam ampicillin products to any
entity in the Philippines. Respondents asked the trial court that, after trial,
judgment be rendered awarding damages in their favor and making the
injunction permanent.
On August 24, 2004, the RTC of Makati City issued an Order10 directing the
issuance of a temporary restraining order conditioned upon respondents'
filing of a bond.
In a subsequent Order11 dated April 6, 2005, the same RTC directed the
issuance of a writ of preliminary injunction "prohibiting and restraining
[petitioner], its agents, representatives and assigns from importing,
distributing or selling Sulbactam Ampicillin products to any entity in the
Philippines."
Meanwhile, on November 16, 2004, petitioner filed a Motion to 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.
36
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:
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 (a) That the applicant is entitled to the relief demanded, and the whole or
against petitioner insofar as the disputed patent is concerned. 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,
The Court agrees.
either for a limited period or perpetually;
Section 37 of Republic Act No. (RA) 165,17 which was the governing law at
(b) That the commission, continuance or non-performance of the act or acts
the time of the issuance of respondents' patent, provides:
complained of during the litigation would probably work injustice to the
Section 37. Rights of patentees. A patentee shall have the exclusive right to applicant; or
make, use and sell the patented machine, article or product, and to use the
(c) That a party, court, or agency or a person is doing, threatening, or
patented process for the purpose of industry or commerce, throughout the
attempting to do, or is procuring or suffering to be done, some act or acts
territory of the Philippines for the term of the patent; and such making, using,
probably in violation of the rights of the applicant respecting the subject of
or selling by any person without the authorization of the patentee constitutes
the action or proceeding, and tending to render the judgment ineffectual.
infringement of the patent.18
In this connection, pertinent portions of Section 5, Rule 58 of the same Rules
It is clear from the above-quoted provision of law that the exclusive right of
provide that if the matter is of extreme urgency and the applicant will suffer
a patentee to make, use and sell a patented product, article or process exists
grave injustice and irreparable injury, a temporary restraining order may be
only during the term of the patent. In the instant case, Philippine Letters
issued ex parte.
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 From the foregoing, it can be inferred that two requisites must exist to
respondents themselves in their complaint. They also admitted that the warrant the issuance of an injunctive relief, namely: (1) the existence of a
validity of the said patent is until July 16, 2004, which is in conformity with clear and unmistakable right that must be protected; and (2) an urgent and
Section 21 of RA 165, providing that the term of a patent shall be seventeen paramount necessity for the writ to prevent serious damage.19
(17) years from the date of issuance thereof. Section 4, Rule 129 of the Rules
In the instant case, it is clear that when the CA issued its January 18, 2005
of Court provides that an admission, verbal or written, made by a party in the
Resolution approving the bond filed by respondents, the latter no longer had
course of the proceedings in the same case, does not require proof and that
a right that must be protected, considering that Philippine Letters Patent No.
the admission may be contradicted only by showing that it was made through
21116 which was issued to them already expired on July 16, 2004. Hence, the
palpable mistake or that no such admission was made. In the present case,
issuance by the CA of a temporary restraining order in favor of the
there is no dispute as to respondents' admission that the term of their patent
respondents is not proper.
expired on July 16, 2004. Neither is there evidence to show that their
admission was made through palpable mistake. Hence, contrary to the In fact, the CA should have granted petitioner's motion to dismiss the petition
pronouncement of the CA, there is no longer any need to present evidence for certiorari filed before it as the only issue raised therein is the propriety of
on the issue of expiration of respondents' patent. 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
On the basis of the foregoing, the Court agrees with petitioner that after July
issue as to the propriety of extending the life of the injunction was already
16, 2004, respondents no longer possess the exclusive right to make, use and
rendered moot and academic.
sell the articles or products covered by Philippine Letters Patent No. 21116.
As to the second issue raised, the Court, is not persuaded by petitioner's
Section 3, Rule 58, of the Rules of Court lays down the requirements for the
argument that, pursuant to the doctrine of primary jurisdiction, the Director
issuance of a writ of preliminary injunction, viz:

37
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 120 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,
38
experience and services of the administrative tribunal to determine technical
and intricate matters of fact, and a uniformity of ruling is essential to comply
with the premises of the regulatory statute administered. The objective of
the doctrine of primary jurisdiction is to guide a court in determining whether
it should refrain from exercising its jurisdiction until after an administrative
agency has determined some question or some aspect of some question
arising in the proceeding before the court. It applies where the claim is
originally cognizable in the courts and comes into play whenever
enforcement of the claim requires the resolution of issues which, under a
regulatory scheme, has been placed within the special competence of an
administrative body; in such case, the judicial process is suspended pending
referral of such issues to the administrative body for its view.22
Based on the foregoing, the Court finds that respondents' initial filing of their
complaint with the BLA-IPO, instead of the regular courts, is in keeping with
the doctrine of primary jurisdiction owing to the fact that the determination
of the basic issue of whether petitioner violated respondents' patent rights
requires the exercise by the IPO of sound administrative discretion which is
based on the agency's special competence, knowledge and experience.
However, the propriety of extending the life of the writ of preliminary
injunction issued by the BLA-IPO in the exercise of its quasi-judicial power is
no longer a matter that falls within the jurisdiction of the said administrative
agency, particularly that of its Director General. The resolution of this issue
which was raised before the CA does not demand the exercise by the IPO of
sound administrative discretion requiring special knowledge, experience and
services in determining technical and intricate matters of fact. It is settled
that one of the exceptions to the doctrine of primary jurisdiction is where the
question involved is purely legal and will ultimately have to be decided by the
courts of justice.23 This is the case with respect to the issue raised in the
petition filed with the CA.
Moreover, as discussed earlier, RA 8293 and its implementing rules and
regulations do not provide for a procedural remedy to question interlocutory
orders issued by the BLA-IPO. In this regard, it bears to reiterate that the
judicial power of the courts, as provided for under the Constitution, includes
the authority of the courts to determine in an appropriate action the validity
of the acts of the political departments.24 Judicial power also includes the
duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
Government.25 Hence, the CA, and not the IPO Director General, has
jurisdiction to determine whether the BLA-IPO committed grave abuse of
discretion in denying respondents' motion to extend the effectivity of the writ
of preliminary injunction which the said office earlier issued.
Lastly, petitioner avers that respondents are guilty of forum shopping for
having filed separate actions before the IPO and the RTC praying for the same
relief.
The Court agrees.
Forum shopping is defined as the act of a party against whom an adverse
judgment has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum (other than by appeal or the special civil
action of certiorari), or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition that one or the
other court would make a favorable disposition.26
The elements of forum shopping are: (a) identity of parties, or at least such
parties that represent the same interests in both actions; (b) identity of rights
asserted and reliefs prayed for, the reliefs being founded on the same facts;
(c) identity of the two preceding particulars, such that any judgment rendered
in the other action will, regardless of which party is successful, amount to res
judicata in the action under consideration.27
There is no question as to the identity of parties in the complaints filed with
the IPO and the RTC.
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.
39
Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or
omission by which a party violates a right of another. In the instant case,
respondents' cause of action in their complaint filed with the IPO is the
alleged act of petitioner in importing, distributing, selling or offering for sale
Sulbactam Ampicillin products, acts that are supposedly violative of
respondents' right to the exclusive sale of the said products which are
covered by the latter's patent. However, a careful reading of the complaint
filed with the RTC of Makati City would show that respondents have the same
cause of action as in their complaint filed with the IPO. They claim that they
have the exclusive right to make, use and sell Sulbactam Ampicillin products
and that petitioner violated this right. Thus, it does not matter that the
patents upon which the complaints were based are different. The fact
remains that in both complaints the rights violated and the acts violative of
such rights are identical.
In fact, respondents seek substantially the same reliefs in their separate
complaints with the IPO and the RTC for the purpose of accomplishing the
same objective.
It is settled by this Court in several cases that the filing by a party of two
apparently different actions but with the same objective constitutes forum
shopping.28 The Court discussed this species of forum shopping as follows:
Very simply stated, the original complaint in the court a quo which gave rise
to the instant petition was filed by the buyer (herein private respondent and
his predecessors-in-interest) against the seller (herein petitioners) to enforce
the alleged perfected sale of real estate. On the other hand, the complaint in
the Second Case seeks to declare such purported sale involving the same real
property "as unenforceable as against the Bank," which is the petitioner
herein. In other words, in the Second Case, the majority stockholders, in
representation of the Bank, are seeking to accomplish what the Bank itself
failed to do in the original case in the trial court. In brief, the objective or the
relief being sought, though worded differently, is the same, namely, to enable
the petitioner Bank to escape from the obligation to sell the property to
respondent.29
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:
(i) declaring that respondent has infringed Pfizer Inc.'s Philippine Patent No.
21116 and that respondent has no right whatsoever over complainant's
patent;
40
(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:
(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.
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.

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.341avvphi1

41
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.
DECISION
TINGA, J.:
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
42
Transfer of a trademark, tradename or other identification mark of a drug in
the name of a natural or juridical person, the process of which is governed
under Part III of the Intellectual Property Code.
In this case, there is no doubt that the subject seized drugs are identical in
content with their Philippine-registered counterparts. There is no claim that
they were adulterated in any way or mislabeled at least. Their classification
as "counterfeit" is based solely on the fact that they were imported from
abroad and not purchased from the Philippine-registered owner of the patent
or trademark of the drugs.
During preliminary investigation, Rodriguez challenged the constitutionality
of the SLCD. However, Assistant Provincial Prosecutor Celerina C. Pineda
skirted the challenge and issued a Resolution dated 17 August 2001
recommending that Rodriguez be charged with violation of Section 4(a) of the
SLCD. The recommendation was approved by Provincial Prosecutor Jesus Y.
Manarang approved the recommendation.3
Hence, the present Petition for Prohibition questing the RTC-Guagua
Pampanga and the Provincial Prosecutor to desist from further prosecuting
Rodriguez, and that Sections 3(b)(3), 4 and 5 of the SLCD be declared
unconstitutional. In gist, Rodriguez asserts that the challenged provisions
contravene three provisions of the Constitution. The first is the equal
protection clause of the Bill of Rights. The two other provisions are Section
11, Article XIII, which mandates that the State make "essential goods, health
and other social services available to all the people at affordable cost;" and
Section 15, Article II, which states that it is the policy of the State "to protect
and promote the right to health of the people and instill health consciousness
among them."
Through its Resolution dated 15 October 2001, the Court issued a temporary
restraining order enjoining the RTC from proceeding with the trial against
Rodriguez, and the BFAD, the NBI and Glaxo Smithkline from prosecuting the
petitioners.4
Glaxo Smithkline and the Office of the Solicitor General (OSG) have opposed
the petition, the latter in behalf of public respondents RTC, Provincial
Prosecutor and Bureau of Food and Drugs (BFAD). On the constitutional issue,
Glaxo Smithkline asserts the rule that the SLCD is presumed constitutional,
arguing that both Section 15, Article II and Section 11, Article XIII "are not self-
executing provisions, the disregard of which can give rise to a cause of action
in the courts." It adds that Section 11, Article XIII in particular cannot be work
"to the oppression and unlawful of the property rights of the legitimate
manufacturers, importers or distributors, who take pains in having imported
drug products registered before the BFAD." Glaxo Smithkline further claims
that the SLCD does not in fact conflict with the aforementioned constitutional
provisions and in fact are in accord with constitutional precepts in favor of
the peoples 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
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
43
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;
"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)1avvphi1
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 SLCOs classification of "unregistered
imported drugs" as "counterfeit drugs," and of corresponding criminal
penalties therefore are irreconcilably in the imposition conflict with Rep. Act
No. 9502 since the latter indubitably grants private third persons the
unqualified right to import or otherwise use such drugs. Where a statute of
later date, such as Rep. Act No. 9502, clearly reveals an intention on the part
of the legislature to abrogate a prior act on the subject that intention must
be given effect.9 When a subsequent enactment covering a field of operation
coterminus with a prior statute cannot by any reasonable construction be
given effect while the prior law remains in operative existence because of
irreconcilable conflict between the two acts, the latest legislative expression
prevails and the prior law yields to the extent of the conflict.10 Irreconcilable
inconsistency between two laws embracing the same subject may exist when
the later law nullifies the reason or purpose of the earlier act, so that the
latter loses all meaning and function.11 Legis posteriors priores contrarias
abrogant.
44
For the reasons above-stated, the prosecution of petitioner is no longer
warranted and the quested writ of prohibition should accordingly be issued.
III.
Had the Court proceeded to directly confront the constitutionality of the
assailed provisions of the SLCD, it is apparent that it would have at least
placed in doubt the validity of the provisions. As written, the law makes a
criminal of any person who imports an unregistered drug regardless of the
purpose, even if the medicine can spell life or death for someone in the
Philippines. It does not accommodate the situation where the drug is out of
stock in the Philippines, beyond the reach of a patient who urgently depends
on it. It does not allow husbands, wives, children, siblings, parents to import
the drug in behalf of their loved ones too physically ill to travel and avail of
the meager personal use exemption allotted by the law. It discriminates, at
the expense of health, against poor Filipinos without means to travel abroad
to purchase less expensive medicines in favor of their wealthier brethren able
to do so. Less urgently perhaps, but still within the range of constitutionally
protected behavior, it deprives Filipinos to choose a less expensive regime for
their health care by denying them a plausible and safe means of purchasing
medicines at a cheaper cost.
The absurd results from this far-reaching ban extends to implications that
deny the basic decencies of humanity. The law would make criminals of
doctors from abroad on medical missions of such humanitarian organizations
such as the International Red Cross, the International Red Crescent, Medicin
Sans Frontieres, and other
like-minded groups who necessarily bring their own pharmaceutical drugs
when they embark on their missions of mercy. After all, they are disabled
from invoking the bare "personal use" exemption afforded by the SLCD.
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 prohibitumor punishable regardless of motive or criminal
intent. For a law that is intended to help save lives, the SLCD has revealed
itself as a heartless, soulless legislative piece.

The challenged provisions of the SLCD apparently proscribe a range of

constitutionally permissible behavior. It is laudable that with the passage of
Rep. Act No. 9502, the State has reversed course and allowed for a sensible
and compassionate approach with respect to the importation of
pharmaceutical drugs urgently necessary for the peoples constitutionally-
recognized right to health.

WHEREFORE, the petition is GRANTED in part. A writ of prohibition is hereby

ISSUED commanding respondents from prosecuting petitioner Romeo
Rodriguez for violation of Section 4 or Rep. Act No. 8203. The Temporary
Restraining Order dated 15 October 2001 is hereby made PERMANENT. No
pronouncements as to costs.

SO ORDERED.

45
G. R. No. 126627 August 14, 2003
SMITH KLINE BECKMAN CORPORATION, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and TRYCO PHARMA CORPORATION,
Respondents.
DECISION
CARPIO-MORALES, J.:
Smith Kline Beckman Corporation (petitioner), a corporation existing by
virtue of the laws of the state of Pennsylvania, United States of America (U.S.)
and licensed to do business in the Philippines, filed on October 8, 1976, as
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
46
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 petitioners patented
Albendazole.5
On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary
restraining order against private respondent enjoining it from committing
acts of patent infringement and unfair competition.6 A writ of preliminary
injunction was subsequently issued.7
Private respondent in its Answer8 averred that Letters Patent No. 14561 does
not cover the substance Albendazole for nowhere in it does that word
appear; that even if the patent were to include Albendazole, such substance
is unpatentable; that the Bureau of Food and Drugs allowed it to manufacture
and market Impregon with Albendazole as its known ingredient; that there is
no proof that it passed off in any way its veterinary products as those of
petitioner; that Letters Patent No. 14561 is null and void, the application for
the issuance thereof having been filed beyond the one year period from the
filing of an application abroad for the same invention covered thereby, in
violation of Section 15 of Republic Act No. 165 (The Patent Law); and that
petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such amount
of actual damages as may be proven; 1,000,000.00 in moral damages;
300,000.00 in exemplary damages; and 150,000.00 in attorneys fees.
Finding for private respondent, the trial court rendered a Decision dated July
23, 1991,9 the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is
hereby, DISMISSED. The Writ of injunction issued in connection with the case
is hereby ordered DISSOLVED.
The Letters Patent No. 14561 issued by the then Philippine Patents Office is
hereby declared null and void for being in violation of Sections 7, 9 and 15 of
the Patents Law.
Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is
hereby directed to cancel Letters Patent No. 14561 issued to the plaintiff and
to publish such cancellation in the Official Gazette.
Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00
actual damages and P100,000.00 attorneys fees as prayed for in its
counterclaim but said amount awarded to defendant is subject to the lien on
correct payment of filing fees.
SO ORDERED. (Underscoring supplied)
On appeal, the Court of Appeals, by Decision of April 21, 1995,10 upheld the
trial courts finding that private respondent was not liable for any
infringement of the patent of petitioner in light of the latters failure to show
that Albendazole is the same as the compound subject of Letters Patent No.
14561. Noting petitioners admission of the issuance by the U.S. of a patent
for Albendazole in the name of Smith Kline and French Laboratories which
was petitioners former corporate name, the appellate court considered the
U.S. patent as implying that Albendazole is different from methyl 5
propylthio-2-benzimidazole carbamate. It likewise found that private
respondent was not guilty of deceiving the public by misrepresenting that
Impregon is its product.
The appellate court, however, declared that Letters Patent No. 14561 was not
void as it sustained petitioners explanation that Patent Application Serial No.
18989 which was filed on October 8, 1976 was a divisional application of
Patent Application Serial No. 17280 filed on June 17, 1975 with the Philippine
Patent Office, well within one year from petitioners filing on June 19, 1974
of its Foreign Application Priority Data No. 480,646 in the U.S. covering the
same compound subject of Patent Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that
Patent Application Serial No. 18989 was deemed filed on June 17, 1995 or still
within one year from the filing of a patent application abroad in compliance
with the one-year rule under Section 15 of the Patent Law. And it rejected
the submission that the compound in Letters Patent No. 14561 was not
patentable, citing the jurisprudentially established presumption that the
Patent Offices determination of patentability is correct. Finally, it ruled that
petitioner established itself to be the one and the same assignee of the patent
47
notwithstanding changes in its corporate name. Thus the appellate court
disposed:
WHEREFORE, the judgment appealed from is AFFIRMED with the
MODIFICATION that the orders for the nullification of Letters Patent No.
14561 and for its cancellation are deleted therefrom.
SO ORDERED.
Petitioners motion for reconsideration of the Court of Appeals decision
having been 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 TRYCOS "IMPREGON" DRUG, IS
INCLUDED IN PETITIONERS LETTERS PATENT NO. 14561, AND THAT
CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE
RESPONDENT TRYCO PHARMA CORPORATION P330,000.00 ACTUAL
DAMAGES AND P100,000.00 ATTORNEYS FEES.
Petitioner argues that under the doctrine of equivalents for determining
patent infringement, Albendazole, the active ingredient it alleges was
appropriated by private respondent for its drug Impregon, is substantially the
same as methyl 5 propylthio-2-benzimidazole carbamate covered by its
patent since both of them are meant to combat worm or parasite infestation
in animals. It cites the "unrebutted" testimony of its witness Dr. Godofredo
C. Orinion (Dr. Orinion) that the chemical formula in Letters Patent No. 14561
refers to the compound Albendazole. Petitioner adds that the two substances
substantially do the same function in substantially the same way to achieve
the same results, thereby making them truly identical. Petitioner thus
submits that the appellate court should have gone beyond the literal
wordings used in Letters Patent No. 14561, beyond merely applying the literal
infringement test, for in spite of the fact that the word Albendazole does not
appear in petitioners letters patent, it has ably shown by evidence its
sameness with methyl 5 propylthio-2-benzimidazole carbamate.
Petitioner likewise points out that its application with the Philippine Patent
Office on account of which it was granted Letters Patent No. 14561 was
merely a divisional application of a prior application in the U. S. which granted
a patent for Albendazole. Hence, petitioner concludes that both methyl 5
propylthio-2-benzimidazole carbamate and the U.S.-patented Albendazole
are dependent on each other and mutually contribute to produce a single
result, thereby making Albendazole as much a part of Letters Patent No.
14561 as the other substance is.
Petitioner concedes in its Sur-Rejoinder13 that although methyl 5 propylthio-
2-benzimidazole carbamate is not identical with Albendazole, the former is
an improvement or improved version of the latter thereby making both
substances still substantially the same.
With respect to the award of actual damages in favor of private respondent
in the amount of 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 attorneys fees as not falling under any of the
instances enumerated by law where recovery of attorneys fees is allowed.
In its Comment,14 private respondent contends that application of the
doctrine of equivalents would not alter the outcome of the case, Albendazole
and methyl 5 propylthio-2-benzimidazole carbamate being two different
compounds with different chemical and physical properties. It stresses that
the existence of a separate U.S. patent for Albendazole indicates that the
same and the compound in Letters Patent No. 14561 are different from each
other; and that since it was on account of a divisional application that the
patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then,
by definition of a divisional application, such a compound is just one of
several independent inventions alongside Albendazole under petitioners
original patent application.
As has repeatedly been held, only questions of law may be raised in a petition
for review on certiorari before this Court. Unless the factual findings of the
appellate court are mistaken, absurd, speculative, conjectural, conflicting,
tainted with grave abuse of discretion, or contrary to the findings culled by
the court of origin,15 this Court does not review them.
From an examination of the evidence on record, this Court finds nothing
infirm in the appellate courts conclusions with respect to the principal issue
48
of whether private respondent committed patent infringement to the
prejudice of petitioner.
The burden of proof to substantiate a charge for patent infringement rests
on the plaintiff.16 In the case at bar, petitioners evidence consists primarily
of its Letters Patent No. 14561, and the testimony of Dr. Orinion, its general
manager in the Philippines for its Animal Health Products Division, by which
it sought to show that its patent for the compound methyl 5 propylthio-2-
benzimidazole carbamate also covers the substance Albendazole.
From a reading of the 9 claims of Letters Patent No. 14561 in relation to the
other portions thereof, no mention is made of the compound Albendazole.
All that the claims disclose are: the covered invention, that is, the compound
methyl 5 propylthio-2-benzimidazole carbamate; the compounds being
anthelmintic but nontoxic for animals or its ability to destroy parasites
without harming the host animals; and the patented methods, compositions
or preparations involving the compound to maximize its efficacy against
certain kinds of parasites infecting specified animals.
When the language of its claims is clear and distinct, the patentee is bound
thereby and may not claim anything beyond them.17 And so are the courts
bound which may not add to or detract from the claims matters not
expressed or necessarily implied, nor may they enlarge the patent beyond
the scope of that which the inventor claimed and the patent office allowed,
even if the patentee may have been entitled to something more than the
words it had chosen would include.18
It bears stressing that the mere absence of the word Albendazole in Letters
Patent No. 14561 is not determinative of Albendazoles non-inclusion in the
claims of the patent. While Albendazole is admittedly a chemical compound
that exists by a name different from that covered in petitioners letters
patent, the language of Letter Patent No. 14561 fails to yield anything at all
regarding Albendazole. And no extrinsic evidence had been adduced to prove
that Albendazole inheres in petitioners patent in spite of its omission
therefrom or that the meaning of the claims of the patent embraces the
same.
While petitioner concedes that the mere literal wordings of its patent cannot
establish private respondents infringement, it urges this Court to apply the
doctrine of equivalents.
The doctrine of equivalents provides that an infringement also takes place
when a device appropriates a prior invention by incorporating its innovative
concept and, although with some modification and change, performs
substantially the same function in substantially the same way to achieve
substantially the same result.19 Yet again, a scrutiny of petitioners evidence
fails to convince this Court of the substantial sameness of petitioners
patented compound and Albendazole. While both compounds have the
effect of neutralizing parasites in animals, identity of result does not amount
to infringement of patent unless Albendazole operates in substantially the
same way or by substantially the same means as the patented compound,
even though it performs the same function and achieves the same result.20
In other words, the principle or mode of operation must be the same or
substantially the same.21
The doctrine of equivalents thus requires satisfaction of the function-means-
and-result test, the patentee having the burden to show that all three
components of such equivalency test are met.22
As stated early on, petitioners evidence fails to explain how Albendazole is
in every essential detail identical to methyl 5 propylthio-2-benzimidazole
carbamate. Apart from the fact that Albendazole is an anthelmintic agent like
methyl 5 propylthio-2-benzimidazole carbamate, nothing more is asserted
and accordingly substantiated regarding the method or means by which
Albendazole weeds out parasites in animals, thus giving no information on
whether that method is substantially the same as the manner by which
petitioners compound works. The testimony of Dr. Orinion lends no support
to petitioners cause, he not having been presented or qualified as an expert
witness who has the knowledge or expertise on the matter of chemical
compounds.
As for the concept of divisional applications proffered by petitioner, it comes
into play when two or more inventions are claimed in a single application but
are of such a nature that a single patent may not be issued for them.23 The
applicant thus is required "to divide," that is, to limit the claims to whichever
invention he may elect, whereas those inventions not elected may be made
49
the subject of separate applications which are called "divisional
applications."24 What this only means is that petitioners methyl 5
propylthio-2-benzimidazole carbamate is an invention distinct from the other
inventions claimed in the original application divided out, Albendazole being
one of those other inventions. Otherwise, methyl 5 propylthio-2-
benzimidazole carbamate would not have been the subject of a divisional
application if a single patent could have been issued for it as well as
Albendazole.1wphi1
The foregoing discussions notwithstanding, this Court does not sustain the
award of actual damages and attorneys fees in favor of private respondent.
The claimed actual damages of 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 respondents 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 evidence obtainable by the injured party.27
The testimonies of private respondents officers are not the competent proof
or best evidence obtainable to establish its right to actual or compensatory
damages for such damages also require presentation of documentary
evidence to substantiate a claim therefor.28
In the same vein, this Court does not sustain the grant by the appellate court
of attorneys fees to private respondent anchored on Article 2208 (2) of the
Civil Code, private respondent having been allegedly forced to litigate as a
result of petitioners suit. Even if a claimant is compelled to litigate with third
persons or to incur expenses to protect its rights, still attorneys fees may not
be awarded where no sufficient showing of bad faith could be reflected in a
partys persistence in a case other than an erroneous conviction of the
righteousness of his cause.29 There exists no evidence on record indicating
that petitioner was moved by malice in suing private respondent.
This Court, however, grants private respondent temperate or moderate
damages in the amount of 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 attorneys fees to private respondent, Tryco Pharma
Corporation, is DELETED; instead, it is hereby awarded the amount of
P20,000.00 as temperate or moderate damages.

SO ORDERED.

50