lip case assignment no.2

8/11/2019 Lip Case Assignment no.2

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Republic of the Philippines

SUPREME COURTManila

FIRST DIVISION

G.R. L-24919 January 28, 1980

JAMES HOWARD OOTHE an! JOH" MORTO", ##,petitioners,vs.

THE D#RECTOR O$ PATE"TS, respondent.

Picazo & Agcaoili for petition.

Office of the Solicitor General for respondent.

MELE"C#O-HERRERA,J.:

Souht to be revie!ed herein is the Decision of the Director of Patents, dated Dece"ber #, $#%&,den'in priorit' rihts under section $( of our Patent )a! *Republic +ct No. $%( to petitioners, as

forein applicants for )etters Patent, for their invention of -he"otherapeutic Materials and Methodsof Preparin the sa"e.

Petitioners /a"es 0o!ard 1oothe and /ohn Morton II, che"ists, citi2ens and residents of the 3nitedStates, clai" to be the inventors of a ne! antibiotic desinated as -tetrac'cline-, a ne! derivative of

chlortetrac'cline *popularl' 4no!n as -aureo"'cin-

On Februar' $#, $#(&, petitioners applied for )etters Patent coverin said invention to respondent

Director of Patents clai"in the riht of priorit' ranted to forein applicants under section $( of thePatent )a! *R+ $%(. Receipt of petitioners5 application !as ac4no!leded b' respondent Director

onMarch 6, 1954.

OnApril 14, 1954, petitioners filed !ith respondent Director a leali2ed cop' of their +pplication for

)etters Patent in the 3nited States for the sa"e invention *3.S. Serial No. 6&7((%. Said leali2ed cop'indicated that the application in the 3nited States !as filed on March $%, $#%6. 1 This latter date is ofcrucial i"portance to petitioners5 cause under section $( of the Patent )a!, !hich provides that8

Section $(. +pplication previousl' filed abroad. 9 +n application for patent for an

invention filed in this countr' b' an' person !ho has previousl' reularl' filed anapplication for a patent for the sa"e invention in a forein countr', !hich b' treat',

convention or la! affords si"ilar privilees to citi2ens of the Philippines, shall have the

sa"e force and effect as the sa"e application !ould have if filed in this countr' on thedate on !hich the application for patent for the sa"e invention !as first filed in such

forein countr'8 Provided, That the application in this countr' is filed !ithin t!elve

"onths fro" the earliest date on !hich such forein application !as filed and a certifiedcop' of the forein application toether !ith a translation thereof into :nlish, if not in

the :nlish lanuae, is filed !ithin si; "onths fro" the date of filin in the Philippines,

unless the Director for ood cause sho!n shall e;tend the ti"e for filin such certifiedcop'8 +nd provided, further, that no patent shall be ranted on an application for patent

for an invention !hich had been patented or described in a printed publication in this or

an' forein countr' "ore than one 'ear before the date of the actual filin of the

application in this countr', or !hich had been in public use or sale in this countr' for"ore than one 'ear prior to such filin.


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3nder the foreoin provision, petitioners !ould be entitled to the priorit' date of March $%, $#(6 if

their application is considered filed in the Philippines as of March (, $#(&, since the latter date !ould

fall !ithin the one, petitioners infor"ed respondent Director that in interference proceedins in the3nited States, )etters Patent for a si"ilar invention as theirs !as a!arded to Pfi2er and o., !hich had

filed its application ahead and that the' failed to obtain an' 3.S. patent for their o!n invention.

Petitioners, ho!ever, observed and re?uested8

In the Philippines, ho!ever, the situation is at least the reverse. Pfi2er and o. did notfile or else filed an application after the above application has alread' been filed. The

said above application therefore is ood and valid.

@e re?uest, therefore, that the present application be ranted on the basis of the clai"s

oriinall' filed.2

On +uust (, $#(#, in Paper No. %, % Patent :;a"iner, )'dia Nueva :spaAa, reBected all of petitioners5clai"s in vie! of -Philippine Patent No. 7(& 9 Nove"ber 7#, $#(%-, apparentl' referrin to a local

Patent obtained b' Pfi2er and o., presu"abl' coverin the sa"e invention. +dditionall', petitioners

!ere advised that the -Specification- the' had sub"itted !as -inco"plete- and that responsive action

should be filed the" four "onths fro" date of "ailin, !hich !as also +uust (, $#(#. Paper No. %precipitated a series of co""unications bet!een the afore"entioned Patent :;a"iner and petitioners,

!ho apparentl' failed to "eet the deadline of four "onths for filin their responsive action.

On October #, $#%$, petitioners re?uested for clarification of Paper No. %, particularl' as to !h' theirSpecification !as considered inco"plete.

In response, Supervisin Patent :;a"iner Nelia de astro infor"ed petitioners as follo!s8

@ith respect to applicant5s re?uest for clarification as to the "eanin of the second to the

last sentence contained in Paper %, attention is called to the fact that the specification

!hich !as oriinall' filed is inco"plete and not in accordance !ith Rule %7 of theRevised Rules. Said specification ends on Pae # !ith the inco"plete sentence -The

refractive indices of this cr'stalline phase !ere found 9

It appears fro" further fro" a co"parison bet!een the sub"itted # paes of the

specification and 7 paes of the clai"s on one hand and the correspondin paes of theleali2ed cop' of the 3.S. application on the other that the present application does not

correspond !ith the said certified cop' of the 3.S. +pplication. The present application

cannot therefore be ranted priorit' date under section $( are re?uested b' applicant. 4

On /ul' 6, $#%7, petitioners sub"itted t!o co"plete copies of the Specification, !hich included nineadditional paes, and reiterated their re?uest for priorit' riht in the Philippines. &

On October 7, $#%7, hief Patent :;a"iner Nicanor Mapili issued Paper No. 7C reBectin the

additional nine paes of Specification sub"itted b' petitioners, and rulin8;;; ;;; ;;;

The filin of the alleed co"plete cop' Of the specification is an atte"pt to effect are"ed' to the previous findin of inco"pleteness as stated in the 7nd to the last

pararaph of Office +ction "ailed +u. (, $#(#, "ar4ed Paper %. This cannot be

allo!ed inas"uch as # paes of ne! "atter are actuall' proposed to be added to the

specification.

This action is "ade final for purpose of appeal '


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to that effect !ith his reasons for so holdin, !hich state"ent shall constitute a reBection

of the clai". Priorit' clai"s are covered b' the rule8 10

On /une $$, $#%(, petitioners filed a Second Motion for reconsideration on the round that priorit'

rihts are overned b' convention and treat', !hile invention clai"s are overned e;clusivel' b' theStatute and Rules of Practice. Respondent Director denied that Motion for lac4 of "erit on +uust 7&,

$#%(.

0ence, this recourse.

On /anuar' #, $#%=, !e dee"ed the case sub"itted for decision, after petitioners had filed their 1rief

on Februar' $7, $#%%, and respondent Director, throuh the Solicitor Eeneral, his 1rief on /une #,$#%%.

On /une #, $#%>, Republic +ct No. (&6& !as enacted providin that final Orders and Decisions of the

Director of Patents in e parte and inter partesproceedins are appealable to the ourt of +ppeals.

Since no provision for retroactivit' e;ists in said +ct this Tribunal has resolved to retain Burisdictionover this case.

Petitioners "aintain before this ourt that8

R:SPOND:NT DIR:TOR OF P+T:NTS :RR:D IN 0O)DINE T0+TP:TITION:RS5 +PP)I+TION, S:RI+) NO. #(7, M+ NOT 1: TR:+T:D +S

FI):D 3ND:R S:TION $( +S +M:ND:D, OF R:P31)I +T NO. $%(GNO@N +S T0: P+T:NT )+@.

and in support thereof stress that8

$ The Director had no Burisdiction to decide the ?uestion of !hether or not the

Philippine +pplication should be treated as filed under Section $( of the +ct

7 The Director had no Burisdiction to decide the ?uestion of !hether or not thePhilippine +pplication !as inco"plete under Rules &= and &> of the Revised Rules of

Practice in Patent ases

6 The Director "isconstrued and "isapplied Rules &= and &> of the Rules

& The Director "isconstrued and "isapplied Rule 7%7 *b of the Rules.

For resolution, therefore, are the follo!in issues8 the scope of the po!ers of the Director of Patents in

cases appealed to hi" and the correctness of his application of Rules &=, &> and 7%7*b of the RevisedRules of Practice in Patent ases.

The facts unfolded call for an affir"ance of respondent Director5s rulins.

:;plicit in Rule 7%7 of the Revised Rules of Practice in Patent ases is the po!er and authorit' of

respondent Director to decide petitioners5 appeal in the "anner that he did, and !e ?uote8

7%7.!ecision "# the !irector. 9 *a The Director, in his decision, "a' affir" or reversethe decision of the Principal :;a"iner in !hole or in part on the round and on the

clai"s specified b' the :;a"iner. The affir"ance of the reBection of a clai" on an' of

the rounds specified constitutes a eneral affir"ance of the decision of the Principal:;a"iner on that clai", e;cept as to an' round specificall' reversed.

*b Should the Director have 4no!lede of an' rounds not involved in the appeal for

reBectin an' clai" he "a' include in his decision a state"ent to that effect !ith his

reasons for so holdin !hich state"ent shall constitute a reBection of the clai"s. ...


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In other !ords, respondent Director is e"po!ered to consider rounds !hich "a' have co"e to his

4no!lede other than those specificall' raised in an appeal 0e need not confine hi"self onl' to issues

invo4ed. 1esides, the ?uestion of ne! "atter is ine;tricabl' lin4ed !ith the riht of priorit' on !hich

petitioners have anchored their application. +s earl' as Paper No. $>,s$pra, the Supervisin Patent:;a"iner had concluded that inas"uch as the sub"itted paes did not correspond !ith the certified

cop' of the 3.S. application, -the present application cannot therefore be ranted priorit' date under

section $% as re?uested b' applicant.- +ain, in Paper No. 77,s$pra, the hief Patent :;a"iner "ade"ention of petitioner5 i"perfect application and the fact that the deadline for filinf re?uired b' section

$( of the Patent )a! cannot be e;tended directl' or indirectl' other!ise -the restrictive provisions of

section $( !ill be nullified.-

It is also far


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are bound to avoid. 12

The specification !hich petitioners sub"itted on March (, $#(& !as far fro" co"plete. That defect

!as one of substance and not "erel' one of for". @hat petitioners clai"ed as their invention !as not

co"pletel' deter"inable therefro". Petitioners5 application could be dee"ed as co"plete onl' on /ul'7, $#%6 !hen the' sub"itted the additional paes on the Specifications and lai"s. Respondent

Director, therefore, did not err in convertin petitioners5 application into an ordinar' application filed

on +pril $&, $#(&, not onl' for their havin failed to co"plete their application !ithin the four


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offices respectivrel' located at 6(&


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1efore the court could act on the plaintiff5s "otion for conte"pt, the defendants filed a Motion to

Dis"iss, dated Ma' 7(, $#%%, allein, a"on others, that the co"plaint states no cause of action

aainst the" since defendant No. $ -!as ranted a co"pulsor' license to "anufacture, use and sell its

o!n brands of "edicinal preparation containin 5chlora"phenicol5.-

On /une $=, $#%%, the plaintiff filed its Opposition to Motion to Dis"iss controvertin, a"on others,

defendants5 contention that the co"plaint states no cause of action. Plaintiff pointed out that the

defendants have confused the substance !hich is the subBect "atter of the co"plaint, na"el',-hlora"phenicol Pal"itate-, !ith the substance covered b' the co"pulsor' licensin case, na"el',-hlora"phenicol-, and the )etters Patent subBect of the co"plaint, na"el', )etters Patent No. 7=#,

!ith the )etters Patent subBect of the co"pulsor' licensin case, na"el', )etters Patent No. (C.

On /une 7=, $#%%, the defendants filed their Repl' to Opposition allein, a"on others, that in

advertisin and sellin their product -Veni"icetin Suspension,- never do the' state that the sa"econtains -hlora"phenicol Pal"itate- The' pointed out that even in the anne;es of plaintiff5s

co"plaint *consistin of the pac4aes and labels alleedl' used b' the defendants in said product, onl'

the substance -hlora"phenicol- is stated sho!in that the substance involved is lora"phenicoland not -hlora"phenicol Pal"itate-.

On /ul' (, $#%%, the plaintiff filed its ReBoinder to Repl' to Opposition allein a"on others, that!hile the pac4aes and labels of defendants5 -Veni"icetin Suspension- indicate that the sa"e contains

-hlora"phenicol-, the truth of the "atter is that said product does not contains said substance but thesubtance covered b' letters Patents No.7=#, na"el', -hlora"phenicol Pal"itate-. This, plaintiff

pointed out, is e;pressl' alleed in the co"plaint thus, appl'in the rule that a "otion to dis"iss

h'potheticall' ad"its the truth of the alleations of the co"plaint, defendants are uilt' of *$infrine"ent of patent, b' sellin, causin to be sold, usin or causin to be used -hlora"phenicol

Pal"itate- in their "edicine called -Veni"icetin Suspension-, and *7 unfair co"petition, b'

concealin that said "edicine contains -hlora"phenicol-, and, b' deceivin and "isleadin thepurchasers !ho are trade to believe that -Veni"icetin Suspension- is covered b' a co"pulsor' license

fro" the plaintiff.

On the basis of the foreoin pleadins, the ourt of First Instance of Ri2al issued the order dated+uust 77, $#%%, !hich dis"issed the co"plaint on the round of lac4 of cause of action, to!it8 $!phJ$.AKt

;;; ;;; ;;;

+fter a careful consideration of the aru"ents for and aainst the "otion to dis"iss, and

in vie! of the fact that the substance covered b' )etters Patent No. (C and )etters Patent

No. 7=# is the sa"e and that is, the substance 4no!n as -hlora"phenicol-, because!hile under )etters Patent No. (C, the substance is referred to as -hlora"phenicol-, in

)etters Patent No. 7=# T0: S31ST+N: 0+S 1::N D:NOMIN+T:D +S

hlora"phenicol Pal"itate it is the opinion of the ourt that -hlora"phenicol- and

-hlora"phenicol Pal"itate are the sa"e, the difference bein "erel' in the taste, andthis ourt to state that there !as infrine"ent of Patent !ith respect to )etters Patent

No. 7=# !ould be tanta"ount to preventin the defendant, Doctors- Phar"aceuticals,

Inc., fro" e;ercisin the riht ranted it b' )etters Patent No. (C. It !ould further rendernuator' the decision of the Director of Patents, affir"ed b' the Supre"e ourt,

rantin the defendant, Doctors5 Phar"aceuticals, Inc., the riht to use and i"port

-hlora"phenicol-.

The defendant, V


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is no cause of action !ith respect to the principal defendant, is li4e!ise of the opinion

that there is no cause of action !ith respect to the defendant, V


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different substances and that -Veni"icetin Suspension- actuall' contains -hlora"phenicol Pal"itate-

and not -hlora"phenicol- as indicated in its pac4ae and label, it necessaril' !ould have to conclude

that the co"plaint states causes of action for infrine"ent of patent and for unfair co"petition. For

defendants !ould then be uilt' of infrine"ent of patent b' sellin, causin to be sold, usin andcausin to be used -hlora"phenicol Pal"itate-, !ithout the consent or authorit' of the plaintiff as the

holder of )etters Patent No. 7=#, lai" & of !hich alleedl' covers said substance. Sections 6= and &7

of R.+. No. $%( provide8$!phJ$.AKtS:. 6=.'(G)*S O+ PA*-*S. + patentee shall have the e;clusive riht to "a4e,use and sell the patented "achine, article or product, and to use the patented process for

the purpose of industr' or co""erce, throuhout the territor' of the Philippines for the

ter" of the patent and s$ch %aing, $sing, or selling "# an# person itho$t thea$thorization of the patentee, constit$tes infringe%ent of the patent. *:"phasis

supplied.

S:. &7. /(0( A/*(O- +O' (-+'(-GM-* . 2 +n' patentee, or an'one possessin

an' riht, title or interest in and to the patented invention, !hose rihts have beeninfrined, "a' brin a civil action before the proper ourt of First Instance, to recover

fro" the infrined, da"aes sustained b' reason of the infrine"ent and to secure an

inBunction for the protection of his rihts.

)i4e!ise, the defendants !ould be uilt' of unfair co"petition b' falsel' statin that defendant No. l5s"edicine called -Veni"icetin Suspension- contains -hlora"phenicol- !hen in fact it actuall'

contains -hlora"phenicol Pal"itate-, and that it is covered b' a co"pulsor' license fro" the plaintiff.

Section 7# of R.+. No. $%% provides,inter alia$!phJ$.AKt

In particular, and !ithout in an' !a' li"itin the scope of unfair co"petition, thefollo!in shall be dee"ed uilt' of unfair co"petition8

;;; ;;; ;;;

*c +n' person !ho shall "a4e an' false state"ent in the course of trade ... .

learl', the lo!er court erred in dis"issin, on the round of failure to state a cause of action, the

co"plaint for da"aes for infrine"ent of patent and unfair co"petition.

@0:R:FOR:, the appealed order of dis"issal is hereb' set aside and the co"plaint for da"aes forinfrine"ent of patent and unfair co"petition is hereb' reinstated. @ithout pronounce"ent as costs.


SUPREME COURTManila

FIRST DIVISION

G.R. "). L-%21'0 January %0, 1982

DOM#C#A"O A. AGUAS,petitioner,vs.CO"RADO G. DE LEO" an! COURT O$ APPEALS, respondents.

$ER"A"DE/,J.:

This is a petition for certiorari to revie! the decision of the ourt of +ppeals in + E.R. NO. 6=>7&


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defendants !as la!full' ranted and issued to hi" that said invention !as ne!, useful, not 4no!n or used b'

others in this countr' before his invention thereof, not patented or described in an' printed publication

an'!here before his invention thereof, or "ore than one 'ear prior to his application for patent thereof,not patented in an' forein countr' b' hi" or his leal representatives on application filed "ore than

one 'ear prior to his application in this countr' that plaintiff has the e;clusive license to "a4e, use and

sell throuhout the Philippines the i"prove"ents set forth in said Patent No. %(> that the inventionpatented b' said Patent No. %(> is of reat utilit' and of reat value to plaintiff and of reat benefit to

the public !ho has de"anded and purchased tiles e"bod'in the said invention in ver' lare ?uantities

and in ver' rapidl' increasin ?uant ies that he has co"plied !ith the Philippine statues relatin to"ar4in patented tiles sold b' hi" that the public has in eneral ac4no!leded the validit' of said

Patent No. %(>, and has respected plaintiff5s riht therein and thereunder that the defendant Do"iciano

+. +uas infrined )etters of Patent No. %(> b' "a4in, usin and sellin tiles e"bod'in said patentinvention and that defendant F. 0. +?uino H Sons is uilt' of infrine"ent b' "a4in and furnishin

to the defendant Do"iciano +. +uas the enravins, castins and devices desined and intended of

tiles e"bod'in plaintiffs patented invention that he has iven direct and personal notice to the

defendants of their said acts of infrine"ent and re?uested the" to desist, but nevertheless, defendantshave refused and nelected to desist and have disrearded such re?uest, and continue to so infrine

causin reat and irreparable da"ae to plaintiff that if the aforesaid infrine"ent is per"itted to

continue, further losses and da"aes and irreparable inBur' !ill be sustained b' the plaintiff that there

is an urent need for the i""ediate issuance of a preli"inar' inBunction that as a result of thedefendants5 !ronful conduct, plaintiff has suffered and the defendants are liable to pa' hi", in

addition to actual da"aes and loss of profits !hich !ould be deter"ined upon proper accountin,"oral and e;e"plar' or corrective da"aes in the su" of P#C,CCC.CC that plaintiff has been co"pelled

to o to court for the protection and enforce"ent of his and to enae the service of counsel, thereb'

incurrin attorne'5s fees and e;penses of litiation in the su" of P(,CCC.CC. 2

On +pril $&, $#%7, an order rantin the plaintiff5s petition for a @rit of Preli"inar' InBunction !asissued. %

On Ma' 76, $#%7, the defendant Do"iciano +. +uas filed his ans!er den'in the alleations of the

plaintiff and allein that8 the plaintiff is neither the oriinal first nor sole inventor of the i"prove"ents

in the process of "a4in "osaic pre !as unla!full' ac?uired b' "a4in it appear in the application in relation thereto that

the process is ne! and that the plaintiff is the o!ner of the process !hen in truth and in fact the process

incorporated in the patent application has been 4no!n and used in the Philippines b' al"ost all tile"a4ers lon before the alleed use and reistration of patent b' plaintiff onrado E. de )eon that the

reistration of the alleed invention did not confer an' riht on the plaintiff because the reistration

!as unla!full' secured and !as a result of the ross "isrepresentation on the part of the plaintiff thathis alleed invention is a ne! and inventive process that the alleation of the plaintiff that Patent No.


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%(> is of reat value to plaintiff and of reat benefit to the public is a "ere conclusion of the plaintiff,

the truth bein that a the invention of plaintiff is neither inventive nor ne!, hence, it is not patentable,

b defendant has been ranted valid patents *Patents No. $C>, $C#, $$C issued on Dece"ber 7$, $#%$

on desins for concrete decorative !all tiles and c that he can not be uilt' of infrine"ent becausehis products are different fro" those of the plaintiff. 4

The trial court rendered a decision dated Dece"ber 7#, $#%(, the dispositive portion of !hich reads8

@0:R:FOR:, Bud"ent is hereb' rendered in favor of plaintiff and aainst the

defendants8

$. Declarin plaintiff5s patent valid and infrined8

7. Erantin a perpetual inBunction restrainin defendants, their officers, aents,e"plo'ees, associates, confederates, and an' and all persons actin under their authorit'

fro" "a4in andLor usin andLor vendin tiles e"bod'in said patented invention or

adapted to be used in co"bination e"bod'in the sa"e, and fro" "a4in,"anufacturin, usin or sellin, enravins, castins and devises desined and intended

for use in apparatus for the "a4in of tiles e"bod'in plaintiff5s patented invention, and

fro" offerin or advertisin so to do, and fro" aidin and abettin or in an' !a'

contributin to the infrine"ent of said patent

6. Orderin that each and all of the infrinin tiles, enravins, castins and devices,

!hich are in the possession or under the control of defendants be delivered to plaintiff

&. Orderin the defendants to Bointl' and severall' pa' to the plaintiff the follo!in

su"s of "one', to !it8

*a P$C,C7C.## b' !a' of actual da"aes

*b P(C,CCC.CC b' !a' of "oral da"aes

*c P(,CCC.CC b' !a' of e;e"plar' da"aes

*d P(,CCC.CC b' !a' of attorne'5s fees and*e costs of suit. &

The defendant Do"iciano +uas appealed to the ourt of +ppeals, assinin the follo!in errors. '

I

T0: TRI+) O3RT :RR:D IN NOT 0O)DINE T0+T P)+INTIFF5S P+T:NT FOR

T0: 5PRO:SS OF M+GINE MOS+I PR:


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lip !idth, artistic slope of ease"ent and critical depth of the enravin that plaintiff

!anted for his "oulds that enraver :nri?ue +?uino 4ne! that the "oulds he !as

enravin for plaintiff !ere the latter5s ver' o!n, !hich possession the ne! features and

characteristics covered b' plaintiff5s parent that defendant +uas personall', as abuildin contractor, purchased fro" plaintiff, tiles shaped out of these "oulds at the

bac4 of !hich !as i"printed plaintiff5s patent nu"ber *:;hs., -+- to -:- that

subse?uentl', throuh a representative, Mr. )eonardo, defendant +uas re?uested+?uino to "a4e enravins of the sa"e t'pe and bearin the characteristics of plaintiff5s

"oulds that Mr. +?uino 4ne! that the "oulds he !as as4ed to enrave for defendant

+uas !ould be used to produce ce"ent tiles si"ilar to plaintiff5s that the "oulds !hichF.0. +?uino H Sons eventuall' enraved for +uas and for !hich it chared +uas

double the rate it chared plaintiff De )eon, contain the ver' sa"e characteristic features

of plaintiff5s "ould and that +uas used these "oulds in the "anufacture of his tiles!hich he actuall' put out for sale to the public *:;hs. -$- to -6- and :;hs. -+- to -:-

that both plaintiff5s and defendant +uas5 tiles are sculptured pre


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@hile it is true that the "atter of ease"ent, lip !idth, depth, protrusions and depressions

are 4no!n to so"e sculptors, still, to be able to produce a ne! and useful !all tile, b'

usin the" all toether, a"ounts to an invention. More so, if the totalit' of all these

features are vie!ed in co"bination !ith the Ideal co"position of ce"ent, sodiu"silicate and screened fine sand.

1' usin his i"proved process, plaintiff has succeeded in producin a ne! product < a

concrete sculptured tile !hich could be utili2ed for !allin and decorative purposes. Noproof !as adduced to sho! that an' tile of the sa"e 4ind had been produced b' othersbefore appellee. Moreover, it appears that appellee has been derivin considerable profit

fro" his "anufacture and sale of such tiles. This co""ercial success is evidence of

patentabilit' *@al4er on Patents, Dellers :dition, Vol. I, p. 76=. 12

The validil' of the patent issued b' the Philippines Patent Office in favor of the private respondent andthe ?uestion over the inventiveness, novelt' and usefulness of the i"proved process therein specified

and described are "atters !hich are better deter"ined b' the Philippines Patent Office. The technical

staff of the Philippines Patent Office, co"posed of e;perts in their field, have, b' the issuance of thepatent in ?uestion, accepted the thinness of the private respondent5s ne! tiles as a discover'. There is a

presu"ption that the Philippines Patent Office has correctl' deter"ined the patentabilit' of the

i"prove"ent b' the private respondent of the process in ?uestion.

+nent this "atter, the ourt of +ppeals said8

+ppellant has not adduced evidence sufficient to overco"e the above established lealpresu"ption of validit' or to !arrant reversal of the findins of the lo!er court relative

to the validit' of the patent in ?uestion. In fact, as !e have alread' pointed out, the clear

preponderance of evidence bolsters said presu"ption of validit' of appellee5s patent.There is no indication in the records of this case and this ourt is una!are of an' fact,

!hich !ould tend to sho! that concrete !all tiles si"ilar to those produced b' appellee

had ever been "ade b' others before he started "anufacturin the sa"e. In fact, durinthe trial, appellant !as challened b' appellee to present a tile of the sa"e 4ind as those

produced b' the latter, fro" an' earlier source but, despite the fact that appellant hadever' chance to do so, he could not present an'. There is, therefore, no concrete proofthat the i"proved process of tile of an inch at its thinnest portion, Ideal

co"position of ce"ent and fine river sand, a"on other inredients that "a4es possible the production

of touh and durable !all tiles, thouh thin and liht the enravin of deep desins in such a !a' as to"a4e the tiles decorative, artistic and suitable for !all orna"entation, and the fact that the tiles can be

"ass produced in co""ercial ?uantities and can be convenientl' stoc4


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tiles produced fro" de )eon5s process are suitable for construction and orna"entation, !hich

previousl' had not been achieved b' tiles "ade out of the old process of tile "a4in. De )eon5s

invention has therefore brouht about a ne! and useful 4ind of tile. The old t'pe of tiles !ere usuall'

intended for floors althouh there is nothin to prevent one fro" usin the" for !allin purposes.These tiles are neither artistic nor orna"ental. The' are heav' and "assive.

The respondent5s i"prove"ent is indeed inventive and oes be'ond the e;ercise of "echanical s4ill.

0e has introduced a ne! 4ind of tile for a ne! purpose. 0e has i"proved the old "ethod of "a4intiles and pre !as leall' issued, the process andLor

i"prove"ent bein patentable.1oth the trial court and the ourt of +ppeals found as a fact that the petitioner Do"iciano +. +uas didinfrine de )eon5s patent. There is no sho!in that this case falls under one of the e;ceptions !hen this

ourt "a' overrule the findins of fact of the ourt of +ppeals. The onl' issue then to be resolved is

the a"ount of da"aes that should be paid b' +uas.

In its decision the ourt of +ppeals affir"ed the a"ount of da"aes a!arded b' the lo!er court !iththe "odification that the respondent is onl' entitled to P6,CCC.CC "oral da"aes. 21

The lo!er court a!arded the follo!in da"aes8 22

a P$C,C7C.## b' !a' of actual da"aes

b P(C,CCC.CC b' !a' of "oral da"aesc P(,CCC.CC b' !a' of e;e"plar' da"aes

d P(,CCC.CC b' !a' of atto"e'5s fees and

e osts of suit

because8

+n e;a"ination of the boo4s of defendant +uas "ade before a o""issioner revealsthat durin the period that +uas !as "anufacturin and sellin tiles si"ilar to


17/59

plaintiff5s, he "ade a ross inco"e of P6,6&C.66, !hich can be safel' be considered the

a"ount b' !hich he enriched hi"self !hen he infrined plaintiff5s patent. 3nder Sec. &7

of the Patent )a! an' patentee !hose rihts have been infrined is entitled to da"aes

!hich, accordin to the circu"stances of the case "a' be in a su" above the a"ountfound as actual da"aes sustained provided the a!ard does not e;ceed three ti"es the

a"ount of such actual da"aes. onsiderin the !antonness of the infrine"ent

co""itted b' the defendants !ho 4ne! all the ti"e about the e;istence of plaintiff5spatent, the ourt feels there is reason to rant plaintiff "a;i"u" da"aes in the su" of

P$C,C7C.##. +nd in order to discourae patent infrine"ents and to ive "ore teeth to

the provisions of the patent la! thus pro"otin a stroner public polic' co""itted toafford reater incentives and protection to inventors, the ourt hereb' a!ards plaintiff

e;e"plar' da"aes in the su" of P(,CCC.CC to be paid Bointl' and severall' b'

defendants. onsiderin the status of plaintiff as a reputable business"an, and o!ner ofthe li4e!ise reputed 0ouse of Pre, 6C, t.s.n., Feb. 7>, $#%&. In addition, plaintiff5s character

and reputation have been unnecessaril' put in ?uestion because defendants, b' their actsof infrine"ent have created a doubt or suspicion in the public "ind concernin the

truth and honest' of plaintiff5s advertise"ents and public announce"ents of his valid

patent. Necessaril', said acts of defendants have caused plaintiff considerable "ental

sufferin, considerin especiall', the fact that he sta4ed ever'thin on his pre7&


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D3r75)r ) Pa7n,respondents.

Salcedo, !el 'osario, 3ito, Misa & ozada a Office for petitioner.

*he Solicitor General for respondents.

R E S O L U T # O "

TEEHA"*EE,Acting C.J.:

In E.R. No. ) of the net sales !hich petitioner co"pan' no! clai"s as rossl' inade?uate and proposes

that it be increased to $(. Petitioner insists that the fi;in of the ro'alt' rate b' the Director of Patents

is arbitrar' and !ithout an' support in evidence pointin out that the prevailin rate for co"pulsor'licensin on the net sales of "edicines containin the patented article is $( and $> of the sellin

price. In as4in for a $( ro'alt' rate, petitioner allees that it is the sa"e rate prevailin in t!oco"pulsor' licenses for patents on "edicine in Ereat 1ritain, and that in the case of /.R. Eei' S.+.5sPatent in anada, the rate of $7 $L7 based on net sales !as allo!ed. On the other hand respondent

co"pan' points out that in a licensin aree"ent bet!een ollett H o. of Nor!a' and )e;al

)aboratories of the Philippines, ro'alties of ( on a vita"in preparation and =, on a phar"aceuticalpellet based on net sales, !ere areed upon.

It is settled that findins of fact of ad"inistrative bodies !ill not be interfered !ith b' courts of Bustice

in the absence of a rave abuse of discretion on the part of said bodies or unless the afore"entioned

findins are not supported b' substantial evidence. 2


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The ourt finds no abuse of discretion on the part of respondent Director of Patents considerin that in

fi;in the ro'alt' rate he "ade a co"pro"ise on the rate proposed b' petitioner and those prevailin in

other countries. The > ro'alt' rate is "id!a' bet!een the rates in anada and Nor!a'. In developin

countries li4e the Philippines, liberal treat"ent in trade relations should be afforded to local industr'for as reasoned out b' respondent co"pan', -it is so difficult to co"pete !ith the industrial iants of

the dru industr', a"on the" bein the petitioner herein, that it al!a's is necessar' that the local dru

co"panies should sell at "uch lo!er *than the prices of said forein dru entities.- %The ourt arees !ith then Solicitor Eeneral, no! retired /ustice +ntonio P. 1arredo and then +sst.Solicitor Eeneral Pacifico de astro, no! /ustice of the Supre"e ourt, that the > ro'alt' rate is

reasonable -considerin that Doctor5s Phar"aceutical, Inc. is a s"all "anufacturin venture co"pared

!ith Par4e, Davis H o"pan', Inc. !hich is a subsidiar' of the hue "other fir", Par4e, Davis Ho"pan' of Michian, 3.S.+.- *+nne; D, Petition for Revie!. If Doctor5s is "a4in sufficient profit

to Bustif' an increase of ro'alt' later, Par4e, Davis H o., Inc. can easil' de"and an increase,

considerin that the latter has access to the boo4s and records of the for"er. 4

The Solicitor Eeneral correctl' states that -there is no sho!in that Par4e, Davis H o., Inc. !ouldtend to suffer business losses b' the i"position of the > ro'alt' nor does it appear that it !ould cause

other effects on the saleabilit' of the antibiotics and conse?uentl' the health of the consu"in public

b' the i"position of > .- &

Petitioner5s aru"ent that respondent Director of Patents has no authorit' to declare that the resolutioncontainin the licensin aree"ent -shall ta4e effect i""ediatel'- is untenable for an' a!ard, order or

decision of the Patent Office is i""ediatel' e;ecutor'. This is clear fro" the provisions of Sec. &, Rule

&& of the Rules of ourt !hich provides that appeal shall not sta' the a!ard, order or decision of thePublic Service o""ission, the Patent Office, and the +ricultural Inventions 1oard. Moreover, the

resolution of respondent official !as issued onl' after the herein parties failed to sub"it a licensin

aree"ent and had left the sa"e to the discretion of the Director of Patents. '+s correctl' arued b'the Solicitor Eeneral -to hold that said +"ended Resolution could not be "ade effectivel' !ould open

the door for inter"inable litiation, thus renderin nuator' said co"pulsor' licensin aree"ent

sanctioned b' the Director of Patents, as an' i"ple"entin condition i"posed therein could be thesubBect of litiation.-

+t an' rate, the letter patent ranted to petitioner on the particular process !as to e;pire after seventeen

'ears, and havin been ranted on Februar' #, $#(C, the sa"e alread' e;pired on Februar' #, $#%=.

@0:R:FOR:, the instant petition is hereb' dis"issed and the ?uestioned resolution of the Director of

Patents is hereb' affir"ed in all respects. No costs.

THIRD DIVISION

[G. R. No. 126627. August 14, 2003]

SMITH KLINE BECKMAN CR!RATIN,petitioner, vs.THE HNRABLE C"RT #A!!EALS $%& TR'C !HARMA CR!RATIN,respondents.

( E C I S I N


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CAR!I)MRALES, J.*

Smith Kline Beckman Corporation (petitioner), a corporation existin !" #irt$e o% the la&so% the state o% 'enns"l#ania, nite States o% *merica (+S+) an license to o !$siness inthe 'hilippines, %ile on Octo!er , -./0, as assinee, !e%ore the 'hilippine 'atent O%%ice(no& B$rea$ o% 'atents, Traemarks an Technolo" Trans%er) an application %or patent o#er

an in#ention entitle 12ethos an Compositions %or 'ro$cin Biphasic 'arasiticie *cti#it"sin 2eth"l 3 'rop"lthio454Ben6imia6ole Car!amate+7 The application !ore Serial No+-..+

On Septem!er 58, -.-, 9etters 'atent No+ -830-:-;%or the a%oresai in#ention &asiss$e to petitioner %or a term o% se#enteen (-/) "ears+

The letters patent pro#ies in its claims:5;that the patente in#ention consiste o% a ne&compo$n name meth"l 3 prop"lthio454!en6imia6ole car!amate an the methos orcompositions $tili6in the compo$n as an acti#e inreient in %ihtin in%ections ca$se !"astrointestinal parasites an l$n&orms in animals s$ch as s&ine, sheep, cattle, oats,

horses, an e#en pet animals+

Tr"co 'harma Corporation (pri#ate responent) is a omestic corporation thatman$%act$res, istri!$tes an sells #eterinar" pro$cts incl$in Impreon, a r$ that has

*l!ena6ole %or its acti#e inreient an is claime to !e e%%ecti#e aainst astro4intestinalro$n&orms, l$n&orms, tape&orms an %l$ke in%estation in cara!aos, cattle an oats+

'etitioner s$e pri#ate responent %or in%rinement o% patent an $n%air competition!e%ore the Caloocan Cit" Reional Trial Co$rt (RTC)+:oinin it %rom committin acts o% patent in%rinement an$n%air competition+:0;* &rit o% preliminar" in>$nction &as s$!se?$entl" iss$e+:/;

'ri#ate responent in its *ns&er:;a#erre that 9etters 'atent No+ -830- oes not co#erthe s$!stance *l!ena6ole %or no&here in it oes that &or appear@ that e#en i% the patent

&ere to incl$e *l!ena6ole, s$ch s$!stance is $npatenta!le@ that the B$rea$ o% Aoo anDr$s allo&e it to man$%act$re an market Impreon &ith *l!ena6ole as its kno&ninreient@ that there is no proo% that it passe o%% in an" &a" its #eterinar" pro$cts as thoseo% petitioner@ that 9etters 'atent No+ -830- is n$ll an #oi, the application %or the iss$ancethereo% ha#in !een %ile !e"on the one "ear perio %rom the %ilin o% an application a!roa%or the same in#ention co#ere there!", in #iolation o% Section -3 o% Rep$!lic *ct No+ -03(The 'atent 9a&)@ an that petitioner is not the reistere patent holer+

'ri#ate responent loe a Co$nterclaim aainst petitioner %or s$ch amo$nt o% act$al
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amaes as ma" !e pro#en@ '-,,+ in moral amaes@ '$nction iss$e in connection &ith the case is here!" orereDISSO9VFD+

The 9etters 'atent No+ -830- iss$e !" the then 'hilippine 'atents O%%ice is here!" eclaren$ll an #oi %or !ein in #iolation o% Sections /, . an -3 o% the 'atents 9a&+

'$rs$ant to Sec+ 80 o% the 'atents 9a&, the Director o% B$rea$ o% 'atents is here!" irecteto cancel 9etters 'atent No+ -830- iss$e to the plainti%% an to p$!lish s$ch cancellation inthe O%%icial Ga6ette+

De%enant Tr"co 'harmace$tical Corporation is here!" a&are '$rispr$entiall" esta!lishe pres$mption that the 'atentO%%ice=s etermination o% patenta!ilit" is correct+ Ainall", it r$le that petitioner esta!lisheitsel% to !e the one an the same assinee o% the patent not&ithstanin chanes in itscorporate name+ Th$s the appellate co$rt ispose

EHFRFAORF, the >$ment appeale %rom is *AAIR2FD &ith the 2ODIAIC*TION that theorers %or the n$lli%ication o% 9etters 'atent No+ -830- an %or its cancellation are eletethere%rom+
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In its Comment,:-8;pri#ate responent contens that application o% the doctrine ofequivalents&o$l not alter the o$tcome o% the case, *l!ena6ole an meth"l 3 prop"lthio454!en6imia6ole car!amate !ein t&o i%%erent compo$ns &ith i%%erent chemical an ph"sicalproperties+ It stresses that the existence o% a separate +S+ patent %or *l!ena6ole inicatesthat the same an the compo$n in 9etters 'atent No+ -830- are i%%erent %rom each other@an that since it &as on acco$nt o% a i#isional application that the patent %or meth"l 3

prop"lthio454!en6imia6ole car!amate &as iss$e, then, !" e%inition o% a i#isionalapplication, s$ch a compo$n is >$st one o% se#eral inepenent in#entions alonsie*l!ena6ole $ner petitioner=s oriinal patent application+

*s has repeatel" !een hel, onl" ?$estions o% la& ma" !e raise in a petition %or re#ie&on certiorari !e%ore this Co$rt+ nless the %act$al %inins o% the appellate co$rt are mistaken,a!s$r, spec$lati#e, con>ect$ral, con%lictin, tainte &ith ra#e a!$se o% iscretion, or contrar"to the %inins c$lle !" the co$rt o% oriin, :-3;this Co$rt oes not re#ie& them+

Arom an examination o% the e#ience on recor, this Co$rt %ins nothin in%irm in theappellate co$rt=s concl$sions &ith respect to the principal iss$e o% &hether pri#ate responent

committe patent in%rinement to the pre>$ice o% petitioner+

The !$ren o% proo% to s$!stantiate a chare %or patent in%rinement rests on the plainti%%+:-0;In the case at !ar, petitioner=s e#ience consists primaril" o% its 9etters 'atent No+ -830-,an the testimon" o% Dr+ Orinion, its eneral manaer in the 'hilippines %or its *nimal Health'ro$cts Di#ision, !" &hich it so$ht to sho& that its patent %or the compo$n meth"l 3prop"lthio454!en6imia6ole car!amate also co#ers the s$!stance *l!ena6ole+

Arom a reain o% the . claims o% 9etters 'atent No+ -830- in relation to the otherportions thereo%, no mention is mae o% the compo$n *l!ena6ole+ *ll that the claimsisclose are the co#ere in#ention, that is, the compo$n meth"l 3 prop"lthio454

!en6imia6ole car!amate@ the compo$n=s !ein anthelmintic !$t nontoxic %or animals or itsa!ilit" to estro" parasites &itho$t harmin the host animals@ an the patente methos,compositions or preparations in#ol#in the compo$n to maximi6e its e%%icac" aainst certainkins o% parasites in%ectin speci%ie animals+

Ehen the lan$ae o% its claims is clear an istinct, the patentee is !o$n there!" anma" not claim an"thin !e"on them+:-/;*n so are the co$rts !o$n &hich ma" not a toor etract %rom the claims matters not expresse or necessaril" implie, nor ma" the" enlarethe patent !e"on the scope o% that &hich the in#entor claime an the patent o%%ice allo&e,e#en i% the patentee ma" ha#e !een entitle to somethin more than the &ors it ha chosen&o$l incl$e+:-;

It !ears stressin that the mere a!sence o% the &or *l!ena6ole in 9etters 'atent No+-830- is not eterminati#e o% *l!ena6ole=s non4incl$sion in the claims o% the patent+ Ehile

*l!ena6ole is amittel" a chemical compo$n that exists !" a name i%%erent %rom thatco#ere in petitioner=s letters patent, the lan$ae o% 9etter 'atent No+ -830- %ails to "ielan"thin at all rearin *l!ena6ole+ *n no extrinsic e#ience ha !een a$ce to pro#ethat *l!ena6ole inheres in petitioner=s patent in spite o% its omission there%rom or that themeanin o% the claims o% the patent em!races the same+
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Ehile petitioner concees that the mere literal &orins o% its patent cannot esta!lishpri#ate responent=s in%rinement, it $res this Co$rt to appl" the doctrine of equivalents+

The doctrine of equivalentspro#ies that an in%rinement also takes place &hen a e#iceappropriates a prior in#ention !" incorporatin its inno#ati#e concept an, altho$h &ith somemoi%ication an chane, per%orms s$!stantiall" the same %$nction in s$!stantiall" the same

&a" to achie#e s$!stantiall" the same res$lt+:-.;et aain, a scr$tin" o% petitioner=s e#ience%ails to con#ince this Co$rt o% the s$!stantial sameness o% petitioner=s patente compo$nan *l!ena6ole+ Ehile !oth compo$ns ha#e the e%%ect o% ne$trali6in parasites inanimals, ientit" o% res$lt oes not amo$nt to in%rinement o% patent $nless *l!ena6oleoperates in s$!stantiall" the same &a" or !" s$!stantiall" the same means as the patentecompo$n, e#en tho$h it per%orms the same %$nction an achie#es the same res$lt+:5;Inother &ors, the +-%-+/ o o& o o+$t-o% m$st !e the same or s$!stantiall" thesame+:5-;

The doctrine of equivalentsth$s re?$ires satis%action o% the %$nction4means4an4res$lttest, the patentee ha#in the !$ren to sho& that all three components o% s$ch e?$i#alenc"

test are met+:55;

*s state earl" on, petitioner=s e#ience %ails to explain ho& *l!ena6ole is in e#er"essential etail ientical to meth"l 3 prop"lthio454!en6imia6ole car!amate+ *part %rom the%act that *l!ena6ole is an anthelmintic aent like meth"l 3 prop"lthio454!en6imia6olecar!amate, nothin more is asserte an accorinl" s$!stantiate rearin the metho ormeans !" &hich *l!ena6ole &ees o$t parasites in animals, th$s i#in no in%ormation on&hether that metho is s$!stantiall" the same as the manner !" &hich petitioner=s compo$n&orks+ The testimon" o% Dr+ Orinion lens no s$pport to petitioner=s ca$se, he not ha#in!een presente or ?$ali%ie as an expert &itness &ho has the kno&lee or expertise on thematter o% chemical compo$ns+

*s %or the concept o% i#isional applications pro%%ere !" petitioner, it comes into pla"&hen t&o or more in#entions are claime in a sinle application !$t are o% s$ch a nat$re thata sinle patent ma" not !e iss$e %or them+:5ect o% separate applications &hich are calle 1i#isionalapplications+7:58;Ehat this onl" means is that petitioner=s meth"l 3 prop"lthio454!en6imia6ole car!amate is an in#ention istinct %rom the other in#entions claime in theoriinal application i#ie o$t, *l!ena6ole !ein one o% those other in#entions+ Other&ise,meth"l 3 prop"lthio454!en6imia6ole car!amate &o$l not ha#e !een the s$!>ect o% ai#isional application i% a sinle patent co$l ha#e !een iss$e %or it as &ell as *l!ena6ole+

The %oreoin isc$ssions not&ithstanin, this Co$rt oes not s$stain the a&ar o%act$al amaes an attorne"=s %ees in %a#or o% pri#ate responent+ The claime act$alamaes o% '


25/59

co#ers not onl" the loss s$%%ere (damnum emergens) !$t also pro%its &hich the o!liee %aileto o!tain (lucrum cessans or ganacias frustradas), it is necessar" to pro#e the act$al amo$nto% amaes &ith a reasona!le eree o% certaint" !ase on competent proo% an on the !este#ience o!taina!le !" the in>$re part"+:5/;The testimonies o% pri#ate responent=s o%%icersare not the competent proo% or !est e#ience o!taina!le to esta!lish its riht to act$al orcompensator" amaes %or s$ch amaes also re?$ire presentation o% oc$mentar"

e#ience to s$!stantiate a claim there%or+:5;

In the same #ein, this Co$rt oes not s$stain the rant !" the appellate co$rt o% attorne"=s%ees to pri#ate responent anchore on *rticle 55 (5) o% the Ci#il Coe, pri#ate responentha#in !een alleel" %orce to litiate as a res$lt o% petitioner=s s$it+ F#en i% a claimant iscompelle to litiate &ith thir persons or to inc$r expenses to protect its rihts, still attorne"=s%ees ma" not !e a&are &here no s$%%icient sho&in o% !a %aith co$l !e re%lecte in apart"=s persistence in a case other than an erroneo$s con#iction o% the rihteo$sness o% hisca$se+:5.;There exists no e#ience on recor inicatin that petitioner &as mo#e !" malicein s$in pri#ate responent+

This Co$rt, ho&e#er, rants pri#ate responent temperate or moerate amaes in theamo$nt o% '5,+ &hich it %ins reasona!le $ner the circ$mstances, it ha#in s$%%eresome pec$niar" loss the amo$nt o% &hich cannot, %rom the nat$re o% the case, !e esta!lishe&ith certaint"+:


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AKMAN, ARTH"R S!RENGER, REM' SIMN( $%& HEINRICH EBERGGER,petitioners,vs. THE HNRABLE C"RT # A!!EALS 8S!ECIAL #I#TH(IISIN9 $%& THE B"REA" # !ATENTS, TRA(EMARKS AN( TECHNLG'TRANS#ER, respondents.

R E S L " T I N

!AR(, J.*

'etitioners appeal via certiorari%rom the ecision:-;o% the Co$rt o% *ppeals ismissin theirappeal %rom the resol$tion o% the Director o% 'atents that enie &ith %inalit" their petition %orre#i#al o% patent applications+

On i%%erent ates, petitioners applie to the B$rea$ o% 'atents, Traemarks anTechnolo" Trans%er %or reistration o% patents+ The" hire the la& %irm Si$ion Re"na,2ontecillo an Onsiako to process their patent applications in the 'hilippines, respecti#el"ienti%ie as %ollo&s

*pplicant Serial No+

(-) 2ichi!a6$ Ochi, Ken>i Shiemats$ an 5


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28/59

(0) ects an ha !een treate !" the B$rea$ o% 'atents as separate an ini#i$alapplications+ Speci%icall" the ecision pro#ies

1EHFRFAORF, %or reasons a!o#e state an in the liht o% the applica!le la& on the matter,this petition %or re#ie& on appeal %rom the orerLecision o% the Director o% B$rea$ o% 'atentsis here!" DIS2ISSFD &ith costs aainst the appellants+

SO ORDFRFD+7 :-0;On Septem!er -8, -..5, petitioners mo#e %or reconsieration o% the Co$rt o% *ppeals=ecision, &hich the co$rt enie on an$ar" /, -..8+ The appellate co$rt %o$n no coentreason to >$sti%" the re#ersal or moi%ication o% its ecision+:-/;

*rie#e, petitioners %ile the instant petition %or re#ie& on certiorari+:-;

*t iss$e is the #aliit" o% the Co$rt o% *ppeals= ismissal o% the consoliate appeal o%petitioners %rom the Director o% 'atents= enial o% the re#i#al o% their patent applications+

'etitioners conten that the Co$rt o% *ppeals committe ra#e a!$se o% iscretion &hen ithel that the consoliate appeal &as %ile o$t o% time+ The" &ere appealin %rom theresol$tion o% the Director o% 'atents ate an$ar"


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The contention is not meritorio$s+ I% the %acts a!o#e4mentione &ere the sole !asis o%eterminin &hether the appeal &as %ile on time, petitioners= ar$ment &o$l !ecorrect+ Ho&e#er, petitioners lost siht o% the %act that the petition co$l not !e rante!eca$se o% laches+ 'rior to the %ilin o% the petition %or re#i#al o% the patent application &iththe B$rea$ o% 'atents, an $nreasona!le perio o% time ha lapse $e to the nelience o%petitioners= co$nsel+ B" s$ch inaction, petitioners &ere eeme to ha#e %or%eite their riht to

re#i#e their applications %or patent+Aacts sho& that the patent attorne"s appointe to %ollo& $p the applications %or patentreistration ha !een nelient in compl"in &ith the r$les o% practice prescri!e !" theB$rea$ o% 'atents+ The %irm ha !een noti%ie a!o$t the a!anonment as earl" as $ne-./, !$t it &as onl" a%ter Decem!er /, -./, &hen their emplo"ees Bankas an Rosas ha!een ismisse, that the" came to kno& a!o$t it+ This clearl" sho&e that petitioners=co$nsel ha !een remiss in the hanlin o% their clients= applications+ :-.;1* la&"er=s %ielit" to the ca$se o% his client re?$ires him to !e e#er min%$l o% theresponsi!ilities that sho$l !e expecte o% him+ * la&"er shall not nelect a leal matterentr$ste to him+7:5;In the instant case, petitioners= patent attorne"s not onl" %aile to takenotice o% the notices o% a!anonment, !$t the" %aile to re#i#e the application &ithin the %o$r4

month perio, as pro#ie in the r$les o% practice in patent cases+ These applications areeeme %or%eite $pon the lapse o% s$ch perio+:5-;

Hence, &e can not rant the present petition+:55;The Co$rt o% *ppeals i not err or ra#el"a!$se its iscretion in ismissin the petition %or re#ie&+

HERE#RE,the Co$rt DFNIFS the petition %or lack o% merit+ The Co$rt *AAIR2S theecision o% the Co$rt o% *ppeals in C*4G+ R+ S' No+ 58-/3+

No costs+

S R(ERE(.


SUPREME COURTManila

S:OND DIVISION

G.R. "). 1%421( May 11, 2000

*E""ETH RO SA+AGE* A"GEL#" E:PORT TRAD#"G, );n7! an! A,respondents.

ELLOS#LLO,J.:

Petitioners G:NN:T0 RO S+V+E: and G +NE:)IN :PORT TR+DINE, o!ned and "anaed

b' E:MM+ D:MOR+)


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certain pieces of !rouht iron furniture fro" the factor' of petitioners located in 1iason, Talisa',

ebu. Their "otion to ?uash the search !arrant !as denied b' respondent /ude as !ell as their "otion

to reconsider the denial. 0ence, this petition for certiorari.

The antecedent facts8 +ctin on a co"plaint loded b' private respondent :ric N Mendo2a, presidentand eneral "anaer of Mendco Develop"ent orporation *M:NDO, $ Supervisin +ent /ose

:r"ie Monsanto of the National 1ureau of Investiation *N1I filed an application for search !arrant

!ith the Reional Trial ourt of ebu it'.7The application souht the authori2ation to search thepre"ises of G +nelin :;port International located in 1iason, Talisa', ebu, and to sei2e the pieces of!rouht iron furniture found therein !hich !ere alleedl' the obBect of unfair co"petition involvin

desin patents, punishable under +rt. $># of the Revised Penal ode as a"ended. The assailed Search

@arrant No. %6= petitioners "oved to reconsider the denial of their "otion to ?uash andalleed substantiall' the sa"e rounds found in their oriinal Motion to uash but addin thereto t!o

*7 ne! rounds, na"el'8 *a respondent court has no Burisdiction over the subBect# of the RevisedPenal ode co""itted !ithin their respective territorial Burisdictions. The sala of /ude 1enino E.

Eaviola of the RT


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*includin the issuance of search !arrants and other Budicial processes in an' one court. /urisdiction is

conferred upon courts b' substantive la! in this case, 1P 1l.$7#, and not b' a procedural rule, "uch

less b' an ad"inistrative order.$(The po!er to issue search !arrants for violations of IPR has not

been e;clusivel' vested in the courts enu"erated in Supre"e ourt +d"inistrative Order No.$$6.7. +n' person !ho shall e"plo' deception or an' other "eans contrar' to ood faithb' !hich he shall pass off the oods "anufactured b' hi" or in !hich he deals, or his

business, or services for those of the one havin established such ood!ill, or shall

co""it an' acts calculated to produce said result, shall be uilt' of unfair co"petition,

and shall be subBect to an action therefor.

$%>.6. In particular, and !ithout in an' !a' li"itin the scope of protection aainst

unfair co"petition, the follo!in shall be dee"ed uilt' of unfair co"petition8

*a +n' person !ho is sellin his oods and ives the" the eneral appearance of oods

of another "anufacturer or dealer, either as to the oods the"selves or in the !rappinof the pac4aes in !hich the' are contained, or the devices or !ords thereon, or in an'

other feature of their appearance !hich !ould be li4el' to influence purchasers to

believe that the oods offered are those of a "anufacturer or dealer, other than the actual
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"anufacturer or dealer, or !ho other!ise clothes the oods !ith such appearance as

shall deceive the public and defraud another of his leiti"ate trade, or an' subse?uent

vendor of such oods or an' aent of an' vendor enaed in sellin such oods !ith a

li4e purpose

*b +n' person !ho b' an' artifice, or device, or !ho e"plo's an' other "eans

calculated to induce the false belief that such person is offerin the services of another

!ho has identified such services in the "ind of the public or

*c +n' person !ho shall "a4e an' false state"ent in the course of trade or !ho shallco""it an' other act contrar' to ood faith of a nature calculated to discredit oods,

businesses or services of another. 7$

There is evidentl' no "ention of an' cri"e of -unfair co"petition- involvin desin patents in the

controllin provisions on 3nfair o"petition. It is therefore unclear !hether the cri"e e;ists at all, forthe enact"ent of R+ >7#6 did not result in the reenact"ent of +rt. $># of the Revised Penal ode. In

the face of this a"biuit', !e "ust strictl' construe the statute aainst the State and liberall' in favor

of the accused,77for penal statutes cannot be enlared or e;tended b' intend"ent, i"plication or an'

e?uitable consideration.7Respondents invo4e Burisprudence to support their contention that -unfair

co"petition- e;ists in this case. 7&0o!ever, !e are prevented fro" appl'in these principles, alon!ith the ne! provisions on 3nfair o"petition found in the IPR ode, to the alleed acts of the

petitioners, for such acts constitute patent infrine"ent as defined b' the sa"e ode 9

Sec. =%. /iil Action for (nfringe%ent. 9 =%.$. The "a4in, usin, offerin for sale,sellin, or i"portin a patented product or a product obtained directl' or indirectl' fro"

a patented process, or the use of a patented process !ithout authori2ation of the patentee

constitutes patent infrine"ent. 7(

+lthouh this case traces its oriins to the 'ear $##= or before the enact"ent of the IPR ode, !e areconstrained to invo4e the provisions of the ode. +rticle 77 of the Revised Penal ode provides that

penal la!s shall be applied retrospectivel', if such application !ould be beneficial to the

accused. 7%Since the IPR ode effectivel' obliterates the possibilit' of an' cri"inal liabilit' attachinto the acts alleed, then that ode "ust be applied here.

In the issuance of search !arrants, the Rules of ourt re?uires a findin of probable cause in

connection !ith one specific offense to be deter"ined personall' b' the Bude after e;a"ination of the

co"plainant and the !itnesses he "a' produce, and particularl' describin the place to be searched andthe thins to be sei2ed. 7=0ence, since there is no cri"e to spea4 of, the search !arrant does not even

bein to fulfill these strinent re?uire"ents and is therefore defective on its face. The nullit' of the

!arrant renders "oot and acade"ic the other issues raised in petitioners5 Motion to uash and Motionfor Reconsideration. Since the assailed search !arrant is null and void, all propert' sei2ed b' virtue

thereof should be returned to petitioners in accordance !ith established Burisprudence. 7>

In petitioners5 Repl' !ith +dditional Infor"ation the' allee that the trial court denied their "otion to

transfer their case to a Special ourt for IPR. @e have one throuh the records and !e fail to find an'trace of such "otion or even a cop' of the order den'in it. +ll that appears in the records is a cop' of

an order rantin a si"ilar "otion filed b' a certain Minnie Da'on !ith reard to Search @arrant No.

%6#


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+SID:. Search @arrant No. %6=>. The co"plaint alleed, a"on others8 that petitioner is the first, true andactual inventor of an aerial fu2e deno"inated as -Fu2e, PDR == 1&- !hich it developed as earl' as

Dece"ber $#>$ under the Self


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fu2e is identical in ever' respect to the petitioner5s fu2e and that the onl' difference bet!een the t!o

fu2es are "iniscule and "erel' cos"etic in nature. Petitioner pra'ed that a te"porar' restrainin order

andLor !rit of preli"inar' inBunction be issued enBoinin private respondent includin an' and all

persons actin on its behalf fro" "anufacturin, "ar4etin andLor profitin therefro", andLor fro"perfor"in an' other act in connection there!ith or tendin to preBudice and deprive it of an' rihts,

privilees and benefits to !hich it is dul' entitled as the first, true and actual inventor of the aerial f$ze.

On Dece"ber $C, $##6, the trial court issued a te"porar' restrainin order. Thereafter, hearins !ereheld on the application of petitioner for the issuance of a !rit of preli"inar' inBunction, !ith bothparties presentin their evidence. +fter the hearins, the trial court directed the parties to sub"it their

respective "e"oranda in support of their positions.

On Dece"ber 7=, $##6, private respondent sub"itted its "e"orandu" ( allein that petitioner has nocause of action to file a co"plaint for infrine"ent aainst it since it has no patent for the aerialf$ze!hich it clai"s to have invented that petitioner5s available re"ed' is to file a petition for

cancellation of patent before the 1ureau of Patents that private respondent as the patent holder cannot

be stripped of its propert' riht over the patented aerial f$zeconsistin of the e;clusive riht to"anufacture, use and sell the sa"e and that it stands to suffer irreparable da"ae and inBur' if it is

enBoined fro" the e;ercise of its propert' rihts over its patent.

On Dece"ber 7#, $##6, the trial court issued an Order 8rantin the issuance of a !rit of preli"inar'inBunction aainst private respondent the dispositive portion of !hich reads8

@0:R:FOR:, plaintiffs application for the issuance of a !rit of preli"inar' inBunctionis ranted and, upon postin of the correspondin bond b' plaintiff in the a"ount of

P0P 7CC,CCC.CC, let the !rit of preli"inar' inBunction be issued b' the branch ler4 of

this ourt enBoinin the defendant and an' and all persons actin on its behalf or b' andunder its authorit', fro" "anufacturin, "ar4etin andLor sellin aerial f$zesidentical,

to those of plaintiff, and fro" profitin therefro", andLor fro" perfor"in an' other act

in connection there!ith until further orders fro" this ourt.

Private respondent "oved for reconsideration but this !as denied b' the trial court in its Order 9ofMa' $$, $##&, pertinent portions of !hich read8

For resolution before this ourt is the Motion for Reconsideration filed b' the defendant

and the plaintiff5s Opposition thereto. The ourt finds no sufficient cause to reconsider

its order dated Dece"ber 7#, $##6. Durin the hearin for the issuance of thepreli"inar' inBunction, the plaintiff has a"pl' proven its entitle"ent to the relief pra'ed

for. It is undisputed that the plaintiff has developed itsaerial f$ze!a' bac4 in $#>$ !hile

the defendant bean "anufacturin the sa"e onl' in $#>=. Thus, it is onl' loical toconclude that it !as the plaintiff5s aerial f$zethat !as copied or i"itated !hich ives the

plaintiff the riht to have the defendant enBoined -fro" "anufacturin, "ar4etin andLor

sellinaerial f$zesidentical to those of the plaintiff, and fro" profitin therefro" andLor

perfor"in an' other act in connection there!ith until further orders fro" this ourt.-@ith reards to the defendant5s assertion that an action for infrine"ent "a' onl' be

brouht b' -an'one possessin riht, title or interest to the patented invention,- *Section

&7, R+ $%( ?ualified b' Sec. $C, R+ $%( to include onl' -the first true and actualinventor, his heirs, leal representatives or assinees, -this court finds the foreoin to

be untenable. Sec. $C "erel' enu"erates the persons !ho "a' have an invention

patented !hich does not necessaril' li"it to these persons the riht to institute an actionfor infrine"ent. Defendant further contends that the order in issue is disruptive of the

status ?uo. On the contrar', the order issued b' the ourt in effect "aintained the status


35/59

?uo. The last actual, peaceable uncontested status e;istin prior to this controvers' !as

the plaintiff "anufacturin and sellin its o!naerial f$zesPDR == 1& !hich !as

ordered stopped throuh the defendant5s letter. @ith the issuance of the order, the

operations of the plaintiff continue. )astl', this court believes that the defendant !ill notsuffer irreparable inBur' b' virtue of said order. The defendant5s clai" is pri"aril'

hined on its patent *)etters Patent No. 3M6 the validit' of !hich is bein

?uestioned in this case.@0:R:FOR:, pre"ises considered, the Motion for Reconsideration is hereb' deniedfor lac4 of "erit.

SO ORD:R:D.

+rieved, private respondent on /une 7=, $##&, filed a petition for certiorari, %anda%$sand

prohibition 10before respondent ourt of +ppeals raisin as rounds the follo!in8

a. Petitioner has no cause of action for infrine"ent aainst private respondent, the latternot havin an' patent for the aerial f$ze!hich it clai"s to have invented and developed

and alleedl' infrined b' private respondent

b. the case bein an action for cancellation or invalidation of private respondent5s )ettersPatent over its o!n aerial f$ze, the proper venue is the Office of the Director of Patents

c. The trial court acted in rave abuse of discretion andLor in e;cess of Burisdiction infindin that petitioner has full' established its clear title or riht to preli"inar'

inBunction

d. The trial court acted in rave abuse of discretion andLor in e;cess of Burisdiction in

rantin the preli"inar' inBunction, it bein disruptive of the status ?uo and

e. The trial court acted in rave abuse of discretion andLor in e;cess of Burisdiction in

rantin the preli"inar' inBunction thereb' deprivin private respondent of its propert'

rihts over the patentedaerial f$zeand cause it irreparable da"aes.

On Nove"ber #, $##&, the respondent court rendered the no! assailed decision reversin the trialcourt5s Order of Dece"ber 7#, $##6 and dis"issin the co"plaint filed b' petitioner.

The "otion for reconsideration !as also denied on /anuar' $=, $##(. 11 0ence, this present petition.

It is petitioner5s contention that it can file, under Section &7 of the Patent )a! *R.+. $%(, an action for

infrine"ent not as a patentee but as an entit' in possession of a riht, title or interest in and to the

patented invention. It advances the theor' that !hile the absence of a patent "a' prevent one fro"la!full' suin another for infrine"ent of said patent, such absence does not bar the first true and

actual inventor of the patented invention fro" suin another !ho !as ranted a patent in a suit for

declarator' or inBunctive relief reconi2ed under +"erican patent la!s. This re"ed', petitioner pointsout, "a' be li4ened to a civil action for infrine"ent under Section &7 of the Philippine Patent )a!.

@e find the above aru"ents untenable.

Section &7 of R.+. $%(, other!ise 4no!n as the Patent )a!, e;plicitl' provides8

Sec. &7. /iil action for infringe%ent. 9 +n' patentee, or an'one possessin an' riht,

title or interest in and to the patented invention, !hose rihts have been infrined, "a'

brin a civil action before the proper ourt of First Instance *no! Reional Trial court,to recover fro" the infriner da"aes sustained b' reason of the infrine"ent and to

secure an inBunction for the protection of his riht. . . .


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3nder the afore?uoted la!, onl' the patentee or his successors of the afore"entioned

la!, file a petition for cancellation of the patent !ithin three *6 'ears fro" the publication of said

patent !ith the Director of Patents and raise as round therefor that the person to !ho" the patent !as

issued is not the true and actual inventor. 0ence, petitioner5s re"ed' is not to file an action forinBunction or infrine"ent but to file a petition for cancellation of private respondent5s patent.

Petitioner ho!ever failed to do so. +s such, it can not no! assail or i"pun the validit' of the privaterespondent5s letters patent b' clai"in that it is the true and actual inventor of the aerial f$ze.

Thus, as correctl' ruled b' the respondent ourt of +ppeals in its assailed decision8 -since the

petitioner *private respondent herein is the patentee of the disputed invention e"braced b' letters of

patent 3M No. %#6> issued to it on /anuar' 76, $##C b' the 1ureau of Patents, it has in its favor notonl' the presu"ption of validit' of its patent, but that of a leal and factual first and true inventor of the

invention.-

In the case ofAg$as s.!e eon, 1'!e stated that8

The validit' of the patent issued b' the Philippine Patent Office in favor of the private

respondent and the ?uestion over the invest"ents, novelt' and usefulness of thei"proved process therein specified and described are "atters !hich are better

deter"ined b' the Philippines Patent Office. The technical Staff of the Philippines Patent

Office, co"posed of e;perts in their field, have, b' the issuance of the patent in?uestion, accepted the thinness of the private respondent5s ne! tiles as a discover'.

There is a presu"ption that the Philippine Patent Office has correctl' deter"ined the

patentabilit' of the i"prove"ent b' the private respondent of the process in ?uestion.


37/59


38/59

affidavit of petitioner allein the e;istence of prior art, "ar4ed :;h. -+- *b a brochure distributed b'

Manila Eas orporation disclosin a pictorial representation of Ranso"e 1urner "ade b' Ranso"e

Torch and 1urner o"pan', 3S+, "ar4ed :;h. -D- and, *c a brochure distributed b' :sso Easul or

:sso Standard :astern, Inc., of the Philippines sho!in a picture of another si"ilar burner !ith topelevation vie! and another perspective vie! of the sa"e burner, "ar4ed :;h. -:.-

Testif'in for herself petitioner narrated that her husband On 1un Tua !or4ed as a helper in the

3NIT:D FO3NDR !here respondent Melecia Madolaria used to be affiliated !ith fro" $#%( to$#=C that On helped in the castin of an )PE burner !hich !as the sa"e utilit' "odel of a burner for!hich )etters Patent No. 3M


39/59

b' petitioner !as identical or substantiall' identical !ith the utilit' "odel of the respondent. The

decision also stated that even assu"in that the brochures depicted clearl' each and ever' ele"ent of

the patented as burner device so that the prior art and patented device beca"e identical althouh in

truth the' !ere not, the' could not serve as anticipator' bars for the reason that the' !ere undated. Thedates !hen the' !ere distributed to the public !ere not indicated and, therefore, !ere useless prior art

references. The records and evidence also do not support the petitioner5s contention that )etters Patent

No. 3M


40/59

-Ranso"e- burners in $#%( !hich had the sa"e confiuration, for" and "echanis" as that of the

private respondent5s patented "odel.

Finall', it is arued that the testi"on' of private respondent5s lone !itness Rolando Madolaria should

not have been iven !eiht b' the Patent Office and the ourt of +ppeals because it contained "ereafter


41/59

clai"ed invention !as probabl' 4no!n in a sinle prior art device or practice. *Gal"an v.

Gi"berl' lar4, 7$> 3SP =>$, =>#

:ven assu"ingratia arg$endithat the aforesaid brochures do depict clearl' on all fours each

and ever' ele"ent of the patented as burner device so that the prior art and the said patenteddevice beco"e identical, althouh in truth the' are not, the' cannot serve as anticipator' bars

for the reason that the' are undated. The dates !hen the' !ere distributed to the public !ere not

indicated and, therefore, the' are useless prior art references.

;;; ;;; ;;;

Further"ore, and "ore sinificantl', the "odel "ar4ed :;h. -G- does not sho! !hether or notit !as "anufactured andLor cast before the application for the issuance of patent for the )PE

burner !as filed b' Melecia Madolaria.

@ith respect to :;h. -),- petitioner clai"ed it to be her o!n "odel of )PE burner alleedl'

"anufactured so"eti"e in $#=& or $#=( and sold b' her in the course of her business operationin the na"e of 1esco Metal Manufacturin, !hich burner !as deno"inated as -Ranso"e-

burner

;;; ;;; ;;;1ut a careful e;a"ination of :;h. -)- !ould sho! that it does not bear the !ord -Ranso"e-

!hich is the burner referred to as the product bein sold b' the Petitioner. This is not the !a' toprove that :;h. -)- anticipates )etters Patent No. 3M


42/59

Office co"posed of e;perts in their field has b' the issuance of the patent in ?uestion accepted private

respondent5s "odel of as burner as a discover'. There is a presu"ption that the Office has correctl'

deter"ined the patentabilit' of the "odel 8and such action "ust not be interfered !ith in the absenceof co"petent evidence to the contrar'.

The rule is settled that the findins of fact of the Director of Patents, especiall' !hen affir"ed b' the

ourt of +ppeals, are conclusive on this ourt !hen supported b' substantial evidence. Petitioner has

failed to sho! co"pellin rounds for a reversal of the findins and conclusions of the Patent Officeand the ourt of +ppeals.

The alleed failure of the Director of Patents and the ourt of +ppeals to accord evidentiar' !eiht to

the testi"onies of the !itnesses of petitioner sho!in anticipation is not a Bustification to rant the

petition. Pursuant to the re?uire"ent of clear and convincin evidence to overthro! the presu"ption of

validit' of a patent, it has been held that oral testi"on' to sho! anticipation is open to suspicion and ifuncorroborated b' coent evidence, as !hat occurred in this case, it "a' be held insufficient. 9

Finall', petitioner !ould !ant this ourt to revie! all over aain the evidence she presented before the

Patent Office. She arues that contrar' to the decision of the Patent Office and the ourt of +ppeals,

the evidence she presented clearl' proves that the patented "odel of private respondent is no loner

ne! and, therefore, fraud attended the ac?uisition of patent b' private respondent.It has been held that the ?uestion on priorit' of invention is one of fact. Novelt' and utilit' are li4e!ise

?uestions of fact. The validit' of patent is decided on the basis of factual in?uiries. @hether evidence

presented co"es !ithin the scope of prior art is a factual issue to be resolved b' the PatentOffice. 10There is ?uestion of fact !hen the doubt or difference arises as to the truth or falsehood ofalleed facts or !hen the ?uer' necessaril' invites calibration of the !hole evidence considerin

"ainl' the credibilit' of !itnesses, e;istence and relevance of specific surroundin circu"stances, theirrelation to each other and to the !hole and the probabilities of the situation. 11

Ti"e and aain !e have held that it is not the function of the Supre"e ourt to anal'2e or !eih all

over aain the evidence and credibilit' of !itnesses presented before the lo!er tribunal or office. The

Supre"e ourt is not a trier of facts. Its Burisdiction is li"ited to revie!in and revisin errors of la!i"puted to the lo!er court, its findins of fact bein conclusive and not revie!able b' this ourt.

@0:R:FOR:, the Petition is D:NI:D. The Decision of the ourt of +ppeals affir"in that of the

Philippine Patent Office is +FFIRM:D. osts aainst petitioner.

SO ORD:R:D.

Republic of the PhilippinesSUPREME COURT

Manila

T0IRD DIVISION

G.R. "). 1218'( Ju?y 24, 199(

SM#TH *L#"E $RE"CH LAORATOR#ES, LTD.,petitioner,vs.

COURT O$ APPEALS, UREAU O$ PATE"TS, TRADEMAR*S A"D TECH"OLOGTRA"S$ER an! DOCTORS PHARMACEUT#CALS, #"C. respondents.

DA+#DE, JR.,J.:


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This is an appeal under Rule &( of the Rules of ourt fro" the decision 1 & Nove"ber $##& of theourt of +ppeals in +=, it filed a petition for co"pulsor' licensin %!ith the1PTTT for authori2ation to "anufacture its o!n brand of "edicine fro" the dru /i%etidine and to

"ar4et the resultin product in the Philippines. The petition !as filed pursuant to the provisions ofSection 6& of Republic +ct No. $%( *+n +ct reatin a Patent Office Prescribin Its Po!ers and

Duties, Reulatin the Issuance of Patents, and +ppropriatin Funds Therefor, !hich provides for the

co"pulsor' licensin of a particular patent after the e;piration of t!o 'ears fro" the rant of the latterif the patented invention relates to, inter alia, "edicine or that !hich is necessar' for public health or

public safet'. Private respondent alleed that the rant of Philippine )etters Patent No. $77C= !as

issued on 7# Nove"ber $#=> that the petition !as filed be'ond the t!o


44/59

Patent No. $77C=, less 9

*a Transportation chares or allo!ances, if an', included in such a"ount

*b Trade, ?uantit' or cash discounts and bro4er5s or aent5s or distributor5s co""issions, if an',

allo!ed or paid

*c redits or allo!ances, if an', iven or "ade on account of reBection or return of the patented

product previousl' delivered and*d +n' ta;, e;cise or overn"ent chare included in such a"ount, or "easured b' the

production sale, transportation, use of deliver' of the products.

In case Qprivate respondent5s product containin the patented substance shall contain one or

"ore active inredients ad"i;ed there!ith, said product hereinafter identified as ad"i;edproduct, the ro'alt' to be paid shall be deter"ined in accordance !ith the follo!in for"ula8

Net Sales on Value of Patented

RO+)T +d"i;ed Product ; C.C7( ; Substance

9999999999 99999999

Value of Patented Value of Other

Substance +ctive Inredients

&. The ro'alties shall be co"puted after the end of each calendar ?uarter to all oods containin

the patented substance herein involved, "ade and sold durin the precedent ?uarter and to bepaid b' Qprivate respondent at its place of business on or before the thirtieth da' of the "onth

follo!in the end of each calendar ?uarter. Pa'"ents should be "ade to Qpetitioner5s

authori2ed representative in the Philippines

(. QPrivate respondent shall 4eep records in sufficient detail to enable Qpetitioner to deter"inethe ro'alties pa'able and shall further per"it its boo4s and records to be e;a"ined fro" ti"e to

ti"e at Qprivate respondent5s pre"ises durin office hours, to the e;tent necessar' to be "ade atthe e;pense of Qpetitioner b' a certified public accountant appointed b' Qpetitioner andacceptable to Qprivate respondent.

%. QPrivate respondent shall adopt and use its o!n trade"ar4 or labels on all its products

containin the patented substance herein involved

=. QPrivate respondent shall co"pl' !ith the la!s on drus and "edicine re?uirin previous

clinical tests and approval of proper overn"ent authorities before sellin to the public its o!nproducts "anufactured under the license

>. QPetitioner shall have the riht to ter"inate the license ranted to Qprivate respondent b'

ivin the latter thirt' *6C da's notice in !ritin to that effect, in the event that Qprivate

respondent default Qsic in the pa'"ent of ro'alt' provided herein or if Qprivate respondentshall default in the perfor"ance of other convenants or conditions of this aree"ent !hich are

to be perfor"ed b' Qprivate respondent8

*a QPrivate respondent shall have the riht provided it is not in default to

pa'"ent or ro'alties or other obliations under this aree"ent, to ter"inate thelicense ranted to its, Qsic ivin Qpetitioner thirt' *6C da's


45/59

operate to den' Qpetitioner its rihts or re"edies, either at la!s Qsic or e?uit', or

relieve Qprivate respondent of the pa'"ent of ro'alties or satisfaction of other

obliations incurred prior to the effective date of such ter"ination and

*c Notice of ter"ination of this license shall be filed !ith the 1ureau of Patents,Trade"ar4s and Technolo' Transfer.

#. In case of dispute as to the enforce"ent of the provisions of this license, the "atter shall be

sub"itted for arbitration before the Director of 1ureau of Patents, Trade"ar4s and Technolo'

Transfer or an' ran4in official of the 1ureau of Patents, Trade"ar4s and Technolo' Transferdul' deleated b' hi".

$C. This )icense shall inure to the benefit of each of the parties herein, to the subsidiaries and

assins of Qpetitioner and to the successors and assins of Qprivate respondent and

$$. This license ta4e Qsic effect i""ediatel'. 4

Petitioner then appealed to the ourt of +ppeals b' !a' of a petition for revie!, !hich !as doc4eted as

+=, the subBect letters Patent No. $77C= issued on

Nove"ber 7#, $#=> has been in effect for "ore than t!o *7 'ears. The patented invention

relates to co"pound and co"positions used in inhibitin certain actions of the hista"ine, hence,it relates to "edicine. Moreover, after hearin and careful consideration of the evidence

presented, the Director of Patents ruled that 9 -there is a"ple evidence to sho! that Qprivate

respondent possesses such capabilit', havin co"petent personnel, "achines and e?uip"ent as

!ell as per"it to "anufacture different drus containin patented active inredients such asetha"butol of +"erican 'ana"id and +"picillin and +"o;icillin of 1eecha" Eroups, )td.-


46/59

+s to the clai" b' the petitioner that it has the capacit' to !or4 the patented product althouh it

!as not sho!n that an' pretended abuse has been co""itted, thus the reason for rantin

co"pulsor' license -is intended not onl' to ive a chance to others to suppl' the public !ith the

?uantit' of the patented article but especiall' to prevent the buildin up of patent "onopolitiesQsic.- QPar4e Davis v. Doctors Phar"aceuticals, Inc., $& SR+ $C(6.

@e find that the rantin of co"pulsor' license is not si"pl' because Sec. 6& *$ e, R+ $%(

allo!s it in cases !here the invention relates to food and "edicine. The Director of Patents alsoconsidered in deter"inin that the applicant has the capabilit' to !or4 or "a4e use of thepatented product in the "anufacture of a useful product. In this case, the applicant !as able to

sho! that i"etidine, *subBect "atter of latters Patent No. $77C= is necessar' for the

"anufacture of an anti


47/59

product to be "anufactured b' 3NI)+1 !ill onl' be used, distributed, and

disposed locall'. Therefore, the ro'alt' rate of 7.( is Bust and reasonable.

It appearin that herein petitioner !ill be paid ro'alties on the sales of an' products Qsic the

licensee "a' "anufacture usin an' or all of the patented co"pounds, the petitioner cannotco"plain of a deprivation of propert' rihts !ithout Bust co"pensation QPrice v. 3NI)+1, )7(&7, Septe"ber $#, $#>>.

@e ta4e note of the !ell>, Minute Resolution

1eautifont, Inc., et al. v. ourt of +ppeals, et al., E.R. No. (C$&$, /anuar' 7#,

$#>>

Its "otion for reconsideration havin been denied in the resolution (of 6$ +uust $##(, petitioner filedthe instant petition for revie! on certiorari!ith the follo!in assin"ent of errors8

I

T0: 0ON. O3RT OF +PP:+)S :RR:D IN NOT 0O)DINE T0+T T0: 1PTTT5S

D:ISION VIO)+T:S INT:RN+TION+) )+@ +S :M1ODI:D IN *+ T0: P+RISONV:NTION FOR T0: PROT:TION OF IND3STRI+) PROP:RT +ND *1 T0:E+TT TR:+T, 3R3E3+ RO3ND, +ND M3ST +ORDINE) 1: S:T +SID: +ND

MODIFI:D.

II

T0: 0ON. O3RT OF +PP:+)S :RR:D IN NOT 0O)DINE T0+T T0: 1PTTT5SD:ISION IS +N INV+)ID ::RIS: OF PO)I: PO@:R, +1S:NT +N

lip case assignment no.2

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