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Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 148222 August 15, 2003
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner,
vs.
SHOEMART, INCORPORATED, and NORTH EDSA MARKETING,
INCORPORATED, Respondents.
D E C I S I O N
CORONA, J .:
In the instant petition for review on certiorari under Rule 45 of the Rules of Court,
petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision
1
of the Court
of Appeals reversing the October 31, 1996 decision
2
of the Regional Trial Court of Makati,
Branch 133, in Civil Case No. 92-516 which declared private respondents Shoemart Inc.
(SMI) and North Edsa Marketing Inc. (NEMI) liable for infringement of trademark and
copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals
3
contained a summary of this dispute:
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture
of advertising display units simply referred to as light boxes. These units utilize specially
printed posters sandwiched between plastic sheets and illuminated with back lights. Pearl
and Dean was able to secure a Certificate of Copyright Registration dated January 20, 1981
over these illuminated display units. The advertising light boxes were marketed under the
trademark "Poster Ads". The application for registration of the trademark was filed with the
Bureau of Patents, Trademarks and Technology Transfer on June 20, 1983, but was
approved only on September 12, 1988, per Registration No. 41165. From 1981 to about
1988, Pearl and Dean employed the services of Metro Industrial Services to manufacture its
advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc.
(SMI) for the lease and installation of the light boxes in SM City North Edsa. Since SM City
North Edsa was under construction at that time, SMI offered as an alternative, SM Makati
and SM Cubao, to which Pearl and Dean agreed. On September 11, 1985, Pearl and Deans
General Manager, Rodolfo Vergara, submitted for signature the contracts covering SM
Cubao and SM Makati to SMIs Advertising Promotions and Publicity Division Manager,
Ramonlito Abano. Only the contract for SM Makati, however, was returned signed. On
October 4, 1985, Vergara wrote Abano inquiring about the other contract and reminding him
that their agreement for installation of light boxes was not only for its SM Makati branch,
but also for SM Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMIs house counsel informed Pearl and Dean
that it was rescinding the contract for SM Makati due to non-performance of the terms
thereof. In his reply dated February 17, 1986, Vergara protested the unilateral action of SMI,
saying it was without basis. In the same letter, he pushed for the signing of the contract for
SM Cubao.
Two years later, Metro Industrial Services, the company formerly contracted by Pearl and
Dean to fabricate its display units, offered to construct light boxes for Shoemarts chain of
stores. SMI approved the proposal and ten (10) light boxes were subsequently fabricated by
Metro Industrial for SMI. After its contract with Metro Industrial was terminated, SMI
engaged the services of EYD Rainbow Advertising Corporation to make the light boxes.
Some 300 units were fabricated in 1991. These were delivered on a staggered basis and
installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were
installed at SM City and in the fastfood section of SM Cubao. Upon investigation, Pearl and
Dean found out that aside from the two (2) reported SM branches, light boxes similar to
those it manufactures were also installed in two (2) other SM stores. It further discovered
that defendant-appellant North Edsa Marketing Inc. (NEMI), through its marketing arm,
Prime Spots Marketing Services, was set up primarily to sell advertising space in lighted
display units located in SMIs different branches. Pearl and Dean noted that NEMI is a sister
company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both
SMI and NEMI enjoining them to cease using the subject light boxes and to remove the
same from SMIs establishments. It also demanded the discontinued use of the trademark
"Poster Ads," and the payment to Pearl and Dean of compensatory damages in the amount of
Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four
(224) light boxes and NEMI took down its advertisements for "Poster Ads" from the lighted
display units in SMIs stores. Claiming that both SMI and NEMI failed to meet all its
demands, Pearl and Dean filed this instant case for infringement of trademark and copyright,
unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently developed its
poster panels using commonly known techniques and available technology, without notice
of or reference to Pearl and Deans copyright. SMI noted that the registration of the mark
"Poster Ads" was only for stationeries such as letterheads, envelopes, and the like. Besides,
according to SMI, the word "Poster Ads" is a generic term which cannot be appropriated as
a trademark, and, as such, registration of such mark is invalid. It also stressed that Pearl and
Dean is not entitled to the reliefs prayed for in its complaint since its advertising display
units contained no copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that
Pearl and Dean had no cause of action against it and that the suit was purely intended to
malign SMIs good name. On this basis, SMI, aside from praying for the dismissal of the
case, also counterclaimed for moral, actual and exemplary damages and for the cancellation
of Pearl and Deans Certification of Copyright Registration No. PD-R-2558 dated January
20, 1981 and Certificate of Trademark Registration No. 4165 dated September 12, 1988.
NEMI, for its part, denied having manufactured, installed or used any advertising display
units, nor having engaged in the business of advertising. It repleaded SMIs averments,
admissions and denials and prayed for similar reliefs and counterclaims as SMI."
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable for
infringement of copyright under Section 2 of PD 49, as amended, and infringement of
trademark under Section 22 of RA No. 166, as amended, and are hereby penalized under
Section 28 of PD 49, as amended, and Sections 23 and 24 of RA 166, as amended.
Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:
(a) actual damages - P16,600,000.00,
representing profits
derived by defendants
as a result of infringe-
ment of plaintiffs copyright
from 1991 to 1992
(b) moral damages - P1,000.000.00
(c) exemplary damages - P1,000,000.00
(d) attorneys fees - P1,000,000.00
plus
(e) costs of suit;
(2) to deliver, under oath, for impounding in the National Library, all light boxes
of SMI which were fabricated by Metro Industrial Services and EYD Rainbow
Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the
trademark "Poster Ads", for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiffs light boxes
and its trademark "Poster Ads".
Defendants counterclaims are hereby ordered dismissed for lack of merit.
SO ORDERED.
4

On appeal, however, the Court of Appeals reversed the trial court:
Since the light boxes cannot, by any stretch of the imagination, be considered as either
prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly
classified as a copyrightable class "O" work, we have to agree with SMI when it posited that
what was copyrighted were the technical drawings only, and not the light boxes themselves,
thus:
42. When a drawing is technical and depicts a utilitarian object, a copyright over the
drawings like plaintiff-appellants will not extend to the actual object. It has so been held
under jurisprudence, of which the leading case is Baker vs. Selden (101 U.S. 841 (1879). In
that case, Selden had obtained a copyright protection for a book entitled "Seldens
Condensed Ledger or Bookkeeping Simplified" which purported to explain a new system of
bookkeeping. Included as part of the book were blank forms and illustrations consisting of
ruled lines and headings, specially designed for use in connection with the system explained
in the work. These forms showed the entire operation of a day or a week or a month on a
single page, or on two pages following each other. The defendant Baker then produced
forms which were similar to the forms illustrated in Seldens copyrighted books. The Court
held that exclusivity to the actual forms is not extended by a copyright. The reason was that
"to grant a monopoly in the underlying art when no examination of its novelty has ever been
made would be a surprise and a fraud upon the public; that is the province of letters patent,
not of copyright." And that is precisely the point. No doubt aware that its alleged original
design would never pass the rigorous examination of a patent application, plaintiff-appellant
fought to foist a fraudulent monopoly on the public by conveniently resorting to a copyright
registration which merely employs a recordal system without the benefit of an in-depth
examination of novelty.
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge
Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright
over an unpublished drawing entitled "Bridge Approach the drawing showed a novel
bridge approach to unsnarl traffic congestion". The defendant constructed a bridge approach
which was alleged to be an infringement of the new design illustrated in plaintiffs drawings.
In this case it was held that protection of the drawing does not extend to the unauthorized
duplication of the object drawn because copyright extends only to the description or
expression of the object and not to the object itself. It does not prevent one from using the
drawings to construct the object portrayed in the drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc.
v. Maddox, 379 F. 2d 84, it was held that there is no copyright infringement when one who,
without being authorized, uses a copyrighted architectural plan to construct a structure. This
is because the copyright does not extend to the structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Deans copyright over the
technical drawings of the latters advertising display units.
xxx xxx xxx
The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate
Court that the protective mantle of the Trademark Law extends only to the goods used by
the first user as specified in the certificate of registration, following the clear mandate
conveyed by Section 20 of Republic Act 166, as amended, otherwise known as the
Trademark Law, which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of
registration of a mark or trade-name shall be prima facie evidence of the validity of the
registration, the registrants ownership of the mark or trade-name, and of the registrants
exclusive right to use the same in connection with the goods, business or services specified
in the certificate, subject to any conditions and limitations stated therein." (underscoring
supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the registration of the
trademark "Poster Ads" with the Bureau of Patents, Trademarks, and Technology Transfer.
Said trademark was recorded in the Principal Register on September 12, 1988 under
Registration No. 41165 covering the following products: stationeries such as letterheads,
envelopes and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the part of
the defendants-appellants for their use of the words "Poster Ads", in the advertising display
units in suit. Jurisprudence has interpreted Section 20 of the Trademark Law as "an implicit
permission to a manufacturer to venture into the production of goods and allow that
producer to appropriate the brand name of the senior registrant on goods other than those
stated in the certificate of registration." The Supreme Court further emphasized the
restrictive meaning of Section 20 when it stated, through Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods not specified
therein, then a situation may arise whereby an applicant may be tempted to register a
trademark on any and all goods which his mind may conceive even if he had never intended
to use the trademark for the said goods. We believe that such omnibus registration is not
contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Deans registered
trademark and defendants-appellants "Poster Ads" design, as well as the parallel use by
which said words were used in the parties respective advertising copies, we cannot find
defendants-appellants liable for infringement of trademark. "Poster Ads" was registered by
Pearl and Dean for specific use in its stationeries, in contrast to defendants-appellants who
used the same words in their advertising display units. Why Pearl and Dean limited the use
of its trademark to stationeries is simply beyond us. But, having already done so, it must
stand by the consequence of the registration which it had caused.
xxx xxx xxx
We are constrained to adopt the view of defendants-appellants that the words "Poster Ads"
are a simple contraction of the generic term poster advertising. In the absence of any
convincing proof that "Poster Ads" has acquired a secondary meaning in this jurisdiction, we
find that Pearl and Deans exclusive right to the use of "Poster Ads" is limited to what is
written in its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark "Poster
Ads".
There being no finding of either copyright or trademark infringement on the part of SMI and
NEMI, the monetary award granted by the lower court to Pearl and Dean has no leg to stand
on.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE,
and another is rendered DISMISSING the complaint and counterclaims in the above-entitled
case for lack of merit.
5

Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the
following errors for the Courts consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM
AND NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
INFRINGEMENT OF PEARL & DEANS TRADEMARK "POSTER ADS"
WAS COMMITTED BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
AWARD OF THE TRIAL COURT, DESPITE THE LATTERS FINDING, NOT
DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS
GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING
CONTRACTS WITH PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR
ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEYS FEES AND
COSTS OF SUIT.
6

ISSUES
In resolving this very interesting case, we are challenged once again to put into proper
perspective four main concerns of intellectual property law patents, copyrights,
trademarks and unfair competition arising from infringement of any of the first three. We
shall focus then on the following issues:
(1) if the engineering or technical drawings of an advertising display unit (light
box) are granted copyright protection (copyright certificate of registration) by the
National Library, is the light box depicted in such engineering drawings ipso facto
also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent
issued by the Bureau of Patents Trademarks and Technology Transfer (now
Intellectual Property Office) in addition to the copyright of the engineering
drawings?
(3) can the owner of a registered trademark legally prevent others from using such
trademark if it is a mere abbreviation of a term descriptive of his goods, services
or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & Ds complaint was that SMI infringed on its copyright over the light boxes
when SMI had the units manufactured by Metro and EYD Rainbow Advertising for its own
account. Obviously, petitioners position was premised on its belief that its copyright over
the engineering drawings extended ipso facto to the light boxes depicted or illustrated in said
drawings. In ruling that there was no copyright infringement, the Court of Appeals held that
the copyright was limited to the drawings alone and not to the light box itself. We agree with
the appellate court.
First, petitioners application for a copyright certificate as well as Copyright Certificate
No. PD-R2588 issued by the National Library on January 20, 1981 clearly stated that it
was for a class "O" work under Section 2 (O) of PD 49 (The Intellectual Property Decree)
which was the statute then prevailing. Said Section 2 expressly enumerated the works
subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with
respect to any of the following works:
x x x x x x x x x
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;
x x x x x x x x x
Although petitioners copyright certificate was entitled "Advertising Display Units" (which
depicted the box-type electrical devices), its claim of copyright infringement cannot be
sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory
grant, the rights are limited to what the statute confers. It may be obtained and enjoyed only
with respect to the subjects and by the persons, and on terms and conditions specified in the
statute.
7
Accordingly, it can cover only the works falling within the statutory enumeration or
description.
8

P & D secured its copyright under the classification class "O" work. This being so,
petitioners copyright protection extended only to the technical drawings and not to the light
box itself because the latter was not at all in the category of "prints, pictorial illustrations,
advertising copies, labels, tags and box wraps." Stated otherwise, even as we find that P & D
indeed owned a valid copyright, the same could have referred only to the technical drawings
within the category of "pictorial illustrations." It could not have possibly stretched out to
include the underlying light box. The strict application
9
of the laws enumeration in Section
2 prevents us from giving petitioner even a little leeway, that is, even if its copyright
certificate was entitled "Advertising Display Units." What the law does not include, it
excludes, and for the good reason: the light box was not a literary or artistic piece which
could be copyrighted under the copyright law. And no less clearly, neither could the lack of
statutory authority to make the light box copyrightable be remedied by the simplistic act of
entitling the copyright certificate issued by the National Library as "Advertising Display
Units."
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the public
without license from P & D, then no doubt they would have been guilty of copyright
infringement. But this was not the case. SMIs and NEMIs acts complained of by P & D
were to have units similar or identical to the light box illustrated in the technical drawings
manufactured by Metro and EYD Rainbow Advertising, for leasing out to different
advertisers. Was this an infringement of petitioners copyright over the technical drawings?
We do not think so.
During the trial, the president of P & D himself admitted that the light box was neither a
literary not an artistic work but an "engineering or marketing invention."
10
Obviously, there
appeared to be some confusion regarding what ought or ought not to be the proper subjects
of copyrights, patents and trademarks. In the leading case of Kho vs. Court of Appeals,
11
we
ruled that these three legal rights are completely distinct and separate from one another, and
the protection afforded by one cannot be used interchangeably to cover items or works that
exclusively pertain to the others:
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise and shall include a stamped
or marked container of goods. In relation thereto, a trade name means the name or
designation identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright
is confined to literary and artistic works which are original intellectual creations in the
literary and artistic domain protected from the moment of their creation. Patentable
inventions, on the other hand, refer to any technical solution of a problem in any field of
human activity which is new, involves an inventive step and is industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial use of the light
boxes without license from petitioner, private respondents cannot be held legally liable for
infringement of P & Ds copyright over itstechnical drawings of the said light boxes, should
they be liable instead for infringement of patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light boxes. It therefore
acquired no patent rights which could have protected its invention, if in fact it really was.
And because it had no patent, petitioner could not legally prevent anyone from
manufacturing or commercially using the contraption. In Creser Precision Systems, Inc. vs.
Court of Appeals,
12
we held that "there can be no infringement of a patent until a patent has
been issued, since whatever right one has to the invention covered by the patent arises alone
from the grant of patent. x x x (A)n inventor has no common law right to a monopoly of his
invention. He has the right to make use of and vend his invention, but if he voluntarily
discloses it, such as by offering it for sale, the world is free to copy and use it with impunity.
A patent, however, gives the inventor the right to exclude all others. As a patentee, he has
the exclusive right of making, selling or using the invention.
13
On the assumption that
petitioners advertising units were patentable inventions, petitioner revealed them fully to
the public by submitting the engineering drawings thereof to the National Library.
To be able to effectively and legally preclude others from copying and profiting from the
invention, a patent is a primordial requirement. No patent, no protection. The ultimate goal
of a patent system is to bring new designs and technologies into the public domain through
disclosure.
14
Ideas, once disclosed to the public without the protection of a valid patent, are
subject to appropriation without significant restraint.
15

On one side of the coin is the public which will benefit from new ideas; on the other are the
inventors who must be protected. As held in Bauer & Cie vs. ODonnel,
16
"The act secured
to the inventor the exclusive right to make use, and vend the thing patented, and
consequently to prevent others from exercising like privileges without the consent of the
patentee. It was passed for the purpose of encouraging useful invention and promoting new
and useful inventions by the protection and stimulation given to inventive genius, and was
intended to secure to the public, after the lapse of the exclusive privileges granted the benefit
of such inventions and improvements."
The law attempts to strike an ideal balance between the two interests:
"(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation
and disclosure of new useful and non-obvious advances in technology and design, in return
for the exclusive right to practice the invention for a number of years. The inventor may
keep his invention secret and reap its fruits indefinitely. In consideration of its disclosure
and the consequent benefit to the community, the patent is granted. An exclusive enjoyment
is guaranteed him for 17 years, but upon the expiration of that period, the knowledge of the
invention inures to the people, who are thus enabled to practice it and profit by its use."
17

The patent law has a three-fold purpose: "first, patent law seeks to foster and reward
invention; second, it promotes disclosures of inventions to stimulate further innovation and
to permit the public to practice the invention once the patent expires; third, the stringent
requirements for patent protection seek to ensure that ideas in the public domain remain
there for the free use of the public."
18

It is only after an exhaustive examination by the patent office that a patent is issued. Such an
in-depth investigation is required because "in rewarding a useful invention, the rights and
welfare of the community must be fairly dealt with and effectively guarded. To that end, the
prerequisites to obtaining a patent are strictly observed and when a patent is issued, the
limitations on its exercise are equally strictly enforced. To begin with, a genuine invention
or discovery must be demonstrated lest in the constant demand for new appliances, the
heavy hand of tribute be laid on each slight technological advance in art."
19

There is no such scrutiny in the case of copyrights nor any notice published before its grant
to the effect that a person is claiming the creation of a work. The law confers the copyright
from the moment of creation
20
and the copyright certificate is issued upon registration with
the National Library of a sworn ex-parte claim of creation.
Therefore, not having gone through the arduous examination for patents, the petitioner
cannot exclude others from the manufacture, sale or commercial use of the light boxes on
the sole basis of its copyright certificate over the technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent
office (IPO) to scrutinize the light boxs eligibility as a patentable invention. The irony here
is that, had petitioner secured a patent instead, its exclusivity would have been for 17 years
only. But through the simplified procedure of copyright-registration with the National
Library without undergoing the rigor of defending the patentability of its invention before
the IPO and the public the petitioner would be protected for 50 years. This situation could
not have been the intention of the law.
In the oft-cited case of Baker vs. Selden
21
, the United States Supreme Court held that only
the expression of an idea is protected by copyright, not the idea itself. In that case, the
plaintiff held the copyright of a book which expounded on a new accounting system he had
developed. The publication illustrated blank forms of ledgers utilized in such a system. The
defendant reproduced forms similar to those illustrated in the plaintiffs copyrighted book.
The US Supreme Court ruled that:
"There is no doubt that a work on the subject of book-keeping, though only explanatory of
well known systems, may be the subject of a copyright; but, then, it is claimed only as a
book. x x x. But there is a clear distinction between the books, as such, and the art, which it
is, intended to illustrate. The mere statement of the proposition is so evident that it requires
hardly any argument to support it. The same distinction may be predicated of every other art
as well as that of bookkeeping. A treatise on the composition and use of medicines, be they
old or new; on the construction and use of ploughs or watches or churns; or on the mixture
and application of colors for painting or dyeing; or on the mode of drawing lines to produce
the effect of perspective, would be the subject of copyright; but no one would contend that
the copyright of the treatise would give the exclusive right to the art or manufacture
described therein. The copyright of the book, if not pirated from other works, would be valid
without regard to the novelty or want of novelty of its subject matter. The novelty of the art
or thing described or explained has nothing to do with the validity of the copyright. To give
to the author of the book an exclusive property in the art described therein, when no
examination of its novelty has ever been officially made, would be a surprise and a
fraud upon the public. That is the province of letters patent, not of copyright. The
claim to an invention of discovery of an art or manufacture must be subjected to the
examination of the Patent Office before an exclusive right therein can be obtained; and
a patent from the government can only secure it.
The difference between the two things, letters patent and copyright, may be illustrated by
reference to the subjects just enumerated. Take the case of medicines. Certain mixtures are
found to be of great value in the healing art. If the discoverer writes and publishes a book
on the subject (as regular physicians generally do), he gains no exclusive right to the
manufacture and sale of the medicine; he gives that to the public. If he desires to
acquire such exclusive right, he must obtain a patent for the mixture as a new art,
manufacture or composition of matter. He may copyright his book, if he pleases; but
that only secures to him the exclusive right of printing and publishing his book. So of
all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it
may contain, gives no exclusive right to the modes of drawing described, though they may
never have been known or used before. By publishing the book without getting a patent for
the art, the latter is given to the public.
x x x
Now, whilst no one has a right to print or publish his book, or any material part thereof, as a
book intended to convey instruction in the art, any person may practice and use the art itself
which he has described and illustrated therein. The use of the art is a totally different
thing from a publication of the book explaining it. The copyright of a book on
bookkeeping cannot secure the exclusive right to make, sell and use account books prepared
upon the plan set forth in such book. Whether the art might or might not have been patented,
is a question, which is not before us. It was not patented, and is open and free to the use of
the public. And, of course, in using the art, the ruled lines and headings of accounts must
necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a
confusion of ideas produced by the peculiar nature of the art described in the books, which
have been made the subject of copyright. In describing the art, the illustrations and diagrams
employed happened to correspond more closely than usual with the actual work performed
by the operator who uses the art. x x x The description of the art in a book, though
entitled to the benefit of copyright, lays no foundation for an exclusive claim to the art
itself. The object of the one is explanation; the object of the other is use. The former
may be secured by copyright. The latter can only be secured, if it can be secured at all,
by letters patent." (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark "Poster Ads" which petitioners
president said was a contraction of "poster advertising." P & D was able to secure a
trademark certificate for it, but one where the goods specified were "stationeries such as
letterheads, envelopes, calling cards and newsletters."
22
Petitioner admitted it did not
commercially engage in or market these goods. On the contrary, it dealt in electrically
operated backlit advertising units and the sale of advertising spaces thereon, which,
however, were not at all specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate
Appellate Court,
23
where we, invoking Section 20 of the old Trademark Law, ruled that "the
certificate of registration issued by the Director of Patents can confer (upon petitioner) the
exclusive right to use its own symbol only to those goods specified in the certificate, subject
to any conditions and limitations specified in the certificate x x x. One who has adopted and
used a trademark on his goods does not prevent the adoption and use of the same trademark
by others for products which are of a different description."
24
Faberge, Inc. was correct and
was in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.
25

Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure of P
& D to secure a trademark registration for specific use on the light boxes meant that there
could not have been any trademark infringement since registration was an essential element
thereof.1wphi1
ON THE ISSUE OF UNFAIR COMPETITION
If at all, the cause of action should have been for unfair competition, a situation which was
possible even if P & D had no registration.
26
However, while the petitioners complaint in
the RTC also cited unfair competition, the trial court did not find private respondents liable
therefor. Petitioner did not appeal this particular point; hence, it cannot now revive its claim
of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of
unfair competition.
By the nature of things, there can be no unfair competition under the law on copyrights
although it is applicable to disputes over the use of trademarks. Even a name or phrase
incapable of appropriation as a trademark or tradename may, by long and exclusive use by a
business (such that the name or phrase becomes associated with the business or product in
the mind of the purchasing public), be entitled to protection against unfair competition.
27
In
this case, there was no evidence that P & Ds use of "Poster Ads" was distinctive or well-
known. As noted by the Court of Appeals, petitioners expert witnesses himself had testified
that " Poster Ads was too generic a name. So it was difficult to identify it with any
company, honestly speaking."
28
This crucial admission by its own expert witness that
"Poster Ads" could not be associated with P & D showed that, in the mind of the public, the
goods and services carrying the trademark "Poster Ads" could not be distinguished from the
goods and services of other entities.
This fact also prevented the application of the doctrine of secondary meaning. "Poster Ads"
was generic and incapable of being used as a trademark because it was used in the field of
poster advertising, the very business engaged in by petitioner. "Secondary meaning" means
that a word or phrase originally incapable of exclusive appropriation with reference to an
article in the market (because it is geographically or otherwise descriptive) might
nevertheless have been used for so long and so exclusively by one producer with reference
to his article that, in the trade and to that branch of the purchasing public, the word or phrase
has come to mean that the article was his property.
29
The admission by petitioners own
expert witness that he himself could not associate "Poster Ads" with petitioner P & D
because it was "too generic" definitely precluded the application of this exception.
Having discussed the most important and critical issues, we see no need to belabor the rest.
All told, the Court finds no reversible error committed by the Court of Appeals when it
reversed the Regional Trial Court of Makati City.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals
dated May 22, 2001 is AFFIRMED in toto.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. L-45101 November 28, 1986
ROSARIO C. MAGUAN (formerly ROSARIO C. TAN), petitioner,
vs.
THE HONORABLE COURT OF APPEALS and SUSANA LUCHAN, respondents.
Ambrosio Padilla Law Offices for petitioner.

PARAS, J .:p
Submitted on December 9, 1977 for Our decision is this petition for review on certiorari of
the two Resolutions of the Court of Appeals, the first dated July 6, 1976, setting aside its
Decision of February 16, 1976 in CA-G.R. No. SP-04706, titled "SUSANA LUCHAN v.
Hon. HONRADO, et al." wherein it ruled for the dismissal of the petition for lack of merit
and at the same time nullifying the writ of preliminary injunction it had previously issued;
and the second, dated November 4, 1976, denying the motion for reconsideration of the first
resolution above-mentioned.
Petitioner is doing business under the firm name and style of SWAN MANUFACTURING"
while private respondent is likewise doing business under the firm name and style of
"SUSANA LUCHAN POWDER PUFF MANUFACTURING."
It is undisputed that petitioner is a patent holder of powder puff namely:
1. UM-423 (extended and/or renewed under Extension No. UM-109 for
a period of 5 years from October 6, 1971)
2. UM-450 (extended and/or renewed under Extension No. UM110 for a
period of 5 years from January 26, 1972)
3. UM 1184, for a period of 5years fromApril 5, 1974.(Petition, Rollo,
pp. 6-7).
In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86), petitioner informed private
respondent that the powder puffs the latter is manufacturing and selling to various
enterprises particularly those in the cosmetics industry, resemble Identical or substantially
Identical powder puffs of which the former is a patent holder under Registration
Certification Nos. Extension UM-109, Extension UM-110 and Utility Model No. 1184;
petitioner explained such production and sale constitute infringement of said patents and
therefore its immediate discontinuance is demanded, otherwise it will be compelled to take
judicial action. (Rollo, pp. 7-8).
Private respondent replied stating that her products are different and countered that
petitioner's patents are void because the utility models applied for were not new and
patentable and the person to whom the patents were issued was not the true and actual
author nor were her rights derived from such author. (Taken from allegations in the Answer,
par. 4, Rollo, p. 93). And on July 25, 1974, private respondent assailed the validity of the
patents involved and filed with the Philippine Patent Office petitions for cancellation of (1)
Utility Model Letter Patent Extension No. UM-109 (Inter Partes Case No. 838, Susana
Luchan v. Rosario C. Tan), (2) Utility Model Letters Patent No. UM-1184 (Inter Partes Case
No. 839, Susana Luchan v. Rosario C. Tan), (3) Utility Model Letters Patent Extension No.
UM-110 (Inter Partes Case No. 840, Susana Luchan v. Rosario C. Tan. (Taken from
allegations in the Answer, par. 10, Rollo, pp. 94-95).
In view thereof, petitioner, on August 24, 1974, filed a complaint for damages with
injunction and preliminary injunction against private respondent with the then Court of First
Instance of Rizal, Pasig Branch, docketed as Civil Case No. 19908, for infringing the
aforesaid letters patent, and prayed, among others, that a writ of preliminary injunction be
immediately issued (Complaint, Rollo, p. 90).
In her answer, private respondent alleged that the products she is manufacturing and offering
for sale are not Identical, or even only substantially Identical to the products covered by
petitioner's patents and, by way of affirmative defenses, further alleged that petitioner's
patents in question are void on the following grounds:
(1) at the time of filing of application for the patents
involved, the utility models applied for were not
new and patentable under Sec. 55 of R.A. 165, as
amended by R.A. 864; and
(2) the person to whom the patents were issued was
not the true and actual author of the utility models
applied for, and neither did she derive her rights
from any true and actual author of these utility
models.
for the following reasons:
(a) since years prior to the filing of applications for
the patents involved, powder puffs of the kind
applied for were then already existing and publicly
being sold in the market; both in the Philippines and
abroad; and
(b) applicant's claims in her applications, of
"construction" or process of manufacturing the
utility models applied for, with respect to UM-423
and UM-450, were but a complicated and
impractical version of an old, simple one which has
been well known to the cosmetics industry since
years previous to her filing of applications, and
which belonged to no one except to the general
public; and with respect to UM1184; her claim in
her application of a unitary powder puff, was but an
limitation of a product well known to the cosmetics
industry since years previous to her firing of
application, and which belonged to no one except to
the general public; (Answer, Rollo, pp. 93-94).
On September 18, 1974, the trial court issued an Order (Annex "K", Rollo, p. 125) granting
the preliminary injunction prayed for by petitioner. Consequently, the corresponding writ
was subsequently issued (Annex "K-1", Rollo, p. 131) enjoining the herein private
respondent (then defendant) and all other persons employed by her, her agents, servants and
employees from directly or indirectly manufacturing, making or causing to be made, selling
or causing to be sold, or using or causing to be used in accordance with, or embodying the
utility models of the Philippine Patent Office Utility Model Letters Patent Nos. 423
(Extension No. UM-109), No. 450 (Extension No. UM-110), and Utility Model No. 1184 or
from infringement upon or violating said letters patent in any way whatsoever (Annex " K-1
", Rollo, p. 131).
Private respondent questioned the propriety of the trial court's issuance of the Writ of
Preliminary Injunction arguing that since there is still a pending cancellation proceedings
before the Philippine Patent Office concerning petitioner's patents, such cannot be the basis
for preliminary injunction (Motion for Reconsideration, Rollo, p. 132).
In an Order dated September 11, 1975, the trial court denied private respondent's motion for
reconsideration (Annex "N", Rollo, p. 142).
In challenging these Orders private respondent filed a petition for certiorari with the
respondent court on September 29, 1975 (Annex "D", Rollo, pp. 148-171) reiterating among
other things the invalidity of petitioner's patents and prayed that the trial court be restrained
from enforcing or continuing to enforce the following:
(1) Order dated September 18, 1974, granting the
preliminary injunction;
(2) Writ of preliminary injunction dated September
18, 1974; and
(3) Order dated September 11, 1974 denying
petitioner's motion petition for reconsideration.
On October 15, 1975, the Writ of Preliminary Injunction was issued by the respondent Court
of Appeals as follows:
NOW, THEREFORE, you, respondents, and/or any person/persons
acting on your stead, are hereby ENJOINED to RESTRAIN from
enforcing or continuing to enforce, the proceedings complained of in the
petition to wit: 1) Order dated September 18, 1974, granting the
preliminary injunction; 2) Writ of Preliminary Injunction dated
September 18, 1974; and Order dated September 11, 1975, denying
petitioner's motion for reconsideration, all issued in connection with
Civil Case No. 19908, UNTIL FURTHER ORDERS FROM THIS
COURT. (Annex "P", Rollo, p. 1.73)
On February 16, 1976, respondent court promulgated a decision the dispositive portion of
which reads:
WHEREFORE, finding no merit in the herein petition, the same is
hereby dismissed and the preliminary injunction previously issued by
this Court is hereby set aside, with costs.
SO ORDERED. (CA Decision, Rollo, p. 189).
ln said decision respondent court stated that in disposing of the petition it tackled only the
issue of whether the court a quo acted with grave abuse of discretion in issuing the
challenged orders. It made clear the question of whether the patents have been infringed or
not was not determined considering the court a 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
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 quohad 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).
In a Resolution dated November 4, 1976, respondent court, not persuaded by the grounds
embodied in the motion for reconsideration filed by herein petitioner (Annex "V ", Rollo, p.
227), denied the same for lack of merit, thereby maintaining the same stand it took in its July
6, 1976 Resolution (Rollo, p. 281). Hence, this petition.
On December 3, 1976, without giving due course to the petition, this Court required
respondent to file her Comment (Rollo, p. 290) which was filed on December 16, 1976
(Rollo, pp. 291-316). Thereafter, petitioner filed her Reply (Rollo, p. 323) and on May 30,
1977, the petition was given due course (Rollo, p. 345). Petitioner filed her brief on July 14,
1977 (Rollo, p. 351) while private respondent filed her brief on August 25, 1977 (Rollo, p.
359). Thereafter, petitioner having failed to file reply brief, the Court resolved to declare the
case submitted for decision on December 9, 1977 (Rollo, p. 359).
The assignment of errors raised by the petitioner in this case (Rollo, pp. 15-16) may be
reduced to three main issues:
(1) Whether or not in an action for infringement the
Court a quo had jurisdiction to determine the
invalidity of the patents at issue which invalidity
was still pending consideration in the patent office.
(2) Whether or not the Court a quo committed grave
abuse of discretion in the issuance of a writ of
preliminary injunction.
(3) Whether or not certiorari is the proper remedy.
The first issue has been laid to rest in a number of cases where the Court ruled that "When a
patent is sought to be enforced, the questions of invention, novelty or prior use, and each 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 faciepresumption of its correctness and validity. The decision of the Commissioner
(now Director) of Patent in granting the patent is presumed to be correct. The burden of
going forward with the evidence (burden of evidence) then shifts to the defendant to
overcome by competent evidence this legal presumption.
The question then in the instant case is whether or not the evidence introduced by private
respondent herein is sufficient to overcome said presumption.
After a careful review of the evidence consisting of 64 exhibits and oral testimonies of five
witnesses presented by private respondents before the Court of First Instance before the
Order of preliminary injunction was issued as well as those presented by the petitioner,
respondent Court of Appeals was satisfied that there is a prima facie showing of a fair
question of invalidity of petitioner's patents on the ground of lack of novelty. As pointed out
by said appellate court said evidence appeared not to have been considered at all by the
court a quo for alleged lack of jurisdiction, on the mistaken notion that such question in
within the exclusive jurisdiction of the patent office.
It has been repeatedly held that an invention must possess the essential elements of novelty ,
originality and precedence and for the patentee to be entitled to protection, the invention
must be new to the world. Accordingly, a single instance of public use of the invention by a
patentee for more than two years (now for more than one year only under Sec. 9 of the
Patent Law) before the date of his application for his patent, will be fatal to, the validity of
the patent when issued. (Frank, et al. v. Kosuyama Vargas v. F.M. Yaptico & Co. and
Vargas v. Chua, et al., supra).
The law provides:
SEC. 9. Invention not considered new or patentable. An invention shall not be
considered new or capable of being patented if it was known or used by others in
the Philippines before the invention thereof by the inventor named in an
application for patent for the invention; or if it was patented or described in any
printed publication in the Philippines or any foreign country more than one year
before the application for a patent therefor; or if it had been in public use or on
sale in the Philippines for more than one year before the application for a patent
therefor; or if it is the subject matter of a validity issued patent in the Philippines
granted on an application filed before the filing of the application for patent
therefor.
Thus, more specifically, under American Law from which our Patent Law was derived
(Vargas v. F.M. Yaptico & Co. supra) it is generally held that in patent cases a preliminary
injunction will not issue for patent infringement unless the validity of the patent is clear and
beyond question. The issuance of letters patent, standing alone, is not sufficient to support
such drastic relief (8 Deller's Walker on Patents p. 406). In cases of infringement of patent
no preliminary injunction will be granted unless the patent is valid and infringed beyond
question and the record conclusively proves the defense is sham. (Ibid., p. 402)
In the same manner, under our jurisprudence, as a general rule because of the injurious
consequences a writ of injunction may bring, the right to the relief demanded must be clear
and unmistakable. (Sangki v. Comelec, 21 SCRA 1392; December 26, 1967) and the
dissolution of the writ is proper where applicant has doubtful title to the disputed property.
(Ramos v. C.A., 95 SCRA 359).
III.
It will be noted that the validity of petitioner's patents is in question for want of novelty.
Private respondent contends that powder puffs Identical in appearance with that covered by
petitioner's patents existed and were publicly known and used as early as 1963 long before
petitioner was issued the patents in question. (List of Exhibits, Rollo, pp. 194-199). As
correctly observed by respondent Court of Appeals, "since sufficient proofs have been
introduced in evidence showing a fair question of the invalidity of the patents issued for
such models, it is but right that the evidence be looked into, evaluated and determined on the
merits so that the matter of whether the patents issued were in fact valid or not may be
resolved." (Rollo, pp. 286-287).
All these notwithstanding, the trial court nonetheless issued the writ of preliminary
injunction which under the circumstances should be denied.
For failure to determine first the validity of the patents before aforesaid issuance of the writ,
the trial court failed to satisfy the two requisites necessary if an injunction is to issue,
namely: the existence of the right to be protected and the violation of said right. (Buayan
Cattle Co., Inc. v. Quintillan, 128 SCRA 276).
Under the above established principles, it appears obvious that the trial court committed a
grave abuse of discretion which makes certiorari the appropriate remedy.
As found by respondent Court of Appeals, the injunctive order of the trial court is of so
general a tenor that petitioner may be totally barred from the sale of any kind of powder
puff. Under the circumstances, respondent appellate court is of the view that ordinary appeal
is obviously inadequate. (Rollo, p. 288). A parallel was drawn from a decision of the
Supreme Court in the case of Sanchez v. Hon. Court of Appeals, 69 SCRA 328 [1976] where
the First Division of the Supreme Court ruled that "The prerogative writ of certiorari may be
applied for by proper petition notwithstanding the existence of the regular remedy of an
appeal in due cause when among other reasons, the broader interests of justice so require or
an ordinary appeal is not an adequate remedy."
Private respondent maintains the position that the resolutions sought to be appealed from
had long become final and executory for failure of Hon. Reynaldo P. Honrado, the trial court
judge, to appeal by certiorari from the resolutions of respondent Court of Appeals. (Rollo,
pp. 291-292).
Such contention is untenable.
There is no dispute that petitioner has seasonably petitioned. On the other hand, it is
elementary that the trial judge is a mere nominal party as clearly provided in Section 5, Rule
65 of the Revised Rules of Court where it shall be the duty of such person or persons
interested in sustaining the proceedings in court, "to appear and defend, both in his or their
own behalf and in behalf of the court or judge affected by the proceedings."
Relative thereto "the judge whose order is under attack is merely a nominal party;
wherefore, a judge in his official capacity should not be made to appear as a party seeking
reversal of a decision that is unfavorable to the action taken by him." (Hon. Alcasid v.
Samson, 102 Phil. 735-736; Tarona v. Sayo, 67 SCRA 508, 524; Lim Se v. Argel, 70 SCRA
378).
As to petitioner's claim of prescription, private respondent's contention that such refers to the
filing of petitions for cancellation in the Patent Office under Sec. 28 of the Patent Law and
not to a defense against an action for infringement under Sec. 45 thereof which may be
raised anytime, is evident under aforesaid law.
PREMISES CONSIDERED, the assailed resolutions of the Court of Appeals are hereby
AFFIRMED. SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
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 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
(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 embodying plaintiff's patented
improvement for the manufacture of pre-cast tiles, plaintiff furnishing
said defendant the actual model of the tiles in escayola and explained to
said engraver the plans, specifications and the details of the engravings
as he wanted them to be made, including an explanation of the lip width,
artistic slope of easement and critical depth of the engraving that
plaintiff wanted for his moulds; that engraver Enrique Aquino knew that
the moulds he was engraving for plaintiff were the latter's very own,
which possession the new features and characteristics covered by
plaintiff's parent; that defendant Aguas personally, as a building
contractor, purchased from plaintiff, tiles shaped out of these moulds at
the back of which was imprinted plaintiff's patent number (Exhs., "A" to
"E"); that subsequently, through a representative, Mr. Leonardo,
defendant Aguas requested Aquino to make engravings of the same type
and bearing the characteristics of plaintiff's moulds; that Mr. Aquino
knew that the moulds he was asked to engrave for defendant Aguas
would be used to produce cement tiles similar to plaintiff's; that the
moulds which F.H. Aquino & Sons eventually engraved for Aguas and
for which it charged Aguas double the rate it charged plaintiff De Leon,
contain the very same characteristic features of plaintiff's mould and that
Aguas used these moulds in the manufacture of his tiles which he
actually put out for sale to the public (Exhs. "1" to "3" and Exhs. "A" to
"E"); that both plaintiff's and defendant Aguas' tiles are sculptured pre-
cast wall tiles intended as a new feature of construction and wag
ornamentation substantially Identical to each other in size, easement, lip
width and critical depth of the deepest depression; and that the only
significant difference between plaintiff's mould and that engraved by
Aquino for Aguas is that, whereas plaintiff's mould turns out tiles 4 x 4
inches in size, defendant Aguas' mould is made to fit a 4-1/4 x 4-1/4
inch tile.
9

The patent right of the private respondent expired on May 5, 1977.
10
The errors will be
discuss only to determine the right of said private respondent to damages.
The petitioner questioned the validity of the patent of the private respondent, Conrado G. de
Leon, on the ground that the process, subject of said patent, is not an invention or discovery,
or an improvement of the old system of making tiles. It should be noted that the private
respondent does not claim to be the discoverer or inventor of the old process of tile-making.
He only claims to have introduced an improvement of said process. In fact, Letters Patent
No. 658 was issued by the Philippine Patent Office to the private respondent, Conrado G. de
Leon, to protect his rights as the inventor of "an alleged new and useful improvement in the
process of making mosaic pre-cast tiles."
11
Indeed, Section 7, Republic Act No. 165, as
amended provides: "Any invention of a new and useful machine, manufactured product or
substance, process, or an improvement of the foregoing, shall be patentable.
The Court of Appeals found that the private respondent has introduced an improvement in
the process of tile-making because:
... we find that plaintiff-appellee has introduced an improvement in the
process of tile-making, which proceeds not merely from mechanical
skill, said improvement consisting among other things, in the new
critical depth, lip width, easement and field of designs of the new tiles.
The improved lip width of appellee's tiles ensures the durability of the
finished product preventing the flaking off of the edges. The easement
caused by the inclination of the protrusions of the patented moulds is for
the purpose of facilitating the removal of the newly processed tile from
the female die. Evidently, appellee's improvement consists in the
solution to the old critical problem by making the protrusions on his
moulds attain an optimum height, so that the engraving thereon would
be deep enough to produce tiles for sculptured and decorative purposes,
strong optimum thickness of appellee's new tiles of only 1/8 of an inch
at the deepest easement (Exhs. "D" and "D-1") is a most critical feature,
suggestive of discovery and inventiveness, especially considering that,
despite said thinness, the freshly formed tile remains strong enough for
its intended purpose.
While it is true that the matter of easement, lip width, depth, protrusions
and depressions are known to some sculptors, still, to be able to produce
a new and useful wall tile, by using them all together, amounts to an
invention. More so, if the totality of all these features are viewed in
combination with the Ideal composition of cement, sodium silicate and
screened fine sand.
By using his improved process, plaintiff has succeeded in producing a
new product - a concrete sculptured tile which could be utilized for
walling and decorative purposes. No proof was adduced to show that
any tile of the same kind had been produced by others before appellee.
Moreover, it appears that appellee has been deriving considerable profit
from his manufacture and sale of such tiles. This commercial success is
evidence of patentability (Walker on Patents, Dellers Edition, Vol. I, p.
237).
12

The validily of the patent issued by the Philippines Patent Office in favor of the private
respondent and the question over the inventiveness, novelty and usefulness of the improved
process therein specified and described are matters which are better determined by the
Philippines Patent Office. The technical staff of the Philippines Patent Office, composed of
experts in their field, have, by the issuance of the patent in question, accepted the thinness of
the private respondent's new tiles as a discovery. There is a presumption that the Philippines
Patent Office has correctly determined the patentability of the improvement by the private
respondent of the process in question.
Anent this matter, the Court of Appeals said:
Appellant has not adduced evidence sufficient to overcome the above
established legal presumption of validity or to warrant reversal of the
findings of the lower court relative to the validity of the patent in
question. In fact, as we have already pointed out, the clear
preponderance of evidence bolsters said presumption of validity of
appellee's patent. There is no indication in the records of this case and
this Court is unaware of any fact, which would tend to show that
concrete wall tiles similar to those produced by appellee had ever been
made by others before he started manufacturing the same. In fact, during
the trial, appellant was challenged by appellee to present a tile of the
same kind as those produced by the latter, from any earlier source but,
despite the fact that appellant had every chance to do so, he could not
present any. There is, therefore, no concrete proof that the improved
process of tile-making described in appellee's patent was used by, or
known to, others previous to his discovery thereof.
13

The contention of the petitioner Aguas that the letters patent of de Leon was actually a
patent for the old and non-patentable process of making mosaic pre-cast tiles is devoid of
merit. De Leon never claimed to have invented the process of tile-making. The Claims and
Specifications of Patent No. 658 show that although some of the steps or parts of the old
process of tile making were described therein, there were novel and inventive features
mentioned in the process. Some of the novel features of the private respondent's
improvements are the following: critical depth, with corresponding easement and lip width
to such degree as leaves the tile as thin as 1/8 of an inch at its thinnest portion, Ideal
composition of cement and fine river sand, among other ingredients that makes possible the
production of tough and durable wall tiles, though thin and light; the engraving of deep
designs in such a way as to make the tiles decorative, artistic and suitable for wall
ornamentation, and the fact that the tiles can be mass produced in commercial quantities and
can be conveniently stock-piled, handled and packed without any intolerable incidence of
breakages.
14

The petitioner also contends that the improvement of respondent is not patentable because it
is not new, useful and inventive. This contention is without merit.
The records disclose that de Leon's process is an improvement of the old process of tile
making. The tiles produced from de Leon's process are suitable for construction and
ornamentation, which previously had not been achieved by tiles made out of the old process
of tile making. De Leon's invention has therefore brought about a new and useful kind of
tile. The old type of tiles were usually intended for floors although there is nothing to
prevent one from using them for walling purposes. These tiles are neither artistic nor
ornamental. They are heavy and massive.
The respondent's improvement is indeed inventive and goes beyond the exercise of
mechanical skill. He has introduced a new kind of tile for a new purpose. He has improved
the old method of making tiles and pre-cast articles which were not satisfactory because of
an intolerable number of breakages, especially if deep engravings are made on the tile. He
has overcome the problem of producing decorative tiles with deep engraving, but with
sufficient durability.
15
Durability inspite of the thinness and lightness of the tile, is assured,
provided that a certain critical depth is maintained in relation to the dimensions of the tile.
16

The petitioner also claims that changing the design from embossed to engraved tiles is
neither new nor inventive because the Machuca Tile Factory and the Pomona Tile
Manufacturing Company have been manufacturing decorative wall tiles that are embossed
as well as engraved;
17
that these tiles have also depth, lip width, easement and field of
designs;
18
and that the private respondent had copied some designs of Pomona.
19

The Machuca tiles are different from that of the private respondent. The designs are
embossed and not engraved as claimed by the petitioner. There may be depressions but these
depressions are too shallow to be considered engraved. Besides, the Machuca tiles are heavy
and massive.
There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles are
made of ceramics.
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, which can be safely be considered the amount by
which he enriched himself when he infringed plaintiff's patent. Under
Sec. 42 of the Patent Law any patentee whose rights have been infringed
is entitled to damages which, according to the circumstances of the case
may be in a sum above the amount found as actual damages sustained
provided the award does not exceed three times the amount of such
actual damages. Considering the wantonness of the infringement
committed by the defendants who knew all the time about the existence
of plaintiff's patent, the Court feels there is reason to grant plaintiff
maximum damages in the sum of P10,020.99. And in order to
discourage patent infringements and to give more teeth to the provisions
of the patent law thus promoting a stronger public policy committed to
afford greater incentives and protection to inventors, the Court hereby
awards plaintiff exemplary damages in the sum of P5,000.00 to be paid
jointly and severally by defendants. Considering the status of plaintiff as
a reputable businessman, and owner of the likewise reputed House of
Pre-Cast, he is entitled to an award of moral damages in the sum of
P50,000.00.
23

In reducing the amount of moral damages the Court of Appeals said:
As regards the question of moral damages it has been shown that as a
result of the unlawful acts of infringment committed by defendants,
plaintiff was unstandably very sad; he worried and became nervous and
lost concentration on his work in connection with his tile business (pp.
28, 30, t.s.n., Feb. 28, 1964). In addition, plaintiff's character and
reputation have been unnecessarily put in question because defendants,
by their acts of infringement have created a doubt or suspicion in the
public mind concerning the truth and honesty of plaintiff's
advertisements and public announcements of his valid patent.
Necessarily, said acts of defendants have caused plaintiff considerable
mental suffering, considering especially, the fact that he staked
everything on his pre-cast tile business (p. 36, t.s.n., Id.) The wantonness
and evident bad faith characterizing defendants' prejudicial acts against
plaintiff justify the assessment of moral damages in plaintiff's favor,
though we do not believe the amount of P50,000.00 awarded by the
lower court is warranted by the circumstances. We feel that said amount
should be reduced to P3,000.00 by way of compensating appellee for his
moral suffering. "Willful injury to property may be a legal ground for
awarding moral damages if the court should find that, under the
circumstances such damages are justly due" (Art. 2219 NCC).
There is no reason to reduce the amount of damages and attorneys fees awarded by the trial
court as modified by the Court of Appeals.
WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed
from is hereby affirmed, without pronouncement as to costs.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G. R. No. 126627 August 14, 2003
SMITH KLINE BECKMAN CORPORATION, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and TRYCO PHARMA CORPORATION, Respondents.
D E C I S I O N
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. 14561
1
for the aforesaid invention was issued to
petitioner for a term of seventeen (17) years.
The letters patent provides in its claims
2
that the patented invention consisted of a new
compound named methyl 5 propylthio-2-benzimidazole carbamate and the methods or
compositions utilizing the compound as an active ingredient in fighting infections caused by
gastrointestinal parasites and lungworms in animals such as swine, sheep, cattle, goats,
horses, and even pet animals.
Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures,
distributes and sells veterinary products including Impregon, a drug that has Albendazole for
its active ingredient and is claimed to be effective against gastro-intestinal roundworms,
lungworms, tapeworms and fluke infestation in carabaos, cattle and goats.
Petitioner sued private respondent for infringement of patent and unfair competition before
the Caloocan City Regional Trial Court (RTC).
3
It claimed that its patent covers or includes
the substance Albendazole such that private respondent, by manufacturing, selling, using,
and causing to be sold and used the drug Impregon without its authorization, infringed
Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No. 14561
4
as well as committed unfair
competition under Article 189, paragraph 1 of the Revised Penal Code and Section 29 of
Republic Act No. 166 (The Trademark Law) for advertising and selling as its own the drug
Impregon although the same contained petitioners patented Albendazole.
5

On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining
order against private respondent enjoining it from committing acts of patent infringement
and unfair competition.
6
A writ of preliminary injunction was subsequently issued.
7

Private respondent in its Answer
8
averred that Letters Patent No. 14561 does not cover the
substance Albendazole for nowhere in it does that word appear; that even if the patent were
to include Albendazole, such substance is unpatentable; that the Bureau of Food and Drugs
allowed it to manufacture and market Impregon with Albendazole as its known ingredient;
that there is no proof that it passed off in any way its veterinary products as those of
petitioner; that Letters Patent No. 14561 is null and void, the application for the issuance
thereof having been filed beyond the one year period from the filing of an application abroad
for the same invention covered thereby, in violation of Section 15 of Republic Act No. 165
(The Patent Law); and that petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such amount of actual
damages as may be proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary
damages; and P150,000.00 in attorneys fees.
Finding for private respondent, the trial court rendered a Decision dated July 23, 1991,
9
the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is hereby,
DISMISSED. The Writ of injunction issued in connection with the case is hereby ordered
DISSOLVED.
The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby declared
null and void for being in violation of Sections 7, 9 and 15 of the Patents Law.
Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby directed
to cancel Letters Patent No. 14561 issued to the plaintiff and to publish such cancellation in
the Official Gazette.
Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual
damages and P100,000.00 attorneys fees as prayed for in its counterclaim but said amount
awarded to defendant is subject to the lien on correct payment of filing fees.
SO ORDERED. (Underscoring supplied)
On appeal, the Court of Appeals, by Decision of April 21, 1995,
10
upheld the trial courts
finding that private respondent was not liable for any infringement of the patent of petitioner
in light of the latters failure to show that Albendazole is the same as the compound subject
of Letters Patent No. 14561. Noting petitioners admission of the issuance by the U.S. of a
patent for Albendazole in the name of Smith Kline and French Laboratories which was
petitioners former corporate name, the appellate court considered the U.S. patent as
implying that Albendazole is different from methyl 5 propylthio-2-benzimidazole
carbamate. It likewise found that private respondent was not guilty of deceiving the public
by misrepresenting that Impregon is its product.
The appellate court, however, declared that Letters Patent No. 14561 was not void as it
sustained petitioners explanation that Patent Application Serial No. 18989 which was filed
on October 8, 1976 was a divisional application of Patent Application Serial No. 17280 filed
on June 17, 1975 with the Philippine Patent Office, well within one year from petitioners
filing on June 19, 1974 of its Foreign Application Priority Data No. 480,646 in the U.S.
covering the same compound subject of Patent Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent
Application Serial No. 18989 was deemed filed on June 17, 1995 or still within one year
from the filing of a patent application abroad in compliance with the one-year rule under
Section 15 of the Patent Law. And it rejected the submission that the compound in Letters
Patent No. 14561 was not patentable, citing the jurisprudentially established presumption
that the Patent Offices determination of patentability is correct. Finally, it ruled that
petitioner established itself to be the one and the same assignee of the patent
notwithstanding changes in its corporate name. Thus the appellate court disposed:
WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that
the orders for the nullification of Letters Patent No. 14561 and for its cancellation are
deleted therefrom.
SO ORDERED.
Petitioners motion for reconsideration of the Court of Appeals decision having been
denied
11
the present petition for review on certiorari
12
was filed, assigning as errors the
following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT
ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCOS "IMPREGON" DRUG, IS
INCLUDED IN PETITIONERS LETTERS PATENT NO. 14561, AND THAT
CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE
RESPONDENT 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-Rejoinder
13
that although methyl 5 propylthio-2-
benzimidazole carbamate is not identical with Albendazole, the former is an improvement or
improved version of the latter thereby making both substances still substantially the same.
With respect to the award of actual damages in favor of private respondent in the amount
of P330,000.00 representing lost profits, petitioner assails the same as highly speculative and
conjectural, hence, without basis. It assails too the award of P100,000.00 in attorneys fees
as not falling under any of the instances enumerated by law where recovery of attorneys
fees is allowed.
In its Comment,
14
private respondent contends that application of the doctrine of equivalents
would not alter the outcome of the case, Albendazole and methyl 5 propylthio-2-
benzimidazole carbamate being two different compounds with different chemical and
physical properties. It stresses that the existence of a separate U.S. patent for Albendazole
indicates that the same and the compound in Letters Patent No. 14561 are different from
each other; and that since it was on account of a divisional application that the patent for
methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by definition of a
divisional application, such a compound is just one of several independent inventions
alongside Albendazole under petitioners original patent application.
As has repeatedly been held, only questions of law may be raised in a petition for review on
certiorari before this Court. Unless the factual findings of the appellate court are mistaken,
absurd, speculative, conjectural, conflicting, tainted with grave abuse of discretion, or
contrary to the findings culled by the court of origin,
15
this Court does not review them.
From an examination of the evidence on record, this Court finds nothing infirm in the
appellate courts conclusions with respect to the principal issue of whether private
respondent committed patent infringement to the prejudice of petitioner.
The burden of proof to substantiate a charge for patent infringement rests on the
plaintiff.
16
In the case at bar, petitioners evidence consists primarily of its Letters Patent No.
14561, and the testimony of Dr. Orinion, its general manager in the Philippines for its
Animal Health Products Division, by which it sought to show that its patent for the
compound methyl 5 propylthio-2-benzimidazole carbamate also covers the substance
Albendazole.
From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions
thereof, no mention is made of the compound Albendazole. All that the claims disclose are:
the covered invention, that is, the compound methyl 5 propylthio-2-benzimidazole
carbamate; the compounds being anthelmintic but nontoxic for animals or its ability to
destroy parasites without harming the host animals; and the patented methods, compositions
or preparations involving the compound to maximize its efficacy against certain kinds of
parasites infecting specified animals.
When the language of its claims is clear and distinct, the patentee is bound thereby and may
not claim anything beyond them.
17
And so are the courts bound which may not add to or
detract from the claims matters not expressed or necessarily implied, nor may they enlarge
the patent beyond the scope of that which the inventor claimed and the patent office
allowed, even if the patentee may have been entitled to something more than the words it
had chosen would include.
18

It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561
is not determinative of Albendazoles non-inclusion in the claims of the patent. While
Albendazole is admittedly a chemical compound that exists by a name different from that
covered in petitioners letters patent, the language of Letter Patent No. 14561 fails to yield
anything at all regarding Albendazole. And no extrinsic evidence had been adduced to prove
that Albendazole inheres in petitioners patent in spite of its omission therefrom or that the
meaning of the claims of the patent embraces the same.
While petitioner concedes that the mere literal wordings of its patent cannot establish private
respondents infringement, it urges this Court to apply the doctrine of equivalents.
The doctrine of equivalents provides that an infringement also takes place when a device
appropriates a prior invention by incorporating its innovative concept and, although with
some modification and change, performs substantially the same function in substantially the
same way to achieve substantially the same result.
19
Yet again, a scrutiny of petitioners
evidence fails to convince this Court of the substantial sameness of petitioners patented
compound and Albendazole. While both compounds have the effect of neutralizing parasites
in animals, identity of result does not amount to infringement of patent unless Albendazole
operates in substantially the same way or by substantially the same means as the patented
compound, even though it performs the same function and achieves the same result.
20
In
other words, the principle or mode of operation must be the same or substantially the
same.
21

The doctrine of equivalents thus requires satisfaction of the function-means-and-result test,
the patentee having the burden to show that all three components of such equivalency test
are met.
22

As stated early on, petitioners evidence fails to explain how Albendazole is in every
essential detail identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the
fact that Albendazole is an anthelmintic agent like methyl 5 propylthio-2-benzimidazole
carbamate, nothing more is asserted and accordingly substantiated regarding the method or
means by which Albendazole weeds out parasites in animals, thus giving no information on
whether that method is substantially the same as the manner by which petitioners
compound works. The testimony of Dr. Orinion lends no support to petitioners cause, he
not having been presented or qualified as an expert witness who has the knowledge or
expertise on the matter of chemical compounds.
As for the concept of divisional applications proffered by petitioner, it comes into play when
two or more inventions are claimed in a single application but are of such a nature that a
single patent may not be issued for them.
23
The applicant thus is required "to divide," that is,
to limit the claims to whichever invention he may elect, whereas those inventions not elected
may be made the subject of separate applications which are called "divisional
applications."
24
What this only means is that petitioners methyl 5 propylthio-2-
benzimidazole carbamate is an invention distinct from the other inventions claimed in the
original application divided out, Albendazole being one of those other inventions.
Otherwise, methyl 5 propylthio-2-benzimidazole carbamate would not have been the subject
of a divisional application if a single patent could have been issued for it as well as
Albendazole.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 P330,000.00 representing lost profits or revenues incurred by private respondent as a
result of the issuance of the injunction against it, computed at the rate of 30% of its
alleged P100,000.00 monthly gross sales for eleven months, were supported by the
testimonies of private respondents President
25
and Executive Vice-President that the
average monthly sale of Impregon was P100,000.00 and that sales plummeted to zero after
the issuance of the injunction.
26
While indemnification for actual or compensatory damages
covers not only the loss suffered (damnum emergens) but also profits which the obligee
failed to obtain (lucrum cessans or ganacias frustradas), it is necessary to prove the actual
amount of damages with a reasonable degree of certainty based on competent proof and on
the best evidence obtainable by the injured party.
27
The testimonies of private respondents
officers are not the competent proof or best evidence obtainable to establish its right to
actual or compensatory damages for such damages also require presentation of documentary
evidence to substantiate a claim therefor.
28

In the same vein, this Court does not sustain the grant by the appellate court of attorneys
fees to private respondent anchored on Article 2208 (2) of the Civil Code, private
respondent having been allegedly forced to litigate as a result of petitioners suit. Even if a
claimant is compelled to litigate with third persons or to incur expenses to protect its rights,
still attorneys fees may not be awarded where no sufficient showing of bad faith could be
reflected in a partys persistence in a case other than an erroneous conviction of the
righteousness of his cause.
29
There exists no evidence on record indicating that petitioner
was moved by malice in suing private respondent.
This Court, however, grants private respondent temperate or moderate damages in the
amount of P20,000.00 which it finds reasonable under the circumstances, it having suffered
some pecuniary loss the amount of which cannot, from the nature of the case, be established
with certainty.
30

WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with
MODIFICATION. The award of actual or compensatory damages and attorneys fees to
private respondent, Tryco Pharma Corporation, is DELETED; instead, it is hereby awarded
the amount of P20,000.00 as temperate or moderate damages.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 97343 September 13, 1993
PASCUAL GODINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SPECIAL FOURTH DIVISION and SV-
AGRO ENTERPRISES, INC.,respondents.
Jesus S. Anonat for petitioner.
Arturo M. Alinio for private respondent.
ROMERO, J .:
Through this petition for review in certiorari of a decision of the Court of Appeals affirming
the decision of the trial court, petitioner Pascual Godines seeks to reverse the adverse
decision of the Court a quo that he was liable for infringement of patent and unfair
competition. The dispositive portion of the assailed decision is hereby quoted to wit:
WHEREFORE, with the elimination of the award for attorney's fees, the
judgment appealed from is hereby AFFIRMED, with costs against
appellant.
1

The patent involved in this case is Letters Patent No. UM-2236 issued by the Philippine
Patent Office to one Magdalena S. Villaruz on July 15, 1976. It covers a utility model for a
hand tractor or power tiller, the main components of which are the following: "(1) a
vacuumatic house float; (2) a harrow with adjustable operating handle; (3) a pair of paddy
wheels; (4) a protective water covering for the engine main drive; (5) a transmission case;
(6) an operating handle; (7) an engine foundation on the top midportion of the vacuumatic
housing float to which the main engine drive is detachedly installed; (8) a frontal frame
extension above the quarter circularly shaped water covering hold (sic) in place the
transmission case; (9) a V-belt connection to the engine main drive with transmission gear
through the pulley, and (10) an idler pulley installed on the engine foundation."
2
The
patented hand tractor works in the following manner: "the engine drives the transmission
gear thru the V-belt, a driven pulley and a transmission shaft. The engine drives the
transmission gear by tensioning of the V-belt which is controlled by the idler pulley. The V-
belt drives the pulley attached to the transmission gear which in turn drives the shaft where
the paddy wheels are attached. The operator handles the hand tractor through a handle which
is inclined upwardly and supported by a pair of substanding pipes and reinforced by a U-
shaped G.I. pipe at the V-shaped end."
3

The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein
private respondent, from Magdalena Villaruz, its chairman and president, by virtue of a
Deed of Assignment executed by the latter in its favor. On October 31, 1979, SV-Agro
Industries caused the publication of the patent in Bulletin Today, a newspaper of general
circulation.
In accordance with the patent, private respondent manufactured and sold the patented power
tillers with the patent imprinted on them. In 1979, SV-Agro Industries suffered a decline of
more than 50% in sales in its Molave, Zamboanga del Sur branch. Upon investigation, it
discovered that power tillers similar to those patented by private respondent were being
manufactured and sold by petitioner herein. Consequently, private respondent notified
Pascual Godines about the existing patent and demanded that the latter stop selling and
manufacturing similar power tillers. Upon petitioner's failure to comply with the demand,
SV-Agro Industries filed before the Regional Trial Court a complaint for infringement of
patent and unfair competition.
After trial, the court held Pascual Godines liable for infringement of patent and unfair
competition. The dispositive portion of the decision reads as follows:
WHEREFORE, premises considered, JUDGMENT is hereby rendered
in favor of the plaintiff SV-Agro Industries Enterprises, Inc., and against
defendant Pascual Godines:
1. Declaring the writ of preliminary injunction issued by this Court
against defendant as permanent;
2. Ordering defendant Pascual Godines to pay plaintiff the sum of Fifty
Thousand Pesos (P50,000.00) as damages to its business reputation and
goodwill, plus the further sum of Eighty Thousand Pesos (P80,000.00)
for unrealized profits during the period defendant was manufacturing
and selling copied or imitation floating power tiller;
3. Ordering the defendant to pay the plaintiff, the further sum of Eight
Thousand Pesos (P8,000.00) as reimbursement of attorney's fees and
other expenses of litigation; and to pay the costs of the suit.
SO ORDERED.
4

The decision was affirmed by the appellate court.
Thereafter, this petition was filed. Petitioner maintains the defenses which he raised before
the trial and appellate courts, to wit: that he was not engaged in the manufacture and sale of
the power tillers as he made them only upon the special order of his customers who gave
their own specifications; hence, he could not be liable for infringement of patent and unfair
competition; and that those made by him were different from those being manufactured and
sold by private respondent.
We find no merit in his arguments. The question of whether petitioner was manufacturing
and selling power tillers is a question of fact better addressed to the lower courts. In
dismissing the first argument of petitioner herein, the Court of Appeals quoted the findings
of the court, to wit:
It is the contention of defendant that he did not manufacture or make
imitations or copies of plaintiff's turtle power tiller as what he merely
did was to fabricate his floating power tiller upon specifications and
designs of those who ordered them. However, this contention appears
untenable in the light of the following circumstances: 1) he admits in his
Answer that he has been manufacturing power tillers or hand tractors,
selling and distributing them long before plaintiff started selling its turtle
power tiller in Zamboanga del Sur and Misamis Occidental, meaning
that defendant is principally a manufacturer of power tillers, not upon
specification and design of buyers, but upon his own specification and
design; 2) it would be unbelievable that defendant would fabricate
power tillers similar to the turtle power tillers of plaintiff upon
specifications of buyers without requiring a job order where the
specification and designs of those ordered are specified. No document
was (sic) ever been presented showing such job orders, and it is rather
unusual for defendant to manufacture something without the
specification and designs, considering that he is an engineer by
profession and proprietor of the Ozamis Engineering shop. On the other
hand, it is also highly unusual for buyers to order the fabrication of a
power tiller or hand tractor and allow defendant to manufacture them
merely based on their verbal instructions. This is contrary to the usual
business and manufacturing practice. This is not only time consuming,
but costly because it involves a trial and error method, repeat jobs and
material wastage. Defendant judicially admitted two (2) units of the
turtle power tiller sold by him to Policarpio Berondo.
5

Of general acceptance is the rule imbedded in our jurisprudence that ". . . the jurisdiction of
the Supreme Court in cases brought to it from the Court of Appeals in a petition
for certiorari under Rule 45 of the Rules of Court is limited to the review of errors of law,
and that said appellate court's findings of fact are conclusive upon this Court."
6

The fact that petitioner herein manufactured and sold power tillers without patentee's
authority has been established by the courts despite petitioner's claims to the contrary.
The question now arises: Did petitioner's product infringe upon the patent of private
respondent?
Tests have been established to determine infringement. These are (a) literal infringement;
and (b) the doctrine of equivalents.
7
In using literal infringement as a test, ". . . resort must
be had, in the first instance, to the words of the claim. If accused matter clearly falls within
the claim, infringement is made out and that is the end of it."
8
To determine whether the
particular item falls within the literal meaning of the patent claims, the court must juxtapose
the claims of the patent and the accused product within the overall context of the claims and
specifications, to determine whether there is exact identity of all material elements.
9

The trial court made the following observation:
Samples of the defendant's floating power tiller have been produced and
inspected by the court and compared with that of the turtle power tiller
of the plaintiff (see Exhibits H to H-28). In appearance and form, both
the floating power tillers of the defendant and the turtle power tiller of
the plaintiff are virtually the same. Defendant admitted to the Court that
two (2) of the power inspected on March 12, 1984, were manufactured
and sold by him (see TSN, March 12, 1984, p. 7). The three power tillers
were placed alongside with each other. At the center was the turtle
power tiller of plaintiff, and on both sides thereof were the floating
power tillers of defendant (Exhibits H to H-2). Witness Rodrigo took
photographs of the same power tillers (front, side, top and back views
for purposes of comparison (see Exhibits H-4 to H-28). Viewed from
any perspective or angle, the power tiller of the defendant is identical
and similar to that of the turtle power tiller of plaintiff in form,
configuration, design and appearance. The parts or components thereof
are virtually the same. Both have the circularly-shaped vacuumatic
housing float, a paddy in front, a protective water covering, a
transmission box housing the transmission gears, a handle which is V-
shaped and inclined upwardly, attached to the side of the vacuumatic
housing float and supported by the upstanding G.I. pipes and an engine
base at the top midportion of the vacuumatic housing float to which the
engine drive may be attached. In operation, the floating power tiller of
the defendant operates also in similar manner as the turtle power tiller of
plaintiff. This was admitted by the defendant himself in court that they
are operating on the same principles. (TSN, August 19, 1987, p. 13)
10

Moreover, it is also observed that petitioner also called his power tiller as a floating power
tiller. The patent issued by the Patent Office referred to a "farm implement but more
particularly to a turtle hand tractor having a vacuumatic housing float on which the engine
drive is held in place, the operating handle, the harrow housing with its operating handle and
the paddy wheel protective covering."
11
It appears from the foregoing observation of the
trial court that these claims of the patent and the features of the patented utility model were
copied by petitioner. We are compelled to arrive at no other conclusion but that there was
infringement.
Petitioner's argument that his power tillers were different from private respondent's is that of
a drowning man clutching at straws.
Recognizing that the logical fallback position of one in the place of defendant is to aver that
his product is different from the patented one, courts have adopted the doctrine of
equivalents which recognizes that minor modifications in a patented invention are sufficient
to put the item beyond the scope of literal infringement.
12
Thus, according to this doctrine,
"(a)n infringement also occurs when a device appropriates a prior invention by incorporating
its innovative concept and, albeit with some modification and change, performs substantially
the same function in substantially the same way to achieve substantially the same
result."
13
The reason for the doctrine of equivalents is that to permit the imitation of a
patented invention which does not copy any literal detail would be to convert the protection
of the patent grant into a hollow and useless thing. Such imitation would leave room for
indeed encourage the unscrupulous copyist to make unimportant and insubstantial
changes and substitutions in the patent which, though adding nothing, would be enough to
take the copied matter outside the claim, and hence outside the reach of the law.
14

In this case, the trial court observed:
Defendant's witness Eduardo Caete, employed for 11 years as welder
of the Ozamis Engineering, and therefore actually involved in the
making of the floating power tillers of defendant tried to explain the
difference between the floating power tillers made by the defendant. But
a careful examination between the two power tillers will show that they
will operate on the same fundamental principles. And, according to
establish jurisprudence, in infringement of patent, similarities or
differences are to be determined, not by the names of things, but in the
light of what elements do, and substantial, rather than technical, identity
in the test. More specifically, it is necessary and sufficient to constitute
equivalency that the same function can be performed in substantially the
same way or manner, or by the same or substantially the same, principle
or mode of operation; but where these tests are satisfied, mere
differences of form or name are immaterial. . . .
15

It also stated:
To establish an infringement, it is not essential to show that the
defendant adopted the device or process in every particular; Proof of an
adoption of the substance of the thing will be sufficient. "In one sense,"
said Justice Brown, "it may be said that no device can be adjudged an
infringement that does not substantially correspond with the patent. But
another construction, which would limit these words to exact
mechanism described in the patent, would be so obviously unjust that no
court could be expected to adopt it. . . .
The law will protect a patentee against imitation of his patent by other
forms and proportions. If two devices do the same work in substantially
the same way, and accomplish substantially the same result, they are the
same, even though they differ in name, form, or shape.
16

We pronounce petitioner liable for infringement in accordance with Section 37 of Republic
Act No. 165, as amended, providing, inter alia:
Sec. 37. Right of Patentees. A patentee shall have the exclusive right
to make, use and sell the patented machine, article or product, and to use
the patented process for the purpose of industry or commerce,
throughout the territory of the Philippines for the terms of the
patent; and such making, using, or selling by any person without the
authorization of the Patentee constitutes infringement of the patent.
(Emphasis ours)
As far as the issue regarding unfair competition is concerned, suffice it to say that Republic
Act No. 166, as amended, provides, inter alia:
Sec. 29. Unfair competition, rights and remedies. . . .
xxx xxx xxx
In particular, and without in any way limiting the scope of unfair
competition, the following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general
appearance of goods of another manufacturer or dealer, either as to the
goods themselves or in the wrapping of the packages in which they are
contained, or the devices or words thereon, or in any other feature of
their appearance, which would be likely to influence purchasers that the
goods offered are those of a manufacturer or dealer other than the actual
manufacturer or dealer, or who otherwise clothes the goods with such
appearance as shall deceive the public and defraud another of his
legitimate trade. . . .
xxx xxx xxx
Considering the foregoing, we find no reversible error in the decision of the Court of
Appeals affirming with modification the decision of the trial court.
WHEREFORE, premises considered, the decision of the Court of Appeals is hereby
AFFIRMED and this petition DENIED for lack of merit.
Bidin, Melo and Vitug, JJ., concur.
Feliciano, J., is on leave.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 121267 October 23, 2001
SMITH KLINE & FRENCH LABORATORIES, LTD. plaintiff-appellee,
vs.
COURT OF APPEALS and DANLEX RESEARCH LABORATORIES,
INC., defendant-appellant.
KAPUNAN, J .:
This petition for review on certiorari assails the Decision dated January 27, 1995 of the
Court of Appeals in CA-G.R. SP No. 33770
1
which affirmed the decision of the Bureau of
Patents, Trademarks and Technology Transfer (BPTTT) granting a compulsory license to
private respondent Danlex Research Laboratories for the use of the pharmaceutical
product Cimetidine. Likewise assailed is the July 25, 1995 Resolution of the Court of
Appeals denying the motion for reconsideration filed by petitioner Smith Kline and French
Laboratories, Ltd.
Petitioner is the assignee of Letters Patent No. 12207 covering the pharmaceutical
product Cimetidine, which relates to derivatives of heterocyclicthio or lower alkoxy or
amino lower alkyl thiourea, ureas or guanadines. Said patent was issued by the BPTTT to
Graham John Durant, John Collin Emmett and Robin Genellin on November 29, 1978.
2

On August 21, 1989, private respondent filed with the BPTTT a petition for compulsory
license to manufacture and produce its own brand of medicines using Cimetidine. Private
respondent invoked Section 34 (1) (e) of Republic Act No. 165,
3
(the Patent Law) the law
then governing patents, which states that an application for the grant of a compulsory license
under a particular patent may be filed with the BPTTT at any time after the lapse of two (2)
years from the date of grant of such patent, if the patented invention or article relates to food
or medicine, or manufactured substances which can be used as food or medicine, or is
necessary for public health or public safety.
4
The petition for compulsory license stated
that Cimetidine is useful as an antihistamine and in the treatment of ulcers, and that private
respondent is capable of using the patented product in the manufacture of a useful product.
5

Petitioner opposed the petition for compulsory license, arguing that the private respondent
had no cause of action and failed to allege how it intended to work the patented product.
Petitioner further stated that its manufacture, use and sales of Cimetidine satisfied the needs
of the Philippine market, hence, there was no need to grant a compulsory license to private
respondent to manufacture, use and sell the same. Finally, petitioner also claimed that the
grant of a compulsory license to private respondent would not promote public safety and
that the latter was only motivated by pecuniary gain.
6

After both parties were heard, the BPTTT rendered a decision directing the issuance of a
compulsory license to private respondent to use, manufacture and sell in the Philippines its
own brand of pharmaceutical products containing Cimetidine and ordered the payment by
private respondent to petitioner of royalties at the rate of 2.5% of net sales in Philippine
currency.
7

Petitioner thereafter filed with the Court of Appeals a petition for review of the decision of
the BPTTT, raising the following arguments: (1) the BPTTT's decision is violative of the
Paris Convention for the Protection of Industrial Property; (2) said decision is an invalid
exercise of police power; (3) the rate of royalties payable to petitioner as fixed by the
BPTTT was rendered without factual basis and amounts to an expropriation of private
property without just compensation; (4) the petition for compulsory license should have
been dismissed by the BPTTT for failure to prove the jurisdictional requirement of
publication.
8

On January 27, 1995, the Court of Appeals promulgated its Decision, the dispositive portion
of which states:
WHEREFORE, the petition is DENIED, and the decision of the Bureau of Patents,
Trademarks and Technology Transfer is hereby AFFIRMED, with costs against
the Petitioner.
SO ORDERED.
9

In affirming the decision of the BPTTT, the appellate court held that the grant of a
compulsory license to private respondent for the manufacture and use of Cimetidine is in
accord with the Patent Law since the patented product is medicinal in nature, and therefore
necessary for the promotion of public health and safety.
10
It explained further that the
provisions of the Patent Law permitting the grant of a compulsory license are intended not
only to give a chance to others to supply the public with the quantity of the patented article
but especially to prevent the building up of patent monopolies.
11
Neither did the appellate
court find the royalty rate of 2.5% of net sales fixed by the BPTTT unreasonable,
considering that what was granted under the compulsory license is only the right to
manufacture Cimetidine, without any technical assistance from petitioner, and royalty rates
identical to that fixed by the BPTTT have been prescribed for the grant of compulsory
license in a good number of patent cases.
12
The Court of Appeals also ruled that contrary to
petitioner's claim, private respondent complied with the requirement of publication under the
Patent Law and had submitted proof of such compliance.
13

Not satisfied with the appellate court's decision, petitioner filed a motion for reconsideration
thereof as well as a motion for the issuance of a temporary restraining order against private
respondent's sister company, Montreal Pharmaceutical, Inc. to refrain from marketing a
product similar to Cimetidine, but both motions were denied by the Court of Appeals in its
Resolution of July 25, 1995.
14

Petitioner thus filed the present petition on September 15, 1995, with the following
assignment of errors:
I. The respondent Court erred in upholding the validity of the decision of public
respondent BPTTT which is an arbitrary exercise of police power and is violative
of international law.
II. The respondent Court erred in holding that compulsory licensing will not create
a confusion that the patented product is the brainchild of private respondent
Danlex and not of petitioner.
III.Assuming that the grant of compulsory license is in order, the respondent Court
still erred in holding that the BPTTT decision fixing the royalty at 2.5% of the net
wholesale price in peso does not amount to expropriation of private property
without just compensation.
IV.The respondent Court erred in finding that the jurisdictional requirement of
publication in a newspaper of general circulation for three (3) consecutive weeks
has been complied with by private respondent Danlex.
15

While petitioner concedes that the State in the exercise of police power may regulate the
manufacture and use of medicines through the enactment and implementation of pertinent
laws, it states that such exercise is valid only if the means employed are reasonably
necessary for the accomplishment of the purpose and if not unduly oppressive.
16
According
to petitioner, the grant of a compulsory license to private respondent is an invalid exercise of
police power since it was not shown that there is an overwhelming public necessity for such
grant, considering that petitioner is able to provide an adequate supply of i to satisfy the
needs of the Philippine market. Petitioner also claims that the grant of a compulsory license
to private respondent unjustly deprives it of a reasonable return on its investment.
17
It argues
further that the provisions of the Patent Law on compulsory licensing contravene the
Convention of Paris for the Protection of Industrial Property
18
(Paris Convention), which
allegedly permits the granting of a compulsory license over a patented product only to
prevent abuses which might result from the exercise of the exclusive rights conferred by the
patent,
19
or on the ground of failure to work or insufficient working of the patented product,
within four years from the date of filing of the patent application or three years from the date
of grant of the patent, whichever expires last.
20
Petitioner opines that the inclusion of
grounds for the grant of a compulsory license in Section 34 of the Patent Law other than
those provided under the Paris Convention constitutes a violation of the Philippines'
obligation to adhere to the provisions of said treaty.
21

It is also contended by petitioner that the grant of a compulsory license to private respondent
will allow the latter to liberally manufacture and sell medicinal products
containing Cimetidine without even extending to petitioner due recognition for pioneering
the development and worldwide acceptance of said invention, and will unreasonably dilute
petitioner's right over the patent.
22

Petitioner likewise asseverates that the rate of royalty fixed by the BPTTT at 2.5% of net
sales is grossly inadequate, taking into consideration its huge investments of money, time
and other resources in the research and development, as well as marketing of Cimetidine. It
is further alleged that such rate has no factual basis since the appellate court and the BPTTT
relied solely on analogous cases and did not explain how such rate was arrived at.
23

Lastly, petitioner claims that the appellate court erred in ruling that private respondent had
complied with the requirement of publication of the notice of the filing of the petition for
compulsory license because private respondent failed to formally offer in evidence copies of
the notice of filing of the petition and notice of the date of hearing thereof as published and
the affidavits of publication thereof. Thus, it says, the BPTTT did not properly acquire
jurisdiction over the petition for compulsory license.
24

In its Comment to the Petition, private respondent adopted the reasoning of the Court of
Appeals in the assailed decision and prayed that the petition be denied for lack of merit.
25

The petition has no merit.
The Court of Appeals did not err in affirming the validity of the grant by the BPTTT of a
compulsory license to private respondent for the use, manufacture and sale of Cimetidine.
The said grant is in accord with Section 34 of the Patent Law which provides:
Grounds for Compulsory Licensing. (1) Any person may apply to the
Director for the grant of a license under a particular patent at any time after
the expiration of two 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 of the patented article in the Philippines is not being met to an
adequate extent and on reasonable terms;
(c) If, by reason of refusal of the patentee to grant a license or licenses on
reasonable terms, or by reason of the conditions attached by the patentee to
licensee or to the purchase, lease or use of the patented article or working of the
patented process or machine for production, the establishment of any new trade or
industry in the Philippines is prevented, or the trade or industry therein is unduly
restrained;
(d) If the working of the invention within the country is being prevented or
hindered by the importation of the patented article;
(e) If the patented invention or article relates to food or medicine or
manufactured substances which can be used as food or medicine, or is
necessary for public health or public safety.
(2) In any of the above cases, a compulsory license shall be granted to the
petitioner provided that he has proved his capability to work the patented
product or to make use of the patented product in the manufacture of a
useful product, or to employ the patented process.
(3) The term "worked" or "working" as used in this section means the manufacture
and sale of the patented article, of patented machine, or the application of the
patented process for production, in or by means of a definite and substantial
establishment or organization in the Philippines and on a scale which is reasonable
and adequate under the circumstances. Importation shall not constitute "working".
(Emphasis supplied.)
The grant of the compulsory license satisfies the requirements of the foregoing provision.
More than ten years have passed since the patent for Cimetidine was issued to petitioner and
its predecessors-in-interest, and the compulsory license applied for by private respondent is
for the use, manufacture and sale of a medicinal product. Furthermore, both the appellate
court and the BPTTT found that private respondent had the capability to workCimetidine or
to make use thereof in the manufacture of a useful product.
Petitioner's contention that Section 34 of the Patent Law contravenes the Paris Convention
because the former provides for grounds for the grant of a compulsory license in addition to
those found in the latter, is likewise incorrect. Article 5, Section A(2) of the Paris
Convention states:
Each country of the union shall have the right to take legislative measures
providing for the grant of compulsory licenses to prevent the abuses which might
result from the exercise of the exclusive rights conferred by the patent, for
example, failure to work.
26

This issue has already been resolved by this Court in the case of Smith Kline & French
Laboratories, Ltd. vs. Court of Appeals,
27
where petitioner herein questioned the BPTTT's
grant of a compulsory license to Doctors Pharmaceuticals, Inc. also for the manufacture, use
and sale of Cimetidine. We found no inconsistency between Section 34 and the Paris
Convention and held that:
It is thus clear that Section A(2) of Article 5 [of the Paris Convention] unequivocally and
explicitly respects the right of member countries to adopt legislative measures to
provide for the grant of compulsory licenses to prevent abuses which might result from
the exercise of the exclusive rights conferred by the patent. An example provided of
possible abuses is "failure to work;" however, as such, is merely supplied by way of an
example, it is plain that the treaty does not preclude the inclusion of other forms of
categories of abuses.
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to
the Convention, fits well within the aforequoted provisions of Article 5 of the Paris
Convention. In the explanatory note of Bill No. 1156 which eventually became R.A. No.
165, the legislative intent in the grant of a compulsory license was not only to afford
others an opportunity to provide the public with the quantity of the patented product,
but also to prevent the growth of monopolies [Congressional Record, House of
Representatives, 12 May 957, 998]. Certainly, the growth of monopolies was among the
abuses which Section A, Article 5 of the Convention foresaw, and which our Congress
likewise wished to prevent in enacting R.A. No. 165.
28
(Emphasis supplied.)
Neither does the Court agree with petitioner that the grant of the compulsory license to
private respondent was erroneous because the same would lead the public to think that
the Cimetidine is the invention of private respondent and not of petitioner. Such fears are
unfounded since, as the appellate court pointed out in the assailed decision, by the grant of
the compulsory license, private respondent as licensee explicitly acknowledges that
petitioner is the source of the patented product Cimetidine.
29
Even assuming arguendo that
such confusion may indeed occur, the disadvantage is far outweighed by the benefits
resulting from the grant of the compulsory license, such as an increased supply of
pharmaceutical products containing Cimetidine, and the consequent reduction in the prices
thereof.
30

There is likewise no basis for the allegation that the grant of a compulsory license to private
respondent results in the deprivation of petitioner's property without just compensation. It
must be pointed out that as owner of Letters Patent No. 12207, petitioner had already
enjoyed exclusive rights to manufacture, use and sell Cimetidine for at least two years from
its grant in November, 1978. Even if other entities like private respondent are subsequently
allowed to manufacture, use and sell the patented invention by virtue of a compulsory
license, petitioner as owner of the patent would still receive remuneration for the use of such
product in the form of royalties.
Anent the perceived inadequacy of the royalty awarded to petitioner, the Court of Appeals
correctly held that the rate of 2.5% of net wholesale price fixed by the Director of the
BPTTT is in accord with the Patent Law. Said law provides:
Sec. 35. Grant of License.(1) If the Director finds that a case for the grant of a
license under Section 34 hereof has been made out, he shall, within one hundred
eighty days from the date the petition was filed, order the grant of an appropriate
license. The order shall state the terms and conditions of the license which he
himself must fix in default of an agreement on the matter manifested or
submitted by the parties during the hearing.
x x x
Section 35-B. Terms and Conditions of Compulsory License. (1) A compulsory
license shall be non-exclusive, but this shall be without prejudice to the licensee's
right to oppose an application for such a new license.
(2) The terms and conditions of a compulsory license, fixed in accordance with
Section 35, may contain obligations and restrictions both for the licensee and for
the registered owner of the patent.
(3) A compulsory license shall only be granted subject to the payment of
adequate royalties commensurate with the extent to which the invention is
worked. However, royalty payments shall not exceed five percent (5%) of the
net wholesale price (as defined in Section 33-A) of the products manufactured
under the license. If the product, substance, or process subject of the compulsory
license is involved in an industrial project approved by the Board of Investments,
the royalty payable to the patentee or patentees shall not exceed three percent (3%)
of the net wholesale price (as defined in Section 33-A) of the patented
commodity/and or commodity manufactured under the patented process; the same
rate of royalty shall be paid whenever two or more patents are involved; which
royalty shall be distributed to the patentees in rates proportional to the extent of
commercial use by the licensee giving preferential values to the holder of the
oldest subsisting product patent.
x x x
Under the aforequoted provisions, in the absence of any agreement between the parties with
respect to a compulsory license, the Director of the BPTTT may fix the terms thereof,
including the rate of the royalty payable to the licensor. The law explicitly provides that the
rate of royalty shall not exceed five percent (5%) of the net wholesale price.
The Court agrees with the appellate court's ruling that the rate of royalty payments fixed by
the Director of the BPTTT is reasonable. The appellate court, citing Price vs. United
Laboratories,
31
ruled as such, considering that the compulsory license awarded to private
respondent consists only of the bare right to use the patented invention in the manufacture of
another product, without any technical assistance from the licensor.
32
Furthermore, this
Court had earlier noted in the Price case that identical royalty rates have been prescribed by
the Director of the BPTTT in numerous patent cases.
33

There was thus no error on the part of the Court of Appeals in affirming the royalty rate
fixed by the Director of the BPTTT, since it was not shown that the latter erred or abused his
discretion in prescribing said rate. The rule is that factual findings of administrative bodies,
which are considered as experts in their respective fields, are accorded not only respect but
even finality if the same are supported by substantial evidence.
34

Finally, as to the alleged lack of jurisdiction of the BPTTT over the petition filed by private
respondent for failure to comply with the publication requirement under Section 35-F of
R.A. No. 165, the Court holds that petitioner is estopped from questioning the same since it
did not raise the issue of lack of jurisdiction at the earliest possible opportunity, i.e., during
the hearings before the BPTTT.
35
The Court notes that petitioner raised this contention for
the first time when it appealed the case to the appellate court.
WHEREFORE, the petition is hereby DENIED for lack of merit and the Decision of the
Court of Appeals is hereby AFFIRMED.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 113388 September 5, 1997
ANGELITA MANZANO, petitioner,
vs.
COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to NEW UNITED
FOUNDRY MANUFACTURING CORPORATION, respondents.

BELLOSILLO, J .:
The primary purpose of the patent system is not the reward of the individual but the
advancement of the arts and sciences. The function of a patent is to add to the sum of useful
knowledge and one of the purposes of the patent system is to encourage dissemination of
information concerning discoveries and inventions. This is a matter which is properly within
the competence of the Patent Office the official action of which has the presumption of
correctness and may not be interfered with in the absence of new evidence carrying
thorough conviction that the Office has erred. Since the Patent Office is an expert body
preeminently qualified to determine questions of patentability, its findings must be accepted
if they are consistent with the evidence, with doubts as to patentability resolved in favor of
the Patent Office.
1

Petitioner Angelita Manzano filed with the Philippine Patent Office on 19 February 1982 an
action for the cancellation of Letters Patent No. UM-4609 for a gas burner registered in the
name of respondent Melecia Madolaria who subsequently assigned the letters patent to New
United Foundry and Manufacturing Corporation (UNITED FOUNDRY, for brevity).
Petitioner alleged that (a) the utility model covered by the letters patent, in this case, an LPG
gas burner, was not inventive, new or useful; (b) the specification of the letters patent did
not comply with the requirements of Sec. 14, RA No. 165, as amended; (c) respondent
Melecia Madolaria was not the original, true and actual inventor nor did she derive her
rights from the original, true and actual inventor of the utility model covered by the letters
patent; and, (d) the letters patent was secured by means of fraud or misrepresentation. In
support of her petition for cancellation petitioner further alleged that (a) the utility model
covered by the letters patent of respondent had been known or used by others in the
Philippines for more than one (1) year before she filed her application for letters patent on 9
December 1979; (b) the products which were produced in accordance with the utility model
covered by the letters patent had been in public use or on sale in the Philippines for more
than one (1) year before the application for patent therefor was filed.
Petitioner presented the following documents which she correspondingly marked as
exhibits: (a) affidavit of petitioner alleging the existence of prior art, marked Exh. "A;" (b) a
brochure distributed by Manila Gas Corporation disclosing a pictorial representation of
Ransome Burner made by Ransome Torch and Burner Company, USA, marked Exh. "D;"
and, (c) a brochure distributed by Esso Gasul or Esso Standard Eastern, Inc., of the
Philippines showing a picture of another similar burner with top elevation view and another
perspective view of the same burner, marked Exh. "E."
Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a helper
in the UNITED FOUNDRY where respondent Melecia Madolaria used to be affiliated with
from 1965 to 1970; that Ong helped in the casting of an LPG burner which was the same
utility model of a burner for which Letters Patent No. UM-4609 was issued, and that after
her 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 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 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 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 model
8
and such action must not be interfered with in the absence of competent
evidence to the contrary.
The rule is settled that the findings of fact of the Director of Patents, especially when
affirmed by the Court of Appeals, are conclusive on this Court when supported by
substantial evidence. Petitioner has failed to show compelling grounds for a reversal of the
findings and conclusions of the Patent Office and the Court of Appeals.
The alleged failure of the Director of Patents and the Court of Appeals to accord evidentiary
weight to the testimonies of the witnesses of petitioner showing anticipation is not a
justification to grant the petition. Pursuant to the requirement of clear and convincing
evidence to overthrow the presumption of validity of a patent, it has been held that oral
testimony to show anticipation is open to suspicion and if uncorroborated by cogent
evidence, as what occurred in this case, it may be held insufficient.
9

Finally, petitioner would want this Court to review all over again the evidence she presented
before the Patent Office. She argues that contrary to the decision of the Patent Office and the
Court of Appeals, the evidence she presented clearly proves that the patented model of
private respondent is no longer new and, therefore, fraud attended the acquisition of patent
by private respondent.
It has been held that the question on priority of invention is one of fact. Novelty and utility
are likewise questions of fact. The validity of patent is decided on the basis of factual
inquiries. Whether evidence presented comes within the scope of prior art is a factual issue
to be resolved by the Patent Office.
10
There is question of fact when the doubt or difference
arises as to the truth or falsehood of alleged facts or when the query necessarily invites
calibration of the whole evidence considering mainly the credibility of witnesses, existence
and relevance of specific surrounding circumstances, their relation to each other and to the
whole and the probabilities of the situation.
11

Time and again we have held that it is not the function of the Supreme Court to analyze or
weigh all over again the evidence and credibility of witnesses presented before the lower
tribunal or office. The Supreme Court is not a trier of facts. Its jurisdiction is limited to
reviewing and revising errors of law imputed to the lower court, its findings of fact being
conclusive and not reviewable by this Court.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals affirming
that of the Philippine Patent Office is AFFIRMED. Costs against petitioner.
SO ORDERED.

SECOND DIVISION
[G.R. No. 118708. February 2, 1998]
CRESER PRECISION SYSTEMS, INC., petitioner, vs. COURT OF APPEALS AND
FLORO INTERNATIONAL CORP., respondents.
D E C I S I O N
MARTINEZ, J .:
This petition for review on certiorari assails the decision
[1]
. The decision of the Court
of Appeals was penned by Justice Gloria C. Paras and concurred in by Justice Salome A.
Montoya and Justice Hector L. Hofilea.
1 of the Court of Appeals dated November 9, 1994 in C.A.-G.R. SP. No. 34425
entitled Floro International Corp. vs. Hon. Tirso D.C Cruz and Creser Precision System,
Inc., the dispositive portion of which reads:
WHEREFORE, THE PETITION IS HEREBY GRANTED. THE COMPLAINT FOR
INJUNCTION AND DAMAGES, CIVIL CASE NO. 93-1856 BEFORE THE
RESPONDENT JUDGE IS HEREBY ORDERED DISMISSED AND HIS ORDERS
THEREIN OF DECEMBER 29, 1993 AND MAY 11, 1994 ARE ORDERED SET ASIDE.
Private respondent is a domestic corporation engaged in the manufacture, production,
distribution and sale of military armaments, munitions, airmunitions and other similar
materials.
[2]

On January 23, 1990, private respondent was granted by the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT), a Letters Patent No. UM-6938
[3]
covering
an aerial fuze which was published in the September-October 1990, Vol. III, No. 5 issue of
the Bureau of Patents Official Gazette.
[4]

Sometime in November 1993, private respondent, through its president, Mr. Gregory
Floro, Jr., discovered that petitioner submitted samples of its patented aerial fuze to the
Armed Forces of the Philippines (AFP) for testing. He learned that petitioner was claiming
the aforesaid aerial fuze as its own and planning to bid and manufacture the same
commercially without license or authority from private respondent. To protect its right,
private respondent on December 3, 1993, sent a letter
[5]
to petitioner advising it fro its
existing patent and its rights thereunder, warning petitioner of a possible court action and/or
application for injunction, should it proceed with the scheduled testing by the military on
December 7, 1993.
In response to private respondents demand, petitioner filed on December 8, 1993 a
complaint
[6]
for injunction and damages arising from the alleged infringement before the
Regional Trial Court of Quezon City, Branch 88. The complaint alleged, among others: that
petitioner is the first, true and actual inventor of an aerial fuze denominated as Fuze, PDR
77 CB4 which is developed as early as December 1981 under the Self-Reliance Defense
Posture Program (SRDP) of the AFP; that sometime in 1986, petitioner began supplying the
AFP with the said aerial fuze; that private respondents aerial fuze is identical in every
respect to the petitioners fuze; and that the only difference between the two fuzes are
miniscule and merely cosmetic in nature. Petitioner prayed that a temporary restraining
order and/or writ of preliminary injunction be issued enjoining private respondent including
any and all persons acting on its behalf from manufacturing, marketing and/or profiting
therefrom, and/or from performing any other act in connection therewith or tending to
prejudice and deprive it of any rights, privileges and benefits to which it is duly entitled as
the first, true and actual inventor of the aerial fuze.
On December 10, 1993, the trial court issued a temporary restraining order.
Thereafter, hearings were held on the application of petitioner for the issuance of a writ of
preliminary injunction, with both parties presenting their evidence. After the hearings, the
trial court directed the parties to submit their respective memoranda in support of their
positions.
On December 27, 1993, private respondent submitted its memorandum
[7]
alleging that
petitioner has no cause of action to file a complaint of infringement against it since it has no
patent for the aerial fuze which it claims to have invented; that petitioners available remedy
is to file a petition for cancellation of patent before the Bureau of Patents; that private
respondent as the patent holder cannot be stripped of its property right over the
patented aerial fuze consisting of the exclusive right to manufacture, use and sell the same
and that it stands to suffer irreparable damage and injury if it is enjoined from the exercise of
its property right over its patent.
On December 29, 1993, the trial court issued an Order
[8]
granting the issuance of a
writ of preliminary injunction against private respondent the dispositive portion of which
reads:
WHEREFORE, plaintiffs application for the issuance of a writ of preliminary injunction is
granted and, upon posting of the corresponding bond by plaintiff in the amount of PHP
200,000.00, let the writ of preliminary injunction be issued by the branch Clerk of this Court
enjoining the defendant and any and all persons acting on its behalf or by and under its
authority, from manufacturing, marketing and/or selling aerial fuzes identical, to those of
plaintiff, and from profiting therefrom, and/or from performing any other act in connection
therewith until further orders from this Court.
Private respondent moved for reconsideration but this was denied by the trial courts in
its Order
[9]
of May 11, 1994, pertinent portions of which read:
For resolution before this Court is the Motion for Reconsideration filed by the defendant
and the plaintiffs Opposition thereto. The Court finds no sufficient cause to reconsider its
order dated December 29, 1993. During the hearing for the issuance of the preliminary
injunction, the plaintiff has amply proven its entitlement to the relief prayed for. It is
undisputed that the plaintiff has developed its aerial fuze way back in 1981 while the
defendant began manufacturing the same only in 1987. Thus, it is only logical to conclude
that it was the plaintiffs aerial fuze that was copied or imitated which gives the plaintiff the
right to have the defendant enjoined from manufacturing, marketing and/or selling aerial
fuzes identical to those of the plaintiff, and from profiting therefrom and/or performing any
other act in connection therewith until further orders from this Court. With regards to the
defendants assertion that an action for infringement may only be brought by anyone
possessing right, title or interest to the patented invention, (Section 42, RA 165) qualified
by Section 10, RA 165 to include only the first true and actual inventor, his heirs, legal
representatives to assignees, this court finds the foregoing to be untenable. Sec. 10 merely
enumerates the persons who may have an invention patented which does not necessarily
limit to these persons the right to institute an action for infringement. Defendant further
contends that the order in issue is disruptive of thestatus quo. On the contrary, the order
issued by the Court in effect maintained the status quo. The last actual , peaceable
uncontested status existing prior to this controversy was the plaintiff manufacturing and
selling its own aerial fuzes PDR 77 CB4 which was ordered stopped through the defendants
letter. With issuance of the order, the operations of the plaintiff continue. Lastly, this court
believes that the defendant will not suffer irreparable injury by virtue of said order. The
defendants claim is primarily hinged on its patent (Letters Patent No. UM-6983) the
validity of which is being questioned in this case.
WHEREFORE, premises considered, the Motion for Reconsideration is hereby denied for
lack of merit.
SO ORDERED.
Aggrieved, private respondent on June 27, 1994, filed a petition for certiorari,
mandamus and prohibition
[10]
before respondent Court of Appeals raising as grounds the
following:
a. Petitioner has no cause of action for infringement against private
respondent, the latter not having any patent for the aerial fuze which it
claims to have invented and developed and allegedly infringed by
private respondent;
b. The case being an action for cancellation or invalidation of private
respondents Letters Patent over its own aerial fuze, the proper venue is
the Office of the Director of Patents;
c. The trial court acted in grave abuse of discretion and or in excess of
jurisdiction in finding that petitioner has fully established its clear title
or right to preliminary injunction;
d. The trial court acted in grave abuse of discretion and/or in excess of
jurisdiction in granting the preliminary injunction, it being disruptive of
the status quo; and
e. The trial court acted in grave abuse of discretion and/or in excess of
jurisdiction in granting the preliminary injunction thereby depriving
private respondent of its property rights over the patented aerial fuze and
cause it irreparable damages.
On November 9, 1994, the respondent court rendered the now assailed decision
reversing the trial courts Order of December 29, 1993 and dismissing the complaint filed by
petitioner.
The motion for reconsideration was also denied on January 17, 1995.
[11]
Hence, this
present petition.
It is petitioners contention that it can file, under Section 42 of the Patent Law (R.A.
165), an action for infringement not as a patentee but as an entity in possession of a right,
title or interest in and to the patented invention. It advances the theory that while the absence
of a patent may prevent one from lawfully suing another for infringement of said patent,
such absence does not bar the first true and actual inventor of the patented invention from
suing another who was granted a patent in a suit for declaratory or injunctive relief
recognized under American patent laws. This remedy, petitioner points out, may be likened
to a civil action for infringement under Section 42 of the Philippine Patent Law.
We find the above arguments untenable.
Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:
SECTION. 42. Civil action for infringement. Any patentee, or anyone possessing any
right, title or interest in and to the patented invention, whose rights have been infringed, may
bring a civil action before the proper Court of First Instance (now Regional Trial court), to
recover from the infringer damages sustained by reason of the infringement and to secure an
injunction for the protection of his right. x x x
Under the aforequoted law, only the patentee or his successors-in-interest may file an
action for infringement. The phrase anyone possessing any right, title or interest in and to
the patented invention upon which petitioner maintains its present suit, refers only to the
patentees successors-in-interest, assignees or grantees since actions for infringement of
patent may be brought in the name of the person or persons interested, whether as patentee,
assignees or grantees, of the exclusive right.
[12]
Moreover, there can be no infringement of a
patent until a patent has been issued, since whatever right one has to the invention covered
by the patent arises alone from the grant of patent.
[13]
In short, a person or entity who has not
been granted letters patent over an invention and has not acquired any right or title thereto
either as assignee or as licensee, has no cause of action for infringement because the right to
maintain an infringement suit depends on the existence of the patent.
[14]

Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis or
cause of action to institute the petition for injunction and damages arising from the alleged
infringement by private respondent. While petitioner claims to be the first inventor of
the aerial fuze, still it has no right of property over the same upon which it can maintain a
suit unless it obtains a patent therefor. Under American jurisprudence, and inventor has no
common-law right to a monopoly of his invention. He has the right to make, use and vend
his own invention, but if he voluntarily discloses it, such as by offering it for sale, the world
is free to copy and use it with impunity. A patent, however, gives the inventor the right to
exclude all others. As a patentee, he has the exclusive right of making, using or selling the
invention.
[15]

Further, the remedy of declaratory judgment or injunctive suit on patent invalidity
relied upon by petitioner cannot be likened to the civil action for infringement under Section
42 of the Patent Law. The reason for this is that the said remedy is available only to the
patent holder or his successors-in-interest. Thus, anyone who has no patent over an
invention but claims to have a right or interest thereto can not file an action for declaratory
judgment or injunctive suit which is not recognized in this jurisdiction. Said person,
however, is not left without any remedy. He can, under Section 28 of the aforementioned
law, file a petition for cancellation of the patent within three (3) years from the publication
of said patent with the Director of Patents and raise as ground therefor that the person to
whom the patent was issued is not the true and actual inventor. Hence, petitioners remedy is
not to file an action for injunction or infringement but to file a petition for cancellation of
private respondent patent. Petitioner however failed to do so. As such, it can not now assail
or impugn the validity of the private respondents letters patent by claiming that it is the true
and actual inventor of the aerial fuze.
Thus, as correctly ruled by the respondent Court of Appeals in its assailed decision:
since the petitioner (private respondent herein) is the patentee of the disputed invention
embraced by letters of patent UM No. 6938 issued to it on January 23, 1990 by the Bureau
of Patents, it has in its favor not only the presumption of validity of its patent, but that of a
legal and factual first and true inventor of the invention.
In the case of Aguas vs. De Leon,
[16]
we stated that:
The validity of the patent issued by the Philippine Patent Office in favor of the private
respondent and the question over the investments, novelty and usefulness of the improved
process therein specified and described are matters which are better determined by the
Philippines patent Office, composed of experts in their field, have, by the issuance of the
patent in question, accepted the thinness of the private respondents new tiles as a discovery.
There is a presumption that the Philippine Patent Office has correctly determined the
patentability of the improvement by the private respondent of the process in question.
In fine, in the absence of error or abuse of power or lack or jurisdiction or grave abuse
of discretion, we sustain the assailed decision of the respondent Court of Appeal.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No
pronouncement as to costs.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 121867 July 24, 1997
SMITH KLINE & FRENCH LABORATORIES, LTD., petitioner,
vs.
COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND
TECHNOLOGY TRANSFER and DOCTORS PHARMACEUTICALS,
INC. respondents.

DAVIDE, JR., J .:
This is an appeal under Rule 45 of the Rules of Court from the decision
1
4 November 1994
of the Court of Appeals in CA-G.R. SP No. 33520, which affirmed the 14 February 1994
decision
2
of the Director of the Bureau of Patents, Trademarks and Technology Transfer
(BPTTT) granting a compulsory non-exclusive and non-transferable license to private
respondent to manufacture, use and sell in the Philippines its own brands of pharmaceutical
products containing petitioner's patented pharmaceutical product known as Cimetidine.
Petitioner is a foreign corporation with principal office at Welwyn Garden City, England. It
owns Philippine Letters Patent No. 12207 issued by the BPTTT for the patent of the
drug Cimetidine.
Private respondent is a domestic corporation engaged in the business of manufacturing and
distributing pharmaceutical products. On 30 March 1987, it filed a petition for compulsory
licensing
3
with the BPTTT for authorization to manufacture its own brand of medicine from
the drug Cimetidine and to market the resulting product in the Philippines. The petition was
filed pursuant to the provisions of Section 34 of Republic Act No. 165 (An Act Creating a
Patent Office Prescribing Its Powers and Duties, Regulating the Issuance of Patents, and
Appropriating Funds Therefor), which provides for the compulsory licensing of a particular
patent after the expiration of two years from the grant of the latter if the patented invention
relates to, inter alia, medicine or that which is necessary for public health or public safety.
Private respondent alleged that the grant of Philippine Letters Patent No. 12207 was issued
on 29 November 1978; that the petition was filed beyond the two-year protective period
provided in Section 34 of R.A. No. 165; and that it had the capability to work the patented
product or make use of it in its manufacture of medicine.
Petitioner opposed, arguing that private respondent had no cause of action and lacked the
capability to work the patented product; the petition failed to specifically divulge how
private respondent would use or improve the patented product; and that private respondent
was motivated by the pecuniary gain attendant to the grant of a compulsory license.
Petitioner also maintained that it was capable of satisfying the demand of the local market in
the manufacture and marketing of the medicines covered by the patented product. Finally,
petitioner challenged the constitutionality of Sections 34 and 35 of R.A. No. 165 for
violating the due process and equal protection clauses of the Constitution.
After appropriate proceedings, the BPTTT handed down its decision on 14 February 1994,
with the dispositive portion thereof providing:
NOW, THEREFORE, by virtue of the powers vested in this Office by Republic
Act No. 165, as amended by Presidential Decree No. 1263, there is hereby issued
a license in favor of the herein [private respondent], United Laboratories, Inc.,
[sic] under Letters Patent No. 12207 issued on November 29, 1978, subject to the
following terms and conditions:
1. That [private respondent] be hereby granted a non-exclusive and non-
transferable license to manufacture, use and sell in the Philippines its own brands
of pharmaceutical products containing [petitioner's] patented invention which is
disclosed and claimed in Letters Patent No. 12207;
2. That the license granted herein shall be for the remaining life of said Letters
Patent No. 12207 unless this license is terminated in the manner hereinafter
provided and that no right or license is hereby granted to [private respondent]
under any patent to [petitioner] or [sic] other than recited herein;
5. By virtue of this license, [private respondent] shall pay [petitioner] a royalty on
all license products containing the patented substance made and sold by [private
respondent] in the amount equivalent to TWO AND ONE HALF PERCENT
(2.5%) of the net sales in Philippine currency. The term "net scale" [sic] means the
gross amount billed for the product pertaining to Letters Patent No. 12207, less
(a) Transportation charges or allowances, if any, included in such amount;
(b) Trade, quantity or cash discounts and broker's or agent's or distributor's
commissions, if any, allowed or paid;
(c) Credits or allowances, if any, given or made on account of rejection or return
of the patented product previously delivered; and
(d) Any tax, excise or government charge included in such amount, or measured
by the production sale, transportation, use of delivery of the products.
In case [private respondent's] product containing the patented substance shall
contain one or more active ingredients admixed therewith, said product hereinafter
identified as admixed product, the royalty to be paid shall be determined in
accordance with the following formula:
Net Sales on Value of Patented
ROYALTY = Admixed Product x 0.025 x Substance

Value of Patented Value of Other
Substance Active Ingredients
4. The royalties shall be computed after the end of each calendar quarter to all
goods containing the patented substance herein involved, made and sold during
the precedent quarter and to be paid by [private respondent] at its place of business
on or before the thirtieth day of the month following the end of each calendar
quarter. Payments should be made to [petitioner's] authorized representative in the
Philippines;
5. [Private respondent] shall keep records in sufficient detail to enable [petitioner]
to determine the royalties payable and shall further permit its books and records to
be examined from time to time at [private respondent's] premises during office
hours, to the extent necessary to be made at the expense of [petitioner] by a
certified public accountant appointed by [petitioner] and acceptable to [private
respondent].
6. [Private respondent] shall adopt and use its own trademark or labels on all its
products containing the patented substance herein involved;
7. [Private respondent] shall comply with the laws on drugs and medicine
requiring previous clinical tests and approval of proper government authorities
before selling to the public its own products manufactured under the license;
8. [Petitioner] shall have the right to terminate the license granted to [private
respondent] by giving the latter thirty (30) days notice in writing to that effect, in
the event that [private respondent] default [sic] in the payment of royalty provided
herein or if [private respondent] shall default in the performance of other
convenants or conditions of this agreement which are to be performed by [private
respondent]:
(a) [Private respondent] shall have the right provided it is not
in default to payment or royalties or other obligations under
this agreement, to terminate the license granted to its, [sic]
giving [petitioner] thirty (30) days-notice in writing to that
effect;
(b) Any termination of this license as provided for above shall
not in any way operate to deny [petitioner] its rights or
remedies, either at laws [sic] or equity, or relieve [private
respondent] of the payment of royalties or satisfaction of other
obligations incurred prior to the effective date of such
termination; and
(c) Notice of termination of this license shall be filed with the
Bureau of Patents, Trademarks and Technology Transfer.
9. In case of dispute as to the enforcement of the provisions of this license, the
matter shall be submitted for arbitration before the Director of Bureau of Patents,
Trademarks and Technology Transfer or any ranking official of the Bureau of
Patents, Trademarks and Technology Transfer duly delegated by him.
10. This License shall inure to the benefit of each of the parties herein, to the
subsidiaries and assigns of [petitioner] and to the successors and assigns of
[private respondent]; and
11. This license take [sic] effect immediately.
4

Petitioner then appealed to the Court of Appeals by way of a petition for review, which was
docketed as CA-G.R. SP No. 33520. Petitioner claimed that the appealed decision was
erroneous because:
I
. . . [IT] VIOLATES INTERNATIONAL LAW AS EMBODIED IN THE PARIS
CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY AND
MUST ACCORDINGLY BE SET ASIDE AND MODIFIED.
II
. . . [IT] IS AN INVALID EXERCISE OF POLICE POWER.
III
CONCEDING ARGUENDO THE QUESTIONED DECISION'S VALIDITY,
THE BPTTT'S PRONOUNCEMENT FIXING THE ROYALTY AT 2.5% OF
THE NET WHOLESALE PRICE IN PHILIPPINE CURRENCY WAS
RENDERED WITHOUT ANY FACTUAL BASIS AND AMOUNTS TO
EXPROPRIATION OF PRIVATE PROPERTY WITHOUT JUST
COMPENSATION WHICH IS VIOLATE OF THE CONSTITUTION.
IV
. . . [IT] SHOULD NOT HAVE PROCEEDED TO DECIDE THE CASE BELOW
FOR FAILURE OF PRIVATE RESPONDENT TO AFFIRMATIVELY PROVE
THE JURISDICTIONAL FACT OF PUBLICATION.
5

In its decision of 4 November 1994,
6
the Court of Appeals affirmed in toto the challenged
decision. We quote its findings and conclusion upon which the affirmance is anchored, viz.:
An assiduous scrutiny of the impugned decision of the public respondent reveals
that the same is supported by substantial evidence. It appears that at the time of the
filing of the petition for compulsory license on March 24, 1987, the subject letters
Patent No. 12207 issued on November 29, 1978 has been in effect for more than
two (2) years. The patented invention relates to compound and compositions used
in inhibiting certain actions of the histamine, hence, it relates to medicine.
Moreover, after hearing and careful consideration of the evidence presented, the
Director of Patents ruled that "there is ample evidence to show that [private
respondent] possesses such capability, having competent personnel, machines and
equipment as well as permit to manufacture different drugs containing patented
active ingredients such as ethambutol of American Cyanamid and Ampicillin and
Amoxicillin of Beecham Groups, Ltd."
As to the claim by the petitioner that it has the capacity to work the patented
product although it was not shown that any pretended abuse has been committed,
thus the reason for granting compulsory license "is intended not only to give a
chance to others to supply the public with the quantity of the patented article but
especially to prevent the building up of patent monopolities [sic]." [Parke Davis v.
Doctors Pharmaceuticals, Inc., 14 SCRA 1053].
We find that the granting of compulsory license is not simply because Sec. 34 (1)
e, RA 165 allows it in cases where the invention relates to food and medicine. The
Director of Patents also considered in determining that the applicant has the
capability to work or make use of the patented product in the manufacture of a
useful product. In this case, the applicant was able to show that Cimetidine,
(subject matter of latters Patent No. 12207) is necessary for the manufacture of an
anti-ulcer drug/medicine, which is necessary for the promotion of public health.
Hence, the award of compulsory license is a valid exercise of police power.
We do not agree to [sic] petitioner's contention that the fixing of the royalty at
2.5% of the net wholesale price amounted to expropriation of private property
without just compensation.
Paragraph 3, Section 35-B, R.A. No. 165, as amended by P.D. No. 1267, states:
Sec. 35-B. Terms and Conditions of Compulsory License.
(1) . . .
(2) . . .
(3) A compulsory license shall only be granted subject to the payment of adequate
royalties commensurate with the extent to which the invention is worked.
However, royalty payments shall not exceed five percent (5%) of the net
wholesale price (as defined in Section 33-A) of the products manufactured under
the license.
If the product, substance, or process subject of the compulsory license is involved
in an industrial project approved by the Board of Investments, the royalty payable
to the patentee or patentees shall not exceed three percent (3%) of the net
wholesale price (as defined in Section 34-A) of the patented commodity and/or
commodity manufactured under the patented process, the same rate of royalty
shall be distributed to the patentees in rates proportional to the extent of
commercial use by the licensee giving preferential values to the holder of the
oldest subsisting product patent.
The foregoing provision grants the Director of Patents the use of his sound
discretion in fixing the percentage for the royalty rate. In the instant case, the
Director of Patents exercised his discretion and ruled that a rate of 2.5% of the net
wholesale price is fair enough for the parties. In Parke Davis & Co. vs. DPI and
Tiburcio, [L-27004, August 6, 1983, 124 SCRA 115] it was held that "liberal
treatment in trade relations should be afforded to local industry for as reasoned out
by respondent company, it is so difficult to compete with the industrial grants [sic]
of the drug industry, among them being the petitioner herein, that it always is
necessary that the local drug companies should sell at much lower (than) the prices
of said foreign drug entities." Besides, foreign produce licensor can later on ask
for an increase in percentage rate of royalty fixed by the Director of Patents if
local sales of license should increase. Further, in Price vs. UNILAB, the award of
royalty rate of 2.5% was deemed to be just and reasonable, to wit [166 SCRA
133]:
Moreover, what UNILAB has with the compulsory license is
the bare right to use the patented chemical compound in the
manufacture of a special product, without any technical
assistance from herein respondent-appellant. Besides, the
special product to be manufactured by UNILAB will only be
used, distributed, and disposed locally. Therefore, the royalty
rate of 2.5% is just and reasonable.
It appearing that herein petitioner will be paid royalties on the sales of any
products [sic] the licensee may manufacture using any or all of the patented
compounds, the petitioner cannot complain of a deprivation of property rights
without just compensation [Price v. UNILAB, L-82542, September 19, 1988].
We take note of the well-crafted petition submitted by petitioner albeit the legal
milieu and a good number of decided cases militate against the grounds posited by
petitioner. In sum, considering the well-entrenched jurisprudence sustaining the
position of respondents, We reiterate the rule in Basay Mining Corporation
vs.SEC, to the effect that
The legal presumption is that official duty has been
performed. And it is particularly strong as regards
administrative agencies vested with powers said to be quasi-
judicial in nature, in connection with the enforcement of laws
affecting particular fields of activity, the proper regulation
and/or promotion of which requires a technical or special
training, aside from a good knowledge and grasp of the overall
conditions, relevant to said field, obtaining in the nations. The
policy and practice underlying our Administrative Law is that
courts of justice should respect the findings of fact of said
administrative agencies, unless there is absolutely no evidence
in support thereof or such evidence is clearly, manifestly and
patently insubstantial. [G.R. No. 76695, October 3, 1988,
Minute Resolution; Beautifont, Inc., et al. v. Court of Appeals,
et al., G.R. No. 50141, January 29, 1988]
Its motion for reconsideration having been denied in the resolution
7
of 31 August 1995,
petitioner filed the instant petition for review on certiorari with the following assignment of
errors:
I
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
BPTTT'S DECISION VIOLATES INTERNATIONAL LAW AS EMBODIED IN
(A) THE PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL
PROPERTY AND (B) THE GATT TREATY, URUGUAY ROUND, AND
MUST ACCORDINGLY BE SET ASIDE AND MODIFIED.
II
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
BPTTT'S DECISION IS AN INVALID EXERCISE OF POLICE POWER,
ABSENT ANY SHOWING BY EVIDENCE OF AN OVERWHELMING
PUBLIC NEED FOR A COMPULSORY LICENSE OVER CIMETIDINE IN
FAVOR OF PRIVATE RESPONDENT.
III
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE
BPTTT'S PRONOUNCEMENT FIXING THE ROYALTY FOR AN
INVOLUNTARY LICENSE AT 2.5% OF THE NET WHOLESALE PRICE IN
PHILIPPINE CURRENCY WAS RENDERED WITHOUT ANY FACTUAL
BASIS AND AMOUNTS TO EXPORTATION OF PRIVATE PROPERTY
WITHOUT JUST COMPENSATION AND IS IN VIOLATION OF THE
CONSTITUTIONAL RIGHT TO DUE PROCESS.
IV
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THE BPTTT'S
ACTION WAS RENDERED NULL AND VOID FOR FAILURE OF PRIVATE
RESPONDENT TO AFFIRMATIVELY PROVE THE JURISDICTIONAL
FACT OF PUBLICATION AS REQUIRED BY LAW.
We resolved to give due course to the petition and required the parties to submit their
respective memoranda, which they did, with that of public respondent filed only on 7
February 1997.
After a careful perusal of the pleadings and evaluation of the arguments adduced by the
parties, we find this petition to be without merit.
In its first assigned error, petitioner invokes Article 5 of the Paris Convention for the
Protection of Industrial Property,
8
or "Paris Convention," for short, of which the Philippines
became a party thereto only in 1965.
9
Pertinent portions of said Article 5, Section A,
provide:
A. . . .
(2) Each country of the union shall have the right to take legislative measures
providing for the grant of compulsory licenses to prevent the abuses which might
result from the exercise of the exclusive rights conferred by the patent, for
example, failure to work.
xxx xxx xxx
(4) A compulsory license may not be applied for on the ground of failure to work
or insufficient working before the expiration of a period of four years from the
date of filing of the patent application or three years from the date of the grant of
the patent, whichever period expires last; it shall be refused if the patentee justifies
his inaction by legitimate reasons. Such a compulsory license shall be non-
exclusive and shall not be transferable, even in the form of the grant of a sub-
license, except with that part of the enterprise or goodwill which exploits such
license.
In is thus clear that Section A (2) of Article 5 above unequivocally and explicitly respects
the right of member countries to adopt legislative measures to provide for the grant of
compulsory licenses to prevent abuses which might result from the exercise of the exclusive
rights conferred by the patent. An example provided of possible abuses is "failure to work;"
however, as such is merely supplied by way of an example, it is plain that the treaty does not
preclude the inclusion of other forms or categories of abuses.
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to
the Convention, fits well within the aforequoted provisions of Article 5 of the Paris
Convention. In the explanatory note of Bill No. 1156 which eventually became R.A. No.
165, the legislative intent in the grant of a compulsory license was not only to afford others
an opportunity to provide the public with the quantity of the patented product, but also to
prevent the growth of monopolies.
10
Certainly, the growth of monopolies was among the
abuses which Section A, Article 5 of the Convention foresaw, and which our Congress
likewise wished to prevent in enacting R.A. No. 165.
R.A. No. 165, as amended by Presidential Decree No. 1263, promulgated on 14 December
1977, provides for a system of compulsory licensing under a particular patent. Sections 34
and 35, Article Two, of Chapter VIII read as follows:
Sec. 34. Grounds for Compulsory Licensing (1) Any person may apply to the
Director for the grant of a license under a particular patent at any time after the
expiration of two 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;
(c) If, by reason of refusal of the patentee to grant a license or licenses on
reasonable terms, or by reason of the conditions attached by the patentee to
licensee or to the purchase, lease or use of the patented article or working of the
patented process or machine for production, the establishment of any new trade or
industry in the Philippines is prevented, or the trade or industry therein is unduly
restrained;
(d) If the working of the invention within the country is being prevented or
hindered by the importation of the patented article; or
(e) If the patented invention or article relates to food or medicine or manufactured
products or substances which can be used as food or medicine, or is necessary for
public health or public safety.
(2) In any of the above cases, a compulsory license shall be granted to the
petitioner provided that he has proved his capability to work the patented product
or to make use of the patented product in the manufacture of a useful product, or
to employ the patented process.
(3) The term "worked" or "working" as used in this section means the manufacture
and sale of the patented article, of the patented machine, or the application of the
patented process for production, in or by means of a definite and substantial
establishment or organization in the Philippines and on a scale which is reasonable
and adequate under the circumstances. Importation shall not constitute "working."
xxx xxx xxx
Sec. 35. Grant of License. (1) If the Director finds that a case for the grant is a
license under Section 34 hereof has been made out, he shall, within one hundred
eighty days from the date the petition was filed, order the grant of an appropriate
license. The order shall state the terms and conditions of the license which he
himself must fix in default of an agreement on the matter manifested or submitted
by the parties during the hearing.
(2) A compulsory license sought under Section 34-B shall be issued within one
hundred twenty days from the filing of the proponent's application or receipt of the
Board of Investment's endorsement.
The case at bar refers more particularly to subparagraph (e) of paragraph 1 of Section 34
the patented invention or article relates to food or medicine or manufactured products or
substances which can be used as food or medicine, or is necessary for public health or public
safety. And it may not be doubted that the aforequoted provisions of R.A. No. 165, as
amended, are not in derogation of, but are consistent with, the recognized right of treaty
signatories under Article 5, Section A (2) of the Paris Convention.
Parenthetically, it must be noted that paragraph (4) of Section A, Article 5 of the Paris
Convention setting time limitations in the application for a compulsory license refers only to
an instance where the ground therefor is "failure to work or insufficient working," and not to
any ground or circumstance as the treaty signatories may reasonably determine.
Neither may petitioner validly invoke what it designates as the GATT Treaty, Uruguay
Round. This act is better known as the Uruguay Final Act signed for the Philippines on 15
April 1994 by Trade and Industry Secretary Rizalino Navarro.
11
Forming integral parts
thereof are the Agreement Establishing the World Trade Organization, the Ministerial
Declarations and Decisions, and the Understanding on Commitments in Financial
Services.
12
The Agreement establishing the World Trade Organization includes various
agreements and associated legal instruments. It was only on 14 December 1994 that the
Philippine Senate, in the exercise of its power under Section 21 of Article VII of the
Constitution, adopted Senate Resolution No. 97 concurring in the ratification by the
President of the Agreement. The President signed the instrument of ratification on 16
December 1994.
13
But plainly, this treaty has no retroactive effect. Accordingly, since the
challenged BPTTT decision was rendered on 14 February 1994, petitioner cannot avail of
the provisions of the GATT treaty.
The second and third assigned errors relate more to the factual findings of the Court of
Appeals. Well-established is the principle that the findings of facts of the latter are
conclusive, unless: (1) the conclusion is a finding grounded entirely on speculation or
conjecture; (2) the inference made is manifestly absurd; (3) there is grave abuse of discretion
in the appreciation of facts; (4) the judgment is premised on a misapprehension of facts; (5)
the findings of fact are conflicting; and (6) the Court of Appeals, in making its findings,
went beyond the issues of the case and the same is contrary to the admissions of both the
appellant and appellee.
14
Petitioner has not convinced us that the instant case falls under any
of the exceptions. On the contrary, we find the findings of fact and conclusions of
respondent Court of Appeals and that of the BPTTT to be fully supported by the evidence
and the applicable law and jurisprudence on the matter.
Petitioner's claim of violations of the due process and eminent domain clauses of the Bill of
Rights are mere conclusions which it failed to convincingly support. As to due the process
argument, suffice it to say that full-blown adversarial proceedings were conducted before the
BPTTT pursuant to the Patent Law. We agree with the Court of Appeals that the BPTTT
exhaustively studied the facts and its findings were fully supported by substantial evidence.
It cannot likewise be claimed that petitioner was unduly deprived of its property rights, as
R.A. No. 165 not only grants the patent holder a protective period of two years to enjoy his
exclusive rights thereto; but subsequently, the law recognizes just compensation in the form
of royalties.
15

In Parke, Davis & Co. v. Doctors' Pharmaceuticals, Inc.,
16
we held:
The right to exclude others from the manufacturing, using, or vending an
invention relating to, food or medicine should be conditioned to allowing any
person to manufacture, use, or vend the same after a period of three [now two]
years from the date of the grant of the letters patent. After all, the patentee is not
entirely deprived of any proprietary right. In fact, he has been given the period of
three years [now two years] of complete monopoly over the patent. Compulsory
licensing of a patent on food or medicine without regard to the other conditions
imposed in Section 34 [now Section 35] is not an undue deprivation of proprietary
interests over a patent right because the law sees to it that even after three years of
complete monopoly something is awarded to the inventor in the form of bilateral
and workable licensing agreement and a reasonable royalty to be agreed upon by
the parties and in default of such an agreement, the Director of Patents may fix the
terms and conditions of the license.
As to the fourth assigned error, we hold that petitioner can no longer assail the jurisdiction
of the BPTTT, raising this issue only for the first time on appeal. In Pantranco North
Express, Inc. v. Court of Appeals,
17
we ruled that where the issue of jurisdiction is raised for
the first time on appeal, the party invoking it is so barred on the ground of laches or estoppel
under the circumstances therein stated. It is now settled that this rule applies with equal
force to quasi-judicial bodies
18
such as the BPTTT. Here, petitioner have not furnished any
cogent reason to depart from this rule.
WHEREFORE, the petition is hereby DENIED and the challenged decision of the Court of
Appeals in CA-G.R. SP No. 33520 is AFFIRMED in toto.
Costs against petitioner.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 115106 March 15, 1996
ROBERTO L. DEL ROSARIO, petitioner,
vs.
COURT OF APPEALS AND JANITO CORPORATION, respondents.

BELLOSILLO, J .:p
Roberto del Rosario petitions this Court to review the decision of the Court of
Appeals
1
which set aside the order of the Regional Trial Court of Makati granting a writ of
preliminary injunction in his favor.
The antecedents: On 18 January 1993 petitioner filed a complaint for patent infringement
against private respondent Janito Corporation.
2
Roberto L. del Rosario alleged that he was a
patentee of an audio equipment and improved audio equipment commonly known as the
sing-along System or karaoke under Letters Patent No. UM-5269 dated 2 June 1983 as well
as Letters Patent No. UM-6237 dated 14 November 1986 issued by the Director of Patents.
The effectivity of both Letters Patents was for five (5) years and was extended for another
five (5) years starting 2 June 1988 and 14 November 1991, respectively. He described his
sing-along system as a handy multi-purpose compact machine which incorporates an
amplifier speaker, one or two tape mechanisms, optional tuner or radio and microphone
mixer with features to enhance one's voice, such as the echo or reverb to stimulate an opera
hall or a studio sound, with the whole system enclosed in one cabinet casing.
In the early part of 1990 petitioner learned that private respondent was manufacturing a
sing-along system bearing the trademark miyata or miyata karaoke substantially similar if
not identical to the sing-along system covered by the patents issued in his favor. Thus he
sought from .the trial court the issuance of a writ of preliminary injunction to enjoin private
respondent, its officers and everybody elsewhere acting on its behalf, from using, selling and
advertising the miyata or miyata karaoke brand, the injunction to be made permanent after
trial, and praying for damages, attorney's fees and costs of suit.
On 5 February 1993 the trial court temporarily restrained private respondent from
manufacturing, using and/or selling and advertising the miyata sing-along system or any
sing-along system substantially identical to the sing-along system patented by petitioner
until further orders.
On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on
the basis of its finding that petitioner was a holder of a utility model patent for a sing-along
system and that without his approval and consent private respondent was admittedly
manufacturing and selling its own sing-along system under the brand name miyata which
was substantially similar to the patented utility mode
3
of petitioner.
Private respondent assailed the order of 24 February 1993 directing the issuance of the writ
by way of a petition for certiorari with prayer for the issuance of a writ of preliminary
injunction and a temporary restraining order before respondent Court of Appeals.
On 15 November 1993 respondent appellate court granted the writ and set aside the
questioned order of the trial court. It expressed the view that there was no infringement of
the patents of petitioner by the fact alone that private respondent had manufactured
the miyata karaoke or audio system, and that the karaoke system was a universal product
manufactured, advertised and marketed in most countries of the world long before the
patents were issued to petitioner. The motion to reconsider the grant of the writ was
denied;
4
hence, the instant petition for review.
This petition alleges that: (a) it was improper for the Court of Appeals to consider questions
of fact in a certiorariproceeding; (b) the Court of Appeals erred in taking judicial notice of
private respondent's self-serving presentation of facts; (c) the Court of Appeals erred in
disregarding the findings of fact of the trial court; and, (d) there was no basis for the Court
of Appeals to grant a writ of preliminary injunction in favor of private respondent.
5

Petitioner argues that in a certiorari proceeding questions of fact are not generally permitted
the inquiry being limited essentially to whether the tribunal has acted without or in excess of
jurisdiction or with grave abuse of discretion; that respondent court should not have
disturbed but respected instead the factual findings of the trial court; that the movant has a
clear legal right to be protected and that there is a violation of such right by private
respondent. Thus, petitioner herein claims, he has satisfied the legal requisites to justify the
order of the trial court directing the issuance of the writ of injunction. On the other hand, in
the absence of a patent to justify the manufacture and sale by private respondent of sing-
along systems, it is not entitled to the injunctive relief granted by respondent appellate court.
The crux of the controversy before us hinges on whether respondent Court of Appeals erred
in finding the trial court to have committed grave abuse of discretion in enjoining private
respondent from manufacturing, selling and advertising the miyata karaoke brand sing-along
system for being substantially similar if not identical to the audio equipment covered by
letters patent issued to petitioner.
Injunction is a preservative remedy for the protection of substantive rights or interests. It is
not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The
controlling reason for the existence of the judicial power to issue the writ is that the court
may thereby prevent a threatened or continuous irremediable injury to some of the parties
before their claims can be thoroughly investigated and advisedly adjudicated. It is to be
resorted to only when there is a pressing necessity to avoid injurious consequences which
cannot be remedied under any standard of compensation. The application of the writ rests
upon an alleged existence of an emergency or of a special reason for such an order before
the case can be regularly heard, and the essential conditions for granting such temporary
injunctive relief are that the complaint alleges facts which appear to be sufficient to
constitute a cause of action for injunction and that on the entire showing from both sides, it
appears, in view of all the circumstances, that the injunction is reasonably necessary to
protect the legal rights of plaintiff pending the litigation.
6

A preliminary injunction may be granted at any time after the commencement of the action
and before judgment when it is established that the defendant is doing, threatens, or is about
to do, or is procuring or suffering to be done, some act probably in violation of the plaintiff's
rights. Thus, there are only two requisites to be satisfied if an injunction is to issue, namely,
the existence of the right to be protected, and that the facts against which the injunction is to
be directed are violative of said right.
7

For the writ to issue the interest of petitioner in the controversy or the right he seeks to be
protected must be a present right, a legal right which must be shown to be clear and positive.
In this regard Sec. 55 of R.A. 165 as amended, known as The Patent 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)
new model or 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 provide . . . .
Admittedly, petitioner is a holder of Letters Patent No. UM-5629 dated 2 June 1985 issued
for a term of five (5) years from the grant of a Utility Model herein described
The construction of an audio equipment comprising a substantially
cubical casing having a window at its rear and upper corner fitted with a
slightly inclined control panel, said cubical (casing) having a vertical
partition wall therein defining a rear compartment and a front
compartment, and said front compartment serving as a speaker baffle; a
transistorized amplifier circuit having an echo section and writhed in at
least the printed circuit boards placed inside said rear compartment of
said casing and attached to said vertical partition wall, said transistorized
amplifier circuit capable of being operated from outside, through various
controls mounted on said control panel of such casing; a loud speaker
fitted inside said front compartment of said casing and connected to the
output of the main audio amplifier section of said transistorized
amplifier circuit and a tape player mounted on the top wall of said
casing and said tape player being connected in conventional manner to
said transistorized amplifier circuit.
8

Again, on 14 November 1986 petitioner was granted Letters Patent No. UM-6237 for a term
of five (5) years from the grant of a Utility Model described as
In an audio equipment consisting of a first cubical casing having an
opening at its rear and upper rear portion and a partition therein forming
a rear compartment and a front compartment serving as a loud speaker
baffle, a control panel formed by vertical and horizontal sections, a
transistorized amplifier circuit wired in at least two printed circuit
boards attached at the back of said control panel, a first loud speaker
fitted inside said first compartment of such first casing and connected to
the output of said transistorized amplifier circuit; the improvement
wherein said control panel being removably fitted to said first cubical
casing and further comprises a set of tape recorder and tape player
mounted on the vertical section of said control panel and said recorder
and player are likewise connected to said transistorized amplifier circuit;
a second cubical casing having an opening at its rear, said second
cubical casing having (being?) provided with a vertical partition therein
defining a rear compartment and a front compartment, said rear
compartment being provided with a door and enclosing therein a set of
tape racks and said front compartment serving as loud speaker baffle,
said second cubical casing being adapted to said first cubical casing so
that said first and second casings are secured together in compact and
portable form; and a second loud speaker fitted inside said front
compartment of said casing and connected to the output of said amplifier
circuit.
9

The terms of both Letters Patents were extended for another five (5) years each, the first
beginning 2 June 1988 and the second, 14 November 1991.
The Patent Law expressly acknowledges that any new model of implements or tools of any
industrial product even if not possessed of the quality of invention but which is of practical
utility is entitled to a patent for utility model.
10
Here, there is no dispute that the letters
patent issued to petitioner are for utility models of audio equipment.
In issuing, reissuing or withholding patents and extensions thereof, the Director of Patents
determines whether the patent is new and whether the machine or device is the proper
subject of patent. In passing on an application, the Director decides not only questions of
law but also questions of fact, i.e. whether there has been a prior public use or sale of the
article sought to be patented.
11
Where petitioner introduces the patent in evidence, if it is in
due form, it affords a prima facie presumption of its correctness and validity. The decision
of the Director of Patents in granting the patent is always presumed to be correct, and the
burden then shifts to respondent to overcome this presumption by competent evidence.
12

Under Sec. 55 of The Patent Law 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. Respondent corporation failed to present before the trial court competent evidence
that the utility models covered by the Letters Patents issued to petitioner were not new. This
is evident from the testimony of Janito Cua, President of respondent Janito Corporation,
during the hearing on the issuance of the injunction, to wit
Q. Mr. Cua, you testified that there are (sic) so many
other companies which already have (sic) the sing-
along system even before the patent application of
Mr. del Rosario and as a matter of fact you
mentioned Sanyo, Sony and Sharp, is that right?
A. Musicmate and Asahi.
Q. Now do you recall that your lawyer filed with
this Honorable Court an Urgent Motion to Lift
Temporary Restraining Order of this Honorable
Court. I am sure you were the one who provided him
with the information about the many other
companies selling the sing-along system, is that
right? These 18 which you enumerated here.
A. More than that because. . . .
Q. Now you will agree with me that in your
statement Sharp you put the date as 1985 agreed?
A. No.
Q. You mean your lawyer was wrong when he put
the word Sharp 1985?
A. Maybe I informed him already.
xxx xxx xxx
Q. You mean your lawyer was wrong in alleging to
this Court that Sharp manufactured and sold (in)
1985 as found in the Urgent Motion?
A. Since it is urgent it is more or less.
Q. The same also with Sanyo 1985 which you put,
more or less?
A. Sanyo is wrong.
Q. It is not 1985?
A. Sanyo is 1979 I think.
Q. So this is also wrong. Panasonic 1986 is also
wrong?
A. Panasonic I think.
Q. So you don't think this is also correct.
A. The date?
Q. So you don't think also that this allegation here
that they manufactured in 1986 is correct?
A. Wrong. Earlier.
Q. National by Precision Electronic 1986 this is also
wrong?
A. I think earlier.
Q. So that means all your allegations here from 2 to
5 are wrong? OK. By Philipps Philippines 1986, this
is also correct or wrong?
A. More or less. We said more or less.
Q. Nakabutshi by Asahi Electronics that is also
wrong?
A. No that is 1979.
Q. Electone by DICO 1989 is this correct or wrong?
A. Correct. More or less.
Q. Skylers 1985 is that correct or wrong?
A. It is more or less because it is urgent. We don't
have time to exact the date.
Q. Musicmate of G.A. Yupangco 1981 this is more
or less? You are not also sure?
A. 95% sure.
Q. Now you are sure 1981.
A. This one because. . . .
Q. Mr. Witness so you are now trying to tell this
Honorable Court that all your allegations here of the
dates in this Urgent Motion except for Musicmate
which you are only 95% sure they are all wrong or
they are also more or less or not sure, is that right?
A. More or less.
Q. Now do you have any proof, any advertisement,
anything in writing that would show that all these
instruments are in the market, do you have it.
A. No I don't have it because. . . .
Q. No I am satisfied with your answer. Now Mr.
Witness, you don't also have a proof that Akai
instrument that you said was also in the market
before 1982? You don't have any written proof, any
advertisement?
A. I have the product.
Q. But you have not brought the product in (sic) this
Honorable Court, right?
A. No.
13

As may be gleaned herein, the rights of petitioner as a patentee have been sufficiently
established, contrary to the findings and conclusions of respondent Court of Appeals.
Consequently, under Sec. 37 of The Patent law, petitioner as a patentee shall have the
exclusive right to make, use and sell the patented machine, article or product for the purpose
of industry or commerce, throughout the territory of the Philippines for the term of the
patent, and such making, using or selling by any person without authorization of the
patentee constitutes infringement of his patent.
Petitioner established before the trial court that respondent Janito Corporation was
manufacturing a similar sing-along system bearing the trademark miyata which infringed his
patented models. He also alleged that both his own patented audio equipment and
respondent's sing-along system were constructed in a casing with a control panel, the casing
having a vertical partition wall defining the rear compartment from the front compartment,
with the front compartment consisting of a loud speaker baffle, both containing a
transistorized amplifier circuit capable of being operated from outside through various
controls mounted on the control panel, and that both had loud speakers fitted inside the front
compartment of the casing and connected to the output of the main audio amplifier section
both having a tape recorder and a tape player mounted on the control panel with the tape
recorder and tape player being both connected to the transistorized amplifier circuit.
14

Respondent Janito Corporation denied that there was any violation of petitioner's patent
rights, and cited the differences between its miyata equipment and petitioner's audio
equipment. But, it must be emphasized, respondent only confined its comparison to the first
model, Utility Model No. 5269, and completely disregarded Utility Model No. 6237 which
improved on the first. As described by respondent corporation,
15
these differences are
First. Under Utility Model 5269, the unit is a substantially cubical
casing with a window at its rear and upper corner fitted with slightly
inclined control panel, while the miyata equipment is a substantially
rectangular casing with panel vertically positioned.
Second. Under Utility Model 5269, the cubical casing has a vertical
partition wall defining a rear compartment and a front compartment
serving as a speaker baffle, while the miyata equipment has no rear
compartment and front compartment in its rectangular casing; it has only
a front compartment horizontally divided into 3 compartments like a 3-
storey building, the 1st compartment being a kit, the 2nd also the
speaker, and the 3rd are kits.
Third. Under Utility Model No. 5269, a transistorized amplifier circuit
with an echo section wired in at least 2 printed circuit boards is placed
inside the rear compartment of the casing and attached to the vertical
partition wall, the printed circuit board having 1 amplifier and 1 echo,
while in the miyataequipment the amplifier is mainly IC (Integrated
Circuit) powered with 8 printed circuit boards almost all of which are
IC controlled, with 1 amplifier with power supply, 1 main tuner, 1
equalizer (3-band), 1 IC controlled volume control, 1 echo IC, 1 tape
pream, 1 instrument and 1 wireless microphone.
Fourth. Under Utility Model 5269, 4 printed circuits are placed inside
the compartment of its casing attached to the vertical partition wall,
while in the miyata, the 7 printed circuit boards (PCB) are attached to
the front panel and 1 attached to the horizontal divider.
Fifth. Under Utility Model 5269, there are various controls mounted on
the control panel of the casing, while in miyata, the various controls are
all separated from the printed circuit boards and the various controls are
all attached thereto.
Sixth. Under Utility Model 5269, a loud speaker fitted inside the front
compartment of the casing is connected to the output of the main audio
amplifier section of the transistorized amplifier circuit, while in miyata,
there is no other way but to use 2 loud speakers connected to the
amplifier.
Seventh. Under Utility Model 5269, a tape player is mounted on the top
wall of the casing, while inmiyata, 2 tape players are used mounted side
by side at the front.
It is elementary that a patent may be infringed where the essential or substantial features of
the patented invention are taken or appropriated, or the device, machine or other subject
matter alleged to infringe is substantially identical with the patented invention. In order to
infringe a patent, a machine or device must perform the same function, or accomplish the
same result by identical or substantially identical means and the principle or mode of
operation must be substantially the same.
16

It may be noted that respondent corporation failed to present before the trial court a clear,
competent and reliable comparison between its own model and that of petitioner, and
disregarded completely petitioner's utility Model No. 6237 which improved on his first
patented model. Notwithstanding the differences cited by respondent corporation, it did not
refute and disprove the allegations of petitioner before the trial court that: (a) both are used
by a singer to sing and amplify his voice; (b) both are used to sing with a minus-one or
multiplex tapes, or that both are used to play minus-one or standard cassette tapes for
singing or for listening to; (c) both are used to sing with a minus-one tape and multiplex tape
and to record the singing and the accompaniment; (d) both are used to sing with live
accompaniment and to record the same; (e) both are used to enhance the voice of the singer
using echo effect, treble, bass and other controls; (g) both are equipped with cassette tape
decks which are installed with one being used for playback and the other, for recording the
singer and the accompaniment, and both may also be used to record a speaker's voice or
instrumental playing, like the guitar and other instruments; (h) both are
encased in a box-like cabinets; and, (i) both can be used with one or more microphones.
1
7
Clearly, therefore, both petitioner's and respondent's models involve substantially the same
modes of operation and produce substantially the same if not identical results when used.
In view thereof, we find that petitioner had established before the trial court prima
facie proof of violation of his rights as patentee to justify the issuance of a writ of
preliminary injunction in his favor during the pendency of the main suit for damages
resulting from the alleged infringement.
WHEREFORE, the Decision of the Court of Appeals dated 15 November 1993 is
REVERSED and SET ASIDE and the Order of the trial court dated 24 February 1993
granting petitioner the writ of injunction is REINSTATED.
The trial court is directed to continue with the proceedings on the main action pending
before it in order to resolve with dispatch the issues therein presented.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20354 July 28, 1969
GERARDO SAMSON, JR., petitioner,
vs.
FELIPE TARROZA and DIRECTOR OF PATENTS, respondents.
Hermenegildo V. Lopez for petitioner.
Isaac S. Puno, Jr. for respondent Felipe Tarroza.
Office of the Solicitor General for respondent Director of Patents.
FERNANDO, J .:
With the statutory recognition of patentability based on the "practical utility"
concept
1
thus rendering clear that a patent is not solely to be earned under the "flash of
genius" theory,
2
this petition for the cancellation of a utility model patent for a Side Tilting-
Dumping Wheelbarrow granted to respondent Felipe A. Tarroza was correctly denied by
respondent Director of Patents. Petitioner Gerardo Samson, Jr., himself the grantee of a
utility model patent for a Dumping and Detachable Wheelbarrow, lacked any legal
justification for such a plea. So respondent Director ruled. Not satisfied, petitioner elevated
the matter to us for review. There is no reason why a different outcome is to be expected.
His appeal must fail.
Petitioner was, on May 22, 1958, awarded Utility Model Patent No. 27 for the above
type of wheelbarrow which, as noted in the decision, "consists of a wheeled carriage base
and an upper pivoted and detachable carrying tray. The carriage base is comprised of a
wheel and two equal lengths of continuous pipes bent to provide wheel forks at the front and
at the rear to support the back portion of the tray, with the ends of the pipes being adopted as
the carrying handles for the wheelbarrow. The two pipes thus bent are joined together by
cross braces in the front and at the rear. The tray is removably pivoted at its front end
through hook catches at its bottom corners, to the forward cross brace, and its rear end rests
solidly over the rear portion of the legs. To dump the load the user pulls a dumping handle at
the back end to cause the tray to pivot upwardly about the front brace to a position of about
45 degrees with the horizontal and with its front end panel being supported by the wheel."
3

Respondent's Side Tilting-Dumping Wheelbarrow, on the other hand, consists "of a
wheeled carriage made of tubular frames essentially as in petitioner's. Welded transversely
to the parallel frames are two brackets provided with holes designed to complement similar
holes on brackets provided on the tray. The brackets on the tray are so placed that with the
provision of a bolt through the openings the tray may be tilted approximately 170 degrees to
the left or to the right of the wheelbarrow with its axis running longitudinally through the
center of the bottom face of the tray."
4

There is an express recognition under the Patent Law, as already noted, that any new
model of implements or tools or of any industrial product even if not possessed of the
quality of invention but which is of "practical utility" is entitled to a "patent for a utility
model." From the above description of the side tilting-dumping wheelbarrow, the product of
respondent's ingenuity and industry, it is quite apparent that it has a place in the market and
possesses what the statute refers to as "practical utility." The requirement explicitly set forth
in the statute has thus been met. Respondent Tarroza is entitled to its benefits. The grant to
him of a patent for a utility model is in accordance with law. There was no reason, therefore,
for its cancellation. So it was held by the Director of Patents. That decision as already noted
should stand.
Moreover, in appeals from a decision of the Director of Patents, only questions of law
may be reviewed, findings of facts being conclusive unless unsupported by substantial
evidence. So it was decided in Che v. Philippines Patent Office.
5
As was emphasized
in Bagano v. Director of Patents: "It is almost trite to state here that in cases of the nature as
the one at bar, only questions of law are to be raised in order that this Court could exercise
its appellate jurisdiction and review the decision."
6
The above well-settled doctrines suffice
to demonstrate that this petition for review, as noted at the outset, is without merit. It was
not error then, to reiterate, for the respondent Director of Patents to deny the cancellation of
the utility patent granted respondent Tarroza. To borrow from the language of the Che
opinion: "Even on the sole issue alone, the petition for review must fail."
Another alleged error was imputed to respondent Director of Patents. It would find
fault with his failing to hold that respondent Tarroza "was not the true and actual" author of
the mechanical contrivance for which he was granted a utility model patent. This is what the
appealed decision has to say on this point: "Petitioner's theory with respect to the second
ground for cancellation, to wit: that respondent is not the true and actual inventor or designer
of the utility model is premised on the fact that because of the proximity of the two, the
petitioner and the respondent being brothers-in-law, and living in adjoining residential lots,
the latter has had ample time and opportunity to observe and copy the former's wheelbarrow.
But the testimonial evidence thus presented is not clear, satisfactory, and free from doubt, in
the face of allegations to the contrary by the respondent."
7
The futility of such an
assignment of error is thus apparent. Again, it is factual in character. It is not for us, as noted
above, to review or revise the same, there being no showing of a lack of substantial evidence
in support thereof.
WHEREFORE, the decision of April 13, 1962 of respondent Director of Patents
denying the petition for the cancellation of Utility Model Letters Patent No. 62 in favor of
respondent Tarroza is hereby affirmed. With costs against petitioner.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Capistrano,
Teehankee and Barredo, JJ., concur.1wph1.t

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 161295 June 29, 2005
JESSIE G. CHING, petitioner,
vs.
WILLIAM M. SALINAS, SR., WILLIAM M. SALINAS, JR., JOSEPHINE L.
SALINAS, JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE, JOHN ERIC I.
SALINAS, NOEL M. YABUT (Board of Directors and Officers of WILAWARE
PRODUCT CORPORATION), respondents.
D E C I S I O N
CALLEJO, SR., J .:
This petition for review on certiorari assails the Decision
1
and Resolution
2
of the Court of
Appeals (CA) in CA-G.R. SP No. 70411 affirming the January 3, 2002 and February 14,
2002 Orders
3
of the Regional Trial Court (RTC) of Manila, Branch 1, which quashed and set
aside Search Warrant Nos. 01-2401 and 01-2402 granted in favor of petitioner Jessie G.
Ching.
Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co., the maker
and manufacturer of a Utility Model, described as "Leaf Spring Eye Bushing for
Automobile" made up of plastic.
On September 4, 2001, Ching and Joseph Yu were issued by the National Library
Certificates of Copyright Registration and Deposit of the said work described therein as
"Leaf Spring Eye Bushing for Automobile."
4

On September 20, 2001, Ching requested the National Bureau of Investigation (NBI) for
police/investigative assistance for the apprehension and prosecution of illegal
manufacturers, producers and/or distributors of the works.
5

After due investigation, the NBI filed applications for search warrants in the RTC of Manila
against William Salinas, Sr. and the officers and members of the Board of Directors of
Wilaware Product Corporation. It was alleged that the respondents therein reproduced and
distributed the said models penalized under Sections 177.1 and 177.3 of Republic Act (R.A.)
No. 8293. The applications sought the seizure of the following:
a.) Undetermined quantity of Leaf spring eye bushing for automobile that are
made up of plastic polypropylene;
b.) Undetermined quantity of Leaf spring eye bushing for automobile that are
made up of polyvinyl chloride plastic;
c.) Undetermined quantity of Vehicle bearing cushion that is made up of polyvinyl
chloride plastic;
d.) Undetermined quantity of Dies and jigs, patterns and flasks used in the
manufacture/fabrication of items a to d;
e.) Evidences of sale which include delivery receipts, invoices and official
receipts.
6

The RTC granted the application and issued Search Warrant Nos. 01-2401 and 01-2402 for
the seizure of the aforecited articles.
7
In the inventory submitted by the NBI agent, it appears
that the following articles/items were seized based on the search warrants:
Leaf Spring eye bushing
a) Plastic Polypropylene
- C190 27 }
- C240 rear 40 }
- C240 front 41 } BAG 1
b) Polyvinyl Chloride Plastic
- C190 13 }
c) Vehicle bearing cushion
- center bearing cushion 11 }
Budder for C190 mold 8 }
Diesel Mold
a) Mold for spring eye bushing rear 1 set
b) Mold for spring eye bushing front 1 set
c) Mold for spring eye bushing for C190 1 set
d) Mold for C240 rear 1 piece of the set
e) Mold for spring eye bushing for L300 2 sets
f) Mold for leaf spring eye bushing C190 with metal 1 set
g) Mold for vehicle bearing cushion 1 set
8

The respondents filed a motion to quash the search warrants on the following grounds:
2. The copyright registrations were issued in violation of the Intellectual Property Code on
the ground that:
a) the subject matter of the registrations are not artistic or literary;
b) the subject matter of the registrations are spare parts of automobiles meaning
there (sic) are original parts that they are designed to replace. Hence, they are not
original.
9

The respondents averred that the works covered by the certificates issued by the National
Library are not artistic in nature; they are considered automotive spare parts and pertain to
technology. They aver that the models are not original, and as such are the proper subject of
a patent, not copyright.
10

In opposing the motion, the petitioner averred that the court which issued the search
warrants was not the proper forum in which to articulate the issue of the validity of the
copyrights issued to him. Citing the ruling of the Court inMalaloan v. Court of
Appeals,
11
the petitioner stated that a search warrant is merely a judicial process designed by
the Rules of Court in anticipation of a criminal case. Until his copyright was nullified in a
proper proceeding, he enjoys rights of a registered owner/holder thereof.
On January 3, 2002, the trial court issued an Order
12
granting the motion, and quashed the
search warrant on its finding that there was no probable cause for its issuance. The court
ruled that the work covered by the certificates issued to the petitioner pertained to solutions
to technical problems, not literary and artistic as provided in Article 172 of the Intellectual
Property Code.
His motion for reconsideration of the order having been denied by the trial courts Order of
February 14, 2002, the petitioner filed a petition for certiorari in the CA, contending that the
RTC had no jurisdiction to delve into and resolve the validity of the copyright certificates
issued to him by the National Library. He insisted that his works are covered by Sections
172.1 and 172.2 of the Intellectual Property Code. The petitioner averred that the copyright
certificates are prima facie evidence of its validity, citing the ruling of the United States
Court of Appeals in Wildlife Express Corporation v. Carol Wright Sales, Inc.
13
The
petitioner asserted that the respondents failed to adduce evidence to support their motion to
quash the search warrants. The petitioner noted that respondent William Salinas, Jr. was not
being honest, as he was able to secure a similar copyright registration of a similar product
from the National Library on January 14, 2002.
On September 26, 2003, the CA rendered judgment dismissing the petition on its finding
that the RTC did not commit any grave abuse of its discretion in issuing the assailed order,
to wit:
It is settled that preliminarily, there must be a finding that a specific offense must have been
committed to justify the issuance of a search warrant. In a number of cases decided by the
Supreme Court, the same is explicitly provided, thus:
"The probable cause must be in connection with one specific offense, and the judge must,
before issuing the warrant, personally examine in the form of searching questions and
answers, in writing and under oath, the complainant and any witness he may produce, on
facts personally known to them and attach to the record their sworn statements together with
any affidavit submitted.
"In the determination of probable cause, the court must necessarily resolve whether or not an
offense exists to justify the issuance or quashal of the search warrant."
In the instant case, the petitioner is praying for the reinstatement of the search warrants
issued, but subsequently quashed, for the offense of Violation of Class Designation of
Copyrightable Works under Section 177.1 in relation to Section 177.3 of Republic Act 8293,
when the objects subject of the same, are patently not copyrightable.
It is worthy to state that the works protected under the Law on Copyright are: literary or
artistic works (Sec. 172) and derivative works (Sec. 173). The Leaf Spring Eye Bushing and
Vehicle Bearing Cushion fall on neither classification. Accordingly, if, in the first place, the
item subject of the petition is not entitled to be protected by the law on copyright, how can
there be any violation?
14

The petitioners motion for reconsideration of the said decision suffered the same fate. The
petitioner forthwith filed the present petition for review on certiorari, contending that the
revocation of his copyright certificates should be raised in a direct action and not in a search
warrant proceeding.
The petitioner posits that even assuming ex argumenti that the trial court may resolve the
validity of his copyright in a proceeding to quash a search warrant for allegedly infringing
items, the RTC committed a grave abuse of its discretion when it declared that his works are
not copyrightable in the first place. He claims that R.A. No. 8293, otherwise known as the
Intellectual Property Code of the Philippines, which took effect on January 1, 1998, provides
in no uncertain terms that copyright protection automatically attaches to a work by the sole
fact of its creation, irrespective of its mode or form of expression, as well as of its content,
quality or purpose.
15
The law gives a non-inclusive definition of "work" as referring to
original intellectual creations in the literary and artistic domain protected from the moment
of their creation; and includes original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial design and other works of applied
art under Section 172.1(h) of R.A. No. 8293.lawphil.net
As such, the petitioner insists, notwithstanding the classification of the works as either
literary and/or artistic, the said law, likewise, encompasses works which may have a bearing
on the utility aspect to which the petitioners utility designs were classified. Moreover,
according to the petitioner, what the Copyright Law protects is the authors intellectual
creation, regardless of whether it is one with utilitarian functions or incorporated in a useful
article produced on an industrial scale.
The petitioner also maintains that the law does not provide that the intended use or use in
industry of an article eligible for patent bars or invalidates its registration under the Law on
Copyright. The test of protection for the aesthetic is not beauty and utility, but art for the
copyright and invention of original and ornamental design for design patents.
16
In like
manner, the fact that his utility designs or models for articles of manufacture have been
expressed in the field of automotive parts, or based on something already in the public
domain does not automatically remove them from the protection of the Law on Copyright.
17

The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293 which gives the
same presumption to an affidavit executed by an author who claims copyright ownership of
his work.
The petitioner adds that a finding of probable cause to justify the issuance of a search
warrant means merely a reasonable suspicion of the commission of the offense. It is not
equivalent to absolute certainty or a finding of actual and positive cause.
18
He assists that the
determination of probable cause does not concern the issue of whether or not the alleged
work is copyrightable. He maintains that to justify a finding of probable cause in the
issuance of a search warrant, it is enough that there exists a reasonable suspicion of the
commission of the offense.
The petitioner contends that he has in his favor the benefit of the presumption that his
copyright is valid; hence, the burden of overturning this presumption is on the alleged
infringers, the respondents herein. But this burden cannot be carried in a hearing on a
proceeding to quash the search warrants, as the issue therein is whether there was probable
cause for the issuance of the search warrant. The petitioner concludes that the issue of
probable cause should be resolved without invalidating his copyright.
In their comment on the petition, the respondents aver that the work of the petitioner is
essentially a technical solution to the problem of wear and tear in automobiles, the
substitution of materials, i.e., from rubber to plastic matter of polyvinyl chloride, an oil
resistant soft texture plastic material strong enough to endure pressure brought about by the
vibration of the counter bearing and thus brings bushings. Such work, the respondents assert,
is the subject of copyright under Section 172.1 of R.A. No. 8293. The respondents posit that
a technical solution in any field of human activity which is novel may be the subject of a
patent, and not of a copyright. They insist that the certificates issued by the National Library
are only certifications that, at a point in time, a certain work was deposited in the said office.
Furthermore, the registration of copyrights does not provide for automatic protection. Citing
Section 218.2(b) of R.A. No. 8293, the respondents aver that no copyright is said to exist if a
party categorically questions its existence and legality. Moreover, under Section 2, Rule 7 of
the Implementing Rules of R.A. No. 8293, the registration and deposit of work is not
conclusive as to copyright outlay or the time of copyright or the right of the copyright
owner. The respondents maintain that a copyright exists only when the work is covered by
the protection of R.A. No. 8293.
The petition has no merit.
The RTC had jurisdiction to delve into and resolve the issue whether the petitioners utility
models are copyrightable and, if so, whether he is the owner of a copyright over the said
models. It bears stressing that upon the filing of the application for search warrant, the RTC
was duty-bound to determine whether probable cause existed, in accordance with Section 4,
Rule 126 of the Rules of Criminal Procedure:
SEC. 4. Requisite for issuing search warrant. A search warrant shall not issue but upon
probable cause in connection with one specific offense to be determined personally by the
judge after examination under oath or affirmation of the complainant and the witnesses he
may produce, and, particularly, describing the place to be searched and the things to be
seized.
In Solid Triangle Sales Corporation v. The Sheriff of RTC QC, Br. 93,
19
the Court held that
in the determination of probable cause, the court must necessarily resolve whether or not an
offense exists to justify the issuance of a search warrant or the quashal of one already issued
by the court. Indeed, probable cause is deemed to exist only where facts and circumstances
exist which could lead a reasonably cautious and prudent man to believe that an offense has
been committed or is being committed. Besides, in Section 3, Rule 126 of the Rules of
Criminal Procedure, a search warrant may be issued for the search and seizure of personal
property (a) subject of the offense; (b) stolen or embezzled and other proceeds or fruits of
the offense; or (c) used or intended to be used as the means of committing an offense.
The RTC is mandated under the Constitution and Rules of Criminal Procedure to determine
probable cause. The court cannot abdicate its constitutional obligation by refusing to
determine whether an offense has been committed.
20
The absence of probable cause will
cause the outright nullification of the search warrant.
21

For the RTC to determine whether the crime for infringement under R.A. No. 8293 as
alleged in an application is committed, the petitioner-applicant was burdened to prove that
(a) respondents Jessie Ching and Joseph Yu were the owners of copyrighted material; and
(b) the copyrighted material was being copied and distributed by the respondents. Thus, the
ownership of a valid copyright is essential.
22

Ownership of copyrighted material is shown by proof of originality and copyrightability. By
originality is meant that the material was not copied, and evidences at least minimal
creativity; that it was independently created by the author and that it possesses at least same
minimal degree of creativity.
23
Copying is shown by proof of access to copyrighted material
and substantial similarity between the two works.
24
The applicant must thus demonstrate the
existence and the validity of his copyright because in the absence of copyright protection,
even original creation may be freely copied.
25

By requesting the NBI to investigate and, if feasible, file an application for a search warrant
for infringement under R.A. No. 8293 against the respondents, the petitioner thereby
authorized the RTC (in resolving the application), to delve into and determine the validity of
the copyright which he claimed he had over the utility models. The petitioner cannot seek
relief from the RTC based on his claim that he was the copyright owner over the utility
models and, at the same time, repudiate the courts jurisdiction to ascertain the validity of
his claim without running afoul to the doctrine of estoppel.
To discharge his burden, the applicant may present the certificate of registration covering
the work or, in its absence, other evidence.
26
A copyright certificate provides prima
facie evidence of originality which is one element of copyright validity. It constitutes prima
facie evidence of both validity and ownership
27
and the validity of the facts stated in the
certificate.
28
The presumption of validity to a certificate of copyright registration merely
orders the burden of proof. The applicant should not ordinarily be forced, in the first
instance, to prove all the multiple facts that underline the validity of the copyright unless the
respondent, effectively challenging them, shifts the burden of doing so to the
applicant.
29
Indeed, Section 218.2 of R.A. No. 8293 provides:
218.2. In an action under this Chapter:
(a) Copyright shall be presumed to subsist in the work or other subject matter to
which the action relates if the defendant does not put in issue the question whether
copyright subsists in the work or other subject matter; and
(b) Where the subsistence of the copyright is established, the plaintiff shall be
presumed to be the owner of the copyright if he claims to be the owner of the
copyright and the defendant does not put in issue the question of his ownership.
A certificate of registration creates no rebuttable presumption of copyright validity where
other evidence in the record casts doubt on the question. In such a case, validity will not be
presumed.
30

To discharge his burden of probable cause for the issuance of a search warrant for violation
of R.A. No. 8293, the petitioner-applicant submitted to the RTC Certificate of Copyright
Registration Nos. 2001-197 and 2001-204 dated September 3, 2001 and September 4, 2001,
respectively, issued by the National Library covering work identified as Leaf Spring Eye
Bushing for Automobile and Vehicle Bearing Cushion both classified under Section
172.1(h) of R.A. No. 8293, to wit:
SEC. 172. Literary and Artistic Works. 172.1. Literary and artistic works, hereinafter
referred to as "works," are original intellectual creations in the literary and artistic domain
protected from the moment of their creation and shall include in particular:
...
(h) Original ornamental designs or models for articles of manufacture, whether or not
registrable as an industrial design, and other works of applied art.
Related to the provision is Section 171.10, which provides that a "work of applied art" is an
artistic creation with utilitarian functions or incorporated in a useful article, whether made
by hand or produced on an industrial scale.
But, as gleaned from the specifications appended to the application for a copyright
certificate filed by the petitioner, the said Leaf Spring Eye Bushing for Automobile is
merely a utility model described as comprising a generally cylindrical body having a co-
axial bore that is centrally located and provided with a perpendicular flange on one of its
ends and a cylindrical metal jacket surrounding the peripheral walls of said body, with the
bushing made of plastic that is either polyvinyl chloride or polypropylene.
31
Likewise, the
Vehicle Bearing Cushion is illustrated as a bearing cushion comprising a generally semi-
circular body having a central hole to secure a conventional bearing and a plurality of ridges
provided therefore, with said cushion bearing being made of the same plastic
materials.
32
Plainly, these are not literary or artistic works. They are not intellectual
creations in the literary and artistic domain, or works of applied art. They are certainly not
ornamental designs or one having decorative quality or value.
It bears stressing that the focus of copyright is the usefulness of the artistic design, and not
its marketability. The central inquiry is whether the article is a work of art.
33
Works for
applied art include all original pictorials, graphics, and sculptural works that are intended to
be or have been embodied in useful article regardless of factors such as mass production,
commercial exploitation, and the potential availability of design patent protection.
34

As gleaned from the description of the models and their objectives, these articles are useful
articles which are defined as one having an intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey information. Indeed, while works of
applied art, original intellectual, literary and artistic works are copyrightable, useful articles
and works of industrial design are not.
35
A useful article may be copyrightable only if and
only to the extent that such design incorporates pictorial, graphic, or sculptural features that
can be identified separately from, and are capable of existing independently of the utilitarian
aspects of the article.
We agree with the contention of the petitioner (citing Section 171.10 of R.A. No. 8293), that
the authors intellectual creation, regardless of whether it is a creation with utilitarian
functions or incorporated in a useful article produced on an industrial scale, is protected by
copyright law. However, the law refers to a "work of applied art which is an artistic
creation." It bears stressing that there is no copyright protection for works of applied art or
industrial design which have aesthetic or artistic features that cannot be identified separately
from the utilitarian aspects of the article.
36
Functional components of useful articles, no
matter how artistically designed, have generally been denied copyright protection unless
they are separable from the useful article.
37

In this case, the petitioners models are not works of applied art, nor artistic works. They are
utility models, useful articles, albeit with no artistic design or value. Thus, the petitioner
described the utility model as follows:
LEAF SPRING EYE BUSHING FOR AUTOMOBILE
Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile are made of
hard rubber. These rubber bushings after a time, upon subjecting them to so much or
intermittent pressure would eventually wore (sic) out that would cause the wobbling of the
leaf spring.
The primary object of this utility model, therefore, is to provide a leaf-spring eye bushing for
automobile that is made up of plastic.
Another object of this utility model is to provide a leaf-spring eye bushing for automobiles
made of polyvinyl chloride, an oil resistant soft texture plastic or polypropylene, a hard
plastic, yet both causes cushion to the leaf spring, yet strong enough to endure pressure
brought about by the up and down movement of said leaf spring.
Yet, an object of this utility model is to provide a leaf-spring eye bushing for automobiles
that has a much longer life span than the rubber bushings.
Still an object of this utility model is to provide a leaf-spring eye bushing for automobiles
that has a very simple construction and can be made using simple and ordinary molding
equipment.
A further object of this utility model is to provide a leaf-spring eye bushing for automobile
that is supplied with a metal jacket to reinforce the plastic eye bushing when in engaged
with the steel material of the leaf spring.
These and other objects and advantages will come to view and be understood upon a reading
of the detailed description when taken in conjunction with the accompanying drawings.
Figure 1 is an exploded perspective of a leaf-spring eye bushing according to the present
utility model;
Figure 2 is a sectional view taken along line 2-2 of Fig. 1;
Figure 3 is a longitudinal sectional view of another embodiment of this utility model;
Figure 4 is a perspective view of a third embodiment; and
Figure 5 is a sectional view thereof.
Referring now to the several views of the drawings wherein like reference numerals
designated same parts throughout, there is shown a utility model for a leaf-spring eye
bushing for automobile generally designated as reference numeral 10.
Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11 having a co-axial
bore 12 centrally provided thereof.
As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a perpendicular
flange 13 on one of its ends and a cylindrical metal jacket 14 surrounding the peripheral
walls 15 of said body 11. When said leaf-spring bushing 10 is installed, the metal jacket 14
acts with the leaf-spring eye (not shown), which is also made of steel or cast steel. In effect,
the bushing 10 will not be directly in contact with steel, but rather the metal jacket, making
the life of the bushing 10 longer than those without the metal jacket.
In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl chloride, an oil
resistant soft texture plastic or a hard polypropylene plastic, both are capable to endure the
pressure applied thereto, and, in effect, would lengthen the life and replacement therefor.
Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of said bushing 10 is
insertably provided with a steel tube 17 to reinforce the inner portion thereof. This steel tube
17 accommodates or engages with the leaf-spring bolt (not shown) connecting the leaf
spring and the automobiles chassis.
Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10 is elongated and
cylindrical as to its construction. Said another embodiment is also made of polypropylene or
polyvinyl chloride plastic material. The steel tube 17 and metal jacket 14 may also be
applied to this embodiment as an option thereof.
38

VEHICLE BEARING CUSHION
Known bearing cushions inserted to bearing housings for vehicle propeller shafts are made
of hard rubber. These rubber bushings after a time, upon subjecting them to so much or
intermittent pressure would eventually be worn out that would cause the wobbling of the
center bearing.
The primary object of this utility model therefore is to provide a vehicle-bearing cushion
that is made up of plastic.
Another object of this utility model is to provide a vehicle bearing cushion made of
polyvinyl chloride, an oil resistant soft texture plastic material which causes cushion to the
propellers center bearing, yet strong enough to endure pressure brought about by the
vibration of the center bearing.
Yet, an object of this utility model is to provide a vehicle-bearing cushion that has a much
longer life span than rubber bushings.
Still an object of this utility model is to provide a vehicle bearing cushion that has a very
simple construction and can be made using simple and ordinary molding equipment.
These and other objects and advantages will come to view and be understood upon a reading
of the detailed description when taken in conjunction with the accompanying drawings.
Figure 1 is a perspective view of the present utility model for a vehicle-bearing cushion; and
Figure 2 is a sectional view thereof.
Referring now to the several views of the drawing, wherein like reference numeral designate
same parts throughout, there is shown a utility model for a vehicle-bearing cushion generally
designated as reference numeral 10.
Said bearing cushion 10 comprises of a generally semi-circular body 11, having central hole
12 to house a conventional bearing (not shown). As shown in Figure 1, said body 11 is
provided with a plurality of ridges 13 which serves reinforcing means thereof.
The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture oil and chemical
resistant plastic material which is strong, durable and capable of enduring severe pressure
from the center bearing brought about by the rotating movement of the propeller shaft of the
vehicle.
39

A utility model is a technical solution to a problem in any field of human activity which is
new and industrially applicable. It may be, or may relate to, a product, or process, or an
improvement of any of the aforesaid.
40
Essentially, a utility model refers to an invention in
the mechanical field. This is the reason why its object is sometimes described as a device or
useful object.
41
A utility model varies from an invention, for which a patent for invention is,
likewise, available, on at least three aspects: first, the requisite of "inventive step"
42
in a
patent for invention is not required; second, the maximum term of protection is only seven
years
43
compared to a patent which is twenty years,
44
both reckoned from the date of the
application; and third, the provisions on utility model dispense with its substantive
examination
45
and prefer for a less complicated system.
Being plain automotive spare parts that must conform to the original structural design of the
components they seek to replace, the Leaf Spring Eye Bushing and Vehicle Bearing Cushion
are not ornamental. They lack the decorative quality or value that must characterize
authentic works of applied art. They are not even artistic creations with incidental utilitarian
functions or works incorporated in a useful article. In actuality, the personal properties
described in the search warrants are mechanical works, the principal function of which is
utility sans any aesthetic embellishment.
Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing Cushion as
included in the catch-all phrase "other literary, scholarly, scientific and artistic works" in
Section 172.1(a) of R.A. No. 8293. Applying the principle of ejusdem generis which states
that "where a statute describes things of a particular class or kind accompanied by words of
a generic character, the generic word will usually be limited to things of a similar nature
with those particularly enumerated, unless there be something in the context of the state
which would repel such inference,"
46
the Leaf Spring Eye Bushing and Vehicle Bearing
Cushion are not copyrightable, being not of the same kind and nature as the works
enumerated in Section 172 of R.A. No. 8293.
No copyright granted by law can be said to arise in favor of the petitioner despite the
issuance of the certificates of copyright registration and the deposit of the Leaf Spring Eye
Bushing and Vehicle Bearing Cushion. Indeed, inJoaquin, Jr. v. Drilon
47
and Pearl & Dean
(Phil.), Incorporated v. Shoemart, Incorporated,
48
the Court ruled that:
Copyright, in the strict sense of the term, is purely a statutory right. It is a new or
independent right granted by the statute, and not simply a pre-existing right regulated by it.
Being a statutory grant, the rights are only such as the statute confers, and may be obtained
and enjoyed only with respect to the subjects and by the persons, and on terms and
conditions specified in the statute. Accordingly, it can cover only the works falling within
the statutory enumeration or description.
That the works of the petitioner may be the proper subject of a patent does not entitle him to
the issuance of a search warrant for violation of copyright laws. In Kho v. Court of
Appeals
49
and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,
50
the Court
ruled that "these copyright and patent rights are completely distinct and separate from one
another, and the protection afforded by one cannot be used interchangeably to cover items or
works that exclusively pertain to the others." The Court expounded further, thus:
Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the
goods (trademark) or services (service mark) of an enterprise and shall include a stamped or
marked container of goods. In relation thereto, a trade name means the name or designation
identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined
to literary and artistic works which are original intellectual creations in the literary and
artistic domain protected from the moment of their creation. Patentable inventions, on the
other hand, refer to any technical solution of a problem in any field of human activity which
is new, involves an inventive step and is industrially applicable.
The petitioner cannot find solace in the ruling of the United States Supreme Court in Mazer
v. Stein
51
to buttress his petition. In that case, the artifacts involved in that case were
statuettes of dancing male and female figures made of semi-vitreous china. The controversy
therein centered on the fact that although copyrighted as "works of art," the statuettes were
intended for use and used as bases for table lamps, with electric wiring, sockets and
lampshades attached. The issue raised was whether the statuettes were copyright protected in
the United States, considering that the copyright applicant intended primarily to use them as
lamp bases to be made and sold in quantity, and carried such intentions into effect. At that
time, the Copyright Office interpreted the 1909 Copyright Act to cover works of artistic
craftsmanship insofar as their form, but not the utilitarian aspects, were concerned. After
reviewing the history and intent of the US Congress on its copyright legislation and the
interpretation of the copyright office, the US Supreme Court declared that the statuettes
were held copyrightable works of art or models or designs for works of art. The High Court
ruled that:
"Works of art (Class G) (a) In General. This class includes works of artistic
craftsmanship, in so far as their form but not their mechanical or utilitarian aspects are
concerned, such as artistic jewelry, enamels, glassware, and tapestries, as well as all works
belonging to the fine arts, such as paintings, drawings and sculpture. "
So we have a contemporaneous and long-continued construction of the statutes by the
agency charged to administer them that would allow the registration of such a statuette as is
in question here.
52

The High Court went on to state that "[t]he dichotomy of protection for the aesthetic is not
beauty and utility but art for the copyright and the invention of original and ornamental
design for design patents." Significantly, the copyright office promulgated a rule to
implement Mazer to wit:
[I]f "the sole intrinsic function of an article is its utility, the fact that the work is unique
and attractively shaped will not qualify it as a work of art."
In this case, the bushing and cushion are not works of art. They are, as the petitioner himself
admitted, utility models which may be the subject of a patent.
IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack
of merit. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No.
70411 are AFFIRMED. Search Warrant Nos. 01-2401 and 01-2402 issued on October 15,
2001 are ANNULLED AND SET ASIDE. Costs against the petitioner.
SO ORDERED.