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INTRODUCTION
Philippine commitment to the GATT-TRIPS agreement
Tanada v. Angara
Facts:
On April 15, 1994, Respondent Navarro, representing
the Government of the Republic of the Philippines,
signed in Morocco, the Final Act Embodying the Results
of the Uruguay Round of Multilateral Negotiations Act of
the WTO.
By signing the Final Act,Secretary Navarro on behalf of
the Republic of the Philippines, agreed:
(a) to submit, as appropriate, the WTO
Agreement for the consideration of their
respective competent authorities, with a
view to seeking approval of the
Agreement in accordance with their
procedures; and
(b) to adopt the Ministerial Declarations
and Decisions.
On December 14, 1994, the Philippine Senate adopted
Resolution No. 97 that concurred the ratification by the
President of the Philippines of the Agreement
Establishing the World Trade Organization.
Issue/s:
1) WON, the WTO Agreement violated the Economic
Nationalism provided in the 1987 Phil Constitution
2) WON, Paragraph 1, Article 34 of the General
Provisions and Basic Principles of the Agreement on
Trade-Related Aspects of Intellectual Property Rights
(TRIPS) intrudes on the power of the Supreme Court to
promulgate rules concerning pleading, practice and
procedures.
SC:
1) No, the Constitution indeed mandates a bias in favor
of Filipino goods, services, labor and enterprises, at the
same time, it recognizes the need for business exchange
with the rest of the world on the bases of equality and
reciprocity and limits protection of Filipino enterprises
INTELLECTUAL PROPERTY LAW DIGESTED CASES

only against foreign competition and trade practices that


are unfair. In other words, the Constitution did not
intend to pursue an isolationist policy. It did not shut out
foreign investments, goods and services in the
development of the Philippine economy. While the
Constitution does not encourage the unlimited entry of
foreign goods, services and investments into the
country, it does not prohibit them either. In fact, it
allows an exchange on the basis of equality and
reciprocity, frowning only on foreign competition that is
unfair.

WTO/GATT itself has provided built-in protection from


unfair foreign competition and trade practices including
anti-dumping measures, countervailing measures and
safeguards against import surges. Where local
businesses are jeopardized by unfair foreign
competition, the Philippines can avail of these measures.
There is hardly therefore any basis for the statement
that under the WTO, local industries and enterprises will
all be wiped out and that Filipinos will be deprived of
control of the economy. Quite the contrary, the weaker
situations of developing nations like the Philippines have
been taken into account.
2) No. A WTO Member is required to provide a rule of
presumption that a product shown to be identical to one
produced with the use of a patented process shall be
deemed to have been obtained by the (illegal) use of the
said patented process, (1) where such product obtained
by the patented product is new, or (2) where there is
"substantial likelihood" that the identical product was
made with the use of the said patented process but the
owner of the patent could not determine the exact
process used in obtaining such identical product. Hence,
the "burden of proof" contemplated by Article 34 should
actually be understood as the duty of the alleged patent
infringer to overthrow such presumption. Such burden,
properly understood, actually refers to the "burden of
evidence" (burden of going forward) placed on the
producer of the identical (or fake) product to show that
his product was produced without the use of the
patented process.
The foregoing notwithstanding, the patent owner still
has the "burden of proof" since, regardless of the
presumption provided under paragraph 1 of Article 34,

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such owner still has to introduce evidence of the
existence of the alleged identical product, the fact that it
is "identical" to the genuine one produced by the
patented process and the fact of "newness" of the
genuine product or the fact of "substantial likelihood"
that the identical product was made by the patented
process.
It should be noted that the requirement of Article 34 to
provide a disputable presumption applies only if (1) the
product obtained by the patented process in NEW or (2)
there is a substantial likelihood that the identical
product was made by the process and the process
owner has not been able through reasonable effort to
determine the process used. Where either of these two
provisos does not obtain, members shall be free to
determine the appropriate method of implementing the
provisions of TRIPS within their own internal systems
and processes.

Did RA 8293 repeal existing laws on intellectual property?


Mirpuri v. CA
The Intellectual Property Code took effect on January 1,
1998 and by its express provision, repealed the
Trademark Law, the Patent Law, Articles 188 and 189 of
the Revised Penal Code, the Decree on Intellectual
Property, and the Decree on Compulsory Reprinting of
Foreign Textbooks. The Code was enacted to strengthen
the intellectual and industrial property system in the
Philippines as mandated by the country's accession to
the Agreement Establishing the World Trade
Organization (WTO).
Samson v. Daway
Facts:
On March 7, 2002, two informations for unfair
competition under Sec. 168.3(a) in relation to Sec. 170
(RA 8293, IPC) were filed against Manolo Samson,
registered owner of ITTI shoes. The informations
accused Samson of unlawful and felonious distribution,
selling and offering for sale CATERPILLAR products
(footwear, garments, clothing, etc) which were closely
identical to and/or colorable imitations of the authentic
products. It further accused Samson of using
trademarks, symbols and/or designs.
INTELLECTUAL PROPERTY LAW DIGESTED CASES

On April 19, 2002, petitioner filed a motion to suspend


arraignment due to a prejudicial question in another civil
case and in view of the pendency of a petition for review
with the Sec. of Justice assailing the finding of probable
cause. The court denied the same.
On April 20, 2002, petitioner filed a twin motion to
quash information and motion for reconsideration. He
challenged the jurisdiction of the court since under Sec.
170 of IPC, the penalty of imprisonment does not exceed
six years, thus, cognizable by the MTC and not by the
RTC, in accordance with RA 7691. The same was denied.
Hence, Samson filed a petition directly before the SC
on the ground of grave abuse of discretion.
Was RA 166 expressly repealed by RA 8293?
No.
The repealing act of RA 8293 states, in part, that All
acts and parts of Acts inconsistent herewith, more
particularlyRA 166 This clause did not expressly
repeal RA 166 in its entirety, otherwise, it would not have
used the phrases parts of Acts and inconsistent
herewith. The use of the phrases parts of Acts and
inconsistent herewith only means that the repeal
pertains only to provisions which are repugnant or not
susceptible of harmonization with RA 8293.
Sec. 27 of RA 166, however, is consistent and in
harmony with Sec. 163 of RA 8293. Had RA 8293
intended to vest jurisdiction over violations of
intellectual property rights with the MTCs, it would have
expressly stated so under Sec. 163.
Which court has jurisdiction over criminal and civil cases
for violation of the intellectual property rights?
RTC.
Under Sec. 170 of RA 8293, which took effect on
January 1, 1998, the criminal penalty for infringement of
registered trademarks, unfair competition, false
designation of origin and false description or
representation, is imprisonment from 2 to 5 years and a
fine ranging from P50,000 to P200,000.
Corollarily, Sec. 163 of the same Code states that
actions (including criminal and civil) under Secs. 150,
155, 164, 166, 167, 168 and 169 shall be brought before
the proper courts with appropriate jurisdiction under
existing laws.
The existing law referred to is Sec. 27 of RA 166
(Trademark Law) which provides that jurisdiction over

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cases for infringement of registered marks, unfair
competition false designation of origin and false
description or representation is lodged with the RTC.
Moreover, a rule in Statutory Construction states that
in case of conflict between a general and a special law,
the latter must prevail. Jurisdiction conferred by a special
law to RTC must prevail over that granted by a general
law to MTC.
In the case at bar, RA 8293 and RA 166 are special laws
conferring jurisdiction over violations of intellectual
property rights to RTC. They should therefore prevail
over RA 7691, which is a general law. Thus, RTC has
jurisdiction even if the penalty of imprisonment is less
than 6 years.

copyright owner has only licensed the broadcaster to


"perform the composition publicly for profit".
SC:
The respondent did not infringe upon the petitioners'
right under the Copyright Act "[t]o perform the
copyrighted work publicly for profit" since the radio
broadcast in the establishment was not equivalent to a
"performance. Respondent did not infringe upon
petitioners' exclusive right, under the Copyright Act,
"[t]o perform the copyrighted work publicly for profit,"
since the radio reception did not constitute a
"performance" of the copyrighted songs.
Feist Publications, Inc. v. Rural Tele. Servs. Co.

R.A. 8293 INTELLECTUAL PROPERTY LAW


Facts:

Preliminary Matters
State Policy Declaration Sec. 2

Twentieth Century Music Corp. v. Aiken


Facts:
George Aiken's Chicken" is fast food restaurant in
Pittsburgh, Pennsylvania, owned and operated by
George Aiken. Inside the store, radio station broadcasts
are played over loud speakers that are audible to anyone
in the restaurant. On March 11, 1972, two songs
copyrighted by Twentieth Century Music Corp. were
played over the radio and heard by customers in the
restaurant. While the radio station broadcasting the
songs was licensed by the American Society of
Composers, Authors and Publishers (ASCAP) to play
them, Aiken's establishment was not.
The petitioners of the case were Twentieth Century
Music Corp., which owned the copyright to one of the
songs, "The More I See You", and Mary Bourne, who
owned the copyright to the other song, "Me and My
Shadow". The petitioners claimed that Aiken's broadcast
of their songs in his establishment violated their right to
publicly perform their work for profit.
Issue:
Whether the reception of a copyrighted song on a radio
broadcast constitutes a copyright violation if the
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Rural Telephone Service Company is a certified public


utility that provides telephone service to several
communities in northwest Kansas. It is subject to a state
regulation that requires all telephone companies
operating in Kansas to issue annually an updated
telephone directory. Rural publishes a typical telephone
directory, consisting of white pages and yellow pages.
Rural distributes its directory free of charge to its
subscribers, but earns revenue by selling yellow pages
advertisements.
Feist Publications, Inc., is a publishing company that
specializes in area-wide telephone directories Feist's
area-wide directories cover a much larger geographical
range The Feist directory that is the subject of this
litigation covers 11 different telephone service areas in
15 counties and contains 46,878 white pages listings -compared to Rural's approximately 7,700 listings. Like
Rural's directory, Feist's is distributed free of charge and
includes both white pages and yellow pages. Feist and
Rural compete vigorously for yellow pages advertising.
As the sole provider of telephone service in its service
area, Rural obtains subscriber information quite easily.
Persons desiring telephone service must apply to Rural
and provide their names and addresses; Rural then
assigns them a telephone number. Feist is not a
telephone company To obtain white pages listings for its

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area-wide directory, Feist approached each of the 11
telephone companies operating in northwest Kansas and
offered to pay for the right to use its white pages
listings. Of the 11 telephone companies, only Rural
refused to license its listings to Feist. Rural's refusal
created a problem for Feist District Court determined
that this was precisely the reason Rural refused to
license its listings. The refusal was motivated by an
unlawful purpose "to extend its monopoly in telephone
service to a monopoly
in
yellow pages
advertising." Unable to license Rural's white pages
listings, Feist used them without Rural's consent. As a
result, a typical Feist listing includes the individual's
street address; most of Rural's listings do not.
Notwithstanding these additions, however, 1,309 of the
46,878 listings in Feist's 1983 directory were identical to
listings in Rural's 1982-1983 white pages.
District Court granted summary judgment to Rural,
explaining that "courts have consistently held that
telephone directories are copyrightable" Court of
Appeals for the Tenth Circuit affirmed "for substantially
the reasons given by the district court."
Issue:
Whether or not Rurals compilations is copyrightable,
hence Fiests actions where an infringement of such
right.
SC:
We rule in the negative.
This case concerns the interaction of two wellestablished propositions. The first is that facts are not
copyrightable; the other, that compilations of facts
generally are. The key to resolving the tension lies in
understanding why facts are not copyrightable. The sine
qua non of copyright is originality. To qualify for
copyright protection, a work must be original to the
author. Original, as the term is used in copyright, means
only that the work was independently created by the
author (as opposed to copied from other works), and
that it possesses at least some minimal degree of
INTELLECTUAL PROPERTY LAW DIGESTED CASES

creativity. Originality does not signify novelty; a work


may be original even though it closely resembles other
works so long as the similarity is fortuitous, not the
result of copying. It is this bedrock principle of copyright
that mandates the law's seemingly disparate treatment
of facts and factual compilations. "No one may claim
originality as to facts." facts do not owe their origin to
an act of authorship. The distinction is one between
creation and discovery: the first person to find and
report a particular fact has not created the fact; he or
she has merely discovered its existence. one who
discovers a fact is not its "maker" or "originator." "The
discoverer merely finds and records."
Factual compilations, on the other hand, may possess
the requisite originality. The compilation author typically
chooses which facts to include, in what order to place
them, and how to arrange the collected data so that
they may be used effectively by readers. These choices
as to selection and arrangement, so long as they are
made independently by the compiler and entail a
minimal degree of creativity, are sufficiently original that
Congress may protect such compilations through the
copyright laws. Thus, even a directory that contains
absolutely no protectible written expression, only facts,
meets the constitutional minimum for copyright
protection if it features an original selection or
arrangement. This protection is subject to an important
limitation. The mere fact that a work is copyrighted does
not mean that every element of the work may be
protected. Originality remains the sine qua non of
copyright; accordingly, copyright protection may extend
only to those components of a work that are original to
the author. Thus, if the compilation author clothes facts
with an original collocation of words, he or she may be
able to claim a copyright in this written expression.
Others may copy the underlying facts from the
publication, but not the precise words used to present
them.
Copyright treats facts and factual compilations in a
wholly consistent manner. Facts, whether alone or as
part of a compilation, are not original and therefore may
not be copyrighted. A factual compilation is eligible for

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copyright if it features an original selection or
arrangement of facts, but the copyright is limited to
[p*351] the particular selection or arrangement. In no
event may copyright extend to the facts themselves.
Three distinct elements and requires each to be met for
a work to qualify as a copyrightable compilation: (1) the
collection and assembly of pre-existing material, facts, or
data; (2) the selection, coordination, or arrangement of
those materials; and (3) the creation, by virtue of the
particular selection, coordination, or arrangement, of an
original work of authorship. A copyright in a directory
. . . is properly viewed as resting on the originality of the
selection and arrangement of the factual material,
rather than on the industriousness of the efforts to
develop the information. Copyright protection does not
extend to the facts themselves, and the mere use of
information contained in a directory without a
substantial copying of the format does not constitute
infringement.
There is no doubt that Feist took from the white pages
of Rural's directory a substantial amount of factual
information. At a minimum, Feist copied the names,
towns, and telephone numbers of 1,309 of Rural's
subscribers. Not all copying, however, is copyright
infringement. To establish infringement, two elements
must be proven: (1) ownership of a valid copyright, and
(2) copying of constituent elements of the work that are
original. The first element is not at issue here; Feist
appears to concede that Rural's directory, considered as
a whole, is subject to a valid copyright because it
contains some foreword text, as well as original material
in its yellow pages advertisements.
The question is whether Rural has proved the second
element. In other words, did Feist, by taking 1,309
names, towns, and telephone numbers from Rural's
white pages, copy anything that was original to Rural?
Certainly, the raw data does not satisfy the originality
requirement. Rural may have been the first to discover
and report the names, towns, and telephone numbers of
its subscribers, but this data does not 'owe its origin'
to Rural. these bits of information are uncopyrightable
INTELLECTUAL PROPERTY LAW DIGESTED CASES

facts; they existed before Rural reported them and


would have continued to exist if Rural had never
published a telephone directory. The selection,
coordination, and arrangement of Rural's white pages do
not satisfy the minimum constitutional standards for
copyright protection. As mentioned at the outset, Rural's
white pages are entirely typical. Persons desiring
telephone service in Rural's service area fill out an
application and Rural issues them a telephone number.
In preparing its white pages, Rural simply takes the data
provided by its subscribers and lists it alphabetically by
surname. The end product is a garden-variety white
pages directory, devoid of even the slightest trace of
creativity. Rural's selection of listings could not be more
obvious: it publishes the most basic information -- name,
town, and telephone number -- about each person who
applies to it for telephone service. This is selection of a
sort, but it lacks the modicum of creativity necessary to
transform mere selection into copyrightable expression.
Rural expended sufficient effort [p*363] to make the
white pages directory useful, but insufficient creativity to
make it original.
This arrangement may, technically speaking, owe its
origin to Rural; no one disputes that Rural undertook the
task of alphabetizing the names itself. But there is
nothing remotely creative about arranging names
alphabetically in a white pages directory. We conclude
that the names, towns, and telephone numbers copied
by Feist were not original to Rural and therefore were
not protected by the copyright in Rural's combined
white and yellow pages directory. As a constitutional
matter, copyright protects only those constituent
elements of a work that possess more than a de
minimis quantum of creativity. Rural's white pages,
limited to basic subscriber information and arranged
alphabetically, fall short of the mark. Because Rural's
white pages lack the requisite originality, Feist's use of
the listings cannot constitute infringement.

Effect on International Conventions and on Principle of


Reciprocity

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Mirpuri v. CA

Coverage of Intellectual Property Rights/ Differences

Facts:

Kho v. CA

Lolita Escobar applied with the Bureau of Patents for


the registration of the trademark Barbizon, alleging
that she had been manufacturing and selling these
products since 1970. private respondent Barbizon Corp
opposed the application in IPC No. 686. The Bureau
granted the application and a certificate of registration
was issued for the trademark Barbizon. Escobar later
assigned all her rights and interest over the trademark to
petitioner Mirpuri. In 1979, Escobar failed to file with the
Bureau the Affidavit of Use of the trademark. Due to his
failure, the Bureau cancelled the certificate of
registration. Escobar reapplied and Mirpuri also applied
and this application was also opposed by private
respondent in IPC No. 2049, claiming that it adopted said
trademark in 1933 and has been using it. It obtained a
certificate from the US Patent Office in 1934. Then in
1991, DTI cancelled petitioners registration and
declared private respondent the owner and prior user of
the business name Barbizon International.

Issue:
Whether or not the treaty (Paris Convention) affords
protection to a foreign corporation against a Philippine
applicant for the registration of a similar trademark.

SC:
The Court held in the affirmative. RA 8293 defines
trademark as any visible sign capable of distinguishing
goods. The Paris Convention is a multilateral treaty that
seeks to protect industrial property consisting of
patents, utility models, industrial designs, trademarks,
service marks, trade names and indications of source or
appellations of origin, and at the same time aims to
repress unfair competition. In short, foreign nationals
are to be given the same treatment in each of the
member countries as that country makes available to its
own citizens. Nationals of the various member nations
are thus assured of a certain minimum of international
protection of their industrial property.
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Facts:
The petitioners complaint alleges that petitioner, doing
business under the name and style of KEC Cosmetics
Laboratory, is the registered owner of the copyrights
Chin Chun Su and Oval Facial Cream Container/Case, as
shown by Certificates of Copyright Registration No. 01358 and No. 0-3678; that she also has patent rights on
Chin Chun Su & Device and Chin Chun Su for medicated
cream after purchasing the same from Quintin Cheng,
the registered owner thereof in the Supplemental
Register of the Philippine Patent Office on February 7,
1980 under Registration Certificate No. 4529; that
respondent Summerville advertised and sold petitioners
cream products under the brand name Chin Chun Su, in
similar containers that petitioner uses, thereby
misleading the public, and resulting in the decline in the
petitioners business sales and income; and, that the
respondents should be enjoined from allegedly
infringing on the copyrights and patents of the
petitioner.
The respondents, on the other hand, alleged as their
defense that Summerville is the exclusive and authorized
importer, re-packer and distributor of Chin Chun Su
products manufactured by Shun Yi Factory of Taiwan;
that the said Taiwanese manufacturing company
authorized Summerville to register its trade name Chin
Chun Su Medicated Cream with the Philippine Patent
Office and other appropriate governmental agencies;
that KEC Cosmetics Laboratory of the petitioner
obtained the copyrights through misrepresentation and
falsification; and, that the authority of Quintin Cheng,
assignee of the patent registration certificate, to
distribute and market Chin Chun Su products in the
Philippines had already been terminated by the said
Taiwanese Manufacturing Company.
After hearing, the tc granted the same. Respondents
filed a petitioner with CA which the latter granted.
Issue:
Whether the copyright and patent over the name and
container of a beauty cream product would entitle the
registrant to the use and ownership over the same to
the exclusion of others.

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SC:
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
Petitioner has no right to support her claim for the
exclusive use of the subject trade name and its
container. The name and container of a beauty cream
product are proper subjects of a trademark inasmuch as
the same falls squarely within its definition. In order to
be entitled to exclusively use the same in the sale of the
beauty cream product, the user must sufficiently prove
that she registered or used it before anybody else did.
The petitioners copyright and patent registration of the
name and container would not guarantee her the right
to the exclusive use of the same for the reason that they
are not appropriate subjects of the said intellectual
rights. Consequently, a preliminary injunction order
cannot be issued for the reason that the petitioner has
not proven that she has a clear right over the said name
and container to the exclusion of others, not having
proven that she has registered a trademark thereto or
used the same before anyone did.
Pearl & Dean, Inc. v. Shoemart Inc.
Facts:
Pearl and Dean Inc. is a corporation engaged in the
manufacture of advertising display units called light
boxes. In January 1981, Pearl and Dean was able to
acquire copyrights over the designs of the display units.
In 1988, their trademark application for Poster Ads
was approved; they used the same trademark to
advertise their light boxes.
INTELLECTUAL PROPERTY LAW DIGESTED CASES

In 1985, Pearl and Dean negotiated with Shoemart Inc.


(SM) so that the former may be contracted to install
light boxes in the ad spaces of SM. Eventually, SM
rejected Pearl and Deans proposal.
Two years later, Pear and Dean received report that light
boxes exactly the same as theirs are being used by SM in
their ad spaces. They demanded SM to stop using the
light boxes and at the same time asked for damages
amounting to P20 M. SM refused to pay damages
though they struck down the light boxes. Pearl and Dean
eventually sued SM. SM argued that it did not infringe
on Pearl and Deans trademark because Pearl and Deans
trademark is only applicable to envelopes and
stationeries and not to the type of ad spaces owned by
SM. SM also averred that Poster Ads is a generic term
hence it is not subject to trademark registration. SM also
averred that the actual light boxes are not copyrightable.
The RTC ruled in favor of Pearl and Dean. But the Court
of Appeals ruled in favor of SM.
Issue:
Whether or not copyright protection extends the light
box itself and not only to the technical drawings?
SC:
NO. Petitioner's copyright protection extended only to
the technical drawings and not to the light box itself
because the latter was not at all in the category of
"prints, pictorials illustrations, advertising copies, labels,
tags and box wraps" under Section 2, (O) of PD 49 (The
Intellectual Property Decree). 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: . . . (O) Prints, pictorial illustrations, advertising
copies, labels, tags, and box wraps; . . . Although
petitioner's copyright certificate was entitled
"Advertising Display Units" (which depicted the box-type
electrical devices), its claim of copyright infringement
cannot be sustained. Copyright, in the strict sense of the
term, is purely a statutory right. Being a mere statutory
grant, the rights are limited to what the statute confers.
It may be obtained and enjoyed only with respect to the
subjects and by the-persons, and on terms and
conditions specified in the statute. Accordingly, it can
cover only the works falling within the statutory
enumeration or description. P & D secured its copyright
under the classification class "O" work. This being so,

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petitioner's copyright protection extended only to the
technical drawings and not to the light box itself because
the latter was not at all in the category of "prints,
pictorial illustrations, advertising copies, labels, tags and
box wraps." Stated otherwise, even as we find that P & D
indeed owned a valid copyright, the same could have
referred only to the technical drawings within the
category of "pictorial illustrations." It could not have
possibly stretched out to include the underlying light
box. The strict application of the law's enumeration in
Section 2 prevents us from giving petitioner even a little
leeway, that is, even if its copyright certificate was
entitled "Advertising Display Units." What the law does
not include, it excludes, and for the good reason: the
light box was not a literary or artistic piece which could be
copyrighted under the copyright law. And no less clearly,
neither could the lack of statutory authority to make the
light box copyrightable be remedied by the simplistic act
of entitling the copyright certificate issued by the
National Library as "Advertising Display Units.
The Court also ruled that petitioner could not legally
prevent anyone from manufacturing or commercially
using its invention for the main reason that it never
secured a patent for it. The Court emphasized that to be
able to effectively and legally preclude others from
copying and profiting from an 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. Ideas, once disclosed to the public without
the protection of a valid patent, are subject to
appropriation without significant restraint.

Such provision encroaches upon the


exclusive jurisdiction of the Intellectual
Property Office
Such provision unduly restricts free trade in
the country, most specifically in the
pesticide industry, violative of the
Constitution, as it sanctions free trade as an
important aspect of the economy.

FPAs arguments:
-

The provision does not encroach upon IPOs


jurisdiction, since patents and date
protection are different
While free trade is encouraged, it does not
divest the State from implementing
measures for general welfare

Issues:
(1) Does it restrict free trade?

SC: No, it does not.


[O]ur present Constitution enshrines free trade
as policy, but it nonetheless reserves to the State the
power to intervene whenever necessary to promote the
general welfare. Proven in this case is the adverse effect
and the imminent danger that unregulated use of
pesticide poses. Such regulation, therefore, is for the
general welfare.
(2) Does it encroach upon the IPOs jurisdiction?

The Intellectual Property Office Secs. 5 to 16 as


amended
Pest Management Assoc. of the Phil. v. Fertilizer and
Pesticide Authority
Facts:
PEST Management Association is a corporation engaged
in the industry of pesticide manufacturing. It questions
now Sec. 3.12 of the Implementing Rules, formulated by
the Pesticide Authority, as mandated by PD 1144. The
assailed provision accords seven (7) years of protection
to the pesticide ingredient after its first full or
conditional registration.

SC:
No, it does not.
Nowhere in the IP Law can it be found that IPO
has exclusive jurisdiction in protecting intellectual
property rights. In fact, under the law, IPO is encouraged
to coordinate with other government agencies and the
private sector to formulate and implement plans and
policies to strengthen policies on protection of
intellectual property rights in the country. Hence, the
FPA, being one of those authorities, may implement
such regulations, akin to protecting property rights.

PESTs arguments:
INTELLECTUAL PROPERTY LAW DIGESTED CASES

August 2014

ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
In-N-Out Burger, Inc. v. Sehwani, Inc. and/or Benitas
Frites

1) Whether the IPO (administrative bodies) have


jurisdiction to cases involving unfair competition

Facts:

(2) Whether respondent Sehwani is liable of unfair


competition

Petitioner IN-N-OUT BURGER, INC., a business entity


incorporated under the laws of US, which is a signatory
to the Convention of Paris on Protection of Industrial
Property and the Agreement on Trade Related Aspects
of Intellectual Property Rights (TRIPS). Petitioner is
engaged mainly in the restaurant business, but it has
never engaged in business in the Philippines.
Respondents Sehwani, Incorporated and Benita Frites,
Inc. are corporations organized in the Philippines. On 2
June 1997, petitioner filed trademark and service mark
applications with the Bureau of Trademarks (BOT) of the
IPO for "IN-N-OUT" and "IN-N-OUT Burger & Arrow
Design." Petitioner later found out, through the Official
Action Papers issued by the IPO on 31 May 2000,that
respondent Sehwani, Incorporated had already obtained
Trademark Registration for the mark "IN N OUT (the
inside of the letter "O" formed like a star)." Petitioner
eventually filed on 4 June 2001 before the Bureau of
Legal Affairs (BLA) of the IPO an administrative
complaint against respondents for unfair competition
and cancellation of trademark registration. Respondents
asserted therein that they had been using the mark "IN
N OUT" in the Philippines since 15 October 1982.
Respondent then filed with the BPTTT an application for
the registration of the mark. BPTTT approved its
application and issued the corresponding certificate of
registration in favor of the respondent. On Dec 22, 2003,
IPO Director of Legal Affairs rendered a decision in favor
of petitioner stating petitioner had the right to use its
trade name and mark in the Philippines to the exclusion
of others. However, the decision also includes that
respondent is not guilty of unfair competition. Upon
appeal by petitioner, the new IPO Director General
declared that respondents were guilty of unfair
competition on December 23, 2005. On 18 July 2006,
the Court of Appeals promulgated a Decision reversing
the Decision dated 23 December 2005 of the IPO
Director General. The appellate court declared that
Section 163 of the Intellectual Property Code specifically
confers upon theregular courts, and not the BLA-IPO,
sole jurisdiction to hear and decide cases involving
provisions of the Intellectual Property Code, particularly
trademarks. Hence, the present petition.

(1) Yes. Sec. 160 and 170, which are found under Part III
of the IP Code, recognize the concurrent jurisdiction of
civil courts and theIPO over unfair competition cases.
Therefore, the IPO Director of Legal Affairs have
jurisdiction to decide the petitioner's administrativecase
against respondents and the IPO Director General have
exclusive jurisdiction over the appeal of the judgment of
the IPO Director of Legal Affairs.
(2) Yes. The evidence on record shows that the
respondents were not using their registered trademark
but that of the petitioner. Further,respondents are
giving their products the general appearance that would
likely influence purchasers to believe that these
products arethose of the petitioner. The intention to
deceive may be inferred from the similarity of the goods
as packed and offered for sale, and, thus, action will lie
to restrain such unfair competition. Also, respondents
use of IN-N-OUT BURGER in busineses signages reveals
fraudulentintent to deceive purchasers.
N.B.

The essential elements of an


competition are 1) confusing
general appearance of the
intentto deceive the public
competitor.

action for unfair


similarity in the
goods and (2)
and defraud a

Phil. Pharmawealth, Inc. v. Pfizer and Pfizer, Inc.


Facts:
This case arose from a Complaint for patent
infringement filed against petitioner Phil Pharmawealth,
Inc. by respondent companies, Pfizer, Inc. and Pfizer
(Phil.), Inc., with the Bureau of Legal Affairs of the
Intellectual Property Office (BLA-IPO).
Pfizer is the registered owner of Philippine Letters
Patent No. 21116 issued on July 16, 1987. The patent is

Issues:
INTELLECTUAL PROPERTY LAW DIGESTED CASES

SC:

August 2014

ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
valid until July 16, 2004 . Patent No. 21116 covers
ampicillin sodium/sulbactam sodium.
Pfizer is marketing Sulbactam Ampicillin under
the brand name Unasyn. The sole and
exclusive distributor of Unasyn products in the
Philippines is Zuellig Pharma Corporation,
pursuant to a Distribution Services Agreement it
executed with Pfizer Phils. on January 23, 2001.
Sometime in January and February 2003, Pfizer,
Inc. came to know that Phil. Pharmawealth Inc
submitted bids for the supply of Sulbactam
Ampicillin to several hospitals without the
consent of complainants and in violation of the
Pfizer, Inc. 's intellectual property rights.
Pfizer, Inc. thus wrote the above hospitals and
demanded that the latter immediately cease and
desist from accepting bids for the supply of
Sulbactam Ampicillin or awarding the same to
entities other than Pfizer, Inc.. Complainants, in
the same letters sent through undersigned
counsel, also demanded that Phil. Pharmawealth
Inc immediately withdraw its bids to supply
Sulbactam Ampicillin.
In gross and evident bad faith, Phil.
Pharmawealth Inc and the hospitals, willfully
ignored complainants' just, plain and valid
demands, refused to comply therewith and
continued to infringe the Patent, all to the
damage and prejudice of complainants. As
registered owner of the Patent, Pfizer is entitled
to protection under Section 76 of the IP Code.
Respondents prayed for permanent injunction, damages
and the forfeiture and impounding of the alleged
infringing products. They also asked for the issuance of a
temporary restraining order and a preliminary injunction
that would prevent herein petitioner, its agents,
representatives and assigns, from importing,
distributing, selling or offering the subject product for
sale to any entity in the Philippines.
On February 7, 2005, petitioner filed a Motion to Dismiss
the case for being moot and academic, contending that
respondents' patent had already lapsed. In the same
manner, petitioner also moved for the reconsideration
of the temporary restraining order issued by the CA on
INTELLECTUAL PROPERTY LAW DIGESTED CASES

the same basis that the patent right sought to be


protected has been extinguished due to the lapse of the
patent license and on the ground that the CA has no
jurisdiction to review the order of the BLA-IPO as said
jurisdiction is vested by law in the Office of the Director
General of the IPO.
Issue:
What tribunal has jurisdiction to review the decisions of
the Director of Legal Affairs of the Intellectual Property
Office?
SC:
The Court of Appeals and not the IPO Director General,
has jurisdiction to determine whether the BLA-IPO
committed grave abuse of discretion in denying
respondents' motion to extend the effectivity of the writ
of preliminary injunction which the said office earlier
issued.
The petitioner's argument is that, pursuant to the
doctrine of primary jurisdiction, the Director General of
the IPO and not the CA has jurisdiction to review the
questioned Orders of the Director of the BLA-IPO.
Under Section 7(b) of RA 8293, otherwise known as
the Intellectual Property Code of the Philippines, which is
the presently prevailing law, the Director General of the
IPO exercises exclusive appellate jurisdiction over all
decisions rendered by the Director of the BLA-IPO.
However, what is being questioned before the CA is not a
decision, but an interlocutory order of the BLA-IPO
denying respondents' motion to extend the life of the
preliminary injunction issued in their favor.
It is worthy to note that RA 8293 and its implementing
rules and regulations do not provide for a procedural
remedy to question interlocutory orders issued by the
BLA-IPO. RA 8293 is silent with respect to any remedy
available to litigants who intend to question an
interlocutory order issued by the BLA-IPO. Hence, in the
absence of such a remedy, the provisions of the Rules of
Court shall apply in a suppletory manner. The
respondents correctly resorted to the filing of a special
civil action for certiorari with the CA to question the
assailed Orders of the BLA-IPO, as they cannot appeal
therefrom and they have no other plain, speedy and
adequate remedy in the ordinary course of law. It is

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
settled that one of the exceptions to the doctrine of
primary jurisdiction is where the question involved is
purely legal and will ultimately have to be decided by the
courts of justice.
The propriety of extending the life of the writ of
preliminary injunction issued by the BLA-IPO in the
exercise of its quasi-judicial power is no longer a matter
that falls within the jurisdiction of the said administrative
agency, particularly that of its Director General. The
resolution of this issue which was raised before the CA
does not demand the exercise by the IPO of sound
administrative discretion requiring special knowledge,
experience and services in determining technical and
intricate matters of fact.

Rene C. Baltazar and Atty. Rico V. Domingo, Search


Warrant No 87-053 for violation of Section 56 of PD No.
49, as amended, was issued by the court a quo. NBI
Agents found and seized various video tapes of duly
copyrighted motion pictures/films owned or exclusively
distributed by private complainants, and machines,
equipment, television sets, paraphernalia, materials,
accessories all of which were included in the receipt for
properties accomplished by the raiding team. Copy of
the receipt was furnished and/or tendered to Mr. Danilo
A. Pelindario, registered owner-proprietor of Sunshine
Home Video.
Issue:
Whether or not absence such registration, as in this
case, there was no right created, hence, no infringement
under PD 49 as amended?

Adoption of Intellectual Property Policies Sec. 230


SC:

THE LAW ON COPYRIGHT


Works Protected
Literary or Artistic Works
Columbia Pictures v. CA
Columbia Pictures lodged a formal complaint with the
National Bureau of Investigation for violation of PD No.
49, as amended, and sought its assistance in their antifilm piracy drive. Agents of the NBI and private
researchers made discreet surveillance on various video
establishments in Metro Manila including Sunshine
Home Video Inc. owned and operated by Danilo A.
Pelindario. On November 14, 1987, NBI Senior Agent
Lauro C. Reyes applied for a search warrant with the
court a quo against Sunshine seeking the seizure, among
others, of pirated video tapes of copyrighted films all of
which were enumerated in a list attached to the
application; and, television sets, video cassettes and/or
laser disc recordings equipment and other machines and
paraphernalia used or intended to be used in the
unlawful exhibition, showing, reproduction, sale, lease or
disposition of videograms tapes in the premises above
described. In the hearing of the application, NBI Senior
Agent Lauro C. Reyes, upon questions by the court a
quo, reiterated in substance his averments in his
affidavit. His testimony was corroborated by another
witness, Mr. Rene C. Baltazar. Atty. Rico V. Domingos
deposition was also taken. On the basis of the affidavits
and depositions of NBI Senior Agent Lauro C. Reyes,
INTELLECTUAL PROPERTY LAW DIGESTED CASES

As correctly pointed out by private complainantsoppositors, the Department of Justice has resolved this
legal question as far back as December 12, 1978 in its
Opinion No. 191 of the then Secretary of Justice Vicente
Abad Santos which stated that Sections 26 and 50 do not
apply to cinematographic works and PD No. 49 had
done away with the registration and deposit of
cinematographic works and that even without prior
registration and deposit of a work which may be entitled
to protection under the Decree, the creator can file
action for infringement of its rights. He cannot
demand, however, payment of damages arising from
infringement. The same opinion stressed that the
requirements of registration and deposit are thus
retained under the Decree, not as conditions for the
acquisition of copyright and other rights, but as
prerequisites to a suit for damages. The statutory
interpretation of the Executive Branch being correct, is
entitled (to) weight and respect. Furthermore, a closer
review of Presidential Decree No. 49 reveals that even
with respect to works which are required under Section
26 thereof to be registered and with copies to be
deposited with the National Library, such as books,
including composite and cyclopedic works, manuscripts,
directories and gazetteers; and periodicals, including
pamphlets and newspapers; lectures, sermons,
addresses, dissertations prepared for oral delivery; and
letters, the failure to comply with said requirements
does not deprive the copyright owner of the right to sue

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
for infringement. Such non-compliance merely limits the
remedies available to him and subjects him to the
corresponding sanction. The reason for this is expressed
in Section 2 of the decree which prefaces its
enumeration of copyrightable works with the explicit
statement that the rights granted under this Decree
shall, from the moment of creation, subsist with respect
to any of the following classes of works. This means
that under the present state of the law, the copyright for
a work is acquired by an intellectual creator from the
moment of creation even in the absence of registration
and deposit. As has been authoritatively clarified: The
registration and deposit of two complete copies or
reproductions of the work with the National Library
within three weeks after the first public dissemination or
performance of the work, as provided for in Section 26
(P.D. No. 49, as amended), is not for the purpose of
securing a copyright of the work, but rather to avoid the
penalty for non-compliance of the deposit of said two
copies and in order to recover damages in an
infringement suit.

Ching v. Salinas
Facts:
Jessie Ching, petitioner, is the owner/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.
Ching and Joseph Yu were issued by the National Library
Certificates of Copyright Registration and Deposit of the
said work.
Ching requested NBI for investigation for
apprehension of illegal manufacturers of his works.

the

After the investigation, it was alleged that William


Salinas, Sr., respondent, illegally reproduced and
distributed the works penalized under Section 177.1 and
177.3 of RA 8293.
RTC granted the application and issued the search
warrants for the seizure of the articles.
Salinas filed a motion to quash the search warrants on
the ground that the works covered by the certificates
are not artistic in nature; they are considered
automotive spare parts and pertain to technology. Also,
the models are not original, and as such are the proper
subject of a patent, not copyright.
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Issue:
WON the Leaf Spring Eye Bushing for automobile is a
work of art.
SC:
No. It is not considered as work of art.
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.
Moreover, it is worthy to state that the works protected
under the Law on Copyright are: literary or artistic works
(Sec. 172) and derivate works (Sec. 173). The Leaf Spring
Eye Bushing and Vehicle Bearing Cushion fall on neither
classification.
We agree with the contention of the petitioner 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.
Functional components of useful articles, no matter how
artistically designed, have generally been denied
copyright protection unless they are separable from the
useful article.
Thus, in the present case, petitioners models are not
works of applied art, nor artistic works. Hence, they are
utility models, useful articles, albeit with no artistic
design or value.

Derivative Works
Laktaw v. Paglinawan
Facts:
Pedro Laktaw is the registered owner and author of a
literary work entitled Diccionario Hispano-Tagalog
(Spanish-Tagalog Dictionary) published in the City of
Manila in 1889 by the printing establishment La Opinion.
Mamerto Paglinawan, without the consent of Laktaw,

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
reproduced and improperly copied the said literary
work.

1879, and nobody can reproduce them without the


permission of the author.

The act done by Paglinawan, which is a violation of


Article 7 of the Law on Intellectual Property, cause
irreparable injuries to Laktaw. Laktaw prayed the court
to order Paglinawan to withdraw from sale all stock of
the work and to pay Laktaw the sum of $10,000.

The author of a dictionary published in 1889 having an


exclusive right thereto, vested under the Law of January
10, 1879, and protected by the Treaty of Paris of
December 10, 1898, every violator of said right will be
held responsible for the damages the said author may
have sustained. Hence, Paglinawan is liable for damages
and must pay to Laktaw.

Paglinawan in his answer denied all the allegations


presented in the complaint. Hence, praying for the court
to absolve him from the complaint.

Works not protected


Issue:

Unprotected Subject Matter

WON Paglinawan, without the consent of Laktaw, can


reproduce the literary work of Laktaw.

Joaquin, Jr. v. Drilon

SC:
No. Paglinawan cannot reproduce the literary work of
Laktaw without asking his permission or consent.
Paglinawan violated Article 7 of Intellectual Property
Law.
Article 7 of the Law of January
10, 1879, on Intellectual
Property:
Nobody
may
reproduce another persons
work without the owners
consent, even merely to
annotate or add anything to it,
or improve any edition thereof.
Moreover, where one in publishing a Spanish-Tagalog
dictionary has but copied the equivalents, definitions
and different meanings given in anothers SpanishTagalog dictionary, although making some additions of
his own and some unimportant changes in the examples
to illustrate the meanings of the words, such as
substituting Tayabas for Bulacan in the expression
Voy a Bulacan (I am going to Bulacan), it is evident that
he merely reproduced the dictionary of the other author
in violation of the Law of January 10, 1879, on
Intellectual Property.
Further, Dictionaries are not common property of the
author, whose right thereto is recognized by Article 7, in
connection with article 2, of the Law of January 10,
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Facts:
Petitioner BJ Productions, Inc. (BJPI) is the
holder/grantee of Certificate of Copyright No. M922,
dated January 28, 1971, of Rhoda and Me, a dating game
show aired from 1970 to 1977.
On June 28, 1973, petitioner BJPI submitted to the
National Library an addendum to its certificate of
copyright specifying the shows format and style of
presentation.
On July 14, 1991, while watching television, petitioner
Francisco Joaquin, Jr., president of BJPI, saw on RPN
Channel 9 an episode of Its a Date, which was produced
by IXL Productions, Inc. (IXL). On July 18, 1991, he wrote
a letter to private respondent Gabriel M. Zosa, president
and general manager of IXL, informing Zosa that BJPI had
a copyright to Rhoda and Me and demanding that IXL
discontinue airing Its a Date.
In a letter, dated July 19, 1991, private respondent Zosa
apologized to petitioner Joaquin and requested a
meeting to discuss a possible settlement. IXL, however,
continued airing Its a Date, prompting petitioner
Joaquin to send a second letter on July 25, 1991 in which
he reiterated his demand and warned that, if IXL did not
comply, he would endorse the matter to his attorneys
for proper legal action.
Meanwhile, private respondent Zosa sought to register
IXLs copyright to the first episode of Its a Date for
which it was issued by the National Library a certificate
of copyright on August 14, 1991.

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
Upon complaint of petitioners, information for violation
of P.D. No. 49 was filed against private respondent Zosa
together with certain officers of RPN Channel 9, namely,
William Esposo, Felipe Medina, and Casey Francisco, in
the Regional Trial Court of Quezon City.
Issue:
Whether the format or mechanics of Joaquins television
show is entitled to copyright protection?
SC:
No, the format or mechanics of a television show is not
included in the list of protected works in 2 of P.D. No.
49. For this reason, the protection afforded by the law
cannot be extended to cover them.
The essence of copyright infringement is the copying, in
whole or in part, of copyrightable materials as defined
and enumerated in Section 2 of PD. No. 49. Apart from
the manner in which it is actually expressed, however,
the idea of a dating game show is, in the opinion of this
Office, a non-copyrightable material. Ideas, concepts,
formats, or schemes in their abstract form clearly do not
fall within the class of works or materials susceptible of
copyright registration as provided in PD. No. 49.
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 the statute. 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. P.D. No. 49, 2, in enumerating
what are subject to copyright, refers to finished works
and not to concepts. The copyright does not extend to
an idea, procedure, process, system, method of
operation, concept, principle, or discovery, regardless of
the form in which it is described, explained, illustrated,
or embodied in such work.
What then is the subject matter of petitioners
copyright?
The Court is of the opinion that petitioner BJPIs
copyright covers audiovisual recordings of each episode
of Rhoda and Me, as falling within the class of works
mentioned in P.D. 49, 2(M),
to wit: Cinematographic works and works produced by a
process analogous to cinematography or any process for
making audio-visual recordings;
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Law
Sec. 175. Unprotected Subject Matter. - Notwithstanding
the provisions of Sections 172 and 173, no protection
shall extend, under this law, to any idea, procedure,
system, method or operation, concept, principle,
discovery or mere data as such, even if they are
expressed, explained, illustrated or embodied in a work;
news of the day and other miscellaneous facts having
the character of mere items of press information; or any
official text of a legislative, administrative or legal
nature, as well as any official translation thereof.
(b)Works of Government Sec. 176; 171.11
Section 176. Works of the Government. - 176.1. No
copyright shall subsist in any work of the Government of
the Philippines. However, prior approval of the
government agency or office wherein the work is
created shall be necessary for exploitation of such work
for profit. Such agency or office may, among other
things, impose as a condition the payment of royalties.
No prior approval or conditions shall be required for the
use of any purpose of statutes, rules and regulations,
and speeches, lectures, sermons, addresses, and
dissertations, pronounced, read or rendered in courts of
justice, before administrative agencies, in deliberative
assemblies and in meetings of public character. (Sec. 9,
first par., P.D. No. 49)
176.2. The author of speeches, lectures, sermons,
addresses, and dissertations mentioned in the preceding
paragraphs shall have the exclusive right of making a
collection of his works. (n)
176.3. Notwithstanding the foregoing provisions, the
Government is not precluded from receiving and holding
copyrights transferred to it by assignment, bequest or
otherwise; nor shall publication or republication by the
Government in a public document of any work in which
copyright is subsisting be taken to cause any abridgment
or annulment of the copyright or to authorize any use or
appropriation of such work without the consent of the
copyright owner. (Sec. 9, third par., P.D. No. 49)
171.11. A "work of the Government of the Philippines" is
a work created by an officer or employee of the
Philippine Government or any of its subdivisions and
instrumentalities, including government-owned or
controlled corporations as a part of his regularly
prescribed official duties.

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
Copyright of Economic Rights: Ownership
Copyright of Economic Rights
Filipino Society of Composers v. Tan
Facts:
Filipino Society of Composers is a non-profit association
of authors, composers and publishers duly organized
under the Corporation Law of the Philippines and
registered with the Securities and Exchange Commission.
Said association is the owner of certain musical
compositions among which are the songs entitled: "Dahil
Sa Iyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao
Lamang" and "The Nearness Of You."
On the other hand, BENJAMIN TAN is the operator of a
restaurant known as "Alex Soda Foundation and
Restaurant" where a combo with professional singers,
hired to play and sing musical compositions to entertain
and amuse customers therein, were playing and singing
the above-mentioned compositions without any license
or permission from the appellant to play or sing the
same. Accordingly, Filipino Society of Composers
demanded from the BENJAMIN TAN payment of the
necessary license fee for the playing and singing of
aforesaid compositions but the demand was ignored.
Hence, on November 7, 1967, Filipino Society of
Composers filed a complaint with the lower court for
infringement of copyright against BENJAMIN TAN for
allowing the playing in the latters restaurant of said
songs copyrighted in the name of the former.
BENJAMIN TAN, in his answer, countered that the
complaint states no cause of action. While not denying
the playing of said copyrighted compositions in his
establishment, Tan maintains that the mere singing and
playing of songs and popular tunes even if they are
copyrighted do not constitute an infringement under the
provisions of Section 3 of the Copyright Law (Act 3134 of
the Philippine Legislature).

WON the playing and signing of musical compositions


which have been copyrighted under the provisions of
the Copyright Law (Act 3134) constitute a public
performance for profit within the meaning and
contemplation of the Copyright Law of the Philippines;
and assuming that there were indeed public
performances for profit, whether or not appellee can be
held liable therefor.
SC:
SC conceded that such performances are "public
performances for profit. " However, such public
performances for profit are not infringements upon the
Copyright Law, so the appellee, Tan cannot be held
liable.
It is admitted that the patrons of the restaurant in
question pay only for the food and drinks and apparently
not for listening to the music. As found by the trial court,
the music provided is for the purpose of entertaining
and amusing the customers in order to make the
establishment more attractive and desirable. It will be
noted that for the playing and singing the musical
compositions involved, the combo was paid as
independent contractors by the appellant. It is therefore
obvious that the expenses entailed thereby are added to
the overhead of the restaurant which are either
eventually charged in the price of the food and drinks or
to the overall total of additional income produced by the
bigger volume of business which the entertainment was
programmed to attract. Consequently, it is beyond
question that the playing and singing of the combo in
defendant-appellee's
restaurant
constituted
performance for profit contemplated by the Copyright
Law. (Act 3134 amended by P.D. No. 49, as amended).
Nevertheless, appellee cannot be said to have infringed
upon the Copyright Law. Appellee is correct when he
alleged that the composers of the contested musical
compositions waived their right in favor of the general
public when they allowed their intellectual creations to
become property of the public domain before applying
for the corresponding copyrights.

Trial Court dismissed the complaint.


Filipino Society of Composers appealed to the Court of
Appeals which in turn, certified the case to the Supreme
Court for adjudication on the legal question involved.
Issue:
INTELLECTUAL PROPERTY LAW DIGESTED CASES

The Supreme Court has ruled that "Paragraph 33 of


Patent Office Administrative Order No. 3 (as amended,
dated September 18, 1947) entitled 'Rules of Practice in
the Philippines Patent Office relating to the Registration
of Copyright Claims' promulgated pursuant to Republic
Act 165, provides among other things that an intellectual

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
creation should be copyrighted thirty (30) days after its
publication, if made in Manila, or within the (60) days if
made elsewhere, failure of which renders such creation
public property. Indeed, if the general public has made
use of the object sought to be copyrighted for thirty (30)
days prior to the copyright application the law deems
the object to have been donated to the public domain
and the same can no longer be copyrighted.

Christmas cards and offered it for sale, for a price. For


such unauthorized act of defendant, plaintiff suffered
moral damages to the tune of P16,000.00, because it has
placed plaintiff's professional integrity and ethics under
serious question and caused him grave embarrassment
before Ambassador Neri. He further prayed for the
additional sum of P3,000.00 by way of attorney's fee.
Issues:

A careful study of the records reveals that the song


"Dahil Sa Iyo" which was registered on April 20, 1956
became popular in radios, juke boxes, etc. long before its
registration while the song "The Nearness Of You"
registered on January 14, 1955 had become popular
twenty five (25) years prior to 1968, (the year of the
hearing) or from 1943 and the songs "Sapagkat Ikaw Ay
Akin" and "Sapagkat Kami Ay Tao Lamang" both
registered on July 10, 1966, appear to have been known
and sang by the witnesses as early as 1965 or three
years before the hearing in 1968. The testimonies of the
witnesses at the hearing of this case on this subject were
unrebutted by the appellant.
Under the circumstances, it is clear that the musical
compositions in question had long become public
property, and are therefore beyond the protection of
the Copyright Law.

Malang Santos v. McCullough Printing


Facts:
Mauro Malalang Santos filed an action for damages for
unauthorized use, adaptation and appropriation by the
MCCULLOUGH PRINTING COMPANY of the intellectual
creation or artistic design of a Christmas card by him
(Mauro Maglalang Santos) based on Article 721 and 722
of the Civil Code of the Philippines. The Christmas card
depicts a Philippine rural Christmas time scene
consisting of a woman and a child in a nipa hut adorned
with a star-shaped lantern and a man astride a carabao,
beside a tree, underneath which appears the plaintiff's
pen name, Malang. The complaint alleges that plaintiff
Mauro Malang Santos designed for former Ambassador
Felino Neri, for his personal Christmas Card greetings for
the year 1959, the artistic motif in question. The
following year the defendant McCullough Printing
Company, without the knowledge and authority of
plaintiff, displayed the very design in its album of
INTELLECTUAL PROPERTY LAW DIGESTED CASES

(1) Whether plaintiff is entitled to protection,


notwithstanding the, fact that he has not copyrighted his
design?
(2) Whether the publication is limited, so as to prohibit
its use by others, or it is general publication?
(3) Whether the provisions of the Civil Code or the
Copyright Law should apply in the case?
SC:
(1)
The Supreme Court found that plaintiff is not entitled to
a protection, the provision of the Civil Code,
notwithstanding. Paragraph 33 of Patent Office
Administrative Order No. 3 (as amended dated
September 18, 1947) entitled "Rules of Practice in the
Philippines Patent Office relating to the Registration of
Copyright Claims" promulgated pursuant to Republic Act
165, provides, among others, that an intellectual
creation should be copyrighted thirty (30) days after its
publication, if made in Manila, or within sixty (60) day's if
made elsewhere, failure of which renders such creation
public property. In the case at bar, even as of this
moment, there is no copyright for the design in
question.
(2)
We are not also prepared to accept the contention of
appellant that the publication of the design was a limited
one, or that there was an understanding that only
Ambassador Neri should, have absolute right to use the
same. In the first place, if such were the condition then
Ambassador Neri would be the aggrieved party, and not
the appellant. In the second place, if there was such a
limited publication or prohibition, the same was not
shown on the face of the design. When the purpose is a
limited publication, but the effect is general publication,
irrevocable rights thereupon become vested in the
public, in consequence of which enforcement of the
restriction becomes impossible (Nutt vs. National

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
Institute, 31 F [2d] 236). It has been held that the effect
of offering for sale a dress, for example manufactured in
accordance with an original design which is not
protected by either a copyright or a patent, is to divest
the owner of his common law rights therein by virtue of
the publication of a 'copy' and thereafter anyone is free
to copy the design or the dress (Fashion Originators
Guild of America v. Federal Trade Commission, 114 F
[2d] 80). When Ambassador Neri distributed 800 copies
of the design in controversy, the plaintiff lost control of
his design and the necessary implication was that there
had been a general publication, there having been no
showing of a clear indication that a limited publication
was intended. The author of a literary composition has a
light to the first publication thereof. He has a right to
determine
whether it shall be published at all, and if published,
when, where, by whom, and in what form. This exclusive
right is confined to the first publication. When once
published, it is dedicated to the public, and the author
loses the exclusive right to control subsequent
publication by others, unless the work is placed under
the protection of the copyright law. (See II Tolentino's
Comments on the Civil Code, p. 433, citing Wright v.
Eisle 83 N.Y. Supp. 887.)

three things: (1) making MP3 files available to other


Napster users; (2) searching for MP3 files stored in other
computers; and (3) allowing users to transfer exact
copies of those MP3 files from other computers. A&M
records. Inc., on the other hand, along with several other
major record companies pray that such program be
prohibited, so that the users could not share and
download copyrighted works, contrary to law.
Napsters Arguments:
-

A&Ms, et al.s Arguments:

(3)
Art. 722. The author and the composer, mentioned in
Nos. 1 and 2 of the preceding article, shall have the
ownership of their creations even before the publication
of the same. Once their works are published, their rights
are governed by the Copyright laws. The painter,
sculptor or other artist shall have dominion over the
product of his art even before it is copyrighted.

The scientist or technologist has the ownership of his


discovery or invention even before it is patented. (n)

Limitations of Copyright
Fair Use of Copyright Work

They have established the two requisites as:


(1) records show that they are the
copyrighted owners of 70-80% of the files
available in the Napster program, and (2)
since it has copyright over these files, they
have the exclusive rights to reproduction
and distribution. Thru the Napsters
program, these rights have been
circumvented.
Fair use cannot be used by Napster, as the
files made available to its users are copied in
toto or in its exact form, as if they bought it
from the copyright owners themselves.

Issues:

A&M Records, Inc. v. Napster, Inc.

Have
requisites?

Facts:
Napster, Inc. was the owner/developer of a computer
program that allowed users to share music files over the
internet, as well as to download these shared materials.
This is called peer-to-peer sharing service. Such allows
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Before this suit can prosper, the ones


alleging infringement must prove that: (1)
they are the owners of the alleged infringed
materials, and (2) they must demonstrate
that the alleged infringers violate their
exclusive rights, as granted by law. In this
case, there has been no showing of the
satisfaction of these two.
However, granting arguendo that they are
able to satisfy the requirements, Napster
cannot be held liable for infringement under
the principle of Fair Use.

the

companies

suing

satisfied

the

Court: Yes, they have. The statistics on record


satisfies the two requisites, but only insofar as the files
that are proven to have been copyrighted by the suing
companies.

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
Can the affirmative defense of fair use be used?
Court: No, in this case, it cannot. The following
factors must be considered in order to ascertain
whether a specific act falls under fair use or not: (1) The
Purpose and the Character of the Use; (2) The Nature of
the use; (3) The extent of the use; (4) the Effect of the
use on the Market.
Purpose and the Character of the Use: In
ascertaining this criterion, the court must answer two
questions: (1) is the use transformative of the work?
(Meaning, does the use just use the property to create
another creation or giving the used work another
purpose or character?); (2) Is the use commercial or noncommercial? Answering these two questions, the Court
finds and holds that: (1) the use is not transformative as
the files are being downloaded in its exact form, and (2)
the use is for commercial purposes, for the user who
sends the file to another cannot be said to have used the
file solely for personal use.
Nature of the use: Works that are more creative
get more protection. In the case at bar, the songs are
creative in character, and in order for these creations to
be used under the principle of fair use, they must be
used in a manner as they constitute only as an
ingredient to another creative work.
The Portion Used: The greater the portion used,
the less likely it is to be fair use. In the case at bar, the
songs are copied exactly or wholesale. Although this fact
alone does not prove, beyond reasonable doubt that
there is not fair use, this is indicative and may be
conclusive when other factors corroborate. Also, fair use
in this case is hard to establish, and cannot overthrow
the prima facie evidence of infringement.
Effect on the Market: Is the use harmful to the
market? The Court is of the opinion that the use is
harmful to the market as it would encourage prospective
buyers not to buy from the suing companies anymore, as
they can get the exact files from the website for free.
This fact alone convinces a reasonable man that the
suing companies are deprived of their potential income
from the songs.
After having examined the four requisites, it is
found that Napster cannot be justified under the
INTELLECTUAL PROPERTY LAW DIGESTED CASES

principle of Fair Use. However, it must be mentioned


that Napster is held liable only as Contributor to
Copyright
Infringement.
Contributory
Copyright
Infringement is such liability of one who, with knowledge
of the infringing activity, induces, causes or materially
contributes to the infringing conduct of another. Napster,
however, is held liable for contributory infringement,
because it failed to prevent the distribution of
copyrighted works.
It must be stressed, however, that the fact that
there is a file sharing program does not mean there is
infringement. As previously held, the suing companies
have only proved that they are the copyrighted owners
of 70-80% of the files in the said program. Thus, it is
improper for the district court to issue an injunction for
the whole program. The proper finding would be to issue
injunction, insofar as the proven copyrighted files are
concerned.

Habana v. Robes
Facts:
Pacita Habana and two others were the authors of
College English for Today Series 1 and 2 (CET). While
they were researching for books to assist them in
updating their own book, they chanced upon the book of
Felicidad Robles entitled Developing English Proficiency
Books 1 and 2 (DEP). They discovered further that the
book of Robles was strikingly similar to the contents,
scheme of presentation, illustrations and illustrative
examples of CET. They then sued Robles and her
publisher (Goodwill Trading Co.) for infringement and/or
unfair competition with damages.
Robles, in her defense, alleged that her sources were
from foreign books; that in their field similarity in styles
cannot be avoided since they come from the same
background and orientation. The trial court as well as
the Court of Appeals ruled in favor of Robles.
Issue:
Whether or not the acts of Robles constitute
infringemen?
SC:
YES. A perusal of the records yields several pages of the
book DEP that are similar if not identical with the text of

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
CET. In several other pages the treatment and manner of
presentation of the topics of DEP are similar if not a
rehash of that contained in CET. The similarities in
examples and material contents are so obviously present
in this case. How can similar/identical examples not be
considered as a mark of copying? Robles act of lifting
from the book of Habana et al substantial portions of
discussions and examples, and her failure to
acknowledge the same in her book is an infringement of
Habana et als copyrights.
For infringement, it does not necessarily require that the
entire copyrighted work, or even a large portion of it, be
copied. If so much is taken that the value of the original
work is substantially diminished, there is an infringement
of copyright and to an injurious extent, the work is
appropriated. In determining the question of
infringement, the amount of matter copied from the
copyrighted work is an important consideration. To
constitute infringement, it is not necessary that the
whole or even a large portion of the work shall have
been copied. If so much is taken that the value of the
original is sensibly diminished, or the labors of the
original author are substantially and to an injurious
extent appropriated by another, that is sufficient in point
of law to constitute piracy. The essence of intellectual
piracy should be essayed in conceptual terms in order to
underscore its gravity by an appropriate understanding
thereof. Infringement of a copyright is a trespass on a
private domain owned and occupied by the owner of the
copyright, and, therefore, protected by law, and
infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the
doing by any person, without the consent of the owner
of the copyright, of anything the sole right to do which is
conferred by statute on the owner of the copyright.

Rights of Performers, Producers of Sound Recordings and


Broadcasting Organizations

to-home (DTH) television via satellite to its subscribers


all over the Philippines.
PMSI was granted legislative franchise under RA 8630 to
install, operate and maintain a nationwide DTH satellite
service and is obligated under by NTC Memorandum
Circular No. 4-08-88, Section 6.2 of which requires all
cable television system operators operating in a
community within Grade A or B contours to carry
the television signals of the authorized television
broadcast stations (must-carry rule).
ABS-CBN filed a complaint with Intellectual Property
Office (IPO) for violation of laws involving property
rights. It alleged that PMSIs unauthorized
rebroadcasting of Channels 2 and 23 infringed on its
broadcasting rights and copyright and that the NTC
circular only covers cable television system operators
and not DTH satellite television operators. Moreover,
NTC Circular 4-08-88 violates Sec. 9 of Art. III of the
Constitution because it allows the taking of property for
public use without payment of just compensation.
PMSI argued that its rebroadcasting of Channels 2 and
23 is sanctioned by Memorandum Circular No. 04-08-88;
that the must-carry rule under the Memorandum
Circular is a valid exercise of police power.
IPO and Court of Appeals ruled in favor of PMSI.

Issues:
(1) w/n PMSI infringed on ABS-CBNs broadcasting rights
and copyright (MAIN ISSUE)
(2) w/n PMSI is covered by the NTC Circular (must-carry
rule)
(3) Whether NTC Circular 4-08-88 violates Sec. 9 of Art.
III of the Constitution because it allows the taking of
property for public use without payment of just
compensation or it is a valid exercise of police power.

Limitations on Rights
ABSCBN v. Phil. Multi-media System, Inc.

SC:

Facts:

(1)

ABS-CBN is engaged in television and radio broadcasting


through wireless and satellite means while Philippine
Multi-Media Systems Inc. (PMSI for brevity), the
operator of Dream Broadcasting System provides directINTELLECTUAL PROPERTY LAW DIGESTED CASES

NO. PMSI does not infringe on ABS-CBNs broadcasting


rights under the IP Code as PMSI is not engaged in
rebroadcasting of Channels 2 and 23. Rebroadcasting,
which is prohibited by the IP Code, is the simultaneous
broadcasting by one broadcasting organization of the

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
broadcast of another broadcasting organization. ABSCBN creates and transmits its own signals; PMSI merely
carries such signals which the viewers receive in its
unaltered form. PMSI does not produce, select, or
determine the programs to be shown in Channels 2 and
23. Likewise, it does not pass itself off as the origin or
author of such programs. Insofar as Channels 2 and 23
are concerned, PMSI merely retransmits the same in
accordance with NTC Memorandum Circular 04-08-88.
(2)
YES. DTH satellite tv operators is covered under the
NTC Circular which requires all cable television system
operators to carry the television signals of the
authorized television broadcast stations. The DirectorGeneral of the IPO and the Court of Appeals correctly
found that PMSIs services are similar to a cable
television system because the services it renders fall
under cable retransmission. Thus, PMSI, being a DTH
Satellite TV operator is covered by the NTC Circular.
(3)
The carriage of ABS-CBNs signals by virtue of the mustcarry rule in Memorandum Circular No. 04-08-88 is
under the direction and control of the government
though the NTC which is vested with exclusive
jurisdiction to supervise, regulate and control
telecommunications and broadcast services/facilities in
the Philippines. The imposition of the must-carry rule is
within the NTCs power to promulgate rules and
regulations, as public safety and interest may require, to
encourage a larger and more effective use of
communications, radio and television broadcasting
facilities, and to maintain effective competition among
private entities.

Infringement
How committed
Microsoft Corp. v. Hwang
Facts:
Microsoft Corporation ("Microsoft"), a Delaware, United
States corporation, owns the copyright and trademark to
several computer software. Beltron Computer
Philippines, Inc. ("Beltron") and Taiwan Machinery
Display & Trade Center, Inc. ("TMTC") are domestic
INTELLECTUAL PROPERTY LAW DIGESTED CASES

corporations. In May 1993, Microsoft and Beltron


entered into a Licensing Agreement ("Agreement").
Under Section 2(a) of the Agreement, as amended in
January 1994, Microsoft authorized Beltron, for a fee, to:
(1) reproduce and install no more than one (1) copy of
Microsoft software on each Customer System hard disk
or Read Only Memory ("ROM") (2) distribute directly or
indirectly and license copies of the Product in object
code form to end users
The Agreement also authorized Microsoft and Beltron
to terminate the contract if the other fails to comply
with any of the Agreements provisions. Microsoft
terminated the Agreement effective 22 June 1995 for
Beltrons non-payment of royalties.
Afterwards,
Microsoft learned that Beltron were illegally copying and
selling Microsoft software. Consequently, Microsoft,
through its Philippine agent, hired the services of
Pinkerton Consulting Services ("PCS"), a private
investigative firm. Microsoft also sought the assistance
of the National Bureau of Investigation ("NBI"). On 10
November 1995, a PCS employee and an NBI agent
posing as representatives of a computer shop, bought
computer hardware (central processing unit ("CPU") and
computer monitor) and software (12 computer disks
("CDs") in read-only memory ("ROM") format) from
Beltron. The CPU contained pre-installed Microsoft
Windows 3.1 and MS-DOS software. The 12 CD-ROMs,
encased in plastic containers with Microsoft packaging,
also contained Microsoft software. At least two of the
CD-ROMs were "installers," so-called because they
contain several software (Microsoft only or both
Microsoft and non- Microsoft). The PCS employee and
the NBI agent were not given the Microsoft end-user
license agreements, users manuals, registration cards or
certificates of authenticity for the articles they
purchased. The receipt issued to them for the CPU and
monitor bore the heading "T.M.T.C. (PHILS.) INC.
BELTRON COMPUTER." The NBI searched the premises
of Beltron and TMTC and seized several computerrelated hardware, software, accessories, and
paraphernalia based on the search warrant applied by
Microsoft. Based on the articles obtained from Beltron
and TMC, Microsoft and a certain Lotus Development
Corporation ("Lotus Corporation") charged Beltron and
TMC before the Department of Justice ("DOJ") with
copyright infringement under Section 5(A) in relation to
Section 29 of Presidential Decree No. 49, as amended,
("PD 49") and with unfair competition under Article

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
189(1) of the Revised Penal Code. Microsoft alleged that
respondents illegally copied and sold Microsoft
software.
Issue:
Whether or not Beltron and TMC are liable for copyright
infringement and unfair competition?
SC:
The gravamen of copyright infringement is not merely
the unauthorized "manufacturing" of intellectual works
but rather the unauthorized performance of any of the
acts covered by Section 5. Hence, any person who
performs any of the acts under Section 5 without
obtaining the copyright owners prior consent renders
himself civilly and criminally liable for copyright
infringement. Infringement of a copyright is a trespass
on a private domain owned and occupied by the owner
of the copyright, and, therefore, protected by law, and
infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the
doing by any person, without the consent of the owner
of the copyright, of anything the sole right to do which is
conferred by statute on the owner of the copyright.
Significantly, under Section 5(A), a copyright owner is
vested with the exclusive right to "copy, distribute,
multiply, [and] sell" his intellectual works.

against Maxicorp Inc. He observed that Microsoft


Software (Windows Operating Systems) were being
produced and packaged within the premises of
Maxicorp. Samiano, together with a civilian witness
(John Benedict Sacriz) then bought a computer unit from
Maxicorp. The unit was pre-installed with a pirated copy
of Windows. For their purchase, they were issued a
receipt, however, the receipt was in the name of a
certain Joel Diaz. Subsequently, Samiano applied for a
search warrant before the RTC. He brought with him
Sacriz as witness. He also brought the computer unit
they bought as evidence as well as the receipt. He even
added an additional witness (Felixberto Pante), a
computer technician, who showed the judge that the
software in the computer unit bought by Samiano from
Maxicorp was pirated. The RTC judge, convinced that
there is a probable cause for a case of copyright
infringement and unfair competition committed by
Maxicorp, issued the corresponding warrant. Maxicorp
assailed the legality of the warrant before the Court of
Appeals. The Court of Appeals ruled in favor of Maxicorp
and in its decision it highlighted the fact that the receipt
issued was not in Samianos or Sacriz name hence the
proceeding in the trial court was infirm from the onset.
Issue:
Whether or not the Court of Appeals is correct.
Held:

The elements of unfair competition under Article


189(1)43 of the Revised Penal Code are:
(a) That the offender gives his goods the general
appearance of the goods of another manufacturer or
dealer; (b) That the general appearance is shown in the
(1) goods themselves, or in the (2) wrapping of their
packages, or in the (3) device or words therein, or in
(4) any other feature of their appearance (c) That the
offender offers to sell or sells those goods or gives other
persons a chance or opportunity to do the same with a
like purpose[; and] (d) That there is actual intent to
deceive the public or defraud a competitor.
Microsoft Corp. v. Maxicorp
Facts:
In 1996, Dominador Samiano, an agent of the National
Bureau of Investigation (NBI) conducted a surveillance
INTELLECTUAL PROPERTY LAW DIGESTED CASES

No. The testimonies of the two witnesses, coupled with


the object and documentary evidence they presented,
are sufficient to establish the existence of probable
cause. From what they have witnessed, there is reason
to believe that Maxicorp engaged in copyright
infringement and unfair competition to the prejudice of
Microsoft. Both NBI Agent Samiano and Sacriz were clear
and insistent that the counterfeit software were not only
displayed and sold within Maxicorps premises, they
were also produced, packaged and in some cases,
installed there.
The fact that the receipt issued was not in Samianos
name nor was it in Sacriz name does not render the
issuance of the warrant void. No law or rule states that
probable cause requires a specific kind of evidence. No
formula or fixed rule for its determination
exists. Probable cause is determined in the light of
conditions obtaining in a given situation.Thus, it was

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
improper for the Court of Appeals to reverse the RTCs
findings simply because the sales receipt evidencing NBI
Agent Samianos purchase of counterfeit goods is not in
his name.
Infringement
Presumption of Authorship
Bayanihan Music Phils, Inc. v. BMG Records
Facts:
Jose Mari Chan entered into a contract with Bayanihan
where the former assigned to the latter all his rights,
interests and participation over his musical composition
[composition/s] Can We Just Stop and Talk A While.
They also entered into a similar contract over another of
Chans composition entitled Afraid For Love To Fade.
In these two contracts, it was stipulated, among others,
that if the Publisher (Bayanihan) fails to use within 2
years the compositions, then the compositions maybe
released in favor of the Writer (Chan). Furthermore, the
contract also stipulated that it may be renewed for a
period of 2 years.
As a result of these contracts, Bayanihan was able to
obtain a Certificate of Copyright Registration for each of
the two compositions from the National Library.
Apparently, without the knowledge of Bayanihan,
Chan authorized BMG to record and distribute these two
compositions in an album of Lea Salonga.
Bayanihan sent letters informing the respondents
about its copyrights. Demands were also made but no
settlement was reached. Hence, Bayanihan filed with the
RTC against the respondents for violation of Sec. 216 of
the IPC with prayer for TRO/writ of preliminary
injunction enjoining the further recording and
distribution of the compositions.
(I omitted BMGs contentions because it has no
bearing in the case.)
Chans answer: (1) it was not his intention to divest
himself of all his rights and interests over the
compositions; (2) his contract with Bayanihan are mere
musical publication agreements, giving Bayanihan the
power to administer his compositions; (3) he did not
have any knowledge about the grant of copyrights to
Bayanihan; and (4) Bayanihan was remissed of its
obligation to promote his compositions, thus, causing
him to rescind the contract.
INTELLECTUAL PROPERTY LAW DIGESTED CASES

RTC denied the issuance of an injunction. Upon appeal


to CA, the appellate court, denied the same. Hence, an
appeal before the SC.
Whether the court erred in not granting the prayer for
the issuance of an injunction
No.
Ruling: An injunctive writ can only be issued if the
following requisites provided for by law are present: (1)
there must be a right in esse or the existence of a right to
be protected; and (2) the act against which the injunction
is to be directed is a violation of such right.
(Note: In this case, the court explained that based on
the evidence presented, Bayanihan was not able to show
that he has the ostensible right to the relief it prayed
primarily because Chan has the better right over his
compositions. Furthermore, Chan is accorded the
presumption of authorship and copyright as explained
below.)
Ruling: Works are protected by the sole fact of their
creation, irrespective of their mode or form of
expression, as well as of their content, quality and
purpose.
Unquestionably, Chan, being undeniably the composer
and author of the lyrics of the two songs, is protected by
the mere fact alone that he is the creator thereof.
Besides, the contracts between Chan and Bayanihan
had already expired because it was not shown that
Bayanihan ever made use of the compositions within the
agreed period.
Whether Bayanihans copyright presumably subsists by
virtue of the copyrights it obtained from the National
Library
No.
Ruling: Art. 218.2
(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
(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

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
In the case, respondent Chan had put in issue the
existence of the said copyrights. Thus, the presumption
of subsisting copyright does not apply to Bayanihan.
In fact, Bayanihan had no more right that is
protectable by injunction by the time it filed its
complaint on August 8, 2000 because Chan had already
revoked and terminated the contracts on July 30, 1997.

LAW ON PATENTS, UTILITY MODELS AND INDUSTRIAL


DESIGNS

burners where the mouth and throat were not


detachable; that in the latter part of 1978 Melecia
Madolaria confided in him that complaints were being
brought to her attention concerning the early models
being manufactured; that he was instructed by Melecia
Madolaria to cast several experimental models based on
revised sketches and specifications. 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.

Purpose of the Patent Law


The Director of Patents denied the petition. CA affirmed.
Hence, this petition.

Manzano v. CA
Facts:
On February 19, 1982, Petitioner Angelita Manzano filed
with the Philippine Patent Office 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.

Issue/s:
WON, Manzanos petition for the cancellation of patents
to Madolaria is tenable.

SC:
She alleged that the invention lacked inventiveness,
novelty and usefulness.

Petitioner presented two 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 Madolaria.

Madolaria presented Rolando Madolaria as a witness. 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
INTELLECTUAL PROPERTY LAW DIGESTED CASES

It was not. 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

August 2014

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
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.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.
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. 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.
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.

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.
Manzano v. CA
Facts:
Petitioner Maguan was a patent holder of powder puff.
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.

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.

The petitioner filed a complaint for damages with


injunction and preliminary injunction against private
respondent with the then Court of First Instance of Rizal,
Pasig Branch for infringing the aforesaid letters patent,
and prayed, among others, that a writ of preliminary
injunction be immediately issued.
CFI granted and was reissued by the CA.

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
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Hence, this petition.

Issue/s:
WON, the evidence introduced by private respondent
herein is sufficient to overcome said presumption.

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
SC:
No. The burden of proof to substantiate a charge of
infringement is with the plaintiff. But where the plaintiff
introduces the patent in evidence, and the same is in
due form, there is created a prima facie presumption of
its correctness and validity. The decision of the
Commissioner (now Director) of Patent in granting the
patent is presumed to be correct. The burden of going
forward with the evidence (burden of evidence) then
shifts to the defendant to overcome by competent
evidence this legal presumption.

infringed beyond question and the record conclusively


proves the defense is sham.
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 and the
dissolution of the writ is proper where applicant has
doubtful title to the disputed property.

Patentable Inventions
Creser Precision Systems, Inc. v. CA

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.
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 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. In cases of infringement of patent no preliminary
injunction will be granted unless the patent is valid and
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Facts:
Respondent was granted by the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT)
a Letter ofpatent for its aerial fuze on January 23, 1990.
Sometime in 1993, respondent discovered that the
petitioner submitted samples of its patented aerial fuze
to the AFP for testing claiming to be his own. To
protect its right,respondent sent letter of warning to
petitioner on a possible court action should it proceed
its testing by the AFP. In response the petitioner filed a
complaint for injunction and damages arising from
alleged infringement before the RTC asserting that it is
the true and actual inventor of the aerial fuze which it
developed on 1981 under the Self Reliance Defense
Posture Program of the AFP. It has been supplying the
military of the aerial fuze since then and that the fuze of
the respondent is similar as that of the petitioner.
Petitioner prayed forrestraining order and injunction
from marketing, manufacturing and profiting from the
said invention by therespondent. The trial court ruled in
favor of the petitioner citing the fact that it was the first
to develop the aerial fuze since 1981 thsu it concludes
that it is the petitioners aerial fuze that was copied by
the respondent. Moreover, the claim of respondent is
solely based on its letter of patent which validity is being
questioned. On appeal, respondent argued that the
petitioner has no cause of action since he has no right to
assert there being no patent issued to his aerial fuze.
The Court of Appeals reversed the decision of the trial
court dismissing the complaint of the petitioner. It was
the contention of the petitioner that it can file under
Section 42 of the Patent Law an action for infringement
not as a patentee but as an entity in possession of a
right, title or interest to the patented invention. It

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
theorizes that while the absence of a patent prevents
one from lawfully suing another for infringement of said
patent, such absence does not bar the true and actual
inventor of the patented invention from suing another in
the same nature as a civil action for infringement.

Issue:
Whether or not the petitioner has the right to assail the
validity of the patented work of the respondent?

SC:
The court finds the argument of the petitioner
untenable. Section 42 of the Law on Patent (RA 165)
provides that only the patentee or his successors-ininterest may file an action against infringement. What
the law contemplates in the phrase anyone possessing
any right, title or interest in and to the patented
invention refers only to the patentees successors-ininterest,
assignees
or
grantees
since
the
action on patent infringement may be brought only in
the name of the person granted with the patent. There
can be no infringement of a patent until a patent has
been issued since the right one has over the invention
covered by the patent arises from the grant of the
patent alone. Therefore, a person who has not been
granted letter of patent over an invention has not
acquired right or title over the invention and thus has no
cause of action for infringement. Petitioner admitted to
have no patent over his invention. Respondents aerial
fuze is covered byletter of patent issued by the Bureau
of Patents thus it has in his favor not only the
presumption of validity of its patent but that of a legal
and factual first and true inventor of the invention.

interest thereto can not file an action for declaratory


judgment or injunctive suit which is not recognized in this
jurisdiction.
Said person, however, is not left without any remedy. He
can, under Section 28 of the aforementioned law, file a
petition for cancellation of the patent within three (3)
years from the publication of said patent with the
Director of Patents and raise as ground therefor that the
person to whom the patent was issued is not the true and actual
inventor.
Hence, petitioner's remedy is not to file an action for
injunction or infringement but to file a petition for
cancellation of private respondent's patent. Petitioner
however failed to do so. As such, it can not now assail or
impugn the validity of the private respondent's letters
patent by claiming that it is the true and actual inventor
of the aerial fuze. Thus, as correctly ruled by the
respondent Court of Appeals in its assailed decision:
"since the petitioner (private respondent herein) is the
patentee of the disputed invention embraced by letters
of patent UM No. 6938 issued to it on January 23, 1990
by the Bureau of Patents, it has in its favor not only the
presumption of validity of its patent, but that of a legal
and factual first and true inventor of the invention. "In
fine, in the absence of error or abuse of power or lack of
jurisdiction or grave abuse of discretion, we sustain the
assailed decision of the respondent Court of Appeal.
WHEREFORE, the decision of the Court of Appeals is
hereby AFFIRMED. No pronouncement as to costs.SO
ORDERED.

Doctrine of Equivalents
Godines v. CA
Facts:

Remedies of Person with Patent


Remedies of True and Actual Inventor
Creser Precision
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
INTELLECTUAL PROPERTY LAW DIGESTED CASES

Magdalena Villaruz was issued a Letters Patent


covering utility model for a hand tractor or power tiller.
Villaluz, chairman and president of SV-Agro Enterprises,
Inc., executed a Deed of Assignment in favor of the
latter. SV-Agro then caused the publication of the patent
in a newspaper of general circulation.
In accordance with the patent, SV-Agro manufactured
and sold the patented power tillers with the patent
imprinted on them.
In 1979, SV-Agro suffered a decline of more than 50%
of its sales in its Molave, Zamboanga del Sur branch.

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
Upon investigation, it discovered that a certain a Pascual
Godines were manufacturing and selling power tillers
similar to those patented by SV-Agro. It then notified
Godines about the existing patent and demanded to
stop selling and manufacturing. Upon petitioners failure
to comply, SV-Agro lodged a complaint before the RTC
for infringement of patent and unfair competition.
After trial, Godines was found liable. RTCs decision
was affirmed by CA. Hence, this petition before the SC.
Whether Godines products infringe the patent of SVAgro
Yes.
Two tests have been established to determine
infringement: (1) literal infringement; and (2) the
doctrine of equivalents.
1. Literal Infringement test
In using this 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. 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.
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." Petitioner, on the other
hand, called his power tiller as floating power tiller.
SC adopted the finding of facts of the trial court that
after the inspection and comparisons made by the trial
court, it found out the appearance and form of the two
are virtually the same. It further found that, viewed from
any perspective or angle, the power tiller of Godines is
identical to that of the turtle power tiller of SV-Agro in
form, configuration, design and appearance.
Thus, the trial court observed that the claims of the
patent and the features of the patented utility model
were copied by petitioner. SC was, therefore, compelled
to arrive at no other conclusion but that there was
infringement.

INTELLECTUAL PROPERTY LAW DIGESTED CASES

2. Doctrine of Equivalents
According to this doctrine, an 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.
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.
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.
Thus, even the claim of Godiness that his product is
different from the patented one, by letting his welder
testify and explain the distinction of the two, will fail.
The trial court found out that a careful examination
between the two will show that they operate on the
same fundamental principle. Hence, it is necessary to
constitute equivalency that the same function can be
performed in substantially the same way or manner or
mode of operation; mere differences to form and
substance are immaterial.
Smith Kline Beckman Corp. v. CA
Facts:
Smith Kline is a US corporation licensed to do business in
the Philippines. In 1981, a patent was issued to it for its
invention entitled Methods and Compositions for
Producing Biphasic Parasiticide Activity Using Methyl 5
Propylthio-2-Benzimidazole Carbamate. The invention
is a means to fight off gastrointestinal parasites from
various cattles and pet animals.
Tryco Pharma is a local corporation engaged in the same
business as Smith Kline.
Smith Kline sued Tryco Pharma because the latter was
selling a veterinary product called Impregon which

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
contains a drug called Albendazole which fights off
gastro-intestinal roundworms, lungworms, tapeworms
and fluke infestation in carabaos, cattle and goats.
Smith Kline is claiming that Albendazole is covered in
their patent because 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. And that Albendazole is
actually patented under Smith Kline by the US.
Tryco Pharma averred that nowhere in Impregons
packaging does it mention that Albendazole is present
but even if it were, the same is unpatentable.
Smith Kline thus invoked the doctrine of equivalents,
which implies that the two substances substantially do
the same function in substantially the same way to
achieve the same results, thereby making them truly
identical 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.
Issue:
Whether or not there is patent infringement in this case
SC:
No. Smith Kline failed to prove that Albendazole is a
compound inherent in the patented invention. Nowhere
in the patent does the word Albendazole found. When
the language of its claims is clear and distinct, the
patentee is bound thereby and may not claim anything
beyond them. Further, there was a separate patent for
Albendazole given by the US which implies that
Albendazole is indeed separate and distinct from the
patented compound here.
A scrutiny of Smith Klines evidence fails to prove the
substantial sameness of the 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. In other words, the
INTELLECTUAL PROPERTY LAW DIGESTED CASES

principle or mode of operation must be the same or


substantially the same.
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.

Damages: Requirement of Notice


Del Rosario v. CA
Facts:
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 known as the
sing-along system or karaoke. He learned that private
respondent was manufacturing a sing-along system
bearing
the
trademark miyata or miyata
karaoke substantially similar if not identical to the singalong 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,
attorneys fees and costs of suit. The trial court
temporarily restrained private respondent until further
orders. Later, 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 model[3] of petitioner.
Private respondent filed 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, it was granted. CA said
there was no infringement of the patents of petitioner
by the fact alone that private respondent had

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
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.
Issue:
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.
SC:
We rule in the negative.
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 x x x
Admittedly, petitioner is a holder of Letters Patent.
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. Here, there is no dispute that the letters
patent issued to petitioner are for utility models of audio
equipment. Under Sec. 55 of The Patent Law a utility
INTELLECTUAL PROPERTY LAW DIGESTED CASES

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. 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.
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. 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

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
recording the singer and the accompaniment, and both
may also be used to record a speakers 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.[17]
Clearly, therefore, both petitioners and
respondents 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.

Whether unfair competition involving design patents


punishable under Art. 189 of the Revised Penal Code
exists in this case.

Criminal Action for Repetition of Infringement

The search warrant cannot even be issued by virtue of a


possible violation of the IPR Code. The assailed acts
specifically alleged were the manufacture and
fabrication of wrought iron furniture similar to that
patented by MENDCO, without securing any license or
patent for the same, for the purpose of deceiving or
defrauding Mendco and the buying public. The Code
defines "unfair competition" thus

Kenneth Roy Savage v. Taypin


Facts:
Acting on a complaint lodged by private respondent Eric
Ng Mendoza, president and general manager of Mendco
Development Corporation (MENDCO),[1] Supervising
Agent Jose Ermie Monsanto of the National Bureau of
Investigation (NBI) filed an application for search
warrant with the Regional Trial Court of Cebu City.[2]
The application sought the authorization to search the
premises of K Angelin Export International located in
Biasong, Talisay, Cebu, and to seize the pieces of
wrought iron furniture found therein which were
allegedly the object of unfair competition involving
design patents, punishable under Art. 189 of the Revised
Penal Code as amended. The assailed Search Warrant
No. 637-10-1697-12 was issued by respondent Judge on
16 October 1997 and executed in the afternoon of the
following day by NBI agents.[3] Seized from the factory
were several pieces of furniture, indicated in the
Inventory Sheet attached to the Return of Search
Warrant, and all items seized have remained in NBI
custody up to the present.
Petitioners moved to quash the warrant but was denied.
Issue:

INTELLECTUAL PROPERTY LAW DIGESTED CASES

SC:
However, since the IPR Code took effect on 1 January
1998 any discussion contrary to the view herein
expressed would be pointless. The repealing clause of
the Code provides -All Acts and parts of Acts inconsistent
herewith, more particularly, Republic Act No. 165, as
amended; Republic Act No. 166, as amended; and
Articles 188 and 189 of the Revised Penal Code;
Presidential Decree No. 49, including Presidential Decree
No. 285, as amended, are hereby repealed (italics ours)
The issue involving the existence of "unfair competition"
as a felony involving design patents, referred to in Art.
189 of the Revised Penal Code, has been rendered moot
and academic by the repeal of the article.

168.2. Any person who shall employ deception


or any other means contrary to good faith by
which he shall pass off the goods manufactured
by him or in which he deals, or his business, or
services for those of the one having established
such goodwill, or shall commit any acts
calculated to produce said result, shall be guilty
of unfair competition, and shall be subject to an
action therefor.
168.3. In particular, and without in any way
limiting the scope of protection against unfair
competition, the following shall be deemed
guilty of unfair competition:
(a) Any person who is selling his goods and gives
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 to believe that the

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ABELLANAABRILAVILABERNALBOLOCEBRECUSDEOGRACIASFELONGCOLAURENTELOCAY-LOCAYTACUYANUGANG
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, or any
subsequent vendor of such goods or any agent
of any vendor engaged in selling such goods
with a like purpose;
(b) Any person who by any artifice, or device, or
who employs any other means calculated to
induce the false belief that such person is
offering the services of another who has
identified such services in the mind of the
public; or
(c) Any person who shall make any false
statement in the course of trade or who shall
commit any other act contrary to good faith of a
nature calculated to discredit goods, businesses
or services of another.
There is evidently no mention of any crime of "unfair
competition" involving design patents in the controlling
provisions on Unfair Competition. It is therefore unclear
whether the crime exists at all, for the enactment of RA
8293 did not result in the reenactment of Art. 189 of the
Revised Penal Code. In the face of this ambiguity, we
must strictly construe the statute against the State and
liberally in favor of the accused, for penal statutes
cannot be enlarged or extended by intendment,
implication or any equitable consideration. Respondents
invoke jurisprudence to support their contention that
"unfair competition" exists in this case. However, we are
prevented from applying these principles, along with the
new provisions on Unfair Competition found in the IPR
Code, to the alleged acts of the petitioners, for such acts
constitute patent infringement as defined by the same
Code.

THAT IN ALL THINGS, GOD MAY BE GLORIFIED!

INTELLECTUAL PROPERTY LAW DIGESTED CASES

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