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[43] Sonic Steel Industries, Inc. v. Atty.

Chua (Recio) business as a manufacturer and distributor of zinc and


July 17, 2013 | PERALTA, J. | Canon 10, Rule 10.01 aluminum-zinc coated metal sheets known in the market as
Superzinc and Superlume.
PETITIONER: SONIC STEEL INDUSTRIES, INC. b. Atty. Chua (respondent) → VP, Corporate Legal Counsel, and
RESPONDENTS: ATTY. NONNATUS P. CHUA Assistant Corp Secretary of Steel Corporation (STEELCORP)
SUMMARY: STEELCORP filed before the DOJ a complaint for violation of c. STEELCORP → petitioner in another case where Sonic Steel is
the Intellectual Property Code against Sonic Steel Industries, Inc. STEELCORP the defendant [inaaway si Sonic Steel].
alleged that Sonic Steel’s product, “SUPERLUME” can only be manufactured d. BIEC International, Inc. → grantor of Patent No. 16269 to
using the same technical information and registered patent used by STEELCORP.
STEELCORP, and that both the technical information and patent has been 2. The controversy arose when STEELCORP applied for a Search Warrant in
exclusively licensed to STEELCORP. Sonic Steel, on the other hand, contended RTC-Cavite against complainant, Sonic Steel Industries. Sonic Steel’s
that STEELCORP’s patent is already expired, and that Atty. Chua, in refusing to properties were seized.
provide a copy of the alleged exclusive patent granted to STEELCORP, 3. A week later, STEELCORP filed before the DOJ a complaint for violation
deliberately misled the Court into believing that STEELCORP still has the of Sec. 168 (Unfair Competition, Rights, Regulation and Remedies) of the
exclusive licensee rights to the subject patent. WoN Atty. Chua deliberately Intellectual Property Code against Sonic Steel. [this actual issue isn’t that
misled the Court. - YES. because Atty Chua did not disclose that the Patent important but just in case he asks]
No. 16269 had already expired. The Court found that under the Technical a. The acts of Sonic Steel of storing, selling, retailing, distributing,
Information and Patent License Agreement between STEELCORP and BIEC importing, dealing with or otherwise disposing of “SUPERLUME”
International, Inc., the terms technical information and patent are SEPARATE metal sheet products which are similarly coated with aluminum-
AND DISTINCT. At the time of the application for a search warrant against zinc alloy and cannot be produced without utilizing the same
Sonic Steel, the patent had already expired; thus, all STEELCORP has licensee basic technical information AND the registered patent used by
rights over currently is the technical information, NOT the patent. In a transcript STEELCORP to manufacture “GALVALUME” metal sheet
of the hearing during the application for a search warrant, every time the RTC products, the ENTIRE PROCESS of which has been lawfully
Judge would ask STEELCORP’s VP whether he had the subject patent, Atty. and exclusively licensed to STEELCORP by BIEC
Chua would quickly interrupt and state, “We reserve the right to present it, your International, Inc., constitute unfair competition.
Honor.” By continuously refusing to present the Patent WHILE KNOWING b. [Basically, STEELCORP is saying that Sonic Steel has a product
FULLY WELL that the Patent is already expired, Atty. Chua DELIBERATELY called “SUPERLUME” which is made using the same technical
MISLED the Court into thinking that STEELCORP still had licensee rights over information and patent as STEELCORP. The latter is saying na
both the technical information and the patent. This is contrary to Canons 10 and bawal yung ginagawa ng Sonic Steel, because STEELCORP owns
10.01 which state that a lawyer owes candor and good faith to the Courts, and the license to BOTH the technical information AND patent.]
that a lawyer shall do no falsehood or mislead the Court. All things considered, 4. Sonic Steel, in its defense, argues:
Atty. Chua was SUSPENDED for 6 months. a. That STEELCORP’s patent has already expired.
b. That in the hearing for the application for a search warrant,
DOCTRINE: Candor in all their dealings is the very essence of a practitioner’s STEELCORP’s counsel, Atty. Chua, in refusing to provide a copy
honorable membership in the legal profession. Lawyers are required to act with of the alleged exclusive patent granted to STEELCORP,
the highest standard of truthfulness, fair play and nobility in the conduct of deliberately misled the Court into believing that STEELCORP
litigation and in their relations with their clients, the opposing parties, the other still has the exclusive licensee rights to the subject patent when,
counsels and the courts. They are bound by their oath to speak the truth and to in fact, it was already expired.
conduct themselves according to the best of their knowledge and discretion, and 5. The following is a portion of the transcript during the hearing for the search
with fidelity to the courts and their clients. warrant.:
a. “Judge Sadang of RTC-Cavite (directed to the VP of
FACTS: STEELCORP): You also state that Steel Corporation owns a patent
1. PARTIES: exclusively licensed to Steel Corporation by BIEC International,
a. Sonic Steel Industries, Inc. (complainant) → corporation doing Inc. Do you have document to show that?
ATTY. CHUA: We reserve the presentation of the trademark
license, your Honor.” the courts to be misled by any artifice. Moreover, they are obliged to
b. “Q: [Philippine Patent No. 16269], do you have a document observe the rules of procedure and not to misuse them to defeat the
regarding that? ends of justice.
VP of STEELCORP: Yes, your Honor. It is in the office. 5. In the present case, it appears that in the application for a search warrant,
ATTY. CHUA: We reserve the right to present it, your Atty. Chua claimed or made it appear that STEELCORP was the licensee of
Honor.” the technical information and Philippine Patent No. 16269 at that time.
6. Atty. Chua counters that he never made an allegation or reservation that a. Under the Technical Information and Patent License Agreement
STEELCORP owned Philippine Patent No. 16269. He asserts that he between STEELCORP and BIEC International, Inc., the terms
merely reserved the right to present the trademark license exclusively technical information and patent are SEPARATE AND
licensed to STEELCORP. Atty. Chua further argues that even DISTINCT.
STEELCORP’s complaint merely stated that STEELCORP is the exclusive b. In the Complaint filed by STEELCORP in DOJ, STEELCORP
licensee of the subject patent, and nowhere does the complaint allege that it claimed that it was the licensee of BOTH technical information
owns the said patent. and Patent No. 16269.
7. IBP’s Commission on Bar Discipline: recommended to suspend Atty. Chua c. HOWEVER, the IBP found out that Patent No. 16269 had
from the practice of law for 3 months. already long expired at the time of the filing of the complaint. In
8. IBP Board of Governors: Adopted the recommendation of Commission on other words, STEELCORP now only has rights as a licensee of
Bar Discipline, but modified the suspension to 6 months. the technical information, and NOT the patent anymore.
6. It also would appear that Atty. Chua was wanting in candor as regards his
ISSUE: dealings with the lower court. In the transcript of the hearing for a search
1. WoN Atty. Chua deliberately misled the Court. - YES. because Atty Chua warrant [SEE FACT #5], Atty. Chua was quick to interrupt and manifest
did not disclose that the Patent No. 16269 had already expired. his client’s reservation to present the subject license when asked by the
judge.
RULING: WHEREFORE, premises considered, respondent Atty. Nonnatus P. Chua a. Atty. Chua was equally swift to end Judge Sadang’s inquiry over
is hereby SUSPENDED from the practice of law for six (6) months with the patent by reserving the right to present the same at another
ADMONITION that a repetition of the same or similar act in the future will be dealt time. While it is not the Commission’s province to dwell with
with more severely. suppositions and hypotheses, it is well within its powers to make
reasonable inferences from established facts.
RATIO: 7. Given that Patent No. 16269 had been in expiry for more than five (5)
Issue 1: Atty. Chua violated Canons 1 and 10. years when Judge Sadang propounded his questions, it logically
1. We affirm in toto the findings and recommendations of the IBP. appears that Atty. Chua, in making such reservations in open court,
2. Pertinent provisions of the CPR: was trying to conceal from the former the fact of the patent’s
a. Canon 1 – A lawyer shall uphold the Constitution, obey the laws of expiration so as to facilitate the grant of the search warrant in favor of
the land and promote respect for the law and legal process. STEELCORP. This is contrary to the exacting standards of conduct
b. Rule 1.01 – A lawyer shall not engage in unlawful, dishonest and required from a member of the Bar.
immoral or deceitful conduct. 8. Indeed, the practice of law is not a right but merely a privilege bestowed
c. Canon 10 – A lawyer owes candor, fairness and good faith to upon by the State upon those who show that they possess, and continue to
the court. possess, the qualifications required by law for the conferment of such
d. Rule 10.01 – A lawyer shall do no falsehood, nor consent to the privilege.
doing of any in Court, nor shall he mislead or allow the Court a. One of those requirements is the observance of honesty and
to be misled by an artifice. candor. Candor in all their dealings is the very essence of a
3. Lawyers are officers of the court, called upon to assist in the administration practitioner’s honorable membership in the legal profession.
of justice. They act as vanguards of our legal system, protecting and Lawyers are required to act with the highest standard of
upholding truth and the rule of law. They are expected to act with honesty truthfulness, fair play and nobility in the conduct of litigation and
in all their dealings, especially with the court. in their relations with their clients, the opposing parties, the other
4. Verily, the Code of Professional Responsibility enjoins lawyers from counsels and the courts. They are bound by their oath to speak the
committing or consenting to any falsehood in court or from allowing truth and to conduct themselves according to the best of their
knowledge and discretion, and with fidelity to the courts and their
clients.
9. From the foregoing, it is clear that Atty Chua violated Canons 1 and 10 and
Rules 1.01 and 10.01.
10. Thus, even at the risk of jeopardizing the probability of prevailing on
STEELCORP’s application for a search warrant, Atty. Chua should
have informed the court of the patent’s expiration so as to allow the
latter to make an informed decision given all available and pertinent
facts.