Intellectual Property Cases

G.R. No. 148222               August 15, 2003

PEARL & DEAN (PHIL.), INCORPORATED, Petitioner, 

vs.
SHOEMART, INCORPORATED, and NORTH EDSA MARKETING,
INCORPORATED, Respondents.

DECISION

CORONA, J.:

In the instant petition for review on certiorari under Rule 45 of the Rules of

Court, petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001
decision1 of the Court of Appeals reversing the October 31, 1996 decision2 of
the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516
which declared private respondents Shoemart Inc. (SMI) and North Edsa
Marketing Inc. (NEMI) liable for infringement of trademark and copyright,
and unfair competition.

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals3 contained a summary of

this dispute:

"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in

the manufacture of advertising display units simply referred to as light
boxes. These units utilize specially printed posters sandwiched between
plastic sheets and illuminated with back lights. Pearl and Dean was able to
secure a Certificate of Copyright Registration dated January 20, 1981
over these illuminated display units. The advertising light boxes were
marketed under the trademark "Poster Ads". The application for
registration of the trademark was filed with the Bureau of Patents,
Trademarks and Technology Transfer on June 20, 1983, but was approved
only on September 12, 1988, per Registration No. 41165. From 1981 to
about 1988, Pearl and Dean employed the services of Metro Industrial
Services to manufacture its advertising displays.

Sometime in 1985, Pearl and Dean negotiated with defendant-appellant

Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM
City North Edsa. Since SM City North Edsa was under construction at that
time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl
and Dean agreed. On September 11, 1985, Pearl and Dean’s General
Manager, Rodolfo Vergara, submitted for signature the contracts covering
SM Cubao and SM Makati to SMI’s Advertising Promotions and Publicity
Division Manager, Ramonlito Abano. Only the contract for SM Makati,
however, was returned signed. On October 4, 1985, Vergara wrote Abano
inquiring about the other contract and reminding him that their agreement
for installation of light boxes was not only for its SM Makati branch, but also
for SM Cubao. SMI did not bother to reply.

Instead, in a letter dated January 14, 1986, SMI’s house counsel

informed Pearl and Dean that it was rescinding the contract for SM
Makati due to non-performance of the terms thereof. In his reply
dated February 17, 1986, Vergara protested the unilateral action of SMI,
saying it was without basis. In the same letter, he pushed for the signing of
the contract for SM Cubao.

Two years later, Metro Industrial Services, the company formerly contracted
by Pearl and Dean to fabricate its display units, offered to construct light
boxes for Shoemart’s chain of stores. SMI approved the proposal and ten
(10) light boxes were subsequently fabricated by Metro Industrial for SMI.
After its contract with Metro Industrial was terminated, SMI engaged the
services of EYD Rainbow Advertising Corporation to make the light boxes.
Some 300 units were fabricated in 1991. These were delivered on a
staggered basis and installed at SM Megamall and SM City.

Sometime in 1989, Pearl and Dean, received reports that exact copies
of its light boxes were installed at SM City and in the fastfood section of
SM Cubao. Upon investigation, Pearl and Dean found out that aside from the
two (2) reported SM branches, light boxes similar to those it manufactures
were also installed in two (2) other SM stores. It further discovered that
defendant-appellant North Edsa Marketing Inc. (NEMI), through its
marketing arm, Prime Spots Marketing Services, was set up primarily to sell
advertising space in lighted display units located in SMI’s different branches.
Pearl and Dean noted that NEMI is a sister company of SMI.

In the light of its discoveries, Pearl and Dean sent a letter dated December
11, 1991 to both SMI and NEMI enjoining them to cease using the subject
light boxes and to remove the same from SMI’s establishments. It
also demanded the discontinued use of the trademark "Poster Ads," and the
payment to Pearl and Dean of compensatory damages in the amount of
Twenty Million Pesos (P20,000,000.00).

Upon receipt of the demand letter, SMI suspended the leasing of two
hundred twenty-four (224) light boxes and NEMI took down its
advertisements for "Poster Ads" from the lighted display units in SMI’s
stores. Claiming that both SMI and NEMI failed to meet all its demands,
Pearl and Dean filed this instant case for infringement of trademark and
copyright, unfair competition and damages.

In denying the charges hurled against it, SMI maintained that it

independently developed its poster panels using commonly known
techniques and available technology, without notice of or reference
to Pearl and Dean’s copyright. SMI noted that the registration of the
mark "Poster Ads" was only for stationeries such as letterheads,
envelopes, and the like. Besides, according to SMI, the word "Poster Ads"
is a generic term which cannot be appropriated as a trademark, and,
as such, registration of such mark is invalid. It also stressed that Pearl and
Dean is not entitled to the reliefs prayed for in its complaint since its
advertising display units contained no copyright notice, in violation of
Section 27 of P.D. 49. SMI alleged that Pearl and Dean had no cause of
action against it and that the suit was purely intended to malign SMI’s good
name. On this basis, SMI, aside from praying for the dismissal of the case,
also counterclaimed for moral, actual and exemplary damages and for the
cancellation of Pearl and Dean’s Certification of Copyright
Registration No. PD-R-2558 dated January 20, 1981 and Certificate
of Trademark Registration No. 4165 dated September 12, 1988.

NEMI, for its part, denied having manufactured, installed or used any
advertising display units, nor having engaged in the business of advertising.
It repleaded SMI’s averments, admissions and denials and prayed for similar
reliefs and counterclaims as SMI."

The RTC of Makati City decided in favor of P & D:

Wherefore, defendants SMI and NEMI are found jointly and severally liable
for infringement of copyright under Section 2 of PD 49, as amended, and
infringement of trademark under Section 22 of RA No. 166, as amended,
and are hereby penalized under Section 28 of PD 49, as amended, and
Sections 23 and 24 of RA 166, as amended. Accordingly, defendants are
hereby directed:

(1) to pay plaintiff the following damages:

(a) actual damages - ₱16,600,000.00,

representing profits
derived by defendants
as a result of infringe-
ment of plaintiff’s copyright
from 1991 to 1992

(b) moral damages - ₱1,000.000.00

(c) exemplary damages - ₱1,000,000.00

(d) attorney’s fees - ₱1,000,000.00

plus

(e) costs of suit;

(2) to deliver, under oath, for impounding in the National Library, all
light boxes of SMI which were fabricated by Metro Industrial Services
and EYD Rainbow Advertising Corporation;

(3) to deliver, under oath, to the National Library, all filler-posters

using the trademark "Poster Ads", for destruction; and

(4) to permanently refrain from infringing the copyright on plaintiff’s

light boxes and its trademark "Poster Ads".

Defendants’ counterclaims are hereby ordered dismissed for lack of merit.

SO ORDERED.4

On appeal, however, the Court of Appeals reversed the trial court:

Since the light boxes cannot, by any stretch of the imagination, be

considered as either prints, pictorial illustrations, advertising copies,
labels, tags or box wraps, to be properly classified as a
copyrightable class "O" work, we have to agree with SMI when it posited
that what was copyrighted were the technical drawings only, and not
the light boxes themselves, thus:

42. When a drawing is technical and depicts a utilitarian object, a copyright

over the drawings like plaintiff-appellant’s will not extend to the actual
object. It has so been held under jurisprudence, of which the leading case
is Baker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained
a copyright protection for a book entitled "Selden’s Condensed
Ledger or Bookkeeping Simplified" which purported to explain a new
system of bookkeeping. Included as part of the book were blank forms and
illustrations consisting of ruled lines and headings, specially designed for use
in connection with the system explained in the work. These forms showed
the entire operation of a day or a week or a month on a single page, or on
two pages following each other. The defendant Baker then produced forms
which were similar to the forms illustrated in Selden’s copyrighted books.
The Court held that exclusivity to the actual forms is not extended by a
copyright. The reason was that "to grant a monopoly in the underlying art
when no examination of its novelty has ever been made would be a surprise
and a fraud upon the public; that is the province of letters patent, not of
copyright." And that is precisely the point. No doubt aware that its alleged
original design would never pass the rigorous examination of a patent
application, plaintiff-appellant fought to foist a fraudulent monopoly on the
public by conveniently resorting to a copyright registration which merely
employs a recordal system without the benefit of an in-depth examination of
novelty.

The principle in Baker vs. Selden was likewise applied in Muller vs.

Triborough Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case,
Muller had obtained a copyright over an unpublished drawing entitled
"Bridge Approach – the drawing showed a novel bridge approach to unsnarl
traffic congestion". The defendant constructed a bridge approach which was
alleged to be an infringement of the new design illustrated in plaintiff’s
drawings. In this case it was held that protection of the drawing does not
extend to the unauthorized duplication of the object drawn because
copyright extends only to the description or expression of the object and not
to the object itself. It does not prevent one from using the drawings to
construct the object portrayed in the drawing.

In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895

and Scholtz Homes, Inc. v. Maddox, 379 F. 2d 84, it was held that there is
no copyright infringement when one who, without being authorized, uses a
copyrighted architectural plan to construct a structure. This is because the
copyright does not extend to the structures themselves.

In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright
over the technical drawings of the latter’s advertising display units.

xxx xxx xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs.

Intermediate Appellate Court that the protective mantle of the Trademark
Law extends only to the goods used by the first user as specified in the
certificate of registration, following the clear mandate conveyed by Section
20 of Republic Act 166, as amended, otherwise known as the Trademark
Law, which reads:

SEC. 20. Certification of registration prima facie evidence of validity.- A

certificate of registration of a mark or trade-name shall be prima
facie evidence of the validity of the registration, the registrant’s ownership of
the mark or trade-name, and of the registrant’s exclusive right to use the
same in connection with the goods, business or services specified in the
certificate, subject to any conditions and limitations stated therein."
(underscoring supplied)

The records show that on June 20, 1983, Pearl and Dean applied for the
registration of the trademark "Poster Ads" with the Bureau of Patents,
Trademarks, and Technology Transfer. Said trademark was recorded in the
Principal Register on September 12, 1988 under Registration No. 41165
covering the following products: stationeries such as letterheads, envelopes
and calling cards and newsletters.

With this as factual backdrop, we see no legal basis to the finding of liability
on the part of the defendants-appellants for their use of the words "Poster
Ads", in the advertising display units in suit. Jurisprudence has interpreted
Section 20 of the Trademark Law as "an implicit permission to a
manufacturer to venture into the production of goods and allow that
producer to appropriate the brand name of the senior registrant on goods
other than those stated in the certificate of registration." The Supreme Court
further emphasized the restrictive meaning of Section 20 when it stated,
through Justice Conrado V. Sanchez, that:

Really, if the certificate of registration were to be deemed as including goods

not specified therein, then a situation may arise whereby an applicant may
be tempted to register a trademark on any and all goods which his mind
may conceive even if he had never intended to use the trademark for the
said goods. We believe that such omnibus registration is not contemplated
by our Trademark Law.

While we do not discount the striking similarity between Pearl and Dean’s
registered trademark and defendants-appellants’ "Poster Ads" design, as
well as the parallel use by which said words were used in the parties’
respective advertising copies, we cannot find defendants-appellants liable for
infringement of trademark. "Poster Ads" was registered by Pearl and Dean
for specific use in its stationeries, in contrast to defendants-appellants who
used the same words in their advertising display units. Why Pearl and Dean
limited the use of its trademark to stationeries is simply beyond us. But,
having already done so, it must stand by the consequence of the registration
which it had caused.

xxx xxx xxx

We are constrained to adopt the view of defendants-appellants that the

words "Poster Ads" are a simple contraction of the generic term poster
advertising. In the absence of any convincing proof that "Poster Ads" has
acquired a secondary meaning in this jurisdiction, we find that Pearl and
Dean’s exclusive right to the use of "Poster Ads" is limited to what is written
in its certificate of registration, namely, stationeries.

Defendants-appellants cannot thus be held liable for infringement of the

trademark "Poster Ads".

There being no finding of either copyright or trademark infringement on the

part of SMI and NEMI, the monetary award granted by the lower court to
Pearl and Dean has no leg to stand on.

xxx xxx xxx

WHEREFORE, premises considered, the assailed decision is REVERSED and

SET ASIDE, and another is rendered DISMISSING the complaint and
counterclaims in the above-entitled case for lack of merit.5

Dissatisfied with the above decision, petitioner P & D filed the instant
petition assigning the following errors for the Court’s consideration:

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO

COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM
AND NEMI;

B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO

INFRINGEMENT OF PEARL & DEAN’S TRADEMARK "POSTER ADS" WAS
COMMITTED BY RESPONDENTS SM AND NEMI;

C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE

AWARD OF THE TRIAL COURT, DESPITE THE LATTER’S FINDING, NOT
DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS
GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING
CONTRACTS WITH PEARL & DEAN.

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING

RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL,
MORAL & EXEMPLARY DAMAGES, ATTORNEY’S FEES AND COSTS OF
SUIT.6

ISSUES

In resolving this very interesting case, we are challenged once again to put
into proper perspective four main concerns of intellectual property law —
patents, copyrights, trademarks and unfair competition arising from
infringement of any of the first three. We shall focus then on the following
issues:

(1) if the engineering or technical drawings of an advertising display

unit (light box) are granted copyright protection (copyright certificate
of registration) by the National Library, is the light box depicted in
such engineering drawings ipso facto also protected by such copyright?

(2) or should the light box be registered separately and protected by a

patent issued by the Bureau of Patents Trademarks and Technology
 Transfer (now Intellectual Property Office) — in addition to the
copyright of the engineering drawings?

(3) can the owner of a registered trademark legally prevent others

from using such trademark if it is a mere abbreviation of a term
descriptive of his goods, services or business?

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioner P & D’s complaint was that SMI infringed on its copyright over the
light boxes when SMI had the units manufactured by Metro and EYD
Rainbow Advertising for its own account. Obviously, petitioner’s position was
premised on its belief that its copyright over the engineering drawings
extended ipso facto to the light boxes depicted or illustrated in said
drawings. In ruling that there was no copyright infringement, the Court of
Appeals held that the copyright was limited to the drawings alone and not to
the light box itself. We agree with the appellate court.

First, petitioner’s application for a copyright certificate — as well as

Copyright Certificate No. PD-R2588 issued by the National Library on
January 20, 1981 — clearly stated that it was for a class "O" work under
Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the
statute then prevailing. Said Section 2 expressly enumerated the works
subject to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of
creation, subsist with respect to any of the following works:

x x x           x x x          x x x

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box
wraps;

x x x           x x x          x x x

Although 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.7 Accordingly,
it can cover only the works falling within the statutory enumeration or
description.8

P & D secured its copyright under the classification class "O" work. This

being so, 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
application9 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."

In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the
public without license from P & D, then no doubt they would have been
guilty of copyright infringement. But this was not the case. SMI’s and NEMI’s
acts complained of by P & D were to have units similar or identical to the
light box illustrated in the technical drawings manufactured by Metro and
EYD Rainbow Advertising, for leasing out to different advertisers. Was this
an infringement of petitioner’s copyright over the technical drawings? We do
not think so.

During the trial, the president of P & D himself admitted that the light box
was neither a literary not an artistic work but an "engineering or marketing
invention."10 Obviously, there appeared to be some confusion regarding what
ought or ought not to be the proper subjects of copyrights, patents and
trademarks. In the leading case of Kho vs. Court of Appeals,11 we ruled that
these three legal rights are completely distinct and separate from one
another, and the protection afforded by one cannot be used interchangeably
to cover items or works that exclusively pertain to the others:

Trademark, copyright and patents are different intellectual property rights

that cannot be interchanged with one another. A trademark is any visible
sign capable of distinguishing the goods (trademark) or services (service
mark) of an enterprise and shall include a stamped or marked container of
goods. In relation thereto, a trade name means the name or designation
identifying or distinguishing an enterprise. Meanwhile, the scope of a
copyright is confined to literary and artistic works which are original
intellectual creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on the other hand, refer to
any technical solution of a problem in any field of human activity which is
new, involves an inventive step and is industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

This brings us to the next point: if, despite its manufacture and commercial
use of the light boxes without license from petitioner, private respondents
cannot be held legally liable for infringement of P & D’s copyright over
its technical drawings of the said light boxes, should they be liable instead
for infringement of patent? We do not think so either.

For some reason or another, petitioner never secured a patent for the light
boxes. It therefore acquired no patent rights which could have protected its
invention, if in fact it really was. And because it had no patent, petitioner
could not legally prevent anyone from manufacturing or commercially using
the contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,12 we
held that "there can be no infringement of a patent until a patent has been
issued, since whatever right one has to the invention covered by the patent
arises alone from the grant of patent. x x x (A)n inventor has no common
law right to a monopoly of his invention. He has the right to make use of and
vend his invention, but if he voluntarily discloses it, such as by offering it for
sale, the world is free to copy and use it with impunity. A patent, however,
gives the inventor the right to exclude all others. As a patentee, he has the
exclusive right of making, selling or using the invention.13 On the assumption
that petitioner’s advertising units were patentable inventions, petitioner
revealed them fully to the public by submitting the engineering drawings
thereof to the National Library.

To be able to effectively and legally preclude others from copying and

profiting from the invention, a patent is a primordial requirement. No patent,
no protection. The ultimate goal of a patent system is to bring new designs
and technologies into the public domain through disclosure.14 Ideas, once
disclosed to the public without the protection of a valid patent, are subject to
appropriation without significant restraint.15

On one side of the coin is the public which will benefit from new ideas; on
the other are the inventors who must be protected. As held in Bauer & Cie
vs. O’Donnel,16 "The act secured to the inventor the exclusive right to make
use, and vend the thing patented, and consequently to prevent others from
exercising like privileges without the consent of the patentee. It was passed
for the purpose of encouraging useful invention and promoting new and
useful inventions by the protection and stimulation given to inventive genius,
and was intended to secure to the public, after the lapse of the exclusive
privileges granted the benefit of such inventions and improvements."

The law attempts to strike an ideal balance between the two interests:

"(The p)atent system thus embodies a carefully crafted bargain for

encouraging the creation and disclosure of new useful and non-obvious
advances in technology and design, in return for the exclusive right to
practice the invention for a number of years. The inventor may keep his
invention secret and reap its fruits indefinitely. In consideration of its
disclosure and the consequent benefit to the community, the patent is
granted. An exclusive enjoyment is guaranteed him for 17 years, but upon
the expiration of that period, the knowledge of the invention inures to the
people, who are thus enabled to practice it and profit by its use."17

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

It is only after an exhaustive examination by the patent office that a patent

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

There is no such scrutiny in the case of copyrights nor any notice published
before its grant to the effect that a person is claiming the creation of a work.
The law confers the copyright from the moment of creation20 and the
copyright certificate is issued upon registration with the National Library of a
sworn ex-parte claim of creation.

Therefore, not having gone through the arduous examination for patents,
the petitioner cannot exclude others from the manufacture, sale or
commercial use of the light boxes on the sole basis of its copyright certificate
over the technical drawings.

Stated otherwise, what petitioner seeks is exclusivity without any

opportunity for the patent office (IPO) to scrutinize the light box’s eligibility
as a patentable invention. The irony here is that, had petitioner secured a
patent instead, its exclusivity would have been for 17 years only. But
through the simplified procedure of copyright-registration with the National
Library — without undergoing the rigor of defending the patentability of its
invention before the IPO and the public — the petitioner would be protected
for 50 years. This situation could not have been the intention of the law.

In the oft-cited case of Baker vs. Selden21 , the United States Supreme Court
held that only the expression of an idea is protected by copyright, not the
idea itself. In that case, the plaintiff held the copyright of a book which
expounded on a new accounting system he had developed. The publication
illustrated blank forms of ledgers utilized in such a system. The defendant
reproduced forms similar to those illustrated in the plaintiff’s copyrighted
book. The US Supreme Court ruled that:

"There is no doubt that a work on the subject of book-keeping, though only

explanatory of well known systems, may be the subject of a copyright; but,
then, it is claimed only as a book. x x x. But there is a clear distinction
between the books, as such, and the art, which it is, intended to illustrate.
The mere statement of the proposition is so evident that it requires hardly
any argument to support it. The same distinction may be predicated of every
other art as well as that of bookkeeping. A treatise on the composition and
use of medicines, be they old or new; on the construction and use of ploughs
or watches or churns; or on the mixture and application of colors for painting
or dyeing; or on the mode of drawing lines to produce the effect of
perspective, would be the subject of copyright; but no one would contend
that the copyright of the treatise would give the exclusive right to the art or
manufacture described therein. The copyright of the book, if not pirated
from other works, would be valid without regard to the novelty or want of
novelty of its subject matter. The novelty of the art or thing described or
explained has nothing to do with the validity of the copyright. To give to
the author of the book an exclusive property in the art described
therein, when no examination of its novelty has ever been officially
made, would be a surprise and a fraud upon the public. That is the
province of letters patent, not of copyright. The claim to an invention
of discovery of an art or manufacture must be subjected to the
examination of the Patent Office before an exclusive right therein
can be obtained; and a patent from the government can only secure
it.

The difference between the two things, letters patent and copyright, may be
illustrated by reference to the subjects just enumerated. Take the case of
medicines. Certain mixtures are found to be of great value in the healing
art. If the discoverer writes and publishes a book on the subject (as
regular physicians generally do), he gains no exclusive right to the
manufacture and sale of the medicine; he gives that to the public. If
he desires to acquire such exclusive right, he must obtain a patent
for the mixture as a new art, manufacture or composition of matter.
He may copyright his book, if he pleases; but that only secures to
him the exclusive right of printing and publishing his book. So of all
other inventions or discoveries.

The copyright of a book on perspective, no matter how many drawings and

illustrations it may contain, gives no exclusive right to the modes of drawing
described, though they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to
the public.

xxx

Now, whilst no one has a right to print or publish his book, or any material
part thereof, as a book intended to convey instruction in the art, any person
may practice and use the art itself which he has described and illustrated
therein. The use of the art is a totally different thing from a
publication of the book explaining it. The copyright of a book on
bookkeeping cannot secure the exclusive right to make, sell and use account
books prepared upon the plan set forth in such book. Whether the art might
or might not have been patented, is a question, which is not before us. It
was not patented, and is open and free to the use of the public. And, of
course, in using the art, the ruled lines and headings of accounts must
necessarily be used as incident to it.

The plausibility of the claim put forward by the complainant in this case
arises from a confusion of ideas produced by the peculiar nature of the art
described in the books, which have been made the subject of copyright. In
describing the art, the illustrations and diagrams employed happened to
correspond more closely than usual with the actual work performed by the
operator who uses the art. x x x The description of the art in a book,
though entitled to the benefit of copyright, lays no foundation for an
exclusive claim to the art itself. The object of the one is explanation;
the object of the other is use. The former may be secured by
copyright. The latter can only be secured, if it can be secured at all,
by letters patent." (underscoring supplied)

ON THE ISSUE OF TRADEMARK INFRINGEMENT

This issue concerns the use by respondents of the mark "Poster Ads" which
petitioner’s president said was a contraction of "poster advertising." P & D
was able to secure a trademark certificate for it, but one where the goods
specified were "stationeries such as letterheads, envelopes, calling cards and
newsletters."22 Petitioner admitted it did not commercially engage in or
market these goods. On the contrary, it dealt in electrically operated backlit
advertising units and the sale of advertising spaces thereon, which,
however, were not at all specified in the trademark certificate.

Under the circumstances, the Court of Appeals correctly cited Faberge Inc.

vs. Intermediate Appellate Court,23where we, invoking Section 20 of the old
Trademark Law, ruled that "the certificate of registration issued by the
Director of Patents can confer (upon petitioner) the exclusive right to use its
own symbol only to those goods specified in the certificate, subject to any
conditions and limitations specified in the certificate x x x. One who has
adopted and used a trademark on his goods does not prevent the adoption
and use of the same trademark by others for products which are of a
different description."24 Faberge, Inc. was correct and was in fact recently
reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.25

Assuming arguendo that "Poster Ads" could validly qualify as a trademark,

the failure of P & D to secure a trademark registration for specific use on the
light boxes meant that there could not have been any trademark
infringement since registration was an essential element thereof.1âwphi1

ON THE ISSUE OF UNFAIR COMPETITION

If at all, the cause of action should have been for unfair competition, a
situation which was possible even if P & D had no registration.26 However,
while the petitioner’s complaint in the RTC also cited unfair competition, the
trial court did not find private respondents liable therefor. Petitioner
did not appeal this particular point; hence, it cannot now revive its claim of
unfair competition.

But even disregarding procedural issues, we nevertheless cannot hold

respondents guilty of unfair competition.

By the nature of things, there can be no unfair competition under the law on
copyrights although it is applicable to disputes over the use of trademarks.
Even a name or phrase incapable of appropriation as a trademark or
tradename may, by long and exclusive use by a business (such that the
name or phrase becomes associated with the business or product in the
mind of the purchasing public), be entitled to protection against unfair
competition.27 In this case, there was no evidence that P & D’s use of "Poster
Ads" was distinctive or well-known. As noted by the Court of Appeals,
petitioner’s expert witnesses himself had testified that " ‘Poster Ads’ was too
generic a name. So it was difficult to identify it with any company, honestly
speaking."28 This crucial admission by its own expert witness that "Poster
Ads" could not be associated with P & D showed that, in the mind of the
public, the goods and services carrying the trademark "Poster Ads" could not
be distinguished from the goods and services of other entities.

This fact also prevented the application of the doctrine of secondary

meaning. "Poster Ads" was generic and incapable of being used as a
trademark because it was used in the field of poster advertising, the very
business engaged in by petitioner. "Secondary meaning" means that a word
or phrase originally incapable of exclusive appropriation with reference to an
article in the market (because it is geographically or otherwise descriptive)
might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of
the purchasing public, the word or phrase has come to mean that the article
was his property.29 The admission by petitioner’s own expert witness that he
himself could not associate "Poster Ads" with petitioner P & D because it was
"too generic" definitely precluded the application of this exception.

Having discussed the most important and critical issues, we see no need to
belabor the rest.

All told, the Court finds no reversible error committed by the Court of
Appeals when it reversed the Regional Trial Court of Makati City.

WHEREFORE, the petition is hereby DENIED and the decision of the Court
of Appeals dated May 22, 2001 is AFFIRMED in toto.

SO ORDERED.

Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio-Morales, JJ.,

concur.

SECOND DIVISION
 
PHIL PHARMAWEALTH, INC., G.R. No. 167715
Petitioner,  
  Present:
   
  CARPIO, J., Chairperson,
- versus - NACHURA,
  PERALTA,
  ABAD, and
  MENDOZA, JJ.
   
  Promulgated:
PFIZER, INC. and PFIZER (PHIL.)  
INC., November 17, 2010
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
----x
 
 
DECISION
 
 
PERALTA, J.:
 
 
Before the Court is a petition for review on certiorari seeking to annul and
set aside the Resolutions dated January 18, 2005[1] and April 11, 2005[2] by
the Court of Appeals (CA) in CA-G.R. SP No. 82734.
 
The instant case arose from a Complaint[3] for patent infringement filed
against petitioner Phil Pharmawealth, Inc. by respondent companies, Pfizer,
Inc. and Pfizer (Phil.), Inc., with the Bureau of Legal Affairs of the
Intellectual Property Office (BLA-IPO). The Complaint alleged as follows:
xxxx
6. Pfizer is the registered owner of Philippine Letters Patent No.
21116 (the Patent) which was issued by this Honorable Office on
July 16, 1987. The patent is valid until July 16, 2004. The claims
of this Patent are directed to a method of increasing the
effectiveness of a beta-lactam antibiotic in a mammalian subject,
which comprises co-administering to said subject a beta-lactam
antibiotic effectiveness increasing amount of a compound of the
formula IA. The scope of the claims of the Patent extends to a
combination of penicillin such as ampicillin sodium and beta-
lactam antibiotic like sulbactam sodium.
 
7. Patent No. 21116 thus covers ampicillin sodium/sulbactam
sodium (hereafter Sulbactam Ampicillin). Ampicillin sodium is a
specific example of the broad beta-lactam antibiotic disclosed
and claimed in the Patent. It is the compound which efficacy is
being enhanced by co-administering the same with sulbactam
sodium. Sulbactam sodium, on the other hand, is a specific
compound of the formula IA disclosed and claimed in the Patent.
 
8. Pfizer is marketing Sulbactam Ampicillin under the brand
name Unasyn. Pfizer's Unasyn products, which come in oral and
IV formulas, are covered by Certificates of Product Registration
(CPR) issued by the Bureau of Food and Drugs (BFAD) under the
name of complainants. The sole and exclusive distributor of
Unasyn products in the Philippines is Zuellig Pharma Corporation,
pursuant to a Distribution Services Agreement it executed with
Pfizer Phils. on January 23, 2001.
 
9. Sometime in January and February 2003, complainants came
to know that respondent [herein petitioner] submitted bids for
the supply of Sulbactam Ampicillin to several hospitals without
the consent of complainants and in violation of the complainants'
intellectual property rights. x x x
xxxx
10. Complainants thus wrote the above hospitals and demanded
that the latter immediately cease and desist from accepting bids
for the supply [of] Sulbactam Ampicillin or awarding the same to
entities other than complainants. Complainants, in the same
letters sent through undersigned counsel, also demanded that
respondent immediately withdraw its bids to supply Sulbactam
Ampicillin.
 
11. In gross and evident bad faith, respondent and the hospitals
named in paragraph 9 hereof, willfully ignored complainants'
just, plain and valid demands, refused to comply therewith and
continued to infringe the Patent, all to the damage and prejudice
of complainants. As registered owner of the Patent, Pfizer is
entitled to protection under Section 76 of the IP Code.
 
 x x x x[4]
Respondents prayed for permanent injunction, damages and the forfeiture
and impounding of the alleged infringing products. They also asked for the
issuance of a temporary restraining order and a preliminary injunction that
would prevent herein petitioner, its agents, representatives and assigns,
from importing, distributing, selling or offering the subject product for sale
to any entity in the Philippines.
In an Order[5] dated July 15, 2003 the BLA-IPO issued a preliminary
injunction which was effective for ninety days from petitioner's receipt of the
said Order.
 
Prior to the expiration of the ninety-day period, respondents filed a Motion
for Extension of Writ of Preliminary Injunction[6] which, however, was denied
by the BLA-IPO in an Order[7] dated October 15, 2003.
 
Respondents filed a Motion for Reconsideration but the same was also
denied by the BLA-IPO in a Resolution[8] dated January 23, 2004.
 
Respondents then filed a special civil action for certiorari with the CA
assailing the October 15, 2003 and January 23, 2004 Resolutions of the BLA-
IPO. Respondents also prayed for the issuance of a preliminary mandatory
injunction for the reinstatement and extension of the writ of preliminary
injunction issued by the BLA-IPO.
 
While the case was pending before the CA, respondents filed a
Complaint[9] with the Regional Trial Court (RTC) of Makati City for
infringement and unfair competition with damages against herein petitioner.
In said case, respondents prayed for the issuance of a temporary restraining
order and preliminary injunction to prevent herein petitioner from importing,
distributing, selling or offering for sale sulbactam ampicillin products to any
entity in the Philippines. Respondents asked the trial court that, after trial,
judgment be rendered awarding damages in their favor and making the
injunction permanent.
 
On August 24, 2004, the RTC of Makati City issued an Order [10] directing the
issuance of a temporary restraining order conditioned upon respondents'
filing of a bond.
 
In a subsequent Order[11] dated April 6, 2005, the same RTC directed the
issuance of a writ of preliminary injunction prohibiting and restraining
[petitioner], its agents, representatives and assigns from importing,
distributing or selling Sulbactam Ampicillin products to any entity in the
Philippines.
 
Meanwhile, on November 16, 2004, petitioner filed a Motion to
Dismiss[12] the petition filed with the CA on the ground of forum shopping,
contending that the case filed with the RTC has the same objective as the
petition filed with the CA, which is to obtain an injunction prohibiting
petitioner from importing, distributing and selling Sulbactam Ampicillin
products.
 
On January 18, 2005, the CA issued its questioned Resolution [13] approving
the bond posted by respondents pursuant to the Resolution issued by the
appellate court on March 23, 2004 which directed the issuance of a
temporary restraining order conditioned upon the filing of a bond. On even
date, the CA issued a temporary restraining order[14] which prohibited
petitioner from importing, distributing, selling or offering for sale Sulbactam
Ampicillin products to any hospital or to any other entity in the Philippines,
or from infringing Pfizer Inc.'s Philippine Patent No. 21116 and impounding
all the sales invoices and other documents evidencing sales by [petitioner] of
Sulbactam Ampicillin products.
 
On February 7, 2005, petitioner again filed a Motion to Dismiss[15] the case
for being moot and academic, contending that respondents' patent had
already lapsed. In the same manner, petitioner also moved for the
reconsideration of the temporary restraining order issued by the CA on the
same basis that the patent right sought to be protected has been
extinguished due to the lapse of the patent license and on the ground that
the CA has no jurisdiction to review the order of the BLA-IPO as said
jurisdiction is vested by law in the Office of the Director General of the IPO.
 
On April 11, 2005, the CA rendered its presently assailed Resolution denying
the Motion to Dismiss, dated November 16, 2004, and the motion for
reconsideration, as well as Motion to Dismiss, both dated February 7, 2005.
 
Hence, the present petition raising the following issues:
 
a) Can an injunctive relief be issued based on an action of patent
infringement when the patent allegedly infringed has already
lapsed?
 
b) What tribunal has jurisdiction to review the decisions of the
Director of Legal Affairs of the Intellectual Property Office?
 
c) Is there forum shopping when a party files two actions with
two seemingly different causes of action and yet pray for the
same relief?[16]
 
 
In the first issue raised, petitioner argues that respondents' exclusive right
to monopolize the subject matter of the patent exists only within the term of
the patent. Petitioner claims that since respondents' patent expired on July
16, 2004, the latter no longer possess any right of monopoly and, as such,
there is no more basis for the issuance of a restraining order or injunction
against petitioner insofar as the disputed patent is concerned.
 
The Court agrees.
 
Section 37 of Republic Act No. (RA) 165,[17] which was the governing law at
the time of the issuance of respondents' patent, provides:
 
Section 37. Rights of patentees.  A patentee shall have the
exclusive right to make, use and sell the patented machine,
article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of the
Philippines for the term of the patent; and such making,
using, or selling by any person without the authorization of the
patentee constitutes infringement of the patent.[18]
 
 
It is clear from the above-quoted provision of law that the exclusive right of
a patentee to make, use and sell a patented product, article or process
exists only during the term of the patent. In the instant case, Philippine
Letters Patent No. 21116, which was the basis of respondents in filing their
complaint with the BLA-IPO, was issued on July 16, 1987. This fact was
admitted by respondents themselves in their complaint. They also admitted
that the validity of the said patent is until July 16, 2004, which is in
conformity with Section 21 of RA 165, providing that the term of a patent
shall be seventeen (17) years from the date of issuance thereof. Section 4,
Rule 129 of the Rules of Court provides that an admission, verbal or written,
made by a party in the course of the proceedings in the same case, does not
require proof and that the admission may be contradicted only by showing
that it was made through palpable mistake or that no such admission was
made. In the present case, there is no dispute as to respondents' admission
that the term of their patent expired on July 16, 2004. Neither is there
evidence to show that their admission was made through palpable mistake.
Hence, contrary to the pronouncement of the CA, there is no longer any
need to present evidence on the issue of expiration of respondents' patent.
 
On the basis of the foregoing, the Court agrees with petitioner that after July
16, 2004, respondents no longer possess the exclusive right to make, use
and sell the articles or products covered by Philippine Letters Patent No.
21116.
 
Section 3, Rule 58, of the Rules of Court lays down the requirements for the
issuance of a writ of preliminary injunction, viz:
 
(a) That the applicant is entitled to the relief demanded,
and the whole or part of such relief consists in restraining the
commission or continuance of the acts complained of, or in
requiring the performance of an act or acts, either for a limited
period or perpetually;
 
 (b) That the commission, continuance or non-performance
of the act or acts complained of during the litigation would
probably work injustice to the applicant; or
 
(c)    That a party, court, or agency or a person is doing,
threatening, or attempting to do, or is procuring or suffering to
be done, some act or acts probably in violation of the rights of
the applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.
 
 
In this connection, pertinent portions of Section 5, Rule 58 of the same
Rules provide that if the matter is of extreme urgency and the applicant will
suffer grave injustice and irreparable injury, a temporary restraining order
may be issued ex parte.
 
From the foregoing, it can be inferred that two requisites must exist to
warrant the issuance of an injunctive relief, namely: (1) the existence of a
clear and unmistakable right that must be protected; and (2) an urgent and
paramount necessity for the writ to prevent serious damage.[19]
 
In the instant case, it is clear that when the CA issued its January 18, 2005
Resolution approving the bond filed by respondents, the latter no longer had
a right that must be protected, considering that Philippine Letters Patent No.
21116 which was issued to them already expired on July 16, 2004. Hence,
the issuance by the CA of a temporary restraining order in favor of the
respondents is not proper.
 
In fact, the CA should have granted petitioner's motion to dismiss the
petition for certiorari filed before it as the only issue raised therein is the
propriety of extending the writ of preliminary injunction issued by the BLA-
IPO. Since the patent which was the basis for issuing the injunction, was no
longer valid, any issue as to the propriety of extending the life of the
injunction was already rendered moot and academic.
 
As to the second issue raised, the Court, is not persuaded by petitioner's
argument 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.
 
It is true that under Section 7(b) of RA 8293, otherwise known as
the Intellectual Property Code of the Philippines, which is the presently
prevailing law, the Director General of the IPO exercises exclusive appellate
jurisdiction over all decisions rendered by the Director of the BLA-IPO.
However, what is being questioned before the CA is not a decision, but an
interlocutory order of the BLA-IPO denying respondents' motion to extend
the life of the preliminary injunction issued in their favor.
 
RA 8293 is silent with respect to any remedy available to litigants who
intend to question an interlocutory order issued by the BLA-IPO. Moreover,
Section 1(c), Rule 14 of the Rules and Regulations on Administrative
Complaints for Violation of Laws Involving Intellectual Property Rights simply
provides that interlocutory orders shall not be appealable. The said Rules
and Regulations do not prescribe a procedure within the administrative
machinery to be followed in assailing orders issued by the BLA-IPO pending
final resolution of a case filed with them. Hence, in the absence of such a
remedy, the provisions of the Rules of Court shall apply in a suppletory
manner, as provided under Section 3, Rule 1 of the same Rules and
Regulations. Hence, in the present case, respondents correctly resorted to
the filing of a special civil action for certiorari with the CA to question the
assailed Orders of the BLA-IPO, as they cannot appeal therefrom and they
have no other plain, speedy and adequate remedy in the ordinary course of
law. This is consistent with Sections 1[20] and 4,[21] Rule 65 of the Rules of
Court, as amended.
In the first place, respondents' act of filing their complaint originally with the
BLA-IPO is already in consonance with the doctrine of primary jurisdiction.
 
This Court has held that:
 
[i]n cases involving specialized disputes, the practice has been to
refer the same to an administrative agency of special
competence in observance of the doctrine of primary jurisdiction.
The Court has ratiocinated that it cannot or will not determine a
controversy involving a question which is within the jurisdiction
of the administrative tribunal prior to the resolution of that
question by the administrative tribunal, where the question
demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the
administrative tribunal to determine technical and intricate
matters of fact, and a uniformity of ruling is essential to comply
with the premises of the regulatory statute administered. The
objective of the doctrine of primary jurisdiction is to guide a
court in determining whether it should refrain from exercising its
jurisdiction until after an administrative agency has determined
some question or some aspect of some question arising in the
proceeding before the court. It applies where the claim is
originally cognizable in the courts and comes into play whenever
enforcement of the claim requires the resolution of issues which,
under a regulatory scheme, has been placed within the special
competence of an administrative body; in such case, the judicial
process is suspended pending referral of such issues to the
administrative body for its view.[22]
 
Based on the foregoing, the Court finds that respondents' initial filing of their
complaint with the BLA-IPO, instead of the regular courts, is in keeping with
the doctrine of primary jurisdiction owing to the fact that the determination
of the basic issue of whether petitioner violated respondents' patent rights
requires the exercise by the IPO of sound administrative discretion which is
based on the agency's special competence, knowledge and experience.
However, the propriety of extending the life of the writ of preliminary
injunction issued by the BLA-IPO in the exercise of its quasi-judicial power is
no longer a matter that falls within the jurisdiction of the said administrative
agency, particularly that of its Director General. The resolution of this issue
which was raised before the CA does not demand the exercise by the IPO of
sound administrative discretion requiring special knowledge, experience and
services in determining technical and intricate matters of fact. It is settled
that one of the exceptions to the doctrine of primary jurisdiction is where the
question involved is purely legal and will ultimately have to be decided by
the courts of justice.[23] This is the case with respect to the issue raised in
the petition filed with the CA.
 
Moreover, as discussed earlier, RA 8293 and its implementing rules and
regulations do not provide for a procedural remedy to question interlocutory
orders issued by the BLA-IPO. In this regard, it bears to reiterate that the
judicial power of the courts, as provided for under the Constitution, includes
the authority of the courts to determine in an appropriate action the validity
of the acts of the political departments.[24] Judicial power also includes the
duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the
Government.[25] Hence, the CA, and not the IPO Director General, has
jurisdiction to determine whether the BLA-IPO committed grave abuse of
discretion in denying respondents' motion to extend the effectivity of the
writ of preliminary injunction which the said office earlier issued.
Lastly, petitioner avers that respondents are guilty of forum shopping for
having filed separate actions before the IPO and the RTC praying for the
same relief.
 
The Court agrees.
 
Forum shopping is defined as the act of a party against whom an adverse
judgment has been rendered in one forum, of seeking another (and possibly
favorable) opinion in another forum (other than by appeal or the special civil
action of certiorari), or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition that one or the
other court would make a favorable disposition.[26]
 
The elements of forum shopping are: (a) identity of parties, or at least such
parties that represent the same interests in both actions; (b) identity of
rights asserted and reliefs prayed for, the reliefs being founded on the same
facts; (c) identity of the two preceding particulars, such that any judgment
rendered in the other action will, regardless of which party is successful,
amount to res judicata in the action under consideration.[27]
 
There is no question as to the identity of parties in the complaints filed with
the IPO and the RTC.
 
Respondents argue that they cannot be held guilty of forum shopping
because their complaints are based on different causes of action as shown
by the fact that the said complaints are founded on violations of different
patents.
The Court is not persuaded.
 
Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or
omission by which a party violates a right of another. In the instant case,
respondents' cause of action in their complaint filed with the IPO is the
alleged act of petitioner in importing, distributing, selling or offering for sale
Sulbactam Ampicillin products, acts that are supposedly violative of
respondents' right to the exclusive sale of the said products which are
covered by the latter's patent. However, a careful reading of the complaint
filed with the RTC of Makati City would show that respondents have the
same cause of action as in their complaint filed with the IPO. They claim that
they have the exclusive right to make, use and sell Sulbactam Ampicillin
products and that petitioner violated this right. Thus, it does not matter that
the patents upon which the complaints were based are different. The fact
remains that in both complaints the rights violated and the acts violative of
such rights are identical.
 
In fact, respondents seek substantially the same reliefs in their separate
complaints with the IPO and the RTC for the purpose of accomplishing the
same objective.
 
It is settled by this Court in several cases that the filing by a party of two
apparently different actions but with the same objective constitutes forum
shopping.[28] The Court discussed this species of forum shopping as follows:
Very simply stated, the original complaint in the court a
quo which gave rise to the instant petition was filed by the
buyer (herein private respondent and his predecessors-in-
interest) against the seller (herein petitioners) to enforce
the alleged perfected sale of real estate. On the other hand,
the complaint in the Second Case seeks to declare such
purported sale involving the same real property as
unenforceable as against the Bank, which is the petitioner
herein. In other words, in the Second Case, the majority
stockholders, in representation of the Bank, are seeking to
accomplish what the Bank itself failed to do in the original
case in the trial court. In brief, the objective or the
relief being sought, though worded differently, is the
same, namely, to enable the petitioner Bank to
escape from the obligation to sell the property to
respondent.[29]
 
  
In Danville Maritime, Inc. v. Commission on Audit, [30] the Court ruled
as follows:
 
In the attempt to make the two actions appear to be different,
petitioner impleaded different respondents therein PNOC in the
case before the lower court and the COA in the case before this
Court and sought what seems to be different reliefs. Petitioner
asks this Court to set aside the questioned letter-directive of the
COA dated October 10, 1988 and to direct said body to approve
the Memorandum of Agreement entered into by and between the
PNOC and petitioner, while in the complaint before the lower
court petitioner seeks to enjoin the PNOC from conducting a
rebidding and from selling to other parties the vessel T/T Andres
Bonifacio, and for an extension of time for it to comply with the
paragraph 1 of the memorandum of agreement and
damages. One can see that although the relief prayed for in
the two (2) actions are ostensibly different, the ultimate
objective in both actions is the same, that is, the approval
of the sale of vessel in favor of petitioner, and to overturn
the letter directive of the COA of October 10,
1988 disapproving the sale.[31]
 
 
In the instant case, the prayer of respondents in their complaint filed with
the IPO is as follows:
 
A. Immediately upon the filing of this action, issue an ex
parte order (a) temporarily restraining respondent, its agents,
representatives and assigns from importing, distributing, selling
or offering for sale Sulbactam Ampicillin products to the hospitals
named in paragraph 9 of this Complaint or to any other entity in
the Philippines, or from otherwise infringing Pfizer Inc.'s
Philippine Patent No. 21116; and (b) impounding all the sales
invoices and other documents evidencing sales by respondent of
Sulbactam Ampicillin products.
 
B. After hearing, issue a writ of preliminary injunction enjoining
respondent, its agents, representatives and assigns from
importing, distributing, selling or offering for sale Sulbactam
Ampicillin products to the hospitals named in paragraph 9 of the
Complaint or to any other entity in the Philippines, or from
otherwise infringing Pfizer Inc.'s Philippine Patent No. 21116;
and
 
C. After trial, render judgment:
 
(i)                declaring that respondent has
infringed Pfizer Inc.'s Philippine Patent No.
21116 and that respondent has no right
whatsoever over complainant's patent;
 
 (ii) ordering respondent to pay complainants the
following amounts:
(a) at least P1,000,000.00 as actual damages;
(b) P700,000.00 as attorney's fees and litigation expenses;
(d) P1,000,000.00 as exemplary damages; and
(d) costs of this suit.
(iii) ordering the condemnation, seizure or forfeiture
of respondent's infringing goods or
products, wherever they may be found, including
the materials and implements used in the
commission of infringement, to be disposed of in
such manner as may be deemed appropriate by
this Honorable Office; and
 
(iv) making the injunction permanent.[32]
 
 
In an almost identical manner, respondents prayed for the following in their
complaint filed with the RTC:
(a) Immediately upon the filing of this action, issue an ex
parte order:
 
(1) temporarily restraining Pharmawealth, its agents,
representatives and assigns from importing, distributing,
selling or offering for sale infringing sulbactam
ampicillin products to various government and
private hospitals or to any other entity in the Philippines,
or from otherwise infringing Pfizer Inc.'s Philippine Patent
No. 26810.
 
(2) impounding all the sales invoices and
other documents evidencing sales by
pharmawealth of sulbactam ampicillin
products; and
 
(3) disposing of the infringing goods outside
the channels of commerce.
 
(b) After hearing, issue a writ of preliminary injunction:
 
(1) enjoining Pharmawealth, its agents,
representatives and assigns from
importing, distributing, selling or offering
for sale infringing sulbactam ampicillin
products to various government hospitals
or to any other entity in the Philippines,
or from otherwise infringing Patent No.
26810;
 
(2) impounding all the sales invoices and
other documents evidencing sales
by Pharmawealth of sulbactam
ampicillin products; and
  
(3) disposing of the infringing goods outside the channels
of commerce.
 
(c) After trial, render judgment:
 
(1) finding Pharmawealth to have
infringed Patent No. 26810 and
declaring Pharmawealth to have no right
whatsoever over plaintiff's patent;
 
(2) ordering Pharmawealth to pay plaintiffs
the following amounts:
(i) at least P3,000,000.00 as actual
damages;
(ii) P500,000.00 as attorney's fees and P1,000,000.00 as
litigation expenses;
(iii) P3,000,000.00 as exemplary
damages; and
(iv) costs of this suit.
(3) ordering the condemnation, seizure or
forfeiture of Pharmawealth's infringing
goods or products, wherever they may
be found, including the materials and
implements used in the commission of
infringement, to be disposed of in such
manner as may be deemed appropriate
by this Honorable Court; and
 
(4) making the injunction permanent.[33]
 
 
It is clear from the foregoing that the ultimate objective which respondents
seek to achieve in their separate complaints filed with the RTC and the IPO,
is to ask for damages for the alleged violation of their right to exclusively sell
Sulbactam Ampicillin products and to permanently prevent or prohibit
petitioner from selling said products to any entity.Owing to the substantial
identity of parties, reliefs and issues in the IPO and RTC cases, a decision in
one case will necessarily amount to res judicata in the other action.
 
It bears to reiterate that what is truly important to consider in determining
whether forum shopping exists or not is the vexation caused the courts and
parties-litigant by a party who asks different courts and/or administrative
agencies to rule on the same or related causes and/or to grant the same or
substantially the same reliefs, in the process creating the possibility of
conflicting decisions being rendered by the different fora upon the same
issue.[34]
 
Thus, the Court agrees with petitioner that respondents are indeed guilty of
forum shopping.
 
Jurisprudence holds that if the forum shopping is not considered willful and
deliberate, the subsequent case shall be dismissed without prejudice, on the
ground of either litis pendentia or res judicata.[35] However, if the forum
shopping is willful and deliberate, both (or all, if there are more than two)
actions shall be dismissed with prejudice.[36] In the present case, the Court
finds that respondents did not deliberately violate the rule on non-forum
shopping. Respondents may not be totally blamed for erroneously believing
that they can file separate actions simply on the basis of different patents.
Moreover, in the suit filed with the RTC of Makati City, respondents were
candid enough to inform the trial court of the pendency of the complaint filed
with the BLA-IPO as well as the petition for certiorari filed with the CA. On
these bases, only Civil Case No. 04-754 should be dismissed on the ground
of litis pendentia.
 
WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions
of the Court of Appeals, dated January 18, 2005 and April 11, 2005, in CA-
G.R. No. 82734, are REVERSED and SET ASIDE. The petition
for certiorari filed with the Court of Appeals is DISMISSED for being moot
and academic.
 
Civil Case No. 04-754, filed with the Regional Trial Court of Makati City,
Branch 138, is likewise DISMISSED on the ground of litis pendentia.
 
SO ORDERED.
SECOND DIVISION
ROMA DRUG and ROMEO G.R. No. 149907
RODRIGUEZ, as Proprietor
of ROMA DRUG, Present:
Petitioners,
QUISUMBING, J.,
Chairperson,
CARPIO-MORALES,
TINGA,
- versus - VELASCO, and
BRION, JJ.
Promulgated:
THE REGIONAL TRIAL COURT
OF GUAGUA, PAMPANGA, THE
PROVINCIAL PROSECUTOR OF April 16, 2009
PAMPANGA, BUREAU OF FOOD
& DRUGS (BFAD) and GLAXO
SMITHKLINE,
Respondents.
 
x----------------------------------------------------------------------------x
 
 
DECISION
 
TINGA, J.:
 
On 14 August 2000, a team composed of the National Bureau of
Investigation (NBI) operatives and inspectors of the Bureau of Food and
Drugs (BFAD) conducted a raid on petitioner Roma Drug, a

 
 
duly registered sole proprietorship of petitioner Romeo Rodriguez
(Rodriguez) operating a drug store located at San Matias, Guagua,
Pampanga. The raid was conducted pursuant to a search warrant [1] issued by
the Regional Trial Court (RTC), Branch 57, Angeles City. The raiding team
seized several imported medicines, including Augmentin (375mg.)
tablets, Orbenin (500mg.) capsules, Amoxil (250mg.) capsules
[2]
and Ampiclox (500mg.).  It appears that Roma Drug is one of six drug
stores which were raided on or around the same time upon the request of
SmithKline Beecham Research Limited (SmithKline), a duly registered
corporation which is the local distributor of pharmaceutical products
manufactured by its parent London-based corporation. The local SmithKline
has since merged with Glaxo Wellcome Phil. Inc to form Glaxo SmithKline,
private respondent in this case. The seized medicines, which were
manufactured by SmithKline, were imported directly from abroad and not
purchased through the local SmithKline, the authorized Philippine distributor
of these products.
 
The NBI subsequently filed a complaint against Rodriguez for violation of
Section 4 (in relation to Sections 3 and 5) of Republic Act No. 8203, also
known as the Special Law on Counterfeit Drugs (SLCD), with the Office of
the Provincial Prosecutor in San Fernando, Pampanga. The section prohibits
the sale of counterfeit drugs, which under Section 3(b)(3), includes an
unregistered imported drug product. The term unregistered signifies the lack
of registration with the Bureau of Patent, Trademark and Technology
Transfer of a trademark, tradename or other identification mark of a drug in
the name of a natural or juridical person, the process of which is governed
under Part III of the Intellectual Property Code.
 
In this case, there is no doubt that the subject seized drugs are identical in
content with their Philippine-registered counterparts. There is no claim that
they were adulterated in any way or mislabeled at least. Their classification
as counterfeit is based solely on the fact that they were imported from
abroad and not purchased from the Philippine-registered owner of the patent
or trademark of the drugs.
 
During preliminary investigation, Rodriguez challenged the
constitutionality of the SLCD. However, Assistant Provincial Prosecutor
Celerina C. Pineda skirted the challenge and issued a Resolution dated 17
August 2001 recommending that Rodriguez be charged with violation of
Section 4(a) of the SLCD. The recommendation was approved by Provincial
Prosecutor Jesus Y. Manarang approved the recommendation.[3]
 
Hence, the present Petition for Prohibition questing the RTC-Guagua
Pampanga and the Provincial Prosecutor to desist from further prosecuting
Rodriguez, and that Sections 3(b)(3), 4 and 5 of the SLCD be declared
unconstitutional. In gist, Rodriguez asserts that the challenged provisions
contravene three provisions of the Constitution. The first is the equal
protection clause of the Bill of Rights. The two other provisions are Section
11, Article XIII, which mandates that the State make essential goods, health
and other social services available to all the people at affordable cost; and
Section 15, Article II, which states that it is the policy of the State to protect
and promote the right to health of the people and instill health
consciousness among them.
 
Through its Resolution dated 15 October 2001, the Court issued a
temporary restraining order enjoining the RTC from proceeding with the trial
against Rodriguez, and the BFAD, the NBI and Glaxo Smithkline from
prosecuting the petitioners.[4]
 
Glaxo Smithkline and the Office of the Solicitor General (OSG) have opposed
the petition, the latter in behalf of public respondents RTC, Provincial
Prosecutor and Bureau of Food and Drugs (BFAD). On the constitutional
issue, Glaxo Smithkline asserts the rule that the SLCD is presumed
constitutional, arguing that both Section 15, Article II and Section 11, Article
XIII are not self-executing provisions, the disregard of which can give rise to
a cause of action in the courts. It adds that Section 11, Article XIII in
particular cannot be work to the oppression and unlawful of the property
rights of the legitimate manufacturers, importers or distributors, who take
pains in having imported drug products registered before the BFAD. Glaxo
Smithkline further claims that the SLCD does not in fact conflict with the
aforementioned constitutional provisions and in fact are in accord with
constitutional precepts in favor of the peoples right to health.
 
The Office of the Solicitor General casts the question as one of policy wisdom
of the law that is, beyond the interference of the judiciary.[5] Again, the
presumption of constitutionality of statutes is invoked, and the assertion is
made that there is no clear and unequivocal breach of the Constitution
presented by the SLCD.
 
II.
 
The constitutional aspect of this petition raises obviously interesting
questions. However, such questions have in fact been mooted with the
passage in 2008 of Republic Act No. 9502, also known as the Universally
Accessible Cheaper and Quality Medicines Act of 2008.[6]
 
Section 7 of Rep. Act No. 9502 amends Section 72 of the Intellectual
Property Code in that the later law unequivocally grants third persons the
right to import drugs or medicines whose patent were registered in
the Philippines by the owner of the product:
 
Sec. 7. Section 72 of Republic Act No. 8293, otherwise
known as the Intellectual Property Code of the Philippines, is
hereby amended to read as follows:

Sec. 72. Limitations of Patent Rights. The owner of a

patent has no right to prevent third parties from performing,
without his authorization, the acts referred to in Section 71
hereof in the following circumstances:

72.1. Using a patented product which has been put on the

market in the Philippines by the owner of the product, or with his
express consent, insofar as such use is performed after that
product has been so put on the said market: Provided, That,
with regard to drugs and medicines, the limitation on
patent rights shall apply after a drug or medicine has
been introduced in the Philippines or anywhere else in the
world by the patent owner,
or by any party authorized to use the invention: Provided,
further, That the right to import the drugs and medicines
contemplated in this section shall be available to any
government agency or any  private third party;

72.2. Where the act is done privately and on a non-commercial

 scale or for a non-commercial purpose: Provided, That it does
not significantly prejudice the economic interests of the owner of
the patent;

72.3. Where the act consists of making or using exclusively for

experimental use of the invention for scientific purposes or
educational purposes and such other activities directly related to
such scientific or educational experimental use;

72.4. In the case of drugs and medicines, where the act includes
testing, using, making or selling the invention including any data
related thereto, solely for purposes reasonably related to the
development and submission of information and issuance of
approvals by government regulatory agencies required under
any law of the Philippines or of another country that regulates
the manufacture, construction, use or sale of any product:
Provided, That, in order to protect the data submitted by the
original patent holder from unfair commercial use provided in
Article 39.3 of the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS Agreement), the Intellectual
Property Office, in consultation with the appropriate government
agencies, shall issue the appropriate rules and regulations
necessary therein not later than one hundred twenty (120) days
after the enactment of this law;

 72.5.  Where the act consists of the preparation for individual

cases, in a pharmacy or by a medical professional, of a medicine
in accordance with a medical shall apply after a drug or medicine
has been introduced in the Philippines or anywhere else in the
world by the patent owner, or by any party authorized to use the
invention: Provided, further, That the right to import the drugs
and medicines contemplated in this section shall be available to
any government agency or any  private third party; xxx[7]
 
The unqualified right of private third parties such as petitioner to import or
possess unregistered imported drugs in the Philippines is further confirmed
by the Implementing Rules to Republic Act No. 9502 promulgated on 4
November 2008.[8] The relevant provisions thereof read:
 
Rule 9. Limitations on Patent Rights. The owner of a
patent has no right to prevent third parties from performing,
without his authorization, the acts referred to in Section 71 of
the IP Code as enumerated hereunder:
 
(i) Introduction in the Philippines or Anywhere Else in the
World.
 
Using a patented product which has been put on the
market in the Philippines by the owner of the product, or with his
express consent, insofar as such use is performed after that
product has been so put on the said market: Provided, That,
with regard to drugs and medicines, the limitation on patent
 rights shall apply after a drug or medicine has been introduced in
the Philippines or anywhere else in the world by the patent
owner, or by any party authorized to use the
invention: Provided, further, That the right to import the drugs
and medicines contemplated in this section shall be available to
any government agency or any private third party. (72.1)
 
The drugs and medicines are deemed introduced when
they have been sold or offered for sale anywhere else in the
world. (n)
 
 
It may be that Rep. Act No. 9502 did not expressly repeal any
provision of the SLCD. However, it is clear that the SLCOs classification of
unregistered imported drugs as counterfeit drugs, and of corresponding
criminal penalties therefore are irreconcilably in the imposition conflict with
Rep. Act No. 9502 since the latter indubitably grants private third persons
the unqualified right to import or otherwise use such drugs. Where a statute
of later date, such as Rep. Act No. 9502, clearly reveals an intention on the
part of the legislature to abrogate a prior act on the subject that intention
must be given effect.[9] When a subsequent enactment covering a field of
operation coterminus with a prior statute cannot by any reasonable
construction be given effect while the prior law remains in operative
existence because of irreconcilable conflict between the two acts, the latest
legislative expression prevails and the prior law yields to the extent of the
conflict.[10] Irreconcilable inconsistency between two laws embracing the
same subject may exist when the later law nullifies the reason or purpose of
the earlier act, so that the latter loses all meaning and function.[11] Legis
posteriors priores contrarias abrogant.
 
For the reasons above-stated, the prosecution of petitioner is no
longer warranted and the quested writ of prohibition should accordingly be
issued.

 
III.
 
Had the Court proceeded to directly confront the constitutionality of
the assailed provisions of the SLCD, it is apparent that it would have at least
placed in doubt the validity of the provisions. As written, the law makes a
criminal of any person who imports an unregistered drug regardless of the
purpose, even if the medicine can spell life or death for someone in
the Philippines. It does not accommodate the situation where the drug is out
of stock in the Philippines, beyond the reach of a patient who urgently
depends on it. It does not allow husbands, wives, children, siblings, parents
to import the drug in behalf of their loved ones too physically ill to travel and
avail of the meager personal use exemption allotted by the law. It
discriminates, at the expense of health, against poor Filipinos without means
to travel abroad to purchase less expensive medicines in favor of their
wealthier brethren able to do so. Less urgently perhaps, but still within the
range of constitutionally protected behavior, it deprives Filipinos to choose a
less expensive regime for their health care by denying them a plausible and
safe means of purchasing medicines at a cheaper cost.
 
The absurd results from this far-reaching ban extends to implications that
deny the basic decencies of humanity. The law would make criminals of
doctors from abroad on medical missions of such humanitarian organizations
such as the International Red Cross,
the International Red Crescent, Medicin Sans Frontieres, and other

 
 
like-minded groups who necessarily bring their own pharmaceutical drugs
when they embark on their missions of mercy. After all, they are disabled
from invoking the bare personal use exemption afforded by the SLCD.
 
Even worse is the fact that the law is not content with simply banning, at
civil costs, the importation of unregistered drugs. It equates the importers of
such drugs, many of whom motivated to do so out of altruism or basic
human love, with the malevolents who would alter or counterfeit
pharmaceutical drugs for reasons of profit at the expense of public safety.
Note that the SLCD is a special law, and the traditional treatment of penal
provisions of special laws is that of malum prohibitumor punishable
regardless of motive or criminal intent. For a law that is intended to help
save lives, the SLCD has revealed itself as a heartless,
soulless legislative piece.
 
The challenged provisions of the SLCD apparently proscribe a range of
constitutionally permissible behavior. It is laudable that with the passage of
Rep. Act No. 9502, the State has reversed course and allowed for a sensible
and compassionate approach with respect to the importation of
pharmaceutical drugs urgently necessary for the peoples constitutionally-
recognized right to health.
 

 
 
WHEREFORE, the petition is GRANTED in part. A writ of prohibition is
hereby ISSUED commanding respondents from prosecuting petitioner
Romeo Rodriguez for violation of Section 4 or Rep. Act No. 8203. The
Temporary Restraining Order dated 15 October 2001 is hereby
made PERMANENT. No pronouncements as to costs.
 
SO ORDERED.

[G. R. No. 126627. August 14, 2003]

SMITH KLINE BECKMAN CORPORATION, petitioner, vs. THE

HONORABLE COURT OF APPEALS and TRYCO PHARMA
CORPORATION, respondents.

DECISION
CARPIO-MORALES, J.:

Smith Kline Beckman Corporation (petitioner), a corporation existing by

virtue of the laws of the state of Pennsylvania, United States of America
(U.S.) and licensed to do business in the Philippines, filed on October 8,
1976, as assignee, before the Philippine Patent Office (now Bureau of
Patents, Trademarks and Technology Transfer) an application for patent over
an invention entitled Methods and Compositions for Producing Biphasic
Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole
Carbamate. The application bore Serial No. 18989.
On September 24, 1981, Letters Patent No. 14561[1] for the aforesaid
invention was issued to petitioner for a term of seventeen (17) years.
The letters patent provides in its claims[2] that the patented invention
consisted of a new compound named methyl 5 propylthio-2-benzimidazole
carbamate and the methods or compositions utilizing the compound as an
active ingredient in fighting infections caused by gastrointestinal parasites
and lungworms in animals such as swine, sheep, cattle, goats, horses, and
even pet animals.
Tryco Pharma Corporation (private respondent) is a domestic corporation
that manufactures, distributes and sells veterinary products including
Impregon, a drug that has Albendazole for its active ingredient and is
claimed to be effective against gastro-intestinal roundworms, lungworms,
tapeworms and fluke infestation in carabaos, cattle and goats.
 Petitioner sued private respondent for infringement of patent and unfair
competition before the Caloocan City Regional Trial Court (RTC).[3] It claimed
that its patent covers or includes the substance Albendazole such that
private respondent, by manufacturing, selling, using, and causing to be sold
and used the drug Impregon without its authorization, infringed Claims 2, 3,
4, 7, 8 and 9 of Letters Patent No. 14561 [4] as well as committed unfair
competition under Article 189, paragraph 1 of the Revised Penal Code and
Section 29 of Republic Act No. 166 (The Trademark Law) for advertising and
selling as its own the drug Impregon although the same contained
petitioners patented Albendazole.[5]
On motion of petitioner, Branch 125 of the Caloocan RTC issued a
temporary restraining order against private respondent enjoining it from
committing acts of patent infringement and unfair competition.[6] A writ of
preliminary injunction was subsequently issued.[7]
Private respondent in its Answer[8] averred that Letters Patent No. 14561
does not cover the substance Albendazole for nowhere in it does that word
appear; that even if the patent were to include Albendazole, such substance
is unpatentable; that the Bureau of Food and Drugs allowed it to
manufacture and market Impregon with Albendazole as its known
ingredient; that there is no proof that it passed off in any way its veterinary
products as those of petitioner; that Letters Patent No. 14561 is null and
void, the application for the issuance thereof having been filed beyond the
one year period from the filing of an application abroad for the same
invention covered thereby, in violation of Section 15 of Republic Act No. 165
(The Patent Law); and that petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such
amount of actual damages as may be proven; P1,000,000.00 in moral
damages; P300,000.00 in exemplary damages; and P150,000.00 in
attorneys fees.
Finding for private respondent, the trial court rendered a Decision dated
July 23, 1991,[9] the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is

hereby, DISMISSED. The Writ of injunction issued in connection with the
case is hereby ordered DISSOLVED.

The Letters Patent No. 14561 issued by the then Philippine Patents Office is
hereby declared null and void for being in violation of Sections 7, 9 and 15 of
the Patents Law.

Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is

hereby directed to cancel Letters Patent No. 14561 issued to the plaintiff and
to publish such cancellation in the Official Gazette.

Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00

actual damages and P100,000.00 attorneys fees as prayed for in its
counterclaim but said amount awarded to defendant is subject to the lien on
correct payment of filing fees.

SO ORDERED. (Underscoring supplied)
 On appeal, the Court of Appeals, by Decision of April 21, 1995,[10] upheld
the trial courts finding that private respondent was not liable for any
infringement of the patent of petitioner in light of the latters failure to show
that Albendazole is the same as the compound subject of Letters Patent No.
14561. Noting petitioners admission of the issuance by the U.S. of a patent
for Albendazole in the name of Smith Kline and French Laboratories which
was petitioners former corporate name, the appellate court considered the
U.S. patent as implying that Albendazole is different from methyl 5
propylthio-2-benzimidazole carbamate. It likewise found that private
respondent was not guilty of deceiving the public by misrepresenting that
Impregon is its product.
The appellate court, however, declared that Letters Patent No. 14561
was not void as it sustained petitioners explanation that Patent Application
Serial No. 18989 which was filed on October 8, 1976 was a divisional
application of Patent Application Serial No. 17280 filed on June 17, 1975
with the Philippine Patent Office, well within one year from petitioners filing
on June 19, 1974 of its Foreign Application Priority Data No. 480,646 in the
U.S. covering the same compound subject of Patent Application Serial No.
17280.
Applying Section 17 of the Patent Law, the Court of Appeals thus ruled
that Patent Application Serial No. 18989 was deemed filed on June 17, 1995
or still within one year from the filing of a patent application abroad in
compliance with the one-year rule under Section 15 of the Patent Law. And it
rejected the submission that the compound in Letters Patent No. 14561 was
not patentable, citing the jurisprudentially established presumption that the
Patent Offices determination of patentability is correct. Finally, it ruled that
petitioner established itself to be the one and the same assignee of the
patent notwithstanding changes in its corporate name. Thus the appellate
court disposed:
WHEREFORE, the judgment appealed from is AFFIRMED
with the MODIFICATION that the orders for the
nullification of Letters Patent No. 14561 and for its
cancellation are deleted therefrom.

SO ORDERED.

Petitioners motion for reconsideration of the Court of Appeals decision

having been denied[11] the present petition for review on certiorari [12] was
filed, assigning as errors the following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT
ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCOS IMPREGON
DRUG, IS INCLUDED IN PETITIONERS LETTERS PATENT NO.
14561, AND THAT CONSEQUENTLY TRYCO IS ANSWERABLE FOR
PATENT INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN
AWARDING TO PRIVATE RESPONDENT TRYCO PHARMA
CORPORATION P330,000.00 ACTUAL DAMAGES AND P100,000.00
ATTORNEYS FEES.
Petitioner argues that under the doctrine of equivalents for determining
patent infringement, Albendazole, the active ingredient it alleges was
appropriated by private respondent for its drug Impregon, is substantially
the same as methyl 5 propylthio-2-benzimidazole carbamate covered by its
patent since both of them are meant to combat worm or parasite infestation
in animals. It cites the unrebutted testimony of its witness Dr. Godofredo C.
Orinion (Dr. Orinion) that the chemical formula in Letters Patent No. 14561
refers to the compound Albendazole.Petitioner adds that the two substances
substantially do the same function in substantially the same way to achieve
the same results, thereby making them truly identical. Petitioner thus
submits that the appellate court should have gone beyond the literal
wordings used in Letters Patent No. 14561, beyond merely applying the
literal infringement test, for in spite of the fact that the word Albendazole
does not appear in petitioners letters patent, it has ably shown by evidence
its sameness with methyl 5 propylthio-2-benzimidazole carbamate.
Petitioner likewise points out that its application with the Philippine
Patent Office on account of which it was granted Letters Patent No. 14561
was merely a divisional application of a prior application in the U. S. which
granted a patent for Albendazole. Hence, petitioner concludes that both
methyl 5 propylthio-2-benzimidazole carbamate and the U.S.-patented
Albendazole are dependent on each other and mutually contribute to
produce a single result, thereby making Albendazole as much a part of
Letters Patent No. 14561 as the other substance is.
Petitioner concedes in its Sur-Rejoinder[13] that although methyl 5
propylthio-2-benzimidazole carbamate is not identical with Albendazole, the
former is an improvement or improved version of the latter thereby making
both substances still substantially the same.
With respect to the award of actual damages in favor of private
respondent in the amount of P330,000.00 representing lost profits,
petitioner assails the same as highly speculative and conjectural, hence,
without basis. It assails too the award of P100,000.00 in attorneys fees as
not falling under any of the instances enumerated by law where recovery of
attorneys fees is allowed.
In its Comment,[14] private respondent contends that application of
the doctrine of equivalents would not alter the outcome of the case,
Albendazole and methyl 5 propylthio-2-benzimidazole carbamate being two
different compounds with different chemical and physical properties. It
stresses that the existence of a separate U.S. patent for Albendazole
indicates that the same and the compound in Letters Patent No. 14561 are
different from each other; and that since it was on account of a divisional
application that the patent for methyl 5 propylthio-2-benzimidazole
carbamate was issued, then, by definition of a divisional application, such a
compound is just one of several independent inventions alongside
Albendazole under petitioners original patent application.
As has repeatedly been held, only questions of law may be raised in a
petition for review on certiorari before this Court. Unless the factual findings
of the appellate court are mistaken, absurd, speculative, conjectural,
conflicting, tainted with grave abuse of discretion, or contrary to the findings
culled by the court of origin,[15] this Court does not review them.
From an examination of the evidence on record, this Court finds nothing
infirm in the appellate courts conclusions with respect to the principal issue
of whether private respondent committed patent infringement to the
prejudice of petitioner.
 The burden of proof to substantiate a charge for patent infringement
rests on the plaintiff.[16] In the case at bar, petitioners evidence consists
primarily of its Letters Patent No. 14561, and the testimony of Dr. Orinion,
its general manager in the Philippines for its Animal Health Products
Division, by which it sought to show that its patent for the compound methyl
5 propylthio-2-benzimidazole carbamate also covers the substance
Albendazole.
From a reading of the 9 claims of Letters Patent No. 14561 in relation to
the other portions thereof, no mention is made of the compound
Albendazole. All that the claims disclose are:the covered invention, that is,
the compound methyl 5 propylthio-2-benzimidazole carbamate; the
compounds being anthelmintic but nontoxic for animals or its ability to
destroy parasites without harming the host animals; and the patented
methods, compositions or preparations involving the compound to maximize
its efficacy against certain kinds of parasites infecting specified animals.
When the language of its claims is clear and distinct, the patentee is
bound thereby and may not claim anything beyond them.[17] And so are the
courts bound which may not add to or detract from the claims matters not
expressed or necessarily implied, nor may they enlarge the patent beyond
the scope of that which the inventor claimed and the patent office allowed,
even if the patentee may have been entitled to something more than the
words it had chosen would include.[18]
It bears stressing that the mere absence of the word Albendazole in
Letters Patent No. 14561 is not determinative of Albendazoles non-inclusion
in the claims of the patent. While Albendazole is admittedly a chemical
compound that exists by a name different from that covered in petitioners
letters patent, the language of Letter Patent No. 14561 fails to yield
anything at all regarding Albendazole. And no extrinsic evidence had been
adduced to prove that Albendazole inheres in petitioners patent in spite of its
omission therefrom or that the meaning of the claims of the patent
embraces the same.
While petitioner concedes that the mere literal wordings of its patent
cannot establish private respondents infringement, it urges this Court to
apply the doctrine of equivalents.
The doctrine of equivalents provides that an infringement also takes
place when a device appropriates a prior invention by incorporating its
innovative concept and, although with some modification and change,
performs substantially the same function in substantially the same way to
achieve substantially the same result.[19] Yet again, a scrutiny of petitioners
evidence fails to convince this Court of the substantial sameness of
petitioners patented compound and Albendazole. While both compounds
have the effect of neutralizing parasites in animals, identity of result does
not amount to infringement of patent unless Albendazole operates in
substantially the same way or by substantially the same means as the
patented compound, even though it performs the same function and
achieves the same result.[20] In other words, the principle or mode of
operation must be the same or substantially the same.[21]
The doctrine of equivalents thus requires satisfaction of the function-
means-and-result test, the patentee having the burden to show that all
three components of such equivalency test are met.[22]
 As stated early on, petitioners evidence fails to explain how Albendazole
is in every essential detail identical to methyl 5 propylthio-2-benzimidazole
carbamate. Apart from the fact that Albendazole is an anthelmintic agent
like methyl 5 propylthio-2-benzimidazole carbamate, nothing more is
asserted and accordingly substantiated regarding the method or means by
which Albendazole weeds out parasites in animals, thus giving no
information on whether that method is substantially the same as the manner
by which petitioners compound works. The testimony of Dr. Orinion lends no
support to petitioners cause, he not having been presented or qualified as an
expert witness who has the knowledge or expertise on the matter of
chemical compounds.
As for the concept of divisional applications proffered by petitioner, it
comes into play when two or more inventions are claimed in a single
application but are of such a nature that a single patent may not be issued
for them.[23] The applicant thus is required to divide, that is, to limit the
claims to whichever invention he may elect, whereas those inventions not
elected may be made the subject of separate applications which are called
divisional applications.[24] What this only means is that petitioners methyl 5
propylthio-2-benzimidazole carbamate is an invention distinct from the other
inventions claimed in the original application divided out, Albendazole being
one of those other inventions. Otherwise, methyl 5 propylthio-2-
benzimidazole carbamate would not have been the subject of a divisional
application if a single patent could have been issued for it as well as
Albendazole.
The foregoing discussions notwithstanding, this Court does not sustain
the award of actual damages and attorneys fees in favor of private
respondent. The claimed actual damages of P330,000.00 representing lost
profits or revenues incurred by private respondent as a result of the issuance
of the injunction against it, computed at the rate of 30% of its
alleged P100,000.00 monthly gross sales for eleven months, were supported
by the testimonies of private respondents President[25] and Executive Vice-
President that the average monthly sale of Impregon was P100,000.00 and
that sales plummeted to zero after the issuance of the injunction.[26] While
indemnification for actual or compensatory damages covers not only the loss
suffered (damnum emergens) but also profits which the obligee failed to
obtain (lucrum cessans or ganacias frustradas), it is necessary to prove the
actual amount of damages with a reasonable degree of certainty based on
competent proof and on the best evidence obtainable by the injured party.
[27]
 The testimonies of private respondents officers are not the competent
proof or best evidence obtainable to establish its right to actual or
compensatory damages for such damages also require presentation of
documentary evidence to substantiate a claim therefor.[28]
In the same vein, this Court does not sustain the grant by the appellate
court of attorneys fees to private respondent anchored on Article 2208 (2) of
the Civil Code, private respondent having been allegedly forced to litigate as
a result of petitioners suit. Even if a claimant is compelled to litigate with
third persons or to incur expenses to protect its rights, still attorneys fees
may not be awarded where no sufficient showing of bad faith could be
reflected in a partys persistence in a case other than an erroneous conviction
of the righteousness of his cause.[29]There exists no evidence on record
indicating that petitioner was moved by malice in suing private respondent.
 This Court, however, grants private respondent temperate or moderate
damages in the amount of P20,000.00 which it finds reasonable under the
circumstances, it having suffered some pecuniary loss the amount of which
cannot, from the nature of the case, be established with certainty.[30]
WHEREFORE, the assailed decision of the Court of Appeals is hereby
AFFIRMED with MODIFICATION. The award of actual or compensatory
damages and attorneys fees to private respondent, Tryco Pharma
Corporation, is DELETED; instead, it is hereby awarded the amount
of P20,000.00 as temperate or moderate damages.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Corona,
JJ., concur.