Pearl & Dean (Phil.), Incorporated v.

Shoemart, Incorporated, and North Edsa Marketing,

Incorporated (CASE DIGEST)

GR No. 148222

15 August 2003

TOPICS: Intellectual Property Law, Copyright, Infringement, Patents

FACTS:

Pearl and Dean (Phil.), Inc. (PDI) is engaged in the manufacture of advertising display units simply
referred to as light boxes. PDI was able to secure a Certificate of Copyright Registration, the
advertising light boxes were marketed under the trademark “Poster Ads”.

In 1985, PDI negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and installation of
the light boxes in certain SM Makati and SM Cubao. PDI submitted for signature the contracts
covering both stores, but only the contract for SM Makati, however, was returned signed. Eventually,
SMI’s informed PDI that it was rescinding the contract for SM Makati due to non-performance of the
terms thereof.

Years later, PDI found out that exact copies of its light boxes were installed at different SM stores. It
was further discovered that SMI’s sister company North Edsa Marketing Inc. (NEMI), sells advertising
space in lighted display units located in SMI’s different branches.

PDI sent a letter to both SMI and NEMI enjoining them to cease using the subject light boxes, remove
the same from SMI’s establishments and to discontinue the use of the trademark “Poster Ads,” as
well as the payment of compensatory damages.

Claiming that both SMI and NEMI failed to meet all its demands, PDI filed this instant case for
infringement of trademark and copyright, unfair competition and damages.

SMI maintained that it independently developed its poster panels using commonly known techniques
and available technology, without notice of or reference to PDI’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. 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 PDI’s Certification of Copyright Registration, and Certificate of Trademark
Registration.

The RTC of Makati City decided in favour of PDI, finding SMI and NEMI jointly and severally liable for
infringement of copyright and infringement of trademark

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

ISSUES:

Whether the the light box depicted in such engineering drawings ipso facto also protected by such
copyright.
Whether there was a patent infringement.
Whether 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?
RULING:

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

The Court of Appeals correctly held that the copyright was limited to the drawings alone and not to
the light box itself.

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

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 light box was not a literary or artistic piece which could be
copyrighted under the copyright law.

The Court reiterated the ruling in the case of Kho vs. Court of Appeals, differentiating patents,
copyrights and trademarks, namely:

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

Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which and
could not legally prevent anyone from manufacturing or commercially using the contraption. 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.

ON THE ISSUE OF TRADEMARK INFRINGEMENT

On the issue of trademark infringement, the petitioner’s president said “Poster Ads” 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.”Petitioner admitted it did not commercially engage in or market these goods. On the
contrary, it dealt in electrically operated backlit advertising units which, however, were not at all
specified in the trademark certificate.

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.

ON THE ISSUE OF UNFAIR COMPETITION

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.”This crucial
admission 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.

“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 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.

The petition is DENIED

Vargas v. Chua, G.R. No. L-36650, January 27, 1933 – full case

Facts:

Angel Vargas, the plaintiff, brought this action to restrain the appellants and the other defendant
entity, Cham Sanco and Sons, their agents and mandatories, from continuing the manufacture
and sale of plows similar to his plow described in his patent No.1,507,530 issued by the United
States Patent Office on September 2, 1924, and to compel all of said defendants, after rendering
an accounting of the profits obtained by them from the sale of said plows from September 2,
1924, to pay him damages equivalent to double the amount of such profits.

It appears from the bill of exceptions that Cham Samco & Sons did not appeal.
In addition to the evidence presented, are the stipulation of the following facts:
That the plows manufactured by the plaintiff in accordance with his patent, Exhibit A, are
commonly known to the trade in Iloilo, as well as in other parts of the Philippines, as "Arados
Vargas", and that the plaintiff is the sole manufacturer of said plows. A sample of these plows is
presented as Exhibit F.

That the document, Exhibit 1-Chua, is a certified copy of the amended complaint, the decision of
the Court of First Instance of Iloilo and that of the Supreme Court (R. G. No. 14101) in civil case
No. 3044 of Iloilo, entitled "Angel Vargas", plaintiff, vs. F. M. Yaptico & Co., Ltd., defendant",
and that Exhibit 2-Chua et al. is a certified copy of Patent No. 1,020,232, to which the
aforementioned complaint and decision refer, issued in favor of Angel Vargas by the United
States Patent Office on March 12, 1912, and that Exhibit 3-Chua et al., represents the plow
manufactured by Angel Vargas in accordance with his Patent marked Exhibit 2-Chua et al.

The appellants assign the following errors:

That the trial court erred in declaring that the Vargas plow, Exhibit F (covered by Patent No.
1,507,530) is distinct from the old model Vargas plow, Exhibit 2-Chua, covered by the former
Patent No. 1,020,232, which had been declared null and void by this court.
That the trial court erred in mistaking the improvement on the plow for the plow itself.
That the trial court erred in rendering judgment in favor of the plaintiff and against the
defendants.
That the trial court erred in not dismissing the complaint with costs against the plaintiff.
The evidence shows that Exhibit F is the kind of plows the plaintiff, Angel Vargas,
manufactures, for which Patent No. 1,507,530, Exhibit A, was issued in his favor. Exhibits B, B1 and B-
2 are samples of the plows which the herein appellants, Coo Pao and Petronila Chua,
have been manufacturing since 1918, and Exhibit 3-Chua represents the plow for which, on
March 12, 1912, the appellee obtained a patent from the United States Patent Office, which was
declared null and void by the Supreme Court in the case of Vargas vs. F. M. Yap Tico & Co. (40
Phil., 195).

Issue:
Whether the plow constitutes a real invention or an improvement for which a patent may be
obtained?

Ruling:
We have carefully examined all the plows presented as exhibits as well as the designs of those
covered by the patent, and we are convinced that no substantial difference exists between the
plow, Exhibit F, and the plow, Exhibit 3-Chua which was originally patented by the appellee,
Vargas. The only difference noted by us is the suppression of the bolt and the three holes on the
metal strap attached to the handle bar. These holes and bolt with its nut were suppressed in
Exhibit F in which the beam is movable as in the original plow. The members of this court, with
the plows in view, arrived at the conclusion that not only is there no fundamental difference
between the two plows but no improvement whatever has been made on the latest model, for the
same working and movement of the beam existed in the original model with the advantage,
perhaps, that its graduation could be carried through with more certainty by the use of the bolt
which as has already been stated, was adjustable and movable.
In view of the foregoing, we are firmly convinced that the appellee is not entitled to the
protection he seeks for the simple reason that his plow, Exhibit F, does not constitute an
invention in the legal sense, and because, according to the evidence, the same type of plows had
been manufactured in this country and had been in use in many parts of the Philippine
Archipelago, especially in the Province of Iloilo, long before he obtained his last patent.
ANGELITA MANZANO VS COURT OF APPEALS
G.R. NO. 113388
September 5, 1997
PONENTE: Bellosillo, J.

FACTS:
Petitioner Manzano filed with Philippine Patent Office an action for the cancellation of Letters Patent
for a gas burner registered in the name of private respondent Madolaria who subsequently assigned
the same to private respondent United Foundry. Petitioner alleged that the utility model covered by
the letters patent was not inventive, new, or useful, the specification did not comply with the
requirements of R.A. No. 165, that respondent was not the original, true, and actual inventor nor did
she derive her rights from the same, and that respondent was guilty of fraud or misrepresentation in
applying for the letters patent.

Petitioner also alleged that the utility model in question had already been in use and on sale
(petitioner herself being a distributor/seller of the said gas burners) in the Philippines for more than
one year before the respondent filed for the application. Petitioner presented two undated brochures
of two different Gas companies (Manila Gas Corp. & Esso Gasul) which allegedly depicts an identical
gas burner as the one covered in respondent’s letters patent. Respondent presented her husband as
lone witness to testify that respondent, thru complaints of customers, devised a way to solve the
defects in the gas burners, and respondent’s innovation is now the subject of the letters patent.

The Director of Patents denied the petition for cancellation, which was affirmed by the CA, on the
ground that petitioner was not able to convincingly establish that the patented utility model was not
novel. Petitioner failed to overcome her burden and overturn the presumption of legality of the
issuance of letters patent and that respondent withheld material facts with intent to deceive which, if
disclosed, would have resulted in the refusal by the PPO to issue the letters patent. Hence, this
appeal.

ISSUE: WON the CA erred in upholding the decision of the Director of Patents.

RULING: NO. In issuing Letters Patent to respondent Madolaria for an LPG Burner, the PPO found her
invention novel and patentable. The issuance of such patent creates a presumption which yields only
to clear and cogent evidence that the patentee was the original and first inventor. The burden of
proving want of novelty is on him who avers it and the burden is a heavy one which is met only by
clear and satisfactory proof which overcomes every reasonable doubt.

As found by the Director of Patents, the standard of evidence sufficient to overcome the presumption
of legality of the issuance of letters patent to respondent Madolaria was not legally met by petitioner
in her action for the cancellation of the patent. The findings and conclusions of the Director of Patent
were reiterated and affirmed by the Court of Appeals. The rule is settled that the findings of fact of
the Director of Patents, especially when affirmed by the Court of Appeals, are conclusive on this Court
when supported by substantial evidence.

The validity of the patent issued by the PPO in favor of private respondent and the question over the
inventiveness, novelty and usefulness of the improved model of the LPG burner are matters which are
better determined by the PPO. The technical staff of the Philippine Patent Office composed of experts
in their field has by the issuance of the patent in question accepted private respondents model of gas
burner as a discovery. There is a presumption that the Office has correctly determined the
patentability of the model and such action must not be interfered with in the absence of competent
evidence to the contrary.
Aguas vs. De Leon
G.R. NO. L-32160, JANUARY 30, 1982

FACTS:
Conrado G. de Leon filed in the CFI of Rizal at Quezon City a complaint for infringement of patent
againstDomiciano A. Aguas and F. H. Aquino and Sons alleging that being the original first and sole
inventor of certain newand useful improvements in the process of making mosaic pre-cast tiles, he
was lawfully granted a patent (Patent No.658). The said invention was new, useful, not known or used
by others in the country.

He alleged that Aguas infringed the patent by making, using and selling tiles embodying said patent
invention and F.H. Aquino & Sons is guilty of infringement by making and furnishing to the defendant
Domiciano A. Aguas theengravings, castings and devices designed and intended of tiles embodying his
patented invention.He has given notice to the defendants of their said acts of infringement and
requested them to desist, but, defendantshave refused and neglected to desist and have disregarded
such request.He sought for the issuance of a preliminary injunction, which was subsequently granted.

Aguas filed his answer denying the allegations of the plaintiff and alleging that: the plaintiff is neither
the original firstnor sole inventor of the improvements in the process of making mosaic pre-cast tiles,
the same having been used byseveral tile-making factories in the Philippines and abroad years before
the alleged invention by de Leon. He furtheralleged that that (a) the invention of plaintiff is neither
inventive nor new, hence, it is not patentable, (b) defendant hasbeen granted valid patents on designs
for concrete decorative wall tiles; and (c) that he cannot be guilty ofinfringement because his
products are different from those of the plaintiff.RTC ruled in favor of de Leon. On appeal, CA affirmed
the RTC decision.

ISSUE:
Whether the alleged invention or discovery of respondent is patentable.

HELD:
Yes.The petitioner questioned the validity of the patent of the private respondent, Conrado G. de
Leon, on the ground thatthe process, subject of said patent, is not an invention or discovery, or an
improvement of the old system of makingtiles. It should be noted that the private respondent does
not claim to be the discoverer or inventor of the old processof tile-making. He only claims to have
introduced an improvement of said process. In fact, Letters Patent No. 658 wasissued by the
Philippine Patent Office to the private respondent, Conrado G. de Leon, to protect his rights as
theinventor of "an alleged new and useful improvement in the process of making mosaic pre-cast
tiles.

"Indeed, Section 7, Republic Act No. 165, as amended provides: "Any invention of a new and useful
machine,manufactured product or substance, process, or an improvement of the foregoing, shall be
patentable.CA found that private respondent has introduced an improvement in the process of tile-
making because:... we find that plaintiff-appellee has introduced an improvement in the process of
tile-making, which proceeds notmerely from mechanical skill, said improvement consisting among
other things, in the new critical depth, lip width,easement and field of designs of the new tiles. The
improved lip width of appellee's tiles ensures thedurability of the finished product preventing the
flaking off of the edges.

The easement caused by theinclination of the protrusions of the patented moulds is for the purpose
of facilitating the removal of the newlyprocessed tile from the female die. Evidently, appellee's
improvement consists in the solution to the old criticalproblem by making the protrusions on his
moulds attain an optimum height, so that the engraving thereon would bedeep enough to produce
tiles for sculptured and decorative purposes, strong optimum thickness of appellee's newtiles of only
1/8 of an inch at the deepest easement (Exhs. "D" and "D-1") is a most critical feature, suggestive
ofdiscovery and inventiveness, especially considering that, despite said thinness, the freshly formed
tile remains strongenough for its intended purpose.
 GR. No. 149907 April 16, 2009ROMA DRUG and ROMEO RODRIGUEZ, as Proprietor of ROMADRUG,
Petitioners, vs.THE REGIONAL TRIAL COURT OF GUAGUA,PAMPANGA, THE PROVINCIAL
PROSECUTOR OF PAMPANGA,BUREAU OF FOOD & DRUGS (BFAD) and GLAXO SMITHKLINE,
Respondents.

Facts:
In 2000, Roma Drug, owned by Romeo Rodriguez, was raided by theNBI upon request of Smithkline –
a pharmaceutical company (now GlaxoSmithkline). Roma Drug is apparently one of 6 pharmacies that
weredirectly importing 5 medicine brands produced by Smithkline from abroad.Roma Drug is not
purchasing those medicines via local Smithkline – theauthorized distributor of Smithkline in the
Philippines. Smithkline Phil. aversthat because the medicines were not purchased from a
Philippineregistered counterpart of Smithkline then the products imported by RomaDrug are
considered as counterfeit or “unregistered imported drug product”as defined by R.A. No. 8203 or the
“Special Law on Counterfeit Drugs.”Rodriguez now assails the constitutionality of RA No. 8203
averring, amongother things, that it has violated his right to equal protection as it bannedhim access
from such medicines.

Issue:
Whether or not R.A. No. 8203 violates equal protection.

Whether or not Roma should be prosecuted for selling counterfeit drugs? NO.

Ruling:
YES. Sec. 7 of RA No. 9502 provides, "Sec. 72. Limitations of PatentRights. – The owner of a patent has
no right to prevent third parties fromperforming, without his authorization, the acts referred to in
Section 71hereof in the following circumstances:"72.1. Using a patented product which has been put
on the market in thePhilippines 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 saidmarket: Provided,That, with
regard to drugs and medicines, thelimitation on patent rights shall apply after a drug or medicine
hasbeen 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 medicinescontemplated in this section shall
be available to any governmentagency or any private third party;In this case, it does not allow private
3rd parties to import suchmedicines abroad even in cases of life and death nor does it allow
theimportation by 3rd parties in cases wherein the stocks of such medicinewould run out. It
discriminates at the expense of Filipinos who cannot travelabroad to purchase such medicines yet
need them badly. Nevertheless, theflawed intention of Congress had been abrogated by the passage
of RANo. 9502 or the “Universally Accessible Cheaper and Quality Medicines Actof 2008” and its
Implementing Rules and Regulations. This law did notexpressly repeal R.A. NO. 8203 but it
emphasized that any medicineintroduced into the Philippines by its patent holder should be
accessible toanyone. It provides that the right to import drugs and medicines shall beavailable to any
government agency OR ANY PRIVATE 3rd PARTY. TheSC noted that this law provided and recognized
the constitutionally-guaranteed right of the public to health.

Yes. Section 7 of Rep. Act No. 9502 unequivocally grants third persons the right to import drugs or
medicines whose patent were registered in the Philippines by the owner of the product. 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 November 4, 2008.

It may be that Rep. Act No. 9502 did not expressly repeal any provision of the SLCD. However, it is
clear that the SLCO’s 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.
CRESER PRECISION SYSTEM INC. VS. CA AND FLORO INTERNATIONAL CORP.
GR No. 118708
February 2, 1998
PONENTE: MARTINEZ, J.

FACTS:

Private respondent Floro is a domestic corporation engaged in the manufacture, production,

distribution and sale of military armaments, munitions, airmunitions and other similar materials. On
Jan. 23, 1990, private respondent Floro was granted by the Bureau of Patents, Trademarks and
Technology Transfer a Letters Patent covering an aerial fuze.

However, Floro’s President, Mr. Gregory Floro discovered that petitioner Creser submitted samples of
its patented aerial fuze to the Armed Forces of the Philippines (AFP) for testing and that petitioner is
claiming the aerial fuze as its own and planning to bid and manufacture it commercially.

Petitioner Creser contends that it is the first, true and actual inventor of an aerial fuze denominated
as which it developed as early as December 1981 under the Self-Reliance Defense Posture Program
(SRDP) of the AFP; that sometime in 1986, petitioner began supplying the AFP with the said aerial
fuze; that private respondent's aerial fuze is identical in every respect to the petitioner's fuze; and
that the only difference between the two fuzes are miniscule and merely cosmetic in nature.

Petitioner prayed that a temporary restraining order and/or writ of preliminary injunction be issued
enjoining private respondent including any and all persons acting on its behalf from manufacturing,
marketing and/or profiting therefrom, and/or from performing any other act in connection therewith
or tending to prejudice and deprive it of any rights, privileges and benefits to which it is duly entitled
as the first, true and actual inventor of the aerial fuze.

RTC issued a TRO and later on granted the preliminary injunction filed by plaintiff against private
respondent. While CA reversed the RTC’s decision and dismissed the complaint filed by petitioner.

ISSUE: Whether Petitioner can file an action for infringement not as a patentee but as an entity in
possession of a right, title or interest in and to the patented invention?

RULING:

NO. Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:
Sec. 42. Civil action for infringement. — Any patentee, or anyone possessing any right, title or interest
in and to the patented invention, whose rights have been infringed, may bring a civil action before the
proper Court of First Instance (now Regional Trial court), to recover from the infringer damages
sustained by reason of the infringement and to secure an injunction for the protection of his right. . . .

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. In short, a person or
entity who has not been granted letters patent over an invention and has not acquired any light or
title thereto either as assignee or as licensee, has no cause of action for infringement because the
right to maintain an infringement suit depends on the existence of the patent.

Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis or cause of
action to institute the petition for injunction and damages arising from the alleged infringement by
private respondent. While petitioner claims to be the first inventor of the aerial fuze, still it has no
right of property over the same upon which it can maintain a suit unless it obtains a patent therefor.
Godines v. CA (G.R. No. 97343)
Facts:

Respondent SV-Agro Industries acquired a letter patent issued to one Magdalena Villaruz which
covers a utility model for hand tractor or power tiller by virtue of a deed of assignment executed by
the latter in its favor. Respondent after suffering a decline in sales of the patented power tillers,
investigated and discovered that petitioner Godines was manufacturing the same power tillers as they
have. Respondent thus filed a complaint for patent infringement and unfair competition against
petitioner Godines. The trial court held petitioner liable for infringement. CA affirmed.

Issue:

Whether or not petitioner’s products infringe upon the patent of respondent SV-Agro.

Ruling: YES.

Tests have been established to determine infringement. These are (a) literal infringement; and (b) the
doctrine of equivalents. In using literal infringement as a test, “. . . resort must be had, in the first
instance, to the words of the claim. If accused matter clearly falls within the claim, infringement is
made out and that is the end of it.” To determine whether the particular item falls within the literal
meaning of the patent claims, the court must juxtapose the claims of the patent and the accused
product within the overall context of the claims and specifications, to determine whether there is
exact identity of all material elements. It appears from the observation of the trial court that these
claims of the patent and the features of the patented utility model were copied by petitioner: In
appearance and form, both the floating power tillers of the defendant and the turtle power tiller of
the plaintiff are virtually the same. Viewed from any perspective or angle, the power tiller of the
defendant is identical and similar to that of the turtle power tiller of plaintiff in form, configuration,
design and appearance. The parts or components thereof are virtually the same. In operation, the
floating power tiller of the defendant operates also in similar manner as the turtle power tiller of
plaintiff.

Petitioner’s argument that his power tillers were different from private respondent’s is that of a
drowning man clutching at straws. Recognizing that the logical fallback position of one in the place of
defendant is to aver that his product is different from the patented one, courts have adopted the
doctrine of equivalents. Thus, according to this doctrine, “(a)n infringement also occurs when a device
appropriates a prior invention by incorporating its innovative concept and, albeit with some
modification and change, performs substantially the same function in substantially the same way to
achieve substantially the same result.” In this case, the trial court observed: But a careful examination
between the two power tillers will show that they will operate on the same fundamental principles.
G. R. No. 126627 – 409 SCRA 33 – Mercantile Law – Intellectual Property Law – Law on Patents –
Doctrine of Equivalents – Function-Means-and-Result Test

Smith Kline is a US corporation licensed to do business in the Philippines. In 1981, a patent was issued
to it for its invention entitled “Methods and Compositions for Producing Biphasic Parasiticide Activity
Using Methyl 5 Propylthio-2-Benzimidazole Carbamate.” The invention is a means to fight off
gastrointestinal parasites from various cattles and pet animals.

Tryco Pharma is a local corporation engaged in the same business as Smith Kline.

Smith Kline sued Tryco Pharma because the latter was selling a veterinary product called Impregon
which contains a drug called Albendazole which fights off gastro-intestinal roundworms, lungworms,
tapeworms and fluke infestation in carabaos, cattle and goats.

Smith Kline is claiming that Albendazole is covered by their patent because it is substantially the same
as methyl 5 propylthio-2-benzimidazole carbamate since both of them are meant to combat worm or
parasite infestation in animals. And that Albendazole is actually patented under Smith Kline in the US.

Tryco Pharma averred that nowhere in Smith Kline’s patent does it mention that Albendazole is
present but even if it were, the same is “unpatentable”.

Smith Kline thus invoked the doctrine of equivalents, which implies that the two substances
substantially do the same function in substantially the same way to achieve the same results, thereby
making them truly identical for in spite of the fact that the word Albendazole does not appear in Tryco
Pharma’s letters of patent, it has ably shown by evidence its sameness with methyl 5 propylthio-2-
benzimidazole carbamate.

ISSUE: Whether or not there is patent infringement in this case

HELD: No. Smith Kline failed to prove that Albendazole is a compound inherent in the patented
invention. Nowhere in the patent is the word Albendazole found. When the language of its claims is
clear and distinct, the patentee is bound thereby and may not claim anything beyond them. Further,
there was a separate patent for Albendazole given by the US which implies that Albendazole is indeed
separate and distinct from the patented compound here.

A scrutiny of Smith Kline’s evidence fails to prove the substantial sameness of the patented
compound and Albendazole. While both compounds have the effect of neutralizing parasites in
animals, identity of result does not amount to infringement of patent unless Albendazole operates in
substantially the same way or by substantially the same means as the patented compound, even
though it performs the same function and achieves the same result. In other words, the principle or
mode of operation must be the same or substantially the same.

The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the
patentee having the burden to show that all three components of such equivalency test are met.
Smith Kline & French Laboratories, Ltd. vs. Court of Appeals

G.R. No. 121267

23 October 2001

Facts:

Petitioner is the assignee of Letters Patent No. 12207 covering the pharmaceutical product
Cimetidine, which relates to derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl
thiourea, ureas or guanadines. Said patent was issued by the BPTTT to Graham John Durant, John
Collin Emmett and Robin Genellin on November 29, 1978.

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

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

Procedural Posture:

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

Petitioner thereafter filed with the Court of Appeals a petition for review of the decision of the BPTTT.
The Court of Appeals affirmed the decision of the BPTTT.

Issue: Whether the grant of the compulsory license satisfies the requirements of Section 34 of the
Patent Law?

Ruling:

The Supreme Court ruled in the affirmative. The grant of the compulsory license satisfies the
requirements of the foregoing provision. More than ten years have passed since the patent for
Cimetidine was issued to petitioner and its predecessors-in-interest, and the compulsory license
applied for by private respondent is for the use, manufacture and sale of a medicinal product.
Furthermore, both the appellate court and the BPTTT found that private respondent had the
capability to work Cimetidine or to make use thereof in the manufacture of a useful product.
There is likewise no basis for the allegation that the grant of a compulsory license to private
respondent results in the deprivation of petitioner’s property without just compensation. It must be
pointed out that as owner of Letters Patent No. 12207, petitioner had already enjoyed exclusive rights
to manufacture, use and sell Cimetidine for at least two years from its grant in November, 1978. Even
if other entities like private respondent are subsequently allowed to manufacture, use and sell the
patented invention by virtue of a compulsory license, petitioner as owner of the patent would still
receive remuneration for the use of such product in the form of royalties.
PARKE DAVIS and COMPANY vs. DOCTORS' PHARMACEUTICALS, INC., ET AL.

G.R. No. L-22221, August 31, 1965

FACTS:

Parke Davies and Company is an owner of a Patent entitled "Process for the Manufacturing of
Antibiotics" (Letters Patent No. 50) which was issued by the Philippine Patent Office on February 9,
1950. The patent relates to a chemical compound represented by a formula commonly called
chloramphenicol. The patent contains ten claims, nine of which are process claims, and the other is a
product claim to the chemical substance chloramphenicol.

Doctors’ Pharmaceuticals Inc. requested that it be granted a voluntary license to manufacture and
produce our own brand of medicine, containing chloramphenicol, and to use, sell, distribute, or
otherwise dispose of the same in the Philippines under such terms and conditions as may be deemed
reasonable and mutually satisfactory, which Parke Davies declined.

Doctors’ Pharmaceuticals Inc. filed a petition with the Director of Patents requesting the Director to
grant a compulsory license. After careful evaluation and hearings, the Director granted the request of
Doctors’ Pharmaceuticals.

ISSUE:

Is the decision of the Director of Patents in granting Doctor’s Pharmaceutical Inc. compulsory license
to use the substance chloramphenicol, valid?

HELD:

Yes the decision of the Director of Patents in granting Doctor’s Pharmaceutical Inc. compulsory license
to use the substance chloramphenicol is valid. The Supreme Court says that patents issued to foods
and medicines are not exclusive so as not to prevent the building up of patent monopolies. Public
benefit is foremost. The Court dismissed the contention of Parke Davies that the Director of Patents
erred in granting compulsory license. The decision appealed from is affirmed, with costs against
petitioner.
Ching v. Salinas, Sr. (G.R. No. 161295)
Facts:

Petitioner Ching is a maker and manufacturer of a utility model, Leaf Spring Eye Bushing for
Automobile, for which he holds certificates of copyright registration. Petitioner’s request to the NBI to
apprehend and prosecute illegal manufacturers of his work led to the issuance of search warrants
against respondent Salinas, alleged to be reproducing and distributing said models in violation of the
IP Code. Respondent moved to quash the warrants on the ground that petitioner’s work is not artistic
in nature and is a proper subject of a patent, not copyright. Petitioner insists that the IP Code protects
a work from the moment of its creation regardless of its nature or purpose. The trial court quashed
the warrants. Petitioner argues that the copyright certificates over the model are prima facie evidence
of its validity. CA affirmed the trial court’s decision.

Issues:

(1) Whether or not petitioner’s model is an artistic work subject to copyright protection.

(2) Whether or not petitioner is entitled to copyright protection on the basis of the certificates of
registration issued to it.

Ruling:

(1) NO. As gleaned from the specifications appended to the application for a copyright certificate filed
by the petitioner, the said Leaf Spring Eye Bushing for Automobile and Vehicle Bearing Cushion are
merely utility models. As gleaned from the description of the models and their objectives, these
articles are useful articles which are defined as one having an intrinsic utilitarian function that is not
merely to portray the appearance of the article or to convey information. Plainly, these are not
literary or artistic works. They are not intellectual creations in the literary and artistic domain, or
works of applied art. They are certainly not ornamental designs or one having decorative quality or
value. Indeed, while works of applied art, original intellectual, literary and artistic works are
copyrightable, useful articles and works of industrial design are not. A useful article may be
copyrightable only if and only to the extent that such design incorporates pictorial, graphic, or
sculptural features that can be identified separately from, and are capable of existing independently
of the utilitarian aspects of the article. In this case, the bushing and cushion are not works of art. They
are, as the petitioner himself admitted, utility models which may be the subject of a patent.

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(2) NO. No copyright granted by law can be said to arise in favor of the petitioner despite the
issuance of the certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing
and Vehicle Bearing Cushion. Indeed, in Joaquin, Jr. v. Drilon and Pearl & Dean (Phil.), Incorporated v.
Shoemart, Incorporated, the Court ruled that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right
granted by the statute, and not simply a pre-existing right regulated by it. Being a statutory grant, the
rights are only such as the statute confers, and may be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and conditions specified in the statute. Accordingly, it can
cover only the works falling within the statutory enumeration or description.

Ownership of copyrighted material is shown by proof of originality and copyrightability. To discharge

his burden, the applicant may present the certificate of registration covering the work or, in its
absence, other evidence. A copyright certificate provides prima facie evidence of originality which is
one element of copyright validity. It constitutes prima facie evidence of both validity and ownership
and the validity of the facts stated in the certificate.
G.R. No. 115106 – 255 SCRA 152 – Mercantile Law – Intellectual Property Law – Law on Patents –
Infringement – Karaoke Machine

Roberto Del Rosario was granted a patent for his innovation called the “Minus One” karaoke. The
patent was issued in June 1988 for five years and was renewed in November 1991 for another five
years as there were improvement introduced to his “minus one” karaoke. In 1993, while the patent
was still effective, Del Rosario sued Janito Corporation, a Japanese company owned by Janito Cua, for
allegedly infringing upon the patent of Del Rosario. Del Rosario alleged that Janito was manufacturing
a sing-along system under the brand “miyata karaoke” which is substantially, if not identical, the same
to his “minus one” karaoke. The lower court ruled in favor of Del Rosario but the Court of Appeals
ruled that there was no infringement because the karaoke system was a universal product
manufactured, advertised, and marketed all over the world long before Del Rosario was issued his
patents.

ISSUE: Whether or not the Court of Appeals erred in its ruling.

HELD: Yes. The Patent Law expressly acknowledges that any new model of implements or tools of any
industrial product even if not possessed of the quality of invention but which is of practical utility is
entitled to a patent for utility model. Here, there is no dispute that the letters patent issued to Del
Rosario are for utility models of audio equipment. It is elementary that a patent may be infringed
where the essential or substantial features of the patented invention are taken or appropriated, or
the device, machine or other subject matter alleged to infringe is substantially identical with the
patented invention. In order to infringe a patent, a machine or device must perform the same
function, or accomplish the same result by identical or substantially identical means and the principle
or mode of operation must be substantially the same. In the case at bar, miyata karaoke was proven
to have substantial if not identical functionality as that of the minus one karaoke which was covered
by the second patent issued to Del Rosario. Further, Janito failed to present competent evidence that
will show that Del Rosario’s innovation is not new.