1

PRIBHDAS J. MIRPURI vs. CA, DIRECTOR OF PATENTS and the reject all pending applications for Philippine registration of signature
BARBIZON CORPORATION and other world-famous trademarks by applicants other than their
original owners or users, enumerating several internationally-known
FACTS trademarks and ordered the Director of Patents to require Philippine
Lolita Escobar, the predecessor-in-interest of petitioner Mirpuri, registrants of such marks to surrender their certificates of
filed an application for the registration of the trademark "Barbizon" registration.
for use in brassieres and ladies undergarments. Escobar alleged that After, Minister Ongpin issued Memorandum which did not
she had been manufacturing and selling these products under the enumerate well-known trademarks but laid down guidelines for the
firm name "L & BM Commercial" since 1970. Director of Patents to observe in determining whether a trademark
Private respondent Barbizon Corporation, a US corporation opposed is entitled to protection as a well-known mark in the Philippines
the application. under Article 6bis of the Paris Convention. All pending applications
Director of Patents rendered judgment dismissing the opposition for registration of world-famous trademarks by persons other than
and giving due course to Escobar's application. their original owners were to be rejected forthwith.
Escobar later assigned all her rights and interest over the trademark The Supreme Court in the 1984 landmark case of La Chemise
to petitioner Mirpuri who, under his firm name then, the "Bonito Lacoste, S.A. v. Fernandez ruled therein that under the provisions of
Enterprises," was the sole and exclusive distributor of Escobar's Article 6bis of the Paris Convention, the Minister of Trade and
"Barbizon" products. Industry was the "competent authority" to determine whether a
In 1979, however, Escobar failed to file with the Bureau of Patents trademark is well-known in this country.
the Affidavit of Use of the trademark required under Section 12 of The Villafuerte Memorandum was issued in 1980. In the case at bar,
R.A. 166. Due to this failure, the Bureau of Patents cancelled the first inter partes case, was filed in 1970, before the Villafuerte
Escobar's certificate of registration. Memorandum but 5 years after the effectivity of the Paris
Escobar reapplied for registration of the cancelled trademark. Convention. Private respondent, however, did not cite the
Mirpuri filed his own application for registration of Escobar's protection of Article 6bis, neither did it mention the Paris
trademark. Escobar later assigned her application to herein Convention at all. It was only in 1981 when second case was
petitioner and this application was opposed by private respondent. instituted that the Paris Convention and the Villafuerte
Petitioner raised the defense of res judicata. Memorandum, and, during the pendency of the case, the 1983
Escobar assigned to petitioner the use of the business name Ongpin Memorandum were invoked by private respondent.
"Barbizon International." Petitioner registered the name with the
Department of Trade and Industry (DTI) for which a certificate of
registration was issued in 1987. MIGHTY CORP. vs. E&J GALLO
Private respondent filed before the Office of Legal Affairs of the DTI G.R. NO. 154342; July 14, 2004
a petition for cancellation of petitioner's business name. DTI, Office
of Legal Affairs, cancelled petitioner's certificate of registration, and FACTS:
declared private respondent the owner and prior user of the On March 12, 1993, E. & J. GALLO WINERY and THE ANDRESONS
business name "Barbizon International." GROUP, INC (respondents) sued MIGHTY CORPORATION and LA
Director rendered a decision declaring private respondent's CAMPANA FABRICA DE TABACO, INC. (petitioners) in the RTC-Makati
opposition barred by res judicata and giving due course to for trademark and trade name infringement and unfair competition,
petitioner's application for registration. with a prayer for damages and preliminary injunction.
CA reversed the Director’s decision that case was barred and
ordered that the case be remanded to the Bureau of Patents for They claimed that petitioners adopted the Gallo trademark to ride
further proceedings. on Gallo Winery’s and Gallo and Ernest & Julio Gallo trademark’s
ISSUES established reputation and popularity, thus causing confusion,
Whether or not respondent is barred by filing this case by res deception and mistake on the part of the purchasing public who had
judicata always associated Gallo and Ernest and Julio & Gallo trademarks
Whether or not petitioner is liable for trademark infringement with Gallo Winery’s wines.

DECISION In their answer, petitioners alleged, among other affirmative

The Paris Convention, is a multilateral treaty that seeks to protect defenses that: petitioners Gallo cigarettes and Gallo Winery’s wine
industrial property consisting of patents, utility models, industrial were totally unrelated products. To wit:
designs, trademarks, service marks, trade names and indications of 1. Gallo Winery’s GALLO trademark registration certificates covered
source or appellations of origin, and at the same time aims to wines only, and not cigarettes;
repress unfair competition. It is essentially a compact among various 2. GALLO cigarettes and GALLO wines were sold through different
countries which, as members of the Union, have pledged to accord channels of trade;
to citizens of the other member countries trademark and other 3. the target market of Gallo Winery’s wines was the middle or high-
rights comparable to those accorded their own citizens by their income bracket while Gallo cigarette buyers were farmers,
domestic laws for an effective protection against unfair competition. fishermen, laborers and other low-income workers;
Both the Philippines and the United States of America, are 4. that the dominant feature of the Gallo cigarette was the rooster
signatories to the Convention. device with the manufacturer’s name clearly indicated as MIGHTY
Private respondent anchors its cause of action on the first paragraph CORPORATION, while in the case of Gallo Winery’s wines, it was the
of Article 6bis of the Paris Convention, said Article governing full names of the founders-owners ERNEST & JULIO GALLO or just
protection of well-known trademarks. their surname GALLO;
Art. 6bis is a self-executing provision and does not require legislative
enactment to give it effect in the member country. It may be applied The Makati RTC denied, for lack of merit, respondent’s prayer for
directly by the tribunals and officials of each member country by the the issuance of a writ of preliminary injunction. CA likewise
mere publication or proclamation of the Convention, after its dismissed respondent’s petition for review on certiorari.
ratification according to the public law of each state and the order
for its execution. After the trial on the merits, however, the Makati RTC held
The essential requirement under Article 6bis is that the trademark to petitioners liable for committing trademark infringement and unfair
be protected must be "well-known" in the country where protection competition with respect to the GALLO trademark.
is sought. The power to determine whether a trademark is well-
known lies in the "competent authority of the country of registration On appeal, the CA affirmed the Makati RTC’s decision and
or use." This competent authority would be either the registering subsequently denied petitioner’s motion for reconsideration.
authority if it has the power to decide this, or the courts of the
country in question if the issue comes before a court. ISSUE/S: Whether GALLO cigarettes and GALLO wines were identical,
Pursuant to Article 6bis, then Minister Villafuerte of the Ministry of similar or related goods for the reason alone that they were
Trade issued a Memorandum instructing Director of Patents to purportedly forms of vice.
 2

very business engaged by Pearl and Dean. Furthermore, Pearl and

RULING: NO. Dean’s exclusive right to the use of “Poster Ads” is limited to what is
Wines and cigarettes are not identical, similar, competing or related written in its certificate of registration. Shoemart cannot be held
goods. liable for the infringement of the trademark.
In resolving whether goods are related, several factors come into
play:
• the business (and its location) to which the goods belong
• the class of product to which the good belong
• the product’s quality, quantity, or size, including the nature of 3. Elidad C. Kho vs. Court of Appeals, Summerville General
the package, wrapper or container Merchandising Company and Ang Tiam Chay (G.R. No. 115758,
• the nature and cost of the articles March 19, 2002, 379 SCRA 410)
• the descriptive properties, physical attributes or essential
characteristics with reference to their form, composition, texture or FACTS:
quality Petitioner‘s allegations are that they are doing business under the
• the purpose of the goods name and style of KEC Cosmetics Laboratory, registered owner of
• whether the article is bought for immediate consumption, Chin Chun Su and oval facial cream container/case, and alleges that
that is, day-to-day household items she also has patent rights on Chin Chun Su and Device and Chin
• the field of manufacture Chun Su Medicated Cream after purchasing the same from Quintin
• the conditions under which the article is usually purchased Cheng, the registered owner thereof in the supplemental register of
and the Philippine Patent Office and that Summerville advertised and
• the articles of the trade through which the goods flow, how sold petitioner’s cream products under the brand name Chin Chun
they are distributed, marketed, displayed and sold. Su, in similar containers that petitioner uses, thereby misleading the
public, and resulting in the decline in the petitioner’s business sales
The test of fraudulent simulation is to the likelihood of the and income; and, that the respondents should be enjoined from
deception of some persons in some measure acquainted with an allegedly infringing on the copyrights and patents of the petitioner.
established design and desirous of purchasing the commodity with
which that design has been associated. The simulation, in order to The respondents, on the other hand, alleged as their defense that
be objectionable, must be as appears likely to mislead the ordinary (1) Summerville is the exclusive and authorized importer, re-packer
intelligent buyer who has a need to supply and is familiar with the and distributor of Chin Chun Su products manufactured by Shun Yi
article that he seeks to purchase. factory of Taiwan, (2) that the said Taiwanese manufacturing
company authorized Summerville to register its trade name Chin
The petitioners are not liable for trademark infringement, unfair Chun Cu Medicated Cream with the Philippine Patent office and
competition or damages. Other appropriate governmental agencies; (3) that KEC Cosmetics
Laboratory of the petitioner obtained the copyrights through
2. Pearl & Dean (Phil.) Inc. v. Shoemart, Inc. and North Edsa misrepresentation and falsification; and, (4) that the authority of
Marketing Inc Quintin Cheng, assignee of the patent registration certificate, to
distribute and market Chin Chun Su products in the Philippines had
FACTS: already terminated by the said Taiwanese manufacturing company.
Pearl and Dean is a corporation engaged in the manufacture of
advertising display units referred to as light boxes and these light ISSUE:
boxes were marketed under the trademark Poster Ads. Pearl and Whether or not Kho has the sole right using the package of Chin
Dean entered into a contract with Shoemart, Inc. for the lease and Chun Su products
installation of the light boxes in SM North Edsa. However, due to
construction constraints, Shoemart, Inc offered as an alternative SM RULING:
Makati and SM Cubao. Petitioner has no right to support her claim for the exclusive use of
After Pearl and Dean’s contract was rescinded, exact copies of the subject trade name and its container. The name and container of
its light boxes were installed in various SM malls, fabricated by a beauty cream product are proper subjects of a trademark in as
Metro Industrial Services and later by EYD Rainbow Advertising much as the same falls squarely within its definition. In order to be
Corporation. Pearl and Dean sent a letter to Shoemart and its sister entitled to exclusively use the same in the sale of the beauty cream
company, North Edsa Marketing to cease using the light boxes and product, the user must sufficiently prove that she registered or used
to remove them from the malls, and demanded the discontinued it before anybody else did. The petitioner’s copyright and patent
used of the trademark “Poster Ads”. registration of the name and container would not guarantee her the
Unsatisfied with the compliance of its demands, Pearl and right to exclusive use of the same for the reason that they are not
Dean sued Shoemart which was ruled by the trial court in their appropriate subjects of the said intellectual rights. Consequently, a
favor. On appeal, however, the Court of Appeals reversed the trial preliminary injunction order cannot be issued for the reason that the
court’s decision. petitioner has not proven that she has a clear right over the said
ISSUE: name and container to the exclusion of others, not having proven
Whether Pearl and Dean’s copyright registration for its light that she has registered a trademark thereto or used the same before
boxes and the trademark registration of “Poster Ads” preclude anyone did.
Shoemart and North Edsa Marketing from using the same.
HELD: NOTE:
No, Pearl and Dean secured its copyright under the Trademark, copyright, and patents are different intellectual property
classification class “o” work. This being so, its protection extended rights that cannot be interchanged with one another. A trademark is
only to the technical drawings and not to the light box itself. Pearl any visible sign capable of distinguishing the goods (trademark) or
and Dean cannot exclude others from the manufacture, sale and services (service mark) of an enterprise and shall include a stamped
commercial use over the light boxes on the sole basis of its or marked container goods. In relation thereto, a trade name means
copyright, certificated over the technical drawings. It cannot be the the name or designation identifying or distinguishing an enterprise.
intention of the law that the right of exclusivity would be granted for Meanwhile, the scope of copyright is confined to literary and artistic
a longer time through the simplified procedure of copyright works which are original intellectual creations in the literary and
registration with the National Library, without the rigor of defending artistic domain protected from the moment of their creation.
the patentability of its “invention” before the IPO and the public. Patentable inventions, on the other hand, refer to any technical
On the other hand, there has been no evidence that Pearl and solution of a problem in any field of human activity which is new,
Dean’s use of “Poster Ads” was distinctive or well known. “Poster involves an inventive step and is industrial applicable.
Ads” was too generic a name to identify it to a specific company or
entity. “Poster Ads” was generic and incapable of being used as a
trademark because it was used in the field of poster advertising, the
 3

G.R. No. 115758 March 19, 2002 immediately withdraw its bids to supply Sulbactam Ampicillin.
Pharmawealth and the hospitals ignored the demands.
ELIDAD C. KHO,
doing business under the name and style of Pfizer then filed a complaint for patent infringement with a prayer
KEC COSMETICS LABORATORY for permanent injunction and forfeiture of the infringing products. A
,petitioner, preliminary injunction effective for 90 days was granted by the IPO’s
Bureau of Legal Affairs (IPO-BLA). Upon expiration, a motion for
vs. extension filed by Pfizer was denied. Pfizer filed a Special Civil Action
for Certiorari in the Court of Appeals (CA) assailing the denial.
HON. COURT OF APPEALS, SUMMERVILLE GENERAL
MERCHANDISING andCOMPANY, While the case was pending in the CA, Pfizer filed with the Regional
and Trial Court of Makati (RTC) a complaint for infringement and unfair
ANG TIAM CHAY, competition, with a prayer for injunction. The RTC issued a
respondents. temporary restraining order, and then a preliminary injunction.

FACTS: Pharmawealth filed a motion to dismiss the case in the CA, on the
The petitioner alleged that she is the registered owner of the ground of forum shopping. Nevertheless, the CA issued a temporary
copyrights Chin Chun Su and OvalFacial Cream Container/Case as restraining order. Pharmawealth again filed a motion to dismiss,
evidenced by certificates of copyright registrations and patent rights alleging that the patent, the main basis of the case, had already
on Chun Chun Su & Device and Chin Chun Su (medicated cream) lapsed, thus making the case moot, and that the CA had no
after she purchased it fromQuintin Cheng (previous registered jurisdiction to review the order of the IPO-BLA because this was
owner in the Philippine Patent Office [PPO]). granted to the Director General. The CA denied all the motions.
Meanwhile, there was a decline in the petitioner’s business income Pharmawealth filed a petition for review on Certiorari with the
due to the advertisement andsale made by Summerville on Supreme Court.
petitioner’s product s under the same brand name and in
similarcontainers. According to Summerville, they are the exclusive Issues:
and authorized importer, re-packerand distributor of Chin Chun Su
products manufactured by Shun Yi Factory of Taiwan and that said a) Can an injunctive relief be issued based on an action of patent
company authorized them to register its trade name “Chin Chun Su infringement when the patent allegedly infringed has already
Mediated Cream” with the lapsed?
PPO.The application for preliminary injunction filed by petitioner b) What tribunal has jurisdiction to review the decisions of the
was granted. Hence, espondentsmoved for reconsideration, which Director of Legal Affairs of the Intellectual Property Office?
was denied. The respondents then moved for nullification of said c) Is there forum shopping when a party files two actions with two
preliminary injunction with the CA. The latter granted its petition. seemingly different causes of action and yet pray for the same
relief?
ISSUE:
WON the copyright and patent over the name and container of the Held:
beauty cream product entitle the registrant to its EXCLUSIVE use and
ownership . a) No. The provision of R.A. 165, from which the Pfizer’s patent was
based, clearly states that "[the] patentee shall have the exclusive
HELD: right to make, use and sell the patented machine, article or product,
and to use the patented process for the purpose of industry or
NO. commerce, throughout the territory of the Philippines for the term
The petitioner has no right for the EXCLUSIVE use of the trade name of the patent; and such making, using, or selling by any person
and its container.In order to be entitled to its exclusive use, the user without the authorization of the patentee constitutes infringement
must sufficiently prove that she registered orused it before anybody of the patent."
else did. This, petitioner failed to do.
“ Clearly, the patentee’s exclusive rights exist only during the term of
Trademark, copyright and patents are different intellectual property the patent. Since the patent was registered on 16 July 1987, it
rights that cannot beinterchanged with one another. A trademark is expired, in accordance with the provisions of R.A. 165, after 17
any visible sign capable of distinguishing thegoods (trademark) or years, or 16 July 2004. Thus, after 16 July 2004, Pfizer no longer
services (service mark) of an enterprise and shall include a stamped possessed the exclusive right to make, use, and sell the products
ormarked container of goods. In relation thereto, a trade name covered by their patent. The CA was wrong in issuing a temporary
means the name or designationidentifying or distinguishing an restraining order after the cut-off date.
enterprise. Meanwhile, the scope of a copyright is confined
toliterary and artistic works which are original intellectual creations b) According to IP Code, the Director General of the IPO exercises
in the literary and artisticdomain protected from the moment of exclusive jurisdiction over decisions of the IPO-BLA. The question in
their creation. the CA concerns an interlocutory order, and not a decision. Since the
IP Code and the Rules and Regulations are bereft of any remedy
Patentable inventions, on the other hand,refer to any technical regarding interlocutory orders of the IPO-BLA, the only remedy
solution of a problem in any field of human activity which is new, available to Pfizer is to apply the Rules and Regulations suppletorily.
involves an inventive step and is industrially applicable”. Under the Rules, a petition for certiorari to the CA is the proper
remedy. This is consistent with the Rules of Court. Thus, the CA had
jurisdiction.
5. Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer (Phil.), Inc. G.R.
No. 167715, 17 November 2010 c) Yes. 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
Facts: Pfizer is the registered owner of a patent pertaining to than by appeal or the special civil action of certiorari), or the
Sulbactam Ampicillin. It is marketed under the brand name institution of two (2) or more actions or proceedings grounded on
“Unasyn.” Sometime in January and February 2003, Pfizer the same cause on the supposition that one or the other court
discovered that Pharmawealth submitted bids for the supply of would make a favorable disposition.
Sulbactam Ampicillin to several hospitals without the Pfizer’s
consent. Pfizer then demanded that the hospitals cease and desist The elements of forum shopping are: (a) identity of parties, or at
from accepting such bids. Pfizer also demanded that Pharmawealth least such parties that represent the same interests in both actions;
(b) identity of rights asserted and reliefs prayed for, the reliefs being
 4

founded on the same facts; (c) identity of the two preceding incorporation. The transformation method requires that an
particulars, such that any judgment rendered in the other action international law be transformed into a domestic law through a
will, regardless of which party is successful, amount to res judicata in constitutional mechanism such as local legislation. The incorporation
the action under consideration. This instance meets these elements. method applies when, by mere constitutional declaration,
international law is deemed to have the force of domestic law.
The parties are clearly identical. In both the complaints in the BLA-
IPO and RTC, the rights allegedly violated and the acts allegedly Consequently, legislation is necessary to transform the provisions of
violative of such rights are identical, regardless of whether the the WHA Resolutions into domestic law. The provisions of the WHA
patents on which the complaints were based are different. In both Resolutions cannot be considered as part of the law of the land that
cases, the ultimate objective of Pfizer was to ask for damages and to can be implemented by executive agencies without the need of a
permanently prevent Pharmawealth from selling the contested law enacted by the legislature
products. Relevantly, the Supreme Court has decided that the filing
of two actions with the same objective, as in this instance,
constitutes forum shopping. Philip Morris, Inc. vs. Fortune Tobacco Corporation
G.R. No. 158589. June 27, 2006
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 Facts:
res judicata in the other action.
Petitioner Philip Morris, Inc. a corporation organized under
the laws of the state of Virginia, USA, is the registered owner of the
Case: Pharmaceutical and Health Care Association v. Duque III, G.R. trademark MARK VII for cigarettes. Benson and Hedges (Canada),
No. 173034, Oct. 9, 2007 Inc., a subsidiary of Philip Morris, Inc., is the registered owner of the
Topic: How international law is transformed or incorporated into trademark MARK TEN for cigarettes. Another subsidiary of Philip
Philippine law Morris, Inc. the Swiss Company Fabriques de Tabac Reunies, S.A., is
the assignee of the trademark LARK. All are evidenced by Trademark
FACTS Certificate of Registration. On the other hand, Fortune Tobacco
Corporation, a company organized in the Philippines, manufactures
On October 28, 1986, Executive Order No. 51 (Milk Code) was issued and sells cigarettes using the trademark MARK.
by President Corazon Aquino by virtue of the legislative powers Philip Morris, Inc. filed a complaint for trademark
granted to the president under the Freedom Constitution. The Milk infringement and damages against Fortune Tobacco Corporation.
Code states that the law seeks to give effect to Article 112 of the The complaint was dismissed by the RTC Pasig City in its decision
International Code of Marketing of Breastmilk Substitutes (ICMBS), a dated January 21, 2003.
code adopted by the World Health Assembly (WHA) in 1981. From Maintaining to have the standing to sue in the local forum
1982 to 2006, the WHA adopted several Resolutions to the effect and that respondent has committed trademark infringement,
that breastfeeding should be supported, promoted and protected, petitioners went on appeal to the CA but CA affirmed the trial
hence, it should be ensured that nutrition and health claims are not court’s decision. The CA found that MARK VII, MARK TEN and LARK
permitted for breastmilk substitutes. The Philippines ratified the do not qualify as well-known marks entitled to protection even
International Convention on the Rights of the Child. Article 24 of said without the benefit of actual use in the local market and that the
instrument provides that State Parties should take appropriate similarities in the trademarks in question are insufficient as to cause
measures to diminish infant and child mortality, and ensure that all deception or confusion tantamount to infringement.
segments of society, specially parents and children, are informed of With the motion for reconsideration denied in the CA, the
the advantages of breastfeeding. The DOH issued RIRR which was to petitioners filed a petition for review with the Supreme Court.
take effect on July 7, 2006. A petition for certiorari under Rule 65 of
the Rules of Court, seeking to nullify Revised Implementing Rules Issues:
and Regulations of The “Milk Code,” assailing that the RIRR was
going beyond the provisions of the Milk Code, thereby amending 1.) Whether or not petitioners, as Philippine registrants of
and expanding the coverage of said law. trademarks, are entitled to enforce trademark rights in the country.
ISSUE/S 2.) Whether or not respondent has committed trademark
1. Whether or not petitioner is a real party-in-interest YES infringement against petitioners by its use of the mark MARK for its
2. Whether Administrative Order No. 2006-0012 or the Revised cigarettes, hence liable for damages.
Implementing Rules and Regulations (RIRR) issued by the
Department of Health (DOH) is not constitutional YES Ruling:
RULING A trademark is any distinctive word, name, symbol,
emblem, sign, or device, or any combination thereof adopted and
1. An association has standing to file suit for its workers used by a manufacturer or merchant on his goods to identify and
despite its lack of direct interest if its members are affected by the distinguish them from those manufactured, sold, or dealt in by
action. An organization has standing to assert the concerns of its others. Inarguably, trademark deserves protection. It is for this
constituents. The respondent is, thus, the appropriate party to reason that the petitioner’s recourse for their entitlement to enforce
assert the rights of its members, because it and its members are in trademark rights in this country and also the right to sue for
every practical sense identical. The respondent [association] is but trademark infringement in Philippine courts and be accorded
the medium through which its individual members seek to make protection against unauthorized use of the Philippine-registered
more effective the expression of their voices and the redress of their trademarks is understandable. Their standing to sue in Philippine
grievances. courts had been recognized by the CA but such right to sue does not
2. Under Article 23, recommendations of the WHA do not necessarily mean protection of their trademarks in the absence of
come into force for members,in the same way that conventions or actual use in the Philippines.
agreements under Article 19 and regulations under Article 21 come But the petitioners are still foreign corporations. They may
into force. Article 23 of the WHO Constitution reads: not sue on that basis alone of their respective certificates of
Article 23. The Health Assembly shall have authority to make registration of trademarks unless their country grants similar rights
recommendations to Members with respect to any matter within and privileges to Filipino citizens pursuant to Section 21-A of R.A.
the competence of the Organization No. 166. This reciprocity requirement is a condition to file a suit by a
for an international rule to be considered as customary law, it must foreign corporation as ruled in Leviton Industries v. Salvador.
be established that such rule is being followed by states because The respective home country of the petitioner, namely,
they consider it obligatory to comply with such rules the United States, Switzerland and Canada, together with the
Philippines are members of the Paris Union. Philippines adherence
Under the 1987 Constitution, international law can become part of to the Paris Convention obligates the country to honor and enforce
the sphere of domestic law either by transformation or its provisions, however, this does not automatically entitle
 5

petitioners to the protection of their trademark in our country It bears stressing that an action for infringement or unfair
without actual use of the marks in local commerce and trade competition, including the available remedies of injunction and
because any protection accorded has to be made subject to the damages, in the regular courts can proceed independently or
limitations of Philippine laws. simultaneously with an action for the administrative cancellation of
Significantly, registration in the Philippines of trademarks a registered trademark in the BPTTT. As applied to the present case,
does not convey an absolute right or exclusive ownership thereof. In petitioner’s prior filing of two inter partes cases against the
Shangri-la v. Development Group of Companies, the Court respondent before the BPTTT for the cancellation of the latter’s
emphasized that trademark is a creation of use and, therefore, trademark registrations, namely, “LIVE’S” and “LIVE’S Label Mark,”
actual use is a prerequisite to exclusive ownership; registration is does not preclude petitioner’s right (as a defendant) to include in its
only an administrative confirmation of the existence of the right of answer (to respondent’s complaint for damages in Civil Case No. No.
ownership of the mark, but does not perfect such right. 96-76944) a counterclaim for infringement with a prayer for the
With the foregoing perspective, it may be stated right off issuance of a writ of preliminary injunction.
that the registration of a trademark unaccompanied by actual use in
the country accords the registrants only the standing to sue for
infringements in Philippine Courts but entitlement to protection of IN-N-OUT BURGER, INC. VS. SEHWANI INC., ET. AL
such trademark in the country is entirely different matter. In-N-Out Burger, Inc. vs. Sehwani Inc., et. al
On the main issue of infringement, the court, relying on
the holistic test ruled against the likelihood of confusion resulting in Facts:
infringement arising from the respondent’s use of the trademark
MARK for its particular cigarette product. The striking dissimilarities Petitioner IN-N-OUT BURGER, INC., is a business entity incorporated
are significant enough to warn any purchaser that one is different under the laws of California. It is a signatory to the Convention of
from the other. This is upon considering the entire marking as a Paris on Protection of Industrial Property and the TRIPS Agreement.
whole It is engaged mainly in the restaurant business, but it has never
For lack of convincing proof on the part of the petitioners engaged in business in the Philippines.
of actual use of their registered trademark prior to respondents use
of its mark and for petitioners failure to demonstrate confusing Respondents Sehwani, Incorporated and Benita Frites, Inc. are
similarity between said trademarks, the dismissal of their basic corporations organized in the Philippines. Sometime in 1991,
complaint of infringement and the plea for damages are affirmed. Sehwani filed with the BPTTT an application for the registration of
The petition is denied. The assailed decision and resolution the mark “IN N OUT (the inside of the letter “O” formed like a star).
of the Court of Appeals are affirmed. Its application was approved and a certificate of registration was
issued in its name on 1993. In 2000, Sehwani, Incorporated and
Benita Frites, Inc. entered into a Licensing Agreement, wherein the
Levi Strauss (Phils.) v. Vogue Traders Clothing Company (G.R. No. former entitled the latter to use its registered mark, “IN N OUT.”
132993)
Facts: Sometime in 1997, In-N-Out Burger filed trademark and service
mark applications with the Bureau of Trademarks for the “IN-N-
Petitioner Levi Strauss Phils. is a grantee of license by its US-based OUT” and “IN-N-OUT Burger & Arrow Design. In 2000, In-N-Out
principal to use LEVI’S trademark in the manufacturing and sale of its Burger found out that Sehwani, Incorporated had already obtained
clothing and other goods. Later, petitioner discovered the existence Trademark Registration for the mark “IN N OUT (the inside of the
of respondent’s trademark LIVE’S which in its view was confusingly letter “O” formed like a star).” Also in 2000, In-N-Out Burger sent a
similar to its trademark. Thus, petitioner instituted an administrative demand letter directing Sehwani, Inc. to cease and desist from
case for its cancellation. Respondent on the other hand, filed a civil claiming ownership of the mark “IN-N-OUT” and to voluntarily
action for damages against petitioner. Petitioner counterclaimed cancel its trademark registration. Sehwani Inc. did not accede to In-
that its trademark is infringed and moved to enjoin respondent from N-Out Burger’s demand but it expressed its willingness to surrender
using said confusingly similar mark. Trial court ruled for petitioner. its registration for a consideration.
CA ordered the trial court to desist from proceeding with the civil
case until the pending administrative action has been resolved. In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an
administrative complaint against the Sehwani, Inc. and Benita Frites,
Issue: Inc. for unfair competition and cancellation of trademark
registration.
Whether or not the administrative action to cancel the trademark
registration can proceed independently from an action of Issues:
infringement or unfair competition.
Whether or not the Intellectual Property Office (an administrative
Ruling: YES. body) have jurisdiction of cases involving provisions of the IPC (e.g.
unfair competition).[1]
The passage of Republic Act No. 8293, otherwise known as the Whether or not there was unfair competition.
“Intellectual Property Code of the Philippines,” expanded the rights Held:
accorded to an owner of a registered trademark. Sections 151 (2)
thereof state: FIRST ISSUE: Yes, the IPO (an administrative body) has jurisdiction in
cases involving provisions of the IPC (e.g. unfair competition) due to
Section 151.2. Notwithstanding the foregoing provisions, the court the following reasons:
or the administrative agency vested with jurisdiction to hear and
adjudicate any action to enforce the rights to a registered mark shall Section 10 of the Intellectual Property Code specifically identifies the
likewise exercise jurisdiction to determine whether the registration functions of the Bureau of Legal Affairs, thus:
of said mark may be cancelled in accordance with this Act. The filing Section 10. The Bureau of Legal Affairs.“The Bureau of Legal Affairs
of a suit to enforce the registered mark with the proper court or shall have the following functions:
agency shall exclude any other court or agency from assuming
jurisdiction over a subsequently filed petition to cancel the same 10.1 Hear and decide opposition to the application for registration
mark. On the other hand, the earlier filing of petition to cancel the of marks; cancellation of trademarks; subject to the provisions of
mark with the Bureau of Legal Affairs {formerly BPTTT] shall not Section 64, cancellation of patents and utility models, and industrial
constitute a prejudicial question that must be resolved before an designs; and petitions for compulsory licensing of patents;
action to enforce the rights to same registered mark may be
decided. 10.2 (a) Exercise original jurisdiction in administrative complaints for
violations of laws involving intellectual property rights; Provided,
That its jurisdiction is limited to complaints where the total damages
 6

claimed are not less than Two hundred thousand pesos (P200,000): offered for sale to the public. Actual fraudulent intent need not be
Provided, futher, That availment of the provisional remedies may be shown.
granted in accordance with the Rules of Court. Xxx

Xxx
[1] IPO – Director of Legal Affairs decision
(vi) The cancellation of any permit, license, authority, or registration In-N-Out Burger has legal capacity to sue in the Philippines because
which may have been granted by the Office, or the suspension of the latter is a signatory of the Convention of Paris on Protection of
the validity thereof for such period of time as the Director of Legal Industrial Property.
Affairs may deem reasonable which shall not exceed one (1) year; IN-N-OUT Burger, Inc. – right to use its tradename and mark to the
exclusion of the others
Xxx Respondents’ use of the petitioner’s mark was made in good faith
and therefore they are not guilty of unfair competition.
(viii) The assessment of damages; IPO – Director General’s Decision
Respondents are guilty of unfair competition.
Unquestionably, petitioner’s complaint, which seeks the cancellation The following are ordered to be paid to In-N-Out Burger, inc.
of the disputed mark in the name of respondent Sehwani, Damages in the amount of PHP 212, 574.28
Incorporated, and damages for violation of petitioner’s intellectual Exemplary damages in the amount of PHP 500,000
property rights, falls within the jurisdiction of the IPO Director of Attorney’s fees and expenses of litigation in the amount of PHP
Legal Affairs. 500,000
CA Decision
Regular courts, and not the BLA-IPO, have sole jurisdiction to hear
and decide cases involving provisions of the IPC.
While Section 163 thereof vests in civil courts jurisdiction over cases
of unfair competition, nothing in the said section states that the
regular courts have sole jurisdiction over unfair competition cases, ANGELITA MANZANO VS COURT OF APPEALS
to the exclusion of administrative bodies. G.R. NO. 113388
Sections 160 and 170, which are also found under Part III of the September 5, 1997
Intellectual Property Code, recognize the concurrent jurisdiction of PONENTE: Bellosillo, J.
civil courts and the IPO over unfair competition cases.
These two provisions read: FACTS:
Petitioner Manzano filed with Philippine Patent Office an action for
Section 160. Right of Foreign Corporation to Sue in Trademark or the cancellation of Letters Patent for a gas burner registered in the
Service Mark Enforcement Action. Any foreign national or juridical name of private respondent Madolaria who subsequently assigned
person who meets the requirements of Section 3 of this Act and the same to private respondent United Foundry. Petitioner alleged
does not engage in business in the Philippines may bring a civil or that the utility model covered by the letters patent was not
administrative action hereunder for opposition, cancellation, inventive, new, or useful, the specification did not comply with the
infringement, unfair competition, or false designation of origin and requirements of R.A. No. 165, that respondent was not the original,
false description, whether or not it is licensed to do business in the true, and actual inventor nor did she derive her rights from the
Philippines under existing laws. same, and that respondent was guilty of fraud or misrepresentation
in applying for the letters patent.
Section 170. Penalties. Independent of the civil and administrative
sanctions imposed by law, a criminal penalty of imprisonment from Petitioner also alleged that the utility model in question had already
two (2) years to five (5) years and a fine ranging from Fifty thousand been in use and on sale (petitioner herself being a distributor/seller
pesos (P50,000) to Two hundred thousand pesos (P200,000), shall of the said gas burners) in the Philippines for more than one year
be imposed on any person who is found guilty of committing any of before the respondent filed for the application. Petitioner presented
the acts mentioned in Section 155, Section168, and two undated brochures of two different Gas companies (Manila Gas
Subsection169.1. Corp. & Esso Gasul) which allegedly depicts an identical gas burner
as the one covered in respondent’s letters patent. Respondent
Based on the foregoing discussion, the IPO Director of Legal Affairs presented her husband as lone witness to testify that respondent,
had jurisdiction to decide the petitioner’s administrative case thru complaints of customers, devised a way to solve the defects in
against respondents and the IPO Director General had exclusive the gas burners, and respondent’s innovation is now the subject of
jurisdiction over the appeal of the judgment of the IPO Director of the letters patent.
Legal Affairs.
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
SECOND ISSUE: Yes. The evidence on record shows that Sehwani Inc. novel. Petitioner failed to overcome her burden and overturn the
and Benita Frites were not using their registered trademark but that presumption of legality of the issuance of letters patent and that
of In-n-Out Burger. Sehwani and Benita Frites are also giving their respondent withheld material facts with intent to deceive which, if
products the general appearance that would likely influence the disclosed, would have resulted in the refusal by the PPO to issue the
purchasers to believe that their products are that of In-N-Out letters patent. Hence, this appeal.
Burger. The intention to deceive may be inferred from the similarity
of the goods as packed and offered for sale, and, thus, an action will ISSUE: WON the CA erred in upholding the decision of the Director
lie to restrain unfair competition. The respondents’ frauduulent of Patents.
intention to deceive purchasers is also apparent in their use of the
In-N-Out Burger in business signages. RULING: NO. In issuing Letters Patent to respondent Madolaria for
an LPG Burner, the PPO found her invention novel and patentable.
The essential elements of an action for unfair competition are (1) The issuance of such patent creates a presumption which yields only
confusing similarity in the general appearance of the goods and (2) to clear and cogent evidence that the patentee was the original and
intent to deceive the public and defraud a competitor. The confusing first inventor. The burden of proving want of novelty is on him who
similarity may or may not result from similarity in the marks, but avers it and the burden is a heavy one which is met only by clear and
may result from other external factors in the packaging or satisfactory proof which overcomes every reasonable doubt.
presentation of the goods. The intent to deceive and defraud may
be inferred from the similarity of the appearance of the goods as As found by the Director of Patents, the standard of evidence
sufficient to overcome the presumption of legality of the issuance of
 7

letters patent to respondent Madolaria was not legally met by the process in question, and obtained against this defendant a
petitioner in her action for the cancellation of the patent. The judgment, granting a perpetual injunction restraining its
findings and conclusions of the Director of Patent were reiterated infringement, which judgment was affirmed by this Court on appeal.
and affirmed by the Court of Appeals. The rule is settled that the The order was couched in the following terms:
findings of fact of the Director of Patents, especially when affirmed
by the Court of Appeals, are conclusive on this Court when “It is ordered that the defendant abstain from manufacturing canes
supported by substantial evidence. and umbrellas with a curved handle by means of a lamp or blowpipe
fed with mineral oil or petroleum, which process was protected by
The validity of the patent issued by the PPO in favor of private patent no. 19288, issued in favor of Henry Gsell, and by him
respondent and the question over the inventiveness, novelty and transferred to Carlos Gsell”.
usefulness of the improved model of the LPG burner are matters
which are better determined by the PPO. The technical staff of the Thereafter the defendant continued to manufacture curved
Philippine Patent Office composed of experts in their field has by the cane handles for walking sticks and umbrellas by a process in all
issuance of the patent in question accepted private respondents respects identical with that used by the plaintiff under his patent,
model of gas burner as a discovery. There is a presumption that the except only that he substituted for a lamp fed with petroleum or
Office has correctly determined the patentability of the model and mineral oil, a lamp fed with alcohol.
such action must not be interfered with in the absence of competent
evidence to the contrary. The trial court found the defendant “not guilty” of contempt
as charged; and this court, on appeal, held that “The violation, if
there has been any, was not of such a character that it could be
PARKE DAVIS and COMPANY vs. DOCTORS' PHARMACEUTICALS, made patent by the mere annunciation of the acts performed by the
INC., ET AL. defendant, which are alleged to constitute the said violation.
Consequently, the contempt with which the accused is charged has
G.R. No. L-22221, August 31, 1965 not been fully and satisfactorily proved, and the order appealed
from should accordingly be affirmed in so far as it holds that the
FACTS: defendant is not guilty of contempt.

Parke Davies and Company is an owner of a Patent entitled "Process Substantially, the same question is submitted in these new
for the Manufacturing of Antibiotics" (Letters Patent No. 50) which proceedings as that submitted in the former case.
was issued by the Philippine Patent Office on February 9, 1950. The
patent relates to a chemical compound represented by a formula ISSUE:
commonly called chloramphenicol. The patent contains ten claims,
nine of which are process claims, and the other is a product claim to Whether the use of a patented process by a third person,
the chemical substance chloramphenicol. without license or authority therefore, constitutes an infringement
when the alleged infringer has substituted in lieu of some
Doctors’ Pharmaceuticals Inc. requested that it be granted a unessential part of the patented process a well-known mechanical
voluntary license to manufacture and produce our own brand of equivalent.
medicine, containing chloramphenicol, and to use, sell, distribute, or
otherwise dispose of the same in the Philippines under such terms HELD:
and conditions as may be deemed reasonable and mutually
satisfactory, which Parke Davies declined. Counsel for plaintiff invokes the doctrine of “mechanical
equivalents” in support of his contention, and indeed that doctrine
Doctors’ Pharmaceuticals Inc. filed a petition with the Director of is applicable to the facts of the case. This doctrine is founded upon
Patents requesting the Director to grant a compulsory license. After sound rules of reason and logic, and unless restrained or modified by
careful evaluation and hearings, the Director granted the request of law in particular jurisdiction, is of universal application, so that it
Doctors’ Pharmaceuticals. matters not whether a patent be issued by one sovereignty or
another, the doctrine may properly be invoked to protect the
patentee from colorable invasions of his patent under the guise of a
ISSUE: substitution of some part of his invention by some well-known
mechanical equivalent.
Is the decision of the Director of Patents in granting Doctor’s
Pharmaceutical Inc. compulsory license to use the substance The use of a process in all respects identical with a process
chloramphenicol, valid? protected by a valid patent, save only that a well-known mechanical
equivalent is substituted in lieu of some particular part of the
patented process is an infringement upon the rights of the owner of
HELD: the patent, which will be enjoined in appropriate proceeding, and
the use of such process, after the order enjoining its use has been
Yes the decision of the Director of Patents in granting Doctor’s issued, is a “contempt”, under the provision of section 172 of the
Pharmaceutical Inc. compulsory license to use the substance Code of Civil Procedure.
chloramphenicol is valid. The Supreme Court says that patents
issued to foods and medicines are not exclusive so as not to prevent Does the use of a patented process by a third person constitute an
the building up of patent monopolies. Public benefit is foremost. The infringement when the alleged infringer has substituted, in lieu of
Court dismissed the contention of Parke Davies that the Director of some unessential part of the patented process, a well-known
Patents erred in granting compulsory license. The decision appealed mechanical equivalent."
from is affirmed, with costs against petitioner.

Yes, under the doctrine of mechanical equivalents, the patentee is

protected from colorable invasions of his patent under the guise of
substitution of some part of his invention by some well known
CASE DIGEST: CARLOS GSELL vs. VALERIANO VELOSO YAP-JUE mechanical equivalent. It is an infringement of the patent, if the
FACTS: substitute performs the same function and was well known at the
date of the patent as a proper substitute for the omitted ingredient.
The principal case to which these proceedings are ancillary, (Gsell v. Yap-Jue, G.R. No. L-4720, Jan. 19, 1909)
was an action to enjoin infringement of a patented process for
manufacture of curved handles for canes, parasols, and umbrellas. ANGEL VARGAS vs F. M. YAPTICO & CO. (Ltd.)
In that case, plaintiff established his title to a valid patent covering G.R. No. 14101, September 24, 1919
 8

Lincoln Engineering Co. v. Stewart-Warner Corp., 303 U.S. 545

Facts: (1938)
Lincoln Engineering Co. v. Stewart-Warner Corp.
Plaintiff Angel Vargas, a farmer, was issued patents by the United
States Patent Office for his so-called invention of an improved No. 608
adjustable plow with the use his own native plow. A certified copy of
the patent was filed in the Division of Patents, Copyrights, and Argued March 10, 1938
Trademarks of the Executive Bureau, Government of the Philippine
Islands. Decided March 28, 1938

Defendant F. M. Yaptico & Co. (Ltd.), a firm engaged in the foundry 303 U.S. 545
business in Iloilo City, was a manufacturer of plow parts. It produced
points, shares, shoes, and heel pieces in a considerable amount
adapted to replace worn-out parts of the Vargas plow. Syllabus

Vargas filed a case in the Court of First Instance of Iloilo to enjoin the 1. Patent No. 1,593,791, July 27, 1926, to Butler, for the combination
alleged infringement of his U.S. Patent by the defendant F. M of a headed nipple, for receiving lubricant, a grease pump, and a
Yaptico & Co. (Ltd.), and to recover the damages suffered by reason coupler having a multi-jawed chuck which is closed over the head of
of this infringement, to which the court issued the preliminary the nipple by the pressure of the grease acting on a piston within
injunction prayed for. the tube of the coupler, held void as claiming more than the
applicant invented. P. 303 U. S. 548.
The defendant denied the allegations and defended that the patent
lacked novelty or invention, that there was no priority of ideas or Assuming that the coupler embraced a patentable improvement in
device in the principle and construction of the plow, and that the the respect that the jaws of the chuck are actuated by the grease
plow, whose manufacture it was sought to have enjoined by the pressure, the chuck form of coupling as well as the headed nipple
plaintiff, had already been in public use for more than two years and grease pump are old in the art, and perform no new functions in
before the application of the plaintiff for his patent. this combination.

The trial judge rendered judgment in favor of the defendant, 2. The improvement of one part of an old combination gives no right
declaring null and without effect the patent in question and to claim that improvement in combination with other old parts
dismissing the suit with costs against the plaintiff. Hence, the which perform no new function in the combination. Rogers v.
plaintiff appealed said judgment. Alemite Corp., 298 U. S. 415. P. 303 U. S. 549.

Issues: 91 F.2d 757 reversed.

1. Whether the patented invention is void for lack of novelty and Certiorari, 302 U.S. 682, to review the affirmance of a decree, 15 F.
invention? Supp. 571; 16 id. 778, holding the present petitioner guilty of
contributory infringement in selling headed fittings or nipples for
2. Whether the patent is invalid considering that the plow had lubrication such as are described in the respondent's patent and
already been in public use for over two years prior to the application which are usable, and intended to be used, in connection with the
for a patent. grease gun and coupler of the patent.

Ruling: Page 303 U. S. 546

1. Yes, the patent if void. The Supreme Court affirmed the trial
court’s conclusion that the plow of the plaintiff is not different from
the native plow, except in the material, in the form, in the weight Diamond, Commissioner of Patents and Trademarks v. Chakbarty,
and the grade of the result, the said differences giving it neither a 447 U.S. 303
new function nor a new result distinct from the function and the
result obtained from the native plow. Also, its production does not Annotation
presuppose the exercise of the inventive faculty but merely of
mechanical skill, which does not give a right to a patent of an Primary Holding
invention under the provisions of the Patent Law. Patent protection is available for a micro-organism that is artificially
constructed rather than naturally occurring.
2. Yes, the patent is void. Under the provisions of the statute, an Facts
inventor's creation must not have been in public use or on sale in Chakrabarty, a scientist, sought patent protection related to his
the United States (and the Philippine Islands) for more than two discovery of a method for developing a bacterium that could break
years prior to his application. down multiple components of crude oil. His claims ranged from the
process of developing the bacterium to the bacterium itself and an
Further, it was proved that the invention was used in public at Iloilo inoculum in which the bacterium was stored with a carrier material.
by others than Vargas, the inventor, more than two years before the While the examiner found that a patent was appropriate for the
application for the patent thus, the patent is invalid. process and the inoculum, Chakrabarty was denied a patent for the
bacterium itself on the grounds that it did not meet the subject
matter requirements for a patent. Under 35 U.S.C. Section 101 and
the 1930 Plant Patent Act, according to the patent examiner, a living
organism may not be patented. Various appellate review panels
reached clashing decisions on the matter before the Acting
Commissioner of Patents and Trademarks sought certiorari review
from the Supreme Court.
Opinions
Majority

Warren Earl Burger

Potter Stewart
Harry Andrew Blackmun
William Hubbs Rehnquist
 9

John Paul Stevens In addition to the evidence presented, the parties submitted the following
Acknowledging that patents cannot protect laws of nature or stipulation of facts:
physical phenomena, Burger still felt that a broad interpretation of
The parties agree on the following facts:
35 U.S.C. Section 101 and particularly the term "manufacture" was
appropriate. He found that "manufacture" should have the same 1. That the plaintiff, Angel Vargas, is of age and a resident of the municipality
expansive meaning as in an ordinary dictionary. Burger also held of Iloilo, Iloilo, Philippine Islands.
that the 1930 Plant Patent Act did not necessitate the examiner's
interpretation, since that law was intended to separate products of 2. That the defendant, Petronila Chua, is also of age, and is married to Coo
nature from products of human ingenuity. The bacterium was a Pao alias Coo Paoco, and resides in Iloilo.
product of Chakrabarty's own ingenuity because it did not occur in
nature. 3. That the defendant, Coo Teng Hee, is also of age and a resident of Iloilo,
and is the sole owner of the business known as Coo Kun & Sons Hardware
Co. established in Iloilo.
Burger also rejected the theory that express authorization from
Congress would be required to permit patent protection for micro- 4. That the defendant, Cham Samco & Sons, is a commercial partnership duly
organisms, since Congress could not have foreseen this evolution in organized under the laws of the Philippine Islands, with their principal office
science when drafting the original patent laws. Patents are designed in the City of Manila, and that the defendants Cham Samco, Cham Siong E,
to reward ingenuity and invention, according to Burger, so it would Cham Ai Chia and Lee Cham Say, all of age and residents of the City of
undermine the policy supporting them to deny protection to Manila, are the partners of the firm Cham Samco & Sons.
unforeseen inventions.
5. The parties take for granted that the complaint in this case is amended in
the sense that it includes Coo Paoco as party defendant in his capacity as
Dissent husband of the defendant, Petronila Chua, with Attorney Jose F. Orozco also
representing him, and that he renounces his rights to receive summons in
William Joseph Brennan, Jr. (Author) this case by reproducing the answer of his codefendant, Petronila Chua.
Byron Raymond White
Thurgood Marshall 6. That the plaintiff is the registered owner and possessor of United States
Lewis Franklin Powell, Jr. Patent No. 1,507,530 on certain plow improvements, issued by the United
Brennan advocated for a narrower interpretation of the issue, States Patent Office on September 2, 1924, a certified copy of which was
registered in the Bureau of Commerce and industry of the Government of
limiting it to whether a living organism like a bacterium may be
the Philippine Islands on October 17, 1924. A certified copy of said patent is
patentable rather than whether unforeseen inventions may be attached to this stipulation of facts as Exhibit A.
patentable. He agreed with the patent examiner that the 1930 Plant
Patent Act prohibited patent protection for living organisms, which 7. That the plaintiff is now and has been engaged, since the issuance of his
he saw as central to the Congressional purpose in crafting that law. patent, in the manufacture and sale of plows of the kind, type and design
Brennan also referred to a 1970 law that specifically excluded covered by the aforementioned patent, said plows being of different sizes
bacteria from patent protection. and numbered in accordance therewith from 1 to 5.

8. That, since the filing of the complaint to date, the defendant, Petronila
Case Commentary
Chua, has been manufacturing and selling plows of the kind, type and design
Naturally occurring organisms and plants cannot be patented represented by Exhibits B, B-1 and B-2, of different sizes, designated by Nos.
because human ingenuity is not responsible for creating them, but 2, 4 and 5.
an artificial organism is the product of an individual's creativity and
skill, so it deserves protection. 9. That, since the filing of the complaint to date, the defendant, Coo Teng
Hee, doing business in Iloilo under the name of Coo Kun & Sons Hardware
Co., has been obtaining his plows, of the form and size of Exhibits B, B-1 and
NO DIGEST B-2, from the defendant Petronila Chua.
G.R. No. L-36650 January 27, 1933
10. Without prejudice to the plaintiff's right to ask the defendants to render
ANGEL VARGAS, plaintiff-appellee, an accounting in case the court deem it proper, the parties agree that the
vs. defendant Coo Teng Hee, doing business under the name of Coo Kun & Sons
PETRONILA CHUA, ET AL., defendants-appellants. Hardware Co., has been selling to his customers in his store on J. Ma. Basa
Street in Iloilo, plows of the kind, type and design represented by Exhibits B,
Jose F. Orozco for appellants. B-1 and B-2, having bought said plows from his codefendant, Petronila Chua,
Jose Yulo for appellee. who manufactures them in her factory on Iznart Street, Iloilo.

IMPERIAL, J.: 11. That, according to the invoices marked Exhibits C and C-2 dated March
13, 1928, and June 19, 1928, respectively, the defendant Cham Samco &
The defendants Petronila Chua, Coo Pao and Coo Teng Hee, appeal from the Sons, on the dates mentioned, had, in the ordinary course of business,
judgment of the Court of First Instance of Manila, the dispositive part of bought of its codefendant Coo Kun & Sons Hardware Co., 90 plows of the
which reads as follows: form, type and design of Exhibits B, B-1 and B-2 which it has been selling in
its store on Sto. Cristo Street, Manila.
Wherefore judgment is rendered in favor of the plaintiff and against the
defendants, ordering each and every one of them, their agents, mandatories 12. That the same defendant Cham Samco & Sons, in the ordinary course of
and attorneys, to henceforth abstain from making, manufacturing, selling or business, bought on March 17, 1928, of the store "El Progreso" owned by Yao
offering for a sale plows of the type of those manufactured by the plaintiff, Ki & Co., of Iloilo, a lot of 50 plows, of the form, type and design of Exhibit B-
and particularly plows of the model of Exhibits B, B-1 and B-2, and to render 1, as shown by Invoice C-1, and that it has been selling them in its store on
to the plaintiff a detailed accounting of the profits obtained by them from Sto. Cristo St., Manila.
the manufacture and sale of said type of plows within thirty (30) days from
the date of the receipt by them of notice of this decision, with costs against 13. That, on September 19, 1928, the defendant Cham Samco & Sons, sold in
all of the defendants. its store on Sto. Cristo St., Manila, the plow Exhibit B-1, for the sale of which
invoice Exhibit D was issued.
Angel Vargas, the plaintiff herein, brought this action to restrain the
appellants and the other defendant entity, Cham Samco & Sons, their agents 14. That, on December 20, 1927, the plaintiff herein, through his attorneys
and mandatories, from continuing the manufacture and sale of plows similar Paredes, Buencamino & Yulo, sent by registered mail to the herein
to his plow described in his patent No. 1,507,530 issued by the United States defendant, Coo Kun & Sons Hardware Co., at Iloilo, the original of the letter
Patent Office on September 2, 1924; and to compel all of said defendants, Exhibit E, which was received by it on September 28, 1927, according to the
after rendering an accounting of the profits obtained by them from the sale receipt marked Exhibit E-1 attached hereto.
of said plows from September 2, 1924, to pay him damages equivalent to
double the amount of such profits. 15. 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
It appears from the bill of exceptions that Cham Samco & Sons did not other parts of the Philippines, as "Arados Vargas", and that the plaintiff is the
appeal. sole manufacturer of said plows. A sample of these plows is presented as
Exhibit F.
 10

presumed to be correct. The burden then shifts to the defendant to

16. That the document, Exhibit 1-Chua, is a certified copy of the amended overcome by competent evidence this legal presumption. With all due
complaint, the decision of the Court of First Instance of Iloilo and that of the respects, therefore, for the critical and expert examination of the invention
Supreme Court (R. G. No. 14101) in civil case No. 3044 of Iloilo, entitled by the United States Patent Office, the question of the validity of the patent
"Angel Vargas", plaintiff, vs. F. M. Yaptico & Co., Ltd., defendant", and that is one for judicial determination, and since a patent has been submitted, the
Exhibit 2-Chua et al. is a certified copy of Patent No. 1,020,232, to which the exact question is whether the defendant has assumed the burden of proof as
aforementioned complaint and decision refer, issued in favor of Angel Vargas to anyone of his defenses. (See Agawan Co. vs. Jordan [1869], 7 Wall., 583;
by the United States Patent Office on March 12, 1912, and that Exhibit 3- Blanchard vs. Putnam [1869], 8 Wall., 420; Seymour vs. Osborne [1871], 11
Chua et al., represents the plow manufactured by Angel Vargas in accordance Wall., 516; Reckendorfer vs. Faber [1876], 92 U. S., 347; 20 R. C. L., 1112,
with his Patent marked Exhibit 2-Chua et al. 1168, 1169.)

The appellants assign the following errors: Although we spent some time in arriving at this point, yet, having reached it,
the question in the case is single and can be brought to a narrow compass.
FIRST ERROR Under the English Statute of Monopolies (21 Jac. Ch., 3), and under the
United States Patent Act of February 21, 1793, later amended to be as herein
The trial court erred in declaring that the Vargas plow, Exhibit F (covered by quoted, it was always the rule, as stated by Lord Coke, Justice Story and
Patent No. 1,507,530) is distinct from the old model Vargas plow, Exhibit 2- other authorities, that to entitle a man to a patent, the invention must be
Chua, covered by the former Patent No. 1,020,232, which had been declared new to the world. (Pennock and Sellers vs. Dialogue [1829], 2 Pet., 1.) As said
null and void by this court. by the United States Supreme Court, "it has been repeatedly held by this
court that a single instance of public use of the invention by a patentee of
SECOND ERROR more than two years before the date of his application for his patent will be
fatal to the validity of the patent when issued." (Worley vs. Lower Tobacco
The trial court erred in mistaking the improvement on the plow for the plow Co. [1882], 104 U. S., 340; McClurg vs. Kingsland [1843], 1 How., 202;
itself. Consolidated Fruit Jar Co. vs. Wright [1877], 94 U. S., 92; Egbert vs. Lippmann
[1881], 104 U. S., 333; Coffin vs. Ogden [1874], 18 Wall., 120; Manning vs.
THIRD ERROR Cape Ann Isinglass and Glue Co. [1883], 108 U. S., 462; Andrews vs. Hovey
[1887], 123 U. S., 267; Campbell vs. City of New York [1888], 1 L. R. A., 48.)
The trial court erred in rendering judgment in favor of the plaintiff and
against the defendants. We repeat that in view of the evidence presented, and particularly of the
examination we have made of the plows, we cannot escape the conclusion
FOURTH ERROR that the plow upon which the appellee's contention is based, does not
constitute an invention and, consequently, the privilege invoked by him is
The trial court erred in not dismissing the complaint with costs against the untenable and the patent acquired by him should be declared ineffective.
plaintiff.
The judgment appealed from is hereby reversed and the appellants are
The evidence shows that Exhibit F is the kind of plows the plaintiff, Angel absolved from the complaint, with costs of this instance against the appellee.
Vargas, manufactures, for which Patent No. 1,507,530, Exhibit A, was issued So ordered.
in his favor. Exhibits B, B-1 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, CASE DIGEST: Aguas vs. De Leon
the appellee obtained a patent from the United States Patent Office, which 111 SCRA 238 (1982)
was declared null and void by the Supreme Court in the case of Vargas vs. F.
M. Yap Tico & Co. (40 Phil., 195).
FACTS:
With these facts in view, the principal and perhaps the only question we are
called upon to decide is whether the plow, Exhibit F, constitutes a real This is a petition for certiorari to review the decision of the
invention or an improvement for which a patent may be obtained, or if, on Court of Appeals.
the contrary, it is substantially the same plow represented by Exhibit 3-Chua
the patent for which was declared null and void in the aforementioned case On April 14, 1962, respondent Conrado de Leon filed in the
of Vargas vs. F. M. Yaptico & Co., supra. CFI of Rizal at Quezon City a complaint for infringement of patent
against petitioner Domiciano Aguas and F.H. Aquino and Sons
We have carefully examined all the plows presented as exhibits as well as the
alleging among others that being the original first and sole inventor
designs of those covered by the patent, and we are convinced that no
substantial difference exists between the plow, Exhibit F, and the plow, of certain new and useful improvements in the process of making
Exhibit 3-Chua which was originally patented by the appellee, Vargas. The mosaic pre-cast tiles, and thereafter lawfully acquired from the
only difference noted by us is the suppression of the bolt and the three holes Philippine Patent Office, Patent No. 658, the latter infringed the
on the metal strap attached to the handle bar. These holes and bolt with its same by making, using and selling tiles embodying said patent
nut were suppressed in Exhibit F in which the beam is movable as in the invention. A writ of Preliminary Injuction was subsequently issued.
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 Petitioner Aguas, in his answer, denied the allegations and
two plows but no improvement whatever has been made on the latest
instead averred inter alia that respondent De Leon is neither the
model, for the same working and movement of the beam existed in the
original model with the advantage, perhaps, that its graduation could be original first nor sole inventor of the improvements in the process of
carried through with more certainty by the use of the bolt which as has making mosaic pre-cast tiles, the same having been used by several
already been stated, was adjustable and movable. tile-making factories both here and abroad years before the alleged
invention by De Leon; hence, it is not patentable.
As to the fact, upon which much emphasis was laid, that deeper furrows can
be made with the new model, we have seen that the same results can be had The trial court and the Court of Appeals, upon appeal
with the old implement. rendered judgment in favor of respondent de Leon. Thus, this
petition.
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, ISSUE:
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, Whether or not the alleged invention or discovery of
especially in the Province of Iloilo, long before he obtained his last patent. respondent is patentable.

In the above mentioned case of Vargas vs. F. M. Yaptico & Co., we said: HELD:
When a patent is sought to be enforced, "the questions of invention, novelty,
or prior use, and each of them, are open to judicial examination." The burden Yea. x x x It should be noted that the private respondent does
of proof to substantiate a charge of infringement is with the plaintiff. Where, not claim to be the discoverer or inventor of the old process of tile-
however, the plaintiff introduces the patent in evidence, if it is the due form, making. He only claims to have introduced an improvement of said
it affords a prima facie presumption of its correctness and validity. The process. In fact, Letters Patent No. 658 was issued by the Philippine
decision of the Commissioner of Patents in granting the patent is always Patent Office to the private respondent Conrado G. De Leon, to
 11

protect his rights as the inventor of “ an alleged new and useful considered at all by the court a quo for alleged lack of jurisdiction,
improvement in the process of making pre-cast tiles.” Indeed, on the mistaken notion that such question is within the exclusive
section 7, Republic Act No. 165, as amended provides: “ Any jurisdiction of the patent office. It has been repeatedly held that an
invention of a new and useful machine, manufactured product or invention must possess the essential elements of novelty, originality
substance, process, or an improvement of the foregoing, shall be and precedence and for the patentee to be entitled to protection,
patentable.” the invention must be new to the world. Accordingly, a single
instance of public use of the invention by a patentee for more than
two years (now for more than one year only under Sec. 9 of the
ROSARIO C. MAGUAN vs. COURT OF APPEALS Patent Law) before the date of his application for his patent, will be
G.R. L-45101, November 28, 1986, SECOND DIVISION, PARAS, J. fatal to, the validity of the patent when issued.

SEC. 9. Invention not considered new or patentable. — An invention

Petitioner Rosario C. Maguan is doing business under the firm name shall not be considered new or capable of being patented if it was
and style of “SWAN MANUFACTURING" while private respondent known or used by others in the Philippines before the invention
Susana Luchan is likewise doing business under the firm name and thereof by the inventor named in an application for patent for the
style of "SUSANA LUCHAN POWDER PUFF MANUFACTURING." The invention; or if it was patented or described in any printed
petitioner informed private respondent that the powder puffs the publication in the Philippines or any foreign country more than one
latter is manufacturing and selling to various enterprises particularly year before the application for a patent therefor; or if it had been in
those in the cosmetics industry, resemble identical or substantially public use or on sale in the Philippines for more than one year
identical powder puffs of which the former is a patent holder under before the application for a patent therefor; or if it is the subject
Registration Certification Nos. Extension UM-109, Extension UM-110 matter of a validity issued patent in the Philippines granted on an
and Utility Model No. 1184; petitioner explained such production application filed before the filing of the application for patent
and sale constitute infringement of said patents and therefore its therefor.
immediate discontinuance is demanded, otherwise it will be
compelled to take judicial action. Private respondent replied stating Thus, more specifically, under American Law from which our Patent
that her products are different and countered that petitioner's Law was derived it is generally held that in patent cases a
patents are void because the utility models applied for were not preliminary injunction will not issue for patent infringement unless
new and patentable and the person to whom the patents were the validity of the patent is clear and beyond question. The issuance
issued was not the true and actual author nor were her rights of letters patent, standing alone, is not sufficient to support such
derived from such author. drastic relief. In cases of infringement of patent no preliminary
injunction will be granted unless the patent is valid and infringed
Maguan filed a complaint for damages with injunction and beyond question and the record conclusively proves the defense is
preliminary injunction against Luchan with the then Court of First sham.
Instance of Rizal. The trial court issued an Order granting the
preliminary injunction prayed for. Consequently, the corresponding For failure to determine first the validity of the patents before
writ was subsequently issued. It having denied the Motion for aforesaid issuance of the writ, the trial court failed to satisfy the two
Reconsideration, the private respondent filed a petition for requisites necessary if an injunction is to issue, namely: the
certiorari before the Court of Appeals. The Preliminary injunction existence of the right to be protected and the violation of said right.
issued by the trial court was affirmed by the CA but it later on
dismissed the petition and set aside the preliminary injunction
previously issued by the trial court. SMITH KLINE BECKMAN CORPORATION v.COURT OF APPEALS, et
al. 409 SCRA 33 (2003)
ISSUE:
Whether Maguan has a right to file an action before the When the language of its claims is clear and distinct, the patentee is
CFI for injunction due to infringement of her patent. bound thereby and may not claim anything beyond them.

HELD: Petitioner Smith Kline Beckman Corporation (SKBC) was granted by

When a patent is sought to be enforced, the questions of invention, the Philippine Patent Office Letters Patent No. 14561 over an
novelty or prior use, and each of them, are open to judicial invented compound entitled “Methods and Compositions for
examination. Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-
Benzimidazole Carbamate.” Such compound is claimed to be an
Under the present Patent Law, there is even less reason to doubt active ingredient in fighting various parasites in certain types of
that the trial court has jurisdiction to declare the patents in question domestic and livestock animals. Respondent Tryco Pharma (Tryco)
invalid. A patentee shall have the exclusive right to make, use and sells veterinary products including a drug Impregon which contains
sell the patented article or product and the making, using, or selling Albendazole as an active ingredient which fights against parasites in
by any person without the authorization of the patentee constitutes animals. Petitioner SKBC then filed an action against respondent
infringement of the patent (Sec. 37, R.A. 165). Any patentee whose Tryco for patent infringement claiming that the patent granted to
rights have been infringed upon may bring an action before the them includes said Albendazole. In their defense respondent Tryco
proper CFI now (RTC) and to secure an injunction for the protection alleges that Letters Patent No. 14561 granted to petitioner SKBC
of his rights (Sec. 42, R.A. 165). does not include Albendazole for nowhere is such word found in the
patent. The Trial Court rendered its decision in favor of respondent
The burden of proof to substantiate a charge of infringement is with Tryco which was affirmed by the Court of Appeals.
the plaintiff. But where the plaintiff introduces the patent in
evidence, and the same is in due form, there is created a prima facie ISSUES:
presumption of its correctness and validity. The decision of the
Commissioner (now Director) of Patent in granting the patent is Whether or not the Court of Appeals erred in not finding that
presumed to be correct. The burden of going forward with the Albendazole is included in petitioners Letter Pattent No. 14561
evidence (burden of evidence) then shifts to the defendant to
overcome by competent evidence this legal presumption. HELD:

The question then in the instant case is whether or not the evidence From an examination of the evidence on record, the Court finds
introduced by private respondent herein is sufficient to overcome nothing infirm in the appellate court’s conclusions with respect to
said presumption. Respondent Court of Appeals was satisfied that the principal issue of whether Tycho Pharma committed patent
there is a prima facie showing of a fair question of invalidity of infringement to the prejudice of SKBC. The burden of proof to
petitioner's patents on the ground of lack of novelty. As pointed out substantiate a charge for patent infringement rests on the plaintiff.
by said appellate court said evidence appeared not to have been In the case at bar, petitioner’s evidence consists primarily of its
 12

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 Abbot Laboratories, a Philippine corporation, has appealed from the
compound methyl 5 propylthio-2- benzimidazole carbamate also decision of the Director of Patents disallowing Patent Application
covers the substance Albendazole. From a reading of the 9 claims of Serial No. 77 on an invention relating to a medical preparation
Letters Patent No. 14561 in relation to the other portions thereof, better known as "Tridione." The review is expressly authorized by
no mention is made of the compound Albendazole. Chapter XIII of Rep. Act No. 165 known as the Philippine Patent Law.

When the language of its claims is clear and distinct, the patentee is The application for patent was submitted in June 1948 by Abbot
bound thereby and may not claim anything beyond them. And so are Laboratories of Illinois, U. S. A. and it represented that the invention
the courts bound which may not add to or detract from the claims was the same as that involved in three applications filed in the
matters not expressed or necessarily implied, nor may they enlarge United States Patent Office by the inventor Marvin A. Spielman,
the patent beyond the scope of that which the inventor claimed and (assignor of applicant) to wit: Application Serial No. 403,073 filed
the patent office allowed, even if the patentee may have been July 18, 1941; Application Serial No. 630,994 filed November 26,
entitled to something more than the words it had chosen would 1945; and Application Serial No. 779,424 filed October 11, 1947, the
include. It bears stressing that the mere absence of the word last two applications merely modifying the preceding one. And it
Albendazole in Letters Patent No. 14561 is not determinative of made the specific request that pursuant to the provisions of Section
Albendazole’s non-inclusion in the claims of the patent. While 76 of the local Patent Law, priority rights be granted by virtue of the
Albendazole is admittedly a chemical compound that exists by a above United States Patent applications.
name different from that covered in SKBC’s letters patent, the
language of Letter Patent No. 14561 fails to yield anything at all The appellee Director of Patents denied the request for priority on
regarding Albendazole. And no extrinsic evidence had been adduced the ground that it had been filed out of time, i.e., after February 28,
to prove that Albendazole inheres in SKBC’s patent in spite of its 1948.
omission therefrom or that the meaning of the claims of the patent
embraces the same. While SKBC concedes that the mere literal Contending that the deadline was July 1, 1948 - and not February 28,
wordings of its patent cannot establish Tyco Pharma’s infringement, 1948 — the Abbot Laboratories, a subsidiary of the applicant,
it urges the Court to apply the doctrine of equivalents. interposed this appeal.

The doctrine of equivalents provides that an infringement also takes Root-cause of the controversy is section 76, fully quoted below for
place when a device appropriates a prior invention by incorporating convenience:jgc:chanrobles.com.ph
its innovative concept and, although with some modification and
change, performs substantially the same function in substantially "SEC. 76. Certain priority rights for filing application extended. —
the same way to achieve substantially the same result. Yet again, a The rights of priority provided by section nine, Chapter II; section
scrutiny of SKBC’s evidence fails to convince the Court of the fifteen, Chapter III; and section fifty-six, Chapter XII hereof for the
substantial sameness of SKBC’s patented compound and filing of applications for patent for inventions and designs, which
Albendazole. While both compounds have the effect of neutralizing rights had not expired on the eight day of December, nineteen
parasites in animals, identity of result does not amount to hundred and forty-one, are extended until the first day of July,
infringement of patent unless Albendazole operates in substantially nineteen hundred and forty-eight, in favor of the citizens or subjects
the same way or by substantially the same means as the patented of countries which have extended, or which now extend, or which
compound, even though it performs the same function and achieves within said period ending the first day of July, nineteen hundred and
the same result. forty-eight, shall extend substantially reciprocal privileges to citizens
of the Philippines."cralaw virtua1aw library
In other words, the principle or mode of operation must be the
same or substantially the same. The doctrine of equivalents thus The Patent Office, argues the petitioner, has changed the above
requires satisfaction of the function-means-and-result test, the date, July 1, 1948 to February 29, 1948, even though it has no power
patentee having the burden to show that all three components of to "alter and much less shorten the period expressly set by our
such equivalency test are met. Legislature as found in section 76."cralaw virtua1aw library

The Director of Patents reasons out that inasmuch as Filipinos may

ABBOT LABORATORIES, Petitioner, v. HON. CELEDONIO AGRAVA, enjoy in the United States priority rights similar to those granted by
Director of Patents, Respondent. section 76, only up to February 29, 1948, therefore American
citizens may invoke in the Philippines priority rights only up to
Gilberto Neri for Petitioner. February 29, 1948.

First Assistant Solicitor General Ruperto Kapunan Jr., and Solicitor Explaining his position said officer quotes a note of the U. S.
Pacifico P. de Castro for Respondent. Secretary of State dated February 12, 1948 to the Philippine
Ambassador, and the latter’s reply thereto dated August 23, 1948.
SYLLABUS Both notes declare that, in the matter of priority patent rights, the
deadline for Filipinos in the U. S. and for Americans in the Philippines
1. PATENTS; APPLICATION FOR PATENT BASED ON RECIPROCITY is February 29, 1948.
GOOD UP TO FEBRUARY 28, 1948. — Since section 76 of Republic
Act 165 known as the Philippine Patent Law, is a reciprocity This exchange of correspondence called "executive agreement" gave
measure, it is logical that if priority rights are not accorded to ground to petitioner’s main proposition in this instance that the
Filipinos in the United States after February 29, 1948, an American Executive Branch of our government has absolutely no power to
who makes application here in June 1948 can not assert nor claim abridge or curtail the period expressly fixed in section 76, that such
that at that time reciprocal privileges were extended to Filipinos in executive agreement is illegal and that consequently, in applying it
his country. The law clearly speaks of reciprocal privileges, and when respondent committed reversible error.
Filipinos receive no preferences in the U.S. or any other foreign
country, there is no reciprocal privileges to consider. Reciprocity is The notes exchanged between the diplomatic representatives of the
never a one-sided affair. two nations are as follows:jgc:chanrobles.com.ph

"NOTE OF THE UNITED STATES SECRETARY OF STATE, DATED

DECISION FEBRUARY 12, 1948, TO THE AMBASSADOR OF THE PHILIPPINES.

". . . the question of the war-caused delay in the use of the right of
BENGZON, J.: priority arises. Section 76 of the Philippine Patent Law extends the
 13

right of priority for the filing of patents which accrued during the time, at some period in the past, e.g. in 1940-1941. The law clearly
war period on a reciprocal basis with countries according speaks of reciprocal privileges, and when Filipinos receive no
substantially the same privileges to citizens of the Philippines. The preferences in the United States or any other foreign country, there
Boykin Act (United States Public Law 690, 79th Congress) contains is no reciprocal privilege to consider. Reciprocity is never a one-
substantially the same provisions and, upon a statement by the sided affair.
appropriate Philippine officials indicating that Section 76 of the
Philippine Patent Law is applicable to citizens of the United States, It is true that the sections says "subjects of countries which have
the United States Patent Office could apply Section 1 of the Boykin extended or which now extend or which within said period ending
Act to citizens of the Philippines. It should be noted, however, that July 1, 1948 shall extend." It is also true that the United States "has
the present expiration date of the extension of the right of priority extended" in its literal sense. Yet it is believed that the employment
under the Boykin Act is February 29, 1948. Unless a further of the three tenses of the verb "extend" merely conveyed the
extension of time is provided for by Congressional action, benefits of legislative idea that foreigners here may invoke priority rights on or
the Act will apply only to cases filed before February 29, before July 1, 1948 provided that Filipinos in their countries enjoy
1948."cralaw virtua1aw library similar rights, no matter when the law granting such right in their
country was approved — whether before Republic Act 165, or at the
"NOTE OF THE AMBASSADOR OF THE PHILIPPINES, DATED AUGUST same time, or afterwards.
23, 1948, TO THE UNITED STATES SECRETARY OF STATE
In other words July 1, 1948 is the expiry date fixed by the Legislature
"I am pleased to inform Your Excellency that my Government has beyond which the Director of Patents may not award priority rights
instructed me to convey to your Government that the following text to foreigners. The law does not imply that before that day he
of the 3rd indorsement of the Director of the Philippines Patent necessarily has to grant priority rights to any foreigners who can
Office, dated May 26, 1948 and concurred in by the Department of establish that sometime in the past this government had granted
Commerce and Industry of my Government, represents the official similar concessions to Philippine citizens, irrespective of whether at
position of the Philippine Government on the matter:chanrob1es the time of such foreigner’s application, Filipinos are actually
virtual 1aw library afforded reciprocal privileges of priority in his own country.

x x x Contrary to appellant’s contention, in this case there was no

alteration of the statutory limit. The Director of Patents merely
declared that Abbott Laboratories of Illinois could not invoke section
"In view of the statement of the Honorable, the Secretary of State of 76 in June 1948, because at that time Filipinos in the United States
the United States that the United States Patent Office could consider could not acquire patent priority rights therein.
the United States Boykin Act (which grants to foreigners
substantially the same patent prior rights as those which Section 76 A subordinate issue discussed by the appellant relates to
of the Philippine Patent Law accords to foreigners) applicable to respondent’s holding that under section 9 of Act 165 the invention is
citizens of the Philippines up to February 29, 1948, the Philippines unpatentable by reason of its having been previously published in
Patent Office will likewise regard Section 76 of the Philippine Patent the August 1944 number of the journal of the American Chemical
Law (Republic Act No. 165) applicable to citizens of the United States Society. Because the appellant’s argument under this heading is
whose patent applications were received at the Philippine Patent premised on the alleged right to priority-which, as we find, does not
Office between June 20, 1947 and February 29, 1948, both dates exist - the point requires no further elucidation.
inclusive."cralaw virtua1aw library
Having found for respondent on the main controversy, we deem it
"It is the understanding of my Government that the aforesaid note unnecessary to resolve the procedural question raised by the
of February 12, 1948 of the Department of States, as reiterated by Solicitor-General regarding petitioner’s personality to prosecute this
its note of August 4, 1948, and this note signifying my Government’s appeal.
assent thereto shall constitute an agreement between the Republic
of the Philippines and the United States on patent."cralaw virtua1aw Wherefore, the decision of the Director of Patents denying the
library request for priority is affirmed. Costs against petitioner.

We find it unnecessary to delve into the question whether an official Paras, C.J., Feria, Pablo, Tuason, Montemayor, Bautista Angelo and
agreement between the diplomatic representative of this country Labrador, JJ., concur.
and the corresponding official of another may have the effect of
amending our statutes enacted prior to such agreement, because it
is our opinion that the above notes do not change any part of
section 76, nor abridge the period therein established. They merely Schuartz v. CA (2000)
constitute an interpretation or application of said provision in so far PARDO, J.:
as Americans and Filipinos are concerned — interpretation which
appears to be in accordance with law. FACTS:
• On different dates, Schuartz et al applied to the BPTTT for
The first letter, in effect, declares that, under the laws of the United registration of patents. They hired the law firm Siguion Reyna,
States, Filipinos could be granted priority rights similar to those Montecillo and Ongsiako to process their patent applications in the
mentioned in section 76, provided their applications are filed on or Philippines.
before February 29, 1948. The second letter, answers that pursuant • Patent applications:
to such statement, the Philippine Government will grant Americans 1) Issuance of letters patent for Hackling Drum Room or
priority rights if applied for not later than February 29, 1948. Chamber at the Self-Feeding Equipment for Threshing of Upper
Hackling System
We must assume that the United States Secretary of State correctly 2) Colour Value Measurement
stated the American law. Was the Philippine law properly read in the 3) For Tool for Moulding the Top Past of a Plastic Container
reply communication? We believe it was, because section 76 being 4) For Tamper Evident Closures and Packages
essentially a reciprocity measure, it is no more than logical to 5) For Method Generation for Hot Gas by Incinerators
conclude that if priority rights are not accorded Filipinos in the 6) For Preservation Composition
United States after February 29, 1948, an American who makes 7) For Pharmaceutical Compositions
application here in June 1948 can not assert nor claim that at that 8) For Process for Producing Copper-Laminated Base Material
time reciprocal privileges are extended to Filipinos in his country. for Printed Circuit Boards
There is no reason to suppose that the Legislature intended to give 9) For Electrodeposition of Chromium and Chromium Bearing
foreigners here preferential privileges in 1948 provided that their Alloys
respective countries have given to Filipinos priority rights at any
 14

• The applications lacked certain requirements and the DISPOSITION: Petition DENIED for lack of merit. CA affirmed.
Bureau informed the law firm about it, through correspondences
called Office Actions. The law firm did not respond to these office
actions within the prescribed time. Thus notices of abandonment CRESER PRECISION SYSTEM INC. VS. CA AND FLORO
were sent (from October 1986 to September 1987). INTERNATIONAL CORP.
• Dec 7, 1987: Two employees of the law firm, George GR No. 118708
Bangkas and Rafael Rosas were dismissed from employment. Prior February 2, 1998
to the dismissal, these employees worked with the patent group of PONENTE: MARTINEZ, J.
the law firm and had the duty, among others, of getting the firms
letters and correspondence from the Bureau of Patents. FACTS:
• Immediately after their dismissal, the law firm conducted
an inventory of all the documents entrusted to them. It was then Private respondent Floro is a domestic corporation engaged in the
that the firm learned about the notices of abandonment. manufacture, production, distribution and sale of military
• Thereafter, Schuartz et al, through the law firm, filed with armaments, munitions, airmunitions and other similar materials. On
the Bureau of Patents separate petitions for revival of the patent Jan. 23, 1990, private respondent Floro was granted by the Bureau
applications (from January to March 1988). No petition for revival of Patents, Trademarks and Technology Transfer a Letters Patent
was file dfor one of the applications (for moulding). covering an aerial fuze.
• 1991: Director Luis M. Duka, Jr. of the Bureau of Patents
denied all the petitions for revival because they were filed out of However, Floro’s President, Mr. Gregory Floro discovered that
time. The Director held that no further petitions nor requests for petitioner Creser submitted samples of its patented aerial fuze to
reconsideration hereof shall be entertained hereafter. the Armed Forces of the Philippines (AFP) for testing and that
• Schuartz et al appealed to CA, petitioner is claiming the aerial fuze as its own and planning to bid
• CA dismissed for being filed beyond the 15-day and manufacture it commercially.
reglementary period to appeal. There was an unreasonable delay
before the petitions to revive applications were filed. Moreover, Petitioner Creser contends that it is the first, true and actual
petitioners patent applications could not be a proper subject of a inventor of an aerial fuze denominated as which it developed as
consolidated appeal because they covered separate and distinct early as December 1981 under the Self-Reliance Defense Posture
subjects and had been treated by the Bureau of Patents as separate Program (SRDP) of the AFP; that sometime in 1986, petitioner began
and individual applications. supplying the AFP with the said aerial fuze; that private respondent's
• MR denied. Thus, the petition for review on certiorari. aerial fuze is identical in every respect to the petitioner's fuze; and
• Schuartz et al contend that CA committed grave abuse of that the only difference between the two fuzes are miniscule and
discretion when it held that the consolidated appeal was filed out of merely cosmetic in nature.
time.
o hey were appealing from the resolution of the Director of Petitioner prayed that a temporary restraining order and/or writ of
Patents dated January 31, 1991, which denied the petition for preliminary injunction be issued enjoining private respondent
revival of the patent applications. including any and all persons acting on its behalf from
o They received a copy of the resolution, through their manufacturing, marketing and/or profiting therefrom, and/or from
patent attorneys, on February 7, 1991, and filed the consolidated performing any other act in connection therewith or tending to
appeal seven (7) days after, or on February 14, 1991. prejudice and deprive it of any rights, privileges and benefits to
o These dates clearly established that their appeal was which it is duly entitled as the first, true and actual inventor of the
seasonably filed. aerial fuze.

ISSUE + RULING (jointly discussed): RTC issued a TRO and later on granted the preliminary injunction
• Whether or not the appeal was seasonably filed. YES. filed by plaintiff against private respondent. While CA reversed the
• Given that is filed on time, whether or not the petition for RTC’s decision and dismissed the complaint filed by petitioner.
revival must be granted. NO.
ISSUE: Whether Petitioner can file an action for infringement not as
RATIO: a patentee but as an entity in possession of a right, title or interest
• Re appeal: If the facts above-mentioned were the sole in and to the patented invention?
basis of determining whether the appeal was filed on time,
petitioners argument would be correct. RULING:
• However, Schuartz et al lost sight of the fact that the
petition could not be granted because of laches. Prior to the filing of NO. Section 42 of R.A. 165, otherwise known as the Patent Law,
the petition for revival of the patent application with the Bureau of explicitly provides:
Patents, an unreasonable period of time had lapsed due to the Sec. 42. Civil action for infringement. — Any patentee, or anyone
negligence of petitioners counsel. By such inaction, Schuartz et al possessing any right, title or interest in and to the patented
were deemed to have forfeited their right to revive their invention, whose rights have been infringed, may bring a civil action
applications for patent. before the proper Court of First Instance (now Regional Trial court),
• The patent attorneys appointed to follow up the to recover from the infringer damages sustained by reason of the
applications for patent registration had been negligent in complying infringement and to secure an injunction for the protection of his
with the rules of practice prescribed by the Bureau of Patents. The right. . . .
firm had been notified about the abandonment as early as June
1987, but it was only after December 7, 1987, when their employees There can be no infringement of a patent until a patent has been
Bangkas and Rosas had been dismissed, that they came to know issued, since whatever right one has to the invention covered by the
about it. This clearly showed that the counsel had been remiss in the patent arises alone from the grant of patent. In short, a person or
handling of their clients applications. entity who has not been granted letters patent over an invention
• A lawyers fidelity to the cause of his client requires him to and has not acquired any light or title thereto either as assignee or
be ever mindful of the responsibilities that should be expected of as licensee, has no cause of action for infringement because the
him. A lawyer shall not neglect a legal matter entrusted to him. The right to maintain an infringement suit depends on the existence of
attorneys not only failed to take notice of the notices of the patent.
abandonment, but they failed to revive the application within the
four-month period, as provided in the rules of practice in patent Petitioner admits it has no patent over its aerial fuze. Therefore, it
cases. These applications are deemed forfeited upon the lapse of has no legal basis or cause of action to institute the petition for
such period. injunction and damages arising from the alleged infringement by
• No grave abuse on CA. private respondent. While petitioner claims to be the first inventor
 15

of the aerial fuze, still it has no right of property over the same upon (Defendant). Plaintiff had sole ownership of two patents practiced
which it can maintain a suit unless it obtains a patent therefor. by some of the lab equipment. Defendant eventually removed
Plaintiff as lab director but continued using the lab equipment.Â
Plaintiff resigned and then sued Defendant for patent infringement
TrafFix Devices, Inc. v. Marketing Displays, Inc., based on Defendant’s continued use of the equipment. Defendant
argued its use fell within the experimental use exception. Plaintiff
Brief Fact Summary. Marketing Displays, Inc. (MDI) (Plaintiff) argued Defendant’s use was for commercial reasons. Defendant
brought suit against TrafFix Devices, Inc. (Defendant) for trade dress relied on its patent policy introduction, which stated Defendant did
infringement of a dual-spring mechanism designed to allow not engage in research or development for primarily commercial
temporary road signs to remain standing in high gusts of wind. purposes. The district court agreed with Defendant and required
Plaintiff to demonstrate Defendant’s use was for “definite,
Synopsis of Rule of Law. An expired utility patent, determined to cognizable, and not insubstantial commercial purposes.” The
serve functional purposes only, is not entitled to trademark district court also held the defense applied to experimental, non-
protection. profit purposes. Defendant’s summary judgment motion was
granted by the district court. Plaintiff appealed.
Issue. Does the experimental use defense apply to use that is to
Facts. Robert Sarkinsian, an inventor, designed a dual-spring further the user’s legitimate business and is not only for
mechanism to attach to temporary road signs (e.g., “Road Work amusement, to satisfy idle curiosity, or strictly philosophical inquiry?
Aheadâ€) so they would not fall over in high gusts of wind. He
obtained two utility patents for the design. Marketing Displays, Inc. Held. (Gajarsa, J.) No. The experimental use defense does not
(MDI) (Plaintiff) obtained the patents and had a successful business apply to use that is to further the user’s legitimate business and is
manufacturing and selling road signs that utilized the dual-spring not only for amusement, to satisfy idle curiosity, or strictly
design under the name “WindMaster.†Once the patents philosophical inquiry. Plaintiff argues the district court wrongly
expired, TrafFix Devices, Inc. (TrafFix) (Defendant) began selling road shifted the burden to him to prove Defendant’s use was not
signs that incorporated a similar dual-spring mechanism under the experimental. This court agrees because Defendant must provide
name “WindBuster.†Plaintiff brought suit against Defendant and prove that defense. However, it is not an affirmative defense
for trade dress infringement. The district court found for TrafFix that must be pled or lost. The district court also impermissibly
(Defendant) and the court of appeals reversed. The United States broadened the defense to include experimental, non-profit
Supreme Court granted certiorari. purposes. The experimental use defense is narrow and does not
Issue. Is an expired utility patent, determined to serve functional apply when the use is even slightly commercial in nature. The
purposes only, entitled to trademark protection? status of profit or non-profit is irrelevant. In this case, Defendant’s
use was to further a legitimate business, which includes research
Held. (Kennedy, J.) No. An expired utility patent, determined to advancement to gain grants and recognition. On remand, the
serve functional purposes only, is not entitled to trademark district court should consider the legitimate business of Duke, not its
protection. Under trade dress law, a “design or packaging of a non-profit status. Reversed in part and remanded
product may acquire a distinctiveness which serves to identify the
product with its manufacturer or source; and a design or package Discussion. There were strong objections by educational institutions
which acquires this secondary meaning, assuming other requisites to this opinion on the charge it took away academic freedoms and
are met, is a trade dress which may not be used in a manner likely to scientific advancement. However, there was no significant change
cause confusion as to the origin, sponsorship, or approval of the in patent law as a result of the opinion. The experimental use
goods.†Trade dress protection, however, may not prohibit the exception was always intended to be narrowly applied and the court
copying of goods and products, unless an intellectual property right simply reiterated its literal application of the exception.
protects those items. In this case, the patent had expired. Where a
trade dress patent has expired, the person who seeks to reestablish Merck KGAA v. Integra Life Sciences I
the patent must show that the feature of the patent in question is
not only functional by showing “that it is merely an ornamental, Brief Fact Summary. Merck (Defendant) used compounds covered by
incidental, or arbitrary aspect of the device.†The main purpose of Integra’s (Plaintiff) patents in experiments and research and did not
the design of the dual-spring is to keep the sign standing upright in provide the results to the FDA. Plaintiff claimed infringement and
heavy winds. This purpose was specifically stated in the patent Defendant defended with § 271(e)(1).
application. In addition, the design is essential to the use of those
specific road signs. Therefore, the design is decidedly functional. Synopsis of Rule of Law. 35 U.S.C. § 271(e)(1) exempts uses of
Due to its functionality, competitors do not need to significantly patented inventions in preclinical research from infringement even
alter or hide the dual-spring design. The court of appeals decision is when the research results are not eventually included in a
reversed and remanded. submission to the FDA.

Discussion. The Supreme Court has stated that copying is not always
prevented or discouraged in the interest of promoting competition. Facts. Integra Lifesciences I, Ltd. (Plaintiff) owns five patents related
When competitors are permitted to copy certain products, it to RGD peptide. Merck KGaA (Defendant) began research into
promotes competition and can lead to alternations that promote angiogenesis and eventually included RGD peptides in the
advances in technology or goods. research. The main researcher used RGD peptides in experiments
and developed cyclic RGD peptides. Plaintiff brought suit against
Madey v. Duke University, 307 F.3d 1 Defendant for willful infringement and inducement to infringe.Â
Defendant argued with a research exemption and § 271(e)(1).Â
Brief Fact Summary. Madey (Plaintiff) brought suit against Duke Plaintiff was awarded damages by a jury and the appellate court
(Defendant) for patent infringement for using his lab equipment. upheld the ruling that Plaintiff’s patents covered the cyclic peptides
Defendant claimed its use fell within the experimental use and § 271(e)(1) did not apply. Certiorari review was granted by
exception. the Supreme Court to review the court of appeal’s construction of
§ 271(e)(1).
Synopsis of Rule of Law. The experimental use defense does not Issue. Does 35 U.S.C. § 271(e)(1) exempt use of patented
apply to use that is to further the user’s legitimate business and is inventions in preclinical research from infringement even when the
not only for amusement, to satisfy idle curiosity, or strictly research results are not eventually included in a submission to the
philosophical inquiry. FDA?

Held. (Scalia, J.) Yes. 35 U.S.C. § 271(e)(1) exempts uses of

Facts. Dr. John M.J. Madey (Plaintiff) moved his successful lab with patented inventions in preclinical research from infringement even
considerable lab equipment from Stanford to Duke University when the research results are not eventually included in a
 16

submission to the FDA. Section 271(e)(1) permits patented Yes.

inventions to be used when the information is to be developed and
submitted according to a federal law. The statute is broad and CONCLUSION:
does not consider only certain information or certain submissions. The United States Supreme Court held that the authorized sale of an
The parties admit its broad span, but Plaintiff argues the FDA is not article that substantially embodied a patent exhausted the patent
interested in preclinical information except for safety and any holder's rights and prevented the patent holder from invoking
research regarding other information is outside exemption’s scope. patent law to control post-sale use of the article. According to the
However, neither the FDA nor this court will limit its inquiry. The Court, a patented method may not be sold in the same way as an
appellate court concluded § 271(e)(1) did not apply here because article or device, but methods nonetheless may be "embodied" in a
Defendant was not using the patented RGD peptides to gather product, the sale of which exhausts patent rights. The Intel Products
information for submission to the FDA but to establish which drug embodied the patents in the present case, and the exhaustion was
was the best candidate for clinical testing in the future. The court triggered by the sale of the lens blanks because their only
also concluded not all experimental activity that might lead to a reasonable and intended use was to practice the patent and because
future FDA submission qualifies for the exemption. This Court they embodied the essential features of the patented invention.
agrees with the latter statement but not the first. Scientific Accordingly, the Court held that Intel’s sale to Quanta exhausted
experiments involve trial and error and not every experiment will LGEs patent rights. Moreover, the Court determined that the License
result in a submission to the FDA. Congress exempted all uses Agreement entered into by the parties did not restrict Intel’s right to
“reasonably related” to the process of information development. sell its products to purchasers who intended to combine them with
Therefore, experiments are protected as long as there is a non-Intel parts. In conclusion, the Court averred that Intel’s
reasonable basis for believing they will lead to information that is authorized sale to Quanta took its products outside the scope of the
submissible and relevant. Vacated and remanded. patent monopoly, and as a result, Intel could no longer asserts its
parent rights against Quanta.
Discussion. The Federal Circuit attempted to narrow the safe harbor
exemption for research activities, but the Supreme Court confirmed PATRICK HENRY FRANK and WILLIAM HENRY GOHN vs.
the statute’s broad scope. The Court did not distinguish between CONSTANCIO BENITO
preclinical and clinical trials. It now increases the probability that G.R. No. L-27793, March 15, 1928
defendants will argue that every potentially infringing action was
done in anticipation of future submission to the FDA regardless of FACTS: Plaintiffs are the owners of a patent covering hemp-stripping
the actual submission. machine No. 1519579 issued to them by the United States Patent
Office and duly registered in the Bureau of Commerce and Industry
of the Philippine Islands under the provisions of Act No. 2235

Quanta Comput., Inc. v. LG Elecs., Inc. - 553 U.S. 617, 128 S. Ct. Plaintiffs allege that the defendant manufactured a hemp-stripping
2109 (2008) machine in which, without authority from the plaintiffs, and has
RULE: embodied and used such spindles and their method of application
The authorized sale of an article that substantially embodies a and use, and is exhibiting his machine to the public for the purpose
patent exhausts the patent holder's rights and prevents the patent of inducing its purchase. Frank and Gohn stress that use by the
holder from invoking patent law to control post-sale use of the Benito of such spindles and the principle of their application to the
article. stripping of hemp is in violation of, and in conflict with, plaintiffs'
patent, together with its conditions and specifications.
FACTS:
Plaintiff LG Electronics, Inc. (LG) purchased the computer technology Plaintiffs assert the violation of infringement upon the patent
patents at issue. One disclosed a system for ensuring that most granted to Frank & Gohn, and requested that an action for
current data were retrieved from main memory, one related to the injunction and damages be instituted against Benito.
coordination of requests to read from and write to main memory,
and one addressed the problem of managing data traffic on a set of Respondent on the other hand contends that it had no prior
wires, or “bus,” connecting two computer components. LG licensed knowledge of the prior existence of the hemp-stripping invention of
the patents to Intel Corporation (Intel), in an agreement (License the plaintiffs nor had any intent to imitate the Frank’s product.
Agreement) that authorized Intel to manufacture and sell Likewise, the defendant contended that the facts alleged therein do
microprocessors and chipsets using the LG Patents (Intel Products) not constitute a cause of action, that it is ambiguous and vague. The
and that did not purport to alter patent exhaustion rules. A separate lower court rendered judgment in favor of the plaintiffs, to which
agreement (Master Agreement) required Intel to give its customers was later affirmed by the appellate court.
written notice that the license did not extend to a product made by
combining an Intel Product with a non-Intel product, and provided HELD: As a rule, the burden of proof to substantiate a charge of
that a breach of the agreement would not affect the License infringement is with the plaintiff. Where, however, the plaintiff
Agreement. Petitioner computer manufacturers (Quanta) purchased introduces the patent in evidence, if it is in due form, it affords a
microprocessors and chipsets from Intel. Defendant Quanta prima facie presumption of its correctness and validity. The decision
Computers, Inc. (Quanta) then manufactured computers using Intel of the Commissioner of Patents in granting the patent is always
parts in combination with non-Intel parts, but did not modify the presumed to be correct. The burden the shifts to the defendant to
Intel components. LG sued, asserting that this combination infringed overcome by competent evidence this legal presumption.
the LG Patents. The District Court granted Quanta summary
judgment, but on reconsideration, denied summary judgment as to The patent in the case at bar, having been introduced in evidence,
the LG Patents because they contained method claims. The Federal affords a prima facie presumption of its correctness and validity.
Circuit affirmed in part and reversed in part, agreeing with the Hence, this is not a case of a conflict between two different patents.
District Court that the patent exhaustion doctrine did not apply to In the recent of Temco Electric Motor Co. vs. Apco Mfg. Co., decided
method patents, which described operations to make or use a by the Supreme Court of the United States ruled “an improper
product; and concluding, in the alternative, that exhaustion did not cannot appropriate the basic patent of another, and if he does so
apply because LG did not license Intel to sell the Intel Products to without license is an infringer, and may be used as such. It is well
Quanta to combine with non-Intel products. The United States established that an improver cannot appropriate the basic patent of
Supreme Court granted certiorari review. another and that the improver without a license is an infringer and
may be sued as such.”
ISSUE:
Did the patent exhaustion doctrine apply to method patents,
thereby warranting the grant of summary judgment to Quanta?

ANSWER:
 17

Frank & Gohn v. Kosuyama, G.R. No. 38010

To support their ownership of patent, Frank and Gohn invoked the
FAST BACKWARD: Legal battle over a patented machine doctrine invoked in the case of Frank and Gohn vs. Benito (51 Phil.,
By Antonio Figueroa - 712), where the defendant was found to have infringed upon the
When Patrick Henry Frank, founder of Davao Light and Power patent of the Americans. However, the high court argued:
Company (DLPC), hit upon the idea of inventing a machine that
would make hemp stripping easy, fast, and efficient, there was “*The+ plaintiffs in the former and those of the latter case are the
promise the abaca industry would further flourish. same and that the patent then involved is the very same one upon
which the present action of the plaintiffs is based. The above-cited
On December 16, 1924, Frank, who also owned Cotabato Light and case, however, cannot be invoked as a precedent to justify a
Power Company (CLPC), registered it with the United States Patent judgment in favor of the [Americans] on the ground that the facts in
Office as Patent No. 1519579, and on March 17,1925 listed it in the one case entirely different from those in the other. In the former
Bureau of Commerce and Industry in the Philippines. case the defendant did not set up the same special defenses as
those alleged by the herein defendant in his answer and the
To make use of the patent and manufacture the machine in plaintiffs therein confined themselves to presenting the patent, or
quantity, Frank established the Universal Hemp Machine Company, rather a copy thereof, wherein the ‘spindle’ was mentioned, and this
with William Henry Gohn, a thriving American planter in Davao, as court took for granted their claim that it was one of the essential
one of the major shareholders. Together they introduced and characteristics thereof which was imitated or copied by the then
convinced Luzon hemp growers the patented stripping machine that defendant.”
“can clean hemp satisfactorily and economically.”
The high tribunal, with finality, declared “the [Japanese] cannot be
But to their surprise, they belatedly discovered some enterprising held civilly liable for alleged infringement of the patent upon which
Japanese were already using a similar machine, prompting them to the present action is based on the ground that there is no essential
file a case in the lower court docketed as G.R. No. L-38010. The part of the machine manufactured and sold by him, which was
defendant was G. Kosuyama, a Japanese. unknown to the public in the Province of Davao at the time the
plaintiffs applied for and obtained their patent for improved hemp
The suit stemmed from the alleged infringement of the rights and stripping machines, the judgment appealed from is hereby
privileges acquired by the Americans as a result of the patent, affirmed.”
claiming the defendant was producing and selling machines that
were similar to Frank’s invention. The Americans lost.

The Americans sought from the court to order the Japanese to cease
the manufacture and sale of machines similar to the patented, to
render an accounting of the profits realized from the machines in ENNETH ROY SAVAGE/K ANGELIN EXPORT TRADING, owned and
question, to pay the patent owner and partner the amount of managed by GEMMA DEMORAL-SAVAGE vs. JUDGE APRONIANO B.
P60.00 as profit for every machine sold, to post a bond in case of TAYPIN, Presiding Judge, RTC-BR. 12, Cebu City, CEBU PROVINCIAL
failure or refusal to account, and to sentence the Japanese to pay PROSECUTOR'S OFFICE, NATIONAL BUREAU OF INVESTIGATION,
the cost and damages due to the Americans. Region VII, Cebu City, JUANITA NG MENDOZA, MENDCO
DEVELOPMENT CORPORATION, ALFREDO SABJON and DANTE
Sadly, the court favored the defendant by dismissing the complaint SOSMEÑA
and the P10,000 counterclaim sought by the Japanese, who did not G.R. No. 134217, May 11, 2000
appeal.
FACTS: Petitioners Savage, seek to nullify the search warrant issued
In the amended complaint, the Americans claimed the machine’s by respondent Judge Aproniano B. Taypin of the Regional Trial
following characteristics: Court, Br. 12 Cebu City, which resulted in the seizure of certain
pieces of wrought iron furniture from the factory of petitioners
“A stripping head, a horizontal table, a stripping knife supported located in Biasong, Talisay, Cebu.
upon such table, a tapering spindle [the only feature cited in the
original complaint, a rest holder adjustably secured on the table The complaint was lodged by private respondent Eric Ng Mendoza,
portion, a lever and means of compelling the knife to close upon the president and general manager of Mendco Development
table, a pallet or rest in the bottom of the table, a resilient cushion Corporation (MENDCO), alleging that Savage’s products are the
under such palletor rest.” object of unfair competition involving design patents, punishable
under Art. 189 of the Revised Penal Code as amended. Savage
Citing its December 21, 1933 verdict, the Supreme Court contends however, that there was no existence of offense leading to
summarized the trial court’s findings based on evidences presented the issuance of a search warrant and eventual seizure of its
for appreciation: products.

“In constructing their machine the plaintiffs did nothing but ISSUE: Whether or not unfair competition involving design patents
improve, to a certain degree, those that were already in vogue and are punishable under Article 189 of the Revised Penal Code.
in actual us in hemp producing provinces. It cannot be said that they
have invented the “spindle” inasmuch as this was already known HELD: To provide a clear view, the Intellectual Property Code took
since the year 1909 or 1910. Neither [can it] be said that they have effect on January 1, 1998. The repealing clause of the IPC provides
invented the stripping knife and the contrivance which controls the that Articles 188 and 189 of the Revised Penal Code (RPC),
movement and pressure thereof on the ground that stripping knives Presidential Decree No. 49, are hereby repealed The issue involving
together with their control sets were already in actual use in the the existence of "unfair competition" as a felony involving design
different stripping machines long before their machine appeared. patents, referred to in Art. 189 of the Revised Penal Code, has been
rendered moot and academic by the repeal of the article. Hence, the
“Neither can it be said that they invented the fly wheel because that search warrant cannot even be issued by virtue of a possible
part or piece thereof, so essential in every machine from time violation of the IPR Code.
immemorial, was already known and actually employed in hemp
stripping machines… were in use for the benefit of hemp long before There is no mention of any crime of "unfair competition" involving
the appearance of the plaintiffs’ machines in the market. Much less design patents in the controlling provisions on Unfair Competition of
can it be said that they invented the pedal to raise the knife in order the RPC. It is therefore unclear whether the crime exists at all, for
to allow the hemp to be stripped to pass under it, on the ground the enactment of RA 8293 did not result in the reenactment of Art.
that the use of such contrivance has, likewise, been known since the 189 of the Revised Penal Code.
invention of the most primitive of hemp stripping machines.”
 18

The court is are prevented from applying these principles, along with accordance with the principles of equity. The Court noted that this
the new provisions on Unfair Competition found in the IPR Code, to approach was consistent with the Supreme Court's treatment of
the alleged acts of the petitioners, for such acts constitute patent injunctions under the Copyright Act. In the case at bar, the Court
infringement as defined by the same Code concluded that neither the district court nor the court of appeals
fairly applied these traditional equitable principles in deciding the
Although the case traces its origins to the year 1997 or before the holder's motion for a permanent injunction. According to the Court,
enactment of the IPR Code, Article 22 of the Revised Penal Code the decision whether to grant or deny injunctive relief rested within
provides that penal laws shall be applied retrospectively, if such the equitable discretion of the district courts, and such discretion
application would be beneficial to the accused. Since the IPR Code had to be exercised consistent with traditional principles of equity,
effectively obliterates the possibility of any criminal liability in patent disputes no less than in other cases governed by such
attaching to the acts alleged, then RPC provisions must be applied. standards.

eBay Inc. v. MercExchange, L.L.C. - 547 U.S. 388, 126 S. Ct. 1837 Roma Drug vs RTCG.R. No. 149907 April 16, 2009
(2006)

FACTS:
RULE:
According to well-established principles of equity, a plaintiff seeking The petitioner Roma Drug was among the 6 local drugstores in
a permanent injunction must satisfy a four-factor test before a court Pampanga raided by the joint NBI and BFAD inspectors where
may grant such relief. A plaintiff must demonstrate: (1) that it has various medicines were found and seized on the strength of a search
suffered an irreparable injury; (2) that remedies available at law, warrant issued by the RTC of Pampanga and upon the request of
such as monetary damages, are inadequate to compensate for that Glaxo Smithkline, a registered corporation and the authorized
injury; (3) that, considering the balance of hardships between the Philippine distributor of the medicines seized from said drugstores.
plaintiff and the defendant, a remedy in equity is warranted; and (4) The NBI proceeded in filing a complaint against petitioner for
that the public interest would not be disserved by a permanent violation of Section 4 (in relation to Sections 3and 5) of Republic Act
injunction. The decision to grant or deny permanent injunctive relief No. 8203, also known as the Special Law on Counterfeit Drugs
is an act of equitable discretion by the district court, reviewable on (SLCD), with the Office of the Provincial Prosecutor in San Fernando,
appeal for abuse of discretion. These familiar principles apply with Pampanga. The law prohibits the sale of counterfeit drugs, which
equal force to disputes arising under the Patent Act. A major include an "unregistered imported drug product". The term
departure from the long tradition of equity practice should not be "unregistered" signifies lack of registration with the Bureau of
lightly implied. Nothing in the Patent Act indicates that Congress Patent, Trademark and Technology Transfer of a trademark of a drug
intended such a departure. To the contrary, the Patent Act expressly in the name of a natural or juridical person. The seized drugs are
provides that injunctions may issue in accordance with the principles identical in content with their Philippine-registered counterparts. No
of equity. claim was made that the drugs were adulterated in any way or
mislabeled at the least.
FACTS: Their classification as "counterfeit" is based solely on the fact that
Petitioner eBay operated a popular Internet Web site that allowed they were imported from abroad and not purchased from
private sellers to list goods they wish to sell, either through an Philippine-registered owner of the patent or trademark of the drugs.
auction or at a fixed price. Petitioner Half.com, now a wholly owned Petitioner Roma Drug challenged the constitutionality of the SLCD
subsidiary of eBay, operated a similar Web site. Respondent during the preliminary investigation but the provincial prosecutors
MercExchange, L.L.C., held a number of patents, including a business issued a resolution recommending that Rodriguez, the owner of
method patent for an electronic market designed to facilitate the Roma Drug, be charged with violation of Section 4 of the SLCD. Thus,
sale of goods between private individuals by establishing a central Roma Drug filed a Petition for Prohibition before the Supreme Court
authority to promote trust among participants. MercExchange questing the RTC-Guagua Pampanga and the Provincial Prosecutor
sought to license its patent to eBay and Half.com, as it had to desist from further prosecuting Rodriguez, and that
previously done with other companies, but the parties failed to Sections3(b)(3), 4 and 5 of the SLCD be declared unconstitutional.
reach an agreement. MercExchange subsequently filed a patent The Court issued a temporary restraining order enjoining the RTC
infringement suit against eBay and Half.com in the United States from proceeding with the trial against Rodriguez, and the BFAD, the
District Court for the Eastern District of Virginia. A jury found that NBI and Glaxo Smithkline from prosecuting the petitioners. Glaxo
MercExchange's patent was valid, that eBay and Half.com had Smithkline and the Office of the Solicitor General (OSG) have
infringed that patent, and that an award of damages was opposed the petition. On the constitutional issue, Glaxo Smithkline
appropriate. Following the jury verdict, the District Court denied asserts the rule that the SLCD is presumed constitutional. The
MercExchange's motion for permanent injunctive relief. The Court of OSGinvokes the presumption of constitutionality of statutes and
Appeals for the Federal Circuit reversed, applying its general rule asserts that there is no clear and unequivocal breach of the
that courts will issue permanent injunctions against patent Constitution presented by the SLCD.
infringement absent exceptional circumstances.
ISSUE:
ISSUE: WON RA 9502 impliedly abrogates the provisions of RA 8203 (SLCD)
Is permanent injunction relief proper in patent infringement cases? with which the petitioner is criminally charged? Yes

ANSWER: HELD:
Yes. (petition granted, writ of prohibition issued, TRO made permanent)
It may be that Rep. Act No. 9502 (Universally Accessible Cheaper
CONCLUSION: and Quality Medicines Act of 2008) did not expressly repeal any
The Supreme Court of the United States vacated the judgment. provision of the SLCD. However, it is clear that the SLCD's
According to the Court, in disputes arising under the Patent Act, a classification of "unregistered imported drugs" as "counterfeit
prevailing plaintiff seeking a permanent injunction must drugs," and of corresponding criminal penalties therefore are
demonstrate that (i) the plaintiff has suffered an irreparable injury; irreconcilably in the imposition conflict with Rep. Act No. 9502 since
(ii) remedies available at law, such as monetary damages, are the latter indubitably grants private third persons the unqualified
inadequate to compensate for that injury; (iii) considering the right to import or otherwise use such drugs.
balance of hardships between the plaintiff and defendant, a remedy
in equity is warranted; and (iv) the public interest would not be Where a statute of later date, such as Rep. Act No. 9502, clearly
disserved by a permanent injunction. The Court held that the Patent reveals an intention on the part of the legislature to abrogate a prior
Act expressly provided that injunctions could have issued in act on the subject that intention must be given effect . When a
 19

subsequent enactment covering a field of operation co-terminus CASE DIGEST: Samson vs. Tarroza
with a prior statute cannot by any reasonable construction be given 28 SCRA 792 (1969)
effect while the prior law remains in operative existence because of
irreconcilable conflict between the two acts, the latest legislative FACTS:
expression prevails and the prior law yields to the extent of the
conflict. Irreconcilable inconsistency between two laws embracing This is an appeal from a decision of the Director of Patents denying
the same subject mayexist when the later law nullifies the reason or the petition for the cancellation of Utility Model Letters Patent No.
purpose of the earlier act, so that the latter loses allmeaning and 62 in favor of respondent Felipe Tarroza for his Side Tilting-Dumping
function. Legis posteriors priores contrarias abrogant . For the Wheelbarrow.
reasons above-stated, the prosecution of petitioner is no longer
warranted and the quested writ of prohibition should accordingly be Petitioner Gerardo Samson, Jr was also a prior grantee of Utility
issued Model Patent No. 27 for a Dumping and Detachable Wheelbarrow,
which he claims to have been infringed by the respondent, they
being neighbors.

PRICE vs UNITED LABORATORIES G.R. No. 82542 September 29, ISSUE:

1988
Whether or not respondent’s Utility Model Patent deserves
FACTS cancellation.
Petitioners are the owners-assignees of a Phil Patent since 1980 for
a pharmaceutical compound known as "aminoalkyl furan HELD:
derivatives." In 1982, UNILAB filed in PPO a petition for the issuance
of a compulsory license to use the patented compound in its No. There is an express recognition under the Patent Law that any
medicines, and to sell, distribute, or otherwise dispose of such new model of implements or tools or of any industrial product even
medicines in the country (UniLab vs. Barry John Price, John Watson if not possessed of the quality of invention but which is of “practical
CLITHERON and John Bradshaw, assignors to Allen & Hanburys Ltd.) utility” is entitled to a “patent for a utility model: From the
PPO, in 1986, granted UNILAB a compulsory license with 10 terms description of the side of tilting-dumping wheelbarrow, the product
and conditions, including (No. 3) the payment by UNILAB of a royalty of ingenuity and industry, it is quite apparent that it has a place in
of 2.5% on net sales on all products containing the substance. the market and possesses what the statute refers to as “practical
*‘net sales' = gross less - a) Transpo charges; b) Trade discounts and utility.”
commissions; c) Credits or allowances; d) Any tax, excise or
government charge.]
In case product contains the substance as admixed, royalty is
computed using a formula. The patentees appealed to CA which
dismissed the appeal. Hence, this petition.
ISSUE

Whether or not the Director of Patents may unilaterally determine

terms and conditions of the compulsory license, without affording
the parties an opportunity to negotiate.
HELD

Yes. Sec 35 of P.D. 1263, amending portions of RA 165 reads:

“GRANT OF LICENSE.—(1) If the Director finds that a case for the
grant of a license under Sec. 34 hereof has been made out, he shall
within 180 days from the date the petition was filed, order the grant
of an appropriate license. The order shall state the terms and
conditions of the license which he himself must fix in default of an
agreement on the matter manifested or submitted by the parties
during the hearing.” CA found that 2.5% royalty fixed by the Director
'is just and reasonable.'
This is based on Par 3, Sec 35-B, RA 165, as amended by PD 1263: “A
compulsory license shall only be granted subject to the payment of
adequate royalties commensurate with the extent to which the
invention is worked. However, royalty payments shall not exceed 5%
of the net wholesale price… If…in an industrial project… the royalty…
shall not exceed 3% of the net wholesale price…”
Thus, said provision grants to the Director the use of his sound
discretion in fixing the percentage for the royalty rate. Also, there is
always a presumption of regularity in the performance of one's
official duties. Furthermore, identical terms and conditions had been
prescribed for the grant of compulsory license in a good number of
patent cases involving UniLab.
On another issue, the Director did not err in granting a compulsory
license over the entire patented invention for there is no law
requiring that the license be limited to a specific embodiment of the
invention, or, to a particular claim.