G.R.

L-24919 January 28, 1980

JAMES HOWARD BOOTHE and JOHN MORTON, II, petitioners,
vs.
THE DIRECTOR OF PATENTS, respondent.
Picazo & Agcaoili for petition.
Office of the Solicitor General for respondent.
MELENCIO-HERRERA, J.:
Sought to be reviewed herein is the Decision of the Director of Patents, dated December 9, 1964, denying
priority rights under section 15 of our Patent Law (Republic Act No. 165) to petitioners, as foreign
applicants for Letters Patent, for their invention of "Chemotherapeutic Materials and Methods of Preparing
the same.
Petitioners James Howard Boothe and John Morton II, chemists, citizens and residents of the United States,
claim to be the inventors of a new antibiotic designated as "tetracycline", a new derivative of
chlortetracycline (popularly known as "aureomycin")
On February 19, 1954, petitioners applied for Letters Patent covering said invention to respondent Director
of Patents claiming the right of priority granted to foreign applicants under section 15 of the Patent Law
(RA 165). Receipt of petitioners' application was acknowledged by respondent Director on March 6, 1954.
On April 14, 1954, petitioners filed with respondent Director a legalized copy of their Application for Letters
Patent in the United States for the same invention (U.S. Serial No. 342556). Said legalized copy indicated
that the application in the United States was filed on March 16, 1963. 1 This latter date is of crucial
importance to petitioners' cause under section 15 of the Patent Law, which provides that:
Section 15. Application previously filed abroad. An application for patent for an invention
filed in this country by any person who has previously regularly filed an application for a
patent for the same invention in a foreign country, which by treaty, convention or law
affords similar privileges to citizens of the Philippines, shall have the same force and effect
as the same application would have if filed in this country on the date on which the
application for patent for the same invention was first filed in such foreign country: Provided,
That the application in this country is filed within twelve months from the earliest date on
which such foreign application was filed and a certified copy of the foreign application
together with a translation thereof into English, if not in the English language, is filed within
six months from the date of filing in the Philippines, unless the Director for good cause
shown shall extend the time for filing such certified copy: And provided, further, that no
patent shall be granted on an application for patent for an invention which had been
patented or described in a printed publication in this or any foreign country more than one
year before the date of the actual filing of the application in this country, or which had been
in public use or sale in this country for more than one year prior to such filing.
Under the foregoing provision, petitioners would be entitled to the priority date of March 16, 1953 if their
application is considered filed in the Philippines as of March 5, 1954, since the latter date would fall within
the one-year period prior to March 5, 1954.
On February 7, 1958, petitioners informed respondent Director that in interference proceedings in the
United States, Letters Patent for a similar invention as theirs was awarded to Pfizer and Co., which had filed
its application ahead and that they failed to obtain any U.S. patent for their own invention. Petitioners,
however, observed and requested:
In the Philippines, however, the situation is at least the reverse. Pfizer and Co. did not file or
else filed an application after the above application has already been filed. The said above
application therefore is good and valid.
We request, therefore, that the present application be granted on the basis of the claims
originally filed. 2

On August 5, 1959, in Paper No. 6, 3 Patent Examiner, Lydia Nueva Espaa, rejected all of petitioners'
claims in view of "Philippine Patent No. 254 November 29, 1956", apparently referring to a local Patent
obtained by Pfizer and Co., presumably covering the same invention. Additionally, petitioners were advised
that the "Specification" they had submitted was "incomplete" and that responsive action should be filed
them four months from date of mailing, which was also August 5, 1959. Paper No. 6 precipitated a series of
communications between the aforementioned Patent Examiner and petitioners, who apparently failed to
meet the deadline of four months for filing their responsive action.
On October 9, 1961, petitioners requested for clarification of Paper No. 6, particularly as to why their
Specification was considered incomplete.
In response, Supervising Patent Examiner Nelia de Castro informed petitioners as follows:
With respect to applicant's request for clarification as to the meaning of the second to the
last sentence contained in Paper 6, attention is called to the fact that the specification which
was originally filed is incomplete and not in accordance with Rule 62 of the Revised Rules.
Said specification ends on Page 9 with the incomplete sentence "The refractive indices of
this crystalline phase were found
It appears from further from a comparison between the submitted 9 pages of the
specification and 2 pages of the claims on one hand and the corresponding pages of the
legalized copy of the U.S. application on the other that the present application does not
correspond with the said certified copy of the U.S. Application. The present application
cannot therefore be granted priority date under section 15 are requested by applicant. 4
On July 3, 1962, petitioners submitted two complete copies of the Specification, which included nine
additional pages, and reiterated their request for priority right in the Philippines. 5
On October 2, 1962, Chief Patent Examiner Nicanor Mapili issued Paper No. 20 rejecting the additional nine
pages of Specification submitted by petitioners, and ruling:
xxx xxx xxx
The filing of the alleged complete copy Of the specification is an attempt to effect a remedy
to the previous finding of incompleteness as stated in the 2nd to the last paragraph of Office
Action mailed Aug. 5, 1959, marked Paper 6. This cannot be allowed inasmuch as 9 pages of
new matter are actually proposed to be added to the specification.
This action is made final for purpose of appeal

Petitioners moved for reconsideration on the ground that their application falls under the exception
provided for in Rule 47 of the Revised Rules of Practice in Patent Cases in that the missing nine pages
submitted by them are not really new matter but a mere "minor informality."
On February 5, 1963, Chief Patent Examiner Mapili issued Paper No. 22 denying petitioners' Motion for
Reconsideration and the findings of Examiner de Castro as follows:
The basis of the examiner's finding is applicant's verification on file, exclusive of what is in
an alleged corresponding application in the US as evidenced by a certified copy of record.
The only use of such certified a copy is to give proof to an earlier filing date as provided for
such section 15 of the Patent Law and to use the inventors' oath therein to complete the
form requirements relative to his application in a dance with the provisions of section 13(3)
of the same law.
The provisions of section 15 of the Patent Law, under which the present application was
filed, provides for a for filing. This deadline cannot be extended directly or indirectly by the
filing of an imperfect application which can be freely amended or rectified at a later date. If
this can be done legally, the restrictive provisions of section 15 will be nullified. 7
Adversely affected, petitioners appealed to dent Director of Patents.

In their Brief filed with respondent Directors petitioners prayed for 1) revocation of the of the Chief Patent
Examiner, 8 2) admission of their Specification submitted on July 3, 1962; and 3) allowance of their
application on the merits.
On December 9, 1964, respondent Director rendered the questioned Decision, the dispositive portion of
which reads:
WHEREFORE, the appeal is hereby sustained. The additional pages to the specification are
hereby admitted, but the application shall not be extended priority rights under section 15 of
the Patent Law. Let the filing date of this application be changed from March 5, 1954 to April
14, 1954. The application is hereby remanded to the Chief Patent Examiner for proper action
and for further examination on the merits. 9
In reaching the foregoing conclusion, respondent Director opined that the portions subsequently supplied
in the local application are not new matter a comparison between the foreign and local applications
showed that the foreign application included the missing portions of the local one. However, respondent
Direct qualified that petitioners' application may be considered complete only on April 14, 1954 when the
certified copy of the foreign application was submitted. Consequently, the instant application is to be
considered an ordinary application, not entitled to the right of priority granted by section 15 of the Patent
Law, inasmuch as said application was not complete within the meaning of Rules 47 and 48 of the Revised
Rules of Practice in Patent Case when first filed on March 5, 1954.
Petitioners filed a Motion for Partial Reconsideration of the above-mentioned Decision questioning that
portion of respondent Director's ruling barring them from entitlement to the right of priority under section
15 of the Patent Law contending that their appeal centered merely on the issue of whether or not the
additional nine pages of Specification they had submitted should be treated as new matter.
On June 10, 1965, respondent Director denied reconsideration for lack of merit, and explained:
... It should be emphasized that under Rule 262 (b) of the Revised Rules of Practice in Patent
Cases, it is stated that should the Director have any knowledge of any ground not involved
in the appeal for rejecting any claim, he may include in his decision a statement to that
effect with his reasons for so holding, which statement shall constitute a rejection of the
claim. Priority claims are covered by the rule: 10
On June 11, 1965, petitioners filed a Second Motion for reconsideration on the ground that priority rights
are governed by convention and treaty, while invention claims are governed exclusively by the Statute and
Rules of Practice. Respondent Director denied that Motion for lack of merit on August 24, 1965.
Hence, this recourse.
On January 9, 1967, we deemed the case submitted for decision, after petitioners had filed their Brief on
February 12, 1966, and respondent Director, through the Solicitor General, his Brief on June 9, 1966.
On June 9, 1968, Republic Act No. 5434 was enacted providing that final Orders and Decisions of the
Director of Patents in ex parte and inter partes proceedings are appealable to the Court of Appeals. Since
no provision for retroactivity exists in said Act this Tribunal has resolved to retain jurisdiction over this case.
Petitioners maintain before this Court that:
RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT PETITIONERS' APPLICATION,
SERIAL NO. 952, MAY NOT BE TREATED AS FILED UNDER SECTION 15 AS AMENDED, OF
REPUBLIC ACT NO. 165 KNOWN AS THE PATENT LAW.
and in support thereof stress that:
1) The Director had no jurisdiction to decide the question of whether or not the Philippine
Application should be treated as filed under Section 15 of the Act;
2) The Director had no jurisdiction to decide the question of whether or not the Philippine
Application was incomplete under Rules 47 and 48 of the Revised Rules of Practice in Patent
Cases;

3) The Director misconstrued and misapplied Rules 47 and 48 of the Rules;

4) The Director misconstrued and misapplied Rule 262 (b) of the Rules.
For resolution, therefore, are the following issues: the scope of the powers of the Director of Patents in
cases appealed to him and the correctness of his application of Rules 47, 48 and 262(b) of the Revised
Rules of Practice in Patent Cases.
The facts unfolded call for an affirmance of respondent Director's rulings.
Explicit in Rule 262 of the Revised Rules of Practice in Patent Cases is the power and authority of
respondent Director to decide petitioners' appeal in the manner that he did, and we quote:
262. Decision by the Director. (a) The Director, in his decision, may affirm or reverse the
decision of the Principal Examiner in whole or in part on the ground and on the claims
specified by the Examiner. The affirmance of the rejection of a claim on any of the grounds
specified constitutes a general affirmance of the decision of the Principal Examiner on that
claim, except as to any ground specifically reversed.
(b) Should the Director have knowledge of any grounds not involved in the appeal for
rejecting any claim he may include in his decision a statement to that effect with his reasons
for so holding which statement shall constitute a rejection of the claims. ...
In other words, respondent Director is empowered to consider grounds which may have come to his
knowledge other than those specifically raised in an appeal He need not confine himself only to issues
invoked. Besides, the question of new matter is inextricably linked with the right of priority on which
petitioners have anchored their application. As early as Paper No. 18, supra, the Supervising Patent
Examiner had concluded that inasmuch as the submitted pages did not correspond with the certified copy
of the U.S. application, "the present application cannot therefore be granted priority date under section 16
as requested by applicant." Again, in Paper No. 22,supra, the Chief Patent Examiner made mention of
petitioner' imperfect application and the fact that the deadline for filinf required by section 15 of the Patent
Law cannot be extended directly or indirectly otherwise "the restrictive provisions of section 15 will be
nullified."
It is also far-fetched for petitioners to claim that in ruling on petitioners' right of priority, respondent
Director had contravened Rule 254 of the Revised Rules of Practice in Patent cases, which provides that the
Director of Patents exercises no direct control, direction and supervision over the Principal Examiner and
the Executive Examiner. What respondent Director exercised was his authority to review the decisions of
Patent Examiners, as explicitly provided for in the last paragraph of the same Rules 254, as follows:
xxx xxx xxx
The only supervision which the Director of Patent may lawfully exercise over the Principal
Examiners and the Executive Examiner is a general supervision, exercised through a review
of the recommendations they may make for the grant of a patent, and through a review of
their decision by petition and appeal.
Similarly untenable is petitioners' contention that respondent Director had misconstrued and misapplied
Rules 47 and 48 of the Revised Rules of Practice in Patent Cases. The said Rules provide:
47. Application accepted and filed for examination only w hen complete An application for
an invention patent will not be accepted and placed upon the files for examination until all
its required parts, complying with the rules relating thereto are received except that 'certain
minor informalities may be waived subject to subsequent correction, whenever required.
If the papers and parts are incomplete, or so defective that they cannot be accepted as a
complete application for examination, the applicant will be notified; the papers will be held
four months for completion and if not by then completed, will be stored as an abandoned
incomplete application and eventually destroyed or otherwise disposed of.
48. Serial number and filing date of application Complete applications are numbered in
regular order, and the applicant win be informed of the serial number and filing date of the

application by a filing receipt. The filing date of the applicant is the, date on which the
complete application, acceptable for placing on the files for examination, is received in the
Patent Office; or the date on which the last part completing such application is received, in
the case of an incomplete or defective application completed within four months. The
Executive Examiner shall be in charge of fixing the filing date and serial number of an
application.
Under the aforecited provisions, it is imperative that the application be complete in order that it may be
accepted. It is essential to the validity of Letters Patent that the specifications be full, definite, and
specific. 11 The purpose of requiring a definite and accurate description of the process is to apprise the
public of what the patentee claims as his invention, to inform the Courts as to what they are called upon to
construe, and to convey to competing manufacturers and dealers information of exactly what they are
bound to avoid. 12
The specification which petitioners submitted on March 5, 1954 was far from complete. That defect was
one of substance and not merely one of form. What petitioners claimed as their invention was not
completely determinable therefrom. Petitioners' application could be deemed as complete only on July 2,
1963 when they submitted the additional pages on the Specifications and Claims. Respondent Director,
therefore, did not err in converting petitioners' application into an ordinary application filed on April 14,
1954, not only for their having failed to complete their application within the four-month period provided
for by Rules 47 and 48, Revised Rules of Practice in Patent Cases, and as required of them by Paper No. 6,
but also for their having failed to file a complete application within twelve months from March 16, 1953,
the date of the foreign application For, to be entitled to the filing date of the patent application, an
invention disclosed in a previously filed application must be described within the instant application in such
a manner as to enable one skilled in the art to use the same for a legally adequate utility. 13
All told, we sustain respondent Director's findings in the absence of error or abuse of power or lack of
jurisdiction or grave abuse of discretion. 14 We have held that in the absence of arbitrariness, and provided
they are supported by substantial evidence, as in this case, the conclusions reached by the Director of
Patents are to be accorded respect and must be upheld. 15
WHEREFORE, we hereby affirm the Decision of respondent Director of Patents dated December 9, 1964.
SO ORDERED.

G.R. No. L-32160 January 30, 1982

DOMICIANO A. AGUAS, petitioner,
vs.
CONRADO G. DE LEON and COURT OF APPEALS, respondents.
FERNANDEZ, J.:
This is a petition for certiorari to review the decision of the Court of Appeals in CA G.R. NO. 37824-R
entitled "Conrado G. de Leon, plaintiff-appelle vs. Dominciano Aguas and F.H. Aquino and Sons,
defendants-appellants," the dispositive portion of which reads:
WHEREFORE, with the modification that plintiff-applee's award of moral damages is hereby
redured to P3,000.00, the appealed judgment is hereby affirmed, in all othe respects, with
costs against appellants. 1

On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal at Quezon City a
complaint for infringement of patent against Domiciano A. Aguas and F. H. Aquino and Sons alleging that
being the original first and sole inventor of certain new and useful improvements in the process of making
mosaic pre-cast tiles, he lawfully filed and prosecuted an application for Philippine patent, and having
complied in all respects with the statute and the rules of the Philippine Patent Office, Patent No. 658 was
lawfully granted and issued to him; that said invention was new, useful, not known or used by others in
this country before his invention thereof, not patented or described in any printed publication anywhere
before his invention thereof, or more than one year prior to his application for patent thereof, not patented
in any foreign country by him or his legal representatives on application filed more than one year prior to
his application in this country; that plaintiff has the exclusive license to make, use and sell throughout the
Philippines the improvements set forth in said Patent No. 658; that the invention patented by said Patent
No. 658 is of great utility and of great value to plaintiff and of great benefit to the public who has
demanded and purchased tiles embodying the said invention in very large quantities and in very rapidly
increasing quant ies; that he has complied with the Philippine statues relating to marking patented tiles
sold by him; that the public has in general acknowledged the validity of said Patent No. 658, and has
respected plaintiff's right therein and thereunder; that the defendant Domiciano A. Aguas infringed Letters
of Patent No. 658 by making, using and selling tiles embodying said patent invention and that defendant F.
H. Aquino & Sons is guilty of infringement by making and furnishing to the defendant Domiciano A. Aguas
the engravings, castings and devices designed and intended of tiles embodying plaintiff;s patented
invention; that he has given direct and personal notice to the defendants of their said acts of infringement
and requested them to desist, but nevertheless, defendants have refused and neglected to desist and
have disregarded such request, and continue to so infringe causing great and irreparable damage to
plaintiff; that if the aforesaid infringement is permitted to continue, further losses and damages and
irreparable injury will be sustained by the plaintiff; that there is an urgent need for the immediate issuance
of a preliminary injunction; that as a result of the defendants' wrongful conduct, plaintiff has suffered and
the defendants are liable to pay him, in addition to actual damages and loss of profits which would be
determined upon proper accounting, moral and exemplary or corrective damages in the sum of
P90,000.00; that plaintiff has been compelled to go to court for the protection and enforcement of his and
to engage the service of counsel, thereby incurring attorney's fees and expenses of litigation in the sum of
P5,000.00. 2
On April 14, 1962, an order granting the plaintiff's petition for a Writ of Preliminary Injunction was issued.

On May 23, 1962, the defendant Domiciano A. Aguas filed his answer denying the allegations of the
plaintiff and alleging that: the plaintiff is neither the original first nor sole inventor of the improvements in
the process of making mosaic pre-cast tiles, the same having been used by several tile-making factories in
the Philippines and abroad years before the alleged invention by de Leon; that Letters Patent No. 658 was
unlawfully acquired by making it appear in the application in relation thereto that the process is new and
that the plaintiff is the owner of the process when in truth and in fact the process incorporated in the
patent application has been known and used in the Philippines by almost all tile makers long before the
alleged use and registration of patent by plaintiff Conrado G. de Leon; that the registration of the alleged
invention did not confer any right on the plaintiff because the registration was unlawfully secured and was
a result of the gross misrepresentation on the part of the plaintiff that his alleged invention is a new and
inventive process; that the allegation of the plaintiff that Patent No. 658 is of great value to plaintiff and of
great benefit to the public is a mere conclusion of the plaintiff, the truth being that a) the invention of
plaintiff is neither inventive nor new, hence, it is not patentable, b) defendant has been granted valid
patents (Patents No. 108, 109, 110 issued on December 21, 1961) on designs for concrete decorative wall
tiles; and c) that he can not be guilty of infringement because his products are different from those of the
plaintiff.4
The trial court rendered a decision dated December 29, 1965, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the defendants:
1. Declaring plaintiff's patent valid and infringed:
2. Granting a perpetual injunction restraining defendants, their officers, agents, employees,
associates, confederates, and any and all persons acting under their authority from making
and/or using and/or vending tiles embodying said patented invention or adapted to be used
in combination embodying the same, and from making, manufacturing, using or selling,
engravings, castings and devises designed and intended for use in apparatus for the making

of tiles embodying plaintiff's patented invention, and from offering or advertising so to do,
and from aiding and abetting or in any way contributing to the infringement of said patent;
3. Ordering that each and all of the infringing tiles, engravings, castings and devices, which
are in the possession or under the control of defendants be delivered to plaintiff;
4. Ordering the defendants to jointly and severally pay to the plaintiff the following sums of
money, to wit:
(a) P10,020.99 by way of actual damages;
(b) P50,000.00 by way of moral damages;
(c) P5,000.00 by way of exemplary damages;
(d) P5,000.00 by way of attorney's fees and
(e) costs of suit.

The defendant Domiciano Aguas appealed to the Court of Appeals, assigning the following errors.

I
THE TRIAL COURT ERRED IN NOT HOLDING THAT PLAINTIFF'S PATENT FOR THE 'PROCESS OF
MAKING MOSAIC PRE-CAST TILE' IS INVALID BECAUSE SAID ALLEGED PROCESS IS NOT AN
INVENTION OR DISCOVERY AS THE SAME HAS ALREADY LONG BEEN USED BY TILE
MANUFACTURERS BOTH ABROAD AND IN THIS COUNTRY.
II
THE TRIAL COURT ERRED IN HOLDING THAT THE PATENT OF PLAINTIFF IS VALID BECAUSE IT
IS AN IMPROVEMENT OR THE AGE-OLD TILE MAKING SYSTEM.
III
THE TRIAL COURT ERRED IN NOT ORDERING THE CANCELLATION OF PLAINTIFF-APPELLEE'S
LETTERS PATENT NO. 658, EXHIBIT L, IN ACCORDANCE WITH THE PERTINENT PROVISIONS OF
THE PATENT LAW, REPUBLIC ACT 165.
IV
THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT DOMICIANO A. AGUAS IS GUILTY OF
INFRINGEMENT DESPITE THE FACT THAT PLAINTIFF'S PATENT IS NOT A VALID ONE.
V
THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT COULD NEVER BE GUILTY
OF INFRINGEMENT OF PLAINTIFF'S PATENT BECAUSE EVEN IN MATTERS NOT PATENTED BY
THE PLAINTIFF - LIKE THE COMPOSITION AND PROPORTION OF INGREDIENTS USED AND THE
STRUCTURAL DESIGNS OF THE MOULD AND THE TILE PRODUCED - THAT OF THE DEFENDANT
ARE DIFFERENT.
VI
THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN HOLDING THE
DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR DAMAGES, AND ATTORNEY'S FEES.
On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with the modification that
plaintiff-appellee's award of moral damages was reduced to P3,000.00. 7
The petitioner assigns the following errors supposedly committed by the Court of Appeals:

It is now respectfully submitted that the Court of Appeals committed the following errors
involving questions of law, to wit:
First error. When it did not conclude that the letters patent of the respondent although
entitled on the cover page as a patent for improvements, was in truth and in fact, on the
basis of the body of the same, a patent for the old and non-patentable process of making
mosaic pre-cast tiles;
Second error. When it did not conclude from the admitted facts of the case, particularly
the contents of the letters patent, Exh. L and the pieces of physical evidence introduced
consisting of samples of the tiles and catalouges, that the alleged improvements introduced
by the respondent in the manufacture of mosaic pre-cast tiles are not patentable, the same
being not new, useful and inventive.
Third error. As a corollary, when it sentenced the herein petitioner to pay the damages
enumerated in the decision of the lower court (Record on Appeal, pp. 74-75), as confirmed
by it (the Court of Appeals), but with the modification that the amount of P50,000.00 moral
damages was reduced to P3,000.00. 8
The facts, as found by the Court of Appeals, are:
The basic facts borne out by the record are to the effect that on December 1, 1959 plaintiffappellee filed a patent application with the Philippine Patent Office, and on May 5, 1960, said
office issued in his favor Letters Patent No. 658 for a "new and useful improvement in the
process of making mosaic pre-cast tiles" (Exh, "L"); that defendant F.H. Aquino & Sons
engraved the moulds embodying plaintiff's patented improvement for the manufacture of
pre-cast tiles, plaintiff furnishing said defendant the actual model of the tiles in escayola and
explained to said engraver the plans, specifications and the details of the engravings as he
wanted them to be made, including an explanation of the lip width, artistic slope of
easement and critical depth of the engraving that plaintiff wanted for his moulds; that
engraver Enrique Aquino knew that the moulds he was engraving for plaintiff were the
latter's very own, which possession the new features and characteristics covered by
plaintiff's parent; that defendant Aguas personally, as a building contractor, purchased from
plaintiff, tiles shaped out of these moulds at the back of which was imprinted plaintiff's
patent number (Exhs., "A" to "E"); that subsequently, through a representative, Mr.
Leonardo, defendant Aguas requested Aquino to make engravings of the same type and
bearing the characteristics of plaintiff's moulds; that Mr. Aquino knew that the moulds he
was asked to engrave for defendant Aguas would be used to produce cement tiles similar to
plaintiff's; that the moulds which F.H. Aquino & Sons eventually engraved for Aguas and for
which it charged Aguas double the rate it charged plaintiff De Leon, contain the very same
characteristic features of plaintiff's mould and that Aguas used these moulds in the
manufacture of his tiles which he actually put out for sale to the public (Exhs. "1" to "3" and
Exhs. "A" to "E"); that both plaintiff's and defendant Aguas' tiles are sculptured pre-cast wall
tiles intended as a new feature of construction and wag ornamentation substantially
Identical to each other in size, easement, lip width and critical depth of the deepest
depression; and that the only significant difference between plaintiff's mould and that
engraved by Aquino for Aguas is that, whereas plaintiff's mould turns out tiles 4 x 4 inches in
size, defendant Aguas' mould is made to fit a 4-1/4 x 4-1/4 inch tile. 9
The patent right of the private respondent expired on May 5, 1977.
determine the right of said private respondent to damages.

10

The errors will be discuss only to

The petitioner questioned the validity of the patent of the private respondent, Conrado G. de Leon, on the
ground that the process, subject of said patent, is not an invention or discovery, or an improvement of the
old system of making tiles. It should be noted that the private respondent does not claim to be the
discoverer or inventor of the old process of tile-making. He only claims to have introduced an improvement
of said process. In fact, Letters Patent No. 658 was issued by the Philippine Patent Office to the private
respondent, Conrado G. de Leon, to protect his rights as the inventor of "an alleged new and useful
improvement in the process of making mosaic pre-cast tiles." 11 Indeed, Section 7, Republic Act No. 165, as
amended provides: "Any invention of a new and useful machine, manufactured product or substance,
process, or an improvement of the foregoing, shall be patentable.

The Court of Appeals found that the private respondent has introduced an improvement in the process of
tile-making because:
... we find that plaintiff-appellee has introduced an improvement in the process of tilemaking, which proceeds not merely from mechanical skill, said improvement consisting
among other things, in the new critical depth, lip width, easement and field of designs of the
new tiles. The improved lip width of appellee's tiles ensures the durability of the finished
product preventing the flaking off of the edges. The easement caused by the inclination of
the protrusions of the patented moulds is for the purpose of facilitating the removal of the
newly processed tile from the female die. Evidently, appellee's improvement consists in the
solution to the old critical problem by making the protrusions on his moulds attain an
optimum height, so that the engraving thereon would be deep enough to produce tiles for
sculptured and decorative purposes, strong optimum thickness of appellee's new tiles of
only 1/8 of an inch at the deepest easement (Exhs. "D" and "D-1") is a most critical feature,
suggestive of discovery and inventiveness, especially considering that, despite said
thinness, the freshly formed tile remains strong enough for its intended purpose.
While it is true that the matter of easement, lip width, depth, protrusions and depressions
are known to some sculptors, still, to be able to produce a new and useful wall tile, by using
them all together, amounts to an invention. More so, if the totality of all these features are
viewed in combination with the Ideal composition of cement, sodium silicate and screened
fine sand.
By using his improved process, plaintiff has succeeded in producing a new product - a
concrete sculptured tile which could be utilized for walling and decorative purposes. No proof
was adduced to show that any tile of the same kind had been produced by others before
appellee. Moreover, it appears that appellee has been deriving considerable profit from his
manufacture and sale of such tiles. This commercial success is evidence of patentability
(Walker on Patents, Dellers Edition, Vol. I, p. 237). 12
The validily of the patent issued by the Philippines Patent Office in favor of the private respondent and the
question over the inventiveness, novelty and usefulness of the improved process therein specified and
described are matters which are better determined by the Philippines Patent Office. The technical staff of
the Philippines Patent Office, composed of experts in their field, have, by the issuance of the patent in
question, accepted the thinness of the private respondent's new tiles as a discovery. There is a
presumption that the Philippines Patent Office has correctly determined the patentability of the
improvement by the private respondent of the process in question.
Anent this matter, the Court of Appeals said:
Appellant has not adduced evidence sufficient to overcome the above established legal
presumption of validity or to warrant reversal of the findings of the lower court relative to
the validity of the patent in question. In fact, as we have already pointed out, the clear
preponderance of evidence bolsters said presumption of validity of appellee's patent. There
is no indication in the records of this case and this Court is unaware of any fact, which would
tend to show that concrete wall tiles similar to those produced by appellee had ever been
made by others before he started manufacturing the same. In fact, during the trial, appellant
was challenged by appellee to present a tile of the same kind as those produced by the
latter, from any earlier source but, despite the fact that appellant had every chance to do so,
he could not present any. There is, therefore, no concrete proof that the improved process of
tile-making described in appellee's patent was used by, or known to, others previous to his
discovery thereof. 13
The contention of the petitioner Aguas that the letters patent of de Leon was actually a patent for the old
and non-patentable process of making mosaic pre-cast tiles is devoid of merit. De Leon never claimed to
have invented the process of tile-making. The Claims and Specifications of Patent No. 658 show that
although some of the steps or parts of the old process of tile making were described therein, there were
novel and inventive features mentioned in the process. Some of the novel features of the private
respondent's improvements are the following: critical depth, with corresponding easement and lip width to
such degree as leaves the tile as thin as 1/8 of an inch at its thinnest portion, Ideal composition of cement
and fine river sand, among other ingredients that makes possible the production of tough and durable wall
tiles, though thin and light; the engraving of deep designs in such a way as to make the tiles decorative,

artistic and suitable for wall ornamentation, and the fact that the tiles can be mass produced in
commercial quantities and can be conveniently stock-piled, handled and packed without any intolerable
incidence of breakages. 14
The petitioner also contends that the improvement of respondent is not patentable because it is not new,
useful and inventive. This contention is without merit.
The records disclose that de Leon's process is an improvement of the old process of tile making. The tiles
produced from de Leon's process are suitable for construction and ornamentation, which previously had
not been achieved by tiles made out of the old process of tile making. De Leon's invention has therefore
brought about a new and useful kind of tile. The old type of tiles were usually intended for floors although
there is nothing to prevent one from using them for walling purposes. These tiles are neither artistic nor
ornamental. They are heavy and massive.
The respondent's improvement is indeed inventive and goes beyond the exercise of mechanical skill. He
has introduced a new kind of tile for a new purpose. He has improved the old method of making tiles and
pre-cast articles which were not satisfactory because of an intolerable number of breakages, especially if
deep engravings are made on the tile. He has overcome the problem of producing decorative tiles with
deep engraving, but with sufficient durability. 15 Durability inspite of the thinness and lightness of the tile,
is assured, provided that a certain critical depth is maintained in relation to the dimensions of the tile. 16
The petitioner also claims that changing the design from embossed to engraved tiles is neither new nor
inventive because the Machuca Tile Factory and the Pomona Tile Manufacturing Company have been
manufacturing decorative wall tiles that are embossed as well as engraved; 17 that these tiles have also
depth, lip width, easement and field of designs; 18 and that the private respondent had copied some
designs of Pomona. 19
The Machuca tiles are different from that of the private respondent. The designs are embossed and not
engraved as claimed by the petitioner. There may be depressions but these depressions are too shallow to
be considered engraved. Besides, the Machuca tiles are heavy and massive.
There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles are made of
ceramics. 20The process involved in making cement tiles is different from ceramic tiles. Cement tiles are
made with the use of water, while in ceramics fire is used. As regards the allegation of the petitioner that
the private respondent copied some designs of Pomona, suffice it to say that what is in issue here is the
process involved in tile making and not the design.
In view of the foregoing, this Court finds that Patent No. 658 was legally issued, the process and/or
improvement being patentable.
Both the trial court and the Court of Appeals found as a fact that the petitioner Domiciano A. Aguas did
infringe de Leon's patent. There is no showing that this case falls under one of the exceptions when this
Court may overrule the findings of fact of the Court of Appeals. The only issue then to be resolved is the
amount of damages that should be paid by Aguas.
In its decision the Court of Appeals affirmed the amount of damages awarded by the lower court with the
modification that the respondent is only entitled to P3,000.00 moral damages. 21
The lower court awarded the following damages:

22

a) P10,020.99 by way of actual damages;

b) P50,000.00 by way of moral damages;
c) P5,000.00 by way of exemplary damages;
d) P5,000.00 by way of attomey's fees and
e) Costs of suit
because:

10

An examination of the books of defendant Aguas made before a Commissioner reveals that
during the period that Aguas was manufacturing and selling tiles similar to plaintiff's, he
made a gross income of P3,340.33, which can be safely be considered the amount by which
he enriched himself when he infringed plaintiff's patent. Under Sec. 42 of the Patent Law any
patentee whose rights have been infringed is entitled to damages which, according to the
circumstances of the case may be in a sum above the amount found as actual damages
sustained provided the award does not exceed three times the amount of such actual
damages. Considering the wantonness of the infringement committed by the defendants
who knew all the time about the existence of plaintiff's patent, the Court feels there is
reason to grant plaintiff maximum damages in the sum of P10,020.99. And in order to
discourage patent infringements and to give more teeth to the provisions of the patent law
thus promoting a stronger public policy committed to afford greater incentives and
protection to inventors, the Court hereby awards plaintiff exemplary damages in the sum of
P5,000.00 to be paid jointly and severally by defendants. Considering the status of plaintiff
as a reputable businessman, and owner of the likewise reputed House of Pre-Cast, he is
entitled to an award of moral damages in the sum of P50,000.00. 23
In reducing the amount of moral damages the Court of Appeals said:
As regards the question of moral damages it has been shown that as a result of the unlawful
acts of infringment committed by defendants, plaintiff was unstandably very sad; he worried
and became nervous and lost concentration on his work in connection with his tile business
(pp. 28, 30, t.s.n., Feb. 28, 1964). In addition, plaintiff's character and reputation have been
unnecessarily put in question because defendants, by their acts of infringement have
created a doubt or suspicion in the public mind concerning the truth and honesty of
plaintiff's advertisements and public announcements of his valid patent. Necessarily, said
acts of defendants have caused plaintiff considerable mental suffering, considering
especially, the fact that he staked everything on his pre-cast tile business (p. 36, t.s.n., Id.)
The wantonness and evident bad faith characterizing defendants' prejudicial acts against
plaintiff justify the assessment of moral damages in plaintiff's favor, though we do not
believe the amount of P50,000.00 awarded by the lower court is warranted by the
circumstances. We feel that said amount should be reduced to P3,000.00 by way of
compensating appellee for his moral suffering. "Willful injury to property may be a legal
ground for awarding moral damages if the court should find that, under the circumstances
such damages are justly due" (Art. 2219 NCC).
There is no reason to reduce the amount of damages and attorneys fees awarded by the trial court as
modified by the Court of Appeals.
WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed from is hereby
affirmed, without pronouncement as to costs.
SO ORDERED.

G.R. L-45101 November 28, 1986

ROSARIO C. MAGUAN (formerly ROSARIO C. TAN), petitioner,
vs.
THE HONORABLE COURT OF APPEALS and SUSANA LUCHAN, respondents.
Ambrosio Padilla Law Offices for petitioner.

11

PARAS, J.:p
Submitted on December 9, 1977 for Our decision is this petition for review on certiorari of the two
Resolutions of the Court of Appeals, the first dated July 6, 1976, setting aside its Decision of February 16,
1976 in CA-G.R. No. SP-04706, titled "SUSANA LUCHAN v. Hon. HONRADO, et al." wherein it ruled for the
dismissal of the petition for lack of merit and at the same time nullifying the writ of preliminary injunction it
had previously issued; and the second, dated November 4, 1976, denying the motion for reconsideration of
the first resolution above-mentioned.
Petitioner is doing business under the firm name and style of SWAN MANUFACTURING" while private
respondent is likewise doing business under the firm name and style of "SUSANA LUCHAN POWDER PUFF
MANUFACTURING."
It is undisputed that petitioner is a patent holder of powder puff namely:
1. UM-423 (extended and/or renewed under Extension No. UM-109 for a period
of 5 years from October 6, 1971)
2. UM-450 (extended and/or renewed under Extension No. UM110 for a period
of 5 years from January 26, 1972)
3. UM 1184, for a period of 5years fromApril 5, 1974.(Petition, Rollo, pp. 6-7).
In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86), petitioner informed private respondent that the
powder puffs the latter is manufacturing and selling to various enterprises particularly those in the
cosmetics industry, resemble Identical or substantially Identical powder puffs of which the former is a
patent holder under Registration Certification Nos. Extension UM-109, Extension UM-110 and Utility Model
No. 1184; petitioner explained such production and sale constitute infringement of said patents and
therefore its immediate discontinuance is demanded, otherwise it will be compelled to take judicial action.
(Rollo, pp. 7-8).
Private respondent replied stating that her products are different and countered that petitioner's patents
are void because the utility models applied for were not new and patentable and the person to whom the
patents were issued was not the true and actual author nor were her rights derived from such author.
(Taken from allegations in the Answer, par. 4, Rollo, p. 93). And on July 25, 1974, private respondent
assailed the validity of the patents involved and filed with the Philippine Patent Office petitions for
cancellation of (1) Utility Model Letter Patent Extension No. UM-109 (Inter Partes Case No. 838, Susana
Luchan v. Rosario C. Tan), (2) Utility Model Letters Patent No. UM-1184 (Inter Partes Case No. 839, Susana
Luchan v. Rosario C. Tan), (3) Utility Model Letters Patent Extension No. UM-110 (Inter Partes Case No. 840,
Susana Luchan v. Rosario C. Tan. (Taken from allegations in the Answer, par. 10, Rollo, pp. 94-95).
In view thereof, petitioner, on August 24, 1974, filed a complaint for damages with injunction and
preliminary injunction against private respondent with the then Court of First Instance of Rizal, Pasig
Branch, docketed as Civil Case No. 19908, for infringing the aforesaid letters patent, and prayed, among
others, that a writ of preliminary injunction be immediately issued (Complaint, Rollo, p. 90).
In her answer, private respondent alleged that the products she is manufacturing and offering for sale are
not Identical, or even only substantially Identical to the products covered by petitioner's patents and, by
way of affirmative defenses, further alleged that petitioner's patents in question are void on the following
grounds:
(1) at the time of filing of application for the patents involved, the utility
models applied for were not new and patentable under Sec. 55 of R.A. 165, as
amended by R.A. 864; and
(2) the person to whom the patents were issued was not the true and actual
author of the utility models applied for, and neither did she derive her rights
from any true and actual author of these utility models.
for the following reasons:

12

(a) since years prior to the filing of applications for the patents involved,
powder puffs of the kind applied for were then already existing and publicly
being sold in the market; both in the Philippines and abroad; and
(b) applicant's claims in her applications, of "construction" or process of
manufacturing the utility models applied for, with respect to UM-423 and UM450, were but a complicated and impractical version of an old, simple one
which has been well known to the cosmetics industry since years previous to
her filing of applications, and which belonged to no one except to the general
public; and with respect to UM1184; her claim in her application of a unitary
powder puff, was but an limitation of a product well known to the cosmetics
industry since years previous to her firing of application, and which belonged
to no one except to the general public; (Answer, Rollo, pp. 93-94).
On September 18, 1974, the trial court issued an Order (Annex "K", Rollo, p. 125) granting the preliminary
injunction prayed for by petitioner. Consequently, the corresponding writ was subsequently issued (Annex
"K-1", Rollo, p. 131) enjoining the herein private respondent (then defendant) and all other persons
employed by her, her agents, servants and employees from directly or indirectly manufacturing, making or
causing to be made, selling or causing to be sold, or using or causing to be used in accordance with, or
embodying the utility models of the Philippine Patent Office Utility Model Letters Patent Nos. 423
(Extension No. UM-109), No. 450 (Extension No. UM-110), and Utility Model No. 1184 or from infringement
upon or violating said letters patent in any way whatsoever (Annex " K-1 ", Rollo, p. 131).
Private respondent questioned the propriety of the trial court's issuance of the Writ of Preliminary
Injunction arguing that since there is still a pending cancellation proceedings before the Philippine Patent
Office concerning petitioner's patents, such cannot be the basis for preliminary injunction (Motion for
Reconsideration, Rollo, p. 132).
In an Order dated September 11, 1975, the trial court denied private respondent's motion for
reconsideration (Annex "N", Rollo, p. 142).
In challenging these Orders private respondent filed a petition for certiorari with the respondent court on
September 29, 1975 (Annex "D", Rollo, pp. 148-171) reiterating among other things the invalidity of
petitioner's patents and prayed that the trial court be restrained from enforcing or continuing to enforce
the following:
(1) Order dated September 18, 1974, granting the preliminary injunction;
(2) Writ of preliminary injunction dated September 18, 1974; and
(3) Order dated September 11, 1974 denying petitioner's motion petition for
reconsideration.
On October 15, 1975, the Writ of Preliminary Injunction was issued by the respondent Court of Appeals as
follows:
NOW, THEREFORE, you, respondents, and/or any person/persons acting on your stead, are
hereby ENJOINED to RESTRAIN from enforcing or continuing to enforce, the proceedings
complained of in the petition to wit: 1) Order dated September 18, 1974, granting the
preliminary injunction; 2) Writ of Preliminary Injunction dated September 18, 1974; and
Order dated September 11, 1975, denying petitioner's motion for reconsideration, all issued
in connection with Civil Case No. 19908, UNTIL FURTHER ORDERS FROM THIS COURT. (Annex
"P", Rollo, p. 1.73)
On February 16, 1976, respondent court promulgated a decision the dispositive portion of which reads:
WHEREFORE, finding no merit in the herein petition, the same is hereby dismissed and the
preliminary injunction previously issued by this Court is hereby set aside, with costs.
SO ORDERED. (CA Decision, Rollo, p. 189).

13

ln said decision respondent court stated that in disposing of the petition it tackled only the issue of
whether the court a quo acted with grave abuse of discretion in issuing the challenged orders. It made
clear the question of whether the patents have been infringed or not was not determined considering the
court a quo has yet to decide the case on the merits (Ibid., p. 186).
Feeling aggrieved, private respondent moved to reconsider the afore-mentioned Decision based on the
following grounds:
I
THAT THIS HONORABLE COURT ERRED IN NOT APPRECIATING THE EXISTENCE
OF A FAIR QUESTION OF INVALIDITY OF PRIVATE RESPONDENT'S PATENTS.
II
THAT THIS HONORABLE COURT ERRED IN NOT REJECTING THE THEORY OF
RESPONDENT JUDGE THAT HE HAS NO JURISDICTION TO INVALIDATE THE
PATENTS UPON GROUND OF LACK OF NOVELTY OF THE PRODUCTS PATENTED.
(Motion for Reconsideration, Rollo, p. 190).
Reviewing on reconsideration, respondent court gave weight to private respondent's allegation that the
latter's products are not identical or even only substantially identical to the products covered by
petitioner's patents. Said court noticed that contrary to the lower courts position that the court a quohad
no jurisdiction to determine the question of invalidity of the patents, Section 45 and 46 of the Patent Law
allow the court to make a finding on the validity or invalidity of patents and in the event there exists a fair
question of its invalidity, the situation calls for a denial of the writ of preliminary injunction pending the
evaluation of the evidence presented (Rollo, pp. 218-226). Thus, finding the lower court's position to have
been opposed to Patent Law, respondent court considered it a grave abuse of discretion when the court a
quo issued the writ being questioned without looking into the defenses alleged by herein private
respondent. Further, it considered the remedy of appeal, under the circumstances, to be inadequate.
Thus, on July 6, 1976, respondent court made a complete turnabout from its original decision and
promulgated a Resolution, the dispositive portion of which reads:
WHEREFORE, our decision is hereby set aside. The writ of certiorari is ordered issued.
Accordingly, the challenged orders, Exhibit H and H-1 and the order denying the motion for
reconsideration (Annex "K", Petition), are hereby set aside. The writ of preliminary injunction
previously ordered by this Court and ordered lifted by the Decision now being set aside is
hereby reinstated and made permanent. Without pronouncement as to costs.
SO ORDERED. (CA Resolution, Rollo, p. 226).
In a Resolution dated November 4, 1976, respondent court, not persuaded by the grounds embodied in the
motion for reconsideration filed by herein petitioner (Annex "V ", Rollo, p. 227), denied the same for lack of
merit, thereby maintaining the same stand it took in its July 6, 1976 Resolution (Rollo, p. 281). Hence, this
petition.
On December 3, 1976, without giving due course to the petition, this Court required respondent to file her
Comment (Rollo, p. 290) which was filed on December 16, 1976 (Rollo, pp. 291-316). Thereafter, petitioner
filed her Reply (Rollo, p. 323) and on May 30, 1977, the petition was given due course (Rollo, p. 345).
Petitioner filed her brief on July 14, 1977 (Rollo, p. 351) while private respondent filed her brief on August
25, 1977 (Rollo, p. 359). Thereafter, petitioner having failed to file reply brief, the Court resolved to declare
the case submitted for decision on December 9, 1977 (Rollo, p. 359).
The assignment of errors raised by the petitioner in this case (Rollo, pp. 15-16) may be reduced to three
main issues:
(1) Whether or not in an action for infringement the Court a quo had
jurisdiction to determine the invalidity of the patents at issue which invalidity
was still pending consideration in the patent office.

14

(2) Whether or not the Court a quo committed grave abuse of discretion in the
issuance of a writ of preliminary injunction.
(3) Whether or not certiorari is the proper remedy.
The first issue has been laid to rest in a number of cases where the Court ruled that "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." (Vargas v. F.M. Yaptico & Co. 40 Phil. 199 [1919]; Vargas v. Chua, 57 Phil. 790-791
[1933]; Frank and Gohn v. Kosuyana 59 Phil. 207 [1933]).
Under the present Patent Law, there is even less reason to doubt that the trial court has jurisdiction to
declare the patents in question invalid. A patentee shall have the exclusive right to make, use and sell the
patented article or product and the making, using, or selling by any person without the authorization of the
patentee constitutes infringement of the patent (Sec. 37, R.A. 165). Any patentee whose rights have been
infringed upon may bring an action before the proper CFI now (RTC) and to secure an injunction for the
protection of his rights (Sec. 42, R.A. 165). Defenses in an action for infringement are provided for in
Section 45 of the same law which in fact were availed of by private respondent in this case. Then, as
correctly stated by respondent Court of Appeals, this conclusion is reinforced by Sec. 46 of the same law
which provides that if the Court shall find the patent or any claim thereof invalid, the Director shall on
certification of the final judgment ... issue an order cancelling the patent or the claims found invalid and
shall publish a notice thereof in the Official Gazette." Upon such certification, it is ministerial on the part of
the patent office to execute the judgment. (Rollo, pp. 221-222).
II.
The burden of proof to substantiate a charge of infringement is with the plaintiff. But where the plaintiff
introduces the patent in evidence, and the same is in due form, there is created a prima faciepresumption
of its correctness and validity. The decision of the Commissioner (now Director) of Patent in granting the
patent is presumed to be correct. The burden of going forward with the evidence (burden of evidence) then
shifts to the defendant to overcome by competent evidence this legal presumption.
The question then in the instant case is whether or not the evidence introduced by private respondent
herein is sufficient to overcome said presumption.
After a careful review of the evidence consisting of 64 exhibits and oral testimonies of five witnesses
presented by private respondents before the Court of First Instance before the Order of preliminary
injunction was issued as well as those presented by the petitioner, respondent Court of Appeals was
satisfied that there is a prima facie showing of a fair question of invalidity of petitioner's patents on the
ground of lack of novelty. As pointed out by said appellate court said evidence appeared not to have been
considered at all by the court a quo for alleged lack of jurisdiction, on the mistaken notion that such
question in within the exclusive jurisdiction of the patent office.
It has been repeatedly held that an invention must possess the essential elements of novelty , originality
and precedence and for the patentee to be entitled to protection, the invention must be new to the world.
Accordingly, a single instance of public use of the invention by a patentee for more than two years (now for
more than one year only under Sec. 9 of the Patent Law) before the date of his application for his patent,
will be fatal to, the validity of the patent when issued. (Frank, et al. v. Kosuyama Vargas v. F.M. Yaptico &
Co. and Vargas v. Chua, et al., supra).
The law provides:
SEC. 9. Invention not considered new or patentable. An invention shall not be considered
new or capable of being patented if it was known or used by others in the Philippines before
the invention thereof by the inventor named in an application for patent for the invention; or
if it was patented or described in any printed publication in the Philippines or any foreign
country more than one year before the application for a patent therefor; or if it had been in
public use or on sale in the Philippines for more than one year before the application for a
patent therefor; or if it is the subject matter of a validity issued patent in the Philippines
granted on an application filed before the filing of the application for patent therefor.
Thus, more specifically, under American Law from which our Patent Law was derived (Vargas v. F.M. Yaptico
& Co. supra) it is generally held that in patent cases a preliminary injunction will not issue for patent

15

infringement unless the validity of the patent is clear and beyond question. The issuance of letters patent,
standing alone, is not sufficient to support such drastic relief (8 Deller's Walker on Patents p. 406). In cases
of infringement of patent no preliminary injunction will be granted unless the patent is valid and infringed
beyond question and the record conclusively proves the defense is sham. (Ibid., p. 402)
In the same manner, under our jurisprudence, as a general rule because of the injurious consequences a
writ of injunction may bring, the right to the relief demanded must be clear and unmistakable. (Sangki v.
Comelec, 21 SCRA 1392; December 26, 1967) and the dissolution of the writ is proper where applicant has
doubtful title to the disputed property. (Ramos v. C.A., 95 SCRA 359).
III.
It will be noted that the validity of petitioner's patents is in question for want of novelty. Private respondent
contends that powder puffs Identical in appearance with that covered by petitioner's patents existed and
were publicly known and used as early as 1963 long before petitioner was issued the patents in question.
(List of Exhibits, Rollo, pp. 194-199). As correctly observed by respondent Court of Appeals, "since
sufficient proofs have been introduced in evidence showing a fair question of the invalidity of the patents
issued for such models, it is but right that the evidence be looked into, evaluated and determined on the
merits so that the matter of whether the patents issued were in fact valid or not may be resolved." (Rollo,
pp. 286-287).
All these notwithstanding, the trial court nonetheless issued the writ of preliminary injunction which under
the circumstances should be denied.
For failure to determine first the validity of the patents before aforesaid issuance of the writ, the trial court
failed to satisfy the two requisites necessary if an injunction is to issue, namely: the existence of the right
to be protected and the violation of said right. (Buayan Cattle Co., Inc. v. Quintillan, 128 SCRA 276).
Under the above established principles, it appears obvious that the trial court committed a grave abuse of
discretion which makes certiorari the appropriate remedy.
As found by respondent Court of Appeals, the injunctive order of the trial court is of so general a tenor that
petitioner may be totally barred from the sale of any kind of powder puff. Under the circumstances,
respondent appellate court is of the view that ordinary appeal is obviously inadequate. (Rollo, p. 288). A
parallel was drawn from a decision of the Supreme Court in the case of Sanchez v. Hon. Court of
Appeals, 69 SCRA 328 [1976] where the First Division of the Supreme Court ruled that "The prerogative
writ of certiorari may be applied for by proper petition notwithstanding the existence of the regular remedy
of an appeal in due cause when among other reasons, the broader interests of justice so require or an
ordinary appeal is not an adequate remedy."
Private respondent maintains the position that the resolutions sought to be appealed from had long
become final and executory for failure of Hon. Reynaldo P. Honrado, the trial court judge, to appeal by
certiorari from the resolutions of respondent Court of Appeals. (Rollo, pp. 291-292).
Such contention is untenable.
There is no dispute that petitioner has seasonably petitioned. On the other hand, it is elementary that the
trial judge is a mere nominal party as clearly provided in Section 5, Rule 65 of the Revised Rules of Court
where it shall be the duty of such person or persons interested in sustaining the proceedings in court, "to
appear and defend, both in his or their own behalf and in behalf of the court or judge affected by the
proceedings."
Relative thereto "the judge whose order is under attack is merely a nominal party; wherefore, a judge in
his official capacity should not be made to appear as a party seeking reversal of a decision that is
unfavorable to the action taken by him." (Hon. Alcasid v. Samson, 102 Phil. 735-736; Tarona v. Sayo, 67
SCRA 508, 524; Lim Se v. Argel, 70 SCRA 378).
As to petitioner's claim of prescription, private respondent's contention that such refers to the filing of
petitions for cancellation in the Patent Office under Sec. 28 of the Patent Law and not to a defense against
an action for infringement under Sec. 45 thereof which may be raised anytime, is evident under aforesaid
law.

16

PREMISES CONSIDERED, the assailed resolutions of the Court of Appeals are hereby AFFIRMED.
SO ORDERED.

G.R. No. 82542 September 29, 1988

BARRY JOHN PRICE, JOHN WATSON CLITHERON and JOHN BRADSHAW, Assignors to ALLEN &
HANBURYS, LTD., petitioners,
vs.
UNITED LABORATORIES, respondent.
Castillo, Laman, Tan & Pantaleon Law Offices for petitioners.
Teodoro B. Pison for respondent.
GRIO-AQUINO, J.:

17

The petitioners are the owners-assignees of Philippine Patent No. 13540 which was granted to them on
June 26,1980 for a pharmaceutical compound known as "aminoalkyl furan derivatives." On October 1,
1982, respondent United Laboratories, Inc. (or UNILAB) filed in the Philippine Patent Office a petition Inter
Partes Case No. 1683, "United Laboratories, Inc. versus Barry John Price, John Watson CLITHERON and John
Bradshaw, assignors to Allen & Hanburys Ltd.') for the issuance of a compulsory license to use the
patented compound in its own brands of medicines and pharmaceuticals and to sell, distribute, or
otherwise dispose of such medicines or pharmaceutical preparations in the country. The petition further
alleged that the patent relates to medicine and that petitioner, which has had long experience in the
business of manufacturing and selling pharmaceutical products, possesses the capability to use the
subject compound in the manufacture of a useful product or of making dosage formulations containing the
said compound.
After the hearing, the Philippine Patent Office rendered a decision on June 2, 1986, granting UNILAB a
compulsory license subject to ten (1 0) terms and conditions No. 3 of which provides as follows:
3. By virtue of this license, petitioner shall pay the respondent a royalty on all license
products containing the patented substance made and sold by the Petitioner in the amount
equivalent to TWO AND ONE HALF (2.5) PER CENT OF THE NET SALES in Philippine currency.
The terms 'net sales' means the gross billed for the product pertaining to Letters Patent No.
13540 lessa) Transportation charges or allowances, if any, included in such amount;
b) Trade, quantity or cash discounts and broker's or agent's or distributor's
commissions, if any, allowed or paid;
c) Credits or allowances, if any, given or made on account with reflection or
return of the product previously delivered; and
d) Any tax, excise or government charge included in such amount, or
measured by the production, sale, transportation, use or delivery of the
products.
In case Petitioner's product containing the patented substance shall contain one or more
active ingredients as admixed product, the royalty to be paid shall be determined in
accordance with the following formula:
Net Sales on Value of
Admixed Product Patented Substance
Royalty = _______________ x 0.025 x ___________________
(Value of Pa Value of
tended Substance) Active Ingredients
4. The royalties shall be computed after the end of each calendar quarter for all goods
containing the patented substance herein involved, made and sold during the preceding
quarter and to be paid by the Petitioner at its place of business on or before the thirtieth day
of the month following the end of each calendar quarter. Payments should be made to
Respondent's authorized representative in the Philippines; (pp. 35-36, Rollo.)
The patentees appealed the decision to the Court of Appeals (CA-G.R. No. SP-09308) which dismissed the
appeal on December 4, 1 987. They have come to his Court praying for a review of the Appellate Court's
decision on the grounds that it erred:
1. in upholding the Director's unilateral determination of the terms and conditions of the
compulsory license, without affording the parties an opportunity to negotiate the terms and
conditions freely and by themselves;
2. in finding that the respondent possess the legally required capability to make use of the
petitioner's patented compound in the manufacture of a useful product;

18

3. in affirming the Director's award of the entire patent to the respondent, when only one
claim of the patent was controverted and
4. in considering evidence that UNILABs capability to use the compound was acquired after,
not before, filing its petition for compulsory licensing.
The first assignment of error has no merit. The terms and conditions of the compulsory license were fixed
by the Director of Patents after a hearing and careful consideration of the evidence of the parties and in
default of an agreement between them as to the terms of the license. This he is authorized to do under
Section 36 of Republic Act No. 165 which provides:
Sec. 36. GRANT OF LICENSE.If the Director finds that a case for the grant of license under
Section 34, hereof made out, he may order the grant of an appropriate license and in default
of agreement among the parties as to the terms and conditions of the license he shall fix the
terms and conditions of the license in the order.
The order of the Director granting a license under this Chapter, when final, shall operate as a
deed granting a- license executed by the patentee and the other patties in interest.
and under Section 35 of P.D. 1263, amending portions of Republic Act No.165 which reads:
Sec. 35. 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 one hundred eighty (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.
The Court of Appeals found that the 2.5% royalty fixed by the Director of Patents 'is just and reasonable.'
We quote its observations hereunder:
Respondent-appellant contends further that the 2.5% royalty rate is unfair to respondentappellant as to amount to an undue deprivation of its property right. We do not hold this
view. The royalty rate of 2.5% provided for by the Director of Patents is reasonable.
Paragraph 3, Section 35-B, Republic Act No. 165, as amended by Presidential Decree No.
1263, provides:
(3) 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 five per cent (5%) of the
net wholesale price (as defined in Section 33-A) of the products manufactured
under the license. If the product, substance, or process subject of the
compulsory license is involved in an industrial project approved by the Board
of Investments, the royalty payable to the patentee or patentees shall not
exceed three per cent (3%) of the net wholesale price (as defined in Section
34-A) of the patented commodity and/or commodity manufactured under the
patented process; the same rule of royalty shall be paid whenever two or
more patents are involved, which royalty shall be distributed to the patentees
in rates proportional to the extent of commercial use by the licensee giving
preferential values to the holder of the oldest subsisting product patent.
Thus, said provision grants to the Director of Patents the use of his sound discretion in fixing
the percentage for the royalty rate and We find that the Director of Patents committed no
abuse of this discretion. Also, there is always a presumption of regularity in the performance
of one's official duties.
Moreover, what UNILAB has with the compulsory license is the bare right to use the patented
chemical compound in the manufacture of a special product, without any technical
assistance from herein respondent-appellant. Besides, the special product to be
manufactured by UNILAB will only be used, distributed, and disposed locally. Therefore, the
royalty rate of 2.5% is just and reasonable. (pp. 10-11, CA Decision, pp. 44-45, Rollo)

19

Furthermore, as pointed out in the respondent's comment on the petition, Identical terms and conditions
had been prescribed for the grant of compulsory license in a good number of patent cases (United
Laboratories, Inc. vs. Boehringer Ingelhelm, GMBH, IPC 929, July 27, 1981; United Laboratories, Inc. vs.
Bristol-Myers Company, IPC 1179, Aug. 20, 1981; United Laboratories, Inc. vs. E.R. Squibb & Sons, Inc., IPC
1349, Sept. 30, 1981; United Laboratories, Inc. vs. Helmut Weber, et al., IPC 949, Dec. 13,1982; Oceanic
Pharmacal Inc. vs. Gruppo Lepetit S.A. IPC 1549, Dec. 21, 1982; United Laboratories. Inc. vs. Boehringer
Ingelheim, IPC 1185, June 8, 1983; United Laboratories, Inc. vs. Pfizer Corp., IPC 1184, June 10,, 1983;
Doctors Pharmaceuticals, Inc. vs. Maggi, et al., July 11, 1983; Drugmaker's Laboratories v. Herningen et al.,
IPC 1679, September 22,1983; Superior Pharmacraft Inc. vs. Maggi, et al., IPC 1759, January 10, 1984;
United Laboratories, Inc. vs. Van Gelder et al., IPC 1627, June 29, 1984; Drugmaker's Laboratories, Inc. vs.
Janssen Pharmaceutical N.V. IPC 1555, August 27,1984; United Laboratories Inc. vs. Graham John Durant et
al., IPC 1731, August 14, 1987; United Laboratories, Inc. vs. Albert Anthony Carr, IPC 1906, August 31,
1987).
The Director's finding that UNILAB has the capability to use the patented compound in the manufacture of
an anti-ulcer pharmaceutical preparation is a factual finding which is supported by substantial evidence,
hence, the Court of Appeals did not commit a reversible error in affirming it (Philippine Nut Industry, Inc.
vs. Standard Brands, Inc., 65 SCRA 575; Sy Ching vs. Gaw Liu 44 SCRA 143; De Gala Sison vs. Manalo, 8
SCRA 595; Goduco vs. Court of Appeals, 14 SCRA 282; Ramos vs. Pepsi-Cola Bottling Company of the P.I.,
19 SCRA 289. Of indubitable relevance to this point is the evidence that UNILAB has been engaged in the
business of manufacturing drugs and pharmaceutical products for the past thirty (30) years, that it is the
leading drug manufacturer in the country, that it has the necessary equipment and technological expertise
for the development of solid dosage forms or for tablet, capsule, and liquid preparations, and that it
maintains standards and procedures to ensure the quality of its products. Even if it were true, as alleged by
the patentee (although it is denied by UNILAB), that its capability to use the patented compound was only
acquired after the petition for compulsory licensing had been filed, the important thing is that such
capability was proven to exist during the hearing of the petition.
The patented invention in this case relates to medicine and is necessary for public health as it can be used
as component in the manufacture of anti-ulcer medicine. The Director of Patents 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. The invention in this case
relates to new aminoalkyl derivatives which have histamine H 2 blocking activity, having the general
formula (I) and physiologically acceptable salts, Noxides and dehydrates thereof. The compound ranitidine
hydrochloride named in Claim 45 is also covered by General Claim I and several other sub-generic claims.
Therefore, a license for Claim 45 alone would not be fully comprehensive. In any event, since the petitioner
will be paid royalties on the sales of any products the licensee may manufacture using any or all of the
patented compounds, the petitioner cannot complain of a deprivation of property rights without just
compensation.
WHEREFORE, the petition for review is denied for lack of merit.
SO ORDERED.

20

G.R. No. 118708 February 2, 1998

CRESER PRECISION SYSTEMS, INC., petitioner,
vs.
COURT OF APPEALS AND FLORO INTERNATIONAL CORP., respondents.
MARTINEZ, J.:
This petition for review on certiorari assails the decision 1 of the Court of Appeals dated November 9, 1994
in C.A.-G.R. SP No. 34425 entitled "Floro International Corp. vs. Hon. Tirso D.C Cruz and Creser Precision
System, Inc.", the dispositive portion of which reads:
WHEREFORE, THE PETITION IS HEREBY GRANTED. THE COMPLAINT FOR INJUNCTION AND
DAMAGES, CIVIL CASE NO. 93-1856 BEFORE THE RESPONDENT JUDGE IS HEREBY ORDERED
DISMISSED AND HIS ORDERS THEREIN OF DECEMBER 29, 1993 AND MAY 11, 1994 ARE
ORDERED SET ASIDE.
Private respondent is a domestic corporation engaged in the manufacture, production, distribution and sale
of military armaments, munitions, airmunitions and other similar materials. 2
On January 23, 1990, private respondent was granted by the Bureau of Patents, Trademarks and
Technology Transfer (BPTTT), a Letters Patent No. UM-6938 3 covering an aerial fuze which was published in
the September-October-1990, Vol. III, No. 5 issue of the Bureau of Patent's Official Gazette. 4
Sometime in November 1993, private respondent, through its president, Mr. Gregory Floro, Jr., discovered
that petitioner submitted samples of its patented aerial fuze to the Armed Forces of the Philippines (AFP)
for testing. He learned that petitioner was claiming the aforesaid aerial fuze as its own and planning to bid
and manufacture the same commercially without license or authority from private respondent. To protect
its right, private respondent on December 3, 1993, sent a letter 5 to petitioner advising it of its existing
patent and its rights thereunder, warning petitioner of a possible court action and/or application for
injunction, should it proceed with the scheduled testing by the military on December 7, 1993.
In response to private respondent's demand, petitioner filed on December 8, 1993 a complaint 6 for
injunction and damages arising from the alleged infringement before the Regional Trial Court of Quezon
City, Branch 88. The complaint alleged, among others: that petitioner is the first, true and actual inventor
of an aerial fuze denominated as "Fuze, PDR 77 CB4" which it developed as early as December 1981 under
the Self-Reliance Defense Posture Program (SRDP) of the AFP; that sometime in 1986, petitioner began
supplying the AFP with the said aerial fuze; that private respondent's aerial fuze is identical in every
respect to the petitioner's fuze; and that the only difference between the two fuzes are miniscule and
merely cosmetic in nature. Petitioner prayed that a temporary restraining order and/or writ of preliminary
injunction be issued enjoining private respondent including any and all persons acting on its behalf from
manufacturing, marketing and/or profiting therefrom, and/or from performing any other act in connection

21

therewith or tending to prejudice and deprive it of any rights, privileges and benefits to which it is duly
entitled as the first, true and actual inventor of the aerial fuze.
On December 10, 1993, the trial court issued a temporary restraining order. Thereafter, hearings were held
on the application of petitioner for the issuance of a writ of preliminary injunction, with both parties
presenting their evidence. After the hearings, the trial court directed the parties to submit their respective
memoranda in support of their positions.
On December 27, 1993, private respondent submitted its memorandum 7 alleging that petitioner has no
cause of action to file a complaint for infringement against it since it has no patent for the aerial
fuze which it claims to have invented; that petitioner's available remedy is to file a petition for cancellation
of patent before the Bureau of Patents; that private respondent as the patent holder cannot be stripped of
its property right over the patented aerial fuze consisting of the exclusive right to manufacture, use and
sell the same and that it stands to suffer irreparable damage and injury if it is enjoined from the exercise of
its property rights over its patent.
On December 29, 1993, the trial court issued an Order 8 granting the issuance of a writ of preliminary
injunction against private respondent the dispositive portion of which reads:
WHEREFORE, plaintiffs application for the issuance of a writ of preliminary injunction is
granted and, upon posting of the corresponding bond by plaintiff in the amount of PHP
200,000.00, let the writ of preliminary injunction be issued by the branch Clerk of this Court
enjoining the defendant and any and all persons acting on its behalf or by and under its
authority, from manufacturing, marketing and/or selling aerial fuzes identical, to those of
plaintiff, and from profiting therefrom, and/or from performing any other act in connection
therewith until further orders from this Court.
Private respondent moved for reconsideration but this was denied by the trial court in its Order 9 of May 11,
1994, pertinent portions of which read:
For resolution before this Court is the Motion for Reconsideration filed by the defendant and
the plaintiff's Opposition thereto. The Court finds no sufficient cause to reconsider its order
dated December 29, 1993. During the hearing for the issuance of the preliminary injunction,
the plaintiff has amply proven its entitlement to the relief prayed for. It is undisputed that
the plaintiff has developed itsaerial fuze way back in 1981 while the defendant began
manufacturing the same only in 1987. Thus, it is only logical to conclude that it was the
plaintiff's aerial fuze that was copied or imitated which gives the plaintiff the right to have
the defendant enjoined "from manufacturing, marketing and/or sellingaerial fuzes identical
to those of the plaintiff, and from profiting therefrom and/or performing any other act in
connection therewith until further orders from this Court." With regards to the defendant's
assertion that an action for infringement may only be brought by "anyone possessing right,
title or interest to the patented invention," (Section 42, RA 165) qualified by Sec. 10, RA 165
to include only "the first true and actual inventor, his heirs, legal representatives or
assignees, "this court finds the foregoing to be untenable. Sec. 10 merely enumerates the
persons who may have an invention patented which does not necessarily limit to these
persons the right to institute an action for infringement. Defendant further contends that the
order in issue is disruptive of the status quo. On the contrary, the order issued by the Court
in effect maintained the status quo. The last actual, peaceable uncontested status existing
prior to this controversy was the plaintiff manufacturing and selling its own aerial fuzes PDR
77 CB4 which was ordered stopped through the defendant's letter. With the issuance of the
order, the operations of the plaintiff continue. Lastly, this court believes that the defendant
will not suffer irreparable injury by virtue of said order. The defendant's claim is primarily
hinged on its patent (Letters Patent No. UM-6983) the validity of which is being questioned in
this case.
WHEREFORE, premises considered, the Motion for Reconsideration is hereby denied for lack
of merit.
SO ORDERED.
Aggrieved, private respondent on June 27, 1994, filed a petition for certiorari, mandamus and
prohibition 10 before respondent Court of Appeals raising as grounds the following:

22

a. Petitioner has no cause of action for infringement against private respondent, the latter
not having any patent for the aerial fuze which it claims to have invented and developed
and allegedly infringed by private respondent;
b. the case being an action for cancellation or invalidation of private respondent's Letters
Patent over its own aerial fuze, the proper venue is the Office of the Director of Patents;
c. The trial court acted in grave abuse of discretion and/or in excess of jurisdiction in finding
that petitioner has fully established its clear title or right to preliminary injunction;
d. The trial court acted in grave abuse of discretion and/or in excess of jurisdiction in
granting the preliminary injunction, it being disruptive of the status quo; and
e. The trial court acted in grave abuse of discretion and/or in excess of jurisdiction in
granting the preliminary injunction thereby depriving private respondent of its property
rights over the patentedaerial fuze and cause it irreparable damages.
On November 9, 1994, the respondent court rendered the now assailed decision reversing the trial court's
Order of December 29, 1993 and dismissing the complaint filed by petitioner.
The motion for reconsideration was also denied on January 17, 1995.

11

Hence, this present petition.

It is petitioner's contention that it can file, under Section 42 of the Patent Law (R.A. 165), an action for
infringement not as a patentee but as an entity in possession of a right, title or interest in and to the
patented invention. It advances the theory that while the absence of a patent may prevent one from
lawfully suing another for infringement of said patent, such absence does not bar the first true and actual
inventor of the patented invention from suing another who was granted a patent in a suit for declaratory or
injunctive relief recognized under American patent laws. This remedy, petitioner points out, may be likened
to a civil action for infringement under Section 42 of the Philippine Patent Law.
We find the above arguments untenable.
Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:
Sec. 42. Civil action for infringement. Any patentee, or anyone possessing any right, title
or interest in and to the patented invention, whose rights have been infringed, may bring a
civil action before the proper Court of First Instance (now Regional Trial court), to recover
from the infringer damages sustained by reason of the infringement and to secure an
injunction for the protection of his right. . . .
Under the aforequoted law, only the patentee or his successors-in-interest may file an action for
infringement. The phrase "anyone possessing any right, title or interest in and to the patented invention"
upon which petitioner maintains its present suit, refers only to the patentee's successors-in-interest,
assignees or grantees since actions for infringement of patent may be brought in the name of the person
or persons interested, whether as patentee, assignees, or as grantees, of the exclusive right. 12 Moreover,
there can be no infringement of a patent until a patent has been issued, since whatever right one has to
the invention covered by the patent arises alone from the grant of patent. 13 In short, a person or entity
who has not been granted letters patent over an invention and has not acquired any light or title thereto
either as assignee or as licensee, has no cause of action for infringement because the right to maintain an
infringement suit depends on the existence of the patent. 14
Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis or cause of action to
institute the petition for injunction and damages arising from the alleged infringement by private
respondent. While petitioner claims to be the first inventor of the aerial fuze, still it has no right of property
over the same upon which it can maintain a suit unless it obtains a patent therefor. Under American
jurisprudence, an inventor has no common-law right to a monopoly of his invention. He has the right to
make, use and vend his own invention, but if he voluntarily discloses it, such as by offering it for sale, the
world is free to copy and use it with impunity. A patent, however, gives the inventor the right to exclude all
others. As a patentee, he has the exclusive right of making, using or selling the invention. 15
Further, the remedy of declaratory judgment or injunctive suit on patent invalidity relied upon by petitioner
cannot be likened to the civil action for infringement under Section 42 of the Patent Law. The reason for

23

this is that the said remedy is available only to the patent holder or his successors-in-interest. Thus,
anyone who has no patent over an invention but claims to have a right or interest thereto can not file an
action for declaratory judgment or injunctive suit which is not recognized in this jurisdiction. Said person,
however, is not left without any remedy. He can, under Section 28 of the aforementioned law, file a petition
for cancellation of the patent within three (3) years from the publication of said patent with the Director of
Patents and raise as ground therefor that the person to whom the patent was issued is not the true and
actual inventor. Hence, petitioner's remedy is not to file an action for injunction or infringement but to file
a petition for cancellation of private respondent's patent. Petitioner however failed to do so. As such, it can
not now assail or impugn the validity of the private respondent's letters patent by claiming that it is the
true and actual inventor of the aerial fuze.
Thus, as correctly ruled by the respondent Court of Appeals in its assailed decision: "since the petitioner
(private respondent herein) is the patentee of the disputed invention embraced by letters of patent UM No.
6938 issued to it on January 23, 1990 by the Bureau of Patents, it has in its favor not only the presumption
of validity of its patent, but that of a legal and factual first and true inventor of the invention."
In the case of Aguas vs. De Leon,

16

we stated that:

The validity of the patent issued by the Philippine Patent Office in favor of the private
respondent and the question over the investments, novelty and usefulness of the improved
process therein specified and described are matters which are better determined by the
Philippines Patent Office. The technical Staff of the Philippines Patent Office, composed of
experts in their field, have, by the issuance of the patent in question, accepted the thinness
of the private respondent's new tiles as a discovery. There is a presumption that the
Philippine Patent Office has correctly determined the patentability of the improvement by
the private respondent of the process in question.
In fine, in the absence of error or abuse of power or lack of jurisdiction or grave abuse of discretion, we
sustain the assailed decision of the respondent Court of Appeal.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.

G.R. No. 121867 July 24, 1997

SMITH KLINE & FRENCH LABORATORIES, LTD., petitioner,
vs.
COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER and
DOCTORS PHARMACEUTICALS, INC. respondents.
DAVIDE, JR., J.:

24

This is an appeal under Rule 45 of the Rules of Court from the decision 1 4 November 1994 of the Court of
Appeals in CA-G.R. SP No. 33520, which affirmed the 14 February 1994 decision 2 of the Director of the
Bureau of Patents, Trademarks and Technology Transfer (BPTTT) granting a compulsory non-exclusive and
non-transferable license to private respondent to manufacture, use and sell in the Philippines its own
brands of pharmaceutical products containing petitioner's patented pharmaceutical product known
as Cimetidine.
Petitioner is a foreign corporation with principal office at Welwyn Garden City, England. It owns Philippine
Letters Patent No. 12207 issued by the BPTTT for the patent of the drug Cimetidine.
Private respondent is a domestic corporation engaged in the business of manufacturing and distributing
pharmaceutical products. On 30 March 1987, it filed a petition for compulsory licensing 3 with the BPTTT for
authorization to manufacture its own brand of medicine from the drug Cimetidine and to market the
resulting product in the Philippines. The petition was filed pursuant to the provisions of Section 34 of
Republic Act No. 165 (An Act Creating a Patent Office Prescribing Its Powers and Duties, Regulating the
Issuance of Patents, and Appropriating Funds Therefor), which provides for the compulsory licensing of a
particular patent after the expiration of two years from the grant of the latter if the patented invention
relates to, inter alia, medicine or that which is necessary for public health or public safety. Private
respondent alleged that the grant of Philippine Letters Patent No. 12207 was issued on 29 November 1978;
that the petition was filed beyond the two-year protective period provided in Section 34 of R.A. No. 165;
and that it had the capability to work the patented product or make use of it in its manufacture of
medicine.
Petitioner opposed, arguing that private respondent had no cause of action and lacked the capability to
work the patented product; the petition failed to specifically divulge how private respondent would use or
improve the patented product; and that private respondent was motivated by the pecuniary gain attendant
to the grant of a compulsory license. Petitioner also maintained that it was capable of satisfying the
demand of the local market in the manufacture and marketing of the medicines covered by the patented
product. Finally, petitioner challenged the constitutionality of Sections 34 and 35 of R.A. No. 165 for
violating the due process and equal protection clauses of the Constitution.
After appropriate proceedings, the BPTTT handed down its decision on 14 February 1994, with the
dispositive portion thereof providing:
NOW, THEREFORE, by virtue of the powers vested in this Office by Republic Act No. 165, as
amended by Presidential Decree No. 1263, there is hereby issued a license in favor of the herein
[private respondent], United Laboratories, Inc., [sic] under Letters Patent No. 12207 issued on
November 29, 1978, subject to the following terms and conditions:
1. That [private respondent] be hereby granted a non-exclusive and non-transferable license to
manufacture, use and sell in the Philippines its own brands of pharmaceutical products containing
[petitioner's] patented invention which is disclosed and claimed in Letters Patent No. 12207;
2. That the license granted herein shall be for the remaining life of said Letters Patent No. 12207
unless this license is terminated in the manner hereinafter provided and that no right or license is
hereby granted to [private respondent] under any patent to [petitioner] or [sic] other than recited
herein;
5. By virtue of this license, [private respondent] shall pay [petitioner] a royalty on all license
products containing the patented substance made and sold by [private respondent] in the amount
equivalent to TWO AND ONE HALF PERCENT (2.5%) of the net sales in Philippine currency. The term
"net scale" [sic] means the gross amount billed for the product pertaining to Letters Patent No.
12207, less
(a) Transportation charges or allowances, if any, included in such amount;
(b) Trade, quantity or cash discounts and broker's or agent's or distributor's commissions, if any,
allowed or paid;
(c) Credits or allowances, if any, given or made on account of rejection or return of the patented
product previously delivered; and

25

(d) Any tax, excise or government charge included in such amount, or measured by the production
sale, transportation, use of delivery of the products.
In case [private respondent's] product containing the patented substance shall contain one or more
active ingredients admixed therewith, said product hereinafter identified as admixed product, the
royalty to be paid shall be determined in accordance with the following formula:
Net Sales on Value of Patented
ROYALTY = Admixed Product x 0.025 x Substance

Value of Patented Value of Other
Substance Active Ingredients
4. The royalties shall be computed after the end of each calendar quarter to all goods containing
the patented substance herein involved, made and sold during the precedent quarter and to be
paid by [private respondent] at its place of business on or before the thirtieth day of the month
following the end of each calendar quarter. Payments should be made to [petitioner's] authorized
representative in the Philippines;
5. [Private respondent] shall keep records in sufficient detail to enable [petitioner] to determine the
royalties payable and shall further permit its books and records to be examined from time to time at
[private respondent's] premises during office hours, to the extent necessary to be made at the
expense of [petitioner] by a certified public accountant appointed by [petitioner] and acceptable to
[private respondent].
6. [Private respondent] shall adopt and use its own trademark or labels on all its products
containing the patented substance herein involved;
7. [Private respondent] shall comply with the laws on drugs and medicine requiring previous clinical
tests and approval of proper government authorities before selling to the public its own products
manufactured under the license;
8. [Petitioner] shall have the right to terminate the license granted to [private respondent] by giving
the latter thirty (30) days notice in writing to that effect, in the event that [private respondent]
default [sic] in the payment of royalty provided herein or if [private respondent] shall default in the
performance of other convenants or conditions of this agreement which are to be performed by
[private respondent]:
(a) [Private respondent] shall have the right provided it is not in default to payment
or royalties or other obligations under this agreement, to terminate the license
granted to its, [sic] giving [petitioner] thirty (30) days-notice in writing to that effect;
(b) Any termination of this license as provided for above shall not in any way operate
to deny [petitioner] its rights or remedies, either at laws [sic] or equity, or relieve
[private respondent] of the payment of royalties or satisfaction of other obligations
incurred prior to the effective date of such termination; and
(c) Notice of termination of this license shall be filed with the Bureau of Patents,
Trademarks and Technology Transfer.
9. In case of dispute as to the enforcement of the provisions of this license, the matter shall be
submitted for arbitration before the Director of Bureau of Patents, Trademarks and Technology
Transfer or any ranking official of the Bureau of Patents, Trademarks and Technology Transfer duly
delegated by him.
10. This License shall inure to the benefit of each of the parties herein, to the subsidiaries and
assigns of [petitioner] and to the successors and assigns of [private respondent]; and

26

11. This license take [sic] effect immediately. 4

Petitioner then appealed to the Court of Appeals by way of a petition for review, which was docketed as
CA-G.R. SP No. 33520. Petitioner claimed that the appealed decision was erroneous because:
I
. . . [IT] VIOLATES INTERNATIONAL LAW AS EMBODIED IN THE PARIS CONVENTION FOR THE
PROTECTION OF INDUSTRIAL PROPERTY AND MUST ACCORDINGLY BE SET ASIDE AND MODIFIED.
II
. . . [IT] IS AN INVALID EXERCISE OF POLICE POWER.
III
CONCEDING ARGUENDO THE QUESTIONED DECISION'S VALIDITY, THE BPTTT'S PRONOUNCEMENT
FIXING THE ROYALTY AT 2.5% OF THE NET WHOLESALE PRICE IN PHILIPPINE CURRENCY WAS
RENDERED WITHOUT ANY FACTUAL BASIS AND AMOUNTS TO EXPROPRIATION OF PRIVATE
PROPERTY WITHOUT JUST COMPENSATION WHICH IS VIOLATE OF THE CONSTITUTION.
IV
. . . [IT] SHOULD NOT HAVE PROCEEDED TO DECIDE THE CASE BELOW FOR FAILURE OF PRIVATE
RESPONDENT TO AFFIRMATIVELY PROVE THE JURISDICTIONAL FACT OF PUBLICATION. 5
In its decision of 4 November 1994, 6 the Court of Appeals affirmed in toto the challenged decision. We
quote its findings and conclusion upon which the affirmance is anchored, viz.:
An assiduous scrutiny of the impugned decision of the public respondent reveals that the same is
supported by substantial evidence. It appears that at the time of the filing of the petition for
compulsory license on March 24, 1987, the subject letters Patent No. 12207 issued on November
29, 1978 has been in effect for more than two (2) years. The patented invention relates to
compound and compositions used in inhibiting certain actions of the histamine, hence, it relates to
medicine. Moreover, after hearing and careful consideration of the evidence presented, the Director
of Patents ruled that "there is ample evidence to show that [private respondent] possesses such
capability, having competent personnel, machines and equipment as well as permit to manufacture
different drugs containing patented active ingredients such as ethambutol of American Cyanamid
and Ampicillin and Amoxicillin of Beecham Groups, Ltd."
As to the claim by the petitioner that it has the capacity to work the patented product although it
was not shown that any pretended abuse has been committed, thus the reason for granting
compulsory license "is intended not only to give a chance to others to supply the public with the
quantity of the patented article but especially to prevent the building up of patent monopolities
[sic]." [Parke Davis v. Doctors Pharmaceuticals, Inc., 14 SCRA 1053].
We find that the granting of compulsory license is not simply because Sec. 34 (1) e, RA 165 allows it
in cases where the invention relates to food and medicine. The Director of Patents also considered
in determining that the applicant has the capability to work or make use of the patented product in
the manufacture of a useful product. In this case, the applicant was able to show that Cimetidine,
(subject matter of latters Patent No. 12207) is necessary for the manufacture of an anti-ulcer
drug/medicine, which is necessary for the promotion of public health. Hence, the award of
compulsory license is a valid exercise of police power.
We do not agree to [sic] petitioner's contention that the fixing of the royalty at 2.5% of the net
wholesale price amounted to expropriation of private property without just compensation.
Paragraph 3, Section 35-B, R.A. No. 165, as amended by P.D. No. 1267, states:
Sec. 35-B. Terms and Conditions of Compulsory License.
(1) . . .

27

(2) . . .
(3) 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 five percent (5%) of the net wholesale price (as defined in Section 33-A) of the products
manufactured under the license.
If the product, substance, or process subject of the compulsory license is involved in an industrial
project approved by the Board of Investments, the royalty payable to the patentee or patentees
shall not exceed three percent (3%) of the net wholesale price (as defined in Section 34-A) of the
patented commodity and/or commodity manufactured under the patented process, the same rate
of royalty shall be distributed to the patentees in rates proportional to the extent of commercial use
by the licensee giving preferential values to the holder of the oldest subsisting product patent.
The foregoing provision grants the Director of Patents the use of his sound discretion in fixing the
percentage for the royalty rate. In the instant case, the Director of Patents exercised his discretion
and ruled that a rate of 2.5% of the net wholesale price is fair enough for the parties. In Parke Davis
& Co. vs. DPI and Tiburcio, [L-27004, August 6, 1983, 124 SCRA 115] it was held that "liberal
treatment in trade relations should be afforded to local industry for as reasoned out by respondent
company, it is so difficult to compete with the industrial grants [sic] of the drug industry, among
them being the petitioner herein, that it always is necessary that the local drug companies should
sell at much lower (than) the prices of said foreign drug entities." Besides, foreign produce licensor
can later on ask for an increase in percentage rate of royalty fixed by the Director of Patents if local
sales of license should increase. Further, in Price vs. UNILAB, the award of royalty rate of 2.5% was
deemed to be just and reasonable, to wit [166 SCRA 133]:
Moreover, what UNILAB has with the compulsory license is the bare right to use the
patented chemical compound in the manufacture of a special product, without any
technical assistance from herein respondent-appellant. Besides, the special product
to be manufactured by UNILAB will only be used, distributed, and disposed locally.
Therefore, the royalty rate of 2.5% is just and reasonable.
It appearing that herein petitioner will be paid royalties on the sales of any products [sic] the
licensee may manufacture using any or all of the patented compounds, the petitioner cannot
complain of a deprivation of property rights without just compensation [Price v. UNILAB, L-82542,
September 19, 1988].
We take note of the well-crafted petition submitted by petitioner albeit the legal milieu and a good
number of decided cases militate against the grounds posited by petitioner. In sum, considering the
well-entrenched jurisprudence sustaining the position of respondents, We reiterate the rule
in Basay Mining Corporation vs.SEC, to the effect that
The legal presumption is that official duty has been performed. And it is particularly
strong as regards administrative agencies vested with powers said to be quasijudicial in nature, in connection with the enforcement of laws affecting particular
fields of activity, the proper regulation and/or promotion of which requires a technical
or special training, aside from a good knowledge and grasp of the overall conditions,
relevant to said field, obtaining in the nations. The policy and practice underlying our
Administrative Law is that courts of justice should respect the findings of fact of said
administrative agencies, unless there is absolutely no evidence in support thereof or
such evidence is clearly, manifestly and patently insubstantial. [G.R. No. 76695,
October 3, 1988, Minute Resolution; Beautifont, Inc., et al. v. Court of Appeals, et al.,
G.R. No. 50141, January 29, 1988]
Its motion for reconsideration having been denied in the resolution 7 of 31 August 1995, petitioner filed the
instant petition for review on certiorari with the following assignment of errors:
I
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BPTTT'S DECISION VIOLATES
INTERNATIONAL LAW AS EMBODIED IN (A) THE PARIS CONVENTION FOR THE PROTECTION OF

28

INDUSTRIAL PROPERTY AND (B) THE GATT TREATY, URUGUAY ROUND, AND MUST ACCORDINGLY BE
SET ASIDE AND MODIFIED.
II
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BPTTT'S DECISION IS AN INVALID
EXERCISE OF POLICE POWER, ABSENT ANY SHOWING BY EVIDENCE OF AN OVERWHELMING PUBLIC
NEED FOR A COMPULSORY LICENSE OVER CIMETIDINE IN FAVOR OF PRIVATE RESPONDENT.
III
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BPTTT'S PRONOUNCEMENT
FIXING THE ROYALTY FOR AN INVOLUNTARY LICENSE AT 2.5% OF THE NET WHOLESALE PRICE IN
PHILIPPINE CURRENCY WAS RENDERED WITHOUT ANY FACTUAL BASIS AND AMOUNTS TO
EXPORTATION OF PRIVATE PROPERTY WITHOUT JUST COMPENSATION AND IS IN VIOLATION OF THE
CONSTITUTIONAL RIGHT TO DUE PROCESS.
IV
THE HON. COURT OF APPEALS ERRED IN NOT HOLDING THE BPTTT'S ACTION WAS RENDERED NULL
AND VOID FOR FAILURE OF PRIVATE RESPONDENT TO AFFIRMATIVELY PROVE THE JURISDICTIONAL
FACT OF PUBLICATION AS REQUIRED BY LAW.
We resolved to give due course to the petition and required the parties to submit their respective
memoranda, which they did, with that of public respondent filed only on 7 February 1997.
After a careful perusal of the pleadings and evaluation of the arguments adduced by the parties, we find
this petition to be without merit.
In its first assigned error, petitioner invokes Article 5 of the Paris Convention for the Protection of Industrial
Property, 8 or "Paris Convention," for short, of which the Philippines became a party thereto only in
1965. 9 Pertinent portions of said Article 5, Section A, provide:
A. . . .
(2) Each country of the union shall have the right to take legislative measures providing for the
grant of compulsory licenses to prevent the abuses which might result from the exercise of the
exclusive rights conferred by the patent, for example, failure to work.
xxx xxx xxx
(4) A compulsory license may not be applied for on the ground of failure to work or insufficient
working before the expiration of a period of four years from the date of filing of the patent
application or three years from the date of the grant of the patent, whichever period expires last; it
shall be refused if the patentee justifies his inaction by legitimate reasons. Such a compulsory
license shall be non-exclusive and shall not be transferable, even in the form of the grant of a sublicense, except with that part of the enterprise or goodwill which exploits such license.
In is thus clear that Section A (2) of Article 5 above unequivocally and explicitly respects the right of
member countries to adopt legislative measures to provide for the grant of compulsory licenses to prevent
abuses which might result from the exercise of the exclusive rights conferred by the patent. An example
provided of possible abuses is "failure to work;" however, as such is merely supplied by way of an example,
it is plain that the treaty does not preclude the inclusion of other forms or categories of abuses.
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to the
Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the
explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the legislative intent in the grant
of a compulsory license was not only to afford others an opportunity to provide the public with the quantity
of the patented product, but also to prevent the growth of monopolies. 10 Certainly, the growth of
monopolies was among the abuses which Section A, Article 5 of the Convention foresaw, and which our
Congress likewise wished to prevent in enacting R.A. No. 165.

29

R.A. No. 165, as amended by Presidential Decree No. 1263, promulgated on 14 December 1977, provides
for a system of compulsory licensing under a particular patent. Sections 34 and 35, Article Two, of Chapter
VIII read as follows:
Sec. 34. Grounds for Compulsory Licensing (1) Any person may apply to the Director for the
grant of a license under a particular patent at any time after the expiration of two years from the
date of the grant of the patent, under any of the following circumstances:
(a) If the patented invention is not being worked within the Philippines on a commercial scale,
although capable of being so worked, without satisfactory reason;
(b) If the demand for the patented article in the Philippines is not being met to an adequate extent
and on reasonable terms;
(c) If, by reason of refusal of the patentee to grant a license or licenses on reasonable terms, or by
reason of the conditions attached by the patentee to licensee or to the purchase, lease or use of the
patented article or working of the patented process or machine for production, the establishment of
any new trade or industry in the Philippines is prevented, or the trade or industry therein is unduly
restrained;
(d) If the working of the invention within the country is being prevented or hindered by the
importation of the patented article; or
(e) If the patented invention or article relates to food or medicine or manufactured products or
substances which can be used as food or medicine, or is necessary for public health or public
safety.
(2) In any of the above cases, a compulsory license shall be granted to the petitioner provided that
he has proved his capability to work the patented product or to make use of the patented product in
the manufacture of a useful product, or to employ the patented process.
(3) The term "worked" or "working" as used in this section means the manufacture and sale of the
patented article, of the patented machine, or the application of the patented process for
production, in or by means of a definite and substantial establishment or organization in the
Philippines and on a scale which is reasonable and adequate under the circumstances. Importation
shall not constitute "working."
xxx xxx xxx
Sec. 35. Grant of License. (1) If the Director finds that a case for the grant is a license under
Section 34 hereof has been made out, he shall, within one hundred eighty 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.
(2) A compulsory license sought under Section 34-B shall be issued within one hundred twenty days
from the filing of the proponent's application or receipt of the Board of Investment's endorsement.
The case at bar refers more particularly to subparagraph (e) of paragraph 1 of Section 34 the patented
invention or article relates to food or medicine or manufactured products or substances which can be used
as food or medicine, or is necessary for public health or public safety. And it may not be doubted that the
aforequoted provisions of R.A. No. 165, as amended, are not in derogation of, but are consistent with, the
recognized right of treaty signatories under Article 5, Section A (2) of the Paris Convention.
Parenthetically, it must be noted that paragraph (4) of Section A, Article 5 of the Paris Convention setting
time limitations in the application for a compulsory license refers only to an instance where the ground
therefor is "failure to work or insufficient working," and not to any ground or circumstance as the treaty
signatories may reasonably determine.
Neither may petitioner validly invoke what it designates as the GATT Treaty, Uruguay Round. This act is
better known as the Uruguay Final Act signed for the Philippines on 15 April 1994 by Trade and Industry
Secretary Rizalino Navarro. 11 Forming integral parts thereof are the Agreement Establishing the World

30

Trade Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in
Financial Services. 12 The Agreement establishing the World Trade Organization includes various
agreements and associated legal instruments. It was only on 14 December 1994 that the Philippine
Senate, in the exercise of its power under Section 21 of Article VII of the Constitution, adopted Senate
Resolution No. 97 concurring in the ratification by the President of the Agreement. The President signed
the instrument of ratification on 16 December 1994. 13 But plainly, this treaty has no retroactive effect.
Accordingly, since the challenged BPTTT decision was rendered on 14 February 1994, petitioner cannot
avail of the provisions of the GATT treaty.
The second and third assigned errors relate more to the factual findings of the Court of Appeals. Wellestablished is the principle that the findings of facts of the latter are conclusive, unless: (1) the conclusion
is a finding grounded entirely on speculation or conjecture; (2) the inference made is manifestly absurd; (3)
there is grave abuse of discretion in the appreciation of facts; (4) the judgment is premised on a
misapprehension of facts; (5) the findings of fact are conflicting; and (6) the Court of Appeals, in making its
findings, went beyond the issues of the case and the same is contrary to the admissions of both the
appellant and appellee. 14 Petitioner has not convinced us that the instant case falls under any of the
exceptions. On the contrary, we find the findings of fact and conclusions of respondent Court of Appeals
and that of the BPTTT to be fully supported by the evidence and the applicable law and jurisprudence on
the matter.
Petitioner's claim of violations of the due process and eminent domain clauses of the Bill of Rights are
mere conclusions which it failed to convincingly support. As to due the process argument, suffice it to say
that full-blown adversarial proceedings were conducted before the BPTTT pursuant to the Patent Law. We
agree with the Court of Appeals that the BPTTT exhaustively studied the facts and its findings were fully
supported by substantial evidence.
It cannot likewise be claimed that petitioner was unduly deprived of its property rights, as R.A. No. 165 not
only grants the patent holder a protective period of two years to enjoy his exclusive rights thereto; but
subsequently, the law recognizes just compensation in the form of royalties. 15
In Parke, Davis & Co. v. Doctors' Pharmaceuticals, Inc., 16 we held:
The right to exclude others from the manufacturing, using, or vending an invention relating to, food
or medicine should be conditioned to allowing any person to manufacture, use, or vend the same
after a period of three [now two] years from the date of the grant of the letters patent. After all, the
patentee is not entirely deprived of any proprietary right. In fact, he has been given the period of
three years [now two years] of complete monopoly over the patent. Compulsory licensing of a
patent on food or medicine without regard to the other conditions imposed in Section 34 [now
Section 35] is not an undue deprivation of proprietary interests over a patent right because the law
sees to it that even after three years of complete monopoly something is awarded to the inventor in
the form of bilateral and workable licensing agreement and a reasonable royalty to be agreed upon
by the parties and in default of such an agreement, the Director of Patents may fix the terms and
conditions of the license.
As to the fourth assigned error, we hold that petitioner can no longer assail the jurisdiction of the BPTTT,
raising this issue only for the first time on appeal. In Pantranco North Express, Inc. v. Court of
Appeals, 17 we ruled that where the issue of jurisdiction is raised for the first time on appeal, the party
invoking it is so barred on the ground of laches or estoppel under the circumstances therein stated. It is
now settled that this rule applies with equal force to quasi-judicial bodies 18 such as the BPTTT. Here,
petitioner have not furnished any cogent reason to depart from this rule.
WHEREFORE, the petition is hereby DENIED and the challenged decision of the Court of Appeals in CA-G.R.
SP No. 33520 is AFFIRMED in toto.
Costs against petitioner.
SO ORDERED.

31

G.R. No. 121267

October 23, 2001

SMITH KLINE & FRENCH LABORATORIES, LTD. plaintiff-appellee,

vs.
COURT OF APPEALS and DANLEX RESEARCH LABORATORIES, INC., defendant-appellant.
KAPUNAN, J.:
This petition for review on certiorari assails the Decision dated January 27, 1995 of the Court of Appeals in
CA-G.R. SP No. 337701 which affirmed the decision of the Bureau of Patents, Trademarks and Technology
Transfer (BPTTT) granting a compulsory license to private respondent Danlex Research Laboratories for the
use of the pharmaceutical product Cimetidine. Likewise assailed is the July 25, 1995 Resolution of the
Court of Appeals denying the motion for reconsideration filed by petitioner Smith Kline and French
Laboratories, Ltd.
Petitioner is the assignee of Letters Patent No. 12207 covering the pharmaceutical product Cimetidine,
which relates to derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl thiourea, ureas or
guanadines. Said patent was issued by the BPTTT to Graham John Durant, John Collin Emmett and Robin
Genellin on November 29, 1978.2
On August 21, 1989, private respondent filed with the BPTTT a petition for compulsory license to
manufacture and produce its own brand of medicines using Cimetidine. Private respondent invoked Section
34 (1) (e) of Republic Act No. 165,3 (the Patent Law) the law then governing patents, which states that an
application for the grant of a compulsory license under a particular patent may be filed with the BPTTT at
any time after the lapse of two (2) years from the date of grant of such patent, if the patented invention or
article relates to food or medicine, or manufactured substances which can be used as food or medicine, or
is necessary for public health or public safety.4 The petition for compulsory license stated that Cimetidine is
useful as an antihistamine and in the treatment of ulcers, and that private respondent is capable of using
the patented product in the manufacture of a useful product. 5
Petitioner opposed the petition for compulsory license, arguing that the private respondent had no cause
of action and failed to allege how it intended to work the patented product. Petitioner further stated that
its manufacture, use and sales of Cimetidine satisfied the needs of the Philippine market, hence, there was
no need to grant a compulsory license to private respondent to manufacture, use and sell the same.
Finally, petitioner also claimed that the grant of a compulsory license to private respondent would not
promote public safety and that the latter was only motivated by pecuniary gain. 6
After both parties were heard, the BPTTT rendered a decision directing the issuance of a compulsory
license to private respondent to use, manufacture and sell in the Philippines its own brand of
pharmaceutical products containing Cimetidine and ordered the payment by private respondent to
petitioner of royalties at the rate of 2.5% of net sales in Philippine currency.7
Petitioner thereafter filed with the Court of Appeals a petition for review of the decision of the BPTTT,
raising the following arguments: (1) the BPTTT's decision is violative of the Paris Convention for the
Protection of Industrial Property; (2) said decision is an invalid exercise of police power; (3) the rate of
royalties payable to petitioner as fixed by the BPTTT was rendered without factual basis and amounts to an
expropriation of private property without just compensation; (4) the petition for compulsory license should
have been dismissed by the BPTTT for failure to prove the jurisdictional requirement of publication. 8
On January 27, 1995, the Court of Appeals promulgated its Decision, the dispositive portion of which
states:
WHEREFORE, the petition is DENIED, and the decision of the Bureau of Patents, Trademarks and
Technology Transfer is hereby AFFIRMED, with costs against the Petitioner.
SO ORDERED.9
In affirming the decision of the BPTTT, the appellate court held that the grant of a compulsory license to
private respondent for the manufacture and use of Cimetidine is in accord with the Patent Law since the
patented product is medicinal in nature, and therefore necessary for the promotion of public health and
safety.10 It explained further that the provisions of the Patent Law permitting the grant of a compulsory
license are intended not only to give a chance to others to supply the public with the quantity of the

32

patented article but especially to prevent the building up of patent monopolies. 11 Neither did the appellate
court find the royalty rate of 2.5% of net sales fixed by the BPTTT unreasonable, considering that what was
granted under the compulsory license is only the right to manufacture Cimetidine, without any technical
assistance from petitioner, and royalty rates identical to that fixed by the BPTTT have been prescribed for
the grant of compulsory license in a good number of patent cases. 12 The Court of Appeals also ruled that
contrary to petitioner's claim, private respondent complied with the requirement of publication under the
Patent Law and had submitted proof of such compliance.13
Not satisfied with the appellate court's decision, petitioner filed a motion for reconsideration thereof as
well as a motion for the issuance of a temporary restraining order against private respondent's sister
company, Montreal Pharmaceutical, Inc. to refrain from marketing a product similar to Cimetidine, but both
motions were denied by the Court of Appeals in its Resolution of July 25, 1995. 14
Petitioner thus filed the present petition on September 15, 1995, with the following assignment of errors:
I. The respondent Court erred in upholding the validity of the decision of public respondent BPTTT
which is an arbitrary exercise of police power and is violative of international law.
II. The respondent Court erred in holding that compulsory licensing will not create a confusion that
the patented product is the brainchild of private respondent Danlex and not of petitioner.
III.Assuming that the grant of compulsory license is in order, the respondent Court still erred in
holding that the BPTTT decision fixing the royalty at 2.5% of the net wholesale price in peso does
not amount to expropriation of private property without just compensation.
IV.The respondent Court erred in finding that the jurisdictional requirement of publication in a
newspaper of general circulation for three (3) consecutive weeks has been complied with by private
respondent Danlex.15
While petitioner concedes that the State in the exercise of police power may regulate the manufacture and
use of medicines through the enactment and implementation of pertinent laws, it states that such exercise
is valid only if the means employed are reasonably necessary for the accomplishment of the purpose and if
not unduly oppressive.16 According to petitioner, the grant of a compulsory license to private respondent is
an invalid exercise of police power since it was not shown that there is an overwhelming public necessity
for such grant, considering that petitioner is able to provide an adequate supply of i to satisfy the needs of
the Philippine market. Petitioner also claims that the grant of a compulsory license to private respondent
unjustly deprives it of a reasonable return on its investment. 17 It argues further that the provisions of the
Patent Law on compulsory licensing contravene the Convention of Paris for the Protection of Industrial
Property18 (Paris Convention), which allegedly permits the granting of a compulsory license over a patented
product only to prevent abuses which might result from the exercise of the exclusive rights conferred by
the patent,19 or on the ground of failure to work or insufficient working of the patented product, within four
years from the date of filing of the patent application or three years from the date of grant of the patent,
whichever expires last.20 Petitioner opines that the inclusion of grounds for the grant of a compulsory
license in Section 34 of the Patent Law other than those provided under the Paris Convention constitutes a
violation of the Philippines' obligation to adhere to the provisions of said treaty. 21
It is also contended by petitioner that the grant of a compulsory license to private respondent will allow the
latter to liberally manufacture and sell medicinal products containing Cimetidine without even extending to
petitioner due recognition for pioneering the development and worldwide acceptance of said invention,
and will unreasonably dilute petitioner's right over the patent. 22
Petitioner likewise asseverates that the rate of royalty fixed by the BPTTT at 2.5% of net sales is grossly
inadequate, taking into consideration its huge investments of money, time and other resources in the
research and development, as well as marketing of Cimetidine. It is further alleged that such rate has no
factual basis since the appellate court and the BPTTT relied solely on analogous cases and did not explain
how such rate was arrived at.23
Lastly, petitioner claims that the appellate court erred in ruling that private respondent had complied with
the requirement of publication of the notice of the filing of the petition for compulsory license because
private respondent failed to formally offer in evidence copies of the notice of filing of the petition and
notice of the date of hearing thereof as published and the affidavits of publication thereof. Thus, it says,
the BPTTT did not properly acquire jurisdiction over the petition for compulsory license. 24

33

In its Comment to the Petition, private respondent adopted the reasoning of the Court of Appeals in the
assailed decision and prayed that the petition be denied for lack of merit. 25
The petition has no merit.
The Court of Appeals did not err in affirming the validity of the grant by the BPTTT of a compulsory license
to private respondent for the use, manufacture and sale of Cimetidine. The said grant is in accord with
Section 34 of the Patent Law which provides:
Grounds for Compulsory Licensing. (1) Any person may apply to the Director for the grant
of a license under a particular patent at any time after the expiration of two years from
the date of the grant of the patent, under any of the following circumstances:
(a) If the patented invention is not being worked within the Philippines on a commercial scale,
although capable of being so worked, without satisfactory reason;
(b) If the demand of the patented article in the Philippines is not being met to an adequate extent
and on reasonable terms;
(c) If, by reason of refusal of the patentee to grant a license or licenses on reasonable terms, or by
reason of the conditions attached by the patentee to licensee or to the purchase, lease or use of the
patented article or working of the patented process or machine for production, the establishment of
any new trade or industry in the Philippines is prevented, or the trade or industry therein is unduly
restrained;
(d) If the working of the invention within the country is being prevented or hindered by the
importation of the patented article;
(e) If the patented invention or article relates to food or medicine or manufactured
substances which can be used as food or medicine, or is necessary for public health or
public safety.
(2) In any of the above cases, a compulsory license shall be granted to the petitioner
provided that he has proved his capability to work the patented product or to make use
of the patented product in the manufacture of a useful product, or to employ the
patented process.
(3) The term "worked" or "working" as used in this section means the manufacture and sale of the
patented article, of patented machine, or the application of the patented process for production, in
or by means of a definite and substantial establishment or organization in the Philippines and on a
scale which is reasonable and adequate under the circumstances. Importation shall not constitute
"working". (Emphasis supplied.)
The grant of the compulsory license satisfies the requirements of the foregoing provision. More than ten
years have passed since the patent for Cimetidine was issued to petitioner and its predecessors-ininterest, and the compulsory license applied for by private respondent is for the use, manufacture and sale
of a medicinal product. Furthermore, both the appellate court and the BPTTT found that private respondent
had the capability to workCimetidine or to make use thereof in the manufacture of a useful product.
Petitioner's contention that Section 34 of the Patent Law contravenes the Paris Convention because the
former provides for grounds for the grant of a compulsory license in addition to those found in the latter, is
likewise incorrect. Article 5, Section A(2) of the Paris Convention states:
Each country of the union shall have the right to take legislative measures providing for the grant of
compulsory licenses to prevent the abuses which might result from the exercise of the exclusive
rights conferred by the patent, for example, failure to work.26
This issue has already been resolved by this Court in the case of Smith Kline & French Laboratories, Ltd.
vs. Court of Appeals,27 where petitioner herein questioned the BPTTT's grant of a compulsory license to
Doctors Pharmaceuticals, Inc. also for the manufacture, use and sale of Cimetidine. We found no
inconsistency between Section 34 and the Paris Convention and held that:

34

It is thus clear that Section A(2) of Article 5 [of the Paris Convention] unequivocally and explicitly
respects the right of member countries to adopt legislative measures to provide for the grant
of compulsory licenses to prevent abuses which might result from the exercise of the exclusive
rights conferred by the patent. An example provided of possible abuses is "failure to work;"
however, as such, is merely supplied by way of an example, it is plain that the treaty does not
preclude the inclusion of other forms of categories of abuses.
Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to the
Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the
explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the legislative intent in the
grant of a compulsory license was not only to afford others an opportunity to provide the
public with the quantity of the patented product, but also to prevent the growth of
monopolies [Congressional Record, House of Representatives, 12 May 957, 998]. Certainly, the growth
of monopolies was among the abuses which Section A, Article 5 of the Convention foresaw,
and which our Congress likewise wished to prevent in enacting R.A. No. 165. 28(Emphasis
supplied.)
Neither does the Court agree with petitioner that the grant of the compulsory license to private respondent
was erroneous because the same would lead the public to think that the Cimetidine is the invention of
private respondent and not of petitioner. Such fears are unfounded since, as the appellate court pointed
out in the assailed decision, by the grant of the compulsory license, private respondent as licensee
explicitly acknowledges that petitioner is the source of the patented product Cimetidine.29 Even
assuming arguendo that such confusion may indeed occur, the disadvantage is far outweighed by the
benefits resulting from the grant of the compulsory license, such as an increased supply of pharmaceutical
products containing Cimetidine, and the consequent reduction in the prices thereof.30
There is likewise no basis for the allegation that the grant of a compulsory license to private respondent
results in the deprivation of petitioner's property without just compensation. It must be pointed out that as
owner of Letters Patent No. 12207, petitioner had already enjoyed exclusive rights to manufacture, use and
sell Cimetidine for at least two years from its grant in November, 1978. Even if other entities like private
respondent are subsequently allowed to manufacture, use and sell the patented invention by virtue of a
compulsory license, petitioner as owner of the patent would still receive remuneration for the use of such
product in the form of royalties.
Anent the perceived inadequacy of the royalty awarded to petitioner, the Court of Appeals correctly held
that the rate of 2.5% of net wholesale price fixed by the Director of the BPTTT is in accord with the Patent
Law. Said law provides:
Sec. 35. Grant of License.(1) If the Director finds that a case for the grant of a license under
Section 34 hereof has been made out, he shall, within one hundred eighty 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.
xxx
Section 35-B. Terms and Conditions of Compulsory License. (1) A compulsory license shall be nonexclusive, but this shall be without prejudice to the licensee's right to oppose an application for
such a new license.
(2) The terms and conditions of a compulsory license, fixed in accordance with Section 35, may
contain obligations and restrictions both for the licensee and for the registered owner of the patent.
(3) 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 five percent (5%) of the net wholesale price (as
defined in Section 33-A) of the products manufactured under the license. If the product, substance,
or process subject of the compulsory license is involved in an industrial project approved by the
Board of Investments, the royalty payable to the patentee or patentees shall not exceed three
percent (3%) of the net wholesale price (as defined in Section 33-A) of the patented commodity/and
or commodity manufactured under the patented process; the same rate of royalty shall be paid
whenever two or more patents are involved; which royalty shall be distributed to the patentees in

35

rates proportional to the extent of commercial use by the licensee giving preferential values to the
holder of the oldest subsisting product patent.
xxx
Under the aforequoted provisions, in the absence of any agreement between the parties with respect to a
compulsory license, the Director of the BPTTT may fix the terms thereof, including the rate of the royalty
payable to the licensor. The law explicitly provides that the rate of royalty shall not exceed five percent
(5%) of the net wholesale price.
The Court agrees with the appellate court's ruling that the rate of royalty payments fixed by the Director of
the BPTTT is reasonable. The appellate court, citing Price vs. United Laboratories,31 ruled as such,
considering that the compulsory license awarded to private respondent consists only of the bare right to
use the patented invention in the manufacture of another product, without any technical assistance from
the licensor.32 Furthermore, this Court had earlier noted in the Price case that identical royalty rates have
been prescribed by the Director of the BPTTT in numerous patent cases. 33
There was thus no error on the part of the Court of Appeals in affirming the royalty rate fixed by the
Director of the BPTTT, since it was not shown that the latter erred or abused his discretion in prescribing
said rate. The rule is that factual findings of administrative bodies, which are considered as experts in their
respective fields, are accorded not only respect but even finality if the same are supported by substantial
evidence.34
Finally, as to the alleged lack of jurisdiction of the BPTTT over the petition filed by private respondent for
failure to comply with the publication requirement under Section 35-F of R.A. No. 165, the Court holds that
petitioner is estopped from questioning the same since it did not raise the issue of lack of jurisdiction at
the earliest possible opportunity, i.e., during the hearings before the BPTTT. 35 The Court notes that
petitioner raised this contention for the first time when it appealed the case to the appellate court.
WHEREFORE, the petition is hereby DENIED for lack of merit and the Decision of the Court of Appeals is
hereby AFFIRMED.
SO ORDERED.

G.R. No. L-27361 May 29, 1981

PARKE, DAVIS & COMPANY, plaintiff-appellant,
vs.

36

DOCTORS' PHARMACEUTICALS, INC. and V-LAB DRUGHOUSE CORPORATION, defendantsappellees.

ABAD SANTOS, J.:
This is an appeal from the order of the Court of First Instance of Rizal dated August 22, 1966, in Civil Case
No. C-712, dismissing, on the ground of lack of cause of action, the complaint for damages for
infringement of patent and unfair competition, with preliminary injunction, filed by the herein appellant
against the herein appellees.
On May 5, 1966, Parke, Davis & Company filed with the Court of First Instance of Rizal, Caloocan City
Branch, the said Complaint with Preliminary Injunction against Doctors' Pharmaceuticals, Inc., otherwise
referred to as defendant No. 1 and V-LAB Drughouse Corporation, otherwise referred to as defendant No. 2,
alleging, among others, that plaintiff is a foreign corporation organized and existing under the laws of the
State of Michigan, U.S.A., with principal office situated in Detroit Michigan, U.S.A.; that the laws of the
United States of America allow corporate or juristic citizens of the Philippines to file in said country, actions
for infringement of patents and for unfair competition: that defendants 1 and 2 are corporations organized
and existing under the laws of the Philippines with offices respectivrely located at 354-B San Diego Street,
Grace Park, Caloocan City and 126 Gen. Evangelista Street, Caloocan City; that on March 21, 1957, Letters
Patent No. 279 was legally issued to plaintiff' by the Patent Office of the Republic of the Philippines for an
invention entitled "Therapeutically Valuable Esters and Method for Obtaining the same"; that since that
date, plaintiff has been and still is, the owner of said Letters Patent No. 279 which is still in force in the
Philippines; that defendant No. 1 has knowingly infringed and is still knowingly infringing Claim 4 of said
Letters Patent No. 279 of plaintiff by selling, causing to be sold, using or causing to be used,
"Chloramphenicol Palmitate", the substance covered by said Claim 4 of said plaintiff's Letters Patent No.
279, under the name "Venimicetin Suspension", willfully and without the consent or authorization of
plaintiff; that defendant No. 2 has likewise, knowingly infringed and is still knowingly investigation Claim 4
of said letters Patent No. 279 by acting as distributor of defendant No. 1 of the latter's medicine called
"Venimicetin Suspension" which contains "Chloramphenicol Palmitate": that plaintiff, through its whollyowned local subsidiary, Parke, Davis & Company, Inc. a domestic corporation with main office at
Mandaluyong, Rizal, has at great expense, established a market and a continuing demand for
"Chloramphenicol Palmitate" in the Philippines and has for many years sold and is still selling this product
in the Philippines that defendants have derived unlawful gains and profits from the aforesaid infringement
to the great and irreparable injury, damage and prejudice of plaintiff, and have deprive plaintiff of
legitimate returns which plaintiff would have otherwise would have falsely and deseptively concealed that
the same contains "Chloramphenicol" and "Chloramphenicol Palmitate" are entirely different substances;
that defendants, advertising and selling "Venimicetin Suspension", have falsely and deceptively use
plaintiffs name and represented that defendant No. 1 holds a license from plaintiff for said medicine
with, inter alia, the following words: 1wph1.t
First Compulsory License in the Philippines by Parke-Davis Company Detroit Michigan, U.S.A.;
that plaintiff has never granted defendant No. 1 any kind of license for any product; that defendant No. 1
has not even applied for a compulsory license under plaintiff's Letters Patent No. 279, the only patent
which covers "Chloramphenicol Palmitate"; that the compulsory licensing case between plaintiff and
defendant No. 1 in the Philippine Patent Office (Inter Partes Case No. 181) dealt with plaintiff's Letters
Patent No. 50 (which covers "Chloramphenicol") and not with plaintiff's Letters Patent No. 279 (which
covers "Chloramphenicol Palmitate"); that the resolution of the Director of Patents fixing the terms and
conditions of the compulsory license for "Chloramphenicol" has not yet become final as the same is still
subject to a pending motion for reconsideration; that even if said resolution does become final, the
compulsory license will not cover defendants' "Venimicetin Suspension" which actually contains
"Chloramphenicol Palmitate" and, therefore, defendants' statement will still be false and misleading; and
that defendants' use of the aforesaid false statement is designed to induce persons to purchase and
physicians to prescribe the use of "Venimicetin Suspension" in the mistaken belief that it is Identical with
the "Chloramphenicol Palmitate" product manufactured and sold in the Philippines by plaintiff's subsidiary
or that the active ingredient in said product has been obtained from plaintiff and/or that said product has
been made under the supervision or control of plaintiff thereby causing damage or loss to plaintiff. On
the basis of the foregoing allegations, the plaintiff prayed, among others, that defendants be enjoined from
performing the acts complained of as infringement of patent and unfair competition and to pay the plaintiff
all damages due thereto by reason of said acts.

37

On May 6, 1966, the Court of First Instance issued an order which, among others, temporarily restrained
the defendants "from directly or indirectly selling, using, causing to be sold or causing to be used any
'Chloramphenicol Palmitate' not manufactured by plaintiff or plaintiff's wholly-owned subsidiary, Parke,
Davis & Company, Inc." Alleging that the defendants have not complied with such order, the plaintiff filed
on May 24, 1966, a motion to punish defendants for contempt.
Before the court could act on the plaintiff's motion for contempt, the defendants filed a Motion to Dismiss,
dated May 25, 1966, alleging, among others, that the complaint states no cause of action against them
since defendant No. 1 "was granted a compulsory license to manufacture, use and sell its own brands of
medicinal preparation containing 'chloramphenicol'."
On June 17, 1966, the plaintiff filed its Opposition to Motion to Dismiss controverting, among others,
defendants' contention that the complaint states no cause of action. Plaintiff pointed out that the
defendants have confused the substance which is the subject matter of the complaint, namely,
"Chloramphenicol Palmitate", with the substance covered by the compulsory licensing case, namely,
"Chloramphenicol", and the Letters Patent subject of the complaint, namely, Letters Patent No. 279, with
the Letters Patent subject of the compulsory licensing case, namely, Letters Patent No. 50.
On June 27, 1966, the defendants filed their Reply to Opposition alleging, among others, that in advertising
and selling their product "Venimicetin Suspension," never do they state that the same contains
"Chloramphenicol Palmitate" They pointed out that even in the annexes of plaintiff's complaint (consisting
of the packages and labels allegedly used by the defendants in said product), only the substance
"Chloramphenicol" is stated showing that the substance involved is Cloramphenicol and not
"Chloramphenicol Palmitate".
On July 5, 1966, the plaintiff filed its Rejoinder to Reply to Opposition alleging among others, that while the
packages and labels of defendants' "Venimicetin Suspension" indicate that the same contains
"Chloramphenicol", the truth of the matter is that said product does not contains said substance but the
subtance covered by letters Patents No.279, namely, "Chloramphenicol Palmitate". This, plaintiff pointed
out, is expressly alleged in the complaint; thus, applying the rule that a motion to dismiss hypothetically
admits the truth of the allegations of the complaint, defendants are guilty of (1) infringement of patent, by
selling, causing to be sold, using or causing to be used "Chloramphenicol Palmitate" in their medicine
called "Venimicetin Suspension", and (2) unfair competition, by concealing that said medicine contains
"Chloramphenicol", and, by deceiving and misleading the purchasers who are trade to believe that
"Venimicetin Suspension" is covered by a compulsory license from the plaintiff.
On the basis of the foregoing pleadings, the Court of First Instance of Rizal issued the order dated August
22, 1966, which dismissed the complaint on the ground of lack of cause of action, to wit: 1wph1.t
xxx xxx xxx
After a careful consideration of the arguments for and against the motion to dismiss, and in
view of the fact that the substance covered by Letters Patent No. 50 and Letters Patent No.
279 is the same and that is, the substance known as "Chloramphenicol", because while
under Letters Patent No. 50, the substance is referred to as "Chloramphenicol", in Letters
Patent No. 279; THE SUBSTANCE HAS BEEN DENOMINATED AS Chloramphenicol Palmitate it
is the opinion of the Court that "Chloramphenicol" and "Chloramphenicol Palmitate are the
same, the difference being merely in the taste, and this Court to state that there was
infringement of Patent with respect to Letters Patent No. 279 would be tantamount to
preventing the defendant, Doctors" Pharmaceuticals, Inc., from exercising the right granted
it by Letters Patent No. 50. It would further render nugatory the decision of the Director of
Patents, affirmed by the Supreme Court, granting the defendant, Doctors' Pharmaceuticals,
Inc., the right to use and import "Chloramphenicol".
The defendant, V-Lab Drughouse Corporation being merely a sales representative of the
defendant, Doctors' Pharmaceuticals, Inc., and the Court being of the opinion that there is no
cause of action with respect to the principal defendant, is likewise of the opinion that there is
no cause of action with respect to the defendant, V-LAB Drughouse Corporation.
It is likewise the opinion of this Court that there is no cause of action for unfair competition
because a perusal of the records of this case will show that under paragraph 7 of the
Resolution of the Director of Patents, Annex "C" of the Motion to Dismiss, the petitioner

38

(Doctors' Pharmaceuticals, Inc.) shall adopt and use its owntrademarks or labels on all its
products containing Chloramphenicol under license from Parke. Davis, & Co., Inc., of
Michigan, U.S.A.
The claim of the plaintiff that the representation:
First Compulsory License in the Philippines by Parke Davis Company, Detroit Michigan, U.S.A.
is false and has a definite tendency to deceive possible purchasers and distort the facts is not well-taken in
view of the above-mentioned (Par. 7) of the Resolution of the Director of Patents. 1wph1.t
WHEREFORE, finding the ground of lack of cause of action to be well-taken, this case is
ordered DISMISSED, without pronouncement as to costs. The restraining order heretofore
issued is hereby lifted and set aside. Having reached the above conclusion, the Court will no
longer pass upon the issue of contempt.
SO ORDERED.
Hence, the present appeal.
We are thus tasked with the resolution of the issue of whether or not the lower court correctly dismissed
the complaint for damages for infringement of patent and unfair competition on the ground of failure to
state a cause of action.
It is axiomatic that in resolving a motion to dismiss a complaint on the ground of failure to state a cause of
action, the court should hypothetically assume the truth of the factual allegations of the complaint (except
allegations of facts the falsity of which the court may take judicial notice of) and determine whether on the
basis thereof, the complainant is entitled to the relief demanded. Had the lower court applied the foregoing
formula, it would not have Dismissed, on the ground of failure to state a cause of action, the complaint for
damages for infringement of patent and unfair competition. For, instead of hypothetically assuming the
truth of the factual allegations of the complaint, the lower court had ruled against their veracity and
consequently concluded that the complaint states no cause of action.
As can be gleaned from the appealed order, the pertinent portions of which We have heretofore quoted,
the lower court premised its ruling that there is no cause of action for infringement of patent on the
assumption that "Chloramphenicol" (the substance covered by Letters Patent No. 50) and
"Chloramphenicol Palmitate" (the substance covered by Letters Patent No. 279) are the same. Thus,
instead of hypothetically assuming the truth of the plaintiff's allegation that "Chloramphenicol" and
"Chloramphenicol Palmitate are two different substances, the lower court had ruled against its veracity.
This is clearly an error considering that the said assumed fact cannot qualify as something which the court
could take judicial notice of nor was it competent to so find in the absence of evidence formally presented
to that effect. The existence of two patents separately covering said substances simply militates against
said factual assumption and requires the presentation of evidence sufficient to convince the court that said
substances are indeed the same.
Had the lower court hypothetically assumed as true, for the purpose of the motion to dismiss, the
allegations in the complaint that "Chloramphenicol" and "Chloramphenicol Palmitate" are entirely different
substances and that "Venimicetin Suspension" actually contains "Chloramphenicol Palmitate" and not
"Chloramphenicol" as indicated in its package and label, it necessarily would have to conclude that the
complaint states causes of action for infringement of patent and for unfair competition. For defendants
would then be guilty of infringement of patent by selling, causing to be sold, using and causing to be used
"Chloramphenicol Palmitate", without the consent or authority of the plaintiff as the holder of Letters
Patent No. 279, Claim 4 of which allegedly covers said substance. Sections 37 and 42 of R.A. No. 165
provide:1wph1.t
SEC. 37. RIGHTS OF PATENTEES. A patentee shall have the exclusive right to make, use
and sell the patented machine, article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of the Philippines for the term of
the patent; and such making, using, or selling by any person without the authorization of the
patentee, constitutes infringement of the patent. (Emphasis supplied.)

39

SEC. 42. CIVIL ACTION FOR INFRINGEMENT . Any patentee, or anyone possessing any right,
title or interest in and to the patented invention, whose rights have been infringed, may
bring a civil action before the proper Court of First Instance, to recover from the infringed,
damages sustained by reason of the infringement and to secure an injunction for the
protection of his rights.
Likewise, the defendants would be guilty of unfair competition by falsely stating that defendant No. l's
medicine called "Venimicetin Suspension" contains "Chloramphenicol" when in fact it actually contains
"Chloramphenicol Palmitate", and that it is covered by a compulsory license from the plaintiff. Section 29
of R.A. No. 166 provides,inter alia;1wph1.t
In particular, and without in any way limiting the scope of unfair competition, the following
shall be deemed guilty of unfair competition:
xxx xxx xxx
(c) Any person who shall make any false statement in the course of trade ... .
Clearly, the lower court erred in dismissing, on the ground of failure to state a cause of action, the
complaint for damages for infringement of patent and unfair competition.
WHEREFORE, the appealed order of dismissal is hereby set aside and the complaint for damages for
infringement of patent and unfair competition is hereby reinstated. Without pronouncement as costs.

G.R. No. 97343 September 13, 1993

PASCUAL GODINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SPECIAL FOURTH DIVISION and SV-AGRO ENTERPRISES,
INC.,respondents.
Jesus S. Anonat for petitioner.
Arturo M. Alinio for private respondent.
ROMERO, J.:
Through this petition for review in certiorari of a decision of the Court of Appeals affirming the decision of
the trial court, petitioner Pascual Godines seeks to reverse the adverse decision of the Court a quo that he
was liable for infringement of patent and unfair competition. The dispositive portion of the assailed
decision is hereby quoted to wit:

40

WHEREFORE, with the elimination of the award for attorney's fees, the judgment appealed
from is hereby AFFIRMED, with costs against appellant. 1
The patent involved in this case is Letters Patent No. UM-2236 issued by the Philippine Patent Office to one
Magdalena S. Villaruz on July 15, 1976. It covers a utility model for a hand tractor or power tiller, the main
components of which are the following: "(1) a vacuumatic house float; (2) a harrow with adjustable
operating handle; (3) a pair of paddy wheels; (4) a protective water covering for the engine main drive; (5)
a transmission case; (6) an operating handle; (7) an engine foundation on the top midportion of the
vacuumatic housing float to which the main engine drive is detachedly installed; (8) a frontal frame
extension above the quarter circularly shaped water covering hold (sic) in place the transmission case;
(9) a V-belt connection to the engine main drive with transmission gear through the pulley, and (10) an
idler pulley installed on the engine foundation." 2 The patented hand tractor works in the following manner:
"the engine drives the transmission gear thru the V-belt, a driven pulley and a transmission shaft. The
engine drives the transmission gear by tensioning of the V-belt which is controlled by the idler pulley. The
V-belt drives the pulley attached to the transmission gear which in turn drives the shaft where the paddy
wheels are attached. The operator handles the hand tractor through a handle which is inclined upwardly
and supported by a pair of substanding pipes and reinforced by a U-shaped G.I. pipe at the V-shaped
end." 3
The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein private
respondent, from Magdalena Villaruz, its chairman and president, by virtue of a Deed of Assignment
executed by the latter in its favor. On October 31, 1979, SV-Agro Industries caused the publication of the
patent in Bulletin Today, a newspaper of general circulation.
In accordance with the patent, private respondent manufactured and sold the patented power tillers with
the patent imprinted on them. In 1979, SV-Agro Industries suffered a decline of more than 50% in sales in
its Molave, Zamboanga del Sur branch. Upon investigation, it discovered that power tillers similar to those
patented by private respondent were being manufactured and sold by petitioner herein. Consequently,
private respondent notified Pascual Godines about the existing patent and demanded that the latter stop
selling and manufacturing similar power tillers. Upon petitioner's failure to comply with the demand, SVAgro Industries filed before the Regional Trial Court a complaint for infringement of patent and unfair
competition.
After trial, the court held Pascual Godines liable for infringement of patent and unfair competition. The
dispositive portion of the decision reads as follows:
WHEREFORE, premises considered, JUDGMENT is hereby rendered in favor of the plaintiff SVAgro Industries Enterprises, Inc., and against defendant Pascual Godines:
1. Declaring the writ of preliminary injunction issued by this Court against defendant as
permanent;
2. Ordering defendant Pascual Godines to pay plaintiff the sum of Fifty Thousand Pesos
(P50,000.00) as damages to its business reputation and goodwill, plus the further sum of
Eighty Thousand Pesos (P80,000.00) for unrealized profits during the period defendant was
manufacturing and selling copied or imitation floating power tiller;
3. Ordering the defendant to pay the plaintiff, the further sum of Eight Thousand Pesos
(P8,000.00) as reimbursement of attorney's fees and other expenses of litigation; and to pay
the costs of the suit.
SO ORDERED. 4
The decision was affirmed by the appellate court.
Thereafter, this petition was filed. Petitioner maintains the defenses which he raised before the trial and
appellate courts, to wit: that he was not engaged in the manufacture and sale of the power tillers as he
made them only upon the special order of his customers who gave their own specifications; hence, he
could not be liable for infringement of patent and unfair competition; and that those made by him were
different from those being manufactured and sold by private respondent.

41

We find no merit in his arguments. The question of whether petitioner was manufacturing and selling
power tillers is a question of fact better addressed to the lower courts. In dismissing the first argument of
petitioner herein, the Court of Appeals quoted the findings of the court, to wit:
It is the contention of defendant that he did not manufacture or make imitations or copies of
plaintiff's turtle power tiller as what he merely did was to fabricate his floating power tiller
upon specifications and designs of those who ordered them. However, this contention
appears untenable in the light of the following circumstances: 1) he admits in his Answer
that he has been manufacturing power tillers or hand tractors, selling and distributing them
long before plaintiff started selling its turtle power tiller in Zamboanga del Sur and Misamis
Occidental, meaning that defendant is principally a manufacturer of power tillers, not upon
specification and design of buyers, but upon his own specification and design; 2) it would be
unbelievable that defendant would fabricate power tillers similar to the turtle power tillers of
plaintiff upon specifications of buyers without requiring a job order where the specification
and designs of those ordered are specified. No document was (sic) ever been presented
showing such job orders, and it is rather unusual for defendant to manufacture something
without the specification and designs, considering that he is an engineer by profession and
proprietor of the Ozamis Engineering shop. On the other hand, it is also highly unusual for
buyers to order the fabrication of a power tiller or hand tractor and allow defendant to
manufacture them merely based on their verbal instructions. This is contrary to the usual
business and manufacturing practice. This is not only time consuming, but costly because it
involves a trial and error method, repeat jobs and material wastage. Defendant judicially
admitted two (2) units of the turtle power tiller sold by him to Policarpio Berondo. 5
Of general acceptance is the rule imbedded in our jurisprudence that ". . . the jurisdiction of the Supreme
Court in cases brought to it from the Court of Appeals in a petition for certiorari under Rule 45 of the Rules
of Court is limited to the review of errors of law, and that said appellate court's findings of fact are
conclusive upon this Court." 6
The fact that petitioner herein manufactured and sold power tillers without patentee's authority has been
established by the courts despite petitioner's claims to the contrary.
The question now arises: Did petitioner's product infringe upon the patent of private respondent?
Tests have been established to determine infringement. These are (a) literal infringement; and (b) the
doctrine of equivalents. 7 In using literal infringement as a test, ". . . resort must be had, in the first
instance, to the words of the claim. If accused matter clearly falls within the claim, infringement is made
out and that is the end of it." 8 To determine whether the particular item falls within the literal meaning of
the patent claims, the court must juxtapose the claims of the patent and the accused product within the
overall context of the claims and specifications, to determine whether there is exact identity of all material
elements. 9
The trial court made the following observation:
Samples of the defendant's floating power tiller have been produced and inspected by the
court and compared with that of the turtle power tiller of the plaintiff (see Exhibits H to H28). In appearance and form, both the floating power tillers of the defendant and the turtle
power tiller of the plaintiff are virtually the same. Defendant admitted to the Court that two
(2) of the power inspected on March 12, 1984, were manufactured and sold by him (see TSN,
March 12, 1984, p. 7). The three power tillers were placed alongside with each other. At the
center was the turtle power tiller of plaintiff, and on both sides thereof were the floating
power tillers of defendant (Exhibits H to H-2). Witness Rodrigo took photographs of the same
power tillers (front, side, top and back views for purposes of comparison (see Exhibits H-4 to
H-28). Viewed from any perspective or angle, the power tiller of the defendant is identical
and similar to that of the turtle power tiller of plaintiff in form, configuration, design and
appearance. The parts or components thereof are virtually the same. Both have the
circularly-shaped vacuumatic housing float, a paddy in front, a protective water covering, a
transmission box housing the transmission gears, a handle which is V-shaped and inclined
upwardly, attached to the side of the vacuumatic housing float and supported by the
upstanding G.I. pipes and an engine base at the top midportion of the vacuumatic housing
float to which the engine drive may be attached. In operation, the floating power tiller of the
defendant operates also in similar manner as the turtle power tiller of plaintiff. This was

42

admitted by the defendant himself in court that they are operating on the same principles.
(TSN, August 19, 1987, p. 13) 10
Moreover, it is also observed that petitioner also called his power tiller as a floating power tiller. The patent
issued by the Patent Office referred to a "farm implement but more particularly to a turtle hand tractor
having a vacuumatic housing float on which the engine drive is held in place, the operating handle, the
harrow housing with its operating handle and the paddy wheel protective covering." 11 It appears from the
foregoing observation of the trial court that these claims of the patent and the features of the patented
utility model were copied by petitioner. We are compelled to arrive at no other conclusion but that there
was infringement.
Petitioner's argument that his power tillers were different from private respondent's is that of a drowning
man clutching at straws.
Recognizing that the logical fallback position of one in the place of defendant is to aver that his product is
different from the patented one, courts have adopted the doctrine of equivalents which recognizes that
minor modifications in a patented invention are sufficient to put the item beyond the scope of literal
infringement. 12 Thus, according to this doctrine, "(a)n infringement also occurs when a device
appropriates a prior invention by incorporating its innovative concept and, albeit with some modification
and change, performs substantially the same function in substantially the same way to achieve
substantially the same result." 13 The reason for the doctrine of equivalents is that to permit the imitation
of a patented invention which does not copy any literal detail would be to convert the protection of the
patent grant into a hollow and useless thing. Such imitation would leave room for indeed encourage
the unscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent
which, though adding nothing, would be enough to take the copied matter outside the claim, and hence
outside the reach of the law. 14
In this case, the trial court observed:
Defendant's witness Eduardo Caete, employed for 11 years as welder of the Ozamis
Engineering, and therefore actually involved in the making of the floating power tillers of
defendant tried to explain the difference between the floating power tillers made by the
defendant. But a careful examination between the two power tillers will show that they will
operate on the same fundamental principles. And, according to establish jurisprudence, in
infringement of patent, similarities or differences are to be determined, not by the names of
things, but in the light of what elements do, and substantial, rather than technical, identity
in the test. More specifically, it is necessary and sufficient to constitute equivalency that the
same function can be performed in substantially the same way or manner, or by the same or
substantially the same, principle or mode of operation; but where these tests are satisfied,
mere differences of form or name are immaterial. . . . 15
It also stated:
To establish an infringement, it is not essential to show that the defendant adopted the
device or process in every particular; Proof of an adoption of the substance of the thing will
be sufficient. "In one sense," said Justice Brown, "it may be said that no device can be
adjudged an infringement that does not substantially correspond with the patent. But
another construction, which would limit these words to exact mechanism described in the
patent, would be so obviously unjust that no court could be expected to adopt it. . . .
The law will protect a patentee against imitation of his patent by other forms and
proportions. If two devices do the same work in substantially the same way, and accomplish
substantially the same result, they are the same, even though they differ in name, form, or
shape. 16
We pronounce petitioner liable for infringement in accordance with Section 37 of Republic Act No. 165, as
amended, providing, inter alia:
Sec. 37. Right of Patentees. A patentee shall have the exclusive right to make, use and
sell the patented machine, article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory of the Philippines for the terms of

43

the patent; and such making, using, or selling by any person without the authorization of the
Patentee constitutes infringement of the patent. (Emphasis ours)
As far as the issue regarding unfair competition is concerned, suffice it to say that Republic Act No. 166, as
amended, provides, inter alia:
Sec. 29. Unfair competition, rights and remedies. . . .
xxx xxx xxx
In particular, and without in any way limiting the scope of unfair competition, the following
shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general appearance of goods of
another manufacturer or dealer, either as to the goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words thereon, or in any other
feature of their appearance, which would be likely to influence purchasers that the goods
offered are those of a manufacturer or dealer other than the actual manufacturer or dealer,
or who otherwise clothes the goods with such appearance as shall deceive the public and
defraud another of his legitimate trade. . . .
xxx xxx xxx
Considering the foregoing, we find no reversible error in the decision of the Court of Appeals affirming with
modification the decision of the trial court.
WHEREFORE, premises considered, the decision of the Court of Appeals is hereby AFFIRMED and this
petition DENIED for lack of merit.

G. R. No. 126627

August 14, 2003

SMITH KLINE BECKMAN CORPORATION, Petitioner,

vs.
THE HONORABLE COURT OF APPEALS and TRYCO PHARMA CORPORATION, Respondents.
DECISION
CARPIO-MORALES, J.:
Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the state of
Pennsylvania, United States of America (U.S.) and licensed to do business in the Philippines, filed on
October 8, 1976, as assignee, before the Philippine Patent Office (now Bureau of Patents, Trademarks and
Technology Transfer) an application for patent over an invention entitled "Methods and Compositions for
Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate." The
application bore Serial No. 18989.
On September 24, 1981, Letters Patent No. 145611 for the aforesaid invention was issued to petitioner for
a term of seventeen (17) years.
The letters patent provides in its claims2 that the patented invention consisted of a new compound named
methyl 5 propylthio-2-benzimidazole carbamate and the methods or compositions utilizing the compound
as an active ingredient in fighting infections caused by gastrointestinal parasites and lungworms in animals
such as swine, sheep, cattle, goats, horses, and even pet animals.
Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures, distributes
and sells veterinary products including Impregon, a drug that has Albendazole for its active ingredient and
is claimed to be effective against gastro-intestinal roundworms, lungworms, tapeworms and fluke
infestation in carabaos, cattle and goats.

44

Petitioner sued private respondent for infringement of patent and unfair competition before the Caloocan
City Regional Trial Court (RTC).3 It claimed that its patent covers or includes the substance Albendazole
such that private respondent, by manufacturing, selling, using, and causing to be sold and used the drug
Impregon without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No. 14561 4 as well
as committed unfair competition under Article 189, paragraph 1 of the Revised Penal Code and Section 29
of Republic Act No. 166 (The Trademark Law) for advertising and selling as its own the drug Impregon
although the same contained petitioners patented Albendazole. 5
On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining order against
private respondent enjoining it from committing acts of patent infringement and unfair competition. 6 A writ
of preliminary injunction was subsequently issued.7
Private respondent in its Answer8 averred that Letters Patent No. 14561 does not cover the substance
Albendazole for nowhere in it does that word appear; that even if the patent were to include Albendazole,
such substance is unpatentable; that the Bureau of Food and Drugs allowed it to manufacture and market
Impregon with Albendazole as its known ingredient; that there is no proof that it passed off in any way its
veterinary products as those of petitioner; that Letters Patent No. 14561 is null and void, the application
for the issuance thereof having been filed beyond the one year period from the filing of an application
abroad for the same invention covered thereby, in violation of Section 15 of Republic Act No. 165 (The
Patent Law); and that petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such amount of actual damages as may be
proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary damages; and P150,000.00 in
attorneys fees.
Finding for private respondent, the trial court rendered a Decision dated July 23, 1991, 9 the dispositive
portion of which reads:
WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is hereby, DISMISSED. The Writ
of injunction issued in connection with the case is hereby ordered DISSOLVED.
The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby declared null and
void for being in violation of Sections 7, 9 and 15 of the Patents Law.
Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby directed to cancel
Letters Patent No. 14561 issued to the plaintiff and to publish such cancellation in the Official Gazette.
Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual damages and
P100,000.00 attorneys fees as prayed for in its counterclaim but said amount awarded to defendant is
subject to the lien on correct payment of filing fees.
SO ORDERED. (Underscoring supplied)
On appeal, the Court of Appeals, by Decision of April 21, 1995, 10 upheld the trial courts finding that private
respondent was not liable for any infringement of the patent of petitioner in light of the latters failure to
show that Albendazole is the same as the compound subject of Letters Patent No. 14561. Noting
petitioners admission of the issuance by the U.S. of a patent for Albendazole in the name of Smith Kline
and French Laboratories which was petitioners former corporate name, the appellate court considered the
U.S. patent as implying that Albendazole is different from methyl 5 propylthio-2-benzimidazole carbamate.
It likewise found that private respondent was not guilty of deceiving the public by misrepresenting that
Impregon is its product.
The appellate court, however, declared that Letters Patent No. 14561 was not void as it sustained
petitioners explanation that Patent Application Serial No. 18989 which was filed on October 8, 1976 was a
divisional application of Patent Application Serial No. 17280 filed on June 17, 1975 with the Philippine
Patent Office, well within one year from petitioners filing on June 19, 1974 of its Foreign Application Priority
Data No. 480,646 in the U.S. covering the same compound subject of Patent Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent Application Serial No.
18989 was deemed filed on June 17, 1995 or still within one year from the filing of a patent application
abroad in compliance with the one-year rule under Section 15 of the Patent Law. And it rejected the
submission that the compound in Letters Patent No. 14561 was not patentable, citing the jurisprudentially

45

established presumption that the Patent Offices determination of patentability is correct. Finally, it ruled
that petitioner established itself to be the one and the same assignee of the patent notwithstanding
changes in its corporate name. Thus the appellate court disposed:
WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that the orders for the
nullification of Letters Patent No. 14561 and for its cancellation are deleted therefrom.
SO ORDERED.
Petitioners motion for reconsideration of the Court of Appeals decision having been denied 11 the present
petition for review on certiorari12 was filed, assigning as errors the following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT ALBENDAZOLE, THE ACTIVE
INGREDIENT IN TRYCOS "IMPREGON" DRUG, IS INCLUDED IN PETITIONERS LETTERS PATENT NO.
14561, AND THAT CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE RESPONDENT TRYCO
PHARMA CORPORATION P330,000.00 ACTUAL DAMAGES AND P100,000.00 ATTORNEYS FEES.
Petitioner argues that under the doctrine of equivalents for determining patent infringement, Albendazole,
the active ingredient it alleges was appropriated by private respondent for its drug Impregon, is
substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered by its patent since both
of them are meant to combat worm or parasite infestation in animals. It cites the "unrebutted" testimony
of its witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical formula in Letters Patent No. 14561
refers to the compound Albendazole. Petitioner adds that the two substances substantially do the same
function in substantially the same way to achieve the same results, thereby making them truly identical.
Petitioner thus submits that the appellate court should have gone beyond the literal wordings used in
Letters Patent No. 14561, beyond merely applying the literal infringement test, for in spite of the fact that
the word Albendazole does not appear in petitioners letters patent, it has ably shown by evidence its
sameness with methyl 5 propylthio-2-benzimidazole carbamate.
Petitioner likewise points out that its application with the Philippine Patent Office on account of which it
was granted Letters Patent No. 14561 was merely a divisional application of a prior application in the U. S.
which granted a patent for Albendazole. Hence, petitioner concludes that both methyl 5 propylthio-2benzimidazole carbamate and the U.S.-patented Albendazole are dependent on each other and mutually
contribute to produce a single result, thereby making Albendazole as much a part of Letters Patent No.
14561 as the other substance is.
Petitioner concedes in its Sur-Rejoinder13 that although methyl 5 propylthio-2-benzimidazole carbamate is
not identical with Albendazole, the former is an improvement or improved version of the latter thereby
making both substances still substantially the same.
With respect to the award of actual damages in favor of private respondent in the amount of P330,000.00
representing lost profits, petitioner assails the same as highly speculative and conjectural, hence, without
basis. It assails too the award of P100,000.00 in attorneys fees as not falling under any of the instances
enumerated by law where recovery of attorneys fees is allowed.
In its Comment,14 private respondent contends that application of the doctrine of equivalents would not
alter the outcome of the case, Albendazole and methyl 5 propylthio-2-benzimidazole carbamate being two
different compounds with different chemical and physical properties. It stresses that the existence of a
separate U.S. patent for Albendazole indicates that the same and the compound in Letters Patent No.
14561 are different from each other; and that since it was on account of a divisional application that the
patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by definition of a divisional
application, such a compound is just one of several independent inventions alongside Albendazole under
petitioners original patent application.
As has repeatedly been held, only questions of law may be raised in a petition for review on certiorari
before this Court. Unless the factual findings of the appellate court are mistaken, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the findings culled by the
court of origin,15 this Court does not review them.

46

From an examination of the evidence on record, this Court finds nothing infirm in the appellate courts
conclusions with respect to the principal issue of whether private respondent committed patent
infringement to the prejudice of petitioner.
The burden of proof to substantiate a charge for patent infringement rests on the plaintiff. 16 In the case at
bar, petitioners evidence consists primarily of its Letters Patent No. 14561, and the testimony of Dr.
Orinion, its general manager in the Philippines for its Animal Health Products Division, by which it sought to
show that its patent for the compound methyl 5 propylthio-2-benzimidazole carbamate also covers the
substance Albendazole.
From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions thereof, no
mention is made of the compound Albendazole. All that the claims disclose are: the covered invention, that
is, the compound methyl 5 propylthio-2-benzimidazole carbamate; the compounds being anthelmintic but
nontoxic for animals or its ability to destroy parasites without harming the host animals; and the patented
methods, compositions or preparations involving the compound to maximize its efficacy against certain
kinds of parasites infecting specified animals.
When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim
anything beyond them.17 And so are the courts bound which may not add to or detract from the claims
matters not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that
which the inventor claimed and the patent office allowed, even if the patentee may have been entitled to
something more than the words it had chosen would include. 18
It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561 is not
determinative of Albendazoles non-inclusion in the claims of the patent. While Albendazole is admittedly a
chemical compound that exists by a name different from that covered in petitioners letters patent, the
language of Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And no extrinsic
evidence had been adduced to prove that Albendazole inheres in petitioners patent in spite of its omission
therefrom or that the meaning of the claims of the patent embraces the same.
While petitioner concedes that the mere literal wordings of its patent cannot establish private respondents
infringement, it urges this Court to apply the doctrine of equivalents.
The doctrine of equivalents provides that an infringement also takes place when a device appropriates a
prior invention by incorporating its innovative concept and, although with some modification and change,
performs substantially the same function in substantially the same way to achieve substantially the same
result.19 Yet again, a scrutiny of petitioners evidence fails to convince this Court of the substantial
sameness of petitioners patented compound and Albendazole. While both compounds have the effect of
neutralizing parasites in animals, identity of result does not amount to infringement of patent unless
Albendazole operates in substantially the same way or by substantially the same means as the patented
compound, even though it performs the same function and achieves the same result.20 In other
words, the principle or mode of operation must be the same or substantially the same.21
The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the patentee
having the burden to show that all three components of such equivalency test are met. 22
As stated early on, petitioners evidence fails to explain how Albendazole is in every essential detail
identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the fact that Albendazole is an
anthelmintic agent like methyl 5 propylthio-2-benzimidazole carbamate, nothing more is asserted and
accordingly substantiated regarding the method or means by which Albendazole weeds out parasites in
animals, thus giving no information on whether that method is substantially the same as the manner by
which petitioners compound works. The testimony of Dr. Orinion lends no support to petitioners cause, he
not having been presented or qualified as an expert witness who has the knowledge or expertise on the
matter of chemical compounds.
As for the concept of divisional applications proffered by petitioner, it comes into play when two or more
inventions are claimed in a single application but are of such a nature that a single patent may not be
issued for them.23 The applicant thus is required "to divide," that is, to limit the claims to whichever
invention he may elect, whereas those inventions not elected may be made the subject of separate
applications which are called "divisional applications." 24 What this only means is that petitioners methyl 5
propylthio-2-benzimidazole carbamate is an invention distinct from the other inventions claimed in the
original application divided out, Albendazole being one of those other inventions. Otherwise, methyl 5

47

propylthio-2-benzimidazole carbamate would not have been the subject of a divisional application if a
single patent could have been issued for it as well as Albendazole.1wphi1
The foregoing discussions notwithstanding, this Court does not sustain the award of actual damages and
attorneys fees in favor of private respondent. The claimed actual damages of P330,000.00 representing
lost profits or revenues incurred by private respondent as a result of the issuance of the injunction against
it, computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for eleven months, were
supported by the testimonies of private respondents President 25 and Executive Vice-President that the
average monthly sale of Impregon was P100,000.00 and that sales plummeted to zero after the issuance
of the injunction.26 While indemnification for actual or compensatory damages covers not only the loss
suffered (damnum emergens) but also profits which the obligee failed to obtain (lucrum cessans or
ganacias frustradas), it is necessary to prove the actual amount of damages with a reasonable degree of
certainty based on competent proof and on the best evidence obtainable by the injured party. 27 The
testimonies of private respondents officers are not the competent proof or best evidence obtainable to
establish its right to actual or compensatory damages for such damages also require presentation of
documentary evidence to substantiate a claim therefor. 28
In the same vein, this Court does not sustain the grant by the appellate court of attorneys fees to private
respondent anchored on Article 2208 (2) of the Civil Code, private respondent having been allegedly forced
to litigate as a result of petitioners suit. Even if a claimant is compelled to litigate with third persons or to
incur expenses to protect its rights, still attorneys fees may not be awarded where no sufficient showing of
bad faith could be reflected in a partys persistence in a case other than an erroneous conviction of the
righteousness of his cause.29 There exists no evidence on record indicating that petitioner was moved by
malice in suing private respondent.
This Court, however, grants private respondent temperate or moderate damages in the amount
of P20,000.00 which it finds reasonable under the circumstances, it having suffered some pecuniary loss
the amount of which cannot, from the nature of the case, be established with certainty. 30
WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION. The
award of actual or compensatory damages and attorneys fees to private respondent, Tryco Pharma
Corporation, is DELETED; instead, it is hereby awarded the amount of P20,000.00 as temperate or
moderate damages.
SO ORDERED.

48

G.R. No. 113388 September 5, 1997

ANGELITA MANZANO, petitioner,
vs.
COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to NEW UNITED FOUNDRY
MANUFACTURING CORPORATION, respondents.
BELLOSILLO, J.:
The primary purpose of the patent system is not the reward of the individual but the advancement of the
arts and sciences. The function of a patent is to add to the sum of useful knowledge and one of the
purposes of the patent system is to encourage dissemination of information concerning discoveries and
inventions. This is a matter which is properly within the competence of the Patent Office the official action
of which has the presumption of correctness and may not be interfered with in the absence of new
evidence carrying thorough conviction that the Office has erred. Since the Patent Office is an expert body
preeminently qualified to determine questions of patentability, its findings must be accepted if they are
consistent with the evidence, with doubts as to patentability resolved in favor of the Patent Office. 1
Petitioner Angelita Manzano filed with the Philippine Patent Office on 19 February 1982 an action for the
cancellation of Letters Patent No. UM-4609 for a gas burner registered in the name of respondent Melecia
Madolaria who subsequently assigned the letters patent to New United Foundry and Manufacturing
Corporation (UNITED FOUNDRY, for brevity). Petitioner alleged that (a) the utility model covered by the
letters patent, in this case, an LPG gas burner, was not inventive, new or useful; (b) the specification of the
letters patent did not comply with the requirements of Sec. 14, RA No. 165, as amended; (c) respondent
Melecia Madolaria was not the original, true and actual inventor nor did she derive her rights from the
original, true and actual inventor of the utility model covered by the letters patent; and, (d) the letters
patent was secured by means of fraud or misrepresentation. In support of her petition for cancellation
petitioner further alleged that (a) the utility model covered by the letters patent of respondent had been
known or used by others in the Philippines for more than one (1) year before she filed her application for
letters patent on 9 December 1979; (b) the products which were produced in accordance with the utility
model covered by the letters patent had been in public use or on sale in the Philippines for more than one
(1) year before the application for patent therefor was filed.
Petitioner presented the following documents which she correspondingly marked as exhibits: (a) affidavit of
petitioner alleging the existence of prior art, marked Exh. "A;" (b) a brochure distributed by Manila Gas
Corporation disclosing a pictorial representation of Ransome Burner made by Ransome Torch and Burner
Company, USA, marked Exh. "D;" and, (c) a brochure distributed by Esso Gasul or Esso Standard Eastern,
Inc., of the Philippines showing a picture of another similar burner with top elevation view and another
perspective view of the same burner, marked Exh. "E."
Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a helper in the UNITED
FOUNDRY where respondent Melecia Madolaria used to be affiliated with from 1965 to 1970; that Ong
helped in the casting of an LPG burner which was the same utility model of a burner for which Letters
Patent No. UM-4609 was issued, and that after her husband's separation from the shop she organized
Besco Metal Manufacturing (BESCO METAL, for brevity) for the casting of LPG burners one of which had the
configuration, form and component parts similar to those being manufactured by UNITED FOUNDRY.
Petitioner presented in evidence an alleged model of an LPG burner marked Exh. "K" and covered by the
Letters Patent of respondent, and testified that it was given to her in January 1982 by one of her customers

49

who allegedly acquired it from UNITED FOUNDRY. Petitioner also presented in evidence her own model of
an LPG burner called "Ransome" burner marked Exh. "L," which was allegedly manufactured in 1974 or
1975 and sold by her in the course of her business operation in the name of BESCO METAL. Petitioner
claimed that this "Ransome" burner (Exh. "L") had the same configuration and mechanism as that of the
model which was patented in favor of private respondent Melecia Madolaria. Also presented by petitioner
was a burner cup of an imported "Ransome" burner marked Exh "M" which was allegedly existing even
before the patent application of private respondent.
Petitioner presented two (2) other witnesses, namely, her husband Ong Bun Tua and Fidel Francisco. Ong
testified that he worked as a helper in the UNITED FOUNDRY from 1965 to 1970 where he helped in the
casting of LPG burners with the same form, configuration and mechanism as that of the model covered by
the Letters Patent issued to private respondent. Francisco testified that he had been employed with the
Manila Gas Corporation from 1930 to 1941 and from 1952 up to 1969 where he retired as supervisor and
that Manila Gas Corporation imported "Ransome" burners way back in 1965 which were advertised through
brochures to promote their sale.
Private respondent, on the other hand, presented only one witness, Rolando Madolaria, who testified,
among others, that he was the General Supervisor of the UNITED FOUNDRY in the foundry, machine and
buffing section; that in his early years with the company, UNITED FOUNDRY was engaged in the
manufacture of different kinds of gas stoves as well as burners based on sketches and specifications
furnished by customers; that the company manufactured early models of single-piece types of burners
where the mouth and throat were not detachable; that in the latter part of 1978 respondent Melecia
Madolaria confided in him that complaints were being brought to her attention concerning the early
models being manufactured; that he was then instructed by private respondent to cast several
experimental models based on revised sketches and specifications; that private respondent again made
some innovations; that after a few months, private respondent discovered the solution to all the defects of
the earlier models and, based on her latest sketches and specifications, he was able to cast several models
incorporating the additions to the innovations introduced in the models. Various tests were conducted on
the latest model in the presence and under the supervision of Melecia Madolaria and they obtained perfect
results. Rolando Madolaria testified that private respondent decided to file her application for utility model
patent in December 1979.
On 7 July 1986 the Director of Patents Cesar C. Sandiego issued Decision No. 86-56 denying the petition for
cancellation and holding that the evidence of petitioner was not able to establish convincingly that the
patented utility model of private respondent was anticipated. Not one of the various pictorial
representations of business clearly and convincingly showed that the devices presented by petitioner was
identical or substantially identical with the utility model of the respondent. The decision also stated that
even assuming that the brochures depicted clearly each and every element of the patented gas burner
device so that the prior art and patented device became identical although in truth they were not, they
could not serve as anticipatory bars for the reason that they were undated. The dates when they were
distributed to the public were not indicated and, therefore, were useless prior art references. The records
and evidence also do not support the petitioner's contention that Letters Patent No. UM-4609 was obtained
by means of fraud and/or misrepresentation. No evidence whatsoever was presented by petitioner to show
that the then applicant Melecia Madolaria withheld with intent to deceive material facts which, if disclosed,
would have resulted in the refusal by the Philippine Patent Office to issue the Letters Patent under inquiry.
Petitioner elevated the decision of the Director of Patents to the Court of Appeals which on 15 October
1993 affirmed the decision of the Director of Patents. Hence, this petition for review on certiorari alleging
that the Court of Appeals erred (a) in relying on imaginary differences which in actuality did not exist
between the model of private respondent covered by Letters Patent No. UM-4609 and the previously
known model of Esso Standard Eastern, Inc., and Manila Gas Corporation, making such imaginary
differences grounded entirely on speculation, surmises and conjectures; (b) in rendering judgment based
on misapprehension of facts; (c) in relying mainly on the testimony of private respondent's sole witness
Rolando Madolaria; and, (d) in not cancelling Letters Patent No. UM-4609 in the name of private
respondent.
Petitioner submits that the differences cited by the Court of Appeals between the utility model of private
respondent and the models of Manila Gas Corporation and Esso Standard Eastern, Inc., are more imaginary
than real. She alleges that based on Exhs. "E," "E-1," "F" and "F-1" or the brochures of Manila Gas
Corporation and Esso Standard Eastern, Inc., presented by petitioner, the cup-shaped burner mouth and
threaded hole on the side are shown to be similar to the utility model of private respondent. The exhibits
also show a detachable burner mouth having a plurality of upwardly existing undulations adopted to act as

50

gas passage when the cover is attached to the top of said cup-shaped mouth all of which are the same as
those in the patented model. Petitioner also denies as substantial difference the short cylindrical tube of
the burner mouth appearing in the brochures of the burners being sold by Manila Gas Corporation and the
long cylindered tube of private respondent's model of the gas burner.
Petitioner argues that the actual demonstration made during the hearing disclosed the similarities in form,
operation and mechanism and parts between the utility model of private respondent and those depicted in
the brochures. The findings of the Patent Office and the Court of Appeals that the brochures of Manila Gas
Corporation and Esso Standard Eastern, Inc., are undated cannot overcome the fact of their circulation
before private respondent filed her application for utility model patent. Petitioner thus asks this Court to
take judicial notice of the fact that Esso Standard Eastern, Inc., disappeared before 1979 and reappeared
only during the Martial Law years as Petrophil Corporation. Petitioner also emphasizes that the brochures
indicated the telephone number of Manila Gas Corporation as 5-79-81 which is a five (5) numbered
telephone number existing before 1975 because telephones in Metro Manila started to have six (6)
numbers only after that year.
Petitioner further contends that the utility model of private respondent is absolutely similar to the LPG
burner being sold by petitioner in 1975 and 1976, and also to the "Ransome" burner depicted in the old
brochures of Manila Gas Corporation and Esso Standard Eastern, Inc., fabricated by Ransome Torch and
Burner Company of Oakland, California, USA, especially when considered through actual physical
examination, assembly and disassembly of the models of petitioner and private respondent. Petitioner
faults the Court of Appeals for disregarding the testimonies of Ong Bun Tua and Fidel Francisco for their
failure to produce documents on the alleged importation by Manila Gas Corporation of "Ransome" burners
in 1965 which had the same configuration, form and mechanism as that of the private respondent's
patented model.
Finally, it is argued that the testimony of private respondent's lone witness Rolando Madolaria should not
have been given weight by the Patent Office and the Court of Appeals because it contained mere afterthoughts and pretensions.
We cannot sustain petitioner. Section 7 of RA No. 165, as amended, which is the law on patents, expressly
provides
Sec. 7. Inventians patentable. Any invention of a new and useful machine, manufactured product or
substance, process or an improvement of any of the foregoing, shall be patentable.
Further, Sec. 55 of the same law provides
Sec. 55. Design patents and patents for utility models. (a) Any new, original and ornamental
design for an article of manufacture and (b) any new model of implements or tools or of any
industrial product or of part of the same, which does not possess the quality of invention, but which
is of practical utility by reason of its form, configuration, construction or composition, may be
protected by the author thereof, the former by a patent for a design and the latter by a patent for a
utility model, in the same manner and subject to the same provisions and requirements as relate to
patents for inventions insofar as they are applicable except as otherwise herein provided.
The element of novelty is an essential requisite of the patentability of an invention or discovery. If a device
or process has been known or used by others prior to its invention or discovery by the applicant, an
application for a patent therefor should be denied; and if the application has been granted, the court, in a
judicial proceeding in which the validity of the patent is drawn in question, will hold it void and
ineffective. 2 It has been repeatedly held that an invention must possess the essential elements of novelty,
originality and precedence, and for the patentee to be entitled to the protection the invention must be new
to the world. 3
In issuing Letters Patent No. UM-4609 to Melecia Madolaria for an "LPG Burner" on 22 July 1981, the
Philippine Patent Office found her invention novel and patentable. The issuance of such patent creates a
presumption which yields only to clear and cogent evidence that the patentee was the original and first
inventor. The burden of proving want of novelty is on him who avers it and the burden is a heavy one
which is met only by clear and satisfactory proof which overcomes every reasonable doubt. 4 Hence, a
utility model shall not be considered "new" if before the application for a patent it has been publicly known
or publicly used in this country or has been described in a printed publication or publications circulated

51

within the country, or if it is substantially similar to any other utility model so known, used or described
within the country. 5
As found by the Director of Patents, the standard of evidence sufficient to overcome the presumption of
legality of the issuance of UM-4609 to respondent Madolaria was not legally met by petitioner in her action
for the cancellation of the patent. Thus the Director of Patents explained his reasons for the denial of the
petition to cancel private respondent's patent
Scrutiny of Exhs. "D" and "E" readily reveals that the utility model (LPG Burner) is not anticipated.
Not one of the various pictorial representations of burners clearly and convincingly show that the
device presented therein is identical or substantially identical in construction with the aforesaid
utility model. It is relevant and material to state that in determining whether novelty or newness is
negatived by any prior art, only one item of the prior art may be used at a time. For anticipation to
occur, the prior art must show that each element is found either expressly or described or under
principles of inherency in a single prior art reference or that the claimed invention was probably
known in a single prior art device or practice. (Kalman v. Kimberly Clark, 218 USPQ 781, 789)
Even assuming gratia arguendi that the aforesaid brochures do depict clearly on all fours each and
every element of the patented gas burner device so that the prior art and the said patented device
become identical, although in truth they are not, they cannot serve as anticipatory bars for the
reason that they are undated. The dates when they were distributed to the public were not
indicated and, therefore, they are useless prior art references.
xxx xxx xxx
Furthermore, and more significantly, the model marked Exh. "K" does not show whether or not it
was manufactured and/or cast before the application for the issuance of patent for the LPG burner
was filed by Melecia Madolaria.
With respect to Exh. "L," petitioner claimed it to be her own model of LPG burner allegedly
manufactured sometime in 1974 or 1975 and sold by her in the course of her business operation in
the name of Besco Metal Manufacturing, which burner was denominated as "Ransome" burner
xxx xxx xxx
But a careful examination of Exh. "L" would show that it does not bear the word "Ransome" which is
the burner referred to as the product being sold by the Petitioner. This is not the way to prove that
Exh. "L" anticipates Letters Patent No. UM-4609 through Exhs. "C" and "D." Another factor working
against the Petitioner's claims is that an examination of Exh. "L" would disclose that there is no
indication of the time or date it was manufactured. This Office, thus has no way of determining
whether Exh. "L" was really manufactured before the filing of the aforesaid application which
matured into Letters Patent No. UM-4609, subject matter of the cancellation proceeding.
At this juncture, it is worthwhile to point out that petitioner also presented Exh. "M" which is the
alleged burner cup of an imported "Ransome" burner. Again, this Office finds the same as unreliable
evidence to show anticipation. It observed that there is no date indicated therein as to when it was
manufactured and/or imported before the filing of the application for issuance of patent of the
subject utility model. What is more, some component parts of Exh. "M" are missing, as only the cup
was presented so that the same could not be compared to the utility model (subject matter of this
case) which consists of several other detachable parts in combination to form the complete LPG
burner.
xxx xxx xxx
It must likewise be pointed out that Ong Bun Tua testified on the brochures allegedly of Manila Gas
and of Esso Gasul marked Exhs. "E" and "F" and on the alleged fact that Manila Gas Corporation
was importing from the United States "Ransome" burners. But the same could not be given
credence since he himself admitted during cross-examination that he has never been connected
with Manila Gas Corporation. He could not even present any importation papers relating to the
alleged imported ransome burners. Neither did his wife. 6

52

The above findings and conclusions of the Director of Patent were reiterated and affirmed by the Court of
Appeals. 7
The validity of the patent issued by the Philippine Patent Office in favor of private respondent and the
question over the inventiveness, novelty and usefulness of the improved model of the LPG burner are
matters which are better determined by the Patent Office. The technical staff of the Philippine Patent Office
composed of experts in their field has by the issuance of the patent in question accepted private
respondent's model of gas burner as a discovery. There is a presumption that the Office has correctly
determined the patentability of the model 8 and such action must not be interfered with in the absence of
competent evidence to the contrary.
The rule is settled that the findings of fact of the Director of Patents, especially when affirmed by the Court
of Appeals, are conclusive on this Court when supported by substantial evidence. Petitioner has failed to
show compelling grounds for a reversal of the findings and conclusions of the Patent Office and the Court
of Appeals.
The alleged failure of the Director of Patents and the Court of Appeals to accord evidentiary weight to the
testimonies of the witnesses of petitioner showing anticipation is not a justification to grant the petition.
Pursuant to the requirement of clear and convincing evidence to overthrow the presumption of validity of a
patent, it has been held that oral testimony to show anticipation is open to suspicion and if uncorroborated
by cogent evidence, as what occurred in this case, it may be held insufficient. 9
Finally, petitioner would want this Court to review all over again the evidence she presented before the
Patent Office. She argues that contrary to the decision of the Patent Office and the Court of Appeals, the
evidence she presented clearly proves that the patented model of private respondent is no longer new
and, therefore, fraud attended the acquisition of patent by private respondent.
It has been held that the question on priority of invention is one of fact. Novelty and utility are likewise
questions of fact. The validity of patent is decided on the basis of factual inquiries. Whether evidence
presented comes within the scope of prior art is a factual issue to be resolved by the Patent Office. 10 There
is question of fact when the doubt or difference arises as to the truth or falsehood of alleged facts or when
the query necessarily invites calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevance of specific surrounding circumstances, their relation to each other and
to the whole and the probabilities of the situation. 11
Time and again we have held that it is not the function of the Supreme Court to analyze or weigh all over
again the evidence and credibility of witnesses presented before the lower tribunal or office. The Supreme
Court is not a trier of facts. Its jurisdiction is limited to reviewing and revising errors of law imputed to the
lower court, its findings of fact being conclusive and not reviewable by this Court.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals affirming that of the Philippine
Patent Office is AFFIRMED. Costs against petitioner.
SO ORDERED.

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