IPL Digests Week 10

Parke Davis v. Doctors

Frank v. Benito
G. Sell v. Yap Jue
Godines v. CA
Del Rosario v. CA
Smith Kline v. CA (2003)
Phil Pharmawealth v. Pfizer
Creser Precision v. CA
Smith Kline v. CA
Smith Kline v. CA
Albana v. Director of Patents

Parke,
Davis
&
Pharmaceuticals,
Inc.
Corporation (1981)
Abad Santos, J.
Rights of Patentee

Company
v.
Doctors'
and
V-Lab
Drughouse

FACTS

On May 5, 1966, Parke, Davis & Company filed with

the Court of First Instance of Rizal, Caloocan City a
Complaint with Preliminary Injunction against
Doctors'
Pharmaceuticals,
Inc.
and
V-Lab
Drughouse Corporation
o
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
o
defendants are corporations organized and
existing under the laws of the Philippines

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"
o
plaintiff, through its wholly-owned 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

defendant Doctors' Pharmaceuticals has knowingly

infringed and is still knowingly infringing Claim 4 of
said Letters Patent No. 279 of plaintiff
o
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"
o
willfully and without the consent or
authorization of plaintiff;

defendant V-Lab has, likewise, knowingly infringed

and is still knowingly infringing 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
"Chlorampenicol Palmitate"

defendants have derived unlawful gains and profits

from the aforesaid infringement to the great and
irreparable injury, damage and prejudice of
plaintiff, and have deprived plaintiff of legitimate
returns which plaintiff would have otherwise

received had it not been for defendants' infringing

acts

defendants, in advertising and selling the medicine

of defendant No. 1 called "Venimicetin Suspension"
have falsely and deceptively concealed that the
same contains "Chloramphenicol Palmitate" and
falsely and deceptively represented the same to
contain "Chloramphenicol"
o
"Chloramphenicol" and "Chloramphenicol
Palmitate"
are
entirely
different
substances
o
defendants, in advertising and selling
"Venimicetin Suspension", have falsely and
deceptively used plaintiff's name and
represented that defendant No. 1 holds a
license from plaintiff for said medicine
with, inter alia, the following words: "First
Compulsory Licensee in the Philippines by
Parke-Davis Company Detroit, Michigan,
U.S.A."

plaintiff has never granted defendant Doctors'

Pharmaceutical any kind of license for any product
o
defendant Doctors' Pharmaceutical has not
even applied for a compulsory license
under plaintiff's Letters Patent No. 279, the
only
patent
which
covers
"Chloramphenicol Palmitate"
o
the compulsory licensing case between
plaintiff and Doctors' Pharmaceutical 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")
o
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
o
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
o
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.
CFI Decision

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
IPL: Digests | Week 10 | kb | 1

plaintiff's wholly-owned subsidiary, Parke, Davis &

Company, Inc."
defendants filed a Motion to Dismiss alleging,
among others, that the complaint states no cause
of action against them since defendant Doctors'
Pharmaceutical "was granted a compulsory license
to manufacture, use and sell its own brands of
medicinal
preparation
containing
'chloramphenicol.'"
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:
o
"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' yet 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."
o
"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'.
o
"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."

ISSUE AND RULING

Whether the petitioner has a cause of action against
respondents as a patentee. YES

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:
o
"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 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." (Italics supplied.).
o
"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
infringer damages sustained by reason of
the infringement and to secure an
injunction for the protection of his rights."

Order of dismissal by CFI set aside and the complaint for

damages for infringement of patent and unfair competition
reinstated.
Frank vs. Benito
FACTS:

Plaintiffs allege that they are the owners of a

patent covering hemp-stripping machine No.
1519579 issued to them by the United States
Patent Office of December 16, 1924, and duly
registered in the Bureau of Commerce and Industry
of the Philippine Islands under the provisions of Act
No. 2235 of the Philippine Legislature on March 17,
1925.
o
That the important feature of the machine
"is a spindle upon which the hemp to be
stripped is wound in the process of
stripping."
o
That plaintiffs have for some time been
manufacturing the machine under the
patent. That the defendant manufactured
a hemp-stripping machine in which,
without authority from the plaintiffs, he
has embodied and used such spindles and
their method of application and use, and is
IPL: Digests | Week 10 | kb | 2

exhibiting his machine to the public for the

purpose of inducing its purchase.
o
That the use by the defendant of such
spindles and the principle of their
application to the stripping of hemp is in
violation of, and in conflict with, plaintiffs'
patent, together with its conditions and
specifications.
o
That the defendant's machine is an
infringement upon the patent granted the
plaintiffs, and plaintiffs pray for an
injunction that the defendant be required
to account to plaintiffs for any profits he
may have made by reason of such
infringement, and for a temporary
injunction
restraining
him
in
the
manufacture of other machines of the
same kind of its exhibition, and that upon
the final hearing, the injunction be made
permanent.
The defendant demurred to the complaint upon the
ground that the facts alleged therein do not
constitute a cause of action, that it is ambiguous
and vague, and that it was error to make William
Henry Gohn plaintiff.
o
That the defendant has never had at any
time nor does he have any knowledge of
any suppose invention of the plaintiffs of
whatever kind of hemp-stripping machine,
whether patented or not, which has
circulated or not in the Philippine Islands
for the sale thereof or its private
exploitation.
o
That not having had any knowledge of any
kind of hemp-stripping machine supposed
to have been invented by the plaintiffs, it
never occurred to the defendant to imitate
the unknown invention of the plaintiffs.
o
That the hemp-stripping machine of the
plaintiffs, known as "La Constancia,"
patent of which is duly registered, has its
characteristics and original invention
belonging to the defendant which consist
of two pinions with horizontal grooves
which form the tool for extracting the
fibers between a straight knife upon
another which is cylindrical and provided
with teeth and on the center of said two
pinions there is a flying wheel its
transmission belt connecting it with the
motor.
The lower court rendered judgment in legal effect
granting the plaintiffs the injunction prayed for in
their complaint, and absolving them from
defendant's counterclaim, and judgment against
the defendant for costs.

ISSUES + RULING:
Whether or not the lower court erred in granted the
injunction prayed for against the defendants with regard to
the use of their machineNO

It is conceded that on December 16, 1924, the

United States Patent Office issued to the plaintiffs
the patent in question No. 1519579, and it was
duly registered in the Bureau of Commerce and
Industry of the Philippine Islands on March 17,
1925.

After such registration the patent laws, as

they exist in the United States for such
patent, are then applied to and are in force
and effect in the Philippine Islands.

In the instant case, the original patent is in

evidence, and that decision further holds that:
o
The burden of proof to substantiate a
charge of infringement is with the plaintiff.
Where, however, the plaintiff introduces
the patent in evidence, if it is in due form,
it affords a prima facie presumption of its
correctness and validity. The decision of
the Commissioner of Patents in granting
the patent is always presumed to be
correct. The burden the shifts to the
defendant to overcome by competent
evidence this legal presumption.

The spindle upon which the patent was obtained,

together with the spindle upon which the
defendant relies are exhibits in the record and
were before the court at the time this case was
argued. The spindle of the plaintiffs was made of
wood, conical in shape and with a smooth surface.

That of the defendant was somewhat similar in

shape, but was made of metal with rough surface,
and the defendant claims that his spindle was
more effective and would do better work than that
of the plaintiffs.

Be that as it may, the plaintiffs have a patent for

their machine, and the defendant does not have a
patent, and the basic principle of plaintiffs' patent
is the spindle upon which they rely, together with
its specified manner and mode of operation, and in
the final analysis, it must be conceded that the
basic principle of the spindle upon which the
defendant relies is founded upon the basic
principle of the spindle for which the plaintiffs have
a patent.
Assuming,
without
deciding,
that
the
defendant's spindle is an improvement upon
and is a better spindle than that of the
plaintiffs, yet, under the authority above
cited, the defendant had no legal right to
appropriate the basic principle upon which
the plaintiffs obtained their patent. The
plaintiffs having obtained their patent, which
was duly registered in the Philippines
Islands, the defendant cannot infringe upon
its basic principle.
The defendant contends that the basic
principle of the spindle was a very old one in
mechanics, and that there was nothing new
or novel in the application of it by the
plaintiffs. Be that as it may, the plaintiffs
applied for and obtained their patent with its
specifications which are attached to, and
made part of, the patent, and the proof is
conclusive that the defendant is infringing
upon the basic principle of the spindle as it is
defined and specified in plaintiffs' patent.

DISPOSITION: The judgment of the lower court is affirmed

Carlos Gsell v Valeriano Veloso Yap-Jue

IPL: Digests | Week 10 | kb | 3

Principal case: Action to enjoin infringement of a

patented process for the manufacture of curved
handles for canes, parasols and umbrellas.
o
Plaintiff in that case established title to a
patent covering such process in question.
o
Obtained a judgment against defendant, which
was a perpetual injunction restraining its
infringement.

It is ordered that the defendant

abstain from manufacturing canes and
umbrellas with a curved handle by
means of a lamp or blowpipe fed with
mineral oil or petroleum, which
process was protected by patent No.
19228, issued in favor of Henry Gsell,
and by him transferred to Carlos
Gsell. Then the process of making
the handles was fully described
therein.
The defendant continued to manufacture curved cane
handled for walking sticks and umbrellas by a process
in all respectes identical with that used by the plaintiff
under his patent, except only that he be substituted for
a lamp fed with petroleum or mineral oil, lamp fed with
alcohol.
Thus, contempt proceedings were instituted against
the defendant.
Trial Court: Found defendant NOT GUILTY.
o
These acts were not clearly and manifestly
contrary to the precise terms of the
prohibition.
o
According to the express language of the
judgment, the prohibition is against the
manufacture of canes and umbrellas with
curved handles by means of the use of a cool
or mineral oil-burning lamp or blowpipe and
the parties have stipulated that the defendant
did not use a coal or mineral oil-burning lamp
but an alcohol-burning lamp.
On appeal, the petitioner (appellant) asks the question:
whether or not the use of a patented process by a third
person, without license or authority therefor,
constitutes an infringement when the alleged infringer
has substituted in lieu of some unessential
part of the patented process a well-known
mechanical equivalent.
o
But the trial court says that this implies that in
the
present
case
the
following were
established:

1) That the use of the lamp fed with

petroleum or mineral oil was an
unessential part of the patented
process the use of which by the
accused was prohibited by the said
judgment;

2) That alcohol is an equivalent and

proper substitute, well known as
such, for mineral oil or petroleum in
connection with the said process.
o
The appellant has failed to affirmatively
establish either of these two essential facts. He
has merely assumed their existence, without
proving the same, thus begging the whole
question.
Consequently the contempt with which the accused is
charged has not been fully and satisfactorily proved,
and the order appealed from should accordingly be
affirmed in so far as it holds that the defendant is not
guilty of contempt.

Substantially the same question is submitted in these

new proceedings as that submitted in the former case.

ISSUES + RULING:
The Supreme Court rules that, based on testimony
introduced in the trial courts, that:
1) Alcohol is an equivalent or substitute, well
known as such at the time when the patent
was issued, for mineral oil or petroleum, in
connection with blast lamps or blowpipes
such as that which plaintiff uses in the
patented process AND
2) The use of a blast lamp or blowpipe fed with
petroleum or mineral oil, rather than one fed
with alcohol, is an unessential part of the
patented process the use of which was
prohibited by the said judgment.
o
It was clearly proven at the trial, that kerosene
and alcohol blast lamps are agencies for
producing and applying heat, well known
throughout the world long prior to 1906, the
date of the issue of the patent. That it is and
for many years has been known that one may
for all ordinary purposes be used in the place
of the other, and especially for the purpose of
applying heat in the manner described in the
patent
o
THUS, the plaintiff does not and cannot claim a
patent upon the particular lamp used by him.

The patent, however, gives him the

exclusive right to the use of "la
lamparilla o soplete, alimentada de
petroleo o esencia mineral" (the small
lamp or blowpipe fed with petroleum
or mineral oil) in manufacturing
curved handles for umbrellas and
canes
o
True, defendant's blast lamp is fed with
alcohol, and its shape varies in unimportant
details, for the purpose of accommodating the
principle, by which the flame is secured, to the
different physical and chemical composition of
the fuel used therein; but the principle on
which it works, its mode of application, and its
general design distinguish it in no essential
particular from that used by the plaintiff.
o
The ground for the rejection of the claims in
each case being the same, and resting on the
fact that unessential changes, which do not
affect the principle of the blast lamp used in
the patented process, or the mode of
application of heat authorized by the patent,
are not sufficient to support a contention that
the process in one case is in any essential
particular different from that used in the other.
Counsel for plaintiff invokes the doctrine of
"mechanical equivalents.
o
The Court recognizes that such doctrine is founded
on sound rules of reason and logic, and is of
universal application such that it doesnt matter
which sovereignty issued the patent the patent
would still be covered.
o
The Doctrine of Mechanical Equivalents: (citing
various decisions of the US Federal Courts)
o
If no one can be held to infringe a patent
for a combination unless he uses all the
parts of the combination and the identical
machinery as that of the patentee, then
will no patent for a combination be
IPL: Digests | Week 10 | kb | 4

infringed; for certainly no one capable of

operating a machine can be incapable of
adopting some formal alteration in the
machinery, or of substituting mechanical
equivalents. No one infringes a patent for
a combination who does not employ all of
the ingredients of the combination; but if
he employs all the ingredients, or adopts
mere formal alterations, or substitutes, for
one ingredient another which was well
known at the date of the patent as a
proper substitute for the one withdrawn,
and which performs substantially the same
function as the one withdrawn, he does
infringe. (King v Louisville Cement)
o
Mere formal alterations in a combination in
letters patent are no defense to the charge
of infringement and the withdrawal of one
ingredient from the same and the
substitution of another which was well
known at the date of the patent as a
proper substitute for the one withdrawn is
a
mere
formal
alteration
of
the
combination if the ingredient substituted
performs substantially the same function
as the one withdrawn.

Bona
fide inventors
of
a
combination are as much entitled
to
suppress
every
other
combination
of
the
same
ingredients to produce the same
result, not substantially different
from what they have invented and
caused to be patented as to any
other class of inventors. All alike
have the right to suppress every
colorable invasion of that which is
secured to them by letters patent.
(Seymour v Osbourne)
o
An equivalent device is such as a
mechanic of ordinary skill in construction
of similar machinery, having the forms,
specifications and machine before him,
could substitute in the place of the
mechanism described without the exercise
of the inventive faculty. (Burden v Corning)
o
HELD: Under doctrine of equivalents, the language
of the note in the descriptive statement applies to
the operation of applying heat for the purpose of
curving handles or canes and umbrellas by means
of a blast lamp fed with alcohol, as well as by
means of a blast lamp fed with petroleum or
mineral oil.
o
That the defendant having admitted the
fact that he applied heat for the purpose
of curving handles for canes and umbrellas
by means of a blast lamp fed with alcohol,
he must be deemed to have contempt of
violating the terms and the injunction
issued in the principal case, wherein
plaintiff was declared the owner of the
patent in question, and defendant
enjoined from its infringement.
Judgment of Trial Court affirmed. (Weird because
found the trial court mentioned defendant was not
guilty. But the final judgment was that he was held
in contempt. Baka completely new proceeding ito.)
Godines v. Court of Appeals (1993)

Romero, J.
FACTS:

Letters Patent No. UM-2236 was issued to one

Magdalena Villaruz, who subsequently assigned it
to private respondent SV-Agro Enterprises, Inc.
o
It covers a utility model for a hand tractor
or tiller.

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
Pascual Godines.

SV-Agro Industries notified Godines about its

patent and demanded that he stop manufacturing
and selling similar power tillers.

Godines did not comply, thus, SV-Agro Industries

filed a complaint for infringement and unfair
competition before the RTC.

RTC: Godines liable.

o
Ordered to pay P50,000 damages and
P80,000 as unrealized profits.

CA: Affirmed.

Hence, this petition.

Godines defenses:
o
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.
o
Those made by him were different from
those being manufactured and sold by SVAgro Industries.
ISSUES + RULING:
WoN Godines is guilty of infringement. YES.

The
question
of
whether
petitioner
was
manufacturing and selling power tillers is a
question of fact better addressed to the lower
courts.

The RTC made the following findings:

o
Petitioner 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.
o
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 job orders were presented in

evidence, contrary to the usual
business
and
manufacturing
practice.
o
Godines judicially admitted two (2) units of
the turtle power tiller sold by him to
Policarpio Berondo.
IPL: Digests | Week 10 | kb | 5

TESTS TO DETERMINE INFRINGEMENT:

o
Literal infringement

Resort must be had, in the first

instance, to the words of the
claim. If accused matter clearly
falls within the claim, infringement
is made out and that is the end of
it.

To
determine
whether
the
particular item falls within the
literal meaning of the patent
claims, the court must juxtapose
the claims of the patent and the
accused product within the overall
context
of
the
claims
and
specifications,
to
determine
whether there is exact identity of
all material elements.
o
Doctrine of equivalents

Recognizes
that
minor
modifications
in
a
patented
invention are sufficient to put the
item beyond the scope of literal
infringement.

Thus, according to this doctrine,

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.
The RTC found that the literal infringement
test was satisfied:
o
In appearance and form, both the floating
power tillers of Godines and the turtle
power tiller of SV-Agro Industries are
virtually the same.
o
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.
o
Moreover, Godines 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."
Caete, Godines welder of 11 years, tried to
show that the floating power tillers of the
latter
were
different
from
SV-Agro
Industries. Despite these differences, there
is still infringement based on the doctrine of
equivalents.
o
But a careful examination between the two
power tillers will show that they will
operate on the same fundamental
principles.
o
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.
o
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 fine, petitioner is guilty of infringement under
37, RA 165:

Sec. 37. Right of Patentees. A patentee shall have the ex

or product, and to use the patented process for the pur
Philippines for the terms of the patent; and such making,
Patentee constitutes infringement of the patent.
WoN Godines is guilty of unfair competition. YES.

29, RA 166 states:

Sec. 29. Unfair competition, rights and remedies. . . .
xxx xxx xxx

In particular, and without in any way limiting the scope of u

competition:

(a) Any person, who in selling his goods shall give them the
either as to the goods themselves or in the wrapping of the
thereon, or in any other feature of their appearance, which w
those of a manufacturer or dealer other than the actual man
appearance as shall deceive the public and defraud another
DISPOSITION: Affirmed.
Del Rosario v. CA
G.R. No. 115106. March 15, 1996
Bellosillo, J.
Short Version:
Del Rosario owned 2 letters patent for a utility model for
karaoke. He sued Janito for infringement, committed by
manufacturing a similar karaoke machine. He prayed for
prelim injunction. RTC granted, but CA reversed, on the
ground that the karaoke system was a universal product
manufactured and marketed in most countries of the world.
SC disagreed, and granted the injunction. The
issuance of letters patent by the Director are presumed
correctly issued. Janito, despite citing differences between
its machine and del Rosario, did not do enough to overturn
this presumption. Further, Janito limited its comparison to
the first letter patent of del Rosario, completely
disregarding his second version of the karaoke machine
covered by the second patent.
Facts:
Roberto del Rosario filed a complaint for patent
infringement against Janito Corporation, alleging that he
patented karaoke in the Philippines under 2 Letters Patent
for Utility Models issued by the Director of Patents, with
effectivity having been extended for five (5) years starting
2 June 1988 and 14 November 1991, respectively.
He described his sing-along system as a handy multipurpose compact machine which incorporates an amplifier
speaker, one or two tape mechanisms, optional tuner or
radio and microphone mixer with features to enhance ones
voice, such as the echo or reverb to stimulate an opera hall
or a studio sound, with the whole system enclosed in one
cabinet casing.
In early 1990, he learned that Janito was manufacturing a
sing-along system bearing the trademark miyata or miyata
IPL: Digests | Week 10 | kb | 6

karaoke substantially similar if not identical to the singalong system covered by the patents issued in his favor.
Thus, he sought from the trial court the issuance of a writ
of preliminary injunction to enjoin Janito from using, selling
and advertising the miyata or miyata karaoke brand,.
Trial court issued TRO, then later issued a writ of
preliminary injunction, on the basis of its finding that
petitioner was a holder of a utility model patent for a singalong system and that without his approval and consent
private respondent was admittedly manufacturing and
selling its own sing-along system under the brand
name miyata which was substantially similar to the
patented utility model of del Rosario
On certiorari, CA reversed, on the ground that there was no
infringement by the fact alone that Janito had
manufactured the miyata karaoke or audio system, and
that the karaoke system was a universal product
manufactured, advertised and marketed in most countries
of the world long before the patents were issued to del
Rosario.
Hence this petition for review.
Issue and Ratio:
WON the Miyata Karaoke sing-along system is substantially
similar, if not identical to the audio equipment covered by
the letters patent issued in favor of del Rosario, and thus,
WON Preliminary Injunction should lie. (Yes)
The grant of the writ of rests upon an alleged existence of
an emergency or of a special reason for such an order
before the case can be regularly heard, and the essential
conditions for granting such temporary injunctive relief are
that the complaint alleges facts which appear to be
sufficient to constitute a cause of action for injunction and
that on the entire showing from both sides, it appears, in
view of all the circumstances, that the injunction is
reasonably necessary to protect the legal rights of plaintiff
pending the litigation.
In contrast a preliminary injunction may be granted at any
time after the commencement of the action and before
judgment when it is established that the defendant is
doing, threatens, or is about to do, or is procuring or
suffering to be done, some act probably in violation of the
plaintiffs rights. Thus, there are only two requisites to be
satisfied if an injunction is to issue, namely, the existence
of the right to be protected, and that the facts against
which the injunction is to be directed are violative of said
right.
The Patent law provides for the issuance of patents for
utility models, which cover new models or 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.
Del Rosario holds such a patent for karaoke.
He even holds another one, which involved an improved
model of karaoke.
The Patent Law expressly acknowledges that any new
model of implements or tools of any industrial product even
if not possessed of the quality of invention but which is of
practical utility is entitled to a patent for utility model.
Here, there is no dispute that the letters patent issued to
petitioner are for utility models of audio equipment.
In issuing, reissuing or withholding patents and extensions
thereof, the Director of Patents determines whether the
patent is new and whether the machine or device is the
proper subject of patent. The decision of the Director of
Patents in granting the patent is always presumed to be
correct, and the burden then shifts to respondent to
overcome this presumption by competent evidence.
Under Sec. 55 of The Patent Law 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 within the country, or if it is substantially similar
to any other utility model so known, used or described
within the country.
Janito failed to present evidence that the utility models
covered by the Letters Patents issued to petitioner were not
new.
Del Rosarios rights as patentee have been sufficiently
established. Consequently, under Sec. 37 of The Patent law,
del Rosario has the exclusive right to make, use and sell the
patented machine, article or product 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 authorization of the
patentee constitutes infringement of his patent.
He proved that Janito was manufacturing a similar singalong system bearing the trademark miyata which infringed
his patented models.
While Janito cited the differences between its miyata
equipment and del Rosarios audio equipment, such
comparison was confined to the first model, Utility Model
No. 5269, and completely disregarded Utility Model No.
6237 which improved on the first.
Thus, Jacinto to a clear, competent and reliable comparison
between its own model present before the trial court and
that of petitioner, and disregarded completely petitioners
Utility Model No. 6237 which improved on his first patented
model.
Notwithstanding the differences cited by respondent
corporation, it did not refute and disprove the allegations of
petitioner before the trial court that: (a) both are used by a
singer to sing and amplify his voice; (b) both are used to
sing with a minus-one or multiplex tapes, or that both are
used to play minus-one or standard cassette tapes for
singing or for listening to; (c) both are used to sing with a
minus-one tape and multiplex tape and to record the
singing and the accompaniment; (d) both are used to sing
with live accompaniment and to record the same; (e) both
are used to enhance the voice of the singer using echo
effect, treble, bass and other controls; (g) both are
equipped with cassette tape decks which are installed with
one being used for playback and the other, for recording
the singer and the accompaniment, and both may also be
used to record a speakers voice or instrumental playing,
like the guitar and other instruments; (h) both are encased
in a box-like cabinets; and, (i) both can be used with one or
more microphones.
Clearly, both the models of del Rosario and Janito involve
substantially the same modes of operation and produce
substantially the same if not identical results when used.
Thus, there was prima facie proof of violation of his rights
as patentee to justify the issuance of a writ of preliminary
injunction in his favor during the pendency of the main suit
for damages resulting from the alleged infringement.
Petition granted. CA decision reversed.
Gabe.
SMITH KLINE v. CA (2003)
Doctrine: When the language of its claims is clear and
distinct, the patentee is bound thereby and may not claim
anything beyond them.
FACTS:

Oct 8 1976: Smith Kline Beckman Corp filed, as

assignee, before the Philippine Patent Office, an
application for patent over an invention entitled
Methods and Compositions for Producing Biphasic
Parasiticide Activity using Methyl 5 Propylthio-2Benzimidazole Carbamate.
IPL: Digests | Week 10 | kb | 7

Sept 24 1981: Letter Patent No. 14561 was issued,

for a term of 17 years.
o
The letters patent provides in its
claims 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 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.
Smith Kline sued Tryco Pharma for infringement of
patent and unfair competition.
o
Smith Kline claimed that its patent covers
or includes the substance Albendazole
such that Tryco Pharma, 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.
o
Also alleged that Tryco Pharma 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.
Upon motion of Smith Kline, RTC issued a TRO
against Tryco Pharma, enjoining it from committing
acts of patent infringement and unfair competition.
Trycos Answer: Letters Patent No. 14561 granted
to petitioner SKBC does not include Albendazole for
nowhere is such word found in the patent.
o
Letters Patent No. 14561 does not cover
the substance Albendazole for nowhere in
it does that word appear;
o
Also averred 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 petition.
RTC: Ruled in favor of Tryco Pharma.
CA: Affirmed RTC decision.

ISSUE:

WON the Court of Appeals erred in not finding that

Albendazole is included in petitioners Letter Pattent
No. 14561.

RATIO: Whether or not the Court of Appeals erred in not

finding that Albendazole is included in petitioners Letter
Pattent No. 14561

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.
o
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.
o
In other words, the principle or mode of
operation must
be
the
same
or
substantially the same
The doctrine
of
equivalents thus
requires
satisfaction of the function-means-and-result test,
the patentee having the burden to show that all
three components of such equivalency test are
met.
From an examination of the evidence on record,
the Court finds nothing infirm in the appellate
courts conclusions with respect to the principal
issue of whether Tycho Pharma committed patent
infringement to the prejudice of SKBC.
The burden of proof to substantiate a charge for
patent infringement rests on the plaintiff. 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.
o
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.
When the language of its claims is clear and
distinct, the patentee is bound thereby and may
not claim anything beyond them.
o
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.
o
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 SKBCs letters patent, the
IPL: Digests | Week 10 | kb | 8

language of Letter Patent No. 14561 fails

to yield anything at all regarding
Albendazole.
o
And no extrinsic evidence had been
adduced to prove that Albendazole inheres
in SKBCs patent in spite of its omission
therefrom or that the meaning of the
claims of the patent embraces the same.
o
While SKBC concedes that the mere literal
wordings of its patent cannot establish
Tyco Pharmas infringement, it urges the
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.
o
Yet again, a scrutiny of SKBCs evidence
fails to convince the Court of the
substantial sameness of SKBCs patented
compound and Albendazole.
o
While both compounds have the effect of
neutralizing parasites in animals, identity
of result does not amount to infringement
of patent unless Albendazole operates in
substantially the same way or by
substantially the same means as the
patented compound, even though it
performs the same function and achieves
the same result.
In other words, the principle or mode of operation
must be the same or substantially the same.
The doctrine of equivalents thus requires
satisfaction of the function-means-and-result test,
the patentee having the burden to show that all
three components of such equivalency test are
met.

DISPOSITION: CA decision affirmed.

Phil Pharmawealth, Inc. vs. Pfizer, Inc. (2010)

Peralta, J.:
FACTS:
Pfizer is the registered owner of Philippine Letters Patent
No. 21116 which was issued by this Honorable Office on
July 16, 1987 and valid until July 16, 2004
The scope of the claims of the Patent extends to a
combination of penicillin such as ampicillin sodium and
beta lactam antibiotic like sulbactam sodium thus covering
ampicillin sodium/sulbactam sodium (hereafter Sulbactam
Ampicillin).
Pfizer is marketing Sulbactam Ampicillin under the brand
name Unasyn. Pfizers Unasyn products, which come in
oral and IV formulas, are covered by Certificates of Product
Registration (CPR) issued by the Bureau of Food and
Drugs (BFAD) under the name of Pfizer.
The sole and exclusive distributor of Unasyn products in
the Philippines is Zuellig Pharma Corporation, pursuant to a
Distribution Services Agreement it executed with Pfizer
Phils.
Without the consent of Pfizer, Phil Pharmawealth submitted
bids for the supply of Sulbactam Ampicillin to several
hospitals.
Pfizer demanded Phil Pharmawealth to stop and for the
hospitals not to accept the bids but they ignored the
demand and refused to comply.

Pfizer and Pfizer (Phil.) filed a complaint for patent

infringement against Phil Pharmawealth with the Bureau of
Legal Affairs of the Intellectual Property Office (BLA-IPO).
prayed for permanent injunction, damages and the
forfeiture and impounding of the alleged infringing
products.
BLA-IPO: issued a preliminary injunction which was
effective for ninety days
When it expired Pfizer asked for an extension of the
injunction but was denied.
Pfizer filed special civil action for certiorari with the CA
While case was pending with the CA, Pfizer filed a
complaint with the RTC for infringement and unfair
competition with damages with prayer for TRO.
RTC: Granted TRO, then subsequently issued preliminary
injunction.
prohibiting and restraining [petitioner], its agents,
representatives and assigns from importing, distributing or
selling Sulbactam Ampicillin products to any entity in the
Philippines.
Phil Pharma filed Motion to Dismiss the petition filed with
the CA for forum shopping.
Case filed with the RTC has the same objective as the
petition filed with the CA, which is to obtain an injunction
CA: approved the bond filed and issued TRO.
Phil Pharma filed Motion to Dismiss for the case being moot
and academic since the patent of Pfizer has already lapsed.
CA: denied motion to dismiss.
Hence the present petition.
ISSUE + RULING:
Can an injunctive relief be issued based on an action of
patent infringement when the patent allegedly infringed
has already lapsed? - NO
Phil Pharma: Pfizers exclusive right to monopolize the
subject matter of the patent exists only within the term of
the patent. Patent already expired on July 16, 2004.
Section 37 of Republic Act No. (RA) 165 (governing law at
that time) states that:
Section 37. Rights of patentees.A patentee shall have the
exclusive right to make, use and sell the patented machine,
article or product, and to use the patented process for the
purpose of industry or commerce, throughout the territory
of the Philippines for the term of the patent; and such
making, using, or selling by any person without the
authorization of the patentee constitutes infringement of
the patent.
Hence the exclusive right of a patentee to make, use and
sell a patented product, article or process exists only during
the term of the patent.
21 of RA 165 states that the life of a patent shall be 17
years for date of issuance (July 16, 1986 - July 16, 2004).
Such fact was admitted by Pfizer and thus considered a
judicial admission thus no evidence need be presented.
Two requisites must exist to warrant the issuance of an
injunctive relief, namely: (1) the existence of a clear and
unmistakable right that must be protected; and (2) an
urgent and paramount necessity for the writ to prevent
serious damage.
Thus when the CA approved the bond on Jan. 18, 2005,
Pfizer no longer had a right that must be protected,
considering that its patent has expired.
What tribunal has jurisdiction to review the decisions of the
Director of Legal Affairs of the Intellectual Property Office? in case of interlocutory orders it is the CA

IPL: Digests | Week 10 | kb | 9

Under RA 8293 (IPC Code) the Director General of the IPO

exercises exclusive appellate jurisdiction over all decisions
rendered by the Director of the BLAIPO.
However, what is being questioned before the CA is not a
decision, but an interlocutory order of the BLAIPO denying
respondents motion to extend the life of the preliminary
injunction issued in their favor.
IPC Code is silent as to the remedy available in such case.
The Rules and Regulations on Administrative Complaints for
Violation of Laws Involving Intellectual Property Rights
simply provides that interlocutory orders shall not be
appealable.
Hence, in the absence of such a remedy, the provisions of
the Rules of Court shall apply in a suppletory manner, as
provided under Section 3, Rule 1 of the same Rules and
Regulations.
Hence, in the present case, respondents correctly resorted
to the filing of a special civil action for certiorari with the CA
as they cannot appeal therefrom and they have no other
plain, speedy and adequate remedy.
As to Primary Jurisdiction:
The initial filing of their complaint with the BLA IPO, instead
of the regular courts, is in keeping with the doctrine of
primary jurisdiction owing to the fact that the
determination of the basic issue of whether petitioner
violated respondents patent rights requires the exercise by
the IPO of sound administrative discretion which is based
on the agencys special competence, knowledge and
experience.
However, the propriety of extending the life of the writ of
preliminary injunction issued by the BLAIPO in the exercise
of its quasijudicial power is no longer a matter that falls
within the jurisdiction of the said administrative agency,
particularly that of its Director General. The resolution of
this issue which was raised before the CA does not demand
the exercise by the IPO of sound administrative discretion
requiring special knowledge, experience and services in
determining technical and intricate matters of fact. It is
settled that one of the exceptions to the doctrine of primary
jurisdiction is where the question involved is purely legal
and will ultimately have to be decided by the courts of
justice.
Is there forum shopping when a party files two actions with
two seemingly different causes of action and yet pray for
the same relief? - YES
The elements of forum shopping are: (a) identity of parties,
or at least such parties that represent the same interests in
both actions; (b) identity of rights asserted and reliefs
prayed for, the reliefs being founded on the same facts; (c)
identity of the two preceding particulars, such that any
judgment rendered in the other action will, regardless of
which party is successful, amount to res judicata in the
action under consideration.
There is no question as to the identity of parties in the
complaints filed with the IPO and the RTC.
In the instant case, respondents cause of action in their
complaint filed with the IPO is the alleged act of petitioner
in importing, distributing, selling or offering for sale
Sulbactam Ampicillin products, acts that are supposedly
violative of respondents right to the exclusive sale of the
said products which are covered by the latters patent.
However, a careful reading of the complaint filed with the
RTC of Makati City would show that respondents have the
same cause of action as in their complaint filed with the
IPO. They claim that they have the exclusive right to make,
use and sell Sulbactam Ampicillin products and that
petitioner violated this right.

In fact, respondents seek substantially the same reliefs in

their separate complaints with the IPO and the RTC for the
purpose of accomplishing the same objective.
IPO

RTC

A. Immediately upon the filing of this action,

issue an ex parte order (a) temporarily
restraining
respondent,
its
agents,
representatives and assigns from importing,
distributing, selling or offering for sale Sulbactam
Ampicillin products to the hospitals named in
paragraph 9 of this Complaint or to any other
entity in the Philippines, or from otherwise
infringing Pfizer Inc.s Philippine Patent No.
21116; and (b) impounding all the sales invoices
and other documents evidencing sales by
respondent of Sulbactam Ampicillin products.
B. After hearing, issue a writ of preliminary
injunction enjoining respondent, its agents,
representatives and assigns from importing,
distributing, selling or offering for sale Sulbactam
Ampicillin products to the hospitals named in
paragraph 9 of the Complaint or to any other
entity in the Philippines, or from otherwise
infringing Pfizer Inc.s Philippine Patent No.
21116; and
C. After trial, render judgment:
(i)
declaring that respondent has infringed
Pfizer Inc.s Philippine Patent No. 21116 and that
respondent has no right whatsoever over
complainants patent;
(ii) ordering respondent to pay complainants the
following amounts:
(a) at least P1,000,000.00 as actual damages;
(b) P700,000.00 as attorneys fees and litigation
expenses;
(c) P1,000,000.00 as exemplary damages; and
(d) costs of this suit.
(iii) ordering the condemnation, seizure or
forfeiture of respondents infringing goods or
products, wherever they may be found, including
the materials and implements used in the
commission of infringement, to be disposed of in
such manner as may be deemed appropriate by
this Honorable Office; and
(iv) making the injunction permanent.

(a) Immedi
an ex parte
(1) tem
agents,
importi
infringi
various
any ot
otherw
No. 268
(2) im
docume
sulbact
(3) dis
channe
(b) Aft
injuncti
(1)
enjo
representat
distributing
sulbactam
hospitals or
Philippines,
26810;
(2) impoun
documents
sulbactam a
products; a
(3) disposi
channels of
commerce.
(c) After tria
(1) find
Patent
have no
(2) ord
followin
(i)
at l
(ii) P50
P1,000,0
(iii) P3,
(iv) cos
(3) ord
forfeitur
products
the ma
commiss
such ma
this Hon
(4) ma

It is clear from the foregoing that the ultimate objective

which respondents seek to achieve in their separate
complaints filed with the RTC and the IPO, is to ask for
damages for the alleged violation of their right to
exclusively sell Sulbactam Ampicillin products and to
permanently prevent or prohibit petitioner from selling said
products to any entity. Owing to the substantial identity of
parties, reliefs and issues in the IPO and RTC cases, a
IPL: Digests | Week 10 | kb | 10

decision in one case will necessarily amount to res judicata

in the other action.
In the present case, the Court finds that respondents did
not deliberately violate the rule on nonforum shopping,
thus subsequent case is dismissed w/o prejudice.
DISPOSITION: Petition is PARTLY GRANTED. CA decision is
REVERSED and SET ASIDE. Petition for certiorari filed with
CA is DISMISSED for being moot and academic. RTC Case is
likewise DISMISSED on the ground of litis pendentia.

Creser Precision Systems v. CA & Floro Intl (1998)

MARTINEZ, J.
FACTS:

Floro Intl is a domestic corporation engaged in the

manufacture, production, distribution and sale of
military armaments, munitions, airmunitions and
other similar materials.

1990: Floro Intl was granted by BPTTT a Letters

Patent covering an aerial fuze which was published
in the Sept-Oct issue of the Bureau of Patents
Official Gazette.

1993: Floro Intl, through its president, Mr. Gregory

Floro, Jr., discovered that Creser Precision Systems
submitted samples of its patented aerial fuze to
the AFP for testing. He learned that Creser was
claiming the aforesaid aerial fuze as its own and
planning to bid and manufacture the same
commercially without license or authority from
Floro Intl.

To protect its right, Floro Intl sent a letter to Creser

advising it of its existing patent and its rights
thereunder, warning Creser of a possible court
action and/or application for injunction, should it
proceed with the scheduled testing by the military.

In response, Creser then filed a complaint for

injunction and damages arising from the alleged
infringement before RTC-QC. The complaint
alleged, among others that:
o
Creser is the first, true and actual inventor
of an aerial fuze which is developed as
early as December 1981 under the SelfReliance Defense Posture Program (SRDP)
of the AFP;
o
In 1986, Creser began supplying the AFP
with the said aerial fuze;
o
Floro Intls aerial fuze is identical in every
respect to the Cresers fuze; and
o
Only difference between the two fuzes are
miniscule and merely cosmetic in nature.

Creser prayed for TRO and/or WPI, from

manufacturing,
marketing
and/or
profiting
therefrom, and/or from performing any other act in
connection therewith or tending to prejudice and
deprive it of any rights, privileges and benefits to
which it is duly entitled as the first, true and actual
inventor of the aerial fuze.

TC issued a TRO. Hearing ensued.

In its memorandum, Floro Intl alleged that:

o
Creser has no cause of action to file a
complaint of infringement against it since
it has no patent for the aerial fuze which it
claims to have invented;
o
Cresers available remedy is to file a
petition for cancellation of patent before
the Bureau of Patents;

Floro Intl 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
right over its patent.
TC granted the issuance of WPI upon Cresers
posting of 200K bond. Floro Intls MR denied.
TC ruled that Creser amply proved his right.
o
TC found untenable the 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 Section
10, RA 165 to include only the first true
and actual inventor, his heirs, legal
representatives to assignees. 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.
o
As to the argument that the order was
disruptive of the status quo, TC held that it
in effect maintained the status quo. The
last actual , peaceable uncontested status
existing prior to this controversy was
Creser manufacturing and selling its own
aerial fuzes which was ordered stopped
through the defendants letter. With
issuance of the order, the operations of
Creser continue.
o
Also, Floro Intl will not suffer irreparable
injury by virtue of said order.
On appeal, CA reversed and ruled in favor of Floro
Intl. MR denied.
Creser contends 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 may be likened
to a civil action for infringement under Section 42
of the Philippine Patent Law.
o

ISSUE + RULING: Whether or not Creser can file the

complaint for injunction and damages. NO.
RATIO:

Section 42 of R.A. 165, otherwise known as the

Patent Law, explicitly provides:
o
SECTION.
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. x x x
IPL: Digests | Week 10 | kb | 11

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 Creser
maintains its present suit, refers only to the
patentees 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 grantees, of the exclusive right.
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. In
short, a person or entity who has not been granted
letters patent over an invention and has not
acquired any right 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.
Creser 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. While Creser 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, and 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.
Further, the remedy of declaratory judgment or
injunctive suit on patent invalidity relied upon by
Creser cannot be likened to the civil action for
infringement under Section 42 of the Patent Law.
The reason for 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.
WHAT IS CRESERS 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, Cresers remedy is not to file an
action for injunction or infringement but to file a
petition for cancellation of Floro Intl patent. Creser
however failed to do so. As such, it can not now
assail or impugn the validity of the Floro Intls
letters patent by claiming that it is the true and
actual inventor of the aerial fuze.
CA: Since Floro Intl is the patentee of the disputed
invention embraced by letters of patent 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.

Aguas vs. De Leon: The validity of the patent

issued by the Philippine Patent Office 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
x x xThere is a presumption that the Philippine
Patent Office has correctly determined the
patentability of the improvement x x x.

In the absence of error or abuse of power or lack or

jurisdiction or grave abuse of discretion, we sustain
CA decision.
DISPOSITION: CA affirmed.
Smith Kline vs. CA
FACTS:

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
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.\
o
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 \
o
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.
o
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.
o
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.

BPTTT: hereby issued a license in favor of the

herein [private respondent], United Laboratories,
Inc., [sic]under Letters Patent No. 12207 issued on
IPL: Digests | Week 10 | kb | 12

November 29, 1978, subject to the following terms

and conditions1
CA: affirmed.

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;
3. 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
(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 covenants or conditions of this agreement
which are to be performed by [private respondent]:

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.

ISSUES + RULING:

WHETHER OR NOT 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 INDUSTRIAL
PROPERTY AND (B) THE GATT TREATY, URUGUAY ROUND,
AND MUST ACCORDINGLY BE SET ASIDE AND MODIFIED.
NO

Pertinent portions of said Article 5, Section A,

provide:
A. x x x
(2) Each country of the union shall have the right to take legislative
to prevent the abuses which might result from the exercise of the
failure to work.
xxx
(4) A compulsory license may not be applied for on the ground of fa
(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
11. This license take [sic] effect immediately.
IPL: Digests | Week 10 | kb | 13

or substances
which
be used
as
of a period of four years from the date of filing of the patent applicationproducts
or three years
from the date
of can
the grant
of the
food orhis
medicine,
or legitimate
is necessary
for Such
public
patent, whichever period expires last; it shall be refused if the patentee justifies
inaction by
reasons.
a
health
public
it may not
be
compulsory license shall be non-exclusive and shall not be transferable, even
in theorform
of thesafety.
grant ofAnd
a sub-license,
except
doubted that the aforequoted provisions of
with that part of the enterprise or goodwill which exploits such license.
R.A. No. 165, as amended, are not in
derogation of, but are consistent with, the

It is thus clear that Section A(2) of Article 5 above

recognized right of treaty signatories under
unequivocally and explicitly respects the right of
Article 5, Section A(2) of the Paris
member countries to adopt legislative measures to
Convention.
provide for the grant of compulsory licenses to

Neither may petitioner validly invoke what it

prevent abuses which might result from the
designates as the GATT Treaty, Uruguay Round.
exercise of the exclusive rights conferred by the
o
The President signed the instrument of
patent. An example provided of possible abuses is
ratification on 16 December 1994.[13] But
"failure to work;" however, as such is merely
plainly, this treaty has no retroactive
supplied by way of an example, it is plain that the
effect. Accordingly, since the challenged
treaty does not preclude the inclusion of other
BPTTT decision was rendered on 14
forms or categories of abuses.
February 1994, petitioner cannot avail of

Section 34 of R.A. No. 165, even if the Act was

the provisions of the GATT treaty.
enacted prior to the Philippines adhesion to the
Convention, fits well within the aforequoted
\Whether or not petitioners right of due process was
provisions of Article 5 of the Paris Convention.
violated--NO

In the explanatory note of Bill No. 1156 which

Petitioners claim of violations of the due process

eventually became R.A. No. 165, the legislative
and eminent domain clauses of the Bill of Rights
intent in the grant of a compulsory license was not
are mere conclusions which it failed to convincingly
only to afford others an opportunity to provide the
support.
public with the quantity of the patented product,

As to due the process argument, suffice it to say

but also to prevent the growth of monopolies.
that full-blown adversarial proceedings were

Certainly, the growth of monopolies was among

conducted before the BPTTT pursuant to the Patent
the abuses which Section A, Article 5 of the
Law. We agree with the Court of Appeals that the
Convention foresaw, and which our Congress
BPTTT exhaustively studied the facts and its
likewise wished to prevent in enacting R.A. No.
findings were fully supported by substantial
165.
evidence.

R.A. No. 165, as amended by Presidential Decree

It cannot likewise be claimed that petitioner was

No. 1263, promulgated on 14 December 1977,
unduly deprived of its property rights, as R.A. No.
provides for a system of compulsory licensing
165 not only grants the patent holder a protective
under a particular patent. Sections 34 and 35,
period of two years to enjoy his exclusive rights
Article Two, of Chapter VIII read as follows:
but subsequently,
theoflaw
recognizes
just
SEC. 34. Grounds for Compulsory Licensing. -- (1) Any person may applythereto;
to the Director
for the grant
a license
under
a
in the
of royalties.
particular patent at any time after the expiration of two years from the compensation
date of the grant
of form
the patent,
under any of the

In Parke, Davies & Co. v. Doctors' Pharmaceuticals,

following circumstances:
(a) If the patented invention is not being worked within the Philippines onInc:
a commercial scale, although capable of being so
o
The right to exclude others from the
worked, without satisfactory reason;
manufacturing,
using,
or vending
(b) If the demand for the patented article in the Philippines is not being met to an adequate
extent and
on reasonable
terms;an
invention
to, food
or conditions
medicine
(c) If, by reason of refusal of the patentee to grant a license or licenses on reasonable
terms,relating
or by reason
of the
should article
be conditioned
any
attached by the patentee to licensee or to the purchase, lease or use of the patented
or workingto
of allowing
the patented
person
to manufacture,
use, or
vend
the
process or machine for production, the establishment of any new trade or industry in
the Philippines
is prevented,
or the
trade
same after a period of three [now two]
or industry therein is unduly restrained;
years by
from
date of the
grant
of the
(d) If the working of the invention within the country is being prevented or hindered
thethe
importation
of the
patented
letters patent. After all, the patentee is not
article; or
of anywhich
proprietary
(e) If the patented invention or article relates to food or medicine or manufactured entirely
productsdeprived
or substances
can be right.
used
In fact, he has been given the period of
as food or medicine, or is necessary for public health or public safety.
three years
[now two
complete
(2) In any of the above cases, a compulsory license shall be granted to the petitioner
provided
that years]
he hasofproved
his
over the
patent.product,
Compulsory
capability to work the patented product or to make use of the patented product in monopoly
the manufacture
of a useful
or to
licensing of a patent on food or medicine
employ the patented process.
without
regard
topatented
the other
conditions
(3) The term "worked" or "working" as used in this section means the manufacture
and sale
of the
article,
of the
imposed
in Section
34 [now
Section
35] is
patented machine, or the application of the patented process for production, in or
by means
of a definite
and
substantial
notand
anadequate
undue deprivation
of proprietary
establishment or organization in the Philippines and on a scale which is reasonable
under the circumstances.
interests over a patent right because the
Importation shall not constitute "working."
law sees to it that even after three years
xxx
of complete monopoly something is
to the
inventor
in thehas
form
of
SEC. 35. Grant of License. -- (1) If the Director finds that a case for the grant is a awarded
license under
Section
34 hereof
been
bilateral
and workable
licensing
agreement
made out, he shall, within one hundred eighty days from the date the petition was
filed, order
the grant
of an appropriate
and must
a reasonable
royalty
to be agreed
license. The order shall state the terms and conditions of the license which he himself
fix in default
of an agreement
on
upon by the parties and in default of such
the matter manifested or submitted by the parties during the hearing.
an agreement,
Director
of Patents
(2) A compulsory license sought under Section 34-B shall be issued within one hundred
twenty the
days
from the
filing ofmay
the
fix the terms and conditions of the license.
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

Whether or not petitioner can assail the jurisdiction of the

BPTTTNO

IPL: Digests | Week 10 | kb | 14

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, 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 such as the
BPTTT. Here, petitioner have not furnished any
cogent reason to depart from this rule.

DISPOSITION: Dismissed.
SMITH KLINE v CA (2001)

Petitioner Smith Kline is the assignee of Letters Patent

No.
12207
covering
pharmaceutical
product
Cimetidine,
which
relatves
to
derivatives
of
heterocyclicthio or lower alkoxy or amino lower alkyl
thiourea, ureas or guanadines.
o
The patent was issued by the BPTTT to Graham
John Durant, John Collin Emmett and Robin
Genellin on November 29, 1978.
Private respondent Danlex Research Labs filed with the
BPTTT a petition for compulsory license to manufacture
and
produce
its
own
brand
of
medicines
using Cimetidine.
o
Ground: Section 34 (1) (e) of Republic Act No.
165 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.
o
Petition for compulsory license cites that
that Cimetidine is useful as an antihistamine
and in the treatment of ulcers, and that private
respondent is capable of using the patented
product in the manufacture of a useful product.
Petitioner Smith Kline opposed the petition, saying that
respondent had no cause of action and failed to allege
how it intended to work the patented product.
o
That is manufacture satisfied the needs of the
Philippine market, and thus there was no need
for compulsory licensing.
o
That such would not promote public safety and
was only motivated by pecuniary gain.
BPTTT Decision: Directing the issuance of a compulsory
license to Danlex for Cimetidine, and ordered the
payment by private respondent to petitioner of
royalties at the rate of 2.5% of net sales in Philippine
currency.
Smith Kline filed with the CA a petition for review of the
decision of the BPTTT.
CA Decision: Petition denied. Decision of the BPTTT
affirmed.
o
Held that grant is in accord with the Patent
Law since the product is medicinal in nature,
and necessary for the promotion of public
health and safety.

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 patented article but especially to prevent
the building up of patent monopolies.
Smith Kline filed an MR and a Motion for issuance of a
TRO but both were denied.
Thus, Smith Klines present petition.
o
Contends that 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 Cimetidine to satisfy the needs of the
Philippine market.

Thus, unduly oppressive and not

reasonably necessary.
o
Contends also that such contravenes the 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,

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.
o
Contends that such license will allow the
manufacture and sale of products without even
extending to petitioner due recognition for
pioneering the invention of the medicine.
o
That the rate of royalty fixed by BPTT 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.
o

Did the CA err in affirming the validity of the grant

by the BPTT of a compulsory license to Danlex? NO.
Petition has no merit.

The grant is in accord with Sec. 34 of the Patent Law

which says:

Grounds for Compulsory Licensing.

(1) Any person may apply to the Director for the grant of a l
the expiration of two years from the date of the grant of the
(a) If the patented invention is not being worked within the Philippin
worked, without satisfactory reason;
(b) If the demand of the patented article in the Philippines is not bein
(c) If, by reason of refusal of the patentee to grant a license or licen
attached by the patentee to licensee or to the purchase, lease or
process or machine for production, the establishment of any new trad
or industry therein is unduly restrained;
(d) If the working of the invention within the country is being pre
article;
(e) If the patented invention or article relates to food or me
used as food or medicine, or is necessary for public health or
(2) In any of the above cases, a compulsory license shall b
proved his capability to work the patented product or to mak
of a useful product, or to employ the patented process.
(3) The term worked or working as used in this section means the m
machine, or the application of the patented process for production, in
or organization in the Philippines and on a scale which is reasonable
not constitute working.
IPL: Digests | Week 10 | kb | 15

patented invention by virtue of a compulsory license,

petitioner as owner of the patent would still receive
More than ten years have passed since the patent
remuneration for the use of such product in the form of
for Cimetidine was issued to petitioner and its
royalties.
predecessors-in-interest,
As to the perceived inadequacy of 2.5% royalty NO

The compulsory license applied for by private

BASIS. SUCH IS CONSISTENT WITH THE PATENT LAW.
respondent is for the use, manufacture and sale of a

Sec. 35. Grant of License.(1) If the Director finds that a

medicinal product.
case for the grant of a license under Section 34 hereof

Furthermore, both the appellate court and the BPTTT

has been made out, he shall, within one hundred eighty
found that private respondent had the capability to
days from the date the petition was filed, order the
work Cimetidine or to make use thereof in the
grant of an appropriate license. The order shall state
manufacture of a useful product.
the terms and conditions of the license which he
As to the issue of WON it contravenes the Paris
himself must fix in default of an agreement on
Convention IT DOES NOT.
the matter manifested or submitted by the

Article 5, Section A(2) of the Paris Convention states:

parties
during for
thethe
hearing.
Each country of the union shall have the right to take legislative measures
providing
grant of compulsory licenses to

Section
35-B.
Terms
of Compulsory
prevent the abuses which might result from the exercise of the exclusive rights conferred byand
the Conditions
patent, for example,
failure
License.
to work.
o
3) A compulsory license shall only be
granted subject to the payment of

It is thus clear that Section A(2) of Article 5 [of the Paris

adequate royalties commensurate with
Convention] unequivocally and explicitly respects the
the extent to which the invention is
right of member countries to adopt legislative
worked. However, royalty payments shall
measures to provide for the grant of compulsory
not exceed five percent (5%) of the net
licenses to prevent abuses which might result from the
wholesale price (as defined in Section 33-A)
exercise of the exclusive rights conferred by the
of the products manufactured under the
patent.
license.
o
Failure to work is merely supplied by way of

In
the
absence
of any agreement between the parties
example.
with respect to a compulsory license, the Director of

Section 34 of R.A. No. 165, even if the Act was enacted

the BPTTT may fix the terms thereof, including the rate
prior to the Philippines adhesion to the Convention, fits
of the royalty payable to the licensor.
well within the aforequoted provisions of Article 5 of
the Paris Convention.
WHEREFORE, the petition is hereby DENIED for lack of

In the explanatory note of Bill No. 1156 which

merit and the Decision of the Court of Appeals is hereby
eventually became R.A. No. 165, the legislative intent
AFFIRMED.
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
Albaa v. Director of Patents (1953)
prevent the growth of
Padilla, J.
o
Certainly, the growth of monopolies was
among the abuses which Section A, Article 5 of
FACTS:
the Convention foresaw, and which our

Dolorito M. Feliciano and Maximo B. Tapinio filed an

Congress likewise wished to prevent in
application for patent for the Fel-Tap Meter Guard
enacting R.A. No. 165.
and Detector.

Pending examination of the application, Meliton D.

As to issue of WON grant would lead the public to
Albaa filed a motion to intervene, claiming that
think that Cimetidine is the invention of private
the applicant-inventors had "sold and/or bartered
respondent and not petitioner UNFOUNDED.
and assigned to him their right to contract or deal
the sale of their invention called Fel-Tap Meter

By the grant of the compulsory license, private

Guard and Detector to or though the Corporation
respondent as licensee explicitly acknowledges that
that they were then organizing under his direction
petitioner
is
the
source
of
the
patented
and to fix and decide on the purchase price of it to
product Cimetidine.
at least P200,000 in installments cash and

Even assuming arguendo that such confusion may

P300,000
in
shares
of
stock
of
said
indeed occur, the disadvantage is far outweighed by
Corporation . . ." and praying that Tapinio be
the benefits resulting from the grant of the compulsory
compelled to sign a contract (Appendix I) and,
license, such as an increased supply of pharmaceutical
together with Feliciano who had already signed it,
products containing Cimetidine, and the consequent
to acknowledge it and another contract (Appendix
reduction in the prices thereof
II) before a notary public, to have both contracts
recorded in the Patent Office and in the Office of
As to the allegation that the grant of a compulsory
the Register of Deeds, and that the patent for the
license to private respondent results in the
invention be issued in his name and in the name of
deprivation of petitioners property without just
the inventors.
compensation NO BASIS.

Director of Patents: Denied for lack of jurisdiction.

Albaa amended his motion claiming "that he is

As owner of Letters Patent No. 12207, petitioner had

the assignee of inventors Dolorito M. Feliciano and
already enjoyed exclusive rights to manufacture, use
Maximo Tapinio of the undivided part interest in the
and sell Cimetidine for at least two years from its grant
invention for whose letter-patent the named
in November, 1978.
petitioners Dolorito M. Feliciano and Maximo

Even if other entities like private respondent are

Tapinio are herein applying."
subsequently allowed to manufacture, use and sell the

IPL: Digests | Week 10 | kb | 16

Director of Patents: Denied. The assignment made

to the movant is not one of exclusive right to
make, use the sell the electrical contrivance for
which a patent is applied for; that it is just an
authority to act as the selling agent for the
inventors of the patent, if granted, and the
invention covered thereby and to receive
compensation therefor.
o
He is not entitled to have his name
included as one of the patentees.
MR denied, hence this appeal.

The above quoted terms and stipulations of the

executory contract clearly show that it was not an
assignment of the invention and the patent applied
for.

Assignments of patents and inventions covered

thereby may be recorded in books and records kept
for the purpose in the Patent Office if presented in
due form.
o
Here, Albaa does not seek the recording
because in the first place, the agreement
is not in due form.
o
What he seeks is for the Director to
compel the inventor Tapinio to sign the
contract and for both Tapinio and Feliciano
to
acknowledge
minutes
of
the

incorporators
meeting
of
the
Manufacturing Corporation.
ISSUE + RULING:

Under the provisions of the Patent Law (Republic

WoN the Director of Patents erred in denying Albaas
Act No. 165), the Director of Patent has no power
motion for lack of jurisdiction. NO.
and authority to compel the applicant-inventors to
do what the appellant is asking them to perform.

The contract, Appendix I, states:

o
This is essentially a judicial function which
which would
the determination
or "Fel-Tap
"We (the inventors) . . . hereby declare and ratify that both of us are the co-inventors
andrequire
joint fifty-fifty
owners of the
finding
by a the
court
of competent
Electric Meter Guard & Detector' . . . ." "We are now organizing a Corporation
under
direction
of Mr. jurisdiction
Albaa (Meliton D.
as totowhether
there
was a meeting
ofletter-patent
the
Albaa) to exploit and industrialize the invention . . . which we promise hereby
sell to said
Corporation
with its
minds
of the contracting
parties
before
. . . except the Royalty Right of the same, . . . ." "For and in consideration of
the monetary
and other helps
(help)
thatit said Mr.
could interesting
compel theand
applicant-inventors
to
Meliton D. Albaa . . . has rendered and is rendering us . . . of approaching,
looking for subscribers
and
perform
whatand
the actually
appellant
prays
the court
prayers to the capital stocks (stock) of said Corporation to be . . . we hereby
promise
pay
to said
Mr. Albaa in
to order
themprice
to do.
installment fifty thousand pesos (P50,000) of said P200,000 installments cash
purchase
...
DISPOSITION: Affirmed.

IPL: Digests | Week 10 | kb | 17