Case # 23

EI Dupont De Nemours and Co. (assignee of Inventors Carini, Duncia and Wong) vs
Director Emma C. Francisco (in her capacity as Director General of The Intellectual Property Office) Et Al.,
GR No. 174379 August 31, 2016

Facts:
EI Dupont Nemours is an American corporation. EI Dupont Nemours filed Philippine Patent Application No.
35526 for Angiotensin II Receptor Blocking Imidazole (losartan)... treatment of hypertension and congestive
heart failure. The patent application was handled by Atty. Nicanor D. Mapili (Atty. Mapili), a local resident
agent. E. Dupont Nemours' new counsel sent the Intellectual Property Office a letter requesting that an office
action be issued on Philippine Patent Application No. 35526.

The reconstituted documents provided no documents that will show that the authority to prosecute the instant
application is now transferred to the present counsel.

On May 29, 2002, E.I. Dupont Nemours replied to the office action by submitting a Power of Attorney... it also
filed a Petition for Revival.

In its Petition for Revival, E.I. Dupont Nemours argued that its former counsel, Atty. Mapili, did not inform it
about the abandonment of the application, and it was not aware that Atty. Mapili had already died. The
Director of Patents denied the Petition for Revival for having been filed out of time.

The Office cannot revive the abandoned application because of the limitations provided in Rule 115. Clearly,
the Petition for Revival was filed beyond the reglementary period.

In the Decision dated October 22, 2003, Director-General Emma C. Francisco denied the appeal and affirmed
the Resolution of the Director of Patents.

Petitioner filed before the Court of Appeals a Petition for Review... the Court of Appeals stated: there is
sufficient justification to relax the application of the above-cited doctrine in this case... to afford petitioner
some relief from the gross negligence committed by its former lawyer, Atty. Nicanor D. Mapili. Therapharma,
Inc. moved for leave to intervene and admit the Attached Motion for Reconsideration... directly affects its
"vested" rights to sell its own product.

Therapharma, Inc. alleged that on January 4, 2003, it filed before the Bureau of Food and Drugs its own
application for a losartan product "Lifezar," a medication for hypertension, which the Bureau granted.
In this exchange, Merck informed Therapharma, Inc. that it was pursuing a patent on the losartan products
in the Philippines and that it would pursue any legal action necessary to protect its product.

On January 31, 2006, the Court of Appeals issued the Resolution granting the Motion for Leave to Intervene.
On August 30, 2006, the Court of Appeals resolved both Motions for Reconsideration and rendered the
Amended Decision reversing its August 31, 2004 Decision. The Court of Appeals ruled that the public interest
would be prejudiced by the revival of E.I. Dupont Nemours' application, the revival of the application
prejudiced Therapharma, Inc.'s interest.

Issues:

Whether the Court of Appeals erred in allowing the intervention of respondent Therapharma, Inc. in
petitioner's appeal;... whether the Court of Appeals erred in denying petitioner's appeal for the revival of its
patent application on the grounds that (a) petitioner committed inexcusable negligence in the prosecution of
its patent application; and (b) third-party rights and the public interest would be prejudiced by the appeal;...
whether Schuartz applies to this case in that the negligence of a patent applicant's counsel binds the
applicant... whether the invention has already become part of public domain.

Ruling:

Case # 23
Page 1 of 3
Under Chapter VII, Section 111(a) of the 1962 Revised Rules of Practice, a patent application is deemed
abandoned if the applicant fails to prosecute the application within four months from the date of the mailing
of the notice of the last action by the Bureau of Patents, Trademarks, and Technology Transfer, and not
from applicant's actual notice.

According to the records of the Bureau of Patents, Trademarks, and Technology Transfer Chemical
Examining Division, petitioner filed Philippine Patent Application No. 35526 on July 10, 1987. It was assigned
to an examiner on June 7, 1988. An Office Action was mailed to petitioner's agent, Atty. Mapili, on July 19,
1988. Because petitioner failed to respond within the allowable period, the application was deemed
abandoned on September 20, 1988. Under Section 113, petitioner had until January 20, 1989 to file for a
revival of the patent application. Its Petition for Revival, however, was filed on May 30, 2002, 13 years after
the date of abandonment.

Section 113 has since been superseded by Section 133.4 of the Intellectual Property Code, Rule 930 of the
Rules and Regulations on Inventions, and Rule 929 of the Revised Implementing Rules and Regulations for
Patents, Utility Models and Industrial Design. The period of four (4) months from the date of abandonment,
however, remains unchanged.

The Intellectual Property Code even provides for a shorter period of three (3) months within which to file for
revival. The rules do not provide any exception that could extend this four (4)-month period to 13 years.
Petitioner's patent application, therefore, should not be revived since it was filed beyond the allowable period.
Even assuming that the four (4)-month period could be extended, petitioner was inexcusably negligent in the
prosecution of its patent application.

Negligence is inexcusable if its commission could have been avoided through ordinary diligence and
prudence. It is also settled that negligence of counsel binds the client as this "ensures against the resulting
uncertainty and tentativeness of proceedings if clients were allowed to merely disown their counsels'
conduct."

Petitioner tries to disown Atty. Mapili's conduct by arguing that it was not informed of the abandonment of its
patent application or of Atty. Mapili's death. By its own evidence, however, petitioner requested a status
update from Atty. Mapili only on July 18, 1995, eight (8) years after the filing of its application. It alleged that
it only found out about Atty. Mapili's death sometime in March 1996, as a result of its senior patent attorney's
visit to the Philippines.

Even if Atty. Mapili's death prevented petitioner from submitting a petition for revival on time, it was clearly
negligent when it subsequently failed to immediately apprise itself of the status of its patent application.
Contrary to the posturing of petitioner, Schuartz is applicable.

Petitioners lost sight of the fact that the petition could not be granted because of laches. Prior to the filing of
the petition for revival of the patent application with the Bureau of Patents, an unreasonable period of time
had lapsed due to the negligence of petitioners' counsel. By such inaction, petitioners were deemed to have
forfeited their right to revive their applications for patent.

Petitioner attempts to distinguish itself from Schuartz by arguing that the petitioners in Schuartz had actual
notice of abandonment while petitioner here was only able to have actual notice when it received Paper No.
2. The four (4)-month period in Section 111of the 1962 Revised Rules of Practice, however, is not counted
from actual notice of abandonment but from mailing of the notice.

The right of priority given to a patent applicant is only relevant when there are two or more conflicting patent
applications on the same invention. Because a right of priority does not automatically grant letters patent to
an applicant, possession of a right of priority does not confer any property rights on the applicant in the
absence of an actual patent.

Petitioner argues that its patent application was filed on July 10, 1987, within 12 months from the prior filing
of a U.S. patent application on July 11, 1986. It argues that it is protected from becoming part of the public

Case # 23
Page 2 of 3
domain because of convention priority under the Paris Convention for the Protection of Industrial Property
and Section 9 of Republic Act No. 165.

Under Section 31 of the Intellectual Property Code, a right of priority is given to any patent applicant who
has previously applied for a patent in a country that grants the same privilege to Filipinos.

A patent applicant with the right of priority is given preference in the grant of a patent when there are two or
more applicants for the same invention. Section 29 of the Intellectual Property Code provides since both the
United States and the Philippines are signatories to the Paris Convention for the Protection of Industrial
Property, an applicant who has filed a patent application in the United States may have a right of priority over
the same invention in a patent application in the Philippines. However, this right of priority does not
immediately entitle a patent applicant the grant of a patent. A right of priority is not equivalent to a patent.
Otherwise, a patent holder of any member-state of the Paris Convention need not apply for patents in other
countries where it wishes to exercise its patent.

It was, therefore, inaccurate for petitioner to argue that its prior patent application in the United States
removed the invention from the public domain in the Philippines. This argument is only relevant if respondent
Therapharma, Inc. had a conflicting patent application with the Intellectual Property Office. A right of priority
has no bearing in a case for revival of an abandoned patent application. The grant of a patent is to provide
protection to any inventor from any patent infringement. Once an invention is disclosed to the public, only the
patent holder has the exclusive right to manufacture, utilize, and market the invention. The grant of a patent
provides protection to the patent holder from the indiscriminate use of the invention. However, its mandatory
publication also has the correlative effect of bringing new ideas into the public consciousness. After the
publication of the patent, any person may examine the invention and develop it into something further than
what the original patent holder may have envisioned. After the lapse of 20 years, the invention becomes part
of the public domain and is free for the public to use.

In addition, a patent holder of inventions relating to food or medicine does not enjoy absolute monopoly over
the patent. Both Republic Act No. 165 and the Intellectual Property Code provide for compulsory licensing.
Compulsory licensing is defined in the Intellectual Property Code as the "grant a license to exploit a patented
invention, even without the agreement of the patent owner."

Under Republic Act No. 165, a compulsory license may be granted to any applicant three (3) years after the
grant of a patent if the invention relates to food or medicine necessary for public health or safety. The patent
holder's proprietary right over the patent only lasts for three (3) years from the grant of the patent, after which
any person may be allowed to manufacture, use, or sell the invention subject to the payment of royalties.
Public interest will be prejudiced if, despite petitioner's inexcusable negligence, its Petition for Revival is
granted. Even without a pending patent application and the absence of any exception to extend the period
for revival, petitioner was already threatening to pursue legal action against respondent Therapharma, Inc. if
it continued to develop and market its losartan product, Lifezar. Once petitioner is granted a patent for its
losartan products, Cozaar and Hyzaar, the loss of competition in the market for losartan products may result
in higher prices. For the protection of public interest, Philippine Patent Application No. 35526 should be
considered a forfeited patent application.

Case # 23
Page 3 of 3