1. G.R. No. L-24919. January 28, 1980.] JAMES HOWARD BOOTHE and JOHN MORTON, II, petitioners, vs. THE DIRECTOR OF PATENTS, respondent. MELENCIO-HERRERA, J.:

Petitioners James Howard Boothe and John Morton II, chemists, citizens and residents of the United States, claim to be the inventors of a new antibiotic designated as "tetracycline", a new derivative of chlortetracycline (popularly known as "aureomycin")

PETITIONER’S CLAIMS:

On February 19, 1954, petitioners applied for Letters Patent covering said invention to respondent Director of Patents claiming the right of priority granted to foreign applicants under section 15 of the Patent Law (RA 165). Receipt of petitioners' application was acknowledged by respondent Director on March 6, 1954.

On April 14, 1954, petitioners filed with respondent Director a legalized copy of their Application for Letters Patent in the United States for the same invention (U.S. Serial No. 342556). Said legalized copy indicated that the application in the United States was filed on March 16, 1963.

Petitioner claims to benefit from Section 15 of the Patent Law, which provides that:

Section 15. Application previously filed abroad. — An application for patent for an invention filed in this country by any person who has previously regularly filed an application for a patent for the same invention in a foreign country, which by treaty, convention or law affords similar privileges to citizens of the Philippines, shall have the same

force and effect as the same application would have if filed in this country on the date on which the application for patent for the same invention was first filed in such foreign country: Provided, That the application in this country is filed within twelve months from the earliest date on which such foreign application was filed and a certified copy of the foreign application together with a translation thereof into English…

Petitioners claim that it would be entitled to the priority date of March 16, 1953 if their application is considered filed in the Philippines as of March 5, 1954, since the latter date would fall within the one-year period prior to March 5, 1954.

RESPONDENT’s CLAIM

Respondent uphold the "Philippine Patent No. 254 — November 29, 1956", which refers to a local Patent obtained by Pfizer and Co., presumably covering the same invention. Also, respondent claims that the "Specification" petitioner submitted in their application was "incomplete".

Respondent Director opined that the portions subsequently supplied in the local application are not new matter a comparison between the foreign and local applications showed that the foreign application included the missing portions of the local one. However, respondent Direct qualified that petitioners' application may be considered complete only on April 14, 1954 when the certified copy of the foreign application was submitted. Consequently, the instant application is to be considered an ordinary application, not entitled to the right of priority granted by section 15 of the Patent Law, inasmuch as said application was not complete within the meaning of Rules 47 and 48 of the

Revised Rules of Practice in Patent Case when first filed on March 5, 1954.

ISSUE: WHETHER RESPONDENT DIRECTOR OF PATENTS ERRED IN HOLDING THAT PETITIONERS' APPLICATION, MAY NOT BE TREATED AS FILED UNDER SECTION 15 AS AMENDED, OF REPUBLIC ACT NO. 165 KNOWN AS THE PATENT LAW.

HELD: NO. It is imperative that the application be complete in order that it may be accepted. It is essential to the validity of Letters Patent that the specifications be full, definite, and specific. The purpose of requiring a definite and accurate description of the process is to apprise the public of what the patentee claims as his invention, to inform the Courts as to what they are called upon to construe, and to convey to competing manufacturers and dealers information of exactly what they are bound to avoid.

The specification which petitioners submitted on March 5, 1954 was far from complete. That defect was one of substance and not merely one of form. What petitioners claimed as their invention was not completely determinable therefrom. Petitioners' application could be deemed as complete only on July 2, 1963 when they submitted the additional pages on the Specifications and Claims. Respondent Director, therefore, did not err in converting petitioners' application into an ordinary application filed on April 14, 1954, not only for their having failed to complete their application within the four-month period provided for by Rules 47 and 48, Revised Rules of Practice in Patent Cases, and as required of them by Paper No. 6, but also for their having failed to file a complete application within twelve months from March 16, 1953, the date of the foreign application For, to be entitled to the filing date of the patent application, an invention disclosed in a previously filed application must be described within the instant

application in such a manner as to enable one skilled in the art to use the same for a legally adequate utility.

2. G.R. No. L-27361. May 29, 1981.] PARKE, DAVIS & COMPANY, plaintiff-appellant, vs. DOCTORS' PHARMACEUTICALS, INC. and V-LAB DRUGHOUSE CORPORATION, defendants-appellees. Facts:

On May 5, 1966, Parke, Davis & Company, a foreign corporation organized and existing under the laws of the State of Michigan, U.S.A., filed with the Court of First Instance of Rizal, Caloocan City Branch, a complaint for damages for infringement of patent and unfair competition, with preliminary injunction against Doctors' Pharmaceuticals, Inc., and V-Lab Drughouse Corporation.

Plaintiff Parke, Davis & Company alleged that the

defendants are guilty of; (1) infringement of patent, by selling, causing to be sold, using or causing to be used "Chloramphenicol Palmitate" in their medicine called "Venimicetin Suspension", and (2) unfair competition, by concealing that said medicine contains "Chloramphenicol", and, by deceiving and misleading the purchasers who are made to believe that "Venimicetin Suspension" is covered by a compulsory license from the plaintiff. It was also alleged that the defendant V-Lab Drughouse Corporation, in advertising and selling the medicine of Doctors' Pharmaceutica called "Venimicetin Suspension" have falsely and deceptively concealed that the same contains "Chloramphenicol Palmitate" and falsely and deceptively represented the same to contain "Chloramphenicol".

On May 6, 1966, the Court of First Instance issued an order which, among others, temporarily restrained the defendants "from directly or indirectly selling, using, causing to be sold or

causing to be used any 'Chloramphenicol Palmitate' not manufactured by plaintiff or plaintiff's wholly-owned subsidiary, Parke, Davis & Company, Inc." Alleging that the defendants have not complied with such order, the plaintiff filed on May 24, 1966, a motion to punish defendants for contempt.

Before the court could act on the plaintiff's motion for contempt, the defendants filed a Motion to Dismiss, dated May 25, 1966, alleging, among others, that the complaint states no cause of action against them since defendant No. I "was granted a compulsory license to manufacture, use and sell its own brands of medicinal preparation containing 'chloramphenicol."

On June 17, 1966, the plaintiff filed its Opposition to Motion to Dismiss controverting, among others, defendants' contention that the complaint states no cause of action. Plaintiff pointed out that the defendants have confused the substance which is the subject matter of the complaint, namely, "Chloramphenicol Palmitate", with the substance covered by the compulsory licensing case, namely, "Chloramphenicol", and the Letters Patent subject of the complaint, namely, Letters Patent No. 279, with the Letters Patent subject of the compulsory licensing case, namely, Letters Patent No. 50.

On June 27, 1966, the defendants filed their Reply to Opposition alleging, among others, that in advertising and selling their product "Venimicetin Suspension," never do they state that the same contains "Chloramphenicol Palmitate".

On July 5, 1966, the plaintiff filed its Rejoinder to Reply to Opposition stating, among others, that while the packages and labels of defendants' "Venimicetin Suspension" indicate that the same contains "Chloramphenicol", the truth of the matter is that said product does not contain said substance but the substance covered by Letters Patent No. 279, namely, "Chloramphenicol Palmitate".

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

ISSUE: Whether or not the lower court correctly dismissed the complaint for damages for infringement of patent and unfair competition on the ground of failure to state a cause of action. HELD:

No. It is axiomatic that in resolving a motion to dismiss a complaint on the ground of failure to state a cause of action, the court should hypothetically assume the truth of the factual allegations of the complaint and determine whether on the basis thereof, the complainant is entitled to the relief demanded. Had the lower court applied the foregoing formula, it would not have dismissed, on the ground of failure to state a cause of action, the complaint for damages for infringement of patent and unfair competition. For, instead of hypothetically assuming the truth of the factual allegations of the complaint, the lower court had ruled against their veracity and consequently concluded that the complaint states no cause of action. As can be gleaned from the appealed order, the pertinent portions of which heretofore quoted, the lower court premised its ruling that there is no cause of action for infringement of patent on the assumption that "Chloramphenicol" (the substance covered by Letters Patent No. 50) and "Chloramphenicol Palmitate" (the substance covered by Letters Patent No. 279) are the same. Thus, instead of hypothetically assuming the truth of the plaintiff's allegation that "Chloramphenicol" and "Chloramphenicol Palmitate" are two different substances, the lower court had ruled against its veracity. This is clearly an error considering that the said assumed fact cannot qualify as something which the court could take judicial notice of nor was it competent to so find in the absence of evidence formally presented to that effect. The existence of two patents separately covering said substances simply militates against said factual assumption and requires the

presentation of evidence sufficient to convince the court that said substances are indeed the same.

Had the lower court hypothetically assumed as true, for the purpose of the motion to dismiss, the allegations in the complaint that "Chloramphenicol" and "Chloramphenicol Palmitate" are entirely different substances and that "Venimicetin Suspension" actually contains "Chloramphenicol Palmitate" and not "Chloramphenicol" as indicated in its package and label, it necessarily would have to conclude that the complaint states causes of action for infringement of patent and for unfair competition. For defendants would then be guilty of infringement of patent by selling, causing to be sold, using and causing to be used "Chloramphenicol Palmitate", without the consent or authority of the plaintiff as the holder of Letters Patent No. 279, Claim 4 of which allegedly covers said substance. Sections 37 and 42 of R.A. No. 165 provide:

"SEC. 37. RIGHTS OF PATENTEES.- A patentee shall have the exclusive right to make, use and sell the patented machine, article or product, and to use the patented process for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the patent; and such making, using or selling by any person without the authorization of the patentee, constitutes infringement of the patent. " (Italics supplied.) "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."

Likewise, the defendants would be guilty of unfair competition by falsely stating that Doctors' Pharmaceuticals, Inc.’s medicine called "Venimicetin Suspension" contains "Chloramphenicol" when in fact it actually contains "Chloramphenicol Palmitate", and that it is covered by a compulsory license from the plaintiff. Section 29 of R.A. No. 166 provides, inter alia:

"In particular, and without in any way limiting the scope of unfair competition, the following shall be deemed guilty of unfair competition: "(c) Any person who shall make any false statement in the course of trade. Clearly, the lower court erred in dismissing, on the ground of failure to state a cause of action, the complaint for damages for infringement of patent and unfair competition.

WHEREFORE, the appealed order of dismissal is hereby set aside and the complaint for damages for infringement of patent and unfair competition reinstated.

3. G.R. No. L-32160. January 30, 1982.] DOMICIANO A. AGUAS, petitioner, vs. CONRADO G. DE LEON and COURT OF APPEALS, respondents. RESPONDENT’S CLAIM:

On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal at Quezon City a complaint for infringement of patent against Domiciano A. Aguas and F. H. Aquino and Sons alleging that:

• he is the original first and sole inventor of certain new and useful improvements in the process of making mosaic pre-cast tiles,

• he lawfully filed and prosecuted an application for Philippine patent, and having complied in all respects with the statute and the rules of the Philippine Patent Office, Patent No. 658 was lawfully granted and issued to him.

• Defendant Domiciano A. Aguas infringed Letters of Patent No. 658 by making, using and selling tiles embodying said patent invention and that

• defendant F. H. Aquino & Sons is guilty of infringement by making and furnishing to the defendant Domiciano A. Aguas the engravings, castings and devices designed and intended of tiles embodying plaintiff;s patented invention.

PETITIONER’S CLAIM: • The petitioner questioned the validity of the patent

of the private respondent, Conrado G. de Leon, on the ground that the process, subject of said patent, is not an invention or discovery, or an improvement of the old system of making tiles.

• The letters patent of de Leon was actually a patent for the old and non-patentable process of making mosaic pre-cast tiles.

• The improvement of respondent is not patentable because it is not new, useful and inventive.

• The petitioner also claims that changing the design from embossed to engraved tiles is neither new nor inventive because the Machuca Tile Factory and the Pomona Tile Manufacturing Company have been manufacturing decorative wall tiles that are embossed as well as engraved.

ISSUE: Whether or not the respondent’s patent for the 'process of

making mosaic pre-cast tile' is INVALID because said alleged process is not an invention or discovery as the same has already long been used by tile manufacturers both abroad and in this country. HELD: NO. It should be noted that the private respondent does not claim to be the discoverer or inventor of the old process of tile-making. He only claims to have introduced an improvement of said process. In fact, Letters Patent No. 658 was issued by the Philippine Patent Office to the private respondent, Conrado G. de Leon, to protect his rights as the inventor of "an alleged new and useful improvement in the process of making mosaic pre-cast tiles." Indeed, Section 7, Republic Act No. 165, as amended provides: "Any invention of a new and useful machine, manufactured product or substance, process, or an improvement of the foregoing, shall be patentable.” The respondent's improvement is indeed inventive and goes beyond the exercise of mechanical skill. He has introduced a new kind of tile for a new purpose. He has improved the old method of making tiles and pre-cast articles which were not satisfactory because of an intolerable number of breakages, especially if deep engravings are made on the tile. He has overcome the problem of producing decorative tiles with deep engraving, but with sufficient durability. Durability in spite of the thinness and lightness of the tile, is assured, provided that a certain critical depth is maintained in relation to the dimensions of the tile. The Machuca tiles are different from that of the private respondent. The designs are embossed and not engraved as claimed by the petitioner. There may be depressions but these depressions are too shallow to be considered engraved. Besides, the Machuca tiles are heavy and massive. There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles

are made of ceramics. The process involved in making cement tiles is different from ceramic tiles. Cement tiles are made with the use of water, while in ceramics fire is used. As regards the allegation of the petitioner that the private respondent copied some designs of Pomona, suffice it to say that what is in issue here is the process involved in tile making and not the design.

4. G.R. No. L-27004. August 16, 1983.] PARKE, DAVIS & COMPANY, petitioner, vs. DOCTOR's PHARMACEUTICALS, INC. and TIBURCIO S. EVALLE, in his capacity as Director of Patents, respondents. TEEHANKEE, Acting C.J.:

FACTS:

In G.R. No. L-22221, which involved the same parties in the instant case, the Court affirmed, in a decision dated August 31, 1965 respondent Director of Patents decision rendered on November 15, 1963 in Inter Partes Case No. 181 ordering petitioner Parke Davis & Co. to grant respondent Doctor's Pharmaceuticals, Inc. a license to manufacture, use and sell in the Philippines its own products containing petitioner's chemical called "chloramphenicol."

Under Section 36 of Republic Act 165 (Patent Law), the Director of Patents is authorized, in case the parties failed to submit a licensing agreement, to fix the terms and conditions of the license. Thus, after the Court's decision in G.R. No. L-22221 became final and executory, without the parties submitting a licensing agreement, the Director of Patents, issued a license in favor of respondent company under petitioner's Letters Patent No. 50 for the patented chemical "chloramphenicol", fixing the terms and conditions thereof and declaring that the license should take effect immediately.

The license provides, among others, that respondent company should pay petitioner Parke, Davis & Co., a royalty, on all licensed products containing "chloramphenicol" made and sold by respondent company in an amount equivalent to Eight Percent (8%) of the net sales which petitioner company now claims as grossly inadequate and proposes that it be increased to 15%. Petitioner insists that the fixing of the royalty rate by the Director of Patents is arbitrary and without any support in evidence pointing out that the prevailing rate for compulsory licensing on the net sales of medicines containing the patented article is 15% and 18% of the selling price.

In asking for a 15% royalty rate, petitioner alleges that it is the same rate prevailing in two compulsory licenses for patents on medicine in Great Britain, and that in the case of J.R. Geigy S.A.'s Patent in Canada, the rate of 12 1/2 % based on net sales was allowed. On the other hand respondent company points out that in a licensing agreement between Collett & Co. of Norway and Lexal Laboratories of the Philippines, royalties of 5% on a vitamin preparation and 7%, on a pharmaceutical pellet based on net sales, were agreed upon.

ISSUE: Whether or not the Director of Patent committed an erroer in fixing the royalty rate

HELD: NO. The Court finds no abuse of discretion on the part of respondent Director of Patents considering that in fixing the royalty rate he made a compromise on the rate proposed by petitioner and those prevailing in other countries. The 8% royalty rate is midway between the rates in Canada and Norway. In developing countries like the Philippines, liberal treatment in trade relations should be afforded to local industry for as reasoned out by respondent company, "it is so difficult to compete with the industrial giants of the drug industry, among them being the petitioner herein, that it always is necessary that the local drug

companies should sell at much lower (than) the prices of said foreign drug entities."

The Court agrees that the 8% royalty rate is reasonable "considering that Doctor's Pharmaceutical, Inc. is a small manufacturing venture compared with Parke, Davis & Company, Inc. which is a subsidiary of the huge mother firm, Parke, Davis & Company of Michigan, U.S.A. If Doctor's is making sufficient profit to justify an increase of royalty later, Parke, Davis & Co., Inc. can easily demand an increase, considering that the latter has access to the books and records of the former.

Also, There is no showing that Parke, Davis & Co., Inc. would tend to suffer business losses by the imposition of the 8 % royalty nor does it appear that it would cause other effects on the saleability of the antibiotics and consequently the health of the consuming public by the imposition of 8 %.

5. G.R. No. 126627. August 14, 2003.] SMITH KLINE BECKMAN CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and TRYCO PHARMA CORPORATION, respondents. Petitioner’s Claim: *Smith Kline Beckman Corp is a corporation existing under the laws of Pennsylvania, US. *It filed an application for patent over an invention entitled “Methods and Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate. The said application was approved. *It claimed that its patent covers the substance Albendazole *It claimed that private respondent infringe its right over the said patent by selling, using and causing to be sold and used the drug Impregon without its authorization.

*It claimed that respondent committed unfair competition under Art 189 for advertising and selling as its own the drug Impregon although the same contained its patented Albendazole. Respondent’s Claim: *Letters Patent that was issued to petitioners does not cover the substance Albendazole. *That even if the patent were to include Albendazole, such substance is unpatentable. *That the BFD allowed it to manufacture and market Impregon with Albendazole as its known ingredient. *there is no proof that it passed off in any way its veterinary products as those of petitioner *The letters patent is null and void. *The application for the issuance is void for having been filed beyond the one year period from the filling of an application abroad for the same invention covered thereby. *Petitioner is not the registered patent holder.

Issue:

Whether respondent committed infringement against petitioner.

Ruling:

No. While Albendazole is admittedly a chemical compound that exists by a name different from that covered in petitioner’s letters patent, the language of Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And no extrinsic evidence had been adduced to prove that Albendazole inheres in petitioner’s patent in spite of its omission therefrom or that the meaning of the claims of the patent embraces the same. 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.

6. [G.R. No. 113407. July 12, 2000.]

LOTHAR SCHUARTZ, FRIEDEL VERDERBERG, UDOLF KUEHNE, DIETER FISCHER, JOHN BERNARD WATKINS, HARRY GREAVES, CHEN WOO CHIN, YOSHIMI IWASAKI, FABIO CARLI, MORTIMER THOMPSON, MALCOLM JOHN LAW, MICHIBAZU OCHI, KENJI SHIGEMATSU, ENI SHINOZAKI, ROBERT CABI-AKMAN, ARTHUR SPRENGER, REMY SIMOND and HEINRICH EVBERGGER, petitioners, vs. THE HONORABLE COURT OF APPEALS (SPECIAL FIFTH DIVISION) and THE BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER, respondents.

Facts: On different dates, petitioners applied to the Bureau of Patents, Trademarks and Technology Transfer for registration of patents. They hired the law firm Siguion Reyna, Montecillo and Ongsiako to process several patent applications in the Philippines

Petitioner’s patent applications lacked certain requirements and the Bureau informed the law firm about it, through correspondences called Office Actions. As petitioners law firm did not respond to these office actions within the prescribed time, notices of abandonment were sent on June 1987.

Two employees of the law firm, George Bangkas and Rafael Rosas were dismissed from employment. Prior to the dismissal, these employees worked with the patent group of the law firm and had the duty, among others, of getting the firms letters and correspondence from the Bureau of Patents.

Immediately after their dismissal, the law firm conducted on December 1987an inventory of all the documents entrusted to

them. It was then that the firm learned about the notices of abandonment.

Thereafter, petitioners, through the law firm, filed with the Bureau of Patents separate petitions for revival of the patent applications. Bureau of Patents denied all the petitions for revival because they were filed out of time.

Petitioners appealed from the resolution of the Director of Patents dated January 31, 1991, which denied the petition for revival of the patent applications. They received a copy of the resolution on February 7, 1991, and filed the consolidated appeal seven (7) days after, or on February 14, 1991. According to petitioners, these dates clearly established that their appeal was seasonably filed. Petitioners contend that their appeal was filed on time.

The CA dismissed the consolidated appeal for being filed beyond the 15-day reglementary period to appeal. The CA declared that there was an unreasonable delay before the petitions to revive applications were filed and; that petitioner’s patent applications could not be a proper subject of a consolidated appeal because they covered separate and distinct subjects and had been treated by the Bureau of Patents as separate and individual applications.

Petitioners appeal via certiorari from the decision of the CA dismissing their appeal from the resolution of the Director of Patents that denied with finality their petition for revival of patent applications.

Issue: Is the appeal filed out of time?

Held: Yes. If the facts above-mentioned were the sole

basis of determining whether the appeal was filed on time, petitioners argument would be correct. However, 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.

Facts show that the patent attorneys appointed to follow up the applications for patent registration had been negligent in complying with the rules of practice prescribed by the Bureau of Patents. The firm had been notified about the abandonment as early as June 1987, but it was only after December 7, 1987, when their employees Bangkas and Rosas had been dismissed, that they came to know about it. This clearly showed that petitioners counsel had been remiss in the handling of their clients applications.

A lawyer’s fidelity to the cause of his client requires him to be ever mindful of the responsibilities that should be expected of him. A lawyer shall not neglect a legal matter entrusted to him. In the instant case, petitioner’s patent attorneys not only failed to take notice of the notices of abandonment, but they failed to revive the application within the four-month period, as provided in the rules of practice in patent cases. These applications are deemed forfeited upon the lapse of such period.

Hence, we cannot grant the present petition. The CA did not err or gravely abuse its discretion in dismissing the petition for review.

7. G.R. No. 134217. May 11, 2000.] KENNETH ROY SAVAGE/K ANGELIN EXPORT TRADING, owned and managed by GEMMA DEMORAL-SAVAGE, petitioners, vs. JUDGE APRONIANO B. TAYPIN, Presiding Judge, RTC-BR. 12, Cebu City, CEBU PROVINCIAL PROSECUTOR'S OFFICE, NATIONAL BUREAU OF INVESTIGATION, Region VII, Cebu City, JUANITA NG MENDOZA, MENDCO DEVELOPMENT CORPORATION, ALFREDO SABJON and DANTE SOSMENA, respondents.

Acting on a complaint lodged by private respondent Eric Ng Mendoza, president and general manager of Mendco Development Corporation (MENDCO), Supervising Agent Monsanto of the NBI filed an application for search warrant with the RTC of Cebu City. The application sought the authorization to search the premises of K Angelin Export International located in Talisay, Cebu, and to seize the pieces of wrought iron furniture found therein which were allegedly the object of unfair competition involving design patents, punishable under Art. 189 of the Revised Penal Code as amended. Thereafter, seized from the factory were several pieces of furniture, indicated in search warrant, and all items seized have remained in NBI custody up to the present.

Petitioners moved to quash the search warrant. Respondent Judge denied the Motion to Quash.

Petitioners claim that respondent trial court had no jurisdiction over the offense since it was not designated as a special court for Intellectual Property Rights (IPR), citing in support thereof Supreme Court Administrative Order No. 113-95 designating certain branches of the Regional Trial Courts, Metropolitan Trial Courts and Municipal Trial Courts in Cities as Special Courts for IPR. The courts enumerated therein are mandated to try and decide violations of IPR including Art. 189 of the Revised Penal Code committed within their respective territorial jurisdictions. Subsequently Supreme Court Administrative Order No. 104-96 was issued providing that jurisdiction over all violations of IPR was thereafter confined to the Regional Trial Courts.

ISSUE: 1) Whether the respondent judge had authority/jurisdiction to issue the said search warrant 2) Whether unfair competition involving design patents punishable under Art. 189 of the Revised Penal Code exists

HELD:

1) YES, respondent judge has authority (Note: the search warrant issued was, however, NOT valid).The authority to issue search warrants was not among those mentioned in the administrative orders. But the Court has consistently ruled that a search warrant is merely a process issued by the court in the exercise of its ancillary jurisdiction and not a criminal action which it may entertain pursuant to its original jurisdiction. The authority to issue search warrants is inherent in all courts and may be effected outside their territorial jurisdiction. In the instant case, the premises searched located in Talisay, Cebu, are well within the territorial jurisdiction of the respondent court.

Petitioners apparently misconstrued the import of the designation of Special Courts for IPR. Administrative Order No. 113-95 merely specified which court could "try and decide" cases involving violations of IPR. It did not, and could not, vest exclusive jurisdiction with regard to all matters (including the issuance of search warrants and other judicial processes) in any one court. The power to issue search warrants for violations of IPR has not been exclusively vested in the courts enumerated in Supreme Court Administrative Order No.113-95.

2) NO. Since the IPR Code took effect on 1 January 1998 any discussion contrary to the view herein expressed would be pointless. The repealing clause of the Code provides that all Acts and parts of Acts inconsistent with the Code are repealed.

The issue involving the existence of "unfair competition" as a felony involving design patents, referred to in Art. 189 of the Revised Penal Code, has been rendered moot and academic by the repeal of the article.

The search warrant cannot even be issued by virtue of a possible violation of the IPR Code. The assailed acts specifically alleged were the manufacture and fabrication of wrought iron furniture similar to that patented by MENDCO, without securing any license or patent for the same, for the purpose of deceiving or defrauding Mendco and the buying public. The Code defines "unfair competition" thus —

168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.

There is evidently no mention of any crime of "unfair competition" involving design patents in the controlling provisions on Unfair Competition. It is therefore unclear whether the crime exists at all, for the enactment of RA 8293 did not result in the reenactment of Art. 189 of the Revised Penal Code. In the face of this ambiguity, we must strictly construe the statute against the State and liberally in favor of the accused, for penal statutes cannot be enlarged or extended by intendment, implication or any equitable consideration.

8. G.R. No. 118708. February 2, 1998.] CRESER PRECISION SYSTEMS, INC., petitioner, vs. COURT OF APPEALS AND FLORO INTERNATIONAL CORP., respondents. Petitioner’s claim:

It is Creser’s contention that it can file, under Section 42 of the Patent Law (R.A. 165), an action for infringement not as a

patentee but as an entity in possession of a right, title or interest in and to the patented invention. It advances the theory that while the absence of a patent may prevent one from lawfully suing another for infringement of said patent, such absence does not bar the first true and actual inventor of the patented invention from suing another who was granted a patent in a suit for declaratory or injunctive relief recognized under American patent laws. This remedy, petitioner points out, may be likened to a civil action for infringement under Section 42 of the Philippine Patent Law. Respondent’s claim:

Private respondent Floro International submitted its memorandum alleging that petitioner has no cause of action to file a complaint for infringement against it since Creser has no patent for the aerial fuze which it claims to have invented; that petitioner's available remedy is to file a petition for cancellation of patent before the Bureau of Patents; that private respondent as the patent holder cannot be stripped of its property right over the patented aerial fuze consisting of the exclusive right to manufacture, use and sell the same and that it stands to suffer irreparable damage and injury if it is enjoined from the exercise of its property rights over its patent. Issue: Whether Creser can file an action for infringement being not as patentee Ruling:

NO. Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:

Sec. 42. Civil action for infringement. — Any patentee, or anyone possessing any right, title or

interest in and to the patented invention, whose rights have been infringed, may bring a civil action before the proper Court of First Instance (now Regional Trial court), to recover from the infringer damages sustained by reason of the infringement and to secure an injunction for the protection of his right. . . .

Under the aforequoted law, only the patentee or his successors-in-interest may file an action for infringement. The phrase "anyone possessing any right, title or interest in and to the patented invention" upon which petitioner maintains its present suit, refers only to the patentee's successors-in-interest, assignees or grantees since actions for infringement of patent may be brought in the name of the person or persons interested, whether as patentee, assignees, or as grantees, of the exclusive right.

Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis or cause of action to institute the petition for injunction and damages arising from the alleged infringement by private respondent.

9. G.R. No. 113388. September 5, 1997.] ANGELITA MANZANO, petitioner, vs. COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to NEW UNITED FOUNDRY MANUFACTURING CORPORATION, respondents. Petitioner’s claim:

Petitioner Angelita Manzano filed with the Philippine Patent Office on 19 February 1982 an action for the cancellation of Letters Patent No. UM-4609 for a gas burner registered in the name of respondent Melecia Madolaria who subsequently assigned the letters patent to New United Foundry and Manufacturing Corporation (UNITED FOUNDRY, for

brevity). Petitioner alleged that (a) the utility model covered by the letters patent, in this case, an LPG gas burner, was not inventive, new or useful; (b) the specification of the letters patent did not comply with the requirements of Sec. 14, RA No. 165, as amended; (c) respondent Melecia Madolaria was not the original, true and actual inventor nor did she derive her rights from the original, true and actual inventor of the utility model covered by the letters patent; and, (d) the letters patent was secured by means of fraud or misrepresentation. In support of her petition for cancellation petitioner further alleged that (a) the utility model covered by the letters patent of respondent had been known or used by others in the Philippines for more than one (1) year before she filed her application for letters patent on 9 December 1979; (b) the products which were produced in accordance with the utility model covered by the letters patent had been in public use or on sale in the Philippines for more than one (1) year before the application for patent therefor was filed. Respondent’s claim:

Private respondent, through one witness, Rolando Madolaria, who testified, among others, that he was the General Supervisor of the UNITED FOUNDRY in the foundry, machine and buffing section; that in his early years with the company, UNITED FOUNDRY was engaged in the manufacture of different kinds of gas stoves as well as burners based on sketches and specifications furnished by customers; that the company manufactured early models of single-piece types of burners where the mouth and throat were not detachable; that in the latter part of 1978 respondent Melecia Madolaria confided in him that complaints were being brought to her attention concerning the early models being manufactured; that he was then instructed by private respondent to cast several experimental models based on revised sketches and specifications; that private respondent again made some innovations; that after a few months, private respondent

discovered the solution to all the defects of the earlier models and, based on her latest sketches and specifications, he was able to cast several models incorporating the additions to the innovations introduced in the models. Various tests were conducted on the latest model in the presence and under the supervision of Melecia Madolaria and they obtained perfect results. Rolando Madolaria testified that private respondent decided to file her application for utility model patent in December 1979. Issue: Whether to grant the application for cancellation of the issued patent utility model to Melecia Madolaria for an ‘LPG Burner’ Ruling: NO. In issuing Letters Patent No. UM-4609 to Melecia Madolaria for an “LPG Burner” on 22 July 1981, the Philippine Patent Office found her invention novel and patentable. The issuance of such patent creates a presumption which yields only to clear and cogent evidence that the patentee was the original and first inventor. On 7 July 1986 the Director of Patents Cesar C. Sandiego issued Decision No. 86-56 denying the petition for cancellation and holding that the evidence of petitioner was not able to establish convincingly that the patented utility model of private respondent was anticipated. Not one of the various pictorial representations of business clearly and convincingly showed that the devices presented by petitioner was identical or substantially identical with the utility model of the respondent. The decision also stated that even assuming that the brochures depicted clearly each and every element of the patented gas burner device so that the prior art and patented device became identical although in truth they were not, they could not serve as anticipatory bars for the reason that they were undated. The

dates when they were distributed to the public were not indicated and, therefore, were useless prior art references. The records and evidence also do not support the petitioner’s contention that Letters Patent No. UM-4609 was obtained by means of fraud and/or misrepresentation. No evidence whatsoever was presented by petitioner to show that the then applicant Melecia Madolaria withheld with intent to deceive material facts which, if disclosed, would have resulted in the refusal by the Philippine Patent Office to issue the Letters Patent under inquiry. The rule is settled that the findings of fact of the Director of Patents, especially when affirmed by the Court of Appeals, are conclusive on this Court when supported by substantial evidence. Petitioner has failed to show compelling grounds for a reversal of the findings and conclusions of the Patent Office and the Court of Appeals.

10. G.R. No. 121867. July 24, 1997.] SMITH KLINE & FRENCH LABORATORIES, LTD., petitioner, vs. COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER and DOCTORS PHARMACEUTICALS, INC., respondents. Petitioner’s claim: SMITH KLINE & FRENCH LABORATORIES, LTD owns Philippine Letters Patent No. 12207 issued by the BPTTT for the patent of the drug Cimetidine. It argued that DOCTORS PHARMACEUTICALS, INC. had no cause of action and lacked the capability to work the patented product; the petition failed to specifically divulge how DOCTORS PHARMACEUTICALS, INC. would use or improve the patented product; and that DOCTORS PHARMACEUTICALS, INC. was motivated by the pecuniary gain attendant to the grant of a compulsory license. It also maintained that it was capable of satisfying the demand of the local market in the manufacture and marketing of the medicines covered by the patented product. Finally, It 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. It also invoked Article 5 of the Paris Convention for the Protection of Industrial Property,or Paris Convention, for short, of which the Philippines became a party thereto only in 1965. Respondent’s claim: DOCTORS PHARMACEUTICALS, INC. 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. It alleged that the grant of Philippine Letters Patent No. 12207 was issued on 29 November 1978; that the petition was filed beyond the two-year protective period provided in Section 34 of R.A. No. 165; and that it had the capability to work the patented product or make use of it in its manufacture of medicine.c

Issue: whether or not the decision of BPTTT 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.

Held: No. It is thus clear that Section A(2) of Article 5 of the Paris Convention unequivocally and explicitly respects the right of member countries to adopt legislative measures to

provide for the grant of compulsory licenses to prevent abuses which might result from the exercise of the exclusive rights conferred by the patent. An example provided of possible abuses is "failure to work;" however, as such is merely supplied by way of an example, it is plain that the treaty does not preclude the inclusion of other forms or categories of abuses. Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines adhesion to the Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the legislative intent in the grant of a compulsory license was not only to afford others an opportunity to provide the public with the quantity of the patented product, but also to prevent the growth of monopolies. Certainly, the growth of monopolies was among the abuses which Section A, Article 5 of the Convention foresaw, and which our Congress likewise wished to prevent in enacting R.A. No. 165.c R.A. No. 165, as amended by Presidential Decree No. 1263, promulgated on 14 December 1977, provides for a system of compulsory licensing under a particular patent. The case at bar refers more particularly to subparagraph (e) of paragraph 1 of Section 34 -- the patented invention or article relates to food or medicine or manufactured products or substances which can be used as food or medicine, or is necessary for public health or public safety. And it may not be doubted that the aforequoted provisions of R.A. No. 165, as amended, are not in derogation of, but are consistent with, the recognized right of treaty signatories under Article 5, Section A(2) of the Paris Convention.c

Parenthetically, it must be noted that paragraph (4) of Section A, Article 5 of the Paris Convention setting time limitations in the application for a compulsory license refers only to an instance where the ground therefor is "failure to work or insufficient

working," and not to any ground or circumstance as the treaty signatories may reasonably determine.

Neither may petitioner validly invoke what it designates as the GATT Treaty, Uruguay Round. This act is better known as the Uruguay Final Act signed for the Philippines on 15 April 1994 by Trade and Industry Secretary Rizalino Navarro. Forming integral parts thereof are the Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services. The Agreement establishing the World Trade Organization includes various agreements and associated legal instruments. It was only on 14 December 1994 that the Philippine Senate, in the exercise of its power under Section 21 of Article VII of the Constitution, adopted Senate Resolution No. 97 concurring in the ratification by the President of the Agreement. The President signed the instrument of ratification on 16 December 1994.But plainly; this treaty has no retroactive effect. Accordingly, since the challenged BPTTT decision was rendered on 14 February 1994, petitioner cannot avail of the provisions of the GATT treaty

11. [G.R. No. 115106. March 15, 1996.] ROBERTO L. DEL ROSARIO, petitioner, vs. COURT OF APPEALS AND JANITO CORPORATION, respondents. Petitioner’s Contention:

• Del Rosario alleged that he was a patentee of an audio equipment and improved audio equipment commonly known as the sing-along system or karaoke under Letters Patent issued by the Director of Patent. The effectivity of both Letters Patents was for five (5) years and was extended for another five (5) years starting 2 June 1988 and 14 November 1991, respectively. He described his

sing-along system as a handy multi-purpose compact machine which incorporates an amplifier speaker, one or two tape mechanisms, optional tuner or radio and microphone mixer with features to enhance one’s 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 1990, he learned that private respondent, Janito

Corporation, was manufacturing a sing-along system bearing the trademark miyata or miyata karaoke substantially similar if not identical to the sing-along 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 private respondent, its officers and everybody elsewhere acting on its behalf, from using, selling and advertising the miyata or miyata karaoke brand.

Respondent’s Contention:

• Respondent Janito Corporation denied that there was any violation of petitioner’s patent rights, and cited the differences between its miyata equipment and petitioner’s audio equipment.

• Respondent also contended that there was no

infringement of the patents of petitioner by the fact alone that private respondent 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 petitioner.

RULING: It is elementary that a patent may be infringed where the essential or substantial features of the patented invention are

taken or appropriated, or the device, machine or other subject matter alleged to infringe is substantially identical with the patented invention. In order to infringe a patent, a machine or device must perform the same function, or accomplish the same result by identical or substantially identical means and the principle or mode of operation must be substantially the same.

It may be noted that respondent corporation failed to present before the trial court a clear, competent and reliable comparison between its own model and that of petitioner, and disregarded completely petitioner’s 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 speaker’s 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, therefore, both petitioner’s and respondent’s models involve substantially the same modes of operation and produce substantially the same if not identical results when used.