PEARL & DEAN (PHIL.), INCORPORATED, Petitioner, vs. SHOEMART,

INCORPORATED, and NORTH EDSA MARKETING,

INCORPORATED, Respondents.

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals3 contained a summary of this

dispute:

"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the

manufacture of advertising display units simply referred to as light boxes. These

units utilize specially printed posters sandwiched between plastic sheets and

illuminated with back lights. Pearl and Dean was able to secure a Certificate of

Copyright Registration dated January 20, 1981 over these illuminated display units.

The advertising light boxes were marketed under the trademark "Poster Ads". The

application for registration of the trademark was filed with the Bureau of Patents,

Trademarks and Technology Transfer on June 20, 1983, but was approved only on

September 12, 1988, per Registration No. 41165. From 1981 to about 1988, Pearl

and Dean employed the services of Metro Industrial Services to manufacture its

advertising displays.

Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart,

Inc. (SMI) for the lease and installation of the light boxes in SM City North Edsa.

Since SM City North Edsa was under construction at that time, SMI offered as an

alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. On

September 11, 1985, Pearl and Dean’s General Manager, Rodolfo Vergara,

submitted for signature the contracts covering SM Cubao and SM Makati to SMI’s

Advertising Promotions and Publicity Division Manager, Ramonlito Abano. Only

the contract for SM Makati, however, was returned signed. On October 4, 1985,

Vergara wrote Abano inquiring about the other contract and reminding him that their

agreement for installation of light boxes was not only for its SM Makati branch, but

also for SM Cubao. SMI did not bother to reply.

Instead, in a letter dated January 14, 1986, SMI’s house counsel informed Pearl and

Dean that it was rescinding the contract for SM Makati due to non-performance of

the terms thereof. In his reply dated February 17, 1986, Vergara protested the

unilateral action of SMI, saying it was without basis. In the same letter, he pushed for

the signing of the contract for SM Cubao.

Two years later, Metro Industrial Services, the company formerly contracted by

Pearl and Dean to fabricate its display units, offered to construct light boxes for

Shoemart’s chain of stores. SMI approved the proposal and ten (10) light boxes were

subsequently fabricated by Metro Industrial for SMI. After its contract with Metro

Industrial was terminated, SMI engaged the services of EYD Rainbow Advertising

Corporation to make the light boxes. Some 300 units were fabricated in 1991. These

were delivered on a staggered basis and installed at SM Megamall and SM City.

Sometime in 1989, Pearl and Dean, received reports that exact copies of its light

boxes were installed at SM City and in the fastfood section of SM Cubao. Upon

investigation, Pearl and Dean found out that aside from the two (2) reported SM

branches, light boxes similar to those it manufactures were also installed in two (2)

other SM stores. It further discovered that defendant-appellant North Edsa Marketing

Inc. (NEMI), through its marketing arm, Prime Spots Marketing Services, was set up

primarily to sell advertising space in lighted display units located in SMI’s different

branches. Pearl and Dean noted that NEMI is a sister company of SMI.

In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991

to both SMI and NEMI enjoining them to cease using the subject light boxes and to

remove the same from SMI’s establishments. It also demanded the discontinued use

of the trademark "Poster Ads," and the payment to Pearl and Dean of compensatory

damages in the amount of Twenty Million Pesos (P20,000,000.00).

Upon receipt of the demand letter, SMI suspended the leasing of two hundred

twenty-four (224) light boxes and NEMI took down its advertisements for "Poster

Ads" from the lighted display units in SMI’s stores. Claiming that both SMI and

NEMI failed to meet all its demands, Pearl and Dean filed this instant case for

infringement of trademark and copyright, unfair competition and damages.

In denying the charges hurled against it, SMI maintained that it independently

developed its poster panels using commonly known techniques and available

technology, without notice of or reference to Pearl and Dean’s copyright. SMI noted

that the registration of the mark "Poster Ads" was only for stationeries such as

letterheads, envelopes, and the like. Besides, according to SMI, the word "Poster

Ads" is a generic term which cannot be appropriated as a trademark, and, as such,

registration of such mark is invalid. It also stressed that Pearl and Dean is not entitled

to the reliefs prayed for in its complaint since its advertising display units contained

no copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that Pearl and

Dean had no cause of action against it and that the suit was purely intended to malign

SMI’s good name. On this basis, SMI, aside from praying for the dismissal of the

case, also counterclaimed for moral, actual and exemplary damages and for the

cancellation of Pearl and Dean’s Certification of Copyright Registration No. PD-R-

2558 dated January 20, 1981 and Certificate of Trademark Registration No. 4165

dated September 12, 1988.

NEMI, for its part, denied having manufactured, installed or used any advertising

display units, nor having engaged in the business of advertising. It repleaded SMI’s

averments, admissions and denials and prayed for similar reliefs and counterclaims

as SMI."

The RTC of Makati City decided in favor of P & D:

Wherefore, defendants SMI and NEMI are found jointly and severally liable for

infringement of copyright under Section 2 of PD 49, as amended, and infringement

of trademark under Section 22 of RA No. 166, as amended, and are hereby penalized

under Section 28 of PD 49, as amended, and Sections 23 and 24 of RA 166, as

amended. Accordingly, defendants are hereby directed:

(1) to pay plaintiff the following damages:

(a) actual damages - P16,600,000.00,

representing profits

derived by defendants

as a result of infringe-

ment of plaintiff’s copyright

from 1991 to 1992

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00

(d) attorney’s fees - P1,000,000.00

plus

(e) costs of suit;

(2) to deliver, under oath, for impounding in the National Library, all light

boxes of SMI which were fabricated by Metro Industrial Services and EYD

Rainbow Advertising Corporation;

(3) to deliver, under oath, to the National Library, all filler-posters using the

trademark "Poster Ads", for destruction; and

(4) to permanently refrain from infringing the copyright on plaintiff’s light

boxes and its trademark "Poster Ads".

Defendants’ counterclaims are hereby ordered dismissed for lack of merit.

SO ORDERED.4

On appeal, however, the Court of Appeals reversed the trial court:

Since the light boxes cannot, by any stretch of the imagination, be considered as

either prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to

be properly classified as a copyrightable class "O" work, we have to agree with SMI

when it posited that what was copyrighted were the technical drawings only, and not

the light boxes themselves, thus:

42. When a drawing is technical and depicts a utilitarian object, a copyright over the

drawings like plaintiff-appellant’s will not extend to the actual object. It has so been

held under jurisprudence, of which the leading case isBaker vs. Selden (101 U.S. 841

(1879). In that case, Selden had obtained a copyright protection for a book entitled

"Selden’s Condensed Ledger or Bookkeeping Simplified" which purported to explain

a new system of bookkeeping. Included as part of the book were blank forms and

illustrations consisting of ruled lines and headings, specially designed for use in

connection with the system explained in the work. These forms showed the entire

operation of a day or a week or a month on a single page, or on two pages following

each other. The defendant Baker then produced forms which were similar to the

forms illustrated in Selden’s copyrighted books. The Court held that exclusivity to

the actual forms is not extended by a copyright. The reason was that "to grant a

monopoly in the underlying art when no examination of its novelty has ever been

made would be a surprise and a fraud upon the public; that is the province of letters

patent, not of copyright." And that is precisely the point. No doubt aware that its

alleged original design would never pass the rigorous examination of a patent

application, plaintiff-appellant fought to foist a fraudulent monopoly on the public by

conveniently resorting to a copyright registration which merely employs a recordal

system without the benefit of an in-depth examination of novelty.

The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough

Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had

obtained a copyright over an unpublished drawing entitled "Bridge Approach – the

drawing showed a novel bridge approach to unsnarl traffic congestion". The

defendant constructed a bridge approach which was alleged to be an infringement of

the new design illustrated in plaintiff’s drawings. In this case it was held that

protection of the drawing does not extend to the unauthorized duplication of the

object drawn because copyright extends only to the description or expression of the

object and not to the object itself. It does not prevent one from using the drawings to

construct the object portrayed in the drawing.

In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz

Homes, Inc. v. Maddox, 379 F. 2d 84, it was held that there is no copyright

infringement when one who, without being authorized, uses a copyrighted

architectural plan to construct a structure. This is because the copyright does not

extend to the structures themselves.

In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright over the

technical drawings of the latter’s advertising display units.

xxx xxx xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate

Appellate Court that the protective mantle of the Trademark Law extends only to the

goods used by the first user as specified in the certificate of registration, following

the clear mandate conveyed by Section 20 of Republic Act 166, as amended,

otherwise known as the Trademark Law, which reads:

SEC. 20. Certification of registration prima facie evidence of validity.- A certificate

of registration of a mark or trade-name shall be prima facie evidence of the validity

of the registration, the registrant’s ownership of the mark or trade-name, and of the

registrant’s exclusive right to use the same in connection with the goods, business or

servicesspecified in the certificate, subject to any conditions and limitations stated

therein." (underscoring supplied)

The records show that on June 20, 1983, Pearl and Dean applied for the registration

of the trademark "Poster Ads" with the Bureau of Patents, Trademarks, and

Technology Transfer. Said trademark was recorded in the Principal Register on

September 12, 1988 under Registration No. 41165 covering the following products:

stationeries such as letterheads, envelopes and calling cards and newsletters.

With this as factual backdrop, we see no legal basis to the finding of liability on the

part of the defendants-appellants for their use of the words "Poster Ads", in the

advertising display units in suit. Jurisprudence has interpreted Section 20 of the

Trademark Law as "an implicit permission to a manufacturer to venture into the

production of goods and allow that producer to appropriate the brand name of the

senior registrant on goods other than those stated in the certificate of registration."

The Supreme Court further emphasized the restrictive meaning of Section 20 when it

stated, through Justice Conrado V. Sanchez, that:

Really, if the certificate of registration were to be deemed as including goods not

specified therein, then a situation may arise whereby an applicant may be tempted to

register a trademark on any and all goods which his mind may conceive even if he

had never intended to use the trademark for the said goods. We believe that such

omnibus registration is not contemplated by our Trademark Law.

While we do not discount the striking similarity between Pearl and Dean’s registered

trademark and defendants-appellants’ "Poster Ads" design, as well as the parallel use

by which said words were used in the parties’ respective advertising copies, we

cannot find defendants-appellants liable for infringement of trademark. "Poster Ads"

was registered by Pearl and Dean for specific use in its stationeries, in contrast to

defendants-appellants who used the same words in their advertising display units.

Why Pearl and Dean limited the use of its trademark to stationeries is simply beyond

us. But, having already done so, it must stand by the consequence of the registration

which it had caused.

xxx xxx xxx

We are constrained to adopt the view of defendants-appellants that the words "Poster

Ads" are a simple contraction of the generic term poster advertising. In the absence

of any convincing proof that "Poster Ads" has acquired a secondary meaning in this

jurisdiction, we find that Pearl and Dean’s exclusive right to the use of "Poster Ads"

is limited to what is written in its certificate of registration, namely, stationeries.

Defendants-appellants cannot thus be held liable for infringement of the trademark

"Poster Ads".

There being no finding of either copyright or trademark infringement on the part of

SMI and NEMI, the monetary award granted by the lower court to Pearl and Dean

has no leg to stand on.

xxx xxx xxx

WHEREFORE, premises considered, the assailed decision is REVERSED and SET

ASIDE, and another is rendered DISMISSING the complaint and counterclaims in

the above-entitled case for lack of merit.5

Dissatisfied with the above decision, petitioner P & D filed the instant petition

assigning the following errors for the Court’s consideration:

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING

THAT NO COPYRIGHT INFRINGEMENT WAS COMMITTED BY

RESPONDENTS SM AND NEMI;

B. THE HONORABLE COURT OF APPEALS ERRED IN RULING

THAT NO INFRINGEMENT OF PEARL & DEAN’S TRADEMARK

"POSTER ADS" WAS COMMITTED BY RESPONDENTS SM AND

NEMI;

C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING

THE AWARD OF THE TRIAL COURT, DESPITE THE LATTER’S

FINDING, NOT DISPUTED BY THE HONORABLE COURT OF

APPEALS, THAT SM WAS GUILTY OF BAD FAITH IN ITS

NEGOTIATION OF ADVERTISING CONTRACTS WITH PEARL &

DEAN.

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT

HOLDING RESPONDENTS SM AND NEMI LIABLE TO PEARL &

DEAN FOR ACTUAL, MORAL & EXEMPLARY DAMAGES,

ATTORNEY’S FEES AND COSTS OF SUIT.6

ISSUES

In resolving this very interesting case, we are challenged once again to put into

proper perspective four main concerns of intellectual property law — patents,

copyrights, trademarks and unfair competition arising from infringement of any of

the first three. We shall focus then on the following issues:

(1) if the engineering or technical drawings of an advertising display unit

(light box) are granted copyright protection (copyright certificate of

registration) by the National Library, is the light box depicted in such

engineering drawings ipso facto also protected by such copyright?

(2) or should the light box be registered separately and protected by a patent

issued by the Bureau of Patents Trademarks and Technology Transfer (now

Intellectual Property Office) — in addition to the copyright of the

engineering drawings?

(3) can the owner of a registered trademark legally prevent others from

using such trademark if it is a mere abbreviation of a term descriptive of his

goods, services or business?

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioner P & D’s complaint was that SMI infringed on its copyright over the light

boxes when SMI had the units manufactured by Metro and EYD Rainbow

Advertising for its own account. Obviously, petitioner’s position was premised on its

belief that its copyright over the engineering drawings extended ipso facto to the

light boxes depicted or illustrated in said drawings. In ruling that there was no

copyright infringement, the Court of Appeals held that the copyright was limited to

the drawings alone and not to the light box itself. We agree with the appellate court.

First, petitioner’s application for a copyright certificate — as well as Copyright

Certificate No. PD-R2588 issued by the National Library on January 20, 1981 —

clearly stated that it was for a class "O" work under Section 2 (O) of PD 49 (The

Intellectual Property Decree) which was the statute then prevailing. Said Section 2

expressly enumerated the works subject to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist

with respect to any of the following works:

x x x           x x x          x x x

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;

x x x           x x x          x x x

Although petitioner’s copyright certificate was entitled "Advertising Display Units"

(which depicted the box-type electrical devices), its claim of copyright infringement

cannot be sustained.

Copyright, in the strict sense of the term, is purely a statutory right. Being a mere

statutory grant, the rights are limited to what the statute confers. It may be obtained

and enjoyed only with respect to the subjects and by the persons, and on terms and

conditions specified in the statute.7 Accordingly, it can cover only the works falling

within the statutory enumeration or description.8

P & D secured its copyright under the classification class "O" work. This being so,

petitioner’s copyright protection extended only to the technical drawings and not to

the light box itself because the latter was not at all in the category of "prints, pictorial

illustrations, advertising copies, labels, tags and box wraps." Stated otherwise, even

as we find that P & D indeed owned a valid copyright, the same could have referred

only to the technical drawings within the category of "pictorial illustrations." It could

not have possibly stretched out to include the underlying light box. The strict

application9 of the law’s enumeration in Section 2 prevents us from giving petitioner

even a little leeway, that is, even if its copyright certificate was entitled "Advertising

Display Units." What the law does not include, it excludes, and for the good reason:

the light box was not a literary or artistic piece which could be copyrighted under the

copyright law. And no less clearly, neither could the lack of statutory authority to

make the light box copyrightable be remedied by the simplistic act of entitling the

copyright certificate issued by the National Library as "Advertising Display Units."

In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the public

without license from P & D, then no doubt they would have been guilty of copyright

infringement. But this was not the case. SMI’s and NEMI’s acts complained of by P

& D were to have units similar or identical to the light box illustrated in the technical

drawings manufactured by Metro and EYD Rainbow Advertising, for leasing out to

different advertisers. Was this an infringement of petitioner’s copyright over the

technical drawings? We do not think so.

During the trial, the president of P & D himself admitted that the light box was

neither a literary not an artistic work but an "engineering or marketing

invention."10 Obviously, there appeared to be some confusion regarding what ought

or ought not to be the proper subjects of copyrights, patents and trademarks. In the

leading case of Kho vs. Court of Appeals,11 we ruled that these three legal rights are

completely distinct and separate from one another, and the protection afforded by

one cannot be used interchangeably to cover items or works that exclusively pertain

to the others:

Trademark, copyright and patents are different intellectual property rights that cannot

be interchanged with one another. A trademark is any visible sign capable of

distinguishing the goods (trademark) or services (service mark) of an enterprise and

shall include a stamped or marked container of goods. In relation thereto, a trade

name means the name or designation identifying or distinguishing an enterprise.

Meanwhile, the scope of a copyright is confined to literary and artistic works which

are original intellectual creations in the literary and artistic domain protected from

the moment of their creation. Patentable inventions, on the other hand, refer to any

technical solution of a problem in any field of human activity which is new, involves

an inventive step and is industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

This brings us to the next point: if, despite its manufacture and commercial use of

the light boxes without license from petitioner, private respondents cannot be held

legally liable for infringement of P & D’s copyright over itstechnical drawings of the

said light boxes, should they be liable instead for infringement of patent? We do not

think so either.

For some reason or another, petitioner never secured a patent for the light boxes. It

therefore acquired no patent rights which could have protected its invention, if in fact

it really was. And because it had no patent, petitioner could not legally prevent

anyone from manufacturing or commercially using the contraption. In Creser

Precision Systems, Inc. vs. Court of Appeals,12 we held that "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. x x x

(A)n inventor has no common law right to a monopoly of his invention. He has the

right to make use of and vend his 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, selling or using the invention.13 On the assumption that

petitioner’s advertising units were patentable inventions, petitioner revealed them

fully to the public by submitting the engineering drawings thereof to the National

Library.

To be able to effectively and legally preclude others from copying and profiting from

the invention, a patent is a primordial requirement. No patent, no protection. The

ultimate goal of a patent system is to bring new designs and technologies into the

public domain through disclosure.14 Ideas, once disclosed to the public without the

protection of a valid patent, are subject to appropriation without significant

restraint.15

On one side of the coin is the public which will benefit from new ideas; on the other

are the inventors who must be protected. As held in Bauer & Cie vs.

O’Donnel,16 "The act secured to the inventor the exclusive right to make use, and

vend the thing patented, and consequently to prevent others from exercising like

privileges without the consent of the patentee. It was passed for the purpose of

encouraging useful invention and promoting new and useful inventions by the

protection and stimulation given to inventive genius, and was intended to secure to

the public, after the lapse of the exclusive privileges granted the benefit of such

inventions and improvements."

The law attempts to strike an ideal balance between the two interests:

"(The p)atent system thus embodies a carefully crafted bargain for encouraging the

creation and disclosure of new useful and non-obvious advances in technology and

design, in return for the exclusive right to practice the invention for a number of

years. The inventor may keep his invention secret and reap its fruits indefinitely. In

consideration of its disclosure and the consequent benefit to the community, the

patent is granted. An exclusive enjoyment is guaranteed him for 17 years, but upon

the expiration of that period, the knowledge of the invention inures to the people,

who are thus enabled to practice it and profit by its use."17

The patent law has a three-fold purpose: "first, patent law seeks to foster and reward

invention; second, it promotes disclosures of inventions to stimulate further

innovation and to permit the public to practice the invention once the patent expires;

third, the stringent requirements for patent protection seek to ensure that ideas in the

public domain remain there for the free use of the public."18

It is only after an exhaustive examination by the patent office that a patent is issued.

Such an in-depth investigation is required because "in rewarding a useful invention,

the rights and welfare of the community must be fairly dealt with and effectively

guarded. To that end, the prerequisites to obtaining a patent are strictly observed and

when a patent is issued, the limitations on its exercise are equally strictly enforced.

To begin with, a genuine invention or discovery must be demonstrated lest in the

constant demand for new appliances, the heavy hand of tribute be laid on each slight

technological advance in art."19

There is no such scrutiny in the case of copyrights nor any notice published before its

grant to the effect that a person is claiming the creation of a work. The law confers

the copyright from the moment of creation20 and the copyright certificate is issued

upon registration with the National Library of a sworn ex-parte claim of creation.

Therefore, not having gone through the arduous examination for patents, the

petitioner cannot exclude others from the manufacture, sale or commercial use of the

light boxes on the sole basis of its copyright certificate over the technical drawings.

Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the

patent office (IPO) to scrutinize the light box’s eligibility as a patentable invention.

The irony here is that, had petitioner secured a patent instead, its exclusivity would

have been for 17 years only. But through the simplified procedure of copyright-

registration with the National Library — without undergoing the rigor of defending

the patentability of its invention before the IPO and the public — the petitioner

would be protected for 50 years. This situation could not have been the intention of

the law.

In the oft-cited case of Baker vs. Selden21, the United States Supreme Court held

that only the expression of an idea is protected by copyright, not the idea itself. In

that case, the plaintiff held the copyright of a book which expounded on a new

accounting system he had developed. The publication illustrated blank forms of

ledgers utilized in such a system. The defendant reproduced forms similar to those

illustrated in the plaintiff’s copyrighted book. The US Supreme Court ruled that:

"There is no doubt that a work on the subject of book-keeping, though only

explanatory of well known systems, may be the subject of a copyright; but, then, it is

claimed only as a book. x x x. But there is a clear distinction between the books, as

such, and the art, which it is, intended to illustrate. The mere statement of the

proposition is so evident that it requires hardly any argument to support it. The same

distinction may be predicated of every other art as well as that of bookkeeping. A

treatise on the composition and use of medicines, be they old or new; on the

construction and use of ploughs or watches or churns; or on the mixture and

application of colors for painting or dyeing; or on the mode of drawing lines to

produce the effect of perspective, would be the subject of copyright; but no one

would contend that the copyright of the treatise would give the exclusive right to the

art or manufacture described therein. The copyright of the book, if not pirated from

other works, would be valid without regard to the novelty or want of novelty of its

subject matter. The novelty of the art or thing described or explained has nothing to

do with the validity of the copyright. To give to the author of the book an

exclusive property in the art described therein, when no examination of its

novelty has ever been officially made, would be a surprise and a fraud upon the

public. That is the province of letters patent, not of copyright. The claim to an

invention of discovery of an art or manufacture must be subjected to the

examination of the Patent Office before an exclusive right therein can be

obtained; and a patent from the government can only secure it.

The difference between the two things, letters patent and copyright, may be

illustrated by reference to the subjects just enumerated. Take the case of medicines.

Certain mixtures are found to be of great value in the healing art. If the discoverer

writes and publishes a book on the subject (as regular physicians generally do),

he gains no exclusive right to the manufacture and sale of the medicine; he gives

that to the public. If he desires to acquire such exclusive right, he must obtain a

patent for the mixture as a new art, manufacture or composition of matter. He

may copyright his book, if he pleases; but that only secures to him the exclusive

right of printing and publishing his book. So of all other inventions or

discoveries.

The copyright of a book on perspective, no matter how many drawings and

illustrations it may contain, gives no exclusive right to the modes of drawing

described, though they may never have been known or used before. By publishing

the book without getting a patent for the art, the latter is given to the public.

x x x

Now, whilst no one has a right to print or publish his book, or any material part

thereof, as a book intended to convey instruction in the art, any person may practice

and use the art itself which he has described and illustrated therein.The use of the

art is a totally different thing from a publication of the book explaining it. The

copyright of a book on bookkeeping cannot secure the exclusive right to make, sell

and use account books prepared upon the plan set forth in such book. Whether the art

might or might not have been patented, is a question, which is not before us. It was

not patented, and is open and free to the use of the public. And, of course, in using

the art, the ruled lines and headings of accounts must necessarily be used as incident

to it.

The plausibility of the claim put forward by the complainant in this case arises from

a confusion of ideas produced by the peculiar nature of the art described in the

books, which have been made the subject of copyright. In describing the art, the

illustrations and diagrams employed happened to correspond more closely than usual

with the actual work performed by the operator who uses the art. x x x The

description of the art in a book, though entitled to the benefit of copyright, lays

no foundation for an exclusive claim to the art itself. The object of the one is

explanation; the object of the other is use. The former may be secured by

copyright. The latter can only be secured, if it can be secured at all, by letters

patent." 

ON THE ISSUE OF TRADEMARK INFRINGEMENT

This issue concerns the use by respondents of the mark "Poster Ads" which

petitioner’s president said was a contraction of "poster advertising." P & D was able

to secure a trademark certificate for it, but one where the goods specified were

"stationeries such as letterheads, envelopes, calling cards and

newsletters."22 Petitioner admitted it did not commercially engage in or market these

goods. On the contrary, it dealt in electrically operated backlit advertising units and

the sale of advertising spaces thereon, which, however, were not at all specified in

the trademark certificate.

Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs.

Intermediate Appellate Court,23where we, invoking Section 20 of the old Trademark

Law, ruled that "the certificate of registration issued by the Director of Patents can

confer (upon petitioner) the exclusive right to use its own symbol only to those goods

specified in the certificate, subject to any conditions and limitations specified in the

certificate x x x. One who has adopted and used a trademark on his goods does not

prevent the adoption and use of the same trademark by others for products which are

of a different description."24 Faberge, Inc. was correct and was in fact recently

reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.25

Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the

failure of P & D to secure a trademark registration for specific use on the light boxes

meant that there could not have been any trademark infringement since registration

was an essential element thereof.1âwphi1

ON THE ISSUE OF UNFAIR COMPETITION

If at all, the cause of action should have been for unfair competition, a situation

which was possible even if P & D had no registration.26 However, while the

petitioner’s complaint in the RTC also cited unfair competition, the trial court did not

find private respondents liable therefor. Petitioner did not appeal this particular point;

hence, it cannot now revive its claim of unfair competition.

But even disregarding procedural issues, we nevertheless cannot hold respondents

guilty of unfair competition.

By the nature of things, there can be no unfair competition under the law on

copyrights although it is applicable to disputes over the use of trademarks. Even a

name or phrase incapable of appropriation as a trademark or tradename may, by long

and exclusive use by a business (such that the name or phrase becomes associated

with the business or product in the mind of the purchasing public), be entitled to

protection against unfair competition.27In this case, there was no evidence that P &

D’s use of "Poster Ads" was distinctive or well-known. As noted by the Court of

Appeals, petitioner’s expert witnesses himself had testified that " ‘Poster Ads’ was

too generic a name. So it was difficult to identify it with any company, honestly

speaking."28 This crucial admission by its own expert witness that "Poster Ads" could

not be associated with P & D showed that, in the mind of the public, the goods and

services carrying the trademark "Poster Ads" could not be distinguished from the

goods and services of other entities.

This fact also prevented the application of the doctrine of secondary meaning.

"Poster Ads" was generic and incapable of being used as a trademark because it was

used in the field of poster advertising, the very business engaged in by petitioner.

"Secondary meaning" means that a word or phrase originally incapable of exclusive

appropriation with reference to an article in the market (because it is geographically

or otherwise descriptive) might nevertheless have been used for so long and so

exclusively by one producer with reference to his article that, in the trade and to that

branch of the purchasing public, the word or phrase has come to mean that the article

was his property.29 The admission by petitioner’s own expert witness that he himself

could not associate "Poster Ads" with petitioner P & D because it was "too generic"

definitely precluded the application of this exception.

Having discussed the most important and critical issues, we see no need to belabor

the rest.

All told, the Court finds no reversible error committed by the Court of Appeals when

it reversed the Regional Trial Court of Makati City.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of

Appeals dated May 22, 2001 is AFFIRMED in toto. SO ORDERED.

SMITH KLINE BECKMAN CORPORATION, Petitioner, vs. THE

HONORABLE COURT OF APPEALS and TRYCO PHARMA

CORPORATION, Respondents.

Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of

the laws of the state of Pennsylvania, United States of America (U.S.) and licensed to

do business in the Philippines, filed on October 8, 1976, as assignee, before the

Philippine Patent Office (now Bureau of Patents, Trademarks and Technology

Transfer) an application for patent over an invention entitled "Methods and

Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5

Propylthio-2-Benzimidazole Carbamate." The application bore Serial No. 18989.

On September 24, 1981, Letters Patent No. 145611 for the aforesaid invention was

issued to petitioner for a term of seventeen (17) years.

The letters patent provides in its claims2 that the patented invention consisted of a

new compound named methyl 5 propylthio-2-benzimidazole carbamate and the

methods or compositions utilizing the compound as an active ingredient in fighting

infections caused by gastrointestinal parasites and lungworms in animals such as

swine, sheep, cattle, goats, horses, and even pet animals.

Tryco Pharma Corporation (private respondent) is a domestic corporation that

manufactures, distributes and sells veterinary products including Impregon, a drug

that has Albendazole for its active ingredient and is claimed to be effective against

gastro-intestinal roundworms, lungworms, tapeworms and fluke infestation in

carabaos, cattle and goats.

Petitioner sued private respondent for infringement of patent and unfair competition

before the Caloocan City Regional Trial Court (RTC).3 It claimed that its patent

covers or includes the substance Albendazole such that private respondent, by

manufacturing, selling, using, and causing to be sold and used the drug Impregon

without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No.

145614 as well as committed unfair competition under Article 189, paragraph 1 of the

Revised Penal Code and Section 29 of Republic Act No. 166 (The Trademark Law)

for advertising and selling as its own the drug Impregon although the same contained

petitioner’s patented Albendazole.5

On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary

restraining order against private respondent enjoining it from committing acts of

patent infringement and unfair competition.6 A writ of preliminary injunction was

subsequently issued.7

Private respondent in its Answer8 averred that Letters Patent No. 14561 does not

cover the substance Albendazole for nowhere in it does that word appear; that even if

the patent were to include Albendazole, such substance is unpatentable; that the

Bureau of Food and Drugs allowed it to manufacture and market Impregon with

Albendazole as its known ingredient; that there is no proof that it passed off in any

way its veterinary products as those of petitioner; that Letters Patent No. 14561 is

null and void, the application for the issuance thereof having been filed beyond the

one year period from the filing of an application abroad for the same invention

covered thereby, in violation of Section 15 of Republic Act No. 165 (The Patent

Law); and that petitioner is not the registered patent holder.

Private respondent lodged a Counterclaim against petitioner for such amount of

actual damages as may be proven;P1,000,000.00 in moral damages; P300,000.00 in

exemplary damages; and P150,000.00 in attorney’s fees.

Finding for private respondent, the trial court rendered a Decision dated July 23,

1991,9 the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, plaintiff’s complaint should be, as it is

hereby, DISMISSED. The Writ of injunction issued in connection with the case is

hereby ordered DISSOLVED.

The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby

declared null and void for being in violation of Sections 7, 9 and 15 of the Patents

Law.

Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby

directed to cancel Letters Patent No. 14561 issued to the plaintiff and to publish such

cancellation in the Official Gazette.

Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual

damages and P100,000.00 attorney’s fees as prayed for in its counterclaim but said

amount awarded to defendant is subject to the lien on correct payment of filing fees.

SO ORDERED. (Underscoring supplied)

On appeal, the Court of Appeals, by Decision of April 21, 1995,10 upheld the trial

court’s finding that private respondent was not liable for any infringement of the

patent of petitioner in light of the latter’s failure to show that Albendazole is the

same as the compound subject of Letters Patent No. 14561. Noting petitioner’s

admission of the issuance by the U.S. of a patent for Albendazole in the name of

Smith Kline and French Laboratories which was petitioner’s former corporate name,

the appellate court considered the U.S. patent as implying that Albendazole is

different from methyl 5 propylthio-2-benzimidazole carbamate. It likewise found that

private respondent was not guilty of deceiving the public by misrepresenting that

Impregon is its product.

The appellate court, however, declared that Letters Patent No. 14561 was not void as

it sustained petitioner’s explanation that Patent Application Serial No. 18989 which

was filed on October 8, 1976 was a divisional application of Patent Application

Serial No. 17280 filed on June 17, 1975 with the Philippine Patent Office, well

within one year from petitioner’s filing on June 19, 1974 of its Foreign Application

Priority Data No. 480,646 in the U.S. covering the same compound subject of Patent

Application Serial No. 17280.

Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent

Application Serial No. 18989 was deemed filed on June 17, 1995 or still within one

year from the filing of a patent application abroad in compliance with the one-year

rule under Section 15 of the Patent Law. And it rejected the submission that the

compound in Letters Patent No. 14561 was not patentable, citing the

jurisprudentially established presumption that the Patent Office’s determination of

patentability is correct. Finally, it ruled that petitioner established itself to be the one

and the same assignee of the patent notwithstanding changes in its corporate name.

Thus the appellate court disposed:

WHEREFORE, the judgment appealed from is AFFIRMED with the

MODIFICATION that the orders for the nullification of Letters Patent No. 14561

and for its cancellation are deleted therefrom.

SO ORDERED.

Petitioner’s motion for reconsideration of the Court of Appeals’ decision having

been denied11 the present petition for review on certiorari12 was filed, assigning as

errors the following:

I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING

THAT ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCO’S

"IMPREGON" DRUG, IS INCLUDED IN PETITIONER’S LETTERS

PATENT NO. 14561, AND THAT CONSEQUENTLY TRYCO IS

ANSWERABLE FOR PATENT INFRINGEMENT.

II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO

PRIVATE RESPONDENT TRYCO PHARMA CORPORATION

P330,000.00 ACTUAL DAMAGES AND P100,000.00 ATTORNEY’S

FEES.

Petitioner argues that under the doctrine of equivalents for determining patent

infringement, Albendazole, the active ingredient it alleges was appropriated by

private respondent for its drug Impregon, is substantially the same as methyl 5

propylthio-2-benzimidazole carbamate covered by its patent since both of them are

meant to combat worm or parasite infestation in animals. It cites the "unrebutted"

testimony of its witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical

formula in Letters Patent No. 14561 refers to the compound Albendazole. Petitioner

adds that the two substances substantially do the same function in substantially the

same way to achieve the same results, thereby making them truly identical. Petitioner

thus submits that the appellate court should have gone beyond the literal wordings

used in Letters Patent No. 14561, beyond merely applying the literal infringement

test, for in spite of the fact that the word Albendazole does not appear in petitioner’s

letters patent, it has ably shown by evidence its sameness with methyl 5 propylthio-

2-benzimidazole carbamate.

Petitioner likewise points out that its application with the Philippine Patent Office on

account of which it was granted Letters Patent No. 14561 was merely a divisional

application of a prior application in the U. S. which granted a patent for Albendazole.

Hence, petitioner concludes that both methyl 5 propylthio-2-benzimidazole

carbamate and the U.S.-patented Albendazole are dependent on each other and

mutually contribute to produce a single result, thereby making Albendazole as much

a part of Letters Patent No. 14561 as the other substance is.

Petitioner concedes in its Sur-Rejoinder13 that although methyl 5 propylthio-2-

benzimidazole carbamate is not identical with Albendazole, the former is an

improvement or improved version of the latter thereby making both substances still

substantially the same.

With respect to the award of actual damages in favor of private respondent in the

amount of P330,000.00 representing lost profits, petitioner assails the same as highly

speculative and conjectural, hence, without basis. It assails too the award

of P100,000.00 in attorney’s fees as not falling under any of the instances

enumerated by law where recovery of attorney’s fees is allowed.

In its Comment,14 private respondent contends that application of the doctrine of

equivalents would not alter the outcome of the case, Albendazole and methyl 5

propylthio-2-benzimidazole carbamate being two different compounds with different

chemical and physical properties. It stresses that the existence of a separate U.S.

patent for Albendazole indicates that the same and the compound in Letters Patent

No. 14561 are different from each other; and that since it was on account of a

divisional application that the patent for methyl 5 propylthio-2-benzimidazole

carbamate was issued, then, by definition of a divisional application, such a

compound is just one of several independent inventions alongside Albendazole under

petitioner’s original patent application.

As has repeatedly been held, only questions of law may be raised in a petition for

review on certiorari before this Court. Unless the factual findings of the appellate

court are mistaken, absurd, speculative, conjectural, conflicting, tainted with grave

abuse of discretion, or contrary to the findings culled by the court of origin,15 this

Court does not review them.

From an examination of the evidence on record, this Court finds nothing infirm in

the appellate court’s conclusions with respect to the principal issue of whether

private respondent committed patent infringement to the prejudice of petitioner.

The burden of proof to substantiate a charge for patent infringement rests on the

plaintiff.16 In the case at bar, petitioner’s evidence consists primarily of its Letters

Patent No. 14561, and the testimony of Dr. Orinion, its general manager in the

Philippines for its Animal Health Products Division, by which it sought to show that

its patent for the compound methyl 5 propylthio-2-benzimidazole carbamate also

covers the substance Albendazole.

From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other

portions thereof, no mention is made of the compound Albendazole. All that the

claims disclose are: the covered invention, that is, the compound methyl 5

propylthio-2-benzimidazole carbamate; the compound’s being anthelmintic but

nontoxic for animals or its ability to destroy parasites without harming the host

animals; and the patented methods, compositions or preparations involving the

compound to maximize its efficacy against certain kinds of parasites infecting

specified animals.

When the language of its claims is clear and distinct, the patentee is bound thereby

and may not claim anything beyond them.17 And so are the courts bound which may

not add to or detract from the claims matters not expressed or necessarily implied,

nor may they enlarge the patent beyond the scope of that which the inventor claimed

and the patent office allowed, even if the patentee may have been entitled to

something more than the words it had chosen would include.18

It bears stressing that the mere absence of the word Albendazole in Letters Patent

No. 14561 is not determinative of Albendazole’s 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 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 petitioner concedes that the mere literal wordings of its patent cannot establish

private respondent’s infringement, it urges this Court to apply the doctrine of

equivalents.

The doctrine of equivalents provides that an infringement also takes place when a

device appropriates a prior invention by incorporating its innovative concept and,

although with some modification and change, performs substantially the same

function in substantially the same way to achieve substantially the same result.19 Yet

again, a scrutiny of petitioner’s evidence fails to convince this Court of the

substantial sameness of petitioner’s patented compound and Albendazole. While

both compounds have the effect of neutralizing parasites in animals, i dentity of result

does not amount to infringement of patent unless Albendazole operates in

substantially the same way or by substantially the same means as the patented

compound, even though it performs the same function and achieves the same

result.20 In other words, the   principle or mode of operation   must be the same or

substantially the same.21

The doctrine of equivalents thus requires satisfaction of the function-means-and-

result test, the patentee having the burden to show that all three components of such

equivalency test are met.22

As stated early on, petitioner’s evidence fails to explain how Albendazole is in every

essential detail identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart

from the fact that Albendazole is an anthelmintic agent like methyl 5 propylthio-2-

benzimidazole carbamate, nothing more is asserted and accordingly substantiated

regarding the method or means by which Albendazole weeds out parasites in

animals, thus giving no information on whether that method is substantially the same

as the manner by which petitioner’s compound works. The testimony of Dr. Orinion

lends no support to petitioner’s cause, he not having been presented or qualified as

an expert witness who has the knowledge or expertise on the matter of chemical

compounds.

As for the concept of divisional applications proffered by petitioner, it comes into

play when two or more inventions are claimed in a single application but are of such

a nature that a single patent may not be issued for them.23 The applicant thus is

required "to divide," that is, to limit the claims to whichever invention he may elect,

whereas those inventions not elected may be made the subject of separate

applications which are called "divisional applications."24What this only means is that

petitioner’s methyl 5 propylthio-2-benzimidazole carbamate is an invention distinct

from the other inventions claimed in the original application divided out,

Albendazole being one of those other inventions. Otherwise, methyl 5 propylthio-2-

benzimidazole carbamate would not have been the subject of a divisional application

if a single patent could have been issued for it as well as Albendazole.1âwphi1

The foregoing discussions notwithstanding, this Court does not sustain the award of

actual damages and attorney’s fees in favor of private respondent. The claimed actual

damages of P330,000.00 representing lost profits or revenues incurred by private

respondent as a result of the issuance of the injunction against it, computed at the rate

of 30% of its alleged P100,000.00 monthly gross sales for eleven months, were

supported by the testimonies of private respondent’s President25 and Executive Vice-

President that the average monthly sale of Impregon wasP100,000.00 and that sales

plummeted to zero after the issuance of the injunction.26 While indemnification for

actual or compensatory damages covers not only the loss suffered (damnum

emergens) but also profits which the obligee failed to obtain (lucrum cessans or

ganacias frustradas), it is necessary to prove the actual amount of damages with a

reasonable degree of certainty based on competent proof and on the best evidence

obtainable by the injured party.27 The testimonies of private respondent’s officers are

not the competent proof or best evidence obtainable to establish its right to actual or

compensatory damages for such damages also require presentation of documentary

evidence to substantiate a claim therefor.28

In the same vein, this Court does not sustain the grant by the appellate court of

attorney’s fees to private respondent anchored on Article 2208 (2) of the Civil Code,

private respondent having been allegedly forced to litigate as a result of petitioner’s

suit. Even if a claimant is compelled to litigate with third persons or to incur

expenses to protect its rights, still attorney’s fees may not be awarded where no

sufficient showing of bad faith could be reflected in a party’s persistence in a case

other than an erroneous conviction of the righteousness of his cause.29 There exists

no evidence on record indicating that petitioner was moved by malice in suing

private respondent.

This Court, however, grants private respondent temperate or moderate damages in

the amount of P20,000.00 which it finds reasonable under the circumstances, it

having suffered some pecuniary loss the amount of which cannot, from the nature of

the case, be established with certainty.30

WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED

with MODIFICATION. The award of actual or compensatory damages and

attorney’s fees to private respondent, Tryco Pharma Corporation, is DELETED;

instead, it is hereby awarded the amount of P20,000.00 as temperate or moderate

damages. SO ORDERED.

ANGELITA MANZANO, petitioner, vs. COURT OF APPEALS, and

MELECIA MADOLARIA, as Assignor to NEW UNITED FOUNDRY

MANUFACTURING CORPORATION, respondents.

The primary purpose of the patent system is not the reward of the individual but the

advancement of the arts and sciences. The function of a patent is to add to the sum of

useful knowledge and one of the purposes of the patent system is to encourage

dissemination of information concerning discoveries and inventions. This is a matter

which is properly within the competence of the Patent Office the official action of

which has the presumption of correctness and may not be interfered with in the

absence of new evidence carrying thorough conviction that the Office has erred.

Since the Patent Office is an expert body preeminently qualified to determine

questions of patentability, its findings must be accepted if they are consistent with

the evidence, with doubts as to patentability resolved in favor of the Patent Office. 1

Petitioner Angelita Manzano filed with the Philippine Patent Office on 19 February

1982 an action for the cancellation of Letters Patent No. UM-4609 for a gas burner

registered in the name of respondent Melecia Madolaria who subsequently assigned

the letters patent to New United Foundry and Manufacturing Corporation (UNITED

FOUNDRY, for brevity). Petitioner alleged that (a) the utility model covered by the

letters patent, in this case, an LPG gas burner, was not inventive, new or useful; (b)

the specification of the letters patent did not comply with the requirements of Sec.

14, RA No. 165, as amended; (c) respondent Melecia Madolaria was not the original,

true and actual inventor nor did she derive her rights from the original, true and

actual inventor of the utility model covered by the letters patent; and, (d) the letters

patent was secured by means of fraud or misrepresentation. In support of her petition

for cancellation petitioner further alleged that (a) the utility model covered by the

letters patent of respondent had been known or used by others in the Philippines for

more than one (1) year before she filed her application for letters patent on 9

December 1979; (b) the products which were produced in accordance with the utility

model covered by the letters patent had been in public use or on sale in the

Philippines for more than one (1) year before the application for patent therefor was

filed.

Petitioner presented the following documents which she correspondingly marked as

exhibits: (a) affidavit of petitioner alleging the existence of prior art, marked Exh.

"A;" (b) a brochure distributed by Manila Gas Corporation disclosing a pictorial

representation of Ransome Burner made by Ransome Torch and Burner Company,

USA, marked Exh. "D;" and, (c) a brochure distributed by Esso Gasul or Esso

Standard Eastern, Inc., of the Philippines showing a picture of another similar burner

with top elevation view and another perspective view of the same burner, marked

Exh. "E."

Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a

helper in the UNITED FOUNDRY where respondent Melecia Madolaria used to be

affiliated with from 1965 to 1970; that Ong helped in the casting of an LPG burner

which was the same utility model of a burner for which Letters Patent No. UM-4609

was issued, and that after her husband's separation from the shop she organized

Besco Metal Manufacturing (BESCO METAL, for brevity) for the casting of LPG

burners one of which had the configuration, form and component parts similar to

those being manufactured by UNITED FOUNDRY. Petitioner presented in evidence

an alleged model of an LPG burner marked Exh. "K" and covered by the Letters

Patent of respondent, and testified that it was given to her in January 1982 by one of

her customers who allegedly acquired it from UNITED FOUNDRY. Petitioner also

presented in evidence her own model of an LPG burner called "Ransome" burner

marked Exh. "L," which was allegedly manufactured in 1974 or 1975 and sold by her

in the course of her business operation in the name of BESCO METAL. Petitioner

claimed that this "Ransome" burner (Exh. "L") had the same configuration and

mechanism as that of the model which was patented in favor of private respondent

Melecia Madolaria. Also presented by petitioner was a burner cup of an imported

"Ransome" burner marked Exh "M" which was allegedly existing even before the

patent application of private respondent.

Petitioner presented two (2) other witnesses, namely, her husband Ong Bun Tua and

Fidel Francisco. Ong testified that he worked as a helper in the UNITED FOUNDRY

from 1965 to 1970 where he helped in the casting of LPG burners with the same

form, configuration and mechanism as that of the model covered by the Letters

Patent issued to private respondent. Francisco testified that he had been employed

with the Manila Gas Corporation from 1930 to 1941 and from 1952 up to 1969

where he retired as supervisor and that Manila Gas Corporation imported "Ransome"

burners way back in 1965 which were advertised through brochures to promote their

sale.

Private respondent, on the other hand, presented only one witness, Rolando

Madolaria, who testified, among others, that he was the General Supervisor of the

UNITED FOUNDRY in the foundry, machine and buffing section; that in his early

years with the company, UNITED FOUNDRY was engaged in the manufacture of

different kinds of gas stoves as well as burners based on sketches and specifications

furnished by customers; that the company manufactured early models of single-piece

types of burners where the mouth and throat were not detachable; that in the latter

part of 1978 respondent Melecia Madolaria confided in him that complaints were

being brought to her attention concerning the early models being manufactured; that

he was then instructed by private respondent to cast several experimental models

based on revised sketches and specifications; that private respondent again made

some innovations; that after a few months, private respondent discovered the solution

to all the defects of the earlier models and, based on her latest sketches and

specifications, he was able to cast several models incorporating the additions to the

innovations introduced in the models. Various tests were conducted on the latest

model in the presence and under the supervision of Melecia Madolaria and they

obtained perfect results. Rolando Madolaria testified that private respondent decided

to file her application for utility model patent in December 1979.

On 7 July 1986 the Director of Patents Cesar C. Sandiego issued Decision No. 86-56

denying the petition for cancellation and holding that the evidence of petitioner was

not able to establish convincingly that the patented utility model of private

respondent was anticipated. Not one of the various pictorial representations of

business clearly and convincingly showed that the devices presented by petitioner

was identical or substantially identical with the utility model of the respondent. The

decision also stated that even assuming that the brochures depicted clearly each and

every element of the patented gas burner device so that the prior art and patented

device became identical although in truth they were not, they could not serve as

anticipatory bars for the reason that they were undated. The dates when they were

distributed to the public were not indicated and, therefore, were useless prior art

references. The records and evidence also do not support the petitioner's contention

that Letters Patent No. UM-4609 was obtained by means of fraud and/or

misrepresentation. No evidence whatsoever was presented by petitioner to show that

the then applicant Melecia Madolaria withheld with intent to deceive material facts

which, if disclosed, would have resulted in the refusal by the Philippine Patent Office

to issue the Letters Patent under inquiry.

Petitioner elevated the decision of the Director of Patents to the Court of Appeals

which on 15 October 1993 affirmed the decision of the Director of Patents. Hence,

this petition for review on certiorari alleging that the Court of Appeals erred (a) in

relying on imaginary differences which in actuality did not exist between the model

of private respondent covered by Letters Patent No. UM-4609 and the previously

known model of Esso Standard Eastern, Inc., and Manila Gas Corporation, making

such imaginary differences grounded entirely on speculation, surmises and

conjectures; (b) in rendering judgment based on misapprehension of facts; (c) in

relying mainly on the testimony of private respondent's sole witness Rolando

Madolaria; and, (d) in not cancelling Letters Patent No. UM-4609 in the name of

private respondent.

Petitioner submits that the differences cited by the Court of Appeals between the

utility model of private respondent and the models of Manila Gas Corporation and

Esso Standard Eastern, Inc., are more imaginary than real. She alleges that based on

Exhs. "E," "E-1," "F" and "F-1" or the brochures of Manila Gas Corporation and

Esso Standard Eastern, Inc., presented by petitioner, the cup-shaped burner mouth

and threaded hole on the side are shown to be similar to the utility model of private

respondent. The exhibits also show a detachable burner mouth having a plurality of

upwardly existing undulations adopted to act as gas passage when the cover is

attached to the top of said cup-shaped mouth all of which are the same as those in the

patented model. Petitioner also denies as substantial difference the short cylindrical

tube of the burner mouth appearing in the brochures of the burners being sold by

Manila Gas Corporation and the long cylindered tube of private respondent's model

of the gas burner.

Petitioner argues that the actual demonstration made during the hearing disclosed the

similarities in form, operation and mechanism and parts between the utility model of

private respondent and those depicted in the brochures. The findings of the Patent

Office and the Court of Appeals that the brochures of Manila Gas Corporation and

Esso Standard Eastern, Inc., are undated cannot overcome the fact of their circulation

before private respondent filed her application for utility model patent. Petitioner

thus asks this Court to take judicial notice of the fact that Esso Standard Eastern,

Inc., disappeared before 1979 and reappeared only during the Martial Law years as

Petrophil Corporation. Petitioner also emphasizes that the brochures indicated the

telephone number of Manila Gas Corporation as 5-79-81 which is a five (5)

numbered telephone number existing before 1975 because telephones in Metro

Manila started to have six (6) numbers only after that year.

Petitioner further contends that the utility model of private respondent is absolutely

similar to the LPG burner being sold by petitioner in 1975 and 1976, and also to the

"Ransome" burner depicted in the old brochures of Manila Gas Corporation and Esso

Standard Eastern, Inc., fabricated by Ransome Torch and Burner Company of

Oakland, California, USA, especially when considered through actual physical

examination, assembly and disassembly of the models of petitioner and private

respondent. Petitioner faults the Court of Appeals for disregarding the testimonies of

Ong Bun Tua and Fidel Francisco for their failure to produce documents on the

alleged importation by Manila Gas Corporation of "Ransome" burners in 1965 which

had the same configuration, form and mechanism as that of the private respondent's

patented model.

Finally, it is argued that the testimony of private respondent's lone witness Rolando

Madolaria should not have been given weight by the Patent Office and the Court of

Appeals because it contained mere after-thoughts and pretensions.

We cannot sustain petitioner. Section 7 of RA No. 165, as amended, which is the law

on patents, expressly provides —

Sec. 7. Inventians patentable. Any invention of a new and useful machine,

manufactured product or substance, process or an improvement of any of

the foregoing, shall be patentable.

Further, Sec. 55 of the same law provides —

Sec. 55. Design patents and patents for utility models. — (a) Any new,

original and ornamental design for an article of manufacture and (b) any

new model of implements or tools or of any industrial product or of part of

the same, which does not possess the quality of invention, but which is of

practical utility by reason of its form, configuration, construction or

composition, may be protected by the author thereof, the former by a patent

for a design and the latter by a patent for a utility model, in the same manner

and subject to the same provisions and requirements as relate to patents for

inventions insofar as they are applicable except as otherwise herein

provided.

The element of novelty is an essential requisite of the patentability of an invention or

discovery. If a device or process has been known or used by others prior to its

invention or discovery by the applicant, an application for a patent therefor should be

denied; and if the application has been granted, the court, in a judicial proceeding in

which the validity of the patent is drawn in question, will hold it void and

ineffective. 2 It has been repeatedly held that an invention must possess the essential

elements of novelty, originality and precedence, and for the patentee to be entitled to

the protection the invention must be new to the world. 3

In issuing Letters Patent No. UM-4609 to Melecia Madolaria for an "LPG Burner"

on 22 July 1981, the Philippine Patent Office found her invention novel and

patentable. The issuance of such patent creates a presumption which yields only to

clear and cogent evidence that the patentee was the original and first inventor. The

burden of proving want of novelty is on him who avers it and the burden is a heavy

one which is met only by clear and satisfactory proof which overcomes every

reasonable doubt. 4 Hence, a utility model shall not be considered "new" if before the

application for a patent it has been publicly known or publicly used in this country or

has been described in a printed publication or publications circulated within the

country, or if it is substantially similar to any other utility model so known, used or

described within the country. 5

As found by the Director of Patents, the standard of evidence sufficient to overcome

the presumption of legality of the issuance of UM-4609 to respondent Madolaria was

not legally met by petitioner in her action for the cancellation of the patent. Thus the

Director of Patents explained his reasons for the denial of the petition to cancel

private respondent's patent —

Scrutiny of Exhs. "D" and "E" readily reveals that the utility model (LPG

Burner) is not anticipated. Not one of the various pictorial representations of

burners clearly and convincingly show that the device presented therein is

identical or substantially identical in construction with the aforesaid utility

model. It is relevant and material to state that in determining whether

novelty or newness is negatived by any prior art, only one item of the prior

art may be used at a time. For anticipation to occur, the prior art must show

that each element is found either expressly or described or under principles

of inherency in a single prior art reference or that the claimed invention was

probably known in a single prior art device or practice. (Kalman v.

Kimberly Clark, 218 USPQ 781, 789)

Even assuming gratia arguendi that the aforesaid brochures do depict

clearly on all fours each and every element of the patented gas burner

device so that the prior art and the said patented device become identical,

although in truth they are not, they cannot serve as anticipatory bars for the

reason that they are undated. The dates when they were distributed to the

public were not indicated and, therefore, they are useless prior art

references.

xxx xxx xxx

Furthermore, and more significantly, the model marked Exh. "K" does not

show whether or not it was manufactured and/or cast before the application

for the issuance of patent for the LPG burner was filed by Melecia

Madolaria.

With respect to Exh. "L," petitioner claimed it to be her own model of LPG

burner allegedly manufactured sometime in 1974 or 1975 and sold by her in

the course of her business operation in the name of Besco Metal

Manufacturing, which burner was denominated as "Ransome" burner

xxx xxx xxx

But a careful examination of Exh. "L" would show that it does not bear the

word "Ransome" which is the burner referred to as the product being sold

by the Petitioner. This is not the way to prove that Exh. "L" anticipates

Letters Patent No. UM-4609 through Exhs. "C" and "D." Another factor

working against the Petitioner's claims is that an examination of Exh. "L"

would disclose that there is no indication of the time or date it was

manufactured. This Office, thus has no way of determining whether Exh.

"L" was really manufactured before the filing of the aforesaid application

which matured into Letters Patent No. UM-4609, subject matter of the

cancellation proceeding.

At this juncture, it is worthwhile to point out that petitioner also presented

Exh. "M" which is the alleged burner cup of an imported "Ransome" burner.

Again, this Office finds the same as unreliable evidence to show

anticipation. It observed that there is no date indicated therein as to when it

was manufactured and/or imported before the filing of the application for

issuance of patent of the subject utility model. What is more, some

component parts of Exh. "M" are missing, as only the cup was presented so

that the same could not be compared to the utility model (subject matter of

this case) which consists of several other detachable parts in combination to

form the complete LPG burner.

xxx xxx xxx

It must likewise be pointed out that Ong Bun Tua testified on the brochures

allegedly of Manila Gas and of Esso Gasul marked Exhs. "E" and "F" and

on the alleged fact that Manila Gas Corporation was importing from the

United States "Ransome" burners. But the same could not be given credence

since he himself admitted during cross-examination that he has never been

connected with Manila Gas Corporation. He could not even present any

importation papers relating to the alleged imported ransome burners.

Neither did his wife. 6

The above findings and conclusions of the Director of Patent were reiterated and

affirmed by the Court of Appeals. 7

The validity of the patent issued by the Philippine Patent Office in favor of private

respondent and the question over the inventiveness, novelty and usefulness of the

improved model of the LPG burner are matters which are better determined by the

Patent Office. The technical staff of the Philippine Patent Office composed of

experts in their field has by the issuance of the patent in question accepted private

respondent's model of gas burner as a discovery. There is a presumption that the

Office has correctly determined the patentability of the model 8 and such action must

not be interfered with in the absence of competent evidence to the contrary.

The rule is settled that the findings of fact of the Director of Patents, especially when

affirmed by the Court of Appeals, are conclusive on this Court when supported by

substantial evidence. Petitioner has failed to show compelling grounds for a reversal

of the findings and conclusions of the Patent Office and the Court of Appeals.

The alleged failure of the Director of Patents and the Court of Appeals to accord

evidentiary weight to the testimonies of the witnesses of petitioner showing

anticipation is not a justification to grant the petition. Pursuant to the requirement of

clear and convincing evidence to overthrow the presumption of validity of a patent, it

has been held that oral testimony to show anticipation is open to suspicion and if

uncorroborated by cogent evidence, as what occurred in this case, it may be held

insufficient. 9

Finally, petitioner would want this Court to review all over again the evidence she

presented before the Patent Office. She argues that contrary to the decision of the

Patent Office and the Court of Appeals, the evidence she presented clearly proves

that the patented model of private respondent is no longer new and, therefore, fraud

attended the acquisition of patent by private respondent.

It has been held that the question on priority of invention is one of fact. Novelty and

utility are likewise questions of fact. The validity of patent is decided on the basis of

factual inquiries. Whether evidence presented comes within the scope of prior art is a

factual issue to be resolved by the Patent Office. 10 There is question of fact when the

doubt or difference arises as to the truth or falsehood of alleged facts or when the

query necessarily invites calibration of the whole evidence considering mainly the

credibility of witnesses, existence and relevance of specific surrounding

circumstances, their relation to each other and to the whole and the probabilities of

the situation. 11

Time and again we have held that it is not the function of the Supreme Court to

analyze or weigh all over again the evidence and credibility of witnesses presented

before the lower tribunal or office. The Supreme Court is not a trier of facts. Its

jurisdiction is limited to reviewing and revising errors of law imputed to the lower

court, its findings of fact being conclusive and not reviewable by this Court.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals

affirming that of the Philippine Patent Office is AFFIRMED. Costs against

petitioner. SO ORDERED.

ROSARIO C. MAGUAN (formerly ROSARIO C. TAN), petitioner, vs. THE

HONORABLE COURT OF APPEALS and SUSANA LUCHAN, respondents.

Petitioner is doing business under the firm name and style of SWAN

MANUFACTURING" while private respondent is likewise doing business under the

firm name and style of "SUSANA LUCHAN POWDER PUFF

MANUFACTURING."

It is undisputed that petitioner is a patent holder of powder puff namely:

1. UM-423 (extended and/or renewed under Extension No. UM-109 for a period of 5

years from October 6, 1971)

2. UM-450 (extended and/or renewed under Extension No. UM110 for a period of 5

years from January 26, 1972)

3. UM 1184, for a period of 5years fromApril 5, 1974.(Petition, Rollo, pp. 6-7).

In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86), petitioner informed private

respondent that the powder puffs the latter is manufacturing and selling to various

enterprises particularly those in the cosmetics industry, resemble Identical or

substantially Identical powder puffs of which the former is a patent holder under

Registration Certification Nos. Extension UM-109, Extension UM-110 and Utility

Model No. 1184; petitioner explained such production and sale constitute

infringement of said patents and therefore its immediate discontinuance is demanded,

otherwise it will be compelled to take judicial action. (Rollo, pp. 7-8).

Private respondent replied stating that her products are different and countered that

petitioner's patents are void because the utility models applied for were not new and

patentable and the person to whom the patents were issued was not the true and

actual author nor were her rights derived from such author. (Taken from allegations

in the Answer, par. 4, Rollo, p. 93). And on July 25, 1974, private respondent

assailed the validity of the patents involved and filed with the Philippine Patent

Office petitions for cancellation of (1) Utility Model Letter Patent Extension No.

UM-109 (Inter Partes Case No. 838, Susana Luchan v. Rosario C. Tan), (2) Utility

Model Letters Patent No. UM-1184 (Inter Partes Case No. 839, Susana Luchan v.

Rosario C. Tan), (3) Utility Model Letters Patent Extension No. UM-110 (Inter

Partes Case No. 840, Susana Luchan v. Rosario C. Tan. (Taken from allegations in

the Answer, par. 10, Rollo, pp. 94-95).

In view thereof, petitioner, on August 24, 1974, filed a complaint for damages with

injunction and preliminary injunction against private respondent with the then Court

of First Instance of Rizal, Pasig Branch, docketed as Civil Case No. 19908, for

infringing the aforesaid letters patent, and prayed, among others, that a writ of

preliminary injunction be immediately issued (Complaint, Rollo, p. 90).

In her answer, private respondent alleged that the products she is manufacturing and

offering for sale are not Identical, or even only substantially Identical to the products

covered by petitioner's patents and, by way of affirmative defenses, further alleged

that petitioner's patents in question are void on the following grounds:

(1) at the time of filing of application for the patents involved, the utility models

applied for were not new and patentable under Sec. 55 of R.A. 165, as amended by

R.A. 864; and

(2) the person to whom the patents were issued was not the true and actual author of

the utility models applied for, and neither did she derive her rights from any true and

actual author of these utility models.

for the following reasons:

(a) since years prior to the filing of applications for the patents involved, powder

puffs of the kind applied for were then already existing and publicly being sold in the

market; both in the Philippines and abroad; and

(b) applicant's claims in her applications, of "construction" or process of

manufacturing the utility models applied for, with respect to UM-423 and UM-450,

were but a complicated and impractical version of an old, simple one which has been

well known to the cosmetics industry since years previous to her filing of

applications, and which belonged to no one except to the general public; and with

respect to UM1184; her claim in her application of a unitary powder puff, was but an

limitation of a product well known to the cosmetics industry since years previous to

her firing of application, and which belonged to no one except to the general public;

(Answer, Rollo, pp. 93-94).

On September 18, 1974, the trial court issued an Order (Annex "K", Rollo, p. 125)

granting the preliminary injunction prayed for by petitioner. Consequently, the

corresponding writ was subsequently issued (Annex "K-1", Rollo, p. 131) enjoining

the herein private respondent (then defendant) and all other persons employed by

her, her agents, servants and employees from directly or indirectly manufacturing,

making or causing to be made, selling or causing to be sold, or using or causing to be

used in accordance with, or embodying the utility models of the Philippine Patent

Office Utility Model Letters Patent Nos. 423 (Extension No. UM-109), No. 450

(Extension No. UM-110), and Utility Model No. 1184 or from infringement upon or

violating said letters patent in any way whatsoever (Annex " K-1 ", Rollo, p. 131).

Private respondent questioned the propriety of the trial court's issuance of the Writ of

Preliminary Injunction arguing that since there is still a pending cancellation

proceedings before the Philippine Patent Office concerning petitioner's patents, such

cannot be the basis for preliminary injunction (Motion for Reconsideration, Rollo, p.

132).

In an Order dated September 11, 1975, the trial court denied private respondent's

motion for reconsideration (Annex "N", Rollo, p. 142).

In challenging these Orders private respondent filed a petition for certiorari with the

respondent court on September 29, 1975 (Annex "D", Rollo, pp. 148-171) reiterating

among other things the invalidity of petitioner's patents and prayed that the trial court

be restrained from enforcing or continuing to enforce the following:

(1) Order dated September 18, 1974, granting the preliminary injunction;

(2) Writ of preliminary injunction dated September 18, 1974; and

(3) Order dated September 11, 1974 denying petitioner's motion petition for

reconsideration.

On October 15, 1975, the Writ of Preliminary Injunction was issued by the

respondent Court of Appeals as follows:

NOW, THEREFORE, you, respondents, and/or any person/persons

acting on your stead, are hereby ENJOINED to RESTRAIN from

enforcing or continuing to enforce, the proceedings complained of

in the petition to wit: 1) Order dated September 18, 1974, granting

the preliminary injunction; 2) Writ of Preliminary Injunction dated

September 18, 1974; and Order dated September 11, 1975, denying

petitioner's motion for reconsideration, all issued in connection

with Civil Case No. 19908, UNTIL FURTHER ORDERS FROM

THIS COURT. (Annex "P", Rollo, p. 1.73)

On February 16, 1976, respondent court promulgated a decision the dispositive

portion of which reads:

WHEREFORE, finding no merit in the herein petition, the same is

hereby dismissed and the preliminary injunction previously issued

by this Court is hereby set aside, with costs.

SO ORDERED. (CA Decision, Rollo, p. 189).

ln said decision respondent court stated that in disposing of the petition it tackled

only the issue of whether the court a quo acted with grave abuse of discretion in

issuing the challenged orders. It made clear the question of whether the patents have

been infringed or not was not determined considering the court a quohas yet to

decide the case on the merits (Ibid., p. 186).

Feeling aggrieved, private respondent moved to reconsider the afore-mentioned

Decision based on the following grounds:

I THAT THIS HONORABLE COURT ERRED IN NOT APPRECIATING THE

EXISTENCE OF A FAIR QUESTION OF INVALIDITY OF PRIVATE

RESPONDENT'S PATENTS.

II THAT THIS HONORABLE COURT ERRED IN NOT REJECTING THE

THEORY OF RESPONDENT JUDGE THAT HE HAS NO JURISDICTION TO

INVALIDATE THE PATENTS UPON GROUND OF LACK OF NOVELTY OF

THE PRODUCTS PATENTED. (Motion for Reconsideration, Rollo, p. 190).

Reviewing on reconsideration, respondent court gave weight to private respondent's

allegation that the latter's products are not identical or even only substantially

identical to the products covered by petitioner's patents. Said court noticed that

contrary to the lower courts position that the court a quo had no jurisdiction to

determine the question of invalidity of the patents, Section 45 and 46 of the Patent

Law allow the court to make a finding on the validity or invalidity of patents and in

the event there exists a fair question of its invalidity, the situation calls for a denial of

the writ of preliminary injunction pending the evaluation of the evidence presented

(Rollo, pp. 218-226). Thus, finding the lower court's position to have been opposed

to Patent Law, respondent court considered it a grave abuse of discretion when the

court a quo issued the writ being questioned without looking into the defenses

alleged by herein private respondent. Further, it considered the remedy of appeal,

under the circumstances, to be inadequate.

Thus, on July 6, 1976, respondent court made a complete turnabout from its original

decision and promulgated a Resolution, the dispositive portion of which reads:

WHEREFORE, our decision is hereby set aside. The writ of

certiorari is ordered issued. Accordingly, the challenged orders,

Exhibit H and H-1 and the order denying the motion for

reconsideration (Annex "K", Petition), are hereby set aside. The

writ of preliminary injunction previously ordered by this Court and

ordered lifted by the Decision now being set aside is hereby

reinstated and made permanent. Without pronouncement as to

costs.

SO ORDERED. (CA Resolution, Rollo, p. 226).

In a Resolution dated November 4, 1976, respondent court, not persuaded by the

grounds embodied in the motion for reconsideration filed by herein petitioner

(Annex "V ", Rollo, p. 227), denied the same for lack of merit, thereby maintaining

the same stand it took in its July 6, 1976 Resolution (Rollo, p. 281). Hence, this

petition.

On December 3, 1976, without giving due course to the petition, this Court required

respondent to file her Comment (Rollo, p. 290) which was filed on December 16,

1976 (Rollo, pp. 291-316). Thereafter, petitioner filed her Reply (Rollo, p. 323) and

on May 30, 1977, the petition was given due course (Rollo, p. 345). Petitioner filed

her brief on July 14, 1977 (Rollo, p. 351) while private respondent filed her brief on

August 25, 1977 (Rollo, p. 359). Thereafter, petitioner having failed to file reply

brief, the Court resolved to declare the case submitted for decision on December 9,

1977 (Rollo, p. 359).

The assignment of errors raised by the petitioner in this case (Rollo, pp. 15-16) may

be reduced to three main issues:

(1) Whether or not in an action for infringement the Court a quo had jurisdiction to

determine the invalidity of the patents at issue which invalidity was still pending

consideration in the patent office.

(2) Whether or not the Court a quo committed grave abuse of discretion in the

issuance of a writ of preliminary injunction.

(3) Whether or not certiorari is the proper remedy.

The first issue has been laid to rest in a number of cases where the Court ruled that

"When a patent is sought to be enforced, the questions of invention, novelty or prior

use, and each of them, are open to judicial examination." (Vargas v. F.M. Yaptico &

Co. 40 Phil. 199 [1919]; Vargas v. Chua, 57 Phil. 790-791 [1933]; Frank and Gohn

v. Kosuyana 59 Phil. 207 [1933]).

Under the present Patent Law, there is even less reason to doubt that the trial court

has jurisdiction to declare the patents in question invalid. A patentee shall have the

exclusive right to make, use and sell the patented article or product and the making,

using, or selling by any person without the authorization of the patentee constitutes

infringement of the patent (Sec. 37, R.A. 165). Any patentee whose rights have been

infringed upon may bring an action before the proper CFI now (RTC) and to secure

an injunction for the protection of his rights (Sec. 42, R.A. 165). Defenses in an

action for infringement are provided for in Section 45 of the same law which in fact

were availed of by private respondent in this case. Then, as correctly stated by

respondent Court of Appeals, this conclusion is reinforced by Sec. 46 of the same

law which provides that if the Court shall find the patent or any claim thereof invalid,

the Director shall on certification of the final judgment ... issue an order cancelling

the patent or the claims found invalid and shall publish a notice thereof in the

Official Gazette." Upon such certification, it is ministerial on the part of the patent

office to execute the judgment. (Rollo, pp. 221-222).

II.

The burden of proof to substantiate a charge of infringement is with the plaintiff. But

where the plaintiff introduces the patent in evidence, and the same is in due form,

there is created a prima facie presumption of its correctness and validity. The

decision of the Commissioner (now Director) of Patent in granting the patent is

presumed to be correct. The burden of going forward with the evidence (burden of

evidence) then shifts to the defendant to overcome by competent evidence this legal

presumption.

The question then in the instant case is whether or not the evidence introduced by

private respondent herein is sufficient to overcome said presumption.

After a careful review of the evidence consisting of 64 exhibits and oral testimonies

of five witnesses presented by private respondents before the Court of First Instance

before the Order of preliminary injunction was issued as well as those presented by

the petitioner, respondent Court of Appeals was satisfied that there is a prima

facie showing of a fair question of invalidity of petitioner's patents on the ground of

lack of novelty. As pointed out by said appellate court said evidence appeared not to

have been considered at all by the court a quo for alleged lack of jurisdiction, on the

mistaken notion that such question in within the exclusive jurisdiction of the patent

office.

It has been repeatedly held that an invention must possess the essential elements of

novelty , originality and precedence and for the patentee to be entitled to protection,

the invention must be new to the world. Accordingly, a single instance of public use

of the invention by a patentee for more than two years (now for more than one year

only under Sec. 9 of the Patent Law) before the date of his application for his patent,

will be fatal to, the validity of the patent when issued. (Frank, et al. v. Kosuyama

Vargas v. F.M. Yaptico & Co. and Vargas v. Chua, et al., supra).

The law provides:

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

invention shall not be considered new or capable of being patented

if it was known or used by others in the Philippines before the

invention thereof by the inventor named in an application for

patent for the invention; or if it was patented or described in any

printed publication in the Philippines or any foreign country more

than one year before the application for a patent therefor; or if it

had been in public use or on sale in the Philippines for more than

one year before the application for a patent therefor; or if it is the

subject matter of a validity issued patent in the Philippines granted

on an application filed before the filing of the application for patent

therefor.

Thus, more specifically, under American Law from which our Patent Law was

derived (Vargas v. F.M. Yaptico & Co. supra) it is generally held that in patent cases

a preliminary injunction will not issue for patent infringement unless the validity of

the patent is clear and beyond question. The issuance of letters patent, standing

alone, is not sufficient to support such drastic relief (8 Deller's Walker on Patents p.

406). In cases of infringement of patent no preliminary injunction will be granted

unless the patent is valid and infringed beyond question and the record conclusively

proves the defense is sham. (Ibid., p. 402)

In the same manner, under our jurisprudence, as a general rule because of the

injurious consequences a writ of injunction may bring, the right to the relief

demanded must be clear and unmistakable. (Sangki v. Comelec, 21 SCRA 1392;

December 26, 1967) and the dissolution of the writ is proper where applicant has

doubtful title to the disputed property. (Ramos v. C.A., 95 SCRA 359).

III.

It will be noted that the validity of petitioner's patents is in question for want of

novelty. Private respondent contends that powder puffs Identical in appearance with

that covered by petitioner's patents existed and were publicly known and used as

early as 1963 long before petitioner was issued the patents in question. (List of

Exhibits, Rollo, pp. 194-199). As correctly observed by respondent Court of

Appeals, "since sufficient proofs have been introduced in evidence showing a fair

question of the invalidity of the patents issued for such models, it is but right that the

evidence be looked into, evaluated and determined on the merits so that the matter of

whether the patents issued were in fact valid or not may be resolved." (Rollo, pp.

286-287).

All these notwithstanding, the trial court nonetheless issued the writ of preliminary

injunction which under the circumstances should be denied.

For failure to determine first the validity of the patents before aforesaid issuance of

the writ, the trial court failed to satisfy the two requisites necessary if an injunction is

to issue, namely: the existence of the right to be protected and the violation of said

right. (Buayan Cattle Co., Inc. v. Quintillan, 128 SCRA 276).

Under the above established principles, it appears obvious that the trial court

committed a grave abuse of discretion which makes certiorari the appropriate

remedy.

As found by respondent Court of Appeals, the injunctive order of the trial court is of

so general a tenor that petitioner may be totally barred from the sale of any kind of

powder puff. Under the circumstances, respondent appellate court is of the view that

ordinary appeal is obviously inadequate. (Rollo, p. 288). A parallel was drawn from

a decision of the Supreme Court in the case of Sanchez v. Hon. Court of Appeals,69

SCRA 328 [1976] where the First Division of the Supreme Court ruled that "The

prerogative writ of certiorari may be applied for by proper petition notwithstanding

the existence of the regular remedy of an appeal in due cause when among other

reasons, the broader interests of justice so require or an ordinary appeal is not an

adequate remedy."

Private respondent maintains the position that the resolutions sought to be appealed

from had long become final and executory for failure of Hon. Reynaldo P. Honrado,

the trial court judge, to appeal by certiorari from the resolutions of respondent Court

of Appeals. (Rollo, pp. 291-292).

Such contention is untenable.

There is no dispute that petitioner has seasonably petitioned. On the other hand, it is

elementary that the trial judge is a mere nominal party as clearly provided in Section

5, Rule 65 of the Revised Rules of Court where it shall be the duty of such person or

persons interested in sustaining the proceedings in court, "to appear and defend, both

in his or their own behalf and in behalf of the court or judge affected by the

proceedings."

Relative thereto "the judge whose order is under attack is merely a nominal party;

wherefore, a judge in his official capacity should not be made to appear as a party

seeking reversal of a decision that is unfavorable to the action taken by him." (Hon.

Alcasid v. Samson, 102 Phil. 735-736; Tarona v. Sayo, 67 SCRA 508, 524; Lim Se

v. Argel, 70 SCRA 378).

As to petitioner's claim of prescription, private respondent's contention that such

refers to the filing of petitions for cancellation in the Patent Office under Sec. 28 of

the Patent Law and not to a defense against an action for infringement under Sec. 45

thereof which may be raised anytime, is evident under aforesaid law.

PREMISES CONSIDERED, the assailed resolutions of the Court of Appeals are

hereby AFFIRMED. SO ORDERED.

PATRICK HENRY FRANK and WILLIAM HENRY GOHN, plaintiffs-

appellants, vs. G. KOSUYAMA, defendant-appellee.

Patent No. 1519579 (Exhibit 117) on improvement in hemp stripping machines,

issued by the United States Patent Office on December 16,1924, and registered in the

Bureau of Commerce and Industry of the Philippine Islands on March 17,1925, was

the origin of this action brought by the plaintiffs herein who prayed that the judgment

be rendered against the defendant, ordering him thereby to refrain immediately from

the manufacture and sale of machines similar to the one covered by the patent: to

render an accounting of the profits realized from the manufacture and sale of the

machines in question; that in case of refusal or failure to render such accounting, the

defendants be ordered to pay the plaintiffs the sum of P60 as profit on each machine

manufactured or sold by him; that upon approval of the required bond, said

defendant be restrained from continuing the manufacture and sale of the same kind

of machines; that after the trial the preliminary injunction issued therein be declared

permanent and, lastly, that the said defendant be sentenced to pay the costs and

whatever damages the plaintiffs might be able to prove therein. The action therefore

was based upon alleged infringement by the defendant of the rights and privileges

acquired by the plaintiffs over the aforesaid patent through the manufacture and sale

by the former of machines similar to that covered by the aforesaid patent.

The plaintiffs appealed from the judgment rendered by the trial court dismissing their

complaint, with cost, as well as the defendant's counterclaim of P10,000. The

defendant did not appeal.

In their amended complaint, the plaintiff alleged that their hemp stripping machines,

for which they obtained a patent, have the following characteristics: "A stripping

head, a horizontal table, a stripping knife supported upon such table, a tappering

spindle, a rest holder adjustably secured on the table portion, a lever and means of

compelling the knife to close upon the table, a pallet or rest in the bottom of the

table, a resilient cushion under such palletor rest." In spite of the fact that they filed

an amended complaint from which the "spindle" or conical drum, which was the only

characteristic feature of the machine mentioned in the original complaint, was

eliminated, the plaintiffs insisted that the said part constitutes the essential difference

between the machine in question and other machines and that it was the principal

consideration upon which their patent was issued. The said plaintiffs sustained their

contention on this point even in their printed brief and memorandum filed in this

appeal.

During the trial, both parties presented voluminous evidence from which the trial

court arrived at the following conclusions:

In constructing their machine the plaintiffs did nothing but improve, to a

certain degree, those that were already in vogue and in actual us in hemp

producing provinces. It cannot be said that they have invented the "spindle"

inasmuch as this was already known since the year 1909 or 1910. Neither it

can be said that they have invented the stripping knife and the contrivance

which controls the movement and pressure thereof on the ground that

stripping knives together with their control sets were already in actual use in

the different stripping machines long before their machine appeared.

Neither can it be said that they invented the fly wheel because that part or

piece thereof, so essential in every machine from time immemorial, was

already known and actually employed in hemp stripping machines such as

those of Riesgo (Exhibit 4-A), Crumb (Exhibit 1-A), Icsiar (Exhibit A-

Suzara), Browne (Exhibit 28-A), McFie, etc., all of which were in use for

the benefit of hemp long before the appearance of the plaintiffs' machines in

the market. Much less can it be said that they invented the pedal to raise the

knife in order to allow the hemp to be stripped to pass under it, on the

ground that the use of such contrivance has, likewise, been known since the

invention of the most primitive of hemp stripping machines.

On the other hand, although the plaintiffs alleged in their original complaint

that "the principal and important feature of said machine is a spindle upon

which the hemp to be stripped is wound in the process of stripping,"

nevertheless, in their amended complaint of March 3, 1928, which was filed

after a portion of the evidence therein had already been submitted and it was

known that the use of the spindle was nothing new, they still made the

allegations appearing in paragraph 3 of their said amended complaint and

reproduced on pages 2,3,4 and 5 hereof, copying the same from the

application which they filed with the United States Patent Office, under

which they obtained their patent in question. The aforesaid application

clearly shows that what they applied for was not a patent for a "pioneer or

primary invention" but only for some "new and useful improvement in

hemp stripping machines."

We have carefully reviewed the evidence presented and have had the opportunity of

ascertaining the truth of the conclusions above stated. We agree with the trial court

that, strictly speaking, the hemp stripping machine of the plaintiffs does not

constitute an invention on the ground that it lacks the elements of novelty, originality

and precedence (48 C.J., sec. 101, p. 97, and 102, p. 98). In fact, before the plaintiffs

herein obtained their patent, they themselves had already publicly used the same kind

of machine for some months, at least, and, various other machines, having in general,

the same characteristics and important parts as that of the said plaintiffs, were known

in the Province of Davao. Machines known as Molo, Riesgo, Crumb, Icsiar, Browne

and McFie were already known in that locality and used by the owners of hemp

plantations before the machine of the plaintiffs came into existence. It may also be

noted that Adrian de Icsiar applied for a patent on an invention which resulted in the

rejection by the United States Patent Office of the plaintiffs' original application for a

patent on the so called "spindle" or conical drum which was then in actual use in the

Dringman and Icsiar hemp stripping machines.

Notwithstanding the foregoing facts, the trial court did not decree the annulment of

the plaintiffs' patent and the herein defendant-appellee insists that the patent in

question should be declared null and void. We are of the opinion that it would be

improper and untimely to render a similar judgment, in view of the nature of the

action brought by the plaintiffs and in the absence of a cross-complaint to that effect.

For the purposes of this appeal, suffice it to hold that the defendant is not civilly

liable for alleged infringement of the patent in question.

In the light of sound logic, the plaintiffs cannot insist that the "spindle" was a

patented invention on the ground that said part of the machine was voluntarily

omitted by them from their application, as evidenced by the photographic copy

thereof (Exhibit 41) wherein it likewise appears that the patent on Improved Hemp

Stripping Machines was issued minus the "spindle" in question. Were we to stress to

this part of the machine, we would be giving the patent obtained by the plaintiffs a

wider range than it actually has, which is contrary to the principles of interpretation

in matters relating to patents.

In support of their claim the plaintiffs invoke the doctrine laid down by this court in

the case of Frank and Gohn vs.Benito (51 Phil., 712), wherein it was held that the

therein defendant really infringed upon the patent of the therein plaintiffs. It may be

noted that the plaintiffs in the former and those of the latter case are the same and

that the patent then involved is the very same one upon which the present action of

the plaintiffs is based. The above-cited case, however, cannot be invoked as a

precedent to justify a judgment in favor of the plaintiffs-appellants on the ground that

the facts in one case entirely different from those in the other. In the former case the

defendant did not set up the same special defenses as those alleged by the herein

defendant in his answer and the plaintiffs therein confined themselves to presenting

the patent, or rather a copy thereof, wherein the "spindle" was mentioned, and this

court took for granted their claim that it was one of the essential characteristics

thereof which was imitated or copied by the then defendant. Thus it came to pass that

the "spindle" in question was insistently mentioned in the decision rendered on

appeal as the essential part of the plaintiffs' machine allegedly imitated by the then

defendant. In the case under consideration, it is obvious that the "spindle" is not an

integral part of the machine patented by the plaintiffs on the ground that it was

eliminated from their patent inasmuch as it was expressly excluded in their

application, as evidenced by the aforesaid Exhibit 41.

Wherefore, reiterating that the defendant cannot be held civilly liable for alleged

infringement of the patent upon which the present action is based on the ground that

there is no essential part of the machine manufactured and sold by him, which was

unknown to the public in the Province of Davao at the time the plaintiffs applied for

and obtained their patent for improved hemp stripping machines, the judgment

appealed from is hereby affirmed, with the costs against the plaintiffs-appellants. So

ordered.

DOMICIANO A. AGUAS, petitioner, vs. CONRADO G. DE LEON and

COURT OF APPEALS, respondents.

On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal

at Quezon City a complaint for infringement of patent against Domiciano A. Aguas

and F. H. Aquino and Sons alleging that being the original first and sole inventor of

certain new and useful improvements in the process of making mosaic pre-cast tiles,

he lawfully filed and prosecuted an application for Philippine patent, and having

complied in all respects with the statute and the rules of the Philippine Patent Office,

Patent No. 658 was lawfully granted and issued to him; that said invention was new,

useful, not known or used by others in this country before his invention thereof, not

patented or described in any printed publication anywhere before his invention

thereof, or more than one year prior to his application for patent thereof, not patented

in any foreign country by him or his legal representatives on application filed more

than one year prior to his application in this country; that plaintiff has the exclusive

license to make, use and sell throughout the Philippines the improvements set forth

in said Patent No. 658; that the invention patented by said Patent No. 658 is of great

utility and of great value to plaintiff and of great benefit to the public who has

demanded and purchased tiles embodying the said invention in very large quantities

and in very rapidly increasing quant ies; that he has complied with the Philippine

statues relating to marking patented tiles sold by him; that the public has in general

acknowledged the validity of said Patent No. 658, and has respected plaintiff's right

therein and thereunder; that the defendant Domiciano A. Aguas infringed Letters of

Patent No. 658 by making, using and selling tiles embodying said patent invention

and that defendant F. H. Aquino & Sons is guilty of infringement by making and

furnishing to the defendant Domiciano A. Aguas the engravings, castings and

devices designed and intended of tiles embodying plaintiff;s patented invention; that

he has given direct and personal notice to the defendants of their said acts of

infringement and requested them to desist, but nevertheless, defendants have refused

and neglected to desist and have disregarded such request, and continue to so

infringe causing great and irreparable damage to plaintiff; that if the aforesaid

infringement is permitted to continue, further losses and damages and irreparable

injury will be sustained by the plaintiff; that there is an urgent need for the

immediate issuance of a preliminary injunction; that as a result of the defendants'

wrongful conduct, plaintiff has suffered and the defendants are liable to pay him, in

addition to actual damages and loss of profits which would be determined upon

proper accounting, moral and exemplary or corrective damages in the sum of

P90,000.00; that plaintiff has been compelled to go to court for the protection and

enforcement of his and to engage the service of counsel, thereby incurring attorney's

fees and expenses of litigation in the sum of P5,000.00. 2

On April 14, 1962, an order granting the plaintiff's petition for a Writ of Preliminary

Injunction was issued. 3

On May 23, 1962, the defendant Domiciano A. Aguas filed his answer denying the

allegations of the plaintiff and alleging that: the plaintiff is neither the original first

nor sole inventor of the improvements in the process of making mosaic pre-cast tiles,

the same having been used by several tile-making factories in the Philippines and

abroad years before the alleged invention by de Leon; that Letters Patent No. 658

was unlawfully acquired by making it appear in the application in relation thereto

that the process is new and that the plaintiff is the owner of the process when in truth

and in fact the process incorporated in the patent application has been known and

used in the Philippines by almost all tile makers long before the alleged use and

registration of patent by plaintiff Conrado G. de Leon; that the registration of the

alleged invention did not confer any right on the plaintiff because the registration

was unlawfully secured and was a result of the gross misrepresentation on the part of

the plaintiff that his alleged invention is a new and inventive process; that the

allegation of the plaintiff that Patent No. 658 is of great value to plaintiff and of great

benefit to the public is a mere conclusion of the plaintiff, the truth being that a) the

invention of plaintiff is neither inventive nor new, hence, it is not patentable, b)

defendant has been granted valid patents (Patents No. 108, 109, 110 issued on

December 21, 1961) on designs for concrete decorative wall tiles; and c) that he can

not be guilty of infringement because his products are different from those of the

plaintiff. 4

The trial court rendered a decision dated December 29, 1965, the dispositive portion

of which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff

and against the defendants:

1. Declaring plaintiff's patent valid and infringed:

2. Granting a perpetual injunction restraining defendants, their

officers, agents, employees, associates, confederates, and any and

all persons acting under their authority from making and/or using

and/or vending tiles embodying said patented invention or adapted

to be used in combination embodying the same, and from making,

manufacturing, using or selling, engravings, castings and devises

designed and intended for use in apparatus for the making of tiles

embodying plaintiff's patented invention, and from offering or

advertising so to do, and from aiding and abetting or in any way

contributing to the infringement of said patent;

3. Ordering that each and all of the infringing tiles, engravings,

castings and devices, which are in the possession or under the

control of defendants be delivered to plaintiff;

4. Ordering the defendants to jointly and severally pay to the

plaintiff the following sums of money, to wit:

(a) P10,020.99 by way of actual damages;

(b) P50,000.00 by way of moral damages;

(c) P5,000.00 by way of exemplary damages;

(d) P5,000.00 by way of attorney's fees and

(e) costs of suit. 5

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

following errors. 6

I

THE TRIAL COURT ERRED IN NOT HOLDING THAT

PLAINTIFF'S PATENT FOR THE 'PROCESS OF MAKING

MOSAIC PRE-CAST TILE' IS INVALID BECAUSE SAID

ALLEGED PROCESS IS NOT AN INVENTION OR

DISCOVERY AS THE SAME HAS ALREADY LONG BEEN

USED BY TILE MANUFACTURERS BOTH ABROAD AND IN

THIS COUNTRY.

II

THE TRIAL COURT ERRED IN HOLDING THAT THE

PATENT OF PLAINTIFF IS VALID BECAUSE IT IS AN

IMPROVEMENT OR THE AGE-OLD TILE MAKING

SYSTEM.

III

THE TRIAL COURT ERRED IN NOT ORDERING THE

CANCELLATION OF PLAINTIFF-APPELLEE'S LETTERS

PATENT NO. 658, EXHIBIT L, IN ACCORDANCE WITH THE

PERTINENT PROVISIONS OF THE PATENT LAW,

REPUBLIC ACT 165.

IV

THE TRIAL COURT ERRED IN HOLDING THAT

DEFENDANT DOMICIANO A. AGUAS IS GUILTY OF

INFRINGEMENT DESPITE THE FACT THAT PLAINTIFF'S

PATENT IS NOT A VALID ONE.

V

THE TRIAL COURT ERRED IN NOT HOLDING THAT THE

DEFENDANT COULD NEVER BE GUILTY OF

INFRINGEMENT OF PLAINTIFF'S PATENT BECAUSE EVEN

IN MATTERS NOT PATENTED BY THE PLAINTIFF - LIKE

THE COMPOSITION AND PROPORTION OF INGREDIENTS

USED AND THE STRUCTURAL DESIGNS OF THE MOULD

AND THE TILE PRODUCED - THAT OF THE DEFENDANT

ARE DIFFERENT.

VI

THE TRIAL COURT ERRED IN NOT DISMISSING THE

COMPLAINT AND IN HOLDING THE DEFENDANT,

INSTEAD OF THE PLAINTIFF, LIABLE FOR DAMAGES,

AND ATTORNEY'S FEES.

On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with

the modification that plaintiff-appellee's award of moral damages was reduced to

P3,000.00. 7

The petitioner assigns the following errors supposedly committed by the Court of

Appeals:

It is now respectfully submitted that the Court of Appeals

committed the following errors involving questions of law, to wit:

First error. — When it did not conclude that the letters patent of

the respondent although entitled on the cover page as a patent for

improvements, was in truth and in fact, on the basis of the body of

the same, a patent for the old and non-patentable process of

making mosaic pre-cast tiles;

Second error. — When it did not conclude from the admitted facts

of the case, particularly the contents of the letters patent, Exh. L

and the pieces of physical evidence introduced consisting of

samples of the tiles and catalouges, that the alleged improvements

introduced by the respondent in the manufacture of mosaic pre-cast

tiles are not patentable, the same being not new, useful and

inventive.

Third error. — As a corollary, when it sentenced the herein

petitioner to pay the damages enumerated in the decision of the

lower court (Record on Appeal, pp. 74-75), as confirmed by it (the

Court of Appeals), but with the modification that the amount of

P50,000.00 moral damages was reduced to P3,000.00. 8

The facts, as found by the Court of Appeals, are:

The basic facts borne out by the record are to the effect that on

December 1, 1959 plaintiff-appellee filed a patent application with

the Philippine Patent Office, and on May 5, 1960, said office

issued in his favor Letters Patent No. 658 for a "new and useful

improvement in the process of making mosaic pre-cast tiles" (Exh,

"L"); that defendant F.H. Aquino & Sons engraved the moulds

embodying plaintiff's patented improvement for the manufacture of

pre-cast tiles, plaintiff furnishing said defendant the actual model

of the tiles in escayola and explained to said engraver the plans,

specifications and the details of the engravings as he wanted them

to be made, including an explanation of the lip width, artistic slope

of easement and critical depth of the engraving that plaintiff

wanted for his moulds; that engraver Enrique Aquino knew that the

moulds he was engraving for plaintiff were the latter's very own,

which possession the new features and characteristics covered by

plaintiff's parent; that defendant Aguas personally, as a building

contractor, purchased from plaintiff, tiles shaped out of these

moulds at the back of which was imprinted plaintiff's patent

number (Exhs., "A" to "E"); that subsequently, through a

representative, Mr. Leonardo, defendant Aguas requested Aquino

to make engravings of the same type and bearing the

characteristics of plaintiff's moulds; that Mr. Aquino knew that the

moulds he was asked to engrave for defendant Aguas would be

used to produce cement tiles similar to plaintiff's; that the moulds

which F.H. Aquino & Sons eventually engraved for Aguas and for

which it charged Aguas double the rate it charged plaintiff De

Leon, contain the very same characteristic features of plaintiff's

mould and that Aguas used these moulds in the manufacture of his

tiles which he actually put out for sale to the public (Exhs. "1" to

"3" and Exhs. "A" to "E"); that both plaintiff's and defendant

Aguas' tiles are sculptured pre-cast wall tiles intended as a new

feature of construction and wag ornamentation substantially

Identical to each other in size, easement, lip width and critical

depth of the deepest depression; and that the only significant

difference between plaintiff's mould and that engraved by Aquino

for Aguas is that, whereas plaintiff's mould turns out tiles 4 x 4

inches in size, defendant Aguas' mould is made to fit a 4-1/4 x 4-

1/4 inch tile. 9

The patent right of the private respondent expired on May 5, 1977. 10 The errors will

be discuss only to determine the right of said private respondent to damages.

The petitioner questioned the validity of the patent of the private respondent,

Conrado G. de Leon, on the ground that the process, subject of said patent, is not an

invention or discovery, or an improvement of the old system of making tiles. It

should be noted that the private respondent does not claim to be the discoverer or

inventor of the old process of tile-making. He only claims to have introduced an

improvement of said process. In fact, Letters Patent No. 658 was issued by the

Philippine Patent Office to the private respondent, Conrado G. de Leon, to protect his

rights as the inventor of "an alleged new and useful improvement in the process of

making mosaic pre-cast tiles." 11Indeed, Section 7, Republic Act No. 165, as

amended provides: "Any invention of a new and useful machine, manufactured

product or substance, process, or an improvement of the foregoing, shall be

patentable.

The Court of Appeals found that the private respondent has introduced an

improvement in the process of tile-making because:

... we find that plaintiff-appellee has introduced an improvement in

the process of tile-making, which proceeds not merely from

mechanical skill, said improvement consisting among other things,

in the new critical depth, lip width, easement and field of designs

of the new tiles. The improved lip width of appellee's tiles ensures

the durability of the finished product preventing the flaking off of

the edges. The easement caused by the inclination of the

protrusions of the patented moulds is for the purpose of facilitating

the removal of the newly processed tile from the female die.

Evidently, appellee's improvement consists in the solution to the

old critical problem by making the protrusions on his moulds attain

an optimum height, so that the engraving thereon would be deep

enough to produce tiles for sculptured and decorative purposes,

strong optimum thickness of appellee's new tiles of only 1/8 of an

inch at the deepest easement (Exhs. "D" and "D-1") is a most

critical feature, suggestive of discovery and inventiveness,

especially considering that, despite said thinness, the freshly

formed tile remains strong enough for its intended purpose.

While it is true that the matter of easement, lip width, depth,

protrusions and depressions are known to some sculptors, still, to

be able to produce a new and useful wall tile, by using them all

together, amounts to an invention. More so, if the totality of all

these features are viewed in combination with the Ideal

composition of cement, sodium silicate and screened fine sand.

By using his improved process, plaintiff has succeeded in

producing a new product - a concrete sculptured tile which could

be utilized for walling and decorative purposes. No proof was

adduced to show that any tile of the same kind had been produced

by others before appellee. Moreover, it appears that appellee has

been deriving considerable profit from his manufacture and sale of

such tiles. This commercial success is evidence of patentability

(Walker on Patents, Dellers Edition, Vol. I, p. 237). 12

The validily of the patent issued by the Philippines Patent Office in favor of the

private respondent and the question over the inventiveness, novelty and usefulness of

the improved process therein specified and described are matters which are better

determined by the Philippines Patent Office. The technical staff of the Philippines

Patent Office, composed of experts in their field, have, by the issuance of the patent

in question, accepted the thinness of the private respondent's new tiles as a discovery.

There is a presumption that the Philippines Patent Office has correctly determined

the patentability of the improvement by the private respondent of the process in

question.

Anent this matter, the Court of Appeals said:

Appellant has not adduced evidence sufficient to overcome the

above established legal presumption of validity or to warrant

reversal of the findings of the lower court relative to the validity of

the patent in question. In fact, as we have already pointed out, the

clear preponderance of evidence bolsters said presumption of

validity of appellee's patent. There is no indication in the records of

this case and this Court is unaware of any fact, which would tend

to show that concrete wall tiles similar to those produced by

appellee had ever been made by others before he started

manufacturing the same. In fact, during the trial, appellant was

challenged by appellee to present a tile of the same kind as those

produced by the latter, from any earlier source but, despite the fact

that appellant had every chance to do so, he could not present any.

There is, therefore, no concrete proof that the improved process of

tile-making described in appellee's patent was used by, or known

to, others previous to his discovery thereof. 13

The contention of the petitioner Aguas that the letters patent of de Leon was actually

a patent for the old and non-patentable process of making mosaic pre-cast tiles is

devoid of merit. De Leon never claimed to have invented the process of tile-making.

The Claims and Specifications of Patent No. 658 show that although some of the

steps or parts of the old process of tile making were described therein, there were

novel and inventive features mentioned in the process. Some of the novel features of

the private respondent's improvements are the following: critical depth, with

corresponding easement and lip width to such degree as leaves the tile as thin as 1/8

of an inch at its thinnest portion, Ideal composition of cement and fine river sand,

among other ingredients that makes possible the production of tough and durable

wall tiles, though thin and light; the engraving of deep designs in such a way as to

make the tiles decorative, artistic and suitable for wall ornamentation, and the fact

that the tiles can be mass produced in commercial quantities and can be conveniently

stock-piled, handled and packed without any intolerable incidence of breakages. 14

The petitioner also contends that the improvement of respondent is not patentable

because it is not new, useful and inventive. This contention is without merit.

The records disclose that de Leon's process is an improvement of the old process of

tile making. The tiles produced from de Leon's process are suitable for construction

and ornamentation, which previously had not been achieved by tiles made out of the

old process of tile making. De Leon's invention has therefore brought about a new

and useful kind of tile. The old type of tiles were usually intended for floors although

there is nothing to prevent one from using them for walling purposes. These tiles are

neither artistic nor ornamental. They are heavy and massive.

The respondent's improvement is indeed inventive and goes beyond the exercise of

mechanical skill. He has introduced a new kind of tile for a new purpose. He has

improved the old method of making tiles and pre-cast articles which were not

satisfactory because of an intolerable number of breakages, especially if deep

engravings are made on the tile. He has overcome the problem of producing

decorative tiles with deep engraving, but with sufficient durability. 15 Durability

inspite of the thinness and lightness of the tile, is assured, provided that a certain

critical depth is maintained in relation to the dimensions of the tile. 16

The petitioner also claims that changing the design from embossed to engraved tiles

is neither new nor inventive because the Machuca Tile Factory and the Pomona Tile

Manufacturing Company have been manufacturing decorative wall tiles that are

embossed as well as engraved; 17 that these tiles have also depth, lip width, easement

and field of designs; 18 and that the private respondent had copied some designs of

Pomona. 19

The Machuca tiles are different from that of the private respondent. The designs are

embossed and not engraved as claimed by the petitioner. There may be depressions

but these depressions are too shallow to be considered engraved. Besides, the

Machuca tiles are heavy and massive.

There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona

tiles are made of ceramics. 20The process involved in making cement tiles is different

from ceramic tiles. Cement tiles are made with the use of water, while in ceramics

fire is used. As regards the allegation of the petitioner that the private respondent

copied some designs of Pomona, suffice it to say that what is in issue here is the

process involved in tile making and not the design.

In view of the foregoing, this Court finds that Patent No. 658 was legally issued, the

process and/or improvement being patentable.

Both the trial court and the Court of Appeals found as a fact that the petitioner

Domiciano A. Aguas did infringe de Leon's patent. There is no showing that this case

falls under one of the exceptions when this Court may overrule the findings of fact of

the Court of Appeals. The only issue then to be resolved is the amount of damages

that should be paid by Aguas.

In its decision the Court of Appeals affirmed the amount of damages awarded by the

lower court with the modification that the respondent is only entitled to P3,000.00

moral damages. 21

The lower court awarded the following damages: 22

a) P10,020.99 by way of actual damages;

b) P50,000.00 by way of moral damages;

c) P5,000.00 by way of exemplary damages;

d) P5,000.00 by way of attomey's fees and

e) Costs of suit

because:

An examination of the books of defendant Aguas made before a

Commissioner reveals that during the period that Aguas was

manufacturing and selling tiles similar to plaintiff's, he made a

gross income of P3,340.33, which can be safely be considered the

amount by which he enriched himself when he infringed plaintiff's

patent. Under Sec. 42 of the Patent Law any patentee whose rights

have been infringed is entitled to damages which, according to the

circumstances of the case may be in a sum above the amount found

as actual damages sustained provided the award does not exceed

three times the amount of such actual damages. Considering the

wantonness of the infringement committed by the defendants who

knew all the time about the existence of plaintiff's patent, the Court

feels there is reason to grant plaintiff maximum damages in the

sum of P10,020.99. And in order to discourage patent

infringements and to give more teeth to the provisions of the patent

law thus promoting a stronger public policy committed to afford

greater incentives and protection to inventors, the Court hereby

awards plaintiff exemplary damages in the sum of P5,000.00 to be

paid jointly and severally by defendants. Considering the status of

plaintiff as a reputable businessman, and owner of the likewise

reputed House of Pre-Cast, he is entitled to an award of moral

damages in the sum of P50,000.00. 23

In reducing the amount of moral damages the Court of Appeals said:

As regards the question of moral damages it has been shown that

as a result of the unlawful acts of infringment committed by

defendants, plaintiff was unstandably very sad; he worried and

became nervous and lost concentration on his work in connection

with his tile business (pp. 28, 30, t.s.n., Feb. 28, 1964). In addition,

plaintiff's character and reputation have been unnecessarily put in

question because defendants, by their acts of infringement have

created a doubt or suspicion in the public mind concerning the

truth and honesty of plaintiff's advertisements and public

announcements of his valid patent. Necessarily, said acts of

defendants have caused plaintiff considerable mental suffering,

considering especially, the fact that he staked everything on his

pre-cast tile business (p. 36, t.s.n., Id.) The wantonness and evident

bad faith characterizing defendants' prejudicial acts against

plaintiff justify the assessment of moral damages in plaintiff's

favor, though we do not believe the amount of P50,000.00 awarded

by the lower court is warranted by the circumstances. We feel that

said amount should be reduced to P3,000.00 by way of

compensating appellee for his moral suffering. "Willful injury to

property may be a legal ground for awarding moral damages if the

court should find that, under the circumstances such damages are

justly due" (Art. 2219 NCC).

There is no reason to reduce the amount of damages and attorneys fees awarded by

the trial court as modified by the Court of Appeals.

WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R

appealed from is hereby affirmed, without pronouncement as to costs. SO

ORDERED.

PASCUAL GODINES, petitioner, vs. THE HONORABLE COURT OF

APPEALS, SPECIAL FOURTH DIVISION and SV-AGRO ENTERPRISES,

INC.,respondents.

The patent involved in this case is Letters Patent No. UM-2236 issued by the

Philippine Patent Office to one Magdalena S. Villaruz on July 15, 1976. It covers a

utility model for a hand tractor or power tiller, the main components of which are the

following: "(1) a vacuumatic house float; (2) a harrow with adjustable operating

handle; (3) a pair of paddy wheels; (4) a protective water covering for the engine

main drive; (5) a transmission case; (6) an operating handle; (7) an engine foundation

on the top midportion of the vacuumatic housing float to which the main engine

drive is detachedly installed; (8) a frontal frame extension above the quarter —

circularly shaped water covering hold (sic) in place the transmission case; (9) a V-

belt connection to the engine main drive with transmission gear through the pulley,

and (10) an idler pulley installed on the engine foundation." 2 The patented hand

tractor works in the following manner: "the engine drives the transmission gear thru

the V-belt, a driven pulley and a transmission shaft. The engine drives the

transmission gear by tensioning of the V-belt which is controlled by the idler pulley.

The V-belt drives the pulley attached to the transmission gear which in turn drives

the shaft where the paddy wheels are attached. The operator handles the hand tractor

through a handle which is inclined upwardly and supported by a pair of substanding

pipes and reinforced by a U-shaped G.I. pipe at the V-shaped end." 3

The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc.,

herein private respondent, from Magdalena Villaruz, its chairman and president, by

virtue of a Deed of Assignment executed by the latter in its favor. On October 31,

1979, SV-Agro Industries caused the publication of the patent in Bulletin Today, a

newspaper of general circulation.

In accordance with the patent, private respondent manufactured and sold the patented

power tillers with the patent imprinted on them. In 1979, SV-Agro Industries

suffered a decline of more than 50% in sales in its Molave, Zamboanga del Sur

branch. Upon investigation, it discovered that power tillers similar to those patented

by private respondent were being manufactured and sold by petitioner herein.

Consequently, private respondent notified Pascual Godines about the existing patent

and demanded that the latter stop selling and manufacturing similar power tillers.

Upon petitioner's failure to comply with the demand, SV-Agro Industries filed before

the Regional Trial Court a complaint for infringement of patent and unfair

competition.

After trial, the court held Pascual Godines liable for infringement of patent and

unfair competition. The dispositive portion of the decision reads as follows:

WHEREFORE, premises considered, JUDGMENT is hereby

rendered in favor of the plaintiff SV-Agro Industries Enterprises,

Inc., and against defendant Pascual Godines:

1. Declaring the writ of preliminary injunction issued by this Court

against defendant as permanent;

2. Ordering defendant Pascual Godines to pay plaintiff the sum of

Fifty Thousand Pesos (P50,000.00) as damages to its business

reputation and goodwill, plus the further sum of Eighty Thousand

Pesos (P80,000.00) for unrealized profits during the period

defendant was manufacturing and selling copied or imitation

floating power tiller;

3. Ordering the defendant to pay the plaintiff, the further sum of

Eight Thousand Pesos (P8,000.00) as reimbursement of attorney's

fees and other expenses of litigation; and to pay the costs of the

suit.

SO ORDERED. 4

The decision was affirmed by the appellate court.

Thereafter, this petition was filed. Petitioner maintains the defenses which he raised

before the trial and appellate courts, to wit: that he was not engaged in the

manufacture and sale of the power tillers as he made them only upon the special

order of his customers who gave their own specifications; hence, he could not be

liable for infringement of patent and unfair competition; and that those made by him

were different from those being manufactured and sold by private respondent.

We find no merit in his arguments. The question of whether petitioner was

manufacturing and selling power tillers is a question of fact better addressed to the

lower courts. In dismissing the first argument of petitioner herein, the Court of

Appeals quoted the findings of the court, to wit:

It is the contention of defendant that he did not manufacture or

make imitations or copies of plaintiff's turtle power tiller as what

he merely did was to fabricate his floating power tiller upon

specifications and designs of those who ordered them. However,

this contention appears untenable in the light of the following

circumstances: 1) he admits in his Answer that he has been

manufacturing power tillers or hand tractors, selling and

distributing them long before plaintiff started selling its turtle

power tiller in Zamboanga del Sur and Misamis Occidental,

meaning that defendant is principally a manufacturer of power

tillers, not upon specification and design of buyers, but upon his

own specification and design; 2) it would be unbelievable that

defendant would fabricate power tillers similar to the turtle power

tillers of plaintiff upon specifications of buyers without requiring a

job order where the specification and designs of those ordered are

specified. No document was (sic) ever been presented showing

such job orders, and it is rather unusual for defendant to

manufacture something without the specification and designs,

considering that he is an engineer by profession and proprietor of

the Ozamis Engineering shop. On the other hand, it is also highly

unusual for buyers to order the fabrication of a power tiller or hand

tractor and allow defendant to manufacture them merely based on

their verbal instructions. This is contrary to the usual business and

manufacturing practice. This is not only time consuming, but

costly because it involves a trial and error method, repeat jobs and

material wastage. Defendant judicially admitted two (2) units of

the turtle power tiller sold by him to Policarpio Berondo. 5

Of general acceptance is the rule imbedded in our jurisprudence that ". . . the

jurisdiction of the Supreme Court in cases brought to it from the Court of Appeals in

a petition for certiorari under Rule 45 of the Rules of Court is limited to the review

of errors of law, and that said appellate court's findings of fact are conclusive upon

this Court." 6

The fact that petitioner herein manufactured and sold power tillers without patentee's

authority has been established by the courts despite petitioner's claims to the

contrary.

The question now arises: Did petitioner's product infringe upon the patent of private

respondent?

Tests have been established to determine infringement. These are (a) literal

infringement; and (b) the doctrine of equivalents. 7 In using literal infringement as a

test, ". . . resort must be had, in the first instance, to the words of the claim. If

accused matter clearly falls within the claim, infringement is made out and that is the

end of it." 8 To determine whether the particular item falls within the literal meaning

of the patent claims, the court must juxtapose the claims of the patent and the

accused product within the overall context of the claims and specifications, to

determine whether there is exact identity of all material elements. 9

The trial court made the following observation:

Samples of the defendant's floating power tiller have been

produced and inspected by the court and compared with that of the

turtle power tiller of the plaintiff (see Exhibits H to H-28). In

appearance and form, both the floating power tillers of the

defendant and the turtle power tiller of the plaintiff are virtually the

same. Defendant admitted to the Court that two (2) of the power

inspected on March 12, 1984, were manufactured and sold by him

(see TSN, March 12, 1984, p. 7). The three power tillers were

placed alongside with each other. At the center was the turtle

power tiller of plaintiff, and on both sides thereof were the floating

power tillers of defendant (Exhibits H to H-2). Witness Rodrigo

took photographs of the same power tillers (front, side, top and

back views for purposes of comparison (see Exhibits H-4 to H-28).

Viewed from any perspective or angle, the power tiller of the

defendant is identical and similar to that of the turtle power tiller of

plaintiff in form, configuration, design and appearance. The parts

or components thereof are virtually the same. Both have the

circularly-shaped vacuumatic housing float, a paddy in front, a

protective water covering, a transmission box housing the

transmission gears, a handle which is V-shaped and inclined

upwardly, attached to the side of the vacuumatic housing float and

supported by the upstanding G.I. pipes and an engine base at the

top midportion of the vacuumatic housing float to which the engine

drive may be attached. In operation, the floating power tiller of the

defendant operates also in similar manner as the turtle power tiller

of plaintiff. This was admitted by the defendant himself in court

that they are operating on the same principles. (TSN, August 19,

1987, p. 13) 10

Moreover, it is also observed that petitioner also called his power tiller as a floating

power tiller. The patent issued by the Patent Office referred to a "farm implement but

more particularly to a turtle hand tractor having a vacuumatic housing float on which

the engine drive is held in place, the operating handle, the harrow housing with its

operating handle and the paddy wheel protective covering." 11 It appears from the

foregoing observation of the trial court that these claims of the patent and the

features of the patented utility model were copied by petitioner. We are compelled to

arrive at no other conclusion but that there was infringement.

Petitioner's argument that his power tillers were different from private respondent's is

that of a drowning man clutching at straws.

Recognizing that the logical fallback position of one in the place of defendant is to

aver that his product is different from the patented one, courts have adopted the

doctrine of equivalents which recognizes that minor modifications in a patented

invention are sufficient to put the item beyond the scope of literal

infringement. 12 Thus, according to this doctrine, "(a)n infringement also occurs

when a device appropriates a prior invention by incorporating its innovative concept

and, albeit with some modification and change, performs substantially the same

function in substantially the same way to achieve substantially the same

result." 13 The reason for the doctrine of equivalents is that to permit the imitation of

a patented invention which does not copy any literal detail would be to convert the

protection of the patent grant into a hollow and useless thing. Such imitation would

leave room for — indeed encourage — the unscrupulous copyist to make

unimportant and insubstantial changes and substitutions in the patent which, though

adding nothing, would be enough to take the copied matter outside the claim, and

hence outside the reach of the law. 14

In this case, the trial court observed:

Defendant's witness Eduardo Cañete, employed for 11 years as

welder of the Ozamis Engineering, and therefore actually involved

in the making of the floating power tillers of defendant tried to

explain the difference between the floating power tillers made by

the defendant. But a careful examination between the two power

tillers will show that they will operate on the same fundamental

principles. And, according to establish jurisprudence, in

infringement of patent, similarities or differences are to be

determined, not by the names of things, but in the light of what

elements do, and substantial, rather than technical, identity in the

test. More specifically, it is necessary and sufficient to constitute

equivalency that the same function can be performed in

substantially the same way or manner, or by the same or

substantially the same, principle or mode of operation; but where

these tests are satisfied, mere differences of form or name are

immaterial. . . . 15

It also stated:

To establish an infringement, it is not essential to show that the

defendant adopted the device or process in every particular; Proof

of an adoption of the substance of the thing will be sufficient. "In

one sense," said Justice Brown, "it may be said that no device can

be adjudged an infringement that does not substantially correspond

with the patent. But another construction, which would limit these

words to exact mechanism described in the patent, would be so

obviously unjust that no court could be expected to adopt it. . . .

The law will protect a patentee against imitation of his patent by

other forms and proportions. If two devices do the same work in

substantially the same way, and accomplish substantially the same

result, they are the same, even though they differ in name, form, or

shape. 16

We pronounce petitioner liable for infringement in accordance with Section 37 of

Republic Act No. 165, as amended, providing, inter alia:

Sec. 37. Right of Patentees. — A patentee shall have the exclusive

right to make, use and sell the patented machine, article or product,

and to use the patented process for the purpose of industry or

commerce, throughout the territory of the Philippines for the terms

of the patent; and such making, using, or selling by any person

without the authorization of the Patentee constitutes infringement

of the patent. (Emphasis ours)

As far as the issue regarding unfair competition is concerned, suffice it to say that

Republic Act No. 166, as amended, provides, inter alia:

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

xxx xxx xxx

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

competition, the following shall be deemed guilty of unfair

competition:

(a) Any person, who in selling his goods shall give them the

general appearance of goods of another manufacturer or dealer,

either as to the goods themselves or in the wrapping of the

packages in which they are contained, or the devices or words

thereon, or in any other feature of their appearance, which would

be likely to influence purchasers that the goods offered are those of

a manufacturer or dealer other than the actual manufacturer or

dealer, or who otherwise clothes the goods with such appearance as

shall deceive the public and defraud another of his legitimate trade.

. . .

xxx xxx xxx

Considering the foregoing, we find no reversible error in the decision of the Court of

Appeals affirming with modification the decision of the trial court.

WHEREFORE, premises considered, the decision of the Court of Appeals is hereby

AFFIRMED and this petition DENIED for lack of merit.

US V. ADAMS

This is a companion case to No. 11, Graham v. John Deere Co., decided this day

along with Nos. 37 and 43, Calmar, Inc. v. Cook Chemical Co. and Colgate-

Palmolive Co. v. Cook Chemical Co. The United States seeks review of a judgment

of the Court of Claims, holding valid and infringed a patent on a wet battery issued

to Adams. This suit under 28 U.S.C. § 1498 (1964 ed.) was brought by Adams and

others holding an interest in the patent against the Government charging both

infringement and breach of an implied contract to pay compensation for the use of

the invention. The Government challenged the validity of the patent, denied that it

had been infringed or that any contract for its use had ever existed. The Trial

Commissioner held that the patent was valid and infringed in part, but that no

contract, express or implied, had been established. The Court of Claims adopted

these findings, initially reaching only the patent questions, 330 F.2d 622, 165 Ct.Cl.

576, but subsequently, on respondents' motion to amend the judgment, deciding the

contract claims as well. 330 F.2d at 634, 165 Ct.Cl. at 598. The United States sought

certiorari on the patent validity issue only. We granted the writ, along with the

others, in order to settle the important issues of patentability presented by the four

cases. 380 U.S. 949. We affirm.

I

While this case is controlled on the merits by No. 11, Graham, ante, p. 383 U. S. 1,

respondents have raised threshold issues as to our jurisdiction which require separate

handling. They say that the petition for certiorari came too late, contending that the

90-day period for filing began with the date of the initial judgment, rather than the

date of the decision on the contract issue, citing FTC v. Minneapolis-Honeywell

Co., 344 U. S. 206 (1952). We cannot agree, first, because that case did not involve a

timely motion to amend the judgment, [Footnote 1] and, secondly, because here the

Government's liability was inextricably

Page 383 U. S. 42

linked with the alleged contract action, which was not determined until the latter

judgment.

Nor is there merit in respondents' contention that the Government failed to comply

with the requirements of our Rules 21(1) and 33 as to service, since these

requirements are not jurisdictional, no prejudice resulted, and the failure was

inadvertent.

We turn now to the merits.

II

The Patent in Issue and Its Background

The patent under consideration, U.S. No. 2,322,210, was issued in 1943 upon an

application filed in December, 1941, by Adams. It relates to a nonrechargeable, as

opposed to a storage, electrical battery. Stated simply, the battery comprises two

electrodes -- one made of magnesium, the other of cuprous chloride -- which are

placed in a container. The electrolyte, or battery fluid, used may be either plain or

salt water.

The specifications of the patent state that the object of the invention is to provide

constant voltage and current without the use of acids, conventionally employed in

storage batteries, and without the generation of dangerous fumes. Another object is

"to provide a battery which is relatively light in weight with respect to capacity" and

which

"may be manufactured and distributed to the trade in a dry condition and rendered

serviceable by merely filling the container with water."

Following the specifications, which also set out a specific embodiment of the

invention, there appear 11 claims. Of these, principal reliance has been placed upon

Claims 1 and 10, which read:

"1. A battery comprising a liquid container, a magnesium electropositive electrode

inside the container and having an exterior terminal, a fused cuprous chloride

electronegative electrode, and a terminal connected with said electronegative

electrode. "

Page 383 U. S. 43

"10. In a battery, the combination of a magnesium electropositive electrode, and an

electronegative electrode comprising cuprous chloride fused with a carbon catalytic

agent."

For several years prior to filing his application for the patent, Adams had worked in

his home experimenting on the development of a wet battery. He found that when

cuprous chloride and magnesium were used as electrodes in an electrolyte of either

plain water or salt water, an improved battery resulted.

The Adams invention was the first practical, water-activated, constant potential

battery which could be fabricated and stored indefinitely without any fluid in its

cells. It was activated within 30 minutes merely by adding water. Once activated, the

battery continued to deliver electricity at a voltage which remained essentially

constant regardless of the rate at which current was withdrawn. Furthermore, its

capacity for generating current was exceptionally large in comparison to its size and

weight. The battery was also quite efficient in that substantially its full capacity

could be obtained over a wide range of currents. One disadvantage, however, was

that, once activated, the battery could not be shut off; the chemical reactions in the

battery continued even though current was not withdrawn. Nevertheless, these

chemical reactions were highly exothermic, liberating large quantities of heat during

operation. As a result, the battery performed with little effect on its voltage or current

in very low temperatures. Relatively high temperatures would not damage the

battery. Consequently, the battery was operable from 65 below zero Fahrenheit to

200 Fahrenheit. See findings at 330 F.2d at 632, 165 Ct.Cl. at 591-592.

Less than a month after filing for his patent, Adams brought his discovery to the

attention of the Army and Navy. Arrangements were quickly made for

demonstrations

Page 383 U. S. 44

before the experts of the United States Army Signal Corps. The Signal Corps

scientists who observed the demonstrations and who conducted further tests

themselves did not believe the battery was workable. Almost a year later, in

December, 1942, Dr. George Vinal, an eminent government expert with the National

Bureau of Standards, still expressed doubts. He felt that Adams was making

"unusually large claims" for "high watt hour output per unit weight," and he found

"far from convincing" the graphical data submitted by the inventor showing the

battery's constant voltage and capacity characteristics. He recommended, "Until the

inventor can present more convincing data about the performance of his [battery]

cell, I see no reason to consider it further."

However, in November, 1943, at the height of World War II, the Signal Corps

concluded that the battery was feasible. The Government thereafter entered into

contracts with various battery companies for its procurement. The battery was found

adaptable to many uses. Indeed, by 1956, it was noted that

"[t]here can be no doubt that the addition of water activated batteries to the family of

power sources has brought about developments which would otherwise have been

technically or economically impractical."

See Tenth Annual Battery Research and Development Conference, Signal Corps

Engineering Laboratories, Fort Monmouth, N.J., p. 25 (1956). Also, see Finding No.

24, 330 F.2d at 632, 165 Ct.Cl. at 592.

Surprisingly, the Government did not notify Adams of its changed views, nor of the

use to which it was putting his device, despite his repeated requests. In 1955, upon

examination of a battery produced for the Government by the Burgess Company, he

first learned of the Government's action. His request for compensation was denied in

1960, resulting in this suit.

Page 383 U. S. 45

III

The Prior Art

The basic idea of chemical generation of electricity is, of course, quite old. Batteries

trace back to the epic discovery by the Italian scientist Volta in 1795, who found that

when two dissimilar metals are placed in an electrically conductive fluid, an

electromotive force is set up and electricity generated. Essentially, the basic elements

of a chemical battery are a pair of electrodes of different electrochemical properties

and an electrolyte which is either a liquid (in "wet" batteries) or a moist paste of

various substances (in the so-called "drycell" batteries). Various materials which may

be employed as electrodes, various electrolyte possibilities, and many combinations

of these elements have been the object of considerable experiment for almost 175

years. See generally, Vinal, Primary Batteries (New York 1950).

At trial, the Government introduced in evidence 24 patents and treatises as

representing the art as it stood in 1938, the time of the Adams invention. [Footnote 2]

Here, however, the Government has relied primarily upon only six of these

references, [Footnote 3] which we may summarize as follows.

The Niaudet treatise describes the Marie Davy cell invented in 1860 and De La Rue's

variations on it. The battery comprises a zinc anode and a silver chloride cathode.

Although it seems to have been capable of working in an electrolyte of pure water,

Niaudet says the battery was of "little interest" until De La Rue used a solution of

ammonium chloride as an electrolyte. Niaudet also states that

"[t]he capital advantage of this battery,

Page 383 U. S. 46

as in all where zinc with sal ammoniac [ammonium chloride solution] is used,

consists in the absence of any local or internal action as long as the electric circuit is

open; in other words, this battery does not work upon itself."

Hayes likewise discloses the De La Rue zinc-silver chloride cell, but with certain

mechanical differences designed to restrict the battery from continuing to act upon

itself.

The Wood patent is relied upon by the Government as teaching the substitution of

magnesium, as in the Adams patent, for zinc. Wood's patent, issued in 1928, states:

"It would seem that a relatively high voltage primary cell would be obtained by using

. . . magnesium as the . . . [positive] electrode, and I am aware that attempts have

been made to develop such a cell. As far as I am aware, however, these have all been

unsuccessful, and it has been generally accepted that magnesium could not be

commercially utilized as a primary cell electrode."

Wood recognized that the difficulty with magnesium electrodes is their susceptibility

to chemical corrosion by the action of acid or ammonium chloride electrolytes.

Wood's solution to this problem was to use a

"neutral electrolyte containing a strong soluble oxidizing agent adapted to reduce the

rate of corrosion of the magnesium electrode on open circuit."

There is no indication of its use with cuprous chloride, nor was there any indication

that a magnesium battery could be water-activated.

The Codd treatise is also cited as authority for the substitution of magnesium.

However, Codd simply lists magnesium in an electromotive series table, a tabulation

of electrochemical substances in descending order of their relative electropositivity.

He also refers to magnesium in an example designed to show that various substances

are more electropositive than others, but the discussion involves a cell containing an

acid which would destroy magnesium within minutes. In short, Codd indicates, by

inference, only that magnesium is a theoretically

Page 383 U. S. 47

desirable electrode by virtue of its highly electropositive character. He does not teach

that magnesium could be combined in a water-activated battery, or that a battery

using magnesium would have the properties of the Adams device. Nor does he

suggest, as the Government indicates, that cuprous chloride could be substituted for

silver chloride. He merely refers to the cuprous ion -- a generic term which includes

an infinite number of copper compounds -- and in no way suggests that cuprous

chloride could be employed in a battery.

The Government then cites the Wensky patent, which was issued in Great Britain in

1891. The patent relates to the use of cuprous chloride as a depolarizing agent. The

specifications of his patent disclose a battery comprising zinc and copper electrodes,

the cuprous chloride being added as a salt in an electrolyte solution containing zinc

chloride as well. While Wensky recognized that cuprous chloride could be used in a

constant-current cell, there is no indication that he taught a water-activated system or

that magnesium could be incorporated in his battery.

Finally, the Skrivanoff patent depended upon by the Government relates to a battery

designed to give intermittent, as opposed to continuous, service. While the patent

claims magnesium as an electrode, it specifies that the electrolyte to be used in

conjunction with it must be a solution of "alcoline, chloro-chromate, or a

permanganate strengthened with sulphuric acid." The cathode was a copper or

carbon electrode faced with a paste of "phosphoric acid, amorphous phosphorous,

metallic copper in spangles, and cuprous chloride." This paste is to be mixed with

hot sulfuric acid before applying to the electrode. The Government's expert testified

in trial that he had no information as to whether the cathode, as placed in the battery,

would, after having been mixed with the other chemicals prescribed, actually

Page 383 U. S. 48

contain cuprous chloride. Furthermore, respondents' expert testified without

contradiction that he had attempted to assemble a battery made in accordance with

Skrivanoff's teachings, but was met first with a fire when he sought to make the

cathode, and then with an explosion when he attempted to assemble the complete

battery.

IV

The Validity of the Patent

The Government challenges the validity of the Adams patent on grounds of lack of

novelty under 35 U.S.C. § 102(a) (1964 ed.), as well as obviousness under 35 U.S.C.

§ 103 (1964 ed.) As we have seen in Graham v. John Deere Co., ante, p. 383 U. S. 1,

novelty and nonobviousness -- as well as utility -- are separate tests of patentability,

and all must be satisfied in a valid patent.

The Government concludes that wet batteries comprising a zinc anode and silver

chloride cathode are old in the art, and that the prior art shows that magnesium may

be substituted for zinc and cuprous chloride for silver chloride. Hence, it argues that

the

"combination of magnesium and cuprous chloride in the Adams battery was not

patentable, because it represented either no change or an insignificant change as

compared the prior battery designs."

And, despite

"the fact that, wholly unexpectedly, the battery showed certain valuable operating

advantages over other batteries, [these advantages] would certainly not justify a

patent on the essentially old formula."

There are several basic errors in the Government's position. First, the fact that the

Adams battery is water-activated sets his device apart from the prior art. It is true that

Claims 1 and 10, supra, do not mention a water electrolyte, but, as we have noted, a

stated object of the invention was to provide a battery rendered serviceable by the

mere addition of water. While the claims of a

Page 383 U. S. 49

patent limit the invention, and specifications cannot be utilized to expand the patent

monopoly, Burns v. Meyer, 100 U. S. 671, 100 U. S. 672 (1880); McCarty v. Lehigh

Valley R. Co., 160 U. S. 110, 160 U. S. 116 (1895), it is fundamental that claims are

to be construed in the light of the specifications, and both are to be read with a view

to ascertaining the invention, Seymour v. Osborne, 11 Wall. 516,78 U. S.

547 (1871); Schriber-Schroth Co. v. Cleveland Trust Co., 311 U. S.

211 (1940); Schering Corp. v. Gilbert, 153 F.2d 428 (1946). Taken together with the

stated object of disclosing a water-activated cell, the lack of reference to any

electrolyte in Claims 1 and 10 indicates that water alone could be used. Furthermore,

of the 11 claims in issue, three of the narrower ones include references to specific

electrolyte solutions comprising water and certain salts. The obvious implication

from the absence of any mention of an electrolyte -- a necessary element in any

battery -- in the other eight claims reinforces this conclusion. It is evident that

respondents' present reliance upon this feature was not the afterthought of an astute

patent trial lawyer. In his first contact with the Government less than a month after

the patent application was filed, Adams pointed out that "no acids, alkalines or any

other liquid other than plain water is used in this cell. Water does not have to be

distilled. . . ." Letter to Charles F. Kettering (January 7, 1942), R., pp. 415, 416. Also

see his letter to the Department of Commerce (March 28, 1942), R., p. 422. The

findings, approved and adopted by the Court of Claims, also fully support this

conclusion.

Nor is Sinclair & Carroll Co. v. Interchemical Corp., 325 U. S. 327 (1945), apposite

here. There, the patentee had developed a rapidly drying printing ink. All that was

needed to produce such an ink was a solvent which evaporated quickly upon heating.

Knowing that the boiling point of a solvent is an indication of its rate of

Page 383 U. S. 50

evaporation, the patentee merely made selections from a list of solvents and their

boiling points. This was no more than "selecting the last piece to put into the last

opening in a jig-saw puzzle." 325 U.S. at 325 U. S. 335. Indeed, the Government's

reliance upon Sinclair & Carroll points up the fallacy of the underlying premise of

its case. The solvent in Sinclair & Carroll had no functional relation to the printing

ink involved. It served only as an inert carrier. The choice of solvent was dictated by

known, required properties. Here, however, the Adams battery is shown to embrace

elements having an interdependent functional relationship. It begs the question, and

overlooks the holding of the Commissioner and the Court of Claims, to state merely

that magnesium and cuprous chloride were individually known battery components.

If such a combination is novel, the issue is whether bringing them together as taught

by Adams was obvious in the light of the prior art.

We believe that the Court of Claims was correct in concluding that the Adams

battery is novel. Skrivanoff disclosed the use of magnesium in an electrolyte

completely different from that used in Adams. As we have mentioned, it is even open

to doubt whether cuprous chloride was a functional element in Skrivanoff. In view of

the unchallenged testimony that the Skrivanoff formulation was both dangerous and

inoperable, it seems anomalous to suggest that it is an anticipation of Adams. An

inoperable invention or one which fails to achieve its intended result does not

negative novelty. Smith v. Snow, 294 U. S. 1, 294 U. S. 17 (1935). That in 1880

Skrivanoff may have been able to convince a foreign patent examiner to issue a

patent on his device has little significance in the light of the foregoing.

Nor is the Government's contention that the electrodes of Adams were mere

substitutions of preexisting battery designs supported by the prior art. If the use of

magnesium

Page 383 U. S. 51

for zinc and cuprous chloride for silver chloride were merely equivalent

substitutions, it would follow that the resulting device -- Adams' -- would have

equivalent operating characteristics. But it does not. The court below found, and the

Government apparently admits, that the Adams battery, "wholly unexpectedly," has

shown "certain valuable operating advantages over other batteries," while those from

which it is claimed to have been copied were long ago discarded. Moreover, most of

the batteries relied upon by the Government were of a completely different type,

designed to give intermittent power and characterized by an absence of internal

action when not in use. Some provided current at voltages which declined fairly

proportionately with time. [Footnote 4] Others were so-called standard cells which,

though producing a constant voltage, were of use principally for calibration or

measurement purposes. Such cells cannot be used as sources of power. [Footnote 5]

For these reasons, we find no equivalency. [Footnote 6]

We conclude the Adams battery was also nonobvious. As we have seen, the

operating characteristics of the Adams battery have been shown to have been

unexpected, and to have far surpassed then-existing wet batteries. Despite the fact

that each of the elements of the Adams battery was well known in the prior art, to

combine

Page 383 U. S. 52

them as did Adams required that a person reasonably skilled in the prior art must

ignore that (1) batteries which continued to operate on an open circuit and which

heated in normal use were not practical; and (2) water-activated batteries were

successful only when combined with electrolytes detrimental to the use of

magnesium. These long-accepted factors, when taken together, would, we believe,

deter any investigation into such a combination as is used by Adams. This is not to

say that one who merely finds new uses for old inventions by shutting his eyes to

their prior disadvantages thereby discovers a patentable innovation. We do say,

however, that known disadvantages in old devices which would naturally discourage

the search for new inventions may be taken into account in determining obviousness.

Nor are these the only factors bearing on the question of obviousness. We have seen

that, at the time Adams perfected his invention, noted experts expressed disbelief in

it. Several of the same experts subsequently recognized the significance of the

Adams invention, some even patenting improvements on the same system.

Fischbach et al., U.S. Patent No. 2,636,060 (1953). Furthermore, in a crowded art

replete with a century and a half of advancement, the Patent Office found not one

reference to cite against the Adams application. Against the subsequently issued

improvement patents to Fischbach, supra, and to Chubb, U.S. Reissue Patent No.

23,883 (1954), it found but three references prior to Adams -- none of which are

relied upon by the Government.

We conclude that the Adams patent is valid. The judgment of the Court of Claims is

affirmed. It is so ordered.

Affirmed.

GOODYEAR TIRE AND RUBBER CO. V. RAY-O-VAC CO.

This case involves the validity and alleged infringement of the Anthony Patent No.

2,198,413, issued April 23, 1940. The District Court held the patent valid and

infringed  1   and its judgment was affirmed by the Circuit Court of Appeals.  2

The patent, a very narrow one in a crowded art, is for a leakproof dry cell for a flash

light battery. The conventional dry cell embodies a cup-like zinc electrode acting as a

container for a central carbon electrode, electrolyte, and depolarizing mix. The

bottom enclosure is the terminal for one electrode, the top enclosure for the other.

The electrolyte is a viscous liquid composed of ammonium chloride, zinc chloride,

water and starch. Use of the battery causes erosion of the zinc and eventually the

mixture leaks through the container. A short circuit, or long continuous use, causes

the formation of solids as the zinc is eaten away. The resultant expansion of the cell

contents, due to the weakness of the zinc walls, causes bulging, breaking, and

seepage. The escaping liquid tends to injure the metal walls of the flash light casing.

Dry cells have been used in flash lights for many years. The tendency of the cells to

damage flash light containers by leakage, bulging, and freezing in the container had

long plagued the industry. So much so that most manufacturers attached warning

notices to their flash light batteries advising users not to allow them to remain in the

flash light for extended periods of non-use and to remove a celll promptly upon

ascertaining that it was dead.

No patent in the prior art addressed itself to the problem of preventing both leakage

and swelling in a dry cell. At the time of the Anthony application flash light cells

were commonly encased in a paper coating which might or might not be

waterproofed, or in some other similar casing for purposes of insulation from the

case. In the patent in suit Anthony calls attention to the existing difficulties and states

that his invention is for an improved protective casing which will prevent fluids from

leaking out of the cell and causing injury to the case or other dry cells within it. He

also adverts to the tendency of the cells to swell after a certain time and associates

this swelling with the leaking. He states that the object of his invention is to protect

the side walls of the zinc cup by providing a strong metal sheath which will closely

and rigidly confine the cell to a given length and diameter and, while providing such

a sheath, to insulate it from both terminals so as to render unnecessary the use of an

insulating over or label to prevent the cell from short circuiting by contact with the

side walls of the case. To accomplish his objects Anthony used the ordinary type of

dry cell having circuit terminals at opposite ends, one electrode being a cylindrical

zinc cup, the other a centrally placed carbon electrode, in electrolyte and

depolarizing mix, the bottom closure affording a terminal for one electrode and the

top for the other. Around this conventional combination he placed an insulating

material and an outside protecting metal sheath which would enclose the insulated

side walls of the zinc cup and tightly embrace both upper and lower closures to

prevent leakage.

The claims in suit are Nos. 1, 2, and 3. If 1 is good, 2 and 3 are also. We, therefore,

quote 1:

'A leak-immunized flash light dry-cell provided with circuit terminals at opposite

ends, comprising: a hollow cylindrical zinc metal electrode containing electrolyte; a

centrally disposed carbon electrode and depolarizing-mix in said electrolyte; a

bottom closure for the cell affording a terminal for one of the electrodes; a top

closure for the cell provided with a terminal for the other electrode, electrically

insulated from the first mentioned terminal; and a protecting sheet-metal sheath

insulated from both of said electrodes and enclosing the side walls of said metal

electrode and tightly embracing said closures so as to prevent leakage of the

electrolyte from the unit.'

The District Judge made findings, which have support in the evidence, to the

following effect: That the problem presented was old and no solution was attained

prior to Anthony's invention; that the respondent began marketing the patented cell in

1939 and was the first to guarantee its product against sticking in the flash light case;

that the cell met with immediate commercial success due to the advantages of its

construction and not to extensive advertising; that its advantages were recognized by

the Army and other governmental agencies and were demonstrated by reliable tests.

In his opinion he examined the prior art and showed that none of the workers in the

art had met the problems of leakage and swelling in the way suggested by Anthony

and that most of the cited patents had not in fact been addressed to these problems.

With respect to the charge of infringement, the court found, on sufficient evidence:

That the petitioners consciously copied the respondent's commercial cell, which was

made in accordance with the claims of the patent; that the petitioners' cell infringed

the claims in suit, since the petitioners' substitutions of structure and material were

no more than the choice of mechanical alternatives and did not avoid the practice of

the principle disclosed by the patent.

The Circuit Court of Appeals reexamined the findings in the light of the evidence

and accepted them. It must be a strong case in which this court will set aside these

concurrent findings of two courts.  3   We think this is not such a case.

Viewed after the event, the means Anthony adopted seem simple and such as should

have been obvious to those who worked in the field, but this is not enough to

negative invention.  4   During a period of half a century, in which the use of flash light

batteries increased enormously, and the manufacturers of flash light cells were

conscious of the defects in them, no one devised a method of curing such defects.

Once the method was discovered it commended itself to the public as evidenced by

marked commercial success. These factors were entitled to weight in determining

whether the improvement amounted to invention and should, in a close case, tip the

scales in favor of patentability.  5 Accepting, as we do, the findings below, we hold the

patent valid and infringed.

The petitioners renew here contentions, based on asserted insufficiency of

description of the invention and on alleged file-wrapper estoppel, which the courts

below overruled. We have considered these defenses but conclude that the proofs do

not sustain them.

Decree affirmed.

Affirmed.

DIAMOND V. DIEHR

I The patent application at issue was filed by the respondents on August 6, 1975. The

claimed invention is a process for molding raw, uncured synthetic rubber into cured

precision products. The process uses a mold for precisely shaping the uncured

material under heat and pressure and then curing the synthetic rubber in the mold so

that the product will retain its shape and be functionally operative after the molding

is completed.

Respondents claim that their process ensures the production of molded articles which

are properly cured. Achieving the perfect cure depends upon several factors,

including the thickness of the article to be molded, the temperature of the molding

process, and the amount of time that the article is allowed to remain in the press. It is

possible, using well-known time, temperature, and cure relationships, to calculate by

means of the Arrhenius equation [Footnote 2] when to open the press

Page 450 U. S. 178

and remove the cured product. Nonetheless, according to the respondents, the

industry has not been able to obtain uniformly accurate cures, because the

temperature of the molding press could not be precisely measured, thus making it

difficult to do the necessary computations to determine cure time. [Footnote 3]

Because the temperature inside the press has heretofore been viewed as an

uncontrollable variable, the conventional industry practice has been to calculate the

cure time as the shortest time in which all parts of the product will definitely be

cured, assuming a reasonable amount of mold-opening time during loading and

unloading. But the shortcoming of this practice is that operating with an

uncontrollable variable inevitably led in some instances to overestimating the mold-

opening time and overcuring the rubber, and in other instances to underestimating

that time and undercuring the product. [Footnote 4]

Respondents characterize their contribution to the art to reside in the process of

constantly measuring the actual temperature inside the mold. These temperature

measurements are then automatically fed into a computer which repeatedly

recalculates the cure time by use of the Arrhenius equation.

Page 450 U. S. 179

When the recalculated time equals the actual time that has elapsed since the press

was closed, the computer signals a device to open the press. According to the

respondents, the continuous measuring of the temperature inside the mold cavity, the

feeding of this information to a digital computer which constantly recalculates the

cure time, and the signaling by the computer to open the press are all new in the art.

The patent examiner rejected the respondents' claims on the sole ground that they

were drawn to nonstatutory subject matter under 35 U.S.C. § 101. [Footnote 5] He

determined that those

Page 450 U. S. 180

steps in respondents' claims that are carried out by a computer under control of a

stored program constituted nonstatutory subject matter under this Court's decision

in Gottschalk v. Benson, 409 U. S. 63 (1972). The remaining steps -- installing

rubber in the press and the subsequent closing of the

Page 450 U. S. 181

press -- were "conventional and necessary to the process, and cannot be the basis of

patentability." The examiner concluded that respondents' claims defined and sought

protection of a computer program for operating a rubber-molding press.

The Patent and Trademark Office Board of Appeals agreed with the examiner, but

the Court of Customs and Patent Appeals reversed. In re Diehr, 602 F.2d 892 (1979).

The court noted that a claim drawn to subject matter otherwise statutory does not

become nonstatutory because a computer is involved. The respondents' claims were

not directed to a mathematical algorithm or an improved method of calculation, but

rather recited an improved process for molding rubber articles by solving a practical

problem which had arisen in the molding of rubber products.

The Commissioner of Patents and Trademarks sought certiorari, arguing that the

decision of the Court of Customs and Patent Appeals was inconsistent with prior

decisions of this Court. Because of the importance of the question presented, we

granted the writ. 445 U.S. 926 (1980).

II Last Term, in Diamond v. Chakrabarty, 447 U. S. 303 (1980), this Court discussed

the historical purposes of the patent laws, and, in particular, 35 U.S.C. § 101. As

in Chakrabarty, we must here construe 35 U.S.C. § 101, which provides:

"Whoever invents or discovers any new and useful process, machine, manufacture,

or composition of matter, or any new and useful improvement thereof, may obtain a

patent therefor, subject to the conditions and requirements of this title. [Footnote 6] "

Page 450 U. S. 182

In cases of statutory construction, we begin with the language of the statute. Unless

otherwise defined, "words will be interpreted as taking their ordinary, contemporary

common meaning," Perrin v. United States, 444 U. S. 37, 444 U. S. 42 (1979), and,

in dealing with the patent laws, we have more than once cautioned that

"courts should not read into the patent laws limitations and conditions which the

legislature has not expressed.'" Diamond v. Chakrabarty, supra, at 447 U. S. 308,

quoting United States v. Dubilier Condenser Corp., 289 U. S. 178, 289 U. S.

199 (1933).

The Patent Act of 1793 defined statutory subject matter as "any new and useful art,

machine, manufacture or composition of matter, or any new or useful improvement

[thereof]." Act of Feb. 21, 1793, ch. 11, § 1, 1 Stat. 318. Not until the patent laws

were recodified in 1952 did Congress replace the word "art" with the word "process."

It is that latter word which we confront today, and, in order to determine its meaning,

we may not be unmindful of the Committee Reports accompanying the 1952 Act

which inform us that Congress intended statutory subject matter to "include anything

under the sun that is made by man." S.Rep. No.1979, 82d Cong., 2d Sess., 5 (1952);

H.R.Rep. No.1923, 82d Cong., 2d Sess., 6 (1952).

Although the term "process" was not added to 35 U.S.C. § 101 until 1952, a process

has historically enjoyed patent protection because it was considered a form of "art"

as that term was used in the 1793 Act. [Footnote 7] In defining the nature of a

patentable process, the Court stated:

"That a process may be patentable, irrespective of the

Page 450 U. S. 183

particular form of the instrumentalities used, cannot be disputed. . . . A process is a

mode of treatment of certain materials to produce a given result. It is an act, or a

series of acts, performed upon the subject matter to be transformed and reduced to a

different state or thing. If new and useful, it is just as patentable as is a piece of

machinery. In the language of the patent law, it is an art. The machinery pointed out

as suitable to perform the process may or may not be new or patentable; whilst the

process itself may be altogether new, and produce an entirely new result. The process

requires

Page 450 U. S. 184

that certain things should be done with certain substances, and in a certain order; but

the tools to be used in doing this may be of secondary consequence."

Cochrane v. Deener, 94 U. S. 780, 94 U. S. 787-788 (1877).

Analysis of the eligibility of a claim of patent protection for a "process" did not

change with the addition of that term to § 101. Recently, in Gottschalk v.

Benson, 409 U. S. 63 (1972), we repeated the above definition recited in Cochrane v.

Deener, adding:

"Transformation and reduction of an article 'to a different state or thing' is the clue to

the patentability of a process claim that does not include particular machines."

409 U.S. at 409 U. S. 70.

Analyzing respondents' claims according to the above statements from our cases, we

think that a physical and chemical process for molding precision synthetic rubber

products falls within the § 101 categories of possibly patentable subject matter. That

respondents' claims involve the transformation of an article, in this case raw, uncured

synthetic rubber, into a different state or thing cannot be disputed. The respondents'

claims describe in detail a step-by-step method for accomplishing such, beginning

with the loading of a mold with raw, uncured rubber and ending with the eventual

opening of the press at the conclusion of the cure. Industrial processes such as this

are the types which have historically been eligible to receive the protection of our

patent laws. [Footnote 8]

Page 450 U. S. 185

III

Our conclusion regarding respondents' claims is not altered by the fact that, in

several steps of the process, a mathematical equation and a programmed digital

computer are used. This Court has undoubtedly recognized limits to § 101, and every

discovery is not embraced within the statutory terms. Excluded from such patent

protection are laws of nature, natural phenomena, and abstract ideas. See Parker v.

Flook, 437 U. S. 584 (1978); Gottschalk v. Benson, supra at 409 U. S. 67; Funk

Bros. Seed Co. v. Kalo Inoculant Co., 333 U. S. 127, 333 U. S. 130 (1948). "An idea

of itself is not patentable," Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 87 U. S.

507 (1874).

"A principle, in the abstract, is a fundamental truth; an original cause; a motive; these

cannot be patented, as no one can claim in either of them an exclusive right."

Le Roy v. Tatham, 14 How. 156, 55 U. S. 175 (1853). Only last Term, we explained:

"[A] new mineral discovered in the earth or a new plant found in the wild is not

patentable subject matter|"

"[A] new mineral discovered in the earth or a new plant found in the wild is not

patentable subject matter. Likewise, Einstein could not patent his celebrated law that

E=mc^2; nor could Newton have patented the law of gravity. Such discoveries are

'manifestations of . . . nature, free to all men and reserved exclusively to none.'"

Diamond v. Chakrabarty, 447 U.S. at 447 U. S. 309, quoting Funk Bros. Seed Co. v.

Kalo Inoculant Co., supra at 333 U. S. 130.

Our recent holdings in Gottschalk v. Benson, supra, and Parker v. Flook, supra, both

of which are computer-related, stand for no more than these long-established

principles. In Benson, we held unpatentable claims for an algorithm used to convert

binary code decimal numbers to equivalent pure binary numbers. The sole practical

application of the algorithm was in connection with the programming of a

Page 450 U. S. 186

general purpose digital computer. We defined "algorithm" as a "procedure for

solving a given type of mathematical problem," and we concluded that such an

algorithm, or mathematical formula, is like a law of nature, which cannot be the

subject of a patent. [Footnote 9]

Parker v. Flook, supra, presented a similar situation. The claims were drawn to a

method for computing an "alarm limit." An "alarm limit" is simply a number, and the

Court concluded that the application sought to protect a formula for computing this

number. Using this formula, the updated alarm limit could be calculated if several

other variables were known. The application, however, did not purport to explain

how these other variables were to be determined, [Footnote 10] nor

Page 450 U. S. 187

did it purport

"to contain any disclosure relating to the chemical processes at work, the monitoring

of process variables, or the means of setting off an alarm or adjusting an alarm

system. All that it provides is a formula for computing an updated alarm limit."

437 U.S. at 437 U. S. 586.

In contrast, the respondents here do not seek to patent a mathematical formula.

Instead, they seek patent protection for a process of curing synthetic rubber. Their

process admittedly employs a well-known mathematical equation, but they do not

seek to preempt the use of that equation. Rather, they seek only to foreclose from

others the use of that equation in conjunction with all of the other steps in their

claimed process. These include installing rubber in a press, closing the mold,

constantly determining the temperature of the mold, constantly recalculating the

appropriate cure time through the use of the formula and a digital computer, and

automatically opening the press at the proper time. Obviously, one does not need a

"computer" to cure natural or synthetic rubber, but if the computer use incorporated

in the process patent significantly lessens the possibility of "overcuring" or

"undercuring," the process as a whole does not thereby become unpatentable subject

matter.

Our earlier opinions lend support to our present conclusion that a claim drawn to

subject matter otherwise statutory does not become nonstatutory simply because it

uses a mathematical formula, computer program, or digital computer. In Gottschalk

v. Benson, we noted: "It is said that the decision precludes a patent for any program

servicing a computer. We do not 90 hold." 409 U.S. at 409 U. S. 71. Similarly,

in Parker v. Flook, we stated that "a process is not unpatentable simply because it

contains a law of nature or a mathematical algorithm." 437 U.S. at 437 U. S. 590. It

is now commonplace that an application of a law of nature or mathematical formula

to a known structure or process may well be deserving of patent protection. See,

e.g., 333 U. S.   Seed

Page 450 U. S. 188

Co. v. Kalo Inoculant Co., 333 U. S. 127 (1948); Ebel Process Co. v. Minnesota &

Ontario Paper Co., 261 U. S. 45 (1923); Cochrane v. Deener, 94 U. S.

780 (1877) O'Reilly v. Morse, 15 How. 62 (1854); and Le Roy v. Tatham, 14 How.

156 (1853). As Justice Stone explained four decades ago:

"While a scientific truth, or the mathematical expression of it, is not a patentable

invention, a novel and useful structure created with the aid of knowledge of scientific

truth may be."

Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U. S. 86, 306 U. S.

94 (1939). [Footnote 11]

We think this statement in Mackay takes us a long way toward the correct answer in

this case. Arrhenius' equation is not patentable in isolation, but when a process for

curing rubber is devised which incorporates in it a more efficient solution of the

equation, that process is, at the very least, not barred at the threshold by § 101.

In determining the eligibility of respondents' claimed process for patent protection

under § 101, their claims must be considered as a whole. It is inappropriate to dissect

the claims into old and new elements and then to ignore the presence of the old

elements in the analysis. This is particularly true in a process claim, because a new

combination of steps in a process may be patentable even though all the constituents

of the combination were well known and in common use before the combination was

made. The "novelty" of any element or steps in a process, or even of the

Page 450 U. S. 189

process itself, is of no relevance in determining whether the subject matter of a claim

falls within the § 101 categories of possibly patentable subject matter. [Footnote 12]

It has been urged that novelty is an appropriate consideration under § 101.

Presumably, this argument results from the language in § 101 referring to any "new

and useful" process, machine, etc. Section 101, however, is a general statement of

the type of subject matter that is eligible for patent protection "subject to the

conditions and requirements of this title." Specific conditions for patentability

follow, and § 102 covers in detail the conditions relating to novelty. [Footnote 13]

Page 450 U. S. 190

The question, therefore, of whether a particular invention is novel is "wholly apart

from whether the invention falls into a category of statutory subject matter." In re

Bergy, 596 F.2d 952, 961 (CCPA 1979) (emphasis deleted). See also Nickola v.

Peterson, 580 F.2d 898 (CA6 1978). The legislative history of the 1952 Patent Act is

in accord with this reasoning. The Senate Report stated:

"Section 101 sets forth the subject matter that can be patented, 'subject to the

conditions and requirements of this title.' The conditions under which a patent may

be obtained follow, and Section 102 covers the conditions relating to novelty."

S.Rep. No.1979, 82d Cong., 2d Sess., 5 (1952) (emphasis supplied). It is later stated

in the same Report:

"Section 102, in general, may be said to describe the statutory novelty required for

patentability, and includes,

Page 450 U. S. 191

in effect, an amplification and definition of 'new' in section 101."

Id. at 6. Finally, it is stated in the "Revision Notes":

"The corresponding section of [the] existing statute is split into two sections, section

101 relating to the subject matter for which patents may be obtained, and section 102

defining statutory novelty and stating other conditions for patentability."

Id. at 17. See also H.R.Rep. No.1923, 82d Cong., 2d Sess., 6, 7, and 17 (1952).

In this case, it may later be determined that the respondents' process is not deserving

of patent protection because it fails to satisfy the statutory conditions of novelty

under § 102 or nonobviousness under § 103. A rejection on either of these grounds

does not affect the determination that respondents' claims recited subject matter

which was eligible for patent protection under § 101.

IV

We have before us today only the question of whether respondents' claims fall within

the § 101 categories of possibly patentable subject matter. We view respondents'

claims as nothing more than a process for molding rubber products, and not as an

attempt to patent a mathematical formula. We recognize, of course, that, when a

claim recites a mathematical formula (or scientific principle or phenomenon of

nature), an inquiry must be made into whether the claim is seeking patent protection

for that formula in the abstract. A mathematical formula, as such, is not accorded the

protection of our patent laws, Gottschalk v. Benson, 409 U. S. 63 (1972), and this

principle cannot be circumvented by attempting to limit the use of the formula to a

particular technological environment. Parker v. Flook, 437 U. S. 584 (1978).

Similarly, insignificant post-solution activity will not transform

Page 450 U. S. 192

an unpatentable principle into a patentable process. Ibid. [Footnote 14] To hold

otherwise would allow a competent draftsman to evade the recognized limitations on

the type of subject matter eligible for patent protection. On the other hand, when a

claim containing a mathematical formula implements or applies that formula in a

structure or process which, when considered as a whole, is performing a function

which the patent laws were designed to protect (e.g., transforming or reducing an

article to a different state or thing), then the claim satisfies the requirements of § 101.

Because we do not view respondents' claims as an attempt to patent a mathematical

formula, but rather to be drawn to an industrial process

Page 450 U. S. 193

for the molding of rubber products, we affirm the judgment of the Court of Customs

and Patent Appeals. [Footnote 15] It is so ordered.

JESSIE G. CHING, petitioner, vs. WILLIAM M. SALINAS, SR., WILLIAM M.

SALINAS, JR., JOSEPHINE L. SALINAS, JENNIFER Y. SALINAS,

ALONTO SOLAIMAN SALLE, JOHN ERIC I. SALINAS, NOEL M. YABUT

(Board of Directors and Officers of WILAWARE PRODUCT

CORPORATION), respondents.

Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co.,

the maker and manufacturer of a Utility Model, described as "Leaf Spring Eye

Bushing for Automobile" made up of plastic.

On September 4, 2001, Ching and Joseph Yu were issued by the National Library

Certificates of Copyright Registration and Deposit of the said work described therein

as "Leaf Spring Eye Bushing for Automobile."4

On September 20, 2001, Ching requested the National Bureau of Investigation (NBI)

for police/investigative assistance for the apprehension and prosecution of illegal

manufacturers, producers and/or distributors of the works.5

After due investigation, the NBI filed applications for search warrants in the RTC of

Manila against William Salinas, Sr. and the officers and members of the Board of

Directors of Wilaware Product Corporation. It was alleged that the respondents

therein reproduced and distributed the said models penalized under Sections 177.1

and 177.3 of Republic Act (R.A.) No. 8293. The applications sought the seizure of

the following:

a.) Undetermined quantity of Leaf spring eye bushing for automobile that

are made up of plastic polypropylene;

b.) Undetermined quantity of Leaf spring eye bushing for automobile that

are made up of polyvinyl chloride plastic;

c.) Undetermined quantity of Vehicle bearing cushion that is made up of

polyvinyl chloride plastic;

d.) Undetermined quantity of Dies and jigs, patterns and flasks used in the

manufacture/fabrication of items a to d;

e.) Evidences of sale which include delivery receipts, invoices and official

receipts.6

The RTC granted the application and issued Search Warrant Nos. 01-2401 and 01-

2402 for the seizure of the aforecited articles.7 In the inventory submitted by the NBI

agent, it appears that the following articles/items were seized based on the search

warrants:

Leaf Spring eye bushing

a) Plastic Polypropylene

- C190 27 }

- C240 rear 40 }

- C240 front 41 } BAG 1

b) Polyvinyl Chloride Plastic

- C190 13 }

c) Vehicle bearing cushion

- center bearing cushion 11 }

Budder for C190 mold 8 }

Diesel Mold

a) Mold for spring eye bushing rear 1 set

b) Mold for spring eye bushing front 1 set

c) Mold for spring eye bushing for C190 1 set

d) Mold for C240 rear 1 piece of the set

e) Mold for spring eye bushing for L300 2 sets

f) Mold for leaf spring eye bushing C190 with metal 1 set

g) Mold for vehicle bearing cushion 1 set8

The respondents filed a motion to quash the search warrants on the following

grounds:

2. The copyright registrations were issued in violation of the Intellectual Property

Code on the ground that:

a) the subject matter of the registrations are not artistic or literary;

b) the subject matter of the registrations are spare parts of automobiles

meaning – there (sic) are original parts that they are designed to replace.

Hence, they are not original.9

The respondents averred that the works covered by the certificates issued by the

National Library are not artistic in nature; they are considered automotive spare parts

and pertain to technology. They aver that the models are not original, and as such are

the proper subject of a patent, not copyright.10

In opposing the motion, the petitioner averred that the court which issued the search

warrants was not the proper forum in which to articulate the issue of the validity of

the copyrights issued to him. Citing the ruling of the Court inMalaloan v. Court of

Appeals,11 the petitioner stated that a search warrant is merely a judicial process

designed by the Rules of Court in anticipation of a criminal case. Until his copyright

was nullified in a proper proceeding, he enjoys rights of a registered owner/holder

thereof.

On January 3, 2002, the trial court issued an Order12 granting the motion, and

quashed the search warrant on its finding that there was no probable cause for its

issuance. The court ruled that the work covered by the certificates issued to the

petitioner pertained to solutions to technical problems, not literary and artistic as

provided in Article 172 of the Intellectual Property Code.

His motion for reconsideration of the order having been denied by the trial court’s

Order of February 14, 2002, the petitioner filed a petition for certiorari in the CA,

contending that the RTC had no jurisdiction to delve into and resolve the validity of

the copyright certificates issued to him by the National Library. He insisted that his

works are covered by Sections 172.1 and 172.2 of the Intellectual Property Code.

The petitioner averred that the copyright certificates are prima facie evidence of its

validity, citing the ruling of the United States Court of Appeals in Wildlife Express

Corporation v. Carol Wright Sales, Inc.13 The petitioner asserted that the respondents

failed to adduce evidence to support their motion to quash the search warrants. The

petitioner noted that respondent William Salinas, Jr. was not being honest, as he was

able to secure a similar copyright registration of a similar product from the National

Library on January 14, 2002.

On September 26, 2003, the CA rendered judgment dismissing the petition on its

finding that the RTC did not commit any grave abuse of its discretion in issuing the

assailed order, to wit:

It is settled that preliminarily, there must be a finding that a specific offense must

have been committed to justify the issuance of a search warrant. In a number of cases

decided by the Supreme Court, the same is explicitly provided, thus:

"The probable cause must be in connection with one specific offense, and the judge

must, before issuing the warrant, personally examine in the form of searching

questions and answers, in writing and under oath, the complainant and any witness

he may produce, on facts personally known to them and attach to the record their

sworn statements together with any affidavit submitted.

"In the determination of probable cause, the court must necessarily resolve whether

or not an offense exists to justify the issuance or quashal of the search warrant."

In the instant case, the petitioner is praying for the reinstatement of the search

warrants issued, but subsequently quashed, for the offense of Violation of Class

Designation of Copyrightable Works under Section 177.1 in relation to Section 177.3

of Republic Act 8293, when the objects subject of the same, are patently not

copyrightable.

It is worthy to state that the works protected under the Law on Copyright are: literary

or artistic works (Sec. 172) and derivative works (Sec. 173). The Leaf Spring Eye

Bushing and Vehicle Bearing Cushion fall on neither classification. Accordingly, if,

in the first place, the item subject of the petition is not entitled to be protected by the

law on copyright, how can there be any violation?14

The petitioner’s motion for reconsideration of the said decision suffered the same

fate. The petitioner forthwith filed the present petition for review on certiorari,

contending that the revocation of his copyright certificates should be raised in a

direct action and not in a search warrant proceeding.

The petitioner posits that even assuming ex argumenti that the trial court may resolve

the validity of his copyright in a proceeding to quash a search warrant for allegedly

infringing items, the RTC committed a grave abuse of its discretion when it declared

that his works are not copyrightable in the first place. He claims that R.A. No. 8293,

otherwise known as the Intellectual Property Code of the Philippines, which took

effect on January 1, 1998, provides in no uncertain terms that copyright protection

automatically attaches to a work by the sole fact of its creation, irrespective of its

mode or form of expression, as well as of its content, quality or purpose.15 The law

gives a non-inclusive definition of "work" as referring to original intellectual

creations in the literary and artistic domain protected from the moment of their

creation; and includes original ornamental designs or models for articles of

manufacture, whether or not registrable as an industrial design and other works of

applied art under Section 172.1(h) of R.A. No. 8293.lawphil.net

As such, the petitioner insists, notwithstanding the classification of the works as

either literary and/or artistic, the said law, likewise, encompasses works which may

have a bearing on the utility aspect to which the petitioner’s utility designs were

classified. Moreover, according to the petitioner, what the Copyright Law protects is

the author’s intellectual creation, regardless of whether it is one with utilitarian

functions or incorporated in a useful article produced on an industrial scale.

The petitioner also maintains that the law does not provide that the intended use or

use in industry of an article eligible for patent bars or invalidates its registration

under the Law on Copyright. The test of protection for the aesthetic is not beauty and

utility, but art for the copyright and invention of original and ornamental design for

design patents.16 In like manner, the fact that his utility designs or models for articles

of manufacture have been expressed in the field of automotive parts, or based on

something already in the public domain does not automatically remove them from

the protection of the Law on Copyright.17

The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293 which gives

the same presumption to an affidavit executed by an author who claims copyright

ownership of his work.

The petitioner adds that a finding of probable cause to justify the issuance of a search

warrant means merely a reasonable suspicion of the commission of the offense. It is

not equivalent to absolute certainty or a finding of actual and positive cause.18 He

assists that the determination of probable cause does not concern the issue of whether

or not the alleged work is copyrightable. He maintains that to justify a finding of

probable cause in the issuance of a search warrant, it is enough that there exists a

reasonable suspicion of the commission of the offense.

The petitioner contends that he has in his favor the benefit of the presumption that

his copyright is valid; hence, the burden of overturning this presumption is on the

alleged infringers, the respondents herein. But this burden cannot be carried in a

hearing on a proceeding to quash the search warrants, as the issue therein is whether

there was probable cause for the issuance of the search warrant. The petitioner

concludes that the issue of probable cause should be resolved without invalidating

his copyright.

In their comment on the petition, the respondents aver that the work of the petitioner

is essentially a technical solution to the problem of wear and tear in automobiles, the

substitution of materials, i.e., from rubber to plastic matter of polyvinyl chloride, an

oil resistant soft texture plastic material strong enough to endure pressure brought

about by the vibration of the counter bearing and thus brings bushings. Such work,

the respondents assert, is the subject of copyright under Section 172.1 of R.A. No.

8293. The respondents posit that a technical solution in any field of human activity

which is novel may be the subject of a patent, and not of a copyright. They insist that

the certificates issued by the National Library are only certifications that, at a point

in time, a certain work was deposited in the said office. Furthermore, the registration

of copyrights does not provide for automatic protection. Citing Section 218.2(b) of

R.A. No. 8293, the respondents aver that no copyright is said to exist if a party

categorically questions its existence and legality. Moreover, under Section 2, Rule 7

of the Implementing Rules of R.A. No. 8293, the registration and deposit of work is

not conclusive as to copyright outlay or the time of copyright or the right of the

copyright owner. The respondents maintain that a copyright exists only when the

work is covered by the protection of R.A. No. 8293.

The petition has no merit.

The RTC had jurisdiction to delve into and resolve the issue whether the petitioner’s

utility models are copyrightable and, if so, whether he is the owner of a copyright

over the said models. It bears stressing that upon the filing of the application for

search warrant, the RTC was duty-bound to determine whether probable cause

existed, in accordance with Section 4, Rule 126 of the Rules of Criminal Procedure:

SEC. 4. Requisite for issuing search warrant. – A search warrant shall not issue but

upon probable cause in connection with one specific offense to be determined

personally by the judge after examination under oath or affirmation of the

complainant and the witnesses he may produce, and, particularly, describing the

place to be searched and the things to be seized.

In Solid Triangle Sales Corporation v. The Sheriff of RTC QC, Br. 93,19 the Court

held that in the determination of probable cause, the court must necessarily resolve

whether or not an offense exists to justify the issuance of a search warrant or the

quashal of one already issued by the court. Indeed, probable cause is deemed to exist

only where facts and circumstances exist which could lead a reasonably cautious and

prudent man to believe that an offense has been committed or is being committed.

Besides, in Section 3, Rule 126 of the Rules of Criminal Procedure, a search warrant

may be issued for the search and seizure of personal property (a) subject of the

offense; (b) stolen or embezzled and other proceeds or fruits of the offense; or (c)

used or intended to be used as the means of committing an offense.

The RTC is mandated under the Constitution and Rules of Criminal Procedure to

determine probable cause. The court cannot abdicate its constitutional obligation by

refusing to determine whether an offense has been committed.20 The absence of

probable cause will cause the outright nullification of the search warrant.21

For the RTC to determine whether the crime for infringement under R.A. No. 8293

as alleged in an application is committed, the petitioner-applicant was burdened to

prove that (a) respondents Jessie Ching and Joseph Yu were the owners of

copyrighted material; and (b) the copyrighted material was being copied and

distributed by the respondents. Thus, the ownership of a valid copyright is essential.22

Ownership of copyrighted material is shown by proof of originality and

copyrightability. By originality is meant that the material was not copied, and

evidences at least minimal creativity; that it was independently created by the author

and that it possesses at least same minimal degree of creativity.23 Copying is shown

by proof of access to copyrighted material and substantial similarity between the two

works.24 The applicant must thus demonstrate the existence and the validity of his

copyright because in the absence of copyright protection, even original creation may

be freely copied.25

By requesting the NBI to investigate and, if feasible, file an application for a search

warrant for infringement under R.A. No. 8293 against the respondents, the petitioner

thereby authorized the RTC (in resolving the application), to delve into and

determine the validity of the copyright which he claimed he had over the utility

models. The petitioner cannot seek relief from the RTC based on his claim that he

was the copyright owner over the utility models and, at the same time, repudiate the

court’s jurisdiction to ascertain the validity of his claim without running afoul to the

doctrine of estoppel.

To discharge his burden, the applicant may present the certificate of registration

covering the work or, in its absence, other evidence.26 A copyright certificate

provides prima facie evidence of originality which is one element of copyright

validity. It constitutes prima facie evidence of both validity and ownership27 and the

validity of the facts stated in the certificate.28 The presumption of validity to a

certificate of copyright registration merely orders the burden of proof. The applicant

should not ordinarily be forced, in the first instance, to prove all the multiple facts

that underline the validity of the copyright unless the respondent, effectively

challenging them, shifts the burden of doing so to the applicant.29 Indeed, Section

218.2 of R.A. No. 8293 provides:

218.2. In an action under this Chapter:

(a) Copyright shall be presumed to subsist in the work or other subject

matter to which the action relates if the defendant does not put in issue the

question whether copyright subsists in the work or other subject matter; and

(b) Where the subsistence of the copyright is established, the plaintiff shall

be presumed to be the owner of the copyright if he claims to be the owner of

the copyright and the defendant does not put in issue the question of his

ownership.

A certificate of registration creates no rebuttable presumption of copyright validity

where other evidence in the record casts doubt on the question. In such a case,

validity will not be presumed.30

To discharge his burden of probable cause for the issuance of a search warrant for

violation of R.A. No. 8293, the petitioner-applicant submitted to the RTC Certificate

of Copyright Registration Nos. 2001-197 and 2001-204 dated September 3, 2001 and

September 4, 2001, respectively, issued by the National Library covering work

identified as Leaf Spring Eye Bushing for Automobile and Vehicle Bearing Cushion

both classified under Section 172.1(h) of R.A. No. 8293, to wit:

SEC. 172. Literary and Artistic Works. – 172.1. Literary and artistic works,

hereinafter referred to as "works," are original intellectual creations in the literary

and artistic domain protected from the moment of their creation and shall include in

particular:

...

(h) Original ornamental designs or models for articles of manufacture, whether or not

registrable as an industrial design, and other works of applied art.

Related to the provision is Section 171.10, which provides that a "work of applied

art" is an artistic creation with utilitarian functions or incorporated in a useful article,

whether made by hand or produced on an industrial scale.

But, as gleaned from the specifications appended to the application for a copyright

certificate filed by the petitioner, the said Leaf Spring Eye Bushing for Automobile is

merely a utility model described as comprising a generally cylindrical body having a

co-axial bore that is centrally located and provided with a perpendicular flange on

one of its ends and a cylindrical metal jacket surrounding the peripheral walls of said

body, with the bushing made of plastic that is either polyvinyl chloride or

polypropylene.31 Likewise, the Vehicle Bearing Cushion is illustrated as a bearing

cushion comprising a generally semi-circular body having a central hole to secure a

conventional bearing and a plurality of ridges provided therefore, with said cushion

bearing being made of the same plastic materials.32 Plainly, these are not literary or

artistic works. They are not intellectual creations in the literary and artistic domain,

or works of applied art. They are certainly not ornamental designs or one having

decorative quality or value.

It bears stressing that the focus of copyright is the usefulness of the artistic design,

and not its marketability. The central inquiry is whether the article is a work of

art.33 Works for applied art include all original pictorials, graphics, and sculptural

works that are intended to be or have been embodied in useful article regardless of

factors such as mass production, commercial exploitation, and the potential

availability of design patent protection.34

As gleaned from the description of the models and their objectives, these articles are

useful articles which are defined as one having an intrinsic utilitarian function that is

not merely to portray the appearance of the article or to convey information. Indeed,

while works of applied art, original intellectual, literary and artistic works are

copyrightable, useful articles and works of industrial design are not.35 A useful article

may be copyrightable only if and only to the extent that such design incorporates

pictorial, graphic, or sculptural features that can be identified separately from, and

are capable of existing independently of the utilitarian aspects of the article.

We agree with the contention of the petitioner (citing Section 171.10 of R.A. No.

8293), that the author’s intellectual creation, regardless of whether it is a creation

with utilitarian functions or incorporated in a useful article produced on an industrial

scale, is protected by copyright law. However, the law refers to a "work of applied

art which is an artistic creation." It bears stressing that there is no copyright

protection for works of applied art or industrial design which have aesthetic or

artistic features that cannot be identified separately from the utilitarian aspects of the

article.36Functional components of useful articles, no matter how artistically

designed, have generally been denied copyright protection unless they are separable

from the useful article.37

In this case, the petitioner’s models are not works of applied art, nor artistic works.

They are utility models, useful articles, albeit with no artistic design or value. Thus,

the petitioner described the utility model as follows:

LEAF SPRING EYE BUSHING FOR AUTOMOBILE

Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile are

made of hard rubber. These rubber bushings after a time, upon subjecting them to so

much or intermittent pressure would eventually wore (sic) out that would cause the

wobbling of the leaf spring.

The primary object of this utility model, therefore, is to provide a leaf-spring eye

bushing for automobile that is made up of plastic.

Another object of this utility model is to provide a leaf-spring eye bushing for

automobiles made of polyvinyl chloride, an oil resistant soft texture plastic or

polypropylene, a hard plastic, yet both causes cushion to the leaf spring, yet strong

enough to endure pressure brought about by the up and down movement of said leaf

spring.

Yet, an object of this utility model is to provide a leaf-spring eye bushing for

automobiles that has a much longer life span than the rubber bushings.

Still an object of this utility model is to provide a leaf-spring eye bushing for

automobiles that has a very simple construction and can be made using simple and

ordinary molding equipment.

A further object of this utility model is to provide a leaf-spring eye bushing for

automobile that is supplied with a metal jacket to reinforce the plastic eye bushing

when in engaged with the steel material of the leaf spring.

These and other objects and advantages will come to view and be understood upon a

reading of the detailed description when taken in conjunction with the accompanying

drawings.

Figure 1 is an exploded perspective of a leaf-spring eye bushing according to the

present utility model;

Figure 2 is a sectional view taken along line 2-2 of Fig. 1;

Figure 3 is a longitudinal sectional view of another embodiment of this utility model;

Figure 4 is a perspective view of a third embodiment; and

Figure 5 is a sectional view thereof.

Referring now to the several views of the drawings wherein like reference numerals

designated same parts throughout, there is shown a utility model for a leaf-spring eye

bushing for automobile generally designated as reference numeral 10.

Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11 having a

co-axial bore 12 centrally provided thereof.

As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a

perpendicular flange 13 on one of its ends and a cylindrical metal jacket 14

surrounding the peripheral walls 15 of said body 11. When said leaf-spring bushing

10 is installed, the metal jacket 14 acts with the leaf-spring eye (not shown), which is

also made of steel or cast steel. In effect, the bushing 10 will not be directly in

contact with steel, but rather the metal jacket, making the life of the bushing 10

longer than those without the metal jacket.

In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl

chloride, an oil resistant soft texture plastic or a hard polypropylene plastic, both are

capable to endure the pressure applied thereto, and, in effect, would lengthen the life

and replacement therefor.

Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of said

bushing 10 is insertably provided with a steel tube 17 to reinforce the inner portion

thereof. This steel tube 17 accommodates or engages with the leaf-spring bolt (not

shown) connecting the leaf spring and the automobile’s chassis.

Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10 is

elongated and cylindrical as to its construction. Said another embodiment is also

made of polypropylene or polyvinyl chloride plastic material. The steel tube 17 and

metal jacket 14 may also be applied to this embodiment as an option thereof.38

VEHICLE BEARING CUSHION

Known bearing cushions inserted to bearing housings for vehicle propeller shafts are

made of hard rubber. These rubber bushings after a time, upon subjecting them to so

much or intermittent pressure would eventually be worn out that would cause the

wobbling of the center bearing.

The primary object of this utility model therefore is to provide a vehicle-bearing

cushion that is made up of plastic.

Another object of this utility model is to provide a vehicle bearing cushion made of

polyvinyl chloride, an oil resistant soft texture plastic material which causes cushion

to the propeller’s center bearing, yet strong enough to endure pressure brought about

by the vibration of the center bearing.

Yet, an object of this utility model is to provide a vehicle-bearing cushion that has a

much longer life span than rubber bushings.

Still an object of this utility model is to provide a vehicle bearing cushion that has a

very simple construction and can be made using simple and ordinary molding

equipment.

These and other objects and advantages will come to view and be understood upon a

reading of the detailed description when taken in conjunction with the accompanying

drawings.

Figure 1 is a perspective view of the present utility model for a vehicle-bearing

cushion; and

Figure 2 is a sectional view thereof.

Referring now to the several views of the drawing, wherein like reference numeral

designate same parts throughout, there is shown a utility model for a vehicle-bearing

cushion generally designated as reference numeral 10.

Said bearing cushion 10 comprises of a generally semi-circular body 11, having

central hole 12 to house a conventional bearing (not shown). As shown in Figure 1,

said body 11 is provided with a plurality of ridges 13 which serves reinforcing means

thereof.

The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture oil and

chemical resistant plastic material which is strong, durable and capable of enduring

severe pressure from the center bearing brought about by the rotating movement of

the propeller shaft of the vehicle.39

A utility model is a technical solution to a problem in any field of human activity

which is new and industrially applicable. It may be, or may relate to, a product, or

process, or an improvement of any of the aforesaid.40Essentially, a utility model

refers to an invention in the mechanical field. This is the reason why its object is

sometimes described as a device or useful object.41 A utility model varies from an

invention, for which a patent for invention is, likewise, available, on at least three

aspects: first, the requisite of "inventive step"42 in a patent for invention is not

required; second, the maximum term of protection is only seven years43 compared to

a patent which is twenty years,44 both reckoned from the date of the application; and

third, the provisions on utility model dispense with its substantive examination45 and

prefer for a less complicated system.

Being plain automotive spare parts that must conform to the original structural

design of the components they seek to replace, the Leaf Spring Eye Bushing and

Vehicle Bearing Cushion are not ornamental. They lack the decorative quality or

value that must characterize authentic works of applied art. They are not even artistic

creations with incidental utilitarian functions or works incorporated in a useful

article. In actuality, the personal properties described in the search warrants are

mechanical works, the principal function of which is utility sans any aesthetic

embellishment.

Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing Cushion

as included in the catch-all phrase "other literary, scholarly, scientific and artistic

works" in Section 172.1(a) of R.A. No. 8293. Applying the principle of ejusdem

generis which states that "where a statute describes things of a particular class or

kind accompanied by words of a generic character, the generic word will usually be

limited to things of a similar nature with those particularly enumerated, unless there

be something in the context of the state which would repel such inference,"46 the Leaf

Spring Eye Bushing and Vehicle Bearing Cushion are not copyrightable, being not of

the same kind and nature as the works enumerated in Section 172 of R.A. No. 8293.

No copyright granted by law can be said to arise in favor of the petitioner despite the

issuance of the certificates of copyright registration and the deposit of the Leaf

Spring Eye Bushing and Vehicle Bearing Cushion. Indeed, inJoaquin, Jr. v.

Drilon47 and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,48 the

Court ruled that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or

independent right granted by the statute, and not simply a pre-existing right regulated

by it. Being a statutory grant, the rights are only such as the statute confers, and may

be obtained and enjoyed only with respect to the subjects and by the persons, and on

terms and conditions specified in the statute. Accordingly, it can cover only the

works falling within the statutory enumeration or description.

That the works of the petitioner may be the proper subject of a patent does not entitle

him to the issuance of a search warrant for violation of copyright laws. In Kho v.

Court of Appeals49 and Pearl & Dean (Phil.), Incorporated v. Shoemart,

Incorporated,50 the Court ruled that "these copyright and patent rights are completely

distinct and separate from one another, and the protection afforded by one cannot be

used interchangeably to cover items or works that exclusively pertain to the others."

The Court expounded further, thus:

Trademark, copyright and patents are different intellectual property rights that cannot

be interchanged with one another. A trademark is any visible sign capable of

distinguishing the goods (trademark) or services (service mark) of an enterprise and

shall include a stamped or marked container of goods. In relation thereto, a trade

name means the name or designation identifying or distinguishing an enterprise.

Meanwhile, the scope of a copyright is confined to literary and artistic works which

are original intellectual creations in the literary and artistic domain protected from

the moment of their creation. Patentable inventions, on the other hand, refer to any

technical solution of a problem in any field of human activity which is new, involves

an inventive step and is industrially applicable.

The petitioner cannot find solace in the ruling of the United States Supreme Court

in Mazer v. Stein51 to buttress his petition. In that case, the artifacts involved in that

case were statuettes of dancing male and female figures made of semi-vitreous china.

The controversy therein centered on the fact that although copyrighted as "works of

art," the statuettes were intended for use and used as bases for table lamps, with

electric wiring, sockets and lampshades attached. The issue raised was whether the

statuettes were copyright protected in the United States, considering that the

copyright applicant intended primarily to use them as lamp bases to be made and

sold in quantity, and carried such intentions into effect. At that time, the Copyright

Office interpreted the 1909 Copyright Act to cover works of artistic craftsmanship

insofar as their form, but not the utilitarian aspects, were concerned. After reviewing

the history and intent of the US Congress on its copyright legislation and the

interpretation of the copyright office, the US Supreme Court declared that the

statuettes were held copyrightable works of art or models or designs for works of art.

The High Court ruled that:

"Works of art (Class G) – (a) – In General. This class includes works of artistic

craftsmanship, in so far as their form but not their mechanical or utilitarian aspects

are concerned, such as artistic jewelry, enamels, glassware, and tapestries, as well as

all works belonging to the fine arts, such as paintings, drawings and sculpture. …"

So we have a contemporaneous and long-continued construction of the statutes by

the agency charged to administer them that would allow the registration of such a

statuette as is in question here.52

The High Court went on to state that "[t]he dichotomy of protection for the aesthetic

is not beauty and utility but art for the copyright and the invention of original and

ornamental design for design patents." Significantly, the copyright office

promulgated a rule to implement Mazer to wit:

… [I]f "the sole intrinsic function of an article is its utility, the fact that the work is

unique and attractively shaped will not qualify it as a work of art."

In this case, the bushing and cushion are not works of art. They are, as the petitioner

himself admitted, utility models which may be the subject of a patent.

IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED

for lack of merit. The assailed Decision and Resolution of the Court of Appeals in

CA-G.R. SP No. 70411 are AFFIRMED. Search Warrant Nos. 01-2401 and 01-2402

issued on October 15, 2001 are ANNULLED AND SET ASIDE. Costs against the

petitioner. SO ORDERED.

CRESER PRECISION SYSTEMS, INC., petitioner, vs. COURT OF APPEALS

AND FLORO INTERNATIONAL CORP., respondents.

Private respondent is a domestic corporation engaged in the manufacture, production,

distribution and sale of military armaments, munitions, airmunitions and other

similar materials. 2

On January 23, 1990, private respondent was granted by the Bureau of Patents,

Trademarks and Technology Transfer (BPTTT), a Letters Patent No. UM-

6938 3 covering an aerial fuze which was published in the September-October-1990,

Vol. III, No. 5 issue of the Bureau of Patent's Official Gazette. 4

Sometime in November 1993, private respondent, through its president, Mr. Gregory

Floro, Jr., discovered that petitioner submitted samples of its patented aerial fuze to

the Armed Forces of the Philippines (AFP) for testing. He learned that petitioner was

claiming the aforesaid aerial fuze as its own and planning to bid and manufacture the

same commercially without license or authority from private respondent. To protect

its right, private respondent on December 3, 1993, sent a letter 5 to petitioner advising

it of its existing patent and its rights thereunder, warning petitioner of a possible

court action and/or application for injunction, should it proceed with the scheduled

testing by the military on December 7, 1993.

In response to private respondent's demand, petitioner filed on December 8, 1993 a

complaint 6 for injunction and damages arising from the alleged infringement before

the Regional Trial Court of Quezon City, Branch 88. The complaint alleged, among

others: that petitioner is the first, true and actual inventor of an aerial fuze

denominated as "Fuze, PDR 77 CB4" which it developed as early as December 1981

under the Self-Reliance Defense Posture Program (SRDP) of the AFP; that sometime

in 1986, petitioner began supplying the AFP with the said aerial fuze; that private

respondent's aerial fuze is identical in every respect to the petitioner's fuze; and that

the only difference between the two fuzes are miniscule and merely cosmetic in

nature. Petitioner prayed that a temporary restraining order and/or writ of preliminary

injunction be issued enjoining private respondent including any and all persons

acting on its behalf from manufacturing, marketing and/or profiting therefrom,

and/or from performing any other act in connection therewith or tending to prejudice

and deprive it of any rights, privileges and benefits to which it is duly entitled as the

first, true and actual inventor of the aerial fuze.

On December 10, 1993, the trial court issued a temporary restraining order.

Thereafter, hearings were held on the application of petitioner for the issuance of a

writ of preliminary injunction, with both parties presenting their evidence. After the

hearings, the trial court directed the parties to submit their respective memoranda in

support of their positions.

On December 27, 1993, private respondent submitted its memorandum 7 alleging that

petitioner has no cause of action to file a complaint for infringement against it since

it has no patent for the aerial fuze which it claims to have invented; that petitioner's

available remedy is to file a petition for cancellation of patent before the Bureau of

Patents; that private respondent as the patent holder cannot be stripped of its property

right over the patented aerial fuze consisting of the exclusive right to manufacture,

use and sell the same and that it stands to suffer irreparable damage and injury if it is

enjoined from the exercise of its property rights over its patent.

On December 29, 1993, the trial court issued an Order 8 granting the issuance of a

writ of preliminary injunction against private respondent the dispositive portion of

which reads:

WHEREFORE, plaintiffs application for the issuance of a writ of

preliminary injunction is granted and, upon posting of the

corresponding bond by plaintiff in the amount of PHP 200,000.00,

let the writ of preliminary injunction be issued by the branch Clerk

of this Court enjoining the defendant and any and all persons

acting on its behalf or by and under its authority, from

manufacturing, marketing and/or selling aerial fuzes identical, to

those of plaintiff, and from profiting therefrom, and/or from

performing any other act in connection therewith until further

orders from this Court.

Private respondent moved for reconsideration but this was denied by the trial court in

its Order 9 of May 11, 1994, pertinent portions of which read:

For resolution before this Court is the Motion for Reconsideration

filed by the defendant and the plaintiff's Opposition thereto. The

Court finds no sufficient cause to reconsider its order dated

December 29, 1993. During the hearing for the issuance of the

preliminary injunction, the plaintiff has amply proven its

entitlement to the relief prayed for. It is undisputed that the

plaintiff has developed itsaerial fuze way back in 1981 while the

defendant began manufacturing the same only in 1987. Thus, it is

only logical to conclude that it was the plaintiff's aerial fuze that

was copied or imitated which gives the plaintiff the right to have

the defendant enjoined "from manufacturing, marketing and/or

sellingaerial fuzes identical to those of the plaintiff, and from

profiting therefrom and/or performing any other act in connection

therewith until further orders from this Court." With regards to the

defendant's assertion that an action for infringement may only be

brought by "anyone possessing right, title or interest to the

patented invention," (Section 42, RA 165) qualified by Sec. 10, RA

165 to include only "the first true and actual inventor, his heirs,

legal representatives or assignees, "this court finds the foregoing to

be untenable. Sec. 10 merely enumerates the persons who may

have an invention patented which does not necessarily limit to

these persons the right to institute an action for infringement.

Defendant further contends that the order in issue is disruptive of

the status quo. On the contrary, the order issued by the Court in

effect maintained the status quo. The last actual, peaceable

uncontested status existing prior to this controversy was the

plaintiff manufacturing and selling its ownaerial fuzes PDR 77

CB4 which was ordered stopped through the defendant's letter.

With the issuance of the order, the operations of the plaintiff

continue. Lastly, this court believes that the defendant will not

suffer irreparable injury by virtue of said order. The defendant's

claim is primarily hinged on its patent (Letters Patent No. UM-

6983) the validity of which is being questioned in this case.

WHEREFORE, premises considered, the Motion for

Reconsideration is hereby denied for lack of merit.

SO ORDERED.

Aggrieved, private respondent on June 27, 1994, filed a petition for certiorari,

mandamus and prohibition 10 before respondent Court of Appeals raising as grounds

the following:

a. Petitioner has no cause of action for infringement against private

respondent, the latter not having any patent for the aerial

fuze which it claims to have invented and developed and allegedly

infringed by private respondent;

b. the case being an action for cancellation or invalidation of

private respondent's Letters Patent over its own aerial fuze, the

proper venue is the Office of the Director of Patents;

c. The trial court acted in grave abuse of discretion and/or in excess

of jurisdiction in finding that petitioner has fully established its

clear title or right to preliminary injunction;

d. The trial court acted in grave abuse of discretion and/or in

excess of jurisdiction in granting the preliminary injunction, it

being disruptive of the status quo; and

e. The trial court acted in grave abuse of discretion and/or in excess

of jurisdiction in granting the preliminary injunction thereby

depriving private respondent of its property rights over the

patentedaerial fuze and cause it irreparable damages.

On November 9, 1994, the respondent court rendered the now assailed decision

reversing the trial court's Order of December 29, 1993 and dismissing the complaint

filed by petitioner.

The motion for reconsideration was also denied on January 17, 1995. 11 Hence, this

present petition.

It is petitioner's contention that it can file, under Section 42 of the Patent Law (R.A.

165), an action for infringement not as a patentee but as an entity in possession of a

right, title or interest in and to the patented invention. It advances the theory that

while the absence of a patent may prevent one from lawfully suing another for

infringement of said patent, such absence does not bar the first true and actual

inventor of the patented invention from suing another who was granted a patent in a

suit for declaratory or injunctive relief recognized under American patent laws. This

remedy, petitioner points out, may be likened to a civil action for infringement under

Section 42 of the Philippine Patent Law.

We find the above arguments untenable.

Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:

Sec. 42. Civil action for infringement. — Any patentee, or anyone

possessing any right, title or interest in and to the patented

invention, whose rights have been infringed, may bring a civil

action before the proper Court of First Instance (now Regional

Trial court), to recover from the infringer damages sustained by

reason of the infringement and to secure an injunction for the

protection of his right. . . .

Under the aforequoted law, only the patentee or his successors-in-interest may file an

action for infringement. The phrase "anyone possessing any right, title or interest in

and to the patented invention" upon which petitioner maintains its present suit, refers

only to the patentee's successors-in-interest, assignees or grantees since actions for

infringement of patent may be brought in the name of the person or persons

interested, whether as patentee, assignees, or as grantees, of the exclusive

right. 12 Moreover, there can be no infringement of a patent until a patent has been

issued, since whatever right one has to the invention covered by the patent arises

alone from the grant of patent. 13 In short, a person or entity who has not been

granted letters patent over an invention and has not acquired any light or title thereto

either as assignee or as licensee, has no cause of action for infringement because the

right to maintain an infringement suit depends on the existence of the patent. 14

Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis

or cause of action to institute the petition for injunction and damages arising from the

alleged infringement by private respondent. While petitioner claims to be the first

inventor of the aerial fuze, still it has no right of property over the same upon which

it can maintain a suit unless it obtains a patent therefor. Under American

jurisprudence, an inventor has no common-law right to a monopoly of his invention.

He has the right to make, use and vend his own invention, but if he voluntarily

discloses it, such as by offering it for sale, the world is free to copy and use it with

impunity. A patent, however, gives the inventor the right to exclude all others. As a

patentee, he has the exclusive right of making, using or selling the invention. 15

Further, the remedy of declaratory judgment or injunctive suit on patent invalidity

relied upon by petitioner cannot be likened to the civil action for infringement under

Section 42 of the Patent Law. The reason for this is that the said remedy is available

only to the patent holder or his successors-in-interest. Thus, anyone who has no

patent over an invention but claims to have a right or interest thereto can not file an

action for declaratory judgment or injunctive suit which is not recognized in this

jurisdiction. Said person, however, is not left without any remedy. He can, under

Section 28 of the aforementioned law, file a petition for cancellation of the patent

within three (3) years from the publication of said patent with the Director of Patents

and raise as ground therefor that the person to whom the patent was issued is not the

true and actual inventor. Hence, petitioner's remedy is not to file an action for

injunction or infringement but to file a petition for cancellation of private

respondent's patent. Petitioner however failed to do so. As such, it can not now assail

or impugn the validity of the private respondent's letters patent by claiming that it is

the true and actual inventor of the aerial fuze.

Thus, as correctly ruled by the respondent Court of Appeals in its assailed decision:

"since the petitioner (private respondent herein) is the patentee of the disputed

invention embraced by letters of patent UM No. 6938 issued to it on January 23,

1990 by the Bureau of Patents, it has in its favor not only the presumption of validity

of its patent, but that of a legal and factual first and true inventor of the invention."

In the case of Aguas vs. De Leon, 16 we stated that:

The validity of the patent issued by the Philippine Patent Office in

favor of the private respondent and the question over the

investments, novelty and usefulness of the improved process

therein specified and described are matters which are better

determined by the Philippines Patent Office. The technical Staff of

the Philippines Patent Office, composed of experts in their field,

have, by the issuance of the patent in question, accepted the

thinness of the private respondent's new tiles as a discovery. There

is a presumption that the Philippine Patent Office has correctly

determined the patentability of the improvement by the private

respondent of the process in question.

In fine, in the absence of error or abuse of power or lack of jurisdiction or grave

abuse of discretion, we sustain the assailed decision of the respondent Court of

Appeal.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No

pronouncement as to costs. SO ORDERED.

PHIL PHARMAWEALTH, INC., Petitioner, vs. PFIZER, INC. and PFIZER

(PHIL.) INC., Respondents.

The instant case arose from a Complaint3 for patent infringement filed against

petitioner Phil Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer

(Phil.), Inc., with the Bureau of Legal Affairs of the Intellectual Property Office

(BLA-IPO). The Complaint alleged as follows: x x x x

6. Pfizer is the registered owner of Philippine Letters Patent No. 21116 (the "Patent")

which was issued by this Honorable Office on July 16, 1987. The patent is valid until

July 16, 2004. The claims of this Patent are directed to "a method of increasing the

effectiveness of a beta-lactam antibiotic in a mammalian subject, which comprises

co-administering to said subject a beta-lactam antibiotic effectiveness increasing

amount of a compound of the formula IA." 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.

7. Patent No. 21116 thus covers ampicillin sodium/sulbactam sodium (hereafter

"Sulbactam Ampicillin"). Ampicillin sodium is a specific example of the broad beta-

lactam antibiotic disclosed and claimed in the Patent. It is the compound which

efficacy is being enhanced by co-administering the same with sulbactam sodium.

Sulbactam sodium, on the other hand, is a specific compound of the formula IA

disclosed and claimed in the Patent.

8. Pfizer is marketing Sulbactam Ampicillin under the brand name "Unasyn." Pfizer's

"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 complainants. 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. on January 23, 2001.

9. Sometime in January and February 2003, complainants came to know that

respondent [herein petitioner] submitted bids for the supply of Sulbactam Ampicillin

to several hospitals without the consent of complainants and in violation of the

complainants' intellectual property rights. x x x x

10. Complainants thus wrote the above hospitals and demanded that the latter

immediately cease and desist from accepting bids for the supply [of] Sulbactam

Ampicillin or awarding the same to entities other than complainants. Complainants,

in the same letters sent through undersigned counsel, also demanded that respondent

immediately withdraw its bids to supply Sulbactam Ampicillin.

11. In gross and evident bad faith, respondent and the hospitals named in paragraph 9

hereof, willfully ignored complainants' just, plain and valid demands, refused to

comply therewith and continued to infringe the Patent, all to the damage and

prejudice of complainants. As registered owner of the Patent, Pfizer is entitled to

protection under Section 76 of the IP Code. x x x x4

Respondents prayed for permanent injunction, damages and the forfeiture and

impounding of the alleged infringing products. They also asked for the issuance of a

temporary restraining order and a preliminary injunction that would prevent herein

petitioner, its agents, representatives and assigns, from importing, distributing,

selling or offering the subject product for sale to any entity in the Philippines.

In an Order5 dated July 15, 2003 the BLA-IPO issued a preliminary injunction which

was effective for ninety days from petitioner's receipt of the said Order.

Prior to the expiration of the ninety-day period, respondents filed a Motion for

Extension of Writ of Preliminary Injunction6 which, however, was denied by the

BLA-IPO in an Order7 dated October 15, 2003.

Respondents filed a Motion for Reconsideration but the same was also denied by the

BLA-IPO in a Resolution8dated January 23, 2004.

Respondents then filed a special civil action for certiorari with the CA assailing the

October 15, 2003 and January 23, 2004 Resolutions of the BLA-IPO. Respondents

also prayed for the issuance of a preliminary mandatory injunction for the

reinstatement and extension of the writ of preliminary injunction issued by the BLA-

IPO.

While the case was pending before the CA, respondents filed a Complaint9 with the

Regional Trial Court (RTC) of Makati City for infringement and unfair competition

with damages against herein petitioner. In said case, respondents prayed for the

issuance of a temporary restraining order and preliminary injunction to prevent

herein petitioner from importing, distributing, selling or offering for sale sulbactam

ampicillin products to any entity in the Philippines. Respondents asked the trial court

that, after trial, judgment be rendered awarding damages in their favor and making

the injunction permanent.

On August 24, 2004, the RTC of Makati City issued an Order10 directing the issuance

of a temporary restraining order conditioned upon respondents' filing of a bond.

In a subsequent Order11 dated April 6, 2005, the same RTC directed the issuance of a

writ of 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."

Meanwhile, on November 16, 2004, petitioner filed a Motion to Dismiss12 the

petition filed with the CA on the ground of forum shopping, contending that the case

filed with the RTC has the same objective as the petition filed with the CA, which is

to obtain an injunction prohibiting petitioner from importing, distributing and selling

Sulbactam Ampicillin products.

On January 18, 2005, the CA issued its questioned Resolution13 approving the bond

posted by respondents pursuant to the Resolution issued by the appellate court on

March 23, 2004 which directed the issuance of a temporary restraining order

conditioned upon the filing of a bond. On even date, the CA issued a temporary

restraining order14 which prohibited petitioner "from importing, distributing, selling

or offering for sale Sulbactam Ampicillin products to any hospital or to any other

entity in the Philippines, or from infringing Pfizer Inc.'s Philippine Patent No. 21116

and impounding all the sales invoices and other documents evidencing sales by

[petitioner] of Sulbactam Ampicillin products."

On February 7, 2005, petitioner again filed a Motion to Dismiss15 the case for being

moot and academic, contending that respondents' patent had already lapsed. In the

same manner, petitioner also moved for the reconsideration of the temporary

restraining order issued by the CA on the same basis that the patent right sought to be

protected has been extinguished due to the lapse of the patent license and on the

ground that the CA has no jurisdiction to review the order of the BLA-IPO as said

jurisdiction is vested by law in the Office of the Director General of the IPO.

On April 11, 2005, the CA rendered its presently assailed Resolution denying the

Motion to Dismiss, dated November 16, 2004, and the motion for reconsideration, as

well as Motion to Dismiss, both dated February 7, 2005.

Hence, the present petition raising the following issues:

a) Can an injunctive relief be issued based on an action of patent

infringement when the patent allegedly infringed has already lapsed?

b) What tribunal has jurisdiction to review the decisions of the Director of

Legal Affairs of the Intellectual Property Office?

c) Is there forum shopping when a party files two actions with two

seemingly different causes of action and yet pray for the same relief?16

In the first issue raised, petitioner argues that respondents' exclusive right to

monopolize the subject matter of the patent exists only within the term of the patent.

Petitioner claims that since respondents' patent expired on July 16, 2004, the latter no

longer possess any right of monopoly and, as such, there is no more basis for the

issuance of a restraining order or injunction against petitioner insofar as the disputed

patent is concerned.

The Court agrees.

Section 37 of Republic Act No. (RA) 165,17 which was the governing law at the time

of the issuance of respondents' patent, provides:

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.18

It is clear from the above-quoted provision of law that 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. In the instant case, Philippine Letters Patent No. 21116,

which was the basis of respondents in filing their complaint with the BLA-IPO, was

issued on July 16, 1987. This fact was admitted by respondents themselves in their

complaint. They also admitted that the validity of the said patent is until July 16,

2004, which is in conformity with Section 21 of RA 165, providing that the term of a

patent shall be seventeen (17) years from the date of issuance thereof. Section 4,

Rule 129 of the Rules of Court provides that an admission, verbal or written, made

by a party in the course of the proceedings in the same case, does not require proof

and that the admission may be contradicted only by showing that it was made

through palpable mistake or that no such admission was made. In the present case,

there is no dispute as to respondents' admission that the term of their patent expired

on July 16, 2004. Neither is there evidence to show that their admission was made

through palpable mistake. Hence, contrary to the pronouncement of the CA, there is

no longer any need to present evidence on the issue of expiration of respondents'

patent.

On the basis of the foregoing, the Court agrees with petitioner that after July 16,

2004, respondents no longer possess the exclusive right to make, use and sell the

articles or products covered by Philippine Letters Patent No. 21116.

Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance

of a writ of preliminary injunction, viz:

(a) That the applicant is entitled to the relief demanded, and the whole or

part of such relief consists in restraining the commission or continuance of

the acts complained of, or in requiring the performance of an act or acts,

either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts

complained of during the litigation would probably work injustice to the

applicant; or

(c) That a party, court, or agency or a person is doing, threatening, or

attempting to do, or is procuring or suffering to be done, some act or acts

probably in violation of the rights of the applicant respecting the subject of

the action or proceeding, and tending to render the judgment ineffectual.

In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide

that if the matter is of extreme urgency and the applicant will suffer grave injustice

and irreparable injury, a temporary restraining order may be issued ex parte.

From the foregoing, it can be inferred that 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.19

In the instant case, it is clear that when the CA issued its January 18, 2005

Resolution approving the bond filed by respondents, the latter no longer had a right

that must be protected, considering that Philippine Letters Patent No. 21116 which

was issued to them already expired on July 16, 2004. Hence, the issuance by the CA

of a temporary restraining order in favor of the respondents is not proper.

In fact, the CA should have granted petitioner's motion to dismiss the petition for

certiorari filed before it as the only issue raised therein is the propriety of extending

the writ of preliminary injunction issued by the BLA-IPO. Since the patent which

was the basis for issuing the injunction, was no longer valid, any issue as to the

propriety of extending the life of the injunction was already rendered moot and

academic.

As to the second issue raised, the Court, is not persuaded by petitioner's argument

that, pursuant to the doctrine of primary jurisdiction, the Director General of the IPO

and not the CA has jurisdiction to review the questioned Orders of the Director of the

BLA-IPO.

It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual

Property Code of the Philippines, which is the presently prevailing law, the Director

General of the IPO exercises exclusive appellate jurisdiction over all decisions

rendered by the Director of the BLA-IPO. However, what is being questioned before

the CA is not a decision, but an interlocutory order of the BLA-IPO denying

respondents' motion to extend the life of the preliminary injunction issued in their

favor.

RA 8293 is silent with respect to any remedy available to litigants who intend to

question an interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule

14 of the Rules and Regulations on Administrative Complaints for Violation of Laws

Involving Intellectual Property Rights simply provides that interlocutory orders shall

not be appealable. The said Rules and Regulations do not prescribe a procedure

within the administrative machinery to be followed in assailing orders issued by the

BLA-IPO pending final resolution of a case filed with them. 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 to question the assailed Orders of the BLA-

IPO, as they cannot appeal therefrom and they have no other plain, speedy and

adequate remedy in the ordinary course of law. This is consistent with Sections

120 and 4,21 Rule 65 of the Rules of Court, as amended.

In the first place, respondents' act of filing their complaint originally with the BLA-

IPO is already in consonance with the doctrine of primary jurisdiction.

This Court has held that:

[i]n cases involving specialized disputes, the practice has been to refer the same to an

administrative agency of special competence in observance of the doctrine of

primary jurisdiction. The Court has ratiocinated that it cannot or will not determine a

controversy involving a question which is within the jurisdiction of the

administrative tribunal prior to the resolution of that question by the administrative

tribunal, where the question demands the exercise of sound administrative discretion

requiring the special knowledge, experience and services of the administrative

tribunal to determine technical and intricate matters of fact, and a uniformity of

ruling is essential to comply with the premises of the regulatory statute administered.

The objective of the doctrine of primary jurisdiction is to guide a court in

determining whether it should refrain from exercising its jurisdiction until after an

administrative agency has determined some question or some aspect of some

question arising in the proceeding before the court. It applies where the claim is

originally cognizable in the courts and comes into play whenever enforcement of the

claim requires the resolution of issues which, under a regulatory scheme, has been

placed within the special competence of an administrative body; in such case, the

judicial process is suspended pending referral of such issues to the administrative

body for its view.22

Based on the foregoing, the Court finds that respondents' 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 agency's special

competence, knowledge and experience.

However, the propriety of extending the life of the writ of preliminary injunction

issued by the BLA-IPO in the exercise of its quasi-judicial 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.23 This is the case with respect to the issue

raised in the petition filed with the CA.

Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations

do not provide for a procedural remedy to question interlocutory orders issued by the

BLA-IPO. In this regard, it bears to reiterate that the judicial power of the courts, as

provided for under the Constitution, includes the authority of the courts to determine

in an appropriate action the validity of the acts of the political departments.24 Judicial

power also includes the duty of the courts of justice to settle actual controversies

involving rights which are legally demandable and enforceable, and to determine

whether or not there has been a grave abuse of discretion amounting to lack or excess

of jurisdiction on the part of any branch or instrumentality of the

Government.25 Hence, the CA, and not the IPO Director General, has jurisdiction to

determine whether the BLA-IPO committed grave abuse of discretion in denying

respondents' motion to extend the effectivity of the writ of preliminary injunction

which the said office earlier issued.

Lastly, petitioner avers that respondents are guilty of forum shopping for having filed

separate actions before the IPO and the RTC praying for the same relief.

The Court agrees.

Forum shopping is defined as the act of a party against whom an adverse judgment

has been rendered in one forum, of seeking another (and possibly favorable) opinion

in another forum (other than by appeal or the special civil action of certiorari), or the

institution of two (2) or more actions or proceedings grounded on the same cause on

the supposition that one or the other court would make a favorable disposition.26

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.27

There is no question as to the identity of parties in the complaints filed with the IPO

and the RTC.

Respondents argue that they cannot be held guilty of forum shopping because their

complaints are based on different causes of action as shown by the fact that the said

complaints are founded on violations of different patents.

The Court is not persuaded.

Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or

omission by which a party violates a right of another. 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 latter's 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. Thus, it does not matter that the patents upon

which the complaints were based are different. The fact remains that in both

complaints the rights violated and the acts violative of such rights are identical.

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.

It is settled by this Court in several cases that the filing by a party of two apparently

different actions but with the same objective constitutes forum shopping.28 The Court

discussed this species of forum shopping as follows:

Very simply stated, the original complaint in the court a quo which gave rise to the

instant petition was filed by the buyer (herein private respondent and his

predecessors-in-interest) against the seller (herein petitioners) to enforce the alleged

perfected sale of real estate. On the other hand, the complaint in the Second Case

seeks to declare such purported sale involving the same real property "as

unenforceable as against the Bank," which is the petitioner herein. In other words, in

the Second Case, the majority stockholders, in representation of the Bank, are

seeking to accomplish what the Bank itself failed to do in the original case in the trial

court. In brief, the objective or the relief being sought, though worded differently, is

the same, namely, to enable the petitioner Bank to escape from the obligation to sell

the property to respondent.29

In Danville Maritime, Inc. v. Commission on Audit,30 the Court ruled as follows:

In the attempt to make the two actions appear to be different, petitioner impleaded

different respondents therein – PNOC in the case before the lower court and the

COA in the case before this Court and sought what seems to be different reliefs.

Petitioner asks this Court to set aside the questioned letter-directive of the COA

dated October 10, 1988 and to direct said body to approve the Memorandum of

Agreement entered into by and between the PNOC and petitioner, while in the

complaint before the lower court petitioner seeks to enjoin the PNOC from

conducting a rebidding and from selling to other parties the vessel "T/T Andres

Bonifacio," and for an extension of time for it to comply with the paragraph 1 of the

memorandum of agreement and damages. One can see that although the relief prayed

for in the two (2) actions are ostensibly different, the ultimate objective in both

actions is the same, that is, the approval of the sale of vessel in favor of petitioner,

and to overturn the letter directive of the COA of October 10, 1988 disapproving the

sale.31

In the instant case, the prayer of respondents in their complaint filed with the IPO is

as follows: 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

complainant's 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 attorney's fees and litigation expenses;

(d) P1,000,000.00 as exemplary damages; and

(d) costs of this suit.

(iii) ordering the condemnation, seizure or forfeiture of respondent's 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.32

In an almost identical manner, respondents prayed for the following in their

complaint filed with the RTC: (a) Immediately upon the filing of this action, issue an

ex parte order: (1) temporarily restraining Pharmawealth, its agents, representatives

and assigns from importing, distributing, selling or offering for sale infringing

sulbactam ampicillin products to various government and private hospitals or to any

other entity in the Philippines, or from otherwise infringing Pfizer Inc.'s Philippine

Patent No. 26810.

(2) impounding all the sales invoices and other documents evidencing sales by

pharmawealth of sulbactam ampicillin products; and

(3) disposing of the infringing goods outside the channels of commerce.

(b) After hearing, issue a writ of preliminary injunction:

(1) enjoining Pharmawealth, its agents, representatives and assigns from importing,

distributing, selling or offering for sale infringing sulbactam ampicillin products to

various government hospitals or to any other entity in the Philippines, or from

otherwise infringing Patent No. 26810;

(2) impounding all the sales invoices and other documents evidencing sales by

Pharmawealth of sulbactam ampicillin products; and

(3) disposing of the infringing goods outside the channels of commerce.

(c) After trial, render judgment:

(1) finding Pharmawealth to have infringed Patent No. 26810 and declaring

Pharmawealth to have no right whatsoever over plaintiff's patent;

(2) ordering Pharmawealth to pay plaintiffs the following amounts:

(i) at least P3,000,000.00 as actual damages;

(ii) P500,000.00 as attorney's fees and P1,000,000.00 as litigation expenses;

(iii) P3,000,000.00 as exemplary damages; and

(iv) costs of this suit.

(3) ordering the condemnation, seizure or forfeiture of Pharmawealth's 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 Court; and

(4) making the injunction permanent.33

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 decision in one case will necessarily amount

to res judicata in the other action.

It bears to reiterate that what is truly important to consider in determining whether

forum shopping exists or not is the vexation caused the courts and parties-litigant by

a party who asks different courts and/or administrative agencies to rule on the same

or related causes and/or to grant the same or substantially the same reliefs, in the

process creating the possibility of conflicting decisions being rendered by the

different fora upon the same issue.341avvphi1

Thus, the Court agrees with petitioner that respondents are indeed guilty of forum

shopping.

Jurisprudence holds that if the forum shopping is not considered willful and

deliberate, the subsequent case shall be dismissed without prejudice, on the ground

of either litis pendentia or res judicata.35 However, if the forum shopping is willful

and deliberate, both (or all, if there are more than two) actions shall be dismissed

with prejudice.36 In the present case, the Court finds that respondents did not

deliberately violate the rule on non-forum shopping. Respondents may not be totally

blamed for erroneously believing that they can file separate actions simply on the

basis of different patents. Moreover, in the suit filed with the RTC of Makati City,

respondents were candid enough to inform the trial court of the pendency of the

complaint filed with the BLA-IPO as well as the petition for certiorari filed with the

CA. On these bases, only Civil Case No. 04-754 should be dismissed on the ground

of litis pendentia.

WHEREFORE, the petition is PARTLY GRANTED. The assailed Resolutions of

the Court of Appeals, dated January 18, 2005 and April 11, 2005, in CA-G.R. No.

82734, are REVERSED and SET ASIDE. The petition for certiorari filed with the

Court of Appeals is DISMISSED for being moot and academic.

Civil Case No. 04-754, filed with the Regional Trial Court of Makati City, Branch

138, is likewise DISMISSED on the ground of litis pendentia.

SO ORDERED.