G.R. No.

118708 February 2, 1998

CRESER PRECISION SYSTEMS, INC., petitioner, vs. COURT OF APPEALS AND FLORO INTERNATIONAL
CORP., respondents.
MARTINEZ, J.:
This petition for review on certiorari assails the decision 1 of the Court of Appeals dated November 9, 1994 in C.A.-G.R.
SP No. 34425 entitled "Floro International Corp. vs. Hon. Tirso D.C Cruz and Creser Precision System, Inc.", the
dispositive portion of which reads:
WHEREFORE, THE PETITION IS HEREBY GRANTED. THE COMPLAINT FOR INJUNCTION AND DAMAGES, CIVIL
CASE NO. 93-1856 BEFORE THE RESPONDENT JUDGE IS HEREBY ORDERED DISMISSED AND HIS ORDERS
THEREIN OF DECEMBER 29, 1993 AND MAY 11, 1994 ARE ORDERED SET ASIDE.
Private respondent is a domestic corporation engaged in the manufacture, production, distribution and sale of military
armaments, munitions, air munitions 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-69383 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
letter5 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 its aerial 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 selling aerial fuzes identical to
those of the plaintiff, and from profiting therefrom and/or performing any other act in connection therewith until further
orders from this Court." With regards to the defendant's assertion that an action for infringement may only be brought by
"anyone possessing right, title or interest to the patented invention," (Section 42, RA 165) qualified by Sec. 10, RA 165 to
include only "the first true and actual inventor, his heirs, legal representatives or assignees, "this court finds the foregoing
to be untenable. Sec. 10 merely enumerates the persons who may have an invention patented which does not necessarily
limit to these persons the right to institute an action for infringement. Defendant further contends that the order in issue is
disruptive of the status quo. On the contrary, the order issued by the Court in effect maintained the status quo. The last
actual, peaceable uncontested status existing prior to this controversy was the plaintiff manufacturing and selling its
own aerial fuzes PDR 77 CB4 which was ordered stopped through the defendant's letter. With the issuance of the order,
the operations of the plaintiff continue. Lastly, this court believes that the defendant will not suffer irreparable injury by
virtue of said order. The defendant's claim is primarily hinged on its patent (Letters Patent No. UM-6983) the validity of
which is being questioned in this case.
WHEREFORE, premises considered, the Motion for Reconsideration is hereby denied for lack of merit.
SO ORDERED.
Aggrieved, private respondent on June 27, 1994, filed a petition for certiorari, mandamus and prohibition 10 before
respondent Court of Appeals raising as grounds the following:
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 patented aerial 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 cannot file an action for declaratory judgment or injunctive suit which is not
recognized in this jurisdiction. Said person, however, is not left without any remedy. He can, under Section 28 of the
aforementioned law, file a petition for cancellation of the patent within three (3) years from the publication of said patent
with the Director of Patents and raise as ground therefor that the person to whom the patent was issued is not the true
and actual inventor. Hence, petitioner's remedy is not to file an action for injunction or infringement but to file a petition for
cancellation of private respondent's patent. Petitioner however failed to do so. As such, it can not now assail or impugn
the validity of the private respondent's letters patent by claiming that it is the true and actual inventor of the aerial fuze.
Thus, as correctly ruled by the respondent Court of Appeals in its assailed decision: "since the petitioner (private
respondent herein) is the patentee of the disputed invention embraced by letters of patent UM No. 6938 issued to it on
January 23, 1990 by the Bureau of Patents, it has in its favor not only the presumption of validity of its patent, but that of a
legal and factual first and true inventor of the invention."
In the case of Aguas vs. De Leon, 16 we stated that:
The validity of the patent issued by the Philippine Patent Office in favor of the private respondent and the question over
the investments, novelty and usefulness of the improved process therein specified and described are matters which are
better determined by the Philippines Patent Office. The technical Staff of the Philippines Patent Office, composed of
experts in their field, have, by the issuance of the patent in question, accepted the thinness of the private respondent's
new tiles as a discovery. There is a presumption that the Philippine Patent Office has correctly determined the
patentability of the improvement by the private respondent of the process in question.
In fine, in the absence of error or abuse of power or lack of jurisdiction or grave abuse of discretion, we sustain the
assailed decision of the respondent Court of Appeal.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.
G.R. No. 148222               August 15, 2003
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner, vs. SHOEMART, INCORPORATED, and NORTH EDSA
MARKETING, INCORPORATED, Respondents.

DECISION
CORONA, J.:
In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl & Dean (Phil.) Inc. (P &
D) assails the May 22, 2001 decision1 of the Court of Appeals reversing the October 31, 1996 decision2 of the Regional
Trial Court of Makati, Branch 133, in Civil Case No. 92-516 which declared private respondents Shoemart Inc. (SMI) and
North Edsa Marketing Inc. (NEMI) liable for infringement of trademark and copyright, and unfair competition.
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 - ₱16,600,000.00, representing profits derived by defendants as a result of infringement of plaintiff’s
copyright from 1991 to 1992
(b) moral damages - ₱1,000.000.00
(c) exemplary damages - ₱1,000,000.00
(d) attorney’s fees - ₱1,000,000.00 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 is Baker 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 services specified 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 application 9 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 its technical
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 creation 20 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. Selden 21 , 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.
xxx
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." (underscoring supplied)
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,23 where 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. 27 In 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.
G.R. No. 115106 March 15, 1996
ROBERTO L. DEL ROSARIO, petitioner, vs. COURT OF APPEALS AND JANITO CORPORATION, respondents.

BELLOSILLO, J.:p

Roberto del Rosario petitions this Court to review the decision of the Court of Appeals 1 which set aside the order of the
Regional Trial Court of Makati granting a writ of preliminary injunction in his favor.
The antecedents: On 18 January 1993 petitioner filed a complaint for patent infringement against private respondent
Janito Corporation.2 Roberto L. del Rosario alleged that he was a patentee of an audio equipment and improved audio
equipment commonly known as the sing-along System or karaoke under Letters Patent No. UM-5269 dated 2 June 1983
as well as Letters Patent No. UM-6237 dated 14 November 1986 issued by the Director of Patents. The effectivity of both
Letters Patents was for five (5) years and was extended for another five (5) years starting 2 June 1988 and 14 November
1991, respectively. He described his sing-along system as a handy multi-purpose compact machine which incorporates
an amplifier speaker, one or two tape mechanisms, optional tuner or radio and microphone mixer with features to enhance
one's voice, such as the echo or reverb to stimulate an opera hall or a studio sound, with the whole system enclosed in
one cabinet casing.
In the early part of 1990 petitioner learned that private respondent was manufacturing a sing-along system bearing the
trademark miyata or miyata karaoke  substantially similar if not identical to the sing-along system covered by the patents
issued in his favor. Thus he sought from .the trial court the issuance of a writ of preliminary injunction to enjoin private
respondent, its officers and everybody elsewhere acting on its behalf, from using, selling and advertising
the miyata or miyata karaoke brand, the injunction to be made permanent after trial, and praying for damages, attorney's
fees and costs of suit.
On 5 February 1993 the trial court temporarily restrained private respondent from manufacturing, using and/or selling and
advertising the miyata sing-along system or any sing-along system substantially identical to the sing-along system
patented by petitioner until further orders.
On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on the basis of its finding that
petitioner was a holder of a utility model patent for a sing-along system and that without his approval and consent private
respondent was admittedly manufacturing and selling its own sing-along system under the brand name miyata which was
substantially similar to the patented utility mode 3 of petitioner.
Private respondent assailed the order of 24 February 1993 directing the issuance of the writ by way of a petition
for certiorari with prayer for the issuance of a writ of preliminary injunction and a temporary restraining order before
respondent Court of Appeals.
On 15 November 1993 respondent appellate court granted the writ and set aside the questioned order of the trial court. It
expressed the view that there was no infringement of the patents of petitioner by the fact alone that private respondent
had manufactured the miyata karaoke or audio system, and that the karaoke system was a universal product
manufactured, advertised and marketed in most countries of the world long before the patents were issued to petitioner.
The motion to reconsider the grant of the writ was denied;4 hence, the instant petition for review.
This petition alleges that: (a) it was improper for the Court of Appeals to consider questions of fact in
a certiorari proceeding; (b) the Court of Appeals erred in taking judicial notice of private respondent's self-serving
presentation of facts; (c) the Court of Appeals erred in disregarding the findings of fact of the trial court; and, (d) there was
no basis for the Court of Appeals to grant a writ of preliminary injunction in favor of private respondent.5
Petitioner argues that in a certiorari proceeding questions of fact are not generally permitted the inquiry being limited
essentially to whether the tribunal has acted without or in excess of jurisdiction or with grave abuse of discretion; that
respondent court should not have disturbed but respected instead the factual findings of the trial court; that the movant
has a clear legal right to be protected and that there is a violation of such right by private respondent. Thus, petitioner
herein claims, he has satisfied the legal requisites to justify the order of the trial court directing the issuance of the writ of
injunction. On the other hand, in the absence of a patent to justify the manufacture and sale by private respondent of sing-
along systems, it is not entitled to the injunctive relief granted by respondent appellate court.
The crux of the controversy before us hinges on whether respondent Court of Appeals erred in finding the trial court to
have committed grave abuse of discretion in enjoining private respondent from manufacturing, selling and advertising
the miyata karaoke brand sing-along system for being substantially similar if not identical to the audio equipment covered
by letters patent issued to petitioner.
Injunction is a preservative remedy for the protection of substantive rights or interests. It is not a cause of action in itself
but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the existence of the judicial power to
issue the writ is that the court may thereby prevent a threatened or continuous irremediable injury to some of the parties
before their claims can be thoroughly investigated and advisedly adjudicated. It is to be resorted to only when there is a
pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation. The
application of the writ rests upon an alleged existence of an emergency or of a special reason for such an order before the
case can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that the
complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire
showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably necessary to protect
the legal rights of plaintiff pending the litigation.6
A preliminary injunction may be granted at any time after the commencement of the action and before judgment when it is
established that the defendant is doing, threatens, or is about to do, or is procuring or suffering to be done, some act
probably in violation of the plaintiff's rights. Thus, there are only two requisites to be satisfied if an injunction is to issue,
namely, the existence of the right to be protected, and that the facts against which the injunction is to be directed are
violative of said right.7
For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must be a present
right, a legal right which must be shown to be clear and positive.
In this regard Sec. 55 of R.A. 165 as amended, known as The Patent 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) new model or implements or tools or of any industrial product or of part of the same, which does not
possess the quality of invention but which is of practical utility 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 provide . . . .
Admittedly, petitioner is a holder of Letters Patent No. UM-5629 dated 2 June 1985 issued for a term of five (5) years from
the grant of a Utility Model herein described —
The construction of an audio equipment comprising a substantially cubical casing having a window at its rear and upper
corner fitted with a slightly inclined control panel, said cubical (casing) having a vertical partition wall therein defining a
rear compartment and a front compartment, and said front compartment serving as a speaker baffle; a transistorized
amplifier circuit having an echo section and writhed in at least the printed circuit boards placed inside said rear
compartment of said casing and attached to said vertical partition wall, said transistorized amplifier circuit capable of being
operated from outside, through various controls mounted on said control panel of such casing; a loud speaker fitted inside
said front compartment of said casing and connected to the output of the main audio amplifier section of said
transistorized amplifier circuit and a tape player mounted on the top wall of said casing and said tape player being
connected in conventional manner to said transistorized amplifier circuit.8
Again, on 14 November 1986 petitioner was granted Letters Patent No. UM-6237 for a term of five (5) years from the
grant of a Utility Model described as —
In an audio equipment consisting of a first cubical casing having an opening at its rear and upper rear portion and a
partition therein forming a rear compartment and a front compartment serving as a loud speaker baffle, a control panel
formed by vertical and horizontal sections, a transistorized amplifier circuit wired in at least two printed circuit boards
attached at the back of said control panel, a first loud speaker fitted inside said first compartment of such first casing and
connected to the output of said transistorized amplifier circuit; the improvement wherein said control panel being
removably fitted to said first cubical casing and further comprises a set of tape recorder and tape player mounted on the
vertical section of said control panel and said recorder and player are likewise connected to said transistorized amplifier
circuit; a second cubical casing having an opening at its rear, said second cubical casing having (being?) provided with a
vertical partition therein defining a rear compartment and a front compartment, said rear compartment being provided with
a door and enclosing therein a set of tape racks and said front compartment serving as loud speaker baffle, said second
cubical casing being adapted to said first cubical casing so that said first and second casings are secured together in
compact and portable form; and a second loud speaker fitted inside said front compartment of said casing and connected
to the output of said amplifier circuit.9
The terms of both Letters Patents were extended for another five (5) years each, the first beginning 2 June 1988 and the
second, 14 November 1991.
The Patent Law expressly acknowledges that any new model of implements or tools of any industrial product even if not
possessed of the quality of invention but which is of practical utility is entitled to a patent for utility model. 10 Here, there is
no dispute that the letters patent issued to petitioner are for utility models of audio equipment.
In issuing, reissuing or withholding patents and extensions thereof, the Director of Patents determines whether the patent
is new and whether the machine or device is the proper subject of patent. In passing on an application, the Director
decides not only questions of law but also questions of fact, i.e. whether there has been a prior public use or sale of the
article sought to be patented. 11 Where petitioner introduces the patent in evidence, if it is in due form, it affords a  prima
facie presumption of its correctness and validity. The decision of the Director of Patents in granting the patent is always
presumed to be correct, and the burden then shifts to respondent to overcome this presumption by competent evidence. 12
Under Sec. 55 of The Patent Law a utility model shall not be considered "new" if before the application for a patent it has
been publicly known or publicly used in this country or has been described in a printed publication or publications
circulated within the country, or if it is substantially similar to any other utility model so known, used or described within the
country. Respondent corporation failed to present before the trial court competent evidence that the utility models covered
by the Letters Patents issued to petitioner were not new. This is evident from the testimony of Janito Cua, President of
respondent Janito Corporation, during the hearing on the issuance of the injunction, to wit —
Q. Mr. Cua, you testified that there are (sic) so many other companies which already have (sic) the sing-along system
even before the patent application of Mr. del Rosario and as a matter of fact you mentioned Sanyo, Sony and Sharp, is
that right?
A. Musicmate and Asahi.
Q. Now do you recall that your lawyer filed with this Honorable Court an Urgent Motion to Lift Temporary Restraining
Order of this Honorable Court. I am sure you were the one who provided him with the information about the many other
companies selling the sing-along system, is that right? These 18 which you enumerated here.
A. More than that because. . . .
Q. Now you will agree with me that in your statement Sharp you put the date as 1985 agreed?
A. No.
Q. You mean your lawyer was wrong when he put the word Sharp 1985?
A. Maybe I informed him already.
x x x           x x x          x x x
Q. You mean your lawyer was wrong in alleging to this Court that Sharp manufactured and sold (in) 1985 as found in the
Urgent Motion?
A. Since it is urgent it is more or less.
Q. The same also with Sanyo 1985 which you put, more or less?
A. Sanyo is wrong.
Q. It is not 1985?
A. Sanyo is 1979 I think.
Q. So this is also wrong. Panasonic 1986 is also wrong?
A. Panasonic I think.
Q. So you don't think this is also correct.
A. The date?
Q. So you don't think also that this allegation here that they manufactured in 1986 is correct?
A. Wrong. Earlier.
Q. National by Precision Electronic 1986 this is also wrong?
A. I think earlier.
Q. So that means all your allegations here from 2 to 5 are wrong? OK. By Philipps Philippines 1986, this is also correct or
wrong?
A. More or less. We said more or less.
Q. Nakabutshi by Asahi Electronics that is also wrong?
A. No that is 1979.
Q. Electone by DICO 1989 is this correct or wrong?
A. Correct. More or less.
Q. Skylers 1985 is that correct or wrong?
A. It is more or less because it is urgent. We don't have time to exact the date.
Q. Musicmate of G.A. Yupangco 1981 this is more or less? You are not also sure?
A. 95% sure.
Q. Now you are sure 1981.
A. This one because. . . .
Q. Mr. Witness so you are now trying to tell this Honorable Court that all your allegations here of the dates in this Urgent
Motion except for Musicmate which you are only 95% sure they are all wrong or they are also more or less or not sure, is
that right?
A. More or less.
Q. Now do you have any proof, any advertisement, anything in writing that would show that all these instruments are in
the market, do you have it.
A. No I don't have it because. . . .
Q. No I am satisfied with your answer. Now Mr. Witness, you don't also have a proof that Akai instrument that you said
was also in the market before 1982? You don't have any written proof, any advertisement?
A. I have the product.
Q. But you have not brought the product in (sic) this Honorable Court, right?
A. No. 13
As may be gleaned herein, the rights of petitioner as a patentee have been sufficiently established, contrary to the
findings and conclusions of respondent Court of Appeals. Consequently, under Sec. 37 of The Patent law, petitioner as a
patentee shall have the exclusive right to make, use and sell the patented machine, article or product for the purpose of
industry or commerce, throughout the territory of the Philippines for the term of the patent, and such making, using or
selling by any person without authorization of the patentee constitutes infringement of his patent.
Petitioner established before the trial court that respondent Janito Corporation was manufacturing a similar sing-along
system bearing the trademark miyata which infringed his patented models. He also alleged that both his own patented
audio equipment and respondent's sing-along system were constructed in a casing with a control panel, the casing having
a vertical partition wall defining the rear compartment from the front compartment, with the front compartment consisting
of a loud speaker baffle, both containing a transistorized amplifier circuit capable of being operated from outside through
various controls mounted on the control panel, and that both had loud speakers fitted inside the front compartment of the
casing and connected to the output of the main audio amplifier section both having a tape recorder and a tape player
mounted on the control panel with the tape recorder and tape player being both connected to the transistorized amplifier
circuit. 14
Respondent Janito Corporation denied that there was any violation of petitioner's patent rights, and cited the differences
between its miyata equipment and petitioner's audio equipment. But, it must be emphasized, respondent only confined its
comparison to the first model, Utility Model No. 5269, and completely disregarded Utility Model No. 6237 which improved
on the first. As described by respondent corporation, 15 these differences are —
First. Under Utility Model 5269, the unit is a substantially cubical casing with a window at its rear and upper corner fitted
with slightly inclined control panel, while the miyata equipment is a substantially rectangular casing with panel vertically
positioned.
Second. Under Utility Model 5269, the cubical casing has a vertical partition wall defining a rear compartment and a front
compartment serving as a speaker baffle, while the miyata equipment has no rear compartment and front compartment in
its rectangular casing; it has only a front compartment horizontally divided into 3 compartments like a 3-storey building,
the 1st compartment being a kit, the 2nd also the speaker, and the 3rd are kits.
Third. Under Utility Model No. 5269, a transistorized amplifier circuit with an echo section wired in at least 2 printed circuit
boards is placed inside the rear compartment of the casing and attached to the vertical partition wall, the printed circuit
board having 1 amplifier and 1 echo, while in the miyata equipment the amplifier is mainly IC (Integrated Circuit) —
powered with 8 printed circuit boards almost all of which are IC controlled, with 1 amplifier with power supply, 1 main
tuner, 1 equalizer (3-band), 1 IC controlled volume control, 1 echo IC, 1 tape pream, 1 instrument and 1 wireless
microphone.
Fourth. Under Utility Model 5269, 4 printed circuits are placed inside the compartment of its casing attached to the vertical
partition wall, while in the miyata, the 7 printed circuit boards (PCB) are attached to the front panel and 1 attached to the
horizontal divider.
Fifth. Under Utility Model 5269, there are various controls mounted on the control panel of the casing, while in miyata, the
various controls are all separated from the printed circuit boards and the various controls are all attached thereto.
Sixth. Under Utility Model 5269, a loud speaker fitted inside the front compartment of the casing is connected to the output
of the main audio amplifier section of the transistorized amplifier circuit, while in miyata, there is no other way but to use 2
loud speakers connected to the amplifier.
Seventh. Under Utility Model 5269, a tape player is mounted on the top wall of the casing, while in miyata, 2 tape players
are used mounted side by side at the front.
It is elementary that a patent may be infringed where the essential or substantial features of the patented invention are
taken or appropriated, or the device, machine or other subject matter alleged to infringe is substantially identical with the
patented invention. In order to infringe a patent, a machine or device must perform the same function, or accomplish the
same result by identical or substantially identical means and the principle or mode of operation must be substantially the
same. 16
It may be noted that respondent corporation failed to present before the trial court a clear, competent and reliable
comparison between its own model and that of petitioner, and disregarded completely petitioner's utility Model No. 6237
which improved on his first patented model. Notwithstanding the differences cited by respondent corporation, it did not
refute and disprove the allegations of petitioner before the trial court that: (a) both are used by a singer to sing and amplify
his voice; (b) both are used to sing with a minus-one or multiplex tapes, or that both are used to play minus-one or
standard cassette tapes for singing or for listening to; (c) both are used to sing with a minus-one tape and multiplex tape
and to record the singing and the accompaniment; (d) both are used to sing with live accompaniment and to record the
same; (e) both are used to enhance the voice of the singer using echo effect, treble, bass and other controls; (g) both are
equipped with cassette tape decks which are installed with one being used for playback and the other, for recording the
singer and the accompaniment, and both may also be used to record a speaker's voice or instrumental playing, like the
guitar and other instruments; (h) both are encased in a box-like cabinets; and, (i) both can be used with one or more
microphones. 17
Clearly, therefore, both petitioner's and respondent's models involve substantially the same modes of operation and
produce substantially the same if not identical results when used.
In view thereof, we find that petitioner had established before the trial court prima facie proof of violation of his rights as
patentee to justify the issuance of a writ of preliminary injunction in his favor during the pendency of the main suit for
damages resulting from the alleged infringement.
WHEREFORE, the Decision of the Court of Appeals dated 15 November 1993 is REVERSED and SET ASIDE and the
Order of the trial court dated 24 February 1993 granting petitioner the writ of injunction is REINSTATED.
The trial court is directed to continue with the proceedings on the main action pending before it in order to resolve with
dispatch the issues therein presented.
SO ORDERED.
G.R. No. 97343 September 13, 1993
PASCUAL GODINES, petitioner, vs. THE HONORABLE COURT OF APPEALS, SPECIAL FOURTH DIVISION and SV-
AGRO ENTERPRISES, INC., respondents.
Jesus S. Anonat for petitioner.
Arturo M. Alinio for private respondent.

ROMERO, J.:
Through this petition for review in certiorari of a decision of the Court of Appeals affirming the decision of the trial court,
petitioner Pascual Godines seeks to reverse the adverse decision of the Court a quo that he was liable for infringement of
patent and unfair competition. The dispositive portion of the assailed decision is hereby quoted to wit:
WHEREFORE, with the elimination of the award for attorney's fees, the judgment appealed from is hereby AFFIRMED,
with costs against appellant.1
The patent involved in this case is Letters Patent No. UM-2236 issued by the Philippine Patent Office to one Magdalena
S. Villaruz on July 15, 1976. It covers a utility model for a hand tractor or power tiller, the main components of which are
the following: "(1) a vacuumatic house float; (2) a harrow with adjustable operating handle; (3) a pair of paddy wheels; (4)
a protective water covering for the engine main drive; (5) a transmission case; (6) an operating handle; (7) an engine
foundation on the top midportion of the vacuumatic housing float to which the main engine drive is detachedly installed;
(8) a frontal frame extension above the quarter — circularly shaped water covering hold (sic) in place the transmission
case; (9) a V-belt connection to the engine main drive with transmission gear through the pulley, and (10) an idler pulley
installed on the engine foundation."2 The patented hand tractor works in the following manner: "the engine drives the
transmission gear thru the V-belt, a driven pulley and a transmission shaft. The engine drives the transmission gear by
tensioning of the V-belt which is controlled by the idler pulley. The V-belt drives the pulley attached to the transmission
gear which in turn drives the shaft where the paddy wheels are attached. The operator handles the hand tractor through a
handle which is inclined upwardly and supported by a pair of substanding pipes and reinforced by a U-shaped G.I. pipe at
the V-shaped end."3
The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein private respondent, from
Magdalena Villaruz, its chairman and president, by virtue of a Deed of Assignment executed by the latter in its favor. On
October 31, 1979, SV-Agro Industries caused the publication of the patent in Bulletin Today, a newspaper of general
circulation.
In accordance with the patent, private respondent manufactured and sold the patented power tillers with the patent
imprinted on them. In 1979, SV-Agro Industries suffered a decline of more than 50% in sales in its Molave, Zamboanga
del Sur branch. Upon investigation, it discovered that power tillers similar to those patented by private respondent were
being manufactured and sold by petitioner herein. Consequently, private respondent notified Pascual Godines about the
existing patent and demanded that the latter stop selling and manufacturing similar power tillers. Upon petitioner's failure
to comply with the demand, 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. . . .
x x x           x x x          x x x
Considering the foregoing, we find no reversible error in the decision of the Court of Appeals affirming with modification
the decision of the trial court.
WHEREFORE, premises considered, the decision of the Court of Appeals is hereby AFFIRMED and this petition DENIED
for lack of merit.

G. R. No. 126627               August 14, 2003

SMITH KLINE BECKMAN CORPORATION, Petitioner, vs. THE HONORABLE COURT OF APPEALS and TRYCO
PHARMA CORPORATION, Respondents.

DECISION
CARPIO-MORALES, J.:
Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the state of Pennsylvania,
United States of America (U.S.) and licensed to do business in the Philippines, filed on October 8, 1976, as assignee,
before the Philippine Patent Office (now Bureau of Patents, Trademarks and Technology Transfer) an application for
patent over an invention entitled "Methods and Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5
Propylthio-2-Benzimidazole Carbamate." The application bore Serial No. 18989.
On September 24, 1981, Letters Patent No. 145611 for the aforesaid invention was issued to petitioner for a term of
seventeen (17) years.
The letters patent provides in its claims 2 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;
₱1,000,000.00 in moral damages; ₱300,000.00 in exemplary damages; and ₱150,000.00 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 ₱330,000.00 representing
lost profits, petitioner assails the same as highly speculative and conjectural, hence, without basis. It assails too the award
of ₱100,000.00 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, identity of result does not amount to
infringement of patent unless Albendazole operates in substantially the same way or by substantially the same means as
the patented compound, even though it performs the same function and achieves the same result.20 In other
words, the principle or mode of operation must be the same or substantially the same.21
The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the patentee having the
burden to show that all three components of such equivalency test are met.22
As stated early on, 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." 24 What 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 ₱330,000.00 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
₱100,000.00 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 was ₱100,000.00 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 ₱20,000.00 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.