lip case digests (compiled)

7/29/2019 LIP Case Digests (Compiled)

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#1 Del Rosario vs. CA et. al, 255 SCRA 152 (1996)Del Rosario was granted a patent for his innovation called the Minus One karaoke. The patent was issued in June 1988

for five years and was renewed in November 1991 for another five years as there were improvement introduced to his

minus one karaoke. In 1993, while the patent was still effective, Del Rosario sued Janito Corporation, a Japanese

company owned by Janito Cua, for allegedly infringing upon the patent of Del Rosario. Del Rosario alleged that Janito was

manufacturing a sing-along system under the brand miyata karaoke which is substantially if not identical to his minus

one karaoke. The lower court ruled in favor of Del Rosario but the Court of Appeals ruled that there was no infringement

because the karaoke system was a universal product manufactured, advertised and marketed all over the world long

before Del Rosario was issued his patents.

ISSUE: Whether or not the Court of Appeals erred in its ruling.HELD:Yes. The Patent Law expressly acknowledges that any new model of implements or tools of any industrial producteven if not possessed of the quality of invention but which is of practical utility is entitled to a patent for utility

model. Here, there is no dispute that the letters patent issued to Del Rosario are for utility models of audio equipment. 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. In the case at bar, miyata karaoke was proven to have substantial if not identical functionality as that of the minus

one karaoke which was covered by the second patent issued to Del Rosario. Further, Janito failed to present competent

evidence that will show that Del Rosarios innovation is not new.


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#2 Godines vs. CA et al 226 SCRA 338 (1993)Through this petition for review in certiorariof a decision of the Court of Appeals affirming the decision of the trialcourt, petitioner Pascual Godines seeks to reverse the adverse decision of the Court a quo that he was liable forinfringement of patent and unfair competition. The dispositive portion of the assailed decision is hereby quoted towit:

WHEREFORE, with the elimination of the award for attorney's fees, the judgment appealed from ishereby 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 oneMagdalena S. Villaruz on July 15, 1976. It covers a utility model for a hand tractor or power tiller, the maincomponents 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) anoperating handle; (7) an engine foundation on the top midportion of the vacuumatic housing float to which the mainengine drive is detachedly installed; (8) a frontal frame extension above the quarter circularly shaped watercovering hold (sic) in place the transmission case; (9) a V-belt connection to the engine main drive with transmissiongear through the pulley, and (10) an idler pulley installed on the engine foundation." 2 The patented hand tractorworks 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 theidler pulley. The V-belt drives the pulley attached to the transmission gear which in turn drives the shaft where thepaddy wheels are attached. The operator handles the hand tractor through a handle which is inclined upwardly andsupported 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, fromMagdalena 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 ofgeneral circulation.

In accordance with the patent, private respondent manufactured and sold the patented power tillers with the patentimprinted 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 privaterespondent were being manufactured and sold by petitioner herein. Consequently, private respondent notifiedPascual Godines about the existing patent and demanded that the latter stop selling and manufacturing similarpower tillers. Upon petitioner's failure to comply with the demand, SV-Agro Industries filed before the Regional TrialCourt 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 dispositiveportion 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 EightyThousand Pesos (P80,000.00) for unrealized profits during the period defendant was manufacturingand 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


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The decision was affirmed by the appellate court.

Thereafter, this petition was filed. Petitioner maintains the defenses which he raised before the trial and appellatecourts, to wit: that he was not engaged in the manufacture and sale of the power tillers as he made them only uponthe special order of his customers who gave their own specifications; hence, he could not be liable for infringementof patent and unfair competition; and that those made by him were different from those being manufactured andsold by private respondent.

We find no merit in his arguments. The question of whether petitioner was manufacturing and selling power tillers isa question of fact better addressed to the lower courts. In dismissing the first argument of petitioner herein, theCourt 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'sturtle power tiller as what he merely did was to fabricate his floating power tiller upon specifications anddesigns of those who ordered them. However, this contention appears untenable in the light of thefollowing circumstances: 1) he admits in his Answer that he has been manufacturing power tillers or handtractors, selling and distributing them long before plaintiff started selling its turtle power tiller inZamboanga del Sur and Misamis Occidental, meaning that defendant is principally a manufacturer ofpower tillers, not upon specification and design of buyers, but upon his own specification and design; 2) itwould be unbelievable that defendant would fabricate power tillers similar to the turtle power tillers ofplaintiff 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 itis 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 theother hand, it is also highly unusual for buyers to order the fabrication of a power tiller or hand tractor andallow defendant to manufacture them merely based on their verbal instructions. This is contrary to theusual business and manufacturing practice. This is not only time consuming, but costly because itinvolves 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 incases brought to it from the Court of Appeals in a petition forcertiorariunder Rule 45 of the Rules of Court is limitedto 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 establishedby 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 ofequivalents. 7 In using literal infringement as a test, ". . . resort must be had, in the first instance, to the words of theclaim. If accused matter clearly falls within the claim, infringement is made out and that is the end of it." 8 Todetermine whether the particular item falls within the literal meaning of the patent claims, the court must juxtaposethe claims of the patent and the accused product within the overall context of the claims and specifications, todetermine 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 andcompared with that of the turtle power tiller of the plaintiff (see Exhibits H to H-28). In appearance andform, both the floating power tillers of the defendant and the turtle power tiller of the plaintiff are virtuallythe same. Defendant admitted to the Court that two (2) of the power inspected on March 12, 1984, weremanufactured and sold by him (see TSN, March 12, 1984, p. 7). The three power tillers were placedalongside with each other. At the center was the turtle power tiller of plaintiff, and on both sides thereofwere the floating power tillers of defendant (Exhibits H to H-2). Witness Rodrigo took photographs of thesame 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 ofthe turtle power tiller of plaintiff in form, configuration, design and appearance. The parts or componentsthereof are virtually the same. Both have the circularly-shaped vacuumatic housing float, a paddy in front,


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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 theupstanding G.I. pipes and an engine base at the top midportion of the vacuumatic housing float to whichthe engine drive may be attached. In operation, the floating power tiller of the defendant operates also insimilar manner as the turtle power tiller of plaintiff. This was admitted by the defendant himself in courtthat 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 issuedby 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 operatinghandle and the paddy wheel protective covering." 11 It appears from the foregoing observation of the trial court thatthese claims of the patent and the features of the patented utility model were copied by petitioner. We arecompelled 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 manclutching at straws.

Recognizing that the logical fallback position of one in the place of defendant is to aver that his product is differentfrom the patented one, courts have adopted the doctrine of equivalents which recognizes that minor modifications ina patented invention are sufficient to put the item beyond the scope of literal infringement. 12 Thus, according to thisdoctrine, "(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 thesame way to achieve substantially the same result." 13 The reason for the doctrine of equivalents is that to permit theimitation of a patented invention which does not copy any literal detail would be to convert the protection of thepatent grant into a hollow and useless thing. Such imitation would leave room for indeed encourage theunscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent which, thoughadding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach of thelaw. 14

In this case, the trial court observed:

Defendant's witness Eduardo Caete, employed for 11 years as welder of the Ozamis Engineering, andtherefore actually involved in the making of the floating power tillers of defendant tried to explain thedifference between the floating power tillers made by the defendant. But a careful examination betweenthe two power tillers will show that they will operate on the same fundamental principles. And, accordingto establish jurisprudence, in infringement of patent, similarities or differences are to be determined, notby the names of things, but in the light of what elements do, and substantial, rather than technical, identityin the test. More specifically, it is necessary and sufficient to constitute equivalency that the same functioncan 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 areimmaterial. . . . 15

It also stated:

To establish an infringement, it is not essential to show that the defendant adopted the device orprocess 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 thatdoes not substantially correspond with the patent. But another construction, which would limit thesewords to exact mechanism described in the patent, would be so obviously unjust that no court couldbe expected to adopt it. . . .

The law will protect a patentee against imitation of his patent by other forms and proportions. If twodevices 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, asamended, providing, inter alia:


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Sec. 37. Right of Patentees. A patentee shall have the exclusive right to make, use and sell thepatented machine, article or product, and to use the patented process for the purpose of industry orcommerce, 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 ofthe patent. (Emphasis ours)

As far as the issue regarding unfair competition is concerned, suffice it to say that Republic Act No. 166, asamended, 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 bedeemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general appearance of goods of anothermanufacturer or dealer, either as to the goods themselves or in the wrapping of the packages inwhich they are contained, or the devices or words thereon, or in any other feature of theirappearance, which would be likely to influence purchasers that the goods offered are those of amanufacturer or dealer other than the actual manufacturer or dealer, or who otherwise clothes thegoods with such appearance as shall deceive the public and defraud another of his legitimatetrade. . . .

xxx xxx xxx

Considering the foregoing, we find no reversible error in the decision of the Court of Appeals affirming withmodification the decision of the trial court.

WHEREFORE, premises considered, the decision of the Court of Appeals is hereby AFFIRMED and this petitionDENIED for lack of merit


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#3 Smith Kline & Beckman vs. CA et al, 409 SCRA 33 (2003)Facts:Petitioner Smith Kline Beckman is an American corporation licensed to do business in the

Philippines. In 1976 it filed with the Philippine Patent Office a patent application over methyl 5

propylthio-2-benzimidazole carbamate, a chemical compound that fought infections caused by

gastrointestinal parasites in farm and pet animals. In 1981 the PPO issued Letters Patent No.

14561 for the said invention for a term of 17 years. Private respondent Tryco Pharma is adomestic corporation that dealt in veterinary products. It manufactured and sold Impregon, a

drug which fought gastrointestinal parasites in farm animals, and which contained the compound

Albendazole as active ingredient.

Claiming that Letters Patent No. 14561 covered the substance Albendazole, Smith Kline filed

before the Caloocan City Regional Trial Court a complaint against Tyco Pharma for patent

infringement, and for unfair competition under Article 189 of the Revised Penal Code and Section

29 of the Trademark Law. In its Decision the RTC dismissed Smith Klines complaint, and ordered

the cancellation of Letters Patent No. 14561 for being null and void. Smith Kline appealed to the

Court of Appeals. The CA affirmed that Tyco Pharma was not liable for patent infringement, but

reversed the RTCs finding that Letters Patent No. 14561 was void. Smith Kline filed a petition for

review with the Supreme Court.

Issue:Whether Tyco Pharma committed patent infringement to the prejudice of Smith Kline.

Held:No, Tyco Pharma did not 1.The claims of Letters Patent No. 14561 do not mention the

compound Albendazole. All that the claims disclose are: the covered invention, i.e., the

compound methyl 5 propylthio-2-benzimidazole carbamate; the compounds 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. The courts are similarly bound: they 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. The mere absence of the word Albendazole in the patent is not determinative of

Albendazoles non-inclusion in its claims. While Albendazole is admittedly a chemical compound

that exists by a name different from that covered in the patent, the language of the patent fails

to yield anything at all regarding Albendazole. No extrinsic evidence had been adduced to prove

that Albendazole inheres in Smith Kleins patent in spite of its omission therefrom, or that themeaning of the claims of the patent embraces Albendazole.

2.Smith Klein has not met the requirements for the application of 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. The doctrine 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. While both compounds have the effect of neutralizing parasites in


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animals, identity of result does not amount to infringement of patent unless Albendazole

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

compound, even though it performs the same function and achieves the same result. In other

words, the principle or mode of operation must be the same or substantially the same.

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 Smith

Kleins compound works.

#3 Smith Kline & Beckman vs. CA et al, 409 SCRA 33 (2003)Philippines. In 1981, a patent was issued to it for its invention entitled Methods and

Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-

Benzimidazole Carbamate. The invention is a means to fight off gastrointestinal parasites from

various cattles and pet animals.

Tryco Pharma is a local corporation engaged in the same business as Smith Kline.

Smith Kline sued Tryco Pharma because the latter was selling a veterinary product called

Impregon which contains a drug called Albendazole which fights off gastro-intestinal

roundworms, lungworms, tapeworms and fluke infestation in carabaos, cattle and goats.

Smith Kline is claiming that Albendazole is covered in their patent because 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. And that Albendazole is

actually patented under Smith Kline by the US.

Tryco Pharma averred that nowhere in Impregons packaging does it mention that Albendazole is

present but even if it were, the same is unpatentable.

Smith Kline thus invoked the doctrine of equivalents, which implies that the two substances

substantially do the same function in substantially the same way to achieve the same results,

thereby making them truly identical for in spite of the fact that the word Albendazole does not

appear in petitioners letters patent, it has ably shown by evidence its sameness with methyl 5

propylthio-2-benzimidazole carbamate.

ISSUE: Whether or not there is patent infringement in this case

HELD: No. Smith Kline failed to prove that Albendazole is a compound inherent in the patented

invention. Nowhere in the patent does the word Albendazole found. When the language of its

claims is clear and distinct, the patentee is bound thereby and may not claim anything beyond

them. Further, there was a separate patent for Albendazole given by the US which implies that

Albendazole is indeed separate and distinct from the patented compound here.

A scrutiny of Smith Klines evidence fails to prove the substantial sameness of the 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


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compound, even though it performs the same function and achieves the same result. In other

words, the principle or mode of operation must be the same or substantially the same.

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

patentee having the burden to show that all three components of such equivalency test are met.


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#3 Smith Kline & Beckman vs. CA et al, 409 SCRA 33 (2003)Facts:

Petitioner Smith Kline Beckman Co., licensed to do business in the Philippines, filed on October 8, 1976 as assignee

before the Bureau of Patents an application for patent on its invention called Methods and Compositions for Producing

Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbanate. A Letters of Patent was issued to

the petitioner on September 24, 1981 for a period of 17 years. The patent provides that the patented inventionconsists of Methyl 5 Propylthio-2-Benzimidazole Carbanate used as an active ingredient in treating gastrointestinal

parasites and lung worms in animals. The respondent Tryco Pharma manufactures, distributes and sells veterinary

product, one of which is the Impregon, a drug having Albendazole as its active ingredient effective against

gastrointestinal worms in animals. Petitioner now sues the respondent for patent infringement and unfair competition

before the RTC as it claims that their patent includes the substance Albendazole used by the respondent and they sold

and used the drug Impregon without the petitioners authorization and committed unfair competition for selling as its

own the drug that substantially functions to achieve the same result. Petitioner further contends that under the

doctrine of equivalents in determining patent infringement, the active substance Albendazole used by the respondent

is substantially the same as Methyl 5 Propylthio-2-Benzimidazole Carbanate covered by its patent with the same use of

combating worm infestations in animals. It prodded the court to go beyond the literal words used in the Letter of

Patent issued to them to consider that the words Methyl 5 Propylthio-2-Benzimidazole Carbanate and Albendazole are

the same. Respondent avers that the Letter of Patents issued to petitioner does not cover Albendazole in that the word

does not appear on it. Even if the patent were to include Albendazole it is unpatentable. They secured approval from

the Bureau of Foods and Drugs to manufacture and market Impregon with the Albendazole as its active ingredients. The

petitioner has no proof that they passed their veterinary products as that of the petitioner.

Issue:

Whether or not respondent is guilty of patent infringement?

Ruling:

The Supreme Court held that it did not. When the language of the claim is clear and distinct, the patentee is bound

thereby and may not claim anything beyond them. The language of the Letter of Patents issued to the petitioner failed

to yield anything that it includes Albendazole. The doctrine of equivalents does not apply in the case at bar because it

requires that for infringement to take place, the device should appropriate a prior invention by incorporating its

innovative concept and although there are some modifications and change they perform substantially the same results.

The petitioners evidence failed to adduce that substantial sameness on both the chemicals they used. While both

compounds produce the same effects of neutralizing parasites in animals, the identity of result does not amount to

infringement. The petitioner has the burden to show that it satisfies the function-means-and-result-test required by

the doctrine of equivalents. Nothing has been substantiated on how Albendazole can weed the parasites out from

animals which is similar to the manner used by the petitioner in using their own patented chemical compound.


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#4 Smith Kline & French Lab Ltd. vs. CA and Danlex Research Lab., Inc. 368 SCRA 9 (2001)In August 1989, Danlex Research Laboratories petitioned before Bureau of Patents, Trademarks and Technology Transfer

(BPTTT) that it may be granted a compulsory license for the use and manufacture of the pharmaceutica

product Cimetidine. Cimetidineis useful as an antihistamine and in the treatment of ulcers. Cimetidineis originally

patented to Smith Kline and French Laboratories in 1978, and the said patent is still in force at the time of application by

Danlex Research.

The BPTTT granted the application of Danlex Research together with a provision that Danlex Research should

be paying 2.5% of the net wholesale price as royalty payment to Smith Kline. This was affirmed by the Court of Appeals.

Smith Kline assailed the grant as it argued, among others, that the same is an invalid exercise ofpolice power because

there is no overwhelming public necessity for such grant considering that Smith Kline is able to provide an adequate

supply of it to satisfy the needs of the Philippine market; that a provision in the Philippine Patent Laws is violative of

the Paris Convention to which the Philippines is a signatory.

To explain the second contention, Smith Kline states that the Paris Convention only allows compulsory licensing if the

original licensee (patent holder) has failed to work on the patent; that therefore, the provision in the Philippine Patent

Laws which adds other grounds for the granting of compulsory license i.e. monopoly, is invalid and contrary to the ParisConvention.

ISSUE: Whether or not Smith Kline is correct.HELD: No. The granting is a valid exercise of police power. Cimetidine is medicinal in nature, and therefore necessaryfor the promotion of public health and safety.

On the second contention, Section A(2) of Article 5 [of the Paris Convention] unequivocally and explicitly respects the

right of member countries to adopt legislative measures to provide for the grant of compulsory licenses to prevent abuses

which might result from the exercise of the exclusive rights conferred by the patent. An example provided of possible

abuses is failure to work; however, as such, is merely supplied by way of an example, it is plain that the treaty does not

preclude the inclusion of other forms of categories of abuses. The legislative intent in the grant of a compulsory license

was not only to afford others an opportunity to provide the public with the quantity of the patented product, but also to

prevent the growth of monopolies. Certainly, the growth of monopolies was among the abuses which Section A, Article 5

of the Convention foresaw, and which our Congress likewise wished to prevent in enacting.


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#4 Smith Kline & French Lab Ltd. vs. CA and Danlex Research Lab., Inc. 368 SCRA 9 (2001)Facts Petitioner is the assignee of a Letter Patent covering the pharmaceutical product

Cimetidine, which relates to derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl

thiourea, ureas or guanadines. Said Patent was issued on

Private respondent filed with the BPTTT a petition for compulsory license to manufacture andproduce its own brand of medicines using Cimetidine. Private respondent invoked Section 34 (1)

(e) of Republic Act No. 165, (the Patent Law), which states that an application for the grant of a

compulsory license under a particular patent may be filed with the BPTTT at any time after the

lapse of two (2) years from the date of grant of such patent, if the patented invention or article

relates to food or medicine, or manufactured substances which can be used as food or medicine,

or is necessary for public health or public safety. The petition for compulsory license stated that

Cimetidine is useful as an antihistamine and in the treatment of ulcers, and that private

respondent is capable of using the patented product in the manufacture of a useful product.

Petitioner opposed the petition for compulsory license, arguing that the private respondent had

no cause of action and failed to allege how it intended to work the patented product. Petitionerfurther stated that its manufacture, use and sales of Cimetidine satisfied the needs of the

Philippine market, hence, there was no need to grant a compulsory license to private respondent

to manufacture, use and sell the same. Finally, petitioner also claimed that the grant of a

compulsory license to private respondent would not promote public safety and that the latter

was only motivated by pecuniary gain.

The Bureau of Patents, Trademarks and Technology Transfer (BPTTT) granted the application of

the respondent for compulsory licensing and the CA affirmed the decision of the BPTTT. Now,

petitioner wanted to set aside the said decisions thus the fling of the case to the SC.

Issue Whether or not the abovementioned patent can be the subject of compulsory licensing.

Held It was held by the SC under section 34 of the patent law;

(e) If the patented invention or article relates to food or medicine or manufactured substanceswhich can be used as food or medicine, or is necessary for public health or public safety.

(2) In any of the above cases, a compulsory license shall be granted to the petitioner provided that

he has proved his capability to work the patented product or to make use of the patented product

in the manufacture of a useful product, or to employ the patented process.

(3) The term "worked" or "working" as used in this section means the manufacture and sale of thepatented article, of patented machine, or the application of the patented process for production, in or bymeans of a definite and substantial establishment or organization in the Philippines and on a scale which

is reasonable and adequate under the circumstances. Importation shall not constitute "working".

The grant of the compulsory license satisfies the requirements of the foregoing provision. More than ten years

have passed since the patent forCimetidine was issued to petitioner and its predecessors-in-interest, and thecompulsory license applied for by private respondent is for the use, manufacture and sale of a medicinal

product. Furthermore, both the appellate court and the BPTTT found that private respondent had the capability

to workCimetidine or to make use thereof in the manufacture of a useful product.


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The petition was denied.

#5#6 Price, et al vs. United Laboratories 166 SCRA 133 (1988)The petitioners are the owners-assignees of Philippine Patent No. 13540 which was granted to them on June26,1980 for a pharmaceutical compound known as "aminoalkyl furan derivatives." On October 1, 1982, respondent

United Laboratories, Inc. (or UNILAB) filed in the Philippine Patent Office a petition Inter Partes Case No. 1683,"United Laboratories, Inc. versus Barry John Price, John Watson CLITHERON and John Bradshaw, assignors to

Allen & Hanburys Ltd.') for the issuance of a compulsory license to use the patented compound in its own brands ofmedicines and pharmaceuticals and to sell, distribute, or otherwise dispose of such medicines or pharmaceuticalpreparations in the country. The petition further alleged that the patent relates to medicine and that petitioner, whichhas had long experience in the business of manufacturing and selling pharmaceutical products, possesses thecapability to use the subject compound in the manufacture of a useful product or of making dosage formulationscontaining the said compound.

After the hearing, the Philippine Patent Office rendered a decision on June 2, 1986, granting UNILAB a compulsorylicense subject to ten (1 0) terms and conditions No. 3 of which provides as follows:

3. By virtue of this license, petitioner shall pay the respondent a royalty on all license productscontaining the patented substance made and sold by the Petitioner in the amount equivalent to TWOAND ONE HALF (2.5) PER CENT OF THE NET SALES in Philippine currency. The terms 'net sales'means the gross billed for the product pertaining to Letters Patent No. 13540 less-

a) Transportation charges or allowances, if any, included in such amount;

b) Trade, quantity or cash discounts and broker's or agent's or distributor'scommissions, if any, allowed or paid;

c) Credits or allowances, if any, given or made on account with reflection or return ofthe product previously delivered; and

d) Any tax, excise or government charge included in such amount, or measured bythe production, sale, transportation, use or delivery of the products.

In case Petitioner's product containing the patented substance shall contain one or more activeingredients as admixed product, the royalty to be paid shall be determined in accordance with thefollowing formula:

Net Sales on Value ofAdmixed Product Patented Substance

Royalty = _______________ x 0.025 x ___________________

(Value of Pa Value oftended Substance) Active Ingredients

4. The royalties shall be computed after the end of each calendar quarter for all goods containing thepatented substance herein involved, made and sold during the preceding quarter and to be paid bythe Petitioner at its place of business on or before the thirtieth day of the month following the end ofeach calendar quarter. Payments should be made to Respondent's authorized representative in thePhilippines; (pp. 35-36, Rollo.)


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The patentees appealed the decision to the Court of Appeals (CA-G.R. No. SP-09308) which dismissed the appealon December 4, 1 987. They have come to his Court praying for a review of the Appellate Court's decision on thegrounds that it erred:

1. in upholding the Director's unilateral determination of the terms and conditions of the compulsorylicense, without affording the parties an opportunity to negotiate the terms and conditions freely andby themselves;

2. in finding that the respondent possess the legally required capability to make use of thepetitioner's patented compound in the manufacture of a useful product;

3. in affirming the Director's award of the entire patent to the respondent, when only one claim of thepatent was controverted and

4. in considering evidence that UNILABs capability to use the compound was acquired after, notbefore, filing its petition for compulsory licensing.

The first assignment of error has no merit. The terms and conditions of the compulsory license were fixed by theDirector of Patents after a hearing and careful consideration of the evidence of the parties and in default of anagreement between them as to the terms of the license. This he is authorized to do under Section 36 of Republic

Act No. 165 which provides:

Sec. 36. GRANT OF LICENSE.If the Director finds that a case for the grant of license underSection 34, hereof made out, he may order the grant of an appropriate license and in default ofagreement among the parties as to the terms and conditions of the license he shall fix the terms andconditions of the license in the order.

The order of the Director granting a license under this Chapter, when final, shall operate as a deedgranting a- license executed by the patentee and the other patties in interest.

and under Section 35 of P.D. 1263, amending portions of Republic Act No.165 which reads:

Sec. 35. GRANT OF LICENSE.(1)If the Director finds that a case for the grant of a license underSec. 34 hereof has been made out, he shall within one hundred eighty (180) days from the date thepetition was filed, order the grant of an appropriate license. The order shall state the terms andconditions of the license which he himself must fix in default of an agreement on the mattermanifested or submitted by the parties during the hearing.

The Court of Appeals found that the 2.5% royalty fixed by the Director of Patents 'is just and reasonable.' We quoteits observations hereunder:

Respondent-appellant contends further that the 2.5% royalty rate is unfair to respondent-appellantas to amount to an undue deprivation of its property right. We do not hold this view. The royalty rateof 2.5% provided for by the Director of Patents is reasonable. Paragraph 3, Section 35-B, Republic

Act No. 165, as amended by Presidential Decree No. 1263, provides:

(3) A compulsory license shall only be granted subject to the payment of adequateroyalties commensurate with the extent to which the invention is worked. However,royalty payments shall not exceed five per cent (5%) of the net wholesale price (asdefined in Section 33-A) of the products manufactured under the license. If theproduct, substance, or process subject of the compulsory license is involved in anindustrial project approved by the Board of Investments, the royalty payable to thepatentee or patentees shall not exceed three per cent (3%) of the net wholesale price(as defined in Section 34-A) of the patented commodity and/or commoditymanufactured under the patented process; the same rule of royalty shall be paidwhenever two or more patents are involved, which royalty shall be distributed to the


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patentees in rates proportional to the extent of commercial use by the licensee givingpreferential values to the holder of the oldest subsisting product patent.

Thus, said provision grants to the Director of Patents the use of his sound discretion in fixing thepercentage for the royalty rate and We find that the Director of Patents committed no abuse of thisdiscretion. Also, there is always a presumption of regularity in the performance of one's officialduties.

Moreover, what UNILAB has with the compulsory license is the bare right to use the patentedchemical compound in the manufacture of a special product, without any technical assistance fromherein respondent-appellant. Besides, the special product to be manufactured by UNILAB will onlybe used, distributed, and disposed locally. Therefore, the royalty rate of 2.5% is just and reasonable.(pp. 10-11, CA Decision, pp. 44-45, Rollo)

Furthermore, as pointed out in the respondent's comment on the petition, Identical terms and conditions had beenprescribed for the grant of compulsory license in a good number of patent cases (United Laboratories, Inc. vs.Boehringer Ingelhelm, GMBH, IPC 929, July 27, 1981; United Laboratories, Inc. vs. Bristol-Myers Company, IPC1179, Aug. 20, 1981; United Laboratories, Inc. vs. E.R. Squibb & Sons, Inc., IPC 1349, Sept. 30, 1981; UnitedLaboratories, Inc. vs. Helmut Weber, et al., IPC 949, Dec. 13,1982; Oceanic Pharmacal Inc. vs. Gruppo Lepetit S.A.IPC 1549, Dec. 21, 1982; United Laboratories. Inc. vs. Boehringer Ingelheim, IPC 1185, June 8, 1983; UnitedLaboratories, Inc. vs. Pfizer Corp., IPC 1184, June 10,, 1983; Doctors Pharmaceuticals, Inc. vs. Maggi, et al., July

11, 1983; Drugmaker's Laboratories v. Herningen et al., IPC 1679, September 22,1983; Superior Pharmacraft Inc.vs. Maggi, et al., IPC 1759, January 10, 1984; United Laboratories, Inc. vs. Van Gelder et al., IPC 1627, June 29,1984; Drugmaker's Laboratories, Inc. vs. Janssen Pharmaceutical N.V. IPC 1555, August 27,1984; UnitedLaboratories Inc. vs. Graham John Durant et al., IPC 1731, August 14, 1987; United Laboratories, Inc. vs. Albert

Anthony Carr, IPC 1906, August 31, 1987).

The Director's finding that UNILAB has the capability to use the patented compound in the manufacture of an anti-ulcer pharmaceutical preparation is a factual finding which is supported by substantial evidence, hence, the Court of

Appeals did not commit a reversible error in affirming it (Philippine Nut Industry, Inc. vs. Standard Brands, Inc., 65SCRA 575; Sy Ching vs. Gaw Liu 44 SCRA 143; De Gala Sison vs. Manalo, 8 SCRA 595; Goduco vs. Court of

Appeals, 14 SCRA 282; Ramos vs. Pepsi-Cola Bottling Company of the P.I., 19 SCRA 289. Of indubitablerelevance to this point is the evidence that UNILAB has been engaged in the business of manufacturing drugs and

pharmaceutical products for the past thirty (30) years, that it is the leading drug manufacturer in the country, that ithas the necessary equipment and technological expertise for the development of solid dosage forms or for tablet,capsule, and liquid preparations, and that it maintains standards and procedures to ensure the quality of itsproducts. Even if it were true, as alleged by the patentee (although it is denied by UNILAB), that its capability to usethe patented compound was only acquired after the petition for compulsory licensing had been filed, the importantthing is that such capability was proven to exist during the hearing of the petition.

The patented invention in this case relates to medicine and is necessary for public health as it can be used ascomponent in the manufacture of anti-ulcer medicine. The Director of Patents did not err in granting a compulsorylicense over the entire patented invention for there is no law requiring that the license be limited to a specificembodiment of the invention, or, to a particular claim. The invention in this case relates to new aminoalkylderivatives which have histamine H 2blocking activity, having the general formula (I) and physiologically acceptablesalts, Noxides and dehydrates thereof. The compound ranitidine hydrochloride named in Claim 45 is also covered

by General Claim I and several other sub-generic claims. Therefore, a license for Claim 45 alone would not be fullycomprehensive. In any event, since the petitioner will be paid royalties on the sales of any products the licenseemay manufacture using any or all of the patented compounds, the petitioner cannot complain of a deprivation ofproperty rights without just compensation.

WHEREFORE, the petition for review is denied for lack of merit.

SO ORDERED.


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#7 Ching vs. Salinas et al, 462 SCRA 241 (2005)Jessie G. Ching is the owner and general manager of JeshicrisManufacturing Co., the maker and manufacturer of a Utility

Model,described as Leaf Spring Eye Bushing for Automobile made up of plastic.On September 4, 2001, Ching and

Joseph Yu were issued bythe National Library Certificates of Copyright Registration and Deposit of the said work

described therein as Leaf Spring Eye Bushing forAutomobile. On September 20, 2001, Ching requested the National

Bureauof Investigation (NBI) for police/investigative assistance for theapprehension and prosecution of illegal

manufacturers, producers and/ordistributors of the works.After due investigation, the NBI filed applications for

searchwarrants in the RTC of Manila against William Salinas, Sr. and the officersand members of the Board of Directors of

Wilaware Product Corporation.It was alleged that the respondents therein reproduced and distributedthe said models

penalized under Sections 177.1 and 177.3 of RepublicAct (R.A.) No. 8293.

Issues

Whether or not the subject matter is covered by the Copyrightof the Intellectual Property Code?

Held

It is worthy to state that the works protected under the Law onCopyright are: literary or artistic works (Sec. 172) andderivative works(Sec. 173). The Leaf Spring Eye Bushing and Vehicle Bearing Cushionfall on neither classification.Being

plain automotive spare parts that must conform to theoriginal structural design of the components they seek to replace,

theLeaf Spring Eye Bushing and Vehicle Bearing Cushion are notornamental. They lack the decorative quality or value that

mustcharacterize authentic works of applied art. They are not even artisticcreations with incidental utilitarian functions or

works incorporated in auseful article. In actuality, the personal properties described in thesearch warrants are mechanical

works, the principal function of which isutility sans any aesthetic embellishment.Neither are we to regard the Leaf Spring

Eye Bushing andVehicle Bearing Cushion as included in the catch-all phrase otherliterary, scholarly, scientific and artistic

works in Section 172.1(a) of R.A. No. 8293. Applying the principle of ejusdem generis which statesthat where a statute

describes things of a particular class or kindaccompanied by words of a generic character, the generic word willusually be

limited to things of a similar nature with those particularlyenumerated, unless there be something in the context of the

state whichwould repel such inference,[46] the Leaf Spring Eye Bushing and VehicleBearing Cushion are notcopyrightable, being not of the same kind andnature as the works enumerated in Section 172 of R.A. No. 8293.

(b) Derivative WorksSec. 173

Section 173. Derivative Works. - 173.1. The following derivative worksshall also be protected by copyright:(a)

Dramatizations, translations, adaptations, abridgments,arrangements, and other alterations of literary or artistic works;

and(b) Collections of literary, scholarly or artistic works, and compilations of data and other materials which are original

by reason of the selection orcoordination or arrangement of their contents. (Sec. 2, [P] and [Q], P.D.No. 49)173.2. The

works referred to in paragraphs (a) and (b) of Subsection173.1 shall be protected as new works: Provided however, That

such newwork shall not affect the force of any subsisting copyright upon theoriginal works employed or any part thereof,

or be construed to implyany right to such use of the original works, or to secure or extendcopyright in such original

works. (Sec. 8, P.D. 49; Art. 10, TRIPS)

Derivative works are original work.There must be compliance of the requirements:1. must borrow the original and

expressive content2. the work must alter not merely copy. / must have substantial variationArticle 5 of civil code.No right

can spring from an unlawful act.


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#8 Pearl and Dean (Phils.) Inc. vs Shoemart, Inc., et al, 409 SCRA 231 (2003)Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to

as light boxes. These units utilize specially printed posters sandwiched between plastic sheets

and illuminated with backlights. It was able to secure registration over these illuminated display

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

In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the

light boxes in SM North Edsa. However, since SM North Edsa was under construction, SMI offered

as alternative SM Makati and Cubao. During the signing of the Contract, SMI only returned the

Contract with SM Makati. Manager of petitioner reminded SMI that their agreement includes SM

Cubao. However, SMI did not bother to reply. Instead, respondent informed petitioner that they

are rescinding the contract for SM Makati due to non-performance.

Two years later, SMI engaged the services of EYD Rainbow Advertising to make the light boxes.

These were delivered in a staggered basis and installed at SM Megamall and SM City. In 1989,

petitioner received reports that exact copy of its light boxes was installed by SMI. It further

discovered that North Edsa Marketing Inc. (NEMI), sister company of SMI, was set up primarily to

sell advertising space in lighted display units located in SMIs different branches. Petitioner sentletters to respondents asking them to cease using the light boxes and the discontinued use of

the trademark Poster

Ads. Claiming that SMI and NEMI failed to meet its demand, petitioner filed a case for

infringement of trademark and copy right, unfair competition and damages. SMI maintained that

it independently developed its poster panels using commonly known techniques and available

technology without notice of or reference to P&Ds copyright. In addition, it said that registration

of Poster Ads obtained by petitioner was only for stationeries such as letterheads, envelopes

and the like. Poster Ads is a generic term which cannot be appropriated as trademark, and, as

such, registration of such mark is invalid. It also stressed that P&D is not entitled to the reliefs

sought because the advertising display units contained no copyright notice as provided for bylaw.

RTC found SMI and NEMI jointly and severally liable for infringement of copyright and trademark.

CA reversed saying that it agreed with SMI that what was copyrighted was the technical

drawings only and not the light boxes. Light boxes cannot be considered as either prints, pictoria

illustrations, advertising copies, labels, tags or box wraps, to be properly classified as

copyrightable class O work. In addition, CA stressed that the protective mantle of the

Trademark Law extends only to the goods used by the first user as specified in its certificate of

registration. The registration of the trademark Poster Ads covers only stationeries such as

letterheads, envelopes and calling cards and newsletter.

ISSUES: (1) If the engineering or technical drawings of an advertising display unit are grantedcopyright protection is the light box depicted in such drawings ipso facto also protected by such

copyright? (2) Should the light box be registered separately? (3) Can the owner of the registered

trademark legally prevent others from using such mark if it is mere abbreviation of a term

descriptive of his goods, services or business?

Held:1.No. Copyright is purely statutory. As such, 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 the

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

within the statutory enumeration or description. Petitioner secured copyright under classification

class O work. Thus, copyright protection extended only to the technical drawings and not to


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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.

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.

It must be noted that 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.

2.Yes. 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. 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 through disclosure.

Ideas, once, disclosed to the public without protection of a valid patent, are subject to

appropriation without significant restraint.

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

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

exclude other s from the manufacture, sale or commercial use of the light boxes on the sole

basis of its copyright certificate over the technical drawings.

3.Court agrees with CA that the certificate of registration issued by the Director of Patents can

confer 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. 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.

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

petitioner 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.

There is no evidence that petitioners use of poster Ads was distinctive or well-known. As noted

by CA, petitioners expert witness himself had testified that Poster Ads was not too generic aname. SO it was difficult to identify it with any company. 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 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. PETITION WAS DENIED.


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#8 Pearl and Dean (Phils.) Inc. vs Shoemart, Inc., et al, 409 SCRA 231 (2003)Facts: Pearl & Dean is a corporation engaged in the manufacture of advertising display

units (Poster Ads)referred as light boxes. It acquired a Certificate of Copyright

Registration over the illuminated display units,and acquired trademark for Poster Ads.

Pearl & Dean negotiated with Shoemart for the lease andinstallation of the light boxes inShoemart Malls. After Pearl & Beans contract was rescinded, exact copiesof its light b

oxes were installed in various SM malls (fabricated by Metro Industrial Services, and later

EYD

Rainbow Advertising Corp.) Pearl & Dean sent a letter to Shoemart and it sister company

North EDSAMarketing, to cease using the light boxes and to remove them from the

malls, and demanded the discontinueduse of the trade mark Poster Ads. Unsatisfied

with the compliance of its demands, Pearl & Dean sued. Thetrial court ruled in favor of

Pearl & Dean, while the appellate court reversed the decision of the trial court.

Issue: Whether pearl & Deans copyright registration for its light boxes and the

trademark registration ofPoster Ads preclude Shoemart and North Edsa Marketing from

using the same.

Held: No. Pearl & Dean secured its copyright under the classification class o work. This

being so, itsprotection extended only to the technical drawings and not to the light box

itself. Pearl & Dean cannotexclude others from the manufacture, sale and/or commercial

use over the light boxes on the sole basis of itscopyright, certificate over the technical

drawings. It cannot be the intention of the law that the right ofexclusivity would begranted for a longer time (so years in copyright, and 17 years in patent) through

thesimplified procedure of copyright registration with the National Library, without the

rigor of defending thepatentability of its invention before the IPO and the public.On the

other hand, there has been no evidence that Pearl & Deans use of Poster Ads was

distinctive orwell known. Poster Ads was too generic a name to identify it to a specific

company or entity. Poster Adswas generic and incapable of being used as a trademark

because it was used in the field of poster advertising,the very business engaged by earl

& Dean. Furthermore, Pearl & Deans exclusive right to the use of PosterAds is limited

to what is written in its certificate of registration. Shoemart, et. al. cannot be held liableforthe infringement of the trademark.


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#8 Pearl and Dean (Phils.) Inc. vs Shoemart, Inc., et al, 409 SCRA 231 (2003)FACTS:

Pearl and Dean is a corporation in the manufacture of advertising display units also known as light boxes, which were

manufactured by Metro Industrial Services. A copyright Registration was obtained in 1981. These were marketed in the

name of "Poster Ads". They also applied for a registration of trademark with the Bureau of Patents in 1983, but was only

approved in 19988. In 1985, petitioner had n agreement with respondent Shoemart Inc (SMI) to install these light boxes

in their Makati and Cubao branch, Only the Makati branch was able to sigh the agreement. In 1986, the contract was

rescinded unilaterally by SMI, and instead contracted with Metro Industrial Services. They installed these lightboxes in

different SM city branches, including Cubao and Makati, with association with North Edsa Marketing Inc (NEMI), SMI's

sister company. Petitioner requested SMI and NEMI to put down their installations of the light boxes, and payment of

compensatory damages worth P20M. Claiming that respondents failed to comply, they filed a case for infringement of

trademark and copyright, unfair competition and damages. RTC ruled in favor of petitioner, but CA reversed.

ISSUES:

(1) Whether there was a copyright infringement

(2) Whether there was a patent infringement

(3) Whether there was a trademark infringement

(4) Whether there was unfair competition

RULING: No to all.

(1) Copyright is a statutory right, subject to the terms and conditions specified in the statute. Therefore, it can only cover

the works falling within the statutory enumeration or description. Since the copyright was classified under class "O" works,

which includes "prints, pictorial illustrations, advertising copies, labels, tags and box wraps," and does not include the light

box itself. A lightbox, even admitted by the president of petitioner company, was neither a literary nor an artistic work but

an engineering or marketing invention, thus not included under a copyright.

(2) Petitioner was not able to secure a patent for its lightboxes, and cannot legally prevent anyone from manufacturing or

commercially using the same. Patent has a three-fold purpose: a) to foster and reward invention; b) promotes disclosures

of invention and permit public to use the same upon expiration; c) stringent requirements for patent protection to ensure in

the public domain remain there for free use of the public. Since petitioner was not able to go through such examination, it

cannot exclude others from manufacturing, or selling such lightboxes. No patent, no protection.

(3) The certificate of registration issued by the Director of Patents gives exclusive right to use its own symbol only to the

description specified in the certificate. It cannot prevent others to use the same trademark with a different description.


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(4) "Poster Ads" is a general term that cannot be associated specifically to Pearl and Dean, thus it cannot be considered

to use such term to be unfair competition against the petitioner

lip case digests (compiled)

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