AMERICAN TOBACCO CO. et al.vs. THE DIRECTOR OF PATENTS et al. G.R. No. L-26803; Oct. 14, 1975; Antonio.

Digest by Ian. Facts: This case involves the validity of the amendment made by the Director of Patents to Rule 168 of the Revised Rules of Practice before the Philippine Patent Office in Trademarks. 1. The Trademark Law (RA 166) vested the Director of Patents with jurisdiction over inter partes proceedings (i.e. hearing of opposition of registration of mark or tradename, interference proceeding instituted for the purpose of determining the question of priority of adoption and use of a trademark, tradename or servicemark, and cancellation of registration of trademark and tradename pending at the Patent Office). 2. The Director of Patents drafted and promulgated the Rules of Practice and approved by the Secretary of Agriculture and Commerce. Rule 168 of the Rules embodies the jurisdiction provided under the Trademark Law. Subsequently, the Director with the approval of the Secretary amended Rule 168:
Previous 168. Original jurisdiction over inter partes proceedings. The Director of Patents shall have original jurisdiction over inter partes proceedings. In the event that the Patent Office should be provided with an Examiner of Interferences, this Examiner shall have the original jurisdiction over these cases, instead of the Director. In the case that the Examiner of Interferences takes over the original jurisdiction over inter partes proceedings, his final decision shall be subject to appeal to the Director of Patents within three months of the receipt of notice of decisions. Such appeals shall be governed by sections, 2, 3, 4, 6, 7, 8, 10, 11, 12, 13, 14, 15 and 22 of Rule 41 of the Rules of Court insofar as said sections arc applicable and appropriate, and the appeal fee shall be P25.00. Amended 168. Original jurisdiction over inter partes proceedings. The Director of Patents shall have original jurisdiction over inter partes proceedings. [In the event that the Patent Office is provided with an Examiner of Interferences, this Examiner shall then have the original jurisdiction over these cases, instead of the Director. In the case that the Examiner of Interferences takes over the original jurisdiction over inter partes proceedings, his final decisions shall be subject to appeal to the Director of Patents within three months of the receipt of notice of decision. Such appeals shall be governed by Sections 2, 3, 4, 6, 7, 8, 10, 11, 12, 13, 14, 15, and 22 of Rule 41 of the Rules of Court insofar as said sections are applicable and appropriate, and the appeal fee shall be P25.00.] Such inter partes proceedings in the Philippine Patent Office under this Title shall be heard before the Director of Patents, any hearing officer, or any ranking official of the office designated by the Director, but all judgments determining the merits of the case shall be personally and directly prepared by the Director and signed by him.

2. Petitioners in this case are parties in inter partes proceedings. Due to the amendment, the Director of Patents delegated the hearing of petitioners cases to hearings officers Attys. Marquez, Velasco, Casia, and Buenaluz. Petitioners claim that the amendment of the Rule is illegal and void because under the law the Director must personally hear and decide the cases. Issue: WON it is within the powers of the Director of Patents to delegate the hearing of the cases. Held: Yes. Petition dismissed.

Ratio: 1. The Revised Administrative Code, Trademark Law (RA 166), and Act creating a Patent Office (RA 165) provide such discretion in the exercise of the power of Director of Patents. Sec. 3 of RA 165 empowered the Director to obtain the assistance of technical, scientific or other qualified officers or employees when deemed necessary in the consideration of any matter submitted to the Office relative to the enforcement of the provisions of the said Act. Sec. 78 empowered the Director to promulgate the rules subject to the approval of the Secretary. There is no provision in either RA 165 or 166 negativing the existence of the authority to designate hearing examiners. Nor can the absence of such authority be fairly inferred from contemporaneous and consistent Executive interpretation of the Act. 2. The nature of the power and authority entrusted to the Director of Patents suggests that the laws should be construed so as to give him the administrative flexibility necessary for the prompt and expeditious discharge of his duties. It could hardly be expected, in view of the magnitude of his responsibility, to require him to hear personally each and every case pending his office. 3. While the power to decide resides solely in the administrative agency vested by law, this does not preclude a delegation of the power to hold a hearing on the basis of which the decision of the administrative agency will be made. This sub-delegation of power has been justified by "sound principles of organization" which demand that "those at the top be able to concentrate their attention upon the larger and more important questions of policy and practice, and their time be freed, so far as possible, from the consideration of the smaller and far less important matters of detail." 4. The rule that requires an administrative officer to exercise his own judgment and discretion does not preclude him from utilizing as a matter of practical administrative procedure, the aid of subordinates to investigate and report to him the facts, on the basis of which the officer makes his decisions. It is sufficient that the judgment and discretion finally exercised are those of the officer authorized by law. 5. There is no abnegation of responsibility on the part of the officer concerned as the actual decision remains with and is made by said officer.

In the case at bar, while the hearing officer may make preliminary rulings on the myriad of questions raised at the hearings of these cases, the ultimate decision on the merits of all the issues and questions involved is left to the Director of Patents.