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[G.R. No. 113388. September 5, 1997]

one of the purposes of the patent system

ANGELITA MANZANO, petitioner, vs. CA, and

is to encourage dissemination of information


concerning discoveries and inventions.

CORPORATION, respondents.

This is a matter which is properly within

the competence of the Patent Office

The primary purpose of the patent system

is not the reward of the individual

the official action of which has

the presumption of correctness

but the advancement of the arts and sciences.

and may not be interfered with

The function of a patent

is to add to the sum of useful knowledge

in the absence of new evidence carrying thorough

conviction that the Office has erred.




Since the Patent Office is an expert body preeminently

qualified to determine questions of patentability,
- its findings must be accepted if they are consistent with the
evidence, with doubts as to patentability resolved in favor
of the Patent Office.[1]

Petitioner alleged that

(a) the utility model covered by the letters patent, in this
case, an LPG gas burner, was not inventive, new or useful;

(b) the specification of the letters patent did not comply

with the requirements of Sec. 14, RA No. 165, as amended;

Petitioner Angelita Manzano filed with the Phil. Patent Office
on Feb 19, 1982

(c) respondent Melecia Madolaria was not the original, true

and actual inventor nor did she derive her rights from the
original, true and actual inventor of the utility model
covered by the letters patent; and,

an action for the cancellation of Letters Patent No. UM4609

(d) the letters patent was secured by means of fraud or
for a gas burner registered in the name of respondent
Melecia Madolaria who subsequently assigned the letters
patent to New United Foundry and Manufacturing
Corporation (UNITED FOUNDRY).

In support of her petition for cancellation petitioner further

alleged that




(a) the utility model covered by the letters patent of

respondent had been known

or used by others in the Phil. for more than one (1) year
before she filed her application for letters patent on
Dec 9, 1979;

(b) the products which were produced in accordance with

the utility model covered by the letters patent had been in
public use or on sale in the Philippines for more than 1
year before the application for patent therefor was filed.

(b) a brochure distributed by Manila Gas Corporation

disclosing a pictorial representation of Ransome Burner
made by Ransome Torch and Burner Company, USA,
marked Exh. D; and,

(c) a brochure distributed by Esso Gasul or Esso Standard

Eastern, Inc., of the Philippines showing a picture of another
similar burner with top elevation view and another
perspective view of the same burner, marked Exh. E.

Testifying for herself petitioner narrated that her husband Ong

Bun Tua worked as a helper in the UNITED FOUNDRY

Petitioner presented the following documents which she

correspondingly marked as exhibits:

(a) affidavit of petitioner alleging the existence of prior art,

marked Exh. A;

where respondent Melecia Madolaria used to be affiliated with

from 1965 to 1970;

that Ong helped in the casting of an LPG burner which was the
same utility model of a burner for which Letters Patent No.
UM-4609 was issued,




and that after her husbands separation from the shop she
organized Besco Metal Manufacturing (BESCO METAL) for
the casting of LPG burners one of which had the configuration,
form and component parts similar to those being manufactured

Petitioner claimed that this Ransome burner (Exh. L)

Petitioner presented in evidence an alleged
- model of an LPG burner marked Exh. K and covered by the
Letters Patent of respondent, and testified that it was given
to her in Jan 1982 by one of her customers who allegedly
acquired it from UNITED FOUNDRY.

- had the same configuration and mechanism as that of the

model which was patented in favor of private respondent
Melecia Madolaria.

Also presented by petitioner was a burner cup of an imported

Ransome burner marked Exh M which was allegedly existing
even before the patent application of private respondent.
Petitioner also presented in evidence her own model of an
LPG burner called Ransome burner marked Exh. L,
- which was allegedly manufactured in 1974 or 1975 and
sold by her in the course of her business operation in the
name of BESCO METAL.

Petitioner presented two (2) other witnesses,

- namely, her husband Ong Bun Tua and Fidel Francisco.




Ong testified that he

o worked as a helper in the UNITED FOUNDRY from
1965 to 1970 where he helped in the casting of LPG
burners with the same form,

o configuration and mechanism as that of the model

covered by the Letters Patent issued to private

Francisco testified that he

presented only one witness, Rolando Madolaria, who

testified, among others,

that he was the General Supervisor of the UNITED

FOUNDRY in the foundry, machine and buffing

that in his early years with the company, UNITED

FOUNDRY was engaged in the manufacture of
different kinds of gas stoves as well as burners based on
sketches and specifications furnished by customers;

o had been employed with the Manila Gas Corporation

from 1930 to 1941

o and from 1952 up to 1969 where he retired as

supervisor and that Manila Gas Corporation imported
Ransome burners way back in 1965 which were
advertised through brochures to promote their sale.

Private respondent, on the other hand,

that the company manufactured early models of singlepiece types of burners where the mouth and throat were
not detachable;

that in the latter part of 1978 respondent Melecia

Madolaria confided in him that complaints were being
brought to her attention concerning the early models
being manufactured;




that he was then instructed by private respondent to cast

several experimental models based on revised sketches
and specifications;

that private respondent again made some innovations;

that after a few months,

private respondent discovered the solution to all the

defects of the earlier models and, based on her latest
sketches and specifications, he was able to cast several
models incorporating the additions to the innovations
introduced in the models.

Various tests were conducted on the latest model in the


Rolando Madolaria testified that private respondent decided to

file her application for utility model patent in Dec 1979.

On 7 July 1986 the Director of Patents Cesar C. Sandiego

issued Decision No. 86-56
- denying the petition for cancellation and holding that the
evidence of petitioner was not able to establish
convincingly that the patented utility model of private
respondent was anticipated.

Not one of the various pictorial representations of business

clearly and convincingly showed that the devices presented by
petitioner was identical or substantially identical with the
utility model of the respondent.

and under the supervision of Melecia Madolaria and

they obtained perfect results.
The decision also stated that even assuming that the brochures
depicted clearly each and every element of the patented gas




burner device so that the prior art and patented device became
identical although in truth they were not,

Petitioner elevated the decision of the Director of Patents to the

Court of Appeals which on Oct 15, 1993 affirmed the decision
of the Director of Patents.

- they could not serve as anticipatory bars for the reason that
they were undated.

Hence, this petition for review on certiorari alleging that the

CA erred
The dates when they were distributed to the public were not
indicated and, therefore, were useless prior art references.
The records and evidence also do not support the petitioners
contention that Letters Patent No. UM-4609 was obtained by
means of fraud and/or misrepresentation.

No evidence whatsoever was presented by petitioner to show

that the then applicant Melecia Madolaria withheld with intent
to deceive material facts which, if disclosed,

(a) in relying on imaginary differences which in actuality did

not exist between the model of private respondent covered by
Letters Patent No. UM-4609 and the previously known model
of Esso Standard Eastern, Inc., and Manila Gas Corporation,
making such imaginary differences grounded entirely on
speculation, surmises and conjectures;

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

- would have resulted in the refusal by the Philippine Patent
Office to issue the Letters Patent under inquiry.
(c) in relying mainly on the testimony of private respondents
sole witness Rolando Madolaria; and,




(d) in not canceling Letters Patent No. UM-4609 in the name of

private respondent.

Petitioner submits
that the differences cited by the CA between the utility
model of private respondent and the models of Manila
Gas Corporation and Esso Standard Eastern, Inc., are
more imaginary than real.

She alleges that based on Exhs. E, E-1, F and F-1

The exhibits also show a detachable burner mouth having a

plurality of upwardly existing undulations adopted to act as gas
passage when the cover is attached to the top of said cupshaped mouth all of which are the same as those in the patented

Petitioner also denies as substantial difference the short

cylindrical tube of the burner mouth appearing in the brochures
of the burners being sold by Manila Gas Corporation and the
long cylindered tube of private respondents model of the gas

or the brochures of Manila Gas Corporation and Esso

Standard Eastern, Inc., presented by petitioner,

the cup-shaped burner mouth and threaded hole on the

side are shown to be similar to the utility model of
private respondent.

Petitioner argues that the actual demonstration made during the

hearing disclosed the similarities in form, operation and
mechanism and parts between the utility model of private
respondent and those depicted in the brochures.




The findings of the Patent Office and the CA

o that the brochures of Manila Gas Corporation and Esso
Standard Eastern, Inc., are undated cannot overcome the
fact of their circulation before private respondent filed
her application for utility model patent.

Petitioner thus asks this Court to take judicial notice of the fact
that Esso Standard Eastern, Inc., disappeared before 1979 and
reappeared only during the Martial Law years as Petrophil

Petitioner further contends

that the utility model of private respondent is absolutely
similar to the LPG burner being sold by petitioner in
1975 and 1976,

and also to the Ransome burner depicted in the old

brochures of Manila Gas Corporation and Esso
Standard Eastern, Inc., fabricated by Ransome Torch
and Burner Company of Oakland, California, USA,
especially when considered through actual physical
examination, assembly and disassembly of the models
of petitioner and private respondent.

Petitioner also emphasizes

- that the brochures indicated the telephone number of
Manila Gas Corporation as 5-79-81 which is a 5 numbered
telephone number existing before 1975 because telephones
in Metro Manila started to have 6 numbers only after that

Petitioner faults the CA




- for disregarding the testimonies of Ong Bun Tua and Fidel

Francisco for their failure to produce documents on the
alleged importation by Manila Gas Corporation of
Ransome burners in 1965 which had the same
configuration, form and mechanism as that of the private
respondents patented model.

- Finally, it is argued that the testimony of private

respondents lone witness Rolando Madolaria should not
have been given weight by the Patent Office and the CA
because it contained mere after-thoughts and pretensions.

Further, Sec. 55 of the same law provides Sec. 55. Design patents and patents for utility models.

(a) Any new, original and ornamental design for an article of

manufacture and

(b) any new model of implements or tools or of any industrial

product or of part of the same,

We cannot sustain petitioner. Section 7 of RA No. 165, as
amended, which is the law on patents, expressly provides -

which does not possess the quality of invention,

but which is of practical utility by reason of its form,

configuration, construction or composition,
Sec. 7. Inventions patentable. Any invention of a new and
useful machine, manufactured product or substance, process or
an improvement of any of the foregoing, shall be patentable.

may be protected by the author thereof,




the former by a patent for a design and the latter by a patent

for a utility model,

in the same manner and subject to the same provisions and

requirements as relate to patents for inventions insofar as
they are applicable except as otherwise herein provided.

The element of novelty is an essential requisite of the

patentability of an invention or discovery.

If a device or process has been known or used by others prior

to its invention or discovery by the applicant, an application for
a patent therefor should be denied;

It has been repeatedly held that an invention must possess

the essential elements of novelty, originality and
precedence, and for the patentee to be entitled to the
protection the invention must be new to the world.[3]

In issuing Letters Patent No. UM-4609 to Melecia Madolaria

for an LPG Burner on July 22, 1981, the Philippine Patent
Office found her invention novel and patentable.

The issuance of such patent creates a presumption which

yields only to clear and cogent evidence that the patentee
was the original and first inventor.

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

proceeding in which the validity of the patent is drawn in
question, will hold it void and ineffective.[2]
The burden of proving want of novelty




is on him who avers it

and the burden is a heavy one which is met only by

clear and satisfactory proof which overcomes every
reasonable doubt.[4]

As found by the Director of Patents,

- the standard of evidence sufficient to overcome the
presumption of legality of the issuance of UM-4609 to
respondent Madolaria was not legally met by petitioner in
her action for the cancellation of the patent.

Hence, a utility model shall not be considered new

- if before the application for a patent
Thus the Director of Patents explained his reasons for the
denial of the petition to cancel private respondents patent - it has been publicly known or publicly used in this country

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

(LPG Burner) is not anticipated.

- or has been described in a printed publication or

publications circulated within the country,

- or if it is substantially similar to any other utility model so

known, used or described within the country.[5]

Not one of the various pictorial representations of burners

clearly and convincingly show that the device presented therein
is identical or substantially identical in construction with the
aforesaid utility model.




Even assuming gratia arguendi

- that the aforesaid brochures do depict clearly
It is relevant and material to state that in determining whether
novelty or newness is negatived by any prior art, only one item
of the prior art may be used at a time.

For anticipation to occur, the prior art must show that each
element is found

- on all fours each and every element of the patented gas

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

- although in truth they are not, they cannot serve as

anticipatory bars for the reason that they are undated.

o either expressly
The dates when they were distributed to the public were not
indicated and, therefore, they are useless prior art references.
o or described or under principles of inherency in a single

prior art reference or that the claimed invention was

probably known in a single prior art device or
practice. (Kalman v. Kimberly Clark, 218 USPQ 781, 789)


Furthermore, and more significantly, the model marked Exh. K

does not show whether or not it was manufactured and/or cast




before the application for the issuance of patent for the LPG
burner was filed by Melecia Madolaria.

This is not the way to prove that Exh. L anticipates Letters

Patent No. UM-4609 through Exhs. C and D.

Another factor working against the Petitioners claims

With respect to Exh. L, petitioner claimed it to be her own
model of LPG burner allegedly manufactured sometime in
1974 or 1975 and sold by her in the course of her business
operation in the name of Besco Metal Manufacturing, which
burner was denominated as Ransome burner

is that an examination of Exh. L would disclose that there is

no indication of the time or date it was manufactured.


But a careful examination of Exh. L

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

was really manufactured before the filing of the aforesaid
application which matured into Letters Patent No. UM-4609,
subject matter of the cancellation proceeding.

- would show that it does not bear the word Ransome which
is the burner referred to as the product being sold by the
At this juncture, it is worthwhile to point out that petitioner
also presented Exh. M which is the alleged burner cup of an
imported Ransome burner.




Again, this Office finds the same as unreliable evidence to

show anticipation.

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

was manufactured and/or imported before the filing of the
application for issuance of patent of the subject utility model.

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

the brochures allegedly of Manila Gas and of Esso Gasul
marked Exhs. E and F and on the alleged fact that Manila Gas
Corporation was importing from the United States Ransome

But the same could not be given credence since he himself

admitted during cross- examination that he has never been
connected with Manila Gas Corporation.

He could not even present any importation papers relating to

the alleged imported ransome burners. Neither did his wife.[6]
What is more, some component parts of Exh. M are missing, as
only the cup was presented so that the same could not be
compared to the utility model (subject matter of this case)
which consists of several other detachable parts in combination
to form the complete LPG burner.

The above findings and conclusions of the Director of Patent

were reiterated and affirmed by the CA.[7]




The validity of the patent issued by the Philippine Patent Office

in favor of private respondent and the question over the
inventiveness, novelty and usefulness of the improved model
of the LPG burner are matters which are better determined by
the Patent Office.

The technical staff of the Philippine Patent Office composed of

experts in their field has by the issuance of the patent in
question accepted private respondents model of gas burner as a

There is a presumption that the Office has correctly determined

the patentability of the model[8] and such action must not be
interfered with in the absence of competent evidence to the

The rule is settled that the findings of fact of the Director of

Patents, especially when affirmed by the CA, are conclusive on
this Court when supported by substantial evidence.

Petitioner has failed to show compelling grounds for a reversal

of the findings and conclusions of the Patent Office and the

The alleged failure of the Director of Patents and the CA to

accord evidentiary weight to the testimonies of the witnesses of
petitioner showing anticipation is not a justification to grant the

Pursuant to the requirement of clear and convincing evidence

to overthrow the presumption of validity of a patent, it has been
held that oral testimony to show anticipation is open to
suspicion and if uncorroborated by cogent evidence, as what
occurred in this case, it may be held insufficient.[9]




Whether evidence presented comes within the scope of prior

art is a factual issue to be resolved by the Patent Office.[10]

Finally, petitioner would want this Court to review all over

again the evidence she presented before the Patent Office.

She argues that contrary to the decision of the Patent Office

and the CA, the evidence she presented clearly proves that the
patented model of private respondent is no longer new and,
therefore, fraud attended the acquisition of patent by private

It has been held that the question on priority of invention is one

of fact. Novelty and utility are likewise questions of fact.

The validity of patent is decided on the basis of factual


There is question of fact when the doubt or difference arises as

to the truth or falsehood of alleged facts or when the query
necessarily invites calibration of the whole evidence
considering mainly the credibility of witnesses, existence and
relevance of specific surrounding circumstances, their relation
to each other and to the whole and the probabilities of the

Time and again we have held that it is not the function of the
SC to analyze or weigh all over again the evidence and
credibility of witnesses presented before the lower tribunal or

The SC is not a trier of facts. Its jurisdiction is limited to

reviewing and revising errors of law imputed to the lower
court, its findings of fact being conclusive and not reviewable
by this Court.




WHEREFORE, the Petition is DENIED. The Decision of the Court

of Appeals affirming that of the Philippine Patent Office is
AFFIRMED. Costs against petitioner.

The May 22, 2001 decision of the CA contained a summary of
this dispute:

Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.

Plaintiff-appellant Pearl and Dean (Phil.), Inc.

[G.R. No. 148222. August 15, 2003]
(PHIL.), INCORPORATED, petitioner, vs. SHOEMART,

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.


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 decision of the CA reversing
the Oct 31, 1996 decision of the RTC 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

Pearl and Dean was able to secure a Certificate of Copyright

Registration dated Jan 20, 1981 over these illuminated display


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




Jun 20, 1983,

On Sept 11, 1985, Pearl and Deans General Manager, Rodolfo

Vergara, submitted for signature the contracts covering SM
Cubao and SM Makati to SMIs Advertising Promotions and
Publicity Division Manager, Ramonlito Abano.

but was approved only on Sept 12, 1988, per Registration

No. 41165.
Only the contract for SM Makati, however, was returned
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 Oct 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 Jan 14, 1986, SMIs 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 Feb 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.

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,

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 Shoemarts chain of stores. SMI approved the proposal
and 10 light boxes were subsequently fabricated by Metro
Industrial for SMI.

- received reports that exact copies of its light boxes were

installed at SM City and in the fastfood section of SM

Upon investigation, Pearl and Dean

After its contract with Metro Industrial was terminated, SMI

engaged the services of EYD Rainbow Advertising
Corporation to make the light boxes.

- found out that aside from the 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,
o was set up primarily to sell advertising space in lighted
display units located in SMIs 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
Dec 11, 1991 to both SMI and NEMI enjoining them to cease
using the subject light boxes and to remove the same from
SMIs establishments.

Claiming that both SMI and NEMI failed to meet all its
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
Deans copyright.

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 P20,000,000.00.
SMI noted that the registration of the mark Poster Ads was
Upon receipt of the demand letter, SMI suspended the leasing
of 224 light boxes and NEMI took down its advertisements for
Poster Ads from the lighted display units in SMIs stores.

- 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 SMIs 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 Deans
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 SMIs averments,
admissions and denials and prayed for similar reliefs and
counterclaims as SMI.

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

Wherefore, defendants SMI and NEMI are found jointly
and severally liable for infringement of copyright under
Section 2 of PD 49, as amended, and infringement of
trademark under Section 22 of RA No. 166, as amended,
and are hereby penalized under Section 28 of PD 49, as
amended, and Sections 23 and 24 of RA 166, as
amended. Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:

(a) actual damages - P16,600,000.00,

representing profits derived by defendants as a
result of infringement of plaintiffs copyright
from 1991 to 1992

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00




(d) attorneys fees - P1,000,000.00

(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

(3) to deliver, under oath, to the National Library, all fillerposters using the trademark Poster Ads, for destruction; and

(4) to permanently refrain from infringing the copyright on

plaintiffs light boxes and its trademark Poster Ads.
Defendants counterclaims are hereby ordered dismissed for
lack of merit.


CA: 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 plaintiffappellants 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 Seldens Condensed Ledger or Bookkeeping
Simplified which purported to explain a new system of




that is the province of letters patent, not of copyright. And that

is precisely the point.
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

The defendant Baker then produced forms which were similar

to the forms illustrated in Seldens copyrighted books.

No doubt aware that its alleged original design would never

pass the rigorous examination of a patent application, plaintiffappellant 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 indepth 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)].

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;

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
plaintiffs 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


In fine, we cannot find SMI liable for infringing Pearl and

Deans copyright over the technical drawings of the latters
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

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




the registrants ownership of the mark or trade-name,

and of the registrants 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)

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 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.
The SC further emphasized the restrictive meaning of Section
20 when it stated, through Justice Conrado V. Sanchez, that:
Said trademark was recorded in the Principal Register on Sept
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

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




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.

We believe that such omnibus registration is not contemplated
by our Trademark Law.

While we do not discount the striking similarity between Pearl

and Deans registered trademark and defendants-appellants
Poster Ads design,

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

- 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.

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 Deans 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.

Dissatisfied with the above decision, petitioner P & D filed

the instant petition assigning the following errors for the Courts






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 aboveentitled case for lack of merit.








(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 IPO) 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?

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?

Petitioner P & Ds 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, petitioners 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 CA held

that the copyright was limited to the drawings alone and not to
the light box itself.

(O) Prints, pictorial illustrations, advertising copies, labels,

tags, and box wraps;

We agree with the appellate court.

First, petitioners application for a copyright certificate as well

as Copyright Certificate No. PD-R2588 issued by the National
Library on JaN 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:

Although petitioners 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. Accordingly, it can
cover only the works falling within the statutory enumeration
or description.


SEC. 2. The rights granted by this Decree shall, from the

moment of creation, subsist with respect to any of the
following works:

P & D secured its copyright under the classification class O

work. This being so, petitioners 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

simplistic act of entitling the copyright certificate issued by the

National Library as Advertising Display Units.

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.

In fine, if SMI and NEMI reprinted P & Ds technical drawings

for sale to the public without license from P & D, then no
doubt they would have been guilty of copyright infringement.

The strict application of the laws 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.

But this was not the case. SMIs and NEMIs 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 petitioners copyright
over the technical drawings? We do not think so.


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.

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.

And no less clearly, neither could the lack of statutory authority

to make the light box copyrightable be remedied by the




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,


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.

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.


QUESTION: This brings us to the next point: if, despite its

manufacture and commercial use of the light
boxes without license from petitioner,

In relation thereto, a trade name means the name or

designation identifying or distinguishing an enterprise.




private respondents cannot be held legally liable

for infringement of P & Ds copyright over
its technical drawings of the said light boxes,
should they be liable instead for infringement of


In Creser Precision Systems, Inc. vs. Court of Appeals,


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.

We do not think so either.

x x x (A)n inventor has no common law right to a

monopoly of his invention.
For some reason or another, petitioner never secured a patent
for the light boxes.
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.
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.

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.




On the assumption that petitioners advertising units were

patentable inventions, petitioner revealed them fully to the
public by submitting the engineering drawings thereof to the
National Library.

On one side of the coin is the public which will benefit from
new ideas; on the other are the inventors who must be

As held in Bauer & Cie vs. ODonnel,


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

- 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





(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.

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.

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

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.

The patent law has a three-fold purpose:

first, patent law seeks to foster and reward invention;

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.




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
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.

Stated otherwise, what petitioner seeks is exclusivity without

any opportunity for the patent office (IPO) to scrutinize the
light boxs eligibility as a patentable invention.
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 irony here is that, had petitioner secured a patent instead,

its exclusivity would have been for 17 years only.

The law confers the copyright from the moment of

creation and the copyright certificate is issued upon
registration with the National Library of a sworn exparte claim of creation.

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 , 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.

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.

The publication illustrated blank forms of ledgers utilized in

such a system.

The defendant reproduced forms similar to those illustrated in

the plaintiffs copyrighted book. The US Supreme Court ruled

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


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.

or on the mode of drawing lines to produce the effect of

perspective, would be the subject of copyright;

That is the province of letters patent, not 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.

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.

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

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

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.

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

drawings and illustrations it may contain, gives no exclusive




Whether the art might or might not have been patented, is a

question, which is not before us.
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.
It was not patented, and is open and free to the use of the

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.

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)


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




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.
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, 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

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
differentdescription. Faberge, Inc. was correct and was in fact
recently reiterated in Canon Kabushiki Kaisha vs. Court of


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. However, while the petitioners 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.

This fact also prevented the application of the doctrine of

secondary meaning.


In this case, there was no evidence that P & Ds use of

Poster Ads was distinctive or well-known. As noted by the CA,
petitioners 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.

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

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.

The admission by petitioners 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.

Puno, (Chairman), Panganiban, SandovalGutierrez, and Carpio-Morales, JJ., concur.

G.R. No. L-27361 May 29, 1981
V-LAB DRUGHOUSE CORPORATION, defendantsappellees.




State of Michigan, U.S.A., with principal office situated in

Detroit Michigan, U.S.A.;

This is an appeal from the order of the CFI of Rizal dated AuG
22, 1966, in Civil Case No. C-712, dismissing,

on the ground of lack of cause of action, the complaint for

damages for infringement of patent and unfair competition,
with preliminary injunction, filed by the herein appellant
against the herein appellees.

On May 5, 1966, Parke, Davis & Company filed with the CFI
of Rizal, Caloocan City Branch, the said Complaint with
Preliminary Injunction
against Doctors' Pharmaceuticals, Inc., otherwise referred
to as defendant No. 1 and V-LAB Drughouse Corporation,
otherwise referred to as defendant No. 2,

alleging, among others, that plaintiff is a foreign

corporation organized and existing under the laws of the

that the laws of the USA allow corporate or juristic citizens

of the Philippines
to file in said country, actions for infringement of patents
and for unfair competition:

that defendants 1 and 2 are corporations organized and

existing under the laws of the Philippines with offices
respectivrely located at 354-B San Diego Street, Grace
Park, Caloocan City and 126 Gen. Evangelista Street,
Caloocan City;

that on March 21, 1957, Letters Patent No. 279 was legally
issued to plaintiff' by the Patent Office of the Republic of
the Philippines for an invention entitled "Therapeutically
Valuable Esters and Method for Obtaining the same";




that since that date, plaintiff has been and still is, the owner
of said Letters Patent No. 279 which is still in force in the

that defendant No. 1 has knowingly infringed and is still

knowingly infringing Claim 4 of said Letters Patent No.
279 of plaintiff
o by selling, causing to be sold, using or causing to be
used, "Chloramphenicol Palmitate",

o the substance covered by said Claim 4 of said

plaintiff's Letters Patent No. 279, under the name
"Venimicetin Suspension",

o willfully and without the consent or authorization of

plaintiff; that defendant No. 2 has likewise,
knowingly infringed and is still knowingly
investigation Claim 4 of said letters Patent No. 279

o by acting as distributor of defendant No. 1 of the

latter's medicine called "Venimicetin Suspension"
which contains "Chloramphenicol Palmitate":

that plaintiff, through its wholly-owned local subsidiary,

Parke, Davis & Company, Inc. a domestic corporation with
main office at Mandaluyong, Rizal, has at great expense,
established a market and a continuing demand for
"Chloramphenicol Palmitate" in the Philippines and has for
many years sold and is still selling this product in the
Philippines that defendants have derived unlawful gains
and profits from the aforesaid infringement to the great and
irreparable injury,

damage and prejudice of plaintiff, and have deprive

plaintiff of legitimate returns which plaintiff would have
otherwise would have falsely and deseptively concealed
that the same contains "Chloramphenicol" and
"Chloramphenicol Palmitate" are entirely different




that defendants, advertising and selling "Venimicetin

Suspension", have falsely and deceptively use plaintiffs
name and represented that defendant No. 1 holds a license
from plaintiff for said medicine with, inter alia, the
following words:
First Compulsory License in the Philippines by ParkeDavis Company Detroit Michigan, U.S.A.;

that plaintiff has never granted defendant No. 1 any kind of

license for any product;

Letters Patent No. 279 (which covers "Chloramphenicol


that the resolution of the Director of Patents fixing the

terms and conditions of the compulsory license for
"Chloramphenicol" has not yet become final as the same is
still subject to a pending motion for reconsideration;

that even if said resolution does become final, the

compulsory license will not cover defendants' "Venimicetin
Suspension" which actually contains "Chloramphenicol
Palmitate" and, therefore, defendants' statement will still be
false and misleading;

that defendant No. 1 has not even applied for a compulsory

license under plaintiff's Letters Patent No. 279, the only
patent which covers "Chloramphenicol Palmitate";

that the compulsory licensing case between plaintiff and

defendant No. 1 in the Philippine Patent Office (Inter Partes
Case No. 181) dealt with plaintiff's Letters Patent No. 50
(which covers "Chloramphenicol") and not with plaintiff's

and that defendants' use of the aforesaid false statement is

designed to induce persons to purchase and physicians to
prescribe the use of "Venimicetin Suspension" in the
mistaken belief that it is Identical with the
"Chloramphenicol Palmitate" product manufactured and
sold in the Philippines by plaintiff's subsidiary or that the
active ingredient in said product has been obtained from




plaintiff and/or that said product has been made under the
supervision or control of plaintiff thereby causing damage
or loss to plaintiff.

On the basis of the foregoing allegations, the plaintiff prayed,

among others, that defendants be enjoined from performing the
acts complained of as infringement of patent and unfair
competition and to pay the plaintiff all damages due thereto by
reason of said acts.

CFI: On May 6, 1966, issued an order which, among others,


temporarily restrained the defendants "from directly or

indirectly selling, using, causing to be sold or causing to be
used any 'Chloramphenicol Palmitate' not manufactured by
plaintiff or plaintiff's wholly-owned subsidiary, Parke,
Davis & Company, Inc."

Alleging that the defendants have not complied with such

order, the plaintiff filed on May 24, 1966, a motion to
punish defendants for contempt.

Before the court could act on the plaintiff's motion for


the defendants filed a Motion to Dismiss, dated May 25,


alleging, among others, that the complaint states no cause

of action against them since defendant No. 1 "was granted a
compulsory license to manufacture, use and sell its own
brands of medicinal preparation containing

On June 17, 1966, the plaintiff filed

its Opposition to Motion to Dismiss controverting,
among others,




defendants' contention that the complaint states no

cause of action.

Plaintiff pointed out that


the defendants have confused the substance

On June 27, 1966, the defendants filed their Reply to

Opposition alleging, among others, that in advertising and
selling their product "Venimicetin Suspension," never do they
state that the same contains "Chloramphenicol Palmitate" They
pointed out that even in the annexes of plaintiff's complaint
(consisting of the packages and labels allegedly used by the
defendants in said product), only the substance
"Chloramphenicol" is stated showing that the substance
involved is Cloramphenicol and not "Chloramphenicol

which is the subject matter of the complaint, namely,

"Chloramphenicol Palmitate",

with the substance covered by the compulsory licensing

case, namely, "Chloramphenicol",

and the Letters Patent subject of the complaint, namely,

Letters Patent No. 279, with the Letters Patent subject of
the compulsory licensing case, namely, Letters Patent No.

On July 5, 1966, the plaintiff filed


its Rejoinder to Reply to Opposition alleging among others,

that while the packages and labels of defendants'

"Venimicetin Suspension" indicate that the same contains

the truth of the matter is that said product does not contains
said substance but the subtance covered by letters Patents
No.279, namely, "Chloramphenicol Palmitate".




On the basis of the foregoing pleadings, the CFI of Rizal issued

the order dated Aug 22, 1966, which dismissed the complaint
on the ground of lack of cause of action, to wit:
This, plaintiff pointed out, is expressly alleged in the
complaint; thus, applying the rule that a motion to dismiss
hypothetically admits the truth of the allegations of the
complaint, defendants are guilty of

xxx xxx xxx

After a careful consideration of the arguments for and against

(1) infringement of patent, by selling, causing to be

sold, using or causing to be used "Chloramphenicol
Palmitate" in their medicine called "Venimicetin
Suspension", and

(2) unfair competition, by concealing that said medicine

contains "Chloramphenicol",

and, by deceiving and misleading the purchasers who

are trade to believe that "Venimicetin Suspension" is
covered by a compulsory license from the plaintiff.

the motion to dismiss, and in view of the fact that the substance
covered by Letters Patent No. 50 and Letters Patent No. 279 is
the same and that is, the substance known as

because while under Letters Patent No. 50, the substance is

referred to as "Chloramphenicol",

in Letters Patent No. 279;





Chloramphenicol Palmitate it is the opinion of the Court that
"Chloramphenicol" and "Chloramphenicol Palmitate are the
same, the difference being merely in the taste, and this Court to
state that there was infringement of Patent with respect to
Letters Patent No. 279 would be tantamount to preventing the
defendant, Doctors" Pharmaceuticals, Inc., from exercising the
right granted it by Letters Patent No. 50.

The defendant, V-Lab Drughouse Corporation being merely a

sales representative of the defendant, Doctors' Pharmaceuticals,
Inc., and the Court being of the opinion that there is no cause
of action with respect to the principal defendant, is likewise of
the opinion that there is no cause of action with respect to the
defendant, V-LAB Drughouse Corporation.

It is likewise the opinion of this Court that there is no cause of

action for unfair competition

It would further render nugatory the decision of the Director of

Patents, affirmed by the Supreme Court, granting the
defendant, Doctors' Pharmaceuticals, Inc., the right to use and
import "Chloramphenicol".

because a perusal of the records of this case will show that

under paragraph 7 of the Resolution of the Director of
Patents, Annex "C" of the Motion to Dismiss, the petitioner
(Doctors' Pharmaceuticals, Inc.) shall adopt and use its
owntrademarks or labels on all its products containing
Chloramphenicol under license from Parke. Davis, & Co.,
Inc., of Michigan, U.S.A.

The claim of the plaintiff that the representation:

First Compulsory License in the Philippines by Parke Davis
Company, Detroit Michigan, U.S.A.




is false and has a definite tendency to deceive possible

purchasers and distort the facts is not well-taken in view of
the above-mentioned (Par. 7) of the Resolution of the
Director of Patents.

WHEREFORE, finding the ground of lack of cause of action to

be well-taken, this case is ordered DISMISSED, without
pronouncement as to costs. The restraining order heretofore
issued is hereby lifted and set aside. Having reached the above
conclusion, the Court will no longer pass upon the issue of

It is axiomatic that in resolving a motion to dismiss a complaint

on the ground of failure to state a cause of action, the court
should hypothetically assume the truth of the factual
allegations of the complaint (except allegations of facts the
falsity of which the court may take judicial notice of) and
determine whether on the basis thereof, the complainant is
entitled to the relief demanded.

Had the lower court applied the foregoing formula, it would
not have Dismissed, on the ground of failure to state a cause of
action, the complaint for damages for infringement of patent
and unfair competition.
Hence, the present appeal.

We are thus tasked with the resolution of the issue of whether
or not the lower court correctly dismissed the complaint for
damages for infringement of patent and unfair competition on
the ground of failure to state a cause of action.

For, instead of hypothetically assuming the truth of the factual

allegations of the complaint, the lower court had ruled against
their veracity and consequently concluded that the complaint
states no cause of action.




As can be gleaned from the appealed order, the pertinent

portions of which We have heretofore quoted, the lower court
premised its ruling that there is no cause of action for
infringement of patent on the assumption that
"Chloramphenicol" (the substance covered by Letters Patent
No. 50) and "Chloramphenicol Palmitate" (the substance
covered by Letters Patent No. 279) are the same.

Thus, instead of hypothetically assuming the truth of the

plaintiff's allegation that "Chloramphenicol" and
"Chloramphenicol Palmitate are two different substances, the
lower court had ruled against its veracity.

This is clearly an error considering that the said assumed fact

cannot qualify as something which the court could take judicial
notice of nor was it competent to so find in the absence of
evidence formally presented to that effect.

The existence of two patents separately covering said

substances simply militates against said factual assumption and

requires the presentation of evidence sufficient to convince the

court that said substances are indeed the same.

Had the lower court hypothetically assumed as true, for the

purpose of the motion to dismiss, the allegations in the
complaint that "Chloramphenicol" and "Chloramphenicol
Palmitate" are entirely different substances and that
"Venimicetin Suspension" actually contains "Chloramphenicol
Palmitate" and not "Chloramphenicol" as indicated in its
package and label, it necessarily would have to conclude that
the complaint states causes of action for infringement of patent
and for unfair competition.

For defendants would then be guilty of infringement of patent

by selling, causing to be sold, using and causing to be used
"Chloramphenicol Palmitate", without the consent or authority
of the plaintiff as the holder of Letters Patent No. 279, Claim 4
of which allegedly covers said substance. Sections 37 and 42 of
R.A. No. 165 provide:




whose rights have been infringed, may bring a civil action

before the proper CFI,
A patentee shall have the exclusive right to make, use and sell
the patented machine, article or product,

to recover from the infringed, damages sustained by reason of

the infringement and to secure an injunction for the protection
of his rights.

and to use the patented process for the purpose of industry or

commerce, throughout the territory of the Philippines for the
term of the patent;

and such making, using, or selling by any person without the

authorization of the patentee, constitutes infringement of the
patent. (Emphasis supplied.)

Likewise, the defendants would be guilty of unfair competition

by falsely stating that defendant No. l's medicine called
"Venimicetin Suspension" contains "Chloramphenicol" when in
fact it actually contains "Chloramphenicol Palmitate", and that
it is covered by a compulsory license from the plaintiff.

Section 29 of R.A. No. 166 provides,inter alia;

Any patentee, or anyone possessing any right, title or interest
in and to the patented invention,

In particular, and without in any way limiting the scope

of unfair competition, the following shall be deemed
guilty of unfair competition:




xxx xxx xxx

(c) Any person who shall make any false
statement in the course of trade ... .

Clearly, the lower court erred in dismissing, on the ground of

failure to state a cause of action, the complaint for damages for
infringement of patent and unfair competition.

WHEREFORE, the appealed order of dismissal is hereby set

aside and the complaint for damages for infringement of patent
and unfair competition is hereby reinstated. Without
pronouncement as costs.

G.R. No. L-1816

April 17, 1906
CARLOS GSELL, plaintiff-appellee, v. VALERIANO VELOSO
YAP-JUE, defendant-appellant.

Barredo (Chairman), Aquino, Guerrero * and De Castro, JJ.,


This was an action by the plaintiff

- to recover of the defendant damages for the infringement of
a certain patent issued by the Spanish Government to the
assignor of the plaintiff.




An examination of the evidence adduced during the trial shows

that upon June 17, 1896,
- Henry Alfred Gsell presented a petition to the "Spanish
Government to be granted a patent for manufacturing
umbrella and cane handles, which patent was as follows:
Descriptive statement which accompanies the application
for patent of invention for the industrial product 'handles
for canes and umbrellas, curred by means of a small lamp
or blowpipe, fed buy petroleum or mineral fuel.'
After the canes have been cut for cane or umbrella handles,
the outsides are thoroughly cleaned.
This operation having been performed, they are then trimmed
and the interior cleaned by means of a gimlet of about fifteen
centimeters in length operated by a wheel, by means of which
the knots inside are broken.

There is then introduced to a depth of about fifteen centimeters

a piece of very clean: bamboo, which completely fills the hole
made by the gimlet, thereby giving to the cane necessary
strength to resist the heat of the lamp or blowpipe without
breaking or cracking.
This operation having been performed, the cane, the end of
which is attached to a fixed point, is given the shape of a hook
or some other form by means of fire and pressure. Once the
cane has been shaped desired, it is allowed to cool, and is then
cleaned, varnished, and ornamented at will.

This industry requires skillful handiwork, owing to the great

risk engendered by the treatment of such fragile material as a
light cane. On the other hand, however, it affords large profits
to the workman.
NOTE. The patent applied for shall be for the industrial
product 'cane handles for walking sticks and umbrellas, curved
by means of a small lamp or blowpipe, fed by petroleum or
mineral fuel.'
Madrid, June 17, 1896.
Which petition was granted in the following decree:
Whereas Mr. Henry Alfred Gsell, of ............. has filed under
date of June 17, 1896, in the civil government of Madrid,
an application for a patent of an invention,
consisting of a process for curving handles for canes
and umbrellas by means of a lamp or blowpipe fed
by petroleum or mineral fuel.
He having complied with the provisions of the law of July 30,
the undersiged by virtue of the power conferred upon him by
article 4 of the royal decree of July 30, 1887,
issues by order of his excellency the minister of the interior,
in favor of said party, the present patent of invention which
guarantees to him the Peninsula and adjacent islands, for the
term of vein ...... from the date of the present title, the exclusive
right to the exploitation of the said industry,




in the form described in the statement attached to ........ He may

extend it to the colonies, provided he complies with the
provisions of article 2 of the royal decree of May 14, 1880.

By virtue of this patent Henry Alfred Gsell

was granted the exclusive right to use the same in the
Philippine Islands for a period of 20 years.

Of this patent the division of industry and registration of

industrial property ............ shall make a record to be forwarded
to the minister of the interior; and it is provided that the same
shall expire and shall be null and void if the interested party
should fail to pay to the said division, and in ............

On May 1, 1899, Henry Alfred Gsell transferred the said patent

and the exclusive right to use the same to the plaintiff herein.

section 14 of the law, the annual fees prescribed in article 13,

and fails to show to the chief of the same division within the
fixed time of ............
from this date, which has been put in practice in Spain, the
object of the patent, establishing a new industry in the country.
Madrid, 28 ............, 1896.
Seal of division of industry and registration of industrial and
commercial property.
Recorded in book 25, page 111, under No. 19228.
Article 2 of the royal decree of May 14, 1880,
complied with.
Madrid, October 31, 1896.
The chief of the division:

The evidence clearly shows that the defendant was

manufacturing umbrella and cane handles bag the same method
as that used by the plaintiff, under and by virtue of his said

Under the treaty of Paris the United States Government

undertook to protect citizens of the Philippine Islands in their
rights secured by copyrights, patents, etc., from the Spanish
Government, in the following language:
ART. 13. The rights of property secured
by copyrights and patents acquired by Spaniards in
the Island of Cuba, and in Porto Rico, the
Philippines, and other ceded territories,
at the time of the exchange of the ratifications of
this treaty,




shall continue to be respected.

Spanish scientific, literary, and artistic works
not subversive of public order in the territories in
shall continue to be admitted free of duty into such
territories, for a period of 10 years,

shall receive the protection accorded them in the

United States under said laws;
and an infringement of the rights secured by lawful
issue of a patent or by registration of a trade-mark,
print, or label

to be reckoned from the date of the exchange of the

ratifications of this treaty.

shall subject the person or party guilty

of such infringement to the liability created and
imposed by the laws of the United States relating to
said matters:

By virtue of the foregoing provisions of said treaty,

- Circular No. 12, Division of Customs and Insular Affairs,
dated Washington, D. C., April 11, 1899, was issued by the
Assistant Secretary of War and is as follows:

Provided, That a duly certified copy of the patents

or of the certificate of registration of the trade-mark,
print, or label shall be filed in the office of the
Governor-General of the Island wherein such
protection is desired:

In territory subject to military government by the military

forces of the United States,
- owners of patents, including design patents,
which have been issued or which may hereafter be issued,
and owners of trade-marks, prints, and labels, duly
registered in the United States Patent Office,
under the laws of the United States relating to the grant of
patents and the registration of trade-marks, prints, and

And provided further, That the rights of property in

patents and trade-mark, secured in the Islands of
Cuba, Porto Rico, the Philippines, and other ceded
territory to persons under the Spanish laws shall be
respected in said territory the same as if such laws
were in full force and effect.
(Signed) G. D. MEIKLEJOHN,
Assistant Secretary of War.

Circular No. 21, Division of Customs and Insular Affairs, dated

Washington, D. C., June 1, 1899, as amended by Circular No.
34 of the same Department, dated September 25, 1899,




required the holds of patents in the insular possessions of

the United States to file with the proper authorities a
certified copy of a patent or a certificate of registration, etc.

In a letter dated Manila, P. I., August 12, 1899, George P.

Ahern, captain, Ninth Infantry United States Army, who was
then in charge of the Office of Patent, Copyrights, and TradeMarks, which letter was directed to the plaintiff herein, said:
I have the honor to hand you herewith nine patents,
namely (among others was mentioned the patent here in
question), now legally held by you, which have been
granted under the Spanish law.
Said patent right will be protected by the United States
authorities in these Islands, pursuant to Circular No. 12,
Division of Customs and Insular Affairs, War
Department, Washington, D. C., April 11, 1899.
"Provided further, That the rights of property in patents and
trade-marks secured in the Islands of Cuba, Porto Rico, the
Philippines, and other ceded territory to persons under the
Spanish laws shall be respected in said territory the same as if
such laws were in full force and effect."
On the 29th on January, 1900, Capt. George P. Ahern, who was
then in charge of the Office of Patents, Copyrights, and TradeMarks, addressed the following letter to the plaintiff herein:
SIR: This is to certify, in reply to your request of December 20,
1899, and pursuant to the provisions of Spanish law, and by
virtue of the duties as prescribed for the undersigned in General

Orders, No. 24, office of the United States military governor in

the Philippine Islands, Manila, P. I.,
June 26, 1899, an inspection was made of your factory in Calle
San Pedro, Manila, by the undersigned officer on the 26th day
of January, 1900, patent number 19228, granted H. A. Gsell,
Madrid, Spain, Sept 28, 1896,
- transferred to Carlos Gsell, May 1, 1899, for an exclusive
privilege of 20 years of a process for curving sticks and
umbrella handles.
A careful inspection was made of the process as per the
specifications accompanying said patent, and all of said
specifications and process were found to be in operation as
required by law.
Captain, Ninth United States Infantry,
In Charge of Office.
At the close of the trial, and after the evidence had all been
introduced, the lower court gave the plaintiff permission to
amend his complaint, and also gave the defendant an
opportunity to file an amended answer.
The court granted this permission to amend the original
complaint under and by virtue of the provisional of section 110
of the Code of Procedure in Civil Actions. This order of the
court was excepted to on the part of the defendant. Said section
110 provides that




The court shall, in furtherance of justice, and on such

terms, if any, as may be proper, allow a party to amend
any pleading or proceeding and at any stage of the
action, in either the CFI or the SC,
by adding or striking out the name of any party, either
plaintiff or defendant, or by correcting a mistake in the
name of a party, or s mistaken or inadequate allegation
or description in any other respect, so that the actual
merits of the controversy may speedily be determined,
without regard to technicalities, and in the most
expeditious and inexpensive manner.
The court may also, upon like terms, allow an answer or
other pleading to be made after the time limited by the
rules of the court for filing the same.
Orders of the court upon the matters provided in this section
shall be made upon motion filed in court, and after notice to the
adverse party, and an opportunity to be heard.
We are of the opinion that this section justified the court in
allowing the amendment.
The appellant assigned several other errors alleged to have
been committed by the inferior court, some of which we deem
unnecessary to be considered here in the decision of this cause.
The trial court, in his decision, stated that there were but two
questions at issue:
First, Did the Government issue to plaintiff's assignor the
patent which covers the process in question?

And second, Did the defendant infringe upon that process?

An examination of the evidence adduced during the trial shows
clearly that the Government of Spain did,
- upon the Sept 28 1896, grant to the plaintiff's assignor the
patent in question,

giving to him the exclusive right to use the name for a

period of twenty years from that date.

The evidence also shows clearly that the defendant used,

and had been using, the same process for the manufacture
of walking sticks and umbrella handle, the exclusive right
to which had been granted to, the plaintiff's assignor.
The evidence also shows that the original grantee of the
patent, Henry Alfred Gsell, had duly transferred to the
plaintiff herein, and that the plaintiff herein thereby
succeeded to all of the right granted in said letter patent.
The lower court made no finding as to the damages suffered by
the plaintiff by reason to-the unlawful use by the defendant of
the said patent.
From all of the evidence adduced during the trial of said cause,
we are convinced that the judgment to the inferior court should
be affirmed with costs.
After the expiration of twenty days let a judgment be entered
perpetually enjoining the defendant, his attorneys, agents, and
representatives of whatever character, from the use of the




process for manufacture of walking sticks and umbrella

handles, the exclusive right to the manufacture of which was
granted to plaintiff's assignor on the 28th day September, 1896.
So ordered.

Arellano, C.J., Torres, Mapa, and Carson, JJ., concur.