G.R. No. 114508 November 19, 1999 PRIBHDAS J. MIRPURI, petitioner, vs.

COURT OF APPEALS, DIRECTOR OF PATENTS and the BARBIZON CORPORATION, respondents.

PUNO, J.: The Convention of Paris for the Protection of Industrial Property is a multi-lateral treaty which the Philippines bound itself to honor and enforce in this country. As to whether or not the treaty affords protection to a foreign corporation against a Philippine applicant for the registration of a similar trademark is the principal issue in this case. On June 15, 1970, one Lolita Escobar, the predecessor-in-interest of petitioner Pribhdas J. Mirpuri, filed an application with the Bureau of Patents for the registration of the trademark "Barbizon" for use in brassieres and ladies undergarments. Escobar alleged that she had been manufacturing and selling these products under the firm name "L & BM Commercial" since March 3, 1970. Private respondent Barbizon Corporation, a corporation organized and doing business under the laws of New York, U.S.A., opposed the application. It claimed that: The mark BARBIZON of respondent-applicant is confusingly similar to the trademark BARBIZON which opposer owns and has not abandoned. That opposer will be damaged by the registration of the mark BARBIZON and its business reputation and goodwill will suffer great and irreparable injury. That the respondent-applicant's use of the said mark BARBIZON which resembles the trademark used and owned by opposer, constitutes an unlawful appropriation of a mark previously used in the Philippines and not abandoned and therefore a statutory violation of Section 4 (d) of Republic Act No. 166, as amended. 1 This was docketed as Inter Partes Case No. 686 (IPC No. 686). After filing of the pleadings, the parties submitted the case for decision. On June 18, 1974, the Director of Patents rendered judgment dismissing the opposition and giving due course to Escobar's application, thus: WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly, Application Serial No. 19010 for the registration of the

trademark BARBIZON, of respondent Lolita R. Escobar, is given due course. IT IS SO ORDERED. 2 This decision became final and on September 11, 1974, Lolita Escobar was issued a certificate of registration for the trademark "Barbizon." The trademark was "for use in "brassieres and lady's underwear garments like panties." 3 Escobar later assigned all her rights and interest over the trademark to petitioner Pribhdas J. Mirpuri who, under his firm name then, the "Bonito Enterprises," was the sole and exclusive distributor of Escobar's "Barbizon" products. In 1979, however, Escobar failed to file with the Bureau of Patents the Affidavit of Use of the trademark required under Section 12 of Republic Act (R.A.) No. 166, the Philippine Trademark Law. Due to this failure, the Bureau of Patents cancelled Escobar's certificate of registration. On May 27, 1981, Escobar reapplied for registration of the cancelled trademark. Mirpuri filed his own application for registration of Escobar's trademark. Escobar later assigned her application to herein petitioner and this application was opposed by private respondent. The case was docketed as Inter Partes Case No. 2049 (IPC No. 2049). In its opposition, private respondent alleged that: (a) The Opposer has adopted the trademark BARBIZON (word), sometime in June 1933 and has then used it on various kinds of wearing apparel. On August 14, 1934, Opposer obtained from the United States Patent Office a more recent registration of the said mark under Certificate of Registration No. 316,161. On March 1, 1949, Opposer obtained from the United States Patent Office a more recent registration for the said trademark under Certificate of Registration No. 507,214, a copy of which is herewith attached as Annex "A." Said Certificate of Registration covers the following goods wearing apparel: robes, pajamas, lingerie, nightgowns and slips; (b) Sometime in March 1976, Opposer further adopted the trademark BARBIZON and Bee design and used the said mark in various kinds of wearing apparel. On March 15, 1977, Opposer secured from the United States Patent Office a registration of the said mark under Certificate of Registration No. 1,061,277, a copy of which is herein enclosed as Annex "B." The said Certificate of Registration covers the following goods: robes, pajamas, lingerie, nightgowns and slips; (c) Still further, sometime in 1961, Opposer adopted the trademark BARBIZON and a Representation of a Woman and thereafter used the

said trademark on various kinds of wearing apparel. Opposer obtained from the United States Patent Office registration of the said mark on April 5, 1983 under Certificate of Registration No. 1,233,666 for the following goods: wearing apparel: robes, pajamas, nightgowns and lingerie. A copy of the said certificate of registration is herewith enclosed as Annex "C." (d) All the above registrations are subsisting and in force and Opposer has not abandoned the use of the said trademarks. In fact, Opposer, through a wholly-owned Philippine subsidiary, the Philippine Lingerie Corporation, has been manufacturing the goods covered by said registrations and selling them to various countries, thereby earning valuable foreign exchange for the country. As a result of respondent-applicant's misappropriation of Opposer's BARBIZON trademark, Philippine Lingerie Corporation is prevented from selling its goods in the local market, to the damage and prejudice of Opposer and its wholly-owned subsidiary. (e) The Opposer's goods bearing the trademark BARBIZON have been used in many countries, including the Philippines, for at least 40 years and has enjoyed international reputation and good will for their quality. To protect its registrations in countries where the goods covered by the registrations are being sold, Opposer has procured the registration of the trademark BARBIZON in the following countries: Australia, Austria, Abu Dhabi, Argentina, Belgium, Bolivia, Bahrain, Canada, Chile, Colombia, Denmark, Ecuador, France, West Germany, Greece, Guatemala, Hongkong, Honduras, Italy, Japan, Jordan, Lebanon, Mexico, Morocco, Panama, New Zealand, Norway, Sweden, Switzerland, Syria, El Salvador, South Africa, Zambia, Egypt, and Iran, among others; (f) To enhance its international reputation for quality goods and to further promote goodwill over its name, marks and products, Opposer has extensively advertised its products, trademarks and name in various publications which are circulated in the United States and many countries around the world, including the Philippines; (g) The trademark BARBIZON was fraudulently registered in the Philippines by one Lolita R. Escobar under Registration No. 21920, issued on September 11, 1974, in violation of Article 189 (3) of the Revised Penal Code and Section 4 (d) of the Trademark Law. Herein respondent applicant acquired by assignment the "rights" to the said mark previously registered by Lolita Escobar, hence respondent-applicant's title is vitiated by the same fraud and criminal act. Besides, Certificate of Registration No. 21920 has been cancelled for failure of either Lolita Escobar or herein respondent-applicant, to seasonably file the statutory affidavit of use. By applying for a re-registration of the mark BARBIZON subject of this opposition, respondent-applicant seeks to perpetuate the fraud and criminal act committed by Lolita Escobar.

(h) Opposer's BARBIZON as well as its BARBIZON and Bee Design and BARBIZON and Representation of a Woman trademarks qualify as wellknown trademarks entitled to protection under Article 6bis of the Convention of Paris for the Protection of Industrial Property and further amplified by the Memorandum of the Minister of Trade to the Honorable Director of Patents dated October 25, 1983 [sic], 4 Executive Order No. 913 dated October 7, 1963 and the Memorandum of the Minister of Trade and Industry to the Honorable Director of Patents dated October 25, 1983. (i) The trademark applied for by respondent applicant is identical to Opposer's BARBIZON trademark and constitutes the dominant part of Opposer's two other marks namely, BARBIZON and Bee design and BARBIZON and a Representation of a Woman. The continued use by respondent-applicant of Opposer's trademark BARBIZON on goods belonging to Class 25 constitutes a clear case of commercial and criminal piracy and if allowed registration will violate not only the Trademark Law but also Article 189 of the Revised Penal Code and the commitment of the Philippines to an international treaty. 5 Replying to private respondent's opposition, petitioner raised the defense of res judicata. On March 2, 1982, Escobar assigned to petitioner the use of the business name "Barbizon International." Petitioner registered the name with the Department of Trade and Industry (DTI) for which a certificate of registration was issued in 1987. Forthwith, private respondent filed before the Office of Legal Affairs of the DTI a petition for cancellation of petitioner's business name. On November 26, 1991, the DTI, Office of Legal Affairs, cancelled petitioner's certificate of registration, and declared private respondent the owner and prior user of the business name "Barbizon International." Thus: WHEREFORE, the petition is hereby GRANTED and petitioner is declared the owner and prior user of the business name "BARBIZON INTERNATIONAL" under Certificate of Registration No. 87-09000 dated March 10, 1987 and issued in the name of respondent, is [sic] hereby ordered revoked and cancelled. . . . . 6 Meanwhile, in IPC No. 2049, the evidence of both parties were received by the Director of Patents. On June 18, 1992, the Director rendered a decision declaring private respondent's opposition barred by res judicata and giving due course to petitioner's application for registration, to wit: WHEREFORE, the present Opposition in Inter Partes Case No. 2049 is hereby DECLARED BARRED by res judicata and is hereby DISMISSED.

Accordingly, Application Serial No. 45011 for trademark BARBIZON filed by Pribhdas J. Mirpuri is GIVEN DUE COURSE. SO ORDERED. 7 Private respondent questioned this decision before the Court of Appeals in CA-G.R. SP No. 28415. On April 30, 1993, the Court of Appeals reversed the Director of Patents finding that IPC No. 686 was not barred by judgment in IPC No. 2049 and ordered that the case be remanded to the Bureau of Patents for further proceedings, viz: WHEREFORE, the appealed Decision No. 92-13 dated June 18, 1992 of the Director of Patents in Inter Partes Case No. 2049 is hereby SET ASIDE; and the case is hereby remanded to the Bureau of Patents for further proceedings, in accordance with this pronouncement. No costs. 8 In a Resolution dated March 16, 1994, the Court of Appeals denied reconsideration of its decision. 9 Hence, this recourse. Before us, petitioner raises the following issues: 1. WHETHER OR NOT THE DECISION OF THE DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 686 RENDERED ON JUNE 18, 1974, ANNEX C HEREOF, CONSTITUTED RES JUDICATA IN SO FAR AS THE CASE BEFORE THE DIRECTOR OF PATENTS IS CONCERNED; 2. WHETHER OR NOT THE DIRECTOR OF PATENTS CORRECTLY APPLIED THE PRINCIPLE OFRES JUDICATA IN DISMISSING PRIVATE RESPONDENT BARBIZON'S OPPOSITION TO PETITIONER'S APPLICATION FOR REGISTRATION FOR THE TRADEMARK BARBIZON, WHICH HAS SINCE RIPENED TO CERTIFICATE OF REGISTRATION NO. 53920 ON NOVEMBER 16, 1992; 3. WHETHER OR NOT THE REQUISITE THAT A "JUDGMENT ON THE MERITS" REQUIRED A "HEARING WHERE BOTH PARTIES ARE SUPPOSED TO ADDUCE EVIDENCE" AND WHETHER THE JOINT SUBMISSION OF THE PARTIES TO A CASE ON THE BASIS OF THEIR RESPECTIVE PLEADINGS WITHOUT PRESENTING TESTIMONIAL OR DOCUMENTARY EVIDENCE FALLS WITHIN THE MEANING OF "JUDGMENT ON THE MERITS" AS ONE OF THE REQUISITES TO CONSTITUTERES JUDICATA; 4. WHETHER A DECISION OF THE DEPARTMENT OF TRADE AND INDUSTRY CANCELLING PETITIONER'S FIRM NAME "BARBIZON INTERNATIONAL" AND WHICH DECISION IS STILL PENDING RECONSIDERATION NEVER OFFERED IN EVIDENCE BEFORE THE

DIRECTOR OF PATENTS IN INTER PARTES CASE NO. 2049 HAS THE RIGHT TO DECIDE SUCH CANCELLATION NOT ON THE BASIS OF THE BUSINESS NAME LAW (AS IMPLEMENTED BY THE BUREAU OF DOMESTIC TRADE) BUT ON THE BASIS OF THE PARIS CONVENTION AND THE TRADEMARK LAW (R.A. 166) WHICH IS WITHIN THE ORIGINAL AND EXCLUSIVE JURISDICTION OF THE DIRECTOR OF PATENTS. 10 Before ruling on the issues of the case, there is need for a brief background on the function and historical development of trademarks and trademark law. A "trademark" is defined under R.A. 166, the Trademark Law, as including "any word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured, sold or dealt in by others. 11 This definition has been simplified in R.A. No. 8293, the Intellectual Property Code of the Philippines, which defines a "trademark" as "any visible sign capable of distinguishing goods." 12 In Philippine jurisprudence, the function of a trademark is to point out distinctly the origin or ownership of the goods to which it is affixed; to secure to him, who has been instrumental in bringing into the market a superior article of merchandise, the fruit of his industry and skill; to assure the public that they are procuring the genuine article; to prevent fraud and imposition; and to protect the manufacturer against substitution and sale of an inferior and different article as his product. 13 Modern authorities on trademark law view trademarks as performing three distinct functions: (1) they indicate origin or ownership of the articles to which they are attached; (2) they guarantee that those articles come up to a certain standard of quality; and (3) they advertise the articles they symbolize. 14 Symbols have been used to identify the ownership or origin of articles for several centuries. 15 As early as 5,000 B.C., markings on pottery have been found by archaeologists. Cave drawings in southwestern Europe show bison with symbols on their flanks. 16 Archaeological discoveries of ancient Greek and Roman inscriptions on sculptural works, paintings, vases, precious stones, glassworks, bricks, etc. reveal some features which are thought to be marks or symbols. These marks were affixed by the creator or maker of the article, or by public authorities as indicators for the payment of tax, for disclosing state monopoly, or devices for the settlement of accounts between an entrepreneur and his workmen. 17 In the Middle Ages, the use of many kinds of marks on a variety of goods was commonplace. Fifteenth century England saw the compulsory use of identifying marks in certain trades. There were the baker's mark on bread, bottlemaker's marks, smith's marks, tanner's marks, watermarks on paper, etc. 18 Every guild had its own mark and every master belonging to it had a special mark of his own. The marks were not trademarks but police marks compulsorily imposed by the sovereign to let the public know that the goods were not "foreign" goods smuggled into an area where the guild

had a monopoly, as well as to aid in tracing defective work or poor craftsmanship to the artisan. 19 For a similar reason, merchants also used merchants' marks. Merchants dealt in goods acquired from many sources and the marks enabled them to identify and reclaim their goods upon recovery after shipwreck or piracy. 20 With constant use, the mark acquired popularity and became voluntarily adopted. It was not intended to create or continue monopoly but to give the customer an index or guarantee of quality. 21 It was in the late 18th century when the industrial revolution gave rise to mass production and distribution of consumer goods that the mark became an important instrumentality of trade and commerce. 22 By this time, trademarks did not merely identify the goods; they also indicated the goods to be of satisfactory quality, and thereby stimulated further purchases by the consuming public. 23 Eventually, they came to symbolize the goodwill and business reputation of the owner of the product and became a property right protected by law. 24 The common law developed the doctrine of trademarks and tradenames "to prevent a person from palming off his goods as another's, from getting another's business or injuring his reputation by unfair means, and, from defrauding the public." 25 Subsequently, England and the United States enacted national legislation on trademarks as part of the law regulating unfair trade. 26 It became the right of the trademark owner to exclude others from the use of his mark, or of a confusingly similar mark where confusion resulted in diversion of trade or financial injury. At the same time, the trademark served as a warning against the imitation or faking of products to prevent the imposition of fraud upon the public. 27 Today, the trademark is not merely a symbol of origin and goodwill; it is often the most effective agent for the actual creation and protection of goodwill. It imprints upon the public mind an anonymous and impersonal guaranty of satisfaction, creating a desire for further satisfaction. In other words, the mark actually sells the goods. 28 The mark has become the "silent salesman," the conduit through which direct contact between the trademark owner and the consumer is assured. It has invaded popular culture in ways never anticipated that it has become a more convincing selling point than even the quality of the article to which it refers. 29 In the last half century, the unparalleled growth of industry and the rapid development of communications technology have enabled trademarks, tradenames and other distinctive signs of a product to penetrate regions where the owner does not actually manufacture or sell the product itself. Goodwill is no longer confined to the territory of actual market penetration; it extends to zones where the marked article has been fixed in the public mind through advertising. 30Whether in the print, broadcast or electronic communications medium, particularly on the Internet, 31 advertising has paved the way for growth and expansion of the product by creating and earning a reputation that crosses over borders, virtually turning the whole world into one vast marketplace. This is the mise-en-scene of the present controversy. Petitioner brings this action claiming that "Barbizon" products have been sold in the Philippines since 1970. Petitioner developed this market by working long hours and spending considerable sums of money on advertisements and promotion of the trademark and its products. Now, almost thirty years later, private respondent, a foreign corporation, "swaggers into

the country like a conquering hero," usurps the trademark and invades petitioner's market. 32 Justice and fairness dictate that private respondent be prevented from appropriating what is not its own. Legally, at the same time, private respondent is barred from questioning petitioner's ownership of the trademark because of res judicata. 33 Literally, res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by judgment. 34 In res judicata, the judgment in the first action is considered conclusive as to every matter offered and received therein, as to any other admissible matter which might have been offered for that purpose, and all other matters that could have been adjudged therein. 35 Res judicata is an absolute bar to a subsequent action for the same cause; and its requisites are: (a) the former judgment or order must be final; (b) the judgment or order must be one on the merits; (c) it must have been rendered by a court having jurisdiction over the subject matter and parties; (d) there must be between the first and second actions, identity of parties, of subject matter and of causes of action. 36 The Solicitor General, on behalf of respondent Director of Patents, has joined cause with petitioner. Both claim that all the four elements of res judicata have been complied with: that the judgment in IPC No. 686 was final and was rendered by the Director of Patents who had jurisdiction over the subject matter and parties; that the judgment in IPC No. 686 was on the merits; and that the lack of a hearing was immaterial because substantial issues were raised by the parties and passed upon by the Director of Patents. 37 The decision in IPC No. 686 reads as follows: xxx xxx xxx. Neither party took testimony nor adduced documentary evidence. They submitted the case for decision based on the pleadings which, together with the pertinent records, have all been carefully considered. Accordingly, the only issue for my disposition is whether or not the herein opposer would probably be damaged by the registration of the trademark BARBIZON sought by the respondent-applicant on the ground that it so resembles the trademark BARBIZON allegedly used and owned by the former to be "likely to cause confusion, mistake or to deceive purchasers." On record, there can be no doubt that respondent-applicant's sought-tobe-registered trademark BARBIZON is similar, in fact obviously identical, to opposer's alleged trademark BARBIZON, in spelling and pronunciation. The only appreciable but very negligible difference lies in their respective appearances or manner of presentation. Respondent-applicant's trademark is in bold letters (set against a black background), while that of the opposer is offered in stylish script letters.

It is opposer's assertion that its trademark BARBIZON has been used in trade or commerce in the Philippines prior to the date of application for the registration of the identical mark BARBIZON by the respondent-applicant. However, the allegation of facts in opposer's verified notice of opposition is devoid of such material information. In fact, a reading of the text of said verified opposition reveals an apparent, if not deliberate, omission of the date (or year) when opposer's alleged trademark BARBIZON was first used in trade in the Philippines (see par. No. 1, p. 2, Verified Notice of Opposition, Rec.). Thus, it cannot here and now be ascertained whether opposer's alleged use of the trademark BARBIZON could be prior to the use of the identical mark by the herein respondent-applicant, since the opposer attempted neither to substantiate its claim of use in local commerce with any proof or evidence. Instead, the opposer submitted the case for decision based merely on the pleadings. On the other hand, respondent-applicant asserted in her amended application for registration that she first used the trademark BARBIZON for brassiere (or "brasseire") and ladies underwear garments and panties as early as March 3, 1970. Be that as it may, there being no testimony taken as to said date of first use, respondent-applicant will be limited to the filing date, June 15, 1970, of her application as the date of first use (Rule 173, Rules of Practice in Trademark Cases). From the foregoing, I conclude that the opposer has not made out a case of probable damage by the registration of the respondent-applicant's mark BARBIZON. WHEREFORE, the opposition should be, as it is hereby, DISMISSED. Accordingly, Application Serial No. 19010, for the registration of the trademark BARBIZON of respondent Lolita R. Escobar, is given due course. 38 The decision in IPC No. 686 was a judgment on the merits and it was error for the Court of Appeals to rule that it was not. A judgment is on the merits when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory objections. 39 It is not necessary that a trial should have been conducted. If the court's judgment is general, and not based on any technical defect or objection, and the parties had a full legal opportunity to be heard on their respective claims and contentions, it is on the merits although there was no actual hearing or arguments on the facts of the case. 40 In the case at bar, the Director of Patents did not dismiss private respondent's opposition on a sheer technicality. Although no hearing was conducted, both parties filed their respective pleadings and were given opportunity to present evidence. They, however, waived their right to do so and submitted the case for decision based on their pleadings. The lack of evidence did not deter the Director of Patents from ruling on the case, particularly on the issue of prior use, which goes into

the very substance of the relief sought by the parties. Since private respondent failed to prove prior use of its trademark, Escobar's claim of first use was upheld. The judgment in IPC No. 686 being on the merits, petitioner and the Solicitor General allege that IPC No. 686 and IPC No. 2049 also comply with the fourth requisite of res judicata, i.e., they involve the same parties and the same subject matter, and have identical causes of action. Undisputedly, IPC No. 686 and IPC No. 2049 involve the same parties and the same subject matter. Petitioner herein is the assignee of Escobar while private respondent is the same American corporation in the first case. The subject matter of both cases is the trademark "Barbizon." Private respondent counter-argues, however, that the two cases do not have identical causes of action. New causes of action were allegedly introduced in IPC No. 2049, such as the prior use and registration of the trademark in the United States and other countries worldwide, prior use in the Philippines, and the fraudulent registration of the mark in violation of Article 189 of the Revised Penal Code. Private respondent also cited protection of the trademark under the Convention of Paris for the Protection of Industrial Property, specifically Article 6bis thereof, and the implementation of Article 6bis by two Memoranda dated November 20, 1980 and October 25, 1983 of the Minister of Trade and Industry to the Director of Patents, as well as Executive Order (E.O.) No. 913. The Convention of Paris for the Protection of Industrial Property, otherwise known as the Paris Convention, is a multilateral treaty that seeks to protect industrial property consisting of patents, utility models, industrial designs, trademarks, service marks, trade names and indications of source or appellations of origin, and at the same time aims to repress unfair competition. 41 The Convention is essentially a compact among various countries which, as members of the Union, have pledged to accord to citizens of the other member countries trademark and other rights comparable to those accorded their own citizens by their domestic laws for an effective protection against unfair competition. 42 In short, foreign nationals are to be given the same treatment in each of the member countries as that country makes available to its own citizens. 43 Nationals of the various member nations are thus assured of a certain minimum of international protection of their industrial property. 44 The Convention was first signed by eleven countries in Paris on March 20, 1883. 45 It underwent several revisions at Brussels in 1900, at Washington in 1911, at The Hague in 1925, at London in 1934, at Lisbon in 1958, 46and at Stockholm in 1967. Both the Philippines and the United States of America, herein private respondent's country, are signatories to the Convention. The United States acceded on May 30, 1887 while the Philippines, through its Senate, concurred on May 10, 1965. 47 The Philippines' adhesion became effective on September 27, 1965, 48 and from this date, the country obligated itself to honor and enforce the provisions of the Convention. 49 In the case at bar, private respondent anchors its cause of action on the first paragraph of Article 6bis of the Paris Convention which reads as follows:

Article 6bis (1) The countries of the Union undertake, either administratively if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well-known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such wellknown mark or an imitation liable to create confusion therewith. (2) A period of at least five years from the date of registration shall be allowed for seeking the cancellation of such a mark. The countries of the Union may provide for a period within which the prohibition of use must be sought. (3) No time limit shall be fixed for seeking the cancellation or the prohibition of the use of marks registered or used in bad faith. 50 This Article governs protection of well-known trademarks. Under the first paragraph, each country of the Union bound itself to undertake to refuse or cancel the registration, and prohibit the use of a trademark which is a reproduction, imitation or translation, or any essential part of which trademark constitutes a reproduction, liable to create confusion, of a mark considered by the competent authority of the country where protection is sought, to be well-known in the country as being already the mark of a person entitled to the benefits of the Convention, and used for identical or similar goods. Art. 6bis was first introduced at The Hague in 1925 and amended in Lisbon in 1952. 51 It is a self-executing provision and does not require legislative enactment to give it effect in the member country. 52 It may be applied directly by the tribunals and officials of each member country by the mere publication or proclamation of the Convention, after its ratification according to the public law of each state and the order for its execution. 53 The essential requirement under Article 6bis is that the trademark to be protected must be "well-known" in the country where protection is sought. The power to determine whether a trademark is well-known lies in the "competent authority of the country of registration or use." This competent authority would be either the registering authority if it has the power to decide this, or the courts of the country in question if the issue comes before a court. 54 Pursuant to Article 6bis, on November 20, 1980, then Minister Luis Villafuerte of the Ministry of Trade issued a Memorandum to the Director of Patents. The Minister ordered the Director that:

Pursuant to the Paris Convention for the Protection of Industrial Property to which the Philippines is a signatory, you are hereby directed to reject all pending applications for Philippine registration of signature and other world-famous trademarks by applicants other than its original owners or users. The conflicting claims over internationally known trademarks involve such name brands as Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus. It is further directed that, in cases where warranted, Philippine registrants of such trademarks should be asked to surrender their certificates of registration, if any, to avoid suits for damages and other legal action by the trademarks' foreign or local owners or original users. You are also required to submit to the undersigned a progress report on the matter. For immediate compliance. 55 Three years later, on October 25, 1983, then Minister Roberto Ongpin issued another Memorandum to the Director of Patents, viz: Pursuant to Executive Order No. 913 dated 7 October 1983 which strengthens the rule-making and adjudicatory powers of the Minister of Trade and Industry and provides inter alia, that "such rule-making and adjudicatory powers should be revitalized in order that the Minister of Trade and Industry can . . . apply more swift and effective solutions and remedies to old and new problems . . . such as infringement of internationally-known tradenames and trademarks . . ." and in view of the decision of the Intermediate Appellate Court in the case of LA CHEMISE LACOSTE, S.A., versus RAM SADWHANI [AC-G.R. SP NO. 13359 (17) June 1983] 56which affirms the validity of the MEMORANDUM of then Minister Luis R. Villafuerte dated 20 November 1980 confirming our obligations under the PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY to which the Republic of the Philippines is a signatory, you are hereby directed to implement measures necessary to effect compliance with our obligations under said Convention in general, and, more specifically, to honor our commitment under Section 6bis 57 thereof, as follows: 1. Whether the trademark under consideration is well-known in the Philippines or is a mark already belonging to a person entitled to the benefits of the CONVENTION, this should be established, pursuant to Philippine Patent Office procedures

in inter partesand ex parte cases, according to any of the following criteria or any combination thereof: (a) a declaration by the Minister of Trade and Industry that the trademark being considered is already well-known in the Philippines such that permission for its use by other than its original owner will constitute a reproduction, imitation, translation or other infringement; (b) that the trademark is used in commerce internationally, supported by proof that goods bearing the trademark are sold on an international scale, advertisements, the establishment of factories, sales offices, distributorships, and the like, in different countries, including volume or other measure of international trade and commerce; (c) that the trademark is duly registered in the industrial property office(s) of another country or countries, taking into consideration the date of such registration; (d) that the trademark has long been established and obtained goodwill and international consumer recognition as belonging to one owner or source; (e) that the trademark actually belongs to a party claiming ownership and has the right to registration under the provisions of the aforestated PARIS CONVENTION. 2. The word trademark, as used in this MEMORANDUM, shall include tradenames, service marks, logos, signs, emblems, insignia or other similar devices used for identification and recognition by consumers. 3. The Philippine Patent Office shall refuse all applications for, or cancel the registration of, trademarks which constitute a reproduction, translation or imitation of a trademark owned by a person, natural or corporate, who is a citizen of a country signatory to the PARIS CONVENTION FOR THE PROTECTION OF INDUSTRIAL PROPERTY.

4. The Philippine Patent Office shall give due course to the Opposition in cases already or hereafter filed against the registration of trademarks entitled to protection of Section 6bis of said PARIS CONVENTION as outlined above, by remanding applications filed by one not entitled to such protection for final disallowance by the Examination Division. 5. All pending applications for Philippine registration of signature and other world-famous trademarks filed by applicants other than their original owners or users shall be rejected forthwith. Where such applicants have already obtained registration contrary to the abovementioned PARIS CONVENTION and/or Philippine Law, they shall be directed to surrender their Certificates of Registration to the Philippine Patent Office for immediate cancellation proceedings. xxx xxx xxx. 58 In the Villafuerte Memorandum, the Minister of Trade instructed the Director of Patents to reject all pending applications for Philippine registration of signature and other worldfamous trademarks by applicants other than their original owners or users. The Minister enumerated several internationally-known trademarks and ordered the Director of Patents to require Philippine registrants of such marks to surrender their certificates of registration. In the Ongpin Memorandum, the Minister of Trade and Industry did not enumerate wellknown trademarks but laid down guidelines for the Director of Patents to observe in determining whether a trademark is entitled to protection as a well-known mark in the Philippines under Article 6bis of the Paris Convention. This was to be established through Philippine Patent Office procedures in inter partes and ex parte cases pursuant to the criteria enumerated therein. The Philippine Patent Office was ordered to refuse applications for, or cancel the registration of, trademarks which constitute a reproduction, translation or imitation of a trademark owned by a person who is a citizen of a member of the Union. All pending applications for registration of world-famous trademarks by persons other than their original owners were to be rejected forthwith. The Ongpin Memorandum was issued pursuant to Executive Order No. 913 dated October 7, 1983 of then President Marcos which strengthened the rule-making and adjudicatory powers of the Minister of Trade and Industry for the effective protection of consumers and the application of swift solutions to problems in trade and industry. 59 Both the Villafuerte and Ongpin Memoranda were sustained by the Supreme Court in the 1984 landmark case ofLa Chemise Lacoste, S.A. v. Fernandez. 60 This court ruled therein that under the provisions of Article 6bis of the Paris Convention, the Minister of Trade and Industry was the "competent authority" to determine whether a trademark is well-known in this country. 61

The Villafuerte Memorandum was issued in 1980, i.e., fifteen (15) years after the adoption of the Paris Convention in 1965. In the case at bar, the first inter partes case, IPC No. 686, was filed in 1970, before the Villafuerte Memorandum but five (5) years after the effectivity of the Paris Convention. Article 6bis was already in effect five years before the first case was instituted. Private respondent, however, did not cite the protection of Article 6bis, neither did it mention the Paris Convention at all. It was only in 1981 when IPC No. 2049 was instituted that the Paris Convention and the Villafuerte Memorandum, and, during the pendency of the case, the 1983 Ongpin Memorandum were invoked by private respondent. The Solicitor General argues that the issue of whether the protection of Article 6bis of the Convention and the two Memoranda is barred by res judicata has already been answered in Wolverine Worldwide, Inc. v. Court of Appeals. 62 In this case, petitioner Wolverine, a foreign corporation, filed with the Philippine Patent Office a petition for cancellation of the registration certificate of private respondent, a Filipino citizen, for the trademark "Hush Puppies" and "Dog Device." Petitioner alleged that it was the registrant of the internationally-known trademark in the United States and other countries, and cited protection under the Paris Convention and the Ongpin Memorandum. The petition was dismissed by the Patent Office on the ground of res judicata. It was found that in 1973 petitioner's predecessor-in-interest filed two petitions for cancellation of the same trademark against respondent's predecessorin-interest. The Patent Office dismissed the petitions, ordered the cancellation of registration of petitioner's trademark, and gave due course to respondent's application for registration. This decision was sustained by the Court of Appeals, which decision was not elevated to us and became final and executory. 63 Wolverine claimed that while its previous petitions were filed under R.A. No. 166, the Trademark Law, its subsequent petition was based on a new cause of action, i.e., the Ongpin Memorandum and E.O. No. 913 issued in 1983, after finality of the previous decision. We held that the said Memorandum and E.O. did not grant a new cause of action because it did "not amend the Trademark Law," . . . "nor did it indicate a new policy with respect to the registration in the Philippines of world-famous trademarks." 64 This conclusion was based on the finding that Wolverine's two previous petitions and subsequent petition dealt with the same issue of ownership of the trademark. 65 In other words, since the first and second cases involved the same issue of ownership, then the first case was a bar to the second case. In the instant case, the issue of ownership of the trademark "Barbizon" was not raised in IPC No. 686. Private respondent's opposition therein was merely anchored on: (a) "confusing similarity" of its trademark with that of Escobar's; (b) that the registration of Escobar's similar trademark will cause damage to private respondent's business reputation and goodwill; and

(c) that Escobar's use of the trademark amounts to an unlawful appropriation of a mark previously used in the Philippines which act is penalized under Section 4 (d) of the Trademark Law. In IPC No. 2049, private respondent's opposition set forth several issues summarized as follows: (a) as early as 1933, it adopted the word "BARBIZON" as trademark on its products such as robes, pajamas, lingerie, nightgowns and slips; (b) that the trademark "BARBIZON" was registered with the United States Patent Office in 1934 and 1949; and that variations of the same trademark, i.e., "BARBIZON" with Bee design and "BARBIZON" with the representation of a woman were also registered with the U.S. Patent Office in 1961 and 1976; (c) that these marks have been in use in the Philippines and in many countries all over the world for over forty years. "Barbizon" products have been advertised in international publications and the marks registered in 36 countries worldwide; (d) Escobar's registration of the similar trademark "BARBIZON" in 1974 was based on fraud; and this fraudulent registration was cancelled in 1979, stripping Escobar of whatsoever right she had to the said mark; (e) Private respondent's trademark is entitled to protection as a wellknown mark under Article 6bis of the Paris Convention, Executive Order No. 913, and the two Memoranda dated November 20, 1980 and October 25, 1983 of the Minister of Trade and Industry to the Director of Patents; (f) Escobar's trademark is identical to private respondent's and its use on the same class of goods as the latter's amounts to a violation of the Trademark Law and Article 189 of the Revised Penal Code. IPC No. 2049 raised the issue of ownership of the trademark, the first registration and use of the trademark in the United States and other countries, and the international recognition and reputation of the trademark established by extensive use and advertisement of private respondent's products for over forty years here and abroad. These are different from the issues of confusing similarity and damage in IPC No. 686. The issue of prior use may have been raised in IPC No. 686 but this claim was limited to prior use in the Philippines only. Prior use in IPC No. 2049 stems from private respondent's claim as originator of the word and symbol "Barbizon," 66 as the first and registered user of the mark attached to its products which have been sold and advertised worldwide for a considerable number of years prior to petitioner's first application for registration of her trademark in the Philippines. Indeed, these are substantial allegations that raised

new issues and necessarily gave private respondent a new cause of action. Res judicata does not apply to rights, claims or demands, although growing out of the same subject matter, which constitute separate or distinct causes of action and were not put in issue in the former action. 67 Respondent corporation also introduced in the second case a fact that did not exist at the time the first case was filed and terminated. The cancellation of petitioner's certificate of registration for failure to file the affidavit of use arose only after IPC No. 686. It did not and could not have occurred in the first case, and this gave respondent another cause to oppose the second application. Res judicata extends only to facts and conditions as they existed at the time judgment was rendered and to the legal rights and relations of the parties fixed by the facts so determined. 68 When new facts or conditions intervene before the second suit, furnishing a new basis for the claims and defenses of the parties, the issues are no longer the same, and the former judgment cannot be pleaded as a bar to the subsequent action. 69 It is also noted that the oppositions in the first and second cases are based on different laws. The opposition in IPC No. 686 was based on specific provisions of the Trademark Law, i.e., Section 4 (d) 70 on confusing similarity of trademarks and Section 8 71 on the requisite damage to file an opposition to a petition for registration. The opposition in IPC No. 2049 invoked the Paris Convention, particularly Article 6bis thereof, E.O. No. 913 and the two Memoranda of the Minister of Trade and Industry. This opposition also invoked Article 189 of the Revised Penal Code which is a statute totally different from the Trademark Law. 72 Causes of action which are distinct and independent from each other, although arising out of the same contract, transaction, or state of facts, may be sued on separately, recovery on one being no bar to subsequent actions on others. 73 The mere fact that the same relief is sought in the subsequent action will not render the judgment in the prior action operative as res judicata, such as where the two actions are based on different statutes. 74 Res judicata therefore does not apply to the instant case and respondent Court of Appeals did not err in so ruling. Intellectual and industrial property rights cases are not simple property cases. Trademarks deal with the psychological function of symbols and the effect of these symbols on the public at large. 75 Trademarks play a significant role in communication, commerce and trade, and serve valuable and interrelated business functions, both nationally and internationally. For this reason, all agreements concerning industrial property, like those on trademarks and tradenames, are intimately connected with economic development. 76 Industrial property encourages investments in new ideas and inventions and stimulates creative efforts for the satisfaction of human needs. They speed up transfer of technology and industrialization, and thereby bring about social and economic progress. 77 These advantages have been acknowledged by the Philippine government itself. The Intellectual Property Code of the Philippines declares that "an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, it attracts foreign investments, and ensures market access for our products." 78 The Intellectual Property Code took effect on January 1, 1998 and by its express provision, 79 repealed the

Trademark Law, 80 the Patent Law, 81 Articles 188 and 189 of the Revised Penal Code, the Decree on Intellectual Property, 82 and the Decree on Compulsory Reprinting of Foreign Textbooks. 83 The Code was enacted to strengthen the intellectual and industrial property system in the Philippines as mandated by the country's accession to the Agreement Establishing the World Trade Organization (WTO). 84 The WTO is a common institutional framework for the conduct of trade relations among its members in matters related to the multilateral and plurilateral trade agreements annexed to the WTO Agreement. 85 The WTO framework ensures a "single undertaking approach" to the administration and operation of all agreements and arrangements attached to the WTO Agreement. Among those annexed is the Agreement on TradeRelated Aspects of Intellectual Property Rights or TRIPs. 86 Members to this Agreement "desire to reduce distortions and impediments to international trade, taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade." To fulfill these objectives, the members have agreed to adhere to minimum standards of protection set by several Conventions. 87 These Conventions are: the Berne Convention for the Protection of Literary and Artistic Works (1971), the Rome Convention or the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, the Treaty on Intellectual Property in Respect of Integrated Circuits, and the Paris Convention (1967), as revised in Stockholm on July 14, 1967. 88 A major proportion of international trade depends on the protection of intellectual property rights. 89 Since the late 1970's, the unauthorized counterfeiting of industrial property and trademarked products has had a considerable adverse impact on domestic and international trade revenues. 90 The TRIPs Agreement seeks to grant adequate protection of intellectual property rights by creating a favorable economic environment to encourage the inflow of foreign investments, and strengthening the multi-lateral trading system to bring about economic, cultural and technological independence. 91 The Philippines and the United States of America have acceded to the WTO Agreement. This Agreement has revolutionized international business and economic relations among states, and has propelled the world towards trade liberalization and economic globalization. 92 Protectionism and isolationism belong to the past. Trade is no longer confined to a bilateral system. There is now "a new era of global economic cooperation, reflecting the widespread desire to operate in a fairer and more open multilateral trading system." 93 Conformably, the State must reaffirm its commitment to the global community and take part in evolving a new international economic order at the dawn of the new millenium. IN VIEW WHEREOF, the petition is denied and the Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 28415 are affirmed. SO ORDERED.

Davide, Jr., C.J., Kapunan, Pardo and Ynares-Santiago, JJ., concur.

G.R. No. L-26676 July 30, 1982 PHILIPPINE REFINING CO., INC., petitioner, vs. NG SAM and THE DIRECTOR OF PATENTS, respondents. Ponce Enrile, Siguion Reyna, Montecillo & Bello and Associates for petitioner. Primitivo C. Bucasas for respondents.

ESCOLIN, J.: The sole issue raised in this petition for review of the decision of the Director of patents is whether or not the product of respondent, Ng Sam, which is ham, and those of petitioner consisting of lard, butter, cooking oil and soap are so related that the use of the same trademark "CAMIA" on said goods would likely result in confusion as to their source or origin. The trademark "CAMIA" was first used ill the Philippines by petitioner on its products in 1922. In 1949, petitioner caused the registration of said trademark with the Philippine Patent Office under certificates of registration Nos. 1352-S and 1353-S, both issued on May 3, 1949. Certificate of Registration No. 1352-S covers vegetable and animal fats, particularly lard, butter and cooking oil, all classified under Class 47 (Foods and Ingredients of Food) of the Rules of Practice of the Patent Office, while certificate of registration No. 1353-S applies to abrasive detergents, polishing materials and soap of all kinds (Class 4). On November 25, 1960, respondent Ng Sam, a citizen residing in Iloilo City, filed an application with the Philippine Patent office for registration of the Identical trademark "CAMIA" for his product, ham, which likewise falls under Class 47. Alleged date of first use of the trademark by respondent was on February 10, 1959. After due publication of the application, petitioner filed an opposition, in accordance with Section 8 of Republic Act No. 166, otherwise known as the Trademark Law, as amended. Basis of petitioner's opposition was Section 4(d) of said law, which provides as unregistrable: a mark which consists of or comprises a mark or tradename which so resembles a mark or tradename registered in the Philippines or a mark or tradename previously used in the Philippines by another and not abandoned, as to be likely, when applied to or used in connection with the goods, business services of the applicant, to cause confusion or mistake or to deceive purchasers.

The parties submitted the case for decision without presenting any evidence: thereafter the Director of patents rendered a decision allowing registration of the trademark "CAMIA" in favor of Ng Sam. Petitioner moved for a reconsideration, but the same was denied. Hence, this petition. A rudimentary precept in trademark protection is that "the right to a trademark is a limited one, in the sense that others may used the same mark on unrelated goods." 1 Thus, as pronounced by the United States Supreme Court in the case of American Foundries vs. Robertson 2, "the mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others on articles of a different description." Such restricted right over a trademark is likewise reflected in our Trademark law. Under Section 4(d) of the law, registration of a trademark which so resembles another already registered or in use should be denied, where to allow such registration could likely result in confusion, mistake or deception to the consumers. Conversely, where no confusion is likely to arise, as in this case, registration of a similar or even Identical mark may be allowed. The term "CAMIA" is descriptive of a whole genus of garden plants with fragrant white flowers. Some people call the "CAMIA" the "white ginger plant" because of its tuberous roots, while children refer to it as the butterfly flower because of its shape. Being a generic and common term, its appropriation as a trademark, albeit in a fanciful manner in that it bears no relation to the product it Identifies, is valid. However, the degree of exclusiveness accorded to each user is closely restricted. 3 The records of this case disclose that the term "CAMIA" has been registered as a trademark not only by petitioner but by two (2) other concerns, as follows: 1. CAMIA Application No. 280 Registration No. SR-320 Date Registered May 26, 1960 Owner Everbright Development Company Business Address 310 M. H. del Pilar Grace Park, Caloocan City Class 4 Thread and Yarn 2. CAMIA and Representation Application No. 538 Date Filed August 10, 1945 Date Registered - April 20, 1946 Owner F.E. Zuellig, Inc. Business Address 55 Rosario St., Manila Class 43 Particular Good on which mark is used: Textiles, Embroideries laces, etc. A trademark is designed to Identify the user. But it should be so distinctive and sufficiently original as to enable those who come into contact with it to recognize instantly the Identity of the user. " It must be affirmative and definite, significant and distinctive, capable to indicate origin." 4

It is evident that "CAMIA" as a trademark is far from being distinctive. By itself, it does not Identify petitioner as the manufacturer or producer of the goods upon which said mark is used, as contra-distinguished to trademarks derived from coined words such as "Rolex", "Kodak" or "Kotex". It has been held that if a mark is so commonplace that it cannot be readily distinguished from others, then it is apparent that it cannot Identify a particular business; and he who first adopted it cannot be injured by any subsequent appropriation or imitation by others, and the public will not be deceived." 5 The trademark "CAMIA" is used by petitioner on a wide range of products: lard, butter, cooking oil, abrasive detergents, polishing materials and soap of all kinds. Respondent desires to use the same on his product, ham. While ham and some of the products of petitioner are classified under Class 47 (Foods and Ingredients of Food), this alone cannot serve as the decisive factor in the resolution of whether or not they are related goods. Emphasis should be on the similarity of the products involved and not on the arbitrary classification or general description of their properties or characteristics. In his decision, the Director of Patents enumerated the factors that set respondent's product apart from the goods of petitioner. He opined and We quote: I have taken into account such factors as probable purchaser attitude and habits, marketing activities, retail outlets, and commercial impression likely to be conveyed by the trademarks if used in conjunction with the respective goods of the parties. I believe that ham on one hand, and lard, butter, oil, and soap on the other are products that would not move in the same manner through the same channels of trade. They pertain to unrelated fields of manufacture, might be distributed and marketed under dissimilar conditions, and are displayed separately even though they frequently may be sold through the same retail food establishments. Opposer's products are ordinary day-to-day household items whereas ham is not necessarily so. Thus, the goods of the parties are not of a character which purchasers would be likely to attribute to a common origin. (p. 23, Rollo). The observation and conclusion of the Director of Patents are correct. The particular goods of the parties are so unrelated that consumers would not in any probability mistake one as the source or origin of the product of the other. "Ham" is not a daily food fare for the average consumer. One purchasing ham would exercise a more cautious inspection of what he buys on account of it price. Seldom, if ever, is the purchase of said food product delegated to household helps, except perhaps to those who, like the cooks, are expected to know their business. Besides, there can be no likelihood for the consumer of respondent's ham to confuse its source as anyone but respondent. The facsimile of the label attached by him on his product, his business name "SAM'S HAM AND BACON FACTORY" written in bold white letters against a reddish orange background 6, is certain to catch the eye of the class of consumers to which he caters.

In addition, the goods of petitioners are basically derived from vegetable oil and animal fats, while the product of respondent is processed from pig's legs. A consumer would not reasonably assume that, petitioner has so diversified its business as to include the product of respondent. Mr. Runolf Callman, in Section 80.3, VOL. I, p. 1121 of his book, Unfair Competition and Trade Marks, declare: While confusion of goods can only be evident, where the litigants are actually in competition, confusion of business may arise between noncompetitive interests as well. This is true whether or not the trademarks are registered. Sec. 16 of the Trademark Act, in referring to 'merchandise of substantially the same descriptive properties, embraces competitive and non-competitive trademark infringement but it is not so extensive as to be applicable to cases where the public would not reasonably expect the plaintiff to make or sell the same class of goods as those made or sold by the defendant. (Emphasis supplied). In fine, We hold that the businesss of the parties are non-competitive and their products so unrelated that the use of Identical trademarks is not likely to give rise to confusion, much less cause damage to petitioner. WHEREFORE, the instant petition is hereby dismissed and the decision of the Director of Patents in Inter Partes Case No. 231 affirmed in toto. Costs against petitioner. SO ORDERED.

G.R. No. 103543 July 5, 1993 ASIA BREWERY, INC., petitioner, vs. THE HON. COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents. Abad Santos & Associates and Sycip, Salazar, Hernandez & Gatmaitan for petitioner. Roco, Bunag, Kapunan Law Office for private respondent.

GRIO-AQUINO, J.: On September 15, 1988, San Miguel Corporation (SMC) filed a complaint against Asia Brewery Inc. (ABI) for infringement of trademark and unfair competition on account of the latter's BEER PALE PILSEN or BEER NA BEER product which has been competing with SMC's SAN MIGUEL PALE PILSEN for a share of the local beer market. (San Miguel Corporation vs. Asia Brewery Inc., Civ. Case. No. 56390, RTC Branch 166, Pasig, Metro Manila.). On August 27, 1990, a decision was rendered by the trial Court, presided over by Judge Jesus O. Bersamira, dismissing SMC's complaint because ABI "has not committed trademark infringement or unfair competition against" SMC (p. 189, Rollo). SMC appealed to the Court of Appeals (C.A.-G.R. CV No. 28104). On September 30, 1991, the Court of Appeals (Sixth Division composed of Justice Jose C. Campos, Jr., chairman and ponente, and Justices Venancio D. Aldecoa Jr. and Filemon H. Mendoza, as members) reversed the trial court. The dispositive part of the decision reads as follows: In the light of the foregoing analysis and under the plain language of the applicable rule and principle on the matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement of trademark and unfair competition. The decision of the trial court is hereby REVERSED, and a new judgment entered in favor of the plaintiff and against the defendant as follows: (1) The defendant Asia Brewery Inc. its officers, agents, servants and employees are hereby permanently enjoined and restrained from manufacturing, putting up, selling, advertising, offering or announcing for sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture or beer in bottles and under labels substantially identical with or like the said bottles and labels of plaintiff San Miguel Corporation employed for that purpose, or substantially identical with or like the bottles and labels now employed by the defendant for that purpose, or in bottles

or under labels which are calculated to deceive purchasers and consumers into the belief that the beer is the product of the plaintiff or which will enable others to substitute, sell or palm off the said beer of the defendant as and for the beer of the plaintiff-complainant. (2) The defendant Asia Brewery Inc. is hereby ordered to render an accounting and pay the San Miguel Corporation double any and all the payments derived by defendant from operations of its business and the sale of goods bearing the mark "Beer Pale Pilsen" estimated at approximately Five Million Pesos (P5,000,000.00); to recall all its products bearing the mark "Beer Pale Pilsen" from its retailers and deliver these as well as all labels, signs, prints, packages, wrappers, receptacles and advertisements bearing the infringing mark and all plates, molds, materials and other means of making the same to the Court authorized to execute this judgment for destruction. (3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as moral damages and Half a Million Pesos (P5,000,000.00) by way of exemplary damages. (4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount of P250,000.00 plus costs to this suit. (p. 90, Rollo.) Upon a motion for reconsideration filed by ABI, the above dispositive part of the decision, was modified by the separate opinions of the Special Sixth Division 1 so that it should read thus: In the light of the foregoing analysis and under the plain language of the applicable rule and principle on the matter, We find the defendant Asia Brewery Incorporated GUILTY of infringement of trademark and unfair competition. The decision of the trial court is hereby REVERSED, and a new judgment entered in favor of the plaintiff and against the defendant as follows: (1) The defendant Asia Brewery Inc., its officers, agents, servants and employees are hereby permanently enjoined and restrained from manufacturing, putting up, selling, advertising, offering or announcing for sale, or supplying Beer Pale Pilsen, or any similar preparation, manufacture or beer in bottles and under labels substantially identical with or like the said bottles and labels of plaintiff San Miguel Corporation employed for that purpose, or substantially identical with or like the bottles and labels now employed by the defendant for that purpose, or in bottles or under labels which are calculated to deceive purchasers and consumers into the belief that the beer if the product of the plaintiff or which will enable others to substitute, sell or palm off the said beer of the defendant as and for the beer of the plaintiff-complainant.

(2) The defendant Asia Brewery Inc. is hereby ordered 2 to recall all its products bearing the mark Beer Pale Pilsen from its retailers and deliver these as well as all labels, signs, prints, packages, wrappers, receptacles and advertisements bearing the infringing mark and all plates, molds, materials and other means of making the same to the Court authorized to execute this judgment for destruction. (3) The defendant is hereby ordered to pay plaintiff the sum of Two Million Pesos (P2,000,000.00) as moral damages and Half a Million Pesos (P500,000.00) by way of exemplary damages. (4) The defendant is further ordered to pay the plaintiff attorney's fees in the amount of P250,000.00 plus costs of this suit. In due time, ABI appealed to this Court by a petition for certiorari under Rule 45 of the Rules of Court. The lone issue in this appeal is whether ABI infringes SMC's trademark: San Miguel Pale Pilsen with Rectangular Hops and Malt Design, and thereby commits unfair competition against the latter. It is a factual issue (Phil. Nut Industry Inc. v. Standard Brands Inc., 65 SCRA 575) and as a general rule, the findings of the Court of Appeals upon factual questions are conclusive and ought not to be disturbed by us. However, there are exceptions to this general rule, and they are: (1) When the conclusion is grounded entirely on speculation, surmises and conjectures; (2) When the inference of the Court of Appeals from its findings of fact is manifestly mistaken, absurd and impossible; (3) Where there is grave abuse of discretion; (4) When the judgment is based on a misapprehension of facts; (5) When the appellate court, in making its findings, went beyond the issues of the case, and the same are contrary to the admissions of both the appellant and the appellee; (6) When the findings of said court are contrary to those of the trial court; (7) When the findings are without citation of specific evidence on which they are based; (8) When the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; and (9) When the findings of facts of the Court of Appeals are premised on the absence of evidence and are contradicted on record. (Reynolds Philippine

Corporation vs. Court of Appeals, 169 SCRA 220, 223 citing, Mendoza vs. Court of Appeals, 156 SCRA 597; Manlapaz vs. Court of Appeals, 147 SCRA 238; Sacay vs. Sandiganbayan, 142 SCRA 593, 609; Guita vs. CA, 139 SCRA 576; Casanayan vs. Court of Appeals, 198 SCRA 333, 336; also Apex Investment and Financing Corp. vs. IAC, 166 SCRA 458 [citing Tolentino vs. De Jesus, 56 SCRA 167; Carolina Industries, Inc. vs. CMS Stock Brokerage, Inc., 97 SCRA 734; Manero vs. CA, 102 SCRA 817; and Moran, Jr. vs. CA, 133 SCRA 88].) Under any of these exceptions, the Court has to review the evidence in order to arrive at the correct findings based on the record (Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411, 420.) Where findings of the Court of Appeals and trial court are contrary to each other, the Supreme Court may scrutinize the evidence on record. (Cruz vs. CA, 129 SCRA 222, 227.) The present case is one of the exceptions because there is no concurrence between the trial court and the Court of Appeals on the lone factual issue of whether ABI, by manufacturing and selling its BEER PALE PILSEN in amber colored steinie bottles of 320 ml. capacity with a white painted rectangular label has committed trademark infringement and unfair competition against SMC. Infringement of trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil. 100, 106). Sec. 22 of Republic Act No. 166, otherwise known as the Trademark Law, defines what constitutes infringement: Sec. 22. Infringement, what constitutes. Any person who shall use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copy or colorably imitate any such mark or tradename and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or services, shall be liable to a civil action by the registrant for any or all of the remedies herein provided. (Emphasis supplied.) This definition implies that only registered trade marks, trade names and service marks are protected against infringement or unauthorized use by another or others. The use of someone else's registered trademark, trade name or service mark is unauthorized, hence, actionable, if it is done "without the consent of the registrant." (Ibid.) The registered trademark of SMC for its pale pilsen beer is:

San Miguel Pale Pilsen With Rectangular Hops and Malt Design. (Philippine Bureau of Patents, Trademarks and Technology Transfer Trademark Certificate of Registration No. 36103, dated 23 Oct. 1986, (p. 174, Rollo.) As described by the trial court in its decision (Page 177, Rollo): . . . . a rectangular design [is] bordered by what appears to be minute grains arranged in rows of three in which there appear in each corner hop designs. At the top is a phrase written in small print "Reg. Phil. Pat. Off." and at the bottom "Net Contents: 320 Ml." The dominant feature is the phrase "San Miguel" written horizontally at the upper portion. Below are the words "Pale Pilsen" written diagonally across the middle of the rectangular design. In between is a coat of arms and the phrase "Expertly Brewed." The "S" in "San" and the "M" of "Miguel," "P" of "Pale" and "Pilsen" are written in Gothic letters with fine strokes of serifs, the kind that first appeared in the 1780s in England and used for printing German as distinguished from Roman and Italic. Below "Pale Pilsen" is the statement "And Bottled by" (first line, "San Miguel Brewery" (second line), and "Philippines" (third line). (p. 177, Rollo; Emphasis supplied.) On the other hand, ABI's trademark, as described by the trial court, consists of: . . . a rectangular design bordered by what appear to be buds of flowers with leaves. The dominant feature is "Beer" written across the upper portion of the rectangular design. The phrase "Pale Pilsen" appears immediately below in smaller block letters. To the left is a hop design and to the right, written in small prints, is the phrase "Net Contents 320 ml." Immediately below "Pale Pilsen" is the statement written in three lines "Especially brewed and bottled by" (first line), "Asia Brewery Incorporated" (second line), and "Philippines" (third line), (p. 177, Rollo; Emphasis supplied.) Does ABI's BEER PALE PILSEN label or "design" infringe upon SMC's SAN MIGUEL PALE PILSEN WITH RECTANGULAR MALT AND HOPS DESIGN? The answer is "No." Infringement is determined by the "test of dominancy" rather than by differences or variations in the details of one trademark and of another. The rule was formulated in Co Tiong Sa vs. Director of Patents, 95 Phil. 1, 4 (1954); reiterated in Lim Hoa vs. Director of Patents, 100 Phil. 214, 216-217 (1956), thus: It has been consistently held that the question of infringement of a trademark is to be determined by the test of dominancy. Similarity in size, form and color, while relevant, is not conclusive. If the competing

trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor it is necessary that the infringing label should suggest an effort to imitate. [C. Neilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co., vs. Pflugh (CC) 180 Fed. 579]. The question at issue in cases of infringement of trademarks is whether the use of the marks involved would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588; . . . .) (Emphasis supplied.) In Forbes, Munn & Co. (Ltd.) vs. Ang San To, 40 Phil. 272, 275, the test was similarity or "resemblance between the two (trademarks) such as would be likely to cause the one mark to be mistaken for the other. . . . [But] this is not such similitude as amounts to identity." In Phil. Nut Industry Inc. vs. Standard Brands Inc., 65 SCRA 575, the court was more specific: the test is "similarity in the dominant features of the trademarks." What are the dominant features of the competing trademarks before us? There is hardly any dispute that the dominant feature of SMC's trademark is the name of the product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and end of the letters "S" and "M" on an amber background across the upper portion of the rectangular design. On the other hand, the dominant feature of ABI's trademark is the name: BEER PALE PILSEN, with the word "Beer" written in large amber letters, larger than any of the letters found in the SMC label. The trial court perceptively observed that the word "BEER" does not appear in SMC's trademark, just as the words "SAN MIGUEL" do not appear in ABI's trademark. Hence, there is absolutely no similarity in the dominant features of both trademarks. Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly similar to SAN MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can possibly be deceived that it is SAN MIGUEL PALE PILSEN. No evidence whatsoever was presented by SMC proving otherwise. Besides the dissimilarity in their names, the following other dissimilarities in the trade dress or appearance of the competing products abound: (1) The SAN MIGUEL PALE PILSEN bottle has a slender tapered neck. The BEER PALE PILSEN bottle has a fat, bulging neck.

(2) The words "pale pilsen" on SMC's label are printed in bold and laced letters along a diagonal band, whereas the words "pale pilsen" on ABI's bottle are half the size and printed in slender block letters on a straight horizontalband. (See Exhibit "8-a".). (3) The names of the manufacturers are prominently printed on their respective bottles. SAN MIGUEL PALE PILSEN is "Bottled by the San Miguel Brewery, Philippines," whereas BEER PALE PILSEN is "Especially brewed and bottled by Asia Brewery Incorporated, Philippines." (4) On the back of ABI's bottle is printed in big, bold letters, under a row of flower buds and leaves, its copyrighted slogan: "BEER NA BEER!" Whereas SMC's bottle carries no slogan. (5) The back of the SAN MIGUEL PALE PILSEN bottle carries the SMC logo, whereas the BEER PALE PILSEN bottle has no logo. (6) The SAN MIGUEL PALE PILSEN bottle cap is stamped with a coat of arms and the words "San Miguel Brewery Philippines" encircling the same. The BEER PALE PILSEN bottle cap is stamped with the name "BEER" in the center, surrounded by the words "Asia Brewery Incorporated Philippines." (7) Finally, there is a substantial price difference between BEER PALE PILSEN (currently at P4.25 per bottle) and SAN MIGUEL PALE PILSEN (currently at P7.00 per bottle). One who pays only P4.25 for a bottle of beer cannot expect to receive San Miguel Pale Pilsen from the storekeeper or bartender. The fact that the words pale pilsen are part of ABI's trademark does not constitute an infringement of SMC's trademark: SAN MIGUEL PALE PILSEN, for "pale pilsen" are generic words descriptive of the color ("pale"), of a type of beer ("pilsen"), which is a light bohemian beer with a strong hops flavor that originated in the City of Pilsen in Czechoslovakia and became famous in the Middle Ages. (Webster's Third New International Dictionary of the English Language, Unabridged. Edited by Philip Babcock Gove. Springfield, Mass.: G & C Merriam Co., [c] 1976, page 1716.) "Pilsen" is a "primarily geographically descriptive word," (Sec. 4, subpar. [e] Republic Act No. 166, as inserted by Sec. 2 of R.A. No. 638) hence, non-registerable and not appropriable by any beer manufacturer. The Trademark Law provides: Sec. 4. . . .. The owner of trade-mark, trade-name or service-mark used to distinguish his goods, business or services from the goods, business or services of others shall have the right to register the same [on the principal register], unless it:

xxx xxx xxx (e) Consists of a mark or trade-name which, when applied to or used in connection with the goods, business or services of the applicant is merely descriptive or deceptively misdescriptive of them, or when applied to or used in connection with the goods, business or services of the applicant isprimarily geographically descriptive or deceptively misdescriptive of them, or is primarily merely a surname." (Emphasis supplied.) The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are part of its registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive words as "evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be appropriated by any single manufacturer of these food products, for no other reason than that he was the first to use them in his registered trademark. InMasso Hermanos, S.A. vs. Director of Patents, 94 Phil. 136, 139 (1953), it was held that a dealer in shoes cannot register "Leather Shoes" as his trademark because that would be merely descriptive and it would be unjust to deprive other dealers in leather shoes of the right to use the same words with reference to their merchandise. No one may appropriate generic or descriptive words. They belong to the public domain (Ong Ai Gui vs. Director of Patents, 96 Phil. 673, 676 [1955]): A word or a combination of words which is merely descriptive of an article of trade, or of its composition, characteristics, or qualities, cannot be appropriated and protected as a trademark to the exclusion of its use by others. . . . inasmuch as all persons have an equal right to produce and vend similar articles, they also have the right to describe them properly and to use any appropriate language or words for that purpose, and no person can appropriate to himself exclusively any word or expression, properly descriptive of the article, its qualities, ingredients or characteristics, and thus limit other persons in the use of language appropriate to the description of their manufactures, the right to the use of such language being common to all. This rule excluding descriptive terms has also been held to apply to trade-names. As to whether words employed fall within this prohibition, it is said that the true test is not whether they are exhaustively descriptive of the article designated, but whether in themselves, and as they are commonly used by those who understand their meaning, they are reasonably indicative and descriptive of the thing intended. If they are thus descriptive, and not arbitrary, they cannot be appropriated from general use and become the exclusive property of anyone. (52 Am. Jur. 542-543.) . . . . Others may use the same or similar descriptive word in connection with their own wares, provided they take proper steps to prevent the public being deceived. (Richmond Remedies Co. vs. Dr. Miles Medical Co., 16 E. [2d] 598.)

. . . . A descriptive word may be admittedly distinctive, especially if the user is the first creator of the article. It will, however, be denied protection, not because it lacks distinctiveness, but rather because others are equally entitled to its use. (2 Callman. Unfair Competition and Trademarks, pp. 869-870.)" (Emphasis supplied.) The circumstance that the manufacturer of BEER PALE PILSEN, Asia Brewery Incorporated, has printed its name all over the bottle of its beer product: on the label, on the back of the bottle, as well as on the bottle cap, disproves SMC's charge that ABI dishonestly and fraudulently intends to palm off its BEER PALE PILSEN as SMC's product. In view of the visible differences between the two products, the Court believes it is quite unlikely that a customer of average intelligence would mistake a bottle of BEER PALE PILSEN for SAN MIGUEL PALE PILSEN. The fact that BEER PALE PILSEN like SAN MIGUEL PALE PILSEN is bottled in ambercolored steinie bottles of 320 ml. capacity and is also advertised in print, broadcast, and television media, does not necessarily constitute unfair competition. Unfair competition is the employment of deception or any other means contrary to good faith by which a person shall pass off the goods manufactured by him or in which he deals, or his business, or services, for those of another who has already established goodwill for his similar goods, business or services, or any acts calculated to produce the same result. (Sec. 29, Republic Act No. 166, as amended.) The law further enumerates the more common ways of committing unfair competition, thus: Sec. 29. . . . In particular, and without in any way limiting the scope of unfair competition, the following shall be deemed guilty of unfair competition: (a) Any person, who in selling his goods shall give them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose. (b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another. In this case, the question to be determined is whether ABI is using a name or mark for its beer that has previously come to designate SMC's beer, or whether ABI is passing off its BEER PALE PILSEN as SMC's SAN MIGUEL PALE PILSEN. . . ..The universal test question is whether the public is likely to be deceived. Nothing less than conduct tending to pass off one man's goods or business as that of another will constitute unfair competition. Actual or probable deception and confusion on the part of the customers by reason of defendant's practices must always appear. (Shell Co., of the Philippines, Ltd. vs. Insular Petroleum Refining Co. Ltd. et al., 120 Phil. 434, 439.) The use of ABI of the steinie bottle, similar but not identical to the SAN MIGUEL PALE PILSEN bottle, is not unlawful. As pointed out by ABI's counsel, SMC did not invent but merely borrowed the steinie bottle from abroad and it claims neither patent nor trademark protection for that bottle shape and design. (See rollo, page 55.) The Cerveza Especial and the Efes Pale Pilsen use the "steinie" bottle. (See Exhibits 57-D, 57-E.) The trial court found no infringement of SMC's bottle The court agrees with defendant that there is no infringement of plaintiff's bottle, firstly, because according to plaintiff's witness Deogracias Villadolid, it is a standard type of bottle called steinie, and to witness Jose Antonio Garcia, it is not a San Miguel Corporation design but a design originally developed in the United States by the Glass Container Manufacturer's Institute and therefore lacks exclusivity. Secondly, the shape was never registered as a trademark. Exhibit "C" is not a registration of a beer bottle design required under Rep. Act 165 but the registration of the name and other marks of ownership stamped on containers as required by Rep. Act 623. Thirdly, the neck of defendant's bottle is much larger and has a distinct bulge in its uppermost part. (p. 186, Rollo.) The petitioner's contention that bottle size, shape and color may not be the exclusive property of any one beer manufacturer is well taken. SMC's being the first to use the steinie bottle does not give SMC a vested right to use it to the exclusion of everyone else. Being of functional or common use, and not the exclusive invention of any one, it is available to all who might need to use it within the industry. Nobody can acquire any exclusive right to market articles supplying simple human needs in containers or wrappers of the general form, size and character commonly and immediately used in marketing such articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)

. . . protection against imitation should be properly confined to nonfunctional features. Even if purely functional elements are slavishly copied, the resemblance will not support an action for unfair competition, and the first user cannot claim secondary meaning protection. Nor can the first user predicate his claim to protection on the argument that his business was established in reliance on any such unpatented nonfunctional feature, even "at large expenditure of money." (Callman Unfair Competition, Trademarks and Monopolies, Sec. 19.33 [4th Ed.].) (Petition for Review, p. 28.) ABI does not use SMC's steinie bottle. Neither did ABI copy it. ABI makes its own steinie bottle which has a fat bulging neck to differentiate it from SMC's bottle. The amber color is a functional feature of the beer bottle. As pointed out by ABI, all bottled beer produced in the Philippines is contained and sold in amber-colored bottles because amber is the most effective color in preventing transmission of light and provides the maximum protection to beer. As was ruled in California Crushed Fruit Corporation vs. Taylor B. and Candy Co., 38 F2d 885, a merchant cannot be enjoined from using a type or color of bottle where the same has the useful purpose of protecting the contents from the deleterious effects of light rays. Moreover, no one may have a monopoly of any color. Not only beer, but most medicines, whether in liquid or tablet form, are sold in amber-colored bottles. That the ABI bottle has a 320 ml. capacity is not due to a desire to imitate SMC's bottle because that bottle capacity is the standard prescribed under Metrication Circular No. 778, dated 4 December 1979, of the Department of Trade, Metric System Board. With regard to the white label of both beer bottles, ABI explained that it used the color white for its label because white presents the strongest contrast to the amber color of ABI's bottle; it is also the most economical to use on labels, and the easiest to "bake" in the furnace (p. 16, TSN of September 20, 1988). No one can have a monopoly of the color amber for bottles, nor of white for labels, nor of the rectangular shape which is the usual configuration of labels. Needless to say, the shape of the bottle and of the label is unimportant. What is all important is the name of the product written on the label of the bottle for that is how one beer may be distinguished form the others. In Dy Buncio v. Tan Tiao Bok, 42 Phil. 190, 196-197, where two competing tea products were both labelled as Formosan tea, both sold in 5-ounce packages made of ordinary wrapping paper of conventional color, both with labels containing designs drawn in green ink and Chinese characters written in red ink, one label showing a double-decked jar in the center, the other, a flower pot, this court found that the resemblances between the designs were not sufficient to mislead the ordinary intelligent buyer, hence, there was no unfair competition. The Court held: . . . . In order that there may be deception of the buying public in the sense necessary to constitute unfair competition, it is necessary to suppose a public accustomed to buy, and therefore to some extent familiar with, the

goods in question. The test of fraudulent simulation is to be found in the likelihood of the deception of persons in some measure acquainted with an established design and desirous of purchasing the commodity with which that design has been associated. The test is not found in the deception, or possibility of the deception, of the person who knows nothing about the design which has been counterfeited, and who must be indifferent as between that and the other. The simulation, in order to be objectionable, must be such as appears likely to mislead the ordinarily intelligent buyer who has a need to supply and is familiar with the article that he seeks to purchase. The main thrust of SMC's complaint if not infringement of its trademark, but unfair competition arising form the allegedly "confusing similarity" in the general appearance or trade dress of ABI's BEER PALE PILSEN beside SMC's SAN MIGUEL PALE PILSEN (p. 209, Rollo) SMC claims that the "trade dress" of BEER PALE PILSEN is "confusingly similar" to its SAN MIGUEL PALE PILSEN because both are bottled in 320 ml. steinie type, ambercolored bottles with white rectangular labels. However, when as in this case, the names of the competing products are clearly different and their respective sources are prominently printed on the label and on other parts of the bottle, mere similarity in the shape and size of the container and label, does not constitute unfair competition. The steinie bottle is a standard bottle for beer and is universally used. SMC did not invent it nor patent it. The fact that SMC's bottle is registered under R.A. No. 623 (as amended by RA 5700, An Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers) simply prohibits manufacturers of other foodstuffs from the unauthorized use of SMC's bottles by refilling these with their products. It was not uncommon then for products such as patis (fish sauce) and toyo (soy sauce) to be sold in recycled SAN MIGUEL PALE PILSEN bottles. Registration of SMC's beer bottles did not give SMC a patent on the steinie or on bottles of similar size, shape or color. Most containers are standardized because they are usually made by the same manufacturer. Milk, whether in powdered or liquid form, is sold in uniform tin cans. The same can be said of the standard ketchup or vinegar bottle with its familiar elongated neck. Many other grocery items such as coffee, mayonnaise, pickles and peanut butter are sold in standard glass jars. The manufacturers of these foodstuffs have equal right to use these standards tins, bottles and jars for their products. Only their respective labels distinguish them from each other. Just as no milk producer may sue the others for unfair competition because they sell their milk in the same size and shape of milk can which he uses, neither may SMC claim unfair competition arising from the fact that ABI's BEER PALE PILSEN is sold, like SMC's SAN MIGUEL PALE PILSEN in amber steinie bottles.

The record does not bear out SMC's apprehension that BEER PALE PILSEN is being passed off as SAN MIGUEL PALE PILSEN. This is unlikely to happen for consumers or buyers of beer generally order their beer by brand. As pointed out by ABI's counsel, in supermarkets and tiendas, beer is ordered by brand, and the customer surrenders his empty replacement bottles or pays a deposit to guarantee the return of the empties. If his empties are SAN MIGUEL PALE PILSEN, he will get SAN MIGUEL PALE PILSEN as replacement. In sari-sari stores, beer is also ordered from the tindera by brand. The same is true in restaurants, pubs and beer gardens beer is ordered from the waiters by brand. (Op. cit. page 50.) Considering further that SAN MIGUEL PALE PILSEN has virtually monopolized the domestic beer market for the past hundred years, those who have been drinking no other beer but SAN MIGUEL PALE PILSEN these many years certainly know their beer too well to be deceived by a newcomer in the market. If they gravitate to ABI's cheaper beer, it will not be because they are confused or deceived, but because they find the competing product to their taste. Our decision in this case will not diminish our ruling in "Del Monte Corporation vs. Court of Appeals and Sunshine Sauce Manufacturing Industries," 181 SCRA 410, 419, 3 that: . . . to determine whether a trademark has been infringed, we must consider the mark as a whole and not as dissected. If the buyer is deceived, it is attributable to the marks as a totality, not usually to any part of it. That ruling may not apply to all kinds of products. The Court itself cautioned that in resolving cases of infringement and unfair competition, the courts should "take into consideration several factors which would affect its conclusion, to wit: the age, training and education of the usual purchaser, the nature and cost of the article, whether the article is bought for immediate consumption and also the conditions under which it is usually purchased" (181 SCRA 410, 418-419). The Del Monte case involved catsup, a common household item which is bought off the store shelves by housewives and house help who, if they are illiterate and cannot identify the product by name or brand, would very likely identify it by mere recollection of its appearance. Since the competitor, Sunshine Sauce Mfg. Industries, not only used recycled Del Monte bottles for its catsup (despite the warning embossed on the bottles: "Del Monte Corporation. Not to be refilled.") but also used labels which were "a colorable imitation" of Del Monte's label, we held that there was infringement of Del Monte's trademark and unfair competition by Sunshine. Our ruling in Del Monte would not apply to beer which is not usually picked from a store shelf but ordered by brand by the beer drinker himself from the storekeeper or waiter in a pub or restaurant.

Moreover, SMC's brand or trademark: "SAN MIGUEL PALE PILSEN" is not infringed by ABI's mark: "BEER NA BEER" or "BEER PALE PILSEN." ABI makes its own bottle with a bulging neck to differentiate it from SMC's bottle, and prints ABI's name in three (3) places on said bottle (front, back and bottle cap) to prove that it has no intention to pass of its "BEER" as "SAN MIGUEL." There is no confusing similarity between the competing beers for the name of one is "SAN MIGUEL" while the competitor is plain "BEER" and the points of dissimilarity between the two outnumber their points of similarity. Petitioner ABI has neither infringed SMC's trademark nor committed unfair competition with the latter's SAN MIGUEL PALE PILSEN product. While its BEER PALE PILSEN admittedly competes with the latter in the open market, that competition is neither unfair nor fraudulent. Hence, we must deny SMC's prayer to suppress it. WHEREFORE, finding the petition for review meritorious, the same is hereby granted. The decision and resolution of the Court of Appeals in CA-G.R. CV No. 28104 are hereby set aside and that of the trial court is REINSTATED and AFFIRMED. Costs against the private respondent. SO ORDERED.

G.R. No. L-10487 M. A. CLARKE, plaintiff-appellant, vs. MANILA CANDY CO. (LTD.), defendant-appellee. D. R. Williams for appellant. Gilbert, Cohn and Fisher for appellee. Carson, J.: The complaint filed in this action (omitting the exhibits) is as follows: Plaintiffs states: I. That the defendant is a corporation organized under the laws of the Philippine Islands, with principal office and residence in the city of Manila. II. That the plaintiff for twelve years last past has been and still engaged in the manufacture of a large line of confectionery products including candy of various and numerous kinds in the said city of Manila. III. That ever since the year 1905, the plaintiff has used as a trade-mark to designate his various candy products the representation of a rooster, and that until the wrongful and unlawful acts of the defendant hereinafter specified, no other manufacturer of or dealer in candy in the Philippine Islands has used such representation in connection with the manufacture and sale of candy in any form. IV. That on the 10th day of November, 1911, the plaintiff caused to be duly filed and registered in the division of archives, patents, copyrights and trade-marks for the Philippine Islands, said trade-mark, as shown in Exhibit A hereto attached and made a part of this complaint. V. That ever since said registration, and for a considerable time before it, the label containing said trade-mark has been used extensively by the plaintiff upon all packages containing the candy of plaintiff. VI. That from the year 1905, the plaintiff has used as a wrapper, for individual pieces of candy, paper bearing said rooster trade-mark in substantially the form shown on Exhibit B hereto attached and made a part hereof. VI. That since July 31, 1911, plaintiff has distributed in connection with the manufacture and sale of his candy many hundreds of the cards of which Exhibit C hereto attached and made a part hereof is a sample. VII. That since August, 1911, plaintiff has used as an advertising poster upon shipping cases and in public places generally throughout the Islands

many hundreds of the labels of which Exhibit D hereto attached and made a part hereof is a simple. VIII. That since January, 1912, plaintiff has used for various kinds of his candy, paper boxes, of which Exhibit E hereto attached and made a part hereof, is a simple. IX. That a various times prior to January 12, 1912, the date of incorporation of the defendant company, plaintiff advertised his candy products extensively in the local papers, as shown by Exhibits F and G hereto attached. X. That besides the use, display, and advertising of said mark in the manner above indicated, plaintiff has during public festivals held in the city of Manila for several years past, and within the exhibition grounds of said festivals, used paper mache roosters of large size, carried about said grounds during the exhibition with the words Clarkes candies written upon said roosters. XI. That in consequence of such use, display and advertising of said rooster as the trade-mark for plaintiffs candies, said candies have for several years last past been known and are now known to the trade in these Islands, both wholesale and retail, and to the consumers of candy as the rooster or Manoc brand. XII. That on January 12, 1912, the defendant company was organized as shown by a copy of the Articles of Incorporation hereto attached and made a part of this complaint, and that two of the directors of said defendant company are ex-employees of the plaintiff, as well as long prior thereto, were aware of the use by plaintiff of the said rooster or Manoc as a trademark in connection with the manufacture and sale of plaintiffs candy. XIII. That notwithstanding the fact that said directors were well aware of the use of said trade-mark by plaintiff, and that no other manufacturer of or dealer in candy in these Islands except the plaintiff has ever used such mark in connection with the manufacture or sale of candy, the said defendant corporation through its said directors, shortly after the organization of the defendant corporation, began the use of the label Exhibit H which accompanies, in connection with the manufacture and sale of the various candy products of the defendant company. XIV. That on the 5th day of June, 1912, there was filed against the said two directors of the defendant company, by the prosecuting attorney of the city of Manila, a complaint of which Exhibit I hereto attached and made a part of this complaint, is a copy.

XV. That the said defendants pleaded not guilty to said complaint, and after trial thereon before the Hon. A. S. Crossfield, presiding in Sala I of this court, were acquitted in the manner and form shown by the courts decision, a copy of which accompanies this complaint as Exhibit J. XVI. That notwithstanding said criminal prosecution, and notwithstanding the warning to the defendant company contained in said judgment, the said corporation defendant has since the rendition of said judgment continued to sell and dispose of its candy products under the said label Exhibit H as rooster or Manoc candy and that retail dealers of defendants candy are also selling and disposing of said candy as Manoc candy. XVII. That the word Manoc is the generic term for chicken in all the principal native dialects of these Islands, and that because of the limited number of descriptive adjectives in each of said dialects, and the limited use of those that do exist, any representation of a chicken, or chickens, on a label, will naturally and inevitably become known to all persons who speak and transact business in any of said dialects as chicken or Manoc brand; that the great majority of persons who buy, sell or consume candy in the Philippines speak one or more of such native dialects. XVIII. That the said defendant corporation, through the use of said label Exhibit H, in selling its goods, has given and is giving said goods the general appearance of the goods of this plaintiff in such a way as likely to influence purchasers to believe that the goods offered by the defendant are those of the plaintiff, and that such appearance has so influence, and is now influencing purchasers. XIX. That such imitation of plaintiffs mark has been done by the defendant for the purpose of deceiving the public and defrauding the plaintiff of his legitimate trade, and that the public have been and are being deceived, and this plaintiff has been and is being defrauded thereby to his great damage. Wherefore, plaintiff asks this honorable court that, upon filing and approval of bond herein, it be ordered: (a) That a temporary injunction be issued against the defendant company, its officers, agents, and employees, restraining them and each of them from any further use of the said label Exhibit H in the sale or other disposition of candy by defendant, until further order in this case; (b) That after due hearing herein the defendant corporation be directed to render under oath of its proper officer a true and complete account of profits upon all sales and other dispositions of its candy products under the said

label Exhibit H; and that judgment be entered in favor of the plaintiff and against defendant for double the amount thereof; (c) That judgment be entered against the defendant company, its officers, agents, and employees perpetually enjoining them from using the said label Exhibit H or any other like imitation of plaintiffs said mark; and (d) That the court grant to plaintiff any other remedy that may be proper under the law, together with the costs herein. MANILA, July 11, 1912. To this complaint the defendant company interposed a general denial and in due course the case was heard in the Court of First Instance of Manila, and judgment entered in favor of the defendant. From this judgment plaintiff appealed, and the case is now before us on his bill of exceptions. It will be seen that in support of his prayer for relief, plaintiff relied in part on his allegations of a technical infringement of his trade-mark, and in part upon his allegations of unfair competition, in that, as he alleged, the defendant in selling his goods, has given and is giving said goods the general appearance of the goods of this plaintiff in such a way as is likely to influence purchasers to believe that the goods offered by the defendant are those of the plaintiff, and this for the purpose of deceiving the public and defrauding the plaintiff of his legitimate trade. Counsel for the defendant corporation lay some stress upon their contention that the exact nature of the action is impossible to define; it is either to restrain the alleged infringement of a trade-mark, or to restrain unfair competition. The complaint of plaintiff (bill of ex., pp. 2-7) embraces both causes of action, although they are essentially different and distinct, and that the fact that appellant himself is wholly unable to determine whether his alleged case is one of infringement or of unfair competition demonstrates quite conclusively that it is neither. We are of opinion, however, that under the terms of Act No. 666, a prayer for an injunction forbidding the use of a specific emblem or design and for damages for its use may properly rest upon allegations of a technical infringement of a trade-mark united in the same complaint with allegations of unfair competition. Cases may well arise wherein the conduct complained of constitutes a wrong under neither theory, or wherein the complainant may be satisfied that he can establish his right to relief under one or the other theory, though he is in doubt as to which theory will prove acceptable to the court, and in such cases the plaintiff should not be forced to an

election of either theory in the introduction of evidence in support of the prayer of his complaint. Under the code system of pleadings in force in this jurisdiction, plaintiff may set forth in his complaint as many distinct causes of action as he may deem proper, the only limitation upon his right to do so being the provisions of section 90 of the Code of Civil Procedure, which prescribes that, if the complaint contains more than one cause of action, each distinct cause of action must be set forth in a separate paragraph containing all the facts constituting the particular cause of action. The infringement of a trade-mark is, in truth, a form of unfair competition. The law, however, allows relief from the wrong done by a trade-mark infringement under circumstances and upon proof which would not entitle the plaintiff to relief upon the theory of unfair competition where it does not appear that there was a technical infringement of a trade-mark. Plaintiff may be in doubt as to whether he can establish a technical infringement of a trade-mark to the satisfaction of the court, and in such a case he may desire to offer additional evidence to support his contention that, if in the opinion of the court a technical infringement has not been established, the evidence is sufficient to sustain a charge of unfair competition, by the use of misleading emblems or designs upon the goods of the defendant. We know of no reason why he should not be permitted to do so. (Cf. the recent case of HamiltonBrown Shoe Co. vs. Wolf Brothers and Co., 240 U. S., 251.) We are not unmindful of what was said in the case of Compaia General de Tabacos vs. Alhambra Cigar and Cigarette Manufacturing Co. (33 Phil. Rep., 485). But what was said there must not be understood as denying the right of a plaintiff to allege as many distinct causes of action as he may deem proper on support of his prayer for relief. It was said in the opinion in that case that a clear distinction must be drawn under our statute between actions for infringement and actions for unfair competition, in that under our statute, evidence sufficient to justify relief upon one or the other theory necessitates the grant of relief upon that theory and precludes the grant of relief under the other; but this does not mean that the plaintiff, in cases of this kind, may not allege in support of his prayer for relief facts which he believes will establish his claim that there has been either an infringement or unfair competition, and thus secure the relief prayed for, whichever theory the court is of opinion is sustained by the proof adduced at the trial. There is no substantial dispute as the various allegations of the foregoing complaint, except as to plaintiffs contentions that his candies have become known to the wholesale and retail trade as Manoc brand candies; that the defendant corporation has sold and continues to sell its candies as Manoc

candy; that in making use of the trade-mark, Exhibit H, the defendant corporation has given and is giving its goods the general appearance of the goods of the plaintiff; and that in thus imitating the goods of the plaintiff the purpose and intention of the defendant corporation has been and is to deceive the public and defraud the plaintiff of his legitimate trade. An examination of Exhibits A, B, C, D, E, F, and G, which were made a part of the above-cited complaint, leaves no room for doubt that the dominant and striking pictorial feature of each and all of them, except perhaps of Exhibit A, is a single rooster standing in an attitude of challenge. Exhibit A is a representation in colors of a rural scene in the Philippines, with a small circular insert, uncolored, containing the figure of the rooster as shown in the other exhibits, and the words trade-mark on the lower margin of the circle. The original of this exhibit was registered by the defendant has made any improper use of this rural scene taken as a whole, or of any part of it except the picture of the rooster which is found in the insert, either as a trade-mark, or for the purpose of dressing his goods in imitation of those manufactured by the plaintiff. Plaintiffs case rests wholly upon his claim that by long-continued use upon the wrappers and containers in which his goods are packed, and as a prominent feature of all his advertising matter, he has lawfully adopted and appropriated as a trade-mark, the representation of a rooster; and these exhibits, taken together with the evidence of record conclusively establish this claim, which, in fact, is not seriously disputed. Exhibit H is an oval panel which has, in the language of counsel for the defendant, as its central and predominating feature, two large and highly colored roosters in an attitude of combat, with the words Manila Candy Co., Ltd., the corporate name of the defendant company, in large and distinct letters running along the upper margin, and along the lower margin the words, Trade-mark, Manila. Upon the whole record we are of opinion that the evidence of record does not affirmatively and satisfactorily sustain plaintiffs claim that his candy has actually become known to the trade as Manoc candy; nor does it sustain his allegations that the defendant corporation has sold or is selling its candy as Manoc candy, or that its candies are sold in the retail trade under that name. The question then which presents itself is whether in the absence of proof of these allegations, the other evidence of record is sufficient to sustain a finding that there has been either a technical infringement of plaintiffs unregistered trade-mark, or unfair competition by the defendant corporation by the use on the containers of their goods and otherwise of the design set forth in Exhibit H.

We think that the bare statement of the undisputed facts disclosed by the record leaves no room for reasonable doubt as to the guilt of the defendant corporation of unfair competitions as defined in Act No. 666. The plaintiff, a candy manufacturer, had for many years made use of a pictorial representation of a rooster upon the packages and wrappers used in connection with his business, and in advertising his goods and made continuous use of a rooster as his trade-mark. Two of his workmen left his employ and organized a corporation which engaged in the business of manufacturing candy. This corporation adopted as its trade-mark a pictorial representation of two roosters, and it has made extensive use of this trademark upon the packages and containers in which it put its candy on the market. No reason has been suggested for the use of this particular design with its predominant display of two roosters as the trade-mark of the defendant corporation other than that alleged by the plaintiff; that is to say, that the new manufacturer, well knowing that the plaintiff had used a rooster as his trade-mark, hoped to secure an unfair advantage by misleading the public, and inducing it to believe that its candies bearing a representation of two roosters were made in the plaintiffs factory, which had always marked its goods with one or more pictures of a single rooster, and at the same time had made extensive use of this design in connection with its advertising campaigns. Counsel for defendant insist that there is no real resemblance between a picture of one rooster and a picture of two roosters; that no person could or would be deceived by the use by the defendant of a trade-mark wholly distinct from that of the plaintiff; that the fact that the defendant used two roosters as its trade-mark clearly discloses its innoncence of any intent to deceive, since a comparison of the trade-mark of the plaintiff with that of the defendant makes apparent at once that one was not intended to be an imitation of the other. We ask, however, why, with all the birds in the air, and all the fishes in the sea, and all the animals on the face of the earth to choose from, the defendant company selected two roosters as its trade-mark, although its directors and managers must have been well aware of the long-continued use of a rooster by the plaintiff in connection with the sale and advertisement of his goods? There is nothing in the picture of one or more roosters which in itself is descriptive of the goods sold by the plaintiff or by the defendant corporation,

or suggestive of the quality of these goods. A cat, a dog, a carabao, a shark or an eagle stamped upon the container in which candies are sold would serve as well as a rooster for purposes of identification as the product of defendants factory. Why did defendant select two roosters as its trademark? We cannot doubt that it was because the plaintiffs candies has acquired a certain reputation under the trade-mark of a rooster, and the defendant corporation hoped to profit unjustly by that reputation. Defendant knew that the use of a single rooster would be prohibited as a technical infringement of plaintiffs trade-mark, but it hoped that it could avoid that danger by the use of two rooster; and at the same time get such advantage as it must have believed it could secure from the use of a design on the containers of its goods, not absolutely identical with that used by the plaintiff, but so similar in the dominant idea as to confuse or mislead the purchasers. Children, and for that matter the average purchasers of candies, might well be expected to recall that packages containing Clarks candies, which they had been accustomed to buy and for which they had acquired a taste, had pictures of a rooster on the outside, and to accept candies made by the defendant company as candy of the same mark, although the design used displayed two roosters in each instance instead of the single rooster used by the plaintiff. In the language of counsel for defendant the trade-mark used by defendant on the packages and containers in which it shipped its goods has, as its central and predominating feature, two large and highly colored roosters, in attitude of combat, and we are satisfied that the predominant idea conveyed to the mind by the use of that trade-mark is substantially identical with that conveyed to the mind by the use of the single rooster by the plaintiff as his trade-mark. The fact that defendant used two roosters, and that these rooster, unlike the rooster in plaintiffs trade-mark, are highly colored, and the further fact that the words Manila Candy Co., Ltd. are used in connection with defendants trade-mark, are wholly insufficient to relieve the design used by the defendant of the vice of an unfair and misleading use of the predominant idea set forth in plaintiffs unregistered trade-mark, in such manner as to be likely to cause confusion in the minds of the ordinary purchasers as to the origin of the goods. By the terms of section 61 of Act No. 666 unfair competition may be found to exist where the deceitful appearance of the goods, misleading as to original ownership, is affected either by the general appearance of the package containing the goods or by the devices or words used thereon. We have no doubt the use of the pictorial representation of two roosters on the containers of the goods of the defendant rendered the defendant corporation

guilty of unfair competition, for under all the circumstances of the case, we are of opinion that we are justified in inferring the intent of the defendant corporation to deceive the public and defraud the plaintiff. A large number of cases are cited by counsel in their briefs in support of their respective contentions, and it must be confessed that it is difficult if not wholly impossible to reconcile the principles upon which some of those cases seem to turn, though the apparent conflict would seem to arise in most instances from the application by the various courts of recognized principles to the varying facts of each case. The truth is, as suggested by counsel for the plaintiff, that there has been a very marked change in the attitude of the public and of the courts in recent years, in dealing with the offense known as unfair competition, which is reflected in the progress made by the law in developing rules and remedies relating to dishonest and unfair commercial practices. Our own statute, Act No. 666, is in itself a clear recognition of the more modern attitude of the lawmaker with relation to these practices. Mr. Justice Holmes said twentyfive years ago that: The law has got to be stated over again. And I venture to say that in fifty years we shall have it in a form of which no one could have dreamed fifty years ago. Our statute crystallizing as it does the modern view as to what the law should be on this subject is a striking realization of that prophecy. In 1895 a writer in the Harvard Law Review, vol. 3, p. 265 [vol. 10, p. 275] observed that: Unfair competition, as the designation of a legal wrong which the law will undertake to redress or prevent, has only of late years begun to make its appearance in the books. To most lawyers, it is safe to say, the title carries no very definite meaning, for as yet its use is almost entirely confined to the Reports, and in these it is used only in the most general way, and always with the facts of the particular case in view, while it is quite unrecognized in digest, text book, or dictionary. The following extracts from the introduction to Nims work on Unfair Business Competition explain in some sort the tendency of the courts in recent years to hold to more rigid account those charged with unfair competition:

There is a maxim as old as the law that there can be no right without a remedy, but it is equally true that men are constantly acquiring new rights and new kinds of property almost unknown to the law, and in lawful ways are putting themselves in new positions, in which they soon suffer wrongs which the court seems powerless to prevent or to end. It seems, sometimes, as if the progress of the unscrupulous merchant and manufacturer in inventing new schemes for filching away the trade of others unfairly, has been far more rapid than that of the courts in finding ways of protecting the honest business man against such schemes. But whatever has been the activity of these unscrupulous members of the business community in the last decade, during this time very marked progress has been made by the law in developing rules and remedies relating to dishonest and unfair commercial practices. It is but few years since cases involving applications for relief against unfair dealing were indifferently classed as trade-mark cases or injunction cases, or hidden away in digest under headings most surprisingly disassociated from ideas conveyed by the term Unfair Competition. Now we find that phrases Passing Off , in England, Concurrence Deloyale, in France and Unfair Competition in America, are recognized legal terms, embracing rules of law applicable to cases of this character. The citation of authority in the briefs would seem to have for its object the development of a definition, as disclosed by judicial interpretation, of the illegal acts now generally known the United States as unfair competition, and also of what is generally recognized as technical infringement of a trade-mark. But for this purpose we can and should look to our own statute, recently enacted, which quite clearly defines, delimits, and penalizes these offenses, and provides for the enforcement of civil remedies for the wrongs resulting therefrom. No little difficulty seems to have been encountered by the courts in determining the degree of similarity between an alleged infringing trademark and the original which should be required in order to sustain a claim of technical infringement, though it is generally recognized that exact similitude is not required to constitute an infringement, or to entitle the complaining party to protection. Colorable imitation is deemed sufficient, and redress is granted where the similarity is sufficient to convey a false impression to the public mind, and is of a character to mislead and deceive the ordinary purchaser, in the exercise of ordinary care and caution in such matters. But in cases wherein it could hardly be said that there was any colorable imitation of the form and arrangement of the original trade-mark, although

the presence of some predominant feature in both designs was likely to create confusion or uncertainty, the difficulty in applying the rules touching technical infringements of trade-marks was notably increased. Some of the courts have gone to greater lengths than others in holding that in such cases, if the use of such design was likely to cause confusion as to the origin of the goods, such use constituted a technical infringement of the original trade-mark. And in order to furnish a remedy for the manifest wrong involved in such conduct, some authorities would appear to have unduly expanded the doctrine as to the right of appropriation of emblems, signs or devices as trade-marks, through a failure to perceive that the remedy for the wrong is to be found in the application of the modern doctrine of unfair competition, without the necessity for the straining of established principles controlling technical infringements of trade-marks. (Cf. Liggett and Myers Tobacco Co. vs. Finzer, 129 U. S., 184; Bickmore, etc., Co. vs. Karns Mfg. Co., 126 Fed., 573, 574; Popham vs. Cole, 66 N. Y., 69; Munro vs. Tousey, 129 N. Y., 38; Bulte vs, Igleheart Bros., 137 Fed. Rep., 492, 502 with which contrast the discussions of The Owl Case, No. 3, vol. 8, Bulletin of the U. S. Trade-Mark Association; The Teddy Bear Case, idem; The Hercules Wrestling Match Case, No. 11, vol. 7, idem; The Star Tea Case, No. 10, vol. 7, idem; The Metropolitan Candy Case, No. 11, vol. 7, idem.) But it would seem that the recognition of the wrong complained of in such cases as a technical trade-mark infringement involves in many instances an undue strain upon the well-settled rules and principles which have long controlled this branch of the law while no difficulty presents itself in dealing with abuses of this kind under the modern doctrine of unfair competition. Certainly, under our statute, all difficulty can and should be avoided by limiting relief prayed for on the ground of trade-mark infringement to cases wherein there is an exact or at least a colorable imitation of the original trade-mark, and in other cases applying the provisions of section 7 of the statute (Act No. 666) which defines the offense of unfair competition. That section expressly provides that unfair competition exists when one selling his goods gives them the general appearance of goofs of another manufacturer or dealer, either in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer, and who clothes the goods with such appearance for the purpose of deceiving the public and defrauding another of his legitimate trade, and it is further provided that this section applied in cases where the deceitful appearance of the goods,

misleading as to origin or ownership, is effected not by means of technical trade-marks, emblems, signs, or devices, but by the general appearance of the package containing the goods, or by the devices or words thereon, even though such packages, devices, or words are not by law capable of appropriation as trade-marks. Under the precise terms of this statute, the use under the conditions therein specified of devices or words, which would be likely to cause confusion as to the origin of the goods, although they may not amount to a colorable imitation of the form and arrangement of a trade-mark, constitutes the offense of unfair competition, and there is no necessity, therefore (in order to give a remedy for the wrong involved in such conduct), for the straining of the well settled principles which have long controlled in cases of technical infringements of trade-marks. We have already indicated that the use by the defendant company of the pictorial device of which the predominating idea is two roosters upon the containers or wrappers in which the goods of the defendant are sold is likely to influence purchasers to believe that the goods offered for sale by the defendant are those of the plaintiff manufacturer, and that the manifest purpose of the use of this device is to deceive the public and defraud the plaintiff of his legitimate trade. It follows therefore that plaintiff is entitled to the relief prescribed in the statute notwithstanding the fact that the devices are dissimilar in so many respects as to preclude a finding that the device of the defendant is a reproduction or a colorable imitation of plaintiffs trademark. The judgment entered in the court below denying relied must, therefore, be reversed, without costs in this instance, and the record returned to the court wherein it originated, where judgment will be entered in conformity herewith granting injunctive relief as hereinbefore indicated and making proper provision for the accounting prayed for in the complaint. So ordered.

G.R. No. L-5378

May 24, 1954

In Re Petition for Registration of Trademark "Freedom" under section 4 of Republic Act No. 166 filed in the Philippine Patent Office bearing Serial No. 38. CO TIONG SA, applicant-petitioner, vs. DIRECTOR OF PATENTS, respondent, SAW WOO CHIONG AND CO., oppositor. Antonio Fa., Quesada, Floro Crisologo, Manuel A. Panis and Rizalino L. Favilla for petitioner. Eufemio E. de Mesa and E. L. Gonzales for oppositor. First Assistant Solicitor General Ruperto Kapunan Jr. and Solicitor Pacifico P. de Castro for respondent. LABRADOR, J.: This is an appeal filed by Co Tiong Sa, applicant for registration of the trademark "Freedom" and its corresponding design, against a decision of the Director of Patents sustaining the opposition thereto of Saw Woo Chiong and Co., and denying the application. The application in said registration proceeding, now petitioner in this Court, has used the trademark on undershirts and T-shirts since March, 1947. The trademark sought to be registered is "Freedom". The word "Freedom" is in hand print, with a slight to the right. In the facsimiles attached to the original application, there are no letters, lines, or figures around the word, but in the label, Exhibit D-1, the said word is preceded by a triangle, with the letter "F" inside and small letters "H.L." under. A capital letter "L" is on the lower right-hand corner; and all of these are enclosed in a rectangle of double lines. In Exhibit D-2, the label is the same word "Freedom" with a capital letter "M" above it, a flourish under the word "Freedom", and the words "HIGH QUALITY" thereunder. The label used for boxes is similar to label Exhibit D-1, except that the rectangle is in a heavy line and is longer. The label presented by Saw Woo Chiong and Co., oppositor-respondent herein (Exhibit D-3), consist of the word "Freeman" in hand print, with a right slant, above the middle of which is a vignette of a man wearing a to what, which vignette is preceded by the small word "The" in print and followed by two parallel lines close to each other, and the words "PERFECT WEAR" in smaller letters under the word "FREEMAN". This trademark was registered in 1947 in the Bureau of Commerce and re-registered in the Patent Office on September 22, 1948. This trademark is used not only on shirts, but also on polo shirts, undershirts, pajamas, skippers, and T-shirts, although in the year 1947 Saw Woo Chiong and Co. discontinued manufacturing skippers and T-shirts on the ground of scarcity of materials. This trademark has been used since 1938, and it had been advertised extensively in newspapers, magazines, etc. The applicant-petitioner claims that in sustaining the objection of the oppositorrespondent, the Director of Patents erred: (1) in holding that in determining an

opposition in the registration of trademarks, attention should be centered upon the central idea of each trademark, disregarding their differences in details; (2) in holding that if the central idea of each trademark gives the same general impression, the two trademarks should be adjudged as confusingly similar; (3) in holding that the word "FREEDOM" and "FREEMAN" convey the same general impression, hence must be adjudged to be confusingly similar; (4) in holding that if the word "FREEDOM" is allowed to be registered as trademark, although no confusion and deception will actually take place, the oppositor will nevertheless be damaged; and (5) in holding that the oppositor is not required to introduce testimony on substantiate the claim made in its opposition. The first four assignments of error are related to each other and may be considered together. There is no question that if the details of the two trademarks are to be considered, many differences would be noted that would enable a careful and scrutinizing eye to distinguish one trademark from the other. Thus, we have the vignette of a man wearing a to what, which would distinguish the oppositor's label from the triangle with the letter "F" on the right hand corner of applicant's label. Then we also have the rectangle enclosing the applicant's mark, which rectangle is absent in that of the oppositor's. But differences of variations in the details of one trademark and of another are not the legally accepted tests of similarity in trademarks. It has been consistently held that the question of infringement of a trademark is to be determined by the test of dominancy. Similarity in size, form, and color, while relevant, is not conclusive. If the competing trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infrigement takes place. Duplication or limitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate. (G. Heilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead Co. vs. Pflugh (CC) 180 Fed. 579.) The question at issue in cases of infringement of trademarks is whether the use of the marks involved would be likely to cause confusion or mistake in the mind of the public or to deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d, 588, citing Procter and Gamble Co. vs. J. L. Prescott Co., 49 F. 2d, 959, 18 CCPA, Patent, 1433; Pepsodent Co. vs. Comfort Manufacturing Co., 83 F. 2d 906, 23 CCPA, Patents, 1224.) When would a trademark cause confusion in the mind of the public or in those unwary customers or purchasers? It must be remembered that infringement of a trademark is a form of unfair competition (Clarke vs. Manila Candy Co., 36 Phil., 100), and unfair competition is always a question of fact. The universal test has been said to be whether the public is likely to be deceived. (Alhambra Cigar and Cigarette Co. vs. Mojica, 27 Phil., 266.) When a person sees an object, a central or dominant idea or picture thereof is formed in his mind. This dominant picture or idea is retained in the mind, and the decorations or details are forgotten. When one sees the city hall of Baguio, the dominant characteristics which are likely to be retained in the mind are the portico in the middle of the building, the tower thereon, the four columns supporting it, and the wings on both sides. The features that are retained are the peculiar, dominant features. When on sees

the Legislative Building in Manila, the picture that is retained is that of a majestic low building with concrete columns all around. In this mind-picture the slight or minor decorations are lost sight of, and the central figure only is retained. So is it with a customer or purchaser who sees a label. He retains in his mind the dominant characteristics or features or central idea in the label, and does not retain or forgets the attendant decorations, flourishes, or variations. The ordinary customer does not scrutinize the details of the label; he forgets or overlooks these, but retains a general impression, or a central figure, or a dominant characteristic. The reason for the above has been explained in the following manner: . . . This rule has a basis in experience. The average person usually will not, and often can not, take in at a casual glance all, or even a large part of the details of what he looks at. What part or parts of two trademarks which are alleged to be similar does the average ordinary buyer see when he looks at them? What features of them are remembered by the average buyer? We do not really hear all that is spoken in our hearing. Far from all we see or hear casually is retained sufficiently clearly or insufficient detail for us to get a lasting impression of it which we can remember when we encounter the mark again. The importance of this rule is emphasized by the increase of radio advertising in which we are deprived of the help of our eyes and must depend entirely on the ear. The average buyer usually seeks a sign, some special, easily remembered earmarks of the brand he has in mind. It may be the color, sound, design, or a peculiar shape or name. Once his eyes see that or his ear hears it, he is satisfied. An unfair competitor need not copy the entire mark to accomplish his fraudulent purpose. It is enough if he takes the one feature which the average buyer is likely to remember. (Nims, The Law of Unfair Competition and Trademarks, 4th ed., Vol. 2, pp. 678-679). The question of infringement is to be determined by the test of dominancy. The dissimilarity in size, form and color of the label and the place where applied are not conclusive. If the competing label contains the trademark of another, and confusion or deception is likely to result, infringement takes place, regardless of the fact that the accessories are dissimilar. Duplication or exact imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate. (G. Heilman Brewing Co. vs. Independent Brewing Co., 191 F., 489, citing Eagle Co. vs. Pflugh (C.C.) 180 F., 579.) In order to constitute infringement, it is not necessary that the trademark be literally copied. ... . Neither is it necessary that every word be appropriated. There may be infringement where the substantial and distinctive part of the trademark is copied or imitated .... Dissimilarity in size, form and color of the label and place where it is applied are not conclusive against infringement. ... . The resemblances may so far dominate the differences as to be likely to deceive ordinary purchasers. (Queen Mfg. Co. vs. Isaac Ginsberg Bros. Co., 25 F 2d 284, 287. See also Finchley, Inc. vs. George Hess Co., Inc., et al., 24 F., Supp. 94.)

Upon examination of the trademark of the oppositor-respondent, one will readily see that the dominant feature is the word "FREEMAN" written in a peculiar print, slightly slanting to the right, with a peculiarly written capital letters "FF". These dominant features or characteristics of oppositor's trademarks are reproduced or imitated in applicant's trademark. In the first place, the word "FREEDOM" conveys a similar idea as the word "FREEMAN". In the second place, the style in which both capital "F" are written are similar. The print and slant of the letters are also similar. An ordinary purchaser or an unsuspecting customer who has seen the oppositor's label sometime before will not recognize the difference between that label and applicant's label. He may notice some variations, but he will ignore these, believing that they are variations of the same trademark to distinguish one kind or quality of goods from another. For purposes of illustration, the following words have been held to have the same significance or to have the same appearance and meaning. "CELDURA" and "CORDURA". That both marks considered as a whole are similar in meaning and appearance can not be doubted. When spoken as written they sound very much alike. Similarity of sound alone, under such circumstances, is sufficient to cause the marks to be regarded as confusingly similar when applied to merchandise of the same descriptive properties. (Celanes Corporation of America vs. E. I. Du Pont de Nemours and Co. (1946),154 F. 2d 146, 148.) "SKOAL" and "SKOL", and "SKOAL" was held identical in sound and meaning to "SKOL". (SKOL Co., Inc.,vs. Olson, 151 F. 2d, 200.) In this jurisdiction we have held that that name "Lusolin" is an infringement of the trademark "Sapolin," as the sound of the two names is almost the same, and the labels of containers being almost the same in respect to color, size, and other characteristics. (Sapolin Co. vs. Balmeceda and Germann and Co., 67 Phil., 705.) In the case of La Insular vs. Jao Oge, 47 Phil., 75, plaintiff's label represented an European female, while defendant's was a Filipino, but both labels exhibited a matron seated on a platform with a view of Manila Bay looking towards Mariveles at sunset. In spite of the fact that the posture and coloring were slightly different, defendant's labels were declared to constitute an infringement of plaintiff's labels. After a careful study, we find that the dominant characteristic of oppositor's trademark "FREEMAN" has been imitated in applicant's trademark "FREEDOM," such as to confuse the public and unwary customers and puchasers, and to deceive them into believing that the articles bearing one label are similar or produced by the same manufacturer as those carrying the other label. The decision of the Director of Patents sustaining the opposition and denying the application must, therefore, be affirmed. With respect to the fifth assignment of error (first in petitioner's brief), it must be remembered that the question of similarity or dissimilarity while it is a question of

opinion, is to be determined by the court mainly on the basis of the facsimiles or labels or pictures submitted to the Director of Patents. In the case at bar, innumerable exhibits were presented to show the similarity. Similarity or dissimilarity can be determined by the Director of Patents, or by this Court on appeal, by a mere examination and comparison of the competing trademarks. Failure on the part of the oppositor to submit the testimony of witnesses, who are to give opinions on the alleged similarity or dissimilarity, can not, therefore, be a ground for a dismissal of an opposition. We hold that the Director of Patents did not err in denying the motion for dismissal presented by the applicant upon the failure of the oppositor to submit witnesses to sustain his opposition. Finding no error in the decision appealed from, the same is hereby affirmed, with costs against the applicant-petitioner Co Tiong Sa.

EN BANC [G.R. No. L-8072. October 31, 1956.] LIM HOA, Petitioner, vs. DIRECTOR OF PATENTS, Respondent. DECISION MONTEMAYOR, J.: On April 26, 1949, the Petitioner, Lim Hoa, filed with the Patent Office an application for the registration of a trademark, consisting of a representation of two midget roosters in an attitude of combat with the word Bantam printed above them, he claiming that he had used said trademark on a food seasoning product since April 25 of that year. The application was published in the Official Gazette in its issue of February, 1953, released for circulation on April 18, of the same year. On April 30, 1953, the Agricom Development Co., Inc., a domestic corporation, opposed the application on several grounds, among others, that the trademark sought to be registered was confusingly similar to its register mark, consisting of a pictorial representation of a hen with the words Hen Brand and Marca Manok, which mark or brand was also used on a food seasoning product, before the use of the trademark by the applicant. It is a fact that the family of C. Javier Advincula, since the year 1946, had adopted and used as a trademark of said food seasoning product manufactured by it, the pictorial representation of a hen. In 1947, the members of the Advincula family organized the Agricom Development Co., Inc., the Oppositor in this case, and said corporation took over the manufacture of the same food product of the Advincula family, including the use of the brand of the pictorial representation of a hen but adding to it the word Hen. In the year 1948, an addition was made to the brand with the words Ve-Tsin, Hen Brand and Marca Manok, and since then, on its food seasoning product at different times, labels were used, in different colors but bearing the representation of a hen and the words just mentioned. So that the application to register applicants brand, consisting of two roosters is an attitude of combat, with the word Bantam printed above them, came along after the use and registration of the mark or brand of the Oppositor corporation and its predecessor, the Advincula family. After considering the application and the opposition thereto, and after comparing the two brands, the Director of Patents issued his order dated June 26, 1954, wherein he found and held that to allow the registration of the applicants trademark would likely cause confusion or mistake or deceive purchasers, and he refused registration of said trademark, under Rule 178 of the Revised Rules of Practice in Trademark Cases, 1953. The Petitioner is now appealling said order. After a careful examination of the facts above mentioned, and after comparing the two brands, we do not hesitate to say and to hold that there is such similarity between the two brands as to cause confusion in the mind of the public that buys the food seasoning product on the strength and on the indication of the trademark or brand identifying or distinguishing the same. In the case of Go Tiong Sa vs. Director of Patents, (95 Phil., 1), we had occasion to say the following:chanroblesvirtuallawlibrary

 cralaw It has been consistently held that the question of infringement of a trademark is to be determined by the test of dominancy. Similarity in size, form, and color, while relevant, is not conclusive. If the competing trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; chan roblesvirtualawlibrarynor it is necessary that the infringing label should suggest an effort to imitate. (C. Neilman Brewing Co. vs. Independent Brewing Co., 191 F. 489, 495, citing Eagle White Lead Co. v. Pflugh (CC) 180 Fed. 579). The question at issue in cases of infringement of trademarks is whether the use of the marks involved would be likely to cause confusion or mistakes in the mind of the public or deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F 2d 588, 590, citing Procter and Gamble Co. vs. J. L. Prescot Co., 49 F 2d 959, 18 CCPA, Patents, 1433; chan roblesvirtualawlibraryPepsodent Co. vs. Comfort Manufacturing Co., 83 F 2d 906; chan roblesvirtualawlibrary23 CCPA, Patents, 124) The danger of confusion in trademarks and brands which are similar may not be so great in the case of commodities or articles of relatively great value, such as, radio and television sets, air conditioning units, machinery, etc., for the prospective buyer, generally the head of the family or a businessman, before making the purchase, reads the pamphlets and all literature available, describing the article he is planning to buy, and perhaps even makes comparisons with similar articles in the market. He is not likely to be deceived by similarity in the trademarks because he makes a more or less thorough study of the same and may even consult his friends about the relative merit and performance of the article or machinery, as compared to others also for sale. But in the sale of a food seasoning product, a kitchen article of everyday consumption, the circumstances are far different. Said product is generally purchased by cooks and household help, sometimes illiterate who are guided by pictorial representations and the sound of the word descriptive of said representation. The two roosters appearing in the trademark of the applicant and the hen appearing on the trademark of the Oppositor, although of different sexes, belong to the same family of chicken, known as manok in all the principal dialects of the Philippines, and when a cook or a household help or even a housewife buys a food seasoning product for the kitchen the brand of Manok or Marca Manok would most likely be upper most in her mind and would influence her in selecting the product, regardless of whether the brand pictures a hen or a rooster or two roosters. To her, they are all manok. Therein lies the confusion, even deception. We do not see why applicant could not have stretched his imagination even a little and extended his choice to other members of the animal kingdom, as a brand to differentiate his product from similar products in the market. In a similar case decided by this Tribunal wherein, although one brand consisting of the representation of a rooster was already being used by one party, another party wanted to register a similar brand, consisting of two roosters on a similar product, namely, candy, this Court said:chanroblesvirtuallawlibrary Counsel for Defendant insists that there is no real resemblance between a picture of one rooster and a picture of two roosters; chan roblesvirtualawlibrarythat no person could or would be deceived by the use by the Defendant of a trade-mark wholly distinct from that of the Plaintiff; chan roblesvirtualawlibrarythat the fact that the Defendant used two roosters as its trademark clearly discloses its innocence of any intent to deceive, since a comparison of the

trade-mark of the Plaintiff with that of theDefendant makes apparent at once that was not intended to be an imitation of the other. We ask, however, why, with all the birds in the air, and all the fishes in the sea, and all the animals on the face of the earth to chose from, the Defendant company selected two roosters as its trade- mark, although its directors, and managers must have been well aware of the longcontinued use of a rooster by the Plaintiff in connection with the sale and advertisement of his goods? There is nothing in the picture of one or more roosters which in itself is descriptive of the goods sold by the Plaintiff or by the Defendant corporation, or suggestive of the quality of these goods. A cat, or dog, a carabao, a shark, or an eagle stamped upon the container in which candies are sold would serve as well as a rooster for purposes of identification as the product of Defendants factory. Why did Defendant select two roosters as its trade-mark? We cannot doubt that it was because the Plaintiffs candies had acquired a certain reputation under the trade-mark of a rooster, and the Defendant corporation hoped to profit unjustly by that reputation. Defendant knew that the use of a single rooster would be prohibited as a technical infringement of Plaintiffs trade-mark, but it hoped that it could avoid that danger by the use of two roosters; chan roblesvirtualawlibraryand at the same time get such advantage as it must have believed it could secure from the use of a design on the containers of its goods, not absolutely identical with that used by the Plaintiff, but so similar in the dominant idea as to confuse or mislead the purchasers cralaw . (Clarke vs. Manila Candy Co., 100 Phil. 36) In view of the foregoing, the order appealed from is hereby affirmed, with costs. We do not deem it necessary to discuss and rule upon the other questions raised in the appeal.

[G. R. No. 126627. August 14, 2003]

SMITH KLINE BECKMAN CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and TRYCO PHARMA CORPORATION,respondents. DECISION CARPIO-MORALES, J.: Smith Kline Beckman Corporation (petitioner), a corporation existing by virtue of the laws of the state of Pennsylvania, United States of America (U.S.) and licensed to do business in the Philippines, filed on October 8, 1976, as assignee, before the Philippine Patent Office (now Bureau of Patents, Trademarks and Technology Transfer) an application for patent over an invention entitled Methods and Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate. The application bore Serial No. 18989. On September 24, 1981, Letters Patent No. 14561 [1] for the aforesaid invention was issued to petitioner for a term of seventeen (17) years. The letters patent provides in its claims[2] that the patented invention consisted of a new compound named methyl 5 propylthio-2-benzimidazole carbamate and the methods or compositions utilizing the compound as an active ingredient in fighting infections caused by gastrointestinal parasites and lungworms in animals such as swine, sheep, cattle, goats, horses, and even pet animals. Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures, distributes and sells veterinary products including Impregon, a drug that has Albendazole for its active ingredient and is claimed to be effective against gastrointestinal roundworms, lungworms, tapeworms and fluke infestation in carabaos, cattle and goats. Petitioner sued private respondent for infringement of patent and unfair competition before the Caloocan City Regional Trial Court (RTC).[3] It claimed that its patent covers or includes the substance Albendazole such that private respondent, by manufacturing, selling, using, and causing to be sold and used the drug Impregon without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No. 14561 [4] as well as committed unfair competition under Article 189, paragraph 1 of the Revised Penal Code and Section 29 of Republic Act No. 166 (The Trademark Law) for advertising and selling as its own the drug Impregon although the same contained petitioners patented Albendazole.[5] On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining order against private respondent enjoining it from committing acts of patent infringement and unfair competition.[6] A writ of preliminary injunction was subsequently issued.[7]

Private respondent in its Answer[8] averred that Letters Patent No. 14561 does not cover the substance Albendazole for nowhere in it does that word appear; that even if the patent were to include Albendazole, such substance is unpatentable; that the Bureau of Food and Drugs allowed it to manufacture and market Impregon with Albendazole as its known ingredient; that there is no proof that it passed off in any way its veterinary products as those of petitioner; that Letters Patent No. 14561 is null and void, the application for the issuance thereof having been filed beyond the one year period from the filing of an application abroad for the same invention covered thereby, in violation of Section 15 of Republic Act No. 165 (The Patent Law); and that petitioner is not the registered patent holder. Private respondent lodged a Counterclaim against petitioner for such amount of actual damages as may be proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary damages; and P150,000.00 in attorneys fees. Finding for private respondent, the trial court rendered a Decision dated July 23, 1991,[9] the dispositive portion of which reads: WHEREFORE, in view of the foregoing, plaintiffs complaint should be, as it is hereby, DISMISSED. The Writ of injunction issued in connection with the case is hereby ordered DISSOLVED. The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby declared null and void for being in violation of Sections 7, 9 and 15 of the Patents Law. Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby directed to cancel Letters Patent No. 14561 issued to the plaintiff and to publish such cancellation in the Official Gazette. Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual damages and P100,000.00 attorneys fees as prayed for in its counterclaim but said amount awarded to defendant is subject to the lien on correct payment of filing fees. SO ORDERED. (Underscoring supplied) On appeal, the Court of Appeals, by Decision of April 21, 1995,[10] upheld the trial courts finding that private respondent was not liable for any infringement of the patent of petitioner in light of the latters failure to show that Albendazole is the same as the compound subject of Letters Patent No. 14561. Noting petitioners admission of the issuance by the U.S. of a patent for Albendazole in the name of Smith Kline and French Laboratories which was petitioners former corporate name, the appellate court considered the U.S. patent as implying that Albendazole is different from methyl 5 propylthio-2-benzimidazole carbamate. It likewise found that private respondent was not guilty of deceiving the public by misrepresenting that Impregon is its product. The appellate court, however, declared that Letters Patent No. 14561 was not void as it sustained petitioners explanation that Patent Application Serial No. 18989 which was filed on October 8, 1976 was a divisional application of Patent Application Serial

No. 17280 filed on June 17, 1975 with the Philippine Patent Office, well within one year from petitioners filing on June 19, 1974 of its Foreign Application Priority Data No. 480,646 in the U.S. covering the same compound subject of Patent Application Serial No. 17280. Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent Application Serial No. 18989 was deemed filed on June 17, 1995 or still within one year from the filing of a patent application abroad in compliance with the one-year rule under Section 15 of the Patent Law. And it rejected the submission that the compound in Letters Patent No. 14561 was not patentable, citing the jurisprudentially established presumption that the Patent Offices determination of patentability is correct. Finally, it ruled that petitioner established itself to be the one and the same assignee of the patent notwithstanding changes in its corporate name. Thus the appellate court disposed: WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that the orders for the nullification of Letters Patent No. 14561 and for its cancellation are deleted therefrom. SO ORDERED. Petitioners motion for reconsideration of the Court of Appeals decision having been denied[11] the present petition for review on certiorari[12] was filed, assigning as errors the following: I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCOS IMPREGON DRUG, IS INCLUDED IN PETITIONERS LETTERS PATENT NO. 14561, AND THAT CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT. II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE RESPONDENT TRYCO PHARMA CORPORATION P330,000.00 ACTUAL DAMAGES AND P100,000.00 ATTORNEYS FEES. Petitioner argues that under the doctrine of equivalents for determining patent infringement, Albendazole, the active ingredient it alleges was appropriated by private respondent for its drug Impregon, is substantially the same as methyl 5 propylthio-2benzimidazole carbamate covered by its patent since both of them are meant to combat worm or parasite infestation in animals. It cites the unrebutted testimony of its witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical formula in Letters Patent No. 14561 refers to the compound Albendazole. Petitioner adds that the two substances substantially do the same function in substantially the same way to achieve the same results, thereby making them truly identical. Petitioner thus submits that the appellate court should have gone beyond the literal wordings used in Letters Patent No. 14561, beyond merely applying the literal infringement test, for in spite of the fact that the word Albendazole does not appear in petitioners letters patent, it has ably shown by evidence its sameness with methyl 5 propylthio-2-benzimidazole carbamate.

Petitioner likewise points out that its application with the Philippine Patent Office on account of which it was granted Letters Patent No. 14561 was merely a divisional application of a prior application in the U. S. which granted a patent for Albendazole. Hence, petitioner concludes that both methyl 5 propylthio-2benzimidazole carbamate and the U.S.-patented Albendazole are dependent on each other and mutually contribute to produce a single result, thereby making Albendazole as much a part of Letters Patent No. 14561 as the other substance is. Petitioner concedes in its Sur-Rejoinder[13] that although methyl 5 propylthio-2benzimidazole carbamate is not identical with Albendazole, the former is an improvement or improved version of the latter thereby making both substances still substantially the same. With respect to the award of actual damages in favor of private respondent in the amount of P330,000.00 representing lost profits, petitioner assails the same as highly speculative and conjectural, hence, without basis. It assails too the award of P100,000.00 in attorneys fees as not falling under any of the instances enumerated by law where recovery of attorneys fees is allowed. In its Comment,[14] private respondent contends that application of the doctrine of equivalents would not alter the outcome of the case, Albendazole and methyl 5 propylthio-2-benzimidazole carbamate being two different compounds with different chemical and physical properties. It stresses that the existence of a separate U.S. patent for Albendazole indicates that the same and the compound in Letters Patent No. 14561 are different from each other; and that since it was on account of a divisional application that the patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by definition of a divisional application, such a compound is just one of several independent inventions alongside Albendazole under petitioners original patent application. As has repeatedly been held, only questions of law may be raised in a petition for review on certiorari before this Court. Unless the factual findings of the appellate court are mistaken, absurd, speculative, conjectural, conflicting, tainted with grave abuse of discretion, or contrary to the findings culled by the court of origin, [15] this Court does not review them. From an examination of the evidence on record, this Court finds nothing infirm in the appellate courts conclusions with respect to the principal issue of whether private respondent committed patent infringement to the prejudice of petitioner. The burden of proof to substantiate a charge for patent infringement rests on the plaintiff.[16] In the case at bar, petitioners evidence consists primarily of its Letters Patent No. 14561, and the testimony of Dr. Orinion, its general manager in the Philippines for its Animal Health Products Division, by which it sought to show that its patent for the compound methyl 5 propylthio-2-benzimidazole carbamate also covers the substance Albendazole. From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions thereof, no mention is made of the compound Albendazole. All that the claims disclose are: the covered invention, that is, the compound methyl 5 propylthio-2-

benzimidazole carbamate; the compounds being anthelmintic but nontoxic for animals or its ability to destroy parasites without harming the host animals; and the patented methods, compositions or preparations involving the compound to maximize its efficacy against certain kinds of parasites infecting specified animals. When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim anything beyond them.[17] And so are the courts bound which may not add to or detract from the claims matters not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that which the inventor claimed and the patent office allowed, even if the patentee may have been entitled to something more than the words it had chosen would include.[18] It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561 is not determinative of Albendazoles non-inclusion in the claims of the patent. While Albendazole is admittedly a chemical compound that exists by a name different from that covered in petitioners letters patent, the language of Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And no extrinsic evidence had been adduced to prove that Albendazole inheres in petitioners patent in spite of its omission therefrom or that the meaning of the claims of the patent embraces the same. While petitioner concedes that the mere literal wordings of its patent cannot establish private respondents infringement, it urges this Court to apply the doctrine of equivalents. The doctrine of equivalents provides that an infringement also takes place when a device appropriates a prior invention by incorporating its innovative concept and, although with some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result. [19] Yet again, a scrutiny of petitioners evidence fails to convince this Court of the substantial sameness of petitioners patented compound and Albendazole. While both compounds have the effect of neutralizing parasites in animals, identity of result does not amount to infringement of patent unless Albendazole operates in substantially the same way or by substantially the same means as the patented compound, even though it performs the same function and achieves the same result.[20] In other words, the principle or mode of operation must be the same or substantially the same.[21] The doctrine of equivalents thus requires satisfaction of the function-means-andresult test, the patentee having the burden to show that all three components of such equivalency test are met.[22] As stated early on, petitioners evidence fails to explain how Albendazole is in every essential detail identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the fact that Albendazole is an anthelmintic agent like methyl 5 propylthio-2benzimidazole 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 petitioners compound works. The testimony of Dr. Orinion lends no

support to petitioners cause, he not having been presented or qualified as an expert witness who has the knowledge or expertise on the matter of chemical compounds. As for the concept of divisional applications proffered by petitioner, it comes into play when two or more inventions are claimed in a single application but are of such a nature that a single patent may not be issued for them.[23] The applicant thus is required to divide, that is, to limit the claims to whichever invention he may elect, whereas those inventions not elected may be made the subject of separate applications which are called divisional applications.[24] What this only means is that petitioners methyl 5 propylthio-2-benzimidazole carbamate is an invention distinct from the other inventions claimed in the original application divided out, Albendazole being one of those other inventions. Otherwise, methyl 5 propylthio-2-benzimidazole carbamate would not have been the subject of a divisional application if a single patent could have been issued for it as well as Albendazole. The foregoing discussions notwithstanding, this Court does not sustain the award of actual damages and attorneys fees in favor of private respondent. The claimed actual damages of P330,000.00 representing lost profits or revenues incurred by private respondent as a result of the issuance of the injunction against it, computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for eleven months, were supported by the testimonies of private respondents President [25] and Executive VicePresident that the average monthly sale of Impregon was P100,000.00 and that sales plummeted to zero after the issuance of the injunction.[26] While indemnification for actual or compensatory damages covers not only the loss suffered (damnum emergens) but also profits which the obligee failed to obtain (lucrum cessans or ganacias frustradas), it is necessary to prove the actual amount of damages with a reasonable degree of certainty based on competent proof and on the best evidence obtainable by the injured party.[27] The testimonies of private respondents officers are not the competent proof or best evidence obtainable to establish its right to actual or compensatory damages for such damages also require presentation of documentary evidence to substantiate a claim therefor.[28] In the same vein, this Court does not sustain the grant by the appellate court of attorneys fees to private respondent anchored on Article 2208 (2) of the Civil Code, private respondent having been allegedly forced to litigate as a result of petitioners suit. Even if a claimant is compelled to litigate with third persons or to incur expenses to protect its rights, still attorneys fees may not be awarded where no sufficient showing of bad faith could be reflected in a partys persistence in a case other than an erroneous conviction of the righteousness of his cause.[29] There exists no evidence on record indicating that petitioner was moved by malice in suing private respondent. This Court, however, grants private respondent temperate or moderate damages in the amount of P20,000.00 which it finds reasonable under the circumstances, it having suffered some pecuniary loss the amount of which cannot, from the nature of the case, be established with certainty.[30] WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION. The award of actual or compensatory damages and attorneys

fees to private respondent, Tryco Pharma Corporation, is DELETED; instead, it is hereby awarded the amount of P20,000.00 as temperate or moderate damages. SO ORDERED.

G.R. No. 97343 September 13, 1993 PASCUAL GODINES, petitioner, vs. THE HONORABLE COURT OF APPEALS, SPECIAL FOURTH DIVISION and SVAGRO ENTERPRISES, INC.,respondents. Jesus S. Anonat for petitioner. Arturo M. Alinio for private respondent. ROMERO, J.: Through this petition for review in certiorari of a decision of the Court of Appeals affirming the decision of the trial court, petitioner Pascual Godines seeks to reverse the adverse decision of the Court a quo that he was liable for infringement of patent and unfair competition. The dispositive portion of the assailed decision is hereby quoted to wit: WHEREFORE, with the elimination of the award for attorney's fees, the judgment appealed from is hereby AFFIRMED, with costs against appellant. 1 The patent involved in this case is Letters Patent No. UM-2236 issued by the Philippine Patent Office to one Magdalena S. Villaruz on July 15, 1976. It covers a utility model for a hand tractor or power tiller, the main components of which are the following: "(1) a vacuumatic house float; (2) a harrow with adjustable operating handle; (3) a pair of paddy wheels; (4) a protective water covering for the engine main drive; (5) a transmission case; (6) an operating handle; (7) an engine foundation on the top midportion of the vacuumatic housing float to which the main engine drive is detachedly installed; (8) a frontal frame extension above the quarter circularly shaped water covering hold (sic) in place the transmission case; (9) a V-belt connection to the engine main drive with transmission gear through the pulley, and (10) an idler pulley installed on the engine foundation." 2 The patented hand tractor works in the following manner: "the engine drives the transmission gear thru the V-belt, a driven pulley and a transmission shaft. The engine drives the transmission gear by tensioning of the V-belt which is controlled by the idler pulley. The V-belt drives the pulley attached to the transmission gear which in turn drives the shaft where the paddy wheels are attached. The operator handles the hand tractor through a handle which is inclined upwardly and supported by a pair of substanding pipes and reinforced by a U-shaped G.I. pipe at the V-shaped end." 3 The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein private respondent, from Magdalena Villaruz, its chairman and president, by virtue of a Deed of Assignment executed by the latter in its favor. On October 31, 1979,

SV-Agro Industries caused the publication of the patent in Bulletin Today, a newspaper of general circulation. In accordance with the patent, private respondent manufactured and sold the patented power tillers with the patent imprinted on them. In 1979, SV-Agro Industries suffered a decline of more than 50% in sales in its Molave, Zamboanga del Sur branch. Upon investigation, it discovered that power tillers similar to those patented by private respondent were being manufactured and sold by petitioner herein. Consequently, private respondent notified Pascual Godines about the existing patent and demanded that the latter stop selling and manufacturing similar power tillers. Upon petitioner's failure to comply with the demand, SV-Agro Industries filed before the Regional Trial Court a complaint for infringement of patent and unfair competition. After trial, the court held Pascual Godines liable for infringement of patent and unfair competition. The dispositive portion of the decision reads as follows: WHEREFORE, premises considered, JUDGMENT is hereby rendered in favor of the plaintiff SV-Agro Industries Enterprises, Inc., and against defendant Pascual Godines: 1. Declaring the writ of preliminary injunction issued by this Court against defendant as permanent; 2. Ordering defendant Pascual Godines to pay plaintiff the sum of Fifty Thousand Pesos (P50,000.00) as damages to its business reputation and goodwill, plus the further sum of Eighty Thousand Pesos (P80,000.00) for unrealized profits during the period defendant was manufacturing and selling copied or imitation floating power tiller; 3. Ordering the defendant to pay the plaintiff, the further sum of Eight Thousand Pesos (P8,000.00) as reimbursement of attorney's fees and other expenses of litigation; and to pay the costs of the suit. SO ORDERED. 4 The decision was affirmed by the appellate court. Thereafter, this petition was filed. Petitioner maintains the defenses which he raised before the trial and appellate courts, to wit: that he was not engaged in the manufacture and sale of the power tillers as he made them only upon the special order of his customers who gave their own specifications; hence, he could not be liable for infringement of patent and unfair competition; and that those made by him were different from those being manufactured and sold by private respondent. We find no merit in his arguments. The question of whether petitioner was manufacturing and selling power tillers is a question of fact better addressed to the

lower courts. In dismissing the first argument of petitioner herein, the Court of Appeals quoted the findings of the court, to wit: It is the contention of defendant that he did not manufacture or make imitations or copies of plaintiff's turtle power tiller as what he merely did was to fabricate his floating power tiller upon specifications and designs of those who ordered them. However, this contention appears untenable in the light of the following circumstances: 1) he admits in his Answer that he has been manufacturing power tillers or hand tractors, selling and distributing them long before plaintiff started selling its turtle power tiller in Zamboanga del Sur and Misamis Occidental, meaning that defendant is principally a manufacturer of power tillers, not upon specification and design of buyers, but upon his own specification and design; 2) it would be unbelievable that defendant would fabricate power tillers similar to the turtle power tillers of plaintiff upon specifications of buyers without requiring a job order where the specification and designs of those ordered are specified. No document was (sic) ever been presented showing such job orders, and it is rather unusual for defendant to manufacture something without the specification and designs, considering that he is an engineer by profession and proprietor of the Ozamis Engineering shop. On the other hand, it is also highly unusual for buyers to order the fabrication of a power tiller or hand tractor and allow defendant to manufacture them merely based on their verbal instructions. This is contrary to the usual business and manufacturing practice. This is not only time consuming, but costly because it involves a trial and error method, repeat jobs and material wastage. Defendant judicially admitted two (2) units of the turtle power tiller sold by him to Policarpio Berondo. 5 Of general acceptance is the rule imbedded in our jurisprudence that ". . . the jurisdiction of the Supreme Court in cases brought to it from the Court of Appeals in a petition for certiorari under Rule 45 of the Rules of Court is limited to the review of errors of law, and that said appellate court's findings of fact are conclusive upon this Court." 6 The fact that petitioner herein manufactured and sold power tillers without patentee's authority has been established by the courts despite petitioner's claims to the contrary. The question now arises: Did petitioner's product infringe upon the patent of private respondent? Tests have been established to determine infringement. These are (a) literal infringement; and (b) the doctrine of equivalents. 7 In using literal infringement as a test, ". . . resort must be had, in the first instance, to the words of the claim. If accused matter clearly falls within the claim, infringement is made out and that is the end of it." 8 To determine whether the particular item falls within the literal meaning of the patent claims, the court must juxtapose the claims of the patent and the accused product within

the overall context of the claims and specifications, to determine whether there is exact identity of all material elements. 9 The trial court made the following observation: Samples of the defendant's floating power tiller have been produced and inspected by the court and compared with that of the turtle power tiller of the plaintiff (see Exhibits H to H-28). In appearance and form, both the floating power tillers of the defendant and the turtle power tiller of the plaintiff are virtually the same. Defendant admitted to the Court that two (2) of the power inspected on March 12, 1984, were manufactured and sold by him (see TSN, March 12, 1984, p. 7). The three power tillers were placed alongside with each other. At the center was the turtle power tiller of plaintiff, and on both sides thereof were the floating power tillers of defendant (Exhibits H to H-2). Witness Rodrigo took photographs of the same power tillers (front, side, top and back views for purposes of comparison (see Exhibits H-4 to H-28). Viewed from any perspective or angle, the power tiller of the defendant is identical and similar to that of the turtle power tiller of plaintiff in form, configuration, design and appearance. The parts or components thereof are virtually the same. Both have the circularly-shaped vacuumatic housing float, a paddy in front, a protective water covering, a transmission box housing the transmission gears, a handle which is V-shaped and inclined upwardly, attached to the side of the vacuumatic housing float and supported by the upstanding G.I. pipes and an engine base at the top midportion of the vacuumatic housing float to which the engine drive may be attached. In operation, the floating power tiller of the defendant operates also in similar manner as the turtle power tiller of plaintiff. This was admitted by the defendant himself in court that they are operating on the same principles. (TSN, August 19, 1987, p. 13) 10 Moreover, it is also observed that petitioner also called his power tiller as a floating power tiller. The patent issued by the Patent Office referred to a "farm implement but more particularly to a turtle hand tractor having a vacuumatic housing float on which the engine drive is held in place, the operating handle, the harrow housing with its operating handle and the paddy wheel protective covering." 11 It appears from the foregoing observation of the trial court that these claims of the patent and the features of the patented utility model were copied by petitioner. We are compelled to arrive at no other conclusion but that there was infringement. Petitioner's argument that his power tillers were different from private respondent's is that of a drowning man clutching at straws. Recognizing that the logical fallback position of one in the place of defendant is to aver that his product is different from the patented one, courts have adopted the doctrine of equivalents which recognizes that minor modifications in a patented invention are

sufficient to put the item beyond the scope of literal infringement. 12 Thus, according to this doctrine, "(a)n infringement also occurs when a device appropriates a prior invention by incorporating its innovative concept and, albeit with some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result." 13 The reason for the doctrine of equivalents is that to permit the imitation of a patented invention which does not copy any literal detail would be to convert the protection of the patent grant into a hollow and useless thing. Such imitation would leave room for indeed encourage the unscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent which, though adding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach of the law. 14 In this case, the trial court observed: Defendant's witness Eduardo Caete, employed for 11 years as welder of the Ozamis Engineering, and therefore actually involved in the making of the floating power tillers of defendant tried to explain the difference between the floating power tillers made by the defendant. But a careful examination between the two power tillers will show that they will operate on the same fundamental principles. And, according to establish jurisprudence, in infringement of patent, similarities or differences are to be determined, not by the names of things, but in the light of what elements do, and substantial, rather than technical, identity in the test. More specifically, it is necessary and sufficient to constitute equivalency that the same function can be performed in substantially the same way or manner, or by the same or substantially the same, principle or mode of operation; but where these tests are satisfied, mere differences of form or name are immaterial. . . . 15 It also stated: To establish an infringement, it is not essential to show that the defendant adopted the device or process in every particular; Proof of an adoption of the substance of the thing will be sufficient. "In one sense," said Justice Brown, "it may be said that no device can be adjudged an infringement that does not substantially correspond with the patent. But another construction, which would limit these words to exact mechanism described in the patent, would be so obviously unjust that no court could be expected to adopt it. . . . The law will protect a patentee against imitation of his patent by other forms and proportions. If two devices do the same work in substantially the same way, and accomplish substantially the same result, they are the same, even though they differ in name, form, or shape. 16

We pronounce petitioner liable for infringement in accordance with Section 37 of Republic Act No. 165, as amended, providing, inter alia: Sec. 37. Right of Patentees. A patentee shall have the exclusive right to make, use and sell the patented machine, article or product, and to use the patented process for the purpose of industry or commerce, throughout the territory of the Philippines for the terms of the patent; and such making, using, or selling by any person without the authorization of the Patentee constitutes infringement of the patent. (Emphasis ours) As far as the issue regarding unfair competition is concerned, suffice it to say that Republic Act No. 166, as amended, provides, inter alia: Sec. 29. Unfair competition, rights and remedies. . . . xxx xxx xxx In particular, and without in any way limiting the scope of unfair competition, the following shall be deemed guilty of unfair competition: (a) Any person, who in selling his goods shall give them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers that the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade. . . . xxx xxx xxx Considering the foregoing, we find no reversible error in the decision of the Court of Appeals affirming with modification the decision of the trial court. WHEREFORE, premises considered, the decision of the Court of Appeals is hereby AFFIRMED and this petition DENIED for lack of merit.

952 F.2d 1320 60 USLW 2451, 21 U.S.P.Q.2d 1161 Jacob H. MALTA and Malmark, Inc., Plaintiffs-Appellants, v. SCHULMERICH CARILLONS, INC., and Ronald O. Beach, Defendants/Cross-Appellants, and Kelly-Michener, Inc., and the Handchime Company, Ltd., Defendants. Nos. 90-1250, 90-1269. United States Court of Appeals, Federal Circuit. Dec. 26, 1991. Suggestion for Rehearing In Banc Declined March 9, 1992. Charles N. Quinn, of Miller & Quinn, Philadelphia, Pa., argued, for plaintiffs-appellants. Albert W. Preston, Jr., of Woodcock Washburn Kurtz Mackiewicz & Norris, Philadelphia, Pa., argued, for defendants/cross-appellants. With him on the brief was John P. Donohue, Jr. Before RICH, NEWMAN and MICHEL, Circuit Judges. RICH, Circuit Judge. 1 Jacob H. Malta and Malmark, Inc. (Malmark) (collectively Malta) appeal in this patent case from the November 20, 1989 Order of the United States District Court for the Eastern District of Pennsylvania, granting judgment notwithstanding a jury verdict (JNOV) of non-infringement in favor of defendant Schulmerich Carillons, Inc. (Schulmerich). Malta v. Schulmerich Carillons Inc., 13 USPQ2d 1900 (E.D.Pa.1989). Schulmerich cross-appealed from the November 20 Order insofar as it denied Schulmerich's motion for JNOV that it is the equitable owner of the patent in suit and/or has a shop right under that patent. We affirm on the ground of noninfringement, and do not reach the cross-appeal. BACKGROUND A. The Patent in Suit 2

The patent in suit, U.S. Patent No. 3,941,082 ('082 patent) issued to Mr. Jacob Malta, is directed to improvements in the design of handbells, of the type used by music groups in churches, schools, and the like. Quoting the patent, "[a] chorus of players using a plurality of tuned bells may render any given tune which falls within the range of notes offered by the specific bells." 3 Handbells are generally made up of the bell itself, a handle attached to the closed end of the bell, and a clapper assembly pivotably mounted inside the bell and moving in a single plane. Attached to one end of the clapper assembly is a generally circular clapper or striker which, when the handbell is swung, strikes the bell to ring it. 4 The '082 patent discloses a number of improvements in handbell design. Most relevant to this suit is Malta's provision of a clapper mechanism for allowing the loudness of the bell to be quickly adjusted "on the fly," i.e., while the bell is being played. Specifically, it was known in the prior art to provide the peripheral surface of the clapper with portions of differing hardness so that, by rotating the clapper, one could change which portion of it struck the bell and consequently the loudness of the bell. However, the clapper could not be adjusted while the bell was being played. The '082 patent not only provided the clapper with striking surfaces of differing hardness around the periphery thereof, but also provided a detent mechanism which releasably locked the clapper in each desired position. In that way, the clapper could be rotated by hand while the handbell was being played. 5 The '082 patent discloses two different embodiments for the clapper. These two embodiments, shown in Figs. 3 and 7 of the '082 patent, are reproduced below. 6 NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE The first embodiment, shown in Fig. 3, has three opposing pairs of "striking surfaces." The first pair (66) consists simply of the hard rubber of which the clapper is made. The second pair (68) of striking surfaces has a slot cut into the rubber material. The third pair (70) has a piece of soft material such as felt attached to the clapper. These three pairs of striking surfaces provide a loud, medium, and soft sound, respectively. The second embodiment, shown in Fig. 7, has three "opposed pairs of buttons" (82) attached to the surface of the clapper. Each pair of buttons has a different degree of hardness so that, like the embodiment of Fig. 3, either a soft, medium, or loud sound can be produced, depending on which button pair is aligned to strike the bell. (The

patent's term "opposed pairs" is somewhat confusing. The pairs are not opposed; rather, each pair has opposed buttons of the same hardness.) Claims 2 and 3 are relevant to this appeal. Claim 3 reads as follows: 3. A handbell comprising in combination: a bell having a generally closed end; a clapper assembly adapted to be removably carried within said bell and centrally of the closed end thereof, said assembly comprising a clapper shaft having one end pivotally associated centrally of the closed end of said bell and carrying a clapper member at its free extremity, said clapper member comprising a generally circular striker assembly rotatably positioned substantially normal to said clapper shaft and including a plurality of striking buttons positioned in opposed pairs around the outer periphery thereof and wherein each pair of buttons has a different degree of hardness; means on said clapper assembly coacting with said rotatable striker assembly for permitting rotation of said striker assembly relative to said clapper shaft for selectively positioning desired pairs of buttons in striking relation to said bell; and detent means cooperating with said rotatable striker for releasably holding said striker assembly in any preselected position. [Emphasis ours.] Claim 2 is very similar to claim 3 and differs primarily in two respects: one, instead of the "coacting" means recited in claim 3, claim 2 requires an "indexing means" on the handle and the clapper assembly; and, two, instead of the "buttons" recited in claim 3, claim 2 requires "at least three opposed pairs of surface portions wherein each of said pairs has a different degree of hardness." B. The Proceedings in the District Court This case presents the familiar scenario of an employee who leaves his job and starts his own company, only to find himself later at legal odds with his former employer. Jacob Malta was employed by Schulmerich as its chief engineer from 1956 to 1973. In 1973, Mr. Malta left Schulmerich and, in 1975, formed Malmark. Malmark quickly grew and became the primary competitor of Schulmerich in the handbell business. The two companies currently supply about 95% of the handbell market. In 1985, Malta sued Schulmerich (and other defendants), alleging, among other things, that a line of Schulmerich handbells sold under the trademark "Quick-Adjust" infringes claims 2 and 3 of the '082 patent.1 The Quick-Adjust handbells are on-the-fly adjustable handbells which have striking surfaces similar to Fig. 3 of the '082 patent, with pairs of opposed striking surfaces of different hardness by virtue of felt coverings and/or slots or holes formed in the hard rubber clapper. With respect to claim 3, Schulmerich denied infringement primarily on the ground that its Quick-Adjust handbells do not have a striker assembly with "a plurality of striking buttons positioned in opposed pairs around the outer periphery thereof and wherein each pair of buttons has a different degree of hardness." Schulmerich argued that the '082 patent uses the word "buttons" only in conjunction with the embodiment of Fig. 7, and that the Quick-Adjust handbells do not have such buttons. In response, Malta

argued, and presented evidence to show, that the word "buttons" was not limited to the embodiment of Fig. 7, but should be construed broadly to literally include striking surfaces such as those of Fig. 3 of the '082 patent and those of the Quick-Adjust handbells. In addition to denying liability on the ground of non-infringement, Schulmerich also contended that Jacob Malta had actually invented the subject matter of the '082 patent while employed at Schulmerich. Consequently Schulmerich argued that it was either the equitable owner of the '082 patent (due to Mr. Malta's contractual obligation to assign to Schulmerich all inventions made while working for Schulmerich), or at the very least had a shop right in the patented subject matter. The case was tried before a jury. Malta requested and obtained a jury instruction not only on literal infringement but also on the doctrine of equivalents. In particular, the judge instructed the jury that Infringement under the doctrine of equivalents may exist if the accused handbells perform substantially the same function in substantially the same way so as to obtain substantially the same results as the claimed invention. ****** In applying the doctrine of equivalents, remember that infringement requires that each and every element of an asserted claim or the equivalent of the element must be present in the accused device. The jury was given special interrogatories asking whether the Quick-Adjust handbells infringed claims 2 and 3 of the '082 patent, either literally or under the doctrine of equivalents. In response, the jury found, for reasons unrelated to any issue here, that claim 2 was not infringed, but that claim 3, while not literally infringed, was infringed under the doctrine of equivalents. The jury was also given special interrogatories concerning Schulmerich's claim of either equitable ownership or shop right, and found that Schulmerich had neither. The jury awarded damages in the amount of $950,000. Schulmerich moved for JNOV on the grounds that the evidence was not sufficient to support either the finding of infringement under the doctrine of equivalents or the finding that Schulmerich had neither equitable ownership of, nor a shop right in, the '082 patent. Approximately seven months later, while decision on the JNOV motion was still pending, this court decided the case of Lear Siegler Inc. v. Sealy Mattress Co., 873 F.2d 1422, 10 USPQ2d 1767 (Fed.Cir.1989). In Lear Siegler, this court reversed a jury's finding of infringement under the doctrine of equivalents, stating, among other things: Absent the proper Graver Tank2 context, i.e., a showing of how plaintiff compares the function, means, and result of its claimed invention with those of the accused device, a jury is more or less put to sea without guiding charts when called upon to determine

infringement under the doctrine. While we do not doubt the ability of a jury to decide the factual issue of equivalence, to enable the jury to use its ability, Nestier3 requires that the three Graver Tank elements [substantial identity of function, way and result] must be presented in the form of particularized testimony and linking argument. 873 F.2d at 1425-26, 10 USPQ2d at 1770. Schulmerich brought Lear Siegler to the judge's attention in a letter citing the case in support of its motion for JNOV of noninfringement. The judge upheld the jury's verdict as to the equitable ownership/shop right question, but agreed that the evidence was insufficient to support the finding of infringement under the doctrine of equivalents. The judge, relying heavily on the Lear Siegler decision, found that Malta had not provided "particularized testimony and linking argument" as to each of the function/way/result prongs of the tripartite Graver Tank equivalency test and granted JNOV in favor of Schulmerich. He set aside the jury verdict and refused to enter a permanent injunction against Schulmerich. Malta appeals from the grant of JNOV of non-infringement, and Schulmerich crossappeals from the denial of its JNOV motion based on the equitable ownership/shop right defense. OPINION A. Sufficiency of the Motion for Directed Verdict Before reaching the merits of the infringement question, we address a procedural issue raised by Malta. Malta argues that Schulmerich's motion for a directed verdict was insufficient to support the JNOV motion that was later granted by the district court. Rule 50(a) of the Federal Rules of Civil Procedure states that a "motion for directed verdict shall state the specific grounds therefor." Fed.R.Civ.P. 50(b) allows for entry of JNOV only "in accordance with the party's motion for a directed verdict." Orthokinetics Inc. v. Safety Travel Chairs Inc., 806 F.2d 1565, 1579, 1 USPQ2d 1081, 1091 (Fed.Cir.1986) (Ground on which JNOV motion is based must have been asserted in a motion for directed verdict. Issue of willfulness of infringement is not the same thing as issue of infringement). The record shows that at the close of Malta's case at the trial in the district court, Schulmerich's counsel moved orally for directed verdict as follows: [V]ery briefly we move for a directed verdict on the issue of noninfringement of claims 2 and claims 3 of the 082 patent on the grounds that the evidence is insufficient. After the close of all the evidence, counsel stated that this motion was renewed. Malta argues that such general allegations of insufficiency of the evidence are insufficient to support a JNOV motion that was granted because of a lack of

particularized function/way/result testimony and linking argument. We disagree. As is clear from the infringement discussion in section B, infra, the district court correctly granted Schulmerich's motion for JNOV because Malta failed to present sufficient evidence to the individual function/way/result elements of the Graver Tank equivalency test. That is to say, the evidence of infringement of claim 3 was insufficient, which was the basis of the motion for directed verdict. The trial judge's initial order filed Nov. 21, 1989, began by stating "Because the evidence does not prove the essential elements of plaintiffs' case, the [defendants'] motion for judgment n.o.v. must be granted." The next day the judge signed another order supplementing the first order saying it "is reopened and judgment is hereby entered for defendant as if the verdict requested at the close of the evidence had been directed. Fed.R.Civ.P. 50(b)." Clearly the trial judge had no doubt, nor do we, that the ground stated in support of the first motion for directed verdict and in support of the motion for JNOV were one and the same. The latter therefore was supported as required by Fed.R.Civ.P. 50(a) and (b). Malta's argument to the contrary is without merit. B. Infringement and the Doctrine of Equivalents To convince this court that a trial judge erred in granting a motion for JNOV, an appellant must show that there was substantial evidence to support the jury's factual findings, and that those findings can support the jury's legal conclusion. Orthokinetics, 806 F.2d at 1571, 1 USPQ2d at 1085. In order to prove infringement under the doctrine of equivalents, a patentee must show that the accused device performs substantially the same function in substantially the same way to achieve substantially the same result as the claimed device. Graver Tank, 339 U.S. at 608, 70 S.Ct. at 856, (85 USPQ at 330). The "substantially the same way" prong of this test may be met if an equivalent of a recited limitation has been substituted in the accused device. See Corning Glass Works v. Sumitomo Elec. U.S.A. Inc., 868 F.2d 1251, 1259, 9 USPQ2d 1962, 1967 (Fed.Cir.1989). The issues of infringement and of equivalency are issues of fact. Sun Studs Inc. v. ATA Equip. Leasing Inc., 872 F.2d 978, 986, 10 USPQ2d 1338, 1345 (Fed.Cir.1989). As an initial matter, Malta contends that the trial judge erred in his grant of JNOV when he stated that a patentee must substantiate all three aspects of equivalency, per Graver Tank, as to each limitation of a claim in order to establish equivalence between claim and accused device. This court has never adopted the three prong approach to determining equivalency of a limitation. In Pennwalt Corp. v. Durand-Wayland Inc., 833 F.2d 931, 4 USPQ2d 1737 (Fed.Cir.1987) (in banc), cert. denied, 485 U.S. 961, 108 S.Ct. 1226, 99 L.Ed.2d 426 (1988), this court upheld a finding of no infringement involving the doctrine of equivalents because the patentee did not establish the presence, in the accused device,

of every claim element4 "or its substantial equivalent." Pennwalt, 833 F.2d at 935-36, 4 USPQ2d at 1740-41 (claimed function found missing). Pennwalt did not set forth a test as to how one proves that an element in an accused device is the "substantial equivalent" of a claim limitation directed to a single element in dispute--here the "buttons." In the subsequent Corning Glass case, 868 F.2d at 1260, 9 USPQ2d at 1968-69, we stated This court has not set out in its precedent a definitive formula for determining equivalency between a required limitation or combination of limitations and what has been allegedly substituted therefor in the accused device. Nor do we propose to adopt one here. We note that the district court resolved the question by comparison of the function/way/result of the substitution with the function/way/result of the limitation in the context of the invention; that is, the court made a subsidiary analysis comparable to the overall function/way/result analysis mandated for determining infringement under the doctrine of equivalents. ****** The district court's "function/way/result" equivalency analysis with respect to a claim limitation appears to be a helpful way to approach the problem and entirely in accord with the analysis actually made in Graver Tank.... Thus, while comparison of function/way/result is an acceptable way of showing that structure in an accused device is the "substantial equivalent" of a claim limitation, it is not the only way to do so, and to this extent, the trial judge in the present case did err. However, this error is harmless. How equivalency to a required limitation is met necessarily varies from case to case due to many variables such as the form of the claim, the nature of the invention defined by it, the kind of limitation that is not literally met, etc. For example, the fact situations in Corning Glass and in this case are simply not comparable, yet application of the doctrine must be adapted to each, which is why the Corning panel declined to propose a formula of general applicability for determining equivalency to a claim limitation. See Hughes Aircraft Co. v. United States, 717 F.2d 1351, 1361, 219 USPQ 473, 480 (Fed.Cir.1983) ("The doctrine is judicially devised to do equity"). Malta's proofs lack evidence to prove either that all three prongs of the Graver Tank test are met or that the "buttons" limitation was met equivalently. The evidence Malta principally points to is the following two portions of the testimony of Jacob Malta (emphasis ours): Q: Would you make that clear as to what the structure is in the Schulmerich bell that corresponds to the buttons that are recited in the claim?

A: All right. The structure is these portions of the clapper, in this case the opposed felt pieces, and adjacent thereto on each side these elliptical spots of green, indicating that there are additional pairs of opposed striking surfaces. Q: Striking surfaces. Would you go on with your explanation of how the portion illustrated in color in the exhibit corresponds to the claim language? A: Right. The--as I described, we have a plurality of buttons, there's three sets, buttons or the equivalent thereof, and they are in opposed pairs around the periphery. We've described how they are related to these indexing slots in the underside of the brass clapper insert, and each pair has a different degree of hardness, we've described that. Here again we have felt which produces a soft impact sound. Here, this would be in relation to this slotted portion here where we have a slot in the core and at 180 degrees another slot, that would be the medium impact position. And then the lowermost one would be the--this one opposed to this where we have a solid plastic material in the impact plane producing a brilliant sound. and: Q: And Claim 3 includes as a part of the striker assembly the phrase, "A plurality of striking buttons positioned in opposed pairs around the outer periphery thereof wherein each pair of buttons is a different degree of hardness," correct? A: That's right. Q: Do you find those buttons in [the accused] structure? A: Yes, there are buttons per se here, the felt, the opposed felt certainly are visible buttons. The opposed locations or surfaces which are related to these long slots are likewise buttons and the opposed pair of solid portions again are buttons. Q: Do you mean they're buttons or function like buttons? A: They function like buttons.... This court in Lear Siegler, following Nestier, held that a patentee must prove substantial identity as to each of the function, way, and result prongs of the doctrine of equivalents. Lear Siegler, 873 F.2d at 1425, 10 USPQ2d at 1770, Nestier, 739 F.2d at 1579-80, 222 USPQ at 750. As the court noted in Lear Siegler, such proof is necessary to prevent the jury from being "put to sea without guiding charts," and from determining infringement by simply comparing the claimed invention and the accused device "as to overall similarity." Lear Siegler, 873 F.2d at 1426-27, 10 USPQ2d at 1770-71.5 With this requirement in mind, we agree with the district court that the evidence was insufficient to support a finding of infringement under the doctrine of equivalents. Malta's brief to this court discusses the above testimony at great length, explaining how this testimony informs the jury of the function, way, and result achieved by the accused

device. However, what is clearly lacking in that testimony is a sufficient explanation of both why the overall function, way, and result of the accused device are substantially the same as those of the claimed device and why the plastic/slotted plastic/felt arrangement is the equivalent of the claimed buttons limitation. Mr. Malta's offhand and conclusory statements ("buttons or the equivalent thereof" and "They function like buttons") are not sufficiently particularized evidence. In short, with little guidance, the jury was left to its own imagination on the technical issue of equivalency. There is no other evidence in the case which provides the necessary "substantial evidence" on the issue of infringement under the doctrine of equivalents. The '082 patent itself has the following to say about the two embodiments of Figs. 3 and 7 (Col. 4, 11. 46-48): Another form of clapper is depicted in Fig. 7. It has all of the advantages of the one shown in Fig. 3 but varies in design, flexibility and simplicity. Thus, while the two embodiments are described as being alternatives to each other, they are not equivalent in "way". Further, the patent specifically uses the term "striking surfaces" with respect to the embodiment of Fig. 3, but uses the different term "buttons" with respect to Fig. 7. The claims of the patent maintain this distinction; claim 2 describes the surface of the clapper using the broad term "surface portions," while claim 3 uses the narrower term "buttons." Though application of the doctrine of equivalents extends the protection of the patent beyond the literal words of the claims, it is not proper "to erase a plethora of meaningful structural and functional limitations of the claim on which the public is entitled to rely in avoiding infringement." Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1532, 3 USPQ2d 1321, 1324 (Fed.Cir.1987). In the present case, where Malta employs a broad term in one claim, but a narrower term, used with respect to only one embodiment in the specification, in another claim, the implication is that infringement of the second claim can be avoided by not meeting the narrower term. In sum, we agree with the district court that Malta failed to present evidence sufficient to support a finding of infringement of claim 3 under the doctrine of equivalents, and we therefore uphold the court's grant of JNOV. C. "Retroactive Application of Lear Siegler" Malta argues that it is improper to retroactively apply the holding of Lear Siegler to this case, citing Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971), since Lear Siegler allegedly established a new principle of law. However, as noted in the previous two sections, Lear Siegler merely requires that a patentee prove all elements of his case, which, with respect to the doctrine of equivalents, means that a patentee must prove that each prong of the Graver Tank equivalency test is met. While Lear Siegler set forth this requirement in language particularly suitable to the present jury case, we do not agree that Lear Siegler established any new principle of law. Reading the opinion is enough to show that the district court was right in saying (n. 7): "Lear Siegler merely

repeats in so many words the explication of Nestier." Nestier was decided in 1984. This case was not tried until 1988. There has been no retroactive application of law. D. Schulmerich's Cross-Appeal Having upheld the district court's determination of non-infringement, we need not and do not reach the issues of equitable ownership and shop right raised in Schulmerich's cross-appeal. Schulmerich's brief states: If this Court affirms the trial court in relation to the grant of JNOV due to the failure of proof at trial by Malta/Malmark, it need not consider Schulmerich's cross-appeal on the issue of co-ownership. E. The Dissent With all respect to the dissent, we are not rejecting a jury verdict or making a de novo determination of infringement. We are reviewing the district court's judgment notwithstanding the jury verdict, the district court which tried the case, heard all the evidence including Mr. Malta's self-serving testimony and opinions about claim construction together with his elaborate illustrations so laboriously listed in the dissent. What we are affirming is the judgment of the fully informed district judge based on his holding that the evidence was insufficient to support a finding of infringement under the doctrine of equivalents, a doctrine the application of which enlarges the coverage of the patent beyond what is defined in the claims. We are following the instruction of the Supreme Court in Graver Tank, 339 U.S. at 610, 70 S.Ct. at 857, referring to the application of the doctrine, that: It is to be decided by the trial court and that court's decision, under general principles of appellate review, should not be disturbed unless clearly erroneous. In essence, what we are affirming is the district court's decision that, in view of all the evidence, this is not a case in which the doctrine of equivalents can be applied, that being the only basis on which Malta can contend that his patent is infringed. The district court's detailed opinion of November 21, 1989, discussed the doctrine of equivalents and its proper application at great length and came to the correct conclusion that "Plaintiffs offered no more than brief, conclusory evidence that the Schulmerich bell contains the equivalent of the disputed buttons." That is what we are reviewing, not the jury verdict, and we will not disturb it. For this court's most recent views on application of the doctrine of equivalents, see London v. Carson Pirie Scott & Co., 946 F.2d 1534, 20 USPQ2d 1456 (Fed.Cir.1991). CONCLUSION For all of the above reasons, the judgment of the district court is affirmed. AFFIRMED.

MICHEL, Circuit Judge, concurring. I agree that the district court's grant of JNOV to defendants must be affirmed, and I join in Judge Rich's opinion. I enter this concurrence only to emphasize that our ground of decision is required implicitly by Graver Tank and Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 70 S.Ct. 854, 94 L.Ed. 1097, 85 USPQ 828 (1950) and explicitly by Lear Siegler, Inc. v. Sealy Mattress Co., 873 F.2d 1422, 10 USPQ2d 1767 (Fed.Cir.1989). For me what is fatal in this record is the failure of Mr. Malta to separate and explicate his comparative analysis of "way" from his comparison of "function" and "result," and to substantiate it. All three requirements of Graver Tank were discussed together, with only two fleeting, conclusory and inferential references to way. Consequently, there was insubstantial evidence of infringement under the doctrine of equivalents as to way, and therefore the verdict of infringement under the doctrine cannot be sustained. I. THE LAW In Lear Siegler, 873 F.2d at 1425-26, 10 USPQ2d at 1770, this court clarified a specific requirement that must be met before the question of infringement under the doctrine of equivalents may be submitted to the trier of fact for decision. To survive a motion for a directed verdict or a JNOV, a patentee must present "substantial evidence" comparing the claimed and accused inventions to one another as to each of the three aspects of equivalency set forth in Graver Tank, 339 U.S. at 608, 70 S.Ct. at 856, 85 USPQ at 330-"function," "way," and "result." Lear Siegler, 873 F.2d at 1425-26, 10 USPQ2d at 1770. In Lear Siegler, we said [t]he party asserting infringement must present "evidence and argument concerning the doctrine and each of its elements." ... While we do not doubt the ability of a jury to decide the factual issue of equivalence, to enable the jury to use its ability, Nestier requires that the three Graver Tank elements must be presented in the form of particularized testimony and linking argument. 873 F.2d at 1425-26, 10 USPQ2d at 1770 (citing Nestier Corp. v. Menasha Corp.Lewisystems Div., 739 F.2d 1576, 1579, 222 USPQ 747, 749 (Fed.Cir.1984) (5-judge panel), cert. denied, 470 U.S. 1053, 105 S.Ct. 1756, 84 L.Ed.2d 819 (1985) (emphasis in original)). Thus, under Nestier Corp. and Lear Siegler, substantial evidence of comparison as to function, way, and result is required as part of the patentee's prima facie case of infringement under the doctrine. Therefore, if the comparison evidence is not substantial, the issue may not be submitted to the jury. Or, if the trial court erred and the jury was allowed to decide the issue and returned a verdict for patentee, JNOV must be granted. We have also held that the comparison as to each Graver Tank element must be made "explicitly" and "separately." Lear Siegler, 873 F.2d at 1425-26, 10 USPQ2d at 1770. Consequently, a jury verdict of infringement under the doctrine can only survive a motion for JNOV if substantial evidence was presented that explicitly and separately compares the function/way/result of the accused device with the function/way/result of

the claimed invention to show that they are substantially the same. That was not done here as to way. Compliance with Lear Siegler is a question of law, which we review de novo. On a motion for directed verdict or JNOV, the trial judge must decide such an issue of law by assessing whether evidence of comparison that is substantial, separate and explicit was introduced by the patentee as to each aspect of infringement by equivalents. See Senmed Inc. v. Richard-Allan Medical Indus., 888 F.2d 815, 818, 12 USPQ2d 1508, 1511 (Fed.Cir.1989). II. THE LAW APPLIED TO THIS CASE The trial judge conducted such an assessment here. In reviewing this legal issue de novo, we decide he was correct in concluding the evidence was not substantial. As the dissent details, in the instant case extensive evidence was presented about how the striking surfaces of the accused bell work. The jury was not separately and explicitly told, however, that drilling slots behind striking surfaces on a clapper made of the same plastic material is an equivalent "way" compared to attaching striking buttons made from different materials. To be sure, the jury was told and shown that the "function" and "result" of their clappers striking the bells were the same, and indeed these two aspects of equivalency are all but uncontested. And, while explaining the similarity of function and result, Mr. Malta may have briefly implied that the way was also essentially the same, the jury certainly was not told how and why that was so. In other words, plaintiff's separate and explicit comparison evidence was sufficient to establish only two of the three Graver Tank requirements. The testimony as to "way" was not substantial. Nor was it separate and explicit. Rather, it was brief, intermingled, inferential and conclusory. Because Lear Siegler clearly requires separate, explicit and substantial comparison evidence as to all three requirements, the case should not have been submitted to the jury, and thus the jury verdict cannot stand. III. THE DISSENT The dissent suggests that the majority has added "a new requirement of proof of equivalency: proof of not only the three Graver Tank 'prongs' of 'function, way, and result', but also a fourth prong of 'why'." Such a characterization of the majority's holding is inaccurate. Because often substantial proof of equivalence of "way" can be made only by an explanation of "how and why," the apparently separate requirement of proof of "why" is actually only an elaboration on the requirement of equivalence as to "way." To my mind, it is clearly no answer to point, as does the dissent, to the great quantity of evidence on the general operation of each of the two bells at issue in this case, i.e., the commercial embodiment of the claimed bell and the accused bell. No amount of purely descriptive evidence about either can suffice, absent separate, explicit and substantial comparison evidence that the clapper "striking surfaces" work in the same "way" as the "buttons."

That the instructions did not contain erroneous statements of law, were reasonably comprehensive, and went unchallenged is immaterial. Defendants did move for a directed verdict, both at the end of plaintiffs' case and again at the close of all the evidence. The stated ground was insufficiency of the evidence on infringement. No reason has been advanced why they should also be required to make the vain gesture of objecting to a facially proper charge of infringement by equivalents. In any event, Fed.R.Civ.P. 50(b) explicitly states that whenever a motion for directed verdict is denied, "the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion." As was noted earlier, compliance with Lear Siegler is a legal question. Moreover, Lear Siegler is based on the very premise that sufficiency of instructions cannot cure an insufficiency of proof as to the three Graver Tank requirements. The reason we do not allow curing by instructions is that even with perfect jury instructions, determining infringement by equivalents would still be guesswork for a jury unless it is given separate, explicit and substantial evidence of comparison as to each requirement of Graver Tank. After all, such comparisons are what infringement by equivalents is all about. As the district court noted, the danger that Lear Siegler, building directly on Nestier Corp., is designed to prevent is that of the doctrine of equivalents becoming "a result oriented catch-all." Malta v. Schulmerich Carillons, Inc., 13 USPQ2d 1900, 1903 (E.D.Pa.1989). The simplicity of the bells, so emphasized by the dissent, is not relevant either. In Lear Siegler, the devices at issue--mattress springs--were equally simple and in no manner implicated complex technology. However, the rule of Lear Siegler is a prophylactic rule of general applicability. As such, it must cover the whole range of infringement cases, many of which do indeed involve complex technology. I would agree, though, that the more complex the technology, the greater the need for the rule. But that is not to say there can be any case where this rule does not apply. In requiring sufficient evidence on each aspect of equivalence, Lear Siegler merely makes explicit what Graver Tank implied. Nor is it relevant that, as the dissent notes, slots in the clapper material were well known in the prior art, for the obviousness of the "way" cannot explicate for judge or jury that it is equivalent, i.e., substantially the same, much less how and why. That clapper surfaces with slots were known as an alternative to buttons of differing materials does not necessarily make them an equivalent. In fact, obviousness is simply non-probative of the three-part test of equivalence. Contrary to the dissent, the rule of Lear Siegler does not implicate the jury's prerogatives, under the Constitution, the case law, the Federal Rules of Civil Procedure, or otherwise. It simply addresses whether the evidence is sufficient to permit submission of the issue to the jury at all. It is thus a rule that restricts judges, not jurors. The dissent also suggests that Schulmerich's failure to request jury instructions on the rule of Lear Siegler means Schulmerich waived the protections of the rule. As a rule that restricts judges and not jurors, its purpose is to establish when the issue of infringement

by equivalents may be given to the jury. It is thus not subject to waiver because of suggested jury instructions, or the lack thereof. Finally, contrary to the suggestion of the dissent, in my view there is not a genuine issue of retroactive application of new law. While Judge Rich's opinion relies primarily on statements in Nestier Corp., decided before the trial of this case, as first setting forth the requirement restated in Lear Siegler, decided after this trial, to overcome the dissent's argument on retroactivity, there is a simpler answer. I submit that requiring separate, explicit and substantial comparison evidence of each of the three Graver Tank aspects of equivalency has been the law at least since 1950 when Graver Tank itself was decided. If Lear Siegler added gloss thereto, it was on peripheral points not dispositive here, such as the requirement of "testimony" (as opposed to other forms of evidence) and "linking argument" (which, being only attorney assertions, is of course not evidence at all). IV. CONCLUSION Generally speaking, both the purpose and effect of the rule of Lear Siegler are to minimize the risk that a jury will find infringement under the doctrine of equivalents merely because one or two of the three Graver Tank requirements is met, ignoring the other(s) or blindly assuming the other(s) must be met, too. Thus, Lear Siegler requires that before a case may be submitted to a jury, a patentee's proof must include substantial evidence of separate and explicit comparison of the claimed and accused devices as to each of the three Graver Tank requirements. A case based solely on descriptive evidence, no matter how extensive, may not go to the jury. Nor may a case lacking separate, explicit and substantial evidence on each of the Graver Tank requirements of equivalence. Here, no separate and explicit comparison evidence at all was presented as to whether, how and why the clapper surfaces of the same plastic material with slots drilled behind them operated in the same "way" as the striking buttons made of materials of different hardness. Instead, brief, inferential and conclusory references to way were buried in answers dealing primarily with function and result. That is not substantial evidence and the jury certainly would not appreciate it as evidence of way. Thus, an error of law occurred in submitting the case to the jury. I join Judge Rich's opinion affirming the district court's judgment of no infringement despite the verdict. I set forth these concurring views in order to clarify Lear Siegler. PAULINE NEWMAN, Circuit Judge, dissenting. I respectfully dissent, for neither the law nor the record provides a basis for overturning the jury's verdict. Upon full trial, upon agreed and correct jury instructions, upon substantial evidence in the form of testimony and exhibits and demonstrations, a reasonable jury could have reached the verdict of infringement reached by this jury. That ends our review. With all respect to my colleagues on this panel, their rejection of the jury verdict and de novo determination of the factual issue of infringement is contrary to the law governing appellate review of jury verdicts.

The questions of infringement and equivalency were decided by the jury. See Gunning v. Cooley, 281 U.S. 90, 94, 50 S.Ct. 231, 233, 74 L.Ed. 720 (1930) ("Issues that depend on the ... weight of evidence are to be decided by the jury."); Baltimore & Ohio R. Co. v. Groeger, 266 U.S. 521, 524, 45 S.Ct. 169, 170, 69 L.Ed. 419 (1925) ("the weight and probative value of evidence are to be determined by the jury and not by the judge"). A reasonable jury, correctly instructed, viewing all the evidence presented at trial of the case here under review, could have found infringement by equivalency. Our role is appellate review, not trial de novo. See Gallick v. Baltimore & Ohio R. Co., 372 U.S. 108, 112-14, 83 S.Ct. 659, 662-63, 9 L.Ed.2d 618 (1963) (the appellate court improperly invaded the jury's function and province in its holding that the evidence at trial of a causal connection fell short of that required for the consideration of a jury). As the Court stated in Anderson v. City of Bessemer City, 470 U.S. 564, 574-75, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d 518 (1985), the trial on the merits is "the 'main event' ... rather than a 'tryout on the road' ", quoting Wainwright v. Sykes, 433 U.S. 72, 90, 97 S.Ct. 2497, 2508, 53 L.Ed.2d 594 (1977). When the relationship between trial and appellate tribunals is distorted, the consequences disserve the public and the courts: The principal consequences of broadening appellate review are two. Such a course impairs the confidence of litigants and the public in the decisions of the trial courts, and it multiplies the number of appeals. C. Wright, The Doubtful Omniscience of Appellate Courts, 41 Minn.L.Rev. 751, 779 (1957). * Appellate Review The standard of judicial review of jury verdicts is established. Sometimes described as a "reasonable jury" standard and sometimes as a "substantial evidence" standard, the challenger must show that there was not an evidentiary basis for the verdict. As discussed by the Court: But where, as here, there is an evidentiary basis for the jury's verdict, the jury is free to discard or disbelieve whatever facts are inconsistent with its conclusion. And the appellate court's function is exhausted when that evidentiary basis becomes apparent, it being immaterial that the court might draw a contrary inference or feel that another conclusion is more reasonable. Lavender v. Kurn, 327 U.S. 645, 653, 66 S.Ct. 740, 744, 90 L.Ed. 916 (1946). This standard has its roots in the Constitution and in tradition, for the principles underlying the jury right require that the jury verdict receive judicial deference. Many illustrations of the requisite standard of appellate review of jury verdicts appear in the precedent of the Third Circuit.1 E.g., Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265, 1273 (3d Cir.1979) (en banc ) ("Our limited function at this point is to ascertain from review of the record whether there is sufficient evidence to sustain the verdict of the jury on this issue"); Dawson v. Chrysler Corp., 630 F.2d 950, 959 (3d

Cir.1980), cert. denied, 450 U.S. 959, 101 S.Ct. 1418, 67 L.Ed.2d 383 (1981) (the jury verdict must be sustained unless the record "is critically deficient of that minimum quantum of evidence from which a jury might reasonably afford relief"), quoting Denneny v. Siegel, 407 F.2d 433, 439 (3d Cir.1969). Federal Circuit decisions have well illustrated this standard. E.g., Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1571, 1 USPQ2d 1081, 1085 (Fed.Cir.1986): To convince this court that a trial judge erred in granting a motion for JNOV, an appellant need only show that there was substantial evidence to support the jury's findings and that those findings can support the jury's legal conclusion. Also, e.g., DMI, Inc. v. Deere & Co., 802 F.2d 421, 425, 231 USPQ 276, 278 (Fed.Cir.1986) (to reverse the jury, the findings must not be supported by substantial evidence); Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 619, 225 USPQ 634, 636 (Fed.Cir.), cert. dismissed, 474 U.S. 976, 106 S.Ct. 340, 88 L.Ed.2d 326 (1985) (determining from the evidence as a whole whether there was substantial evidence in support of the jury verdict); Perkin-Elmer Corp. v. Computervision Corp., 732 F.2d 888, 893, 221 USPQ 669, 673 (Fed.Cir.), cert. denied, 469 U.S. 857, 105 S.Ct. 187, 83 L.Ed.2d 120 (1984) ("only when the court is convinced upon the record before the jury that reasonable persons could not have reached a verdict for the non-mover, should it grant the motion for JNOV.") On judicial review following a duly made motion for judgment n.o.v., the evidence must be viewed and reasonable inferences drawn in the light most favorable to the party with the jury verdict. Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 696, 82 S.Ct. 1404, 1409, 8 L.Ed.2d 777 (1962); Danny Kresky Enterprises Corp. v. Magid, 716 F.2d 206, 209 (3d Cir.1983); Chuy, 595 F.2d at 1273. The reviewing court is not free to reweigh the evidence or substitute its own judgment for that of the jury, Blair v. Manhattan Life Ins. Co., 692 F.2d 296, 300 (3d Cir.1982), or to pass on the credibility of witnesses. Kinnel v. Mid-Atlantic Mausoleums, Inc., 850 F.2d 958, 961 (3d Cir.1988). Those functions are assigned to the fact-finder, in this case the jury. Our function is to determine only whether there is evidence upon which the jury could properly return a verdict, viewing the evidence most favorably to Kinnel the non-movant, and giving Kinnel the benefit of all reasonable inferences. Id. at 961-62. The Federal Circuit is in accord. E.g., Orthokinetics, 806 F.2d at 1572-73, 1 USPQ2d at 1085-86 (it is "a misunderstanding of our appellate role" for this court to determine what is supported by the evidence as a whole, rather than whether the evidence the jury could have believed was substantial); Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1546, 220 USPQ 193, 197 (Fed.Cir.1983) (the appellate court must consider all the evidence in the light most favorable to the non-movant, must not determine the credibility of witnesses, and must not substitute its choice for that of the jury in finding

facts, drawing inferences, or deciding between conflicting elements in the evidence). These are functions of the trier of fact, not the reviewing court. These precepts are not here followed. The panel majority has rejected the jury verdict, although it is supported by substantial evidence and could clearly have been reached by a reasonable jury. Indeed, the panel majority has ignored much of the evidence that was presented at trial; see Part B post. The majority instead imposes the new requirements of "particularized testimony and linking argument" that were set forth in Lear Siegler, Inc. v. Sealy Mattress Co., 873 F.2d 1422, 10 USPQ2d 1767 (Fed.Cir.1989). These requirements, which apply solely to jury trials, were not referred to at the trial, for Lear Siegler was decided eight months after this jury verdict was rendered.2 These new requirements are not trivial. They demand a certain stylized testimony and specified attorney argument when trial is to a jury. As compared with trial to the bench, these requirements must be fulfilled no matter how simple the invention. The court holds that if this extra testimony and extra argument are omitted, the case can not go to the jury at all--no matter whether the evidence might suffice were the trial to the court. The panel majority, applying Lear Siegler to remove this case from the jury, has invoked a new requirement of proof of equivalency: proof of not only the three Graver Tank "prongs" of "function, way, and result", but also a fourth prong of "why". It is contrary to due process to revise the evidentiary and procedural burdens of the trial after the jury's verdict has been rendered. Were these new criteria for jury trials indeed required to be applied to this case, then in the interest of justice a new trial, not reversal of the jury verdict, is the appropriate remedy. See Cone v. West Virginia Pulp & Paper Co., 330 U.S. 212, 216 n. 4, 67 S.Ct. 752, 755 n. 4, 91 L.Ed. 849 (1947) (court always has discretion, when justice requires, to order a new trial); Roebuck v. Drexel University, 852 F.2d 715, 735-36 (3d Cir.1988) (granting new trial when verdict contrary to the great weight of evidence); 9 C. Wright & A. Miller, Federal Practice and Procedure, 2539 at 608 (2d ed. 1971) (court may grant new trial when verdict is against the great weight of the evidence, even when there is insufficient basis for granting judgment n.o.v.) In addition, as I shall discuss, even these new requirements were met in this thoroughly presented case. Even on the legal and evidentiary standards adopted by the panel majority, there is not sufficient basis for reversal of this jury verdict. B The Trial The patented invention of Jacob H. Malta is a musical handbell that can be rapidly adjusted so that the bell tone is changed "on the fly" during performance of a musical composition. It is not a complicated device. Because of the rapid adjustability of the bells that Malta invented, performers have achieved musical effects not previously available in the old, indeed ancient, art of

handbell music. After this handbell was produced, composers of handbell music adopted a new system of notation for handbell scores. Music for handbells was now written that could not have been performed before. Patent validity was conceded at trial. The patent drawing shows the Malta bell: NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE 7 Claim 3, the only claim at issue, is directed to the entire bell, as discussed infra. The rotation of the clapper to change the striking surface, thereby changing the bell tone, was well known. The novel contribution of the Malta bell to the art was the mechanism for rapid adjustment of the clapper during performance; that aspect is not here challenged. The issue on this appeal is the jury verdict of equivalency, a verdict that required the jury to consider certain known, interchangeable clapper structures. 8 Infringement is a question of fact, Intervet America, Inc. v. Kee-Vet Laboratories, Inc., 887 F.2d 1050, 1053, 12 USPQ2d 1474, 1476 (Fed.Cir.1989), as is the question of equivalence, Graver Tank & Mfg. Co., Inc. v. Linde Air Products Co., 339 U.S. 605, 609, 70 S.Ct. 854, 856, 94 L.Ed. 1097, 85 USPQ 328, 331 (1950); Radio Steel & Mfg. Co. v. MTD Products, Inc., 731 F.2d 840, 847, 221 USPQ 657, 662 (Fed.Cir.), cert. denied, 469 U.S. 831, 105 S.Ct. 119, 83 L.Ed.2d 62 (1984). At the trial extensive evidence was adduced on the issues both of literal infringement and infringement in accordance with the doctrine of equivalents. These questions are the province of the jury. Royer v. Schultz Belting Co., 135 U.S. 319, 325, 10 S.Ct. 833, 835, 34 L.Ed. 214 (1890); Carver v. Hyde, 41 U.S. (16 Pet.) 513, 520, 10 L.Ed. 1051 (1842); Sun Studs, Inc. v. ATA Equipment Leasing, Inc., 872 F.2d 978, 986, 10 USPQ2d 1338, 1345 (Fed.Cir.1989); Perkin-Elmer, 732 F.2d at 900, 221 USPQ at 678. The jury found, inter alia, that claim 3 of the Malta patent was not literally infringed, but was infringed under the doctrine of equivalents. Infringement of claim 3 is the only issue on appeal. 9 Following is claim 3, clause by clause in accordance with the presentation at trial. Beneath each clause is a summary of the evidence of infringement as to each claim element. The evidence was methodically presented: 10 3. A handbell comprising in combination: a bell having a generally closed end; 11

1. photograph of disassembled parts of bell with transparent overlay of claim text for this element 12 2. color drawing highlighting this element in accused bell 3. explained by witness 4. no contradictory evidence 13 5. actual bells were shown and handed to jury 14 6. this element was known in prior art bells 15 a clapper assembly adapted to be removably carried within said bell and centrally of the closed end thereof, 16 1. photograph of disassembled parts of bell with transparent overlay of claim text for this element 17 2. a second color drawing highlighting this element in accused bell 3. explained by witness 4. no contradictory evidence 18 5. this element was known in prior art bells 19 said assembly comprising a clapper shaft having one end pivotally associated centrally of the closed end of said bell and carrying a clapper member at its free extremity,

20 1. photograph of disassembled parts of bell with transparent overlay of claim text for this element 21 2. a third color drawing highlighting this element in accused bell 3. explained by witness 4. no contradictory evidence 22 5. this element was known in prior art bells 23 said clapper member comprising a generally circular striker assembly rotatably positioned substantially normal to said clapper shaft 24 1. photograph of disassembled parts of bell with transparent overlay of claim text for this element 25 2. a fourth color drawing highlighting this element in accused bell 3. explained by witness 4. no contradictory evidence 26 5. this element was known in prior art bells 27 and including a plurality of striking buttons positioned in opposed pairs around the outer periphery thereof and wherein each pair of buttons has a different degree of hardness; 28

1. photograph of disassembled parts of bell with transparent overlay of claim text for this element 29 2. a fifth color drawing highlighting this element in accused bell 3. explained by witness 30 4. no dispute as to presence of opposed pairs of striking elements positioned around the outer periphery of the clapper, each pair having a different degree of hardness 31 [the only dispute at trial was the equivalency of the striking buttons of the claim clause and the felt/plastic striking surfaces of the accused bells] 32 5. equivalency of the striking surfaces was explained and demonstrated using accused bell 33 6. both forms of striking surfaces were illustrated as alternatives in the patent in suit 34 7. both forms of striking surfaces were known in the prior art 35 means on said clapper assembly coacting with said rotatable striker assembly for permitting rotation of said striker assembly relative to said clapper shaft for selectively positioning desired pairs of buttons in striking relation to said bell; 36 1. photograph of disassembled parts of bell with transparent overlay of claim text for this element2. a sixth color drawing highlighting this element in accused bell 3. explained and demonstrated by witness 4. demonstrated in videotaped performance

5. no contradictory evidence 37 [this was the first new element of the claimed bell; its presence in the accused bells was admitted] 38 and detent means cooperating with said rotatable striker for releasably holding said striker assembly in any preselected position. 39 1. photograph of disassembled parts of bell with transparent overlay of claim text for this element 40 2. a seventh color drawing highlighting this element in accused bell 3. explained and demonstrated by witness 4. demonstrated in videotaped performance 5. no contradictory evidence 41 [this was the other new element; its presence in the accused bells was admitted] 42 Mr. Malta was a principal witness on the question of infringement. He identified each of the elements of the claims, and the corresponding element of the accused bells. The jury was shown 24"' X 30"' photographs of the details of disassembled bells, and Mr. Malta used transparent overlays identifying each part of the accused bells and the corresponding element in each claim. 43 He also testified with the aid of seven 24"' X 30"' drawings for each claim, each drawing highlighting in color a different part of the accused bells, and labelled to show the corresponding element of the claims. From these photographs and drawings, Mr. Malta compared each claim element with the corresponding element in the accused bells. The jury viewed a videotaped musical performance during which Malta stopped the tape to show the patented bells being quickly adjusted by the performers.

44 It was explained to the jury that what was new in Malta's bells was his means for rapidly changing the striking surfaces during a musical performance. Mr. Malta demonstrated how the clapper is rotated during performance and click-locked into the desired striking position: the new elements of the claimed combination. It was not disputed by Schulmerich that these new elements, as well as all the other elements of claim 3 except the form of the striking surfaces, were literally present in the accused bells. 45 Malta demonstrated to the jury how the different striking surfaces produced different tones. He explained to the jury that it was not new to use striking surfaces of different hardness on the bell clapper, in order to change the bell tone. The jury was shown bell clappers two hundred years old having this feature. Malta also explained that it was not new to use clappers having the striking surfaces illustrated in the patent; that these striking surfaces were known. The issue before the jury was simply the equivalence of the two sets of known striking surfaces that were described in the patent. There was substantial evidence of the equivalence of these striking surfaces. I shall discuss some of this evidence, for the panel majority does not. 46 For example, the patent specification shows the felt and plastic striking surfaces that are used in the accused bells, and also shows the button striking surfaces of claim 3. The patent specification discusses their relationship, and explains that the varying hardness of these surfaces varies the tone of the bell. These embodiments are illustrated in Figures 3 and 7 of the patent: 47 NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE Schulmerich did not dispute that the accused bells use the embodiment of Figure 3. In evidence was the patent specification, which describes the Figure 3 striking surfaces as follows: The striking surface of the ring 64 [of the clapper] may offer different hardness strike surfaces 68 therearound for varying the tone. This is accomplished by drilling or molding relief portions 69 adjacent the surfaces. A third opposed pair of striking surfaces may also be provided wherein felt or some other relatively soft material is applied to opposed striking surfaces of the clapper 26. In this embodiment, the clapper will offer three opposed areas of strike, each with a different impact effect and available according to its position relative to the plane of swing of the clapper 26. The specification also discusses the striking buttons of Figure 7, and relates them to the Figure 3 embodiment and to the invention as a whole:

Opposed pairs of buttons 82 are of the same hardness and each opposed pair is of a different hardness to accomplish the same results as described in connection with the clapper shown in FIG. 3. It is apparent that other deviations may also be used without departing from the spirit of my invention which comprehends a manually adjustable clapper having a plurality of strike portions, in opposed relation and of different hardness, to selectively produce a variety of tonal effects. I emphasize that the striking surfaces used in the Schulmerich bells, the only claim element for which equivalence was at issue, were described, as well as pictured, in the patent.3The patent specification describes how the hardness of the "strike portions" is varied, and how these alternative embodiments function to change the tone of the bell. Malta explained all this at trial, with explicit reference to the claimed invention and the accused bells. He testified that the felt striking surfaces in the Schulmerich handbells (shown in Fig. 3 of the patent) function in the same way and with the same effect as the softest pair of buttons (Fig. 7) to produce a soft tone. He testified that the plastic striking surfaces (Fig. 3) and the plastic surfaces with slots (Fig. 3) of the Schulmerich handbells function in the same way and with the same effect as the harder and medium pairs of buttons (Fig. 7), to produce the brilliant and medium tones. Malta also explained this correspondence between the striking surfaces of the claimed and the accused bells using a color-highlighted drawing labelled with the relevant claim clause. For example: Q: Would you make that clear as to what the structure is in the Schulmerich bell that corresponds to the buttons that are recited in the claim? A: All right. The structure is these portions of the clapper, in this case the opposed felt pieces, and adjacent thereto on each side these elliptical spots of green, indicating that there are additional pairs of opposed striking surfaces. Q: Striking surfaces. Would you go on with your explanation of how the portion illustrated in color in the exhibit corresponds to the claim language? A: Right. The--as I described, we have a plurality of buttons, there's three sets, buttons or the equivalent thereof, and they are in opposed pairs around the periphery. We've described how they are related to these indexing slots in the underside of the brass clapper insert, and each pair has a different degree of hardness, we've described that. Here again we have felt which produced a soft impact sound. Here, this would be in relation to this slotted portion here where we have a slot in the core and at 180 degrees another slot, that would be the medium impact position. And then the lowermost one would be the--this one opposed to this where we have a solid plastic material in the impact plane producing a brilliant sound. Malta here, and elsewhere, did compare each pair of striking surfaces, and did explain to the jury the way the various striking surfaces changed the tone of the bell. As further evidence of the equivalence of the striking surfaces, it was explained to the jury that the

prior art '574 patent describes the same felt, plastic, and slotted plastic surfaces as were shown to be present in the accused bells, as were shown to be pictured in Figure 3 of the patent in suit, and as were discussed by Malta in his testimony. A 1902 catalogue of prior art bells, about which Malta also testified, shows "pins" of different materials on a rotatable clapper. Mr. Malta explained and demonstrated to the jury that the use of striking surfaces made from material of varying degrees of hardness was known in the prior art; and that the use both of striking buttons and striking surfaces made of felt, plastic, and plastic with slots, to produce varying degrees of hardness, was known in the prior art. This comports with the holding in Graver Tank, 339 U.S. at 609, 70 S.Ct. at 856, 85 USPQ at 331, that proof of equivalence "can be made ... by the disclosures of the prior art". The panel majority, holding that there was insufficient evidence of equivalency to present the issue to a jury, appears to concentrate its attack on Malta's evidence of the "way" aspect of the function/way/result test of Graver Tank. The panel majority finds an inadequate showing of why the elements work in the same way. Following is another example of the testimony in which Malta explained and demonstrated the "way" the bells work, by rotating the clapper and aligning the surfaces of varying degrees of hardness in the striking plane. The witness also explained "why", describing the felt surfaces, the slotted plastic, and the solid surfaces: Q: [E]xplain to the jury what you mean about changing the brightness or color. Demonstrate it.... A: May I demonstrate it? Q: ... you will ... certainly, certainly. A: All right. Right now this clapper is aligned so that there are felt surfaces in the striking plane. The clapper is restricted in its motion so that it will only move through one plane, and it's going to be moving toward you. I'll ring it now. (Rings a bell.) There we've got a rather soft, mellow sound. I turn it to the next indexing spot and this spot are the opposed surfaces contain cord in, molded in slots. These slots will allow the plastic surface to give, to compress. And in so doing the tone that results will be brighter because we do not have felt covering the surface, felt being softer, but it will not be as bright as it will in the next position which we'll use opposed surfaces where there are no cord slots. (Rings a bell.) And now I'll dampen the bell and I've turned it already to the third position which utilizes solid surfaces and strike it. (Rings a bell.) And again we've got a brighter sound. I'll run through it now quickly. (Rings a bell.) The jury was not "left to its own imagination", as my colleagues hold, on the "function, way, and result" determination of equivalency. Although the panel majority states that

Malta presented only "offhand" and "conclusory" evidence, that statement does not accord with the record. Malta's testimony on infringement took most of three days. Each claim clause was compared with its embodiment in the accused handbells, using real, demonstrative, and testimonial evidence, for literal infringement and for equivalency. There was substantial evidence of the function, way, and result of the striking surfaces of the accused handbells compared with the striking surfaces of the claimed invention. There was substantial evidence not only as to this specific claim element but also as to the invention as a whole, leaving no theory of equivalency uncovered. Compare Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 4 USPQ2d 1737 (Fed.Cir.1987) (en banc ), cert. denied, 485 U.S. 961, 108 S.Ct. 1226, 99 L.Ed.2d 426 (1988) (requiring presence of every claim element, literally or by an equivalent) with Graver Tank, 339 U.S. at 607-08, 70 S.Ct. at 855-56, 85 USPQ at 330 (equivalency is determined of the invention as a whole). Looking first at the invention as a whole, there was substantial evidence that the accused bell functioned by instantaneous hand adjustment of the clapper, as does the claimed bell; changing the striking surfaces of varying hardness, thereby changing the tone of the bell. As to way, there was substantial evidence of how the tone is changed on rotation of the clapper, due to the change in hardness of the surface in the striking plane, for the claimed and the accused bells. As to result, there was substantial evidence of the rapidly adjustable changes in tone of the accused bell, as in the claimed bell, to obtain soft, medium, and hard tones. The jury was instructed that in order to find infringement every element of the claim or the equivalent of every element must be present in the accused device.4 Looking at the specific claim element for which equivalency was at issue, i.e., the "plurality of striking buttons in opposed pairs having different degrees of hardness", again there was testimonial, documentary, and real evidence of the function, way, and result that characterize this element in the accused bells, and equivalency to the function, way, and result that characterize the corresponding element of the claim. Malta presented substantial evidence that the function of the opposed pairs of felt/plastic striking surfaces in the Schulmerich bells, and of the opposed pairs of striking buttons of the claim, is to produce varying tones on striking the bell. Using physical and documentary evidence, Malta testified that the felt, solid plastic, and slotted plastic surfaces of the accused bells "function like buttons". Malta also presented substantial evidence that the way the striking surfaces produce varying tones is by their varying degrees of hardness, in the accused bells and in the claimed invention. He pointed to the accused striking surfaces, using a color-highlighted drawing, and testified that "these are the three positions that I described earlier on the clapper that produce the hard, medium and soft", and that "each pair has a different degree of hardness." I quoted ante Malta's discussion of how slots in the plastic surface affect the tone:

These slots will allow the plastic surface to give, to compress. And in so doing the tone that results will be brighter because we do not have felt covering the surface, felt being softer, but it will not be as bright as it will in the next position which we'll use opposed surfaces where there are no cord slots. The Malta patent, in evidence and the subject of testimony before the jury, also describes the way both sets of striking surfaces function; see Figures 3 and 7 pictured ante and the description in the patent specification. Although the panel majority now holds that Malta was required to explain how and why these known surfaces work in the way that they were known and shown to work, at least when trial is to a jury, Schulmerich did not raise this point; not on motion for directed verdict, not in its requested jury instructions, not on motion for judgment n.o.v., and not in its appellate brief. As a criterion of equivalency, it is unprecedented. However, as I have stated, Mr. Malta did explain how and why. He explained that felt is "softer" than plastic, and he explained that the slots "allow the plastic to give, to compress", producing a less brilliant sound than the solid plastic surfaces. He was not required to explain "why". An inventor need not know the why of the scientific and technologic principles underlying an invention. Diamond Rubber Co. v. Consolidated Rubber Tire Co., 220 U.S. 428, 435-36, 31 S.Ct. 444, 447, 55 L.Ed. 527 (1911); Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565, 1570, 219 USPQ 1137, 1140 (Fed.Cir.1983). For example, in Graver Tank it was not required that the patentee explain why manganese and magnesium have similar properties in the claimed composition--an explanation requiring an understanding of atomic structure and chemical forces. Rather, it was the observed fact of the similar properties when used in the claimed composition that was legally significant.5 Malta also provided substantial evidence that the resulting change of tones is the same, for the striking surfaces of the accused bells and those of claim 3. He testified to the "different impact sounds" and "different tonal effect" that result. All of this evidence was specific to the issue of equivalency of the striking buttons and the felt/plastic/slotted plastic surfaces. The evidence was thorough and, if anything, redundant. It is hard to imagine what more would have been appropriate. Malta surely met that threshold quantity and quality of evidence required for consideration by the jury of the factual question of equivalency. A reasonable jury viewing this evidence could have found that these known alternative embodiments were equivalent. The fundamental right of litigants to a jury trial is impugned by the creation of new evidentiary rules after the trial is over. "[T]he procedures by which the facts of the case are determined assume an importance fully as great as the validity of the substantive rule of law to be applied." Speiser v. Randall, 357 U.S. 513, 520, 78 S.Ct. 1332, 1339, 2 L.Ed.2d 1460 (1958) (misplacement of burdens of proof and persuasion violated procedural safeguards). By holding that Malta was required to present evidence of "why"

because the factfinder was a jury, the majority creates a new substantive and procedural rule of uncertain soundness, as well as treading upon due process. C The Jury Instructions The parties agreed on the law to be applied. There was no objection to the jury instructions. Agreed instructions are subject to the general rule that failure to object will bar a later challenge to the law that was applied. Fed.R.Civ.P. 51: No party may assign as error the giving or the failure to give an instruction unless that party objects thereto before the jury retires to consider its verdict, stating distinctly the matter objected to and the grounds of the objection. See also, e.g., United States v. 78.40 Acres of Land, 384 F.2d 746 (3d Cir.1967) (counsel had no suggestions or objections to the jury charge, thus waiving assignment of error); Allen Organ Co. v. Kimball Int'l, Inc., 839 F.2d 1556, 1566, 5 USPQ2d 1769, 1777 (Fed.Cir.), cert. denied, 488 U.S. 850, 109 S.Ct. 132, 102 L.Ed.2d 104 (1988) (agreement without objection to the jury charge is agreement to the law the jury is to apply). This is not the rare case where appellate intervention on the basis of plain error in an instruction is "necessary to prevent a miscarriage of justice". 9 C. Wright & A. Miller, Federal Practice and Procedure, 2558 at 672 (2d ed. 1971). Schulmerich did not request jury instructions on any of the points on which the panel's majority opinions now rely. In instructing the jury on infringement in terms of the doctrine of equivalents, the trial court used the classical words of Graver Tank, 339 U.S. at 609, 70 S.Ct. at 856, 85 USPQ at 331; and also explained the law of equivalency in light of other factual aspects of equivalency that had been raised at the trial: Infringement under the Doctrine of Equivalents may exist if the accused handbells perform substantially the same function in substantially the same way so as to obtain substantially the same results as the claimed invention. I'll repeat that. Infringement under the Doctrine of Equivalents may exist if the accused handbells perform substantially the same function in substantially the same way so as to obtain substantially the same results as the claimed invention. What constitutes equivalency must be determined considering the context of the patent, what we're talking about, the prior art and the particular circumstances of the case. The smaller the advance over the prior art, that is, what's in the prior field, the narrower the range of available equivalents. Also, it must be kept in mind that the Doctrine of Equivalents has certain limits. For example, the doctrine may not be used to support an interpretation that would resurrect or reopen subject matter surrendered or dropped during prosecution of the patent application or subject matter that is in the realm of public information.

Additionally, the scope of the patent may not be expanded or extended so far that they've become invalid or meaningless in light of the scope of the prior art. Also, equivalents must be established with respect to the claims of the patent, not for commercial purposes for which the products are used. In applying the Doctrine of Equivalents, remember that infringement requires that each and every element of an asserted claim or the equivalent of the element must be present in the accused device. Schulmerich's counsel said: "I think it was a nice charge." Neither member of the panel majority directs criticism to the jury instructions. It must be assumed that the jury followed the court's instructions. Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 604, 105 S.Ct. 2847, 2858, 86 L.Ed.2d 467 (1985). A reasonable jury, applying these instructions in light of the evidence, could have found infringement of claim 3 under the doctrine of equivalents. The record shows that there was substantial evidence on which the jury could rely to find equivalency. See Kinnel, 850 F.2d at 961-62 (verdict must be affirmed if there is the minimum amount of evidence on which the jury could rely, giving the nonmovant the benefit of all reasonable inferences). I can not discern, and the panel majority does not explain, how the jury was "put to sea without guiding charts". In addition to the well-organized testimony, there were the actual bells, the photographs, the charts, the videotape, the description and drawings in the patent, and the prior art. There were examination and cross-examination, opposing witnesses, and experts. All of the exhibits were taken to the jury room. These bells are simple devices. The majority's criticism that this jury was "left to its own imagination" on the technical and legal issue of equivalency is belied by the record. Any legal gap was waived by failure to object to the jury instructions, McAdam v. Dean Witter Reynolds, Inc., 896 F.2d 750, 768-69 (3d Cir.1990); and any technical gap must be measured by the established standard for review of jury verdicts. Denneny, 407 F.2d at 439 (the jury verdict must be sustained unless the record "is critically deficient of that minimum quantum of evidence from which a jury might reasonably afford relief"). On the correct standard, the jury verdict must be upheld. D The New Rules for Jury Trials Eight months after this jury verdict was rendered this court held, in Lear Siegler, Inc. v. Sealy Mattress Co., 873 F.2d 1422, 10 USPQ2d 1767 (Fed.Cir.1989), that proof of equivalency requires a different evidentiary standard and enlarged attorney explanation when a jury is the trier of fact, as compared with trial to the court. Both members of the panel majority rely on this holding, or at least on the dictum to similar effect in Nestier, see n. 2, supra.

As I have discussed, the Lear Siegler requirements of "particularized testimony and linking argument" in jury trials are in conflict with Graver Tank, 339 U.S. at 609, 70 S.Ct. at 856, 85 USPQ at 331, wherein the Court made clear that proof of equivalence "can be made in any form". If, as both members of the panel majority insist, the Lear Siegler requirements are not new, their unprotested absence from the jury instructions, and from every other aspect of the trial, means that they were waived. And this panel's new requirement that there be evidence of "why" as well as "function, way, and result" contravenes the holding of Graver Tank that "equivalence, in the patent law, is not the prisoner of a formula". 339 U.S. at 609, 70 S.Ct. at 856, 85 USPQ at 330.6 The new requirements also conflict with the truism that attorney argument is not evidence, 1 Wigmore On Evidence, 1(b), at p. 7 (Tillers rev. 1983), and with the further truism that "the required findings are controlled by the court's instructions to the jury", DMI, 802 F.2d at 425, 231 USPQ at 279. There is also conflict with the rule that the appellate court must view the evidence and draw reasonable inferences in the light most favorable to the party with the verdict, Link v. Mercedes-Benz of North America, Inc., 788 F.2d 918, 921 (3d Cir.1986); and conflict with the proscription against appellate fact-finding: [C]onflicting evidence which could reasonably lead to inconsistent conclusions will not justify a judgment notwithstanding the verdict or a directed verdict. It is the function of the trier of fact alone, the jury in this instance, to evaluate contradictory evidence and to draw inferences therefrom. Fireman's Fund Ins. Co. v. Videfreeze Corp., 540 F.2d 1171, 1178 (3d Cir.1976), cert. denied, 429 U.S. 1053, 97 S.Ct. 767, 50 L.Ed.2d 770 (1977) (citations omitted). An additional conflict with precedent arises in the panel majority's treatment of expert testimony. Although Malta testified as an expert, the majority rejects that testimony as insufficient under its new approach to jury trials. Compare, e.g., Symbol Technologies, Inc. v. Opticon, Inc., 935 F.2d 1569, 1574-76, 19 USPQ2d 1241, 1245-46 (Fed.Cir.1991), wherein this court held that under the Federal Rules of Evidence an expert's testimony on infringement, including claim charts, was sufficient to establish a prima facie case of infringement. See Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 627-28, 64 S.Ct. 724, 728-29, 88 L.Ed. 967 (1944) (where trial court admits opinion testimony, it is for jury to decide what, if any, weight to assign it). Here, Malta's testimony is being held insufficient as a matter of law, for failure to meet the majority's retrospectively imposed requirements for jury trials. Today's paternalistic ruling that more and different evidence and argument are required when infringement is tried to a jury diverts patent jury trials from the mainstream of the law, a place assured by history and once accepted by the Federal Circuit: So long as the Seventh Amendment stands, the right to a jury trial should not be rationed, nor should particular issues in particular types of cases be treated differently from similar issues in other types of cases.

Connell v. Sears, Roebuck, 722 F.2d at 1547, 220 USPQ at 197. [I]t is appropriate to affirm unequivocally that patent litigants are entitled to neither a greater nor a lesser but to the same right to a jury trial, under the same governing considerations, as are all other litigants. SRI International v. Matsushita Electric Corp. of America, 775 F.2d 1107, 1127, 227 USPQ 577, 590 (Fed.Cir.1985) (Markey, C.J., additional views). In Railroad Dynamics, Inc. v. A. Stucki Co., 727 F.2d 1506, 1515, 220 USPQ 929, 937 (Fed.Cir.), cert. denied, 469 U.S. 871, 105 S.Ct. 220, 83 L.Ed.2d 150 (1984), this court stated: There is, of course, no reason for considering patent cases as somehow out of the mainstream of the law and rules of procedure applicable to jury trials for centuries under our jurisprudence. The retroactive imposition of these new rules and resultant reversal of the jury verdict also contravenes the guidance of Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971) (discussing retroactive imposition of law). This court is changing not only the rules governing jury trials, but the rules of appellate review. The mischief is well illustrated in today's post hoc, retrospectively imposed, micro-management of the jury trial process. It is inimical to due process, for litigants and trial judges will not know when the Federal Circuit will decide, on appeal, that a particular issue required more explanatory testimony and attorney argument at a jury trial than either the parties or the trial judge deemed necessary, or the law required. The role of the jury in civil litigation is not ours to change. See H.T. Markey, On Simplifying Patent Trials, 116 F.R.D. 369, 370 (1987): There is neither reason nor authority for employing in a patent trial procedures and practices different from those employed in any other civil trial. Indeed, reason and authority mandate the contrary. On appellate review, after the motion for judgment n.o.v. has been made and decided, the appellate court shall "apply the same standard as the trial court." Simone v. Golden Nugget Hotel and Casino, 844 F.2d 1031, 1034 (3d Cir.1988). The standards for granting a motion for judgment n.o.v., on which the constitutionality of such action depends, are the same as those governing the direction of a verdict. Thus, the motion for judgment n.o.v. may be granted only when, without weighing the credibility of the evidence, there can be but one reasonable conclusion as to the proper judgment. Where there is sufficient conflicting evidence, or insufficient evidence to conclusively establish the movant's case, judgment n.o.v. should not be awarded. In considering the motion, the court must view the evidence in the light and with all reasonable inferences most favorable to the party who secured the jury's verdict. This approach governs the appellate courts as well as the trial courts.

5A Moore's Federal Practice p 50.07 (2d ed. 1985) (footnotes omitted). It is incorrect to hold that the motion for judgment n.o.v. converts appellate review of a jury verdict to simple review of the trial judge's decision, as if there were no jury and no verdict.7 See Boyle v. United Technologies Corp., 487 U.S. 500, 513-14, 108 S.Ct. 2510, 2518-19, 101 L.Ed.2d 442 (1988) (it was error for the appellate court to decide on its own whether the evidence was sufficient; the necessary inquiry was whether a reasonable jury could, on the proper formulation of the defense, have found for the plaintiff on the facts presented); Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 695-96, 82 S.Ct. 1404, 1408-09, 8 L.Ed.2d 777 (1962) (criticizing appellate court for reviewing "the correctness of the judgment" entered on the jury verdict, instead of following the rules for review of jury verdicts). "[J]udges ... are precluded from reexamining facts tried by a jury". Davis v. Omitowoju, 883 F.2d 1155, 1165 (3d Cir.1989). Similarly on motion for directed verdict, a motion whereby the trial judge must decide whether to withhold the case from the jury: The Court of Appeals was, of course, bound to view the evidence in the light most favorable to [the non-movant] and to give it the benefit of all inferences which the evidence fairly supports, even though contrary inferences might reasonably be drawn. Continental Ore Co., 370 U.S. at 696, 82 S.Ct. at 1409 (1962). The Court quoted Professor Moore's statement that "the appellate court must consider the evidence in its strongest light in favor of the party against whom the motion for directed verdict was made, and must give him the advantage of every fair and reasonable intendment that the evidence can justify." Id. at 696 n. 6, 82 S.Ct. at 1409 n. 6, quoting 5 Moore's Federal Practice 2316 (2d ed., 1951). Nor can the right to jury trial of this factual issue be extinguished because the doctrine of equivalents was "judicially devised to do equity". The jury has historically been charged with the factual inquiry of equivalency: The question whether one thing is a mechanical equivalent for another is a question of fact for the jury, on the testimony of experts, or an inspection of the machines; and it is an inference to be drawn from all the circumstances of the case, by attending to the consideration, whether the contrivance used by the defendant is used for the same purpose, performs the same duties, or is applicable to the same object, as the contrivance used by the patentee. G. Curtis, A Treatise on the Law of Patents, ch. VIII, 310 at p. 405 (4th ed. 1873). This court, by retroactively imposing new requirements for proving infringement, then refinding the facts under the guise of determining whether these new requirements were

complied with, has denied this litigant's historic right.8 I do not lightly charge my colleagues with so serious a breach; yet the Supreme Court has admonished: Maintenance of the jury as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with the utmost care. Dimick v. Schiedt, 293 U.S. 474, 486, 55 S.Ct. 296, 301, 79 L.Ed. 603 (1935). Applying the correct standard of appellate review, the jury's verdict must be affirmed. The panel majority has adopted an improper view of the jury process, in contravention of fundamental law and the precedent of the Supreme Court, the Third Circuit, and the Federal Circuit. Thus, respectfully, I dissent. 1 The complaint also included claims other than patent infringement against Schulmerich and other named defendants, Ronald O. Beach, Kelly-Michener, Inc., and The Handchime Co. The case was subsequently bifurcated into patent and non-patent portions. 2 Graver Tank and Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 70 S.Ct. 854, 94 L.Ed. 1097 (85 USPQ 328) (1950). 3 Nestier Corp. v. Menasha Corp.-Lewisystems Div., 739 F.2d 1576, 222 USPQ 747 (Fed.Cir.1984), cert. denied, 470 U.S. 1053, 105 S.Ct. 1756, 84 L.Ed.2d 819 (1985). 4 In this context, the word "element" refers to a limitation of the claim, and not necessarily to a component of the claimed device. See Corning Glass, 868 F.2d at 1259, 9 USPQ2d at 1968. 5 The dissent has attempted to draw out the function, way, and result achieved by the accused and claimed devices from the testimony quoted in the dissenting opinion. However, its conclusion as to what those functions, ways, and results are does not come from the testimony itself but from Malta's appeal brief and from its own conjecture. While Lear Siegler does not go so far as to require recitation of the magic words "function", "way", and "result", we think that it at least requires the evidence to establish what the function, way, and result of both the claimed device and the accused device are, and why those functions, ways, and results are substantially the same. 1 The Federal Circuit follows the rule that the procedural law of the trial court is not affected by the path of appellate review, thereby avoiding unnecessary conflict and confusion in the trial courts of the nation. Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1574-75, 223 USPQ 465, 471 (Fed.Cir.1984). For similar reasons, the Federal Circuit applies the substantive law of the regional circuit to matters not unique to patent law. Atari, Inc. v. JS & A Group, Inc., 747 F.2d 1422, 1438-40, 223 USPQ 1074, 1086-87 (Fed.Cir.1984) (en banc ).

Thus we look to Supreme Court and Third Circuit precedent for explication of the standard of review of jury verdicts, see Newell Companies, Inc. v. Kenney Mfg. Co., 864 F.2d 757, 761 n. 1, 9 USPQ2d 1417, 1420 n. 1 (Fed.Cir.1988), cert. denied, 493 U.S. 814, 110 S.Ct. 62, 107 L.Ed.2d 30 (1989), taking note that this standard does not vary significantly among the circuits, see 5A Moore's Federal Practice p 50.07 (2d ed. 1985), including until today the Federal Circuit. 2 The panel majority states that Lear Siegler merely repeats an earlier ruling in Nestier Corp. v. Menasha Corp.-Lewisystems Div., 739 F.2d 1576, 222 USPQ 747 (Fed.Cir.1984). Lear Siegler itself described this aspect of Nestier as dictum, for in Nestier the issue of equivalency was waived at trial, and this court held on appeal simply that it was not error for the trial court to have refused to give a jury instruction on an issue that was not before the jury. "In a jury trial, a court should not instruct on a proposition of law about which there is no competent evidence." Nestier, 739 F.2d at 1579, 222 USPQ at 750. Not until Lear Siegler did a panel of this court impose the special rules now relied on. 3 It is not necessary that alternatives be described in the patent in order to be equivalent. In Graver Tank, 339 U.S. at 609, 70 S.Ct. at 856, 85 USPQ at 331, the Court stated: "An important factor is whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient not contained in the patent with one that was." In Atlas Powder Co. v. E.I. du Pont de Nemours & Co., 750 F.2d 1569, 158081, 224 USPQ 409, 416-17 (Fed.Cir.1984) this court held that the equivalent need not have existed at the time the invention was made, and could itself be a patentable invention. In Malta's case, however, the asserted equivalent was a known alternative, and was described in the patent document; this was explained to the jury.4 This explains why the jury did not find infringement of claim 2, for that claim requires the presence of an additional element (the indexing means) that was not found present in the Schulmerich bells. That finding carries no inference as to equivalency of the claim element here at issue, for there was no prosecution history limiting this claim element. Estoppel applies to claim changes made to overcome prior art; not to the space between broader and narrower claim clauses. See Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 871, 228 USPQ 90, 96 (Fed.Cir.1985) (the reason for the difference in claim scope must be considered). The verdict that claim 2 was not infringed was not appealed, and does not carry the "implication" with which the majority seeks to clothe it. There is no presumption or per se rule that a claimed element is not entitled to any equivalents whenever another claim describes that element in broader terms. 5 I do not fault the inquiring mind that continually asks "why", for each deeper level of inquiry leads to enlarged scientific understanding. Each deeper level of inquiry invokes principles that are more abstract, more fundamental, less specific to the particular practical application, more attuned to pure science. The state of human knowledge is soon strained, as inquiry probes the depths of "why". (Why, for example, is some metal harder than other metal? why is felt softer than plastic? why does compression change the tone? why do slots change the compression?)

The patent system is directed to practical utility, not to basic research. 6 The jury instructions that were given used the words of Graver Tank (the three "prongs" of function, way, and result), plus the "all-elements rule" of Pennwalt. The panel majority's statement that "this court has never adopted the three prong approach to determining equivalency of a limitation" will surprise readers of some of our opinions. 7 The majority errs in interpreting the Graver Tank words that equivalency "is to be decided by the trial court", see majority slip op. at 18, as meaning that this question is not for the jury. The sentences preceding that quoted by the majority are: A finding of equivalence is a determination of fact. Proof can be made in any form: through testimony of experts or others versed in the technology; by documents, including texts and treatises; and, of course, by the disclosures of the prior art. Like any other issue of fact, final determination requires a balancing of credibility, persuasiveness and weight of evidence. It is to be decided by the trial court.... 339 U.S. at 609-10, 70 S.Ct. at 856-57, 85 USPQ at 331. Graver Tank was not tried to a jury. 8 U.S. Const. amend. VII: ... no fact tried by a jury shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law.