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[G.R. No. 115758. March 19, 2002.

ELIDAD C. KHO, doing business under the name and style of KEC COSMETICS
LABORATORY, Petitioner, v. HON. COURT OF APPEALS, SUMMERVILLE GENERAL
MERCHANDISING and COMPANY, and ANG TIAM CRAY, Respondents.

DECISION

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision 1 dated May 24, 1993 of the Court of
Appeals setting aside and declaring as null and void the Orders 2 dated February 10, 1992 and March 19,
1992 of the Regional Trial Court, Branch 90, of Quezon City granting the issuance of a writ of preliminary
injunction.c hanrob1es vi rt ua1 1aw 1i bra ry

The facts of the case are as follows: chanrob 1es vi rtual 1aw lib rary

On December 20, 1991, petitioner Elidad C. Kho filed a complaint for injunction and damages with a
prayer for the issuance of a writ of preliminary injunction, docketed as Civil Case No. Q-91-10926,
against the respondents Summerville General Merchandising and Company (Summerville, for brevity)
and Ang Tiam Chay.

The petitioner’s complaint alleges that petitioner, doing business under the name and style of KEC
Cosmetics Laboratory, is the registered owner of the copyrights Chin Chun Su and Oval Facial Cream
Container/Case, as shown by Certificates of Copyright Registration No. 0-1358 and No. 0-3678; that she
also has patent rights on Chin Chun Su & Device and Chin Chun Su for medicated cream after purchasing
the same from Quintin Cheng, the registered owner thereof in the Supplemental Register of the
Philippine Patent Office on February 7, 1980 under Registration Certificate No. 4529; that respondent
Summerville advertised and sold petitioner’s cream products under the brand name Chin Chun Su, in
similar containers that petitioner uses, thereby misleading the public, and resulting in the decline in the
petitioner’s business sales and income; and, that the respondents should be enjoined from allegedly
infringing on the copyrights and patents of the petitioner.

The respondents, on the other hand, alleged as their defense that Summerville is the exclusive and
authorized importer, re-packer and distributor of Chin Chun Su products manufactured by Shun Yi
Factory of Taiwan; that the said Taiwanese manufacturing company authorized Summerville to register
its trade name Chin Chun Su Medicated Cream with the Philippine Patent Office and other appropriate
governmental agencies; that KEC Cosmetics Laboratory of the petitioner obtained the copyrights through
misrepresentation and falsification; and, that the authority of Quintin Cheng, assignee of the patent
registration certificate, to distribute and market Chin Chun Su products in the Philippines had already
been terminated by the said Taiwanese Manufacturing Company.

After due hearing on the application for preliminary injunction, the trial court granted the same in an
Order dated February 10, 1992, the dispositive portion of which reads: chanrob 1es vi rtual 1aw lib rary

ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing business under the style of KEC Cosmetic
Laboratory, for preliminary injunction, is hereby granted. Consequentially, plaintiff is required to file with
the Court a bond executed to defendants in the amount of five hundred thousand pesos (P500,000.00)
to the effect that plaintiff will pay to defendants all damages which defendants may sustain by reason of
the injunction if the Court should finally decide that plaintiff is not entitled thereto.

SO ORDERED. 3

The respondents moved for reconsideration but their motion for reconsideration was denied by the trial
court in an Order dated March 19, 1992. 4

On April 24, 1992, the respondents filed a petition for certiorari with the Court of Appeals, docketed as
CA-G.R. SP No. 27803, praying for the nullification of the said writ of preliminary injunction issued by the
trial court. After the respondents filed their reply and almost a month after petitioner submitted her
comment, or on August 14 1992, the latter moved to dismiss the petition for violation of Supreme Court
Circular No. 28-91, a circular prohibiting forum shopping. According to the petitioner, the respondents
did not state the docket number of the civil case in the caption of their petition and, more significantly,
they did not include therein a certificate of non-forum shopping. The respondents opposed the petition
and submitted to the appellate court a certificate of non-forum shopping for their petition.

On May 24, 1993, the appellate court rendered a Decision in CA-G.R. SP No. 27803 ruling in favor of the
respondents, the dispositive portion of which reads: chanrob1es v irt ual 1aw l ibra ry

WHEREFORE, the petition is hereby given due course and the orders of respondent court dated February
10, 1992 and March 19, 1992 granting the writ of preliminary injunction and denying petitioners’ motion
for reconsideration are hereby set aside and declared null and void. Respondent court is directed to
forthwith proceed with the trial of Civil Case No. Q-91-10926 and resolve the issue raised by the parties
on the merits.

SO ORDERED. 5

In granting the petition, the appellate court ruled that: chan rob1es v irt ual 1aw l ibra ry

The registration of the trademark or brandname "Chin Chun Su" by KEC with the supplemental register
of the Bureau of Patents, Trademarks and Technology Transfer cannot be equated with registration in the
principal register, which is duly protected by the Trademark Law.

x x x

As ratiocinated in La Chemise Lacoste, S.S. v. Fernandez, 129 SCRA 373, 393: jgc:chanrobles .com.p h

"Registration in the Supplemental Register, therefore, serves as notice that the registrant is using or has
appropriated the trademark. By the very fact that the trademark cannot as yet he on guard and there are
certain defects, some obstacles which the use must still overcome before he can claim legal ownership of
the mark or ask the courts to vindicate his claims of an exclusive right to the use of the same. It would
be deceptive for a party with nothing more than a registration in the Supplemental Register to posture
before courts of justice as if the registration is in the Principal Register.

The reliance of the private respondent on the last sentence of the Patent office action on application
Serial No. 30954 that ‘registrants is presumed to be the owner of the mark until after the registration is
declared cancelled’ is, therefore, misplaced and grounded on shaky foundation. The supposed
presumption not only runs counter to the precept embodied in Rule 124 of the Revised Rules of Practice
before the Philippine Patent Office in Trademark Cases but considering all the facts ventilated before us
in the four interrelated petitions involving the petitioner and the respondent, it is devoid of factual basis.
As even in cases where presumption and precept may factually be reconciled, we have held that the
presumption is rebuttable, not conclusive, (People v. Lim Hoa, G.R. No. L-10612, May 30, 1958,
Unreported). One may be declared an unfair competitor even if his competing trademark is registered
(Parke, Davis & Co. v. Kiu Foo & Co., Et Al., 60 Phil 928; La Yebana Co. v. chua Seco & Co., 14 Phil 534)."
6

The petitioner filed a motion for reconsideration. This she followed with several motions to declare
respondents in contempt of court for publishing advertisements notifying the public of the promulgation
of the assailed decision of the appellate court and stating that genuine Chin Chun Su products could be
obtained only from Summerville General Merchandising and Co.

In the meantime, the trial court went on to hear petitioner’s complaint for final injunction and damages.
On October 22, 1993, the trial court rendered a Decision 7 barring the petitioner from using the
trademark Chin Chun Su and upholding the right of the respondents to use the same, but recognizing the
copyright of the petitioner over the oval shaped container of her beauty cream. The trial court did not
award damages and costs to any of the parties but to their respective counsels were awarded
Seventy-Five Thousand Pesos (P75,000.00) each as attorney’s fees. The petitioner duly appealed the
said decision to the Court of Appeals.

On June 3, 1994, the Court of Appeals promulgated a Resolution 8 denying the petitioner’s motions for
reconsideration and for contempt of court in CA-G.R. SP No. 27803.

Hence, this petition anchored on the following assignment of errors: chanrob1e s virtual 1aw lib rary

I
RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON PETITIONER’S MOTION TO DISMISS.

II

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION


AMOUNTING TO LACK OF JURISDICTION IN REFUSING TO PROMPTLY RESOLVE PETITIONER’S MOTION
FOR RECONSIDERATION.

III

IN DELAYING THE RESOLUTION OF PETITIONER’S MOTION FOR RECONSIDERATION, THE HONORABLE


COURT OF APPEALS DENIED PETITIONER’S RIGHT TO SEEK TIMELY APPELLATE RELIEF AND VIOLATED
PETITIONER’S RIGHT TO DUE PROCESS.

IV

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION


AMOUNTING TO LACK OF JURISDICTION IN FAILING TO CITE THE PRIVATE RESPONDENTS IN
CONTEMPT. 9

The petitioner faults the appellate court for not dismissing the petition on the ground of violation of
Supreme Court Circular No. 28-91. Also, the petitioner contends that the appellate court violated Section
6, Rule 9 of the Revised Internal Rules of the Court of Appeals when it failed to rule on her motion for
reconsideration within ninety (90) days from the time it is submitted for resolution. The appellate court
ruled only after the lapse of three hundred fifty-four (354) days, or on June 3, 1994. In delaying the
resolution thereof, the appellate court denied the petitioner’s right to seek the timely appellate relief.
Finally, petitioner describes as arbitrary the denial of her motions for contempt of court against the
respondents.

We rule in favor of the respondents.

Pursuant to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one of the grounds for the issuance
of a writ of preliminary injunction is a proof that the applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the commission or continuance of the act or acts
complained of, either for a limited period or perpetually. Thus, a preliminary injunction order may be
granted only when the application for the issuance of the same shows facts entitling the applicant to the
relief demanded. 10 This is the reason why we have ruled that it must be shown that the invasion of the
right sought to be protected is material and substantial, that the right of complainant is clear and
unmistakable, and, that there is an urgent and paramount necessity for the writ to prevent serious
damage. 11

In the case at bar, the petitioner applied for the issuance of a preliminary injunctive order on the ground
that she is entitled to the use of the trademark on Chin Chun Su and its container based on her copyright
and patent over the same. We first find it appropriate to rule on whether the copyright and patent over
the name and container of a beauty cream product would entitle the registrant to the use and ownership
over the same to the exclusion of others.

Trademark, copyright and patents are different intellectual property rights that cannot be interchanged
with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a stamped or marked container of goods. 12 In
relation thereto, a trade name means the name or designation identifying or distinguishing an enterprise.
13 Meanwhile, the scope of a copyright is confined to literary and artistic works which are original
intellectual creations in the literary and artistic domain protected from the moment of their creation. 14
Patentable inventions, on the other hand, refer to any technical solution of a problem in any field of
human activity which is new, involves an inventive step and is industrially applicable. 15

Petitioner has no right to support her claim for the exclusive use of the subject trade name and its
container. The name and container of a beauty cream product are proper subjects of a trademark
inasmuch as the same falls squarely within its definition. In order to be entitled to exclusively use the
same in the sale of the beauty cream product, the user must sufficiently prove that she registered or used
it before anybody else did. The petitioner’s copyright and patent registration of the name and container
would not guarantee her the right to the exclusive use of the same for the reason that they are not
appropriate subjects of the said intellectual rights. Consequently, a preliminary injunction order cannot
be issued for the reason that the petitioner has not proven that she has a clear right over the said name
and container to the exclusion of others, not having proven that she has registered a trademark thereto
or used the same before anyone did.

We cannot likewise overlook the decision of the trial court in the case for final injunction and damages.
The dispositive portion of said decision held that the petitioner does not have trademark rights on the
name and container of the beauty cream product. The said decision on the merits of the trial court
rendered the issuance of the writ of a preliminary injunction moot and academic notwithstanding the fact
that the Same has been appealed in the Court of Appeals. This is supported by our ruling in La Vista
Association, Inc. v. Court of Appeals 16 , to wit:chanrob 1es vi rtua l 1aw lib ra ry

Considering the preliminary injunction is a provisional remedy which may be granted at any time after
the commencement of the action and before judgment when it is established that the plaintiff is entitled
to the relief demanded and only when his complaint shows facts entitling such reliefs . . . and it appearing
that the trial court had already granted the issuance of a final injunction in favor of petitioner in its
decision rendered after trial on the merits . . . the Court resolved to Dismiss the instant petition having
been rendered moot and academic. An injunction issued by the trial court after it has already made a
clear pronouncement as to the plaintiff’s right thereto, that is, after the same issue has been decided on
the merits, the trial court having appreciated the evidence presented, is proper, notwithstanding the fact
that the decision rendered is not yet final . . . Being an ancillary remedy, the proceedings for preliminary
injunction cannot stand separately or proceed independently of the decision rendered on the merit of the
main case for injunction. The merit of the main case having been already determined in favor of the
applicant, the preliminary determination of its non-existence ceases to have any force and effect.
(Emphasis supplied)

La Vista categorically pronounced that the issuance of a final injunction renders any question on the
preliminary injunctive order moot and academic despite the fact that the decision granting a final
injunction is pending appeal. Conversely, a decision denying the applicant-plaintiff’s right to a final
injunction, although appealed, renders moot and academic any objection to the prior dissolution of a writ
of preliminary injunction.

The petitioner argues that the appellate court erred in not dismissing the petition for certiorari for
non-compliance with the rule on forum shopping. We disagree. First, the petitioner improperly raised the
technical objection of non compliance with Supreme Court Circular No. 28-91 by filing a motion to
dismiss the petition for certiorari filed in the appellate court. This is prohibited by Section 6, Rule 66 of
the Revised Rules of Civil Procedure which provides that" (I)n petitions for certiorari before the Supreme
Court and the Court of Appeals, the provisions of Section 2, Rule 56, shall be observed. Before giving due
course thereto, the court may require the respondents to file their comment to, and not a motion to
dismiss, the petition . . . (Emphasis supplied)." Secondly, the issue was raised one month after petitioner
had filed her answer/comment and after private respondent had replied thereto. Under Section 1, Rule
16 of the Revised Rules of Civil Procedure, a motion to dismiss shall be filed within the time for but before
filing the answer to the complaint or pleading asserting a claim. She therefore could no longer submit a
motion to dismiss nor raise defenses and objections not included in the answer/comment she had earlier
tendered. Thirdly, substantial justice and equity require this Court not to revive a dissolved writ of
injunction in favor of a party without any legal right thereto merely on a technical infirmity. The granting
of an injunctive writ based on a technical ground rather than compliance with the requisites for the
issuance of the same is contrary to the primary objective of legal procedure which is to serve as a means
to dispense justice to the deserving party.

The petitioner likewise contends that the appellate court unduly delayed the resolution of her motion for
reconsideration. But we find that petitioner contributed to this delay when she filed successive
contentious motions in the same proceeding, the last of which was on October 27, 1993, necessitating
counter-manifestations from private respondents with the last one being filed on November 9, 1993.
Nonetheless, it is well-settled that non-observance of the period for deciding cases or their incidents does
not render such judgments ineffective or void. 17 With respect to the purported damages she suffered
due to the alleged delay in resolving her motion for reconsideration, we find that the said issue has
likewise been rendered moot and academic by our ruling that she has no right over the trademark and,
consequently, to the issuance of a writ of preliminary injunction.

Finally, we rule that the Court of Appeals correctly denied the petitioner’s several motions for contempt
of court. There is nothing contemptuous about the advertisements complained of which, as regards the
proceedings in CA-G.R. SP No. 27803 merely announced in plain and straightforward language the
promulgation of the assailed Decision of the appellate court. Moreover, pursuant to Section 4 of Rule 39
of the Revised Rules of Civil Procedure, the said decision nullifying the injunctive writ was immediately
executory.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals dated May 24,
1993 and June 3, 1994, respectively, are hereby AFFIRMED. With costs against the petitioner. chanrob 1es vi rtua1 1aw 1ib rary

SO ORDERED.

Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur.

G.R. No. 221732, August 23, 2017

FERNANDO U. JUAN, Petitioner, v. ROBERTO U. JUAN (SUBSTITUTED BY HIS SON JEFFREY C.


JUAN) AND LAUNDROMATIC CORPORATION, Respondents.

DECISION

PERALTA, J.:

For this Court's resolution is the Petition for Review on Certiorari under Rule 45 of the Rules of Court
dated January 25, 2016, of petitioner Fernando U. Juan that seeks to reverse and set aside the
Decision1 dated May 7, 2015 and Resolution2 dated December 4, 2015 of the Court of Appeals (CA)
dismissing his appeal for failure to comply with the requirements of Section 13, Rule 44 and Section 1,
Rule 50 of the Rules of Court.

The facts follow.

Respondent Roberto U. Juan claimed that he began using the name and mark "Lavandera Ko" in his
laundry business on July 4, 1994. He then opened his laundry store at No. 119 Alfaro St., Salcedo St.,
Makati City in 1995. Thereafter, on March 17, 1997, the National Library issued to him a certificate of
copyright over said name and mark. Over the years, the laundry business expanded with numerous
franchise outlets in Metro Manila and other provinces. Respondent Roberto then formed a corporation to
handle the said business, hence, Laundromatic Corporation (Laundromatic) was incorporated in 1997,
while "Lavandera Ko" was registered as a business name on November 13, 1998 with the Department of
Trade and Industry (DTI). Thereafter, respondent Roberto discovered that his brother, petitioner
Fernando was able to register the name and mark "Lavandera Ko" with the Intellectual Property
Office (IPO) on October 18, 2001, the registration of which was filed on June 5, 1995. Respondent
Roberto also alleged that a certain Juliano Nacino (Juliano) had been writing the franchisees of the
former threatening them with criminal and civil cases if they did not stop using the mark and name
"Lavandera Ko." It was found out by respondent Roberto that petitioner Fernando had been selling his
own franchises.

Thus, respondent Roberto filed a petition for injunction, unfair competition, infringement of copyright,
cancellation of trademark and name with/and prayer for TRO and Preliminary Injunction with the
Regional Trial Court (RTC) and the case was raffled off at Branch 149, Makati City. The RTC issued a writ
of preliminary injunction against petitioner Fernando in Order dated June 10, 2004. On July 21, 2008,
due to the death of respondent Roberto, the latter was substituted by his son, Christian Juan (Christian).
Pre-trial conference was concluded on July 13, 2010 and after the presentation of evidence of both
parties, the RTC rendered a Resolution dated September 23, 2013, dismissing the petition and ruling that
neither of the parties had a right to the exclusive use or appropriation of the mark "Lavandera Ko"
because the same was the original mark and work of a certain Santiago S. Suarez (Santiago). According
to the RTC, the mark in question was created by Suarez in 1942 in his musical composition called,
"Lavandera Ko" and both parties of the present case failed to prove that they were the originators of the
same mark. The dispositive portion of the RTC's resolution reads as follows:

WHEREFORE, premises considered, this court finds both the


plaintiff-Roberto and defendant-Fernando guilty of making
misrepresentations before this court, done under oath, hence,
the Amended Petition and the Answer with their money claims
prayed for therein are hereby DISMISSED.

Therefore, the Amended Petition and the Answer are hereby


DISMISSED for no cause of action, hence, the prayer for the
issuance of a writ of injunction is hereby DENIED for utter
lack of merit; and the Writ of Preliminary Injunction issued
on June 10, 2004 is hereby LIFTED AND SET ASIDE.

Finally, the National Library is hereby ordered to cancel the


Certificate of Registration issued to Roberto U. Juan on
March 17, 1997 over the word "Lavandera Ko," under
certificate no. 97-362. Moreover, the Intellectual Property
Office is also ordered to cancel Certificate of Registration
No. 4-1995-102749, Serial No. 100556, issued on October 18,
2001, covering the work LAVANDERA KO AND DESIGN, in favor of
Fernando U. Juan.

The two aforesaid government agencies are hereby requested


to furnish this Court of the copy of their cancellation.

Cost de oficio.

SO ORDERED.3

Herein petitioner elevated the case to the CA through a notice of appeal. In his appeal, petitioner
contended that a mark is different from a copyright and not interchangeable. Petitioner Fernando insisted
that he is the owner of the service mark in question as he was able to register the same with the IPO
pursuant to Section 122 of R.A. No. 8293. Furthermore, petitioner Fernando argued that the RTC erred
in giving credence to the article of information it obtained from the internet stating that the Filipino folk
song "Lavandera Ko" was a composition of Suarez in 1942 rather than the actual pieces of evidence
presented by the parties. As such, according to petitioner, such information acquired by the RTC is
hearsay because no one was presented to testify on the veracity of such article.

Respondent Roberto, on the other hand, contended that the appeal should be dismissed outright for
raising purely questions of law. He further raised as a ground for the dismissal of the appeal, the failure
of the petitioner to cite the page references to the record as required in Section 13, paragraphs (a), (c),
(d) and (f) of Rule 44 of the Rules of Court and petitioner's failure to provide a statement of facts.
Respondent also argued that assuming that the Appellant's Brief complied with the formal requirements
of the Rules of Court, the RTC still did not err in dismissing the petitioner's answer with counterclaim
because he cannot be declared as the owner of "Lavandera Ko," since there is prior use of said mark by
another person.

The CA, in its Decision dated May 7, 2015, dismissed the petitioner's appeal based on technical grounds,
thus:

WHEREFORE, premises considered, the instant appeal is


DISMISSED for failure to comply with the requirements of
Section 13, Rule 44 and Section 1, Rule 50 of the Rules of
Court.

SO ORDERED.4

Hence, the present petition after the denial of petitioner Fernando's motion for reconsideration.
Petitioner Fernando raises the following issues:

A.

WHETHER OR NOT THE DISMISSAL OF THE APPEAL BY THE COURT OF


APPEALS ON PURELY TECHNICAL GROUNDS WAS PROPER CONSIDERING
THAT THE CASE BEFORE IT CAN BE RESOLVED BASED ON THE BRIEF
ITSELF.

B.

WHETHER OR NOT A MARK IS THE SAME AS A COPYRIGHT.

C.

WHETHER OR NOT FERNANDO U. JUAN IS THE OWNER OF THE MARK


"LAVANDERA KO."

D.

WHETHER OR NOT AN INTERNET ARTICLE IS SUPERIOR THAN ACTUAL


EVIDENCE SUBMITTED BY THE PARTIES.5

According to petitioner Fernando, the CA should have considered that the rules are there to promote and
not to defeat justice, hence, it should have decided the case based on the merits and not dismiss the
same based on a mere technicality. The rest of the issues are similar to those that were raised in
petitioner's appeal with the CA.

In his Comment6 dated April 22, 2016, respondent Roberto insists that the CA did not commit an error in
dismissing the appeal considering that the formal requirements violated by the petitioner in the
Appellant's Brief are basic, thus, inexcusable and that petitioner did not proffer any valid or substantive
reason for his non-compliance with the rules. He further argues that there was prior use of the mark
"Lavandera Ko" by another, hence, petitioner cannot be declared the owner of the said mark despite his
subsequent registration with the IPO.

The petition is meritorious.

Rules of procedure must be used to achieve speedy and efficient administration of justice and not derail
it.7 Technicality should not be allowed to stand in the way of equitably and completely resolving the rights
and obligations of the parties.8 It is, [thus] settled that liberal construction of the rules may be invoked
in situations where there may be some excusable formal deficiency or error in a pleading, provided that
the same does not subvert the essence of the proceeding and it at least connotes a reasonable attempt
at compliance with the rules.9 In Aguam v. CA,10 this Court ruled that:
x x x Technicalities, however, must be avoided. The law abhors
technicalities that impede the cause of justice. The court's
primary duty is to render or dispense justice. "A litigation
is not a game of technicalities." "Law suits, unlike duels,
are not to be won by a rapier's thrust. Technicality, when
it deserts its proper office as an aid to justice and becomes
its great hindrance and chief enemy, deserves scant
consideration from courts." Litigations must be decided on
their merits and not on technicality. Every party litigant
must be afforded the amplest opportunity for the proper and
just determination of his cause, free from the unacceptable
plea of technicalities. Thus, dismissal of appeals purely on
technical grounds is frowned upon where the policy of the
court is to encourage hearings of appeals on their merits and
the rules of procedure ought not to be applied in a very rigid,
technical sense; rules of procedure are used only to help
secure, not override substantial justice. It is a far better
and more prudent course of action for the court to excuse a
technical lapse and afford the parties a review of the case
on appeal to attain the ends of justice rather than dispose
of the case on technicality and cause a grave injustice to
the parties, giving a false impression of speedy disposal of
cases while actually resulting in more delay, if not a
miscarriage of justice.

In this case, this Court finds that a liberal construction of the rules is needed due to the novelty of the
issues presented. Besides, petitioner had a reasonable attempt at complying with the rules. After all, the
ends of justice are better served when cases are determined on the merits, not on mere technicality.11

The RTC, in dismissing the petition, ruled that neither of the parties are entitled to use the trade name
"Lavandera Ko" because the copyright of "Lavandera Ko", a song composed in 1942 by Santiago S.
Suarez belongs to the latter. The following are the RTC's reasons for such ruling:

The resolution of this Court - NO ONE OF THE HEREIN PARTIES


HAS THE RIGHT TO USE AND ENJOY "LAVANDERA KO"!

Based on the date taken from the internet - References: CCP


encyclopedia of Philippine art, vol. 6
http://www.himig.coin.ph (http://kahimyang.info /
kauswagan/articles/1420/today - in - philippine -history
this information was gathered: "In 1948, Cecil Lloyd
established the first Filipino owned record company, the
Philippine Recording System, which featured his rendition of
Filipino folk songs among them the "Lavandera ko" (1942)
which is a composition of Santiago S. Suarez". Thus, the
herein parties had made misrepresentation before this court,
to say the least, when they declared that they had coined and
created the subject mark and name. How can the herein parties
have coined and created the subject mark and work when these
parties were not yet born; when the subject mark and work had
been created and used in 1942.

The heirs of Mr. Santiago S. Suarez are the rightful owners


of subject mark and work - "Lavandera ko".

Therefore, the writ of injunction issued in the instant case


was quite not proper, hence the same shall be lifted and
revoked. This is in consonance with the finding of this court
of the origin of the subject mark and work, e.g., a music
composition of one Santiago S. Suarez in 1942.

Moreover, Section 171.1 of R.A. 8293 states: "Author" is the


natural person who has created the work." And, Section 172.1
of R.A. No. 8293 provides: Literary and artistic works,
hereinafter referred to as "works", are original
intellectual creations in the literary and artistic domain
protected from the moment of their creation and shall include
in particular:

(d) Letters;

(f) Musical compositions, with or without


words;”

Thus, the subject mark and work was created by Mr. Santiago
S. Suarez, hence, the subject mark and work belong to him,
alone.

The herein parties are just false claimants, done under oath
before this court (paragraph 4 of Roberto's affidavit,
Exhibit A TRO, page 241, Vol. I and paragraph 2 of Fernando's
affidavit, Exhibit 26 TRO, page 354, Vol. I), of the original
work of Mr. Santiago S. Suarez created in 1942.

Furthermore, Section 21 of R.A. 8293 declares: "Patentable


Inventions - any technical solution of a problem in any field
of human activity which is new, involves an inventive step
and is industrially applicable shall be patentable. It may
be, or may relate to, a product, or process, or an improvement
of any of the foregoing." Thus, the herein subject mark and
work can never be patented for the simple reason that it is
not an invention. It is a title of a music composition
originated from the mind of Mr. Santiago S. Suarez in 1942.

Thus, the proper and appropriate jurisprudence applicable to


this instant case is the wisdom of the High Court in the case
of Pearl & Dean (Phil.), Incorporation v. Shoemart,
Incorporated (G.R. No. 148222, August 15, 2003), the Supreme
Court ruled: "The scope of a copyright is confined to literary
and artistic works which are original intellectual creations
in the literary and artistic domain protected from the moment
of their creation." The Supreme Court concluded: "The
description of the art in a book, though entitled to the
benefit of copyright, lays no foundation for an exclusive
claim to the art itself. The object of the one is explanation;
the object of the other is use. The former may be secured by
copyright. The latter can only be secured, if it can be
secured at all, by letters patent." (Pearl & Dean v. Shoemart,
supra., citing the case of Baker v. Selden, 101 U.S. 99; 1879
U.S. Lexis 1888; 25 L. Ed. 841; 11 Otto 99, October, 1879
Term).

It is noted that the subject matter of Exhibit "5" (Annex 5)


Of Fernando (IPO certificate of registration) and Exhibit B
of Roberto (Certificate of Copyright Registration) could not
be considered as a literary and artistic work emanating from
the creative mind and/or hand of the herein parties for the
simple reason that the subject work was a creation of the mind
of Mr. Santiago S. Suarez in 1942. Thus, neither of the herein
parties has an exclusive right over the subject work
"Lavandera Ko" for the simple reason that herein parties were
not the maker, creator or the original one who conceptualized
it. Section 171.1 defines the author as the natural person
who has created the work. (R.A. No. 8293). Therefore, it can
be said here, then and now, that said registrations of the
word "Lavandera Ko" by the herein parties cannot be protected
by the law, Republic Act No. 8293. Section 172.2 (R.A. No.
8293) is quite crystal clear on this point, it declares:
"Works are protected by the sole fact of their creation,
irrespective of their mode or form of expressions, as well
as of their content, quality and purpose." Herein parties
were not the creators of the subject word. It was a creation
of Santiago S. Suarez in 1942.

Finally, in the case of Wilson Ong Ching Kian Chuan v. Court


of Appeals and Lorenzo Tan (G.R. No. 130360, August 15, 2001),
the Supreme Court ruled: "A person to be entitled to a
copyright must be the original creator of the work. He must
have created it by his own skill, labor and judgment without
directly copying or evasively imitating the work of another."
Again, herein parties, both, miserably failed to prove and
establish on how they have created this alleged work before
registering it with the National Library and the Intellectual
Property Office, hence their claim of ownership of the word
"Lavandera Ko" is not conclusive or herein parties are both
great pretenders and imitators. Therefore, it is hereby
declared that registration with the IPO by Fernando is hereby
cancelled, for one and many others stated herein, because of
the admission of Fernando that he coined the name from the
lyrics of a song popularized in the 1950's by singer Ruben
Tagalog. Admission is admissible without need of evidence.
(Section 4, Rule 129 of the Revised Rules of Court).

Considering that herein parties had made misrepresentations


before this court, hence, both the herein parties came to this
court with unclean hands. Thus, no damage could be awarded
to anyone of the herein parties.12

The above ruling is erroneous as it confused trade or business name with copyright.

The law on trademarks, service marks and trade names are found under Part III of Republic Act (R.A.) No.
8293, or the Intellectual Code of the Philippines, while Part IV of the same law governs copyrights.

"Lavandera Ko," the mark in question in this case is being used as a trade name or specifically, a service
name since the business in which it pertains involves the rendering of laundry services. Under Section
121.1 of R.A. No. 8293, "mark" is defined as any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall include a stamped or marked container
of goods. As such, the basic contention of the parties is, who has the better right to use "Lavandera Ko"
as a service name because Section 165.213 of the said law, guarantees the protection of trade names and
business names even prior to or without registration, against any unlawful act committed by third parties.
A cause of action arises when the subsequent use of any third party of such trade name or business name
would likely mislead the public as such act is considered unlawful. Hence, the RTC erred in denying the
parties the proper determination as to who has the ultimate right to use the said trade name by ruling
that neither of them has the right or a cause of action since "Lavandera Ko" is protected by a copyright.
By their very definitions, copyright and trade or service name are different. Copyright is the right of
literary property as recognized and sanctioned by positive law.14 An intangible, incorporeal right granted
by statute to the author or originator of certain literary or artistic productions, whereby he is invested, for
a limited period, with the sole and exclusive privilege of multiplying copies of the same and publishing
and selling them.15 Trade name, on the other hand, is any designation which (a) is adopted and used by
person to denominate goods which he markets, or services which he renders, or business which he
conducts, or has come to be so used by other, and (b) through its association with such goods, services
or business, has acquired a special significance as the name thereof, and (c) the use of which for the
purpose stated in (a) is prohibited neither by legislative enactment nor by otherwise defined public
policy.16

Section 172.1 of R.A. 8293 enumerates the following original intellectual creations in the literary and
artistic domain that are protected from the moment of their creation, thus:

172.1 Literary and artistic works, hereinafter referred to


as "works", are original intellectual creations in the
literary and artistic domain protected from the moment of
their creation and shall include in particular:

(a) Books, pamphlets, articles and other


writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations
prepared for oral delivery, whether or not
reduced in writing or other material form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions;
choreographic works or entertainment in dumb
shows;
(f) Musical compositions, with or without
words;
(g) Works of drawing, painting, architecture,
sculpture, engraving, lithography or other
works of art; models or designs for works of art;
(h) Original ornamental designs or models for
articles of manufacture, whether or not
registrable as an industrial design, and other
works of applied art;
(i) Illustrations, maps, plans, sketches,
charts and three-dimensional works relative to
geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or
technical character;
(k) Photographic works including works produced
by a process analogous to photography; lantern
slides;
(l) Audiovisual works and cinematographic works
and works produced by a process analogous to
cinematography or any process for making
audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and
artistic works.

As such, "Lavandera Ko," being a musical composition with words is protected under the copyright law
(Part IV, R.A. No. 8293) and not under the trademarks, service marks and trade names law (Part III, R.A.
No. 8293).

In connection therewith, the RTC's basis or source, an article appearing in a website,17 in ruling that the
song entitled "Lavandera Ko" is protected by a copyright, cannot be considered a subject of judicial notice
that does not need further authentication or verification. Judicial notice is the cognizance of certain facts
that judges may properly take and act on without proof because these facts are already known to
them.18 Put differently, it is the assumption by a court of a fact without need of further traditional
evidentiary support. The principle is based on convenience and expediency in securing and introducing
evidence on matters which are not ordinarily capable of dispute and are not bona fide
disputed.19 In Spouses Latip v. Chua,20 this Court expounded on the nature of judicial notice, thus:

Sections 1 and 2 of Rule 129 of the Rules of Court declare


when the taking of judicial notice is mandatory or
discretionary on the courts, thus:

SECTION 1. Judicial notice, when mandatory. - A


court shall take judicial notice, without the
introduction of evidence, of the existence and
territorial extent of states, their political
history, forms of government and symbols of
nationality, the law of nations, the admiralty
and maritime courts of the world and their seals,
the political constitution and history of the
Philippines, the official acts of the
legislative, executive and judicial departments
of the Philippines, the laws of nature, the
measure of time, and the geographical divisions.

SEC. 2. Judicial notice, when discretionary. -


A court may take judicial notice of matters which
are of public knowledge, or are capable of
unquestionable demonstration or ought to be
known to judges because of their judicial
functions.
On this point, State Prosecutors v. Muro is instructive:

I. The doctrine of judicial notice rests on the


wisdom and discretion of the courts. The power
to take judicial notice is to be exercised by
courts with caution; care must be taken that the
requisite notoriety exists; and every
reasonable doubt on the subject should be
promptly resolved in the negative.

Generally speaking, matters of judicial notice


have three material requisites: (1) the matter
must be one of common and general knowledge; (2)
it must be well and authoritatively settled and
not doubtful or uncertain; and (3) it must be
known to be within the limits of the jurisdiction
of the court. The principal guide in determining
what facts may be assumed to be judicially known
is that of notoriety. Hence, it can be said that
judicial notice is limited to facts evidenced by
public records and facts of general notoriety.

To say that a court will take judicial notice of


a fact is merely another way of saying that the
usual form of evidence will be dispensed with if
knowledge of the fact can be otherwise acquired.
This is because the court assumes that the matter
is so notorious that it will not be disputed. But
judicial notice is not judicial knowledge. The
mere personal knowledge of the judge is not the
judicial knowledge of the court, and he is not
authorized to make his individual knowledge of
a fact, not generally or professionally known,
the basis of his action. Judicial cognizance is
taken only of those matters which are "commonly"
known.

Things of "common knowledge," of which courts


take judicial notice, may be matters coming to
the knowledge of men generally in the course of
the ordinary experiences of life, or they may be
matters which are generally accepted by mankind
as true and are capable of ready and unquestioned
demonstration. Thus, facts which are
universally known, and which may be found in
encyclopedias, dictionaries or other
publications, are judicially noticed, provided
they are of such universal notoriety and so
generally understood that they may be regarded
as forming part of the common knowledge of every
person.

We reiterated the requisite of notoriety for the taking of


judicial notice in the recent case of Expertravel & Tours,
Inc. v. Court of Appeals, which cited State Prosecutors:

Generally speaking, matters of judicial notice


have three material requisites: (1) the matter
must be one of common and general knowledge; (2)
it must be well and authoritatively settled and
not doubtful or uncertain; and (3) it must be
known to be within the limits of the jurisdiction
of the court. The principal guide in determining
what facts may be assumed to be judicially known
is that of notoriety. Hence, it can be said that
judicial notice is limited to facts evidenced by
public records and facts of general notoriety.
Moreover, a judicially noticed fact must be one
not subject to a reasonable dispute in that it
is either: (1) generally known within the
territorial jurisdiction of the trial court; or
(2) capable of accurate and ready determination
by resorting to sources whose accuracy cannot
reasonably be questionable.

Things of "common knowledge," of which courts take judicial


notice, may be matters coming to the knowledge of men
generally in the course of the ordinary experiences of life,
or they may be matters which are generally accepted by mankind
as true and are capable of ready and unquestioned
demonstration. Thus, facts which are universally known, and
which may be found in encyclopedias, dictionaries or other
publications, are judicially noticed, provided, they are
such of universal notoriety and so generally understood that
they may be regarded as forming part of the common knowledge
of every person. As the common knowledge of man ranges far
and wide, a wide variety of particular facts have been
judicially noticed as being matters of common knowledge. But
a court cannot take judicial notice of any fact which, in part,
is dependent on the existence or non-existence of a fact of
which the court has no constructive knowledge.

The article in the website cited by the RTC patently lacks a requisite for it to be of judicial notice to the
court because such article is not well and authoritatively settled and is doubtful or uncertain. It must be
remembered that some articles appearing in the internet or on websites are easily edited and their
sources are unverifiable, thus, sole reliance on those articles is greatly discouraged.

Considering, therefore, the above premise, this Court deems it proper to remand the case to the RTC for
its proper disposition since this Court cannot, based on the records and some of the issues raised by both
parties such as the cancellation of petitioner's certificate of registration issued by the Intellectual
Property Office, make a factual determination as to who has the better right to use the
trade/business/service name, "Lavandera Ko."

WHEREFORE, the Petition for Review on Certiorari under Rule 45 of the Rules of Court dated January 25,
2016, of petitioner Fernando U. Juan is GRANTED. Consequently, the Decision dated May 7, 2015 and
Resolution dated December 4, 2015 of the Court of Appeals are REVERSED andSET ASIDE. This Court,
however, ORDERS the REMAND of this case to the RTC for its prompt disposition.

SO ORDERED.

G.R. No. 113388 September 5, 1997

ANGELITA MANZANO, petitioner,


vs.
COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to NEW UNITED
FOUNDRY MANUFACTURING CORPORATION, respondents.

BELLOSILLO, J.:

The primary purpose of the patent system is not the reward of the individual but the
advancement of the arts and sciences. The function of a patent is to add to the sum of
useful knowledge and one of the purposes of the patent system is to encourage
dissemination of information concerning discoveries and inventions. This is a matter which
is properly within the competence of the Patent Office the official action of which has the
presumption of correctness and may not be interfered with in the absence of new
evidence carrying thorough conviction that the Office has erred. Since the Patent Office is
an expert body preeminently qualified to determine questions of patentability, its findings
must be accepted if they are consistent with the evidence, with doubts as to patentability
resolved in favor of the Patent Office. 1

Petitioner Angelita Manzano filed with the Philippine Patent Office on 19 February 1982
an action for the cancellation of Letters Patent No. UM-4609 for a gas burner registered in
the name of respondent Melecia Madolaria who subsequently assigned the letters patent
to New United Foundry and Manufacturing Corporation (UNITED FOUNDRY, for brevity).
Petitioner alleged that (a) the utility model covered by the letters patent, in this case, an
LPG gas burner, was not inventive, new or useful; (b) the specification of the letters patent
did not comply with the requirements of Sec. 14, RA No. 165, as amended; (c) respondent
Melecia Madolaria was not the original, true and actual inventor nor did she derive her
rights from the original, true and actual inventor of the utility model covered by the letters
patent; and, (d) the letters patent was secured by means of fraud or misrepresentation. In
support of her petition for cancellation petitioner further alleged that (a) the utility model
covered by the letters patent of respondent had been known or used by others in the
Philippines for more than one (1) year before she filed her application for letters patent on
9 December 1979; (b) the products which were produced in accordance with the utility
model covered by the letters patent had been in public use or on sale in the Philippines for
more than one (1) year before the application for patent therefor was filed.

Petitioner presented the following documents which she correspondingly marked as


exhibits: (a) affidavit of petitioner alleging the existence of prior art, marked Exh. "A;" (b) a
brochure distributed by Manila Gas Corporation disclosing a pictorial representation of
Ransome Burner made by Ransome Torch and Burner Company, USA, marked Exh. "D;"
and, (c) a brochure distributed by Esso Gasul or Esso Standard Eastern, Inc., of the
Philippines showing a picture of another similar burner with top elevation view and another
perspective view of the same burner, marked Exh. "E."

Testifying for herself petitioner narrated that her husband Ong Bun Tua worked as a
helper in the UNITED FOUNDRY where respondent Melecia Madolaria used to be
affiliated with from 1965 to 1970; that Ong helped in the casting of an LPG burner which
was the same utility model of a burner for which Letters Patent No. UM-4609 was issued,
and that after her husband's separation from the shop she organized Besco Metal
Manufacturing (BESCO METAL, for brevity) for the casting of LPG burners one of which
had the configuration, form and component parts similar to those being manufactured by
UNITED FOUNDRY. Petitioner presented in evidence an alleged model of an LPG burner
marked Exh. "K" and covered by the Letters Patent of respondent, and testified that it was
given to her in January 1982 by one of her customers who allegedly acquired it from
UNITED FOUNDRY. Petitioner also presented in evidence her own model of an LPG
burner called "Ransome" burner marked Exh. "L," which was allegedly manufactured in
1974 or 1975 and sold by her in the course of her business operation in the name of
BESCO METAL. Petitioner claimed that this "Ransome" burner (Exh. "L") had the same
configuration and mechanism as that of the model which was patented in favor of private
respondent Melecia Madolaria. Also presented by petitioner was a burner cup of an
imported "Ransome" burner marked Exh "M" which was allegedly existing even before the
patent application of private respondent.

Petitioner presented two (2) other witnesses, namely, her husband Ong Bun Tua and
Fidel Francisco. Ong testified that he worked as a helper in the UNITED FOUNDRY from
1965 to 1970 where he helped in the casting of LPG burners with the same form,
configuration and mechanism as that of the model covered by the Letters Patent issued to
private respondent. Francisco testified that he had been employed with the Manila Gas
Corporation from 1930 to 1941 and from 1952 up to 1969 where he retired as supervisor
and that Manila Gas Corporation imported "Ransome" burners way back in 1965 which
were advertised through brochures to promote their sale.

Private respondent, on the other hand, presented only one witness, Rolando Madolaria,
who testified, among others, that he was the General Supervisor of the UNITED
FOUNDRY in the foundry, machine and buffing section; that in his early years with the
company, UNITED FOUNDRY was engaged in the manufacture of different kinds of gas
stoves as well as burners based on sketches and specifications furnished by customers;
that the company manufactured early models of single-piece types of burners where the
mouth and throat were not detachable; that in the latter part of 1978 respondent Melecia
Madolaria confided in him that complaints were being brought to her attention concerning
the early models being manufactured; that he was then instructed by private respondent
to cast several experimental models based on revised sketches and specifications; that
private respondent again made some innovations; that after a few months, private
respondent discovered the solution to all the defects of the earlier models and, based on
her latest sketches and specifications, he was able to cast several models incorporating
the additions to the innovations introduced in the models. Various tests were conducted
on the latest model in the presence and under the supervision of Melecia Madolaria and
they obtained perfect results. Rolando Madolaria testified that private respondent decided
to file her application for utility model patent in December 1979.

On 7 July 1986 the Director of Patents Cesar C. Sandiego issued Decision No. 86-56
denying the petition for cancellation and holding that the evidence of petitioner was not
able to establish convincingly that the patented utility model of private respondent was
anticipated. Not one of the various pictorial representations of business clearly and
convincingly showed that the devices presented by petitioner was identical or substantially
identical with the utility model of the respondent. The decision also stated that even
assuming that the brochures depicted clearly each and every element of the patented gas
burner device so that the prior art and patented device became identical although in truth
they were not, they could not serve as anticipatory bars for the reason that they were
undated. The dates when they were distributed to the public were not indicated and,
therefore, were useless prior art references. The records and evidence also do not
support the petitioner's contention that Letters Patent No. UM-4609 was obtained by
means of fraud and/or misrepresentation. No evidence whatsoever was presented by
petitioner to show that the then applicant Melecia Madolaria withheld with intent to deceive
material facts which, if disclosed, would have resulted in the refusal by the Philippine
Patent Office to issue the Letters Patent under inquiry.

Petitioner elevated the decision of the Director of Patents to the Court of Appeals which on
15 October 1993 affirmed the decision of the Director of Patents. Hence, this petition for
review on certiorari alleging that the Court of Appeals erred (a) in relying on imaginary
differences which in actuality did not exist between the model of private respondent
covered by Letters Patent No. UM-4609 and the previously known model of Esso
Standard Eastern, Inc., and Manila Gas Corporation, making such imaginary differences
grounded entirely on speculation, surmises and conjectures; (b) in rendering judgment
based on misapprehension of facts; (c) in relying mainly on the testimony of private
respondent's sole witness Rolando Madolaria; and, (d) in not cancelling Letters Patent No.
UM-4609 in the name of private respondent.

Petitioner submits that the differences cited by the Court of Appeals between the utility
model of private respondent and the models of Manila Gas Corporation and Esso
Standard Eastern, Inc., are more imaginary than real. She alleges that based on Exhs.
"E," "E-1," "F" and "F-1" or the brochures of Manila Gas Corporation and Esso Standard
Eastern, Inc., presented by petitioner, the cup-shaped burner mouth and threaded hole on
the side are shown to be similar to the utility model of private respondent. The exhibits
also show a detachable burner mouth having a plurality of upwardly existing undulations
adopted to act as gas passage when the cover is attached to the top of said cup-shaped
mouth all of which are the same as those in the patented model. Petitioner also denies as
substantial difference the short cylindrical tube of the burner mouth appearing in the
brochures of the burners being sold by Manila Gas Corporation and the long cylindered
tube of private respondent's model of the gas burner.
Petitioner argues that the actual demonstration made during the hearing disclosed the
similarities in form, operation and mechanism and parts between the utility model of
private respondent and those depicted in the brochures. The findings of the Patent Office
and the Court of Appeals that the brochures of Manila Gas Corporation and Esso
Standard Eastern, Inc., are undated cannot overcome the fact of their circulation before
private respondent filed her application for utility model patent. Petitioner thus asks this
Court to take judicial notice of the fact that Esso Standard Eastern, Inc., disappeared
before 1979 and reappeared only during the Martial Law years as Petrophil Corporation.
Petitioner also emphasizes that the brochures indicated the telephone number of Manila
Gas Corporation as 5-79-81 which is a five (5) numbered telephone number existing
before 1975 because telephones in Metro Manila started to have six (6) numbers only
after that year.

Petitioner further contends that the utility model of private respondent is absolutely similar
to the LPG burner being sold by petitioner in 1975 and 1976, and also to the "Ransome"
burner depicted in the old brochures of Manila Gas Corporation and Esso Standard
Eastern, Inc., fabricated by Ransome Torch and Burner Company of Oakland, California,
USA, especially when considered through actual physical examination, assembly and
disassembly of the models of petitioner and private respondent. Petitioner faults the Court
of Appeals for disregarding the testimonies of Ong Bun Tua and Fidel Francisco for their
failure to produce documents on the alleged importation by Manila Gas Corporation of
"Ransome" burners in 1965 which had the same configuration, form and mechanism as
that of the private respondent's patented model.

Finally, it is argued that the testimony of private respondent's lone witness Rolando
Madolaria should not have been given weight by the Patent Office and the Court of
Appeals because it contained mere after-thoughts and pretensions.

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

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

Further, Sec. 55 of the same law provides —

Sec. 55. Design patents and patents for utility models. — (a) Any new, original and
ornamental design for an article of manufacture and (b) any new model of implements or
tools or of any industrial product or of part of the same, which does not possess the quality
of invention, but which is of practical utility by reason of its form, configuration,
construction or composition, may be protected by the author thereof, the former by a
patent for a design and the latter by a patent for a utility model, in the same manner and
subject to the same provisions and requirements as relate to patents for inventions insofar
as they are applicable except as otherwise herein provided.

The element of novelty is an essential requisite of the patentability of an invention or


discovery. If a device or process has been known or used by others prior to its invention or
discovery by the applicant, an application for a patent therefor should be denied; and if the
application has been granted, the court, in a judicial proceeding in which the validity of the
patent is drawn in question, will hold it void and ineffective. It has been repeatedly held
2

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

In issuing Letters Patent No. UM-4609 to Melecia Madolaria for an "LPG Burner" on 22
July 1981, the Philippine Patent Office found her invention novel and patentable. The
issuance of such patent creates a presumption which yields only to clear and cogent
evidence that the patentee was the original and first inventor. The burden of proving want
of novelty is on him who avers it and the burden is a heavy one which is met only by clear
and satisfactory proof which overcomes every reasonable doubt. Hence, a utility model
4

shall not be considered "new" if before the application for a patent it has been publicly
known or publicly used in this country or has been described in a printed publication or
publications circulated within the country, or if it is substantially similar to any other utility
model so known, used or described within the country. 5

As found by the Director of Patents, the standard of evidence sufficient to overcome the
presumption of legality of the issuance of UM-4609 to respondent Madolaria was not
legally met by petitioner in her action for the cancellation of the patent. Thus the Director
of Patents explained his reasons for the denial of the petition to cancel private
respondent's patent —

Scrutiny of Exhs. "D" and "E" readily reveals that the utility model (LPG Burner) is not
anticipated. Not one of the various pictorial representations of burners clearly and
convincingly show that the device presented therein is identical or substantially identical in
construction with the aforesaid utility model. It is relevant and material to state that in
determining whether novelty or newness is negatived by any prior art, only one item of the
prior art may be used at a time. For anticipation to occur, the prior art must show that each
element is found either expressly or described or under principles of inherency in a single
prior art reference or that the claimed invention was probably known in a single prior art
device or practice. (Kalman v. Kimberly Clark, 218 USPQ 781, 789)

Even assuming gratia arguendi that the aforesaid brochures do depict clearly on all fours
each and every element of the patented gas burner device so that the prior art and the
said patented device become identical, although in truth they are not, they cannot serve
as anticipatory bars for the reason that they are undated. The dates when they were
distributed to the public were not indicated and, therefore, they are useless prior art
references.

xxx xxx xxx

Furthermore, and more significantly, the model marked Exh. "K" does not show whether
or not it was manufactured and/or cast before the application for the issuance of patent for
the LPG burner was filed by Melecia Madolaria.

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

xxx xxx xxx

But a careful examination of Exh. "L" would show that it does not bear the word
"Ransome" which is the burner referred to as the product being sold by the Petitioner. This
is not the way to prove that Exh. "L" anticipates Letters Patent No. UM-4609 through Exhs.
"C" and "D." Another factor working against the Petitioner's claims is that an examination
of Exh. "L" would disclose that there is no indication of the time or date it was
manufactured. This Office, thus has no way of determining whether Exh. "L" was really
manufactured before the filing of the aforesaid application which matured into Letters
Patent No. UM-4609, subject matter of the cancellation proceeding.

At this juncture, it is worthwhile to point out that petitioner also presented Exh. "M" which
is the alleged burner cup of an imported "Ransome" burner. Again, this Office finds the
same as unreliable evidence to show anticipation. It observed that there is no date
indicated therein as to when it was manufactured and/or imported before the filing of the
application for issuance of patent of the subject utility model. What is more, some
component parts of Exh. "M" are missing, as only the cup was presented so that the same
could not be compared to the utility model (subject matter of this case) which consists of
several other detachable parts in combination to form the complete LPG burner.

xxx xxx xxx

It must likewise be pointed out that Ong Bun Tua testified on the brochures allegedly of
Manila Gas and of Esso Gasul marked Exhs. "E" and "F" and on the alleged fact that
Manila Gas Corporation was importing from the United States "Ransome" burners. But
the same could not be given credence since he himself admitted during
cross-examination that he has never been connected with Manila Gas Corporation. He
could not even present any importation papers relating to the alleged imported ransome
burners. Neither did his wife. 6

The above findings and conclusions of the Director of Patent were reiterated and affirmed
by the Court of Appeals. 7

The validity of the patent issued by the Philippine Patent Office in favor of private
respondent and the question over the inventiveness, novelty and usefulness of the
improved model of the LPG burner are matters which are better determined by the Patent
Office. The technical staff of the Philippine Patent Office composed of experts in their field
has by the issuance of the patent in question accepted private respondent's model of gas
burner as a discovery. There is a presumption that the Office has correctly determined the
patentability of the model and such action must not be interfered with in the absence of
8

competent evidence to the contrary.

The rule is settled that the findings of fact of the Director of Patents, especially when
affirmed by the Court of Appeals, are conclusive on this Court when supported by
substantial evidence. Petitioner has failed to show compelling grounds for a reversal of
the findings and conclusions of the Patent Office and the Court of Appeals.

The alleged failure of the Director of Patents and the Court of Appeals to accord
evidentiary weight to the testimonies of the witnesses of petitioner showing anticipation is
not a justification to grant the petition. Pursuant to the requirement of clear and convincing
evidence to overthrow the presumption of validity of a patent, it has been held that oral
testimony to show anticipation is open to suspicion and if uncorroborated by cogent
evidence, as what occurred in this case, it may be held insufficient. 9

Finally, petitioner would want this Court to review all over again the evidence she
presented before the Patent Office. She argues that contrary to the decision of the Patent
Office and the Court of Appeals, the evidence she presented clearly proves that the
patented model of private respondent is no longer new and, therefore, fraud attended the
acquisition of patent by private respondent.

It has been held that the question on priority of invention is one of fact. Novelty and utility
are likewise questions of fact. The validity of patent is decided on the basis of factual
inquiries. Whether evidence presented comes within the scope of prior art is a factual
issue to be resolved by the Patent Office. There is question of fact when the doubt or
10

difference arises as to the truth or falsehood of alleged facts or when the query
necessarily invites calibration of the whole evidence considering mainly the credibility of
witnesses, existence and relevance of specific surrounding circumstances, their relation
to each other and to the whole and the probabilities of the situation. 11

Time and again we have held that it is not the function of the Supreme Court to analyze or
weigh all over again the evidence and credibility of witnesses presented before the lower
tribunal or office. The Supreme Court is not a trier of facts. Its jurisdiction is limited to
reviewing and revising errors of law imputed to the lower court, its findings of fact being
conclusive and not reviewable by this Court.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals affirming
that of the Philippine Patent Office is AFFIRMED. Costs against petitioner.

SO ORDERED.

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 for the aforesaid invention was issued
1

to petitioner for a term of seventeen (17) years.

The letters patent provides in its claims that the patented invention consisted of a new
2

compound named methyl 5 propylthio-2-benzimidazole carbamate and the methods or


compositions utilizing the compound as an active ingredient in fighting infections caused
by gastrointestinal parasites and lungworms in animals such as swine, sheep, cattle,
goats, horses, and even pet animals.
Tryco Pharma Corporation (private respondent) is a domestic corporation that
manufactures, distributes and sells veterinary products including Impregon, a drug that
has Albendazole for its active ingredient and is claimed to be effective against
gastro-intestinal roundworms, lungworms, tapeworms and fluke infestation in carabaos,
cattle and goats.

Petitioner sued private respondent for infringement of patent and unfair competition before
the Caloocan City Regional Trial Court (RTC). It claimed that its patent covers or includes
3

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 as well as committed unfair
4

competition under Article 189, paragraph 1 of the Revised Penal Code and Section 29 of
Republic Act No. 166 (The Trademark Law) for advertising and selling as its own the drug
Impregon although the same contained petitioner’s patented Albendazole. 5

On motion of petitioner, Branch 125 of the Caloocan RTC issued a temporary restraining
order against private respondent enjoining it from committing acts of patent infringement
and unfair competition. A writ of preliminary injunction was subsequently issued.
6 7

Private respondent in its Answer averred that Letters Patent No. 14561 does not cover
8

the substance Albendazole for nowhere in it does that word appear; that even if the patent
were to include Albendazole, such substance is unpatentable; that the Bureau of Food
and Drugs allowed it to manufacture and market Impregon with Albendazole as its known
ingredient; that there is no proof that it passed off in any way its veterinary products as
those of petitioner; that Letters Patent No. 14561 is null and void, the application for the
issuance thereof having been filed beyond the one year period from the filing of an
application abroad for the same invention covered thereby, in violation of Section 15 of
Republic Act No. 165 (The Patent Law); and that petitioner is not the registered patent
holder.

Private respondent lodged a Counterclaim against petitioner for such amount of actual
damages as may be proven; ₱1,000,000.00 in moral damages; ₱300,000.00 in exemplary
damages; and ₱150,000.00 in attorney’s fees.

Finding for private respondent, the trial court rendered a Decision dated July 23, 1991, 9

the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, plaintiff’s complaint should be, as it is hereby,


DISMISSED. The Writ of injunction issued in connection with the case is hereby ordered
DISSOLVED.

The Letters Patent No. 14561 issued by the then Philippine Patents Office is hereby
declared null and void for being in violation of Sections 7, 9 and 15 of the Patents Law.

Pursuant to Sec. 46 of the Patents Law, the Director of Bureau of Patents is hereby
directed to cancel Letters Patent No. 14561 issued to the plaintiff and to publish such
cancellation in the Official Gazette.

Defendant Tryco Pharmaceutical Corporation is hereby awarded P330,000.00 actual


damages and P100,000.00 attorney’s fees as prayed for in its counterclaim but said
amount awarded to defendant is subject to the lien on correct payment of filing fees.
SO ORDERED. (Underscoring supplied)

On appeal, the Court of Appeals, by Decision of April 21, 1995, upheld the trial court’s
10

finding that private respondent was not liable for any infringement of the patent of
petitioner in light of the latter’s failure to show that Albendazole is the same as the
compound subject of Letters Patent No. 14561. Noting petitioner’s admission of the
issuance by the U.S. of a patent for Albendazole in the name of Smith Kline and French
Laboratories which was petitioner’s former corporate name, the appellate court
considered the U.S. patent as implying that Albendazole is different from methyl 5
propylthio-2-benzimidazole carbamate. It likewise found that private respondent was not
guilty of deceiving the public by misrepresenting that Impregon is its product.

The appellate court, however, declared that Letters Patent No. 14561 was not void as it
sustained petitioner’s explanation that Patent Application Serial No. 18989 which was filed
on October 8, 1976 was a divisional application of Patent Application Serial No. 17280
filed on June 17, 1975 with the Philippine Patent Office, well within one year from
petitioner’s filing on June 19, 1974 of its Foreign Application Priority Data No. 480,646 in
the U.S. covering the same compound subject of Patent Application Serial No. 17280.

Applying Section 17 of the Patent Law, the Court of Appeals thus ruled that Patent
Application Serial No. 18989 was deemed filed on June 17, 1995 or still within one year
from the filing of a patent application abroad in compliance with the one-year rule under
Section 15 of the Patent Law. And it rejected the submission that the compound in Letters
Patent No. 14561 was not patentable, citing the jurisprudentially established presumption
that the Patent Office’s determination of patentability is correct. Finally, it ruled that
petitioner established itself to be the one and the same assignee of the patent
notwithstanding changes in its corporate name. Thus the appellate court disposed:

WHEREFORE, the judgment appealed from is AFFIRMED with the MODIFICATION that
the orders for the nullification of Letters Patent No. 14561 and for its cancellation are
deleted therefrom.

SO ORDERED.

Petitioner’s motion for reconsideration of the Court of Appeals’ decision having been
denied the present petition for review on certiorari was filed, assigning as errors the
11 12

following:

I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT


ALBENDAZOLE, THE ACTIVE INGREDIENT IN TRYCO’S "IMPREGON" DRUG, IS
INCLUDED IN PETITIONER’S LETTERS PATENT NO. 14561, AND THAT
CONSEQUENTLY TRYCO IS ANSWERABLE FOR PATENT INFRINGEMENT.

II. THE COURT OF APPEALS GRAVELY ERRED IN AWARDING TO PRIVATE


RESPONDENT TRYCO PHARMA CORPORATION P330,000.00 ACTUAL DAMAGES
AND P100,000.00 ATTORNEY’S FEES.

Petitioner argues that under the doctrine of equivalents for determining patent
infringement, Albendazole, the active ingredient it alleges was appropriated by private
respondent for its drug Impregon, is substantially the same as methyl 5
propylthio-2-benzimidazole carbamate covered by its patent since both of them are meant
to combat worm or parasite infestation in animals. It cites the "unrebutted" testimony of its
witness Dr. Godofredo C. Orinion (Dr. Orinion) that the chemical formula in Letters Patent
No. 14561 refers to the compound Albendazole. Petitioner adds that the two substances
substantially do the same function in substantially the same way to achieve the same
results, thereby making them truly identical. Petitioner thus submits that the appellate
court should have gone beyond the literal wordings used in Letters Patent No. 14561,
beyond merely applying the literal infringement test, for in spite of the fact that the word
Albendazole does not appear in petitioner’s letters patent, it has ably shown by evidence
its sameness with methyl 5 propylthio-2-benzimidazole carbamate.

Petitioner likewise points out that its application with the Philippine Patent Office on
account of which it was granted Letters Patent No. 14561 was merely a divisional
application of a prior application in the U. S. which granted a patent for Albendazole.
Hence, petitioner concludes that both methyl 5 propylthio-2-benzimidazole carbamate and
the U.S.-patented Albendazole are dependent on each other and mutually contribute to
produce a single result, thereby making Albendazole as much a part of Letters Patent No.
14561 as the other substance is.

Petitioner concedes in its Sur-Rejoinder that


13
although methyl 5
propylthio-2-benzimidazole carbamate is not identical with Albendazole, the former is an
improvement or improved version of the latter thereby making both substances still
substantially the same.

With respect to the award of actual damages in favor of private respondent in the amount
of ₱330,000.00 representing lost profits, petitioner assails the same as highly speculative
and conjectural, hence, without basis. It assails too the award of ₱100,000.00 in attorney’s
fees as not falling under any of the instances enumerated by law where recovery of
attorney’s fees is allowed.

In its Comment, private respondent contends that application of the doctrine of


14

equivalents would not alter the outcome of the case, Albendazole and methyl 5
propylthio-2-benzimidazole carbamate being two different compounds with different
chemical and physical properties. It stresses that the existence of a separate U.S. patent
for Albendazole indicates that the same and the compound in Letters Patent No. 14561
are different from each other; and that since it was on account of a divisional application
that the patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by
definition of a divisional application, such a compound is just one of several independent
inventions alongside Albendazole under petitioner’s original patent application.

As has repeatedly been held, only questions of law may be raised in a petition for review
on certiorari before this Court. Unless the factual findings of the appellate court are
mistaken, absurd, speculative, conjectural, conflicting, tainted with grave abuse of
discretion, or contrary to the findings culled by the court of origin, this Court does not
15

review them.

From an examination of the evidence on record, this Court finds nothing infirm in the
appellate court’s conclusions with respect to the principal issue of whether private
respondent committed patent infringement to the prejudice of petitioner.

The burden of proof to substantiate a charge for patent infringement rests on the plaintiff.16

In the case at bar, petitioner’s evidence consists primarily of its Letters Patent No. 14561,
and the testimony of Dr. Orinion, its general manager in the Philippines for its Animal
Health Products Division, by which it sought to show that its patent for the compound
methyl 5 propylthio-2-benzimidazole carbamate also covers the substance Albendazole.
From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions
thereof, no mention is made of the compound Albendazole. All that the claims disclose are:
the covered invention, that is, the compound methyl 5 propylthio-2-benzimidazole
carbamate; the compound’s being anthelmintic but nontoxic for animals or its ability to
destroy parasites without harming the host animals; and the patented methods,
compositions or preparations involving the compound to maximize its efficacy against
certain kinds of parasites infecting specified animals.

When the language of its claims is clear and distinct, the patentee is bound thereby and
may not claim anything beyond them. And so are the courts bound which may not add to
17

or detract from the claims matters not expressed or necessarily implied, nor may they
enlarge the patent beyond the scope of that which the inventor claimed and the patent
office allowed, even if the patentee may have been entitled to something more than the
words it had chosen would include. 18

It bears stressing that the mere absence of the word Albendazole in Letters Patent No.
14561 is not determinative of Albendazole’s non-inclusion in the claims of the patent.
While Albendazole is admittedly a chemical compound that exists by a name different
from that covered in petitioner’s letters patent, the language of Letter Patent No. 14561
fails to yield anything at all regarding Albendazole. And no extrinsic evidence had been
adduced to prove that Albendazole inheres in petitioner’s patent in spite of its omission
therefrom or that the meaning of the claims of the patent embraces the same.

While petitioner concedes that the mere literal wordings of its patent cannot establish
private respondent’s infringement, it urges this Court to apply the doctrine of equivalents.

The doctrine of equivalents provides that an infringement also takes place when a device
appropriates a prior invention by incorporating its innovative concept and, although with
some modification and change, performs substantially the same function in substantially
the same way to achieve substantially the same result. Yet again, a scrutiny of
19

petitioner’s evidence fails to convince this Court of the substantial sameness of


petitioner’s patented compound and Albendazole. While both compounds have the effect
of neutralizing parasites in animals, identity of result does not amount to infringement of
patent unless Albendazole operates in substantially the same way or by substantially the
same means as the patented compound, even though it performs the same function and
achieves the same result. In other words, the principle or mode of operation must be
20

the same or substantially the same. 21

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


test, the patentee having the burden to show that all three components of such
equivalency test are met.22

As stated early on, petitioner’s evidence fails to explain how Albendazole is in every
essential detail identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from
the fact that Albendazole is an anthelmintic agent like methyl 5 propylthio-2-benzimidazole
carbamate, nothing more is asserted and accordingly substantiated regarding the method
or means by which Albendazole weeds out parasites in animals, thus giving no
information on whether that method is substantially the same as the manner by which
petitioner’s compound works. The testimony of Dr. Orinion lends no support to petitioner’s
cause, he not having been presented or qualified as an expert witness who has the
knowledge or expertise on the matter of chemical compounds.
As for the concept of divisional applications proffered by petitioner, it comes into play
when two or more inventions are claimed in a single application but are of such a nature
that a single patent may not be issued for them. The applicant thus is required "to divide,"
23

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." What
24
this only means is that petitioner’s methyl 5
propylthio-2-benzimidazole carbamate is an invention distinct from the other inventions
claimed in the original application divided out, Albendazole being one of those other
inventions. Otherwise, methyl 5 propylthio-2-benzimidazole carbamate would not have
been the subject of a divisional application if a single patent could have been issued for it
as well as Albendazole. 1âwphi1

The foregoing discussions notwithstanding, this Court does not sustain the award of
actual damages and attorney’s fees in favor of private respondent. The claimed actual
damages of ₱330,000.00 representing lost profits or revenues incurred by private
respondent as a result of the issuance of the injunction against it, computed at the rate of
30% of its alleged ₱100,000.00 monthly gross sales for eleven months, were supported
by the testimonies of private respondent’s President and Executive Vice-President that
25

the average monthly sale of Impregon was ₱100,000.00 and that sales plummeted to zero
after the issuance of the injunction. While indemnification for actual or compensatory
26

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. The testimonies of private
27

respondent’s officers are not the competent proof or best evidence obtainable to establish
its right to actual or compensatory damages for such damages also require presentation
of documentary evidence to substantiate a claim therefor. 28

In the same vein, this Court does not sustain the grant by the appellate court of attorney’s
fees to private respondent anchored on Article 2208 (2) of the Civil Code, private
respondent having been allegedly forced to litigate as a result of petitioner’s suit. Even if a
claimant is compelled to litigate with third persons or to incur expenses to protect its rights,
still attorney’s fees may not be awarded where no sufficient showing of bad faith could be
reflected in a party’s persistence in a case other than an erroneous conviction of the
righteousness of his cause. There exists no evidence on record indicating that petitioner
29

was moved by malice in suing private respondent.

This Court, however, grants private respondent temperate or moderate damages in the
amount of ₱20,000.00 which it finds reasonable under the circumstances, it having
suffered some pecuniary loss the amount of which cannot, from the nature of the case, be
established with certainty. 30

WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with
MODIFICATION. The award of actual or compensatory damages and attorney’s fees to
private respondent, Tryco Pharma Corporation, is DELETED; instead, it is hereby
awarded the amount of P20,000.00 as temperate or moderate damages.

SO ORDERED.

Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Corona, JJ., concur.

G.R. No. L-32160 January 30, 1982


DOMICIANO A. AGUAS, petitioner,
vs.
CONRADO G. DE LEON and COURT OF APPEALS, respondents.

FERNANDEZ, J.:

This is a petition for certiorari to review the decision of the Court of Appeals in CA G.R.
NO. 37824-R entitled "Conrado G. de Leon, plaintiff-appelle vs. Dominciano Aguas and
F.H. Aquino and Sons, defendants-appellants," the dispositive portion of which reads:

WHEREFORE, with the modification that plintiff-applee's award of moral damages is


hereby redured to P3,000.00, the appealed judgment is hereby affirmed, in all othe
respects, with costs against appellants. 1

On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal at Quezon
City a complaint for infringement of patent against Domiciano A. Aguas and F. H. Aquino and
Sons alleging that being the original first and sole inventor of certain new and useful
improvements in the process of making mosaic pre-cast tiles, he lawfully filed and prosecuted
an application for Philippine patent, and having complied in all respects with the statute and
the rules of the Philippine Patent Office, Patent No. 658 was lawfully granted and issued to him;
that said invention was new, useful, not known or used by others in this country before his
invention thereof, not patented or described in any printed publication anywhere before his
invention thereof, or more than one year prior to his application for patent thereof, not patented
in any foreign country by him or his legal representatives on application filed more than one
year prior to his application in this country; that plaintiff has the exclusive license to make, use
and sell throughout the Philippines the improvements set forth in said Patent No. 658; that the
invention patented by said Patent No. 658 is of great utility and of great value to plaintiff and of
great benefit to the public who has demanded and purchased tiles embodying the said
invention in very large quantities and in very rapidly increasing quant ies; that he has complied
with the Philippine statues relating to marking patented tiles sold by him; that the public has in
general acknowledged the validity of said Patent No. 658, and has respected plaintiff's right
therein and thereunder; that the defendant Domiciano A. Aguas infringed Letters of Patent No.
658 by making, using and selling tiles embodying said patent invention and that defendant F.
H. Aquino & Sons is guilty of infringement by making and furnishing to the defendant
Domiciano A. Aguas the engravings, castings and devices designed and intended of tiles
embodying plaintiff;s patented invention; that he has given direct and personal notice to the
defendants of their said acts of infringement and requested them to desist, but nevertheless,
defendants have refused and neglected to desist and have disregarded such request, and
continue to so infringe causing great and irreparable damage to plaintiff; that if the aforesaid
infringement is permitted to continue, further losses and damages and irreparable injury will be
sustained by the plaintiff; that there is an urgent need for the immediate issuance of a
preliminary injunction; that as a result of the defendants' wrongful conduct, plaintiff has
suffered and the defendants are liable to pay him, in addition to actual damages and loss of
profits which would be determined upon proper accounting, moral and exemplary or corrective
damages in the sum of P90,000.00; that plaintiff has been compelled to go to court for the
protection and enforcement of his and to engage the service of counsel, thereby incurring
attorney's fees and expenses of litigation in the sum of P5,000.00. 2

On April 14, 1962, an order granting the plaintiff's petition for a Writ of Preliminary Injunction
was issued. 3
On May 23, 1962, the defendant Domiciano A. Aguas filed his answer denying the
allegations of the plaintiff and alleging that: the plaintiff is neither the original first nor sole
inventor of the improvements in the process of making mosaic pre-cast tiles, the same
having been used by several tile-making factories in the Philippines and abroad years
before the alleged invention by de Leon; that Letters Patent No. 658 was unlawfully
acquired by making it appear in the application in relation thereto that the process is new
and that the plaintiff is the owner of the process when in truth and in fact the process
incorporated in the patent application has been known and used in the Philippines by
almost all tile makers long before the alleged use and registration of patent by plaintiff
Conrado G. de Leon; that the registration of the alleged invention did not confer any right
on the plaintiff because the registration was unlawfully secured and was a result of the
gross misrepresentation on the part of the plaintiff that his alleged invention is a new and
inventive process; that the allegation of the plaintiff that Patent No. 658 is of great value to
plaintiff and of great benefit to the public is a mere conclusion of the plaintiff, the truth
being that a) the invention of plaintiff is neither inventive nor new, hence, it is not
patentable, b) defendant has been granted valid patents (Patents No. 108, 109, 110
issued on December 21, 1961) on designs for concrete decorative wall tiles; and c) that he
can not be guilty of infringement because his products are different from those of the
plaintiff. 4

The trial court rendered a decision dated December 29, 1965, the dispositive portion of
which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the


defendants:

1. Declaring plaintiff's patent valid and infringed:

2. Granting a perpetual injunction restraining defendants, their officers, agents,


employees, associates, confederates, and any and all persons acting under their authority
from making and/or using and/or vending tiles embodying said patented invention or
adapted to be used in combination embodying the same, and from making, manufacturing,
using or selling, engravings, castings and devises designed and intended for use in
apparatus for the making of tiles embodying plaintiff's patented invention, and from
offering or advertising so to do, and from aiding and abetting or in any way contributing to
the infringement of said patent;

3. Ordering that each and all of the infringing tiles, engravings, castings and devices,
which are in the possession or under the control of defendants be delivered to plaintiff;

4. Ordering the defendants to jointly and severally pay to the plaintiff the following sums of
money, to wit:

(a) P10,020.99 by way of actual damages;

(b) P50,000.00 by way of moral damages;

(c) P5,000.00 by way of exemplary damages;

(d) P5,000.00 by way of attorney's fees and

(e) costs of suit. 5


The defendant Domiciano Aguas appealed to the Court of Appeals, assigning the following
errors. 6

THE TRIAL COURT ERRED IN NOT HOLDING THAT PLAINTIFF'S PATENT FOR THE
'PROCESS OF MAKING MOSAIC PRE-CAST TILE' IS INVALID BECAUSE SAID
ALLEGED PROCESS IS NOT AN INVENTION OR DISCOVERY AS THE SAME HAS
ALREADY LONG BEEN USED BY TILE MANUFACTURERS BOTH ABROAD AND IN
THIS COUNTRY.

II

THE TRIAL COURT ERRED IN HOLDING THAT THE PATENT OF PLAINTIFF IS VALID
BECAUSE IT IS AN IMPROVEMENT OR THE AGE-OLD TILE MAKING SYSTEM.

III

THE TRIAL COURT ERRED IN NOT ORDERING THE CANCELLATION OF


PLAINTIFF-APPELLEE'S LETTERS PATENT NO. 658, EXHIBIT L, IN ACCORDANCE
WITH THE PERTINENT PROVISIONS OF THE PATENT LAW, REPUBLIC ACT 165.

IV

THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT DOMICIANO A. AGUAS


IS GUILTY OF INFRINGEMENT DESPITE THE FACT THAT PLAINTIFF'S PATENT IS
NOT A VALID ONE.

THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEFENDANT COULD
NEVER BE GUILTY OF INFRINGEMENT OF PLAINTIFF'S PATENT BECAUSE EVEN
IN MATTERS NOT PATENTED BY THE PLAINTIFF - LIKE THE COMPOSITION AND
PROPORTION OF INGREDIENTS USED AND THE STRUCTURAL DESIGNS OF THE
MOULD AND THE TILE PRODUCED - THAT OF THE DEFENDANT ARE DIFFERENT.

VI

THE TRIAL COURT ERRED IN NOT DISMISSING THE COMPLAINT AND IN HOLDING
THE DEFENDANT, INSTEAD OF THE PLAINTIFF, LIABLE FOR DAMAGES, AND
ATTORNEY'S FEES.

On August 5, 1969, the Court of Appeals affirmed the decision of the trial court, with the
modification that plaintiff-appellee's award of moral damages was reduced to P3,000.00. 7

The petitioner assigns the following errors supposedly committed by the Court of Appeals:

It is now respectfully submitted that the Court of Appeals committed the following errors
involving questions of law, to wit:

First error. — When it did not conclude that the letters patent of the respondent although
entitled on the cover page as a patent for improvements, was in truth and in fact, on the
basis of the body of the same, a patent for the old and non-patentable process of making
mosaic pre-cast tiles;

Second error. — When it did not conclude from the admitted facts of the case, particularly
the contents of the letters patent, Exh. L and the pieces of physical evidence introduced
consisting of samples of the tiles and catalouges, that the alleged improvements
introduced by the respondent in the manufacture of mosaic pre-cast tiles are not
patentable, the same being not new, useful and inventive.

Third error. — As a corollary, when it sentenced the herein petitioner to pay the damages
enumerated in the decision of the lower court (Record on Appeal, pp. 74-75), as
confirmed by it (the Court of Appeals), but with the modification that the amount of
P50,000.00 moral damages was reduced to P3,000.00. 8

The facts, as found by the Court of Appeals, are:

The basic facts borne out by the record are to the effect that on December 1, 1959
plaintiff-appellee filed a patent application with the Philippine Patent Office, and on May 5,
1960, said office issued in his favor Letters Patent No. 658 for a "new and useful
improvement in the process of making mosaic pre-cast tiles" (Exh, "L"); that defendant
F.H. Aquino & Sons engraved the moulds embodying plaintiff's patented improvement for
the manufacture of pre-cast tiles, plaintiff furnishing said defendant the actual model of the
tiles in escayola and explained to said engraver the plans, specifications and the details of
the engravings as he wanted them to be made, including an explanation of the lip width,
artistic slope of easement and critical depth of the engraving that plaintiff wanted for his
moulds; that engraver Enrique Aquino knew that the moulds he was engraving for plaintiff
were the latter's very own, which possession the new features and characteristics covered
by plaintiff's parent; that defendant Aguas personally, as a building contractor, purchased
from plaintiff, tiles shaped out of these moulds at the back of which was imprinted
plaintiff's patent number (Exhs., "A" to "E"); that subsequently, through a representative,
Mr. Leonardo, defendant Aguas requested Aquino to make engravings of the same type
and bearing the characteristics of plaintiff's moulds; that Mr. Aquino knew that the moulds
he was asked to engrave for defendant Aguas would be used to produce cement tiles
similar to plaintiff's; that the moulds which F.H. Aquino & Sons eventually engraved for
Aguas and for which it charged Aguas double the rate it charged plaintiff De Leon, contain
the very same characteristic features of plaintiff's mould and that Aguas used these
moulds in the manufacture of his tiles which he actually put out for sale to the public (Exhs.
"1" to "3" and Exhs. "A" to "E"); that both plaintiff's and defendant Aguas' tiles are
sculptured pre-cast wall tiles intended as a new feature of construction and wag
ornamentation substantially Identical to each other in size, easement, lip width and critical
depth of the deepest depression; and that the only significant difference between plaintiff's
mould and that engraved by Aquino for Aguas is that, whereas plaintiff's mould turns out
tiles 4 x 4 inches in size, defendant Aguas' mould is made to fit a 4-1/4 x 4-1/4 inch tile. 9

The patent right of the private respondent expired on May 5, 1977. 10 The errors will be
discuss only to determine the right of said private respondent to damages.

The petitioner questioned the validity of the patent of the private respondent, Conrado G.
de Leon, on the ground that the process, subject of said patent, is not an invention or
discovery, or an improvement of the old system of making tiles. It should be noted that the
private respondent does not claim to be the discoverer or inventor of the old process of
tile-making. He only claims to have introduced an improvement of said process. In fact,
Letters Patent No. 658 was issued by the Philippine Patent Office to the private
respondent, Conrado G. de Leon, to protect his rights as the inventor of "an alleged new
and useful improvement in the process of making mosaic pre-cast tiles." 11 Indeed, Section
7, Republic Act No. 165, as amended provides: "Any invention of a new and useful machine,
manufactured product or substance, process, or an improvement of the foregoing, shall be
patentable.

The Court of Appeals found that the private respondent has introduced an improvement in
the process of tile-making because:

... we find that plaintiff-appellee has introduced an improvement in the process of


tile-making, which proceeds not merely from mechanical skill, said improvement
consisting among other things, in the new critical depth, lip width, easement and field of
designs of the new tiles. The improved lip width of appellee's tiles ensures the durability of
the finished product preventing the flaking off of the edges. The easement caused by the
inclination of the protrusions of the patented moulds is for the purpose of facilitating the
removal of the newly processed tile from the female die. Evidently, appellee's
improvement consists in the solution to the old critical problem by making the protrusions
on his moulds attain an optimum height, so that the engraving thereon would be deep
enough to produce tiles for sculptured and decorative purposes, strong optimum thickness
of appellee's new tiles of only 1/8 of an inch at the deepest easement (Exhs. "D" and "D-1")
is a most critical feature, suggestive of discovery and inventiveness, especially
considering that, despite said thinness, the freshly formed tile remains strong enough for
its intended purpose.

While it is true that the matter of easement, lip width, depth, protrusions and depressions
are known to some sculptors, still, to be able to produce a new and useful wall tile, by
using them all together, amounts to an invention. More so, if the totality of all these
features are viewed in combination with the Ideal composition of cement, sodium silicate
and screened fine sand.

By using his improved process, plaintiff has succeeded in producing a new product - a
concrete sculptured tile which could be utilized for walling and decorative purposes. No
proof was adduced to show that any tile of the same kind had been produced by others
before appellee. Moreover, it appears that appellee has been deriving considerable profit
from his manufacture and sale of such tiles. This commercial success is evidence of
patentability (Walker on Patents, Dellers Edition, Vol. I, p. 237). 12

The validily of the patent issued by the Philippines Patent Office in favor of the private
respondent and the question over the inventiveness, novelty and usefulness of the
improved process therein specified and described are matters which are better
determined by the Philippines Patent Office. The technical staff of the Philippines Patent
Office, composed of experts in their field, have, by the issuance of the patent in question,
accepted the thinness of the private respondent's new tiles as a discovery. There is a
presumption that the Philippines Patent Office has correctly determined the patentability
of the improvement by the private respondent of the process in question.

Anent this matter, the Court of Appeals said:

Appellant has not adduced evidence sufficient to overcome the above established legal
presumption of validity or to warrant reversal of the findings of the lower court relative to
the validity of the patent in question. In fact, as we have already pointed out, the clear
preponderance of evidence bolsters said presumption of validity of appellee's patent.
There is no indication in the records of this case and this Court is unaware of any fact,
which would tend to show that concrete wall tiles similar to those produced by appellee
had ever been made by others before he started manufacturing the same. In fact, during
the trial, appellant was challenged by appellee to present a tile of the same kind as those
produced by the latter, from any earlier source but, despite the fact that appellant had
every chance to do so, he could not present any. There is, therefore, no concrete proof
that the improved process of tile-making described in appellee's patent was used by, or
known to, others previous to his discovery thereof. 13

The contention of the petitioner Aguas that the letters patent of de Leon was actually a
patent for the old and non-patentable process of making mosaic pre-cast tiles is devoid of
merit. De Leon never claimed to have invented the process of tile-making. The Claims and
Specifications of Patent No. 658 show that although some of the steps or parts of the old
process of tile making were described therein, there were novel and inventive features
mentioned in the process. Some of the novel features of the private respondent's
improvements are the following: critical depth, with corresponding easement and lip width
to such degree as leaves the tile as thin as 1/8 of an inch at its thinnest portion, Ideal
composition of cement and fine river sand, among other ingredients that makes possible
the production of tough and durable wall tiles, though thin and light; the engraving of deep
designs in such a way as to make the tiles decorative, artistic and suitable for wall
ornamentation, and the fact that the tiles can be mass produced in commercial quantities
and can be conveniently stock-piled, handled and packed without any intolerable
incidence of breakages. 14

The petitioner also contends that the improvement of respondent is not patentable
because it is not new, useful and inventive. This contention is without merit.

The records disclose that de Leon's process is an improvement of the old process of tile
making. The tiles produced from de Leon's process are suitable for construction and
ornamentation, which previously had not been achieved by tiles made out of the old
process of tile making. De Leon's invention has therefore brought about a new and useful
kind of tile. The old type of tiles were usually intended for floors although there is nothing
to prevent one from using them for walling purposes. These tiles are neither artistic nor
ornamental. They are heavy and massive.

The respondent's improvement is indeed inventive and goes beyond the exercise of
mechanical skill. He has introduced a new kind of tile for a new purpose. He has improved
the old method of making tiles and pre-cast articles which were not satisfactory because
of an intolerable number of breakages, especially if deep engravings are made on the tile.
He has overcome the problem of producing decorative tiles with deep engraving, but with
sufficient durability. 15 Durability inspite of the thinness and lightness of the tile, is assured,
16
provided that a certain critical depth is maintained in relation to the dimensions of the tile.

The petitioner also claims that changing the design from embossed to engraved tiles is
neither new nor inventive because the Machuca Tile Factory and the Pomona Tile
Manufacturing Company have been manufacturing decorative wall tiles that are
embossed as well as engraved; 17 that these tiles have also depth, lip width, easement and
field of designs; 18 and that the private respondent had copied some designs of Pomona. 19

The Machuca tiles are different from that of the private respondent. The designs are embossed
and not engraved as claimed by the petitioner. There may be depressions but these
depressions are too shallow to be considered engraved. Besides, the Machuca tiles are heavy
and massive.
There is no similarity between the Pomona Tiles and de Leon's tiles. The Pomona tiles are
made of ceramics. 20 The process involved in making cement tiles is different from ceramic
tiles. Cement tiles are made with the use of water, while in ceramics fire is used. As regards
the allegation of the petitioner that the private respondent copied some designs of Pomona,
suffice it to say that what is in issue here is the process involved in tile making and not the
design.

In view of the foregoing, this Court finds that Patent No. 658 was legally issued, the
process and/or improvement being patentable.

Both the trial court and the Court of Appeals found as a fact that the petitioner Domiciano
A. Aguas did infringe de Leon's patent. There is no showing that this case falls under one
of the exceptions when this Court may overrule the findings of fact of the Court of Appeals.
The only issue then to be resolved is the amount of damages that should be paid by
Aguas.

In its decision the Court of Appeals affirmed the amount of damages awarded by the lower
court with the modification that the respondent is only entitled to P3,000.00 moral
damages. 21

The lower court awarded the following damages: 22

a) P10,020.99 by way of actual damages;

b) P50,000.00 by way of moral damages;

c) P5,000.00 by way of exemplary damages;

d) P5,000.00 by way of attomey's fees and

e) Costs of suit

because:

An examination of the books of defendant Aguas made before a Commissioner reveals


that during the period that Aguas was manufacturing and selling tiles similar to plaintiff's,
he made a gross income of P3,340.33, which can be safely be considered the amount by
which he enriched himself when he infringed plaintiff's patent. Under Sec. 42 of the Patent
Law any patentee whose rights have been infringed is entitled to damages which,
according to the circumstances of the case may be in a sum above the amount found as
actual damages sustained provided the award does not exceed three times the amount of
such actual damages. Considering the wantonness of the infringement committed by the
defendants who knew all the time about the existence of plaintiff's patent, the Court feels
there is reason to grant plaintiff maximum damages in the sum of P10,020.99. And in
order to discourage patent infringements and to give more teeth to the provisions of the
patent law thus promoting a stronger public policy committed to afford greater incentives
and protection to inventors, the Court hereby awards plaintiff exemplary damages in the
sum of P5,000.00 to be paid jointly and severally by defendants. Considering the status of
plaintiff as a reputable businessman, and owner of the likewise reputed House of Pre-Cast,
he is entitled to an award of moral damages in the sum of P50,000.00. 23

In reducing the amount of moral damages the Court of Appeals said:


As regards the question of moral damages it has been shown that as a result of the
unlawful acts of infringment committed by defendants, plaintiff was unstandably very sad;
he worried and became nervous and lost concentration on his work in connection with his
tile business (pp. 28, 30, t.s.n., Feb. 28, 1964). In addition, plaintiff's character and
reputation have been unnecessarily put in question because defendants, by their acts of
infringement have created a doubt or suspicion in the public mind concerning the truth and
honesty of plaintiff's advertisements and public announcements of his valid patent.
Necessarily, said acts of defendants have caused plaintiff considerable mental suffering,
considering especially, the fact that he staked everything on his pre-cast tile business (p.
36, t.s.n., Id.) The wantonness and evident bad faith characterizing defendants' prejudicial
acts against plaintiff justify the assessment of moral damages in plaintiff's favor, though
we do not believe the amount of P50,000.00 awarded by the lower court is warranted by
the circumstances. We feel that said amount should be reduced to P3,000.00 by way of
compensating appellee for his moral suffering. "Willful injury to property may be a legal
ground for awarding moral damages if the court should find that, under the circumstances
such damages are justly due" (Art. 2219 NCC).

There is no reason to reduce the amount of damages and attorneys fees awarded by the
trial court as modified by the Court of Appeals.

WHEREFORE, the decision of the Court of Appeals in CA G.R. No. 37824-R appealed
from is hereby affirmed, without pronouncement as to costs.

SO ORDERED.

Makasiar, Guerrero, Melencio-Herrera and Plana, JJ., concur.

Gottschalk v. Benson

Brief Fact Summary. Gottschalk (Defendant), the Acting Commissioner of Patents,


appealed the reversal of his rejection of patent claims relating to the programmed
conversion of numerical information.

Synopsis of Rule of Law. A mathematical formula with no substantial practical


application exception in connection with a digital computer cannot be patented.

Facts. Benson (Plaintiff) submitted patent claims for a method for converting
binary-coded-decimal (BCD) numbers into pure binary numbers. The claims were
not limited to any particular art or technology, to any particular equipment or
machinery, or to any particular end use. They claimed to cover any use of the
method in any type of general purpose digital computer. Defendant appealed the
reversal of his rejection of the patent claims.

Issue. Can a mathematical formula without a substantial practical application


exception in connection with a digital computer be patented?

Held. (Douglas, J.) No. A mathematical formula with no substantial practical


application exception in connection with a digital computer cannot be patented. One
may not patent an idea, which would be the result if the formula for converting binary
code into pure binary were patented in this case. A procedure for solving a given
type of mathematical problem is known as an “algorithm.” The procedures
presented in the present claims are generalized formulations for programs to solve
mathematical problems of converting one form of numbers to another. A patent on
the formula would result in a patent on the algorithm itself. This would raise
considerable problems that only committees of Congress can manage. Reversed.

Discussion. The Benson decision is the leading one on the question of whether or not
computer programs can be patented. The history of the case reveals the typical
positions which have been taken by the Defendant and the Court of Customs and Patent
Appeals. Defendant rejected the patent claims in its usual opposition to patenting
computer programs. The Court of Customs and Patent Appeals, typically defiant of
the Patent Office, reversed. They even seemed to defy the Supreme Court in later
decisions that attempted to gain patents for computer programs.

G.R. No. L-20354 July 28, 1969

GERARDO SAMSON, JR., petitioner,


vs.
FELIPE TARROZA and DIRECTOR OF PATENTS, respondents.

Hermenegildo V. Lopez for petitioner.


Isaac S. Puno, Jr. for respondent Felipe Tarroza.
Office of the Solicitor General for respondent Director of Patents.

FERNANDO, J.:

With the statutory recognition of patentability based on the "practical utility" concept 1 thus
rendering clear that a patent is not solely to be earned under the "flash of genius"
theory, 2 this petition for the cancellation of a utility model patent for a Side Tilting-Dumping
Wheelbarrow granted to respondent Felipe A. Tarroza was correctly denied by
respondent Director of Patents. Petitioner Gerardo Samson, Jr., himself the grantee of a
utility model patent for a Dumping and Detachable Wheelbarrow, lacked any legal
justification for such a plea. So respondent Director ruled. Not satisfied, petitioner
elevated the matter to us for review. There is no reason why a different outcome is to be
expected. His appeal must fail.

Petitioner was, on May 22, 1958, awarded Utility Model Patent No. 27 for the above type
of wheelbarrow which, as noted in the decision, "consists of a wheeled carriage base and
an upper pivoted and detachable carrying tray. The carriage base is comprised of a wheel
and two equal lengths of continuous pipes bent to provide wheel forks at the front and at
the rear to support the back portion of the tray, with the ends of the pipes being adopted
as the carrying handles for the wheelbarrow. The two pipes thus bent are joined together
by cross braces in the front and at the rear. The tray is removably pivoted at its front end
through hook catches at its bottom corners, to the forward cross brace, and its rear end
rests solidly over the rear portion of the legs. To dump the load the user pulls a dumping
handle at the back end to cause the tray to pivot upwardly about the front brace to a
position of about 45 degrees with the horizontal and with its front end panel being
supported by the wheel." 3
Respondent's Side Tilting-Dumping Wheelbarrow, on the other hand, consists "of a
wheeled carriage made of tubular frames essentially as in petitioner's. Welded
transversely to the parallel frames are two brackets provided with holes designed to
complement similar holes on brackets provided on the tray. The brackets on the tray are
so placed that with the provision of a bolt through the openings the tray may be tilted
approximately 170 degrees to the left or to the right of the wheelbarrow with its axis
running longitudinally through the center of the bottom face of the tray." 4

There is an express recognition under the Patent Law, as already noted, that any new
model of implements or tools or of any industrial product even if not possessed of the
quality of invention but which is of "practical utility" is entitled to a "patent for a utility
model." From the above description of the side tilting-dumping wheelbarrow, the product
of respondent's ingenuity and industry, it is quite apparent that it has a place in the market
and possesses what the statute refers to as "practical utility." The requirement explicitly
set forth in the statute has thus been met. Respondent Tarroza is entitled to its benefits.
The grant to him of a patent for a utility model is in accordance with law. There was no
reason, therefore, for its cancellation. So it was held by the Director of Patents. That
decision as already noted should stand.

Moreover, in appeals from a decision of the Director of Patents, only questions of law may
be reviewed, findings of facts being conclusive unless unsupported by substantial
evidence. So it was decided in Che v. Philippines Patent Office. 5 As was emphasized
in Bagano v. Director of Patents: "It is almost trite to state here that in cases of the nature
as the one at bar, only questions of law are to be raised in order that this Court could
exercise its appellate jurisdiction and review the decision." 6 The above well-settled
doctrines suffice to demonstrate that this petition for review, as noted at the outset, is
without merit. It was not error then, to reiterate, for the respondent Director of Patents to
deny the cancellation of the utility patent granted respondent Tarroza. To borrow from the
language of the Che opinion: "Even on the sole issue alone, the petition for review must
fail."

Another alleged error was imputed to respondent Director of Patents. It would find fault
with his failing to hold that respondent Tarroza "was not the true and actual" author of the
mechanical contrivance for which he was granted a utility model patent. This is what the
appealed decision has to say on this point: "Petitioner's theory with respect to the second
ground for cancellation, to wit: that respondent is not the true and actual inventor or
designer of the utility model is premised on the fact that because of the proximity of the
two, the petitioner and the respondent being brothers-in-law, and living in adjoining
residential lots, the latter has had ample time and opportunity to observe and copy the
former's wheelbarrow. But the testimonial evidence thus presented is not clear,
satisfactory, and free from doubt, in the face of allegations to the contrary by the
respondent." 7 The futility of such an assignment of error is thus apparent. Again, it is
factual in character. It is not for us, as noted above, to review or revise the same, there
being no showing of a lack of substantial evidence in support thereof.

WHEREFORE, the decision of April 13, 1962 of respondent Director of Patents denying
the petition for the cancellation of Utility Model Letters Patent No. 62 in favor of
respondent Tarroza is hereby affirmed. With costs against petitioner.

Wilson Sporting Goods Co., v. David Geoffrey & Assoc.,


Brief Fact Summary. Wilson (Plaintiff) won an infringement suit regarding the design
patent on its golf balls, and Dunlop (Defendant) and David Geoffrey & Associates
(Defendant) appealed.

Synopsis of Rule of Law. There can be no infringement if the scope of equivalency


necessary to find infringement would cover prior art.

Facts. Plaintiff brought suit against both Defendants for infringement on its golf ball
patent. The patent concerned the placement of dimples on the golf ball. The
patent divided the ball into an icosahedrons (20 triangles) and then drew lines between
the midpoints of each triangle, making 80 triangles. The 80 dimples were then
arranged so no dimple was on a line. Plaintiff’s Claim 1 described this process and
the other twenty-six claims were dependent on it. The prior art was the British Pugh
patent and several Uniroyal patents. Both considered dividing the ball into a polygon,
including an icosahedrons, and either subdividing the ball into 320 triangles or placing
the dimples based on the icosahedrons’ lines. The jury found for Plaintiff, and both
Defendants appealed, claiming the prior art covered their inventions, and therefore
could not infringe.

Issue. Can there be infringement if the scope of equivalency necessary to find


infringement would cover prior art?

Held. (Rich, J.) No. There can be no infringement if the scope of equivalency
necessary to find infringement would cover prior art. Prior art limits what an
inventor could have claimed, and therefore it limits the possible range of allowed
equivalents of a claim. To simplify analysis, imagine a hypothetical patent that
literally covers the accused product. The question then becomes whether the Patent
and Trademark Office would have permitted the hypothetical patent over the prior
art. The patent owner, or Plaintiff, bears the burden of proving the range of
equivalents it seeks would not capture the prior art. Given the Uniroyal prior art, the
hypothetical claim, similar to Plaintiff’s Claim 1 but enough to cover the Dunlop
(Defendant) balls, would not have been patentable. Though the dependent claims
must be examined separately, neither are they infringed. Reversed.

Discussion. As a result of Wilson, the burden was clearly put on both patentees to
create and prove the validity of the hypothetical claim. This resulted in widespread
criticism, and the Federal Circuit in Key Manufacturing Group, Inc. v. Microdot, Inc.,
925 F.2d 1444, 17 U.S.P.Q.2d 1806 (Fed. Cir. 1991), pointed out the hypothetical claim
analysis was not “obligatory” in the determination of every doctrine of
equivalents. The Wilson court had actually only characterized the hypothetical claim
analysis as “helpful,” not necessary
Al-Site Corp. v. VSI
International, Inc.
Brief Fact Summary. Magnavision (Plaintiff) alleged that VSI (Defendant) infringed
its patent for technology for displaying eyeglasses on racks.

Synopsis of Rule of Law. Even though a product may avoid literal infringement when
it performs an identical function to a patented invention, it may infringe under the
doctrine of equivalents.

Facts. Plaintiff sold non-prescription eyeglasses and obtained a patent for an eyeglass
rack that allows consumers to try glasses on and then return the glasses to the rack
without removing their display hangers. The hanger has an extension that encircles
the nose bridge of the glasses. Defendant, a competitor, began using a similar rack
without this type of fastening for the glasses. Plaintiff sued Defendant for
infringement anyway. A district court jury found literal infringement on one claim
and infringement under the doctrine of equivalents on other claims. However, on the
scope of the patent claims and doctrine of equivalents, both parties disagreed with the
court’s instructions.

Issue. Even though a product may avoid literal infringement when it performs an
identical function to a patented invention, it may infringe under the doctrine of
equivalents.

Held. (Rader, J.) Yes. Even though a product may avoid literal infringement
when it performs an identical function to a patented invention, it may infringe under the
doctrine of equivalents. Under 35 U.S.C. § 112, the test to determine equivalence
is whether there are substantial differences between the structure in the accused product
and those written in the specification. Under § 112, equivalents narrow the
application of broad literal claims, meaning a functional claim element is restricted to
ways that are equivalent to the actual ways shown in the specification. Therefore, it
informs the claim meaning for an analysis of literal infringement. However, if there
is equivalence between the elements of the accused product and the claimed elements
of a patented invention, the doctrine of equivalents allows enforcement of claim terms
beyond their literal reach. Although they have different purposes and
administrations, under the doctrine of equivalents, a finding of a lack of literal
infringement for lack of equivalent structure could come before a finding of
equivalence. So, if an accused product or process performs the identical function and
yet avoids literal infringement for lack of a structural equivalent, it may avoid
infringing the same element under the doctrine. In this case, the jury did not find
substantial structural differences in the function of Defendant’s eyeglass rack which is
identical to the function claimed in Plaintiff’s patent. This finding is adequate to
support the inference that the jury found infringement even under the most restricted
reading of the claims. Therefore, any mistake in the trial court’s determination of the
scope of the claim did not affect the final decision. Affirmed.

Discussion. In this case, it was found by the jury that a chemical fastener used by
Defendant was the equivalent of the mechanical fastener described in the Plaintiff
patent claim. The decision allowed this rather broad interpretation by the
jury. The trial court’s mistake was in interpreting some of the claims as
means-plus-function elements subject to the limitations of § 112.

Global-Tech Appliances, Inc. v.


SEB S.A.
The plaintiff, SEB S.A., is a French maker of home appliances. In the late
1980s, SEB invented a deep fryer with external surfaces that remained cool
during the frying process, which it sold under the “T-Fal” brand. The fryer
was commercially successful. In 1997, Sunbeam Products, a U.S.
competitor of SEB, asked a subsidiary of the main defendant, Global-Tech
Appliances, to supply it with deep fryers meeting certain specifications. To
develop its fryer, Global-Tech’s subsidiary purchased an SEB fryer in Hong
Kong and copied it. Because the SEB fryer was purchased in Hong Kong, it
bore no U.S. patent markings. After copying SEB's design, Global-Tech
retained an attorney to conduct a right-to-use study but did not tell the
attorney that its fryer was a copy of SEB’s. The attorney failed to locate
SEB’s patent and in August 1997 issued an opinion letter concluding that
Global-Tech’s deep fryer did not infringe. Global-Tech then started selling
deep fryers with this design to Sunbeam, which resold them in the United
States under its trademarks.

SEB sued Sunbeam in March 1998, alleging that Sunbeam’s sales infringed
SEB’s patent. Shortly thereafter, Sunbeam notified Global-Tech of the
lawsuit. But Global-Tech continued to sell deep fryers to Fingerhut Corp.
and Montgomery Ward & Co., both of which resold them in the United
States. SEB settled its lawsuit with Sunbeam, and then sued Global-Tech,
asserting two theories of recovery. First, SEB claimed that Global-Tech
directly infringed SEB’s patent in violation of 35 U.S.C. § 271(a) by selling or
offering to sell the deep fryers. Second, SEB claimed that Global-Tech
violated § 271(b) by actively inducing Sunbeam, Fingerhut and Montgomery
Ward to sell or to offer to sell infringing fryers.

At trial, a jury found for SEB on both theories and found that Global-Tech’s
infringement was willful. Global-Tech filed post-trial motions seeking a new
trial or judgment as a matter of law on several grounds, including that there
was insufficient evidence to support the jury's finding of induced
infringement under § 271(b). Global-Tech argued that it did not actually
know of SEB’s patent until it received notice of the Sunbeam lawsuit in April
1998.

Both the district court and the Federal Circuit rejected Global-Tech’s
argument. Summarizing an earlier en banc decision, the Federal Circuit
stated that induced infringement under § 271(b) requires a “plaintiff [to]
show that the alleged infringer knew or should have known that his actions
would induce actual infringements” and that this showing “includes proof
that the alleged infringer knew of the patent.” Although the record
contained no direct evidence that Global-Tech knew of SEB's patent before
April 1998, the Federal Circuit found adequate evidence to support a finding
that “Global-Tech deliberately disregarded a known risk that SEB had a
protective patent.” Such disregard, the court said, “is not different from
actual knowledge, but is a form of actual knowledge.”

The Majority Decision


1. The Supreme Court first addressed whether active inducement
requires (1) an intent to cause infringement or (2) merely an intent to cause
actions that happen to result in infringement. Consistent with precedent, the
Court adopted the first view.
Justice Alito’s opinion for the Court began with the statutory text, which
states, “Whoever actively induces infringement of a patent shall be liable as
an infringer.” The Court noted that although the statute does not expressly
mention intent, intent must be required because the word “induce” means “to
lead on” or “influence,” and “actively” suggests taking affirmative steps to
bring about a result. The Court recognized, though, that the statutory
language is ambiguous as to whether intent to cause infringement was
required. The Court thus turned to the case law for helpful
constructions. However, the case law from before Congress enacted § 271
in 1952 was ambiguous—some cases followed the “happens to infringe”
rule and others required the inducer to intend the resulting infringement.

2.
Ultimately, the Court was persuaded to carry over its interpretation of
§ 271(c), the contributory infringement statute, from Aro Manufacturing. Co.
v. Convertible Top Replacement Co., 377 U. S. 476 (1964). The
contributory infringement statute contains a similar ambiguity, requiring the
defendant to “know” that a component was “especially made or especially
adapted for use in an infringement.” In Aro, the Court held that contributing
to infringement requires that the defendant must know “that the combination
for which his component was especially designed was both patented and
infringing.” Because the Aro interpretation requiring knowledge of the
patent has been long followed by the courts and unchanged by Congress,
the Court deemed that interpretation firmly established and
binding. Because the two provisions of § 271 had a common origin in
contributory infringement and the language of the two provisions created the
same ambiguity, the Court held that induced infringement under § 271(b)
requires the same type of knowledge, that is, “knowledge that the induced
acts constitute patent infringement.”
3.
4. The Court then turned to Global-Tech’s primary contention that
liability absent direct proof of knowledge requires more than mere
“deliberate indifference to a known risk that a patent exists.” Although the
Supreme Court agreed with Global-Tech and rejected the Federal Circuit’s
test, it nevertheless found Global-Tech liable under a new “willful blindness”
standard.
Looking to criminal law for guidance, the Court found extensive precedent
that “willful blindness” can suffice under criminal statutes that require a
defendant to have acted “knowingly” or “willfully.” The Court saw no reason
not to extend this doctrine to the civil context of inducement of patent
infringement. In establishing “willful blindness” as a proxy for proof of actual
knowledge, the Court adopted the two-part test that the federal courts of
appeals use in criminal cases. To establish willful blindness, the plaintiff
must show that (1) the defendant subjectively believed that there was a high
probability that a fact existed, and (2) the defendant took deliberate actions
to avoid learning that fact. This test, the Court said, sets the bar for
knowledge appropriately high, somewhere above recklessness and
negligence, such that “a willfully blind defendant is one who takes deliberate
actions to avoid confirming a high probability of wrongdoing and who can
almost be said to have actually known the critical facts.” The Supreme
Court rejected the Federal Circuit’s more lenient “deliberate indifference”
standard for at least two reasons: (1) it permitted a finding of knowledge
when there is merely a “known risk” that the induced acts are infringing; and
(2) in demanding only “deliberate indifference,” it did not require active
efforts by an inducer to avoid knowing about the infringing nature of the
activities.
5.
6. Despite adopting a more stringent test, the Supreme Court affirmed
the judgment holding Global-Tech liable. The Court held that the jury was
entitled to find that Global-Tech subjectively believed that there was a high
probability that SEB’s fryer was patented; took deliberate steps to avoid
knowing that fact; and therefore willfully blinded itself to the infringing nature
of Sunbeam’s sales. First, SEB’s cool-touch fryer was an innovation in the
U.S. market when Global-Tech copied it. Global-Tech performed market
research, gathered as much information as possible, and believed that
SEB’s fryer embodied advanced technology that would be valuable in the
U.S. market. Second, Global-Tech had extensive knowledge of patents
generally and copied an overseas model of SEB’s fryer that lacked patent
markings, despite the fact that it was designing its product for the U.S.
market. Finally, Global-Tech chose not to inform its patent attorney, from
whom it sought a right-to-use opinion, that the product to be evaluated was
simply a knockoff of SEB’s deep fryer. The Court “[could not] fathom what
motive [Global-Tech] could have had for withholding this information other
than to manufacture a claim of plausible deniability in the event that [the]
company was later accused of patent infringement.”
7. Justice Kennedy dissented. He agreed with the majority that
inducement requires knowledge that the induced acts constitute patent
infringement, but disagreed with allowing “willful blindness” to substitute for
actual knowledge of a patent. He was particularly troubled that the Court
appeared to endorse the “willful blindness” standard for federal criminal
cases in a civil patent case. Instead, he believed that “probabilistic
judgments [may] count as knowledge” and would have remanded to allow
the Federal Circuit to consider the sufficiency of the evidence of actual
knowledge.

Significance
Although the Supreme Court affirmed the judgment of induced
infringement, Global-Tech should benefit accused infringers, at least
marginally. The Supreme Court has reaffirmed that an intent to infringe is
required, and the standard for “willful blindness” (belief that there is a high
probability that a patent exists and deliberate steps taken to avoid
confirming that fact) will be difficult for patentees to meet. Some patent
litigators had viewed the Federal Circuit’s “deliberate indifference” standard
as problematic, fearing that juries might find “deliberate indifference” simply
because the defendant failed to conduct a patent search despite a “known
risk” that a patent existed. The law now requires a belief in
a high probability that a product is patented and taking active steps to avoid
learning about it.
Seal-Flex, Inc.v.W.R. Dougherty and Associates, Inc.

1. Plaintiff filed the complaint in this patent infringement action on April 26, 2000. The Court has
jurisdiction in this case pursuant to 28 U.S.C. § 1331 and 1338(a).

2. Plaintiff Seal-Flex, Inc. ("Plaintiff" or "Seal-Flex") is a Minnesota corporation and the assignee of U.S.
Patent No. 4,529,622 (the "`622 patent"), which issued on July 16, 1985. (Rev. Joint Pretrial Order ¶
4(a); Pl. Ex. 1.)
3. The `622 patent describes a method for constructing an all weather surface used on running tracks
(the "Seal-Flex method"). (Rev. Joint Pretrial Order ¶ 4(b); Pl. Ex. 1.) The `622 patent expired on
October 2, 2001. (Pl. Ex. 1.)

4. In Michigan, Plaintiff licenses use of the `622 patent to Current Surfaces, Inc., a contract installer of
athletic surfaces. (Rev. Joint Pretrial Order ¶ 4(c).)

5. Defendant W.R. Dougherty and Associates, Inc. ("Defendant") is a Michigan corporation doing
business as "Sports, Surfaces" as well as in its own name. (Rev. Joint Pretrial Order ¶ 4(d).)

6. Defendant installs running tracks and other athletic surfaces. (Rev. Joint Pretrial Order ¶ 4(e).)

7. Richard R. Dougherty is President of Defendant W.R. Dougherty and Associates, Inc. (Vol. 1
68.) Richard Dougherty has been President of Defendant since 1987. (Vol. I 69-70.)

The transcripts from the damages trial are divided into two volumes. Volume I contains the testimony
from May 7, 2002, and Volume II contains the testimony from May 8, 2002. Numbers in parentheses
refer to page numbers in the transcript volumes.

8. Defendant is a small, closely held corporation, and Defendant's stock is owned solely by Richard
Dougherty's father, William Dougherty. (Vol. I 72; Vol. II 65.) Richard Dougherty at one time owned a
minority stake in Defendant. (Vol. I 70.)

9. From 1979 to 1989, Richard Dougherty was employed by Dougherty Contractors, Inc. ("Dougherty
Contractors"). (Vol. I 70-72.) Dougherty Contractors was a small, closely held corporation owned by
Richard Dougherty's father, William Dougherty. (Vol. 1. 70-72; Vol. II 65-66.) At one time, Richard
Dougherty held a minority ownership interest in Dougherty Contractors. (Vol. I 72.)

10. Both Dougherty Contractors and Defendant have always engaged in the business of installing
athletic surfaces. (Vol. I, 74.)

11. This Court has held that Defendant literally infringed claims 1, 4, 5, and 6 of the `622
patent. See slip. op. at 14 (April 23, 2001).

12. This Court has held that claims 1, 4, 5, and 6 of the `622 patent are valid. See Seal-Flex, Inc. v. W.R.
Dougherty and Assoc., Inc., 179 F. Supp.2d 735, 742 (E.D.Mich. 2002).

B. DAMAGES

1. REASONABLE ROYALTY

13. Plaintiff is entitled to damages from April 26, 1994, which is six years prior to the filing of the
complaint, until the `622 patent's expiration date. 35 U.S.C. § 286.

14. On the issue of damages, Plaintiff presented evidence regarding a reasonable royalty and did not
attempt to prove actual damages in the form of lost profits.

15. In 1983, Plaintiff entered into a licensing agreement with "The Track Group, Inc." as "Licensee,"
and six "Members" as "Sub-Licensees." (Pl. Ex. 4.) The 1983 licensing agreement provided, in relevant
part: "Each Member shall pay royalties to Seal-Flex of Five Cents (5¢) per pound and to Licensee of
Three Cents (3¢) per pound for each pound of ground rubber used by such member in the application
of the Seal-Flex process. The combined royalty of Eight Cents (8¢) per pound shall be collected by
Licensee as a matter of convenience to all parties." (Pl. Ex. 4 at ¶ 4.)

16. On May 30, 1983, Dougherty Contractors entered into the above-referenced licensing agreement
as a sub-licensee of Seal-Flex. (Pl. Ex. 4.) Richard Dougherty signed the licensing agreement on behalf
of Dougherty Contractors. (Vol. I. 76.; Vol. II 66; Pl. Ex. 4.)
17. William Dougherty engaged in the negotiations leading to the licensing agreement between
Seal-Flex and Dougherty Contractors. (Vol. I. 76; Vol. II 66.)

18. A reasonable royalty as evidenced by Plaintiff's established licensing practice among its
membership is eight cents per pound of rubber. (Pl. Ex. 4; Vol. I 30-31; Vol. II. 40,
49-50.); see Conclusions of Law, infra, Part II.B.1.

19. Plaintiff offered expert testimony on the calculation of a reasonable royalty. (Vol. II 42-50.)
Defendant offered no such testimony.

20. On average, eight pounds of rubber are applied to a square yard of running track. (Pl. Ex. 151
(rev.).)

21. The average track size is 4,500 to 5,500 square yards. (Pl. Ex. 151 (rev.).)

22. During the six years prior to the filing of the complaint, Defendant installed 258,675 total surface
square yards of infringing rubber latex tracks. (Pl. Ex. 151 (rev.), Sched. II) (excluding Exhibits 80, 101,
103 and 111.)

Exhibits 46, 101, 102, and 103, all concerned the "Monument Valley package" at San Juan School
District. (Vol. II 31.) The Court has concluded, however, that Exhibits 101 and 103 are not relevant to
the damages calculation because these Exhibits do not represent projects involving the installation of
infringing running tracks. Exhibit 103 was not admitted at trial, and the Court addresses Exhibit 103 in
its order denying Plaintiff's motion to reopen the proofs, issued concurrently with these Findings of
Fact and Conclusions of Law. Exhibit 101 was admitted, and thus the Court addresses it here.
Richard Dougherty admitted that Exhibits 46 and 102 represented installations of infringing tracks.
(Vol. II 5.) However, Richard Dougherty also testified that, of the four schools in the Monument Valley
package, only two involved use of the Seal-Flex method. (Vol. II 31-32.) The remaining two schools
involved repairs only and did not involve the use of the Seal-Flex method. (Vol. II 31-32.) It appears
clear that Exhibit 101 and Exhibit 103 represent the two non-infringing repair projects. This conclusion
is supported not only by Richard Dougherty's testimony, but also by the fact that Exhibits 46 and 102
involve significantly higher dollar amounts than Exhibits 101 and 103. Accordingly, the Court
concludes that Exhibit 101 is not relevant to the issue of damages because the project represented by
that Exhibit did not involve use of the Seal-Flex method.

C. WILLFUL INFRINGEMENT

27. The licensing agreement between Seal-Flex and Dougherty Contractors signed by Richard
Dougherty and negotiated by William Dougherty, stated that "Seal-Flex has made application for a
patent on the Seal-Flex Process." (Pl. Ex. 4 at ¶ 8.)

28. Richard Dougherty was aware of the Seal-Flex method and the fact that a patent was pending on
this method as early as May, 1983, when he entered the licensing agreement on behalf of Dougherty
Contractors. (Pl. Ex. 4.)

29. William Dougherty was aware that Seal-Flex had applied for a patent on its methodology as of
May, 1983, when Dougherty Contractors entered into the licensing agreement with Seal-Flex. (Vol. II.
66-67.)

30. After entering into the licensing agreement, Dougherty Contractors began installing tracks using
the Seal-Flex method. (Vol. I 77; Vol. II 66.)

31. Pursuant to the licensing agreement, Dougherty Contractors paid a royalty of eight cents per
pound of rubber to Seal-Flex. (Vol. I 77-79; Vol. II 67.)
32. Dougherty Contractors and Defendant installed latex and rubber running tracks from 1983 until
2000 using the Seal-Flex method. (Vol. I 81.; Vol. II 67.)

33. At some point between 1984 and 1989, Dougherty Contractors' license to install Seal-Flex tracks
was revoked after the other licensees determined that Dougherty Contractors had violated the
non-compete provisions of the agreement. (Vol. I 33.)

34. Dougherty Contractors and Defendant continued to utilize the Seal-Flex method to install running
tracks after the revocation of Dougherty Contractors' license to do so. (Vol. II 67.)

35. Neither Dougherty Contractors nor Defendant paid royalties to Seal-Flex after the revocation of
Dougherty Contractors' license. (Vol. II 67.)

36. William Dougherty was aware that Seal-Flex had been granted a patent on its methodology prior
to the filing of this action. (Vol. II 68-69.)

37. Plaintiff's patent counsel contacted Defendant by letter on March 25, 1994, and March 12, 1998,
warning Defendant that Plaintiff would challenge infringement of the `622 patent. (Pl. Ex. 84.; Vol. II
38.)

38. At least as early as 1994, William Dougherty and Richard Dougherty were aware that Seal-Flex was
accusing Defendant of infringing the `622 patent. (Vol. II 38; 69-70, 72; Pl. Ex. 84.)

39. Despite accusations of infringement from Plaintiff's counsel, Defendant continued to install tracks
using the Seal-Flex method. (Vol. II 39.)

40. William Dougherty has never applied for a patent and has no knowledge of patent law. (Vol. II
70-71.) Moreover, William Dougherty has never been listed as an inventor or co-inventor on a patent
and has never negotiated for a license on a patent. (Vol. II 71.) Richard Dougherty also has no
experience with patents or knowledge of patent law. (Vol. II 16.)

41. From the time that Dougherty Contractors' license with Seal-Flex was terminated through the
time of this suit, Richard Dougherty made no contact with a patent attorney regarding Defendant's
potential liability for infringement of the `622 patent. (Vol. II 15-16.)

42. William Dougherty never sought the advice of patent counsel regarding Defendant's potential
liability for infringement of the `622 patent. (Vol. II 71-72.)

43. William Dougherty concluded that Defendant had not infringed the `622 patent, drawing this
conclusion without the advice of patent counsel. (Vol. II 72-73.) William Dougherty's conclusion of
non-infringement was based upon his belief that he had utilized a method identical to that set forth in
the `622 patent before Seal-Flex had applied for the patent. (Vol. II 68-70.)

44. Richard Dougherty concluded that Defendant had not infringed the `622 patent based upon his
belief that the patent had been ruled invalid in another lawsuit. (Vol. II 18, 22-23, 38-39.) Richard
Dougherty also concluded that Defendant had not infringed the `622 patent based upon his belief
that his father had used an identical process prior to Seal-Flex's application for the patent. (Vol. II 19,
23, 40.)

45. In a letter dated March 12, 1998, counsel for Plaintiff informed Richard Dougherty that the prior
litigation in question involving the `622 patent had not been lost but settled. (Vol. II 39; Pl. Ex. 84.)
Richard Dougherty understood from this correspondence that Plaintiff's counsel was directing
Defendant not to bid on tracks requiring the Seal-Flex method. (Vol. II 40.)

46. Despite this contact from Plaintiff's counsel, Richard Dougherty continued to install tracks using
the Seal-Flex method. (Vol. II 39.)
104. First, Defendant had actual notice of the `622 patent. Defendant's President, Richard Dougherty,
signed a licensing agreement on behalf of Dougherty Contractors in May, 1983, which granted
Dougherty Contractors a license to use the Seal-Flex method in exchange for a royalty of eight cents
per pound of rubber. Defendant's owner, William Dougherty, negotiated this agreement as the owner
of Dougherty Contractors. Thus, Defendant's principals were at one point willing to pay a royalty in
exchange for a license to use the Seal-Flex method. The licensing agreement itself expressly stated
that Plaintiff had applied for a patent. Further, Richard Dougherty and William Dougherty admitted
knowing that Plaintiff had applied for and was granted a patent well before the filing of this action.

105. Second, Plaintiff's patent counsel contacted Defendant on at least two occasions, in 1994 and in
1998, indicating Plaintiff's willingness to challenge infringement of the `622 patent. Both Richard
Dougherty and William Dougherty were aware as early as 1994 that Plaintiff's patent counsel was
accusing Defendant of patent infringement.

106. Third, despite the termination of Dougherty Contractors' license and the warnings of Plaintiff's
patent counsel, Defendant continued to install infringing running tracks. Defendant did not cease
installation of Seal-Flex tracks until 2000. In this regard, the fact that Dougherty Contractors at one
point in time paid a royalty in exchange for a license to use the Seal-Flex method is particularly strong
evidence that Defendant's decision to utilize the Seal-Flex method after the termination of the
licensing agreement constitutes willful infringement.

107. Fourth, despite the allegations of infringement, Defendant never sought the opinion of patent
counsel. Neither William Dougherty nor Richard Dougherty were versed in patent law. Thus, their
claims that the `622 patent was invalid, made without the advice of counsel, were simply not
reasonable.

Under the totality of the circumstances in this case, the Court concludes that Plaintiff has presented
clear and convincing evidence of willful infringement.

Albana v. Director of Patents (1953) Facts: Pending examination of the


patent application of Tapinio and Feliciano, Meliton Albaña filed a motion
to intervene claiming that the applicant-inventors had "sold and assigned
to him the right to contract or deal the sale of their invention called
Fel-Tap Meter Guard and Detector through the Corporation that they were
then organizing under his direction and to fix and decide on the purchase
price of it. Albaña prayed that (1) Tapinio be compelled to sign their
contract, which was already signed by Feliciano (2) have such contract
acknowledged before a notary public, (3) have it recorded in the Patent
Office and Register of Deeds, and (4) patent be issued in his name and
in the name of the inventors. The motion to intervene was denied on the
ground that the Director of Patents has no jurisdiction on the question
submitted to him. Albaña filed an amended motion to intervene, now
claiming "that he is the assignee of the inventors of the undivided part
interests in the invention..." The amended motion was still denied on the
ground that the assignment made to the movant is not one of exclusive right
to make, use and sell the electrical contrivance for which patent is
applied for; that it is just an authority to act as the selling agent for
the inventors and to receive compensation; and that not being entitled
to have his name included as one of the patentees, the movant has no right
to intervene

Issue: 1. W/N Director of Patent has jurisdiction/ authority to act on


Albaña's motion. NO. Held/Ratio: 1. What Albaña attempted to secure by
his motion to intervene is beyond the jurisdiction and authority of the
Director of Patents to grant. Despite the amendment to the first motion,
still it remains that the alleged assignment is not of the invention but
it is an agreement whereby he is to act as selling agent for the inventors
of the patent and of the invention while receiving compensation therefor.
This is clearly supported by the clauses found in their contract.
Assignments of patents and inventions be recorded in books and records
kept for the purpose in the Patent Office if presented in due form; but
Albaña does not ask for the registration of the alleged agreement between
him and the inventors, and because it is not in due form it cannot be
recorded. Under the provisions of the Patent Law, the Director of Patents
has no power and authority to compel the applicant-inventors to do what
Albaña is asking them to perform. What he asked the Director of Patents
to do for him is essentially a judicial function which would require the
determination or finding by a court of competent jurisdiction as to
whether there was a meeting of the minds of the contracting parties before
it could compel the applicant-inventors to perform what he prays the court
to order them to do. Aside from want of authority and power, the Director
of Patents lacks the means to make such determination and finding which
would be necessary before he could act on the appellant's motion.

Stanford University v. Roche


Molecular Systems, Inc.
In the late 1980s, Dr. Mark Holodniy, a Stanford University researcher,
conducted part of his research at a private biotechnology company.
The result of his work, which was partially funded by the government,
was an improved method for testing the effectiveness of HIV
treatments. Over the next few years, Roche Molecular Systems, the
owner of the biotechnology company at which Dr. Holodniy conducted
his research, incorporated his invention into its publicly sold
HIV-testing kits. At roughly the same time, Stanford, Dr. Holodniy’s
employer, began the process of patenting the invention under the
University and Small Business Patent Procedure Act, commonly
known as the Bayh-Dole Act. In 2005, Stanford sued Roche for patent
infringement, arguing among other things that the Bayh-Dole Act
gave Stanford the exclusive first right to acquire ownership of
Holodniy’s invention. The district court ruled for Stanford, but the
Federal Circuit reversed, holding that an assignment of ownership
rights in an earlier confidentiality agreement between Holodniy and
the biotechnology company trumped Stanford’s ownership rights.
Now, the Supreme Court must decide whether the Bayh-Dole Act
prevents individual inventors from assigning to third parties their
ownership rights in federally funded inventions.

Question presented
Whether a federal contractor university’s statutory right under the
Bayh-Dole Act, 35 U.S.C. §§ 200-212, in inventions arising from
federally funded research can be terminated unilaterally by an
individual inventor through a separate agreement purporting to
assign the inventor’s rights to a third party

Issue
May an employee of a university receiving government funding assign
the rights in an invention to a third party without the university’s
consent, or does the university retain the rights to the invention under
the Bayh-Dole Act?

Facts
In the late 1980s and early 1990s, a team of scientists working
at Stanford University and Cetus Corporation laboratories developed
a method to discern the efficacy of HIV drug treatments. In 1992,
Stanford filed three patents related to this method and named Mark
Holodniy, Thomas Merigan, David Katzenstein, and Michael Kozal as
the inventors. The National Institute of Health (NIH) funded
Stanford’s HIV research, so in 1995 Stanford duly notified the
government that it had elected to retain title in the inventions per
the University and Small Business Patent Procedure Act of 1980,
better known as the Bayh-Dole Act (“the Act”).
A critical component of the team’s method is a technique
called polymerase chain reaction (PCR), which was developed by
Cetus. Recognizing the potential of PCR in HIV research, it was
arranged for Holodniy to collaborate with Cetus scientists. Holodniy
signed a Copyright and Patent Agreement (CPA) which committed him
to assign any future inventions to Stanford. However, prior to
beginning at Cetus, Holodniy signed a Visitor’s Confidentiality
Agreement (VCA). In signing the VCA, Holodniy immediately assigned
to Cetus any invention he created as a result of his work at
Cetus. Eventually, Holodniy’s work at both Cetus and Stanford
contributed to the discovery of a method to quantify HIV RNA, which
would ultimately lead to the patents in question in this case.
In December 1991, Roche Molecular Systems (“Roche”) bought
Cetus’s PCR business through an Asset Purchase Agreement. Soon
after, Roche began producing commercial HIV kits using the method
that Holodniy’s work helped develop. In 2000, a Senior Licensing
Associate at Stanford approached Roche to assert Stanford’s
ownership over the patents in question, and to offer Roche an
exclusive license. These negotiations with Roche ultimately proved
fruitless.
In 2005, Stanford filed suit against Roche in the Northern District of
California claiming patent infringement. Roche counterclaimed,
stating that its purchase of Cetus’s PCR assets secured it ownership
and license rights over the patents. Roche’s counterclaim also
asserted that Stanford’s patent claims were invalid. The District Court
found that California’s statute of limitation, laches, and the Bayh-Dole
Act prevented Roche from claiming ownership. Also, because
Stanford did not consent to the transfer of Cetus’s patent licenses to
Roche, Roche did not have a license to the patented
methods. However, the District Court invalidated the patent claims
for obviousness because of earlier reports published in the Journal of
Infectious Diseases.
Upon appeal, the Federal Circuit Court of Appeals held that nothing at
the time Holodniy signed the VCA prevented him from assigning his
rights to discoveries he made using PCR. The Federal Court of Appeals
ruled against Stanford and its interpretation of the Bayh-Doyle
Act. Stanford now appeals that decision to the Supreme Court.
top

Discussion
The controversy in this case concerns The University and Small
Business Patent Procedures Act of 1980, better known as the
Bayh-Dole Act (“the Act”). The Supreme Court’s decision here could
have serious implications on the future of government-funded
research.
The petitioner, Stanford University, accepted federal money to
conduct research. In doing so, Stanford argues that the Act
established Stanford’s superior ownership rights over inventors to
inventions created with that funding. Stanford explains that the Act’s
purpose is to promote the commercialization of government-funded
inventions. Stanford argues that its reading of the Act provides the
certainty necessary to comport with this purpose. In reply, Roche
Molecular Systems (“Roche”) contends that the Act does not
preemptively defeat inventors’ rights, but requires contractors to
secure inventors’ assignments. Moreover, Roche argues that such
assignments provide adequate certainty for continued
commercialization of government-funded inventions.
The United States echoes Stanford’s concerns that the
commercialization of government-funded projects may be
jeopardized if rights to these project could be lost to an inventor’s
prior or inadvertent assignment. The United States fears the
substantial increase in due diligence costs that will result under
Roche’s reading of the Act. Intel Corporation and other leading
companies (collectively “Intel”) add that under Stanford’s reading,
universities could predatorily inject small amounts of government
funding into any project and then legally own all rights to any
invention produced. Intel suggests that this would not protect
collaboration with private industry, but would rather create a
disincentive to do so.
The American Intellectual Property Law Association (AIPLA) argues
that the United States’ fears are unwarranted. AIPLA concedes that
while due diligence is costly, universities are able to protect
non-federally funded research. It repeats Roche’s contention that
universities can secure assignments contractually. However,
the Association of American Universities (AAU) counters that AIPLA’s
and Roche’s contractual solutions amount to legal opportunism. The
AAU contends that Roche’s argument that universities should improve
their standard contracts to avoid this legal predicament ignores the
principle of the Act. Further, the AAU warns that Roche’s reading not
only seriously increases due diligence costs that burden public fiscal
resources, but that the security of past and pending patents are still
potentially at risk.
Senator Birch Bayh worries that the public will ultimately be the ones
who suffer when their tax dollars no longer return the social and
economic dividends that the Act was meant to protect. Roche
questions this fear, pointing out that Stanford filed its patent
applications in 1992, but made no attempts to commercialize the
invention for eight years. In the meantime, Roche obtained approval
from the Food and Drug Administration and commercialized the
invention, helping millions of HIV sufferers.
However, Bayh also points out other benefits of the Act. He notes that
net proceeds from universities’ license efforts could be reinvested in
scientific research.
He adds that universities could, and should, ensure that licensees
manufacture the bulk of licensed products domestically. Bayh
explains that this will create jobs.
The nonprofit Bayhdole25 suggests that a proper reading of the Act
should not allow government rights to federally-funded inventions to
be defeated by the whims of individual, for-hire inventors. However,
the American Association of University Professors counters that
professors are not for-hire inventors and that if the Act made the
process of assignment unnecessary, universities would not have been
conducting the process for the past thirty years.
Moreover, Roche points out that the government is not without
remedy. Under Roche’s reading, Stanford’s policy arguments
completely ignore the fact that Stanford was required to secure
proper assignment of the inventions, and in failing to do so the
government may sue for breach of contract to reclaim the funding
amount.
top

Analysis
The University and Small Business Patent Procedure Act of 1980,
more commonly known as the Bayh-Dole Act (“the Act”), addresses
the ownership of patents resulting from government-funded
research. After originally pursuing an action for patent infringement,
the Board of Trustees of Stanford University claims that the Act
prevented its employee, Dr. Mark Holodniy, from assigning away
ownership rights to a federally funded invention he developed with
Cetus Corporation. Roche Molecular Systems, which subsequently
purchased Cetus, contends that Holodniy validly transferred his
ownership rights to Cetus. Roche asserts that the Act does not affect
inventors’ ability to independently assign their ownership rights to
third parties.

Textual and Structural Arguments

Stanford argues that a plain reading of the Act confirms that it gives
federal contractors, such as universities, the first right to inventions
created by their employees. According to Stanford, since an
institution can only create an invention through the actions of its
employees, the Act’s reference to “subject inventions” encompasses
all inventions made by a contractor’s employees with the aid of
federal funding. Furthermore, Stanford contends that other
provisions of the Act clarify that federally funded inventions do not
automatically belong to the government. Based on the principle
of expressio unius est exclusio alterius—the mention of one thing
excludes all others—Stanford argues that the Act requires contractors
to meet a detailed set of conditions before securing title to applicable
inventions. The omission of other conditions from the Act, Stanford
argues, gives rise to a “strong inference” that no other conditions
exist. Thus, Stanford concludes that once an institution has complied
with all of the requirements, as Stanford has, it successfully obtains
title to federally funded inventions.
Roche argues that Stanford both misstates the range of federally
funded inventions covered by the Act and violates the interpretive
principle that all words in a statute be given full effect. In Roche’s
view, the Bayh-Dole Act does not supplant the longstanding patent
law principle that inventors presumptively own their inventions, even
when the inventions are made in the course of employment. Further,
Roche specifically disagrees with Stanford’s interpretation of the word
“retain” as used in the Act. . Roche argues that the word should be
understood according to its common definition, “to keep hold or
possession of.” According to Roche, this understanding of “retain”
reveals that the Act protects only those contractors who already own
federally funded inventions. Finally, Roche points out that the Act
contains neither explicit “vesting” language nor procedural
protections for third parties. Roche asserts that the absence of such
language indicates that the Act did not automatically vest ownership
rights in federal contractors and did not affect the ability of inventors
to assign their rights to third parties.

Legislative History
Stanford and Roche both agree that the purpose of the Bayh-Dole Act
was to encourage cooperation between the public and private sectors,
to move inventions off government shelves, and to stimulate the
commercialization of inventions that could benefit the
public. However, the parties disagree as to how the Act allocated
ownership rights in federally funded inventions between contractors,
inventors, and third parties.
Stanford observes that when the Senate considered drafts of the Act,
no pro-Act Senator challenged the idea that contractors would
automatically gain title to federally funded inventions. Stanford notes
that the main objection to the Act was that the Act gave contractors
too many rights. Second, Stanford argues that federal
regulations—issued shortly after the Act—contradict Roche’s
argument that by cooperating with Holodniy on a federally funded
invention, Cetus became entitled to rights in the invention. Finally,
Stanford argues that the Congress that passed the Act in 1980
recognized the importance of giving contractors clear title to federally
funded inventions created by their employees. If contractors were not
sure of their ownership rights over their employees’ creations,
Stanford contends, the contractors would hesitate to take the
expensive and time-consuming steps necessary to commercialize
inventions.

Roche argues in response that, by passing the Bayh-Dole Act,


Congress intended to solve patent disputes that arose strictly
between the government and federal contractors, not disputes that
involve third parties or inventor assignments. Roche concedes that no
Senator in 1980 suggested that contractors needed title assignments
from inventors in order to claim ownership of federally funded
inventions. However, Roche interprets this silence as Congress’s
reluctance to upset a settled rule, namely, that inventors
presumptively own their inventions and can transfer ownership rights
to third parties. Roche contends the Act merely limits the
circumstances in which the government could claim rights in
inventions that appeared to belong to the contractor. Roche points
out that no legislator from the enactment period suggested that the
Act would displace established laws of ownership and assignment.

Federal Interests and Public Policy


Stanford contends that all patent disputes involving the Bayh-Dole
Act implicate two important federal interests—the determination of
rights under federal contracts and patent law. With respect to the first
interest, the balance of rights under federal contracts, Stanford
argues that the Bayh-Dole Act itself represents a decision on the part
of Congress to shift ownership rights in federally funded inventions
toward contractors and away from the government. According to
Stanford, giving contractors clear and complete ownership to
federally funded inventions increases the likelihood that the
inventions will be commercialized and put to positive public use. If, on
the other hand, the ownership of federally funded inventions could be
undermined by inventor and third-party assignments, Stanford
contends that contractors such as research institutions would hesitate
to engage in productive research and commercialization. Second,
with respect to patent law, Stanford notes that patent disputes are
often resolved using principles of equity or fairness. Stanford argues
that the equities lie in its favor—while Roche and Cetus “slept on their
rights” of ownership for over fifteen years, Stanford expended time,
money and effort in licensing and commercializing its patents to
Holodniy’s invention.

Roche, on the other hand, argues that Stanford is remiss for ignoring
the principle of constitutional avoidance. The principle, Roche
explains, encourages courts to interpret statutes in a way that avoids
constitutional problems. Roche contends that Stanford’s
interpretation of the Act is problematic because it perpetrates a Fifth
Amendment taking, depriving Roche of rightful property without
compensation. Additionally, Roche rejects Stanford’s argument that,
in order for inventions to reach the public through commercialization,
contractors must enjoy complete ownership over federally funded
inventions. Roche points out that innovation remains high in private
investment, where the risk of ownership disputes is always
present. Finally, Roche challenges Stanford’s assertion that the
equities in this case lie in Stanford’s favor. Far from “sleeping on its
rights,” Roche notes it incorporated Holodniy’s invention into its
HIV-testing kits, which were then offered on the market for over
fifteen years.
top

Conclusion
In this case, the Supreme Court will decide whether the Bayh-Dole Act
precludes an inventor working on a federally funded project from
assigning his ownership rights in the invention to a third party.
Stanford argues that both the Act and public policy considerations
require that research institutions get an exclusive opportunity to
patent their employees’ creations. Stanford contends that, if research
institutions did not receive this privilege, they would hesitate to
pursue costly and time-consuming research projects. Roche, on the
other hand, argues that the Bayh-Dole Act did not affect the
longstanding rule allowing inventors to assign their ownership rights
to third parties. Constitutional and equitable considerations, Roche
asserts, caution against Stanford’s interpretation of the Act. The
outcome of this case will likely affect the future of government-funded
research.
This week, the Supreme Court issued its decision in Stanford v. Roche Molecular Systems, Inc.,
holding that the Bayh-Dole Act, which allows federal contractors to “elect to retain title” to
patents developed with federal money, does not automatically vest contractors with patent
rights to federally funded inventions or otherwise authorize contractors to unilaterally take title
to such inventions. The Court stated that the premise that rights to an invention belong to the
inventor holds here, as the language of the Act did not clearly intend to modify this background
premise.
In this case, Stanford had been granted rights to the patents at issue by assignment, but those
patents were subject to a side agreement an inventor had made with a third party research
facility due to the lower court’s interpretation of the contract provisions the inventor had signed
with each. The Court noted that federal contractors generally obtain assignments from their
employees, as do most employers, and that effective assignment practice would grant
contractors such rights, as intended in the Act, without the need for disrupting basic patent law
principles

Converse Rubber Corporation v. Universal Rubber Products (G.R. No. L-27906)

Respondent Universal Rubber applied for the registration of the trademark ‘Universal Converse and
Device’ used on its rubber shoes and rubber slippers. Petitioner Converse opposed on the ground that
the trademark sought to be registered is confusingly similar to the word ‘Converse’ which is part of its
corporate name ‘Converse Rubber Corporation’ and will likely deceive purchasers and cause
irreparable injury to its reputation and goodwill in the Philippines. Respondent argued that the
trademarks petitioner uses on its rubber shoes are ‘Chuck Taylor’ and ‘All Star Device.’ The Director of
Patents gave due course to respondent’s application. MR was denied.

Issue:

Whether or not there is confusing similarity between the two trademarks.

Ruling: YES.

The trademark of respondent “UNIVERSAL CONVERSE and DEVICE” is imprinted in a circular manner
on the side of its rubber shoes. In the same manner, the trademark of petitioner which reads
“CONVERSE CHUCK TAYLOR” is imprinted on a circular base attached to the side of its rubber shoes.
The determinative factor in ascertaining whether or not marks are confusingly similar to each other
“is not whether the challenged mark would actually cause confusion or deception of the purchasers
but whether the use of such mark would likely cause confusion or mistake on the part of the buying
public. It would be sufficient, for purposes of the law that the similarity between the two labels is
such that there is a possibility or likelihood of the purchaser of the older brand mistaking the new
brand for it.” Even if not all the details just mentioned were identical, with the general appearance
alone of the two products, any ordinary, or even perhaps even [sic] a not too perceptive and
discriminating customer could be deceived … “

But even assuming, arguendo, that the trademark sought to be registered by respondent is
distinctively dissimilar from those of the petitioner, the likelihood of confusion would still subsists, not
on the purchaser’s perception of the goods but on the origins thereof. By appropriating the word
“CONVERSE,” respondent’s products are likely to be mistaken as having been produced by petitioner.
“The risk of damage is not limited to a possible confusion of goods but also includes confusion of
reputation if the public could reasonably assume that the goods of the parties originated from the
same source.

DISTILLERIA WASHINGTON, INC. or WASHINGTON


DISTILLERY, INC., petitioner

vs

LA TONDEÑA DISTILLERS, INC. and THE HONORABLE


COURT OF APPEALS, respondents.

Facts:

La Tondeña Distillers, Inc. filed before the Regional Trial


Court for the recovery, under its claim of ownership, of
possession or replevin against Distilleria Washington, Inc. or
Washington Distillery, Inc. of 18,157 empty “350 c.c. white
flint bottles” bearing the blown-in marks of “La Tondeña
Inc.” and “Ginebra San Miguel,” averring that Distilleria
Washington was using the bottles for its own “Gin Seven”
products without the consent of Distilleria Washington in
violation of Republic Act 623.
In the original decision, the court acknowledged that there
was a valid transfer of the bottles to Distilleria Washington,
except that its possession of the bottles without the written
consent of La Tondeña gives rise to a prima facie
presumption of illegal use under R.A. 623.

In seeking reconsideration of the decision, petitioner raises


the issue that if petitioner became the owner over the bottles
seized from it by replevin, then it has the right to their
possession and use as attributes of ownership.

The instant case is one for replevin (manual delivery) where


the claimant must be able to show convincingly that he is
either the owner or clearly entitled to the possession of the
object sought to be recovered. Replevin is a possessory action.
The gist of which focuses on the right of possession that in
turn, is dependent on a legal basis that, not infrequently,
looks to the ownership of the object sought to be replevied.

Issue:

Since replevin as a possessory action is dependent upon


ownership, it is relevant to ask: Whether or not there was a
transfer ownership of La Tondeña Distillers’ marked bottles
or containers when it sold its products in the market? Were
the marked bottles or containers part of the products sold to
the public?
Held:

The manufacturer sells the product in marked containers,


through dealers, to the public in supermarkets, grocery shops,
retail stores and other sales outlets. The buyer takes the item;
he is neither required to return the bottle nor required to
make a deposit to assure its return to the seller. He could
return the bottle and get a refund. A number of bottles at
times find their way to commercial users. It cannot be
gainsaid that ownership of the containers does pass on the
consumer albeit subject to the statutory limitations on the
use of the registered containers and to the trademark rights
of the registrant.

In plain terms, therefore, La Tondeña not only sold its gin


products but also the marked bottles or containers, as well.
And when these products were transferred by way of sale,
then ownership over the bottles and all its attributes (jus
utendi, jus abutendi, just fruendi, jus disponendi) passed to
the buyer. It necessarily follows that the transferee has the
right to possession of the bottles unless he uses them in
violation of the original owner’s registered or incorporeal
rights.

Furthermore, Sec. 5 of R.A. 623 states that when the bottles


have been “transferred by way of sale,” there should not be
any need of institution of any action included in the same act
(where there is a need of the written consent of the
manufacturer, bottler, or seller). Since the Court has found
that the bottles have been transferred by way of sale then, La
Tondeña has relinquished all its proprietary rights over the
bottles in favor of Distilleria Washington who has obtained
them in due course. Now as owner, it can exercise all
attributes of ownership over the bottles.

The general rule on ownership, therefore, must apply and


petitioner be allowed to enjoy all the rights of an owner in
regard the bottles in question, to wit: the jus utendi or the
right to receive from the thing what it produces; the jus
abutendi or the right to consume the thing by its use; the jus
disponendi or the power of the owner to alienate, encumber,
transform and even destroy the thing owned; and the jus
vindicandi or the right to exclude from the possession of the
thing owned any other person to whom the owner has not
transmitted such thing. What is proscribed is the use of the
bottles in infringement of another’s trademark or
incorporeal rights.

SERI SOMBOONSAKDIKUL, Petitioner vs. ORLANE S.A., Respondent

G.R. No. 188996

February 1, 2017

Facts:

On September 23, 2003, petitioner Seri Somboonsakdikul (petitioner) filed an application for
registration of the mark LOLANE with the IPO for goods classified under Class 3 (personal care
products) of the International Classification of Goods and Services for the Purposes of the Registration
of Marks (International Classification of Goods). Orlane S.A. (respondent) filed an opposition to
petitioner's application, on the ground that the mark LOLANE was similar to ORLANE in presentation,
general appearance and pronunciation, and thus would amount to an infringement of its mark.
Respondent alleged that: (1) it was the rightful owner of the ORLANE mark which was first used in
1948; (2) the mark was earlier registered in the Philippines on July 26, 1967 under Registration No.
129961 with the following goods: x x x perfumes, toilet water, face powders, lotions, essential oils,
cosmetics, lotions for the hair, dentrifices, eyebrow pencils, make-up creams, cosmetics & toilet
preparations under Registration No. 12996 and (3) on September 5, 2003, it filed another application
for use of the trademark on its additional products.

Petitioner denied that the LOLANE mark was confusingly similar to the mark ORLANE. He averred that
he was the lawful owner of the mark LOLANE which he has used for various personal care products
sold worldwide. He alleged that the first worldwide use of the mark was in Vietnam on July 4, 1995.
Petitioner also alleged that he had continuously marketed and advertised Class 3 products bearing
LOLANE mark in the Philippines and in different parts of the world and that as a result, the public had
come to associate the mark with him as provider of quality personal care products.

Petitioner maintained that the marks were distinct and not confusingly similar either under the
dominancy test or the holistic test.

The Bureau of Legal Affairs (BLA) rejected petitioner's application in a Decision dated February 27,
2007, finding that respondent's application was filed, and its mark registered, much earlier. The BLA
ruled that there was likelihood of confusion based on the following observations: (1) ORLANE and
LOLANE both consisted of six letters with the same last four letters - LANE; (2) both were used as label
for similar products; (3) both marks were in two syllables and that there was only a slight difference in
the first syllable; and (4) both marks had the same last syllable so that if these marks were read aloud,
a sound of strong similarity would be produced and such would likely deceive or cause confusion to
the public as to the two trademarks.16

Petitioner filed a motion for reconsideration but this was denied by the Director of the BLA on May 7,
2007. On appeal, the Director General of the IPO affirmed the Decision of the BLA Director. Thus,
petitioner filed a petition for review before the CA arguing that there is no confusing similarity
between the two marks. The Court of Appeals denied the petition and held that there exists colorable
imitation of respondent's mark by LOLANE. The CA accorded due respect to the Decision of the
Director General and ruled that there was substantial evidence to support the IPO's findings of fact.
Applying the dominancy test, the CA ruled that LOLANE' s mark is confusingly or deceptively similar to
ORLANE.

Issue:

Wether or not there is confusing similarity between ORLANE and LOLANE which would bar the
registration of LOLANE before the IPO.

Ruling:

No, there is no confusing similarity between ORLANE and LOLANE which would bar the registration of
LOLANE before the IPO. The Court ruled that the CA erred when it affirmed the Decision of the IPO.
There is no colorable imitation between the marks LOLANE and ORLANE which would lead to any
likelihood of confusion to the ordinary purchasers. A trademark is defined under Section 121.1 of RA
8293 as any visible sign capable of distinguishing the goods. It is susceptible to registration if it is
crafted fancifully or arbitrarily and is capable of identifying and distinguishing the goods of one
manufacturer or seller from those of another. Thus, the mark must be distinctive. The registrability of
a trademark is governed by Section 123 of RA 8293. Section 123.1 provides: Section 123. 1. A mark
cannot be registered if it: xxx...d. Is identical with a registered mark belonging to a different
proprietor or a mark with an earlier filing or priority date, in respect of: i. The same goods or services,
or ii. Closely related goods or services, or iii. If it nearly resembles such a mark as to be likely to
deceive or cause confusion; e. Is identical with, or confusingly similar to, or constitutes a translation of
a mark which is considered by the competent authority of the Philippines to be well-known
internationally and in the Philippines, whether or not it is registered here, as being already the mark
of a person other than the applicant for registration, and used for identical or similar goods or
services: provided, that in determining whether a mark is well-known, account shall be taken of the
knowledge of the relevant sector of the public, rather than of the public at large, including knowledge
in the Philippines which has been obtained as a result of the promotion of the mark; xxx.

In determining the likelihood of confusion, the Court must consider: [a] the resemblance between the
trademarks; [b] the similarity of the goods to which the trademarks are attached; [c] the likely effect
on the purchaser and [d] the registrant's express or implied consent and other fair and equitable
considerations. Likewise, the Court finding that LOLANE is not a colorable imitation of ORLANE due to
distinct visual and aural differences using the dominancy test, it no longer finds necessary to discuss
the contentions of the petitioner as to the appearance of the marks together with the packaging,
nature of the goods represented by the marks and the price difference, as well as the applicability of
foreign judgments. The Court ruled that the mark LOLANE is entitled to registration. Hence, the
petition is GRANTED and the Decision of the Court of Appeals dated July 14, 2009 is REVERSED and
SET ASIDE.

Prosource International, Inc. v. Horphag Research Management SA,


G.R. No. 180073
Respondent is a corporation and owner of trademark PYCNOGENOL, a food. Respondent
later discovered that petitioner was also distributing a similar food supplement using the
mark PCO-GENOLS since 1996. This prompted respondent to demand that petitioner
cease and desist from using the aforesaid mark.

Respondent filed a Complaint for Infringement of Trademark with Prayer for Preliminary
Injunction against petitioner, in using the name PCO-GENOLS for being confusingly
similar. Petitioner appealed otherwise.

The RTC decided in favor of respondent. It observed that PYCNOGENOL and PCO-GENOLS
have the same suffix "GENOL" which appears to be merely descriptive and thus open for
trademark registration by combining it with other words and concluded that the marks,
when read, sound similar, and thus confusingly similar especially since they both refer to
food supplements.
On appeal to the CA, petitioner failed to obtain a favorable decision. The appellate court
explained that under the Dominancy or the Holistic Test, PCO-GENOLS is deceptively
similar to PYCNOGENOL.

ISSUE: Whether the names are confusingly similar.

RULING:

Yes. There is confusing similarity and the petition is denied. Jurisprudence developed
two test to prove such.

The Dominancy Test focuses on the similarity of the prevalent features of the competing
trademarks that might cause confusion and deception, thus constituting infringement. If
the competing trademark contains the main, essential and dominant features of another,
and confusion or deception is likely to result, infringement takes place. Duplication or
imitation is not necessary; nor is it necessary that the infringing label should suggest an
effort to imitate. The question is whether the use of the marks involved is likely to cause
confusion or mistake in the mind of the public or to deceive purchasers. Courts will
consider more the aural and visual impressions created by the marks in the public mind,
giving little weight to factors like prices, quality, sales outlets, and market segments.

The Holistic Test entails a consideration of the entirety of the marks as applied to the
products, including the labels and packaging, in determining confusing similarity. Not
only on the predominant words should be the focus but also on the other features
appearing on both labels in order that the observer may draw his conclusion whether one
is confusingly similar to the other.

SC applied the Dominancy Test.Both the words have the same suffix "GENOL" which on
evidence, appears to be merely descriptive and furnish no indication of the origin of the
article and hence, open for trademark registration by the plaintiff through combination
with another word or phrase. When the two words are pronounced, the sound effects are
confusingly similar not to mention that they are both described by their manufacturers as
a food supplement and thus, identified as such by their public consumers. And although
there were dissimilarities in the trademark due to the type of letters used as well as the
size, color and design employed on their individual packages/bottles, still the close
relationship of the competing products’ name in sounds as they were pronounced, clearly
indicates that purchasers could be misled into believing that they are the same and/or
originates from a common source and manufacturer.

Coffee Partners v. San Francisco Coffee & Roastery (G.R. No. 169504)

The petitioner holds a business in maintaining coffee shops in the Philippines. It is registered with the
Securities and Exchange Commission in January 2001. In its franchise agreement with Coffee Partners
Ltd, it carries the trademark “San Francisco Coffee.” Respondent is engaged in the wholesale and
retail sale of coffee that was registered in SEC in May 1995 under a registered business name of “San
Francisco Coffee &Roastery, Inc.” It entered into a joint venture with Boyd Coffee USA to study coffee
carts in malls.
When respondent learned that petitioner will open a coffee shop in Libis, Q.C. they sent a letter to
the petitioner demanding them to stop using the name “San Francisco Coffee” as it causes
confusion to the minds of the public. A complaint was also filed by respondents before the Bureau of
Legal Affairs of the Intellectual Property Office for infringement and unfair competition with claims for
damages. Petitioners contend that there are distinct differences in the appearance of their trademark
and that respondent abandoned the use of their trademark when it joined venture with Boyd Coffee
USA. The Bureau of Legal Affairs of the IPO held that petitioner’s trademark infringed on the
respondent’s trade name as it registered its business name first with the DTI in 1995 while petitioner
only registered its trademark in 2001.

Furthermore, it ruled that the respondent did not abandon the use of its trade name upon its joint
venture with Boyd Coffee USA since in order for abandonment to exist it must be permanent,
intentional and voluntary. It also held that petitioner’s use of the trademark "SAN FRANCISCO
COFFEE" will likely cause confusion because of the exact similarity in sound, spelling, pronunciation,
and commercial impression of the words "SAN FRANCISCO" which is the dominant portion of
respondent’s trade name and petitioner’s trademark. Upon appeal before the office of the Director
General of the IPO, the decision of its legal affairs was reversed declaring there was no infringement.
The Court of Appeals however set aside its decision and reinstated the IPO legal affairs’ decision.
Petitioner contends that the respondent’s trade name is not registered therefore a suit for
infringement is not available.

Issue:

Whether or not the petitioner’s use of the trademark "SAN FRANCISCO COFFEE" constitutes
infringement of respondent’s trade name "SAN FRANCISCO COFFEE & ROASTERY, INC.," even if the
trade name is not registered with the Intellectual Property Office (IPO).

Ruling:

Registration of a trademark before the IPO is no longer a requirement to file an action for
infringement as provided in Section 165.2 of RA 8293. All that is required is that the trade name is
previously used in trade or commerce in the Philippines. There is no showing that respondent
abandoned the use of its trade name as it continues to embark to conduct research on retailing coffee,
import and sell coffee machines as among the services for which the use of the business name has
been registered.

The court also laid down two tests to determine similarity and likelihood of confusion. The dominancy
test focuses on similarity of the prevalent features of the trademarks that could cause deception and
confusion that constitutes infringement. Exact duplication or imitation is not required. The question is
whether the use of the marks involved is likely to cause confusion or mistake in the mind of the public
or to deceive consumers. the holistic test entails a consideration of the entirety of the marks as
applied to the products, including the labels and packaging, in determining confusing similarity.15 The
discerning eye of the observer must focus not only on the predominant words but also on the other
features appearing on both marks in order that the observer may draw his conclusion whether one is
confusingly similar to the other. Applying either the dominancy test or the holistic test, petitioner’s
"SAN FRANCISCO COFFEE" trademark is a clear infringement of respondent’s "SAN FRANCISCO
COFFEE & ROASTERY, INC." trade name. The descriptive words "SAN FRANCISCO COFFEE" are
precisely the dominant features of respondent’s trade name. And because both are involved in coffee
business there is always the high chance that the public will get confused of the source of the coffee
sold by the petitioner. Respondent has acquired an exclusive right to the use of the trade name "SAN
FRANCISCO COFFEE & ROASTERY, INC." since the registration of the business name with the DTI in
1995.

SY CHANG vs. GAW LIU G.R. No. L-29123. March 29, 1972 Facts: • a petition
was filed by Sy Chang to cancel a certificate of registration No. 10637,
of a trademark, LION and TIGER issued by the Philippines Patent Office
on December 12, 1963 in favor of respondent Gaw Liu • grounds: he had
previously used such a trademark since 1952 on aniline basic colors or
goods similar to those manufactured or sold by respondent whom he accused
of fraudulently appropriating and registering the same with full
knowledge that he was not the owner. • The application was filed on
February 20 of that year, the use of such trademark on his product
consisting of dyestuffs allegedly dating back to 1956. • His firm
allegedly is engaged in the manufacture of dyestuff, crayone, stationery,
and school supplies, and in the sale of dyestuff the trademark LION and
TIGER label has been adopted since 1952. • The witness identified a
LION-TIGER label being used by Petitioner. It was designed for Venus
Commercial in 1952 by Mr. Gaudencio Eugenio, a free lance artist who
confirmed this fact by testifying that around June, 1952, upon request
of Sy Chang, he designed a label for dyestuff, the LION & TIGER label,
for which he was duly compensated. • The design was in turn first printed
by Majestic Press owned by the other witness, Antonio T. Cheng, who
affirmed that he knew Venus Commercial because of a printing job in 1952
pertaining to the 10,000 pieces of LION-TIGER label. Gaw Liu's contention:
• Gaw Liu himself testified that he was engaged in chemical manufacturing
since the Japanese occupation, with offices at Magdalena St., Manila. •
in 1947, he used and adopted the brand TIGER for his dyestuff and later,
he allegedly adopted LION & TIGER, made some sales, as shown by an invoice
dated December 10, 1951 issued to Pue Chong Beng of Zamboanga. • He
confirmed having known Venus Commercial in 1951 or 1952 through the owner
he knew only as 'Mr. Cao' who used to offer him discarded materials such
as dyestuff and empty cans. He also admitted knowing witness Sy Chang who
worked for Venus Commercial, but only after 1952, but he had never been
inside the firm's establishment; neither had he received any calendar from
said firm. • According to him, Venus Commercial sold dyestuff in 1950,
or 1951, or 1952, using another brand he described as a lady carrying on
her back two children holding two rotating small drums. After it stopped
selling dyestuff of the 'Lady' brand, they started using the LION brand
in 1952 or 1953. • Asked how he advertised his trademark LION-TIGER, the
Respondent said that it was a small business so he did not advertise it
either by newspaper, radio, or handbills, but he sold it cheaper to
convince people to use it • both parties admitted that there was an
arranged meeting between them to reach an amicable settlement with regard
the trademark Lion & Tiger, but such meeting never pushed through as Gaw
Liu is asking for 80,000 as value for the trademark which was then
registered in his name Issue: • WON Gaw Liu had proven that he has prior
use of the trademark Lion and Tiger as oppose to the claim of Sy Chang
Answer: • negative. He never presented proof required by law to invest
him with exclusive, continuous adoption and use of the trademark which
should consist in, inter alia, considerable sale since his adoption
thereof combined with promotional work suitable to popularize the
trademark. Ratio Decidendi: • Gaw Liu was asked to explain why he claimed
to have used the trademark in 1947 when, according to his application he
first used it in commerce on June 10, 1956. He explained that it was because
the Patent Office required two months use at the time the application was
filed • Where the rebuttable character of the validity of registration
of the trademark registered in the name of respondent is put in issue,
the evidentiary burden of proving invalidity rests upon the petitioner.
From the facts as presented though, the conclusion reached is that the
presumption had been rebutted, petitioner having shown "that at the time
the respondent filed his application for registration and for years prior
thereto, he was not the exclusive user of the trademark LION-TIGER. The
burden of going forward is thus shifted to the respondent who must show
that the subject matter of registration is, in fact, distinctive of his
goods. • the record is wanting in proof sufficient to show that
Respondent-Registrant has actually and substantially adopted and used the
trademark so as to show that his firm was the source or origin of his
dyestuff. • it has been admitted by respondent that he never advertised
the trademark, either by newspaper, radio or handbills. He was not able
to show extensive sales, except those made by him to Pua Chong Beng, which,
however, may be considered as negligible and sporadic. • No further sales
were made as the record eloquently shows. These matters are necessary
especially when Respondent alleges use on a date earlier than that alleged
in his application, in which case his evidence, testimonial or documentary,
must be definite, clear, and free from doubt or inconsistencies. • Under
the Rules of Practice in Trademark Cases (Rule 173), in all inter partes
proceedings, the allegation of date of use in the application for
registration of the applicant or of the registrant cannot be used as
evidence in behalf of the party making the same. In case no testimony is
taken as to the date of use, the party will be limited to the filing of
the application as the date of his first use. • because the Respondent
was not able to prove his date of first use in commerce of the trademark
LION-TIGER he is deemed to have used it on the filing date of his
application which is February 20, 1963 • the superior right of petitioner
in view of what the decision called "the chain of circumstances" favorable
to him namely his "use thereof in commerce, and a systematic preservation
of the records to support his claim of continuous use, such as the making
of the design, the printing of the design on labels, the actual use on
the goods, advertising in calendars, and other acts of dominion, such as
the filing of this petition for cancellation. • The Certificate of
Registration No. 10637 issued to Gaw Liu for the trade
WILTON DY v. KONINKLIJKE PHILIPS ELECTRONICS, GR No. 186088, 2017-03-22
Facts:
On 12 April 2000, petitioner PHILITES filed a trademark application (Application Serial
Number 4-2000-002937) covering its fluorescent bulb, incandescent light, starter and
ballast. After publication, respondent Koninklijke Philips Electronics, N.V. ("PHILIPS")
filed a Verified Notice of Opposition on 17 March 2006, alleging the following:
(a) The approval of Application Serial No. 4-2000-002937 is contrary to the following
provisions of Republic Act No. [RA] 8293 or the Intellectual Property Code of the
Philippines... approval... will cause grave and irreparable damage and injury to opp...
ose.
use and registration of the applied for mark by [petitioner] will mislead the public as to
the origin, nature, quality, and characteristic of the goods on which it is affixed...
application for registration is tantamount to fraud as it seeks to register and obtain legal
protection for an identical or confusingly similar mark that clearly infringes upon the
established rights of the [respondent] over its registered and internationally well-known
mark... egistration of the trademark PHILITES & LETTER P DEVICE in the name of the
[petitioner] will violate the proprietary rights and interests, business reputation and
goodwill of the [respondent] over its trademark, considering that the distinctiveness of
the trademark PHILIPS will be diluted... registration of the applied for mark will not only
prejudice the Opposer, but will also cause [petitioner] to unfairly profit commercially
from the goodwill, fame and notoriety of Opposer's trademark and reputation.
registration and use of the applied for mark in connection with goods under Class 11
will weaken the unique and distinctive significance of mark PHILIPS
On 8 August 2006, petitioner filed a Verified Answer, stating that its PHILITES &
LETTER P DEVICE trademark and respondent's PHILIPS have vast dissimilarities in
terms of spelling, sound and meaning... on 9 November 2006, IPP-BLA Director
Estrellita Beltran-Abelardo rendered a Decision[8] denying the Opposition filed by
respondent PHILIPS
Application... filed by Respondent-Applicant, Wilton Dy and/or Philites Electronic &
Lighting Products on 12 April 2000 for the mark "PHILITES & LETTER P DEVICE"
used on fluorescent bulb, incandescent light, starter, ballast under class 11, is
GRANTED
IPP-BLA concluded that the PHILIPS and PHILITES marks were so unlike, both
visually and aurally. It held that no confusion was likely to occur, despite their
contemporaneous use... observations:
The Philips shield mark has four stars in different sizes located at the north east and
south west portions inside a circle within the shield. There are three wavy lines
dissecting the middle of the circle. None of these appear in the respondent's
mark.[Respondent] declares that the word Philips is the surname of the brothers who
founded the Philips company engaged in manufacturing and selling lighting products.
[Petitioner] on the other hand has testified that the word Philites is coined from the
word 'Philippines' and 'lights,' hence 'Philites.' This Bureau finds that there is no
dictionary meaning to the [petitioner's] mark. It is a coined and arbitrary word capable
of appropriation as a trademark. x x xMoreover, by mere pronouncing the two marks,
the phonetic sounds produced when each mark is uttered are not the same. The last
syllable of respondent's mark is uttered in a long vowel sound, while the last vowel of
the opposer's mark is not.
the IPP-DG noted that "[t]he dominant feature of the [respondent's] trademark is
'PHILIPS' while that of the [petitioner's] trademark is 'PHILITES.' While the first
syllables of the marks are identical - 'PHI' - the second syllables are not. The
differences in the last syllable accounted for the variance of the trademarks visually
and aurally."
Moreover, there were "glaring differences and dissimilarities in the design and general
appearance of the Philips shield emblem mark and the letter 'P' of Philites mark."
Upon intermediate appellate review, the CA rendered a Decision... the Petition for
Review .is GRANTED. The Decision dated 16 April 2008 of the Director General of the
Intellectual Property Office in Appeal No. 14-06-28; IPC No. 14-2006-00034 is
REVERSED and SET ASIDE.
the CA reasoned that the "drawing of the trademark submitted by [petitioner] has a
different appearance from that of [petitioner's] actual wrapper or packaging that
contain the light bulbs, which We find confusingly similar with that of [respondent's]
registered trademark and packaging."
"self-serving [petitioner's] asseveration that the mark 'PHILITES' is a coined or
arbitrary mark from the words 'Philippines' and 'lights.'
Issues:
Whether or not respondent's mark is a registered and well-known mark in the
Philippines
Whether or not the mark applied for by petitioner is identical or confusingly similar with
that of respondent
Ruling:
Petition is bereft of merit.
A trademark is "any distinctive word, name, symbol, emblem, sign, or device, or any
combination thereof, adopted and used by a manufacturer or merchant on his goods to
identify and distinguish them from those manufactured, sold, or dealt by others.
Respondent opposes petitioner's application on the ground that PHILITES' registration
will mislead the public over an identical or confusingly similar mark of PHILIPS, which
is registered and internationally well-known mark.
respondent invokes the following provisions of Section 123:
(d) Is identical with a registered mark belonging to a different proprietor or a mark with
an earlier filing or priority date, in respect of: (i) The same goods or services, or (ii)
Closely related goods or services, or (iii) If it nearly resembles such a mark as to be
likely to deceive or cause confusion;
(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark
which is considered by the competent authority of the Philippines to be well-known
internationally and in the Philippines, whether or not it is registered here, as being
already the mark of a person other than the applicant for registration, and used for
identical or similar goods or services: Provided, That in determining whether a mark is
well-known, account shall be taken of the knowledge of the relevant sector of the
public, rather than of the public at large, including knowledge in the Philippines which
has been obtained as a result of the promotion of the mark.
Respondent's mark is a registered and well-known mark in the Philippines.There is no
question that respondent's mark PHILIPS is already a registered and well-known mark
in the Philippines.
'a mark which is considered by the competent authority of the Philippines to be
well-known internationally and in the Philippines, whether or not it is registered here,'
cannot be registered by another in the Philippines."
Petitioner seeks to register a mark nearly resembling that of respondent, which may
likely to deceive or cause confusion among consumers.Despite respondent's
diversification to numerous and varied industries,[33] the records show that both
parties are engaged in the same line of business: selling identical or similar goods
such as fluorescent bulbs, incandescent lights, starters and ballasts.In determining
similarity and likelihood of confusion, jurisprudence has developed two tests: the
dominancy test, and the holistic or totality test.
he dominancy test focuses on "the similarity of the prevalent or dominant features of
the competing trademarks that might cause confusion, mistake, and deception in the
mind of the purchasing public. Duplication or imitation is not necessary... neither is it
required that the mark sought to be registered suggests an effort to imitate. Given
more consideration are the aural and visual impressions created by the marks on the
buyers of goods, giving little weight to factors like prices, quality, sales outlets, and
market segments."... the holistic or totality test necessitates a "consideration of the
entirety of the marks as applied to the products, including the labels and packaging, in
determining confusing similarity. The discerning eye of the observer must focus not
only on the predominant words, but also on the other features appearing on both labels
so that the observer may draw conclusion on whether one is confusingly similar to the
other."
Applying the dominancy test to this case requires us to look only at the mark submitted
by petitioner in its application, while we give importance to the aural and visual
impressions the mark is likely to create in the minds of the buyers. We agree with the
findings of the CA that the mark "PHILITES" bears an uncanny resemblance or
confusing similarity with respondent's mark "PHILIPS," to wit:
An examination of the trademarks shows that their dominant or prevalent feature is the
five-letter "PHILI", "PHILIPS" for petitioner, and "PHILITES" for respondent. The marks
are confusingly similar with each other such that an ordinary purchaser can conclude
an association or relation between the marks. The consuming public does not have the
luxury of time to ruminate the phonetic sounds of the trademarks, to find out which one
has a short or long vowel sound.
Most importantly, both trademarks are used in the sale of the same goods, which are
light bulbs.
nfusing similarity becomes even more prominent when we examine the entirety of the
marks used by petitioner and respondent, including the way the products are
packaged. In using the holistic test, we find that there is a confusing similarity between
the registered marks PHILIPS and PHILITES, and note that the mark petitioner seeks
to register-is vastly different from that which it actually uses in the packaging of its
products. We quote with approval the findings of the CA as follows:
A comparison between petitioner's registered trademark "PHILIPS" as used in the
wrapper or packaging of its light bulbs and that of respondent's applied for trademark
"PHILITES" as depicted in the container or actual wrapper/packaging of the latter's
light bulbs will readily show that there is a strong similitude and likeness between the
two trademarks that will likely cause deception or confusion to the purchasing public.
the Petition for Review on Certiorari is hereby DENIED
MANG INASAL PHILIPPINES, INC., Petitioner Vs. IFP MANUFACTURING CORPORATION, Respondent
G.R. No. 221717
June 19, 2017

FACTS:

The Trademark Application and the Opposition Respondent IFP Manufacturing Corporation is a local
manufacturer of snacks and beverages.

On May 26, 2011, respondent filed with the Intellectual Property Office (IPO) an application for the
registration of the mark "OK Hotdog Inasal Cheese Hotdog Flavor Mark"in connection with goods
under Class 30 of the Nice Classification. The said mark, which respondent intends to use on one of its
curl snack products. The application of respondent was opposed by petitioner Mang Inasal Philippines,
Inc. Petitioner is a domestic fast food company and the owner of the mark "Mang Inasal, Home of
Real Pinoy Style Barbeque and Device" (Mang Inasal mark) for services under Class 43 of the Nice
Classification. The said mark, which was registered with the IPO in 2006 and had been used by
petitioner for its chain of restaurants since 2003.

Petitioner, in its opposition, contended that the registration of respondent's OK Hotdog Inasal mark is
prohibited under Section 123.l (d)(iii) of Republic Act No. (RA) 8293. Petitioner averred that the OK
Hotdog Inasal mark and the Mang Inasal mark share similarities-both as to their appearance and as to
the goods or services that they epresent which tend to suggest a false connection or association
between the said marks and, in that regard, would likely cause confusion on the part of the public. As
petitioner explained:
1. The OK Hotdog Inasal mark is similar to the Mang Inasal mark. Both marks feature the same
dominant element-i.e., the word "INASAL"-printed and stylized in the exact same manner, viz:

a. In both marks, the word "INASAL" is spelled using the same font style and red color;

b. In both marks, the word "INASAL" is placed inside the same black outline and yellow background;
and

c. In both marks, the word "INASAL" is arranged in the same staggered format.

2. The goods that the OK Hotdog Inasal mark is intended to identify (i.e., curl snack products) are also
closely related to the services represented by the Mang Inasal mark (i.e., fast food restaurants). Both
marks cover inasal or inasal-flavored food products. Petitioner's opposition was referred to the
Bureau of Legal Affairs (BLA) of the IPO for hearing and disposition.

ISSUE:

Whether or not the registration of respondent's OK Hotdog Inasal mark is prohibited under Section
123.l (d) (iii) of Republic Act No. (RA) 8293

The OK Hotdog Inasal Mark Is Similar to the Mang Inasal Mark

The first condition of the proscription requires resemblance or similarity between a


prospective mark and an earlier mark. Similarity does not mean absolute identity of
marks. To be regarded as similar to an earlier mark, it is enough that a prospective mark
21

be a colorable imitation of the former. Colorable imitation denotes such likeness in form,
22

content, words, sound, meaning, special arrangement or general appearance of one mark
with respect to another as would likely mislead an average buyer in the ordinary course of
purchase. 23

In determining whether there is similarity or colorable imitation between two marks,


authorities employ either the dominancy test or the holistic test. In Mighty Corporation v.
24

E. & J. Gallo Winery, we distinguished between the two tests as follows:


25

The Dominancy Test focuses on the similarity of the prevalent features of


the competing trademarks which might cause confusion or deception, and
thus infringement. If the competing trademark contains the main, essential
or dominant features of another, and confusion or deception is likely to
result, infringement takes place. Duplication or imitation is not necessary;
nor is it necessary that the infringing label should suggest an effort to
imitate. The question is whether the use of the marks involved is likely to
cause confusion or mistake in the mind of the public or deceive
purchasers.

On the other hand, the Holistic Test requires that the entirety of the marks
in question be considered in resolving confusing similarity. Comparison of
words is not the only determining factor. The trademarks in their entirety
as they appear in their respective labels or hang tags must also be
considered in relation to the goods to which they are attached. The
discerning eye of the observer must focus not only on the predominant
words but also on the other features appearing in both labels in order that
he may draw his conclusion whether one is confusingly similar to the other.
(citations omitted and emphasis supplied)

There are currently no fixed rules as to which of the two tests can be applied in any given
case. However, recent case law on trademark seems to indicate an overwhelming
26

judicial preference towards applying the dominancy test. We conform.


27

Our examination of the marks in controversy yielded the following findings:

1. The petitioner's Mang Inasal mark has a single dominant feature-the


word "INASAL" written in a bold red typeface against a black outline and
yellow background with staggered design. The other perceptible elements
of the mark-such as the word "MANG" written in black colored font at the
upper left side of the mark and the phrase "HOME OF REAL PINOY
STYLE BARBEQUF' written in a black colored stylized font at the lower
portion of the mark-are not as visually outstanding as the mentioned
feature.

2. Being the sole dominant element, the word "INASAL," as stylized in the
Mang Inasal mark, is also the most distinctive and recognizable feature of
the said mark.

3. The dominant element "INASAL," as stylized in the Mang Inasal mark,


is different from the term "inasal' per se. The term "inasal" per se is a
descriptive term that cannot be appropriated. However, the dominant
element "INASAL," as stylized in the Mang Inasal mark, is not. Petitioner,
as the registered owner of the Mang Inasal mark, can claim exclusive use
of such element.

4. The respondent's OK Hotdog Inasal mark, on the other hand, has three
(3) dominant features: (a) the word "INASAL" written in a bold red
typeface against a black and yellow outline with staggered design; (b) the
word "HOTDOG" written in green colored font; and (c) a picture of three
pieces of curls. Though there are other observable elements in the
mark-such as the word "OK'' written in red colored font at the upper left
side of the mark, the small red banner overlaying the picture of the curls
with the words "CHEESE HOTDOG FLAVOR" written on it, and the image
of a block of cheese beside the picture of the curls-none of those are as
prevalent as the two features aforementioned.

5. The dominant element "INASAL" in the OK Hotdog Inasal mark is


exactly the same as the dominant element "INASAL" in the Mang Inasal
mark. Both elements in both marks are printed using the exact same red
colored font, against the exact same black outline and yellow background
and is arranged in the exact same staggered format.

6. Apart from the element "INASAL," there appear no other perceivable


similarities between the two marks.

Given the foregoing premises, and applying the dominancy test, we hold that the OK
Hotdog Inasal mark is a colorable imitation of the Mang Inasal mark.
First. The fact that the conflicting marks have exactly the same dominant element is key. It
is undisputed that the OK Hotdog Inasal mark copied and adopted as one of its dominant
features the "INASAL" element of the Mang Inasal mark. Given that
the "INASAL" element is, at the same time, the dominant and most distinctive feature of
the Mang Inasal mark, the said element's incorporation in the OK Hotdog Inasal mark,
thus, has the potential to project the deceptive and false impression that the latter mark is
somehow linked or associated with the former mark.

Second. The differences between the two marks are I trumped by the overall impression
created by their similarity. The mere fact that there are other elements in the OK Hotdog
Inasal mark that are not present in the Mang Inasal mark actually does little to change the
probable public perception that both marks are linked or associated. It is worth reiterating
1âwphi1

that the OK Hotdog Inasal mark actually brandishes a literal copy of the most
recognizable feature of the Mang Inasal mark. We doubt that an average buyer catching a
casual glimpse of the OK Hotdog Inasal mark would pay more attention to the peripheral
details of the said mark than it would to the mark's more prominent feature, especially
when the same invokes the distinctive feature of another more popular brand.

All in all, we find that the OK Hotdog Inasal mark is similar to the Mang Inasal mark.

Diaz vs People of the Philippines


G.R. No. 180677 February 18, 2013

Facts: Levi Strauss Philippines, Inc. (Levi’s Philippines) is a licensee of Levi’s. After
receiving information that Diaz was selling counterfeit LEVI’S 501 jeans in his tailoring
shops in Almanza and Talon, Las Piñas City, Levi’s Philippines hired a private
investigation group to verify the information. Surveillance and the purchase of jeans
from the tailoring shops of Diaz established that the jeans bought from the tailoring
shops of Diaz were counterfeit or imitations of LEVI’S 501. Levi’s Philippines then
sought the assistance of the National Bureau of Investigation (NBI) for purposes of
applying for a search warrant against Diaz to be served at his tailoring shops. The
search warrants were issued in due course. Armed with the search warrants, NBI
agents searched the tailoring shops of Diaz and seized several fake LEVI’S 501 jeans
from them. Levi’s Philippines claimed that it did not authorize the making and selling
of the seized jeans; that each of the jeans were mere imitations of genuine LEVI’S 501
jeans by each of them bearing the registered trademarks, like the arcuate design, the
tab, and the leather patch; and that the seized jeans could be mistaken for original
LEVI’S 501 jeans due to the placement of the arcuate, tab, and two-horse leather
patch. Diaz stated that he did not manufacture Levi’s jeans, and that he used the label
“LS Jeans Tailoring” in the jeans that he made and sold; that the label “LS Jeans
Tailoring” was registered with the Intellectual Property Office; that his shops received
clothes for sewing or repair; that his shops offered made-to-order jeans, whose styles
or designs were done in accordance with instructions of the customers; that since the
time his shops began operating in 1992, he had received no notice or warning
regarding his operations; that the jeans he produced were easily recognizable because
the label “LS Jeans Tailoring,” and the names of the customers were placed inside the
pockets, and each of the jeans had an “LSJT” red tab; that “LS” stood for “Latest
Style;” and that the leather patch on his jeans had two buffaloes, not two horses.

Issue: Whether or not Diaz is liable for trademark infringement.

Held: No. Section 155 of R.A. No. 8293 defines the acts that constitute infringement
of trademark, viz:

Remedies; Infringement. — Any person who shall, without the consent of the owner of
the registered mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation


of a registered mark or the same container or a dominant feature thereof in
connection with the sale, offering for sale, distribution, advertising of any goods or
services including other preparatory steps necessary to carry out the sale of any goods
or services on or in connection with which such use is likely to cause confusion, or to
cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a


dominant feature thereof and apply such reproduction, counterfeit, copy or colorable
imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in connection with the sale, offering for sale,
distribution, or advertising of goods or services on or in connection with which such use
is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil
action for infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts stated in
Subsection 155.1 or this subsection are committed regardless of whether there is
actual sale of goods or services using the infringing material.

The elements of the offense of trademark infringement under the Intellectual Property
Code are, therefore, the following:

 The trademark being infringed is registered in the Intellectual Property Office;


 The trademark is reproduced, counterfeited, copied, or colorably imitated by
the infringer;
 The infringing mark is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark is applied
to labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods, business or services;
 The use or application of the infringing mark is likely to cause confusion or
mistake or to deceive purchasers or others as to the goods or services
themselves or as to the source or origin of such goods or services or the identity
of such business; and
 The use or application of the infringing mark is without the consent of the
trademark owner or the assignee thereof.

As can be seen, the likelihood of confusion is the gravamen of the offense of trademark
infringement. There are two tests to determine likelihood of confusion, namely: the
dominancy test, and the holistic test. The contrasting concept of these tests was
explained in Societes Des Produits Nestle, S.A. v. Dy, Jr., thus:

x x x. The dominancy test focuses on the similarity of the main, prevalent or essential
features of the competing trademarks that might cause confusion. Infringement takes
place when the competing trademark contains the essential features of
another. Imitation or an effort to imitate is unnecessary. The question is whether the
use of the marks is likely to cause confusion or deceive purchasers.

The holistic test considers the entirety of the marks, including labels and packaging, in
determining confusing similarity. The focus is not only on the predominant words but
also on the other features appearing on the labels.

The holistic test is applicable here considering that the herein criminal cases also
involved trademark infringement in relation to jeans products. Accordingly, the jeans
trademarks of Levi’s Philippines and Diaz must be considered as a whole in determining
the likelihood of confusion between them. The maong pants or jeans made and sold by
Levi’s Philippines, which included LEVI’S 501, were very popular in the Philippines. The
consuming public knew that the original LEVI’S 501 jeans were under a foreign brand
and quite expensive. Such jeans could be purchased only in malls or boutiques as
ready-to-wear items, and were not available in tailoring shops like those of Diaz’s as
well as not acquired on a “made-to-order” basis. Under the circumstances, the
consuming public could easily discern if the jeans were original or fake LEVI’S 501, or
were manufactured by other brands of jeans.

Given the foregoing, it should be plain that there was no likelihood of confusion
between the trademarks involved. Thereby, the evidence of guilt did not satisfy the
quantum of proof required for a criminal conviction, which is proof beyond reasonable
doubt. According to Section 2, Rule 133 of the Rules of Court, proof beyond a
reasonable doubt does not mean such a degree of proof as, excluding possibility of error,
produces absolute certainty. Moral certainty only is required, or that degree of proof
which produces conviction in an unprejudiced mind. Consequently, Diaz should be
acquitted of the charges.

EMERALD GARMENT v. CA G.R. No. 100098 December 29, 1995 Trademark Law

Private respondent H.D. Lee Co., Inc., a foreign corporation, filed with the Bureau of Patents,
Trademarks & Technology Transfer (BPTTT) a Petition for Cancellation of Registration No. SR 5054 for
the trademark “STYLISTIC MR. LEE” used on clothing and lingerie issued in the name of petitioner
Emerald Garment Manufacturing Corp., a domestic corporation organized and existing under
Philippine laws.

Petitioner contended that its trademark was entirely and unmistakably different from that of private
respondent and that its certificate of registration was legally and validly granted.

The Director of Patents found private respondent to be the prior registrant of the trademark “LEE” in
the Philippines and that it had been using said mark in the Philippines.

Moreover, the Director of Patents, using the test of dominancy, declared that petitioner’s trademark
was confusingly similar to private respondent’s mark because “it is the word ‘Lee’ which draws the
attention of the buyer and leads him to conclude that the goods originated from the same
manufacturer. It is undeniably the dominant feature of the mark.”

Petitioner appealed to the CA which in turn affirmed the decision of the Director of Patents.

ISSUE:

Whether or not petitioner’s trademark Stylistic Mr. Lee, is confusingly similar with the private
respondent’s trademark Lee or Lee-Rider, Lee-Leens and Lee-Sures.

RULING:

The pertinent provision of R.A. No. 166 (Trademark Law) states thus:

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 imitable any such mark or trade-name 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.

In determining whether colorable imitation exists, jurisprudence has developed two kinds of tests —
the Dominancy Test and the Holistic Test.

As its title implies, the test of dominancy focuses on the similarity of the prevalent features of the
competing trademarks which might cause confusion or deception and thus constitutes infringement.
xxx xxx xxx

. . . 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.

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.

xxx xxx xxx

On the other side of the spectrum, the holistic test mandates that the entirety of the marks in
question must be considered in determining confusing similarity.

xxx xxx xxx

In determining whether the trademarks are confusingly similar, a comparison of the words is not the
only determinant factor. The trademarks in their entirety as they appear in their respective labels or
hang tags must also be considered in relation to the goods to which they are attached. The discerning
eye of the observer must focus not only on the predominant words but also on the other features
appearing in both labels in order that he may draw his conclusion whether one is confusingly similar
to the other

xxx xxx xxx

Applying the foregoing tenets to the present controversy and taking into account the factual
circumstances of this case, we considered the trademarks involved as a whole and rule that
petitioner’s “STYLISTIC MR. LEE” is not confusingly similar to private respondent’s “LEE” trademark.

Petitioner’s trademark is the whole “STYLISTIC MR. LEE.” Although on its label the word “LEE” is
prominent, the trademark should be considered as a whole and not piecemeal. The dissimilarities
between the two marks become conspicuous, noticeable and substantial enough to matter especially
in the light of the following variables that must be factored in.

For lack of adequate proof of actual use of its trademark in the Philippines prior to petitioner’s use of
its own mark and for failure to establish confusing similarity between said trademarks, private
respondent’s action for infringement must necessarily fail.

062 Puma v IAC

Feb. 26, 1988

Gutierrez Jr, J.

Short Version:

Puma sued Mil-oro for trademark infringement, as the latter had been producing “Puma” socks and
belts. MTD filed for lack of capacity to sue. Denied and injunction issued.

SC upheld injunction. Puma had capacity to sue. A foreign corporation not doing business in the
Philippines which is a national of a country party to the Paris Convention need not have a license in
order to sue to protect its intellectual property.

Facts:

Puma, a West German Corporation and producer of Puma products, filed a complaint for patent or
trademark infringement with a prayer for the issuance of a writ of prelim injunction against Mil-Oro
Manufacturing Corp. Mil-Oro had been producing Puma socks and belts.
MTD filed for lack of capacity to sue. MTD denied, injunction granted. CA reversed. Hence this
petition for review on certiorari.

Issues:

1. WON Puma has capacity to sue (Yes)


2. WON the case should be dismissed on the ground of lis pendens (No)
3. WON injunction should issue. (Yes)

Ratio:

1. Puma had substantially complied with Sec. 21-A of RA 166. Its complaint specifically alleged
that it is not doing business in the Philippines and is suing under that law, which provides
that "the country of which the said corporation or juristic person is a citizen, or in which it is
domiciled, by treaty, convention or law, grants a similar privilege to corporate or juristic
persons of the Philippines." The Federal Republic of Germany and the Philippines are both
parties of the Paris Convention, which forms part of the law of the land.

As held in La Chemise Lacoste, S.A .v. Fernandez,, a foreign corporation not doing business in the
Philippines needs no license to sue before Philippine courts for infringement of trademark and unfair
competition.

Further, a foreign corporation which has never done any business in the Philippines and which is
unlicensed and unregistered to do business here, but is widely and favorably known in the Philippines
through the use therein of its products bearing its corporate and tradename, has a legal right to
maintain an action in the Philippines to restrain the residents and inhabitants thereof from organizing
a corporation therein bearing the same name as the foreign corporation, when it appears that they
have personal knowledge of the existence of such a foreign corporation, and it is apparent that the
purpose of the proposed domestic corporation is to deal and trade in the same goods as those of the
foreign corporation.

This is in accordance with Section 37 of RA No. 166, otherwise known as the trademark Law,
which provides that “Persons who are nationals of, domiciled in, or have a bona fide or effective
business or commercial establishment in any foreign country, which is a party to an international
convention or treaty relating to marks or tradenames on the represssion of unfair competition to
which the Philippines may be party, shall be entitled to the benefits and subject to the provisions of
this Act ...

Tradenames of persons described in the first paragraph of this section shall be protected without the
obligation of filing or registration whether or not they form part of marks.”

Thus, Puma had the legal capacity to file the action.

2. There was no lis pendens. The civil action filed was different from the administrative action
filed. For a finding of lis pendens, the other case pending between the same parties and
having the same cause must be a court action. Thus, the Court of Appeals likewise erred in
holding that the requisites of lis pendens were present so as to justify the dismissal of the
case below.
3. Mil-oro intentionally refused to present counter-evidence against the issuance of the writ.
Thus, the court reiterated its guidance to lower courts and administrative agencies found in
Lacoste:

One final point. It is essential that we stress our concern at the seeming inability of law
enforcement officials to stem the tide of fake and counterfeit consumer items flooding the
Philippine market or exported abroad from our country. The greater victim is not so much the
manufacturer whose product is being faked but the Filipino consuming public and in the case of
exportations, our image abroad. No less than the President, in issuing Executive Order No. 913
dated October 7, 1983 to strengthen the powers of the Minister of Trade and Industry for the
protection of consumers, stated that, among other acts, the dumping of substandard, imitated,
hazardous, and cheap goods, the infringement of internationally known tradenames and
trademarks, and the unfair trade Practices of business firms have reached such proportions as to
constitute economic sabotage. We buy a kitchen appliance, a household tool, perfume, face
powder, other toilet articles, watches, brandy or whisky, and items of clothing like jeans, T-shirts,
neckties, etc. — the list is quite lengthy — pay good money relying on the brand name as
guarantee of its quality and genuine nature only to explode in bitter frustration and helpless
anger because the purchased item turns out to be a shoddy imitation, albeit a clever looking
counterfeit, of the quality product. Judges all over the country are well advised to remember that
court processes should not be used as instruments to, unwittingly or otherwise, aid
counterfeiters and intellectual pirates, tie the hands of the law as it seeks to protect the Filipino
consuming public and frustrate executive and administrative implementation of solemn
commitments pursuant to international conventions and treaties.

CA reversed and set aside.

La Chemise Lacoste v. Fernandez

Petitioner La Chemise Lacoste is a foreign corporation and the actual owner of the trademarks
‘Lacoste,’ ‘Chemise Lacoste,’ and ‘Crocodile Device’ used on clothing and other goods that are sold in
many parts of the world. Herein respondent Hemadas & Co., a domestic firm, applied and was
granted registration of the mark ‘Chemise Lacoste and Crocodile Device’ for its garment products.
Sometime later, petitioner applied for the registration of its mark ‘Crocodile Device’ and ‘Lacoste’ but
was opposed by herein respondent. Later, petitioner filed a letter-complaint of unfair competition
before the NBI which led to the issuance of search warrants and the seizure of goods of respondent
Hemadas. Respondent moved to quash the warrants alleging that its trademark was different from
petitioner’s trademark. Respondent court ruled to set aside the warrants and to return the seized
goods.

ISSUE:

Whether or not the trademark “Chemise Lacoste and Q Crocodile Device”


is registrable.

HELD:

No.

Inasmuch as the goodwill and reputation of La Chemise Lacoste products


date back even before 1964, Hemandas cannot be allowed to continue the
trademark “Lacoste” for the reason that he was the first registrant in
the Supplemental Register of a trademark used in international commerce.

Registration in the Supplemental Register cannot be given a posture as


if the registration is in the Principal Register. La Chemise Lacoste.
VS. Fernandez
It must be noted that one may be declared an unfair competitor even if
his competing trademark is registered.

La Chemise Lacoste is world renowned mark, and by virtue of the 20 November


1980 Memorandum of the Minister of Trade to the director of patents in
compliance with the Paris Convention for the protection of industrial
property, effectively cancels the registration of contrary claimants to
the enumerated marks, which include “Lacoste.”

DEL MONTE VS. CA


G.R. No. 78325, January 25, 1990

Facts:

Petitioner Del Monte Corporation is a foreign company organized under the


laws of the United States and not engaged in business in the Philippines. Both
the Philippines and the United States are signatories to the Convention of Paris,
a treaty which grants to the nationals of the parties rights and advantages
which their own nationals enjoy for the repression of acts of infringement and
unfair competition. On the other hand, petitioner Philippine Packing
Corporation (Philpack) is a domestic corporation duly organized under the
laws of the Philippines.

Sometime in 1965, Del Monte authorized Philpack to register with the


Philippine Patent Office the Del Monte catsup bottle configuration, for which it
was granted Certificate of Trademark Registration by the Philippine Patent
Office under the Supplemental Register. In 1969, Del Monte granted
Philpack the right to manufacture, distribute and sell in the Philippines various
agricultural products, including catsup, under the Del Monte trademark and
logo. In 1972, Del Monte also obtained two registration certificates for its
trademark “DEL MONTE” and its logo.

Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate


of Registration by the Bureau of Domestic Trade in 1980 to engage in the
manufacture, packing, distribution and sale of various kinds of sauce, identified
by the logo Sunshine Fruit Catsup. The logo was registered in the Supplemental
Register in 1983. Sunshine Sauce’s product itself was contained in various
kinds of bottles, including the Del Monte bottle, which it bought from the junk
shops for recycling.

Philpack received reports that Sunshine Sauce was using its exclusively
designed bottles and a logo confusingly similar to Del Monte’s. Philpack warned
Sunshine Sauce to desist from doing so on pain of legal action. Thereafter,
claiming that the demand had been ignored, Philpack and Del Monte filed a
complaint against the Sunshine Sauce for infringement of trademark and
unfair competition.

Sunshine alleged that:

 it had long ceased to use the Del Monte bottle and that
 its logo was substantially different from the Del Monte logo and would
not confuse the buying public to the detriment of the petitioners.

The RTC dismissed the complaint on the following grounds:

 there were substantial differences between the logos or trademarks of


the parties
 Sunshine Sauce became the owner of the said bottles upon its purchase
thereof from the junk yards
 Del Monte and Philpack had failed to establish the its malice or bad
faith, which is an essential element of infringement of trademark or
unfair competition

The CA affirmed RTC’s decision in toto. Hence, the appeal.

Issue(s):

 Whether or not Sunshine Sauce is guilty of unfair competition.


 Whether or not Sunshine Sauce is guilty of infringement for having used
the Del Monte bottle.

Held:
 Yes, it is guilty of unfair competition.

The SC compared the Del Monte and Sunshine Sauce’s packaging. While it
recognized several distinctions, it does not agree with the conclusion that there
was no infringement or unfair competition.

According to the SC, side-by-side comparison is not the final test of similarity.
Such comparison requires a careful scrutiny to determine in what points the
labels of the products differ, as was done by the trial judge. The ordinary buyer
does not usually make such scrutiny nor does he usually have the time to do so.
The average shopper is usually in a hurry and does not inspect every product
on the shelf as if he were browsing in a library.

The question is not whether the two articles are distinguishable by their label
when set side by side but whether the general confusion made by the article
upon the eye of the casual purchaser who is unsuspicious and off his guard, is
such as to likely result in his confounding it with the original.

A number of courts have held 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. The court therefore should be guided by its first impression, for
a buyer acts quickly and is governed by a casual glance, the value of which may
be dissipated as soon as the court assumes to analyze carefully the respective
features of the mark.

It has also been held that it is not the function of the court in cases of
infringement and unfair competition to educate purchasers but rather to take
their carelessness for granted, and to be ever conscious of the fact that marks
need not be identical. A confusing similarity will justify the intervention of
equity. The judge must also be aware of the fact that usually a defendant in
cases of infringement does not normally copy but makes only colorable
changes. Well has it been said that the most successful form of copying is to
employ enough points of similarity to confuse the public with enough points of
difference to confuse the courts.

The Sunshine label is a colorable imitation of the Del Monte trademark. The
predominant colors used in the Del Monte label are green and red-orange, the
same with Sunshine. The word “catsup” in both bottles is printed in white and
the style of the print/letter is the same. Although the logo of Sunshine is not a
tomato, the figure nevertheless approximates that of a tomato.

 No, it is not guilty of infringement.

Sunshine Sauce is not guilty of infringement for having used the Del Monte
bottle. The reason is that the configuration of the said bottle was merely
registered in the Supplemental Register. Registration only in the Supplemental
Register means absence of the following presumptions: validity of the
trademark, the registrant’s ownership of the mark and his right to its exclusive
use.

SHIRLEY F. TORRES, petitioner, vs. IMELDA PEREZ and RODRIGO


PEREZ, respondents.
FACTS:
Respondents spouses Perez own RGP Footwear Manufacturing (RGP), which
supplies ladies' shoes to Shoe Mart (SM). Petitioner and Sunshine formed Sasay's
Closet Co. (SCC), a partnership registered with the SEC. SCC was engaged in the
supply, trading, retailing of garments such as underwear, children's wear, women's
and men's wear, and other incidental activities related thereto.
For its products, SCC used the trademark "Naturals with Design," which it filed with
the Intellectual Property Office and registered. These products were primarily
supplied to SM, which assigned to them the vendor code "190501".
SCC used the facilities and equipment owned by RGP, as well as the latter's business
address (No. 72 Victoria Subdivision, Barangay Dela Paz, Biñan, Laguna), which was
also the residential address of respondents.
Sunshine pulled out of the partnership and respondent Imelda took over Sunshine's
responsibilities in the partnership.
Despite the objections of petitioner to the dissolution of SCC, various amounts were
paid to her by respondents for her share in the partnership assets.
Petitioner established Tezares Enterprise, a sole proprietorship engaged in supplying
and trading of clothing and accessories except footwear. 23 Also in March 2006, she
discovered that underwear products bearing the brand "Naturals" were being sold in
SM with vendor code "180195." 24 This code was registered to RGP, 25 a fact
confirmed by test buys conducted by her lawyers on 13 and 14 May 2006. 26
The trial court ruled that respondents did not pass off "Naturals" as the brand of
another manufacturer. On the contrary, they used the brand in the honest belief that
they owned SCC, the owner of the brand.
ISSUE

Whether or not there exists probable cause to indict respondents for unfair
competition.

HELD:

Here, we find that there was no probable cause to indict respondents, because the
crime of unfair competition was not committed.
In positing that respondents were guilty of unfair competition, petitioner makes a lot
of the fact that they used the vendor code of RGP in marketing the "Naturals"
products. She argues that they passed off the "Naturals" products, which they
marketed under RGP, as those of SCC; thus, they allegedly prejudiced the rights of
SCC as owner of the trademark. She also claims that she has the personality to
prosecute respondents for unfair competition on behalf of SCC.
When Judge Untalan denied the Motion to Dismiss and/or Withdraw Information
filed by the prosecution and thereby sustained the position of petitioner, his error lay
in the fact that his focus on the crime of unfair competition was unwarranted. In this
case, much more important than the issue of protection of intellectual property is the
change of ownership of SCC. The arguments of petitioner have no basis, because
respondents are the exclusive owners of SCC, of which she is no longer a partner.
Based on the findings of fact of the CA and the DOJ, respondents have completed the
payments of the share of petitioner in the partnership affairs. Having bought her out of
SCC, respondents were already its exclusive owners who, as such, had the right to use
the "Naturals" brand.
The use of the vendor code of RGP was resorted to only for the practical purpose of
ensuring that SM's payments for the "Naturals" products would go to respondents,
who were the actual suppliers.
Furthermore, even if we were to assume that the issue of protection of intellectual
property is paramount in this case, the criminal complaint for unfair competition
against respondents cannot prosper, for the elements of the crime were not present.
We have enunciated in CCBPI v. Gomez 67 that the key elements of unfair
competition are "deception, passing off and fraud upon the public." 68 No deception
can be imagined to have been foisted on the public through different vendor codes,
which are used by SM only for the identification of suppliers' products.

Wilson Ong Ching Kian Chuan v CA


[G.R. No. 130360. August 15, 2001]
QUISUMBING, J.

FACTS:
 Petitioner imports vermicelli from China National Cereals Oils and Foodstuffs, based in Beijing, China,
under the firm name C.K.C. Trading. He repacks it in cellophane wrappers with a design of two-dragons
and the TOWER trademark on the uppermost portion.
 Ong acquired a Certificate of Copyright Registration from the National Library on June 9, 1993 on the
said design.
 Ong filed against Tan a verified complaint for infringement of copyright with damages and prayer for
temporary restraining order or writ of preliminary injunction with the RTC-QC.
o Ong alleged that he was the holder of a Certificate of Copyright Registration over the
cellophane wrapper with the two-dragon design, and that Tan used an identical
wrapper in his business. In his prayer for a preliminary injunction in addition to
damages, he asked that Tan be restrained from using the wrapper.
 Tan filed an opposition alleging that Ong was not entitled to an injunction.
o According to Tan, Ong did not have a clear right over the use of the trademark Pagoda
and Lungkow vermicelli as these were registered in the name of Ceroilfood Shandong,
based in Qingdao, China.
o Further, Tan averred that he was the exclusive distributor in the Philippines of the
Pagoda and Lungkow vermicelli and was solely authorized to use said trademark.
o He added that Ong merely copied the two-dragon design from Ceroilfood Shandong
which had the Certificates of Registration issued by different countries.
o Private respondent alleges that the trademark PAGODA BRAND was registered in
China on October 31, 1979 while the trademark LUNGKOW VERMICELLI WITH
TWO-DRAGON DEVICE was registered on August 15, 1985.
 Trial Court issued a temporary restraining order on the same date the complaint was filed. It likewise
issued the writ in Ong’s favor upon his filing of a P100,000.00 bond.
 CA gave due course and granted the petition. The lower court’s orders, as well as the writ of preliminary
injunction, were set aside. Ong filed a MR from which CA modified its decision and made the injunction
permanent.

ISSUE:
 W/N the issuance of the writ of preliminary injunction in favor of private respondent was proper?

HELD: Petition is partially granted. The prayer for a writ of preliminary injunction to prohibit Tan from
using the cellophane wrapper with two-dragon device is denied, but the finding of the respondent
appellate court that Ong’s copyrighted wrapper is a copy of that of Ceroilfood Shandong is SET ASIDE
for being premature. Case was remanded to RTC.

RATIO:
 A person to be entitled to a copyright must be the original creator of the work. He must have
created it by his own skill, labor and judgment without directly copying or evasively imitating the
work of another. The copies of the certificates of copyright registered in the name of Ceroilfood
Shandong sufficiently raise reasonable doubt. With such a doubt, the preliminary injunction asked by
Ong against Tan is unavailing.
 To be entitled to an injunctive writ, petitioner must show, inter alia, the existence of a clear and
unmistakable right and an urgent and paramount necessity for the writ to prevent serious damage. In this
case, the Court found that petitioner’s right has not been clearly and unmistakably demonstrated.
 The Court added it was premature for the CA to declare that the design of petitioner’s wrapper is a copy
of the wrapper allegedly registered by Ceroilfood Shandong. The only issue brought before the CA
involved the grave abuse of discretion allegedly committed by the trial court in granting the writ of
preliminary injunction, and not on the merits of the infringement case. That matter remains for decision
after appropriate proceedings at the trial court.

VENANCIO SAMBAR, doing business under the name and style of


CVS Garment Enterprises vs. LEVI STRAUSS & CO., LEVI
STRAUSS (PHIL.), INC.

FACTS:

Private respondents alleged in their complaint that Levi Strauss and


Co. (LS&Co.), an internationally known clothing manufacturer, own
the arcuate design trademark which was registered under US
Trademark Registration No. 404,248 on November 16, 1943. That
sometime in 1987, CVSGIC and Venancio Sambar, without the
consent and authority of private respondents and in infringement
and unfair competition, sold and advertised, and despite demands
to cease and desist, continued to manufacture, sell and advertise
denim, pants under the brand name “Europress” with back pockets
bearing a design similar to the arcuate trademark of private
respondents, thereby causing confusion on the buying public,
prejudiced to private respondent’s goodwill and property right.

Sambar filed a separate answer. He admitted that copyright


Registration No. 1-1998 was issued to him, but he denied using it.
He said he did not authorize anyone to use the copyrighted design.

Trial court issued a writ of preliminary injunction enjoining CVSGIC


and petitioner from manufacturing, advertising and selling pants
with the arcuate design on their back pockets.

Private respondents moved for reconsideration praying for the


cancellation of petitioner’s copyright registration.

Trial court granted the prayer.

Petitioner appealed to the Court of Appeals which affirmed the


ruling of the trial court.
ISSUE:

Whether petitioner infringe on private respondent’s arcuate design.

HELD:

To be entitled to a copyright, the thing being copyrighted must be


original, created by the author through his own skill, labor and
judgment, without directly copying or evasively imitating the work of
another.

Both the trail court and the Court of Appeals found there was
infringement.

ABS-CBN vs Philippine Multi-Media System, Inc (PMSI)


G.R. Nos. 175769-70, January 19, 2009
Petitioner ABS-CBN, a broadcasting corporation, filed a complaint against respondent PMSI alleging
that the latter’s unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights
and copyright. PMSI posits that it was granted a franchise to operate a digital direct-to-home satellite
service and that the rebroadcasting was in accordance with the NTC memo to carry television signals
of authorized television broadcast stations, which includes petitioner’s programs. The IPO Bureau of
Legal Affairs found PMSI to have infringed petitioner’s broadcasting rights and ordered it to
permanently desist from rebroadcasting. On appeal, the IPO Director General found for PMSI. CA
affirmed.

Issue:

Whether or not petitioner’s broadcasting rights and copyright are infringed.

Ruling: NO.

The Director-General of the IPO correctly found that PMSI is not engaged in rebroadcasting and thus
cannot be considered to have infringed ABS-CBN’s broadcasting rights and copyright.

Section 202.7 of the IP Code defines broadcasting as “the transmission by wireless means for the
public reception of sounds or of images or of representations thereof; such transmission by satellite is
also ‘broadcasting’ where the means for decrypting are provided to the public by the broadcasting
organization or with its consent.” On the other hand, rebroadcasting as defined in Article 3(g) of the
International Convention for the Protection of Performers, Producers of Phonograms and
Broadcasting Organizations, otherwise known as the 1961 Rome Convention, of which the Republic of
the Philippines is a signatory, is “the simultaneous broadcasting by one broadcasting organization of
the broadcast of another broadcasting organization.” The Working Paper prepared by the Secretariat
of the Standing Committee on Copyright and Related Rights defines broadcasting organizations as
“entities that take the financial and editorial responsibility for the selection and arrangement of, and
investment in, the transmitted content.” Evidently, PMSI would not qualify as a broadcasting
organization because it does not have the aforementioned responsibilities imposed upon
broadcasting organizations, such as ABS-CBN.

ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the viewers
receive in its unaltered form. PMSI does not produce, select, or determine the programs to be shown
in Channels 2 and 23. Likewise, it does not pass itself off as the origin or author of such programs.
Insofar as Channels 2 and 23 are concerned, PMSI merely retransmits the same in accordance with
Memorandum Circular 04-08-88. With regard to its premium channels, it buys the channels from
content providers and transmits on an as-is basis to its viewers. Clearly, PMSI does not perform the
functions of a broadcasting organization; thus, it cannot be said that it is engaged in rebroadcasting
Channels 2 and 23.

White v. Samsung Electronics


America, Inc.
Citation. White v. Samsung Elecs. Am., Inc., 989 F.2d 1512, 1993 U.S. App. LEXIS 4928,
26 U.S.P.Q.2D (BNA) 1362, 93 Cal. Daily Op. Service 1933, 93 Daily Journal DAR 3477,
21 Media L. Rep. 1330 (9th Cir. Mar. 18, 1993)

Brief Fact Summary. Defendant ran a television ad, which depicted Plaintiff for the
purpose of selling Defendant’s VCR. Plaintiff sued Defendant for appropriation.

Synopsis of Rule of Law. Television and other media create marketable celebrity identity
value. The law protects the celebrity’s sole right to exploit this value whether the celebrity
has achieved her fame out of rear ability, dumb luck, or a combination thereof.

Facts. Vanna White (Plaintiff) is the hostess of “Wheel of Fortune.” Plaintiff markets her
identity to various advertisers. The dispute in this case arose out of a series of
advertisements prepared for Samsung (Defendant). The advertisement, which prompted
the dispute, was for Samsung videocassette recorders. The ad depicted a robot, which was
consciously presented to resemble Plaintiff next to a game board that is instantly
recognizable as The Wheel of Fortune. Defendant referred to the ad as the “Vanna White”
ad. Plaintiff neither consented to the ads nor was paid. Plaintiff sued Defendant for:
(1) California Civil Code section 3344, (2) the California common law right of publicity;
and (3) the Lanham Act. The district court granted summary judgment against Plaintiff on
each of her claims. Plaintiff appealed.

Issue. Is the appropriation of a person’s identity without consent an invasion of the right to
privacy?

Held. Yes. Judgment reversed.


* Defendant used a robot with mechanical features and not, for example, a manikin molded
to Plaintiff’s precise features. The robot at issue was not Plaintiff’s “likeness” within the
meaning of section 3344.
* The common law right of publicity cause of action may be pleaded by alleging: (1)
Defendant’s use of Plaintiff’s identity; (2) the appropriation of Plaintiff’s name or likeness
to Defendant’s advantage; (3) lack of consent; and (4) resulting injury. The right of
publicity is not limited to the appropriation of name or likeness – the common law right of
publicity is not so defined.
* The right of publicity had developed to protect the commercial interest of celebrities in
their identities. The theory of the right is that a celebrity’s identity can be valuable in the
promotion of products, and the celebrity has an interest that may be protected from the
unauthorized commercial exploitation of that identity. If the celebrity’s identity is
commercially exploited, there has been an invasion of his right whether or not his “name or
likeness” is used. It is not important how Defendant has appropriated Plaintiff’s identity,
but whether Defendant has done so.
* Television and other media create marketable celebrity identity value. The law protects
the celebrity’s sole right to exploit this value whether the celebrity has achieved her fame
out of rear ability, dumb luck, or a combination thereof.
* Defendant’s claim of the parody defense is rejected. Parodies of advertisements run for
the purpose of poking fun. In this case, the ad’s primary message is: “buy Samsung
VCRs.” The difference between a parody and a knock-off is the difference between fun
and profit.

Dissent. (J. Kozinski) Overprotecting intellectual property is as harmful as under


protecting it. Creativity is impossible without a rich public domain. Nothing today, likely
nothing since we tamed fire, grows by accretion, each new creator building on the works of
those who came before. Over-protection stifles the very creative forces it’s supposed to
nurture.

Discussion. In this case, the Court abandoned the strict common law rules of appropriation.
The viewer of the ad could clearly see that it was an attempt to convey Plaintiff on the set
of Wheel of Fortune. Defendant hoped to profit from Plaintiff’s fame without paying her
for it. Because Plaintiff did not consent to such appropriation, Defendant is liable.

Princeton Univ. Press v. Mich. Document Servs

RULE:

The fair use doctrine under the Copyright Act does not obviate the need to
obtain permission to reproduce works; generally speaking, the larger the
volume (or the greater the importance) of what is taken, the greater the affront
to the interests of the copyright owner, and the less likely that a taking will
qualify as a "fair use."

FACTS:
The corporate defendant, Michigan Document Services, Inc., is a commercial
copyshop that reproduced substantial segments of copyrighted works of
scholarship, bound the copies into "coursepacks," and sold the coursepacks to
students for use in fulfilling reading assignments given by professors at the
University of Michigan. The copyshop acted without permission from the
copyright holders. Consequently, Princeton University Press, Macmillan, Inc.,
and St. Martin’s Press, Inc., collectively, the plaintiffs, brought a copyright
infringement claim against defendant for unfair use under 17 U.S.C.S. § 107.
Finding that the fair use doctrine did not obviate the need to obtain permission
to reproduce the works and that the infringement was willful, the trial court
granted appellees summary judgment.

ISSUE:

Did the Michigan Document Services, Inc.’s act of reproducing copyrighted


works of scholarship without obtaining permission from the copyright holders
for students’ use constitute fair use under 17 U.S.C.S. § 107?

ANSWER:

No.

CONCLUSION:

The Court held that the Michigan Document Services, Inc.’s use of the works
was a commercial use, in that it sought to profit from its sales to the students.
According to the Court, because Michigan Document Services, Inc. did not pay
license fees to the copyright holders, its use was an unfair exploitation of the
monopoly privilege that belonged to the owners of the copyright.

Sega Enterprises Ltd. v.


Accolade, Inc.
Brief Fact Summary. Accolade, Inc. (Defendant) copied and then disassembled Sega
Enterprises Ltd.’s (Sega’s) (Plaintiff) video game programs in order to discover the
requirements for compatibility with Plaintiff’s console.

Synopsis of Rule of Law. Disassembly of a copyrighted object code is a fair use of the
material if it is the only way to access uncopyrighted elements of the code and there is a
legitimate reason for seeking to do so.

Facts. Sega Enterprises Ltd. (Sega) (Plaintiff) and Accolade, Inc. (Defendant) made
and marketed video game cartridges. In order to make its own games compatible with
Sega’s (Plaintiff) console, Accolade (Defendant) “reverse engineered” Sega’s
(Plaintiff) video game programs to discover the requirements for compatibility with the
console. In order to do this, it first copied Plaintiff’s copyright code in its entirety and
then disassembled it to see how it worked. Defendant then created its own games for
use with Plaintiff’s console, but did not copy Plaintiff’s programs or use any of its
codes. Plaintiff sued for copyright infringement. The district court granted Plaintiff’s
motion for a preliminary injunction to prevent Defendant from further disassembly of
Plaintiff’s object codes. Defendant appealed.

Issue. Is disassembly of a copyrighted object code a fair use of the material if it is the
only way to access uncopyrighted elements of the code and there is a legitimate reason
for seeking to do so?

Held. (Reinhardt, J.) Yes. Disassembly of a copyrighted object code is a fair use of the
material if it is the only way to access uncopyrighted elements of the code and there is a
legitimate reason for seeking to do so. Section 107 of the Copyright Act of 1976 lists
four factors to be considered in determining whether a certain use is a fair one: (1) the
purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount
and substantiality of the portion used in relation to the copyrighted work as a whole;
and (4) the effect of the use upon the market for the copyrighted work. First, Accolade
(Defendant) only sought to become a legitimate competitor in the field of Sega
(Plaintiff) compatible video games. It therefore had a legitimate, non-exploitative
purpose for copying Plaintiff’s code. Second, Plaintiff’s video game programs must be
afforded a lower degree of protection than more traditional literary works as they
contain unprotected aspects that cannot be examined without copying. Third, the fact
that Defendant disassembled entire programs written by Sega (Plaintiff) should receive
little weight. Fourth, Accolade’s (Defendant) copying may have affected the market,
but not significantly, as customers tend to buy many video games, not just one.
Accordingly, Defendant has the better case on the fair use issue. Affirmed in part,
reversed in part, and remanded.

Discussion. An issue similar to reverse engineering was raised in Triad Systems Corp.
v. Southeastern Express Co., 64 F.3d 1330 (9th Cir. 1995). In that case, Southeastern
copied Triad’s software into Triad’s computer as part of an attempt to service the
computer. The Ninth Circuit concluded that such copying was not fair use because it
was neither creative nor transformative and did not provide the marketplace with new
creative works. Instead, the copies made by Southeastern undoubtedly lowered the
value of Triad’s copyright.

Pearl & Dean v. Shoemart

Pearl and Dean is a corporation engaged in the manufacture


of advertising display units referred to as light boxes and
these light boxes were marketed under the trademark Poster
Ads. Pearl and Dean entered into a contract with Shoemart,
Inc. for the lease and installation of the light boxes in SM
North Edsa. However, due to construction constraints,
Shoemart, Inc offered as an alternative SM Makati and SM
Cubao.

After Pearl and Dean’s contract was rescinded, exact


copies of its light boxes were installed in various SM malls,
fabricated by Metro Industrial Services and later by EYD
Rainbow Advertising Corporation. Pearl and Dean sent a
letter to Shoemart and its sister company, North Edsa
Marketing to cease using the light boxes and to remove them
from the malls, and demanded the discontinued used of the
trademark “Poster Ads”.

Unsatisfied with the compliance of its demands,


Pearl and Dean sued Shoemart which was ruled by the trial
court in their favor. On appeal, however, the Court of
Appeals reversed the trial court’s decision.

ISSUE:

Whether Pearl and Dean’s copyright registration for


its light boxes and the trademark registration of “Poster
Ads” preclude Shoemart and North Edsa Marketing from
using the same.

HELD:
No, Pearl and Dean secured its copyright under the
classification class “o” work. This being so, its protection
extended only to the technical drawings and not to the light
box itself. Pearl and Dean cannot exclude others from the
manufacture, sale and commercial use over the light boxes on
the sole basis of its copyright, certificated over the technical
drawings. It cannot be the intention of the law that the right
of exclusivity would be granted for a longer time through the
simplified procedure of copyright registration with the
National Library, without the rigor of defending the
patentability of its “invention” before the IPO and the public.

On the other hand, there has been no evidence that


Pearl and Dean’s use of “Poster Ads” was distinctive or well
known. “Poster Ads” was too generic a name to identify it to
a specific company or entity. “Poster Ads” was generic and
incapable of being used as a trademark because it was used in
the field of poster advertising, the very business engaged by
Pearl and Dean. Furthermore, Pearl and Dean’s exclusive
right to the use of “Poster Ads” is limited to what is written
in its certificate of registration. Shoemart cannot be held
liable for the infringement of the trademark.

PACITA I. HABANA, ALICIA L. CINCO and JOVITA N.


FERNANDO vs. FELICIDAD C. ROBLES and GOODWILL
TRADING CO., INC.
G.R. No. 131522, July 19, 1999
FACTS: Pacita Habana et al., are authors and copyright owners of
duly issued of the book, College English For Today (CET).
Respondent Felicidad Robles was the author of the book
Developing English Proficiency (DEP). Petitioners found that
several pages of the respondent's book are similar, if not all
together a copy of petitioners' book. Habana et al. filed an action for
damages and injunction, alleging respondent’s infringement of
copyrights, in violation of P.D. 49. They allege respondent Felicidad
C. Robles being substantially familiar with the contents of
petitioners' works, and without securing their permission, lifted,
copied, plagiarized and/or transposed certain portions of their book
CET.

On the other hand, Robles contends that the book DEP is the
product of her own intellectual creation, and was not a copy of any
existing valid copyrighted book and that the similarities may be due
to the authors' exercise of the "right to fair use of copyrighted
materials, as guides."

The trial court ruled in favor of the respondents, absolving them of


any liability. Later, the Court of Appeals rendered judgment in
favor of respondents Robles and Goodwill Trading Co., Inc. In this
appeal, petitioners submit that the appellate court erred in affirming
the trial court's decision.

ISSUE: Whether Robles committed infringement in the production


of DEP.

HELD: A perusal of the records yields several pages of the book


DEP that are similar if not identical with the text of CET. The court
finds that respondent Robles' act of lifting from the book of
petitioners substantial portions of discussions and examples, and
her failure to acknowledge the same in her book is an infringement
of petitioners' copyrights.
In the case at bar, the least that respondent Robles could have
done was to acknowledge petitioners Habana et. al. as the source
of the portions of DEP. The final product of an author's toil is her
book. To allow another to copy the book without appropriate
acknowledgment is injury enough.