The Law on Trademarks_Prof. Amador

(part 3 of Sir Amador's notes)

The Law on Trademarks

Trademark Act

Section 121.1, definition of marks
Section 121.2, Collective marks
Section 122, How marks are acquired

 The Trademark Act, Republic Act No. 166, as amended, which has been repealed under Section 339 of the Intellectual Property Code, was effective from June 20, 1947 until January 1, 1998, when the Intellectual Property Code took effect.

 RA 166 adopted the actual use system under which a trademark owner can apply for the registration of his mark only after he has used it in commerce in the Philippines for at least two months before the filing of the application.

IP Code

Section 123 to 123.3, Registrability of marks

 Intellectual Property Code, Republic Act No. 8293, adopted a hybrid system of registration in that while actual use of the mark is not required at the time of filing of the application, use of the mark in commerce must actually commence within three years from the filing date of the application; otherwise, the application will be refused or the registration cancelled if it has been issued.

 The Trademark Act adopted a single class registration system. In contrast, the IP Code adopted a multiple class registration system. Use of the mark on any item within a specific class of goods preserves the trademark owner’s registration for the entire class.

Section 128, Single registration for goods and services

 A trademark owner need only file a single application for the registration of his mark covering several classes of goods or services whether they belong to one class or to several classes of the Nice Classification

Paris Convention

 The provisions of the Paris Convention may be sub-divided into four main categories:

 A first category contains rules of substantive law, which guarantee a basic right known as the right to national treatment in each of the member countries;

 A second category establishes another basic right known as the right of priority;

 A third category defines a certain number of common rules in the field of substantive law which contain either rules establishing rights and obligations of natural persons and legal entities, or rules requiring or permitting the member countries to enact legislation following those rules;

 A fourth category deals with the administrative framework which has been set up to implement the Convention, and includes the final clauses of the Convention.


National Treatment Principle

 National treatment means that, as regards the protection of industrial property, each country party to the Paris Convention must grant the same protection to nationals of the other member countries as it grants to its own nationals.

 The same national treatment must be granted to nationals of countries, which are not party to the Paris Convention if they are domiciled in a member country or if they have a “real and effective” industrial or commercial establishment in such a country.

 This national treatment rule guarantees not only that foreigners will be protected, but also that they will not be discriminated against in any way. The national treatment rule applies first of all to the “nationals” of the member countries. The term “national” includes both natural persons and legal entities.

Right of Priority

Section 131, Priority right

 The right of priority means that, on the basis of a regular application for an industrial property right filed by a given applicant in one of the member countries, the same applicant (or its or his successor in title) may, within a specified period of time (six or 12 months), apply for protection in all the other member countries. These later applications will then be regarded as if they had been filed on the same day as the earliest application.

The TRIPS Agreement

 Standards. In respect of each of the main areas of intellectual property covered by the TRIPS Agreement, the Agreement sets out the minimum standards of protection to be provided by each Member. Each of the main elements of protection is defined, namely the subject-matter to be protected, the rights to be conferred and permissible exceptions to those rights, and the minimum duration of protection

 Enforcement. The second main set of provisions deals with domestic procedures and remedies for the enforcement of intellectual property rights. The Agreement lays down certain general principles applicable to all IPR enforcement procedures.

 Dispute settlement. The Agreement makes disputes between WTO Members about the respect of the TRIPS obligations subject to the WTO's dispute settlement procedures.

Trademarks

Visually perceptible under IP Code; perceptible under the US Lanham Act

 Any sign, or any combination of signs, capable of distinguishing the goods and services of one undertaking from those of other undertakings, must be eligible for registration as a trademark, provided that it is visually perceptible.

 The TRIPS Agreement contains certain provisions on well-known marks, which supplement the protection required by Article 6bis of the Paris Convention, as incorporated by reference into the TRIPS Agreement, which obliges Members to refuse or to cancel the registration, and to prohibit the use of a mark conflicting with a mark which is well known.

Geographical indications

 Geographical indications are defined, for the purposes of the Agreement, as indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.

Visible Sign

 The term "mark” means 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.

 The IP Code does not provide for registration of trade names, but only for registration of trademarks. It provides that notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties in literal compliance with the provisions of the Paris Convention.

 “Collective mark” means any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristic, including the quality of goods or services of different enterprises which use the sign under the control of the registered owner of the collective mark. Collective marks indicate origin in members of a group while a trademark indicates a single origin for the goods bearing the trademark.

Economic Function

 A 'trade-mark' is a distinctive mark of authenticity through which the goods of a particular producer or manufacturer may be distinguished from those of others, and its sole function is to designate distinctively the origin of the products to which it is attached.

Source-Indicating Function

 The ability of a trademark to distinguish the product to which it is affixed from competing goods of other manufacturers is in legal language called the distinctiveness of a trademark. The traditional legal function of a trademark therefore is to indicate the source or origin of the goods on which it is used.

Guarantee Function

 Trademarks also serve to guarantee that the product to which it is affixed comes up to a certain standard of quality. In its guarantee function, a trade-mark is a distinctive mark of authenticity through which the goods of a particular producer or manufacturer may be distinguished from those of others.

Advertisement Function

 The ability of a trademark to indicate the source or origin of the product on which it is used and ensure that the product comes up to the quality or standard that consumers have come to expect from it combine to give effect to the advertising function of trademark among consumers.

Distinctiveness

 The distinctiveness of a trademark determines its relative strength or weakness. In other words, the strength of a mark denotes its tendency to identify the goods sold under the mark as emanating from a particular source.

Spectrum of Distinctiveness

Generic Marks

 Since mark is intended to be an indication of the origin of the goods or services on which it is used, a mark cannot be registered if it consists exclusively of signs that are generic for the goods or services that they seek to identify. A generic word is unregistrable as a mark because it totally lacks distinctiveness.

e.g. The trademarks T-JOIST and TEE JOISTS ostensibly for floor and roof systems, but actually for joists shaped like the capital letter T, are generic.

e. g. When a generic term is made part of an otherwise registrable mark, it must be disclaimed before the composite mark may be registered. The basic purpose of disclaimers is to make of record that a significant element of a composite mark is not being exclusively appropriated by itself apart from the composite.

Case:

Ong Ai Gui Alias Tan Ai Gui vs. The Director of the Philippines Patent office, respondent. E. I. Du Pont De Nemours and Company, intervenor G.R. No. L-6235 March 28, 1955.

e.g. "Nylon" used in connection with shirt-making, can never become distinctive or acquire secondary meaning because it is a generic term, like cotton, silk, linen, or ramie.

Case: Mcdonald’s Corporation et.al. vs. L.C. Big Mak Burger, Inc., et. al., G.R. No. 143993, August 18, 2004

e.g. The BIG MAC mark, which should be treated in its entirety and not dissected word for word, is neither generic nor descriptive. Generic marks are commonly used as the name or description of a kind of goods, such as “Lite” for beer or “Chocolate Fudge” for chocolate soda drink.

Descriptive Marks

 Descriptive marks, on the other hand, convey the characteristics, functions, qualities or ingredients of a product to one who has never seen it or does not know it exists, such as “Arthriticare” for arthritis medication. On the contrary, “Big Mac” falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual characteristics of the product it represents.

 Section 123.1 (j) precludes the registration of a mark that “consists exclusively of signs or of indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or other characteristics of the goods or services.”

Suggestive Marks

 A suggestive mark is therefore a word, picture, or other symbol that suggests, but does not directly describe, something about the goods or services in connection with which it is used as a mark. Suggestive marks are those which require imagination, thought or perception to reach a conclusion as to the nature of the goods or services. Thus, a suggestive term differs from a descriptive term, which immediately tells something about the goods or services. Suggestive marks, like fanciful and arbitrary marks, are registrable without proof of secondary meaning.

Case: American Wire & Cable Company vs. Director of Patents and Central Banahaw Industries, G.R. No. L-26557 February 18, 1970.

e.g. The trademark DYNAFLEX for electrical wires is a combination of the words FLEX, which means bend, and the prefix DYNA, which suggests power. DYNA is not in itself a root word but it has been commonly associated with any source of power.

Arbitrary or Fanciful Marks

 An arbitrary mark is a word or picture that is in common linguistic use but which, when used in connection with certain goods or services, neither suggests nor describes any quality or characteristic of those particular goods or services. Arbitrary marks are inherently distinctive and need no proof of secondary meaning to be regarded as valid for registration or legal protection.

Case: Andres Romero vs. Maiden form Brassiere Co., Inc. and The Director of Patents, respondents. G.R. No. L-18289 March 31, 1964.

Case: Masso Hermanos, S.A.vs.Director of Patents, G.R. No. L-3952 December 29, 1953

e.g. Trademarks derived from coined words such as "Rolex," "Kodak" or "Kotex" are most distinctive

e.g "Cosmopolite" does not give the name, quality or description of the canned fish for which it is used. It does not even describe the place of origin, for it does not indicate the country or place where the canned fish was manufactured. It is a very general term which does not give the kind or quality of the goods.

e.g. The musical term ADAGIO is used in an arbitrary or fanciful sense for brassiere.

Immoral and Scandalous Marks

 Section 123.1 (a) states that a mark cannot be registered if it consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute. Paragraph (m) also precludes the registration of a mark that is contrary to public order or morality.

Case: In re Runsdorf, 171 USPQ 443, 444 (TTAB 1971). See also In re Tinseltown, Inc., 212 USPQ 863 (TTAB 1981)

e.g. The mark BULLSHIT is considered "profane" and was declared scandalous for "accessories of a personal nature ... attaché cases, hand bags, purses, belts, and wallets."

Disparaging Marks

Section 168.3 (c), IP Code

Case: In re Runsdorf, 171 USPQ 443, 444 (TTAB 1971). See also In re Tinseltown, Inc., 212 USPQ 863 (TTAB 1981)

 Section 123.1 (a) bars the registration of any mark that consists of or comprises matter which, with regard to persons, institutions, beliefs, or national symbols, does any of the following: (1) disparages them, (2) falsely suggests a connection with them, (3) brings them into contempt, or (4) brings them into disrepute.

Disparagement is essentially a violation of one's right of privacy -- the right to be "let alone" from contempt or ridicule.

Elements of disparagement are (1) that the communication reasonably would be understood as referring to the plaintiff; and (2) that the communication is disparaging, and would be considered offensive or objectionable by a reasonable person of ordinary sensibilities.

e.g. INTEL, INUTEL INSIDE

National Symbols

 Designations have been held to be national symbols within the meaning of the Act

e.g. Hammer and sickle is a national symbol of the Union of Soviet Socialist Republics; the American or bald eagle with wings extended is a well-known national symbol or emblem of the United States.

False Suggestion of a Connection

 Section 123.1 (a) prohibits the registration of a mark that consists of or comprises matter which may falsely suggest a connection with persons, institutions, beliefs or national symbols.

 National Flag or Coat of Arms


Section 123.1 (b) precludes the registration of a mark which consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any simulation thereof.

 Name, Portrait and Signature Marks

Section 123.1 (c) prohibits the registration of a mark which consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any, except by written consent of the widow.

e.g. PRINCE CHARLES, 'Name' in this section is not restricted to the full name of an individual but refers to any name regardless of whether it is a full name, or a surname or given name, or even a nickname, which identifies a particular living individual.

Particular Living Individual or Deceased President

 Section 123.1 (c) applies to marks that comprise matter which identifies living individuals; it does not apply to marks that comprise matter which identifies deceased persons

e.g. greeting cards consisting of the name EISENHOWER, a portrait of President Dwight D. Eisenhower

e.g. When a name, portrait or signature in a mark identifies a particular living individual, or a deceased president of the country during the life of his widow, the mark can be registered only if the written consent of the individual, or of the president's widow, is filed in the application.

 Conflicting Marks

Section 123.1 (d) prohibits the registration of a mark is it 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 (ii) closely related goods or services, or (iii) if it nearly resembles such a mark as to be likely to deceive or cause confusion.

Under Section 147.1, in case of use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.

 Confusing Similarity with Registered Marks

Note: If the competing trademarks contain 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 is it necessary that the infringing label should suggest an effort to imitate.

 Consent Agreements

A "consent agreement" refers to an agreement in which a party, such as a prior registrant, consents to the use and/or registration of a mark by another party, like an applicant for registration of the same mark or a similar mark. It may also refer to an agreement in which each party consents to the use and/or registration of the same mark or a similar mark by the other party. A consent agreement that is not merely a "naked" consent specifies the reasons why no likelihood of confusion exists and/or arrangements undertaken by the parties to avoid confusion of the public.

 Relatedness of the Goods or Services

The goods or services do not need to be identical or even competitive to justify a determination that there is a likelihood of confusion. It is sufficient that the goods or services of the applicant and the registrant are related in some manner or that the circumstances surrounding their marketing are such that they are likely to confuse consumers.

e.g. MARTIN'S for wheat bran and honey bread likely to be confused with MARTIN'S for cheese

e.g. LAREDO for land vehicles LAREDO for pneumatic tires

Comparing Word Marks

 Similarity in appearance is one consideration in determining whether there is a likelihood of confusion between marks. Likelihood of confusion is not avoided between otherwise confusingly similar marks merely by adding or deleting a house mark or matter that is descriptive or suggestive of the named goods or services.

e.g. Thus, TRUCOOL for synthetic coolant was held likely to be confused with TURCOOL for cutting oil

 Design Marks

When the marks at issue are both design marks, the issue of the similarity of the marks must be decided primarily on the basis of visual similarity. In this situation, consideration must be given to the fact that a purchaser's recollection of design marks is often of a general and hazy nature.

e.g. a design mark consisting of an abstract circular design mark for seafood was held not likely to be confused with oval breaking wave design for various food items including juices and fruits.

 Confusing Similarity with Well-Known Marks

 Section 123.1 (e) precludes the registration of a mark which 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;

 On the other hand, Section 123.1 (f) prohibits the registration of a mark which is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: Provided, That use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use

Case: 246 CORPORATION, doing business under the name and style of Rolex Music Lounge vs. Hon. Reynaldo B. Daway, Montes Rolex S.A. and Rolex Centre Phil. Limited

e.g. ROLEX, KODAK

ROLEX cannot be appropriated as part of ROLEX MUSIC LOUNGE

e.g. In Montres Rolex, S.A., Rolex (Hong Kong) Ltd.) and Rolex Center Limited Philippine Branch versus Rolex Plastic Manufacturing Corporation, Montres Rolex S. A. sought the compulsory change the name of Rolex Plastic Manufacturing Corporation, by deleting its well-known trademark and Rolex from the corporate name.

 Deceptive Marks

Section 123.1 (g) of the Intellectual Property Code precludes the registration of deceptive marks or those that are “likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or serves.”

e.g. use of the term "nylon" in the trade-name is both "descriptive" and "deceptively and misdescriptive" of the applicant-appellant's business, for apparently he does not use nylon in the manufacture of the shirts, pants.

Deceptive marks may include marks which falsely describe the material content of a product and marks which are geographically.
Neither a disclaimer of deceptive matter nor a claim that it has acquired distinctiveness can obviate a rejection on the ground that the mark consists of or comprises deceptive matter.


 Signs Indicating Quality, Kind, Geographical Origin

Section 123.1 (j) precludes the registration of a mark that “consist exclusively of signs or of indications that may serve in trade to designate the geographical origin” of the goods of services. While the language suggests that they may be registered as part of registrable matter, they must nonetheless be disclaimed on the basis of the principle that they cannot be exclusively appropriated.

Case: Asia Brewery, Inc. vs. The Hon. Court of Appeals and San Miguel Corporation, G.R. No. 103543 July 5, 1993.
e.g, "Pilsen" is a "primarily geographically descriptive word." It is unregistrable and not appropriable by any beer manufacturer because it refers to a type of beer ("pilsen")

Descriptive Trademarks

Marks that are “merely descriptive” when applied to or used in connection with the goods, business or services of the applicant or “deceptively misdescriptive” of them are not registrable.

e.g. a dealer in shoes cannot register "Leather Shoes" as his trademark because that would be merely descriptive;

Case: Lyceum of The Philippines, Inc. vs. Court of Appeals, Lyceum of Aparri, Lyceum of Cabagan, Lyceum of Camalaniugan, Inc., Lyceum of Lallo, Inc., Lyceum of Tuao, Inc., Buhi Lyceum, Central Lyceum of Catanduanes, Lyceum of Southern Philippines, Lyceum of Eastern Mindanao, Inc. and Western Pangasinan Lyceum, Inc. G.R. No. 101897 March 5, 1993.

e.g. LYCEUM for an educational institution is merely descriptive of its purpose and its first user may not prohibit others from using the word to apply to their school of learning.

 Geographical Marks under the TRIPS Agreement

Under the Agreement on Trade Related Aspects of Intellectual Property Rights. (TRIPS Agreement), geographical indications are those which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin.

Functional Marks

Section 123.1 (k) of the Intellectual Property Code explicitly precludes the registration of “shapes that may be necessitated by the nature of the goods themselves or factors that affect their intrinsic value.”

e.g. under this provision, the shape of a hat will be unregistrable as a trademark for hat since the shape is dictated by the nature of the good itself.

Color Marks

Under Section 123.1 (l), a mark consisting of color alone cannot be registered as a mark unless defined by a given form. It is fundamental in trademark jurisprudence that color alone, unless displayed in a distinct or arbitrary design, does not function as a trademark. In one case, the colors black and red are not so displayed by the petitioner, and are primary colors commonly and freely used in the printing business.

Secondary Meaning

Section 123.2 of the Intellectual Property Code allows the registration of marks mentioned in paragraphs (j), (k) and (l), “which have become distinctive in relations to the goods for which registration is requested as a result of the use that has been made of it in commerce in the Philippines. The IPO may accept as prima facie evidence that the mark has become distinctive, as used in connection with the applicant’s goods in commerce, proof of substantially exclusive and continuous use thereof by the applicant in commerce in the Philippines for five years before the date on which the claim of distinctiveness is made.” The Intellectual Property Code therefore recognizes that marks that are unregistrable under its Section 123.1, paragraphs (j), (k) and (l), may nonetheless become registrable after they have acquired secondary meaning.

Case: Ana L. Ang vs. Toribio Teodoro, G.R. No. L-48226 December 14, 1942


The doctrine of "secondary meaning" is to the effect that a word or phrase originally incapable of exclusive appropriation with reference to an article of the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product.

 Prior Use

Prior use must be trademark use in the legal and protectable sense. Thus, if the trademark itself, like “Nylon” is not legally protectable no length of use and no amount of advertising will make it distinctive of shirts or of the business of manufacturing them.

Prior use by one will controvert a claim of legal appropriation, by subsequent users. In the case at bar, the Director of Patents found that "ample evidence was presented in the record that Centennial Mills, Inc. was the owner and prior user in the Philippines of the trademark 'All Montana' through a local importer and broker. Use of a trademark by a mere importer, indentor or exporter inures to the benefit of the foreign manufacturer whose goods are identified by the trademark.

 The Territoriality of Rights in Marks

 Before the Philippine adherence to the TRIPS Agreement and the enactment of the IP Code, the unyielding doctrine of the Supreme Court has been that trademark rights are territorial and cannot extend to markets which the goods bearing the trademark have not reached.

 The principle of territoriality of the Trademark Law has been recognized in the Philippines. As Callmann puts it, the law of trademarks "rests upon the doctrine of nationality or territoriality." The mere origination or adoption of a particular trade name without actual use thereof in the market is insufficient to give any exclusive right to its use, even though such adoption is publicly declared, such as by use of the name in advertisements, circulars, price lists, and on signs and stationery.

 A trade-mark acknowledges no territorial boundaries of municipalities or states or nations, but extends to every market where the trader's goods have become known and identified by the use of the mark.

 Prior Use of Marks

 Prior use must be trademark use in the legal and protectable sense. Thus, if the trademark itself, like “Nylon” is not legally protectable no length of use and no amount of advertising will make it distinctive of shirts or of the business of manufacturing them.

 Prior use by one will controvert a claim of legal appropriation, by subsequent users. Use of a trademark by a mere importer, indentor or exporter inures to the benefit of the foreign manufacturer whose goods are identified by the trademark. Where the Junior Party has established a continuous chain of title and, consequently, prior adoption and use it is safe to conclude that the Junior Party has satisfactorily discharged the burden of proving priority of adoption and use and is entitled to registration.

 Doctrine of Related Goods

 Goods are related when they belong to the same class or have the same descriptive properties; when they possess the same physical attributes or essential characteristics with reference to their form, composition, texture or quality. They may also be related because they serve the same purpose or are sold in grocery stores.

Case: Faberge, Incorporated vs. The Intermediate Appellate Court and Co Beng Kay, G.R. No. 71189 November 4, 1992

e.g. In Faberge Incorporated vs. Intermediate Appellate Court, the Third Division of the Supreme Court attempted to lay this issue to rest on the basis of the literal and restrictive language of Section 20 of the Trademark Law. The Court allowed the registration of the trademark "BRUTE" for briefs in the name of respondent since Faberge using its mark BRUT only on after-shave lotion, shaving cream, deodorant, talcum powder and toilet soap.

 Well-Known Marks

 The Supreme Court in La Chemise Lacoste has held that the Philippines is bound to accord protection to well-known trademarks under Article 6bis of the Paris Convention.

Case: In 246 CORPORATION, doing business under the name and style of Rolex Music Lounge vs. Hon. Reynaldo B. Daway, Montes Rolex S.A. and Rolex Centre Phil. Limited, upheld an injunction in favor of Montres Rolex SA against the use of its trademark ROLEX by Rolex Music Lounge.

e.g. The Supreme Court cited Section 123.1 (f) of the IP Code and noted that the provision prohibits the appropriation of well-known marks that are registered in the Philippines not only for goods that are similar but also for goods that are not similar to those for which the owner had registered its well-known mark in the Philippines.

 Actual Use of Marks

 Rights in marks are acquired through actual use in commerce. Advertising is not use.

 Excusable Non-Use

 Failure of the applicant to file a declaration and evidence of actual use within three years from the filing date of the application shall result in the rejection of the application or the cancellation of the registration certificate if it has been issued

 Non-use of a mark may be excused if caused by circumstances arising independently of the will of the trademark owner. Lack of funds shall not excuse non-use of a mark

 Use by Related Company

Section 52.4 of the IP Code

 The use of a mark by a company related with the registrant or applicant shall inure to the latter's benefit, and such use shall not affect the validity of such mark or of its registration. This is subject to the condition that such mark is not used in such manner as to deceive the public.

 A related company may be either a natural person or a juristic person. A party may claim use of a mark through a related company provided the party relying on such use controls the nature and quality of the goods or services on or in connection with which the mark is used.

First-to-File and First-to-Use

 The rights in a mark shall be acquired through registration made validly in accordance with the provisions of this law. Rights are not acquired by mere registration. Mere registration without actual use does not lead to acquisition of trademark rights since the applicant or registrant’s failure to use the mark in commerce within three years from the filing date of the application leads to rejection.

 A trademark owner who is first to file an application for the registration of a mark acquires the limited right to have his application examined ahead of any identical or similar mark.

 The applicant who has the earliest filing date may not necessarily end up as the registered owner of a mark. His application for the registration of the mark may be rejected if it 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.

 Rights Conferred by Registration

 Sections 147.1 and 147.2, IP Code, Rights Conferred

147.1. The owner of a registered mark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use, of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.
147.2. The exclusive right of the owner of a well-known mark defined in Subsection 123.1(e) which is registered in the Philippines, shall extend to goods and services which are not similar to those in respect of which the mark is registered: Provided, That use of that mark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use.

 Section 148, IP Code, Use of Indications by Third Parties for Purposes Other than those for which the mark is used.
Registration of the mark shall not confer on the registered owner the right to preclude third parties from using bona fide their names, addresses, pseudonyms, a geographical name, or exact indications concerning the kind, quality, quantity, destination, value, place of origin, or time of production or of supply, of their goods or services: Provided, That such use is confined to the purposes of mere identification or information and cannot mislead the public as to the source of the goods or services.
Case: Playboy v Terri Welles

 Section 150, IP Code License Contracts

Section 152.1 to 152.4, Non-use of Mark When Excused

Non-use of a mark may be excused if caused by circumstances arising independently of the will of the trademark owner. Lack of funds shall not excuse non-use of a mark. The special circumstances to excuse non-use in affidavits of non-use shall not be accepted unless they are clearly beyond the control of the registrant such as the prohibition of sale imposed by government regulation.


 Enforcement of Rights on Marks

 Section 134, Opposition
Any person who believes that he would be damaged by the registration of a mark may, upon payment of the required fee and within thirty (30) days after the publication referred to in Subsection 133.2, file with the Office an opposition to the application.
Such opposition shall be in writing and verified by the oppositor or by any person on his behalf who knows the facts, and shall specify the grounds on which it is based and include a statement of the facts relied upon. Copies of certificates of registration of marks registered in other countries or other supporting documents mentioned in the opposition shall be filed therewith, together with the translation in English, if not in the English language.
For good cause shown and upon payment of the required surcharge, the time for filing an opposition may be extended by the Director of Legal Affairs, who shall notify the applicant of such extension. The Regulations shall fix the maximum period of time within which to file the opposition.
 120-day period for notice of opposition, affidavit with supporting documentary evidence, power of attorney
 120-day period for respondent’s answer, affidavit with supporting documentary evidence, power of attorney
 Summary rules of procedure – decision to be rendered on the basis of the documents submitted, with opportunity to file a memorandum and a draft decision.

Sec. 155. 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.

 Measure of Damage
 The measure of the damages suffered shall be either the reasonable profit which the complaining party would have made.
 Profit which the defendant actually made out of the infringement
 Court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant

 Border Control
Sec. 166. Goods Bearing Infringing Marks or Trade Names
No article of imported merchandise which shall copy or simulate the name of any domestic product, or manufacturer, or dealer, or which shall copy or simulate a mark registered in accordance with the provisions of this Act, or shall bear a mark or trade name calculated to induce the public to believe that the article is manufactured in the Philippines, or that it is manufactured in any foreign country or locality other than the country or locality where it is in fact manufactured, shall be admitted to entry at any customhouse of the Philippines.

The Law on Copyright_Sir Amador

(part 2 of Sir Amador's Lecture notes)

 The Law on Copyright


Changes under the IP Code relating to copopyright

In summary form, to be discussed in greater detail later, the salient features of the Intellectual Property Intellectual Property Code are as follows:

 The law deleted the deposit and notice requirements under the Decree, which were inconsistent with the Berne Convention prohibition against any formality requirement as a condition for copyright protection.

 The law clarified that copyright includes not just author’s right of exploitation of the work but also the negative right to prevent the unauthorized exploitation of the works.

 The law incorporated the basic concept that works shall be protected by the sole fact of their creation and irrespective of their mode of expression, as well as of their content, quality or purpose. On the other hand, the law reaffirmed the basic principle that no protection shall extend to any idea, procedure, system, method or operation, discovery, concept or mere data.

 The law confirmed that protection is extended to databases that are original by reason of the selection or coordination of arrangement of their contents. There is growing consensus implemented by the TRIPS Agreement that protection should extend to all collections of pre-existing works, materials or other data that are selected, coordinated or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.

 The law made it clear that “other communication to the public of the works” is included among the economic rights comprising copyright which by definition includes “broadcast and re-broadcast” of works.

 The Intellectual Property Code recognized the new concept of “rental or public lending,” which under the TRIPS Agreement should be included among the economic rights of the copyright owner.

 The law deleted the provisions of the Decree on translation of works. In lieu of a provision on translation and reproduction of protected works, the law provided for a possible availment by the Philippines of the special provisions regarding developing countries, including provisions for licenses granted by competent authorities.

 The law contained new provisions on limitations on copyright and explicitly provided that the specific acts shall not be considered infringement of copyright. The exercise of these authorized limitations on copyright is subject to the condition that their exercise will not unreasonably prejudice the right holder’s legitimate interests or conflict with the normal exploitation of the works.

 The law recognized that the reproduction of computer programs may be permissible under specific limitations mentioned therein.

New Rights Created under the WIPO Copyright Treaty

The WIPO Copyright Treaty, in both its provisions and the supplemental Agreed Statement established several norms about applying copyright law in the digital environment. They include:

 copyright owners should have an exclusive right to control the making of copies of their works in digital form;

 copyright owners should have an exclusive right to control the communication of their works to the public;

 countries can continue to apply existing exceptions and limitations, such as fair use, as appropriate in the digital environment, and can even create new exceptions and limitations appropriate to the digital environment;

 merely providing facilities for the communication of works should not be a basis for infringement liability.

 WIPO Copyright Treaty Preserved Fair Use Rights

On the other hand, while the Treaty itself did not specifically use the words “fair use,” the Agreed Statement states that “it is understood that the provisions of Article 10 permit Contracting Parties to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws” which have been considered acceptable under the Berne Convention. Similarly, these provisions should be understood to permit Contracting Parties to devise ”new exceptions and limitations that are appropriate in the digital network environment. It is also understood that Article 10(2) neither reduces nor extends the scope of applicability of the limitations and exceptions permitted by the Berne Convention.Purpose of Copyright

The economic philosophy behind the clause empowering Congress to grant patents and copyright is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventions in the ‘science and the arts.

 Primary Objective of Copyright

The primary objective of copyright is not to reward the labor of authors, but to promote the progress of science and useful arts. To this end, copyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work. This principle, known as the idea/expression or fact/expression dichotomy, applies to all works of authorship.

 Balancing of Competing Claims in Copyright

The limited scope of the copyright holder's statutory monopoly, like the limited copyright duration required by the Constitution, reflects a balance of competing claims upon the public interest: Creative work is to be encouraged and rewarded, but private motivation must ultimately serve the cause of promoting broad public availability of literature, music, and the other arts.

 Fixation in a Tangible Medium of Expression

A copyright work is not a material thing but is the intellectual production of the author. We may concede that no copyright will arise unless and until the thoughts are fixed in a material form, for that is the result of the Act. A work acquires copyright either by first publication in a suitable country, or by virtue of the national status or residents of the author at the time of publication or, it unpublished, at the time when it was made, that is, reduced to writing or other material form. That, however, merely shows that fixation is a condition precedent to the subsistence of copyright.

 Competing Claims Involved In Copyright

The Supreme Court has stated that the copyright law, like the patent statutes, makes reward to the owner a secondary consideration. To serve the constitutional purpose, courts in passing upon particular claims of infringement must occasionally subordinate the copyright holder's interest in maximum financial return to the greater public interest in the development of art, science and industry.

 Original Works under the IP Code - Even if a work is completely identical to a prior work, it may be considered original if it is not copied from the prior work but is rather the product of an independent effort by the author.


Section 172 enumerates literary and artistic works as original intellectual creations in the literary and artistic domain protected from the moment of their creation, which shall include in particular:

 (a)Books, pamphlets, articles and other writings;

Biggest category, if not in numbers, by variety : novels, news, poems, recitations, short stories whether fictional or not, pamphlets, treatises or handbooks on philosophy, history and all other natural or physical science, almanacs, year books, programmes, guides

 (b) Periodicals and newspapers;

A contribution to a newspaper, notwithstanding that it may convey news, may be admitted to copyright under the provisions of the Copyright Act that ‘all the writings of an author,’ mentioning those appearing in periodicals, including newspapers, may be copyrighted. But news as such is not the subject of copyright.

 (c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other material form;

If a work had not been prepared for oral delivery, it could not claim copyright protection under this classification. Therefore, formats, outlines, brochures synopses, or general descriptions of radio and television programs were not registrable under this section since they are not, as such, to be orally presented.


 (d) Letters;

Case: Jerome D. Salinger a/k/a J. D. Salinger v. Random House, Inc. and Ian Hamilton, Court of Appeals for the Second Circuit, 811 F.2d 90, January 29, 1987


 (e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;

Section 172.1 (e) covers dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows. This is a matter of pieces for the theatre and, if they have a musical accompaniment of operas grand and light, operettas, musical comedies, etc.

Like other forms of copyrightable works, pantomimes and choreographic works must contain some original and expressive elements to be protected. As a consequence, not all combinations of gesture, expression and movement will constitute protectible subject matter.

 (f) Musical compositions, with or without words;

One court has suggested that ‘originality of rhythm is a rarity, if not an impossibility, and at least one other court seems to have agreed that originality may be found in the rhythm alone. However, one court has recognized copyrightable originality in rhythmic annotations and another found the necessary originality in fingering, dynamic marks, tempo indications, slurs and phrasing.


 (g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or designs for works of art;

The Act provides that accompanying music combines with the dramatic work into a single work of authorship. Dramatic works include theatrical plays, screenplays, works of musical theater and operas. Pantomimes and choreographic works were only protected to the extent that they were "dramatic compositions."

 (h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art;


 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.

172.2.Works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well as of their content, quality and purpose.

 Originality in Copyright

Originality is both a constitutional and statutory requirement for copyright protection. A work is original if it is (1) independently created by the author, and (2) possesses some minimal degree of creativity. The requisite level of creativity is relatively low and even a slight amount is sufficient to invoke copyright protections.

Case: Waldman Publishing Corp. v. Landoll, Inc. Waldman Publishing Corp. and Playmore Inc. v.s, Landoll, Inc., United States Court of Appeals for the Second Circuit, December 27, 1994

 Works of Artistic Craftsmanship

Section 172.1 (h) covers original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art. Since articles of manufacture must of necessity have functional value, the subject matter of copyright in this class of work is not the utilitarian function of the article, which is not subject to copyright, but the ornamental or aesthetic appearance of the article.

Case: Pivot Point Intern., Inc. v. Charlene Products, Inc. 372 F.3d 913, C.A.7 (Ill.),2004, June 25, 2004

Case: Mazer v. Stein, 347 U.S. 201 (1954)

 Original Works Derived From Public Domain Materials

A work may be protected by copyright even though it is based on something already in the public domain if the author, through his skill and effort, has contributed a distinguishable variation from the older works. However, a "distinguishable variation" must be substantial and not merely trivial.

Case: Norma Ribbon & Trimming vs. Little, United States Court of Appeals, Fifth Circuit., No. 94-60389., April 27, 1995.


 Original Compilation of Facts

Under the originality standard, bare facts are never copyrightable "because facts do not owe their origin to an act of authorship." A compilation of facts, however, may be copyrightable if the author made choices as to "which facts to include, in what order to place them, and how to arrange the collected data so that they may be used effectively by readers."

Case: Hodge E. Mason and Hodge vs. Montgomery Data, Inc., United States Court of Appeals, Fifth Circuit, No. 91-2305. Hodge E. Mason and Hodge Mason Maps, Inc. vs.Montgomery Data, Inc., et al. July 28, 1992.

 Computer Programs

Computer programs are protected under Section 172.1 (n). Computer programs, whether in source or object code, shall be protected as literary works under the Berne Convention (1971).

 Judicial Opinions

The literary productions of judges acting in their official capacity as judges are not the subject of copyright. This doctrine extends to whatever work they perform in their capacity as judges, and consequently applies to their statements of cases and to the syllabi or head notes prepared by them in their official capacity, as well as to their opinions and decisions themselves. The question is one of public policy.

 Law Reports

The fact that the opinions of judges rendered in litigation before them, and the syllabi and the statements of cases prepared by judges in pursuance of their judicial duties, are not copyrightable, does not imply that one cannot, with respect to other non-copyrightable matters, obtain a copyright upon volumes containing the reports of judicial decisions.

 News Stories, History, Biography

Copyright extends not only to the literal phrasing employed in news stories and historical or biographical works, but also to the author’s original narrative style and arrangement of facts reported. However, incidents that would be protected if fictional will not be protected if they are factual, and even the author’s ordering of incidents will not be protected if it follows the chronological order in which the incidents occurred.

 Derivative Works

Section 173 of the Intellectual Property Code enumerates derivative works, which shall also be protected by copyright, which include:

(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary or artistic works.

(b) Collections of literary, scholarly or artistic works, and compilations of data and other material which are original by reason of the selection and coordination or arrangement of their contents.

 A Derivative Work is substantially similar to the Underlying Work

To be a derivative work, the new work must be more than merely "inspired by" a prior work. A derivative work must take more than merely unprotectable ideas or concepts from the underlying work. To constitute a derivative work, the new work must be so "substantially similar" to the underlying work that in the absence of a license, it would be a copyright infringement of the underlying work.

Case: Waldman Pub. Corp. v. Landoll, Inc. 43 F.3d 775, C.A.2 (N.Y.),1994. December 22, 1994

 Adaptation of Old Play

Copyright may be secured in the adaptation of a play which is itself common property.

 Abridgements of Literary Work

Copyright may likewise exist in a genuine and just abridgment, for it is said that an abridgment may with great propriety be called a new book, and therefore is an original literary work.

Derivative Works of the Visual Arts

 In applying the requirement that a protectable work of visual art, such as a figurine or fabric design, embody a distinguishable, nontrivial variation over the work on which it is based, courts generally deny protection to minor applications that consumers would ordinarily overlook, but grant protection to alterations that change the work's actual appearance to consumers.

 Derivative Musical Works

Courts universally recognize that the limits of the musical vocabulary constrain original and expressive contributions in musical composition. In the context of derivative musical compositions, this constraint has produced a somewhat higher standard of distinguishable, nontrivial variation than is applied other forms of derivative works.

Case: Campbell v. Acuff-Rose Music, Inc., 10 U.S. 569, 579, 114 S. Ct. 1164, 1171, 127 L. Ed. 2d 500, 22 Media L. Rep. (BNA) 1353, 29 U.S.P.Q.2d (BNA) 1961 (1994)

Case: Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 60 U.S.P.Q.2d (BNA) 1225 (11th Cir. 2001)

Case: Bill Graham Archives, LLC. v. Dorling Kindersley Ltd., 75 U.S.P.Q.2d (BNA) 1192, 2005 WL 1137878 (S.D. N.Y. 2005)

Case: New York Times Co., Inc. vs. Tasini, 533 U.S. 483, 121 S. Ct. 2381, 150 L. Ed. 2d 500, 29 Media L. Rep. (BNA) 1865, 59 U.S.P.Q.2d (BNA) 1001, 5 A.L.R. Fed. 2d 623 (2001

Case: Faulkner v. National Geographic Enterprises Inc., 409 F.3d 26, 33 Media L. Rep. (BNA) 1385, 73 U.S.P.Q.2d (BNA) 1980 (2d Cir. 2005.

 Collective Works

Under Section 171.2 of the Intellectual Property Code, a collective work is a work which has been created by two (2) or more natural persons at the initiative and under the direction of another with the understanding that it will be disclosed by the latter under his own name and that contributing natural persons will not be identified. Section 196 states that when an author contributes to a collective work, his right to have his contribution attributed to him is deemed waived unless he expressly reserves it.

 Compilation of Works without License

So long as the pre-existing work remains out of the public domain, its use is infringing if one who employs the work does not have a valid license or assignment for use of the pre-existing work. Established doctrine prevents unauthorized copying or other infringing use of the underlying work or any part of that work contained in the derivative product so long as the underlying work itself remains copyrighted.

 Uncopyrightable Subject Matter

Section 175 provides that, notwithstanding the provisions of Sections 172 and 173, no protection shall extend, under this law, to any idea, procedure, system, method or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other miscellaneous facts having the character of mere items of press information; or any official text of a legislative, administrative or legal nature, as well as any official translation thereof.

 Works of the Government

Under Section 176.1 of the Intellectual Property Code, no copyright shall subsist in any work of the Government of the Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties. No prior approval or conditions shall be required for the use for any purpose of statutes, rules and regulations, and speeches, lectures, sermons, addresses, and dissertations, pronounced, read or rendered in courts of justice, before administrative agencies, in deliberative assemblies and in meetings of public character.

 Rules on Copyright Ownership
Under Section 178, copyright ownership shall be governed by the following rules:

 Subject to the provisions of this section, in the case of original literary and artistic works, copyright shall belong to the author of the work, who is defined is the natural person who has created the work.

 In case of works of joint authorship, the co-authors shall be the original owners of the copyright and in the absence of agreement, their right shall be governed by the rules on co-ownership. If, however, a work of joint authorship consists of parts that can be used separately and the author of each part can be identified, the author of each part shall be the original owner of the copyright in the part that he has created.

 In respect of work created by an author during and in the course of his employment, the copyright shall belong to:

 The employee, if the creation of the object of copyright is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer.

 The employer, if the work is the work is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary.

 In respect of a work commissioned by a person other than the employer of the creator and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of the work, but the copyright thereto shall remain with the creator, unless there is a written stipulation to the contrary.

 In respect of audiovisual work, the copyright shall belong to the producer, the author of the scenario, the composer of the music, the film director, the photographic director, and the author of the work adapted. However, subject to contrary or other stipulation among the creators, the producer shall exercise the copyright to an extent required for the exhibition of the work in any manner, except for the right to collect performing license fees for the musical compositions, with or without words, which may be incorporated into the work.

 In respect of letters, the copyright shall belong to the writer subject to the provisions of Article 723 of the Civil Code, which provides that letters and other private communications in writing are owned by the person to whom they are addressed and delivered, but they cannot be published or disseminated withsout the consent of the writer or his heirs. However, the court may authorize their publication or dissemination if the public good or the interest of justice so requires.

Case: Tests of Joint Authorship Erickson v. Trinity Theatre, Inc. 13 F.3d 1061, C.A.7 (Ill.),1994, January 06, 1994

There are two tests for determining whether a work is the result of joint authorship: the first is called the “de minimis test” propounded by Professor Nimmer and the other is the “copyrightable matter” test propounded by Professor Goldstein. The “copyrightable matter test” appeared to be favored by the courts.


Works of Joint Authorship

Section 178.2 provides in case of works of joint authorship, the co-authors shall be the original owners of the copyright and in the absence of agreement, their right shall be governed by the rules on co-ownership. If, however, a work of joint authorship consists of parts that can be used separately and the author of each part can be identified, the author of each part shall be the original owner of the copyright in the part that he has created.

Case: TMTV, Corp. v. Mass Productions, Inc. 345 F.Supp.2d 196, D.Puerto Rico,2004. Nov 24, 2004

Rules on Co-Ownership

 Section 178.2 recognizes that in case of works of joint authorship, the co-authors shall be the original owners of the copyright. Unless they agree on a different rules to govern their rights, the rules on co-ownership shall be applied.

 If, however, a work of joint authorship consists of parts that can be used separately and the author of each part can be identified, the author of each part shall be the original owner of the copyright in the part that he has created.

 An infringement claim can be brought only against one who violates "the exclusive rights of the copyright owner," and an owner does not have rights exclusive of a co-owner's, so an infringement claim cannot lie against a co-owner

 Copyright ownership ordinarily vests in the author of the work. As a general rule, the author is the party who actually creates the work. There is, however, an allowance for "works made for hire." If the work is made for hire, the owner is the employer or other person for whom the work was prepared.

 Under the "work-for-hire doctrine," an employer owns the copyright on a product prepared by an employee within the scope of his or her employment, absent a written agreement to the contrary.

Case: Montgomery v. Alcoa, Inc., 11 Fed. Appx. 471 (6th Cir. 2001).

 Anonymous and Pseudonymous Works

 Under Section 179, for purposes of the Act, the publishers shall be deemed to represent the authors of articles and other writings published without the names of the authors or under pseudonyms, unless the contrary appears, or the pseudonyms or adopted name leaves no doubt as to the author’s identity.

 Copyright or Economic Rights
Sec. 177. Copyright or Economic Rights. - Subject to the provisions of Chapter VIII, copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:
177.1. Reproduction of the work or substantial portion of the work;

 The reproduction right is seen as the bedrock of copyright and is fundamental to the concept of ownership of a copyright. The right inheres in each of the eight statutory categories of works of authorship, 'Copies' are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced

177.2 Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work;

 The Act grants the copyright owner the exclusive right "to prepare derivative works based upon the copyrighted work." The right is also frequently termed the right of adaptation. A 'derivative work' is a work based upon one or more pre-existing works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment

177.3. The first public distribution of the original and each copy of the work by sale or other forms of transfer of ownership;

 The exclusive right of public distribution is the right to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.
 Unlike the other rights of copyright, the distribution right is infringed merely by a transfer of copies of the work, whether those copies are lawfully or unlawfully made.

Case: First Sale Doctrine; Quality King Distributors, Inc., Petitioner v. L'anza Research International, Inc., No. 961470, March 9, 1998


177.4. Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound recording, a computer program, a compilation of data and other materials or a musical work in graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental; (n)

 In compliance with the TRIPS Agreement , covers situations where the copyright proprietor continues to have rental rights to the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound recording, a computer program, a compilation of data and other materials or a musical work in graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental.


177.5. Public display of the original or a copy of the work;

 To 'display' a work means to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process or, in the case of a motion picture or other audiovisual work, to show individual images consequentially. The definition of "publicly" in connection with display is identical to the definition of "publicly" in connection with performance.

 Display covers any showing of a "copy" of the work, either directly or by means of a film, slide, television image or any other device or process. However, in order for there to be copyright infringement, the display must be public.


177.6. Public performance of the work; and

 Performance is undertaken either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible."

 Case: Filipino Society of Composers, Authors and Publishers, Inc. vs. Tan, 148 SCRA 461

177.7. Other communication to the public of the work (Sec. 5, P. D. No. 49a)

 copyright may be assigned in whole or in part

 exclusive rights encompassed by copyright may be transferred separately or assigned individually as the copyright proprietor sees fit

 author of a novel may assign the right of reproduction of the novel separately from the right of adaptation of the novel to a screenplay, or its translation to other languages.

 transfer or assignment must, however, be clear from the written instrument

 In cases of assignment, the assignee of the particular right has standing to sue for the infringement of the particular right assigned to him.

 Section 180.3 provides that the submission of a literary, photographic or artistic work to a newspaper, magazine or periodical for publication shall constitute only a license to make a single publication unless a greater right is expressly granted.

 Sec. 184. Limitations on Copyright
184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright:

 the recitation or performance of a work, once it has been lawfully made accessible to the public, if done privately and free of charge or if made strictly for a charitable or religious institution or society; (Sec. 10(1), P. D. No. 49)

 The making of quotations from a published work if they are compatible with fair use and only to the extent justified for the purpose, including quotations from newspaper articles and periodicals in the form of press summaries: Provided, That the source and the name of the author, if appearing on the work, are mentioned; (Sec. 11, Third Par., P. D. No. 49)

 The reproduction or communication to the public by mass media of articles on current political, social, economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are delivered in public if such use is for information purposes and has not been expressly reserved: Provided, That the source is clearly indicated; (Sec. 11, P. D. No. 49)

 The reproduction and communication to the public of literary, scientific or artistic works as part of reports of current events by means of photography, cinematography or broadcasting to the extent necessary for the purpose; (Sec. 12, P. D. No. 49)

 The inclusion of a work in a publication, broadcast, or other communication to the public, sound recording or film, if such inclusion is made by way of illustration for teaching purposes and is compatible with fair use: Provided, That the source and of the name of the author, if appearing in the work, are mentioned;

 The recording made in schools, universities, or educational institutions of a work included in a broadcast for the use of such schools, universities or educational institutions: Provided, That such recording must be deleted within a reasonable period after they were first broadcast: Provided, further, That such recording may not be made from audiovisual works which are part of the general cinema repertoire of feature films except for brief excerpts of the work;

 The making of ephemeral recordings by a broadcasting organization by means of its own facilities and for use in its own broadcast;

 The use made of a work by or under the direction or control of the Government, by the National Library or by educational, scientific or professional institutions where such use is in the public interest and is compatible with fair use;

 The public performance or the communication to the public of a work, in a place where no admission fee is charged in respect of such public performance or communication, by a club or institution for charitable or educational purpose only, whose aim is not profit making, subject to such other limitations as may be provided in the Regulations; (n)

 Public display of the original or a copy of the work not made by means of a film, slide, television image or otherwise on screen or by means of any other device or process: Provided, That either the work has been published, or, that original or the copy displayed has been sold, given away or otherwise transferred to another person by the author or his successor in title; and

 Any use made of a work for the purpose of any judicial proceedings or for the giving of professional advice by a legal practitioner.

184.2. The provisions of this section shall be interpreted in such a way as to allow the work to be used in a manner which does not conflict with the normal exploitation of the work and does not unreasonably prejudice the right holder's legitimate interest.


 Scope of Moral Rights

Section 193 provides that the author of a work shall, independently of the economic rights in Section 177 or the grant of an assignment or license with respect to such right, have the right.

 To require that the authorship of the works be attributed to him, in particular, the right that his name, as far as practicable, be indicated in a prominent way on the copies, and in connection with the public use of his work;

 To make any alterations of his work prior to, or to withhold it from publication;

 To object to any distortion, mutilation or other modification of, or other derogatory action in relation to, his work which would be prejudicial to his honor or reputation;

 To restrain the use of his name with respect to any work not of his own creation or in a distorted version of his work

 Note: The rights spring from a belief that an artist in the process of creation injects his spirit into the work and that the artist's personality, as well as the integrity of the work should therefore be protected and preserved.


 Breach of Contract

 Under Section 194 confers upon the author the moral right to decline to perform his contract to create a work or to publish his work already in existence. Although he cannot be sued for compulsory performance of his undertaking, he may be held liable for damages for breach of such contract.

 The author’s right under Section 194 is ancillary to his moral right under Article 193.2 to withhold his work from publication.

 Term of Moral Rights: Section 198 provides that the rights of a creator under this chapter shall last during the lifetime of the creator and for fifty (50) years after his death and shall not be assignable or subject to license.


 Fair Use of a Copyrighted Work

Section 185.1 provides that the fair use of a copyrighted work for criticism, comment, news reporting, teaching, including multiple copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright. Decompilation, which is understood here to be the reproduction of the code and translation of the forms of the computer program to achieve the inter-operability of an independently created computer program with other programs may also constitute fair use. In determining whether the use made of a work in any particular case is fair use, the factors to be considered shall include:

 The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes;

 The nature of the copyrighted work;

 The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

 The effect of the use upon the potential market for or value of the copyrighted work.

Section 185.2 states that the fact that a work is unpublished shall not by itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

Case: Luther R. Campbell Aka Luke Skywalker vs. Acuff-Rose Music, Inc., United States Court of Appeals for the Sixth Circuit, March 7, 1994

Case: Princeton University Press v. Michigan Document Services, Inc., 99 F.3d 1381, C.A.6 (Mich.),1996. November 08, 1996

Case: American Geophysical Union v. Texaco Inc. 60 F.3d 913, C.A.2 (N.Y.),1994. October 28, 1994

 Optical Media Act


 The Optical Media Act (Republic Act No. 9239) aims to curb widespread piracy in optical media in the Philippines through a revamp of the implementing government agency, introduction of licensing requirements, use of identity codes in optical media, and criminal prosecution for engaging in prohibited activities.

 The Philippine Congress enacted the Act in answer to the calls from local and foreign copyright-holders for better regulation and control of optical media that are being used for digital piracy. Prior to the Act, the manufacturing and distribution of optical media was virtually unregulated. While videograms were subject to regulation by the Videogram Regulatory Board (VRB), the primary function of the VRB was classification of videograms, and the manufacturing and distribution of software and audio casettes and CDs was largely unsupervised by any government agency.

 The Act seeks to remedy this situation by regulating the manufacture, mastering, replication, importation and exportation of optical and magnetic media.

 Copyright Online

 The Right of Reproduction


The reproduction right of the Copyright Act arguably is implicated by each reproduction of a work in computer memory, whether the work is reproduced to or resides in a central server or a user' s personal computer.

A few cases now have held that software embodied in either random access memory (RAM), hard disk drives, or other digital storage media are copies in the copyright sense, notwithstanding, in the case of RAM, the volatile nature of that storage medium.

These decisions- at least with respect to RAM storage- appear inconsistent with the House Report on the 1976 Act, which stated that " the definition of ' fixation' would exclude from the concept purely evanescent or transient reproductions such as those... captured momentarily in the ' memory' of a computer."

Digital Millennium Copyright Act (the DMCA), the Computer Maintenance Competition Assurance Act, expressly exempts from infringement liability ephemeral copies created in connection with the maintenance and repair of computer systems, but only if the copies are destroyed after the maintenance and repair are completed.

The DMCA also exempts certain ephemeral copies created by online service providers as part of an " automatic technical process." Again, there is no implication that ephemeral copies would otherwise be infringing.

In the case of computer programs, reproductions in long-term digital storage of other types of works would constitute copies or phonorecords. One decision suggests, however, that an e-book might not infringe the copyright of a traditional printed book because users interact with e-books differently.

Where the digital embodiment is sufficiently permanent to permit the perception, reproduction or other communication of the work, in accordance with the Copyright Act definition of " copies," then the copying would violate the author' s exclusive reproduction right unless authorized or unless subject to one of the limitations embodied in Sections 107 through 120 of the Copyright Act.

Where, however, the copying is entirely passive, and the copies are made at the direction of a service provider' s users, the service provider may not be liable.

The Copyright Act' s definitions of " copies" and " phonorecords" may also encompass digitally compressed or encrypted versions of digitized works of authorship, as such versions can be " perceived, reproduced or otherwise communicated... with the aid of a machine or device," at least in the hands of those possessing the requisite decrypting software or keys.

 The Right of Preparation of Derivative Works

A work does not become a derivative work simply because it has been digitized or, once digitized, encrypted or compressed. Such techniques are essentially techniques of copying. If, however, the process of digitization involves the addition of creative and expressive content to the work, a separately copyrightable derivative work may result. Mere digitization of the notes and other composed elements of musical works would be copying, rather than creation of a derivative work.

When computer music enthusiasts and professional musicians employ technologies such as MIDI that permit them to add creative elements of their own relating to the expressive playback of the work, the result is a sound recording that is derivative of the underlying musical work.

One court has held that the digital manipulation of a photograph may result in the creation of a derivative work if " substantial use" is made of the original.

Derivative works may also be created by the removal of copyrightable expression from the original. Absent fair use, the creation of such derivative works would violate the right of adaptation

 The Right of Public Distribution

The statutory right of public distribution of copies or phonorecords would, on its face, seem to permit the electronic transmission of a work without that specific right being violated. Such transmissions might not be considered " distributions" because no material objects constituting phonorecords or copies are sold, leased or otherwise subject to a change of possession. Certainly the practice in the broadcasting and cable industries has been to treat broadcasts and cable transmissions as if they were not distributions.

Public distribution is not as clear, however, in the case of online transmissions resulting in creation of a copy by the receiving computer. Accordingly, it has been thought that courts could well rule that a transmission is a distribution whenever it has the effect of a distribution (e.g., foreseeably results in a copy being possessed, in a sale transaction, by a member of the public).

In New York Times Co. v. Tasini, the Supreme Court apparently equated an electronic transmission with a public distribution. The Court stated that selling copies of " articles through the NEXIS Database" constituted distribution of copies " to the public by sale," albeit without analyzing how the defendants were distributing physical copies.

The plaintiffs in Frank Music Corp. v. CompuServe Inc. alleged that the downloading of files of data embodying sound recordings from the defendant' s online information service constituted public distribution of the underlying musical compositions.The settlement of that action established a scheme by which third party forum managers who operate the interest areas of the defendant' s service could obtain licenses for such downloading as if it were public distribution and subject to the mechanical royalties and statutory license under US law.

The Working Group on Intellectual Property Rights of the United States Information Infrastructure Task Force recommended the amendment of Section 106(3) of the Copyright Act to provide that the public distribution right would be violated by certain unauthorized electronic transmissions.

The White Paper and its proponents have argued that there is no reason to treat works distributed electronically to the public differently from works distributed in physical copies. Under the proposal of the White Paper, transmissions would implicate the distribution right only if made to the public, and such distributions would be subject to the limitation of the first sale doctrine, to the extent it is applicable in an online environment.

 The First Sale Doctrine and Electronic Transmissions

The controversial copyright issues in the online environment is whether and how the first sale doctrine, which limits the public distribution right, applies to copies that are transmitted electronically, or are created as a result of such transmissions. During an electronic transmission, no material copy of a work changes hands; thus, Section 109 of the Copyright Act, which pertains to the sale or disposal of " the possession of [a] copy or phonorecord" would appear inapposite to an online distribution.

To the extent a new copy is created on a recipient' s computer, for example, as a result of an unauthorized transmission, the first sale doctrine itself would not be a defense to that infringement of the reproduction right by the transmitting party.

It has been proposed that the first sale doctrine should apply to transmissions creating a copy in the recipient' s computer if the transmitting party deletes the copy from which the transmission was made. In such a case only one copy of the work would be extant at the end of the transmission-cum-deletion, an outcome akin to that when a physical copy of the work is transferred in a conventional first sale transaction.

The Copyright Office released its report. It also refrained from recommending to Congress that the first sale doctrine be extended to electronic distributions. According to the Copyright Office, (1) there was " no convincing evidence of present-day problems," (2) the analogy to the circulation of physical goods was not compelling, (3) " forward-and-delete" technology is not available, (4) expanding Section 109 would encourage infringement of the reproduction right, and (5) it was unaware of any consumer expectations of being able to transfer downloaded material.

 MP3 and Other Digital Music Distribution on the Internet

The online marketplace for digital distribution of sound recordings has exploded, with many thousands of music files being downloaded every day from MP3.com and other similar Web sites and traded on college campuses and elsewhere.

Although many of these files are made available with the permission of the copyright owner, including sites maintained by artists, many others are posted on the Internet without proper authorization. The recording industry and movie studios have objected strenuously to these activities because they threaten the royalties earned through more conventional distribution channels.

Law on Patents_From Sir Amador

(the following are from Sir Amador's notes. This is for the benefit of the people who were not able to copy from sir amador last saturday)



The Law on Patents


 First to File

 The Intellectual Property Code adopts the first-to-file system of patent registration in contrast to the Patent Law, which followed the first-to-invent system.
 First to file is the rule in which patent priority is determined by which inventor was the first to file a patent application, rather than who was the first to actually invent.
 The IP Code provides that if two (2) or more persons have made the invention separately and independently of each other, the right to the patent shall belong the person who filed an application for such invention, or where two or more applications are filed for the same invention, to the applicant who has the earliest filing date or, the earliest priority date.

 The first-to-file system may, however, lead to certain fraudulent practices, which the Intellectual Property Code seeks to minimize.

 If a person, who was deprived of the patent without his consent or through fraud is declared by final court order or decision to be the true and actual inventor, the court shall order for substitution as patentee, or at the option of the true inventor, cancel the patent, and award actual and other damages in his favor if warranted by the circumstances.

 Any prior user, who, in good faith was using the invention or has undertaken serious preparations to use the invention in his enterprise or business, before the filing date or priority date of the application on which a patent is granted, shall have the right to continue the use thereof as envisaged in such preparations within the territory where the patent produces its effect.

 Elements of Patentable Inventions

 Under Section 21, 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.

 Inventions may be either machines, manufactures, or compositions of matter.
A machine is "a concrete thing, consisting of parts or of certain devices and combinations of devices." .
Case: Burr v. Duryee, 68 U.S. (1 Wall.) 531, 570 (1863)
A manufacture is "the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties or combinations, whether by hand labor or by machinery."
Case: Chakrabarty, 447 U.S. at 308, 206 USPQ at 196-97 (quoting American Fruit Growers, Inc. v. Brogdex Co., 283 U.S. 1, 11 (1931)
A composition of matter is "a composition of two or more substances or a composite article, whether it be the result of chemical union, or of mechanical mixture, or whether it be a gas, fluid, powder, or solid."
Case: id. at 308, 206 USPQ at 197 (quoting Shell Development Co. v. Watson, 149 F. Supp. 279, 280, 113 USPQ 265, 266 (D.D.C. 1957), aff'd per curiam, 252 F.2d 861, 116 USPQ 428 (D.C. Cir. 1958).
 An invention that consists of a new alloy is an exam¬ple of a product invention.

 An invention that consists of a new method or process of making a known or new alloy is a process invention.

 'The corresponding patents are usually referred to as a "product patent for invention," and a "process patent for invention," respectively.

 Protection for Patentable Inventions

 The protection that a patent for invention confers means that anyone who wishes to exploit the invention must obtain the authorization of the person who received the patent-called "the patentee" or "the owner of the patent"-to exploit the invention.

 If anyone exploits the patented invention without such authorization, he commits an illegal act.

 One speaks about "protection" since what is involved is that the patentee is pro¬tected against exploitation of the invention which he has not authorized. Such protection is limited in time. In most countries, it is about 20 years.

 The rights, usually called "exclusive rights of exploitation", generally consist of:

 In the case of product patents for invention, the right to make, use, sell and import the product that includes the invention, and

 In the case of process patents for invention, the right to use the process that includes the invention as well as the right to make, use, sell and import products which were made by the process that includes the invention
Utility Models

One of these two other means or forms of protection consists in the registration, or the granting, of a patent for a "utility model." The concept of utility models is known in the laws of a certain number of countries, among them the People's Republic of China, the Federal Republic of Germany and Japan.

The expression "utility model" requires clarification. In essence, it is merely a name given to certain inventions, namely-according to the laws of most countries which contain provisions on utility models-inventions in the mechanical field. This is why the objects of utility models are sometimes devices or useful objects.

Utility models differ from inventions for which patents for invention are available mainly in two respect first, in the case of an invention called "utility model," the technological progress required is less than the technological progress ("inventive step")

Case: Gerardo Samson, Jr. Vs. Felipe Tarroza, et al. , G.R. No. L-20354, July 28, 1969

Case: Ex Parte Case Jackson Appeal To the Director of Patents From Final Rejection of Application By Principal Examiner Raymond M. Jackson, Applicant-Appellant, Appln. Serial No. Um-10473-A, June 15, 1988, Decision No. 91-9 (Pat), August 29, 1991

Conversion of Patent Applications or Applications for Utility Model
Registration

Section 110. 1 states that at any time before the grant or refusal of a patent, an applicant for a patent may upon payment of the prescribed fee convert his application into an application for registration of a utility model, which shall be accorded the filling date of the initial application. An application may be converted only once.

Industrial Designs

Section 112 states that an industrial design is any composition of lines or colors or any three dimensional form whether or not associated with lines or colors: Provided, That such composition or form gives a special appearance to and can serve as pattern for an industrial product or handicraft. Under Section 113.1, only industrial designs that are new or original shall benefit from protection under this Act.

Section 113.2 provides that industrial designs dictated essentially by technical or functional considerations to obtain a technical result or those that are contrary to public order., health or morals shall not be protected.

The appearance of a claimed design must meet the condition of novelty in order to qualify for a design patent. In other words, a design patent only protects the novel features of the design patented.

Industrial Designs

Industrial designs belong to the aesthetic field, but are at the same time intended to serve as patterns for the manufacture of products of industry or handicraft. Generally speaking, an industrial design is the ornamental or aesthetic aspect of a useful article. The ornamental aspect may consist of the shape and/or pattern and/or color of the article. The ornamental or aesthetic aspect must appeal to the sense of sight. The article must be reproducible by industrial means.


Independence of Patents

This principle is to be understood in its broadest sense. It means that the grant of a patent for invention in one country for a given invention does not oblige any other member country to grant a patent for invention for the same invention.

TRIPS AGREEMENT

National Treatment

The first and most basic general requirement of the TRIPS Agreement is the requirement for national treatment. By virtue of that requirement, each Member of the WTO must treat the nationals of every other Member as favorably as its own with respect to intellectual property-i.e., must not discriminate against foreign nationals of Members.

Most-Favored-Nation Treatment

The requirement for most-favored-nation treatment is an innovation with the TRIPS Agreement. Drawn from the field of international trade generally, this requirement goes farther than the requirement for national treatment. It requires not only that each Member give other Members' nationals the same treatment as its own, but that each Member not prefer any other Member's nationals, or those of any nonmember country, over the nationals of any Member.

Exhaustion or First-Sale Doctrine

Article 6 of the TRIPS Agreement explicitly disclaims an intent to impose any particular requirements regarding the issue of the exhaustion of intellectual property rights. As a result, Members of the WTO are free to implement exhaustion of intellectual property rights as they please.

The term generally refers to doctrines that extinguish certain exclusive rights of the holder of intellectual property with respect to a particular physical item embodying the intellectual property after the item has first been sold under the holder's authority.

Patentable Subject Matter


Product and Process Patents

Article 27(1) says that, subject to the stated exceptions, patents must be available for both products and processes in all fields of technology. This requirement implicitly repudiates a practice observed in a number of developing countries, of providing only process patents in certain fields of technology, thereby encouraging local inventors to develop other, non-infringing processes to make the same products.

Exclusive Rights

A product patentee must have the right to prevent others, without authorization, from making, using, offering for sale, selling, or importing [the patented product] for these purposes.

A process patentee must have the right to prevent others, without authorization, from using the process and from using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process.

Compulsory Licensing

The provisions of the TRIPS Agreement regarding compulsory licensing are probably second in importance to those specifying the scope of subject matter for which patents must be available.

Proof of Process Patent Infringement

The final major substantive requirement of the TRIPS Agreement in the field of patent law relates to enforcement of process patents. Among the required exclusive rights of a process patent holder are the rights to use the patented process to make products and to use, import and sell products made at least directly by that process.

A process patent holder as such, however, does not have the right to control the making or distribution even of identical products if made by another, non-infringing process.


Data Submission to Government

Paragraph 3 of Article 39 provides special protection for a certain kind of undisclosed information-that submitted to government agencies to secure regulatory approval of pharmaceuticals and agricultural chemicals. More specifically, it protects undisclosed test or other data, the origination of which involves considerable effort and which is submitted as a condition of regulatory approval for pharmaceutical or agricultural chemical products which utilize new chemical entities.

Major Concepts of the PCT
The Patent Cooperation Treaty (PCT) enables the U.S. applicant to file one application, "an international application," in a standardized format in English in the U.S. Receiving Office (the U.S. Patent and Trademark Office), and have that application acknowledged as a regular national or regional filing in as many Contracting States to the PCT as the applicant "designates" or "elects," that is, names, as countries or regions in which patent protection is desired.

Requirements for Patentability

Section 21 states that 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.

Novelty, Inventive Step and Industrial Application

Section 21 embodies the elements of patentability: novelty, inventive step or non-obviousness and industrial applicability. The dispositive question is not whether the claimed device is an ‘invention’; rather, it is whether the invention satisfies the standards of patentability.

A conception of the mind is not an invention until represented in some physical form, and unsuccessful experiments or projects, abandoned by the inventor, are equally destitute of that character.

It is an essential requirement for the validity of a patent that the subject-matter display "invention," more ingenuity than the work of a mechanic skilled in the art.

The applicant whose invention satisfies the requirements of
[1] novelty, [2] non-obviousness, and [3] utility, and who is [4] willing to reveal to the public the substance of his discovery and the best mode of carrying out his invention, is granted the [5] right to exclude others from making, using, or selling the invention throughout the country, for the statutory period.

Novelty

Under Section 23 of the Intellectual Property Code, an invention shall not be considered new if it forms part of the prior art.

The repealed Patent Act followed the rule of relative novelty. The IP Code follows the rule of absolute novelty.

Prior art shall consist of:

(i) everything which has been made available to the public anywhere in the world, before the filling date or the priority date of the application claiming- the invention; and
(ii) (ii) the whole contents of an application for a patent, utility model or industrial design registration, published in accordance with this Act, filed or effective in the Philippines, with a filing or priority date that is earlier than the filing or priority date of the application

Non-Prejudicial Disclosure

Under Section 25, certain forms of disclosure cannot prejudice the patent applicant. These non-prejudicial disclosures include:

() The disclosure of information contained in the application during the twelve (12) months preceding the filing date or the priority date of the application shall not prejudice the applicant on the ground of lack of novelty if such disclosure was made by:

() The inventor;

() A patent office and the information was contained (a) in another application filed by the inventor and should not have been disclosed by the office, or (b) in an application filed without the knowledge or consent of the inventor by a third party which obtained the information directly or indirectly from the inventor; or

() A third party which obtained the information directly or indirectly from the inventor.



Inventive Step

The expression "inventive step" conveys the idea that it is not enough that the claimed invention be new, that is, different from what exists in the state of the art, but that this difference must have two characteristics: it must be inventive, that is, the result of a creative idea and it mat be a step, that is, it must be noticeable.

The “inventive step” means that the difference between the claimed invention and the state of the art must be the result of a creative idea. The notion of inventive step is explained by words to the effect that the difference between the claimed invention and the state of the art must be "non-obvious".

Enablement

In addition to requiring a written description of the invention, § 112 requires that the specification contain "the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same."

To satisfy the enablement requirement, the specification must enable the full scope of the claimed invention.

Specific and Substantial Utility
The enablement requirement is different from the utility requirement. The requirement is that some specific, substantial, and credible use be set forth for the invention. On the other hand, the enablement requirement must disclose how the invention can be carried out, i.e., how the invention can be used.
Case: Man-Made Bacteria: Diamond v. Chakrabarty, Supreme Court of The United States, 447 U.S. 303, 100 S. Ct. 2204, 65 L. Ed. 2d 144, June 16, 1980

Improvement Patents

Section 21 recognizes the patentability of improvement patents. It is well established that an improver can not appropriate the basic patent of another and that the improver without a license is an infringer and may be sued as such.

Unlicensed Improver

An improver who appropriates, without license, the basic patent of another, is an infringer and liable as such.

Unpatented Inventions as Part of Public Domain

It is true that 'the discoverer of a new and useful improvement is vested by law with an inchoate right to its exclusive use, which he may perfect and make absolute by proceeding in the manner which the law requires'. Failure to file a patent for an invention consigns it to the public domain.

Exclusions from Patentability

Section 22 excludes the following matter from patent protection:

() Discoveries, scientific theories and mathematical methods;

() Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers;

() Methods for treatment of the human or body by surgery or therapy and diagnostic methods practice on the human or animal body. This provision shall not apply to products and composition for use in any of these methods;

() Plant varieties or animal breeds or essentially biological process for the production of plants or animals. This provision shall not apply to micro-organism and non-biological and micro-biological processes. Provisions under this subsection shall not preclude Congress to consider the enactment of a law providing sui genesis protection of plant varieties and breeds and a system of community intellectual rights protection:

() Aesthetic creations; and

() Anything which is contrary to public order or morality.

The subject matter courts have found to be outside the four statutory categories of invention is limited to abstract ideas, laws of nature and natural phenomena.

While this is easily stated, determining whether an applicant is seeking to patent an abstract idea, a law of nature or a natural phenomenon has proven to be challenging. These three exclusions recognize that subject matter that is not a practical application or use of an idea, a law of nature or a natural phenomenon is not patentable.

An idea of itself is not patentable, but a new device by which it may be made practically useful is. While a scientific truth, or the mathematical expression of it, is not patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.



Case: U.S. Supreme Court Decision in LabCorp. v. Metabolite
Laboratory Corporation of America Holdings, dba LabCorp v. Metabolite Laboratories, Inc., No. 04–607, Supreme Court of the United States, On Writ of Certiorari to the United States Court of Appeals for The Federal Circuit, June 22, 2006

Proving Anticipation

Anticipation by prior art can be found only when a reference discloses exactly what is claimed. A finding of anticipation requires that the publication describe or disclose all of the elements of the claims, arranged as in the patented device, functioning in substantially same way to produce substantially same results. Stated alternatively, in order that an invention may be anticipated by a description contained in a printed publication, the latter must disclose the complete and operative invention in such full, clear, and exact terms as to enable any person skilled in the art to which the invention relates, or is most nearly connected, to practice the invention without the exercise of inventive skill of his own.

Evidence Required for Anticipation or Lack of Novelty

The facts establishing anticipation or lack of novelty of a method or device for which a patent has been granted must be proven by clear and convincing evidence, proof frequently characterized as so sufficiently clear, certain, and precise as to satisfy beyond reasonable doubt.


Computer Programs
Computer Programs are not patentable. They are protected instead as copyright works under Section 172.1 (n) of the IP Code.

Case: State Street Bank & Trust Co. V Signature Financial Group, Inc., United States Court of Appeals, Federal Circuit,149 F.3d 1368, 47 U.S.P.Q.2d 1596, July 23, 1998.

Plant Varieties and Animal Breeds

Protection of Plant Varieties is governed by the Plant Variety Protection Act of 2002, Republic Act No. 2168.

Section 4 of the Act specifies the conditions for the grant of the plant variety protection:

The Certificate of Plant Variety Protection shall be granted for varieties that are:
()New;

Newness. — A variety shall be deemed new if the propagating or harvested material of the variety has not been sold, offered for sale or otherwise disposed of to others, by or with the consent of the breeder, for purposes of exploitation of the variety;
()In the Philippines for more than one (1) year before the date of filing of an application for plant variety protection; or

()In other countries or territories in which the application has been filed, for more than four (4) years or, in the case of vines or trees, more than six (6) years before the date of filing of an application for Plant Variety Protection.
However, the requirement of novelty provided for in this Act shall not apply to varieties sold, offered for sale or disposed of to others for a period of five (5) years before the approval of this Act: Provided, That application for PVP shall be filed within one (1) year from the approval of this Act.

() Distinct;

Distinctness. — A variety shall be deemed distinct if it is clearly distinguishable from any commonly known variety. The filing of an application for the granting of a plant variety protection or for the entering of a new variety in an official register of variety in the Philippines or in any country, shall render the said variety a matter of public knowledge from the date of the said application: Provided, That the application leads to the granting of a Certificate of Plant Variety Protection or the entering of the said other variety in the official register of variety as the case may be.

() Uniform; and

Uniformity. — The variety shall be deemed uniform if, subject to the variation that may be expected from the particular features of its propagation, it is sufficiently uniform in its relevant characteristics.

() Stable.

Stability. — The variety shall be deemed stable if its relevant characteristics remain unchanged after repeated propagation or, in the case of a particular cycle of propagation, at the end of each such cycle.

Under Section 36, in respect of the propagating materials, holders of a Certificate of Plant Variety Protection shall have the right to authorize any of the following acts:
() Production or reproduction;
() Conditioning for the purpose of propagation;
() Offering for sale;
() Selling or other marketing;
()Exporting;
()Importing; and
()Stocking for any purpose mentioned above.

The holder may make his authorization subject to conditions and limitations.

Doctrine of Equivalents

Under Section 75.2 of the IP Code, for the purpose of determining the extent of protection confirmed by the patent, due account shall be taken of elements which are equivalent to the elements expressed in the claims, so that a claim shall be considered to cover not only an the elements as expressed therein, but also equivalents.

Under the doctrine of equivalents, an accused product that differs from the claim, and thus does not literally infringe, nonetheless infringes if its difference from that claim is insubstantial from the perspective of one of ordinary skill in the relevant art.

The essence of the doctrine of equivalents is that one may not practice a fraud on a patent. In determining whether an accused device or composition infringes a valid patent, resort must be had in the first instance to the words of the claim. If accused matter falls clearly within the claim, infringement is made out and that is the end of it.

The doctrine of equivalents is founded on the theory that, if two devices do the same work in substantially the same way and accomplish substantially the same result, they are the same, even though they differ in name, form or shape.

Case: Pascual Godines vs. The Honorable Court of Appeals, Special Fourth Division and SV-Agro Enterprises, Inc., G.R. No. 97343. September 13, 1993


Protection of Patent is measured by the Claims

The claims of a patent are what define the scope of an invention.

As such, claim validity must be determined on the basis of what is claimed since their purpose is to force a patentee to insert in claims those limitations and relationships regarded to be in the invention.

While the language of a patent claim must be read in light of the specification and the file wrapper, the claim alone is the measure of the invention.

Courts Cannot Expand the Claims

Where patent claim language is clear, it controls and may not be limited or distorted by resort to specifications, title, or drawings to ascertain the invention. Courts may not add to, or detract from, the claims matter not expressed or necessarily implied, or enlarge the patent beyond the scope of that which the inventor claimed and the patent office allowed.

Determining Infringement of Claims

Determining whether a patent claim has been infringed requires a two-step analysis: First, the claim must be properly construed to determine its scope and meaning. Second, the claim as properly construed must be compared to the accused device or process. Claim construction is to be determined by the court. In construing the claims, the court looks to the claims, the specification, the prosecution history, and, if necessary, extrinsic evidence. Application of the properly construed claim to the accused device is a question of fact.


Cases




THIRD DIVISION
[G.R. No. 126627. August 14, 2003.]
SMITH KLINE BECKMAN CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and TRYCO PHARMA CORPORATION, respondents.
D E C I S I O N
CARPIO MORALES, J p:
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. ISCcAT
On September 24, 1981, Letters Patent No. 14561 1 for the aforesaid invention was issued to petitioner for a term of seventeen (17) years.
The letters patent provides in its claims 2 that the patented invention consisted of a new compound named methyl 5 propylthio-2-benzimidazole carbamate and the methods or compositions utilizing the compound as an active ingredient in fighting infections caused by gastrointestinal parasites and lungworms in animals such as swine, sheep, cattle, goats, horses, and even pet animals.
Tryco Pharma Corporation (private respondent) is a domestic corporation that manufactures, distributes and sells veterinary products including Impregon, a drug that has Albendazole for its active ingredient and is claimed to be effective against 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). 3 It claimed that its patent covers or includes the substance Albendazole such that private respondent, by manufacturing, selling, using, and causing to be sold and used the drug Impregon without its authorization, infringed Claims 2, 3, 4, 7, 8 and 9 of Letters Patent No. 14561 4 as well as committed unfair competition under Article 189, paragraph 1 of the Revised Penal Code and Section 29 of Republic Act No. 166 (The Trademark Law) for advertising and selling as its own the drug Impregon although the same contained 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. 6 A writ of preliminary injunction was subsequently issued. 7
Private respondent in its Answer 8 averred that Letters Patent No. 14561 does not cover the substance Albendazole for nowhere in it does that word appear; that even if the patent were to include Albendazole, such substance is unpatentable; that the Bureau of Food and Drugs allowed it to manufacture and market Impregon with Albendazole as its known ingredient; that there is no proof that it passed off in any way its veterinary products as those of petitioner; that Letters Patent No. 14561 is null and void, the application for the issuance thereof having been filed beyond the one year period from the filing of an application abroad for the same invention covered thereby, in violation of Section 15 of Republic Act No. 165 (The Patent Law); and that petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against petitioner for such amount of actual damages as may be proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary damages; and P150,000.00 in attorney's fees. DaTICE
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. (Emphasis supplied)
On appeal, the Court of Appeals, by Decision of April 21, 1995, 10 upheld the trial court's 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. TDAcCa
SO ORDERED.
Petitioner's motion for reconsideration of the Court of Appeals' decision having been denied 11 the present petition for review on certiorari 12 was filed, assigning as errors the following:
I. THE COURT OF APPEALS GRAVELY ERRED IN NOT FINDING THAT ALBENDAZOLE, THE ACTIVE INGREDIENT IN 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 13 that 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 P330,000.00 representing lost profits, petitioner assails the same as highly, speculative and conjectural, hence, without basis. It assails too the award of P100,000.00 in attorney's fees as not falling under any of the instances enumerated by law where recovery of attorney's fees is allowed. ECcDAH
In its Comment, 14 private respondent contends that application of the doctrine of equivalents would not alter the outcome of the case, Albendazole and methyl 5 propylthio-2-benzimidazole carbamate being two different compounds with different chemical and physical properties. It stresses that the existence of a separate U.S. patent for Albendazole indicates that the same and the compound in Letters Patent No. 14561 are different from each other; and that since it was on account of a divisional application that the patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by definition of a divisional application, such a compound is just one of several independent inventions alongside Albendazole under 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, 15 this Court does not 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. 17 And so are the courts bound which may not add to or detract from the claims matters not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that which the inventor claimed and the patent office allowed, even if the patentee may have been entitled to something more than the words it had chosen would include. 18
It bears stressing that the mere absence of the word Albendazole in Letters Patent No. 14561 is not determinative of 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. cTCADI
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. 19 Yet again, a scrutiny of 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. 20 In other words, the principle or mode of operation must be the same or substantially the same. 21
The doctrine of equivalents thus requires satisfaction of the function-means-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. 23 The applicant thus is required "to divide," that is, to limit the claims to whichever invention he may elect, whereas those inventions not elected may be made the subject of separate applications which are called "divisional applications." 24 What this only means is that 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.
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 P330,000.00 representing lost profits or revenues incurred by private respondent as a result of the issuance of the injunction against it, computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for eleven months, were supported by the testimonies of private respondent's President 25 and Executive Vice-President that the average monthly sale of Impregon was P100,000.00 and that sales plummeted to zero after the issuance of the injunction. 26 While indemnification for actual or compensatory damages covers not only the loss suffered (damnum emergens) but also profits which the obligee failed to obtain (lucrum cessans or ganacias frustradas), it is necessary to prove the actual amount of damages with a reasonable degree of certainty based on competent proof and on the best evidence obtainable by the injured party. 27 The testimonies of private 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. 29 There exists no evidence on record indicating that petitioner was moved by malice in suing private respondent. cCaATD
This Court, however, grants private respondent temperate or moderate damages in the amount of P20,000.00 which it finds reasonable under the circumstances, it having suffered some pecuniary loss the amount of which cannot, from the nature of the case, be established with certainty. 30
WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED with MODIFICATION. The award of actual or compensatory damages and 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, Panganiban, Sandoval-Gutierrez and Corona, JJ ., concur.




[Philippine Patent Office Decision No. 247. June 22, 1981.]
BASILIO C. PRESTO, petitioner, vs. RENATO C. ANGEL and REYNALDO C. ANGEL, respondents-patentees.
Inter Partes Case No. 1359
Petition for Cancellation:

Letters Patent No. UM-2520
Issued: May 26, 1977
Patentee: Renato C. Angel and
Reynaldo C. Angel
For: AN IMPROVED PALAY
THRESHER
D E C I S I O N
This is a cancellation proceeding instituted by Basilio C. Presto, a Filipino citizen and a resident of Poblacion, Matalam, North Cotabato, seeking the cancellation of Letters Patent No. UM-2250 granted to Renato C. Angel and Reynaldo C. Angel, both Filipino citizens, the former residing at Poblacion Cabatan, North Cotabato, and the latter at Milang, North Cotabato. cdasia
The records show that on July 20, 1976, Respondents Renato C. Angel and Reynaldo C. Angel filed with this Office an application for a grant of letters patent for an "Improved Palay Thresher", which application ripened into Letters Patent No. UM-2520 granted by the Philippine Patent Office on May 26, 1977.
Claiming to be damaged by the grant of said Letters Patent No. UM-2520, Basilio Presto, the herein Petitioner, filed on March 21, 1980 a petition seeking for the cancellation of said Letters Patent No. UM-2520. The statutory grounds relied upon by the Petitioner in his petition for cancellation are as follows:
"1. The utility model covered by said Letters Patent No. UM-2520 is not new or patentable under Sec. 9 and Sec. 55 of Republic Act No. 165, as amended;
2. The persons to whom the above patent was issued were not the true and actual authors of the utility model in question or did they derive their rights from the true and actual author thereof."
For failure of the Respondents-Patentees to file their Answer in the above-entitled case, and upon motion of counsel for the Petitioner, Respondents-Patentees were declared in default; hence, Petitioner was allowed to present his evidence ex parte in accordance with the Rules of Court. cdasia
The petitioner has shown that he is a holder of Letters Patent No. UM-1003 issued by the Philippine Patent Office on July 14, 1972 which was extended under Certificate of U.M. Extensions No. 287 which the Petitioner claims to protect his "threshing machine comprising of the essential parts such as pair of threshing drums and askew rows of twin solid teeth or beaters, arcuate or fixed screen below the said pair of drums assembly of two parts or sections, one section being especially and transversely bent steel plate while the other section is a separator, said thresher having also a grain return through. This thresher also has a hay shaker disposed behind the threshing chamber which is actuated upon by an eccentric shaft in order that it will have a tossing and shaking motion, said thresher having grain gutters underneath said sieve separators and auger disposed with said grain gutter, a blower which is also disposed underneath said sieve, the relative position and combination and arrangements of these essential parts, and also the motion of these parts. cdtai
On the other hand, the Petitioner also alleges that "the specification of Renato and Reynaldo Angel stated that their utility model could take a threshing chamber of any construction which insinuates that it may be of any combination whether of an expired patent utility model or any protected utility model for that matter. It has also shown that the utility model that they sought to be patented and protected has a strainer or sieve disposed below the threshing chamber. That they also have shown a pair of grain gutters which catches the falling grain from the separator of the said sieve; that it has also straw shakers which even if it has been stated that it is in pair but the relative position and the function of which is the same as in Petitioner's patented utility model so that in the actual manufacture of said utility model the Respondents have adopted the entire essential parts of Petitioner's utility model together with their relative position and their motion. Petitioner claims that although Respondent's patent specification is differently worded, the essential parts of Respondents' utility model are also present in Petitioner's utility model. cdasia
Petitioner also further alleges that Respondents Renato C. Angel and Reynaldo C. Angel are brothers known to him; that he was granted patent Utility Model No. 1003 as early as July 14, 1972 with certificate of extension No. 287 for a five-year period up to July 14, 1982. Petitioner claims that Respondent Renato Angel signed a promissory document that he will desist from doing an unlawful act of copying Petitioner's utility model. cdtai
Petitioner also alleges that he tried on fine wire similar to that mentioned in the specification and drawings of the Respondent and that he was unable to make this successfully finding that the wire mesh has no practical utility. According to his experience with the Respondent-Patentee's utility model, when a mass of grain coming from the directly dressed palay mixed with shaff, broken stalks and broken leaves, the wire mesh will catch those foreign matters and eventually clog the opening of this wire mesh so only a few cavans of clean palay gathered from said mixed grain, the opening shall have been fully clogged up and this whole mass of mixed grain will now fall to the rear of the threshing machine without allowing the grains to fall therefrom so that this particular material has no practical utility as far as this portion of Respondents-Patentees' thresher is concerned. aisadc
Petitioner also claims that in Respondents' specification and drawings (Figure 3), this particular material again used by the Respondents as the carriage for the platform is again of no practical utility; that when Petitioner experimented on this particular portion also using the same materials, he found out that there is no way of protecting this particular portion in order that this machine of Respondents employ blower in driving or separating the heavy grain from the foreign matters, those foreign matters and even the heavy grains always could find a way to this particular portions wherein it will reside on the support of the bearings whereby they become wedged. Meaning to say that when they are wedged the bearing is blocked, thus stopping the motion of the primary platform or the screen. For this reason, Petitioner claims that the Respondents were forced to stop using this material in supporting the primary platform as stated in their specification, showing again that their patent has no practical utility.
Referring to drawing (Figure 3) of the Respondents, Petitioner alleges that he has observed in this particular portion that while the straw of hay shaker has been installed adjacent to each other, they have to rub against each other on the center during the operation and that when this space has been filled up with foreign matters, it will clog up and the machine will stop operation. cdasia
I have carefully gone over the records of this case particularly the specifications and drawings submitted by both parties and I am convinced that the allegations made by the Petitioner in his petition for cancellation are well-taken.
WHEREFORE, Letters Patent No. UM-2520 issued on May 26, 1977 in favor of Respondents-Patentees Renato C. Angel and Reynaldo C. Angel for an "Improved Palay Thresher" is hereby ordered CANCELLED.
SO ORDERED.
(SGD.) DEMETRIO T. WENDAM
Director





[IPO Decision No. 082. June 28, 2007.]
MICHIGAN ENTERPRISES CORP., petitioner, vs. INCA PLASTICS PHILIPPINES, INC., respondent-patentee.
IPC No. 13-2005-00115
Petition for Cancellation
Registration No. 3-2003-000535
(Industrial Design)
Date Issued: May 19, 2005
Title: "PLASTIC TRASH CONTAINER"
D E C I S I O N
For decision is a Petition for Cancellation filed by Michigan Enterprises Corporation, a corporation duly organized and existing under Philippine laws, with place of business at Bagong Filipino Industrial Compound, M. Gregorio Street, Canumay, Valenzuela City against Industrial Design Registration No. 3-2003-000535, for a Plastic Trash Container, issued on May 19, 2005 to Inca Plastic Philippines, Inc., with address at 23 West Service Road, Cupang, Muntinlupa City, Metro Manila. HTCDcS
The petitioner relied on the following grounds for cancellation:
a) The industrial design for a PLASTIC TRASH CONTAINER registered under Industrial Design Registration No. 3-2003-000535 is not new and/or original, and therefore, not registrable under Sections 112 and 113 of Republic Act No. 8293;
b) Industrial Design Registration No. 3-2003-000535 was secured fraudulently;
c) Ralph A. Cabrera, the alleged designer, is not the first and/or original designer of the industrial design for a PLASTIC TRASH CONTAINER registered under Industrial Design Registration No. 3-2003-000535;
d) The issuance and continued existence of Industrial Design Registration No. 3-2003-000535 has caused and will continue to cause damage and prejudice to petitioner. CHaDIT
"3.1.5. Respondent on the other hand states the following:
3.1.5.1.1. It has manufactured and sold the Plastic Trash Container earlier than petitioner Michigan Enterprise Corporation. In fact, the respondent's employees Norvito Ecat and Romulo Rapas has executed affidavits attesting to the fact that they worked as Finisher/Grinder in the Mold Department of the company; that it was sometime in January 1992 that one of the aluminum molds which was fabricated was the iron trash bin classified as TC60 by the respondent company; that they were among the two (2) who started and completed the grinding and finishing of the mold, after which the same TCT60 was commercially produced. The affidavits are attached hereto and marked as Annexes "1" and "2".
3.1.5.2. Another employee, Hermiline Laviña, presently Vice President for Sales and Marketing of the Respondent, states that she joined the respondent company in April 15, 1993 as product managers, and as such, prepared the marketing plan for the company trash bins; and that the marketing plan was supported by advertisements by August 1993. A copy of her affidavit is attached hereto as Annex "4", and the Affidavit of Publication from Manila Bulletin to show that the advertisements were published August 16, 1993, and copies of Manila Bulletin advertisements are marked as Annexes "5" to "5-b". The sales invoice for the advertisement materials for the environmental bins dated 14 September 1993 are attached hereto as Annex "6". CSHcDT
3.1.5.3 Aside From the foregoing written testimonies and relevant supporting documents, the respondent submits the following:
a. PEPSICO INC.; Confirmation Order for 130 pieces TC60SDS, dated 29 November 1993.
b. RFC Supermarket Purchase Order No. 4768, dated 16 June 1994;
c. Philippine Seven Corporation Purchase Order No. 21833, dated 7 July 1994;
d. The Exelsior Purchase Order No. 425, dated 20 July 1994;
e. Marymount School Purchase Order No. 01088;
f. INCA Delivery Receipt No. 3740 to Cebu City Hall, dated 18 December 1995; cDCaHA
g. Cebu Midtown Hotel Purchase Order No. 012657, dated 18 December 1995;
h. Delivery Receipt to Sterling Tobacco, dated 4 January 1996;
i. INCA Sales Invoice No. 14611 to Ms. Josephine Isidro (Shell Station Dealer), dated 27 August 1999;
j. INCA Sales Invoice No. 14728 — Calbayog Shell Station, dated 9 September 1999;
k. INCA Sales Invoice No. 15770 — Kimberly Clark Philippines, Inc., dated 7 April 2000;
l. INCA Sales Invoice No. 15795 — SM Prime Holdings, Inc., Fairview Storyland, dated 12 April 2000;
m. INCA Sales Invoice No. 15922 — Wet Consultancy, dated 17 May 2000; cEAIHa
n. INCA Sales Invoice No. 19263 — Ace Hardware Philippines, Inc., dated 26 January 2002;
o. INCA Sales Invoice No. 19144 — JAE Philippines, Inc., dated 09 January 2002;
p. INCA Sales Invoice No. 22317 — Ateneo de Manila University, dated 26 June 2003;
q. INCA Sales Invoice No. 22919 — Our Lady Chartres Diagnostic Center, dated 25 September 2003;
r. INCA Sales Invoice No. 236000 — General Service Office Panlalawigan, Capitol Building, Lingayen, Pangasinan, dated 28 January 2004;
s. INCA Sales Invoice No. 25302 — Sojitz Philippines Corporation, dated 16 October 2004;
t. INCA Sales Invoice No. 25874 — Kimberly Clark Philippines, Inc., dated 29 January 2005; and
u. INCA Sales Invoice No. 26320 — St. Joseph's College, dated 21 April 2005. IcTEAD
All the foregoing are hereto attached as Annexes "7" to "7-T". These Annexes clearly and indubitable shows that respondent has been engaged in the manufacturing, sales and distribution of the industrial design for Plastic Trash Container, which is now registered as Industrial Design Registration No. 3-2003-000535.
3.1.5.4 With regard to the petitioner's claim that Himalaya Manufacturing is its sister company, respondent put forward the following;
a. There is nothing on record which shows or proves that petitioner is a "sister company" of Himalaya Manufacturing. What is has presented are the Articles of Incorporation of both companies, and all it shows that there are common stockholders of said corporations. But since these are two different corporate and juridical entities, then the proof of such a relation must be shown. cADSCT
b. There is likewise no document which shows that petitioner took over the business of Himalaya Manufacturing, or that the latter sold to any of its business of manufacturing and selling of products such as the trash bins petitioner claims to be similar to that registered by respondent. There is no basis then for it to claim that all prior business transactions and concerns of Himalaya Manufacturing is owned by petitioner.
c. Further, verification with the Securities and Exchange Commission (SEC) shows that both companies are still in existence and operating, and have submitted their respective General Information Sheets (GIS) for the current year. An examination of the GIS of Michigan and Himalaya shows that it has not declared or claimed any relationship with each other, or any other company. Attached are certified true copies of the GIS of petitioner and Himalaya, marked as Annexes "8" and "9". EAcIST
3.2 2nd ground: Industrial Design Registration No. 3-2003-000535 was secured fraudulently.
3.2.1 Although petitioner accuses respondent of securing the industrial design registration fraudulently, it has failed to duly provide the details of the fraud, or to present clear and indubitable circumstances, arguments of proof which would support its allegations of fraud. At this juncture, respondent will be merely speculating as to what the petitioner is referring to with respect to its allegations of fraud.
3.2.2 And since it is petitioner which has alleged fraud to have been committed by INCA Philippines, then it has the burden to prove such an allegations; it is not incumbent on the respondent to come up with any explanation to dispute fraud, especially when it is not aware what and how the fraud came about or was committed. This is inconsonance with Rule 131 of the Revised Rules on evidence which state:
Burden of Proof and Presumptions
Sec. 3 Disputable presumptions. — The following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence: AECacS
(a) That a person is innocent of crime or wrong;
xxx xxx xxx
3.3 3rd Ground: Ralph A. Cabrera, designer, is not the first and/or original designer of the industrial design for a PLASTIC TRASH CONTAINER registered under Industrial design Registration No. 3-2003-000535.
3.3.1 Again, as discussed in the previous paragraph, petitioner makes a bare allegation or accusation, this time directed at Mr. Cabrera, the designer of the industrial PLASTIC TRASH CONTAINER. Petitioner claims that the registered design registered is identical and/or substantially similar to an industrial design already in existence. This is the substance of its allegation that the industrial design registered under Industrial Design Registration No. 3-2003-000535 is not the first and/or original.
3.3.2 The same has been fully discussed in the previous paragraph, with the showing that it has been the Patentee which has been first one that designed and used the registered design. The discussion is hereby repleaded and adopted herein. DEICaA
3.4 4th Ground: The issuance and continued existence of Industrial Design Registration No. 3-2003-000535 has caused and will continue to cause damage to petitioner.
Respondent is totally surprise by this ground relied upon by the petitioner, since this is not a ground for the cancellation of the industrial design. The grounds for cancellation of design registration are enumerated under Republic Act No. 8293, which provides that:
Sec. 120. Cancellation of Design Registration. — 120.1. At any time during the term of industrial design registration, any person upon payment of the required fee, may petition the Director of Legal Affairs to cancel the industrial design on any of the following grounds:
(a) If the subject matter of the industrial design is not registrable within the terms of Section 112 and 113;
(b) If the subject matter is not new; or
(c) If the subject matter of the industrial design extends beyond the content of the application as originally filed.
The main issue to be resolved is whether the industrial design registration is new? Corollary issues are whether registration was obtained fraudulently and whether Ralph A. Cabrera is the original designer of the subject industrial design.
The pertinent law on the matter, Section 20, Republic 8293 provides:
"Section 20. Cancellation of Design Registration. — 120.1 — At any time during the term of the industrial design registration, any person upon payment of the required fee, may petition the Director of Legal Affairs to cancel the industrial design on any of the following grounds:
(a) if the subject matter of the industrial design is not registrable within terms of Sections 112 and 113. cSTCDA
(b) If the subject matter is not new, . . ."
An industrial design is not considered new, and is therefore unregistrable if it forms part of prior art. The law provides:
"Section 24. Prior Art. — Prior art shall consist of:
24.1 Everything which has been made available to the public anywhere in the world before the filing date or the priority date of the application claiming the invention; and . . ."
At the outset, this Bureau observes that in its Answer, respondent admits that it manufactured and sold the plastic trash container subject of the industrial design. Respondent avers:
"3.1.5. Respondent on the other hand states the following:
3.1.5.1.2. It has manufactured and sold the Plastic Trash Container earlier than petitioner Michigan Enterprise Corporation. In fact, the respondent's employees Norvito Ecat and Romulo Rapas has executed affidavits attesting to the fact that they worked as Finisher/Grinder in the Mold Department of the company; that it was sometime in January 1992 that one of the aluminum molds which was fabricated was the iron trash bin classified as TC60 by the respondent company; that they were among the two (2) who started and completed the grinding and finishing of the mold, after which the same TCT60 was commercially produced. The affidavits are attached hereto and marked as Annexes "1" and "2". HDCAaS
3.1.5.2. Another employee, Hermiline Lavina, presently Vice president for Sales and Marketing of the respondent, states that she joined the respondent company in April 15, 1993 as product managers, and as such, prepared the marketing plan for the company trash bins; and that the marketing plan was supported by advertisements by August 1993. A copy of her affidavit is attached hereto as Annex "4", and the Affidavit of Publication from Manila Bulletin to show that the advertisements were published August 16, 1993, and copies of Manila Bulletin advertisements are marked as Annexes "5" to "5-b". The sales invoice for the advertisement materials for the environmental bins dated 14 September 1993 are attached hereto as Annex "6".
3.1.5.3. Aside from the foregoing written testimonies and relevant supporting documents, the respondent submits the following:
a. PEPSICO INC., Confirmation Order for 130 pieces TC60SDS, dated 29 November 1993;
b. RFC Supermarket Purchase Order No. 4768, dated 16 June 1994;
c. Philippine Seven Corporation Purchase Order No. 21833, dated 7 July 1994;
d. The Exelsior Purchase Order No. 425, dated 20 July 1994;
e. Marymount School Purchase Order No. 01088;
f. INCA Delivery Receipt No. 3740 to Cebu City Hall, dated 18 December 1995;
g. Cebu Midtown Hotel Purchase Order No. 012657, dated 18 December 1995;
h. Delivery Receipt to Sterling Tobacco, dated 4 January 1996;
i. INCA Sales Invoice No. 14611 to Ms. Josephine Isidro (Shell Station Dealer), dated 27 August 1999;
j. INCA Sales Invoice No. 14728 — Calbayog Shell Station, dated 9 September 1999;
k. INCA Sales Invoice No. 15770 — Kimberly Clark Philippines, Inc., dated 7 April 2000;
l. INCA Sales Invoice No. 15795 — SM Prime Holdings, Inc., Fairview Storyland, dated 12 April 2000;
m. INCA Sales Invoice No. 15922 — Wet Consultancy, dated 17 May 2000;
n. INCA Sales Invoice No. 19263 — Ace Hardware Philippines, Inc., dated 26 January 2002;
o. INCA Sales Invoice No. 19144 — JAE Philippines, Inc., dated 09 January 2002;
p. INCA Sales Invoice No. 22317 — Ateneo de Manila University, dated 26 June 2003;
This admission is fatal to its defense. The evidence showing that the plastic trash container has been in existence and sold on a commercial scale years before the application for registration of that exact industrial design with the Intellectual Property Office shows that what respondent applied for as an industrial design for "PLASTIC TRASH CONTAINER" was no longer new at the time Respondent applied for its registration. Lack of novelty renders an industrial design unregistrable under the Intellectual Property Code. THCSEA
Respondent's witness Norvito Ecat, in his affidavit (Exhibit "I") stated:
"6. Aside from the TC 60 bin, several variants of the same design were fabricated from 1993-1995 and these were the TC 15, TC40, TC120 all shaped and modeled from the original TC 60 design. As before; I was one of the moldshop personnel assigned to do the grinding and finishing all these molds.
7. That the TC 60 bin and other variants mentioned in the above paragraphs is the same TC60 bin design now being disputed with the Intellectual Property Office (I.P.O.)"
Another witness, Romulo D. Rapas similarly testified of the production of the plastic trash container way back in 1992. He stated in his affidavit (Exhibit "2"):
"5. Upon completion of the grinding and finishing of the mold, I witnessed the plastic prototyping and actual commercial production of the TC 60 in our manufacturing plant. I did some minor repair and modification of the mold during the prototyping and commercial production since 1993 and up to the present. AICEDc
6. Aside from the TC 60 bin, several variants of the same design were fabricated from 1993-1995 and these were the TC 15, TC40, TC120 all shaped and modeled from the original TC 60 design. As before, I was one of the moldshop personnel assigned to do the grinding and finishing all these molds.
8. That the TC 60 bin and other variants mentioned in the above paragraphs is the same TC60 bin design now being disputed with the Intellectual Property Office (I.P.O.)"
Witness Hermiline Lavina, in her affidavit (Exhibit "4") testified as to the commercial sale of the trash bin referred to as TC 60 and its advertisement as part of the company's selling strategy. The affidavit of publication in the Manila Bulletin was submitted as evidence. (Exhibit "5") Exhibit "5"-A is the actual newspaper advertisement showing an illustration of several waste disposal bins which include the plastic trash container which looks the same as the plastic trash container depicted in the industrial design registration of respondent. She testified:
"4. After the company started with its selling strategy, the same was later supported with advertisements so by August 1993, I caused the publication of the advertisement of the TC 60 trash bins together with other trash bins. TEacSA
5. After a while, the strategy was successful since the company started receiving orders, most noticeable of which came from Pepsi Bottling Company which was still at their plaint in Aurora Blvd. at that time. Because of the positive market response of the TC 60 bin design, other variants of the same design such as TC 15, TC 40, TC 120 were all produced and sold between 1993 to 1995."
In fact, respondent does not deny that the plastic trash container it has been manufacturing, selling and distributing are the products which depict the registered industrial design no. 3-2003-000535.
Respondent submitted Sales invoices (Exhibit "&" and sub-markings) which show the sale of the plastic trash containers. Exhibits "7" to "7"-O are various sales invoices whose dates bear the year 1993 to June 26, 2003. These all ante-date the filing date of respondent's application for registration on September 1, 2003.
The relevant inquiry is whether there was a definite sale or offer for sale of the claimed invention prior to the critical date, defined as one year prior to the U.S. filing date to which the application was entitled. The foremost purpose of the on-sale bar is to "prevent inventors from exploiting the commercial value of their inventions while deferring the beginning of the statutory term." (Wayne K. Pfaff v. Wells Electronics, Inc. USCA Federal Circuit, September 8, 1997.) aDTSHc
The on-sale bar represents a balance of the policies of allowing the inventor a reasonable amount of time to ascertain the commercial value of an invention, while requiring prompt entry into the patent system after sales activity has begun. Thus the statute limits the period of commercial sale or offers of sale of an invention to one year before, before the patent application must be filed or forever barred. (Sed-flex, Inc. v. Athletic Track and Court Construction, USCA Federal Circuit, October 24, 1996)
It is also respondent's contention that its sales ante-date the sales made by petitioner's sales of plastic trash containers were only shown through purchase order dated January 29, 2001. Respondent argues that Michigan and Himalayas are not the same entities. This supposition belies any claim by petitioner that advertisements by Himalayas Manufacturing in a telephone directory shows use, manufacture and distribution as its own. Whether the two corporate entities are related is immaterial to our finding that what was being sold by these entities are plastic trash containers bearing an similar if not identical design with the design belatedly registered by respondent only in September 1, 2003. Petitioner's brochure printed on April 25, 2001 of Exhibit "D" shows a pictorial representation of a plastic trash bin; "E"-1 to "E"-8 are advertisements in the yellow pages of the PLDT Metro Manila Telephone Directories from the years 1995 to 2003 which includes illustrations of the trash bins. Petitioner also submitted advertisements of Unimagna Phils., Inc. (Exhibit "J" and sub-markings in the PLDT Metro Manila Telephone Directories from the years 1998 to 2003 of similarly designed trash bins. Finally, we note the photographs attached to petitioner's witness' Rosemarie Ong's affidavit (Exhibit "L") which show hooded plastic trash bins sold by petitioner. All in all, this Bureau notes that when goods sold and advertised by others entities are compared with the registered design of respondent, the design look essentially the same if not identical. CHDTEA
We fittingly apply the "ordinary observer test" utilized in the case of Gorham Mfg. v. White, 81 U.S. 511 (1871) in concluding that the plastic trash bins sold by Himalaya Manufacturing Corp. or Michigan Enterprises Corp. are identical and the same the plastic trash container registered by respondent.
"We do not say that in determining whether two designs are substantially the same, differences in the lines, the configuration, or the modes by which the aspects they exhibit are not considered; but we think that the controlling consideration is the resultant effect. . . .
Plainly, it must be the sameness of appearance and the mere differences of lines and in the drawing or sketch, a greater or smaller number of lines, or slight variances in configuration, if sufficient to change the effect upon the eye, will not destroy the substantial identity. . . .
We hold, therefore, that if, in the eye of the ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, including him to purchase one supposing it to be the other, the first one patented is infringed by the other." aTcIAS
If the two designs are so alike that one may readily be taken as the other by an ordinary observer, the earlier constitutes an anticipation of the later, notwithstanding the differences in detail and in non-essential matters. (Sagandorth v. Huger, 95 FED. 178).
The import of all these earlier sales is that the industrial design registered by herein Respondent titled "PLASTIC TRASH CONTAINER" is no longer new because it has become available to the public. Having said this, this Bureau can only conclude that the design for Plastic Trash Container designed by Ralph Cabrera subject of Industrial Design Registration No. 3-2003-000535 issued on May 19, 2005 is no longer novel and therefore, unregistrable under Patent law. However, there is insufficient evidence to prove that the designer fraudulently obtained its registration.
The Supreme Court in Angelita Manzano v. Court of Appeals and Melecia Madolaria, G.R. No. 113388, September 5, 1997, held:
"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 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." DaTHAc
WHEREFORE, in view of the foregoing, the Petition for Cancellation filed by Michigan Enterprises Corporation against Industrial Design Registration No. 3-2003-000535, for a Plastic Trash Container, is hereby GRANTED. Consequently, Industrial Design Registration No. 3-2003-000535, for a Plastic Trash Container issued on May 19, 2005 to Inca Plastic Philippines, Inc. is hereby CANCELLED.
Let the filewrapper of subject: Industrial Design Registration No. 3-2003-000535 together with a copy of this DECISION be forwarded to the Bureau of Patents for appropriate action. cHaADC
SO ORDERED.
Makati City, June 28, 2007.




[BPTTT Decision No. 01 (PAT). January 6, 1993.]
DR. ANTONIO F. MATEO, petitioner, vs. BEATRIZ CHUA SENG SO, respondent.
Inter Partes Case No. 3560
Petition for Cancellation:

Letters Patent No. UM-6780
Issued: March 30, 1989
Patentee: Beatriz Chua Seng So
For WATER METER COUPLING DETECTOR
D E C I S I O N
This refers to a petition for cancellation of Letters Patent No. UM-6780 issued to Respondent Beatriz Chua Seng So on 30 March 1989 and entitled Water Meter Coupling Detector. cdasia
Petitioner, Dr. Antonio F. Mateo, a resident of 9-E Mother Ignacia Avenue, Diliman, Quezon City filed this Petition on 26 June 1990 and alleged the following grounds for cancellation, to wit:
"1. That the utility model is not new and is of no practical utility as required by Section 55 of the Republic Act No. 165 as amended by Republic Act No. 864.
2. That the person whom the patent was issued is not the first, original, true and actual maker of the utility model (Republic Act No. 165, Section 28, as amended by Republic Act No. 864)."
Furthermore, Petitioner averred that he shall rely on the following facts to support his Petition for Cancellation, to wit:
"1. That I am true, original and actual maker of the utility model from whom Ms. Chua Seng So fraudulently derived her utility model as evidenced by my Letters Patent No. UM-5258 entitled "WATER METER PROTECTOR" granted by your Office on May 25, 1983 and extended on may 30, 1988.
2. That Ms. Chua Seng So's utility model is not new since even before the application of her patent, may device was publicly known.
3. That my utility model, WATER METER PROTECTOR, has been a 1st Prize Awardee during the 1984 National Inventors Week Contest (see Annex A) and was given a Presidential and Merit Award in the same year as evidenced by (Annex B).
4. That my WATER METER PROTECTOR is widely known and used by Water Districts all over the country since 1984.
In her Answer filed on 30 August 1990, Respondent-Patentee denied the material allegations of the aforesaid Petition and raised the following special and affirmative defenses:
"8. The registration and issuance of respondent's questioned Letters Patent were in accordance with the law, that is, it was properly examined by the Bureau of Patents, Trademarks and Technology Transfer according to the requirements of R.A. 165 and of the Rules of Practice in Patent Cases, which examination includes among others, the citation of references (which in turn included or made mention of petitioner's letters patent), recommended for allowance after a thorough and finally, issued the Letters Patent. All these would show that respondent's products is patentable, notwithstanding petitioner's previously issued Letters Patent, Because otherwise, the Bureau would not have issued respondent's Letters Patent;
9. Respondent's utility model is "new", and therefore respondent is the first, original, true and actual maker of the product, because before the application for patent, it has not been publicly known or publicly used in the country, nor described in a printed publication or publications circulated within the country, nor substantially similar to any other utility model so known, used or described within the country.
10. As can be seen from comparative pictures of petitioner's and respondent's patented products, attached hereto as Annexes "1" to "5", petitioner's product is very different from and not similar with, whether substantially or otherwise, respondent's product, in the following manner:
Petitioner's Product Respondent's Product

a) made of either polypro- a) made of ABS
oylene/polyethylene (Accrylonitrile
polyethylene or Butadiene Styrene)
polybutylene

b) the external shape is circular b) the external shape is
hexagonal

c) comes in only one (1) c) comes in three (3)
color — black colors — blue, to
indicate that the meter
where it is attached is in
order; yellow to
indicate that the meter
has once been tampered;
and red, to indicate that
the meter has been
tampered more than
once

d) secured by two (2) ordinary d) and e) not secured by
screws screws nor by seals but
by a special crimping
device

e) bound by an alleged tamper
-proof seal
In sum, respondent's product is very different from that of the petitioner in materials used, design structure, construction, features, color and purpose.
11. Respondent's product is of substantial practical utility because it acts as a tamper-proof protector for water coupling of various sizes.
The basic question to be resolved is whether or not Letters Patent UM-5258 issued to the herein Petitioner could be considered a "prior art" so as to bar the issuance of Letters Patent UM-6780? If the answer to this question is in the affirmative, then Letter Patent UM-6780 should be Cancelled, otherwise not.
Petitioner's Letter Patent UM-5258 is directed to a construction of a water meter coupling protector. Respondent's Letter Patent No. UM-6780 also relates to the same subject matter. To show the similarities of the two models, the Petitioner submitted drawings of the following: 1.) a pair of identical upper and lower bodies, each provided with a downward directed side flanges, having semi circular openings, to define therein a chamber; and 2.) a pair of identical horizontal end flanges adjacently disposed in both ends thereof. The Petitioner averred that the only difference between the two models is the introduction of the hollow male projector integrally molded on the upper face of one of the adjacent end flanges and a hollow female projection on the lower face of the other end flange. He also introduced actual samples of the two utility models.
Respondent-Patentee, also formally offered in evidence the actual sample of the products covered by the two utility models to show their alleged differences. In addition, Respondent-Patentee introduced a copper wire seal and a lead seal attached to the upper wire (Exhibits "9" and "10") used in the Petitioner's product to show that the Petitioner's Patented product is sealed by a copper wire which is not found in Respondent's Patented product.
A drawback was discussed in the Petitioner's specification the petitioner, viz:
"With my utility model of this meter protector 10, these tail pieces 20 can be totally enclosed by the protector 10, provided thru with a wire-lead seal (not shown) and the protector positively screwed together as shown in Figure 3 to totally enclose the connects nut and prevent the removed of the water meter. To be more positive, the head ends of the screw inside the screw holes can be plogged with epoxy substance, such that only an intentional unscrewing of the screw will allow the removal of the protector and also the connector nut 20 to indicate an illegal act by a person. Even with the seal broken, the protector 10 is still intact. (Emphasis supplied)"
Consequently, all it takes to tamper with the water meter is the removal of the screw above-mentioned. To conceal such an act, the consumer would just replace the screw after the meter has been tampered with so that a water-meter reader would not notice it. cdasia
A solution to this draw back was presented by the Respondent-Registrant in her specification, to wit:
Attempts have been made to devise a positive sealing of the meter which is safe from accidental destruction. As exemplified in Patent Nos. UM-5258 and UM-6357 issued to Antonio Mateo and Tan Leong Tat, respectively, both patents employ complemental cylindrical bodies to enclose the coupling nuts of the water meters and fastened together by means of screws. The following drawbacks of said devices have been observed:
1. the fastening screws which are used for purposes of re-usability of the device allow easy tampering of the meter, hence not positive and perfectly seal-proof.
2. expensive in its manufacture in terms of labor and material.
The present utility model seeks to remedy and overcome the aforementioned drawbacks.
It is then an object of this utility model to provide a water coupling protector which is unique, novel and very simple.
An important object of this utility model is to provide a water meter coupling protector which is seal-proof, reliable and very effective such that when tampered with it could no longer be reused.
A specific object of this utility model is to provide a water meter coupling protector wherein the fastener used to secure said protector is in the form of integrally molded hollow male and female projections to forms rivet-like fasteners which when tampered with becomes useless, hence a positive indication of a tampered meter".
During the examination stage of the Respondent's patent, the issue of its similarity to that of the Petitioner's Patent was raised and squarely passed upon in favor of the Respondent. There is no reason to alter the conclusion we made then. The patentable subject matter of the Respondent's utility model lies in the construction of the male projection and a female projection on the adjacent end flanges of said upper and lower bodies whereby said male projections snugly fits in the said female projection when pressed together.
In Section 55 of R.A. 165, it provides that any new model of implements or tools or of any industrial product, which does not possess the quality of invention but which is of practical utility by reason of its construction may be protected by the author thereof by a patent for a utility model. In the case at bar, it cannot be denied that the construction of a water meter protector made by the respondent out of a male and female projections to form rivet like fasteners is not described in the utility model the petitioner or other prior art. Hence, it satisfies the first requirement of patentability which is novelty.
The next question to be resolved is whether or not Respondent's model possesses practical utility. A careful analysis of the drawback set forth in petitioner's utility model and the solution thereof in Respondent's patent an affirmative reply. The introduction of the aforesaid male and female projections in Respondent's, water meter reader would facilitate detection of tampering. If the projections are intact, no tampering has If the same had been destroyed, obviously the meter has been tampered.
In Samson vs. Tarroza, 28 SCRA 792, the Honorable Supreme Court held that:
"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 and with its front end panel being supported by the Wheel."
"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."
"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."
WHEREFORE, premises considered, this Petition for Cancellation is hereby DENIED. Patent No. UM-6780 issued in the name of the Respondent is hereby declared valid and subsisting.
Let the filewrapper of this case be forwarded to Application, Issuance and Publication Division for appropriate action in accordance with this Decision. Likewise, let a copy of this Decision be furnished the Mechanical Examining Division for information an to update its records.
SO ORDERED.
(SGD.) IGNACIO S. SAPALO





FIRST DIVISION
[G.R. No. 115106. March 15, 1996.]
ROBERTO L. DEL ROSARIO, petitioner, vs. COURT OF APPEALS AND JANITO CORPORATION, respondents.
Quisumbing, Torres and Evangelista for petitioners.
J.P. Villanueva and Associates for private respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PROVISIONAL REMEDIES; INJUNCTION; ITS NATURE. — Injunction is a preservative remedy for the protection of substantive rights or interests. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly investigated and advisely adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation. The application of the writ rests upon an alleged existence for an emergency or of a special reason for such an order before the case can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire showing from both sides, it appears, in view of all the circumstances, that the inunction is reasonably necessary to protect the legal rights of plaintiff pending the litigation.
2. ID.; WHEN INJUNCTION MAY BE GRANTED; REQUISITES FOR ITS ISSUANCE. — A preliminary injunction may be granted at any time after the commencement of the action and before judgment when it is established that the defendant is doing, threatens, or is about to do, or is procuring or suffering to be done, some act probably in violation of the plaintiff's rights. Thus, there are only two requisites to be satisfied if an injunction is to issue, namely, the existence of the right to be protected, and that the facts against which the injunction is to be directed are violative of said right. For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must be a present right, a legal right which must be shown to be clear and positive.
3. COMMERCIAL LAW; INTELLECTUAL PROPERTY; THE PATENT LAW; WHEN A UTILITY MODEL IS NOT CONSIDERED "NEW" UNDER SECTION 55 OF THE PATENT LAW. — Under Sec. 55 of the Patent Law a utility model 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 is substantially similar to any other utility model so known, used or described within the country.
4. ID.; WHEN ANY NEW MODEL OF IMPLEMENTS OR TOOLS IS ENTITLED TO A PATENT FOR UTILITY MODEL. — The Patent Law expressly acknowledges that any model of implements or tools of any industrial product even if not possessed of the quality of invention but which is practical utility is entitled to a patent for utility model.
5. ID.; RIGHTS OF A PATENTEE UNDER SECTION 37 OF THE PATENT LAW. — The rights of petitioner as a patentee have been sufficiently established, contrary to the findings and conclusions of respondent Court of Appeals. Consequently, under Sec. 37 of The Patent law, petitioner as a patentee shall have the exclusive right to make, use and sell the patented machine, article or product for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the patent, and such making, using or selling by any person without authorization of the patentee constitutes infringement of his patent.
6. ID.; WHAT CONSTITUTES AN INFRINGEMENT OF A PATENT. — It is elementary that a patent may be infringed where the essential or substantial features of the patented invention are taken or appropriated, or the device, machine or other subject matter alleged to infringe is substantially identical with the patent invention. In order to infringe a patent, a machine or device must perform the same function, or accomplish the same result by identical or substantially identical means and the principle or mode of operation must be substantially the same.
7. ID.; PETITIONER HAD SUFFICIENTLY ESTABLISHED A PRIMA FACIE PROOF OF VIOLATION OF HIS RIGHTS AS PATENTEE. — It may be noted that respondent corporation failed to present before the trial court a clear, competent and reliable comparison between its own model and that of petitioner, and disregarded completely petitioner's Utility Model No. 6237 which improved on his first patented model. Notwithstanding the differences cited by respondent corporation, it did not refute and disprove the allegations of petitioner before the trial court that: (a) both are used by a singer to sing and amplify his voice; (b) both are used to sing with a minus-one or multiplex tapes, or that both are used to play minus-one or standard cassette tapes for singing or for listening to; (c) both are used to sing with a minus-one tape and multiplex tape and to record the singing and the accompaniment; (d) both are used to sing with live accompaniment and to record the same; (e) both are used to enhance the voice of the singer using echo effect, treble, bass and other controls; (f) both are equipped with cassette tape decks which are installed with one being used for playback and the other, for recording the singer and the accompaniment, and both may also be used to record a speaker's voice or instrumental playing, like the guitar and other instruments, (g) both are encased in box-like cabinets; and (h) both can be used with one or more microphones. Clearly, therefore, both petitioner's and respondent's models involve substantially the same modes of operation and produce substantially the same if not identical results when used. In view thereof, we find that petitioner had established before the trial court prima facie proof of violation of his rights as patentee to justify the issuance of a writ of preliminary injunction in his favor during the pendency of the main suit for damages resulting from the alleged infringement.
D E C I S I O N
BELLOSILLO, J p:
Roberto del Rosario petitions this Court to review the decision of the Court of Appeals 1 which set aside the order of the Regional Trial Court of Makati granting a writ of preliminary injunction in his favor.
The antecedents: On 18 January 1993 petitioner filed a complaint for patent infringement against private respondent Janito Corporation. 2 Roberto L. del Rosario alleged that he was a patentee of an audio equipment and improved audio equipment commonly known as the sing-along system or karaoke under Letters Patent No. UM-5269 dated 2 June 1983 as well as Letters Patent No. UM-6237 dated 14 November 1986 issued by the Director of Patents. The effectivity of both Letters Patents was for five (5) years and was extended for another five (5) years starting 2 June 1988 and 14 November 1991, respectively. He described his sing-along system as a handy multi-purpose compact machine which incorporates an amplifier speaker, one or two tape mechanisms, optional tuner or radio and microphone mixer with features to enhance one's voice, such as the echo or reverb to stimulate an opera hall or a studio sound, with the whole system enclosed in one cabinet casing.
In the early part of 1990 petitioner learned that private respondent was manufacturing a sing-along system bearing the trademark or miyata karaoke substantially similar if not identical to the sing-along system covered by the patents issued in his favor. Thus he sought from the trial court the issuance of a writ of preliminary injunction to enjoin private respondent, its officers and everybody elsewhere acting on its behalf, from using, selling and advertising the miyata or miyata karaoke brand, the injunction to be made permanent after trial, and praying for damages, attorney's fees and costs of suit.
On 5 February 1993 the trial court temporarily restrained private respondent from manufacturing, using and/or selling and advertising the miyata sing-along system or any sing-along system substantially identical to the sing-along system patented by petitioner until further orders.
On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on the basis of its finding that petitioner was a holder of a utility model patent for a sing-along system and that without his approval and consent private respondent was admittedly manufacturing and selling its own sing-along system under the brand name miyata which was substantially similar to the patented utility model 3 of petitioner.
Private respondent assailed the order of 24 February 1993 directing the issuance of the writ by way of a petition for certiorari with prayer for the issuance of a writ of preliminary injunction and a temporary restraining order before respondent Court of Appeals.
On 15 November 1993 respondent appellate court granted the writ and set aside the questioned order of the trial court. It expressed the view that there was no infringement of the patents of petitioner by the fact alone that private respondent had manufactured the miyata karaoke or audio system, and that the karaoke system was a universal product manufactured, advertised and marketed in most countries of the world long before the patents were issued to petitioner. The motion to reconsider the grant of the writ was denied; 4 hence, the instant petition for review.
This petition alleges that: (a) it was improper for the Court of Appeals to consider questions of fact in a certiorari proceeding; (b) the Court of Appeals erred in taking judicial notice of private respondent's self-serving presentation of facts; (c) the Court of Appeals erred in disregarding the findings of fact of the trial court; and, (d) there was no basis for the Court of Appeals to grant a writ of preliminary injunction in favor of private respondent. 5
Petitioner argues that in a certiorari proceeding questions of fact are not generally permitted the inquiry being limited essentially to whether the tribunal has acted without or in excess of jurisdiction or with grave abuse of discretion; that respondent court should not have disturbed but respected instead the factual findings of the trial court; that the movant has a clear legal right to be protected and that there is a violation of such right by private respondent. Thus, petitioner herein claims, he has satisfied the legal requisites to justify the order of the trial court directing the issuance of the writ of injunction. On the other hand, in the absence of a patent to justify the manufacture and sale by private respondent of sing-along systems, it is not entitled to the injunctive relief granted by respondent appellate court.
The crux of the controversy before us hinges on whether respondent Court of Appeals erred in finding the trial court to have committed grave abuse of discretion in enjoining private respondent from manufacturing, selling and advertising the miyata karaoke brand sing-along system for being substantially similar if not identical to the audio equipment covered by letters patent issued to petitioner.
Injunction is a preservative remedy for the protection of substantive rights or interests. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly investigated and advisedly adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation. The application of the writ rests upon an alleged existence of an emergency or of a special reason for such an order before the case can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably necessary to protect the legal rights of plaintiff pending the litigation. 6
A preliminary injunction may be granted at any time after the commencement of the action and before judgment when it is established that the defendant is doing, threatens, or is about to do, or is procuring or suffering to be done, some act probably in violation of the plaintiff's rights. Thus, there are only two requisites to be satisfied if an injunction is to issue, namely, the existence of the right to be protected, and that the facts against which the injunction is to be directed are violative of said right. 7
For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must be a present right, a legal right which must be shown to be clear and positive.
In this regard Sec. 55 of R.A. 165 as amended known as The Patent 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) new model or 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 provide . . .
Admittedly, petitioner is a holder of Letters Patent No. UM-5629 dated 2 June 1985 issued for a term of five (5) years from the grant of a Utility Model herein described —
The construction of an audio equipment comprising a substantially cubical casing having a window at its rear and upper corner fitted with a slightly inclined control panel, said cubical (casing) having a vertical partition wall therein defining a rear compartment and a front compartment, and said front compartment serving as a speaker baffle; a transistorized amplifier circuit having an echo section and writhed in at least the printed circuit boards placed inside said rear compartment of said casing and attached to said vertical partition wall, said transistorized amplifier circuit capable of being operated from outside, through various controls mounted on said control panel of such casing; a loud speaker fitted inside said front compartment of said casing and connected to the output of the main audio amplifier section of said transistorized amplifier circuit and a tape player mounted on the top wall of said casing and said tape player being connected in conventional manner to said transistorized amplifier circuit. 8
Again, on 14 November 1986 petitioner was granted Letters Patent No. UM-6237 for a term of five (5) years from the grant of a Utility Model described as —
In an audio equipment consisting of a first cubical casing having an opening at its rear and upper rear portion and a partition therein forming a rear compartment and a front compartment serving as a loud speaker baffle, a control panel formed by vertical and horizontal sections, a transistorized amplifier circuit wired in at least two printed circuit boards attached at the back of said control panel, a first loud speaker fitted inside said first compartment of such first casing and connected to the output of said transistorized amplifier circuit; the improvement wherein said control panel being removably fitted to said first cubical casing and further comprises a set of tape recorder and type player mounted on the vertical section of said control panel and said recorder and player are likewise connected to said transistorized amplifier circuit; a second cubical casing having an opening at its rear, said second cubical casing having (being?) provided with a vertical partition therein defining a rear compartment and a front compartment, said rear compartment being provided with a door and enclosing therein a set of tape racks and said front compartment serving as loud speaker baffle, said second cubical casing being adapted to said first cubical casing so that said first and second casing are secured together in compact and portable form; compartment of said casing and connected to the output of said amplifier circuit. 9
The terms of both Letters Patents were extended for another five (5) years each, the first beginning 2 June 1988 and the second, 14 November 1991.
The Patent Law expressly acknowledges that any new model of implements or tools 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 utility model. 10 Here, there is no dispute that the letters patent issued to petitioner are for utility models of audio equipment.
In issuing, reissuing or withholding patents and extensions thereof, the Director of Patents determines whether the patent is new and whether the machine or device is the proper subject of patent. In passing on an application, the Director decides not only questions of law but also questions of fact, i.e. whether there has been a prior public use or sale of the article sought to be patented. 11 Where petitioner introduces the patent in evidence, if it is in due form, it affords a prima facie presumption of its correctness and validity. The decision of the Director of Patents in granting the patent is always presumed to be correct, and the burden then shifts to respondent to overcome this presumption by competent evidence. 12
Under Sec. 55 of The Patent Law a utility model 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. Respondent corporation failed to present before the trial court competent evidence that the utility models covered by the Letters Patents issued to petitioner were not new. This is evident from the testimony of Janito Cua, President of respondent Janito Corporation, during the hearing on the issuance of the injunction, to wit —
Q. Mr. Cua, you testified that there are (sic) so many other companies which already have (sic) the sing-along system even before the patent application of Mr. del Rosario and as a matter of fact you mentioned Sanyo, Sony and Sharp, is that right?
A. Musicmate and Asahi.
Q. Now do you recall that your lawyer filed with this Honorable Court an Urgent Motion to Lift Temporary Restraining Order of this Honorable Court. I am sure you were the one who provided him with the information about the many other companies selling the sing-along system, is that right? These 18 which you enumerated here.
A. More than that because . . .
Q. Now you will agree with me that in your statement Sharp you put the date as 1985 agreed?
A. No.
Q. You mean lawyer was wrong when he put the word Sharp 1985?
A. Maybe I informed him already
xxx xxx xxx
Q. You men your lawyer was wrong in alleging to this Court that Sharp manufactured and sold (in) 1985 as found in the Urgent Motion?
A. Since it is urgent it is more or less.
Q. The same also with Sanyo 1985 which you put, more or less?
A. Sanyo is wrong.
Q. It is not 1985?
A. Sanyo is 1979 I think.
Q. So this is also wrong. Panasonic 1986 is also wrong?
A. Panasonic I think.
Q. Soy you don't think this is also correct.
A. The date?
Q. So you don't think also that this allegation here that they manufacture in 1986 is correct?
A. The date?
Q. So you don't think also that this allegation here that they manufactured in 1986 is correct?
A. Wrong. Earlier.
Q. National by Precision Electronic 1986 this is also wrong?
A. I think earlier.
Q. So that means all your allegations here from 2 to 5 are wrong? OK. By Philipps Philippines 1986, this is also correct or wrong?
A. More or less. We said more or less.
Q. Nakabutshi by Asahi Electronics that is also wrong?
A. No that is 1979.
Q. Electone by DICO 1989 is this correct or wrong?
A. Correct. More or less.
Q. Skylers 1985 is that correct or wrong?
A. It is more or less because it is urgent. We don't have time to exact the date.
Q. Musicmate of G.A. Yupangco 1981 this is more or less? You are not also sure?
A. 95% sure.
Q. Now you are sure 1981.
A. This one because . . .
Q. Mr. Witness so you are now trying to tell this Honorable Court that all your allegations here of the dates in this Urgent Motion except for Musicmate which you are only 95% sure they are all wrong or they are also more or less or not sure, is that right?
A. More or less.
Q. Now do you have any proof, any advertisement, anything in writing that would show that all these instruments are in the market, do you have it.
A. No I don't have it because . . .
Q. No I am satisfied with your answer. Now Mr. Witness, you don't also have a proof that Akai instrument that you said was also in the market before 1982? You don't have any written proof, any advertisement?
A. I have the product.
Q. But you have not brought the product in (sic) this Honorable Court, right?
A. No 13
As may be gleaned herein, the rights of petitioner as a patentee have been sufficiently established, contrary to the findings and conclusions of respondent Court of Appeals. Consequently, under Sec. 37 of the Paten law, petitioner as a patentee shall have the exclusive right to make, use and sell the patented machine, article or product for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the patent, and such making, using or selling by any person without authorization of the patentee constitutes infringement of his patent.
Petitioner established before the trial court that respondent Janito Corporation was manufacturing a similar sing-along system bearing the trademark miyata which infringed his patented models. He also alleged that both his own patented audio equipment and respondent's sing-along system were constructed in a casing with a control panel, the casing having a vertical partition wall defining the rear compartment from the front compartment, with the front compartment consisting of a loud speaker baffle, both containing a transistorized amplifier circuit capable of being operated from outside through various controls mounted on the control panel, and that both had loud speakers fitted inside the front compartment of the casing and connected to the output of the main audio amplifier section both having a tape recorder and a tape player mounted on the control panel with the tape recorder and tape player being both connected to the transistorized amplifier circuit. 14
Respondent Janito Corporation denied that there was any violation of petitioner's patent rights, and cited the differences between its miyata equipment and petitioner's audio equipment. But, it must be emphasized, respondent only confined its comparison to the first model, Utility Model No. 5269, and completely disregarded Utility Model No. 6237 which improved on first. As described by respondent corporation, 15 these differences are —
First. Under Utility Model 5269, the unit is a substantially cubical casing with a window at its rear and upper corner fitted with slightly inclined control panel, while the miyata equipment is a substantially rectangular casing with panel vertically positioned.
Second. Under Utility Model 5269, the cubical casing has a vertical partition wall defining a rear compartment and a front compartment serving as a speaker baffle, while the miyata equipment has no rear compartment and front compartment in its rectangular casing; it has only a front compartment horizontally divided into 3 compartments like a 3-storey building, the 1st compartment being a kit, the 2nd also the speaker, and 3rd are kits.
Third. Under Utility Model No. 5269, a transistorized amplifier circuit with an echo section wired in at least 2 printed circuit boards is placed inside the rear compartment of the casing and attached to the vertical partition wall, the printed circuit board having 1 amplifier and 1 echo, while in the miyata equipment the amplifier is mainly IC (Integrated Circuit) - powered with 8 printed circuit boards almost all of which are IC controlled, with 1 amplifier with power supply, 1 main tuner, 1 equalizer (3-band), 1 IC controlled volume control, 1 echo IC, 1 tape pream, 1 instrument and 1 wireless microphone.
Fourth. Under Utility Model 5269, 4 printed circuits are placed inside the compartment of its casing attached to the vertical partition wall, while in the miyata, the 7 printed circuit boards (PCB) are attached to the front panel and 1 attached to the horizontal divider.
Fifth. Under Utility Model 5269, there are various controls mounted on the control panel of the casing, while in miyata, the various controls are all separated form the printed circuit boards and the various controls are all attached thereto.
Sixth. Under Utility Model 5269, a loud speaker fitted inside the front compartment of the casing is connected to the output of the main audio amplifier section of the transistorized amplifier circuit, while in miyata, there is no other way but to use 2 loud speakers connected to the amplifier.
Seventh. Under Utility Model 5269, a tape player is mounted on the top wall of the casing, while in miyata, 2 tape players are used mounted side by side at the front.
It is elementary that a patent may be infringed where the essential or substantial features of the patented invention are taken or appropriated, or the device, machine or other subject matter alleged to infringe is substantially identical with the patented invention. In order to infringe a patent, a machine or device must perform the same function, or accomplish the same result by identical or substantially identical means and the principle or mode of operation must be substantially the same. 16
It may be noted that respondent corporation failed to present before the trial court a clear, competent and reliable comparison between its own model and that of petitioner, and disregarded completely petitioner's Utility Model No. 6237 which improved on his first patented model. Notwithstanding the differences cited by respondent corporation, it did not refute and disprove the allegations of petitioner before the trial court that: (a) both are used by a singer to sing a amplify his voice; (b) both are used to sing with a minus-one or multiplex tapes, or that both are used to play minus-one or standard cassette tapes for singing or for listening to; (c) both are used to sing a minus-one tape and multiplex tape and to record the singing and the accompaniment; (d) both are used to sing with live accompaniment; (d) both are used to sing with live accompaniment and to record the same; (e) both are used to enhance the voice of the singer using echo effect, treble, bass and other controls; (g) both are equipped with cassette tape decks which are installed with one being used for playback and the other, for recording the singer and the accompaniment, and both may also be used to record a speaker's voice or instrumental playing, like the guitar and other instruments; (h) both are encased in a box-like cabinets; and (i) both can be used with one or more microphones. 17
Clearly, therefore, both petitioner's and respondent's models involve substantially the same modes of operation and produce substantially the same if not identical results when used.
In view thereof, we find that petitioner had established before the trial court prima facie proof of violation of his rights as patentee to justify the issuance of a writ of preliminary injunction in his favor during the pendency of the main suit for damages resulting from the alleged infringement.
WHEREFORE, the Decision of the Court of Appeals dated 15 November 1993 is REVERSED and SET ASIDE and the Order of the trial court dated 24 February 1993 granting petitioner the writ of injunction is REINSTATED.
The trial court is directed to continue with the proceedings on the main action pending before it in order to resolve with dispatch the issues therein presented.
SO ORDERED
Padilla, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.




[BPTTT Decision No. 02 (PAT). January 20, 1988]
RE: APPEAL FROM FINAL REJECTION OF APPLICATION BY PATENT EXAMINER BENITO C. LAO, applicant-appellant.
Ex Parte Case No. 215

Serial No. UM-6776
Filed : October 30, 1980
Applicant : Benito C. Lao
For : Punched Grip-Hole Plastic Bag, etc.
D E C I S I O N
This is an ex-parte appeal from the final rejection of the Patent Examiner of Application Serial No. UM-6776 filed on October 30, 1980 by herein Appellant-Applicant, Benito Lao, of 485 Lavezares Street, Manila.
The appeal pertains to an application for a utility model, entitled "Punched Grip-Hole Plastic Bag, etc." Its main feature as embodied in the specification is the thicker upper portion of the bag, which part was made stronger without the need for any add-on reinforcement or patches around the grip.
For lack of novelty, the said application was rejected. The Examiner, in his final action of rejection, stated thus: cdasia
"According to the third paragraph of Sec. 55 of R.A. 165, a utility model shall not be considered 'new' if . . . it is substantially similar to any other utility model so known, used or described within the country . . ." (Emphasis supplied)
The sole reference cited and relied upon by the Examiner in rejecting the application is Letters Patent No. D-2259, a design patent granted on March 23, 1983 in favor of Benito Lao, the herein Appellant Applicant. Said patent discloses a plastic bag with a heart-shaped punched grip hole disposed at the upper portion of the bag. Being a design patent, the specification did not mention the purpose of the hole but it can be inferred that the said heart-shaped hole is for the fingers of the hand to pass through when one grips the bag.
Appellant-Applicant's arguments boil down to the resolution of two major issues, to wit:
(1) Whether or not a design patent can be validly used as a prior art reference against a utility model application; and
(2) Whether or not varying the thickness of the plastic bag, i.e., making the upper portion thicker than the other part of the bag is patentable.
Tackling the first issue, a Appellant-Applicant, citing Rule 134 of the Revised Rules of Practice in Patent Cases (Sec. 55, Republic Act 165), argues that a design patent cannot be cited as a prior art reference for utility model application. Appellant-Applicant construed the term utility model as equivalent to the term utility model patent. This Office begs to disagree. The law uses the term utility model, not utility model patent. The two terms are different from each other. The former is generic while the latter is a specific term. Being generic, the term utility model when used in relation to the field of prior art searching is deemed to include not only utility model patent but also invention and design patents. Also, the term utility model as used in the law means any device or article. This is the gist of the decision in Electro Mfg. Co. v. Yellin, 56 USPQ 290, 292 where it was held that a design patent may anticipate a mechanical patent, and a design patent issued before a mechanical patent, or a mechanical patent issued before a design patent, is a part of prior art and a valid anticipation (Lein v. Myers, 105 F 962, C.C.A. 2). If a design patent cannot be used as a prior art reference against a utility model application as alleged by Appellant-Applicant then, conversely, it follows that a utility model patent cannot also be used as a valid prior art reference against a design patent. This should not be the case. Thus, the Director of Patents in the case of Co Su Lin v. Nicholas Tiu (Decision No. 84-39, March 30, 1984) cancelled Patent No. D-1646 on the basis of Patent No. UM-2328.
In this case, the cited design patent as a prior art reference discloses the main feature that Appellant-Applicant is claiming in his utility model application. Therefore, the utility model sough to be patented by Appellant-Applicant is unpatentable pursuant to Section 55 of Republic Act 165, as amended.
With respect to the second issue, Rule 134 of the Rules of Practice in Patent Cases provides that "a utility model shall not be considered new and patentable for that reason . . . if it is substantially similar to any other utility model so known, used and described within the Philippines". (Emphasis supplied)
The phrase "substantially similar" as defined in relation to the "doctrine equivalents" in the case of Pessumal Tolaram v. Chi Chuan Ko (Decision No. 262, June 7, 1963) means that "in order that one device may be considered equivalent of another, it must perform the same function in substantially the same way to obtain same result (Westro Inc. v. Illinois Watch Care Co., 98 USPQ 354), and "if two devices do the same work in substantially the same result, they are the same even though they differ in name, form or shape (Machine Co. v. Murphy, 97 U.S. 120, 24 L Ed. 935).
The variation of thickness claimed by Appellant-Applicant in his application is not apparent and cannot be appreciated using the naked eye alone. Neither such thickness be appreciated by trying to feel it between the fingers. In effect, the variation of thickness has very little or no impact in the form or shape of the plastic bag. Taken in the light of the meaning of the phrase "substantially similar", as enunciated in the aforecited doctrine, this Office believes and is so convinced that the subject plastic bag is deemed substantially similar with the cited reference; hence, unpatentable. cdtai
The claim that material savings can be derived by making the upper portion of the bag thicker is likewise unmeritorious. The material saving is significant only in theory but not in actual commercial practice. The proof submitted by Appellant-Applicant was based only on theoretical mathematical computation without regard to other factors involved in actual production.
To allow the subject application which is substantially similar to Appellant-Applicant's patented design (D-225, the reference) is a commercial strategy that confers no benefit to the public other than an opportunity for Appellant-Applicant to prolong his monopoly to make, use and sell his design patent beyond the period prescribed by law.
WHEREFORE, premises considered, this ex-parte appeal is, as it is hereby, DISMISSED. Accordingly, Appellant-Applicant's Serial No. UM-6776 filed on October 30, 1980 is, as it is hereby, ordered REJECTED.
Let the records of this case be remanded to the Mechanical, Electrical Division for appropriate action in accordance with this Decision.
SO ORDERED.
(SGD.) IGNACIO S. SAPALO
Director