Page 1 of 18

#1 Del Rosario vs. CA et. al, 255 SCRA 152 (1996)

Del Rosario was granted a patent for his innovation called the “Minus One” karaoke. The patent was issued in June 1988
for five years and was renewed in November 1991 for another five years as there were improvement introduced to his
“minus one” karaoke. In 1993, while the patent was still effective, Del Rosario sued Janito Corporation, a Japanese
company owned by JanitoCua, for allegedly infringing upon the patent of Del Rosario. Del Rosario alleged that Janito was
manufacturing a sing-along system under the brand “miyata karaoke” which is substantially if not identical to his “minus
one” karaoke. The lower court ruled in favor of Del Rosario but the Court of Appeals ruled that there was no infringement
because the karaoke system was a universal product manufactured, advertised and marketed all over the world long
before Del Rosario was issued his patents.

ISSUE: Whether or not the Court of Appeals erred in its ruling.

HELD: Yes. 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. Here, there is no dispute that the letters patent issued to Del Rosario are for utility models of audio equipment. 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. In the case at bar, miyata karaoke was proven to have substantial if not identical functionality as that of the minus
one karaoke which was covered by the second patent issued to Del Rosario. Further, Janito failed to present competent
evidence that will show that Del Rosario’s innovation is not new.
 Page 2 of 18

#2 Godines vs. CA et al 226 SCRA 338 (1993)

Through this petition for review in certiorari of a decision of the Court of Appeals affirming the decision of the trial
court, petitioner PascualGodines seeks to reverse the adverse decision of the Court a quo that he was liable for
infringement of patent and unfair competition. The dispositive portion of the assailed decision is hereby quoted to
wit:

WHEREFORE, with the elimination of the award for attorney's fees, the judgment appealed from is
hereby AFFIRMED, with costs against appellant. 1

The patent involved in this case is Letters Patent No. UM-2236 issued by the Philippine Patent Office to one
Magdalena S. Villaruz on July 15, 1976. It covers a utility model for a hand tractor or power tiller, the main
components of which are the following: "(1) a vacuumatic house float; (2) a harrow with adjustable operating handle;
(3) a pair of paddy wheels; (4) a protective water covering for the engine main drive; (5) a transmission case; (6) an
operating handle; (7) an engine foundation on the top midportion of the vacuumatic housing float to which the main
engine drive is detachedly installed; (8) a frontal frame extension above the quarter — circularly shaped water
covering hold (sic) in place the transmission case; (9) a V-belt connection to the engine main drive with transmission
gear through the pulley, and (10) an idler pulley installed on the engine foundation." 2 The patented hand tractor
works in the following manner: "the engine drives the transmission gear thru the V-belt, a driven pulley and a
transmission shaft. The engine drives the transmission gear by tensioning of the V-belt which is controlled by the
idler pulley. The V-belt drives the pulley attached to the transmission gear which in turn drives the shaft where the
paddy wheels are attached. The operator handles the hand tractor through a handle which is inclined upwardly and
supported by a pair of substanding pipes and reinforced by a U-shaped G.I. pipe at the V-shaped end." 3

The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein private respondent, from
Magdalena Villaruz, its chairman and president, by virtue of a Deed of Assignment executed by the latter in its favor.
On October 31, 1979, SV-Agro Industries caused the publication of the patent in Bulletin Today, a newspaper of
general circulation.

In accordance with the patent, private respondent manufactured and sold the patented power tillers with the patent
imprinted on them. In 1979, SV-Agro Industries suffered a decline of more than 50% in sales in its Molave,
Zamboangadel Sur branch. Upon investigation, it discovered that power tillers similar to those patented by private
respondent were being manufactured and sold by petitioner herein. Consequently, private respondent notified
PascualGodines about the existing patent and demanded that the latter stop selling and manufacturing similar
power tillers. Upon petitioner's failure to comply with the demand, SV-Agro Industries filed before the Regional Trial
Court a complaint for infringement of patent and unfair competition.

After trial, the court held PascualGodines liable for infringement of patent and unfair competition. The dispositive
portion of the decision reads as follows:

WHEREFORE, premises considered, JUDGMENT is hereby rendered in favor of the plaintiff SV-
Agro Industries Enterprises, Inc., and against defendant PascualGodines:

1. Declaring the writ of preliminary injunction issued by this Court against defendant as permanent;

2. Ordering defendant PascualGodines to pay plaintiff the sum of Fifty Thousand Pesos
(P50,000.00) as damages to its business reputation and goodwill, plus the further sum of Eighty
Thousand Pesos (P80,000.00) for unrealized profits during the period defendant was manufacturing
and selling copied or imitation floating power tiller;

3. Ordering the defendant to pay the plaintiff, the further sum of Eight Thousand Pesos (P8,000.00)
as reimbursement of attorney's fees and other expenses of litigation; and to pay the costs of the suit.

SO ORDERED. 4

The decision was affirmed by the appellate court.

 Page 3 of 18

Thereafter, this petition was filed. Petitioner maintains the defenses which he raised before the trial and appellate
courts, to wit: that he was not engaged in the manufacture and sale of the power tillers as he made them only upon
the special order of his customers who gave their own specifications; hence, he could not be liable for infringement
of patent and unfair competition; and that those made by him were different from those being manufactured and sold
by private respondent.

We find no merit in his arguments. The question of whether petitioner was manufacturing and selling power tillers is
a question of fact better addressed to the lower courts. In dismissing the first argument of petitioner herein, the
Court of Appeals quoted the findings of the court, to wit:

It is the contention of defendant that he did not manufacture or make imitations or copies of plaintiff's
turtle power tiller as what he merely did was to fabricate his floating power tiller upon specifications and
designs of those who ordered them. However, this contention appears untenable in the light of the
following circumstances: 1) he admits in his Answer that he has been manufacturing power tillers or hand
tractors, selling and distributing them long before plaintiff started selling its turtle power tiller in
Zamboanga del Sur and Misamis Occidental, meaning that defendant is principally a manufacturer of
power tillers, not upon specification and design of buyers, but upon his own specification and design; 2) it
would be unbelievable that defendant would fabricate power tillers similar to the turtle power tillers of
plaintiff upon specifications of buyers without requiring a job order where the specification and designs of
those ordered are specified. No document was (sic) ever been presented showing such job orders, and it
is rather unusual for defendant to manufacture something without the specification and designs,
considering that he is an engineer by profession and proprietor of the Ozamis Engineering shop. On the
other hand, it is also highly unusual for buyers to order the fabrication of a power tiller or hand tractor and
allow defendant to manufacture them merely based on their verbal instructions. This is contrary to the
usual business and manufacturing practice. This is not only time consuming, but costly because it
involves a trial and error method, repeat jobs and material wastage. Defendant judicially admitted two (2)
units of the turtle power tiller sold by him to PolicarpioBerondo. 5

Of general acceptance is the rule imbedded in our jurisprudence that ". . . the jurisdiction of the Supreme Court in
cases brought to it from the Court of Appeals in a petition for certiorari under Rule 45 of the Rules of Court is limited
to the review of errors of law, and that said appellate court's findings of fact are conclusive upon this Court." 6

The fact that petitioner herein manufactured and sold power tillers without patentee's authority has been established
by the courts despite petitioner's claims to the contrary.

The question now arises: Did petitioner's product infringe upon the patent of private respondent?

Tests have been established to determine infringement. These are (a) literal infringement; and (b) the doctrine of
equivalents. 7 In using literal infringement as a test, ". . . resort must be had, in the first instance, to the words of the
claim. If accused matter clearly falls within the claim, infringement is made out and that is the end of it." 8 To
determine whether the particular item falls within the literal meaning of the patent claims, the court must juxtapose
the claims of the patent and the accused product within the overall context of the claims and specifications, to
determine whether there is exact identity of all material elements. 9

The trial court made the following observation:

Samples of the defendant's floating power tiller have been produced and inspected by the court and
compared with that of the turtle power tiller of the plaintiff (see Exhibits H to H-28). In appearance and
form, both the floating power tillers of the defendant and the turtle power tiller of the plaintiff are virtually
the same. Defendant admitted to the Court that two (2) of the power inspected on March 12, 1984, were
manufactured and sold by him (see TSN, March 12, 1984, p. 7). The three power tillers were placed
alongside with each other. At the center was the turtle power tiller of plaintiff, and on both sides thereof
were the floating power tillers of defendant (Exhibits H to H-2). Witness Rodrigo took photographs of the
same power tillers (front, side, top and back views for purposes of comparison (see Exhibits H-4 to H-28).
Viewed from any perspective or angle, the power tiller of the defendant is identical and similar to that of
the turtle power tiller of plaintiff in form, configuration, design and appearance. The parts or components
thereof are virtually the same. Both have the circularly-shaped vacuumatic housing float, a paddy in front,
a protective water covering, a transmission box housing the transmission gears, a handle which is V-
shaped and inclined upwardly, attached to the side of the vacuumatic housing float and supported by the
 Page 4 of 18

upstanding G.I. pipes and an engine base at the top midportion of the vacuumatic housing float to which
the engine drive may be attached. In operation, the floating power tiller of the defendant operates also in
similar manner as the turtle power tiller of plaintiff. This was admitted by the defendant himself in court
that they are operating on the same principles. (TSN, August 19, 1987, p. 13) 10

Moreover, it is also observed that petitioner also called his power tiller as a floating power tiller. The patent issued by
the Patent Office referred to a "farm implement but more particularly to a turtle hand tractor having a vacuumatic
housing float on which the engine drive is held in place, the operating handle, the harrow housing with its operating
handle and the paddy wheel protective covering." 11 It appears from the foregoing observation of the trial court that
these claims of the patent and the features of the patented utility model were copied by petitioner. We are compelled
to arrive at no other conclusion but that there was infringement.

Petitioner's argument that his power tillers were different from private respondent's is that of a drowning man
clutching at straws.

Recognizing that the logical fallback position of one in the place of defendant is to aver that his product is different
from the patented one, courts have adopted the doctrine of equivalents which recognizes that minor modifications in
a patented invention are sufficient to put the item beyond the scope of literal infringement. 12 Thus, according to this
doctrine, "(a)n infringement also occurs when a device appropriates a prior invention by incorporating its innovative
concept and, albeit with some modification and change, performs substantially the same function in substantially the
same way to achieve substantially the same result." 13 The reason for the doctrine of equivalents is that to permit the
imitation of a patented invention which does not copy any literal detail would be to convert the protection of the
patent grant into a hollow and useless thing. Such imitation would leave room for — indeed encourage — the
unscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent which, though
adding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach of the
law. 14

In this case, the trial court observed:

Defendant's witness Eduardo Cañete, employed for 11 years as welder of the Ozamis Engineering, and
therefore actually involved in the making of the floating power tillers of defendant tried to explain the
difference between the floating power tillers made by the defendant. But a careful examination between
the two power tillers will show that they will operate on the same fundamental principles. And, according
to establish jurisprudence, in infringement of patent, similarities or differences are to be determined, not
by the names of things, but in the light of what elements do, and substantial, rather than technical, identity
in the test. More specifically, it is necessary and sufficient to constitute equivalency that the same function
can be performed in substantially the same way or manner, or by the same or substantially the same,
principle or mode of operation; but where these tests are satisfied, mere differences of form or name are
immaterial. . . . 15

It also stated:

To establish an infringement, it is not essential to show that the defendant adopted the device or
process in every particular; Proof of an adoption of the substance of the thing will be sufficient. "In
one sense," said Justice Brown, "it may be said that no device can be adjudged an infringement that
does not substantially correspond with the patent. But another construction, which would limit these
words to exact mechanism described in the patent, would be so obviously unjust that no court could
be expected to adopt it. . . .

The law will protect a patentee against imitation of his patent by other forms and proportions. If two
devices do the same work in substantially the same way, and accomplish substantially the same result,
they are the same, even though they differ in name, form, or shape. 16

We pronounce petitioner liable for infringement in accordance with Section 37 of Republic Act No. 165, as amended,
providing, inter alia:

Sec. 37.Right of Patentees. — A patentee shall have the exclusive right to make, use and sell the
patented machine, article or product, and to use the patented process for the purpose of industry or
 Page 5 of 18

commerce, throughout the territory of the Philippines for the terms of the patent; and such making,
using, or selling by any person without the authorization of the Patentee constitutes infringement of
the patent. (Emphasis ours)

As far as the issue regarding unfair competition is concerned, suffice it to say that Republic Act No. 166, as
amended, provides, inter alia:

Sec. 29.Unfair competition, rights and remedies. — . . .

xxxxxxxxx

In particular, and without in any way limiting the scope of unfair competition, the following shall be
deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general appearance of goods of another
manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in
which they are contained, or the devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers that the goods offered are those of a
manufacturer or dealer other than the actual manufacturer or dealer, or who otherwise clothes the
goods with such appearance as shall deceive the public and defraud another of his legitimate trade.
...

xxxxxxxxx

Considering the foregoing, we find no reversible error in the decision of the Court of Appeals affirming with
modification the decision of the trial court.

WHEREFORE, premises considered, the decision of the Court of Appeals is hereby AFFIRMED and this petition
DENIED for lack of merit
 Page 6 of 18

#3 Smith Kline & Beckman vs. CA et al, 409 SCRA 33 (2003)

Facts:Petitioner Smith Kline Beckman is an American corporation licensed to do business in the Philippines. In 1976 it
filed with the Philippine Patent Office a patent application over methyl 5 propylthio-2-benzimidazole carbamate, a
chemical compound that fought infections caused by gastrointestinal parasites in farm and pet animals. In 1981 the PPO
issued Letters Patent No. 14561 for the said invention for a term of 17 years. Private respondent TrycoPharma is a
domestic corporation that dealt in veterinary products. It manufactured and sold Impregon, a drug which fought
gastrointestinal parasites in farm animals, and which contained the compound Albendazole as active ingredient.

Claiming that Letters Patent No. 14561 covered the substance Albendazole, Smith Kline filed before the Caloocan City
Regional Trial Court a complaint against Tyco Pharma for patent infringement, and for unfair competition under Article
189 of the Revised Penal Code and Section 29 of the Trademark Law. In its Decision the RTC dismissed Smith Kline’s
complaint, and ordered the cancellation of Letters Patent No. 14561 for being null and void. Smith Kline appealed to the
Court of Appeals. The CA affirmed that Tyco Pharma was not liable for patent infringement, but reversed the RTC’s
finding that Letters Patent No. 14561 was void. Smith Kline filed a petition for review with the Supreme Court.

Issue:Whether Tyco Pharma committed patent infringement to the prejudice of Smith Kline.

Held:No, Tyco Pharma did not1.The claims of Letters Patent No. 14561 do not mention the compound Albendazole. All
that the claims disclose are: the covered invention, i.e., the compound methyl 5 propylthio-2-benzimidazole carbamate;
the compound’s 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. The courts are similarly bound: they 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. The mere absence of the word Albendazole in the patent is not determinative of Albendazole’s non-
inclusion in its claims. While Albendazole is admittedly a chemical compound that exists by a name different from that
covered in the patent, the language of the patent fails to yield anything at all regarding Albendazole. No extrinsic
evidence had been adduced to prove that Albendazole inheres in Smith Klein’s patent in spite of its omission therefrom,
or that the meaning of the claims of the patent embraces Albendazole.

2.Smith Klein has not met the requirements for the application of 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. The doctrine 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. While both compounds have the effect of neutralizing parasites in animals, identity of
result does not amount to infringement of patent unless Albendazole operates in substantially the same way or by
substantially the same means as the patented compound, even though it performs the same function and achieves the
same result. In other words, the principle or mode of operation must be the same or substantially the same.

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 Smith Klein’s compound works.
 Page 7 of 18

#3 Smith Kline & Beckman vs. CA et al, 409 SCRA 33 (2003)

Philippines. In 1981, a patent was issued to it for its invention entitled “Methods and Compositions for Producing
Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate.” The invention is a means to fight
off gastrointestinal parasites from various cattles and pet animals.

TrycoPharma is a local corporation engaged in the same business as Smith Kline.

Smith Kline sued TrycoPharma because the latter was selling a veterinary product called Impregon which contains a drug
called Albendazole which fights off gastro-intestinal roundworms, lungworms, tapeworms and fluke infestation in
carabaos, cattle and goats.

Smith Kline is claiming that Albendazole is covered in their patent because 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. And that Albendazole is actually patented under Smith Kline by the US.

TrycoPharma averred that nowhere in Impregon’s packaging does it mention that Albendazole is present but even if it
were, the same is “unpatentable”.

Smith Kline thus invoked the doctrine of equivalents, which implies that the two substances substantially do the same
function in substantially the same way to achieve the same results, thereby making them truly identical 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.

ISSUE: Whether or not there is patent infringement in this case

HELD: No. Smith Kline failed to prove that Albendazole is a compound inherent in the patented invention. Nowhere in
the patent does the word Albendazole found. When the language of its claims is clear and distinct, the patentee is
bound thereby and may not claim anything beyond them. Further, there was a separate patent for Albendazole given by
the US which implies that Albendazole is indeed separate and distinct from the patented compound here.

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

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.
 Page 8 of 18

#3 Smith Kline & Beckman vs. CA et al, 409 SCRA 33 (2003)

Facts:
Petitioner Smith Kline Beckman Co., licensed to do business in the Philippines, filed on October 8, 1976 as assignee
before the Bureau of Patents an application for patent on its invention called “Methods and Compositions for Producing
Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbanate.” A Letters of Patent was issued to
the petitioner on September 24, 1981 for a period of 17 years. The patent provides that the patented invention consists
of Methyl 5 Propylthio-2-Benzimidazole Carbanate used as an active ingredient in treating gastrointestinal parasites
and lung worms in animals. The respondent TrycoPharma manufactures, distributes and sells veterinary product, one of
which is the Impregon, a drug having Albendazole as its active ingredient effective against gastrointestinal worms in
animals. Petitioner now sues the respondent for patent infringement and unfair competition before the RTC as it
claims that their patent includes the substance Albendazole used by the respondent and they sold and used the drug
Impregon without the petitioner’s authorization and committed unfair competition for selling as its own the drug that
substantially functions to achieve the same result. Petitioner further contends that under the doctrine of equivalents in
determining patent infringement, the active substance Albendazole used by the respondent is substantially the same as
Methyl 5 Propylthio-2-Benzimidazole Carbanate covered by its patent with the same use of combating worm
infestations in animals. It prodded the court to go beyond the literal words used in the Letter of Patent issued to them
to consider that the words Methyl 5 Propylthio-2-Benzimidazole Carbanate and Albendazole are the same. Respondent
avers that the Letter of Patents issued to petitioner does not cover Albendazole in that the word does not appear on it.
Even if the patent were to include Albendazole it is unpatentable. They secured approval from the Bureau of Foods and
Drugs to manufacture and market Impregon with the Albendazole as its active ingredients. The petitioner has no proof
that they passed their veterinary products as that of the petitioner.

Issue:

Whether or not respondent is guilty of patent infringement?

Ruling:

The Supreme Court held that it did not. When the language of the claim is clear and distinct, the patentee is bound
thereby and may not claim anything beyond them. The language of the Letter of Patents issued to the petitioner failed
to yield anything that it includes Albendazole. The doctrine of equivalents does not apply in the case at bar because it
requires that for infringement to take place, the device should appropriate a prior invention by incorporating its
innovative concept and although there are some modifications and change they perform substantially the same results.
The petitioner’s evidence failed to adduce that substantial sameness on both the chemicals they used. While both
compounds produce the same effects of neutralizing parasites in animals, the identity of result does not amount to
infringement. The petitioner has the burden to show that it satisfies the function-means-and-result-test required by
the doctrine of equivalents. Nothing has been substantiated on how Albendazole can weed the parasites out from
animals which is similar to the manner used by the petitioner in using their own patented chemical compound.
 Page 9 of 18

#4 Smith Kline & French Lab Ltd. vs. CA and Danlex Research Lab., Inc. 368 SCRA 9 (2001)

In August 1989, Danlex Research Laboratories petitioned before Bureau of Patents, Trademarks and Technology Transfer
(BPTTT) that it may be granted a compulsory license for the use and manufacture of the pharmaceutical
product Cimetidine. Cimetidine is useful as an antihistamine and in the treatment of ulcers. Cimetidine is originally
patented to Smith Kline and French Laboratories in 1978, and the said patent is still in force at the time of application by
Danlex Research.
The BPTTT granted the application of Danlex Research together with a provision that Danlex Research should
be paying 2.5% of the net wholesale price as royalty payment to Smith Kline. This was affirmed by the Court of Appeals.
Smith Kline assailed the grant as it argued, among others, that the same is an invalid exercise of police power because
there is no overwhelming public necessity for such grant considering that Smith Kline is able to provide an adequate
supply of it to satisfy the needs of the Philippine market; that a provision in the Philippine Patent Laws is violative of
the Paris Convention to which the Philippines is a signatory.
To explain the second contention, Smith Kline states that the Paris Convention only allows compulsory licensing if the
original licensee (patent holder) has failed to work on the patent; that therefore, the provision in the Philippine Patent
Laws which adds other grounds for the granting of compulsory license i.e. monopoly, is invalid and contrary to the Paris
Convention.

ISSUE: Whether or not Smith Kline is correct.

HELD: No. The granting is a valid exercise of police power. Cimetidine is medicinal in nature, and therefore necessary
for the promotion of public health and safety.
On the second contention, Section A(2) of Article 5 [of the Paris Convention] unequivocally and explicitly respects the
right of member countries to adopt legislative measures to provide for the grant of compulsory licenses to prevent abuses
which might result from the exercise of the exclusive rights conferred by the patent. An example provided of possible
abuses is “failure to work;” however, as such, is merely supplied by way of an example, it is plain that the treaty does not
preclude the inclusion of other forms of categories of abuses. The legislative intent in the grant of a compulsory license
was not only to afford others an opportunity to provide the public with the quantity of the patented product, but also to
prevent the growth of monopolies. Certainly, the growth of monopolies was among the abuses which Section A, Article 5
of the Convention foresaw, and which our Congress likewise wished to prevent in enacting.
 Page 10 of 18

#4 Smith Kline & French Lab Ltd. vs. CA and Danlex Research Lab., Inc. 368 SCRA 9 (2001)

Facts Petitioner is the assignee of a Letter Patent covering the pharmaceutical product Cimetidine, which relates to
derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl thiourea, ureas or guanadines. Said Patent was
issued on

Private respondent filed with the BPTTT a petition for compulsory license to manufacture and produce its own brand of
medicines using Cimetidine. Private respondent invoked Section 34 (1) (e) of Republic Act No. 165, (the Patent Law),
which states that an application for the grant of a compulsory license under a particular patent may be filed with the
BPTTT at any time after the lapse of two (2) years from the date of grant of such patent, if the patented invention or
article relates to food or medicine, or manufactured substances which can be used as food or medicine, or is necessary
for public health or public safety. The petition for compulsory license stated that Cimetidine is useful as an
antihistamine and in the treatment of ulcers, and that private respondent is capable of using the patented product in
the manufacture of a useful product.

Petitioner opposed the petition for compulsory license, arguing that the private respondent had no cause of action and
failed to allege how it intended to work the patented product. Petitioner further stated that its manufacture, use and
sales of Cimetidine satisfied the needs of the Philippine market, hence, there was no need to grant a compulsory license
to private respondent to manufacture, use and sell the same. Finally, petitioner also claimed that the grant of a
compulsory license to private respondent would not promote public safety and that the latter was only motivated by
pecuniary gain.

The Bureau of Patents, Trademarks and Technology Transfer (BPTTT) granted the application of the respondent for
compulsory licensing and the CA affirmed the decision of the BPTTT. Now, petitioner wanted to set aside the said
decisions thus the fling of the case to the SC.

Issue Whether or not the abovementioned patent can be the subject of compulsory licensing.

Held It was held by the SC under section 34 of the patent law;

(e) If the patented invention or article relates to food or medicine or manufactured substances
which can be used as food or medicine, or is necessary for public health or public safety.

(2) In any of the above cases, a compulsory license shall be granted to the petitioner provided that
he has proved his capability to work the patented product or to make use of the patented product
in the manufacture of a useful product, or to employ the patented process.

(3) The term "worked" or "working" as used in this section means the manufacture and sale of the
patented article, of patented machine, or the application of the patented process for production, in or by
means of a definite and substantial establishment or organization in the Philippines and on a scale which
is reasonable and adequate under the circumstances. Importation shall not constitute "working".

The grant of the compulsory license satisfies the requirements of the foregoing provision. More than ten years
have passed since the patent for Cimetidine was issued to petitioner and its predecessors-in-interest, and the
compulsory license applied for by private respondent is for the use, manufacture and sale of a medicinal
product. Furthermore, both the appellate court and the BPTTT found that private respondent had the capability
to work Cimetidine or to make use thereof in the manufacture of a useful product.

The petition was denied.

 Page 11 of 18

#5

#6 Price, et al vs. United Laboratories 166 SCRA 133 (1988)

The petitioners are the owners-assignees of Philippine Patent No. 13540 which was granted to them on June
26,1980 for a pharmaceutical compound known as "aminoalkyl furan derivatives." On October 1, 1982, respondent
United Laboratories, Inc. (or UNILAB) filed in the Philippine Patent Office a petition Inter Partes Case No. 1683,
"United Laboratories, Inc. versus Barry John Price, John Watson CLITHERON and John Bradshaw, assignors to
Allen &Hanburys Ltd.') for the issuance of a compulsory license to use the patented compound in its own brands of
medicines and pharmaceuticals and to sell, distribute, or otherwise dispose of such medicines or pharmaceutical
preparations in the country. The petition further alleged that the patent relates to medicine and that petitioner, which
has had long experience in the business of manufacturing and selling pharmaceutical products, possesses the
capability to use the subject compound in the manufacture of a useful product or of making dosage formulations
containing the said compound.

After the hearing, the Philippine Patent Office rendered a decision on June 2, 1986, granting UNILAB a compulsory
license subject to ten (1 0) terms and conditions No. 3 of which provides as follows:

3. By virtue of this license, petitioner shall pay the respondent a royalty on all license products
containing the patented substance made and sold by the Petitioner in the amount equivalent to TWO
AND ONE HALF (2.5) PER CENT OF THE NET SALES in Philippine currency. The terms 'net sales'
means the gross billed for the product pertaining to Letters Patent No. 13540 less-

a) Transportation charges or allowances, if any, included in such amount;

b) Trade, quantity or cash discounts and broker's or agent's or distributor's

commissions, if any, allowed or paid;

c) Credits or allowances, if any, given or made on account with reflection or return of

the product previously delivered; and

d) Any tax, excise or government charge included in such amount, or measured by

the production, sale, transportation, use or delivery of the products.

In case Petitioner's product containing the patented substance shall contain one or more active
ingredients as admixed product, the royalty to be paid shall be determined in accordance with the
following formula:

Net Sales on Value of

Admixed Product Patented Substance

Royalty = _______________ x 0.025 x ___________________

(Value of Pa Value of
tended Substance) Active Ingredients

4. The royalties shall be computed after the end of each calendar quarter for all goods containing the
patented substance herein involved, made and sold during the preceding quarter and to be paid by
the Petitioner at its place of business on or before the thirtieth day of the month following the end of
each calendar quarter. Payments should be made to Respondent's authorized representative in the
Philippines; (pp. 35-36, Rollo.)

The patentees appealed the decision to the Court of Appeals (CA-G.R. No. SP-09308) which dismissed the appeal
on December 4, 1 987. They have come to his Court praying for a review of the Appellate Court's decision on the
grounds that it erred:
 Page 12 of 18

1. in upholding the Director's unilateral determination of the terms and conditions of the compulsory
license, without affording the parties an opportunity to negotiate the terms and conditions freely and
by themselves;

2. in finding that the respondent possess the legally required capability to make use of the
petitioner's patented compound in the manufacture of a useful product;

3. in affirming the Director's award of the entire patent to the respondent, when only one claim of the
patent was controverted and

4. in considering evidence that UNILABs capability to use the compound was acquired after, not
before, filing its petition for compulsory licensing.

The first assignment of error has no merit. The terms and conditions of the compulsory license were fixed by the
Director of Patents after a hearing and careful consideration of the evidence of the parties and in default of an
agreement between them as to the terms of the license. This he is authorized to do under Section 36 of Republic
Act No. 165 which provides:

Sec. 36.GRANT OF LICENSE.—If the Director finds that a case for the grant of license under
Section 34, hereof made out, he may order the grant of an appropriate license and in default of
agreement among the parties as to the terms and conditions of the license he shall fix the terms and
conditions of the license in the order.

The order of the Director granting a license under this Chapter, when final, shall operate as a deed
granting a- license executed by the patentee and the other patties in interest.

and under Section 35 of P.D. 1263, amending portions of Republic Act No.165 which reads:

Sec. 35.GRANT OF LICENSE.—(1)If the Director finds that a case for the grant of a license under
Sec. 34 hereof has been made out, he shall within one hundred eighty (180) days from the date the
petition was filed, order the grant of an appropriate license. The order shall state the terms and
conditions of the license which he himself must fix in default of an agreement on the matter
manifested or submitted by the parties during the hearing.

The Court of Appeals found that the 2.5% royalty fixed by the Director of Patents 'is just and reasonable.' We quote
its observations hereunder:

Respondent-appellant contends further that the 2.5% royalty rate is unfair to respondent-appellant
as to amount to an undue deprivation of its property right. We do not hold this view. The royalty rate
of 2.5% provided for by the Director of Patents is reasonable. Paragraph 3, Section 35-B, Republic
Act No. 165, as amended by Presidential Decree No. 1263, provides:

(3) A compulsory license shall only be granted subject to the payment of adequate
royalties commensurate with the extent to which the invention is worked. However,
royalty payments shall not exceed five per cent (5%) of the net wholesale price (as
defined in Section 33-A) of the products manufactured under the license. If the
product, substance, or process subject of the compulsory license is involved in an
industrial project approved by the Board of Investments, the royalty payable to the
patentee or patentees shall not exceed three per cent (3%) of the net wholesale price
(as defined in Section 34-A) of the patented commodity and/or commodity
manufactured under the patented process; the same rule of royalty shall be paid
whenever two or more patents are involved, which royalty shall be distributed to the
patentees in rates proportional to the extent of commercial use by the licensee giving
preferential values to the holder of the oldest subsisting product patent.

Thus, said provision grants to the Director of Patents the use of his sound discretion in fixing the
percentage for the royalty rate and We find that the Director of Patents committed no abuse of this
 Page 13 of 18

discretion. Also, there is always a presumption of regularity in the performance of one's official
duties.

Moreover, what UNILAB has with the compulsory license is the bare right to use the patented
chemical compound in the manufacture of a special product, without any technical assistance from
herein respondent-appellant. Besides, the special product to be manufactured by UNILAB will only
be used, distributed, and disposed locally. Therefore, the royalty rate of 2.5% is just and reasonable.
(pp. 10-11, CA Decision, pp. 44-45, Rollo)

Furthermore, as pointed out in the respondent's comment on the petition, Identical terms and conditions had been
prescribed for the grant of compulsory license in a good number of patent cases (United Laboratories, Inc. vs.
BoehringerIngelhelm, GMBH, IPC 929, July 27, 1981; United Laboratories, Inc. vs. Bristol-Myers Company, IPC
1179, Aug. 20, 1981; United Laboratories, Inc. vs. E.R. Squibb & Sons, Inc., IPC 1349, Sept. 30, 1981; United
Laboratories, Inc. vs. Helmut Weber, et al., IPC 949, Dec. 13,1982; Oceanic Pharmacal Inc. vs. GruppoLepetit S.A.
IPC 1549, Dec. 21, 1982; United Laboratories. Inc. vs. BoehringerIngelheim, IPC 1185, June 8, 1983; United
Laboratories, Inc. vs. Pfizer Corp., IPC 1184, June 10,, 1983; Doctors Pharmaceuticals, Inc. vs. Maggi, et al., July
11, 1983; Drugmaker's Laboratories v. Herningen et al., IPC 1679, September 22,1983; Superior Pharmacraft Inc.
vs. Maggi, et al., IPC 1759, January 10, 1984; United Laboratories, Inc. vs. Van Gelder et al., IPC 1627, June 29,
1984; Drugmaker's Laboratories, Inc. vs. Janssen Pharmaceutical N.V. IPC 1555, August 27,1984; United
Laboratories Inc. vs. Graham John Durant et al., IPC 1731, August 14, 1987; United Laboratories, Inc. vs. Albert
Anthony Carr, IPC 1906, August 31, 1987).

The Director's finding that UNILAB has the capability to use the patented compound in the manufacture of an anti-
ulcer pharmaceutical preparation is a factual finding which is supported by substantial evidence, hence, the Court of
Appeals did not commit a reversible error in affirming it (Philippine Nut Industry, Inc. vs. Standard Brands, Inc., 65
SCRA 575; SyChing vs. Gaw Liu 44 SCRA 143; De Gala Sison vs. Manalo, 8 SCRA 595; Goduco vs. Court of
Appeals, 14 SCRA 282; Ramos vs. Pepsi-Cola Bottling Company of the P.I., 19 SCRA 289. Of indubitable
relevance to this point is the evidence that UNILAB has been engaged in the business of manufacturing drugs and
pharmaceutical products for the past thirty (30) years, that it is the leading drug manufacturer in the country, that it
has the necessary equipment and technological expertise for the development of solid dosage forms or for tablet,
capsule, and liquid preparations, and that it maintains standards and procedures to ensure the quality of its
products. Even if it were true, as alleged by the patentee (although it is denied by UNILAB), that its capability to use
the patented compound was only acquired after the petition for compulsory licensing had been filed, the important
thing is that such capability was proven to exist during the hearing of the petition.

The patented invention in this case relates to medicine and is necessary for public health as it can be used as
component in the manufacture of anti-ulcer medicine. The Director of Patents did not err in granting a compulsory
license over the entire patented invention for there is no law requiring that the license be limited to a specific
embodiment of the invention, or, to a particular claim. The invention in this case relates to new aminoalkyl
derivatives which have histamine H 2 blocking activity, having the general formula (I) and physiologically acceptable
salts, Noxides and dehydrates thereof. The compound ranitidine hydrochloride named in Claim 45 is also covered
by General Claim I and several other sub-generic claims. Therefore, a license for Claim 45 alone would not be fully
comprehensive. In any event, since the petitioner will be paid royalties on the sales of any products the licensee
may manufacture using any or all of the patented compounds, the petitioner cannot complain of a deprivation of
property rights without just compensation.

WHEREFORE, the petition for review is denied for lack of merit.

SO ORDERED.
 Page 14 of 18

#7 Ching vs. Salinas et al, 462 SCRA 241 (2005)

Jessie G. Ching is the owner and general manager of JeshicrisManufacturing Co., the maker and manufacturer of a Utility
Model,described as “Leaf Spring Eye Bushing for Automobile” made up of plastic.On September 4, 2001, Ching and
Joseph Yu were issued bythe National Library Certificates of Copyright Registration and Deposit of the said work
described therein as “Leaf Spring Eye Bushing forAutomobile.” On September 20, 2001, Ching requested the National
Bureauof Investigation (NBI) for police/investigative assistance for theapprehension and prosecution of illegal
manufacturers, producers and/ordistributors of the works.After due investigation, the NBI filed applications for
searchwarrants in the RTC of Manila against William Salinas, Sr. and the officersand members of the Board of Directors of
Wilaware Product Corporation.It was alleged that the respondents therein reproduced and distributedthe said models
penalized under Sections 177.1 and 177.3 of RepublicAct (R.A.) No. 8293.

Issues

Whether or not the subject matter is covered by the Copyrightof the Intellectual Property Code?

Held

It is worthy to state that the works protected under the Law onCopyright are: literary or artistic works (Sec. 172) and
derivative works(Sec. 173). The Leaf Spring Eye Bushing and Vehicle Bearing Cushionfall on neither classification.Being
plain automotive spare parts that must conform to theoriginal structural design of the components they seek to replace,
theLeaf Spring Eye Bushing and Vehicle Bearing Cushion are notornamental. They lack the decorative quality or value that
mustcharacterize authentic works of applied art. They are not even artisticcreations with incidental utilitarian functions or
works incorporated in auseful article. In actuality, the personal properties described in thesearch warrants are mechanical
works, the principal function of which isutility sans any aesthetic embellishment.Neither are we to regard the Leaf Spring
Eye Bushing andVehicle Bearing Cushion as included in the catch-all phrase “otherliterary, scholarly, scientific and artistic
works” in Section 172.1(a) of R.A. No. 8293. Applying the principle of ejusdem generis which statesthat “where a statute
describes things of a particular class or kindaccompanied by words of a generic character, the generic word willusually be
limited to things of a similar nature with those particularlyenumerated, unless there be something in the context of the
state whichwould repel such inference,”[46] the Leaf Spring Eye Bushing and VehicleBearing Cushion are not
copyrightable, being not of the same kind andnature as the works enumerated in Section 172 of R.A. No. 8293.

(b) Derivative WorksSec. 173

Section 173. Derivative Works. - 173.1. The following derivative worksshall also be protected by copyright:(a)
Dramatizations, translations, adaptations, abridgments,arrangements, and other alterations of literary or artistic works;
and(b) Collections of literary, scholarly or artistic works, and compilations of data and other materials which are original
by reason of the selection orcoordination or arrangement of their contents. (Sec. 2, [P] and [Q], P.D.No. 49)173.2. The
works referred to in paragraphs (a) and (b) of Subsection173.1 shall be protected as new works: Provided however, That
such newwork shall not affect the force of any subsisting copyright upon theoriginal works employed or any part thereof,
or be construed to implyany right to such use of the original works, or to secure or extendcopyright in such original
works. (Sec. 8, P.D. 49; Art. 10, TRIPS)

Derivative works are original work.There must be compliance of the requirements:1. must borrow the original and
expressive content2. the work must alter not merely copy. / must have substantial variationArticle 5 of civil code.No right
can spring from an unlawful act.
 Page 15 of 18

#8 Pearl and Dean (Phils.) Inc. vsShoemart, Inc., et al, 409 SCRA 231 (2003)

Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as light
boxes. These units utilize specially printed posters sandwiched between plastic sheets and illuminated with
backlights. It was able to secure registration over these illuminated display units. The advertising light boxes
were marketed under the trademark “Poster Ads”.
In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the light boxes in
SM North Edsa. However, since SM North Edsa was under construction, SMI offered as alternative SM Makati
and Cubao. During the signing of the Contract, SMI only returned the Contract with SM Makati. Manager of
petitioner reminded SMI that their agreement includes SM Cubao. However, SMI did not bother to reply.
Instead, respondent informed petitioner that they are rescinding the contract for SM Makati due to non-
performance.
Two years later, SMI engaged the services of EYD Rainbow Advertising to make the light boxes. These were
delivered in a staggered basis and installed at SM Megamall and SM City. In 1989, petitioner received reports
that exact copy of its light boxes was installed by SMI. It further discovered that North Edsa Marketing Inc.
(NEMI), sister company of SMI, was set up primarily to sell advertising space in lighted display units located
in SMI’s different branches. Petitioner sent letters to respondents asking them to cease using the light boxes
and the discontinued use of the trademark “Poster
Ads”. Claiming that SMI and NEMI failed to meet its demand, petitioner filed a case for infringement of
trademark and copy right, unfair competition and damages. SMI maintained that it independently developed
its poster panels using commonly known techniques and available technology without notice of or reference to
P&D’s copyright. In addition, it said that registration of “Poster Ads” obtained by petitioner was only for
stationeries such as letterheads, envelopes and the like. “Poster Ads” is a generic term which cannot be
appropriated as trademark, and, as such, registration of such mark is invalid. It also stressed that P&D is not
entitled to the reliefs sought because the advertising display units contained no copyright notice as provided
for by law.
RTC found SMI and NEMI jointly and severally liable for infringement of copyright and trademark. CA
reversed saying that it agreed with SMI that what was copyrighted was the technical drawings only and not
the light boxes. Light boxes cannot be considered as either prints, pictorial illustrations, advertising copies,
labels, tags or box wraps, to be properly classified as copyrightable class “O” work. In addition, CA stressed
that the protective mantle of the Trademark Law extends only to the goods used by the first user as specified
in its certificate of registration. The registration of the trademark “Poster Ads” covers only stationeries such as
letterheads, envelopes and calling cards and newsletter.
ISSUES: (1) If the engineering or technical drawings of an advertising display unit are granted copyright
protection is the light box depicted in such drawings ipso facto also protected by such copyright? (2) Should
the light box be registered separately? (3) Can the owner of the registered trademark legally prevent others
from using such mark if it is mere abbreviation of a term descriptive of his goods, services or business?
1.No. Copyright is purely statutory. As such, the rights are limited to what the statute confers. It may be
Held:

obtained and enjoyed only with respect to the subjects and by the persons, and on the terms and conditions
specified in the statute. Accordingly, it can cover only the works falling within the statutory enumeration or
description. Petitioner secured copyright under classification class “O” work. Thus, copyright protection
extended only to the technical drawings and not to the light box itself because the latter was not at all in the
category of “prints, pictorial illustrations, advertising copies, labels, tags and box wraps.
What the law does not include, it excludes, and for the good reason: the light box was not a literary or artistic
piece which could be copyrighted under the copyright law. And no less clearly, neither could the lack of
 Page 16 of 18

statutory authority to make the light box copyrightable be remedied by the simplistic act of entitling the
copyright certificate issued by the National Library as “Advertising Display Units”.
It must be noted that copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their creation.
2.Yes. Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which could
have protected its invention, if in fact it really was. And because it had no patent, petitioner could not legally
prevent anyone from manufacturing or commercially using the contraption. To be able to effectively and
legally preclude others from copying and profiting from the invention, a patent is a primordial requirement.
No patent, no protection. The ultimate goal of a patent system is to bring new designs and technologies into
the public through disclosure. Ideas, once, disclosed to the public without protection of a valid patent, are
subject to appropriation without significant restraint.
The Patent Law has a three-fold purpose: first, patent law seeks to foster and reward invention; second, it
promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the
invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that
ideas in the public domain remain there for the free use of the public. It is only after an exhaustive examination
by the patent office that patent is issued. Therefore, not having gone through the arduous examination for
patents, petitioner cannot exclude other s from the manufacture, sale or commercial use of the light boxes on
the sole basis of its copyright certificate over the technical drawings.
3.Court agrees with CA that the certificate of registration issued by the Director of Patents can confer the
exclusive right to use its own symbol only to those goods specified in the certificate, subject to any conditions
and limitations specified in the certificate. One who has adopted and used a trademark on his goods does not
prevent the adoption and use of the same trademark by others for products which are of a different
description.
Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure of petitioner to secure
a trademark registration for specific use on the light boxes meant that there could not have been any
trademark infringement since registration was an essential element thereof.
There is no evidence that petitioner’s use of “poster Ads” was distinctive or well-known. As noted by CA,
petitioner’s expert witness himself had testified that “Poster Ads” was not too generic a name. SO it was
difficult to identify it with any company. This fact also prevented the application of the doctrine of secondary
meaning. “Poster Ads” was generic and incapable of being used as a trademark because it was used in the
field of poster advertising the very business engaged in by petitioner. Secondary meaning means that a word
or phrase originally incapable of exclusive appropriation with reference to an article in the market might
nevertheless have been used for so long and so exclusively by one producer with reference to his article that ,
in the trade and to that branch of the purchasing public, the word or phrase has come to mean that the article
was his property. PETITION WAS DENIED.
 Page 17 of 18

#8 Pearl and Dean (Phils.) Inc. vsShoemart, Inc., et al, 409 SCRA 231 (2003)

Facts: Pearl & Dean is a corporation engaged in the manufacture of advertising display units (Poster
Ads)referred as light boxes. It acquired a Certificate of Copyright Registration over the illuminated display
units,and acquired trademark for “Poster Ads”. Pearl & Dean negotiated with Shoemart for the lease
andinstallation of the light boxes in Shoemart Malls. After Pearl & Bean’s contract was rescinded, exact
copiesof its light b oxes were installed in various SM malls (fabricated by Metro Industrial Services, and later
EYD

Rainbow Advertising Corp.) Pearl & Dean sent a letter to Shoemart and it sister company. North
EDSAMarketing, to cease using the light boxes and to remove them from the malls, and demanded the
discontinueduse of the trade mark “Poster Ads.” Unsatisfied with the compliance of its demands, Pearl & Dean
sued. Thetrial court ruled in favor of Pearl & Dean, while the appellate court reversed the decision of the trial
court.

Issue: Whether pearl & Dean’s copyright registration for its light boxes and the trademark registration
of“Poster Ads” preclude Shoemart and North Edsa Marketing from using the same.

Held: No. Pearl & Dean secured its copyright under the classification class “o” work. This being so,
itsprotection extended only to the technical drawings and not to the light box itself. Pearl & Dean
cannotexclude others from the manufacture, sale and/or commercial use over the light boxes on the sole basis
of itscopyright, certificate over the technical drawings. It cannot be the intention of the law that the right
ofexclusivity would be granted for a longer time (so years in copyright, and 17 years in patent) through
thesimplified procedure of copyright registration with the National Library, without the rigor of defending
thepatentability of its “invention” before the IPO and the public.On the other hand, there has been no
evidence that Pearl & Dean’s use of “Poster Ads” was distinctive orwell known. “Poster Ads” was too generic a
name to identify it to a specific company or entity. “Poster Ads”was generic and incapable of being used as a
trademark because it was used in the field of poster advertising,the very business engaged by earl & Dean.
Furthermore, Pearl & Dean’s exclusive right to the use of “PosterAds” is limited to what is written in its
certificate of registration. Shoemart, et. al. cannot be held liable forthe infringement of the trademark.
 Page 18 of 18

#8 Pearl and Dean (Phils.) Inc. vsShoemart, Inc., et al, 409 SCRA 231 (2003)

FACTS:
Pearl and Dean is a corporation in the manufacture of advertising display units also known as light boxes, which were
manufactured by Metro Industrial Services. A copyright Registration was obtained in 1981. These were marketed in the
name of "Poster Ads". They also applied for a registration of trademark with the Bureau of Patents in 1983, but was only
approved in 19988. In 1985, petitioner had n agreement with respondent ShoemartInc (SMI) to install these light boxes in
their Makati and Cubao branch, Only the Makati branch was able to sigh the agreement. In 1986, the contract was
rescinded unilaterally by SMI, and instead contracted with Metro Industrial Services. They installed these lightboxes in
different SM city branches, including Cubao and Makati, with association with North Edsa Marketing Inc (NEMI), SMI's
sister company. Petitioner requested SMI and NEMI to put down their installations of the light boxes, and payment of
compensatory damages worth P20M. Claiming that respondents failed to comply, they filed a case for infringement of
trademark and copyright, unfair competition and damages. RTC ruled in favor of petitioner, but CA reversed.

ISSUES:
(1) Whether there was a copyright infringement
(2) Whether there was a patent infringement
(3) Whether there was a trademark infringement
(4) Whether there was unfair competition

RULING: No to all.
(1) Copyright is a statutory right, subject to the terms and conditions specified in the statute. Therefore, it can only cover
the works falling within the statutory enumeration or description. Since the copyright was classified under class "O" works,
which includes "prints, pictorial illustrations, advertising copies, labels, tags and box wraps," and does not include the light
box itself. A lightbox, even admitted by the president of petitioner company, was neither a literary nor an artistic work but
an engineering or marketing invention, thus not included under a copyright.

(2) Petitioner was not able to secure a patent for its lightboxes, and cannot legally prevent anyone from manufacturing or
commercially using the same. Patent has a three-fold purpose: a) to foster and reward invention; b) promotes disclosures
of invention and permit public to use the same upon expiration; c) stringent requirements for patent protection to ensure in
the public domain remain there for free use of the public. Since petitioner was not able to go through such examination, it
cannot exclude others from manufacturing, or selling such lightboxes. No patent, no protection.

(3) The certificate of registration issued by the Director of Patents gives exclusive right to use its own symbol only to the
description specified in the certificate. It cannot prevent others to use the same trademark with a different description.

(4) "Poster Ads" is a general term that cannot be associated specifically to Pearl and Dean, thus it cannot be considered
to use such term to be unfair competition against the petitioner