G.R. No.

172835

December 13, 2007

AIR PHILIPPINES CORPORATION, Petitioner,

vs.
PENNSWELL, INC. Respondent.
Facts:

Petitioner Air Philippines Corporation is a domestic corporation engaged in

the business of air transportation services.
On the other hand, respondent Pennswell, Inc. was organized to engage in
the business of manufacturing and selling industrial chemicals,
solvents, and special lubricants.
Respondent sold to petitioner its products.
For failure of the petitioner to comply with its obligation under said contracts,
respondent filed a Complaint for a Sum of Money.
Petitioner contended that its refusal to pay was not without valid and
justifiable reasons.
o In particular, petitioner alleged that the subject items/products were
misrepresented by respondent as belonging to a new line, but were in
truth and in fact, identical with products petitioner had previously
purchased from respondent.
o Merely altered the names and labels of such goods.
During the pendency of the trial, petitioner filed a Motion to
Compel respondent to give a detailed list of the ingredients and chemical
components of the subject products.
Respondent opposed the said motion.
o It cannot be compelled to disclose the chemical components sought
because the matter is confidential.
o The said list of ingredients and chemical components is a trade
secret which respondent cannot be forced to divulge.
o its products are specialized lubricants, and if their components were
revealed, its business competitors may easily imitate and market the
same types of products, in violation of its proprietary rights and to its
serious damage and prejudice.
RTC denied the motion.
CA affirmed the order of the RTC
Hence, this petition for review.
Issue: Whether petitioner can compel respondent to divulge the list of ingredients
and chemical components of their products.
Held: NO. It is considered as a trade secret.
Page 1 of 24

A trade secret is defined as a plan or process, tool, mechanism or compound

known only to its owner and those of his employees to whom it is necessary
to confide it.
The definition also extends to a secret formula or process not patented, but
known only to certain individuals using it in compounding some article of
trade having a commercial value.
A trade secret may consist of any formula, pattern, device, or compilation of
information that:
o (1) is used in one's business; and
o (2) gives the employer an opportunity to obtain an advantage over
competitors who do not possess the information.
Generally, a trade secret is a process or device intended for continuous use in
the operation of the business, for example, a machine or formula, but can be
a price list or catalogue or specialized customer list.
It is indubitable that trade secrets constitute proprietary rights.
The inventor, discoverer, or possessor of a trade secret or similar innovation
has rights therein which may be treated as property, and ordinarily an
injunction will be granted to prevent the disclosure of the trade secret by one
who obtained the information "in confidence" or through a "confidential
relationship."
American jurisprudence has utilized the following factors 21 to determine if an
information is a trade secret, to wit:
(1) the extent to which the information is known outside of the employer's
business;
(2) the extent to which the information is known by employees and others
involved in the business;
(3) the extent of measures taken by the employer to guard the secrecy of the
information;
(4) the value of the information to the employer and to competitors;
(5) the amount of effort or money expended by the company in developing the
information; and
(6) the extent to which the information could be easily or readily obtained
through an independent source.

In the case at bar, the chemical composition, formulation, and

ingredients of respondents special lubricants are trade secrets
within the contemplation of the law.
Respondent was established to engage in the business of general
manufacturing and selling of, and to deal in, distribute, sell or otherwise
dispose of goods, wares, merchandise, products, including but not limited to
Page 2 of 24

industrial chemicals, solvents, lubricants, acids, alkalies, salts, paints, oils,

varnishes, colors, pigments and similar preparations, among others.
It is unmistakable to our minds that the manufacture and production
of respondents products proceed from a formulation of a secret list
of ingredients.
In the creation of its lubricants, respondent expended efforts, skills,
research, and resources.
What it had achieved by virtue of its investments may not be wrested from
respondent on the mere pretext that it is necessary for petitioners defense
against a collection for a sum of money.
By and large, the value of the information to respondent is crystal clear.
The ingredients constitute the very fabric of respondents
production and business. (NOTE)
No doubt, the information is also valuable to respondents competitors.
To compel its disclosure is to cripple respondents business, and to place it at
an undue disadvantage.
If the chemical composition of respondents lubricants are opened to public
scrutiny, it will stand to lose the backbone on which its business is founded.
This would result in nothing less than the probable demise of respondents
business.
Respondents proprietary interest over the ingredients which it had developed
and expended money and effort on is incontrovertible.
Our conclusion is that the detailed ingredients sought to be revealed have a
commercial value to respondent.
Not only do we acknowledge the fact that the information grants it a
competitive advantage; we also find that there is clearly a glaring intent on
the part of respondent to keep the information confidential and not available
to the prying public.

Modes of Discovery under the ROC is not without limitations.

Rule 27 sets an unequivocal proviso that the documents, papers, books,

accounts, letters, photographs, objects or tangible things that may be
produced and inspected should not be privileged.
The documents must not be privileged against disclosure.
On the ground of public policy, the rules providing for production and
inspection of books and papers do not authorize the production or inspection
of privileged matter; that is, books and papers which, because of their
confidential and privileged character, could not be received in evidence.
Such a condition is in addition to the requisite that the items be specifically
described, and must constitute or contain evidence material to any matter
involved in the action and which are in the partys possession, custody or
control.

Page 3 of 24

The Rules on Evidence also provides exemption in divulging trade secrets.

Section 24 of Rule 130 draws the types of disqualification by reason of

privileged communication, to wit: (a) communication between husband and
wife; (b) communication between attorney and client; (c) communication
between physician and patient; (d) communication between priest and
penitent; and (e) public officers and public interest.
There are, however, other privileged matters that are not mentioned by Rule
130.
Among them are the following: (a) editors may not be compelled to disclose
the source of published news; (b) voters may not be compelled to disclose for
whom they voted; (c) trade secrets; (d) information contained in tax census
returns; and (d) bank deposits.

Other laws that affords protection to trade secrets:

The Interim Rules of Procedure on Government Rehabilitation

expressly provides that the court may issue an order to protect trade secrets
or other confidential research, development, or commercial information
belonging to the debtor.
Securities Regulation Code is explicit that the Securities and Exchange
Commission is not required or authorized to require the revelation of trade
secrets or processes in any application, report or document filed with the
Commission.
Revised Penal Code endows a cloak of protection to trade secrets under the
following articles:
Art. 291. Revealing secrets with abuse of office. The penalty
of arresto mayor and a fine not exceeding 500 pesos shall be
imposed upon any manager, employee or servant who, in such
capacity, shall learn the secrets of his principal or master and
shall reveal such secrets.
Art. 292. Revelation of industrial secrets. The penalty of
prision correccional in its minimum and medium periods and a
fine not exceeding 500 pesos shall be imposed upon the person
in charge, employee or workman of any manufacturing or
industrial establishment who, to the prejudice of the owner
thereof, shall reveal the secrets of the industry of
the latter.

National Internal Revenue Code of 1997, has a restrictive provision on

trade secrets, penalizing the revelation thereof by internal revenue officers or
employees under Section 278.
Page 4 of 24

Toxic Substances and Hazardous and Nuclear Wastes Control Act of

1990, enacted to implement the policy of the state to regulate, restrict or
prohibit the importation, manufacture, processing, sale, distribution, use and
disposal of chemical substances and mixtures that present unreasonable risk
and/or injury to health or the environment, also contains a provision that
limits the right of the public to have access to records, reports or
information concerning chemical substances and mixtures including
safety data submitted and data on emission or discharge into the
environment, if the matter is confidential such that it would divulge
trade secrets, production or sales figures; or methods, production or
processes unique to such manufacturer, processor or distributor; or
would otherwise tend to affect adversely the competitive position of
such manufacturer, processor or distributor.
Jurispridence on Labor Law- Bona fide occupational qualifications.

Elidad C. Kho vs. Court of Appeals, Summerville General Merchandising

Company and Ang Tiam Chay (G.R. No. 115758, March 19, 2002, 379 SCRA
410)
FACTS:
Petitioners allegations are that they are doing business under the name and style
of KEC Cosmetics Laboratory, registered owner of Chin Chun Su and oval facial
cream container/case, and alleges that she also has patent rights on Chin Chun Su
and Device and Chin Chun Su Medicated Cream after purchasing the same from
Quintin Cheng, the registered owner thereof in the supplemental register of the
Philippine Patent Office and that Summerville advertised and sold petitioners cream
products under the brand name Chin Chun Su, in similar containers that petitioner
uses, thereby misleading the public, and resulting in the decline in the petitioners
business sales and income; and, that the respondents should be enjoined from
allegedly infringing on the copyrights and patents of the petitioner.
The respondents, on the other hand, alleged as their defense that (1) Summerville
is the exclusive and authorized importer, re-packer and distributor of Chin Chun Su
products manufactured by Shun Yi factory of Taiwan, (2) that the said Taiwanese
manufacturing company authorized Summerville to register its trade name Chin
Chun Cu Medicated Cream with the Philippine Patent office and Other appropriate
governmental agencies; (3) that KEC Cosmetics Laboratory of the petitioner
obtained the copyrights through misrepresentation and falsification; and, (4) that
the authority of Quintin Cheng, assignee of the patent registration certificate, to

Page 5 of 24

distribute and market Chin Chun Su products in the Philippines had already
terminated by the said Taiwanese manufacturing company.
ISSUE:
Whether or not Kho has the sole right using the package of Chin Chun Su products.
RULING:
Petitioner has no right to support her claim for the exclusive use of the subject trade
name and its container. The name and container of a beauty cream product are
proper subjects of a trademark in as much as the same falls squarely within its
definition. In order to be entitled to exclusively use the same in the sale of
the beauty cream product, the user must sufficiently prove that she
registered or used it before anybody else did. The petitioners copyright
and patent registration of the name and container would not guarantee
her the right to exclusive use of the same for the reason that they are not
appropriate subjects of the said intellectual rights. Consequently, a
preliminary injunction order cannot be issued for the reason that the petitioner has
not proven that she has a clear right over the said name and container to the
exclusion of others, not having proven that she has registered a trademark thereto
or used the same before anyone did.
NOTE:
Trademark, copyright, and patents are different intellectual property rights that
cannot be interchanged with one another. A trademark is any visible sign capable
of distinguishing the goods (trademark) or services (service mark) of an enterprise
and shall include a stamped or marked container goods. In relation thereto,
a trade name means the name or designation identifying or distinguishing an
enterprise. Meanwhile, the scope of copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic domain
protected from the moment of their creation. Patentable inventions, on the other
hand, refer to any technical solution of a problem in any field of human activity
which is new, involves an inventive step and is industrial applicable.
Pearl and Dean Inc. v Shoemart Inc. GR No. 148222, August 15, 2003
Facts:
Plaintiff P and D is engaged in manufacturing advertising display units called as light
boxes. These are specialty printed posters with plastic sheets and illuminated back
lights that are mainly used as stationeries. They secure copyright registration over
these advertising light boxes and marketed using the trademark poster ads. They
applied for the registration of trademark before the Bureau of Patents, Trademark
and Technology Transfer which was approved on September 12, 1988. P and
D negotiated with the defendant Shoemart for the lease and installation of the light
boxes in SM City North Edsa but was given an alternative to have them leased to SM
Makati and SM Cubao while the said branch was under construction. Only the
contract with SM Makati was returned with signature. In 1986 the counsel of
Shoemart informed P and D that it is rescinding its contract for SM Makati due to
non-performance of the terms thereof. Two years later, the Metro Industrial Services,
Page 6 of 24

the same company contracted by the plaintiff to fabricate their display units offered
to construct light boxes for the Shoemart chain of stores wherein 10 light boxes
were created for them. Upon the termination of contract with Metro Industrial
Service, SM hired EYD Rainbow Advertising Co. to make light boxes. When P and
D knew about the exact copies of its light boxes installed at SM City branches in
1989, it investigated and found out that North Edsa Marketing Inc (NEMI), sister
company of SM was primarily selling ad space in lighted display units. P and D sent
letter to both NEMI and SM enjoining them to cease from using the subject light
boxes and remove them from SM establishments. It also demanded to discontinue
the use of its trademark poster ads with compensatory damages of 20M. SM
suspended the lease of light boxes in its branches while NEMI took down its
advertisement for posterads. Claiming both failed to meet its demand P and D filed
a case for infringement of trademark, copyright, unfair competition and damages.
SM denied the charges against it and noted that the registration of mark poster
ads is limited to stationeries like letterhead and envelope. It further stresses that it
independently develop its own poster panels using techniques and available
technology without notice to P and D copyright. It further contends that poster
ads is a generic name that cannot be appropriated for a trademark and that P and
Ds advertising display units contained no copyright notice in violation of Section 27
of P.D. 49. NEMI likewise repleaded the averments of SM and denied to have
manufactured, installed or advertised the display units. The RTC decided in favor of
P and D but on appeal the Court of Appeals reversed its decision. In its judgment its
stand is that the copyright of the plaintiff is limited to its technical drawings only
and not the light boxes itself. When a drawing is technical, the copyright over the
drawing does not extend to actual object. Thus the CA is constrained to adopt the
view of the respondents that the poster ads is a generic poster term ads and in
the absence of convincing proof that such wording acquired secondary meaning, the
P and Ds exclusive right to use poster ads is limited to what is written on its
certificate of registration which is stationaries.
ISSUES:
(1)
(2)
(3)
(4)

Whether
Whether
Whether
Whether

there
there
there
there

was
was
was
was

a copyright infringement
a patent infringement
a trademark infringement
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

Page 7 of 24

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.

G.R. No. 113388 September 5, 1997

ANGELITA MANZANO, petitioner,
vs.
COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to NEW
UNITED FOUNDRY MANUFACTURING CORPORATION, respondents.
Doctrine:

The primary purpose of the patent system is not the reward of the individual
but the advancement of the arts and sciences.

The function of a patent is to add to the sum of useful knowledge and one of
the purposes of the patent system is to encourage dissemination of
information concerning discoveries and inventions.

This is a matter which is properly within the competence of the Patent Office
the official action of which has the presumption of correctness and may not
be interfered with in the absence of new evidence carrying thorough
conviction that the Office has erred.
Page 8 of 24

Since the Patent Office is an expert body preeminently qualified to determine

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

Facts:

Petitioner Manzano filed with the Philippine Patent Office on 19 February 1982
an action for the cancellation of a Letters Patent for a gas burner registered in
the name of respondent Madolaria who subsequently assigned the letters
patent to UNITED FOUNDRY.

Petitioner alleged that:

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

(b) the specification of the letters patent did not comply with the
requirements of Sec. 14, RA No. 165, as amended;

(c) respondent was not the original, true and actual inventor nor did
she derive her rights from the original, true and actual inventor of the
utility model covered by the letters patent; and,

(d) the letters patent

misrepresentation.

(e) the utility model covered by the letters patent had been known or
used and produced and on sale by others in the Philippines for more
than 1 year before she filed her application for letters patent on 9
December 1979;

was

secured

by

means

of

fraud

or

Petitioner presented the following pieces of evidence:

o

Brochure distributed by Manila Gas Corporation and Esso Gasul

disclosing a pictorial representation of Ransome Burner made by
Ransome Torch and Burner Company, USA; and

Brochure distributed by Esso Gasul Philippines showing a picture of

another similar burner with top elevation view and another perspective
view of the same burner.

Page 9 of 24

Private respondent presented Rolando Madolaria, who testified, among

others, that he was the General Supervisor of the UNITED FOUNDRY in the
foundry, machine and buffing section.
o

Private respondent discovered the solution to all the defects of the

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

Various tests were conducted on the latest model in the

presence and under the supervision of Melecia Madolaria and
they obtained perfect results.

Rolando Madolaria testified that private respondent decided to file her

application for utility model patent in December 1979.

Director of Patents denied the petition for cancellation.

o

The evidence of petitioner was not able to establish

convincingly that the patented utility model of private
respondent was anticipated.

CA affirmed the ruling of the Director of Patents.

Issue: Whether there is sufficient basis to cancel the subject Letters of Patent.
Held: NO.

We cannot sustain petitioner. Section 7 of RA No. 165, as amended, which is

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

Further, Sec. 55 of the same law provides

Sec. 55. Design patents and patents for utility models. (a)
Any new, original and ornamental design for an article of
manufacture and (b) any new model of implements or tools or
of any industrial product or of part of the same, which does not
possess the quality of invention, but which is of practical utility
by reason of its form, configuration, construction or composition,
may be protected by the author thereof, the former by a
Page 10 of 24

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

model, in the same manner and subject to the same provisions
and requirements as relate to patents for inventions insofar as
they are applicable except as otherwise herein provided.
The element of novelty is an essential requisite of the patentability
of an invention or discovery.

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

It has been repeatedly held 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.

The issuance of such patent creates a presumption which yields only

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

The burden of proving want of novelty is on him who avers it and the burden
is a heavy one which is met only by clear and satisfactory proof which
overcomes every reasonable doubt.

Hence, a utility model 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.

As found by the Director of Patents, the standard of evidence sufficient to

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

Thus the Director of Patents explained his reasons for the denial of the
petition to cancel private respondent's patent
o

Not one of the various pictorial representations of burners

clearly and convincingly show that the device presented

Page 11 of 24

therein is identical or substantially identical in construction

with the aforesaid utility model.
o

It is relevant and material to state that in determining whether novelty

or newness is negatived by any prior art, only one item of the prior art
may be used at a time.

For anticipation to occur, the prior art must show that each element is
found either expressly or described or under principles of inherency in
a single prior art reference or that the claimed invention was probably
known in a single prior art device or practice.

The dates when they were distributed to the public were not
indicated and, therefore, they are useless prior art references.
(NOTE)

A careful examination of the alleged Ransome burner would show

that it does not bear the word "Ransome" which is the burner
referred to as the product being sold by the Petitioner.

There is no indication of the time or date it was manufactured.

There is no way of determining whether the Ransome burner

was really manufactured before the filing of the aforesaid
application.

It must likewise be pointed out that Ong Bun Tua testified on the
brochures allegedly of Manila Gas and of Esso Gasul and on the alleged
fact that Manila Gas Corporation was importing from the United States
"Ransome" burners.

But the same could not be given credence since he himself

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

He could not even present any importation papers

relating to the alleged imported ransome burners.
Neither did his wife.

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

Page 12 of 24

DOMICIANO A. AGUAS, petitioner,

vs.
CONRADO G. DE LEON and COURT OF APPEALS, respondents.
Facts:

On December 1, 1959 plaintiff-appellee filed a patent application with the

Philippine Patent Office, and on May 5, 1960, said office issued in his favor
Letters Patent No. 658 for a "new and useful improvement in the process of
making mosaic pre-cast tiles.

Defendant F.H. Aquino & Sons engraved the moulds embodying

plaintiff's patented improvement for the manufacture of pre-cast
tiles, plaintiff furnishing said defendant the actual model of the tiles in
escayola and explained to said engraver the plans, specifications and
the details of the engravings as he wanted them to be made,
including an explanation of the lip width, artistic slope of easement
and critical depth of the engraving that plaintiff wanted for his
moulds

The engraver Enrique Aquino knew that the moulds he was engraving for
plaintiff were the latter's very own, which possess the new features and
characteristics covered by plaintiff's parent.

Defendant Aguas personally, as a building contractor, purchased from

plaintiff, tiles shaped out of these moulds at the back of which was imprinted
plaintiff's patent number.

Subsequently, Aguas requested Aquino to make engravings of the

same type and bearing the characteristics of plaintiff's MOULDS
(NOTE)

Aquino & Sons eventually engraved for Aguas, the same moulds as that of De
Leon covered by the patent and for which it charged Aguas double the rate it
charged plaintiff De Leon, contain the very same characteristic features of
plaintiff's mould and that Aguas used these moulds in the manufacture
of his tiles which he actually put out for sale to the public.

The tiles produced by the respective moulds were substantially Identical to

each other in size, easement, lip width and critical depth of the deepest
depression and that the only significant difference between plaintiff's mould
and that engraved by Aquino for Aguas is that, whereas plaintiff's mould

Page 13 of 24

turns out tiles 4 x 4 inches in size, defendant Aguas' mould is made to fit a 41/4 x 4-1/4 inch tile.

On April 14, 1962, Conrado G. de Leon filed in the CFI a complaint for
infringement of patent against Domiciano A. Aguas and F. H. Aquino
and Sons.

Alleging that being the original first and sole inventor of certain new and
useful IMPROVEMENTS in the process of making mosaic pre-cast
tiles, he lawfully filed and prosecuted an application for Philippine patent,
and having complied in all respects with the statute and the rules of the
Philippine Patent Office, Patent No. 658 was lawfully granted and issued to
him.

Aguas infringed Letters of Patent No. 658 by making, using and selling tiles
embodying said patent invention.

Defendant F. H. Aquino & Sons is guilty of infringement by making

and furnishing to the defendant Domiciano A. Aguas the engravings,
castings and devices designed and intended of tiles embodying
plaintiffs patented invention.

Aguas filed an answer stating that:

o

Plaintiff is neither the original first nor sole inventor of the

improvements in the process of making mosaic pre-cast tiles, the same
having been used by several tile-making factories in the Philippines
and abroad years before the alleged invention by de Leon.

The patent was secured through gross misrepresentation.

Trial Court ruled in favour of De Leon patent and its infringement by

petitioner.

CA affirmed the ruling of the trial court.

Issue: Whether there was patent infringement committed by petitioner.

Held: YES.

The contention of the petitioner Aguas that the letters patent of de Leon was
actually a patent for the old and non-patentable process of making mosaic
pre-cast tiles is devoid of merit.
Page 14 of 24

De Leon never claimed to have invented the process of tile-making.

The Claims and Specifications of Patent No. 658 show that although some of
the steps or parts of the old process of tile making were described therein,
there were novel and inventive features mentioned in the process.

Some of the novel features of the private respondent's improvements are the
following:
o

critical depth, with corresponding easement and lip width to such

degree as leaves the tile as thin as 1/8 of an inch at its thinnest
portion,

Ideal composition of cement and fine river sand, among other

ingredients that makes possible the production of tough and
durable wall tiles, though thin and light;

the engraving of deep designs in such a way as to make the tiles

decorative, artistic and suitable for wall ornamentation, and

the fact that the tiles can be mass produced in commercial quantities
and can be conveniently stock-piled, handled and packed without any
intolerable incidence of breakages.

The records disclose that de Leon's process is an improvement of the

old process of tile making.

The tiles produced from de Leon's process are suitable for construction and
ornamentation, which previously had not been achieved by tiles made out of
the old process of tile making.

De Leon's invention has therefore brought about a new and useful kind of tile.

The old type of tiles were usually intended for floors although there
is nothing to prevent one from using them for walling purposes.

These tiles are neither artistic nor ornamental.

They are heavy and massive.

The respondent's improvement is indeed inventive and goes beyond the

exercise of mechanical skill.

Page 15 of 24

He has introduced a new kind of tile for a new purpose.

He has improved the old method of making tiles and pre-cast articles
which were not satisfactory because of an intolerable number of
breakages, especially if deep engravings are made on the tile.

He has overcome the problem of producing decorative tiles

with deep engraving, but with sufficient durability.

Durability inspite of the thinness and lightness of the tile, is assured,

provided that a certain critical depth is maintained in relation to the
dimensions of the tile.

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

The Machuca tiles are different from that of the private respondent.

The designs are embossed and not engraved as claimed by the

petitioner.

There may be depressions but these depressions are too

shallow to be considered engraved.

Besides, the Machuca tiles are heavy and massive.

There is no similarity between the Pomona Tiles and de Leon's tiles.

o

The Pomona tiles are made of ceramics.

The process involved in making cement tiles is different from ceramic

tiles.

Cement tiles are made with the use of water, while in ceramics
fire is used.

As regards the allegation of the petitioner that the private respondent copied
some designs of Pomona, suffice it to say that what is in issue here is the
process involved in tile making and not the design.
Page 16 of 24

G.R. No. L-36650

January 27, 1933

ANGEL VARGAS, plaintiff-appellee,

vs.
PETRONILA CHUA, ET AL., defendants-appellants.
Facts:

Angel Vargas, the plaintiff herein, brought this action to restrain the
appellants and the other defendant entity, Cham Samco & Sons, their agents
and mandatories, from continuing the manufacture and sale of plows
similar to his plow described in his patent No. 1,507,530 issued by
the United States Patent Office on September 2, 1924.

Plaintiff is the registered owner and possessor of United States Patent No.
1,507,530 on certain plow improvements, issued by the United States Patent
Office on September 2, 1924.

The plaintiff is now and has been engaged, since the issuance of his patent,
in the manufacture and sale of plows of the kind, type and design covered by
the aforementioned patent, said plows being of different sizes and numbered
in accordance therewith from 1 to 5.

That, since the filing of the complaint to date, the defendant,

Petronila Chua, has been manufacturing and selling plows of the
kind, type and design represented by Exhibits B, B-1 and B-2, of
different sizes, designated by Nos. 2, 4 and 5.
Defendant Coo Teng Hee, has been selling to his customers in his store on J.
Ma. Basa Street in Iloilo, plows of the kind, type and design represented by
Exhibits B, B-1 and B-2, having bought said plows from his codefendant, Petronila Chua, who manufactures them in her factory on
Iznart Street, Iloilo.
Also, defendant Cham Samco & Sons, bought of its co-defendant Coo Kun &
Sons Hardware Co., 90 plows of the form, type and design of Exhibits B, B-1
and B-2 which it has been selling in its store on Sto. Cristo Street, Manila.

CFI ruled in favour of plaintiff.

Issue: Whether the plow (Exhibit F) constitutes a real invention or an improvement

for which a patent may be obtained.
Page 17 of 24

Held: NO.

The evidence shows that Exhibit F is the kind of plows the plaintiff, Angel
Vargas, manufactures, for which Patent No. 1,507,530, was issued in his
favor.

Exhibits B, B-1 and B-2 are samples of the plows which the herein appellants,
Coo Pao and Petronila Chua, have been manufacturing since 1918, and
Exhibit 3-Chua represents the plow for which, on March 12, 1912, the plaintiff
obtained a patent from the United States Patent Office, which was declared
null and void by the Supreme Court in the case of Vargas vs. F. M.
Yap Tico & Co.

No substantial difference exists between the plow, Exhibit F, and the

plow, Exhibit 3-Chua which was originally patented by the appellee,
Vargas.

The only difference noted by us is the suppression of the bolt and the
three holes on the metal strap attached to the handle bar. (NOTE)

These holes and bolt with its nut were suppressed in Exhibit F in which
the beam is movable as in the original plow.

Not only is there no fundamental difference between the two plows but
no improvement whatever has been made on the latest model, for the
same working and movement of the beam existed in the
original model with the advantage, perhaps, that its
graduation could be carried through with more certainty by the
use of the bolt which as has already been stated, was
adjustable and movable..

As to the fact, upon which much emphasis was laid, that deeper furrows
can be made with the new model, we have seen that the same
results can be had with the old implement.

In view of the foregoing, we are firmly convinced that the appellee is not
entitled to the protection he seeks for the simple reason that his plow,
Exhibit F, does not constitute an invention in the legal sense, and
because, according to the evidence, the same type of plows had
been manufactured in this country and had been in use in many
parts of the Philippine Archipelago, especially in the Province of
Iloilo, long before he obtained his last patent.

Page 18 of 24

 In the above mentioned case of Vargas vs. F. M. Yaptico & Co., we said:

When a patent is sought to be enforced, "the questions of invention,

novelty, or prior use, and each of them, are open to judicial
examination."

The burden of proof to substantiate a charge of infringement is with

the plaintiff.

Where, however, the plaintiff introduces the patent in evidence, if it is

the due form, it affords a prima facie presumption of its correctness
and validity.

The decision of the Commissioner of Patents in granting the patent is

always presumed to be correct.

The burden then shifts to the defendant to overcome by competent

evidence this legal presumption.

With all due respects, therefore, for the critical and expert examination
of the invention by the United States Patent Office, the question of the
validity of the patent is one for judicial determination, and since a
patent has been submitted, the exact question is whether the
defendant has assumed the burden of proof as to anyone of his
defenses.

Although we spent some time in arriving at this point, yet, having

reached it, the question in the case is single and can be brought to a
narrow compass.

Under the English Statute of Monopolies and under the United States
Patent Act of February 21, 1793, later amended to be as herein quoted,
it was always the rule, as stated by Lord Coke, Justice Story and other
authorities, that to entitle a man to a patent, the invention must
be new to the world.

As said by the United States Supreme Court, "it has been repeatedly
held by this court that a single instance of public use of the
invention by a patentee of more than two years before the
date of his application for his patent will be fatal to the
validity of the patent when issued."

We repeat that in view of the evidence presented, and particularly of the

examination we have made of the plows, we cannot escape the conclusion
Page 19 of 24

that the plow upon which the appellee's contention is based, does not
constitute an invention and, consequently, the privilege invoked by him is
untenable and the patent acquired by him should be declared ineffective.

G.R. No. 118708 February 2, 1998

CRESER PRECISION SYSTEMS, INC., petitioner,
vs.
COURT OF APPEALS AND FLORO INTERNATIONAL CORP., respondents.
Facts:

Private respondent is a domestic corporation engaged in the manufacture,

production, distribution and sale of military armaments, munitions,
airmunitions and other similar materials.

On January 23, 1990, private respondent was granted by the Bureau of

Patents, Trademarks and Technology Transfer (BPTTT), a Letters
Patent covering an aerial fuze which was published in the SeptemberOctober-1990, Vol. III, No. 5 issue of the Bureau of Patent's Official Gazette.

Sometime in November 1993, private respondent, discovered that petitioner

submitted samples of its patented aerial fuze to the AFP for testing.

He learned that petitioner was claiming the aforesaid aerial fuze as

its own and planning to bid and manufacture the same commercially
without license or authority from private respondent.

To protect its right, private respondent sent a letter to petitioner advising it of

its existing patent and its rights thereunder, warning petitioner of a possible
court action and/or application for injunction, should it proceed with the
scheduled testing by the military.

Petitioner filed a complaint for injunction and damages arising from

the alleged infringement before the RTC.

The complaint alleged, among others:

o

that petitioner is the first, true and actual inventor of an aerial fuze
denominated as "Fuze, PDR 77 CB4" which it developed as early as
December 1981 under the Self-Reliance Defense Posture
Program (SRDP) of the AFP.
Page 20 of 24

Sometime in 1986, petitioner began supplying the AFP with the

said aerial fuze.

Private respondent's aerial fuze is identical in every respect to the

petitioner's fuze and that the only difference between the two fuzes
are miniscule and merely cosmetic in nature.

RTC issued a TRO.

Private respondent submitted its memorandum alleging that petitioner has no

cause of action to file a complaint for infringement against it.

since it has no patent for the aerial fuze which it claims to

have invented;

that petitioner's available remedy is to file a petition for

cancellation of patent before the Bureau of Patents;

RTC issued the WPI prayed for by the petitioner.

o

With regards to the defendant's assertion that an action for

infringement may only be brought by "anyone possessing
right, title or interest to the patented invention," (Section 42, RA
165) qualified by Sec. 10, RA 165 to include only "the first true and
actual inventor, his heirs, legal representatives or assignees, "this
court finds the foregoing to be untenable.

Sec. 10 merely enumerates the persons who may have an

invention patented which does not necessarily limit to these
persons the right to institute an action for infringement.

CA reversed the ruling of the RTC.

MR denied. Hence, this petition.

Petitioners Contention:

It can file, under Section 42 of the Patent Law (R.A. 165), an action for
infringement not as a patentee but as an entity in possession of a right,
title or interest in and to the patented invention.

It advances the theory that while the absence of a patent may prevent one
from lawfully suing another for infringement of said patent, such absence
Page 21 of 24

does not bar the first true and actual inventor of the patented
invention from suing another who was granted a patent in a suit for
declaratory or injunctive relief recognized under American patent
laws.

This remedy may be likened to a civil action for infringement under Section
42 of the Philippine Patent Law.

Issue: Whether contention of petitioner is correct.

Held: NO.

Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly

provides:
Sec. 42. Civil action for infringement. Any patentee, or
anyone possessing any right, title or interest in and to
the patented invention, whose rights have been infringed,
may bring a civil action before the proper Court of First Instance
(now Regional Trial court), to recover from the infringer damages
sustained by reason of the infringement and to secure an
injunction for the protection of his right. . . .

Under the aforequoted law, only the patentee or his successors-ininterest may file an action for infringement.

The phrase "anyone possessing any right, title or interest in and to the
patented invention" upon which petitioner maintains its present suit, refers
only to the patentee's successors-in-interest, assignees or grantees
since actions for infringement of patent may be brought in the name
of the person or persons interested, whether as patentee,
assignees, or as grantees, of the exclusive right.

Moreover, there can be no infringement of a patent until a patent has

been issued, since whatever right one has to the invention covered
by the patent arises alone from the grant of patent.

In short, a person or entity who has not been granted letters patent over an
invention and has not acquired any light or title thereto either as assignee or
as licensee, has no cause of action for infringement because the right to
maintain an infringement suit depends on the existence of the patent.

Petitioner admits it has no patent over its aerial fuze.

Page 22 of 24

Therefore, it has no legal basis or cause of action to institute the

petition for injunction and damages arising from the alleged
infringement by private respondent.

While petitioner claims to be the first inventor of the aerial fuze, still it has no
right of property over the same upon which it can maintain a suit unless it
obtains a patent therefor.

Under American jurisprudence, an inventor has no common-law right to a

monopoly of his invention.

He has the right to make, use and vend his own invention, but if he
voluntarily discloses it, such as by offering it for sale, the world is
free to copy and use it with impunity.

A patent, however, gives the inventor the right to exclude all others. As a
patentee, he has the exclusive right of making, using or selling the invention.

Further, the remedy of declaratory judgment or injunctive suit on patent

invalidity relied upon by petitioner cannot be likened to the civil action for
infringement under Section 42 of the Patent Law.
o

The reason for this is that the said remedy is available only to the
patent holder or his successors-in-interest.

Thus, anyone who has no patent over an invention but claims to have
a right or interest thereto cannot file an action for declaratory
judgment or injunctive suit which is not recognized in this jurisdiction.

He can, under Section 28 of the aforementioned law, file a

petition for cancellation of the patent within three (3) years
from the publication of said patent with the Director of Patents
and raise as ground therefor that the person to whom the
patent was issued is not the true and actual inventor.

Hence, petitioner's remedy is not to file an action for injunction or

infringement but to file a petition for cancellation of private
respondent's patent.

Petitioner however failed to do so.

Page 23 of 24

As such, it cannot now assail or impugn the validity of the private

respondent's letters patent by claiming that it is the true and actual inventor
of the aerial fuze.

In the case of Aguas vs. De Leon, we stated that:

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

In fine, in the absence of error or abuse of power or lack of jurisdiction or

grave abuse of discretion, we sustain the assailed decision of the respondent
Court of Appeal.

Page 24 of 24