Professional Documents
Culture Documents
8293
2|P ag e
4.4. The term "IPO Gazette" refers to the gazette
published by the Office under this Act. (n)
MIGHTY CORPORATION and LA CAMPANA FABRICA DE
TABACO, INC. vs. E. & J. GALLO
WINERY and THE ANDRESONS GROUP, INC.
3|P ag e
distributor in the Philippines since 1991, selling
these products in its own name and for its own
account.5[5]
Gallo Winerys GALLO wine trademark was registered
in the principal register of the Philippine Patent
Office (now Intellectual Property Office) on
November 16, 1971 under Certificate of
Registration No. 17021 which was renewed on
November 16, 1991 for another 20 years.6[6] Gallo
Winery also applied for registration of its ERNEST
& JULIO GALLO wine trademark on October 11, 1990
under Application Serial No. 901011-00073599-PN
but the records do not disclose if it was ever
approved by the Director of Patents.7[7]
On the other hand, petitioners Mighty Corporation
and La Campana and their sister company, Tobacco
Industries of the Philippines (Tobacco
Industries), are engaged in the cultivation,
manufacture, distribution and sale of tobacco
products for which they have been using the GALLO
cigarette trademark since 1973. 8[8]
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the principal register of the then Philippine
Patent Office.10[10]
In May 1984, Tobacco Industries assigned the GALLO
cigarette trademark to La Campana which, on July
16, 1985, applied for trademark registration in
the Philippine Patent Office.11[11] On July 17,
1985, the National Library issued Certificate of
Copyright Registration No. 5834 for La Campanas
lifetime copyright claim over GALLO cigarette
labels.12[12]
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part of 1992 when an Andresons employee saw such
cigarettes on display with GALLO wines in a Davao
supermarket wine cellar section.17[17] Forthwith,
respondents sent a demand letter to petitioners
asking them to stop using the GALLO trademark, to
no avail.
II.
The Legal Dispute
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at least P500,000 as attorneys fees and litigation
expenses.23[23]
In their answer, petitioners alleged, among other
affirmative defenses, that: petitioners GALLO
cigarettes and Gallo Winerys wines were totally
unrelated products; Gallo Winerys GALLO trademark
registration certificate covered wines only, not
cigarettes; GALLO cigarettes and GALLO wines were
sold through different channels of trade; GALLO
cigarettes, sold at P4.60 for GALLO filters and
P3 for GALLO menthols, were low-cost items
compared to Gallo Winerys high-priced luxury wines
which cost between P98 to P242.50; the target
market of Gallo Winerys wines was the middle or
high-income bracket with at least P10,000 monthly
income while GALLO cigarette buyers were farmers,
fishermen, laborers and other low-income workers;
the dominant feature of the GALLO cigarette mark
was the rooster device with the manufacturers name
clearly indicated as MIGHTY CORPORATION while, in
the case of Gallo Winerys wines, it was the full
names of the founders-owners ERNEST & JULIO GALLO
or just their surname GALLO; by their inaction and
conduct, respondents were guilty of laches and
estoppel; and petitioners acted with honesty,
justice and good faith in the exercise of their
right to manufacture and sell GALLO cigarettes.
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On August 19, 1993, the Makati RTC denied, for
lack of merit, respondents motion for
reconsideration. The court reiterated that
respondents wines and petitioners cigarettes were
not related goods since the likelihood of
deception and confusion on the part of the
consuming public was very remote. The trial court
emphasized that it could not rely on foreign
rulings cited by respondents because the[se] cases
were decided by foreign courts on the basis of
unknown facts peculiar to each case or upon
factual surroundings which may exist only within
their jurisdiction. Moreover, there [was] no
showing that [these cases had] been tested or
found applicable in our jurisdiction.27[27]
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domestic or export markets under the GALLO
trademark.
b. ordering defendants to pay plaintiffs
III.
The Issues
Petitioners now seek relief from this Court
contending that the CA did not follow prevailing
laws and jurisprudence when it held that: [a] RA
8293 (Intellectual Property Code of the
Philippines [IP Code]) was applicable in this
case; [b] GALLO cigarettes and GALLO wines were
identical, similar or related goods for the reason
alone that they were purportedly forms of vice;
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[c] both goods passed through the same channels
of trade and [d] petitioners were liable for
trademark infringement, unfair competition and
damages.31[31]
Respondents, on the other hand, assert that this
petition which invokes Rule 45 does not involve
pure questions of law, and hence, must be
dismissed outright.
IV.
Discussion
THE EXCEPTIONAL CIRCUMSTANCES
IN THIS CASE OBLIGE THE COURT TO REVIEW
THE CAS FACTUAL FINDINGS
As a general rule, a petition for review on
certiorari under Rule 45 must raise only questions
of law32[32] (that is, the doubt pertains to the
application and interpretation of law to a certain
set of facts) and not questions of fact (where the
doubt concerns the truth or falsehood of alleged
facts),33[33] otherwise, the petition will be
denied. We are not a trier of facts and the Court
of Appeals factual findings are generally
conclusive upon us.34[34]
10 | P a g e
more of the following exceptional circumstances
oblige us to review the evidence on record:35[35]
(1) the conclusion is grounded entirely on
speculation, surmises, and conjectures;
(2) the inference of the Court of Appeals from
its findings of fact is manifestly mistaken,
absurd and impossible;
(3) there is grave abuse of discretion;
(4) the judgment is based on a
misapprehension of facts;
(5) the appellate court, in making its
findings, went beyond the issues of the
case, and the same are contrary to the
admissions of both the appellant and the
appellee;
(6) the findings are without citation of
specific evidence on which they are based;
(7) the facts set forth in the petition as
well as in the petitioner's main and reply
briefs are not disputed by the respondents;
and
(8) the findings of fact of the Court of
Appeals are premised on the absence of
evidence and are contradicted [by the
evidence] on record.36[36]
In this light, after thoroughly examining the
evidence on record, weighing, analyzing and
balancing all factors to determine whether
trademark infringement and/or unfair competition
has been committed, we conclude that both the
Court of Appeals and the trial court veered away
from the law and well-settled jurisprudence.
Thus, we give due course to the petition.
THE TRADEMARK LAW AND THE PARIS
CONVENTION ARE THE APPLICABLE LAWS,
NOT THE INTELLECTUAL PROPERTY CODE
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We note that respondents sued petitioners on March
12, 1993 for trademark infringement and unfair
competition committed during the effectivity of
the Paris Convention and the Trademark Law.
Yet, in the Makati RTC decision of November 26,
1998, petitioners were held liable not only under
the aforesaid governing laws but also under the
IP Code which took effect only on January 1,
1998,37[37] or about five years after the filing
of the complaint:
12 | P a g e
conclusively known by the populace. To make a law
binding even before it takes effect may lead to
the arbitrary exercise of the legislative
power.40[40] Nova constitutio futuris formam
imponere debet non praeteritis. A new state of the
law ought to affect the future, not the past. Any
doubt must generally be resolved against the
retroactive operation of laws, whether these are
original enactments, amendments or repeals.41[41]
There are only a few instances when laws may be
given retroactive effect,42[42] none of which is
present in this case.
The IP Code, repealing the Trademark Law,43[43]
was approved on June 6, 1997. Section 241 thereof
expressly decreed that it was to take effect only
on January 1, 1998, without any provision for
retroactive application. Thus, the Makati RTC and
the CA should have limited the consideration of
the present case within the parameters of the
Trademark Law and the Paris Convention, the laws
in force at the time of the filing of the
complaint.
DISTINCTIONS BETWEEN
TRADEMARK INFRINGEMENT
AND UNFAIR COMPETITION
13 | P a g e
although the two subjects are entwined with each
other and are dealt with together in the Trademark
Law (now, both are covered by the IP Code). Hence,
even if one fails to establish his exclusive
property right to a trademark, he may still obtain
relief on the ground of his competitors unfairness
or fraud. Conduct constitutes unfair competition
if the effect is to pass off on the public the
goods of one man as the goods of another. It is
not necessary that any particular means should be
used to this end.44[44]
In Del Monte Corporation vs. Court of
Appeals,45[45] we distinguished trademark
infringement from unfair competition:
(1) Infringement of trademark is the
unauthorized use of a trademark, whereas
unfair competition is the passing off of
one's goods as those of another.
(2) In infringement of trademark fraudulent
intent is unnecessary, whereas in unfair
competition fraudulent intent is
essential.
(3) In infringement of trademark the prior
registration of the trademark is a
prerequisite to the action, whereas in
unfair competition registration is not
necessary.
Pertinent Provisions on Trademark
Infringement under the Paris
Convention and the Trademark Law
Article 6bis of the Paris Convention,46[46] an
international agreement binding on the
Philippines and the United States (Gallo Winerys
country of domicile and origin) prohibits the
[registration] or use of a trademark which
constitutes a reproduction, imitation or
translation, liable to create confusion, of a mark
considered by the competent authority of the
country of registration or use to be well-known
14 | P a g e
in that country as being already the mark of a
person entitled to the benefits of the [Paris]
Convention and used for identical or similar
goods. [This rule also applies] when the essential
part of the mark constitutes a reproduction of any
such well-known mark or an imitation liable to
create confusion therewith. There is no time limit
for seeking the prohibition of the use of marks
used in bad faith.47[47]
Thus, under Article 6bis of the Paris Convention,
the following are the elements of trademark
infringement:
(a) registration or use by another person of
a trademark which is a reproduction,
imitation or translation liable to create
confusion,
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such goods, business or services.49[49] Trademark
registration and actual use are material to the
complaining partys cause of action.
Corollary to this, Section 20 of the Trademark
Law50[50] considers the trademark registration
certificate as prima facie evidence of the
validity of the registration, the registrants
ownership and exclusive right to use the trademark
in connection with the goods, business or services
as classified by the Director of Patents51[51] and
as specified in the certificate, subject to the
conditions and limitations stated therein.
Sections 2 and 2-A52[52] of the Trademark Law
emphasize the importance of the trademarks actual
use in commerce in the Philippines prior to its
registration. In the adjudication of trademark
rights between contending parties, equitable
principles of laches, estoppel, and acquiescence
may be considered and applied.53[53]
Under Sections 2, 2-A, 9-A, 20 and 22 of the
Trademark Law therefore, the following constitute
the elements of trademark infringement:
(a) a trademark actually used in commerce in
the Philippines and registered in the
principal register of the Philippine Patent
Office
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reproduction, counterfeit, copy or colorable
imitation is applied to labels, signs, prints,
packages, wrappers, receptacles or
advertisements intended to be used upon or in
connection with such goods, business or
services as to likely cause confusion or
mistake or to deceive purchasers,
(c) the trademark is used for identical or similar
goods, and
(d) such act is done without the consent of
the trademark registrant or assignee.
17 | P a g e
TRADEMARK PRECEDED THAT OF
GALLO WINE TRADEMARK.
By respondents own judicial admission, the GALLO
wine trademark was registered in the Philippines
in November 1971 but the wine itself was first
marketed and sold in the country only in 1974 and
only within the former U.S. military facilities,
and outside thereof, only in 1979. To prove
commercial use of the GALLO wine trademark in the
Philippines, respondents presented sales invoice
no. 29991 dated July 9, 1981 addressed to Conrad
Company Inc., Makati, Philippines and sales
invoice no. 85926 dated March 22, 1996 addressed
to Andresons Global, Inc., Quezon City,
Philippines. Both invoices were for the sale and
shipment of GALLO wines to the Philippines during
that period.55[55] Nothing at all, however, was
presented to evidence the alleged sales of GALLO
wines in the Philippines in 1974 or, for that
matter, prior to July 9, 1981.
On the other hand, by testimonial evidence
supported by the BIR authorization letters, forms
and manufacturers sworn statement, it appears that
petitioners and its predecessor-in-interest,
Tobacco Industries, have indeed been using and
selling GALLO cigarettes in the Philippines since
1973 or before July 9, 1981.56[56]
In Emerald Garment Manufacturing Corporation vs.
Court of Appeals,57[57] we reiterated our rulings
in Pagasa Industrial Corporation vs. Court of
Appeals,58[58] Converse Rubber Corporation vs.
Universal Rubber Products, Inc.,59[59] Sterling
Products International, Inc. vs. Farbenfabriken
Bayer Aktiengesellschaft,60[60] Kabushi Kaisha
18 | P a g e
Isetan vs. Intermediate Appellate Court,61[61]
and Philip Morris vs. Court of Appeals,62[62]
giving utmost importance to the actual commercial
use of a trademark in the Philippines prior to its
registration, notwithstanding the provisions of
the Paris Convention:
xxx xxx xxx
In addition to the foregoing, we are constrained
to agree with petitioner's contention that private
respondent failed to prove prior actual commercial
use of its LEE trademark in the Philippines before
filing its application for registration with the
BPTTT and hence, has not acquired ownership over
said mark.
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the law of the land does not by any means imply
the primacy of international law over national law
in the municipal sphere. Under the doctrine of
incorporation as applied in most countries, rules
of international law are given a standing equal,
not superior, to national legislative enactments.
xxx xxx xxx
In other words, (a foreign corporation) may have
the capacity to sue for infringement irrespective
of lack of business activity in the Philippines
on account of Section 21-A of the Trademark Law
but the question of whether they have an exclusive
right over their symbol as to justify issuance of
the controversial writ will depend on actual use
of their trademarks in the Philippines in line
with Sections 2 and 2-A of the same law. It is
thus incongruous for petitioners to claim that
when a foreign corporation not licensed to do
business in the Philippines files a complaint for
infringement, the entity need not be actually
using the trademark in commerce in the
Philippines. Such a foreign corporation may have
the personality to file a suit for infringement
but it may not necessarily be entitled to
protection due to absence of actual use of the
emblem in the local market.
20 | P a g e
prerequisite in the acquisition of the right of
ownership over a trademark.
21 | P a g e
Our rulings in Pagasa Industrial Corp. v. Court
of Appeals (118 SCRA 526 [1982]) and Converse
Rubber Corp. v. Universal Rubber Products, Inc.,
(147 SCRA 154 [1987]), respectively, are
instructive:
22 | P a g e
successors-in-interest, herein petitioners,
either under the Trademark Law or the Paris
Convention.
Respondents GALLO trademark
registration is limited to
wines only
We also note that the GALLO trademark registration
certificates in the Philippines and in other
countries expressly state that they cover wines
only, without any evidence or indication that
registrant Gallo Winery expanded or intended to
expand its business to cigarettes.63[63]
23 | P a g e
by petitioner in this aspect does not suffice and
may not vest an exclusive right in its favor that
can ordinarily be protected by the Trademark Law.
In short, paraphrasing Section 20 of the Trademark
Law as applied to the documentary evidence adduced
by petitioner, the certificate of registration
issued by the Director of Patents can confer upon
petitioner the exclusive right to use its own
symbol only to those goods specified in the
certificate, subject to any conditions and
limitations stated therein. This basic point is
perhaps the unwritten rationale of Justice Escolin
in Philippine Refining Co., Inc. vs. Ng Sam (115
SCRA 472 [1982]), when he stressed the principle
enunciated by the United States Supreme Court in
American Foundries vs. Robertson (269 U.S. 372,
381, 70 L ed 317, 46 Sct. 160) that 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. Verily, this Court had the occasion
to observe in the 1966 case of George W. Luft Co.,
Inc. vs. Ngo Guan (18 SCRA 944 [1966]) that no
serious objection was posed by the petitioner
therein since the applicant utilized the emblem
Tango for no other product than hair pomade in
which petitioner does not deal.
This brings Us back to the incidental issue raised
by petitioner which private respondent sought to
belie as regards petitioner's alleged expansion
of its business. It may be recalled that
petitioner claimed that it has a pending
application for registration of the emblem BRUT
33 for briefs (page 25, Brief for the Petitioner;
page 202, Rollo) to impress upon Us the Solomonic
wisdom imparted by Justice JBL Reyes in Sta. Ana
vs. Maliwat (24 SCRA 1018 [1968]), to the effect
that dissimilarity of goods will not preclude
relief if the junior user's goods are not remote
from any other product which the first user would
be likely to make or sell (vide, at page 1025).
Commenting on the former provision of the
Trademark Law now embodied substantially under
Section 4(d) of Republic Act No. 166, as amended,
the erudite jurist opined that the law in point
does not require that the articles of manufacture
24 | P a g e
of the previous user and late user of the mark
should possess the same descriptive properties or
should fall into the same categories as to bar the
latter from registering his mark in the principal
register. (supra at page 1026).
Yet, it is equally true that as aforesaid, the
protective mantle of the Trademark Law extends
only to the goods used by the first user as
specified in the certificate of registration
following the clear message conveyed by Section
20.
How do We now reconcile the apparent conflict
between Section 4(d) which was relied upon by
Justice JBL Reyes in the Sta. Ana case and Section
20? It would seem that Section 4(d) does not
require that the goods manufactured by the second
user be related to the goods produced by the
senior user while Section 20 limits the exclusive
right of the senior user only to those goods
specified in the certificate of registration. But
the rule has been laid down that the clause which
comes later shall be given paramount significance
over an anterior proviso upon the presumption that
it expresses the latest and dominant purpose.
(Graham Paper Co. vs. National Newspapers Asso.
(Mo. App.) 193 S.W. 1003; Barnett vs. Merchant's
L. Ins. Co., 87 Okl. 42; State ex nel Atty. Gen.
vs. Toledo, 26 N.E., p. 1061; cited by Martin,
Statutory Construction Sixth ed., 1980 Reprinted,
p. 144). It ineluctably follows that Section 20
is controlling and, therefore, private respondent
can appropriate its symbol for the briefs it
manufactures because as aptly remarked by Justice
Sanchez in Sterling Products International Inc.
vs. Farbenfabriken Bayer (27 SCRA 1214 [1969]):
25 | P a g e
NO LIKELIHOOD OF CONFUSION, MISTAKE
OR DECEIT AS TO THE IDENTITY OR SOURCE
OF PETITIONERS AND RESPONDENTS
GOODS OR BUSINESS
A crucial issue in any trademark infringement case
is the likelihood of confusion, mistake or deceit
as to the identity, source or origin of the goods
or identity of the business as a consequence of
using a certain mark. Likelihood of confusion is
admittedly a relative term, to be determined
rigidly according to the particular (and sometimes
peculiar) circumstances of each case. Thus, in
trademark cases, more than in other kinds of
litigation, precedents must be studied in the
light of each particular case. 65[65]
There are two types of confusion in trademark
infringement. The first is confusion of goods when
an otherwise prudent purchaser is induced to
purchase one product in the belief that he is
purchasing another, in which case defendants goods
are then bought as the plaintiffs and its poor
quality reflects badly on the plaintiffs
reputation. The other is confusion of business
wherein the goods of the parties are different but
the defendants product can reasonably (though
mistakenly) be assumed to originate from the
plaintiff, thus deceiving the public into
believing that there is some connection between
the plaintiff and defendant which, in fact, does
not exist.66[66]
In determining the likelihood of confusion, the
Court must consider: [a] the resemblance between
the trademarks; [b] the similarity of the goods
to which the trademarks are attached; [c] the
likely effect on the purchaser and [d] the
registrants express or implied consent and other
fair and equitable considerations.
26 | P a g e
to a legal conclusion that there is trademark
infringement:
(a) in Acoje Mining Co., Inc. vs. Director of
Patent,67[67] we ordered the approval of
Acoje Minings application for registration
of the trademark LOTUS for its soy sauce
even though Philippine Refining Company had
prior registration and use of such identical
mark for its edible oil which, like soy
sauce, also belonged to Class 47;
(b) in Philippine Refining Co., Inc. vs. Ng Sam
and Director of Patents,68[68] we upheld the
Patent Directors registration of the same
trademark CAMIA for Ng Sams ham under Class
47, despite Philippine Refining Companys
prior trademark registration and actual use
of such mark on its lard, butter, cooking
oil (all of which belonged to Class 47),
abrasive detergents, polishing materials and
soaps;
(c) in Hickok Manufacturing Co., Inc. vs. Court
of Appeals and Santos Lim Bun Liong,69[69]
we dismissed Hickoks petition to cancel
private respondents HICKOK trademark
registration for its Marikina shoes as
against petitioners earlier registration of
the same trademark for handkerchiefs,
briefs, belts and wallets;
(d) in Shell Company of the Philippines vs.
Court of Appeals,70[70] in a minute
resolution, we dismissed the petition for
review for lack of merit and affirmed the
Patent Offices registration of the trademark
SHELL used in the cigarettes manufactured by
respondent Fortune Tobacco Corporation,
notwithstanding Shell Companys opposition as
the prior registrant of the same trademark
27 | P a g e
for its gasoline and other petroleum
products;
(e) in Esso Standard Eastern, Inc. vs. Court of
Appeals,71[71] we dismissed ESSOs complaint
for trademark infringement against United
Cigarette Corporation and allowed the latter
to use the trademark ESSO for its
cigarettes, the same trademark used by ESSO
for its petroleum products, and
(f) in Canon Kabushiki Kaisha vs. Court of
Appeals and NSR Rubber Corporation,72[72] we
affirmed the rulings of the Patent Office
and the CA that NSR Rubber Corporation could
use the trademark CANON for its sandals
(Class 25) despite Canon Kabushiki Kaishas
prior registration and use of the same
trademark for its paints, chemical products,
toner and dyestuff (Class 2).
Whether a trademark causes confusion and is likely
to deceive the public hinges on colorable
imitation73[73] which has been defined as such
similarity in form, content, words, sound,
meaning, special arrangement or general
appearance of the trademark or tradename in their
overall presentation or in their essential and
substantive and distinctive parts as would likely
mislead or confuse persons in the ordinary course
of purchasing the genuine article.74[74]
Jurisprudence has developed two tests in
determining similarity and likelihood of
confusion in trademark resemblance:75[75]
28 | P a g e
(a) the Dominancy Test applied in Asia
Brewery, Inc. vs. Court of Appeals76[76] and
other cases,77[77] and
(b) the Holistic or Totality Test used in Del
Monte Corporation vs. Court of Appeals78[78]
and its preceding cases.79[79]
The Dominancy Test focuses on the similarity of
the prevalent features of the competing trademarks
which might cause confusion or deception, and thus
infringement. If the competing trademark contains
the main, essential or dominant features of
another, and confusion or deception is likely to
result, infringement takes place. Duplication or
imitation is not necessary; nor is it necessary
that the infringing label should suggest an effort
to imitate. The question is whether the use of the
marks involved is likely to cause confusion or
mistake in the mind of the public or deceive
purchasers.80[80]
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size, form, meaning of letters, words, designs and
emblems used, the likelihood of deception of the
mark or name's tendency to confuse82[82] and the
commercial impression likely to be conveyed by the
trademarks if used in conjunction with the
respective goods of the parties.83[83]
Applying the Dominancy and Holistic Tests, we find
that the dominant feature of the GALLO cigarette
trademark is the device of a large rooster facing
left, outlined in black against a gold background.
The roosters color is either green or red green
for GALLO menthols and red for GALLO filters.
Directly below the large rooster device is the
word GALLO. The rooster device is given prominence
in the GALLO cigarette packs in terms of size and
location on the labels.84[84]
30 | P a g e
few, one or two small roosters facing right or
facing each other (atop the EJG crest, surrounded
by leaves or ribbons), with additional designs in
green, red and yellow colors, appear as minor
features thereof.87[87] Directly below or above
these sketches is the entire printed name of the
founder-owners, ERNEST & JULIO GALLO or just their
surname GALLO,88[88] which appears in different
fonts, sizes, styles and labels, unlike
petitioners uniform casque-font bold-lettered
GALLO mark.
Moreover, on the labels of Gallo Winerys wines are
printed the words VINTED AND BOTTLED BY ERNEST &
JULIO GALLO, MODESTO, CALIFORNIA.89[89]
The many different features like color schemes,
art works and other markings of both products
drown out the similarity between them the use of
the word GALLO ― a family surname for the Gallo
Winerys wines and a Spanish word for rooster for
petitioners cigarettes.
31 | P a g e
deceived and misled that they come from the same
maker or manufacturer, trademark infringement
occurs.92[92]
Non-competing goods may be those which, though
they are not in actual competition, are so related
to each other that it can reasonably be assumed
that they originate from one manufacturer, in
which case, confusion of business can arise out
of the use of similar marks.93[93] They may also
be those which, being entirely unrelated, cannot
be assumed to have a common source; hence, there
is no confusion of business, even though similar
marks are used.94[94] Thus, there is no trademark
infringement if the public does not expect the
plaintiff to make or sell the same class of goods
as those made or sold by the defendant.95[95]
32 | P a g e
(f) the purpose of the goods99[99]
(g) whether the article is bought for immediate
consumption,100[100] that is, day-to-day
household items101[101]
33 | P a g e
number of ordinarily prudent purchasers will be
misled, or simply confused, as to the source of
the goods in question.108[108] The purchaser is
not the completely unwary consumer but is the
ordinarily intelligent buyer considering the type
of product involved.109[109] He is accustomed to
buy, and therefore to some extent familiar with,
the goods in question. The test of fraudulent
simulation is to be found in the likelihood of the
deception of some persons in some measure
acquainted with an established design and desirous
of purchasing the commodity with which that design
has been associated. The test is not found in the
deception, or the possibility of deception, of the
person who knows nothing about the design which
has been counterfeited, and who must be
indifferent between that and the other. The
simulation, in order to be objectionable, must be
such as appears likely to mislead the ordinary
intelligent buyer who has a need to supply and is
familiar with the article that he seeks to
purchase.110[110]
34 | P a g e
Part II of the Rules of Practice in Trademark
Cases while petitioners GALLO cigarettes fall
under Class 34.
We are mindful that product classification alone
cannot serve as the decisive factor in the
resolution of whether or not wines and cigarettes
are related goods. Emphasis should be on the
similarity of the products involved and not on the
arbitrary classification or general description
of their properties or characteristics. But the
mere fact that one person has adopted and used a
particular trademark for his goods does not
prevent the adoption and use of the same trademark
by others on articles of a different description.
112[112]
Both the Makati RTC and the CA held that wines and
cigarettes are related products because: (1) they
are related forms of vice, harmful when taken in
excess, and used for pleasure and relaxation and
(2) they are grouped or classified in the same
section of supermarkets and groceries.
35 | P a g e
quality, quantity, size, including the nature of
their packages, wrappers or containers.113[113]
Accordingly, the U.S. patent office and courts
have consistently held that the mere fact that
goods are sold in one store under the same roof
does not automatically mean that buyers are likely
to be confused as to the goods respective sources,
connections or sponsorships. The fact that
different products are available in the same store
is an insufficient standard, in and of itself, to
warrant a finding of likelihood of
confusion.114[114]
In this regard, we adopted the Director of Patents
finding in Philippine Refining Co., Inc. vs. Ng
Sam and the Director of Patents:115[115]
36 | P a g e
The observations and conclusion of the Director
of Patents are correct. The particular goods of
the parties are so unrelated that consumers, would
not, in any probability mistake one as the source
of origin of the product of the other. (Emphasis
supplied).
The same is true in the present case. Wines and
cigarettes are non-competing and are totally
unrelated products not likely to cause confusion
vis--vis the goods or the business of the
petitioners and respondents.
Wines are bottled and consumed by drinking while
cigarettes are packed in cartons or packages and
smoked. There is a whale of a difference between
their descriptive properties, physical attributes
or essential characteristics like form,
composition, texture and quality.
37 | P a g e
Philippines through Gallo Winerys exclusive
contracts with a domestic entity, which is
currently Andresons. By respondents own
testimonial evidence, GALLO wines are sold in
hotels, expensive bars and restaurants, and high-
end grocery stores and supermarkets, not through
sari-sari stores or ambulant vendors.119[119]
38 | P a g e
Those decisions, however, must be considered in
perspective of the principle that tobacco products
and alcohol products should be considered related
only in cases involving special circumstances.
Schenley Distillers, Inc. v. General Cigar Co.,
57C.C.P.A. 1213, 427 F. 2d 783, 785 (1970). The
presence of special circumstances has been found
to exist where there is a finding of unfair
competition or where a famous or well-known mark
is involved and there is a demonstrated intent to
capitalize on that mark. For example, in John
Walker & Sons, the court was persuaded to find a
relationship between products, and hence a
likelihood of confusion, because of the plaintiffs
long use and extensive advertising of its mark and
placed great emphasis on the fact that the
defendant used the trademark Johnnie Walker with
full knowledge of its fame and reputation and with
the intention of taking advantage thereof. John
Walker & Sons, 124 F. Supp. At 256; see Mckesson
& Robbins, Inc. v. P. Lorillard Co., 1959 WL 5894,
120 U.S.P.Q. 306, 307 (1959) (holding that the
decision in John Walker & Sons was merely the law
on the particular case based upon its own peculiar
facts); see also Alfred Dunhill, 350 F. Supp. At
1363 (defendants adoption of Dunhill mark was not
innocent). However, in Schenley, the court noted
that the relation between tobacco and whiskey
products is significant where a widely known
arbitrary mark has long been used for diversified
products emanating from a single source and a
newcomer seeks to use the same mark on unrelated
goods. Schenley, 427 F.2d. at 785. Significantly,
in Schenley, the court looked at the industry
practice and the facts of the case in order to
determine the nature and extent of the
relationship between the mark on the tobacco
product and the mark on the alcohol product.
The record here establishes conclusively that IDV
has never advertised BAILEYS liqueurs in
conjunction with tobacco or tobacco accessory
products and that IDV has no intent to do so. And,
unlike the defendant in Dunhill, S & M Brands does
not market bar accessories, or liqueur related
products, with its cigarettes. The advertising and
promotional materials presented a trial in this
39 | P a g e
action demonstrate a complete lack of affiliation
between the tobacco and liqueur products bearing
the marks here at issue.
xxx xxx xxx
40 | P a g e
IDENTICAL OR SIMILAR GOODS
First, the records bear out that most of the
trademark registrations took place in the late
1980s and the 1990s, that is, after Tobacco
Industries use of the GALLO cigarette trademark
in 1973 and petitioners use of the same mark in
1984.
GALLO wines and GALLO cigarettes are neither the
same, identical, similar nor related goods, a
requisite element under both the Trademark Law and
the Paris Convention.
41 | P a g e
Intermediate Appellate Court (203 SCRA 59 [1991]).
As pointed out by the BPTTT:
Regarding the applicability of Article 8 of the
Paris Convention, this Office believes that there
is no automatic protection afforded an entity
whose tradename is alleged to have been infringed
through the use of that name as a trademark by a
local entity.
43 | P a g e
of petitioners. The scales of conscience and
reason tip far more readily in favor of
petitioners than respondents.
Moreover, there exists no evidence that
petitioners employed malice, bad faith or fraud,
or that they intended to capitalize on respondents
goodwill in adopting the GALLO mark for their
cigarettes which are totally unrelated to
respondents GALLO wines. Thus, we rule out
trademark infringement on the part of petitioners.
45 | P a g e
reversing the October 31, 1996 decision127[2] of
the Regional Trial Court of Makati, Branch 133,
in Civil Case No. 92-516 which declared private
respondents Shoemart Inc. (SMI) and North Edsa
Marketing Inc. (NEMI) liable for infringement of
trademark and copyright, and unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of
Appeals128[3] contained a summary of this dispute:
46 | P a g e
reminding him that their agreement for
installation of light boxes was not only for its
SM Makati branch, but also for SM Cubao. SMI did
not bother to reply.
Instead, in a letter dated January 14, 1986, SMIs
house counsel informed Pearl and Dean that it was
rescinding the contract for SM Makati due to non-
performance of the terms thereof. In his reply
dated February 17, 1986, Vergara protested the
unilateral action of SMI, saying it was without
basis. In the same letter, he pushed for the
signing of the contract for SM Cubao.
Two years later, Metro Industrial Services, the
company formerly contracted by Pearl and Dean to
fabricate its display units, offered to construct
light boxes for Shoemarts chain of stores. SMI
approved the proposal and ten (10) light boxes
were subsequently fabricated by Metro Industrial
for SMI. After its contract with Metro Industrial
was terminated, SMI engaged the services of EYD
Rainbow Advertising Corporation to make the light
boxes. Some 300 units were fabricated in 1991.
These were delivered on a staggered basis and
installed at SM Megamall and SM City.
47 | P a g e
to Pearl and Dean of compensatory damages in the
amount of Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended
the leasing of two hundred twenty-four (224) light
boxes and NEMI took down its advertisements for
Poster Ads from the lighted display units in SMIs
stores. Claiming that both SMI and NEMI failed to
meet all its demands, Pearl and Dean filed this
instant case for infringement of trademark and
copyright, unfair competition and damages.
48 | P a g e
Wherefore, defendants SMI and NEMI are found
jointly and severally liable for infringement of
copyright under Section 2 of PD 49, as amended,
and infringement of trademark under Section 22 of
RA No. 166, as amended, and are hereby penalized
under Section 28 of PD 49, as amended, and
Sections 23 and 24 of RA 166, as amended.
Accordingly, defendants are hereby directed:
(1) to pay plaintiff the following damages:
(a) actual damages - P16,600,000.00,
representing profits
derived by defendants
as a result of infringe-
ment of plaintiffs copyright
from 1991 to 1992
49 | P a g e
On appeal, however, the Court of Appeals reversed
the trial court:
Since the light boxes cannot, by any stretch of
the imagination, be considered as either prints,
pictorial illustrations, advertising copies,
labels, tags or box wraps, to be properly
classified as a copyrightable class O work, we
have to agree with SMI when it posited that what
was copyrighted were the technical drawings only,
and not the light boxes themselves, thus:
51 | P a g e
certificate, subject to any conditions and
limitations stated therein. (underscoring
supplied)
52 | P a g e
appellants who used the same words in their
advertising display units. Why Pearl and Dean
limited the use of its trademark to stationeries
is simply beyond us. But, having already done so,
it must stand by the consequence of the
registration which it had caused.
xxx xxx xxx
We are constrained to adopt the view of
defendants-appellants that the words Poster Ads
are a simple contraction of the generic term
poster advertising. In the absence of any
convincing proof that Poster Ads has acquired a
secondary meaning in this jurisdiction, we find
that Pearl and Deans exclusive right to the use
of Poster Ads is limited to what is written in its
certificate of registration, namely,
stationeries.
53 | P a g e
DEANS TRADEMARK POSTER ADS WAS COMMITTED
BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN
DISMISSING THE AWARD OF THE TRIAL COURT,
DESPITE THE LATTERS FINDING, NOT DISPUTED
BY THE HONORABLE COURT OF APPEALS, THAT SM
WAS GUILTY OF BAD FAITH IN ITS NEGOTIATION
OF ADVERTISING CONTRACTS WITH PEARL &
DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN
NOT HOLDING RESPONDENTS SM AND NEMI LIABLE
TO PEARL & DEAN FOR ACTUAL, MORAL &
EXEMPLARY DAMAGES, ATTORNEYS FEES AND
COSTS OF SUIT.131[6]
ISSUES
In resolving this very interesting case, we are
challenged once again to put into proper
perspective four main concerns of intellectual
property law patents, copyrights, trademarks and
unfair competition arising from infringement of
any of the first three. We shall focus then on the
following issues:
54 | P a g e
term descriptive of his goods, services or
business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
x x x x x x x x x
55 | P a g e
on terms and conditions specified in the
statute.132[7] Accordingly, it can cover only the
works falling within the statutory enumeration or
description.133[8]
56 | P a g e
an infringement of petitioners copyright over the
technical drawings? We do not think so.
During the trial, the president of P & D himself
admitted that the light box was neither a literary
not an artistic work but an engineering or
marketing invention.135[10] Obviously, there
appeared to be some confusion regarding what ought
or ought not to be the proper subjects of
copyrights, patents and trademarks. In the leading
case of Kho vs. Court of Appeals,136[11] we ruled
that these three legal rights are completely
distinct and separate from one another, and the
protection afforded by one cannot be used
interchangeably to cover items or works that
exclusively pertain to the others:
Trademark, copyright and patents are different
intellectual property rights that cannot be
interchanged with one another. A trademark is any
visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an
enterprise and shall include a stamped or marked
container of goods. In relation thereto, a trade
name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the
scope of a copyright is confined to literary and
artistic works which are original intellectual
creations in the literary and artistic domain
protected from the moment of their creation.
Patentable inventions, on the other hand, refer
to any technical solution of a problem in any
field of human activity which is new, involves an
inventive step and is industrially applicable.
57 | P a g e
they be liable instead for infringement of patent?
We do not think so either.
For some reason or another, 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. In Creser
Precision Systems, Inc. vs. Court of
Appeals,137[12] we held that 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. x x x (A)n inventor has no
common law right to a monopoly of his invention.
He has the right to make use of and vend his
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, selling or using the
invention.138[13] On the assumption that
petitioners advertising units were patentable
inventions, petitioner revealed them fully to the
public by submitting the engineering drawings
thereof to the National Library.
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 domain through
disclosure.139[14] Ideas, once disclosed to the
public without the protection of a valid patent,
are subject to appropriation without significant
restraint.140[15]
58 | P a g e
On one side of the coin is the public which will
benefit from new ideas; on the other are the
inventors who must be protected. As held in Bauer
& Cie vs. ODonnel,141[16] The act secured to the
inventor the exclusive right to make use, and vend
the thing patented, and consequently to prevent
others from exercising like privileges without the
consent of the patentee. It was passed for the
purpose of encouraging useful invention and
promoting new and useful inventions by the
protection and stimulation given to inventive
genius, and was intended to secure to the public,
after the lapse of the exclusive privileges
granted the benefit of such inventions and
improvements.
59 | P a g e
public domain remain there for the free use of the
public.143[18]
It is only after an exhaustive examination by the
patent office that a patent is issued. Such an in-
depth investigation is required because in
rewarding a useful invention, the rights and
welfare of the community must be fairly dealt with
and effectively guarded. To that end, the
prerequisites to obtaining a patent are strictly
observed and when a patent is issued, the
limitations on its exercise are equally strictly
enforced. To begin with, a genuine invention or
discovery must be demonstrated lest in the
constant demand for new appliances, the heavy hand
of tribute be laid on each slight technological
advance in art.144[19]
60 | P a g e
the patentability of its invention before the IPO
and the public the petitioner would be protected
for 50 years. This situation could not have been
the intention of the law.
In the oft-cited case of Baker vs. Selden146[21],
the United States Supreme Court held that only the
expression of an idea is protected by copyright,
not the idea itself. In that case, the plaintiff
held the copyright of a book which expounded on a
new accounting system he had developed. The
publication illustrated blank forms of ledgers
utilized in such a system. The defendant
reproduced forms similar to those illustrated in
the plaintiffs copyrighted book. The US Supreme
Court ruled that:
There is no doubt that a work on the subject of
book-keeping, though only explanatory of well
known systems, may be the subject of a copyright;
but, then, it is claimed only as a book. x x x.
But there is a clear distinction between the
books, as such, and the art, which it is, intended
to illustrate. The mere statement of the
proposition is so evident that it requires hardly
any argument to support it. The same distinction
may be predicated of every other art as well as
that of bookkeeping. A treatise on the composition
and use of medicines, be they old or new; on the
construction and use of ploughs or watches or
churns; or on the mixture and application of
colors for painting or dyeing; or on the mode of
drawing lines to produce the effect of
perspective, would be the subject of copyright;
but no one would contend that the copyright of the
treatise would give the exclusive right to the art
or manufacture described therein. The copyright
of the book, if not pirated from other works,
would be valid without regard to the novelty or
want of novelty of its subject matter. The novelty
of the art or thing described or explained has
nothing to do with the validity of the copyright.
To give to the author of the book an exclusive
property in the art described therein, when no
examination of its novelty has ever been
61 | P a g e
officially made, would be a surprise and a fraud
upon the public. That is the province of letters
patent, not of copyright. The claim to an
invention of discovery of an art or manufacture
must be subjected to the examination of the Patent
Office before an exclusive right therein can be
obtained; and a patent from the government can
only secure it.
62 | P a g e
It was not patented, and is open and free to the
use of the public. And, of course, in using the
art, the ruled lines and headings of accounts must
necessarily be used as incident to it.
The plausibility of the claim put forward by the
complainant in this case arises from a confusion
of ideas produced by the peculiar nature of the
art described in the books, which have been made
the subject of copyright. In describing the art,
the illustrations and diagrams employed happened
to correspond more closely than usual with the
actual work performed by the operator who uses the
art. x x x The description of the art in a book,
though entitled to the benefit of copyright, lays
no foundation for an exclusive claim to the art
itself. The object of the one is explanation; the
object of the other is use. The former may be
secured by copyright. The latter can only be
secured, if it can be secured at all, by letters
patent. (underscoring supplied)
63 | P a g e
to any conditions and limitations specified in the
certificate x x x. 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.149[24] Faberge, Inc. was correct and
was in fact recently reiterated in Canon Kabushiki
Kaisha vs. Court of Appeals.150[25]
Assuming arguendo that Poster Ads could validly
qualify as a trademark, the failure of P & D 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.
ON THE ISSUE OF UNFAIR COMPETITION
64 | P a g e
evidence that P & Ds use of Poster Ads was
distinctive or well-known. As noted by the Court
of Appeals, petitioners expert witnesses himself
had testified that Poster Ads was too generic a
name. So it was difficult to identify it with any
company, honestly speaking.153[28] This crucial
admission by its own expert witness that Poster
Ads could not be associated with P & D showed
that, in the mind of the public, the goods and
services carrying the trademark Poster Ads could
not be distinguished from the goods and services
of other entities.
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 (because it is geographically or otherwise
descriptive) 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.154[29] The admission by petitioners
own expert witness that he himself could not
associate Poster Ads with petitioner P & D because
it was too generic definitely precluded the
application of this exception.
Having discussed the most important and critical
issues, we see no need to belabor the rest.
65 | P a g e
2. ELIDAD C. KHO, doing business under the name
and style of KEC COSMETICS LABORATORY vs. HON.
COURT OF APPEALS, SUMMERVILLE GENERAL
MERCHANDISING and COMPANY, and ANG TIAM CHAY.
66 | P a g e
distributor of Chin Chun Su products manufactured
by Shun Yi Factory of Taiwan; that the said
Taiwanese manufacturing company authorized
Summerville to register its trade name Chin Chun
Su Medicated Cream with the Philippine Patent
Office and other appropriate governmental
agencies; that KEC Cosmetics Laboratory of the
petitioner obtained the copyrights through
misrepresentation and falsification; and, that
the authority of Quintin Cheng, assignee of the
patent registration certificate, to distribute
and market Chin Chun Su products in the
Philippines had already been terminated by the
said Taiwanese Manufacturing Company.
SO ORDERED.iii[3]
The respondents moved for reconsideration but
their motion for reconsideration was denied by the
trial court in an Order dated March 19, 1992.iv[4]
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According to the petitioner, the respondents did
not state the docket number of the civil case in
the caption of their petition and, more
significantly, they did not include therein a
certificate of non-forum shopping. The
respondents opposed the petition and submitted to
the appellate court a certificate of non-forum
shopping for their petition.
On May 24, 1993, the appellate court rendered a
Decision in CA-G.R. SP No. 27803 ruling in favor
of the respondents, the dispositive portion of
which reads:
WHEREFORE, the petition is hereby given due course
and the orders of respondent court dated February
10, 1992 and March 19, 1992 granting the writ of
preliminary injunction and denying petitioners
motion for reconsideration are hereby set aside
and declared null and void. Respondent court is
directed to forthwith proceed with the trial of
Civil Case No. Q-91-10926 and resolve the issue
raised by the parties on the merits.
SO ORDERED.v[5]
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right to the use of the same. It would be deceptive
for a party with nothing more than a registration
in the Supplemental Register to posture before
courts of justice as if the registration is in the
Principal Register.
I
RESPONDENT HONORABLE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OF JURISDICTION IN FAILING TO RULE ON
PETITIONERS MOTION TO DISMISS.
II
RESPONDENT HONORABLE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OF JURISDICTION IN REFUSING TO
PROMPTLY RESOLVE PETITIONERS MOTION FOR
RECONSIDERATION.
III
IV
RESPONDENT HONORABLE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OF JURISDICTION IN FAILING TO CITE
THE PRIVATE RESPONDENTS IN CONTEMPT.
71 | P a g e
container of goods. In relation thereto, a trade
name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the
scope of a copyright is confined to literary and
artistic works which are original intellectual
creations in the literary and artistic domain
protected from the moment of their creation.
Patentable inventions, on the other hand, refer
to any technical solution of a problem in any
field of human activity which is new, involves an
inventive step and is industrially applicable.
Petitioner has no right to support her claim for
the exclusive use of the subject trade name and
its container. The name and container of a beauty
cream product are proper subjects of a trademark
inasmuch as the same falls squarely within its
definition. In order to be entitled to exclusively
use the same in the sale of the beauty cream
product, the user must sufficiently prove that she
registered or used it before anybody else did. The
petitioners copyright and patent registration of
the name and container would not guarantee her the
right to the exclusive use of the same for the
reason that they are not appropriate subjects of
the said intellectual rights. Consequently, a
preliminary injunction order cannot be issued for
the reason that the petitioner has not proven that
she has a clear right over the said name and
container to the exclusion of others, not having
proven that she has registered a trademark thereto
or used the same before anyone did.
We cannot likewise overlook the decision of the
trial court in the case for final injunction and
damages. The dispositive portion of said decision
held that the petitioner does not have trademark
rights on the name and container of the beauty
cream product. The said decision on the merits of
the trial court rendered the issuance of the writ
of a preliminary injunction moot and academic
notwithstanding the fact that the same has been
appealed in the Court of Appeals. This is
supported by our ruling in La Vista Association,
Inc. v. Court of Appeals, to wit:
74 | P a g e
Finally, we rule that the Court of Appeals
correctly denied the petitioners several motions
for contempt of court. There is nothing
contemptuous about the advertisements complained
of which, as regards the proceedings in CA-G.R.
SP No. 27803 merely announced in plain and
straightforward language the promulgation of the
assailed Decision of the appellate court.
Moreover, pursuant to Section 4 of Rule 39 of the
Revised Rules of Civil Procedure, the said
decision nullifying the injunctive writ was
immediately executory.
WHEREFORE, the petition is DENIED. The Decision
and Resolution of the Court of Appeals dated May
24, 1993 and June 3, 1994, respectively, are
hereby AFFIRMED. With costs against the
petitioner.
CHAPTER IV
PATENT APPLICATION
Section 32. The Application. - 32.1. The patent
application shall be in Filipino or English and
shall contain the following:
75 | P a g e
the application for patent or the patent may be
served. (Sec. 11, R.A. No. 165a)
Section 34. The Request. - The request shall
contain a petition for the grant of the patent,
the name and other data of the applicant, the
inventor and the agent and the title of the
invention. (n)
Section 35. Disclosure and Description of the
Invention. - 35.1. Disclosure. - The application
shall disclose the invention in a manner
sufficiently clear and complete for it to be
carried out by a person skilled in the art. Where
the application concerns a microbiological
process or the product thereof and involves the
use of a micro-organism which cannot be
sufficiently disclosed in the application in such
a way as to enable the invention to be carried out
by a person skilled in the art, and such material
is not available to the public, the application
shall be supplemented by a deposit of such
material with an international depository
institution.
35.2. Description. - The Regulations shall
prescribe the contents of the description and the
order of presentation. (Sec. 14, R.A. No. 165a)
Section 36. The Claims. - 36.1. The application
shall contain one (1) or more claims which shall
define the matter for which protection is sought.
Each claim shall be clear and concise, and shall
be supported by the description.
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(c) Description of the invention and one (1)
or more claims in Filipino or English.
40.2. If any of these elements is not submitted
within the period set by the Regulations, the
application shall be considered withdrawn. (n)
Section 41. According a Filing Date. - The Office
shall examine whether the patent application
satisfies the requirements for the grant of date
of filing as provided in Section 40 hereof. If the
date of filing cannot be accorded, the applicant
shall be given an opportunity to correct the
deficiencies in accordance with the implementing
Regulations. If the application does not contain
all the elements indicated in Section 40, the
filing date should be that date when all the
elements are received. If the deficiencies are not
remedied within the prescribed time limit, the
application shall be considered withdrawn. (n)
Section 42. Formality Examination. - 42.1. After
the patent application has been accorded a filing
date and the required fees have been paid on time
in accordance with the Regulations, the applicant
shall comply with the formal requirements
specified by Section 32 and the Regulations within
the prescribed period, otherwise the application
shall be considered withdrawn.
78 | P a g e
44.2. After publication of a patent application,
any interested party may inspect the application
documents filed with the Office.
44.3. The Director General subject to the approval
of the Secretary of Trade and Industry, may
prohibit or restrict the publication of an
application, if in his opinion, to do so would be
prejudicial to the national security and interests
of the Republic of the Philippines. (n)
Section 45. Confidentiality Before Publication. -
A patent application, which has not yet been
published, and all related documents, shall not
be made available for inspection without the
consent of the applicant. (n)
Section 46. Rights Conferred by a Patent
Application After Publication. - The applicant
shall have all the rights of a patentee under
Section 76 against any person who, without his
authorization, exercised any of the rights
conferred under Section 71 of this Act in relation
to the invention claimed in the published patent
application, as if a patent had been granted for
that invention: Provided, That the said person
had:
46.1. Actual knowledge that the invention that he
was using was the subject matter of a published
application; or
46.2. Received written notice that the invention
that he was using was the subject matter of a
published application being identified in the said
notice by its serial number: Provided, That the
action may not be filed until after the grant of
a patent on the published application and within
four (4) years from the commission of the acts
complained of. (n)
Section 47. Observation by Third Parties. -
Following the publication of the patent
application, any person may present observations
in writing concerning the patentability of the
invention. Such observations shall be
communicated to the applicant who may comment on
them. The Office shall acknowledge and put such
79 | P a g e
observations and comment in the file of the
application to which it relates. (n)
Section 48. Request for Substantive Examination.
- 48.1. The application shall be deemed withdrawn
unless within six (6) months from the date of
publication under Section 41, a written request
to determine whether a patent application meets
the requirements of Sections 21 to 27 and Sections
32 to 39 and the fees have been paid on time.
48.2. Withdrawal of the request for examination
shall be irrevocable and shall not authorize the
refund of any fee. (n)
Section 49. Amendment of Application. - An
applicant may amend the patent application during
examination: Provided, That such amendment shall
not include new matter outside the scope of the
disclosure contained in the application as filed.
(n)
Section 50. Grant of Patent. - 50.1. If the
application meets the requirements of this Act,
the Office shall grant the patent: Provided, That
all the fees are paid on time.
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52.2. Any interested party may inspect the
complete description, claims, and drawings of the
patent on file with the Office. (Sec. 18, R.A. No.
165a)
Section 53. Contents of Patent. - The patent shall
be issued in the name of the Republic of the
Philippines under the seal of the Office and shall
be signed by the Director, and registered together
with the description, claims, and drawings, if
any, in books and records of the Office. (Secs.
19 and 20, R.A. No. 165a)
Section 54. Term of Patent. - The term of a patent
shall be twenty (20) years from the filing date
of the application. (Sec. 21, R.A. No. 165a)
Section 55. Annual Fees. - 55.1. To maintain the
patent application or patent, an annual fee shall
be paid upon the expiration of four (4) years from
the date the application was published pursuant
to Section 44 hereof, and on each subsequent
anniversary of such date. Payment may be made
within three (3) months before the due date. The
obligation to pay the annual fees shall terminate
should the application be withdrawn, refused, or
cancelled.
55.2. If the annual fee is not paid, the patent
application shall be deemed withdrawn or the
patent considered as lapsed from the day following
the expiration of the period within which the
annual fees were due. A notice that the
application is deemed withdrawn or the lapse of a
patent for non-payment of any annual fee shall be
published in the IPO Gazette and the lapse shall
be recorded in the Register of the Office.
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faith: Provided, That where the change would
result in a broadening of the extent of
protection conferred by the patent, no request
may be made after the expiration of two (2)
years from the grant of a patent and the change
shall not affect the rights of any third party
which has relied on the patent, as published.
59.2. No change in the patent shall be permitted
under this section, where the change would result
in the disclosure contained in the patent going
beyond the disclosure contained in the application
filed.
59.3. If, and to the extent to which the Office
changes the patent according to this section, it
shall publish the same. (n)
Section 60. Form and Publication of Amendment. -
An amendment or correction of a patent shall be
accomplished by a certificate of such amendment
or correction, authenticated by the seal of the
Office and signed by the Director, which
certificate shall be attached to the patent.
Notice of such amendment or correction shall be
published in the IPO Gazette and copies of the
patent kept or furnished by the Office shall
include a copy of the certificate of amendment or
correction. (Sec. 27, R.A. No. 165)
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Invention Patent Application Procedures
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(d) If the priority of an earlier filed
application is being claimed, the details of the
claim, i.e. filing date, file number and country
of origin.
2. Formality Examination
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5. Decision to Grant Patent Registration or
Decision of Refusal
CHAPTER VI
CANCELLATION OF PATENTS AND SUBSTITUTION OF
PATENTEE
Section 61. Cancellation of Patents. - 61.1. Any
interested person may, upon payment of the
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required fee, petition to cancel the patent or any
claim thereof, or parts of the claim, on any of
the following GROUNDS:
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Section 71. Rights Conferred by Patent. - 71.1. A
patent shall confer on its owner the following
exclusive rights:
(a) Where the subject matter of a patent is a
product, to restrain, prohibit and prevent any
unauthorized person or entity from making,
using, offering for sale, selling or importing
that product;
(b) Where the subject matter of a patent is a
process, to restrain, prevent or prohibit any
unauthorized person or entity from using the
process, and from manufacturing, dealing in,
using, selling or offering for sale, or
importing any product obtained directly or
indirectly from such process.
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with a medical prescription or acts concerning the
medicine so prepared;
72.5. Where the invention is used in any ship,
vessel, aircraft, or land vehicle of any other
country entering the territory of the Philippines
temporarily or accidentally: Provided, That such
invention is used exclusively for the needs of the
ship, vessel, aircraft, or land vehicle and not
used for the manufacturing of anything to be sold
within the Philippines. (Secs. 38 and 39, R.A. No.
165a)
Section 73. Prior User. - 73.1. Notwithstanding
Section 72 hereof, any prior user, who, in good
faith was using the invention or has undertaken
serious preparations to use the invention in his
enterprise or business, before the filing date or
priority date of the application on which a patent
is granted, shall have the right to continue the
use thereof as envisaged in such preparations
within the territory where the patent produces its
effect.
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74.2. The use by the Government, or third person
authorized by the Government shall be subject,
mutatis mutandis, to the conditions set forth in
Sections 95 to 97 and 100 to 102. (Sec. 41, R.A.
No. 165a)
Section 75. Extent of Protection and
Interpretation of Claims. - 75.1. The extent of
protection conferred by the patent shall be
determined by the claims, which are to be
interpreted in the light of the description and
drawings.
75.2. For the purpose of determining the extent
of protection conferred by the patent, due account
shall be taken of elements which are equivalent
to the elements expressed in the claims, so that
a claim shall be considered to cover not only all
the elements as expressed therein, but also
equivalents. (n)
Patent Infringement
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of an application abroad for the same invention
covered thereby, in violation of Section 15 of
Republic Act No. 165 (The Patent Law); and that
petitioner is not the registered patent holder.
Private respondent lodged a Counterclaim against
petitioner for such amount of actual damages as
may be proven; P1,000,000.00 in moral damages;
P300,000.00 in exemplary damages; and P150,000.00
in attorney’s fees.
Finding for private respondent, the trial court
rendered a Decision dated July 23, 1991,9 the
dispositive portion of which reads:
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Laboratories which was petitioner’s former
corporate name, the appellate court considered the
U.S. patent as implying that Albendazole is
different from methyl 5 propylthio-2-
benzimidazole carbamate. It likewise found that
private respondent was not guilty of deceiving the
public by misrepresenting that Impregon is its
product.
The appellate court, however, declared that
Letters Patent No. 14561 was not void as it
sustained petitioner’s explanation that Patent
Application Serial No. 18989 which was filed on
October 8, 1976 was a divisional application of
Patent Application Serial No. 17280 filed on June
17, 1975 with the Philippine Patent Office, well
within one year from petitioner’s filing on June
19, 1974 of its Foreign Application Priority Data
No. 480,646 in the U.S. covering the same compound
subject of Patent Application Serial No. 17280.
Applying Section 17 of the Patent Law, the Court
of Appeals thus ruled that Patent Application
Serial No. 18989 was deemed filed on June 17, 1995
or still within one year from the filing of a
patent application abroad in compliance with the
one-year rule under Section 15 of the Patent Law.
And it rejected the submission that the compound
in Letters Patent No. 14561 was not patentable,
citing the jurisprudentially established
presumption that the Patent Office’s
determination of patentability is correct.
Finally, it ruled that petitioner established
itself to be the one and the same assignee of the
patent notwithstanding changes in its corporate
name. Thus the appellate court disposed:
SO ORDERED.
Petitioner’s motion for reconsideration of the
Court of Appeals’ decision having been denied11
the present petition for review on certiorari12
was filed, assigning as errors the following:
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I. THE COURT OF APPEALS GRAVELY ERRED IN NOT
FINDING THAT ALBENDAZOLE, THE ACTIVE
INGREDIENT IN TRYCO’S "IMPREGON" DRUG, IS
INCLUDED IN PETITIONER’S LETTERS PATENT NO.
14561, AND THAT CONSEQUENTLY TRYCO IS
ANSWERABLE FOR PATENT INFRINGEMENT.
II. THE COURT OF APPEALS GRAVELY ERRED IN
AWARDING TO PRIVATE RESPONDENT TRYCO PHARMA
CORPORATION P330,000.00 ACTUAL DAMAGES AND
P100,000.00 ATTORNEY’S FEES.
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court’s conclusions with respect to the principal
issue of whether private respondent committed
patent infringement to the prejudice of
petitioner.
The burden of proof to substantiate a charge for
patent infringement rests on the plaintiff.16 In
the case at bar, petitioner’s evidence consists
primarily of its Letters Patent No. 14561, and the
testimony of Dr. Orinion, its general manager in
the Philippines for its Animal Health Products
Division, by which it sought to show that its
patent for the compound methyl 5 propylthio-2-
benzimidazole carbamate also covers the substance
Albendazole.
From a reading of the 9 claims of Letters Patent
No. 14561 in relation to the other portions
thereof, no mention is made of the compound
Albendazole. All that the claims disclose are: the
covered invention, that is, the compound methyl 5
propylthio-2-benzimidazole carbamate; the
compound’s being anthelmintic but nontoxic for
animals or its ability to destroy parasites
without harming the host animals; and the patented
methods, compositions or preparations involving
the compound to maximize its efficacy against
certain kinds of parasites infecting specified
animals.
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14561 fails to yield anything at all regarding
Albendazole. And no extrinsic evidence had been
adduced to prove that Albendazole inheres in
petitioner’s patent in spite of its omission
therefrom or that the meaning of the claims of the
patent embraces the same.
While petitioner concedes that the mere literal
wordings of its patent cannot establish private
respondent’s infringement, it urges this Court to
apply the doctrine of equivalents.
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substantially the same as the manner by which
petitioner’s compound works. The testimony of Dr.
Orinion lends no support to petitioner’s cause,
he not having been presented or qualified as an
expert witness who has the knowledge or expertise
on the matter of chemical compounds.
As for the concept of divisional applications
proffered by petitioner, it comes into play when
two or more inventions are claimed in a single
application but are of such a nature that a single
patent may not be issued for them.23 The applicant
thus is required "to divide," that is, to limit
the claims to whichever invention he may elect,
whereas those inventions not elected may be made
the subject of separate applications which are
called "divisional applications."24 What this only
means is that petitioner’s methyl 5 propylthio-2-
benzimidazole carbamate is an invention distinct
from the other inventions claimed in the original
application divided out, Albendazole being one of
those other inventions. Otherwise, methyl 5
propylthio-2-benzimidazole carbamate would not
have been the subject of a divisional application
if a single patent could have been issued for it
as well as Albendazole.1âwphi1
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Section 76. Civil Action for Infringement. - 76.1.
The making, using, offering for sale, selling, or
importing a patented product or a product obtained
directly or indirectly from a patented process,
or the use of a patented process without the
authorization of the patentee constitutes patent
infringement.
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76.4. The court may, according to the
circumstances of the case, award damages in a sum
above the amount found as actual damages
sustained: Provided, That the award does not
exceed three (3) times the amount of such actual
damages.
76.5. The court may, in its discretion, order that
the infringing goods, materials and implements
predominantly used in the infringement be disposed
of outside the channels of commerce or destroyed,
without compensation.
76.6. Anyone who actively induces the infringement
of a patent or provides the infringer with a
component of a patented product or of a product
produced because of a patented process knowing it
to be especially adopted for infringing the
patented invention and not suitable for
substantial non-infringing use shall be liable as
a contributory infringer and shall be jointly and
severally liable with the infringer. (Sec. 42,
R.A. No. 165a)
Section 77. Infringement Action by a Foreign
National. - Any foreign national or juridical
entity who meets the requirements of Section 3 and
not engaged in business in the Philippines, to
which a patent has been granted or assigned under
this Act, may bring an action for infringement of
patent, whether or not it is licensed to do
business in the Philippines under existing law.
(Sec. 41-A, R.A. No. 165a)
Section 78. Process Patents; Burden of Proof . -
If the subject matter of a patent is a process for
obtaining a product, any identical product shall
be presumed to have been obtained through the use
of the patented process if the product is new or
there is substantial likelihood that the identical
product was made by the process and the owner of
the patent has been unable despite reasonable
efforts, to determine the process actually used.
In ordering the defendant to prove that the
process to obtain the identical product is
different from the patented process, the court
shall adopt measures to protect, as far as
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practicable, his manufacturing and business
secrets. (n)
Section 79. Limitation of Action for Damages. -
No damages can be recovered for acts of
infringement committed more than four (4) years
before the institution of the action for
infringement. (Sec. 43, R.A. No. 165)
Section 80. Damages, Requirement of Notice. -
Damages cannot be recovered for acts of
infringement committed before the infringer had
known, or had reasonable grounds to know of the
patent. It is presumed that the infringer had
known of the patent if on the patented product,
or on the container or package in which the
article is supplied to the public, or on the
advertising material relating to the patented
product or process, are placed the words
"Philippine Patent" with the number of the patent.
(Sec. 44, R.A. No. 165a)
Section 81. Defenses in Action for Infringement.
- In an action for infringement, the defendant,
in addition to other defenses available to him,
may show the invalidity of the patent, or any
claim thereof, on any of the grounds on which a
petition of cancellation can be brought under
Section 61 hereof. (Sec. 45, R.A. No. 165)
Section 82. Patent Found Invalid May be Cancelled.
- In an action for infringement, if the court
shall find the patent or any claim to be invalid,
it shall cancel the same, and the Director of
Legal Affairs upon receipt of the final judgment
of cancellation by the court, shall record that
fact in the register of the Office and shall
publish a notice to that effect in the IPO
Gazette. (Sec. 46, R.A. No. 165a)
Section 83. Assessor in Infringement Action. -
83.1. Two (2) or more assessors may be appointed
by the court. The assessors shall be possessed of
the necessary scientific and technical knowledge
required by the subject matter in litigation.
Either party may challenge the fitness of any
assessor proposed for appointment.
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83.2. Each assessor shall receive a compensation
in an amount to be fixed by the court and advanced
by the complaining party, which shall be awarded
as part of his costs should he prevail in the
action. (Sec. 47, R.A. No. 165a)
Section 84. Criminal Action for Repetition of
Infringement. - If infringement is repeated by the
infringer or by anyone in connivance with him
after finality of the judgment of the court
against the infringer, the offenders shall,
without prejudice to the institution of a civil
action for damages, be criminally liable therefor
and, upon conviction, shall suffer imprisonment
for the period of not less than six (6) months but
not more than three (3) years and/or a fine of not
less than One hundred thousand pesos (P100,000)
but not more than Three hundred thousand pesos
(P300,000), at the discretion of the court. The
criminal action herein provided shall prescribe
in three (3) years from date of the commission of
the crime. (Sec. 48, R.A. No. 165a)
CHAPTER IX
VOLUNTARY LICENSING
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Section 87. Prohibited Clauses. - Except in cases
under Section 91, the following provisions shall
be deemed prima facie to have an adverse effect
on competition and trade:
87.1. Those which impose upon the licensee the
obligation to acquire from a specific source
capital goods, intermediate products, raw
materials, and other technologies, or of
permanently employing personnel indicated by the
licensor;
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arrangement due to reason(s) attributable to the
licensee;
87.10. Those which require payments for patents
and other industrial property rights after their
expiration, termination arrangement;
87.11. Those which require that the technology
recipient shall not contest the validity of any
of the patents of the technology supplier;
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88.3. In the event the technology transfer
arrangement shall provide for arbitration, the
Procedure of Arbitration of the Arbitration Law
of the Philippines or the Arbitration Rules of the
United Nations Commission on International Trade
Law (UNCITRAL) or the Rules of Conciliation and
Arbitration of the International Chamber of
Commerce (ICC) shall apply and the venue of
arbitration shall be the Philippines or any
neutral country; and
CHAPTER X
COMPULSORY LICENSING
Section 93. Grounds for Compulsory Licensing. -
The Director of Legal Affairs may grant a license
to exploit a patented invention, even without the
agreement of the patent owner, in favor of any
person who has shown his capability to exploit the
invention, under any of the following
circumstances:
93.1. National emergency or other circumstances
of extreme urgency;
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93.3. Where a judicial or administrative body has
determined that the manner of exploitation by the
owner of the patent or his licensee is anti-
competitive; or
93.4. In case of public non-commercial use of the
patent by the patentee, without satisfactory
reason;
93.5. If the patented invention is not being
worked in the Philippines on a commercial scale,
although capable of being worked, without
satisfactory reason: Provided, That the
importation of the patented article shall
constitute working or using the patent. (Secs. 34,
34-A, 34-B, R.A. No. 165a)
Section 94. Period for Filing a Petition for a
Compulsory License. - 94.1. A compulsory license
may not be applied for on the ground stated in
Subsection 93.5 before the expiration of a period
of four (4) years from the date of filing of the
application or three (3) years from the date of
the patent whichever period expires last.
94.2. A compulsory license which is applied for
on any of the grounds stated in Subsections 93.2,
93.3, and 93.4 and Section 97 may be applied for
at any time after the grant of the patent. (Sec.
34(1), R.A. No. 165)
Section 95. Requirement to Obtain a License on
Reasonable Commercial Terms. - 95.1. The license
will only be granted after the petitioner has made
efforts to obtain authorization from the patent
owner on reasonable commercial terms and
conditions but such efforts have not been
successful within a reasonable period of time.
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(c) In cases of public non-commercial use.
95.3. In situations of national emergency or other
circumstances of extreme urgency, the right holder
shall be notified as soon as reasonably
practicable.
95.4. In the case of public non-commercial use,
where the government or contractor, without making
a patent search, knows or has demonstrable grounds
to know that a valid patent is or will be used by
or for the government, the right holder shall be
informed promptly. (n)
Section 96. Compulsory Licensing of Patents
Involving Semi-Conductor Technology. - In the case
of compulsory licensing of patents involving semi-
conductor technology, the license may only be
granted in case of public non-commercial use or
to remedy a practice determined after judicial or
administrative process to be anti-competitive.
(n)
Section 97. Compulsory License Based on
Interdependence of Patents. - If the invention
protected by a patent, hereafter referred to as
the "second patent," within the country cannot be
worked without infringing another patent,
hereafter referred to as the "first patent,"
granted on a prior application or benefiting from
an earlier priority, a compulsory license may be
granted to the owner of the second patent to the
extent necessary for the working of his invention,
subject to the following conditions:
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97.4. The terms and conditions of Sections 95, 96
and 98 to 100 of this Act. (Sec. 34-C, R.A. No.
165a)
Section 98. Form and Contents of Petition. - The
petition for compulsory licensing must be in
writing, verified by the petitioner and
accompanied by payment of the required filing fee.
It shall contain the name and address of the
petitioner as well as those of the respondents,
the number and date of issue of the patent in
connection with which compulsory license is
sought, the name of the patentee, the title of the
invention, the statutory grounds upon which
compulsory license is sought, the ultimate facts
constituting the petitioner's cause of action, and
the relief prayed for. (Sec. 34-D, R.A. No. 165)
Section 99. Notice of Hearing. - 99.1. Upon filing
of a petition, the Director of Legal Affairs shall
forthwith serve notice of the filing thereof upon
the patent owner and all persons having grants or
licenses, or any other right, title or interest
in and to the patent and invention covered thereby
as appears of record in the Office, and of notice
of the date of hearing thereon, on such persons
and petitioner. The resident agent or
representative appointed in accordance with
Section 33 hereof, shall be bound to accept
service of notice of the filing of the petition
within the meaning of this Section.
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(c) If the licensee has not complied with the
prescribed terms of the license;
101.3. The licensee may surrender the license by
a written declaration submitted to the Office.
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