Compilation of Digested Cases in Ipl

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INTELLECTUAL PROPERTY LAW DIGESTED CASES August 2014

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INTRODUCTION

Philippine commitment to the GATT-TRIPS agreement

Tanada v. Angara

Facts:

On April 15, 1994, Respondent Navarro, representing the Government of the Republic of the Philippines, signed in Morocco, the Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations Act of the WTO.

By signing the Final Act,Secretary Navarro on behalf of the Republic of the Philippines, agreed:

(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a view to seeking approval of the Agreement in accordance with their procedures; and

(b) to adopt the Ministerial Declarations and Decisions.

On December 14, 1994, the Philippine Senate adopted Resolution No. 97 that concurred the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization.

Issue/s:

1) WON, the WTO Agreement violated the Economic

Nationalism provided in the 1987 Phil Constitution

2) WON, Paragraph 1, Article 34 of the General

Provisions and Basic Principles of the Agreement on

Trade-Related Aspects of Intellectual Property Rights

(TRIPS) intrudes on the power of the Supreme Court to

promulgate rules concerning pleading, practice and

procedures.

SC:

1) No, the Constitution indeed mandates a bias in favor

of Filipino goods, services, labor and enterprises, at the

same time, it recognizes the need for business exchange

with the rest of the world on the bases of equality and

reciprocity and limits protection of Filipino enterprises

only against foreign competition and trade practices that

are unfair. In other words, the Constitution did not

intend to pursue an isolationist policy. It did not shut out

foreign investments, goods and services in the

development of the Philippine economy. While the

Constitution does not encourage the unlimited entry of

foreign goods, services and investments into the

country, it does not prohibit them either. In fact, it

allows an exchange on the basis of equality and

reciprocity, frowning only on foreign competition that is

unfair.

WTO/GATT itself has provided built-in protection from

unfair foreign competition and trade practices including

anti-dumping measures, countervailing measures and

safeguards against import surges. Where local

businesses are jeopardized by unfair foreign

competition, the Philippines can avail of these measures.

There is hardly therefore any basis for the statement

that under the WTO, local industries and enterprises will

all be wiped out and that Filipinos will be deprived of

control of the economy. Quite the contrary, the weaker

situations of developing nations like the Philippines have

been taken into account.

2) No. A WTO Member is required to provide a rule of presumption that a product shown to be identical to one produced with the use of a patented process shall be deemed to have been obtained by the (illegal) use of the said patented process, (1) where such product obtained by the patented product is new, or (2) where there is "substantial likelihood" that the identical product was made with the use of the said patented process but the owner of the patent could not determine the exact process used in obtaining such identical product. Hence, the "burden of proof" contemplated by Article 34 should actually be understood as the duty of the alleged patent infringer to overthrow such presumption. Such burden, properly understood, actually refers to the "burden of evidence" (burden of going forward) placed on the producer of the identical (or fake) product to show that his product was produced without the use of the patented process.

The foregoing notwithstanding, the patent owner still has the "burden of proof" since, regardless of the presumption provided under paragraph 1 of Article 34,

validglobalizationlimits our sovereignty because other countries also affords us the same protection and benefitsembodied in our constitution that we adopt as part of the law of the land international agreements and principles



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such owner still has to introduce evidence of the existence of the alleged identical product, the fact that it is "identical" to the genuine one produced by the patented process and the fact of "newness" of the genuine product or the fact of "substantial likelihood" that the identical product was made by the patented process.

It should be noted that the requirement of Article 34 to

provide a disputable presumption applies only if (1) the

product obtained by the patented process in NEW or (2)

there is a substantial likelihood that the identical

product was made by the process and the process

owner has not been able through reasonable effort to

determine the process used. Where either of these two

provisos does not obtain, members shall be free to

determine the appropriate method of implementing the

provisions of TRIPS within their own internal systems

and processes.

Did RA 8293 repeal existing laws on intellectual property?

Mirpuri v. CA

The Intellectual Property Code took effect on January 1,

1998 and by its express provision, repealed the

Trademark Law, the Patent Law, Articles 188 and 189 of

the Revised Penal Code, the Decree on Intellectual

Property, and the Decree on Compulsory Reprinting of

Foreign Textbooks. The Code was enacted to strengthen

the intellectual and industrial property system in the

Philippines as mandated by the country's accession to

the Agreement Establishing the World Trade

Organization (WTO).

Samson v. Daway

Facts:

On March 7, 2002, two informations for unfair competition under Sec. 168.3(a) in relation to Sec. 170 (RA 8293, IPC) were filed against Manolo Samson, registered owner of ITTI shoes. The informations accused Samson of unlawful and felonious distribution, selling and offering for sale CATERPILLAR products (footwear, garments, clothing, etc) which were closely identical to and/or colorable imitations of the authentic products. It further accused Samson of using trademarks, symbols and/or designs.

On April 19, 2002, petitioner filed a motion to suspend arraignment due to a prejudicial question in another civil case and in view of the pendency of a petition for review with the Sec. of Justice assailing the finding of probable cause. The court denied the same.

On April 20, 2002, petitioner filed a twin motion to quash information and motion for reconsideration. He challenged the jurisdiction of the court since under Sec. 170 of IPC, the penalty of imprisonment does not exceed six years, thus, cognizable by the MTC and not by the RTC, in accordance with RA 7691. The same was denied.

Hence, Samson filed a petition directly before the SC on the ground of grave abuse of discretion.

Was RA 166 expressly repealed by RA 8293?

No.

The repealing act of RA 8293 states, in part, that “All acts and parts of Acts inconsistent herewith, more particularly…RA 166…” This clause did not expressly repeal RA 166 in its entirety, otherwise, it would not have used the phrases “parts of Acts” and “inconsistent herewith”. The use of the phrases “parts of Acts” and “inconsistent herewith” only means that the repeal pertains only to provisions which are repugnant or not susceptible of harmonization with RA 8293.

Sec. 27 of RA 166, however, is consistent and in harmony with Sec. 163 of RA 8293. Had RA 8293 intended to vest jurisdiction over violations of intellectual property rights with the MTCs, it would have expressly stated so under Sec. 163.

Which court has jurisdiction over criminal and civil cases for violation of the intellectual property rights?

RTC.

Under Sec. 170 of RA 8293, which took effect on January 1, 1998, the criminal penalty for infringement of registered trademarks, unfair competition, false designation of origin and false description or representation, is imprisonment from 2 to 5 years and a fine ranging from P50,000 to P200,000.

Corollarily, Sec. 163 of the same Code states that actions (including criminal and civil) under Secs. 150, 155, 164, 166, 167, 168 and 169 shall be brought before the proper courts with appropriate jurisdiction under existing laws.

The existing law referred to is Sec. 27 of RA 166 (Trademark Law) which provides that jurisdiction over

effect: apply section 27 of r.a. 166 in which RTC is proper court for infringment cases



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cases for infringement of registered marks, unfair competition false designation of origin and false description or representation is lodged with the RTC.

Moreover, a rule in Statutory Construction states that in case of conflict between a general and a special law, the latter must prevail. Jurisdiction conferred by a special law to RTC must prevail over that granted by a general law to MTC.

In the case at bar, RA 8293 and RA 166 are special laws conferring jurisdiction over violations of intellectual property rights to RTC. They should therefore prevail over RA 7691, which is a general law. Thus, RTC has jurisdiction even if the penalty of imprisonment is less than 6 years.

R.A. 8293 – INTELLECTUAL PROPERTY LAW

Preliminary Matters

State Policy Declaration – Sec. 2

Twentieth Century Music Corp. v. Aiken

Facts:

George Aiken's Chicken" is fast food restaurant in Pittsburgh, Pennsylvania, owned and operated by George Aiken. Inside the store, radio station broadcasts are played over loud speakers that are audible to anyone in the restaurant. On March 11, 1972, two songs copyrighted by Twentieth Century Music Corp. were played over the radio and heard by customers in the restaurant. While the radio station broadcasting the songs was licensed by the American Society of Composers, Authors and Publishers (ASCAP) to play them, Aiken's establishment was not.

The petitioners of the case were Twentieth Century Music Corp., which owned the copyright to one of the songs, "The More I See You", and Mary Bourne, who owned the copyright to the other song, "Me and My Shadow". The petitioners claimed that Aiken's broadcast of their songs in his establishment violated their right to publicly perform their work for profit.

Issue:

Whether the reception of a copyrighted song on a radio broadcast constitutes a copyright violation if the

copyright owner has only licensed the broadcaster to "perform the composition publicly for profit".

SC:

The respondent did not infringe upon the petitioners' right under the Copyright Act "[t]o perform the copyrighted work publicly for profit" since the radio broadcast in the establishment was not equivalent to a "performance. Respondent did not infringe upon petitioners' exclusive right, under the Copyright Act, "[t]o perform the copyrighted work publicly for profit," since the radio reception did not constitute a "performance" of the copyrighted songs.

Feist Publications, Inc. v. Rural Tele. Servs. Co.

Facts:

Rural Telephone Service Company is a certified public

utility that provides telephone service to several

communities in northwest Kansas. It is subject to a state

regulation that requires all telephone companies

operating in Kansas to issue annually an updated

telephone directory. Rural publishes a typical telephone

directory, consisting of white pages and yellow pages.

Rural distributes its directory free of charge to its

subscribers, but earns revenue by selling yellow pages

advertisements.

Feist Publications, Inc., is a publishing company that

specializes in area-wide telephone directories Feist's

area-wide directories cover a much larger geographical

range The Feist directory that is the subject of this

litigation covers 11 different telephone service areas in

15 counties and contains 46,878 white pages listings --

compared to Rural's approximately 7,700 listings. Like

Rural's directory, Feist's is distributed free of charge and

includes both white pages and yellow pages. Feist and

Rural compete vigorously for yellow pages advertising.

As the sole provider of telephone service in its service

area, Rural obtains subscriber information quite easily.

Persons desiring telephone service must apply to Rural

and provide their names and addresses; Rural then

assigns them a telephone number. Feist is not a

telephone company To obtain white pages listings for its

http://en.wikipedia.org/wiki/George_Aiken

http://en.wikipedia.org/wiki/Copyright_violation

SECTION 2. Declaration of State Policy. — The State recognizes that an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products. It shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in this Act.The immediate effect of our copyright law is to serve a fair return for an "author's" creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good."



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area-wide directory, Feist approached each of the 11

telephone companies operating in northwest Kansas and

offered to pay for the right to use its white pages

listings. Of the 11 telephone companies, only Rural

refused to license its listings to Feist. Rural's refusal

created a problem for Feist District Court determined

that this was precisely the reason Rural refused to

license its listings. The refusal was motivated by an

unlawful purpose "to extend its monopoly in telephone

service to a monopoly in yellow pages

advertising." Unable to license Rural's white pages

listings, Feist used them without Rural's consent. As a

result, a typical Feist listing includes the individual's

street address; most of Rural's listings do not.

Notwithstanding these additions, however, 1,309 of the

46,878 listings in Feist's 1983 directory were identical to

listings in Rural's 1982-1983 white pages.

District Court granted summary judgment to Rural,

explaining that "courts have consistently held that

telephone directories are copyrightable" Court of

Appeals for the Tenth Circuit affirmed "for substantially

the reasons given by the district court."

Issue:

Whether or not Rural’s compilations is copyrightable,

hence Fiest’s actions where an infringement of such

right.

SC:

We rule in the negative.

This case concerns the interaction of two well-

established propositions. The first is that facts are not

copyrightable; the other, that compilations of facts

generally are. The key to resolving the tension lies in

understanding why facts are not copyrightable. The sine

qua non of copyright is originality. To qualify for

copyright protection, a work must be original to the

author. Original, as the term is used in copyright, means

only that the work was independently created by the

author (as opposed to copied from other works), and

that it possesses at least some minimal degree of

creativity. Originality does not signify novelty; a work

may be original even though it closely resembles other

works so long as the similarity is fortuitous, not the

result of copying. It is this bedrock principle of copyright

that mandates the law's seemingly disparate treatment

of facts and factual compilations. "No one may claim

originality as to facts." facts do not owe their origin to

an act of authorship. The distinction is one between

creation and discovery: the first person to find and

report a particular fact has not created the fact; he or

she has merely discovered its existence. one who

discovers a fact is not its "maker" or "originator." "The

discoverer merely finds and records."

Factual compilations, on the other hand, may possess

the requisite originality. The compilation author typically

chooses which facts to include, in what order to place

them, and how to arrange the collected data so that

they may be used effectively by readers. These choices

as to selection and arrangement, so long as they are

made independently by the compiler and entail a

minimal degree of creativity, are sufficiently original that

Congress may protect such compilations through the

copyright laws. Thus, even a directory that contains

absolutely no protectible written expression, only facts,

meets the constitutional minimum for copyright

protection if it features an original selection or

arrangement. This protection is subject to an important

limitation. The mere fact that a work is copyrighted does

not mean that every element of the work may be

protected. Originality remains the sine qua non of

copyright; accordingly, copyright protection may extend

only to those components of a work that are original to

the author. Thus, if the compilation author clothes facts

with an original collocation of words, he or she may be

able to claim a copyright in this written expression.

Others may copy the underlying facts from the

publication, but not the precise words used to present

them.

Copyright treats facts and factual compilations in a

wholly consistent manner. Facts, whether alone or as

part of a compilation, are not original and therefore may

not be copyrighted. A factual compilation is eligible for



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copyright if it features an original selection or

arrangement of facts, but the copyright is limited to

[p*351] the particular selection or arrangement. In no

event may copyright extend to the facts themselves.

Three distinct elements and requires each to be met for

a work to qualify as a copyrightable compilation: (1) the

collection and assembly of pre-existing material, facts, or

data; (2) the selection, coordination, or arrangement of

those materials; and (3) the creation, by virtue of the

particular selection, coordination, or arrangement, of an

“original” work of authorship. “A copyright in a directory

. . . is properly viewed as resting on the originality of the

selection and arrangement of the factual material,

rather than on the industriousness of the efforts to

develop the information. Copyright protection does not

extend to the facts themselves, and the mere use of

information contained in a directory without a

substantial copying of the format does not constitute

infringement.

There is no doubt that Feist took from the white pages

of Rural's directory a substantial amount of factual

information. At a minimum, Feist copied the names,

towns, and telephone numbers of 1,309 of Rural's

subscribers. Not all copying, however, is copyright

infringement. To establish infringement, two elements

must be proven: (1) ownership of a valid copyright, and

(2) copying of constituent elements of the work that are

original. The first element is not at issue here; Feist

appears to concede that Rural's directory, considered as

a whole, is subject to a valid copyright because it

contains some foreword text, as well as original material

in its yellow pages advertisements.

The question is whether Rural has proved the second

element. In other words, did Feist, by taking 1,309

names, towns, and telephone numbers from Rural's

white pages, copy anything that was “original” to Rural?

Certainly, the raw data does not satisfy the originality

requirement. Rural may have been the first to discover

and report the names, towns, and telephone numbers of

its subscribers, but this data does not “'owe its origin'”

to Rural. these bits of information are uncopyrightable

facts; they existed before Rural reported them and

would have continued to exist if Rural had never

published a telephone directory. The selection,

coordination, and arrangement of Rural's white pages do

not satisfy the minimum constitutional standards for

copyright protection. As mentioned at the outset, Rural's

white pages are entirely typical. Persons desiring

telephone service in Rural's service area fill out an

application and Rural issues them a telephone number.

In preparing its white pages, Rural simply takes the data

provided by its subscribers and lists it alphabetically by

surname. The end product is a garden-variety white

pages directory, devoid of even the slightest trace of

creativity. Rural's selection of listings could not be more

obvious: it publishes the most basic information -- name,

town, and telephone number -- about each person who

applies to it for telephone service. This is “selection” of a

sort, but it lacks the modicum of creativity necessary to

transform mere selection into copyrightable expression.

Rural expended sufficient effort [p*363] to make the

white pages directory useful, but insufficient creativity to

make it original.

This arrangement may, technically speaking, owe its

origin to Rural; no one disputes that Rural undertook the

task of alphabetizing the names itself. But there is

nothing remotely creative about arranging names

alphabetically in a white pages directory. We conclude

that the names, towns, and telephone numbers copied

by Feist were not original to Rural and therefore were

not protected by the copyright in Rural's combined

white and yellow pages directory. As a constitutional

matter, copyright protects only those constituent

elements of a work that possess more than a de

minimis quantum of creativity. Rural's white pages,

limited to basic subscriber information and arranged

alphabetically, fall short of the mark. Because Rural's

white pages lack the requisite originality, Feist's use of

the listings cannot constitute infringement.

Effect on International Conventions and on Principle of Reciprocity



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Mirpuri v. CA

Facts:

Lolita Escobar applied with the Bureau of Patents for

the registration of the trademark “Barbizon”, alleging

that she had been manufacturing and selling these

products since 1970. private respondent Barbizon Corp

opposed the application in IPC No. 686. The Bureau

granted the application and a certificate of registration

was issued for the trademark “Barbizon”. Escobar later

assigned all her rights and interest over the trademark to

petitioner Mirpuri. In 1979, Escobar failed to file with the

Bureau the Affidavit of Use of the trademark. Due to his

failure, the Bureau cancelled the certificate of

registration. Escobar reapplied and Mirpuri also applied

and this application was also opposed by private

respondent in IPC No. 2049, claiming that it adopted said

trademark in 1933 and has been using it. It obtained a

certificate from the US Patent Office in 1934. Then in

1991, DTI cancelled petitioner’s registration and

declared private respondent the owner and prior user of

the business name “Barbizon International”.

Issue:

Whether or not the treaty (Paris Convention) affords

protection to a foreign corporation against a Philippine

applicant for the registration of a similar trademark.

SC:

The Court held in the affirmative. RA 8293 defines

trademark as any visible sign capable of distinguishing

goods. The Paris Convention is a multilateral treaty that

seeks to protect industrial property consisting of

patents, utility models, industrial designs, trademarks,

service marks, trade names and indications of source or

appellations of origin, and at the same time aims to

repress unfair competition. In short, foreign nationals

are to be given the same treatment in each of the

member countries as that country makes available to its

own citizens. Nationals of the various member nations

are thus assured of a certain minimum of international

protection of their industrial property.

Coverage of Intellectual Property Rights/ Differences

Kho v. CA

Facts:

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

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

After hearing, the tc granted the same. Respondents filed a petitioner with CA which the latter granted.

Issue:

Whether the copyright and patent over the name and container of a beauty cream product would entitle the registrant to the use and ownership over the same to the exclusion of others.



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SC:

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

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

Pearl & Dean, Inc. v. Shoemart Inc.

Facts:

Pearl and Dean Inc. is a corporation engaged in the manufacture of advertising display units called light boxes. In January 1981, Pearl and Dean was able to acquire copyrights over the designs of the display units. In 1988, their trademark application for “Poster Ads” was approved; they used the same trademark to advertise their light boxes.

In 1985, Pearl and Dean negotiated with Shoemart Inc. (SM) so that the former may be contracted to install light boxes in the ad spaces of SM. Eventually, SM rejected Pearl and Dean’s proposal.

Two years later, Pear and Dean received report that light boxes exactly the same as theirs are being used by SM in their ad spaces. They demanded SM to stop using the light boxes and at the same time asked for damages amounting to P20 M. SM refused to pay damages though they struck down the light boxes. Pearl and Dean eventually sued SM. SM argued that it did not infringe on Pearl and Dean’s trademark because Pearl and Dean’s trademark is only applicable to envelopes and stationeries and not to the type of ad spaces owned by SM. SM also averred that “Poster Ads” is a generic term hence it is not subject to trademark registration. SM also averred that the actual light boxes are not copyrightable. The RTC ruled in favor of Pearl and Dean. But the Court of Appeals ruled in favor of SM.

Issue:

Whether or not copyright protection extends the light box itself and not only to the technical drawings?

SC:

NO. Petitioner's copyright protection extended only to the technical drawings and not to the light box itself because the latter was not at all in the category of "prints, pictorials illustrations, advertising copies, labels, tags and box wraps" under Section 2, (O) of PD 49 (The Intellectual Property Decree). Said Section 2 expressly enumerated the works subject to copyright: SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of the following works: . . . (O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps; . . . Although petitioner's copyright certificate was entitled "Advertising Display Units" (which depicted the box-type electrical devices), its claim of copyright infringement cannot be sustained. Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to the subjects and by the-persons, and on terms and conditions specified in the statute. Accordingly, it can cover only the works falling within the statutory enumeration or description. P & D secured its copyright under the classification class "O" work. This being so,



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petitioner's copyright protection extended only to the technical drawings and not to the light box itself because the latter was not at all in the category of "prints, pictorial illustrations, advertising copies, labels, tags and box wraps." Stated otherwise, even as we find that P & D indeed owned a valid copyright, the same could have referred only to the technical drawings within the category of "pictorial illustrations." It could not have possibly stretched out to include the underlying light box. The strict application of the law's enumeration in Section 2 prevents us from giving petitioner even a little leeway, that is, even if its copyright certificate was entitled "Advertising Display Units." What the law does not include, it excludes, and for the good reason: the light box was not a literary or artistic piece which could be copyrighted under the copyright law. And no less clearly, neither could the lack of statutory authority to make the light box copyrightable be remedied by the simplistic act of entitling the copyright certificate issued by the National Library as "Advertising Display Units.

The Court also ruled that petitioner could not legally prevent anyone from manufacturing or commercially using its invention for the main reason that it never secured a patent for it. The Court emphasized that to be able to effectively and legally preclude others from copying and profiting from an 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. Ideas, once disclosed to the public without the protection of a valid patent, are subject to appropriation without significant restraint.

The Intellectual Property Office – Secs. 5 to 16 as amended

Pest Management Assoc. of the Phil. v. Fertilizer and Pesticide Authority

Facts:

PEST Management Association is a corporation engaged

in the industry of pesticide manufacturing. It questions

now Sec. 3.12 of the Implementing Rules, formulated by

the Pesticide Authority, as mandated by PD 1144. The

assailed provision accords seven (7) years of protection

to the pesticide ingredient after its first full or

conditional registration.

PEST’s arguments:

- Such provision encroaches upon the

exclusive jurisdiction of the Intellectual

Property Office

- Such provision unduly restricts free trade in

the country, most specifically in the

pesticide industry, violative of the

Constitution, as it sanctions free trade as an

important aspect of the economy.

FPA’s arguments:

- The provision does not encroach upon IPO’s

jurisdiction, since patents and date

protection are different

- While free trade is encouraged, it does not

divest the State from implementing

measures for general welfare

Issues:

(1) Does it restrict free trade?

SC: No, it does not.

“[O]ur present Constitution enshrines free trade

as policy,” but it nonetheless reserves to the State the

power to intervene whenever necessary to promote the

general welfare. Proven in this case is the adverse effect

and the imminent danger that unregulated use of

pesticide poses. Such regulation, therefore, is for the

general welfare.

(2) Does it encroach upon the IPO’s jurisdiction?

SC:

No, it does not.

Nowhere in the IP Law can it be found that IPO

has exclusive jurisdiction in protecting intellectual

property rights. In fact, under the law, IPO is encouraged

to coordinate with other government agencies and the

private sector to formulate and implement plans and

policies to strengthen policies on protection of

intellectual property rights in the country. Hence, the

FPA, being one of those authorities, may implement

such regulations, akin to protecting property rights.



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In-N-Out Burger, Inc. v. Sehwani, Inc. and/or Benita’s Frites

Facts:

Petitioner IN-N-OUT BURGER, INC., a business entity incorporated under the laws of US, which is a signatory to the Convention of Paris on Protection of Industrial Property and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Petitioner is engaged mainly in the restaurant business, but it has never engaged in business in the Philippines. Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations organized in the Philippines. On 2 June 1997, petitioner filed trademark and service mark applications with the Bureau of Trademarks (BOT) of the IPO for "IN-N-OUT" and "IN-N-OUT Burger & Arrow Design." Petitioner later found out, through the Official Action Papers issued by the IPO on 31 May 2000,that respondent Sehwani, Incorporated had already obtained Trademark Registration for the mark "IN N OUT (the inside of the letter "O" formed like a star)." Petitioner eventually filed on 4 June 2001 before the Bureau of Legal Affairs (BLA) of the IPO an administrative complaint against respondents for unfair competition and cancellation of trademark registration. Respondents asserted therein that they had been using the mark "IN N OUT" in the Philippines since 15 October 1982. Respondent then filed with the BPTTT an application for the registration of the mark. BPTTT approved its application and issued the corresponding certificate of registration in favor of the respondent. On Dec 22, 2003, IPO Director of Legal Affairs rendered a decision in favor of petitioner stating petitioner had the right to use its trade name and mark in the Philippines to the exclusion of others. However, the decision also includes that respondent is not guilty of unfair competition. Upon appeal by petitioner, the new IPO Director General declared that respondents were guilty of unfair competition on December 23, 2005. On 18 July 2006, the Court of Appeals promulgated a Decision reversing the Decision dated 23 December 2005 of the IPO Director General. The appellate court declared that Section 163 of the Intellectual Property Code specifically confers upon theregular courts, and not the BLA-IPO, sole jurisdiction to hear and decide cases involving provisions of the Intellectual Property Code, particularly trademarks. Hence, the present petition.

Issues:

1) Whether the IPO (administrative bodies) have jurisdiction to cases involving unfair competition

(2) Whether respondent Sehwani is liable of unfair competition

SC:

(1) Yes. Sec. 160 and 170, which are found under Part III of the IP Code, recognize the concurrent jurisdiction of civil courts and theIPO over unfair competition cases. Therefore, the IPO Director of Legal Affairs have jurisdiction to decide the petitioner's administrativecase against respondents and the IPO Director General have exclusive jurisdiction over the appeal of the judgment of the IPO Director of Legal Affairs.

(2) Yes. The evidence on record shows that the respondents were not using their registered trademark but that of the petitioner. Further,respondents are giving their products the general appearance that would likely influence purchasers to believe that these products arethose of the petitioner. The intention to deceive may be inferred from the similarity of the goods as packed and offered for sale, and, thus, action will lie to restrain such unfair competition. Also, respondent’s use of IN-N-OUT BURGER in busineses signages reveals fraudulentintent to deceive purchasers.

N.B.

The essential elements of an action for unfair competition are 1) confusing similarity in the general appearance of the goods and (2) intentto deceive the public and defraud a competitor.

Phil. Pharmawealth, Inc. v. Pfizer and Pfizer, Inc.

Facts:

This case arose from a Complaint for patent infringement filed against petitioner Phil Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with the Bureau of Legal Affairs of the Intellectual Property Office (BLA-IPO).

Pfizer is the registered owner of Philippine Letters Patent No. 21116 issued on July 16, 1987. The patent is



10

valid until July 16, 2004 . Patent No. 21116 covers ampicillin sodium/sulbactam sodium.

Pfizer is marketing Sulbactam Ampicillin under the brand name “Unasyn.” The sole and exclusive distributor of “Unasyn” products in the Philippines is Zuellig Pharma Corporation, pursuant to a Distribution Services Agreement it executed with Pfizer Phils. on January 23, 2001.

Sometime in January and February 2003, Pfizer, Inc. came to know that Phil. Pharmawealth Inc submitted bids for the supply of Sulbactam Ampicillin to several hospitals without the consent of complainants and in violation of the Pfizer, Inc. 's intellectual property rights.

Pfizer, Inc. thus wrote the above hospitals and demanded that the latter immediately cease and desist from accepting bids for the supply of Sulbactam Ampicillin or awarding the same to entities other than Pfizer, Inc.. Complainants, in the same letters sent through undersigned counsel, also demanded that Phil. Pharmawealth Inc immediately withdraw its bids to supply Sulbactam Ampicillin.

In gross and evident bad faith, Phil. Pharmawealth Inc and the hospitals, willfully ignored complainants' just, plain and valid demands, refused to comply therewith and continued to infringe the Patent, all to the damage and prejudice of complainants. As registered owner of the Patent, Pfizer is entitled to protection under Section 76 of the IP Code.

Respondents prayed for permanent injunction, damages and the forfeiture and impounding of the alleged infringing products. They also asked for the issuance of a temporary restraining order and a preliminary injunction that would prevent herein petitioner, its agents, representatives and assigns, from importing, distributing, selling or offering the subject product for sale to any entity in the Philippines.

On February 7, 2005, petitioner filed a Motion to Dismiss the case for being moot and academic, contending that respondents' patent had already lapsed. In the same manner, petitioner also moved for the reconsideration of the temporary restraining order issued by the CA on

the same basis that the patent right sought to be protected has been extinguished due to the lapse of the patent license and on the ground that the CA has no jurisdiction to review the order of the BLA-IPO as said jurisdiction is vested by law in the Office of the Director General of the IPO.

Issue:

What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the Intellectual Property Office?

SC:

The Court of Appeals and not the IPO Director General, has jurisdiction to determine whether the BLA-IPO committed grave abuse of discretion in denying respondents' motion to extend the effectivity of the writ of preliminary injunction which the said office earlier issued.

The petitioner's argument is that, pursuant to the doctrine of primary jurisdiction, the Director General of the IPO and not the CA has jurisdiction to review the questioned Orders of the Director of the BLA-IPO.

Under Section 7(b) of RA 8293, otherwise known as the Intellectual Property Code of the Philippines, which is the presently prevailing law, the Director General of the IPO exercises exclusive appellate jurisdiction over all decisions rendered by the Director of the BLA-IPO. However, what is being questioned before the CA is not a decision, but an interlocutory order of the BLA-IPO denying respondents' motion to extend the life of the preliminary injunction issued in their favor.

It is worthy to note that RA 8293 and its implementing rules and regulations do not provide for a procedural remedy to question interlocutory orders issued by the BLA-IPO. RA 8293 is silent with respect to any remedy available to litigants who intend to question an interlocutory order issued by the BLA-IPO. Hence, in the absence of such a remedy, the provisions of the Rules of Court shall apply in a suppletory manner. The respondents correctly resorted to the filing of a special civil action for certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot appeal therefrom and they have no other plain, speedy and adequate remedy in the ordinary course of law. It is



11

settled that one of the exceptions to the doctrine of primary jurisdiction is where the question involved is purely legal and will ultimately have to be decided by the courts of justice.

The propriety of extending the life of the writ of preliminary injunction issued by the BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within the jurisdiction of the said administrative agency, particularly that of its Director General. The resolution of this issue which was raised before the CA does not demand the exercise by the IPO of sound administrative discretion requiring special knowledge, experience and services in determining technical and intricate matters of fact.

Adoption of Intellectual Property Policies – Sec. 230

THE LAW ON COPYRIGHT

Works Protected

Literary or Artistic Works

Columbia Pictures v. CA

Columbia Pictures lodged a formal complaint with the National Bureau of Investigation for violation of PD No. 49, as amended, and sought its assistance in their anti-film piracy drive. Agents of the NBI and private researchers made discreet surveillance on various video establishments in Metro Manila including Sunshine Home Video Inc. owned and operated by Danilo A. Pelindario. On November 14, 1987, NBI Senior Agent Lauro C. Reyes applied for a search warrant with the court a quo against Sunshine seeking the seizure, among others, of pirated video tapes of copyrighted films all of which were enumerated in a list attached to the application; and, television sets, video cassettes and/or laser disc recordings equipment and other machines and paraphernalia used or intended to be used in the unlawful exhibition, showing, reproduction, sale, lease or disposition of videograms tapes in the premises above described. In the hearing of the application, NBI Senior Agent Lauro C. Reyes, upon questions by the court a quo, reiterated in substance his averments in his affidavit. His testimony was corroborated by another witness, Mr. Rene C. Baltazar. Atty. Rico V. Domingo’s deposition was also taken. On the basis of the affidavits and depositions of NBI Senior Agent Lauro C. Reyes,

Rene C. Baltazar and Atty. Rico V. Domingo, Search Warrant No 87-053 for violation of Section 56 of PD No. 49, as amended, was issued by the court a quo. NBI Agents found and seized various video tapes of duly copyrighted motion pictures/films owned or exclusively distributed by private complainants, and machines, equipment, television sets, paraphernalia, materials, accessories all of which were included in the receipt for properties accomplished by the raiding team. Copy of the receipt was furnished and/or tendered to Mr. Danilo A. Pelindario, registered owner-proprietor of Sunshine Home Video.

Issue:

Whether or not absence such registration, as in this case, there was no right created, hence, no infringement under PD 49 as amended?

SC:

As correctly pointed out by private complainants-oppositors, the Department of Justice has resolved this legal question as far back as December 12, 1978 in its Opinion No. 191 of the then Secretary of Justice Vicente Abad Santos which stated that Sections 26 and 50 do not apply to cinematographic works and PD No. 49 “had done away with the registration and deposit of cinematographic works” and that “even without prior registration and deposit of a work which may be entitled to protection under the Decree, the creator can file action for infringement of its rights.” He cannot demand, however, payment of damages arising from infringement. The same opinion stressed that “the requirements of registration and deposit are thus retained under the Decree, not as conditions for the acquisition of copyright and other rights, but as prerequisites to a suit for damages.” The statutory interpretation of the Executive Branch being correct, is entitled (to) weight and respect. Furthermore, a closer review of Presidential Decree No. 49 reveals that even with respect to works which are required under Section 26 thereof to be registered and with copies to be deposited with the National Library, such as books, including composite and cyclopedic works, manuscripts, directories and gazetteers; and periodicals, including pamphlets and newspapers; lectures, sermons, addresses, dissertations prepared for oral delivery; and letters, the failure to comply with said requirements does not deprive the copyright owner of the right to sue



12

for infringement. Such non-compliance merely limits the remedies available to him and subjects him to the corresponding sanction. The reason for this is expressed in Section 2 of the decree which prefaces its enumeration of copyrightable works with the explicit statement that “the rights granted under this Decree shall, from the moment of creation, subsist with respect to any of the following classes of works.” This means that under the present state of the law, the copyright for a work is acquired by an intellectual creator from the moment of creation even in the absence of registration and deposit. As has been authoritatively clarified: The registration and deposit of two complete copies or reproductions of the work with the National Library within three weeks after the first public dissemination or performance of the work, as provided for in Section 26 (P.D. No. 49, as amended), is not for the purpose of securing a copyright of the work, but rather to avoid the penalty for non-compliance of the deposit of said two copies and in order to recover damages in an infringement suit.

Ching v. Salinas

Facts:

Jessie Ching, petitioner, is the owner/general manager of Jeshicris Manufacturing Co., the maker and manufacturer of a Utility Model, described as “Leaf Spring Eye Bushing for Automobile” made up of plastic. Ching and Joseph Yu were issued by the National Library Certificates of Copyright Registration and Deposit of the said work.

Ching requested NBI for investigation for the apprehension of illegal manufacturers of his works.

After the investigation, it was alleged that William Salinas, Sr., respondent, illegally reproduced and distributed the works penalized under Section 177.1 and 177.3 of RA 8293.

RTC granted the application and issued the search warrants for the seizure of the articles.

Salinas filed a motion to quash the search warrants on the ground that the works covered by the certificates are not artistic in nature; they are considered automotive spare parts and pertain to technology. Also, the models are not original, and as such are the proper subject of a patent, not copyright.

Issue:

WON the Leaf Spring Eye Bushing for automobile is a work of art.

SC:

No. It is not considered as work of art.

No copyright granted by law can be said to arise in favor of the petitioner despite the issuance of the certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing and Vehicle Bearing Cushion. Moreover, it is worthy to state that the works protected under the Law on Copyright are: literary or artistic works (Sec. 172) and derivate works (Sec. 173). The Leaf Spring Eye Bushing and Vehicle Bearing Cushion fall on neither classification.

We agree with the contention of the petitioner that the author’s intellectual creation, regardless of whether it is a creation with utilitarian functions or incorporated in a useful article produced on an industrial scale, is protected by copyright law. However, the law refers to a “work of applied art which is an artistic creation.” It bears stressing that there is no copyright protection for works of applied art or industrial design which have aesthetic or artistic features that cannot be identified separately from the utilitarian aspects of the article. Functional components of useful articles, no matter how artistically designed, have generally been denied copyright protection unless they are separable from the useful article.

Thus, in the present case, petitioner’s models are not works of applied art, nor artistic works. Hence, they are utility models, useful articles, albeit with no artistic design or value.

Derivative Works

Laktaw v. Paglinawan

Facts:

Pedro Laktaw is the registered owner and author of a literary work entitled Diccionario Hispano-Tagalog (Spanish-Tagalog Dictionary) published in the City of Manila in 1889 by the printing establishment La Opinion. Mamerto Paglinawan, without the consent of Laktaw,



13

reproduced and improperly copied the said literary work.

The act done by Paglinawan, which is a violation of Article 7 of the Law on Intellectual Property, cause irreparable injuries to Laktaw. Laktaw prayed the court to order Paglinawan to withdraw from sale all stock of the work and to pay Laktaw the sum of $10,000.

Paglinawan in his answer denied all the allegations presented in the complaint. Hence, praying for the court to absolve him from the complaint.

Issue:

WON Paglinawan, without the consent of Laktaw, can reproduce the literary work of Laktaw.

SC:

No. Paglinawan cannot reproduce the literary work of Laktaw without asking his permission or consent.

Paglinawan violated Article 7 of Intellectual Property Law.

“Article 7 of the Law of January 10, 1879, on Intellectual Property: Nobody may reproduce another person’s work without the owner’s consent, even merely to annotate or add anything to it, or improve any edition thereof.”

Moreover, where one in publishing a Spanish-Tagalog dictionary has but copied the equivalents, definitions and different meanings given in another’s Spanish-Tagalog dictionary, although making some additions of his own and some unimportant changes in the examples to illustrate the meanings of the words, such as substituting “Tayabas” for “Bulacan” in the expression “Voy a Bulacan” (I am going to Bulacan), it is evident that he merely reproduced the dictionary of the other author in violation of the Law of January 10, 1879, on Intellectual Property.

Further, Dictionaries are not common property of the author, whose right thereto is recognized by Article 7, in connection with article 2, of the Law of January 10,

1879, and nobody can reproduce them without the permission of the author.

The author of a dictionary published in 1889 having an exclusive right thereto, vested under the Law of January 10, 1879, and protected by the Treaty of Paris of December 10, 1898, every violator of said right will be held responsible for the damages the said author may have sustained. Hence, Paglinawan is liable for damages and must pay to Laktaw.

Works not protected

Unprotected Subject Matter

Joaquin, Jr. v. Drilon

Facts:

Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of Copyright No. M922, dated January 28, 1971, of Rhoda and Me, a dating game show aired from 1970 to 1977.

On June 28, 1973, petitioner BJPI submitted to the National Library an addendum to its certificate of copyright specifying the show’s format and style of presentation.

On July 14, 1991, while watching television, petitioner Francisco Joaquin, Jr., president of BJPI, saw on RPN Channel 9 an episode of It’s a Date, which was produced by IXL Productions, Inc. (IXL). On July 18, 1991, he wrote a letter to private respondent Gabriel M. Zosa, president and general manager of IXL, informing Zosa that BJPI had a copyright to Rhoda and Me and demanding that IXL discontinue airing It’s a Date.

In a letter, dated July 19, 1991, private respondent Zosa apologized to petitioner Joaquin and requested a meeting to discuss a possible settlement. IXL, however, continued airing It’s a Date, prompting petitioner Joaquin to send a second letter on July 25, 1991 in which he reiterated his demand and warned that, if IXL did not comply, he would endorse the matter to his attorneys for proper legal action.

Meanwhile, private respondent Zosa sought to register IXL’s copyright to the first episode of “It’s a Date” for which it was issued by the National Library a certificate of copyright on August 14, 1991.



14

Upon complaint of petitioners, information for violation of P.D. No. 49 was filed against private respondent Zosa together with certain officers of RPN Channel 9, namely, William Esposo, Felipe Medina, and Casey Francisco, in the Regional Trial Court of Quezon City.

Issue:

Whether the format or mechanics of Joaquin’s television show is entitled to copyright protection?

SC:

No, the format or mechanics of a television show is not included in the list of protected works in §2 of P.D. No. 49. For this reason, the protection afforded by the law cannot be extended to cover them.

The essence of copyright infringement is the copying, in whole or in part, of copyrightable materials as defined and enumerated in Section 2 of PD. No. 49. Apart from the manner in which it is actually expressed, however, the idea of a dating game show is, in the opinion of this Office, a non-copyrightable material. Ideas, concepts, formats, or schemes in their abstract form clearly do not fall within the class of works or materials susceptible of copyright registration as provided in PD. No. 49.

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted by the statute, and not simply a pre-existing right regulated by the statute. Being a statutory grant, the rights are only such as the statute confers, and may be obtained and enjoyed only with respect to the subjects and by the persons, and on terms and conditions specified in the statute. P.D. No. 49, §2, in enumerating what are subject to copyright, refers to finished works and not to concepts. The copyright does not extend to an idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

What then is the subject matter of petitioners’ copyright?

The Court is of the opinion that petitioner BJPI’s copyright covers audiovisual recordings of each episode of Rhoda and Me, as falling within the class of works mentioned in P.D. 49, §2(M),

to wit: Cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings;

Law

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

(b)Works of Government Sec. 176; 171.11

Section 176. Works of the Government. - 176.1. No copyright shall subsist in any work of the Government of the Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties. No prior approval or conditions shall be required for the use of any purpose of statutes, rules and regulations, and speeches, lectures, sermons, addresses, and dissertations, pronounced, read or rendered in courts of justice, before administrative agencies, in deliberative assemblies and in meetings of public character. (Sec. 9, first par., P.D. No. 49)

176.2. The author of speeches, lectures, sermons, addresses, and dissertations mentioned in the preceding paragraphs shall have the exclusive right of making a collection of his works. (n)

176.3. Notwithstanding the foregoing provisions, the Government is not precluded from receiving and holding copyrights transferred to it by assignment, bequest or otherwise; nor shall publication or republication by the Government in a public document of any work in which copyright is subsisting be taken to cause any abridgment or annulment of the copyright or to authorize any use or appropriation of such work without the consent of the copyright owner. (Sec. 9, third par., P.D. No. 49)

171.11. A "work of the Government of the Philippines" is a work created by an officer or employee of the Philippine Government or any of its subdivisions and instrumentalities, including government-owned or controlled corporations as a part of his regularly prescribed official duties.



15

Copyright of Economic Rights: Ownership

Copyright of Economic Rights

Filipino Society of Composers v. Tan

Facts:

Filipino Society of Composers is a non-profit association of authors, composers and publishers duly organized under the Corporation Law of the Philippines and registered with the Securities and Exchange Commission. Said association is the owner of certain musical compositions among which are the songs entitled: "Dahil Sa Iyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao Lamang" and "The Nearness Of You."

On the other hand, BENJAMIN TAN is the operator of a restaurant known as "Alex Soda Foundation and Restaurant" where a combo with professional singers, hired to play and sing musical compositions to entertain and amuse customers therein, were playing and singing the above-mentioned compositions without any license or permission from the appellant to play or sing the same. Accordingly, Filipino Society of Composers demanded from the BENJAMIN TAN payment of the necessary license fee for the playing and singing of aforesaid compositions but the demand was ignored.

Hence, on November 7, 1967, Filipino Society of Composers filed a complaint with the lower court for infringement of copyright against BENJAMIN TAN for allowing the playing in the latter’s restaurant of said songs copyrighted in the name of the former.

BENJAMIN TAN, in his answer, countered that the complaint states no cause of action. While not denying the playing of said copyrighted compositions in his establishment, Tan maintains that the mere singing and playing of songs and popular tunes even if they are copyrighted do not constitute an infringement under the provisions of Section 3 of the Copyright Law (Act 3134 of the Philippine Legislature).

Trial Court dismissed the complaint.

Filipino Society of Composers appealed to the Court of Appeals which in turn, certified the case to the Supreme Court for adjudication on the legal question involved.

Issue:

WON the playing and signing of musical compositions which have been copyrighted under the provisions of the Copyright Law (Act 3134) constitute a public performance for profit within the meaning and contemplation of the Copyright Law of the Philippines; and assuming that there were indeed public performances for profit, whether or not appellee can be held liable therefor. SC: SC conceded that such performances are "public performances for profit. " However, such public performances for profit are not infringements upon the Copyright Law, so the appellee, Tan cannot be held liable. It is admitted that the patrons of the restaurant in question pay only for the food and drinks and apparently not for listening to the music. As found by the trial court, the music provided is for the purpose of entertaining and amusing the customers in order to make the establishment more attractive and desirable. It will be noted that for the playing and singing the musical compositions involved, the combo was paid as independent contractors by the appellant. It is therefore obvious that the expenses entailed thereby are added to the overhead of the restaurant which are either eventually charged in the price of the food and drinks or to the overall total of additional income produced by the bigger volume of business which the entertainment was programmed to attract. Consequently, it is beyond question that the playing and singing of the combo in defendant-appellee's restaurant constituted performance for profit contemplated by the Copyright Law. (Act 3134 amended by P.D. No. 49, as amended). Nevertheless, appellee cannot be said to have infringed upon the Copyright Law. Appellee is correct when he alleged that the composers of the contested musical compositions waived their right in favor of the general public when they allowed their intellectual creations to become property of the public domain before applying for the corresponding copyrights. The Supreme Court has ruled that "Paragraph 33 of Patent Office Administrative Order No. 3 (as amended, dated September 18, 1947) entitled 'Rules of Practice in the Philippines Patent Office relating to the Registration of Copyright Claims' promulgated pursuant to Republic Act 165, provides among other things that an intellectual



16

creation should be copyrighted thirty (30) days after its publication, if made in Manila, or within the (60) days if made elsewhere, failure of which renders such creation public property. Indeed, if the general public has made use of the object sought to be copyrighted for thirty (30) days prior to the copyright application the law deems the object to have been donated to the public domain and the same can no longer be copyrighted. A careful study of the records reveals that the song "Dahil Sa Iyo" which was registered on April 20, 1956 became popular in radios, juke boxes, etc. long before its registration while the song "The Nearness Of You" registered on January 14, 1955 had become popular twenty five (25) years prior to 1968, (the year of the hearing) or from 1943 and the songs "Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay Tao Lamang" both registered on July 10, 1966, appear to have been known and sang by the witnesses as early as 1965 or three years before the hearing in 1968. The testimonies of the witnesses at the hearing of this case on this subject were unrebutted by the appellant. Under the circumstances, it is clear that the musical compositions in question had long become public property, and are therefore beyond the protection of the Copyright Law. Malang Santos v. McCullough Printing Facts: Mauro Malalang Santos filed an action for damages for unauthorized use, adaptation and appropriation by the MCCULLOUGH PRINTING COMPANY of the intellectual creation or artistic design of a Christmas card by him (Mauro Maglalang Santos) based on Article 721 and 722 of the Civil Code of the Philippines. The Christmas card depicts a Philippine rural Christmas time scene consisting of a woman and a child in a nipa hut adorned with a star-shaped lantern and a man astride a carabao, beside a tree, underneath which appears the plaintiff's pen name, Malang. The complaint alleges that plaintiff Mauro Malang Santos designed for former Ambassador Felino Neri, for his personal Christmas Card greetings for the year 1959, the artistic motif in question. The following year the defendant McCullough Printing Company, without the knowledge and authority of plaintiff, displayed the very design in its album of

Christmas cards and offered it for sale, for a price. For such unauthorized act of defendant, plaintiff suffered moral damages to the tune of P16,000.00, because it has placed plaintiff's professional integrity and ethics under serious question and caused him grave embarrassment before Ambassador Neri. He further prayed for the additional sum of P3,000.00 by way of attorney's fee. Issues: (1) Whether plaintiff is entitled to protection, notwithstanding the, fact that he has not copyrighted his design? (2) Whether the publication is limited, so as to prohibit its use by others, or it is general publication? (3) Whether the provisions of the Civil Code or the Copyright Law should apply in the case? SC: (1) The Supreme Court found that plaintiff is not entitled to a protection, the provision of the Civil Code, notwithstanding. Paragraph 33 of Patent Office Administrative Order No. 3 (as amended dated September 18, 1947) entitled "Rules of Practice in the Philippines Patent Office relating to the Registration of Copyright Claims" promulgated pursuant to Republic Act 165, provides, among others, that an intellectual creation should be copyrighted thirty (30) days after its publication, if made in Manila, or within sixty (60) day's if made elsewhere, failure of which renders such creation public property. In the case at bar, even as of this moment, there is no copyright for the design in question. (2) We are not also prepared to accept the contention of appellant that the publication of the design was a limited one, or that there was an understanding that only Ambassador Neri should, have absolute right to use the same. In the first place, if such were the condition then Ambassador Neri would be the aggrieved party, and not the appellant. In the second place, if there was such a limited publication or prohibition, the same was not shown on the face of the design. When the purpose is a limited publication, but the effect is general publication, irrevocable rights thereupon become vested in the public, in consequence of which enforcement of the restriction becomes impossible (Nutt vs. National



17

Institute, 31 F [2d] 236). It has been held that the effect of offering for sale a dress, for example manufactured in accordance with an original design which is not protected by either a copyright or a patent, is to divest the owner of his common law rights therein by virtue of the publication of a 'copy' and thereafter anyone is free to copy the design or the dress (Fashion Originators Guild of America v. Federal Trade Commission, 114 F [2d] 80). When Ambassador Neri distributed 800 copies of the design in controversy, the plaintiff lost control of his design and the necessary implication was that there had been a general publication, there having been no showing of a clear indication that a limited publication was intended. The author of a literary composition has a light to the first publication thereof. He has a right to determine whether it shall be published at all, and if published, when, where, by whom, and in what form. This exclusive right is confined to the first publication. When once published, it is dedicated to the public, and the author loses the exclusive right to control subsequent publication by others, unless the work is placed under the protection of the copyright law. (See II Tolentino's Comments on the Civil Code, p. 433, citing Wright v. Eisle 83 N.Y. Supp. 887.) (3) Art. 722. The author and the composer, mentioned in Nos. 1 and 2 of the preceding article, shall have the ownership of their creations even before the publication of the same. Once their works are published, their rights are governed by the Copyright laws. The painter, sculptor or other artist shall have dominion over the product of his art even before it is copyrighted. The scientist or technologist has the ownership of his discovery or invention even before it is patented. (n) Limitations of Copyright Fair Use of Copyright Work A&M Records, Inc. v. Napster, Inc.

Facts:

Napster, Inc. was the owner/developer of a computer

program that allowed users to share music files over the

internet, as well as to download these shared materials.

This is called “peer-to-peer” sharing service. Such allows

three things: (1) making MP3 files available to other

Napster users; (2) searching for MP3 files stored in other

computers; and (3) allowing users to transfer exact

copies of those MP3 files from other computers. A&M

records. Inc., on the other hand, along with several other

major record companies pray that such program be

prohibited, so that the users could not share and

download copyrighted works, contrary to law.

Napster’s Arguments:

- Before this suit can prosper, the ones

alleging infringement must prove that: (1)

they are the owners of the alleged infringed

materials, and (2) they must demonstrate

that the alleged infringers violate their

exclusive rights, as granted by law. In this

case, there has been no showing of the

satisfaction of these two.

- However, granting arguendo that they are

able to satisfy the requirements, Napster

cannot be held liable for infringement under

the principle of Fair Use.

A&M’s, et al.’s Arguments:

- They have established the two requisites as:

(1) records show that they are the

copyrighted owners of 70-80% of the files

available in the Napster program, and (2)

since it has copyright over these files, they

have the exclusive rights to reproduction

and distribution. Thru the Napster’s

program, these rights have been

circumvented.

- Fair use cannot be used by Napster, as the

files made available to its users are copied in

toto or in its exact form, as if they bought it

from the copyright owners themselves.

Issues:

Have the companies suing satisfied the

requisites?

Court: Yes, they have. The statistics on record

satisfies the two requisites, but only insofar as the files

that are proven to have been copyrighted by the suing

companies.



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Can the affirmative defense of fair use be used?

Court: No, in this case, it cannot. The following

factors must be considered in order to ascertain

whether a specific act falls under fair use or not: (1) The

Purpose and the Character of the Use; (2) The Nature of

the use; (3) The extent of the use; (4) the Effect of the

use on the Market.

Purpose and the Character of the Use: In

ascertaining this criterion, the court must answer two

questions: (1) is the use transformative of the work?

(Meaning, does the use just “use” the property to create

another creation or giving the used work another

purpose or character?); (2) Is the use commercial or non-

commercial? Answering these two questions, the Court

finds and holds that: (1) the use is not transformative as

the files are being downloaded in its exact form, and (2)

the use is for commercial purposes, for the user who

sends the file to another cannot be said to have used the

file solely for personal use.

Nature of the use: Works that are more creative

get more protection. In the case at bar, the songs are

creative in character, and in order for these creations to

be used under the principle of fair use, they must be

used in a manner as they constitute only as an

ingredient to another creative work.

The Portion Used: The greater the portion used,

the less likely it is to be fair use. In the case at bar, the

songs are copied exactly or wholesale. Although this fact

alone does not prove, beyond reasonable doubt that

there is not fair use, this is indicative and may be

conclusive when other factors corroborate. Also, fair use

in this case is hard to establish, and cannot overthrow

the prima facie evidence of infringement.

Effect on the Market: Is the use harmful to the

market? The Court is of the opinion that the use is

harmful to the market as it would encourage prospective

buyers not to buy from the suing companies anymore, as

they can get the exact files from the website for free.

This fact alone convinces a reasonable man that the

suing companies are deprived of their potential income

from the songs.

After having examined the four requisites, it is

found that Napster cannot be justified under the

principle of Fair Use. However, it must be mentioned

that Napster is held liable only as Contributor to

Copyright Infringement. Contributory Copyright

Infringement is such liability of one who, with knowledge

of the infringing activity, induces, causes or materially

contributes to the infringing conduct of another. Napster,

however, is held liable for contributory infringement,

because it failed to prevent the distribution of

copyrighted works.

It must be stressed, however, that the fact that

there is a file sharing program does not mean there is

infringement. As previously held, the suing companies

have only proved that they are the copyrighted owners

of 70-80% of the files in the said program. Thus, it is

improper for the district court to issue an injunction for

the whole program. The proper finding would be to issue

injunction, insofar as the proven copyrighted files are

concerned.

Habana v. Robes

Facts:

Pacita Habana and two others were the authors of College English for Today Series 1 and 2 (CET). While they were researching for books to assist them in updating their own book, they chanced upon the book of Felicidad Robles entitled Developing English Proficiency Books 1 and 2 (DEP). They discovered further that the book of Robles was strikingly similar to the contents, scheme of presentation, illustrations and illustrative examples of CET. They then sued Robles and her publisher (Goodwill Trading Co.) for infringement and/or unfair competition with damages.

Robles, in her defense, alleged that her sources were from foreign books; that in their field similarity in styles cannot be avoided since they come from the same background and orientation. The trial court as well as the Court of Appeals ruled in favor of Robles.

Issue:

Whether or not the acts of Robles constitute infringemen?

SC:

YES. A perusal of the records yields several pages of the book DEP that are similar if not identical with the text of



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CET. In several other pages the treatment and manner of presentation of the topics of DEP are similar if not a rehash of that contained in CET. The similarities in examples and material contents are so obviously present in this case. How can similar/identical examples not be considered as a mark of copying? Robles’ act of lifting from the book of Habana et al substantial portions of discussions and examples, and her failure to acknowledge the same in her book is an infringement of Habana et al’s copyrights.

For infringement, it does not necessarily require that the entire copyrighted work, or even a large portion of it, be copied. If so much is taken that the value of the original work is substantially diminished, there is an infringement of copyright and to an injurious extent, the work is appropriated. In determining the question of infringement, the amount of matter copied from the copyrighted work is an important consideration. To constitute infringement, it is not necessary that the whole or even a large portion of the work shall have been copied. If so much is taken that the value of the original is sensibly diminished, or the labors of the original author are substantially and to an injurious extent appropriated by another, that is sufficient in point of law to constitute piracy. The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its gravity by an appropriate understanding thereof. Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the doing by any person, without the consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright.

Rights of Performers, Producers of Sound Recordings and Broadcasting Organizations

Limitations on Rights

ABSCBN v. Phil. Multi-media System, Inc.

Facts:

ABS-CBN is engaged in television and radio broadcasting through wireless and satellite means while Philippine Multi-Media Systems Inc. (“PMSI” for brevity), the operator of Dream Broadcasting System provides direct-

to-home (DTH) television via satellite to its subscribers all over the Philippines.

PMSI was granted legislative franchise under RA 8630 to install, operate and maintain a nationwide DTH satellite service and is obligated under by NTC Memorandum Circular No. 4-08-88, Section 6.2 of which requires all cable television system operators operating in a community within Grade “A” or “B” contours to carry the television signals of the authorized television broadcast stations (“must-carry rule”).

ABS-CBN filed a complaint with Intellectual Property Office (IPO) for violation of laws involving property rights. It alleged that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright and that the NTC circular only covers cable television system operators and not DTH satellite television operators. Moreover, NTC Circular 4-08-88 violates Sec. 9 of Art. III of the Constitution because it allows the taking of property for public use without payment of just compensation.

PMSI argued that its rebroadcasting of Channels 2 and 23 is sanctioned by Memorandum Circular No. 04-08-88; that the must-carry rule under the Memorandum Circular is a valid exercise of police power.

IPO and Court of Appeals ruled in favor of PMSI.

Issues:

(1) w/n PMSI infringed on ABS-CBN’s broadcasting rights and copyright (MAIN ISSUE)

(2) w/n PMSI is covered by the NTC Circular (“must-carry rule”)

(3) Whether NTC Circular 4-08-88 violates Sec. 9 of Art. III of the Constitution because it allows the taking of property for public use without payment of just compensation or it is a valid exercise of police power.

SC:

(1)

NO. PMSI does not infringe on ABS-CBN’s broadcasting rights under the IP Code as PMSI is not engaged in rebroadcasting of Channels 2 and 23. Rebroadcasting, which is prohibited by the IP Code, is “the simultaneous broadcasting by one broadcasting organization of the

Mc Wafa

Sticky Note



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broadcast of another broadcasting organization.” ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the viewers receive in its unaltered form. PMSI does not produce, select, or determine the programs to be shown in Channels 2 and 23. Likewise, it does not pass itself off as the origin or author of such programs. Insofar as Channels 2 and 23 are concerned, PMSI merely retransmits the same in accordance with NTC Memorandum Circular 04-08-88.

(2)

YES. “DTH satellite tv operators” is covered under the NTC Circular which “requires all cable television system operators… to carry the television signals of the authorized television broadcast stations”. The Director-General of the IPO and the Court of Appeals correctly found that PMSI’s services are similar to a cable television system because the services it renders fall under cable “retransmission”. Thus, PMSI, being a DTH Satellite TV operator is covered by the NTC Circular.

(3)

The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No. 04-08-88 is under the direction and control of the government though the NTC which is vested with exclusive jurisdiction to supervise, regulate and control telecommunications and broadcast services/facilities in the Philippines. The imposition of the must-carry rule is within the NTC’s power to promulgate rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities.

Infringement

How committed

Microsoft Corp. v. Hwang

Facts:

Microsoft Corporation ("Microsoft"), a Delaware, United States corporation, owns the copyright and trademark to several computer software. Beltron Computer Philippines, Inc. ("Beltron") and Taiwan Machinery Display & Trade Center, Inc. ("TMTC") are domestic

corporations. In May 1993, Microsoft and Beltron entered into a Licensing Agreement ("Agreement"). Under Section 2(a) of the Agreement, as amended in January 1994, Microsoft authorized Beltron, for a fee, to:

(1) reproduce and install no more than one (1) copy of Microsoft software on each Customer System hard disk or Read Only Memory ("ROM") (2) distribute directly or indirectly and license copies of the Product in object code form to end users

The Agreement also authorized Microsoft and Beltron to terminate the contract if the other fails to comply with any of the Agreement’s provisions. Microsoft terminated the Agreement effective 22 June 1995 for Beltron’s non-payment of royalties. Afterwards, Microsoft learned that Beltron were illegally copying and selling Microsoft software. Consequently, Microsoft, through its Philippine agent, hired the services of Pinkerton Consulting Services ("PCS"), a private investigative firm. Microsoft also sought the assistance of the National Bureau of Investigation ("NBI"). On 10 November 1995, a PCS employee and an NBI agent posing as representatives of a computer shop, bought computer hardware (central processing unit ("CPU") and computer monitor) and software (12 computer disks ("CDs") in read-only memory ("ROM") format) from Beltron. The CPU contained pre-installed Microsoft Windows 3.1 and MS-DOS software. The 12 CD-ROMs, encased in plastic containers with Microsoft packaging, also contained Microsoft software. At least two of the CD-ROMs were "installers," so-called because they contain several software (Microsoft only or both Microsoft and non- Microsoft). The PCS employee and the NBI agent were not given the Microsoft end-user license agreements, user’s manuals, registration cards or certificates of authenticity for the articles they purchased. The receipt issued to them for the CPU and monitor bore the heading "T.M.T.C. (PHILS.) INC. BELTRON COMPUTER." The NBI searched the premises of Beltron and TMTC and seized several computer-related hardware, software, accessories, and paraphernalia based on the search warrant applied by Microsoft. Based on the articles obtained from Beltron and TMC, Microsoft and a certain Lotus Development Corporation ("Lotus Corporation") charged Beltron and TMC before the Department of Justice ("DOJ") with copyright infringement under Section 5(A) in relation to Section 29 of Presidential Decree No. 49, as amended, ("PD 49") and with unfair competition under Article



21

189(1) of the Revised Penal Code. Microsoft alleged that respondents illegally copied and sold Microsoft software.

Issue:

Whether or not Beltron and TMC are liable for copyright infringement and unfair competition?

SC:

The gravamen of copyright infringement is not merely the unauthorized "manufacturing" of intellectual works but rather the unauthorized performance of any of the acts covered by Section 5. Hence, any person who performs any of the acts under Section 5 without obtaining the copyright owner’s prior consent renders himself civilly and criminally liable for copyright infringement. Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the doing by any person, without the consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright. Significantly, under Section 5(A), a copyright owner is vested with the exclusive right to "copy, distribute, multiply, [and] sell" his intellectual works.

The elements of unfair competition under Article 189(1)43 of the Revised Penal Code are:

(a) That the offender gives his goods the general appearance of the goods of another manufacturer or dealer; (b) That the general appearance is shown in the (1) goods themselves, or in the (2) wrapping of their packages, or in the (3) device or words therein, or in (4) any other feature of their appearance (c) That the offender offers to sell or sells those goods or gives other persons a chance or opportunity to do the same with a like purpose[; and] (d) That there is actual intent to deceive the public or defraud a competitor.

Microsoft Corp. v. Maxicorp

Facts:

In 1996, Dominador Samiano, an agent of the National Bureau of Investigation (NBI) conducted a surveillance

against Maxicorp Inc. He observed that Microsoft Software (Windows Operating Systems) were being produced and packaged within the premises of Maxicorp. Samiano, together with a civilian witness (John Benedict Sacriz) then bought a computer unit from Maxicorp. The unit was pre-installed with a pirated copy of Windows. For their purchase, they were issued a receipt, however, the receipt was in the name of a certain “Joel Diaz”. Subsequently, Samiano applied for a search warrant before the RTC. He brought with him Sacriz as witness. He also brought the computer unit they bought as evidence as well as the receipt. He even added an additional witness (Felixberto Pante), a computer technician, who showed the judge that the software in the computer unit bought by Samiano from Maxicorp was pirated. The RTC judge, convinced that there is a probable cause for a case of copyright infringement and unfair competition committed by Maxicorp, issued the corresponding warrant. Maxicorp assailed the legality of the warrant before the Court of Appeals. The Court of Appeals ruled in favor of Maxicorp and in its decision it highlighted the fact that the receipt issued was not in Samiano’s or Sacriz’ name hence the proceeding in the trial court was infirm from the onset.

Issue:

Whether or not the Court of Appeals is correct.

Held:

No. The testimonies of the two witnesses, coupled with the object and documentary evidence they presented, are sufficient to establish the existence of probable cause. From what they have witnessed, there is reason to believe that Maxicorp engaged in copyright infringement and unfair competition to the prejudice of Microsoft. Both NBI Agent Samiano and Sacriz were clear and insistent that the counterfeit software were not only displayed and sold within Maxicorp’s premises, they were also produced, packaged and in some cases, installed there.

The fact that the receipt issued was not in Samiano’s name nor was it in Sacriz’ name does not render the issuance of the warrant void. No law or rule states that probable cause requires a specific kind of evidence. No formula or fixed rule for its determination exists. Probable cause is determined in the light of conditions obtaining in a given situation.Thus, it was



22

improper for the Court of Appeals to reverse the RTC’s findings simply because the sales receipt evidencing NBI Agent Samiano’s purchase of counterfeit goods is not in his name.

Infringement

Presumption of Authorship

Bayanihan Music Phils, Inc. v. BMG Records

Facts:

Jose Mari Chan entered into a contract with Bayanihan where the former assigned to the latter all his rights, interests and participation over his musical composition [composition/s] “Can We Just Stop and Talk A While. They also entered into a similar contract over another of Chan’s composition entitled “Afraid For Love To Fade”. In these two contracts, it was stipulated, among others, that if the Publisher (Bayanihan) fails to use within 2 years the compositions, then the compositions maybe released in favor of the Writer (Chan). Furthermore, the contract also stipulated that it may be renewed for a period of 2 ½ years.

As a result of these contracts, Bayanihan was able to obtain a Certificate of Copyright Registration for each of the two compositions from the National Library.

Apparently, without the knowledge of Bayanihan, Chan authorized BMG to record and distribute these two compositions in an album of Lea Salonga.

Bayanihan sent letters informing the respondents about its copyrights. Demands were also made but no settlement was reached. Hence, Bayanihan filed with the RTC against the respondents for violation of Sec. 216 of the IPC with prayer for TRO/writ of preliminary injunction enjoining the further recording and distribution of the compositions.

(I omitted BMG’s contentions because it has no bearing in the case.)

Chan’s answer: (1) it was not his intention to divest himself of all his rights and interests over the compositions; (2) his contract with Bayanihan are mere musical publication agreements, giving Bayanihan the power to administer his compositions; (3) he did not have any knowledge about the grant of copyrights to Bayanihan; and (4) Bayanihan was remissed of its obligation to promote his compositions, thus, causing him to rescind the contract.

RTC denied the issuance of an injunction. Upon appeal to CA, the appellate court, denied the same. Hence, an appeal before the SC.

Whether the court erred in not granting the prayer for the issuance of an injunction

No.

Ruling: An injunctive writ can only be issued if the following requisites provided for by law are present: (1) there must be a right in esse or the existence of a right to be protected; and (2) the act against which the injunction is to be directed is a violation of such right.

(Note: In this case, the court explained that based on the evidence presented, Bayanihan was not able to show that he has the ostensible right to the relief it prayed primarily because Chan has the better right over his compositions. Furthermore, Chan is accorded the presumption of authorship and copyright as explained below.)

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

Unquestionably, Chan, being undeniably the composer and author of the lyrics of the two songs, is protected by the mere fact alone that he is the creator thereof.

Besides, the contracts between Chan and Bayanihan had already expired because it was not shown that Bayanihan ever made use of the compositions within the agreed period.

Whether Bayanihan’s copyright presumably subsists by virtue of the copyrights it obtained from the National Library

No.

Ruling: Art. 218.2

(a) Copyright shall be presumed to subsist in the work or other subject matter to which the action relates if the defendant does not put in issue the question whether copyright subsists in the work or other subject matter

(b) Where the subsistence of the copyright is established, the plaintiff shall be presumed to be the owner of the copyright if he claims to be the owner of the copyright and the defendant does not put in issue the question of his ownership



23

In the case, respondent Chan had put in issue the existence of the said copyrights. Thus, the presumption of subsisting copyright does not apply to Bayanihan.

In fact, Bayanihan had no more right that is protectable by injunction by the time it filed its complaint on August 8, 2000 because Chan had already revoked and terminated the contracts on July 30, 1997.

LAW ON PATENTS, UTILITY MODELS AND INDUSTRIAL DESIGNS

Purpose of the Patent Law

Manzano v. CA

Facts:

On February 19, 1982, Petitioner Angelita Manzano filed

with the Philippine Patent Office an action for the

cancellation of Letters Patent No. UM-4609 for a gas

burner registered in the name of respondent Melecia

Madolaria who subsequently assigned the letters patent

to New United Foundry and Manufacturing Corporation.

She alleged that the invention lacked inventiveness,

novelty and usefulness.

Petitioner presented two other witnesses, namely, her

husband Ong Bun Tua and Fidel Francisco. Ong testified

that he worked as a helper in the UNITED FOUNDRY

from 1965 to 1970 where he helped in the casting of

LPG burners with the same form, configuration and

mechanism as that of the model covered by the Letters

Patent issued to Madolaria.

Madolaria presented Rolando Madolaria as a witness. He

was the General Supervisor of the UNITED FOUNDRY in

the foundry, machine and buffing section; that in his

early years with the company, UNITED FOUNDRY was

engaged in the manufacture of different kinds of gas

stoves as well as burners based on sketches and

specifications furnished by customers; that the company

manufactured early models of single-piece types of

burners where the mouth and throat were not

detachable; that in the latter part of 1978 Melecia

Madolaria confided in him that complaints were being

brought to her attention concerning the early models

being manufactured; that he was instructed by Melecia

Madolaria to cast several experimental models based on

revised sketches and specifications. 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.

The Director of Patents denied the petition. CA affirmed.

Hence, this petition.

Issue/s:

WON, Manzano’s petition for the cancellation of patents

to Madolaria is tenable.

SC:

It was not. Section 7 of RA No. 165, as amended, which is the law on patents, expressly provides —

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

Further, Sec. 55 of the same law provides —

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



24

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.

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

Not one of the various pictorial representations of

burners clearly and convincingly show that the device

presented therein is identical or substantially identical in

construction with the aforesaid utility model. It is

relevant and material to state that in determining

whether novelty or newness is negatived by any prior

art, only one item of the prior art may be used at a time.

For anticipation to occur, the prior art must show that

each element is found either expressly or described or

under principles of inherency in a single prior art

reference or that the claimed invention was probably

known in a single prior art device or practice.

Manzano v. CA

Facts:

Petitioner Maguan was a patent holder of powder puff.

petitioner informed private respondent that the powder

puffs the latter is manufacturing and selling to various

enterprises particularly those in the cosmetics industry,

resemble Identical or substantially Identical powder

puffs of which the former is a patent holder under

Registration Certification Nos. Extension UM-109,

Extension UM-110 and Utility Model No. 1184;

petitioner explained such production and sale constitute

infringement of said patents and therefore its immediate

discontinuance is demanded, otherwise it will be

compelled to take judicial action.

Private respondent replied stating that her products are

different and countered that petitioner's patents are

void because the utility models applied for were not new

and patentable and the person to whom the patents

were issued was not the true and actual author nor were

her rights derived from such author.

The petitioner filed a complaint for damages with

injunction and preliminary injunction against private

respondent with the then Court of First Instance of Rizal,

Pasig Branch for infringing the aforesaid letters patent,

and prayed, among others, that a writ of preliminary

injunction be immediately issued.

CFI granted and was reissued by the CA.

Hence, this petition.

Issue/s:

WON, the evidence introduced by private respondent

herein is sufficient to overcome said presumption.

Mc Wafa

Sticky Note

Maguan v CA�



25

SC:

No. The burden of proof to substantiate a charge of

infringement is with the plaintiff. But where the plaintiff

introduces the patent in evidence, and the same is in

due form, there is created a prima facie presumption of

its correctness and validity. The decision of the

Commissioner (now Director) of Patent in granting the

patent is presumed to be correct. The burden of going

forward with the evidence (burden of evidence) then

shifts to the defendant to overcome by competent

evidence this legal presumption.

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 protection, the invention must be new to the world. Accordingly, a single instance of public use of the invention by a patentee for more than two years (now for more than one year only under Sec. 9 of the Patent Law) before the date of his application for his patent, will be fatal to, the validity of the patent when issued.

The law provides:

SEC. 9. Invention not considered new or patentable. — An invention shall not be considered new or capable of being patented if it was known or used by others in the Philippines before the invention thereof by the inventor named in an application for patent for the invention; or if it was patented or described in any printed publication in the Philippines or any foreign country more than one year before the application for a patent therefor; or if it had been in public use or on sale in the Philippines for more than one year before the application for a patent therefor; or if it is the subject matter of a validity issued patent in the Philippines granted on an application filed before the filing of the application for patent therefor.

Thus, more specifically, under American Law from which our Patent Law was derived it is generally held that in patent cases a preliminary injunction will not issue for patent infringement unless the validity of the patent is clear and beyond question. The issuance of letters patent, standing alone, is not sufficient to support such drastic. In cases of infringement of patent no preliminary injunction will be granted unless the patent is valid and

infringed beyond question and the record conclusively proves the defense is sham.

In the same manner, under our jurisprudence, as a general rule because of the injurious consequences a writ of injunction may bring, the right to the relief demanded must be clear and unmistakable and the dissolution of the writ is proper where applicant has doubtful title to the disputed property.

Patentable Inventions

Creser Precision Systems, Inc. v. CA

Facts:

Respondent was granted by the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) a Letter ofpatent for its aerial fuze on January 23, 1990. Sometime in 1993, respondent discovered that the petitioner submitted samples of its patented aerial fuze to the AFP for testing claiming to be his own. To protect its right,respondent sent letter of warning to petitioner on a possible court action should it proceed its testing by the AFP. In response the petitioner filed a complaint for injunction and damages arising from alleged infringement before the RTC asserting that it is the true and actual inventor of the aerial fuze which it developed on 1981 under the Self Reliance Defense Posture Program of the AFP. It has been supplying the military of the aerial fuze since then and that the fuze of the respondent is similar as that of the petitioner. Petitioner prayed forrestraining order and injunction from marketing, manufacturing and profiting from the said invention by therespondent. The trial court ruled in favor of the petitioner citing the fact that it was the first to develop the aerial fuze since 1981 thsu it concludes that it is the petitioner’s aerial fuze that was copied by the respondent. Moreover, the claim of respondent is solely based on its letter of patent which validity is being questioned. On appeal, respondent argued that the petitioner has no cause of action since he has no right to assert there being no patent issued to his aerial fuze. The Court of Appeals reversed the decision of the trial court dismissing the complaint of the petitioner. It was the contention of the petitioner that it can file under Section 42 of the Patent Law an action for infringement not as a patentee but as an entity in possession of a right, title or interest to the patented invention. It



26

theorizes that while the absence of a patent prevents one from lawfully suing another for infringement of said patent, such absence does not bar the true and actual inventor of the patented invention from suing another in the same nature as a civil action for infringement.

Issue:

Whether or not the petitioner has the right to assail the validity of the patented work of the respondent?

SC:

The court finds the argument of the petitioner untenable. Section 42 of the Law on Patent (RA 165) provides that only the patentee or his successors-in-interest may file an action against infringement. What the law contemplates in the phrase “anyone possessing any right, title or interest in and to the patented invention” refers only to the patentee’s successors-in-interest, assignees or grantees since the action on patent infringement may be brought only in the name of the person granted with the patent. There can be no infringement of a patent until a patent has been issued since the right one has over the invention covered by the patent arises from the grant of the patent alone. Therefore, a person who has not been granted letter of patent over an invention has not acquired right or title over the invention and thus has no cause of action for infringement. Petitioner admitted to have no patent over his invention. Respondent’s aerial fuze is covered byletter of patent issued by the Bureau of Patents thus it has in his favor not only the presumption of validity of its patent but that of a legal and factual first and true inventor of the invention.

Remedies of Person with Patent

Remedies of True and Actual Inventor

Creser Precision

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. 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 can not file an action for declaratory judgment or injunctive suit which is not recognized in this jurisdiction. Said person, however, is not left without any remedy. 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. As such, it can not 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. Thus, as correctly ruled by the respondent Court of Appeals in its assailed decision: "since the petitioner (private respondent herein) is the patentee of the disputed invention embraced by letters of patent UM No. 6938 issued to it on January 23, 1990 by the Bureau of Patents, it has in its favor not only the presumption of validity of its patent, but that of a legal and factual first and true inventor of the invention. "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. WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No pronouncement as to costs.SO ORDERED. Doctrine of Equivalents Godines v. CA Facts:

Magdalena Villaruz was issued a Letters Patent covering utility model for a hand tractor or power tiller. Villaluz, chairman and president of SV-Agro Enterprises, Inc., executed a Deed of Assignment in favor of the latter. SV-Agro then caused the publication of the patent in a newspaper of general circulation.

In accordance with the patent, SV-Agro manufactured and sold the patented power tillers with the patent imprinted on them.

In 1979, SV-Agro suffered a decline of more than 50% of its sales in its Molave, Zamboanga del Sur branch.



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Upon investigation, it discovered that a certain a Pascual Godines were manufacturing and selling power tillers similar to those patented by SV-Agro. It then notified Godines about the existing patent and demanded to stop selling and manufacturing. Upon petitioner’s failure to comply, SV-Agro lodged a complaint before the RTC for infringement of patent and unfair competition.

After trial, Godines was found liable. RTC’s decision was affirmed by CA. Hence, this petition before the SC.

Whether Godines’ products infringe the patent of SV-Agro

Yes.

Two tests have been established to determine infringement: (1) literal infringement; and (2) the doctrine of equivalents.

1. Literal Infringement test

In using this test, resort must be had, in the first instance, to the words of the claim. If accused matter clearly falls within the claim, infringement is made out and that is the end of it. To determine whether the particular item falls within the literal meaning of the patent claims, the Court must juxtapose the claims of the patent and the accused product within the overall context of the claims and specifications, to determine whether there is exact identity of all material elements.

The patent issued by the Patent Office referred to a "farm implement but more particularly to a turtle hand tractor having a vacuumatic housing float on which the engine drive is held in place, the operating handle, the harrow housing with its operating handle and the paddy wheel protective covering." Petitioner, on the other hand, called his power tiller as floating power tiller.

SC adopted the finding of facts of the trial court that after the inspection and comparisons made by the trial court, it found out the appearance and form of the two are virtually the same. It further found that, viewed from any perspective or angle, the power tiller of Godines is identical to that of the turtle power tiller of SV-Agro in form, configuration, design and appearance.

Thus, the trial court observed that the claims of the patent and the features of the patented utility model were copied by petitioner. SC was, therefore, compelled to arrive at no other conclusion but that there was infringement.

2. Doctrine of Equivalents

According to this doctrine, an infringement also occurs when a device appropriates a prior invention by incorporating its innovative concept and, albeit with some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result.

The reason for the doctrine of equivalents is that to permit the imitation of a patented invention which does not copy any literal detail would be to convert the protection of the patent grant into a hollow and useless thing. Such imitation would leave room for — indeed encourage — the unscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent which, though adding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach of the law.

To establish an infringement, it is not essential to show that the defendant adopted the device or process in every particular; Proof of an adoption of the substance of the thing will be sufficient.

Thus, even the claim of Godiness that his product is different from the patented one, by letting his welder testify and explain the distinction of the two, will fail. The trial court found out that a careful examination between the two will show that they operate on the same fundamental principle. Hence, it is necessary to constitute equivalency that the same function can be performed in substantially the same way or manner or mode of operation; mere differences to form and substance are immaterial.

Smith Kline Beckman Corp. v. CA Facts:

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

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

Smith Kline sued Tryco Pharma because the latter was selling a veterinary product called Impregon which



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contains a drug called Albendazole which fights off gastro-intestinal roundworms, lungworms, tapeworms and fluke infestation in carabaos, cattle and goats.

Smith Kline is claiming that Albendazole is covered in their patent because substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered by its patent since both of them are meant to combat worm or parasite infestation in animals. And that Albendazole is actually patented under Smith Kline by the US.

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

Smith Kline thus invoked the doctrine of equivalents, which implies that the two substances substantially do the same function in substantially the same way to achieve the same results, thereby making them truly identical for in spite of the fact that the word Albendazole does not appear in petitioner’s letters patent, it has ably shown by evidence its sameness with methyl 5 propylthio-2-benzimidazole carbamate.

Issue:

Whether or not there is patent infringement in this case

SC:

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

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

principle or mode of operation must be the same or substantially the same.

The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the patentee having the burden to show that all three components of such equivalency test are met.

Damages: Requirement of Notice Del Rosario v. CA

Facts:

Petitioner filed a complaint for patent infringement

against private respondent Janito Corporation.[2] Roberto

L. del Rosario alleged that he was a patentee of an audio

equipment and improved audio equipment known as the

sing-along system or karaoke. He learned that private

respondent was manufacturing a sing-along system

bearing the trademark miyata or miyata

karaoke substantially similar if not identical to the sing-

along system covered by the patents issued in his

favor. Thus he sought from the trial court the issuance

of a writ of preliminary injunction to enjoin private

respondent, its officers and everybody elsewhere acting

on its behalf, from using, selling and advertising

the miyata or miyata karaoke brand, the injunction to be

made permanent after trial, and praying for damages,

attorney’s fees and costs of suit. The trial court

temporarily restrained private respondent until further

orders. Later, trial court issued a writ of preliminary

injunction upon a bond on the basis of its finding that

petitioner was a holder of a utility model patent for a

sing-along system and that without his approval and

consent private respondent was admittedly

manufacturing and selling its own sing-along system

under the brand name miyata which was substantially

similar to the patented utility model[3] of petitioner.

Private respondent filed a petition for certiorari

with prayer for the issuance of a writ of preliminary

injunction and a temporary restraining order before

respondent Court of Appeals, it was granted. CA said

there was no infringement of the patents of petitioner

by the fact alone that private respondent had

http://sc.judiciary.gov.ph/jurisprudence/1996/mar1996/115106.htm#_edn2




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manufactured the miyata karaoke or audio system, and

that the karaoke system was a universal product

manufactured, advertised and marketed in most

countries of the world long before the patents were

issued to petitioner.

Issue:

Whether respondent Court of Appeals erred in finding

the trial court to have committed grave abuse of

discretion in enjoining private respondent from

manufacturing, selling and advertising the miyata

karaoke brand sing-along system for being substantially

similar if not identical to the audio equipment covered

by letters patent issued to petitioner.

SC:

We rule in the negative.

For the writ to issue the interest of petitioner in the

controversy or the right he seeks to be protected must

be a present right, a legal right which must be shown to

be clear and positive.

In this regard Sec. 55 of R.A. 165 as amended,

known as The Patent Law, provides –

Sec. 55. Design patents and patents for utility models. -

(a) Any new, original, and ornamental design for an

article of manufacture and (b) new model or implements

or tools or of any Industrial product or of part of the

same, which does not possess the quality of invention

but which is of practical utility by reason of its form,

configuration, construction or composition, may be

protected by the author thereof, the former by a patent

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

in the same manner and subject to the same provisions

and requirements as relate to patents for inventions

insofar as they are applicable, except as otherwise

herein provide x x x

Admittedly, petitioner is a holder of Letters Patent.

The Patent Law expressly acknowledges that any new

model of implements or tools of any industrial product

even if not possessed of the quality of invention but

which is of practical utility is entitled to a patent for

utility model. Here, there is no dispute that the letters

patent issued to petitioner are for utility models of audio

equipment. Under Sec. 55 of The Patent Law a utility

model shall not be considered “new” if before the

application for a patent it has been publicly known or

publicly used in this country or has been described in a

printed publication or publications circulated within the

country, or if it is substantially similar to any other utility

model so known, used or described within the

country. Respondent corporation failed to present

before the trial court competent evidence that the utility

models covered by the Letters Patents issued to

petitioner were not new. Petitioner as a patentee shall

have the exclusive right to make, use and sell the

patented machine, article or product for the purpose of

industry or commerce, throughout the territory of the

Philippines for the term of the patent, and such making,

using or selling by any person without authorization of

the patentee constitutes infringement of his patent.

It is elementary that a patent may be infringed

where the essential or substantial features of the

patented invention are taken or appropriated, or the

device, machine or other subject matter alleged to

infringe is substantially identical with the patented

invention. In order to infringe a patent, a machine or

device must perform the same function, or accomplish

the same result by identical or substantially identical

means and the principle or mode of operation must be

substantially the same.[16]

It may be noted that respondent corporation failed

to present before the trial court a clear, competent and

reliable comparison between its own model and that of

petitioner. Notwithstanding the differences cited by

respondent corporation, it did not refute and disprove

the allegations of petitioner before the trial court that:

(a) both are used by a singer to sing and amplify his

voice; (b) both are used to sing with a minus-one or

multiplex tapes, or that both are used to play minus-one

or standard cassette tapes for singing or for listening to;

(c) both are used to sing with a minus-one tape and

multiplex tape and to record the singing and the

accompaniment; (d) both are used to sing with live

accompaniment and to record the same; (e) both are

used to enhance the voice of the singer using echo

effect, treble, bass and other controls; (g) both are

equipped with cassette tape decks which are installed

with one being used for playback and the other, for




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recording the singer and the accompaniment, and both

may also be used to record a speaker’s voice or

instrumental playing, like the guitar and other

instruments; (h) both are encased in a box-like cabinets;

and, (i) both can be used with one or more

microphones.[17]

Clearly, therefore, both petitioner’s and

respondent’s models involve substantially the same

modes of operation and produce substantially the same

if not identical results when used.

In view thereof, we find that petitioner had

established before the trial court prima facie proof of

violation of his rights as patentee to justify the issuance

of a writ of preliminary injunction in his favor during the

pendency of the main suit for damages resulting from

the alleged infringement.

Criminal Action for Repetition of Infringement Kenneth Roy Savage v. Taypin Facts: Acting on a complaint lodged by private respondent Eric Ng Mendoza, president and general manager of Mendco Development Corporation (MENDCO),[1] Supervising Agent Jose Ermie Monsanto of the National Bureau of Investigation (NBI) filed an application for search warrant with the Regional Trial Court of Cebu City.[2] The application sought the authorization to search the premises of K Angelin Export International located in Biasong, Talisay, Cebu, and to seize the pieces of wrought iron furniture found therein which were allegedly the object of unfair competition involving design patents, punishable under Art. 189 of the Revised Penal Code as amended. The assailed Search Warrant No. 637-10-1697-12 was issued by respondent Judge on 16 October 1997 and executed in the afternoon of the following day by NBI agents.[3] Seized from the factory were several pieces of furniture, indicated in the Inventory Sheet attached to the Return of Search Warrant, and all items seized have remained in NBI custody up to the present.

Petitioners moved to quash the warrant but was denied.

Issue:

Whether unfair competition involving design patents punishable under Art. 189 of the Revised Penal Code exists in this case.

SC:

However, since the IPR Code took effect on 1 January 1998 any discussion contrary to the view herein expressed would be pointless. The repealing clause of the Code provides -All Acts and parts of Acts inconsistent herewith, more particularly, Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are hereby repealed (italics ours)

The issue involving the existence of "unfair competition" as a felony involving design patents, referred to in Art. 189 of the Revised Penal Code, has been rendered moot and academic by the repeal of the article.

The search warrant cannot even be issued by virtue of a possible violation of the IPR Code. The assailed acts specifically alleged were the manufacture and fabrication of wrought iron furniture similar to that patented by MENDCO, without securing any license or patent for the same, for the purpose of deceiving or defrauding Mendco and the buying public. The Code defines "unfair competition" thus –

168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.

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

(a) Any person who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance which would be likely to influence purchasers to believe that the




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goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit goods, businesses or services of another.

There is evidently no mention of any crime of "unfair competition" involving design patents in the controlling provisions on Unfair Competition. It is therefore unclear whether the crime exists at all, for the enactment of RA 8293 did not result in the reenactment of Art. 189 of the Revised Penal Code. In the face of this ambiguity, we must strictly construe the statute against the State and liberally in favor of the accused, for penal statutes cannot be enlarged or extended by intendment, implication or any equitable consideration. Respondents invoke jurisprudence to support their contention that "unfair competition" exists in this case. However, we are prevented from applying these principles, along with the new provisions on Unfair Competition found in the IPR Code, to the alleged acts of the petitioners, for such acts constitute patent infringement as defined by the same Code.

THAT IN ALL THINGS, GOD MAY BE GLORIFIED!

Documents

Compilation of Digested Cases in Ipl