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Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 148222 August 15, 2003

PEARL & DEAN (PHIL.), INCORPORATED, Petitioner,

vs.

SHOEMART, INCORPORATED, and NORTH EDSA MARKETING,

INCORPORATED, Respondents.

D E C I S I O N

CORONA, J.:

In the instant petition for review on certiorari under Rule 45 of the Rules

of Court, petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22,

2001 decision1 of the Court of Appeals reversing the October 31, 1996

decision2 of the Regional Trial Court of Makati, Branch 133, in Civil Case

No. 92-516 which declared private respondents Shoemart Inc. (SMI) and

North Edsa Marketing Inc. (NEMI) liable for infringement of trademarkand copyright, and unfair competition.

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals3 contained a

summary of this dispute:

"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged

in the manufacture of advertising display units simply referred to as light

boxes. These units utilize specially printed posters sandwiched betweenplastic sheets and illuminated with back lights. Pearl and Dean was able

to secure a Certificate of Copyright Registration dated January 20, 1981

over these illuminated display units. The advertising light boxes were

marketed under the trademark "Poster Ads". The application for

registration of the trademark was filed with the Bureau of Patents,

Trademarks and Technology Transfer on June 20, 1983, but was

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approved only on September 12, 1988, per Registration No. 41165. From

1981 to about 1988, Pearl and Dean employed the services of Metro

Industrial Services to manufacture its advertising displays.

Sometime in 1985, Pearl and Dean negotiated with defendant-appellant

Shoemart, Inc. (SMI) for the lease and installation of the light boxes in

SM City North Edsa. Since SM City North Edsa was under construction

at that time, SMI offered as an alternative, SM Makati and SM Cubao, to

which Pearl and Dean agreed. On September 11, 1985, Pearl and Deans

General Manager, Rodolfo Vergara, submitted for signature the contracts

covering SM Cubao and SM Makati to SMIs Advertising Promotions and

Publicity Division Manager, Ramonlito Abano. Only the contract for SM

Makati, however, was returned signed. On October 4, 1985, Vergara

wrote Abano inquiring about the other contract and reminding him that

their agreement for installation of light boxes was not only for its SMMakati branch, but also for SM Cubao. SMI did not bother to reply.

Instead, in a letter dated January 14, 1986, SMIs house counsel

informed Pearl and Dean that it was rescinding the contract for SM

Makati due to non-performance of the terms thereof. In his reply dated

February 17, 1986, Vergara protested the unilateral action of SMI, saying

it was without basis. In the same letter, he pushed for the signing of the

contract for SM Cubao.

Two years later, Metro Industrial Services, the company formerly

contracted by Pearl and Dean to fabricate its display units, offered to

construct light boxes for Shoemarts chain of stores. SMI approved the

proposal and ten (10) light boxes were subsequently fabricated by Metro

Industrial for SMI. After its contract with Metro Industrial was

terminated, SMI engaged the services of EYD Rainbow Advertising

Corporation to make the light boxes. Some 300 units were fabricated in

1991. These were delivered on a staggered basis and installed at SM

Megamall and SM City.

Sometime in 1989, Pearl and Dean, received reports that exact copies of

its light boxes were installed at SM City and in the fastfood section of SM

Cubao. Upon investigation, Pearl and Dean found out that aside from the

two (2) reported SM branches, light boxes similar to those it

manufactures were also installed in two (2) other SM stores. It further

discovered that defendant-appellant North Edsa Marketing Inc. (NEMI),

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through its marketing arm, Prime Spots Marketing Services, was set up

primarily to sell advertising space in lighted display units located in

SMIs different branches. Pearl and Dean noted that NEMI is a sister

company of SMI.

In the light of its discoveries, Pearl and Dean sent a letter dated

December 11, 1991 to both SMI and NEMI enjoining them to cease using

the subject light boxes and to remove the same from SMIs

establishments. It also demanded the discontinued use of the trademark

"Poster Ads," and the payment to Pearl and Dean of compensatory

damages in the amount of Twenty Million Pesos (P20,000,000.00).

Upon receipt of the demand letter, SMI suspended the leasing of two

hundred twenty-four (224) light boxes and NEMI took down its

advertisements for "Poster Ads" from the lighted display units in SMIsstores. Claiming that both SMI and NEMI failed to meet all its demands,

Pearl and Dean filed this instant case for infringement of trademark and

copyright, unfair competition and damages.

In denying the charges hurled against it, SMI maintained that it

independently developed its poster panels using commonly known

techniques and available technology, without notice of or reference to

Pearl and Deans copyright. SMI noted that the registration of the mark

"Poster Ads" was only for stationeries such as letterheads, envelopes, and

the like. Besides, according to SMI, the word "Poster Ads" is a generic

term which cannot be appropriated as a trademark, and, as such,

registration of such mark is invalid. It also stressed that Pearl and Dean

is not entitled to the reliefs prayed for in its complaint since its

advertising display units contained no copyright notice, in violation of

Section 27 of P.D. 49. SMI alleged that Pearl and Dean had no cause of

action against it and that the suit was purely intended to malign SMIs

good name. On this basis, SMI, aside from praying for the dismissal of

the case, also counterclaimed for moral, actual and exemplary damages

and for the cancellation of Pearl and Deans Certification of CopyrightRegistration No. PD-R-2558 dated January 20, 1981 and Certificate of

Trademark Registration No. 4165 dated September 12, 1988.

NEMI, for its part, denied having manufactured, installed or used any

advertising display units, nor having engaged in the business of

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advertising. It repleaded SMIs averments, admissions and denials and

prayed for similar reliefs and counterclaims as SMI."

The RTC of Makati City decided in favor of P & D:

Wherefore, defendants SMI and NEMI are found jointly and severally

liable for infringement of copyright under Section 2 of PD 49, as

amended, and infringement of trademark under Section 22 of RA No.

166, as amended, and are hereby penalized under Section 28 of PD 49,

as amended, and Sections 23 and 24 of RA 166, as amended.

Accordingly, defendants are hereby directed:

(1) to pay plaintiff the following damages:

(a) actual damages - P16,600,000.00,representing profits

derived by defendants

as a result of infringe-

ment of plaintiffs copyright

from 1991 to 1992

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00

(d) attorneys fees - P1,000,000.00

plus

(e) costs of suit;

(2) to deliver, under oath, for impounding in the National Library, all light

boxes of SMI which were fabricated by Metro Industrial Services and EYD

Rainbow Advertising Corporation;

(3) to deliver, under oath, to the National Library, all filler-posters using

the trademark "Poster Ads", for destruction; and

(4) to permanently refrain from infringing the copyright on plaintiffs light

boxes and its trademark "Poster Ads".

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Defendants counterclaims are hereby ordered dismissed for lack of

merit.

SO ORDERED.4

On appeal, however, the Court of Appeals reversed the trial court:

Since the light boxes cannot, by any stretch of the imagination, be

considered as either prints, pictorial illustrations, advertising copies,

labels, tags or box wraps, to be properly classified as a copyrightable

class "O" work, we have to agree with SMI when it posited that what was

copyrighted were the technical drawings only, and not the light boxes

themselves, thus:

42. When a drawing is technical and depicts a utilitarian object, a

copyright over the drawings like plaintiff-appellants will not extend to the

actual object. It has so been held under jurisprudence, of which the

leading case is Baker vs. Selden (101 U.S. 841 (1879). In that case,

Selden had obtained a copyright protection for a book entitled "Seldens

Condensed Ledger or Bookkeeping Simplified" which purported to explain

a new system of bookkeeping. Included as part of the book were blank

forms and illustrations consisting of ruled lines and headings, specially

designed for use in connection with the system explained in the work.

These forms showed the entire operation of a day or a week or a month

on a single page, or on two pages following each other. The defendant

Baker then produced forms which were similar to the forms illustrated in

Seldens copyrighted books. The Court held that exclusivity to the actual

forms is not extended by a copyright. The reason was that "to grant a

monopoly in the underlying art when no examination of its novelty has

ever been made would be a surprise and a fraud upon the public; that is

the province of letters patent, not of copyright." And that is precisely the

point. No doubt aware that its alleged original design would never pass

the rigorous examination of a patent application, plaintiff-appellantfought to foist a fraudulent monopoly on the public by conveniently

resorting to a copyright registration which merely employs a recordal

system without the benefit of an in-depth examination of novelty.

The principle in Baker vs. Selden was likewise applied in Muller vs.

Triborough Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this

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case, Muller had obtained a copyright over an unpublished drawing

entitled "Bridge Approach the drawing showed a novel bridge approach

to unsnarl traffic congestion". The defendant constructed a bridge

approach which was alleged to be an infringement of the new design

illustrated in plaintiffs drawings. In this case it was held that protection

of the drawing does not extend to the unauthorized duplication of the

object drawn because copyright extends only to the description or

expression of the object and not to the object itself. It does not prevent

one from using the drawings to construct the object portrayed in the

drawing.

In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and

Scholtz Homes, Inc. v. Maddox, 379 F. 2d 84, it was held that there is no

copyright infringement when one who, without being authorized, uses a

copyrighted architectural plan to construct a structure. This is becausethe copyright does not extend to the structures themselves.

In fine, we cannot find SMI liable for infringing Pearl and Deans

copyright over the technical drawings of the latters advertising display

units.

xxx xxx xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs.

Intermediate Appellate Court that the protective mantle of the Trademark

Law extends only to the goods used by the first user as specified in the

certificate of registration, following the clear mandate conveyed by

Section 20 of Republic Act 166, as amended, otherwise known as the

Trademark Law, which reads:

SEC. 20. Certification of registration prima facie evidence of validity.- A

certificate of registration of a mark or trade-name shall be prima facie

evidence of the validity of the registration, the registrants ownership of

the mark or trade-name, and of the registrants exclusive right to use thesame in connection with the goods, business or services specified in the

certificate, subject to any conditions and limitations stated therein."

(underscoring supplied)

The records show that on June 20, 1983, Pearl and Dean applied for the

registration of the trademark "Poster Ads" with the Bureau of Patents,

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Trademarks, and Technology Transfer. Said trademark was recorded in

the Principal Register on September 12, 1988 under Registration No.

41165 covering the following products: stationeries such as letterheads,

envelopes and calling cards and newsletters.

With this as factual backdrop, we see no legal basis to the finding of

liability on the part of the defendants-appellants for their use of the

words "Poster Ads", in the advertising display units in suit.

Jurisprudence has interpreted Section 20 of the Trademark Law as "an

implicit permission to a manufacturer to venture into the production of

goods and allow that producer to appropriate the brand name of the

senior registrant on goods other than those stated in the certificate of

registration." The Supreme Court further emphasized the restrictive

meaning of Section 20 when it stated, through Justice Conrado V.

Sanchez, that:

Really, if the certificate of registration were to be deemed as including

goods not specified therein, then a situation may arise whereby an

applicant may be tempted to register a trademark on any and all goods

which his mind may conceive even if he had never intended to use the

trademark for the said goods. We believe that such omnibus registration

is not contemplated by our Trademark Law.

While we do not discount the striking similarity between Pearl and

Deans registered trademark and defendants-appellants "Poster Ads"

design, as well as the parallel use by which said words were used in the

parties respective advertising copies, we cannot find defendants-

appellants liable for infringement of trademark. "Poster Ads" was

registered by Pearl and Dean for specific use in its stationeries, in

contrast to defendants-appellants who used the same words in their

advertising display units. Why Pearl and Dean limited the use of its

trademark to stationeries is simply beyond us. But, having already done

so, it must stand by the consequence of the registration which it had

caused.

xxx xxx xxx

We are constrained to adopt the view of defendants-appellants that the

words "Poster Ads" are a simple contraction of the generic term poster

advertising. In the absence of any convincing proof that "Poster Ads" has

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acquired a secondary meaning in this jurisdiction, we find that Pearl and

Deans exclusive right to the use of "Poster Ads" is limited to what is

written in its certificate of registration, namely, stationeries.

Defendants-appellants cannot thus be held liable for infringement of the

trademark "Poster Ads".

There being no finding of either copyright or trademark infringement on

the part of SMI and NEMI, the monetary award granted by the lower

court to Pearl and Dean has no leg to stand on.

xxx xxx xxx

WHEREFORE, premises considered, the assailed decision is REVERSED

and SET ASIDE, and another is rendered DISMISSING the complaint andcounterclaims in the above-entitled case for lack of merit.5

Dissatisfied with the above decision, petitioner P & D filed the instant

petition assigning the following errors for the Courts consideration:

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO

COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM

AND NEMI;

B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO

INFRINGEMENT OF PEARL & DEANS TRADEMARK "POSTER ADS" WAS

COMMITTED BY RESPONDENTS SM AND NEMI;

C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE

AWARD OF THE TRIAL COURT, DESPITE THE LATTERS FINDING, NOT

DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS

GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING

CONTRACTS WITH PEARL & DEAN.

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING

RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR

ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEYS FEES AND

COSTS OF SUIT.6

ISSUES

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In resolving this very interesting case, we are challenged once again to

put into proper perspective four main concerns of intellectual property

law patents, copyrights, trademarks and unfair competition arising

from infringement of any of the first three. We shall focus then on the

following issues:

(1) if the engineering or technical drawings of an advertising display unit

(light box) are granted copyright protection (copyright certificate of

registration) by the National Library, is the light box depicted in such

engineering drawings ipso facto also protected by such copyright?

(2) or should the light box be registered separately and protected by a

patent issued by the Bureau of Patents Trademarks and Technology

Transfer (now Intellectual Property Office) in addition to the copyrightof the engineering drawings?

(3) can the owner of a registered trademark legally prevent others from

using such trademark if it is a mere abbreviation of a term descriptive of

his goods, services or business?

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioner P & Ds complaint was that SMI infringed on its copyright over

the light boxes when SMI had the units manufactured by Metro and EYD

Rainbow Advertising for its own account. Obviously, petitioners position

was premised on its belief that its copyright over the engineering

drawings extended ipso facto to the light boxes depicted or illustrated in

said drawings. In ruling that there was no copyright infringement, the

Court of Appeals held that the copyright was limited to the drawings

alone and not to the light box itself. We agree with the appellate court.

First, petitioners application for a copyright certificate as well as

Copyright Certificate No. PD-R2588 issued by the National Library onJanuary 20, 1981 clearly stated that it was for a class "O" work under

Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the

statute then prevailing. Said Section 2 expressly enumerated the works

subject to copyright:

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SEC. 2. The rights granted by this Decree shall, from the moment of

creation, subsist with respect to any of the following works:

x x x x x x x x x

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box

wraps;

x x x x x x x x x

Although petitioners 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.7 Accordingly, it can cover only the works falling within the

statutory enumeration or description.8

P & D secured its copyright under the classification class "O" work. This

being so, petitioners 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 application9 of the laws 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 copyrightlaw. 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."

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In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to

the public without license from P & D, then no doubt they would have

been guilty of copyright infringement. But this was not the case. SMIs

and NEMIs acts complained of by P & D were to have units similar or

identical to the light box illustrated in the technical drawings

manufactured by Metro and EYD Rainbow Advertising, for leasing out to

different advertisers. Was this an infringement of petitioners copyright

over the technical drawings? We do not think so.

During the trial, the president of P & D himself admitted that the light

box was neither a literary not an artistic work but an "engineering or

marketing invention."10 Obviously, there appeared to be some confusion

regarding what ought or ought not to be the proper subjects of

copyrights, patents and trademarks. In the leading case of Kho vs. Court

of Appeals,11 we ruled that these three legal rights are completelydistinct and separate from one another, and the protection afforded by

one cannot be used interchangeably to cover items or works that

exclusively pertain to the others:

Trademark, copyright and patents are different intellectual property

rights that cannot be interchanged with one another. A trademark is any

visible sign capable of distinguishing the goods (trademark) or services

(service mark) of an enterprise and shall include a stamped or marked

container of goods. In relation thereto, a trade name means the name or

designation identifying or distinguishing an enterprise. Meanwhile, the

scope of a copyright is confined to literary and artistic works which are

original intellectual creations in the literary and artistic domain

protected from the moment of their creation. Patentable inventions, on

the other hand, refer to any technical solution of a problem in any field of

human activity which is new, involves an inventive step and is

industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

This brings us to the next point: if, despite its manufacture and

commercial use of the light boxes without license from petitioner, private

respondents cannot be held legally liable for infringement of P & Ds

copyright over its technical drawings of the said light boxes, should they

be liable instead for infringement of patent? We do not think so either.

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For some reason or another, petitioner never secured a patent for the

light boxes. It therefore acquired no patent rights which could have

protected its invention, if in fact it really was. And because it had no

patent, petitioner could not legally prevent anyone from manufacturing or

commercially using the contraption. In Creser Precision Systems, Inc. vs.

Court of Appeals,12 we held that "there can be no infringement of a

patent until a patent has been issued, since whatever right one has to

the invention covered by the patent arises alone from the grant of patent.

x x x (A)n inventor has no common law right to a monopoly of his

invention. He has the right to make use of and vend his invention, but if

he voluntarily discloses it, such as by offering it for sale, the world is free

to copy and use it with impunity. A patent, however, gives the inventor

the right to exclude all others. As a patentee, he has the exclusive right

of making, selling or using the invention.13 On the assumption that

petitioners advertising units were patentable inventions, petitionerrevealed them fully to the public by submitting the engineering drawings

thereof to the National Library.

To be able to effectively and legally preclude others from copying and

profiting from the invention, a patent is a primordial requirement. No

patent, no protection. The ultimate goal of a patent system is to bring

new designs and technologies into the public domain through

disclosure.14 Ideas, once disclosed to the public without the protection

of a valid patent, are subject to appropriation without significant

restraint.15

On one side of the coin is the public which will benefit from new ideas;

on the other are the inventors who must be protected. As held in Bauer &

Cie vs. ODonnel,16 "The act secured to the inventor the exclusive right

to make use, and vend the thing patented, and consequently to prevent

others from exercising like privileges without the consent of the patentee.

It was passed for the purpose of encouraging useful invention and

promoting new and useful inventions by the protection and stimulation

given to inventive genius, and was intended to secure to the public, afterthe lapse of the exclusive privileges granted the benefit of such

inventions and improvements."

The law attempts to strike an ideal balance between the two interests:

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"(The p)atent system thus embodies a carefully crafted bargain for

encouraging the creation and disclosure of new useful and non-obvious

advances in technology and design, in return for the exclusive right to

practice the invention for a number of years. The inventor may keep his

invention secret and reap its fruits indefinitely. In consideration of its

disclosure and the consequent benefit to the community, the patent is

granted. An exclusive enjoyment is guaranteed him for 17 years, but

upon the expiration of that period, the knowledge of the invention inures

to the people, who are thus enabled to practice it and profit by its

use."17

The patent law has a three-fold purpose: "first, patent law seeks to foster

and reward invention; second, it promotes disclosures of inventions to

stimulate further innovation and to permit the public to practice the

invention once the patent expires; third, the stringent requirements forpatent protection seek to ensure that ideas in the public domain remain

there for the free use of the public."18

It is only after an exhaustive examination by the patent office that a

patent is issued. Such an in-depth investigation is required because "in

rewarding a useful invention, the rights and welfare of the community

must be fairly dealt with and effectively guarded. To that end, the

prerequisites to obtaining a patent are strictly observed and when a

patent is issued, the limitations on its exercise are equally strictly

enforced. To begin with, a genuine invention or discovery must be

demonstrated lest in the constant demand for new appliances, the heavy

hand of tribute be laid on each slight technological advance in art."19

There is no such scrutiny in the case of copyrights nor any notice

published before its grant to the effect that a person is claiming the

creation of a work. The law confers the copyright from the moment of

creation20 and the copyright certificate is issued upon registration with

the National Library of a sworn ex-parte claim of creation.

Therefore, not having gone through the arduous examination for patents,

the petitioner cannot exclude others from the manufacture, sale or

commercial use of the light boxes on the sole basis of its copyright

certificate over the technical drawings.

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Stated otherwise, what petitioner seeks is exclusivity without any

opportunity for the patent office (IPO) to scrutinize the light boxs

eligibility as a patentable invention. The irony here is that, had petitioner

secured a patent instead, its exclusivity would have been for 17 years

only. But through the simplified procedure of copyright-registration with

the National Library without undergoing the rigor of defending the

patentability of its invention before the IPO and the public the

petitioner would be protected for 50 years. This situation could not have

been the intention of the law.

In the oft-cited case of Baker vs. Selden21, the United States Supreme

Court held that only the expression of an idea is protected by copyright,

not the idea itself. In that case, the plaintiff held the copyright of a book

which expounded on a new accounting system he had developed. The

publication illustrated blank forms of ledgers utilized in such a system.The defendant reproduced forms similar to those illustrated in the

plaintiffs copyrighted book. The US Supreme Court ruled that:

"There is no doubt that a work on the subject of book-keeping, though

only explanatory of well known systems, may be the subject of a

copyright; but, then, it is claimed only as a book. x x x. But there is a

clear distinction between the books, as such, and the art, which it is,

intended to illustrate. The mere statement of the proposition is so evident

that it requires hardly any argument to support it. The same distinction

may be predicated of every other art as well as that of bookkeeping. A

treatise on the composition and use of medicines, be they old or new; on

the construction and use of ploughs or watches or churns; or on the

mixture and application of colors for painting or dyeing; or on the mode

of drawing lines to produce the effect of perspective, would be the subject

of copyright; but no one would contend that the copyright of the treatise

would give the exclusive right to the art or manufacture described

therein. The copyright of the book, if not pirated from other works, would

be valid without regard to the novelty or want of novelty of its subject

matter. The novelty of the art or thing described or explained has nothingto do with the validity of the copyright. To give to the author of the book

an exclusive property in the art described therein, when no examination

of its novelty has ever been officially made, would be a surprise and a

fraud upon the public. That is the province of letters patent, not of

copyright. The claim to an invention of discovery of an art or

manufacture must be subjected to the examination of the Patent Office

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before an exclusive right therein can be obtained; and a patent from the

government can only secure it.

The difference between the two things, letters patent and copyright, may

be illustrated by reference to the subjects just enumerated. Take the case

of medicines. Certain mixtures are found to be of great value in the

healing art. If the discoverer writes and publishes a book on the subject

(as regular physicians generally do), he gains no exclusive right to the

manufacture and sale of the medicine; he gives that to the public. If he

desires to acquire such exclusive right, he must obtain a patent for the

mixture as a new art, manufacture or composition of matter. He may

copyright his book, if he pleases; but that only secures to him the

exclusive right of printing and publishing his book. So of all other

inventions or discoveries.

The copyright of a book on perspective, no matter how many drawings

and illustrations it may contain, gives no exclusive right to the modes of

drawing described, though they may never have been known or used

before. By publishing the book without getting a patent for the art, the

latter is given to the public.

x x x

Now, whilst no one has a right to print or publish his book, or any

material part thereof, as a book intended to convey instruction in the art,

any person may practice and use the art itself which he has described

and illustrated therein. The use of the art is a totally different thing from

a publication of the book explaining it. The copyright of a book on

bookkeeping cannot secure the exclusive right to make, sell and use

account books prepared upon the plan set forth in such book. Whether

the art might or might not have been patented, is a question, which is

not before us. It was not patented, and is open and free to the use of the

public. And, of course, in using the art, the ruled lines and headings of

accounts must necessarily be used as incident to it.

The plausibility of the claim put forward by the complainant in this case

arises from a confusion of ideas produced by the peculiar nature of the

art described in the books, which have been made the subject of

copyright. In describing the art, the illustrations and diagrams employed

happened to correspond more closely than usual with the actual work

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performed by the operator who uses the art. x x x The description of the

art in a book, though entitled to the benefit of copyright, lays no

foundation for an exclusive claim to the art itself. The object of the one is

explanation; the object of the other is use. The former may be secured by

copyright. The latter can only be secured, if it can be secured at all, by

letters patent." (underscoring supplied)

ON THE ISSUE OF TRADEMARK INFRINGEMENT

This issue concerns the use by respondents of the mark "Poster Ads"

which petitioners president said was a contraction of "poster

advertising." P & D was able to secure a trademark certificate for it, but

one where the goods specified were "stationeries such as letterheads,

envelopes, calling cards and newsletters."22 Petitioner admitted it did not

commercially engage in or market these goods. On the contrary, it dealtin electrically operated backlit advertising units and the sale of

advertising spaces thereon, which, however, were not at all specified in

the trademark certificate.

Under the circumstances, the Court of Appeals correctly cited Faberge

Inc. vs. Intermediate Appellate Court,23 where we, invoking Section 20 of

the old Trademark Law, ruled that "the certificate of registration issued

by the Director of Patents can confer (upon petitioner) the exclusive right

to use its own symbol only to those goods specified in the certificate,

subject to any conditions and limitations specified in the certificate x x x.

One who has adopted and used a trademark on his goods does not

prevent the adoption and use of the same trademark by others for

products which are of a different description."24 Faberge, Inc. was

correct and was in fact recently reiterated in Canon Kabushiki Kaisha vs.

Court of Appeals.25

Assuming arguendo that "Poster Ads" could validly qualify as a

trademark, the failure of P & D to secure a trademark registration for

specific use on the light boxes meant that there could not have been anytrademark infringement since registration was an essential element

thereof.1wphi1

ON THE ISSUE OF UNFAIR COMPETITION

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If at all, the cause of action should have been for unfair competition, a

situation which was possible even if P & D had no registration.26

However, while the petitioners complaint in the RTC also cited unfair

competition, the trial court did not find private respondents liable

therefor. Petitioner did not appeal this particular point; hence, it cannot

now revive its claim of unfair competition.

But even disregarding procedural issues, we nevertheless cannot hold

respondents guilty of unfair competition.

By the nature of things, there can be no unfair competition under the law

on copyrights although it is applicable to disputes over the use of

trademarks. Even a name or phrase incapable of appropriation as a

trademark or tradename may, by long and exclusive use by a business

(such that the name or phrase becomes associated with the business orproduct in the mind of the purchasing public), be entitled to protection

against unfair competition.27 In this case, there was no evidence that P

& Ds use of "Poster Ads" was distinctive or well-known. As noted by the

Court of Appeals, petitioners expert witnesses himself had testified that "

Poster Ads was too generic a name. So it was difficult to identify it with

any company, honestly speaking."28 This crucial admission by its own

expert witness that "Poster Ads" could not be associated with P & D

showed that, in the mind of the public, the goods and services carrying

the trademark "Poster Ads" could not be distinguished from the goods

and services of other entities.

This fact also prevented the application of the doctrine of secondary

meaning. "Poster Ads" was generic and incapable of being used as a

trademark because it was used in the field of poster advertising, the very

business engaged in by petitioner. "Secondary meaning" means that a

word or phrase originally incapable of exclusive appropriation with

reference to an article in the market (because it is geographically or

otherwise descriptive) might nevertheless have been used for so long and

so exclusively by one producer with reference to his article that, in thetrade and to that branch of the purchasing public, the word or phrase

has come to mean that the article was his property.29 The admission by

petitioners own expert witness that he himself could not associate

"Poster Ads" with petitioner P & D because it was "too generic" definitely

precluded the application of this exception.

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Having discussed the most important and critical issues, we see no need

to belabor the rest.

All told, the Court finds no reversible error committed by the Court of

Appeals when it reversed the Regional Trial Court of Makati City.

WHEREFORE, the petition is hereby DENIED and the decision of the

Court of Appeals dated May 22, 2001 is AFFIRMED in toto.

SO ORDERED.

Republic of the Philippines

SUPREME COURTManila

SECOND DIVISION

G.R. L-45101 November 28, 1986

ROSARIO C. MAGUAN (formerly ROSARIO C. TAN), petitioner,

vs.

THE HONORABLE COURT OF APPEALS and SUSANA LUCHAN,

respondents.

Ambrosio Padilla Law Offices for petitioner.

PARAS, J.:p

Submitted on December 9, 1977 for Our decision is this petition for

review on certiorari of the two Resolutions of the Court of Appeals, the

first dated July 6, 1976, setting aside its Decision of February 16, 1976in CA-G.R. No. SP-04706, titled "SUSANA LUCHAN v. Hon. HONRADO, et

al." wherein it ruled for the dismissal of the petition for lack of merit and

at the same time nullifying the writ of preliminary injunction it had

previously issued; and the second, dated November 4, 1976, denying the

motion for reconsideration of the first resolution above-mentioned.

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Petitioner is doing business under the firm name and style of SWAN

MANUFACTURING" while private respondent is likewise doing business

under the firm name and style of "SUSANA LUCHAN POWDER PUFF

MANUFACTURING."

It is undisputed that petitioner is a patent holder of powder puff namely:

1. UM-423 (extended and/or renewed under Extension No. UM-109

for a period of 5 years from October 6, 1971)

2. UM-450 (extended and/or renewed under Extension No. UM110 for

a period of 5 years from January 26, 1972)

3. UM 1184, for a period of 5years fromApril 5, 1974.(Petition, Rollo,

pp. 6-7).

In a letter dated July 10, 1974 (Annex "D", Rollo, p. 86), 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. (Rollo,

pp. 7-8).

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. (Taken from allegations in the Answer,

par. 4, Rollo, p. 93). And on July 25, 1974, private respondent assailed

the validity of the patents involved and filed with the Philippine PatentOffice petitions for cancellation of (1) Utility Model Letter Patent

Extension No. UM-109 (Inter Partes Case No. 838, Susana Luchan v.

Rosario C. Tan), (2) Utility Model Letters Patent No. UM-1184 (Inter

Partes Case No. 839, Susana Luchan v. Rosario C. Tan), (3) Utility Model

Letters Patent Extension No. UM-110 (Inter Partes Case No. 840, Susana

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Luchan v. Rosario C. Tan. (Taken from allegations in the Answer, par. 10,

Rollo, pp. 94-95).

In view thereof, petitioner, on August 24, 1974, filed a complaint for

damages with injunction and preliminary injunction against private

respondent with the then Court of First Instance of Rizal, Pasig Branch,

docketed as Civil Case No. 19908, for infringing the aforesaid letters

patent, and prayed, among others, that a writ of preliminary injunction

be immediately issued (Complaint, Rollo, p. 90).

In her answer, private respondent alleged that the products she is

manufacturing and offering for sale are not Identical, or even only

substantially Identical to the products covered by petitioner's patents

and, by way of affirmative defenses, further alleged that petitioner's

patents in question are void on the following grounds:

(1) at the time of filing of application for the patents involved, the

utility models applied for were not new and patentable under Sec. 55 of

R.A. 165, as amended by R.A. 864; and

(2) the person to whom the patents were issued was not the true and

actual author of the utility models applied for, and neither did she derive

her rights from any true and actual author of these utility models.

for the following reasons:

(a) since years prior to the filing of applications for the patents

involved, powder puffs of the kind applied for were then already existing

and publicly being sold in the market; both in the Philippines and

abroad; and

(b) applicant's claims in her applications, of "construction" or process

of manufacturing the utility models applied for, with respect to UM-423

and UM-450, were but a complicated and impractical version of an old,simple one which has been well known to the cosmetics industry since

years previous to her filing of applications, and which belonged to no one

except to the general public; and with respect to UM1184; her claim in

her application of a unitary powder puff, was but an limitation of a

product well known to the cosmetics industry since years previous to her

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firing of application, and which belonged to no one except to the general

public; (Answer, Rollo, pp. 93-94).

On September 18, 1974, the trial court issued an Order (Annex "K",

Rollo, p. 125) granting the preliminary injunction prayed for by

petitioner. Consequently, the corresponding writ was subsequently

issued (Annex "K-1", Rollo, p. 131) enjoining the herein private

respondent (then defendant) and all other persons employed by her, her

agents, servants and employees from directly or indirectly

manufacturing, making or causing to be made, selling or causing to be

sold, or using or causing to be used in accordance with, or embodying

the utility models of the Philippine Patent Office Utility Model Letters

Patent Nos. 423 (Extension No. UM-109), No. 450 (Extension No. UM-

110), and Utility Model No. 1184 or from infringement upon or violating

said letters patent in any way whatsoever (Annex " K-1 ", Rollo, p. 131).

Private respondent questioned the propriety of the trial court's issuance

of the Writ of Preliminary Injunction arguing that since there is still a

pending cancellation proceedings before the Philippine Patent Office

concerning petitioner's patents, such cannot be the basis for preliminary

injunction (Motion for Reconsideration, Rollo, p. 132).

In an Order dated September 11, 1975, the trial court denied private

respondent's motion for reconsideration (Annex "N", Rollo, p. 142).

In challenging these Orders private respondent filed a petition for

certiorari with the respondent court on September 29, 1975 (Annex "D",

Rollo, pp. 148-171) reiterating among other things the invalidity of

petitioner's patents and prayed that the trial court be restrained from

enforcing or continuing to enforce the following:

(1) Order dated September 18, 1974, granting the preliminary

injunction;

(2) Writ of preliminary injunction dated September 18, 1974; and

(3) Order dated September 11, 1974 denying petitioner's motion

petition for reconsideration.

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On October 15, 1975, the Writ of Preliminary Injunction was issued by

the respondent Court of Appeals as follows:

NOW, THEREFORE, you, respondents, and/or any person/persons

acting on your stead, are hereby ENJOINED to RESTRAIN from enforcing

or continuing to enforce, the proceedings complained of in the petition to

wit: 1) Order dated September 18, 1974, granting the preliminary

injunction; 2) Writ of Preliminary Injunction dated September 18, 1974;

and Order dated September 11, 1975, denying petitioner's motion for

reconsideration, all issued in connection with Civil Case No. 19908,

UNTIL FURTHER ORDERS FROM THIS COURT. (Annex "P", Rollo, p.

1.73)

On February 16, 1976, respondent court promulgated a decision the

dispositive portion of which reads:

WHEREFORE, finding no merit in the herein petition, the same is hereby

dismissed and the preliminary injunction previously issued by this Court

is hereby set aside, with costs.

SO ORDERED. (CA Decision, Rollo, p. 189).

ln said decision respondent court stated that in disposing of the petition

it tackled only the issue of whether the court a quo acted with grave

abuse of discretion in issuing the challenged orders. It made clear the

question of whether the patents have been infringed or not was not

determined considering the court a quo has yet to decide the case on the

merits (Ibid., p. 186).

Feeling aggrieved, private respondent moved to reconsider the afore-

mentioned Decision based on the following grounds:

I

THAT THIS HONORABLE COURT ERRED IN NOT APPRECIATING THE

EXISTENCE OF A FAIR QUESTION OF INVALIDITY OF PRIVATE

RESPONDENT'S PATENTS.

II

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THAT THIS HONORABLE COURT ERRED IN NOT REJECTING THE

THEORY OF RESPONDENT JUDGE THAT HE HAS NO JURISDICTION

TO INVALIDATE THE PATENTS UPON GROUND OF LACK OF NOVELTY

OF THE PRODUCTS PATENTED. (Motion for Reconsideration, Rollo, p.

190).

Reviewing on reconsideration, respondent court gave weight to private

respondent's allegation that the latter's products are not identical or even

only substantially identical to the products covered by petitioner's

patents. Said court noticed that contrary to the lower courts position

that the court a quo had no jurisdiction to determine the question of

invalidity of the patents, Section 45 and 46 of the Patent Law allow the

court to make a finding on the validity or invalidity of patents and in the

event there exists a fair question of its invalidity, the situation calls for a

denial of the writ of preliminary injunction pending the evaluation of theevidence presented (Rollo, pp. 218-226). Thus, finding the lower court's

position to have been opposed to Patent Law, respondent court

considered it a grave abuse of discretion when the court a quo issued the

writ being questioned without looking into the defenses alleged by herein

private respondent. Further, it considered the remedy of appeal, under

the circumstances, to be inadequate.

Thus, on July 6, 1976, respondent court made a complete turnabout

from its original decision and promulgated a Resolution, the dispositive

portion of which reads:

WHEREFORE, our decision is hereby set aside. The writ of certiorari is

ordered issued. Accordingly, the challenged orders, Exhibit H and H-1

and the order denying the motion for reconsideration (Annex "K",

Petition), are hereby set aside. The writ of preliminary injunction

previously ordered by this Court and ordered lifted by the Decision now

being set aside is hereby reinstated and made permanent. Without

pronouncement as to costs.

SO ORDERED. (CA Resolution, Rollo, p. 226).

In a Resolution dated November 4, 1976, respondent court, not

persuaded by the grounds embodied in the motion for reconsideration

filed by herein petitioner (Annex "V ", Rollo, p. 227), denied the same for

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lack of merit, thereby maintaining the same stand it took in its July 6,

1976 Resolution (Rollo, p. 281). Hence, this petition.

On December 3, 1976, without giving due course to the petition, this

Court required respondent to file her Comment (Rollo, p. 290) which was

filed on December 16, 1976 (Rollo, pp. 291-316). Thereafter, petitioner

filed her Reply (Rollo, p. 323) and on May 30, 1977, the petition was

given due course (Rollo, p. 345). Petitioner filed her brief on July 14,

1977 (Rollo, p. 351) while private respondent filed her brief on August

25, 1977 (Rollo, p. 359). Thereafter, petitioner having failed to file reply

brief, the Court resolved to declare the case submitted for decision on

December 9, 1977 (Rollo, p. 359).

The assignment of errors raised by the petitioner in this case (Rollo, pp.

15-16) may be reduced to three main issues:

(1) Whether or not in an action for infringement the Court a quo had

jurisdiction to determine the invalidity of the patents at issue which

invalidity was still pending consideration in the patent office.

(2) Whether or not the Court a quo committed grave abuse of

discretion in the issuance of a writ of preliminary injunction.

(3) Whether or not certiorari is the proper remedy.

The first issue has been laid to rest in a number of cases where the Court

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

invention, novelty or prior use, and each of them, are open to judicial

examination." (Vargas v. F.M. Yaptico & Co. 40 Phil. 199 [1919]; Vargas v.

Chua, 57 Phil. 790-791 [1933]; Frank and Gohn v. Kosuyana 59 Phil.

207 [1933]).

Under the present Patent Law, there is even less reason to doubt that the

trial court has jurisdiction to declare the patents in question invalid. Apatentee shall have the exclusive right to make, use and sell the patented

article or product and the making, using, or selling by any person

without the authorization of the patentee constitutes infringement of the

patent (Sec. 37, R.A. 165). Any patentee whose rights have been infringed

upon may bring an action before the proper CFI now (RTC) and to secure

an injunction for the protection of his rights (Sec. 42, R.A. 165). Defenses

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in an action for infringement are provided for in Section 45 of the same

law which in fact were availed of by private respondent in this case.

Then, as correctly stated by respondent Court of Appeals, this conclusion

is reinforced by Sec. 46 of the same law which provides that if the Court

shall find the patent or any claim thereof invalid, the Director shall on

certification of the final judgment ... issue an order cancelling the patent

or the claims found invalid and shall publish a notice thereof in the

Official Gazette." Upon such certification, it is ministerial on the part of

the patent office to execute the judgment. (Rollo, pp. 221-222).

II.

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 itscorrectness 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.

The question then in the instant case is whether or not the evidence

introduced by private respondent herein is sufficient to overcome said

presumption.

After a careful review of the evidence consisting of 64 exhibits and oral

testimonies of five witnesses presented by private respondents before the

Court of First Instance before the Order of preliminary injunction was

issued as well as those presented by the petitioner, respondent Court of

Appeals was satisfied that there is a prima facie showing of a fair

question of invalidity of petitioner's patents on the ground of lack of

novelty. As pointed out by said appellate court said evidence appeared

not to have been considered at all by the court a quo for alleged lack of

jurisdiction, on the mistaken notion that such question in within the

exclusive jurisdiction of the patent office.

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

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the Patent Law) before the date of his application for his patent, will be

fatal to, the validity of the patent when issued. (Frank, et al. v. Kosuyama

Vargas v. F.M. Yaptico & Co. and Vargas v. Chua, et al., supra).

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 thePhilippines 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 (Vargas v. F.M. Yaptico & Co. supra) 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 relief (8 Deller's Walker on Patents p. 406). 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. (Ibid., p. 402)

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. (Sangki v. Comelec,

21 SCRA 1392; December 26, 1967) and the dissolution of the writ is

proper where applicant has doubtful title to the disputed property.

(Ramos v. C.A., 95 SCRA 359).

III.

It will be noted that the validity of petitioner's patents is in question for

want of novelty. Private respondent contends that powder puffs Identical

in appearance with that covered by petitioner's patents existed and were

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publicly known and used as early as 1963 long before petitioner was

issued the patents in question. (List of Exhibits, Rollo, pp. 194-199). As

correctly observed by respondent Court of Appeals, "since sufficient

proofs have been introduced in evidence showing a fair question of the

invalidity of the patents issued for such models, it is but right that the

evidence be looked into, evaluated and determined on the merits so that

the matter of whether the patents issued were in fact valid or not may be

resolved." (Rollo, pp. 286-287).

All these notwithstanding, the trial court nonetheless issued the writ of

preliminary injunction which under the circumstances should be denied.

For failure to determine first the validity of the patents before aforesaid

issuance of the writ, the trial court failed to satisfy the two requisites

necessary if an injunction is to issue, namely: the existence of the rightto be protected and the violation of said right. (Buayan Cattle Co., Inc. v.

Quintillan, 128 SCRA 276).

Under the above established principles, it appears obvious that the trial

court committed a grave abuse of discretion which makes certiorari the

appropriate remedy.

As found by respondent Court of Appeals, the injunctive order of the trial

court is of so general a tenor that petitioner may be totally barred from

the sale of any kind of powder puff. Under the circumstances,

respondent appellate court is of the view that ordinary appeal is

obviously inadequate. (Rollo, p. 288). A parallel was drawn from a

decision of the Supreme Court in the case of Sanchez v. Hon. Court of

Appeals, 69 SCRA 328 [1976] where the First Division of the Supreme

Court ruled that "The prerogative writ of certiorari may be applied for by

proper petition notwithstanding the existence of the regular remedy of an

appeal in due cause when among other reasons, the broader interests of

justice so require or an ordinary appeal is not an adequate remedy."

Private respondent maintains the position that the resolutions sought to

be appealed from had long become final and executory for failure of Hon.

Reynaldo P. Honrado, the trial court judge, to appeal by certiorari from

the resolutions of respondent Court of Appeals. (Rollo, pp. 291-292).

Such contention is untenable.

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There is no dispute that petitioner has seasonably petitioned. On the

other hand, it is elementary that the trial judge is a mere nominal party

as clearly provided in Section 5, Rule 65 of the Revised Rules of Court

where it shall be the duty of such person or persons interested in

sustaining the proceedings in court, "to appear and defend, both in his

or their own behalf and in behalf of the court or judge affected by the

proceedings."

Relative thereto "the judge whose order is under attack is merely a

nominal party; wherefore, a judge in his official capacity should not be

made to appear as a party seeking reversal of a decision that is

unfavorable to the action taken by him." (Hon. Alcasid v. Samson, 102

Phil. 735-736; Tarona v. Sayo, 67 SCRA 508, 524; Lim Se v. Argel, 70

SCRA 378).

As to petitioner's claim of prescription, private respondent's contention

that such refers to the filing of petitions for cancellation in the Patent

Office under Sec. 28 of the Patent Law and not to a defense against an

action for infringement under Sec. 45 thereof which may be raised

anytime, is evident under aforesaid law.

PREMISES CONSIDERED, the assailed resolutions of the Court of

Appeals are hereby AFFIRMED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 113388September 5, 1997

ANGELITA MANZANO, petitioner,

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vs.

COURT OF APPEALS, and MELECIA MADOLARIA, as Assignor to

NEW UNITED FOUNDRY MANUFACTURING CORPORATION,

respondents.

BELLOSILLO, J.:

The primary purpose of the patent system is not the reward of the

individual but the advancement of the arts and sciences. The function of

a patent is to add to the sum of useful knowledge and one of the

purposes of the patent system is to encourage dissemination of

information concerning discoveries and inventions. This is a matter

which is properly within the competence of the Patent Office the official

action of which has the presumption of correctness and may not be

interfered with in the absence of new evidence carrying thorough

conviction that the Office has erred. Since the Patent Office is an expert

body preeminently qualified to determine questions of patentability, its

findings must be accepted if they are consistent with the evidence, with

doubts as to patentability resolved in favor of the Patent Office. 1

Petitioner Angelita Manzano filed with the Philippine Patent Office on 19

February 1982 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 UnitedFoundry and Manufacturing Corporation (UNITED FOUNDRY, for

brevity). Petitioner alleged that (a) the utility model covered by the letters

patent, in this case, an LPG gas burner, was not inventive, new or useful;

(b) the specification of the letters patent did not comply with the

requirements of Sec. 14, RA No. 165, as amended; (c) respondent Melecia

Madolaria was not the original, true and actual inventor nor did she

derive her rights from the original, true and actual inventor of the utility

model covered by the letters patent; and, (d) the letters patent was

secured by means of fraud or misrepresentation. In support of her

petition for cancellation petitioner further alleged that (a) the utility

model covered by the letters patent of respondent had been known or

used by others in the Philippines for more than one (1) year before she

filed her application for letters patent on 9 December 1979; (b) the

products which were produced in accordance with the utility model

covered by the letters patent had been in public use or on sale in the

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Philippines for more than one (1) year before the application for patent

therefor was filed.

Petitioner presented the following documents which she correspondingly

marked as exhibits: (a) affidavit of petitioner alleging the existence of

prior art, marked Exh. "A;" (b) a brochure distributed by Manila Gas

Corporation disclosing a pictorial representation of Ransome Burner

made by Ransome Torch and Burner Company, USA, marked Exh. "D;"

and, (c) a brochure distributed by Esso Gasul or Esso Standard Eastern,

Inc., of the Philippines showing a picture of another similar burner with

top elevation view and another perspective view of the same burner,

marked Exh. "E."

Testifying for herself petitioner narrated that her husband Ong Bun Tua

worked as a helper in the UNITED FOUNDRY where respondent MeleciaMadolaria used to be affiliated with from 1965 to 1970; that Ong helped

in the casting of an LPG burner which was the same utility model of a

burner for which Letters Patent No. UM-4609 was issued, and that after

her husband's separation from the shop she organized Besco Metal

Manufacturing (BESCO METAL, for brevity) for the casting of LPG

burners one of which had the configuration, form and component parts

similar to those being manufactured by UNITED FOUNDRY. Petitioner

presented in evidence an alleged model of an LPG burner marked Exh.

"K" and covered by the Letters Patent of respondent, and testified that it

was given to her in January 1982 by one of her customers who allegedly

acquired it from UNITED FOUNDRY. Petitioner also presented in evidence

her own model of an LPG burner called "Ransome" burner marked Exh.

"L," which was allegedly manufactured in 1974 or 1975 and sold by her

in the course of her business operation in the name of BESCO METAL.

Petitioner claimed that this "Ransome" burner (Exh. "L") had the same

configuration and mechanism as that of the model which was patented

in favor of private respondent Melecia Madolaria. Also presented by

petitioner was a burner cup of an imported "Ransome" burner marked

Exh "M" which was allegedly existing even before the patent applicationof private respondent.

Petitioner presented two (2) 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

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mechanism as that of the model covered by the Letters Patent issued to

private respondent. Francisco testified that he had been employed with

the Manila Gas Corporation from 1930 to 1941 and from 1952 up to

1969 where he retired as supervisor and that Manila Gas Corporation

imported "Ransome" burners way back in 1965 which were advertised

through brochures to promote their sale.

Private respondent, on the other hand, presented only one witness,

Rolando Madolaria, who testified, among others, that 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 respondent Melecia Madolaria confided in

him that complaints were being brought to her attention concerning the

early models being manufactured; that he was then instructed by private

respondent to cast several experimental models based on revised

sketches and specifications; that private respondent again made some

innovations; that after a few months, private respondent discovered the

solution to all the defects of the earlier models and, based on her latest

sketches and specifications, he was able to cast several models

incorporating the additions to the innovations introduced in the models.

Various tests were conducted on the latest model in the presence and

under the supervision of Melecia Madolaria and they obtained perfect

results. Rolando Madolaria testified that private respondent decided to

file her application for utility model patent in December 1979.

On 7 July 1986 the Director of Patents Cesar C. Sandiego issued

Decision No. 86-56 denying the petition for cancellation and holding that

the evidence of petitioner was not able to establish convincingly that the

patented utility model of private respondent was anticipated. Not one of

the various pictorial representations of business clearly and convincinglyshowed that the devices presented by petitioner was identical or

substantially identical with the utility model of the respondent. The

decision also stated that even assuming that the brochures depicted

clearly each and every element of the patented gas burner device so that

the prior art and patented device became identical although in truth they

were not, they could not serve as anticipatory bars for the reason that

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they were undated. The dates when they were distributed to the public

were not indicated and, therefore, were useless prior art references. The

records and evidence also do not support the petitioner's contention that

Letters Patent No. UM-4609 was obtained by means of fraud and/or

misrepresentation. No evidence whatsoever was presented by petitioner

to show that the then applicant Melecia Madolaria withheld with intent

to deceive material facts which, if disclosed, would have resulted in the

refusal by the Philippine Patent Office to issue the Letters Patent under

inquiry.

Petitioner elevated the decision of the Director of Patents to the Court of

Appeals which on 15 October 1993 affirmed the decision of the Director

of Patents. Hence, this petition for review on certiorari alleging that the

Court of Appeals erred (a) in relying on imaginary differences which in

actuality did not exist between the model of private respondent coveredby Letters Patent No. UM-4609 and the previously known model of Esso

Standard Eastern, Inc., and Manila Gas Corporation, making such

imaginary differences grounded entirely on speculation, surmises and

conjectures; (b) in rendering judgment based on misapprehension of

facts; (c) in relying mainly on the testimony of private respondent's sole

witness Rolando Madolaria; and, (d) in not cancelling Letters Patent No.

UM-4609 in the name of private respondent.

Petitioner submits that the differences cited by the Court of Appeals

between the utility model of private respondent and the models of Manila

Gas Corporation and Esso Standard Eastern, Inc., are more imaginary

than real. She alleges that based on Exhs. "E," "E-1," "F" and "F-1" or the

brochures of Manila Gas Corporation and Esso Standard Eastern, Inc.,

presented by petitioner, the cup-shaped burner mouth and threaded hole

on the side are shown to be similar to the utility model of private

respondent. The exhibits also show a detachable burner mouth having a

plurality of upwardly existing undulations adopted to act as gas passage

when the cover is attached to the top of said cup-shaped mouth all of

which are the same as those in the patented model. Petitioner also deniesas substantial difference the short cylindrical tube of the burner mouth

appearing in the brochures of the burners being sold by Manila Gas

Corporation and the long cylindered tube of private respondent's model

of the gas burner.

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Petitioner argues that the actual demonstration made during the hearing

disclosed the similarities in form, operation and mechanism and parts

between the utility model of private respondent and those depicted in the

brochures. The findings of the Patent Office and the Court of Appeals

that the brochures of Manila Gas Corporation and Esso Standard

Eastern, Inc., are undated cannot overcome the fact of their circulation

before private respondent filed her application for utility model patent.

Petitioner thus asks this Court to take judicial notice of the fact that

Esso Standard Eastern, Inc., disappeared before 1979 and reappeared

only during the Martial Law years as Petrophil Corporation. Petitioner

also emphasizes that the brochures indicated the telephone number of

Manila Gas Corporation as 5-79-81 which is a five (5) numbered

telephone number existing before 1975 because telephones in Metro

Manila started to have six (6) numbers only after that year.

Petitioner further contends that the utility model of private respondent is

absolutely similar to the LPG burner being sold by petitioner in 1975 and

1976, and also to the "Ransome" burner depicted in the old brochures of

Manila Gas Corporation and Esso Standard Eastern, Inc., fabricated by

Ransome Torch and Burner Company of Oakland, California, USA,

especially when considered through actual physical examination,

assembly and disassembly of the models of petitioner and private

respondent. Petitioner faults the Court of Appeals for disregarding the

testimonies of Ong Bun Tua and Fidel Francisco for their failure to

produce documents on the alleged importation by Manila Gas

Corporation of "Ransome" burners in 1965 which had the same

configuration, form and mechanism as that of the private respondent's

patented model.

Finally, it is argued that the testimony of private respondent's lone

witness Rolando Madolaria should not have been given weight by the

Patent Office and the Court of Appeals because it contained mere after-

thoughts and pretensions.

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

which is the law on patents, expressly provides

Sec. 7. Inventians patentable. Any invention of a new and useful

machine, manufactured product or substance, process or an

improvement of any of the foregoing, shall be patentable.

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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 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 aninvention 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. 2 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. 3

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. 4 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 printedpublication 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. 5

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

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respondent Madolaria was not legally met by petitioner in her action for

the cancellation of the patent. Thus the Director of Patents explained his

reasons for the denial of the petition to cancel private respondent's

patent

Scrutiny of Exhs. "D" and "E" readily reveals that the utility model (LPG

Burner) is not anticipated. 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 asingle prior art device or practice. (Kalman v. Kimberly Clark, 218 USPQ

781, 789)

Even assuming gratia arguendi that the aforesaid brochures do depict

clearly on all fours each and every element of the patented gas burner

device so that the prior art and the said patented device become

identical, although in truth they are not, they cannot serve as

anticipatory bars for the reason that they are undated. The dates when

they were distributed to the public were not indicated and, therefore,

they are useless prior art references.

xxx xxx xxx

Furthermore, and more significantly, the model marked Exh. "K" does

not show whether or not it was manufactured and/or cast before the

application for the issuance of patent for the LPG burner was filed by

Melecia Madolaria.

With respect to Exh. "L," petitioner claimed it to be her own model of LPGburner allegedly manufactured sometime in 1974 or 1975 and sold by

her in the course of her business operation in the name of Besco Metal

Manufacturing, which burner was denominated as "Ransome" burner

xxx xxx xxx

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But a careful examination of Exh. "L" would show that it does not bear

the word "Ransome" which is the burner referred to as the product being

sold by the Petitioner. This is not the way to prove that Exh. "L"

anticipates Letters Patent No. UM-4609 through Exhs. "C" and "D."

Another factor working against the Petitioner's claims is that an

examination of Exh. "L" would disclose that there is no indication of the

time or date it was manufactured. This Office, thus has no way of

determining whether Exh. "L" was really manufactured before the filing of

the aforesaid application which matured into Letters Patent No. UM-

4609, subject matter of the cancellation proceeding.

At this juncture, it is worthwhile to point out that petitioner also

presented Exh. "M" which is the alleged burner cup of an imported

"Ransome" burner. Again, this Office finds the same as unreliable

evidence to show anticipation. It observed that there is no date indicatedtherein as to when it was manufactured and/or imported before the filing

of the application for issuance of patent of the subject utility model.

What is more, some component parts of Exh. "M" are missing, as only

the cup was presented so that the same could not be compared to the

utility model (subject matter of this case) which consists of several other

detachable parts in combination to form the complete LPG burner.

xxx xxx xxx

It must likewise be pointed out that Ong Bun Tua testified on the

brochures allegedly of Manila Gas and of Esso Gasul marked Exhs. "E"

and "F" and on the alleged fact that Manila Gas Corporation was

importing from the United States "Ransome" burners. But the same

could not be given credence since he himself admitted during cross-

examination that he has never been connected with Manila Gas

Corporation. He could not even present any importation papers relating

to the alleged imported ransome burners. Neither did his wife. 6

The above findings and conclusions of the Director of Patent werereiterated and affirmed by the Court of Appeals. 7

The validity of the patent issued by the Philippine Patent Office in favor

of private respondent and the question over the inventiveness, novelty

and usefulness of the improved model of the LPG burner are matters

which are better determined by the Patent Office. The technical staff of

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the Philippine Patent Office composed of experts in their field has by the

issuance of the patent in question accepted private respondent's model of

gas burner as a discovery. There is a presumption that the Office has

correctly determined the patentability of the model 8 and such action

must not be interfered with in the absence of competent evidence to the

contrary.

The rule is settled that the findings of fact of the Director of Patents,

especially when affirmed by the Court of Appeals, are conclusive on this

Court when supported by substantial evidence. Petitioner has failed to

show compelling grounds for a reversal of the findings and conclusions of

the Patent Office and the Court of Appeals.

The alleged failure of the Director of Patents and the Court of Appeals to

accord evidentiary weight to the testimonies of the witnesses of petitionershowing anticipation is not a justification to grant the petition. Pursuant

to the requirement of clear and convincing evidence to overthrow the

presumption of validity of a patent, it has been held that oral testimony

to show anticipation is open to suspicion and if uncorroborated by cogent

evidence, as what occurred in this case, it may be held insufficient. 9

Finally, petitioner would want this Court to review all over again the

evidence she presented before the Patent Office. She argues that contrary

to the decision of the Patent Office and the Court of Appeals, the

evidence she presented clearly proves that the patented model of private

respondent is no longer new and, therefore, fraud attended the

acquisition of patent by private respondent.

It has been held that the question on priority of invention is one of fact.

Novelty and utility are likewise questions of fact. The validity of patent is

decided on the basis of factual inquiries. Whether evidence presented

comes within the scope of prior art is a factual issue to be resolved by

the Patent Office. 10 There is question of fact when the doubt or

difference arises as to the truth or falsehood of alleged facts or when thequery necessarily invites calibration of the whole evidence considering

mainly the credibility of witnesses, existence and relevance of specific

surrounding circumstances, their relation to each other and to the whole

and the probabilities of the situation. 11

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Time and again we have held that it is not the function of the Supreme

Court to analyze or weigh all over again the evidence and credibility of

witnesses presented before the lower tribunal or office. The Supreme

Court is not a trier of facts. Its jurisdiction is limited to reviewing and

revising errors of law imputed to the lower court, its findings of fact being

conclusive and not reviewable by this Court.

WHEREFORE, the Petition is DENIED. The Decision of the Court of

Appeals affirming that of the Philippine Patent Office is AFFIRMED.

Costs against petitioner.

SO ORDERED.

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Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 118708February 2, 1998

CRESER PRECISION SYSTEMS, INC., petitioner,vs.

COURT OF APPEALS AND FLORO INTERNATIONAL CORP.,

respondents.

MARTINEZ, J.:

This petition for review on certiorari assails the decision 1 of the Court of

Appeals dated November 9, 1994 in C.A.-G.R. SP No. 34425 entitled

"Floro International Corp. vs. Hon. Tirso D.C Cruz and Creser Precision

System, Inc.", the dispositive portion of which reads:

WHEREFORE, THE PETITION IS HEREBY GRANTED. THE COMPLAINT

FOR INJUNCTION AND DAMAGES, CIVIL CASE NO. 93-1856 BEFORE

THE RESPONDENT JUDGE IS HEREBY ORDERED DISMISSED AND

HIS ORDERS THEREIN OF DECEMBER 29, 1993 AND MAY 11, 1994

ARE ORDERED SET ASIDE.

Private respondent is a domestic corporation engaged in the

manufacture, production, distribution and sale of military armaments,munitions, airmunitions and other similar materials. 2

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

Patents, Trademarks and Technology Transfer (BPTTT), a Letters Patent

No. UM-6938 3 covering an aerial fuze which was published in the

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On December 27, 1993, private respondent submitted it