AirPhil

Facts:

Pennswell sold and delivered to Air Philippines Corporation industrial chemicals, solvents,
and special lubricants amounting to P450,000.00. When Air Philippines refused to pay the
obligation, Pensswell filed a collection case before RTC Makati. In its Answer, Air Philippines
alleged that: it refused to pay because it was defrauded in the amount of P600,000.00 by
Pennswell for its previous sale of 4 items; said items were misrepresented by Pennswell as
belonging to a new line, but were in truth and in fact, identical with products it had previously
purchased from Pennswell; and, Pennswell merely altered the names and labels of such goods.
During the trial, Air Philippines filed a motion to compel Pennswell to give a detailed list of the
chemical components and the ingredients used for the products that were sold. Pennswell
opposed the motion for production, contending that the requested information was a trade
secret that it could not be forced to disclose.

Issue:

May Pennswell be compelled to disclose the chemical components and the ingredients used for
its products through a motion for production?

Held:

No. Rule 27 of the Rules of Court provides:

Sec. 1. Motion for production or inspection order. Upon motion of any party showing good cause
therefore, the court in which an action is pending may (a) order any party to produce and permit
the inspection and copying or photographing, by or on behalf of the moving party, of any
designated documents, papers, books, accounts, letters, photographs, objects or tangible
things, not privileged, which constitute or contain evidence material to any matter involved in
the action and which are in his possession, custody or control; or (b) order any party to permit
entry upon designated land or other property in his possession or control for the purpose of
inspecting, measuring, surveying, or photographing the property or any designated relevant
object or operation thereon. The order shall specify the time, place and manner of making the
inspection and taking copies and photographs, and may prescribe such terms and conditions as
are just.

Rule 27 sets an unequivocal proviso that the documents, papers, books, accounts, letters,
photographs, objects or tangible things that may be produced and inspected should not be
privileged. Section 24 of Rule 130 draws the types of disqualification by reason of privileged
communication, to wit: (a) communication between husband and wife; (b) communication
between attorney and client; (c) communication between physician and patient; (d)
communication between priest and penitent; and (e) public officers and public interest. There
are, however, other privileged matters that are not mentioned by Rule 130. Among them are the
following: (a) editors may not be compelled to disclose the source of published news; (b) voters
may not be compelled to disclose for whom they voted; (c) trade secrets; (d) information
contained in tax census returns; and (d) bank deposits.

A trade secret is defined as a plan or process, tool, mechanism or compound known only to its
owner and those of his employees to whom it is necessary to confide it. The definition also
extends to a secret formula or process not patented, but known only to certain individuals using
it in compounding some article of trade having a commercial value. American jurisprudence has
utilized the following factors to determine if an information is a trade secret, to wit:

(1) the extent to which the information is known outside of the employers business;
(2) the extent to which the information is known by employees and others involved in the
business;
(3) the extent of measures taken by the employer to guard the secrecy of the information;
(4) the value of the information to the employer and to competitors;
(5) the amount of effort or money expended by the company in developing the information; and
(6) the extent to which the information could be easily or readily obtained through an
independent source.

The chemical composition, formulation, and ingredients of respondents special lubricants are
trade secrets within the contemplation of the law. Respondent was established to engage in the
business of general manufacturing and selling of, and to deal in, distribute, sell or otherwise
dispose of goods, wares, merchandise, products, including but not limited to industrial chemicals,
solvents, lubricants, acids, alkalies, salts, paints, oils, varnishes, colors, pigments and similar
preparations, among others. It is unmistakable to our minds that the manufacture and
production of respondents products proceed from a formulation of a secret list of ingredients. In
the creation of its lubricants, respondent expended efforts, skills, research, and resources.

Mirpuri

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 petitioners 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.

HELD
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.

CokaCola

Facts:
Petitioner Coca-Cola applied for a search warrant against Pepsi for hoarding empty Coke bottles
in Pepsis yard, an act allegedly penalized as unfair competition under the IP Code. MTC issued
the search warrants and the local police seized the goods. Later, a complaint against respondents
was filed for violation of the IP Code. Respondent contended that the hoarding of empty Coke
bottles did not involve fraud and deceit for them to be liable for unfair competition. MTC upheld
the validity of the warrants. RTC voided the warrant for lack of probable cause of the commission
of unfair competition.
Issue:
Whether or not respondents hoarding of Coke bottles constitute unfair competition.
Ruling: NO.
From jurisprudence, unfair competition has been defined as the passing off (or palming off) or
attempting to pass off upon the public the goods or business of one person as the goods or
business of another with the end and probable effect of deceiving the public. One of the essential
requisites in an action to restrain unfair competition is proof of fraud; the intent to deceive must
be shown before the right to recover can exist. The advent of the IP Code has not significantly
changed these rulings as they are fully in accord with what Section 168 of the Code in its entirety
provides. Deception, passing off and fraud upon the public are still the key elements that must be
present for unfair competition to exist.
As basis for this interpretative analysis, we note that Section 168.1 speaks of a person who has
earned goodwill with respect to his goods and services and who is entitled to protection under
the Code, with or without a registered mark. Section 168.2, as previously discussed, refers to the
general definition of unfair competition. Section 168.3, on the other hand, refers to the specific
instances of unfair competition, with Section 168.3(a) referring to the sale of goods given the
appearance of the goods of another; Section 168.3(b), to the inducement of belief that his or her
goods or services are that of another who has earned goodwill; while the disputed Section
168.3(c) being a catch all clause whose coverage the parties now dispute.
Under all the above approaches, we conclude that the hoarding as defined and charged by
the petitioner does not fall within the coverage of the IP Code and of Section 168 in particular.
It does not relate to any patent, trademark, trade name or service mark that the respondents
have invaded, intruded into or used without proper authority from the petitioner. Nor are the
respondents alleged to be fraudulently passing off their products or services as those of the
petitioner. The respondents are not also alleged to be undertaking any representation or
misrepresentation that would confuse or tend to confuse the goods of the petitioner with those
of the respondents, or vice versa. What in fact the petitioner alleges is an act foreign to the Code,
to the concepts it embodies and to the acts it regulates; as alleged, hoarding inflicts unfairness
by seeking to limit the oppositions sales by depriving it of the bottles it can use for these sales.
In this light, hoarding for purposes of destruction is closer to what another law, R.A. No. 623
covers.

Emerald
In 1981, H.D Lee Co., Inc., a foreign company, filed an opposition against the trademark
application of Emerald Garment. Allegedly, the trademark Stylistic Mr. Lee sought to be applied
for by Emerald Garment is too confusingly similar with the brand Lee which has for its variations
Lee Riders, Lee Sures, and Lee Leens. The Director of Patents as well as the Court of
Appeals ruled in favor of H.D. Lee Co.
ISSUE: Whether or not the decision of the Court of Appeals is correct.
HELD: No. The Supreme Court considered that the trademarks involved as a whole and ruled that
Emerald Garments STYLISTIC MR. LEE is not confusingly similar to H.D. Lees LEE trademark.
The trademark Stylistic Mr. Lee, although on its label the word LEE is prominent, the
trademark should be considered as a whole and not piecemeal. The dissimilarities between the
two marks become conspicuous, noticeable and substantial enough to matter especially in the
light of the following variables that must be factored in.
First, the products involved in the case at bar are, in the main, various kinds of jeans. These are
not your ordinary household items like catsup, soysauce or soap which are of minimal cost.
Maong pants or jeans are not inexpensive. Accordingly, the casual buyer is predisposed to be
more cautious and discriminating in and would prefer to mull over his purchase. Confusion and
deception, then, is less likely.
Second, like his beer, the average Filipino consumer generally buys his jeans by brand. He does
not ask the sales clerk for generic jeans but for, say, a Levis, Guess, Wrangler or even an Armani.
He is, therefore, more or less knowledgeable and familiar with his preference and will not easily
be distracted.
Finally, in line with the foregoing discussions, more credit should be given to the ordinary
purchaser. Cast in this particular controversy, the ordinary purchaser is not the completely
unwary consumer but is the ordinarily intelligent buyer considering the type of product
involved.
There is no cause for the Court of Appeals apprehension that Emerald Garments products might
be mistaken as another variation or line of garments under H.D. Lees LEE trademark. As one
would readily observe, H.D. Lees variation follows a standard format LEERIDERS, LEESURES
and LEELEENS. It is, therefore, improbable that the public would immediately and naturally
conclude that petitioners STYLISTIC MR. LEE is but another variation under H.D. Lees LEE
mark.
The issue of confusing similarity between trademarks is resolved by considering the distinct
characteristics of each case. In the present controversy, taking into account these unique factors,
we conclude that the similarities in the trademarks in question are not sufficient as to likely cause
deception and confusion tantamount to infringement.
Further, H.D. Lee failed to prove in court that it had prior actual commercial use of its LEE
trademark in the Philippines. H.D. Lee did show certificates of registrations for its brand but
registration is not sufficient. Actual use in commerce in the Philippines is an essential prerequisite
for the acquisition of ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippine
Trademark Law (R.A. No. 166).
A rule widely accepted and firmly entrenched because it has come down through the years is
that actual use in commerce or business is a prerequisite in the acquisition of the right of
ownership over a trademark.
It would seem quite clear that adoption alone of a trademark would not give exclusive right
thereto. Such right grows out of their actual use. Adoption is not use. One may make
advertisements, issue circulars, give out price lists on certain goods; but these alone would not
give exclusive right of use. For trademark is a creation of use. The underlying reason for all these
is that purchasers have come to understand the mark as indicating the origin of the wares.
Flowing from this is the traders right to protection in the trade he has built up and the goodwill
he has accumulated from use of the trademark. Registration of a trademark, of course, has value:
it is an administrative act declaratory of a pre-existing right. Registration does not, however,
perfect a trademark right.
ANGELITA MANZANO,
petitioner, vs
. COURT OF APPEALS, and MELECIA MADOLARIA, asAssignor to NEW UNITED FOUNDRY
MANUFACTURING CORPORATION,
respondents
.FACTS:The petitioner filed an action for the cancellation of Letters of Patent covering a gasburner registered in
the name of responded Melecia Madolaria who subsequently assigned theletter of patent to United Foundry.
Petitioner alleged that the private respondent was not theoriginal, true and actual inventor nor did
she derive her rights from the original, true and actualinventor of the utility model covered by
the letter of patent; further alleged that the utilitymodel covered by the subject letter of patent had
been known or used by others in thePhilippines for than one (1) year before she filed her application
for letter of patent on Dec1979. For failure to present substantive proof of her allegations, the
lower court and Court of Appeals denied the action for cancellation. Hence, the present
petition.ISSUE:Whether or not the respondent court wrongfully denied the cancellation of letter of patent
registered under the private respondent.HELD:No. The issuance of such patent creates a presumption
which yields only to clear andcogent evidence that the patentee was the original and first inventor. The burden
of provingwant of novelty is on him who avers it and the burden is a heavy one which is met only
by clearand satisfactory proof which overcomes every reasonable doubt. Clearly enough,
the petitionerfailed to present clear and satisfactory proof to overcome every reasonable doubt
to afford thecancellation of the patent to the private respondent.

Kho

Elidad Kho is the owner of KEC Cosmetics Laboratory and she was also the holder of copyrights
over Chin Chun Su and its Oval Facial Cream Container/Case. She also bought the patent rights
over the Chin Chun Su & Device and Chin Chun Su for medicated cream from one Quintin Cheng,
who was the assignee of Shun Yi Factory a Taiwanese factory actually manufacturing Chin Chun
Su products.
Kho filed a petition for injunction against Summerville General Merchandising and Company to
enjoin the latter from advertising and selling Chin Chun Su products, in similar containers as that
of Kho, for this is misleading the public and causing Kho to lose income; the petition is also to
enjoin Summerville from infringing upon Khos copyrights.
Summerville in their defense alleged that they are the exclusive and authorized importer, re-
packer and distributor of Chin Chun Su products; that Shun Yi even authorized Summerville to
register its trade name Chin Chun Su Medicated Cream with the Philippine Patent Office; that
Quintin Cheng, from whom Kho acquired her patent rights, had been terminated (her services)
by Shun Yi.
ISSUE: Whether or not Kho has the exclusive right to use the trade name and its container.
HELD: No. Kho 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 (not copyright like what she registered for) 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.
Khos 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.

Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer (Phil.), Inc. G.R. No. 167715, 17 November 2010

Facts: Pfizer is the registered owner of a patent pertaining to Sulbactam Ampicillin. It is

marketed under the brand name Unasyn. Sometime in January and February 2003, Pfizer
discovered that Pharmawealth submitted bids for the supply of Sulbactam Ampicillin to several
hospitals without the Pfizers consent. Pfizer then demanded that the hospitals cease and desist
from accepting such bids. Pfizer also demanded that Pharmawealth immediately withdraw its
bids to supply Sulbactam Ampicillin. Pharmawealth and the hospitals ignored the demands.

Pfizer then filed a complaint for patent infringement with a prayer for permanent injunction
and forfeiture of the infringing products. A preliminary injunction effective for 90 days was
granted by the IPOs Bureau of Legal Affairs (IPO-BLA). Upon expiration, a motion for extension
filed by Pfizer was denied. Pfizer filed a Special Civil Action for Certiorari in the Court of Appeals
(CA) assailing the denial.

While the case was pending in the CA, Pfizer filed with the Regional Trial Court of Makati (RTC)
a complaint for infringement and unfair competition, with a prayer for injunction. The RTC
issued a temporary restraining order, and then a preliminary injunction.

Pharmawealth filed a motion to dismiss the case in the CA, on the ground of forum shopping.
Nevertheless, the CA issued a temporary restraining order. Pharmawealth again filed a motion
to dismiss, alleging that the patent, the main basis of the case, had already lapsed, thus making
the case moot, and that the CA had no jurisdiction to review the order of the IPO-BLA because
this was granted to the Director General. The CA denied all the motions. Pharmawealth filed a
petition for review on Certiorari with the Supreme Court.

Issues:
) Can an injunctive relief be issued based on an action of patent infringement when the patent
allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the
Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly different causes
of action and yet pray for the same relief?

Held:

a) No. The provision of R.A. 165, from which the Pfizers patent was based, clearly states that
"[the] patentee shall have the exclusive right to make, use and sell the patented machine,
article or product, and to use the patented process for the purpose of industry or commerce,
throughout the territory of the Philippines for the term of the patent; and such making, using,
or selling by any person without the authorization of the patentee constitutes infringement of
the patent."

Clearly, the patentees exclusive rights exist only during the term of the patent. Since the patent
was registered on 16 July 1987, it expired, in accordance with the provisions of R.A. 165, after
17 years, or 16 July 2004. Thus, after 16 July 2004, Pfizer no longer possessed the exclusive right
to make, use, and sell the products covered by their patent. The CA was wrong in issuing a
temporary restraining order after the cut-off date.

b) According to IP Code, the Director General of the IPO exercises exclusive jurisdiction over
decisions of the IPO-BLA. The question in the CA concerns an interlocutory order, and not a
decision. Since the IP Code and the Rules and Regulations are bereft of any remedy regarding
interlocutory orders of the IPO-BLA, the only remedy available to Pfizer is to apply the Rules
and Regulations suppletorily. Under the Rules, a petition for certiorari to the CA is the proper
remedy. This is consistent with the Rules of Court. Thus, the CA had jurisdiction.

c) Yes. Forum shopping is defined as the act of a party against whom an adverse judgment has
been rendered in one forum, of seeking another (and possibly favorable) opinion in another
forum (other than by appeal or the special civil action of certiorari), or the institution of two (2)
or more actions or proceedings grounded on the same cause on the supposition that one or the
other court would make a favorable disposition.

The elements of forum shopping are: (a) identity of parties, or at least such parties that
represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed
for, the reliefs being founded on the same facts; (c) identity of the two preceding particulars,
such that any judgment rendered in the other action will, regardless of which party is
successful, amount to res judicata in the action under consideration. This instance meets these
elements.

The parties are clearly identical. In both the complaints in the BLA-IPO and RTC, the rights
allegedly violated and the acts allegedly violative of such rights are identical, regardless of
whether the patents on which the complaints were based are different. In both cases, the
ultimate objective of Pfizer was to ask for damages and to permanently prevent Pharmawealth
from selling the contested products. Relevantly, the Supreme Court has decided that the filing
of two actions with the same objective, as in this instance, constitutes forum shopping.

Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a
decision in one case will necessarily amount to res judicata in the other action.

CHING V. SALINAS, SR. (G.R. NO. 161295)

Facts:
Petitioner Ching is a maker and manufacturer of a utility model, Leaf Spring Eye Bushing for
Automobile, for which he holds certificates of copyright registration. Petitioners request to the
NBI to apprehend and prosecute illegal manufacturers of his work led to the issuance of search
warrants against respondent Salinas, alleged to be reproducing and distributing said models in
violation of the IP Code. Respondent moved to quash the warrants on the ground that
petitioners work is not artistic in nature and is a proper subject of a patent, not copyright.
Petitioner insists that the IP Code protects a work from the moment of its creation regardless of
its nature or purpose. The trial court quashed the warrants. Petitioner argues that the copyright
certificates over the model are prima facie evidence of its validity. CA affirmed the trial courts
decision.
Issues:
(1) Whether or not petitioners model is an artistic work subject to copyright protection.
(2) Whether or not petitioner is entitled to copyright protection on the basis of the certificates
of registration issued to it.
Ruling:
(1) NO. As gleaned from the specifications appended to the application for a copyright certificate
filed by the petitioner, the said Leaf Spring Eye Bushing for Automobile and Vehicle Bearing
Cushion are merely utility models. As gleaned from the description of the models and their
objectives, these articles are useful articles which are defined as one having an intrinsic utilitarian
function that is not merely to portray the appearance of the article or to convey information.
Plainly, these are not literary or artistic works. They are not intellectual creations in the literary
and artistic domain, or works of applied art. They are certainly not ornamental designs or one
having decorative quality or value. Indeed, while works of applied art, original intellectual, literary
and artistic works are copyrightable, useful articles and works of industrial design are not. A
useful article may be copyrightable only if and only to the extent that such design incorporates
pictorial, graphic, or sculptural features that can be identified separately from, and are capable
of existing independently of the utilitarian aspects of the article. In this case, the bushing and
cushion are not works of art. They are, as the petitioner himself admitted, utility models which
may be the subject of a patent.
(2) NO. 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. Indeed, in Joaquin, Jr. v.Drilon and Pearl & Dean (Phil.),
Incorporated v. Shoemart, Incorporated, the Court ruled that:
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 it. 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.
Accordingly, it can cover only the works falling within the statutory enumeration or description.
Ownership of copyrighted material is shown by proof of originality and copyrightability. To
discharge his burden, the applicant may present the certificate of registration covering the work
or, in its absence, other evidence. A copyright certificate provides prima facie evidence of
originality which is one element of copyright validity. It constitutes prima facie evidence of both
validity and ownership and the validity of the facts stated in the certificate.

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

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

HELD: Yes. The Patent Law expressly acknowledges that any new model of implements or
tools of any industrial product even if not possessed of the quality of invention but which is of
practical utility is entitled to a patent for utility model. Here, there is no dispute that the letters
patent issued to Del Rosario are for utility models of audio equipment. It is elementary that a
patent may be infringed where the essential or substantial features of the patented invention
are taken or appropriated, or the device, machine or other subject matter alleged to infringe
is substantially identical with the patented invention. In order to infringe a patent, a machine
or device must perform the same function, or accomplish the same result by identical or
substantially identical means and the principle or mode of operation must be substantially the
same. In the case at bar, miyata karaoke was proven to have substantial if not identical
functionality as that of the minus one karaoke which was covered by the second patent issued
to Del Rosario. Further, Janito failed to present competent evidence that will show that Del
Rosarios innovation is not new.