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ANGEL VARGAS vs F. M. YAPTICO & CO. (Ltd.) G.R. No. 14101, September 24, 1919 Facts: Plaintiff Angel Vargas, a farmer, was issued patents by the United States Patent Office for his so-called invention of an improved adjustable plow with the use his own native plow. A certified copy of the patent was filed in the Division of Patents, Copyrights, and Trademarks of the Executive Bureau, Government of the Philippine Islands. Defendant F. M. Yaptico & Co. (Ltd.), a firm engaged in the foundry business in Iloilo City, was a manufacturer of plow parts. It produced points, shares, shoes, and heel pieces in a considerable amount adapted to replace worn-out parts of the Vargas plow. Vargas filed a case in the Court of First Instance of Iloilo to enjoin the alleged infringement of his U.S. Patent by the defendant F. M Yaptico & Co. (Ltd.), and to recover the damages suffered by reason of this infringement, to which the court issued the preliminary injunction prayed for. The defendant denied the allegations and defended that the patent lacked novelty or invention, that there was no priority of ideas or device in the principle and construction of the plow, and that the plow, whose manufacture it was sought to have enjoined by the plaintiff, had already been in public use for more than two years before the application of the plaintiff for his patent. The trial judge rendered judgment in favor of the defendant, declaring null and without effect the patent in question and dismissing the suit with costs against the plaintiff. Hence, the plaintiff appealed said judgment. Issues: 1. Whether the patented invention is void for lack of novelty and invention? 2. Whether the patent is invalid considering that the plow had

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ANGEL VARGAS vs F. M. YAPTICO & CO. (Ltd.)G.R. No. 14101, September 24, 1919

Facts: 

Plaintiff Angel Vargas, a farmer, was issued patents by the United States Patent Office for his so-called invention of an improved adjustable plow with the use his own native plow. A

certified copy of the patent was filed in the Division of Patents, Copyrights, and Trademarks of the Executive Bureau, Government of the Philippine Islands. 

Defendant F. M. Yaptico & Co. (Ltd.), a firm engaged in the foundry business in Iloilo City, was a manufacturer of plow parts. It produced points, shares, shoes, and heel pieces in a

considerable amount adapted to replace worn-out parts of the Vargas plow. 

Vargas filed a case in the Court of First Instance of Iloilo to enjoin the alleged infringement of his U.S. Patent by the defendant F. M Yaptico & Co. (Ltd.), and to recover the damages suffered by reason of this infringement, to which the court issued the preliminary injunction

prayed for. 

The defendant denied the allegations and defended that the patent lacked novelty or invention, that there was no priority of ideas or device in the principle and construction of

the plow, and that the plow, whose manufacture it was sought to have enjoined by the plaintiff, had already been in public use for more than two years before the application of the

plaintiff for his patent. 

The trial judge rendered judgment in favor of the defendant, declaring null and without effect the patent in question and dismissing the suit with costs against the plaintiff. Hence, the

plaintiff appealed said judgment. 

Issues: 

1. Whether the patented invention is void for lack of novelty and invention? 

2. Whether the patent is invalid considering that the plow had already been in public use for over two years prior to the application for a patent. 

Ruling: 

1. Yes, the patent if void. The Supreme Court affirmed the trial court’s conclusion that the plow of the plaintiff is not different from the native plow, except in the material, in the form,

in the weight and the grade of the result, the said differences giving it neither a new function nor a new result distinct from the function and the result obtained from the native plow. Also,

its production does not presuppose the exercise of the inventive faculty but merely of mechanical skill, which does not give a right to a patent of an invention under the provisions

of the Patent Law. 

2. Yes, the patent is void. Under the provisions of the statute, an inventor's creation must not have been in public use or on sale in the United States (and the Philippine Islands) for

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more than two years prior to his application. 

Further, it was proved that the invention was used in public at Iloilo by others than Vargas, the inventor, more than two years before the application for the patent thus, the patent is

invalid.

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CASE DIGEST: CARLOS GSELL vs. VALERIANO VELOSO YAP-JUEFACTS:

            The principal case to which these proceedings are ancillary, was an action to enjoin infringement of a patented process for manufacture of curved handles for canes, parasols, and umbrellas. In that case, plaintiff established his title to a valid patent covering the process in question, and obtained against this defendant a judgment, granting a perpetual injunction restraining its infringement, which judgment was affirmed by this Court on appeal. The order was couched in the  following terms:

“It is ordered that the defendant abstain from manufacturing canes and umbrellas with a curved handle by means of a lamp or blowpipe fed with mineral oil or petroleum, which process was protected by patent no. 19288, issued in favor of Henry Gsell, and by him transferred to Carlos Gsell”.

            Thereafter the defendant continued to manufacture curved cane handles for walking sticks and umbrellas by a process in all respects identical with that used by the plaintiff under his patent, except only that he substituted for a lamp fed with petroleum or mineral oil, a lamp fed with alcohol.

            The trial court found the defendant “not guilty” of contempt as charged; and this court, on appeal, held that “The violation, if there has been any, was not of such a character that it could be made patent by the mere annunciation of the acts performed by the defendant, which are alleged to constitute the said violation. Consequently, the contempt with which the accused is charged has not been fully and satisfactorily proved, and the order appealed from should accordingly be affirmed in so far as it holds that the defendant is not guilty of contempt.

            Substantially, the same question is submitted in these new proceedings as that submitted in the former case.

ISSUE:

            Whether the use of a patented process by a third person, without license or authority therefore, constitutes an infringement when the alleged infringer has substituted in lieu of some unessential part of the patented process a well-known mechanical equivalent.

HELD:

            Counsel for plaintiff invokes the doctrine of “mechanical equivalents” in support of his contention, and indeed that doctrine is applicable to the facts of the case. This doctrine is founded upon sound rules of reason and logic, and unless restrained or modified by law in particular jurisdiction, is of universal application, so that it matters not whether a patent be issued by one sovereignty or another, the doctrine may properly be invoked to protect the patentee from colorable invasions of his patent under the guise of a substitution of some part of his invention by some well-known mechanical equivalent.

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            The use of a process in all respects identical with a process protected by a valid patent, save only that a well-known mechanical equivalent is substituted in lieu of some particular part of the patented process is an infringement upon the rights of the owner of the patent, which will be enjoined in appropriate proceeding, and the use of such process, after the order enjoining its use has been issued, is a “contempt”, under the provision of section 172 of the Code of Civil Procedure.

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PATRICK HENRY FRANK and WILLIAM HENRY GOHN vs. CONSTANCIO BENITOG.R. No. L-27793, March 15, 1928 

FACTS: Plaintiffs are the owners of a patent covering hemp-stripping machine No. 1519579 issued to them by the United States Patent Office and duly registered in the Bureau of Commerce and Industry of the Philippine Islands under the provisions of Act No. 2235  

Plaintiffs allege that the defendant manufactured a hemp-stripping machine in which, without authority from the plaintiffs, and has embodied and used such spindles and their method of application and use, and is exhibiting his machine to the public for the purpose of inducing its purchase. Frank and Gohn stress that use by the Benito of such spindles and the principle of their application to the stripping of hemp is in violation of, and in conflict with, plaintiffs' patent, together with its conditions and specifications.

Plaintiffs assert the violation of infringement upon the patent granted to Frank & Gohn, and requested that an action for injunction and damages be instituted against Benito.

Respondent on the other hand contends that it had no prior knowledge of the prior existence of the hemp-stripping invention of the plaintiffs nor had any intent to imitate the Frank’s product.  Likewise, the defendant contended that the facts alleged therein do not constitute a cause of action, that it is ambiguous and vague. The lower court rendered judgment in favor of the plaintiffs, to which was later affirmed by the appellate court.

HELD: As a rule, the burden of proof to substantiate a charge of infringement is with the plaintiff. Where, however, the plaintiff introduces the patent in evidence, if it is in due form, it affords a prima facie presumption of its correctness and validity. The decision of the Commissioner of Patents in granting the patent is always presumed to be correct. The burden the shifts to the defendant to overcome by competent evidence this legal presumption.

The patent in the case at bar, having been introduced in evidence, affords a prima facie presumption of its correctness and validity. Hence, this is not a case of a conflict between two different patents. In the recent of Temco Electric Motor Co. vs. Apco Mfg. Co., decided by the Supreme Court of the United States ruled “an improper cannot appropriate the basic patent of another, and if he does so without license is an infringer, and may be used as such. It is well established that an improver cannot appropriate the basic patent of another and that the improver without a license is an infringer and may be sued as such.”

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Vargas vs. chua

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Tobacco vs. director

ATC et al filed before the Philippine Patent Office concerning the use of trade mark and trade name. ATC et al challenged the validity of Rule 168 of the “Revised Rules of Practice before the Philippine Patent Office in Trademark Cases” as amended, authorizing the Director of Patents to designate any ranking official of said office to hear “inter partes” proceedings. Said Rule likewise provides that “all judgments determining the merits of the case shall be personally and directly prepared by the Director and signed by him.” These proceedings refer to the hearing of opposition to the registration of a mark or trade name, interference proceeding instituted for the purpose of determining the question of priority of adoption and use of a trade-mark, trade name or service-mark, and cancellation of registration of a trade-mark or trade name pending at the Patent Office. Petitioners filed their objections to the authority of the hearing officers to hear their cases, alleging that the amendment of the Rule is illegal and void because under the law the Director must personally hear and decide inter partes case. Said objections were overruled by the Director of Patents, hence, the present petition for mandamus, to compel the Director of Patents to personally hear the cases of petitioners, in lieu of the hearing officers.ISSUE: Whether or not the hearing done by hearing officers are within due process.HELD: The SC ruled that the power to decide resides solely in the administrative agency vested by law, this does not preclude a delegation of the power to hold a hearing on the basis of which the decision of the administrative agency will be made. The rule that requires an administrative officer to exercise his own judgment and discretion does not preclude him from utilizing, as a matter of practical administrative procedure, the aid of subordinates to investigate and report to him the facts, on the basis of which the officer makes his decisions.   It is sufficient that the judgment and discretion finally exercised are those of the officer authorized by law. Neither does due process of law nor the requirements of fair hearing require that the actual taking of testimony be before the same officer who will make the decision in the case. As long as a party is not deprived of his right to present his own case and submit evidence in support thereof, and the decision is supported by the evidence in the record, there is no question that the requirements of due process and fair trial are fully met.   In short, there is no abnegation of responsibility on the part of the officer concerned as the actual decision remains with and is made by said officer.   It is, however, required that to “give the substance of a hearing, which is for the purpose of making determinations upon evidence the officer who makes the determinations must consider and appraise the evidence which justifies them.”

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UNIVERSAL FOOD CORPORATION VS. CA33 SCRA 1

FACTS:This is a petition for certiorari by the UFC against

the CA decision of February 13, 1968 declaring the BILLOF ASSIGNMENT rescinded, ordering UFC to return to

Magdalo Francisco his Mafran sauce trademark and to payhis monthly salary of P300.00 from Dec. 1, 1960 until the

return to him of said trademark and formula.

In 1938, plaintiff Magdalo V. Francisco, Sr.discovered a formula for the manufacture of a food

seasoning (sauce) derived from banana fruits popularlyknown as MAFRAN sauce. It was used commercially since

1942, and in the same year plaintiff registered histrademark in his name as owner and inventor with theBureau of Patents. However, due to lack of sufficient

capital to finance the expansion of the business, in 1960,said plaintiff secured the financial assistance of Tirso T.Reyes who, after a series of negotiations, formed with

others defendant Universal Food Corporation eventuallyleading to the execution on May 11, 1960 of the

aforequoted "Bill of Assignment" (Exhibit A or 1).

On May 31, 1960, Magdalo Francisco entered intocontract with UFC stipulating among other things that hebe the Chief Chemist and Second Vice-President of UFCand shall have absolute control and supervision over thelaboratory assistants and personnel and in the purchaseand safekeeping of the chemicals used in the preparation

of said Mafran sauce and that said positions are permanentin nature.

In line with the terms and conditions of the Bill ofAssignment, Magdalo Francisco was appointed ChiefChemist with a salary of P300.00 a month. Magdalo

Francisco kept the formula of the Mafran sauce secret tohimself. Thereafter, however, due to the alleged scarcityand high prices of raw materials, on November 28, 1960,

Secretary-Treasurer Ciriaco L. de Guzman of UFC issued aMemorandum duly approved by the President and General

Manager Tirso T. Reyes that only Supervisor RicardoFrancisco should be retained in the factory and that thesalary of plaintiff Magdalo V. Francisco, Sr., should bestopped for the time being until the corporation should

resume its operation. On December 3, 1960, President andGeneral Manager Tirso T. Reyes, issued a memorandum to

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Victoriano Francisco ordering him to report to the factoryand produce "Mafran Sauce" at the rate of not less than

100 cases a day so as to cope with the orders of thecorporation's various distributors and dealers, and withinstructions to take only the necessary daily employees

without employing permanent employees. Again, onDecember 6, 1961, another memorandum was issued bythe same President and General Manager instructing theAssistant Chief Chemist Ricardo Francisco, to recall alldaily employees who are connected in the production ofMafran Sauce and also some additional daily employees

for the production of Porky Pops. On December 29, 1960,another memorandum was issued by the President and

General Manager instructing Ricardo Francisco, as ChiefChemist, and Porfirio Zarraga, as Acting Superintendent,

to produce Mafran Sauce and Porky Pops in full swingstarting January 2, 1961 with further instructions to hire

daily laborers in order to cope with the full blast operation.Magdalo V. Francisco, Sr. received his salary as Chief

Chemist in the amount of P300.00 a month only until hisservices were terminated on November 30, 1960. On

January 9 and 16, 1961, UFC, acting thru its President andGeneral Manager, authorized Porfirio Zarraga and Paulade Bacula to look for a buyer of the corporation includingits trademarks, formula and assets at a price of not lessthan P300,000.00. Due to these successive memoranda,

without plaintiff Magdalo V. Francisco, Sr. being recalledback to work, he filed the present action on February 14,

1961. Then in a letter dated March 20, 1961, UFC requestedsaid plaintiff to report for duty, but the latter declined the

request because the present action was already filed incourt.

ISSUES:1. Was the Bill of Assignment really one that

involves transfer of the formula for Mafran sauce itself?2. Was petitioner’s contention that MagdaloFrancisco is not entitled to rescission valid?

RULING:

1. No. Certain provisions of the bill would leadone to believe that the formula itself was transferred. To

quote, “the respondent patentee "assign, transfer andconvey all its property rights and interest over said

Mafran trademark and formula for MAFRAN SAUCEunto the Party of the Second Part," and the last

paragraph states that such "assignment, transfer and

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conveyance is absolute and irrevocable (and) in no caseshall the PARTY OF THE First Part ask, demand or sue

for the surrender of its rights and interest over saidMAFRAN trademark and mafran formula."

“However, a perceptive analysis of the entireinstrument and the language employed therein would lead

one to the conclusion that what was actually ceded andtransferred was only the use of the Mafran sauce formula.

This was the precise intention of the parties.”

The SC had the following reasons to back up theabove conclusion. First, royalty was paid by UFC to

Magdalo Francisco. Second, the formula of said Mafransauce was never disclosed to anybody else. Third, the Bill

acknowledged the fact that upon dissolution of said Corporation, the patentee rights and interests of said

trademark shall automatically revert back to MagdaloFrancisco. Fourth, paragraph 3 of the Bill declared onlythe transfer of the use of the Mafran sauce and not theformula itself which was admitted by UFC in its answer.

Fifth, the facts of the case undeniably show that what wastransferred was only the use. Finally, our Civil Code allows

only “the least transmission of right, hence, what betterway is there to show the least transmission of right of thetransfer of the use of the transfer of the formula itself.”

2. No. Petitioner’s contention that MagdaloFrancisco’s petition for rescission should be deniedbecause under Article 1383 of the Civil Code of the

Philippines rescission can not be demanded except whenthe party suffering damage has no other legal means to

obtain reparation, was of no merit because “it is predicatedon a failure to distinguish between a rescission for breach

of contract under Article 1191 of the Civil Code and arescission by reason of lesion or economic prejudice, under

Article 1381, et seq.” This was a case of reciprocalobligation. Article 1191 may be scanned without disclosing

anywhere that the action for rescission thereunder wassubordinated to anything other than the culpable breach ofhis obligations by the defendant. Hence, the reparation ofdamages for the breach was purely secondary. Simply put,unlike Art. 1383, Art. 1191 allows both the rescission andthe payment for damages. Rescission is not given to the

party as a last resort, hence, it is not subsidiary in nature.

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PARKE DAVIS and COMPANY vs. DOCTORS' PHARMACEUTICALS, INC., ET AL. G.R. No. L-22221, August 31, 1965

FACTS:

            Parke Davies and Company is an owner of a Patent entitled "Process for the Manufacturing of Antibiotics" (Letters Patent No. 50) which was issued by the Philippine Patent Office on February 9, 1950. The patent relates to a chemical compound represented by a formula commonly called chloramphenicol. The patent contains ten claims, nine of which are process claims, and the other is a product claim to the chemical substance chloramphenicol.

Doctors’ Pharmaceuticals Inc. requested that it be granted a voluntary license to manufacture and produce our own brand of medicine, containing chloramphenicol, and to use, sell, distribute, or otherwise dispose of the same in the Philippines under such terms and conditions as may be deemed reasonable and mutually satisfactory, which Parke Davies declined.

Doctors’ Pharmaceuticals Inc. filed a petition with the Director of Patents requesting the Director to grant a compulsory license. After careful evaluation and hearings, the Director granted the request of Doctors’ Pharmaceuticals.

ISSUE:

            Is the decision of the Director of Patents in granting Doctor’s Pharmaceutical Inc. compulsory license to use the substance chloramphenicol,valid?

HELD:

            Yes the decision of the Director of Patents in granting Doctor’s Pharmaceutical Inc. compulsory license to use the substance chloramphenicol is valid. The Supreme Court says that patents issued to foods and medicines are not exclusive so as not to prevent the building up of patent monopolies. Public benefit is foremost. The Court dismissed the contention of Parke Davies that the Director of Patents erred in granting compulsory license.  The decision appealed from is affirmed, with costs against petitioner.