Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 118708 February 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   of the Court of Appeals dated November 9,
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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  covering an aerial fuze which was
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published in the September-October-1990, Vol. III, No. 5 issue of the Bureau of Patent's
Official Gazette.4

Sometime in November 1993, private respondent, through its president, Mr. Gregory Floro,
Jr., discovered that petitioner submitted samples of its patented aerial fuze to the Armed
Forces of the Philippines (AFP) for testing. He learned that petitioner was claiming the
aforesaid aerial fuze as its own and planning to bid and manufacture the same commercially
without license or authority from private respondent. To protect its right, private respondent
on December 3, 1993, sent a letter  to petitioner advising it of its existing patent and its rights
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thereunder, warning petitioner of a possible court action and/or application for injunction,
should it proceed with the scheduled testing by the military on December 7, 1993.

In response to private respondent's demand, petitioner filed on December 8, 1993 a

complaint  for injunction and damages arising from the alleged infringement before the
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Regional Trial Court of Quezon City, Branch 88. The complaint alleged, among others: that
petitioner is the first, true and actual inventor of an aerial fuze denominated as "Fuze, PDR 77
CB4" which it developed as early as December 1981 under the Self-Reliance Defense Posture
Program (SRDP) of the AFP; that sometime in 1986, petitioner began supplying the AFP with
the said aerial fuze; that private respondent's aerial fuze is identical in every respect to the
petitioner's fuze; and that the only difference between the two fuzes are miniscule and merely
cosmetic in nature. Petitioner prayed that a temporary restraining order and/or writ of
preliminary injunction be issued enjoining private respondent including any and all persons
acting on its behalf from manufacturing, marketing and/or profiting therefrom, and/or from
performing any other act in connection therewith or tending to prejudice and deprive it of any
rights, privileges and benefits to which it is duly entitled as the first, true and actual inventor
of the aerial fuze.

On December 10, 1993, the trial court issued a temporary restraining order. Thereafter,
hearings were held on the application of petitioner for the issuance of a writ of preliminary
injunction, with both parties presenting their evidence. After the hearings, the trial court
directed the parties to submit their respective memoranda in support of their positions.

On December 27, 1993, private respondent submitted its memorandum   alleging that
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petitioner has no cause of action to file a complaint for infringement against it since it has no
patent for the aerial fuze which it claims to have invented; that petitioner's available remedy
is to file a petition for cancellation of patent before the Bureau of Patents; that private
respondent as the patent holder cannot be stripped of its property right over the
patented aerial fuze consisting of the exclusive right to manufacture, use and sell the same
and that it stands to suffer irreparable damage and injury if it is enjoined from the exercise of
its property rights over its patent.

On December 29, 1993, the trial court issued an Order   granting the issuance of a writ of
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preliminary injunction against private respondent the dispositive portion of which reads:

WHEREFORE, plaintiffs application for the issuance of a writ of preliminary

injunction is granted and, upon posting of the corresponding bond by plaintiff
in the amount of PHP 200,000.00, let the writ of preliminary injunction be
issued by the branch Clerk of this Court enjoining the defendant and any and
all persons acting on its behalf or by and under its authority, from
manufacturing, marketing and/or selling aerial fuzes identical, to those of
plaintiff, and from profiting therefrom, and/or from performing any other act in
connection therewith until further orders from this Court.

Private respondent moved for reconsideration but this was denied by the trial court in its
Order  of May 11, 1994, pertinent portions of which read:
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For resolution before this Court is the Motion for Reconsideration filed by the
defendant and the plaintiff's Opposition thereto. The Court finds no sufficient
cause to reconsider its order dated December 29, 1993. During the hearing for
the issuance of the preliminary injunction, the plaintiff has amply proven its
entitlement to the relief prayed for. It is undisputed that the plaintiff has
developed its aerial fuze way back in 1981 while the defendant began
manufacturing the same only in 1987. Thus, it is only logical to conclude that it
was the plaintiff's aerial fuze that was copied or imitated which gives the
plaintiff the right to have the defendant enjoined "from manufacturing,
marketing and/or selling aerial fuzes identical to those of the plaintiff, and from
profiting therefrom and/or performing any other act in connection therewith
until further orders from this Court." With regards to the defendant's assertion
that an action for infringement may only be brought by "anyone possessing
right, title or interest to the patented invention," (Section 42, RA 165) qualified
 by Sec. 10, RA 165 to include only "the first true and actual inventor, his heirs,
legal representatives or assignees, "this court finds the foregoing to be
untenable. Sec. 10 merely enumerates the persons who may have an invention
patented which does not necessarily limit to these persons the right to
institute an action for infringement. Defendant further contends that the order
in issue is disruptive of the status quo. On the contrary, the order issued by
the Court in effect maintained the status quo. The last actual, peaceable
uncontested status existing prior to this controversy was the plaintiff
manufacturing and selling its own aerial fuzes PDR 77 CB4 which was ordered
stopped through the defendant's letter. With the issuance of the order, the
operations of the plaintiff continue. Lastly, this court believes that the
defendant will not suffer irreparable injury by virtue of said order. The
defendant's claim is primarily hinged on its patent (Letters Patent No. UM-6983)
the validity of which is being questioned in this case.

WHEREFORE, premises considered, the Motion for Reconsideration is hereby

denied for lack of merit.

SO ORDERED.

Aggrieved, private respondent on June 27, 1994, filed a petition for certiorari, mandamus and
prohibition   before respondent Court of Appeals raising as grounds the following:
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a. Petitioner has no cause of action for infringement against private

respondent, the latter not having any patent for the aerial fuze which it claims
to have invented and developed and allegedly infringed by private respondent;

b. the case being an action for cancellation or invalidation of private

respondent's Letters Patent over its own aerial fuze, the proper venue is the
Office of the Director of Patents;

c. The trial court acted in grave abuse of discretion and/or in excess of

jurisdiction in finding that petitioner has fully established its clear title or right
to preliminary injunction;

d. The trial court acted in grave abuse of discretion and/or in excess of

jurisdiction in granting the preliminary injunction, it being disruptive of the
status quo; and

e. The trial court acted in grave abuse of discretion and/or in excess of

jurisdiction in granting the preliminary injunction thereby depriving private
respondent of its property rights over the patented aerial fuze and cause it
irreparable damages.

On November 9, 1994, the respondent court rendered the now assailed decision reversing the
trial court's Order of December 29, 1993 and dismissing the complaint filed by petitioner.

The motion for reconsideration was also denied on January 17, 1995.   Hence, this present
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petition.
It is petitioner's contention that it can file, under Section 42 of the Patent Law (R.A. 165), an
action for infringement not as a patentee but as an entity in possession of a right, title or
interest in and to the patented invention. It advances the theory that while the absence of a
patent may prevent one from lawfully suing another for infringement of said patent, such
absence does not bar the first true and actual inventor of the patented invention from suing
another who was granted a patent in a suit for declaratory or injunctive relief recognized
under American patent laws. This remedy, petitioner points out, may be likened to a civil
action for infringement under Section 42 of the Philippine Patent Law.

We find the above arguments untenable.

Section 42 of R.A. 165, otherwise known as the Patent Law, explicitly provides:

Sec. 42. Civil action for infringement. — Any patentee, or anyone possessing

any right, title or interest in and to the patented invention, whose rights have
been infringed, may bring a civil action before the proper Court of First
Instance (now Regional Trial court), to recover from the infringer damages
sustained by reason of the infringement and to secure an injunction for the
protection of his right. . . .

Under the aforequoted law, only the patentee or his successors-in-interest may file an action
for infringement. The phrase "anyone possessing any right, title or interest in and to the
patented invention" upon which petitioner maintains its present suit, refers only to the
patentee's successors-in-interest, assignees or grantees since actions for infringement of
patent may be brought in the name of the person or persons interested, whether as patentee,
assignees, or as grantees, of the exclusive right.   Moreover, there can be no infringement of
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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.   In short, a person or entity who has not
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been granted letters patent over an invention and has not acquired any light or title thereto
either as assignee or as licensee, has no cause of action for infringement because the right
to maintain an infringement suit depends on the existence of the patent.  14

Petitioner admits it has no patent over its aerial fuze. Therefore, it has no legal basis or cause
of action to institute the petition for injunction and damages arising from the alleged
infringement by private respondent. While petitioner claims to be the first inventor of
the aerial fuze, still it has no right of property over the same upon which it can maintain a suit
unless it obtains a patent therefor. Under American jurisprudence, an inventor has no
common-law right to a monopoly of his invention. He has the right to make, use and vend his
own 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, using or selling the
invention. 15

Further, the remedy of declaratory judgment or injunctive suit on patent invalidity relied upon
by petitioner cannot be likened to the civil action for infringement under Section 42 of the
Patent Law. The reason for this is that the said remedy is available only to the patent holder
or his successors-in-interest. Thus, anyone who has no patent over an invention but claims
to have a right or interest thereto can not file an action for declaratory judgment or injunctive
suit which is not recognized in this jurisdiction. Said person, however, is not left without any
remedy. He can, under Section 28 of the aforementioned law, file a petition for cancellation of
the patent within three (3) years from the publication of said patent with the Director of
Patents and raise as ground therefor that the person to whom the patent was issued is not
the true and actual inventor. Hence, petitioner's remedy is not to file an action for injunction
or infringement but to file a petition for cancellation of private respondent's patent. Petitioner
however failed to do so. As such, it can not now assail or impugn the validity of the private
respondent's letters patent by claiming that it is the true and actual inventor of the aerial fuze.

Thus, as correctly ruled by the respondent Court of Appeals in its assailed decision: "since
the petitioner (private respondent herein) is the patentee of the disputed invention embraced
by letters of patent UM No. 6938 issued to it on January 23, 1990 by the Bureau of Patents, it
has in its favor not only the presumption of validity of its patent, but that of a legal and
factual first and true inventor of the invention."

In the case of Aguas vs. De Leon,   we stated that:

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The validity of the patent issued by the Philippine Patent Office in favor of the
private respondent and the question over the investments, novelty and
usefulness of the improved process therein specified and described are
matters which are better determined by the Philippines Patent Office. The
technical Staff of the Philippines Patent Office, composed of experts in their
field, have, by the issuance of the patent in question, accepted the thinness of
the private respondent's new tiles as a discovery. There is a presumption that
the Philippine Patent Office has correctly determined the patentability of the
improvement by the private respondent of the process in question.

In fine, in the absence of error or abuse of power or lack of jurisdiction or grave abuse of
discretion, we sustain the assailed decision of the respondent Court of Appeal.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. No pronouncement

as to costs.

SO ORDERED.

Regalado, Melo, Puno and Mendoza, JJ., concur.