G.R.

L-45101
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, 1976 in 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.

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 Patent Office 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
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 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.

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:

THAT THIS HONORABLE COURT ERRED IN NOT

APPRECIATING THE EXISTENCE OF A FAIR QUESTION OF
INVALIDITY OF PRIVATE RESPONDENT'S PATENTS.

II

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 the evidence 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 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. A patentee 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 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 its correctness and
validity. The decision of the Commissioner (now Director) of Patent in granting
the patent is presumed to be correct. The burden of going forward with the
evidence (burden of evidence) then shifts to the defendant to overcome by
competent evidence this legal presumption.

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 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 the Philippines granted on an application filed
before the filing of the application for patent therefor.

Thus, more specifically, under American Law from which our Patent Law was
derived (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 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 right to 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.

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.

Feria (Chairman), Fernan, Gutierrez, Jr., and Feliciano, * JJ., concur.

Alampay, J., took no part.

Footnotes

* Justice Alampay took no part. Justice Feliciano was designated to

sit in the Second Division.

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