ASG Law

Category: Patent Law

  • Patent Law: Novelty, Prior Art, and the Presumption of Patent Validity in the Philippines

    n

    Understanding Patent Novelty: Overcoming the Presumption of Validity

    n

    The key takeaway from this case is that obtaining a patent creates a strong presumption of validity, and challenging that patent requires clear and convincing evidence of a lack of novelty. This means showing that the invention was already publicly known or used before the patent application. Mere assertions or undated materials are insufficient to invalidate a patent. The Philippine Patent Office’s decision holds significant weight unless compelling evidence proves otherwise.

    nn

    G.R. No. 113388, September 05, 1997

    nn

    Introduction

    n

    Imagine investing years of research and development into a groundbreaking invention, only to have someone claim it’s not truly new. This is the reality for inventors who rely on patent protection. In the Philippines, obtaining a patent grants a presumption of validity, but it’s not an impenetrable shield. The case of Angelita Manzano v. Court of Appeals delves into what it takes to challenge a patent based on a lack of novelty and highlights the importance of the Philippine Patent Office’s expert evaluation.

    nn

    The core issue revolves around Angelita Manzano’s attempt to cancel a utility model patent for an LPG gas burner held by Melecia Madolaria (later assigned to New United Foundry Manufacturing Corporation). Manzano argued that the burner wasn’t inventive, new, or useful, and that Madolaria wasn’t the original inventor. The Supreme Court ultimately upheld the patent, reinforcing the principle that overturning a patent requires substantial evidence.

    nn

    Legal Context: The Cornerstones of Philippine Patent Law

    n

    Philippine patent law, primarily governed by Republic Act No. 165 (as amended), emphasizes the importance of novelty in granting patent protection. An invention, whether a machine, product, process, or improvement, must be demonstrably new and useful to be patentable. Similarly, a utility model—a new form, configuration, or composition of an industrial product—must also be novel and practically useful.

    nn

    Here are some key legal principles:

    n

      n

    • Novelty: The invention or utility model must not have been publicly known or used in the Philippines before the patent application.

      • n

    • Utility: The invention or utility model must have a practical use or purpose.

      • n

    • Presumption of Validity: A patent granted by the Philippine Patent Office carries a presumption that the invention meets the requirements for patentability.

      • n

    nn

    Crucially, Section 7 of RA No. 165 states:

    n

    “Sec. 7. Inventions 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.”

    nn

    Section 55 further clarifies the requirements for utility models:

    n

    “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.”

    nn

    Case Breakdown: The Battle Over the LPG Burner

    n

    The story begins with Angelita Manzano filing a petition to cancel Melecia Madolaria’s utility model patent for an LPG gas burner. Manzano claimed the burner was not new, citing prior art in the form of brochures from Manila Gas Corporation and Esso Standard Eastern, Inc., depicting similar burners. She also presented her own burner model, claiming it predated Madolaria’s patent application.

    nn

    The procedural journey unfolded as follows:

    n

      n

    1. Philippine Patent Office: The Director of Patents denied Manzano’s petition, finding that her evidence failed to convincingly demonstrate that Madolaria’s utility model was anticipated by prior art. The Director noted that the brochures were undated and didn’t clearly show identical burners.

      2. n

    2. Court of Appeals: The Court of Appeals affirmed the Director of Patents’ decision, upholding the validity of Madolaria’s patent.

      3. n

    3. Supreme Court: Manzano appealed to the Supreme Court, arguing that the lower courts had misapprehended the facts and relied too heavily on the testimony of Madolaria’s witness.

      4. n

    nn

    The Supreme Court sided with Madolaria, emphasizing the presumption of validity attached to patents. The Court quoted:

    n

    “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.”

    n

    The court further stated:

    n

    “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…There is a presumption that the Office has correctly determined the patentability of the model and such action must not be interfered with in the absence of competent evidence to the contrary.”

    nn

    Practical Implications: Protecting Your Intellectual Property

    n

    This case underscores the importance of maintaining meticulous records and conducting thorough prior art searches before applying for a patent. It also highlights the challenges in overturning a patent once it has been granted. For businesses and inventors, this means proactive measures are crucial to secure and defend their intellectual property rights.

    nn

    Here are some key lessons:

    n

      n

    • Document Everything: Keep detailed records of the invention’s development, including dates, sketches, prototypes, and testing results.

      • n

    • Conduct Prior Art Searches: Before applying for a patent, conduct a thorough search of existing patents, publications, and products to ensure your invention is truly novel.

      • n

    • Gather Strong Evidence: If challenging a patent, gather clear and convincing evidence, such as dated publications, expert testimony, and physical evidence, to demonstrate a lack of novelty.

      • n

    • Understand the Presumption of Validity: Be aware that patents carry a legal presumption of validity, making it difficult to overturn them without strong evidence.

      • n

    nn

    Frequently Asked Questions

    nn

    Q: What is

  • Compulsory Licensing of Patents: Balancing Innovation and Public Access in the Philippines

    When Can the Government Force You to License Your Patent?

    G.R. No. 121867, July 24, 1997, SMITH KLINE & FRENCH LABORATORIES, LTD., PETITIONER, VS. COURT OF APPEALS, BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER AND DOCTORS PHARMACEUTICALS, INC. RESPONDENTS.

    Imagine investing years and millions of pesos into developing a life-saving drug, only to be told that another company can manufacture and sell it too. This is the reality of compulsory licensing, a legal mechanism that allows the government to authorize third parties to use a patented invention without the patent holder’s consent. While it might seem unfair, it’s a tool designed to balance the rights of inventors with the needs of public health and economic development. The case of Smith Kline & French Laboratories, Ltd. v. Court of Appeals delves into the complexities of this system, specifically concerning pharmaceutical patents in the Philippines. The central question: Under what circumstances can the government compel a patent holder to license their invention to another party?

    Understanding Compulsory Licensing in the Philippines

    Compulsory licensing is governed primarily by Republic Act No. 165, also known as the Patent Law, as amended. Section 34 of this law outlines the grounds for compulsory licensing, providing a framework for when the government can step in and override a patent holder’s exclusive rights.

    Several key legal principles underpin the concept of compulsory licensing:

    • Public Interest: The overriding principle is that the public’s welfare takes precedence over individual patent rights.
    • Abuse Prevention: Compulsory licensing aims to prevent patent holders from abusing their monopoly power, such as by failing to work the patent or charging exorbitant prices.
    • Economic Development: It promotes the development of local industries by allowing them to utilize patented inventions, particularly in sectors like medicine and food.

    Section 34 of R.A. No. 165 explicitly states the grounds for compulsory licensing:

    “SEC. 34. Grounds for Compulsory Licensing. — (1) Any person may apply to the Director for the grant of a license under a particular patent at any time after the expiration of two years from the date of the grant of the patent, under any of the following circumstances:
    (e) If the patented invention or article relates to food or medicine or manufactured products or substances which can be used as food or medicine, or is necessary for public health or public safety.”

    This provision is particularly relevant to the Smith Kline case, as it directly addresses patents related to medicine. The law balances patent protection and public access to essential goods like medicine.

    The Smith Kline Case: A Battle Over Cimetidine

    The story begins with Smith Kline & French Laboratories, a foreign corporation that held a Philippine patent for Cimetidine, a drug used to treat ulcers. Doctors Pharmaceuticals, Inc., a local pharmaceutical company, sought a compulsory license to manufacture its own version of the drug. This request was based on the argument that Cimetidine was a medicine necessary for public health, and thus subject to compulsory licensing under R.A. No. 165.

    Smith Kline opposed the petition, arguing that Doctors Pharmaceuticals lacked the capability to properly manufacture the drug and that granting the license would violate international law and constitute an invalid exercise of police power. They also challenged the royalty rate set by the Bureau of Patents, Trademarks and Technology Transfer (BPTTT).

    Here’s a breakdown of the case’s journey:

    1. BPTTT Decision: The BPTTT granted Doctors Pharmaceuticals a non-exclusive, non-transferable license to manufacture, use, and sell Cimetidine in the Philippines, subject to a 2.5% royalty on net sales.
    2. Court of Appeals Appeal: Smith Kline appealed to the Court of Appeals, arguing that the BPTTT’s decision violated international law, constituted an invalid exercise of police power, and amounted to expropriation without just compensation.
    3. Supreme Court Review: The Court of Appeals affirmed the BPTTT’s decision, prompting Smith Kline to elevate the case to the Supreme Court.

    The Supreme Court ultimately upheld the decision to grant the compulsory license. The Court reasoned that R.A. No. 165 was consistent with the Paris Convention for the Protection of Industrial Property, which allows member countries to implement compulsory licensing to prevent abuses of patent rights. The Court also emphasized the importance of public access to medicine and the government’s police power to promote public health.

    Key quotes from the Supreme Court’s decision:

    “It is thus clear that Section A(2) of Article 5 above unequivocally and explicitly respects the right of member countries to adopt legislative measures to provide for the grant of compulsory licenses to prevent abuses which might result from the exercise of the exclusive rights conferred by the patent.”

    “[T]he legislative intent in the grant of a compulsory license was not only to afford others an opportunity to provide the public with the quantity of the patented product, but also to prevent the growth of monopolies.”

    What This Means for Patent Holders and the Public

    The Smith Kline case reaffirms the Philippine government’s power to grant compulsory licenses for pharmaceutical patents when it serves the public interest. This decision has significant implications for both patent holders and the public:

    • Reduced Monopoly Power: Pharmaceutical companies must be aware that their patent rights are not absolute and can be limited in the interest of public health.
    • Increased Access to Medicine: The decision can lead to lower drug prices and greater availability of essential medicines.
    • Local Industry Development: It encourages the growth of local pharmaceutical companies by allowing them to manufacture and sell patented drugs under license.

    Key Lessons

    • Understand the Limits of Patent Protection: Patent rights are not absolute and can be subject to compulsory licensing under certain circumstances.
    • Be Prepared to Justify Pricing and Availability: Patent holders must be able to demonstrate that they are meeting the public’s needs for their patented products at reasonable prices.
    • Comply with Philippine Laws and Regulations: Foreign patent holders must be aware of and comply with Philippine laws governing patents and compulsory licensing.

    Frequently Asked Questions

    Q: What is a compulsory license?

    A: A compulsory license is a government authorization that allows a third party to use a patented invention without the patent holder’s consent, typically in exchange for a royalty payment.

    Q: When can a compulsory license be granted in the Philippines?

    A: Under R.A. No. 165, a compulsory license can be granted after two years from the date of the patent grant if the patented invention is not being worked in the Philippines, the demand for the patented article is not being met, or if the invention relates to food or medicine and is necessary for public health.

    Q: How much royalty is typically paid to the patent holder in a compulsory licensing situation?

    A: The royalty rate is determined by the Director of Patents, but it cannot exceed 5% of the net wholesale price of the products manufactured under the license. In the Smith Kline case, the royalty rate was set at 2.5%.

    Q: Can a compulsory license be transferred to another company?

    A: No, compulsory licenses are generally non-transferable, meaning the licensee cannot assign or sublicense the license to another party.

    Q: What if the patent holder believes the royalty rate is too low?

    A: The patent holder can petition the Director of Patents for an increase in the royalty rate if local sales of the licensed product increase.

    Q: Does the Philippines follow international laws on compulsory licensing?

    A: Yes, the Philippine Patent Law is consistent with international agreements like the Paris Convention for the Protection of Industrial Property, which allows member countries to grant compulsory licenses under certain conditions.

    ASG Law specializes in intellectual property law and patent litigation. Contact us or email hello@asglawpartners.com to schedule a consultation.