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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
October-2001 Jurisprudence                 

  • G.R. No. 137841 October 1, 2001 - PEOPLE OF THE PHIL. v. ALBERTO CHUA

  • G.R. No. 117512 October 2, 2001 - REBECCA ALA-MARTIN v. HON. JUSTO M. SULTAN

  • G.R. No. 120098 October 2, 2001 - RUBY L. TSAI v. HON. COURT OF APPEALS EVER TEXTILE MILLS

  • G.R. No. 124037 October 2, 2001 - PEOPLE OF THE PHILIPPINES v. REYNALDO DE GUZMAN

  • G.R. No. 126592 October 2, 2001 - ROMEO G. DAVID v. JUDGE TIRSO D.C. VELASCO, ET AL.

  • G.R. No. 129900 October 2, 2001 - JANE CARAS y SOLITARIO v. HON. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES

  • G.R. No. 133000 October 2, 2001 - PATRICIA NATCHER petitioner v. HON. COURT OF APPEALS AND THE HEIRS OF GRACIANO DEL ROSARIO-LETICIA DEL ROSARIO

  • G.R. No. 133895 October 2, 2001 - ZENAIDA M. SANTOS v. CALIXTO SANTOS, ET AL.

  • G.R. Nos. 135522-23 October 2, 2001 - PEOPLE OF THE PHIL. v. AMORSOLO G. TORRES

  • G.R. No. 137777 October 2, 2001 - THE PRESIDENTIAL AD-HOC FACT FINDING COMMITTEE, ET AL. v. THE HON. OMBUDSMAN ANIANO DESIERTO, ET AL.

  • G.R. No. 138322 October 2, 2001 - GRACE J. GARCIA v. REDERICK A. RECIO

  • G.R. No. 138929 October 2, 2001 - PEOPLE OF THE PHIL. v. FLORENTINO DEL MUNDO

  • G.R. No. 139050 October 2, 2001 - REPUBLIC OF THE PHILIPPINES v. THE COURT OF TAX APPEALS and AGFHA

  • G.R. No. 142877 October 2, 2001 - JINKIE CHRISTIE A. DE JESUS and JACQUELINE A. DE JESUS v. THE ESTATE OF DECEDENT JUAN GAMBOA DIZON

  • G.R. No. 125081 October 3, 2001 - PEOPLE OF THE PHILIPPINES v. REMEDIOS PASCUA

  • G.R. No. 128195 October 3, 2001 - ELIZABETH LEE and PACITA YULEE v. REPUBLIC OF THE PHILIPPINES

  • G.R. Nos. 128514 & 143856-61 October 3, 2001 - PEOPLE OF THE PHILIPPINES v. NILO LEONES

  • G.R. Nos. 142602-05 October 3, 2001 - PEOPLE OF THE PHILIPPINES v. BONIFACIO ARIOLA

  • A.M. No. 01-6-192-MCTC October 5, 2001 - Request To Designate Another Judge To Try And Decide Criminal Case No. 3713

  • A.M. No. RTJ-01-1610 October 5, 2001 - ATTY. EDGAR H. TALINGDAN v. JUDGE HENEDINO P. EDUARTE

  • G.R. No. 124498 October 5, 2001 - EDDIE B. SABANDAL v. HON. FELIPE S. TONGCO Presiding Judge

  • G.R. No. 127441 October 5, 2001 - DOROTEO TOBES @ DOTING v. COURT OF APPEALS

  • G.R. No. 130499 October 5, 2001 - PEOPLE OF THE PHILIPPINES v. PAMFILO QUIMSON @ "NOEL QUIMSON

  • G.R. No. 130962 October 5, 2001 - PEOPLE OF THE PHILIPPINES v. JOSE REAPOR y SAN JUAN

  • G.R. No. 131040 October 5, 2001 - PEOPLE OF THE PHIL. v. MICHAEL FRAMIO SABAGALA

  • G.R. No. 132044 October 5, 2001 - PEOPLE OF THE PHILIPPINES v. ANTONIO @ Tony EVANGELISTA Y BINAY

  • G.R. No. 132718 October 5, 2001 - PEOPLE OF THE PHILIPPINES v. JOSE CASTILLON III and JOHN DOE

  • G.R. Nos. 135452-53 October 5, 2001 - PEOPLE OF THE PHIL. v. IRENEO M. ALCOREZA

  • G.R. No. 139760 October 5, 2001 - FELIZARDO S. OBANDO v. HON. COURT OF APPEALS

  • G.R. No. 144189 October 5, 2001 - R & M GENERAL MERCHANDISE v. COURT OF APPEALS, ET AL.

  • G.R. No. 121948 October 8, 2001 - PERPETUAL HELP CREDIT COOPERATIVE v. BENEDICTO FABURADA

  • G.R. No. 123075 October 8, 2001 - PEOPLE OF THE PHIL. v. PEDRO L. NUELAN

  • G.R. No. 129926 October 8, 2001 - PEOPLE OF THE PHIL. v. NOLE M. ZATE

  • G.R. No. 137599 October 8, 2001 - PEOPLE OF THE PHILIPPINES v. GILBERT BAULITE and LIBERATO BAULITE

  • G.R. No. 138941 October 8, 2001 - AMERICAN HOME ASSURANCE COMPANY v. TANTUCO ENTERPRISES

  • G.R. No. 141297 October 8, 2001 - DOMINGO R. MANALO v. COURT OF APPEALS (Special Twelfth Division) and PAIC SAVINGS AND MORTGAGE BANK

  • A.M. No. 01-9-246-MCTC October 9, 2001 - OFFICE OF THE COURT ADMINISTRATOR v. JUDGE ALIPIO M. ARAGON

  • G.R. No. 138886 October 9, 2001 - PEOPLE OF THE PHILIPPINES v. SP01 WILFREDO LEAÑO SP01 FERDINAND MARZAN SPO1 RUBEN B. AGUSTIN SP02 RODEL T. MADERAL * SP02 ALEXANDER S. MICU and SP04 EMILIO M. RAMIREZ

  • G.R. No. 141182 October 9, 2001 - HEIRS OF PEDRO CUETO Represented by ASUNCION CUETO v. HON. COURT OF APPEALS (SPECIAL FORMER FIRST DIVISION) and CONSOLACION COMPUESTO

  • A.M. No. 99-12-03-SC October 10, 2001 - RE: INITIAL REPORTS ON THE GRENADE INCIDENT THAT OCCURRED AT ABOUT 6:40 A.M. ON DECEMBER 6, 1999

  • G.R. No. 129313 October 10, 2001 - SPOUSES MA. CRISTINA D. TIRONA and OSCAR TIRONA v. HON. FLORO P. ALEJO as Presiding Judge

  • G.R. Nos. 135679 & 137375 October 10, 2001 - PEOPLE OF THE PHILIPPINES v. GODOFREDO RUIZ

  • G.R. No. 136258 October 10, 2001 - PEOPLE OF THE PHIL. v. CARLOS FELICIANO

  • A.M. No. 2001-9-SC October 11, 2001 - DOROTEO IGOY v. GILBERT SORIANO

  • A.M. No. RTJ-99-1485 October 11, 2001 - TEOFILO C. SANTOS v. JUDGE FELICIANO V. BUENAVENTURA

  • G.R. No. 80796 & 132885 October 11, 2001 - PROVINCE OF CAMARINES NORTE v. PROVINCE OF QUEZON

  • G.R. No. 118387 October 11, 2001 - MARCELO LEE v. COURT OF APPEALS and HON. LORENZO B. VENERACION and HON. JAIME T. HAMOY

  • G.R. Nos. 123913-14 October 11,2001

    PEOPLE OF THE PHIL. v. PABLO CALLOS

  • G.R. No. 130415 October 11, 2001 - PEOPLE OF THE PHILIPPINES v. ALVIN YRAT y BUGAHOD and RAUL JIMENA, ET AL.

  • G.R. No. 130562 October 11, 2001 - Brigida Conculada v. Hon. Court Of Appeals

  • G.R. No. 112526 October 12, 2001 - STA. ROSA REALTY DEVELOPMENT CORPORATION v. COURT OF APPEALS

  • G.R. No. 122710 October 12, 2001 - PHILIPPINE NATIONAL BANK v. COURT OF APPEALS and REMINGTON INDUSTRIAL SALES CORPORATION

  • G.R. Nos. 134769-71 October 12, 2001 - PEOPLE OF THE PHIL. v. ROBERTO BATION

  • G.R. No. 137843 October 12, 2001 - PEOPLE OF THE PHIL. v. EDUARDO S. AÑONUEVO

  • G.R. No. 139904 October 12, 2001 - PEOPLE OF THE PHIL. v. CONRADO MERCADO

  • G.R. No. 136470 October 16, 2001 - VENANCIO R. NAVA v. COMMISSION ON AUDIT

  • G.R. No. 140794 October 16, 2001 - PEOPLE OF THE PHIL. v. RICARDO T. AGLIDAY

  • A.M. No. P-00-7-323-RTJ October 17, 2001 - RE: RELEASE BY JUDGE MANUEL T. MURO, RTC, BRANCH 54 MANILA, OF AN ACCUSED IN A NON-BAILABLE OFFENSE

  • A.M. No. P-00-1419 October 17, 2001 - OFFICE OF THE COURT ADMINISTRATOR v. MAGDALENA G. MAGNO

  • A.M. No. RTJ-97-1390 & AM RTJ-98-1411 October 17, 2001 - ATTY. CESAR B. MERIS v. JUDGE CARLOS C. OFILADA

  • G.R. No. 123137 October 17, 2001 - PEOPLE OF THE PHILIPPINES v. PO2 ALBERT ABRIOL

  • G.R. No. 124513 October 17, 2001 - ROBERTO ERQUIAGA v. HON. COURT OF APPEALS

  • G.R. No. 127540 October 17, 2001 - EUGENIO DOMINGO v. HON. COURT OF APPEALS

  • G.R. No. 127830 October 17, 2001 - MANOLET LAVIDES v. ERNESTO B. PRE

  • G.R. No. 129069 October 17, 2001 - PEOPLE OF THE PHIL. v. JULIO R. RECTO

  • G.R. No. 129236 October 17, 2001 - PEOPLE OF THE PHIL. v. RAYMUNDO G. DIZON

  • G.R. No. 129389 October 17, 2001 - PEOPLE OF THE PHILIPPINES v. TEODORICO UBALDO

  • G.R. Nos. 132673-75 October 17, 200

    PEOPLE OF THE PHIL. v. DOMINADOR C. GOMEZ

  • G.R. No. 136291 October 17, 2001 - LETICIA M. MAGSINO v. REPUBLIC OF THE PHILIPPINES

  • G.R. No. 136869 October 17, 2001 - PEOPLE OF THE PHILIPPINES v. DENNIS MAZO

  • G.R. No. 141673 October 17, 2001 - MANUEL L. QUEZON UNIVERSITY/AUGUSTO B. SUNICO v. NLRC (Third Division), ET AL.

  • G.R. No. 142726 October 17, 2001 - PEOPLE OF THE PHIL. v. APOLONIO ACOSTA

  • G.R. No. 143190 October 17, 2001 - ANTONIO P. BELICENA v. SECRETARY OF FINANCE

  • G.R. No. 143990 October 17, 2001 - MARIA L. ANIDO v. FILOMENO NEGADO and THE HONORABLE COURT OF APPEALS

  • G.R. Nos. 121039-45 October 18, 2001 - THE PEOPLE OF THE PHILIPPINES v. MAYOR ANTONIO L. SANCHEZ

  • G.R. No. 132869 October 18, 2001 - GREGORIO DE VERA v. COURT OF APPEALS

  • G.R. No. 143486 October 18, 2001 - PEOPLE OF THE PHILIPPINES v. MARIO DUMAGAY TUADA

  • G.R. No. 144735 October 18, 2001 - YU BUN GUAN v. ELVIRA ONG

  • G.R. No. 116285 October 19, 2001 - ANTONIO TAN v. COURT OF APPEALS and the .C.C.P

  • G.R. Nos. 121201-02 October 19, 2001 - THE PEOPLE OF THE PHILIPPINES plaintiff-appellee v. GIO CONCORCIO @ JUN

  • G.R. No. 129995 October 19, 2001 - THE PROVINCE OF BATAAN v. HON. PEDRO VILLAFUERTE

  • G.R. No. 130730 October 19, 2001 - HERNANDO GENER v. GREGORIO DE LEON and ZENAIDA FAUSTINO

  • G.R. No. 133002 October 19, 2001 - PEOPLE OF THE PHILIPPINES v. INTOY GALLO @ PALALAM

  • G.R. No. 137904 October 19, 2001 - PURIFICACION M. VDA. DE URBANO v. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS)

  • A.M. No. 99-12-497-RTC October 23, 2001 - REQUEST OF JUDGE FRANCISCO L. CALINGIN

  • G.R. No. 121267 October 23, 2001 - SMITH KLINE & FRENCH LABORATORIES v. COURT OF APPEALS, ET AL.

  • G.R. No. 124036 October 23, 2001 - FIDELINO GARCIA v. COURT OF APPEALS, ET AL.

  • G.R. No. 124295 October 23, 2001 - JUDGE RENATO A. FUENTES v. OFFICE OF THE OMBUDSMAN-MINDANAO

  • G.R. No. 125193 October 23, 2001 - MANUEL BARTOCILLO v. COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES

  • G.R. No. 130846 October 23, 2001 - PEOPLE OF THE PHILIPPINES v. ROGELIO PAMILAR y REVOLIO

  • G.R. No. 131841 October 23, 2001 - PEOPLE OF THE PHILIPPINES v. RUBEN VILLARMOSA

  • G.R. No. 132373 October 23, 2001 - PEOPLE OF THE PHILIPPINES v. TIRSO ARCAY @ "TISOY" and TEODORO CLEMEN @ "BOY

  • G.R. No. 134740 October 23, 2001 - IRENE V. CRUZ v. COMMISSION ON AUDIT

  • G.R. No. 135481 October 23, 2001 - LIGAYA S. SANTOS v. COURT OF APPEALS, ET AL.

  • G.R. No. 136105 October 23, 2001 - PEOPLE OF THE PHILIPPINES v. ANTONIO PAREDES y SAUQUILLO

  • G.R. No. 136337 October 23, 2001 - PEOPLE OF THE PHILIPPINES v. NELSON CABUNTOG

  • G.R. No. 139114 October 23, 2001 - PEOPLE OF THE PHILIPPINES v. ROMAN LACAP Y CAILLES

  • G.R. No. 139274 October 23, 2001 - QUEZON PROVINCE v. HON. ABELIO M. MARTE

  • G.R. No. 139329 October 23, 2001 - PEOPLE OF THE PHILIPPINES v. ERLINDO MAKILANG

  • G.R. Nos. 140934-35 October 23, 2001 - PEOPLE OF THE PHILIPPINES v. CONDE RAPISORA y ESTRADA

  • A.M. No. RTJ-01-1634 October 25, 2001 - OFFICE OF THE COURT ADMINISTRATOR v. SILVERIO Q. CASTILLO

  • G.R. No. 102367 October 25, 2001 - PEOPLE OF THE PHILIPPINES v. ABUNDIO ALBARIDO and BENEDICTO IGDOY

  • G.R. No. 126359 October 25, 2001 - PEOPLE OF THE PHIL v. CARLITO OLIVA

  • G.R. No. 127465 October 25, 2001 - SPOUSES NICETAS DELOS SANTOS v. COURT OF APPEALS

  • G.R. No. 133102 October 25, 2001 - PEOPLE OF THE PHILIPPINES v. DINDO AMOGIS y CRINCIA

  • G.R. Nos. 134449-50 October 25, 2001 - PEOPLE OF THE PHILIPPINES v. PEDRO HERNANDEZ y PALMA

  • G.R. No. 135813 October 25, 2001 - FERNANDO SANTOS v. Spouses ARSENIO and NIEVES REYES

  • G.R. No. 135822 October 25, 2001 - PEOPLE OF THE PHILIPPINES v. PIO DACARA y NACIONAL

  • G.R. Nos. 137494-95 October 25, 2001 - THE PEOPLE OF THE PHILIPPINES v. SOTERO REYES alias "TURING"

  • G.R. Nos. 142741-43 October 25, 2001 - PEOPLE OF THE PHILIPPINES v. ROMEO MANAYAN

  • A.M. No. P-01-1474 October 26, 2001 - ANTONIO C. REYES v. JOSEFINA F. DELIM

  • G.R. No. 120548 October 26, 2001 - PEOPLE OF THE PHILIPPINES v. JOSELITO ESCARDA

  • G.R. Nos. 121492 & 124325 October 26, 2001 - BAN HUA UY FLORES v. JOHNNY K.H. UY

  • G.R. No. 132169 October 26, 2001 - PEOPLE OF THE PHILIPPINES v. SANICO NUEVO @ "SANY

  • G.R. No. 133741-42 October 26, 2001 - PEOPLE OF THE PHILIPPINES v. LINO VILLARUEL

  • G.R. No. 134802 October 26, 2001 - PEOPLE OF THE PHILIPPINES v. RENATO Z. DIZON

  • G.R. No. 135920 October 26, 2001 - ENCARNACION ET AL. v. SEVERINA REALTY CORPORATION

  • G.R. No. 140719 October 26, 2001 - NICOLAS UY DE BARON v. COURT OF APPEALS

  • G.R. No. 140912 October 26, 2001 - PEOPLE OF THE PHILIPPINES v. RODRIGO DIAZ Y SEVILLETA

  • G.R. No. 141540 October 26, 2001 - EDUARDO TAN v. FLORITA MUECO and ROLANDO MUECO

  • G.R. No. 143231 October 26, 2001 - ALBERTO LIM v. PEOPLE OF THE PHILIPPINES

  • G.R. No. 144237 October 26, 2001 - WINSTON C. RACOMA v. MA. ANTONIA B. F. BOMA

  • G.R. Nos. 146319 & 146342 October 26, 2001 - BENJAMIN E. CAWALING v. THE COMMISSION ON ELECTIONS

  • G.R. No. 146593 October 26, 2001 - UNITED COCONUT PLANTERS BANK v. ROBERTO V. ONGPIN

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    G.R. No. 121267   October 23, 2001 - SMITH KLINE & FRENCH LABORATORIES v. COURT OF APPEALS, ET AL.

     
    PHILIPPINE SUPREME COURT DECISIONS

    FIRST DIVISION

    [G.R. No. 121267. October 23, 2001.]

    SMITH KLINE & FRENCH LABORATORIES, LTD. plaintiff-appellee, v. COURT OF APPEALS and DANLEX RESEARCH LABORATORIES, INC., Defendant-Appellant.

    D E C I S I O N


    KAPUNAN, J.:


    This petition for review on certiorari assails the Decision dated January 27, 1995 of the Court of Appeals in CA-G.R. SP No. 33770 1 which affirmed the decision of the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) granting a compulsory license to private respondent Danlex Research Laboratories for the use of the pharmaceutical product Cimetidine. Likewise assailed is the July 25, 1995 Resolution of the Court of Appeals denying the motion for reconsideration filed by petitioner Smith Kline and French Laboratories, Ltd.

    Petitioner is the assignee of Letters Patent No. 12207 covering the pharmaceutical product Cimetidine, which relates to derivatives of heterocyclicthio or lower alkoxy or amino lower alkyl thiourea, ureas or guanadines. Said patent was issued by the BPTTT to Graham John Durant, John Collin Emmett and Robin Genellin on November 29, 1978. 2chanrob1es virtua1 1aw 1ibrary

    On August 21, 1989, private respondent filed with the BP17 a petition for compulsory license to manufacture and produce its own brand of medicines using Cimetidine. Private respondent invoked Section 34 (1) (e) of Republic Act No. 165, 3 (the Patent Law) the law then governing patents, which states that an application for the grant of a compulsory license under a particular patent may be filed with the BPTTT at any time after the lapse of two (2) years from the date of grant of such patent, if the patented invention or article relates to food or medicine, or manufactured substances which can be used as food or medicine, or is necessary for public health or public safety. 4 The petition for compulsory license stated that Cimetidine is useful as an antihistamine and in the treatment of ulcers, and that private respondent is capable of using the patented product in the manufacture of a useful product. 5

    Petitioner opposed the petition for compulsory license, arguing that the private respondent had no cause of action and failed to allege how it intended to work the patented product. Petitioner further stated that its manufacture, use and sales of Cimetidine satisfied the needs of the Philippine market, hence, there was no need to grant a compulsory license to private respondent to manufacture, use and sell the same. Finally, petitioner also claimed that the grant of a compulsory license to private respondent would not promote public safety and that the latter was only motivated by pecuniary gain. 6chanrob1es virtua1 1aw 1ibrary

    After both parties were heard, the BPTTT rendered a decision directing the issuance of a compulsory license to private respondent to use, manufacture and sell in the Philippines its own brand of pharmaceutical products containing Cimetidine and ordered the payment by private respondent to petitioner of royalties at the rate of 2.5% of net sales in Philippine currency. 7

    Petitioner thereafter filed with the Court of Appeals a petition for review of the decision of the BPTTT, raising the following arguments: (1) the BPTTT decision is violative of the Paris Convention for the Protection of Industrial Property; (2) said decision is an invalid exercise of police power; (3) the rate of royalties payable to petitioner as fixed by the BPTTT was rendered without factual basis and amounts to an expropriation of private property without just compensation; (4) the petition for compulsory license should have been dismissed by the BPTTT for failure to prove the jurisdictional requirement of publication. 8

    On January 27, 1995, the Court of Appeals promulgated its Decision, the dispositive portion of which states:chanrob1es virtual 1aw library

    WHEREFORE, the petition is DENIED, and the decision of the Bureau of Patents, Trademarks and Technology Transfer is hereby AFFIRMED, with costs against the Petitioner.

    SO ORDERED. 9

    In affirming the decision of the BPTTT, the appellate court held that the grant of a compulsory license to private respondent for the manufacture and use of Cimetidine is in accord with the Patent Law since the patented product is medicinal in nature, and therefore necessary for the promotion of public health and safety. 10 It explained further that the provisions of the Patent Law permitting the grant of a compulsory license are intended not only to give a chance to others to supply the public with the quantity of the patented article but especially to prevent the building up of patent monopolies. 11 Neither did the appellate court find the royalty rate of 2.5% of net sales fixed by the BPTTT unreasonable, considering that what was granted under the compulsory license is only the right to manufacture Cimetidine, without any technical assistance from petitioner, and royalty rates identical to that fixed by the BPTTT have been prescribed for the grant of compulsory license in a good number of patent cases. 12 The Court of Appeals also ruled that contrary to petitioner’s claim, private respondent complied with the requirement of publication under the Patent Law and had submitted proof of such compliance. 13chanrob1es virtua1 1aw 1ibrary

    Not satisfied with the appellate court’s decision, petitioner filed a motion for reconsideration thereof as well as a motion for the issuance of a temporary restraining order against private respondent’s sister company, Montreal Pharmaceutical, Inc. to refrain from marketing a product similar to Cimetidine, but both motions were denied by the Court of Appeals in its Resolution of July 25, 1995. 14

    Petitioner thus filed the present petition on September 15, 1995, with the following assignment of errors:chanrob1es virtual 1aw library

    I. The respondent Court erred in upholding the validity of the decision of public respondent BPTTT which is an arbitrary exercise of police power and is violative of international law.

    II. The respondent Court erred in holding that compulsory licensing will not create a confusion that the patented product is the brainchild of private respondent Danlex and not of petitioner.

    III. Assuming that the grant of compulsory license is in order, the respondent Court still erred in holding that the BPTTT decision fixing the royalty at 2.5% of the net wholesale price in peso does not amount to expropriation of private property without just compensation.

    IV. The respondent Court erred in finding that the jurisdictional requirement of publication in a newspaper of general circulation for three (3) consecutive weeks has been complied with by private respondent Danlex. 15

    While petitioner concedes that the State in the exercise of police power may regulate the manufacture and use of medicines through the enactment and implementation of pertinent laws, it states that such exercise is valid only if the means employed are reasonably necessary for the accomplishment of the purpose and if not unduly oppressive. 16 According to petitioner, the grant of a compulsory license to private respondent is an invalid exercise of police power since it was not shown that there is an overwhelming public necessity for such grant, considering that petitioner is able to provide an adequate supply of Cimetidine to satisfy the needs of the Philippine market. Petitioner also claims that the grant of a compulsory license to private respondent unjustly deprives it of a reasonable return on its investment. 17 It argues further that the provisions of the Patent Law on compulsory licensing contravene the Convention of Paris for the Protection of Industrial Property 18 (Paris Convention), which allegedly permits the granting of a compulsory license over a patented product only to prevent abuses which might result from the exercise of the exclusive rights conferred by the patent, 19 or on the ground of failure to work or insufficient working of the patented product, within four years from the date of filing of the patent application or three years from the date of grant of the patent, whichever expires last. 20 Petitioner opines that the inclusion of grounds for the grant of a compulsory license in Section 34 of the Patent Law other than those provided under the Paris Convention constitutes a violation of the Philippines’ obligation to adhere to the provisions of said treaty. 21chanrob1es virtua1 1aw 1ibrary

    It is also contended by petitioner that the grant of a compulsory license to private respondent will allow the latter to liberally manufacture and sell medicinal products containing Cimetidine without even extending to petitioner due recognition for pioneering the development and worldwide acceptance of said invention, and will unreasonably dilute petitioner’s right over the patent. 22

    Petitioner likewise asseverates that the rate of royalty fixed by the BPTTT at 2.5% of net sales is grossly inadequate, taking into consideration its huge investments of money, time and other resources in the research and development, as well as marketing of Cimetidine. It is further alleged that such rate has no factual basis since the appellate court and the BPTTT relied solely on analogous cases and did not explain how such rate was arrived at. 23

    Lastly, petitioner claims that the appellate court erred in ruling that private respondent had complied with the requirement of publication of the notice of the filing of the petition for compulsory license because private respondent failed to formally offer in evidence copies of the notice of filing of the petition and notice of the date of hearing thereof as published and the affidavits of publication thereof. Thus, it says, the BPTTT did not properly acquire jurisdiction over the petition for compulsory license. 24

    In its Comment to the Petition, private respondent adopted the reasoning of the Court of Appeals in the assailed decision and prayed that the petition be denied for lack of merit.25cralaw:red

    The petition has no merit.

    The Court of Appeals did not err in affirming the validity of the grant by the BPTTT of a compulsory license to private respondent for the use, manufacture and sale of Cimetidine. The said grant is in accord with Section 34 of the Patent Law which provides:chanrob1es virtual 1aw library

    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:chanrob1es virtual 1aw library

    (a) If the patented invention is not being worked within the Philippines on a commercial scale, although capable of being so worked, without satisfactory reason;

    (b) If the demand of the patented article in the Philippines is not being met to an adequate extent and on reasonable terms;

    (c) If, by reason of refusal of the patentee to grant a license or licenses on reasonable terms, or by reason of the conditions attached by the patentee to licensee or to the purchase, lease or use of the patented article or working of the patented process or machine for production, the establishment of any new trade or industry in the Philippines is prevented, or the trade or industry therein is unduly restrained;

    (d) If the working of the invention within the country is being prevented or hindered by the importation of the patented article;

    (e) If the patented invention or article relates to food or medicine or manufactured substances which can be used as food or medicine, or is necessary for public health or public safety.

    (2) In any of the above cases, a compulsory license shall be granted to the petitioner provided that he has proved his capability to work the patented product or to make use of the patented product in the manufacture of a useful product, or to employ the patented process.

    (3) The term "worked" or "working" as used in this section means the manufacture and sale of the patented article, of patented machine, or the application of the patented process for production, in or by means of a definite and substantial establishment or organization in the Philippines and on a scale which is reasonable and adequate under the circumstances. Importation shall not constitute "working." (Emphasis supplied.)

    The grant of the compulsory license satisfies the requirements of the foregoing provision. More than ten years have passed since the patent for Cimetidine was issued to petitioner and its predecessors-in-interest, and the compulsory license applied for by private respondent is for the use, manufacture and sale of a medicinal product. Furthermore, both the appellate court and the BPTTT found that private respondent had the capability to work Cimetidine or to make use thereof in the manufacture of a useful product.

    Petitioner’s contention that Section 34 of the Patent Law contravenes the Paris Convention because the former provides for grounds for the grant of a compulsory license in addition to those found in the latter, is likewise incorrect. Article 5, Section A(2) of the Paris Convention states:chanrob1es virtual 1aw library

    Each country of the union shall have the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent, for example, failure to work. 26

    This issue has already been resolved by this Court in the case of Smith Kline & French Laboratories, Ltd. v. Court of Appeals, 27 where petitioner herein questioned the BPTTT’s grant of a compulsory license to Doctors Pharmaceuticals, Inc. also for the manufacture, use and sale of Cimetidine. We found no inconsistency between Section 34 and the Paris Convention and held that:chanrob1es virtual 1aw library

    It is thus clear that Section A(2) of Article 5 of the Paris Conventional 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. An example provided of possible abuses is "failure to work;" however, as such, is merely supplied by way of an example, it is plain that the treaty does not preclude the inclusion of other forms of categories of abuses.

    Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines’ adhesion to the Convention, fits well within the aforequoted provisions of Article 5 of the Paris Convention. In the explanatory note of Bill No. 1156 which eventually became R.A. No. 165, the 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 [Congressional Record, House of Representatives, 12 May 957, 998]. Certainly, the growth of monopolies was among the abuses which Section A, Article 5 of the Convention foresaw, and which our Congress likewise wished to prevent in enacting R.A. No. 165. 28 (Emphasis supplied.)

    Neither does the Court agree with petitioner that the grant of the compulsory license to private respondent was erroneous because the same would lead the public to think that the Cimetidine is the invention of private respondent and not of petitioner. Such fears are unfounded since, as the appellate court pointed out in the assailed decision, by the grant of the compulsory license, private respondent as licensee explicitly acknowledges that petitioner is the source of the patented product Cimetidine. 29 Even assuming arguendo that such confusion may indeed occur, the disadvantage is far outweighed by the benefits resulting from the grant of the compulsory license, such as an increased supply of pharmaceutical products containing Cimetidine, and the consequent reduction in the prices thereof. 30

    There is likewise no basis for the allegation that the grant of a compulsory license to private respondent results in the deprivation of petitioner’s property without just compensation. It must be pointed out that as owner of Letters Patent No. 12207, petitioner had already enjoyed exclusive rights to manufacture, use and sell Cimetidine for at least two years from its grant in November, 1978. Even if other entities like private respondent are subsequently allowed to manufacture, use and sell the patented invention by virtue of a compulsory license, petitioner as owner of the patent would still receive remuneration for the use of such product in the form of royalties.

    Anent the perceived inadequacy of the royalty awarded to petitioner, the Court of Appeals correctly held that the rate of 2.5% of net wholesale price fixed by the Director of the BPTTT is in accord with the Patent Law. Said law provides:chanrob1es virtual 1aw library

    Sec. 35. Grant of License. — (1) If the Director finds that a case for the grant of a license under Section 34 hereof has been made out, he shall, within one hundred eighty days from the date the petition was filed, order the grant of an appropriate license. The order shall state the terms and conditions of the license which he himself must fix in default of an agreement on the matter manifested or submitted by the parties during the hearing.

    Section 35-B. Terms and Conditions of Compulsory License. — (1) A compulsory license shall be non-exclusive, but this shall be without prejudice to the licensee’s right to oppose an application for such a new license.

    (2) The terms and conditions of a compulsory license, fixed in accordance with Section 35, may contain obligations and restrictions both for the licensee and for the registered owner of the patent.

    (3) A compulsory license shall only be granted subject to the payment of adequate royalties commensurate with the extent to which the invention is worked. However, royalty payments shall not exceed five percent (5%) of the net wholesale price (as defined in Section 33-A) of the products manufactured under the license. If the product, substance, or process subject of the compulsory license is involved in an industrial project approved by the Board of Investments, the royalty payable to the patentee or patentees shall not exceed three percent (3%) of the net wholesale price (as defined in Section 33-A) of the patented commodity/and or commodity manufactured under the patented process; the same rate of royalty shall be paid whenever two or more patents are involved; which royalty shall be distributed to the patentees in rates proportional to the extent of commercial use by the licensee giving preferential values to the holder of the oldest subsisting product patent.

    x       x       x


    Under the aforequoted provisions, in the absence of any agreement between the parties with respect to a compulsory license, the Director of the BPTTT may fix the terms thereof, including the rate of the royalty payable to the licensor. The law explicitly provides that the rate of royalty shall not exceed five percent (5%) of the net wholesale price.

    The Court agrees with the appellate court’s ruling that the rate of royalty payments fixed by the Director of the BPTTT is reasonable. The appellate court, citing Price v. United Laboratories, 31 ruled as such, considering that the compulsory license awarded to private respondent consists only of the bare right to use the patented invention in the manufacture of another product, without any technical assistance from the licensor. 32 Furthermore, this Court had earlier noted in the Price case that identical royalty rates have been prescribed by the Director of the BPTTT in numerous patent cases. 33

    There was thus no error on the part of the Court of Appeals in affirming the royalty rate fixed by the Director of the BP17[T, since it was not shown that the latter erRed or abused his discretion in prescribing said rate. The rule is that factual findings of administrative bodies, which are considered as experts in their respective fields, are accorded not only respect but even finality if the same are supported by substantial evidence. 34

    Finally, as to the alleged lack of jurisdiction of the BPTTT over the petition filed by private respondent for failure to comply with the publication requirement under Section 35-F of R.A. No. 165, the Court holds that petitioner is estopped from questioning the same since it did not raise the issue of lack of jurisdiction at the earliest possible opportunity, i.e., during the hearings before the BPTTT. 35 The Court notes that petitioner raised this contention for the first time when it appealed the case to the appellate court.

    WHEREFORE, the petition is hereby DENIED for lack of merit and the Decision of the Court of Appeals is hereby AFFIRMED.

    SO ORDERED.

    Davide Jr., CJ., Puno, Pardo, and Ynares-Santiago, JJ., concur.

    Footnotes

    1. Smith Kline and French Laboratories, Ltd., Petitioner, v. Hon. Director of the Bureau of Patents, Trademarks and Technology Transfer, and Danlex Research Laboratories, Inc., Respondents.

    2. See Decision of the Court of Appeals dated January 27, 1995, Rollo, pp. 32-33.

    3. The Patent Law (1947), as amended. Chapter VIII thereof on Licensing was amended by Presidential Decree No. 1263 in 1977, by including two types of licensing: voluntary licensing and compulsory licensing.

    4. Section 34 (1) (e), R.A. No. 165, as amended, infra.

    5. Decision of the Court of Appeals, Rollo, p. 33.

    6. Ibid.

    7. Id., at 34.

    8. Id., at 34-35.

    9. Id.,at 41.

    10. Id., at 36.

    11. Id., at 37.

    12. Id., at 39-40.

    13. Id., at 40.

    14. Resolution of the Court of Appeals, Id., at 43.

    15. Petition, Id., at 13.

    16. Id., at 15-16.

    17. Id., at 17.

    18. 61 O.G. 8011.

    19. Article 5, Section A (2), Paris Convention for the Protection of Industrial Property, infra.

    20. Article 5, Section A, (4), Paris Convention for the Protection of Industrial Property reads as follows:chanrob1es virtual 1aw library

    (4) A compulsory license may not be applied for on the ground of failure to work or insufficient working before the expiration of a period of four years from the date of filing of the patent application or three years f om the date of grant of the patent, whichever period expires last; it shall be refused if the patentee justifies his inaction by legitimate reasons. Such compulsory license shall be non-exclusive and shall not be transferable, even in the form of the grant of a sub- license, except with that part of the enterprise or goodwill which exploits such license.

    21. Petition, Rollo, pp. 17-18.

    22. Id., at 20.

    23. Id., at 21-22.

    24. Id., at 24-28.

    25. Comment to Petition for Review on Certiorari, Id., at 60-66.

    26. O.G. 8011, 8016 (1965).

    27. 276 SCRA 224 (1997).

    28. Id., at 237.

    29. Decision of the Court of Appeals, Rollo, p. 38.

    30. See Parke Davis & Co. v. Doctors ‘ Pharmaceuticals, Inc., 14 SCRA I 0s3, 1061 (1965).

    31. 166 SCRA 133, 137-138 (1988).

    32. Decision of the Court of Appeals, Rollo, p. 39.

    33. In Price v. United Laboratories, supra, at 138, this Court noted:chanrob1es virtual 1aw library

    Furthermore, as pointed out in respondent’s comment on the petition, identical terms and conditions had been prescribed for the grant of compulsory license in a good number of patent cases (United Laboratories, Inc. v. Boehringer Ingelheim, GMBH, IPC 929, July 27, 1981; United Laboratories, Inc. v. Bristol-Myers Company, IPC 1179, Aug. 20, 1981; United Laboratories, Inc. v. Squibb & Sons, Inc., lPC 1349, Sept. 30, 1981; United Laboratories, Inc. v. Helmut Weber, Et Al., IPC 949, Dec. 13, 1982; Oceanic Pharmacal, Inc., v. Gruppo Lepetit S.A., IPC 1549, Dec. 21, 1982; United Laboratories, Inc. v. Boehringer Ingelheim, IPC 1185, June 8, 1983; United Laboratories, Inc. v. Pfizer Corp., IPC 1184, June 10, 1983; Doctors Pharmaceuticals, Inc. v. Maggi, Et Al., July 11, 1983; Drugmaker’s Laboratories v. Herningen, Et Al., IPC 1679, September 22, 1983; Superior Pharmacraft, Inc. v. Maggi, Et Al., IPC 1759, January 10, 1984; United Laboratories, Inc. v. Van Gelder, Et Al., IPC 1927, June 29, 1984; Drugmaker’s Laboratories, Inc. v. Janssen Pharmaceutical N.V., IPC 1555, August 27, 1984; United Laboratories, Inc. v. Graham John Durant, Et Al., IPC 1731, August 14, 1987; United Laboratories, Inc. v. Albert Anthony Carr, IPC 1906, August 31, 1987).

    34. Golden Thread Knitting Industries, Inc. v. National Labor Relations Commission, 304 SCRA 568, 576 (1999).

    35. Smith Kline & French Laboratories, Ltd.. v. Court of Appeals, supra, at 241-242.

    G.R. No. 121267   October 23, 2001 - SMITH KLINE & FRENCH LABORATORIES v. COURT OF APPEALS, ET AL.


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