FACTS: E.I.
Dupont Nemours is an American corporation, it is the assignee of inventors.
In 1987, E.I. Dupont Nemours filed Philippine Patent
Application No. 35526 for Angiotensin II Receptor Blocking Imidazole (losartan)
treatment of hypertension and congestive heart failure.
The patent application was handled by Atty. Nicanor D.
Mapili (Atty. Mapili), a local resident agent.
In 2000, E.I. Dupont Nemours' new counsel, Ortega, Del
Castillo, Bacorro, Odulio, Calma, and Carbonell, sent the Intellectual Property
Office a letter requesting that an office action be issued on Philippine Patent
Application No. 35526.
Patent Examiner
The reconstituted documents provided no documents that will
show that the authority to prosecute the instant application is now transferred
to the present counsel.
On May 29, 2002, E.I. Dupont Nemours replied to the office
action by submitting a Power of Attorney, it also filed a Petition for Revival.
In its Petition for Revival, E.I. Dupont Nemours argued
that its former counsel, Atty. Mapili, did not inform it about the abandonment
of the application, and it was not aware that Atty. Mapili had already died.
The Director of Patents denied the Petition for Revival for
having been filed out of time.
The Office cannot revive the abandoned application because
of the limitations provided in Rule 115. Clearly, the Petition for Revival was
filed beyond the reglementary period.
In the Decision dated October 22, 2003, Director-General
Emma C. Francisco denied the appeal and affirmed the Resolution of the Director
of Patents.
Petitioner filed before the Court of Appeals a Petition for
Review. The Court of Appeals stated that there is sufficient justification to
relax the application of the above-cited doctrine in this case. to afford
petitioner some relief from the gross negligence committed by its former
lawyer, Atty. Nicanor D. Mapili.
Therapharma, Inc. moved for leave to intervene and admit
the Attached Motion for Reconsideration directly affects its "vested"
rights to sell its own product.
Therapharma, Inc. alleged that on January 4, 2003, it filed
before the Bureau of Food and Drugs its own application for a losartan product
"Lifezar," a medication for hypertension, which the Bureau granted.
In this exchange, Merck informed Therapharma, Inc. that it
was pursuing a patent on the losartan products in the Philippines and that it
would pursue any legal action necessary to protect its product.
On January 31, 2006, the Court of Appeals issued the
Resolution granting the Motion for Leave to Intervene.
On August 30, 2006, the Court of Appeals resolved both
Motions for Reconsideration and rendered the Amended Decision reversing its
August 31, 2004 Decision.
Court of Appeals ruled that the public interest would be
prejudiced by the revival of E.I. Dupont Nemours' application.
The revival of the application prejudiced Therapharma,
Inc.'s interest.
ISSUES: Whether
the Court of Appeals erred in allowing the intervention of respondent
Therapharma, Inc. in petitioner's appeal;
Whether the Court of Appeals erred in denying petitioner's
appeal for the revival of its patent application on the grounds that (a)
petitioner committed inexcusable negligence in the prosecution of its patent
application; and (b) third-party rights and the public interest would be
prejudiced by the appeal;
Whether Schuartz applies to this case in that the
negligence of a patent applicant's counsel binds the applicant;
Whether the invention has already become part of public
domain.
HELD: Under Chapter
VII, Section 111(a) of the 1962 Revised Rules of Practice, a patent application
is deemed abandoned if the applicant fails to prosecute the application within
four months from the date of the mailing of the notice of the last action by
the Bureau of Patents, Trademarks, and Technology Transfer, and not from
applicant's actual notice.
According to the records of the Bureau of Patents,
Trademarks, and Technology Transfer Chemical Examining Division, petitioner
filed Philippine Patent Application No. 35526 on July 10, 1987. It was assigned
to an examiner on June 7, 1988. An Office Action was mailed to petitioner's
agent, Atty. Mapili, on July 19, 1988. Because petitioner failed to respond
within the allowable period, the application was deemed abandoned on September
20, 1988 Under Section 113, petitioner had until January 20, 1989 to file for a
revival of the patent application. Its Petition for Revival, however, was filed
on May 30, 2002,13 years after the date of abandonment.
Section 113 has since been superseded by Section 133.4 of
the Intellectual Property Code, Rule 930 of the Rules and Regulations on
Inventions, and Rule 929 of the Revised Implementing Rules and Regulations for
Patents, Utility Models and Industrial Design. The period of four (4) months
from the date of abandonment, however, remains unchanged.
The Intellectual Property Code even provides for a shorter
period of three (3) months within which to file for revival
The rules do not provide any exception that could extend
this four (4)-month period to 13 years.
Petitioner's patent application, therefore, should not be
revived since it was filed beyond the allowable period.
Even assuming that the four (4)-month period could be
extended, petitioner was inexcusably negligent in the prosecution of its patent
application.
Negligence is inexcusable if its commission could have been
avoided through ordinary diligence and prudence. It is also settled that negligence
of counsel binds the client as this "ensures against the resulting
uncertainty and tentativeness of proceedings if clients were allowed to merely
disown their counsels' conduct."
Petitioner tries to disown Atty. Mapili's conduct by
arguing that it was not informed of the abandonment of its patent application
or of Atty. Mapili's death. By its own evidence, however, petitioner requested
a status update from Atty. Mapili only on July 18, 1995, eight (8) years after
the filing of its application. It alleged that it only found out about Atty.
Mapili's death sometime in March 1996, as a result of its senior patent
attorney's visit to the Philippines.
Even if Atty. Mapili's death prevented petitioner from
submitting a petition for revival on time, it was clearly negligent when it
subsequently failed to immediately apprise itself of the status of its patent
application.
Contrary to the posturing of petitioner, Schuartz is
applicable.
[Petitioners lost sight of the fact that the petition could
not be granted because of laches. Prior to the filing of the petition for
revival of the patent application with the Bureau of Patents, an unreasonable
period of time had lapsed due to the negligence of petitioners' counsel. By
such inaction, petitioners were deemed to have forfeited their right to revive
their applications for patent.
Petitioner attempts to distinguish itself from Schuartz by
arguing that the petitioners in Schuartz had actual notice of abandonment while
petitioner here was only able to have actual notice when it received Paper No.
2.The four (4)-month period in Section 111 of the 1962 Revised Rules of
Practice, however, is not counted from actual notice of abandonment but from
mailing of the notice.
The right of priority given to a patent applicant is only
relevant when there are two or more conflicting patent applications on the same
invention. Because a right of priority does not automatically grant letters
patent to an applicant, possession of a right of priority does not confer any
property rights on the applicant in the absence of an actual patent.
Petitioner argues that its patent application was filed on
July 10, 1987, within 12 months from the prior filing of a U.S. patent
application on July 11, 1986. It argues that it is protected from becoming part
of the public domain because of convention priority under the Paris Convention
for the Protection of Industrial Property and Section 9 of Republic Act No.
165.
Under Section 31 of the Intellectual Property Code, a right
of priority is given to any patent applicant who has previously applied for a
patent in a country that grants the same privilege to Filipinos.
A patent applicant with the right of priority is given
preference in the grant of a patent when there are two or more applicants for
the same invention.
Since both the United States and the Philippines are
signatories to the Paris Convention for the Protection of Industrial Property,
an applicant who has filed a patent application in the United States may have a
right of priority over the same invention in a patent application in the
Philippines. However, this right of priority does not immediately entitle a
patent applicant the grant of a patent. A right of priority is not equivalent
to a patent. Otherwise, a patent holder of any member-state of the Paris
Convention need not apply for patents in other countries where it wishes to
exercise its patent.
It was, therefore, inaccurate for petitioner to argue that
its prior patent application in the United States removed the invention from
the public domain in the Philippines. This argument is only relevant if
respondent Therapharma, Inc. had a conflicting patent application with the
Intellectual Property Office. A right of priority has no bearing in a case for
revival of an abandoned patent application.
The grant of a patent is to provide protection to any
inventor from any patent infringement. Once an invention is disclosed to the
public, only the patent holder has the exclusive right to manufacture, utilize,
and market the invention.
The grant of a patent provides protection to the patent
holder from the indiscriminate use of the invention. However, its mandatory
publication also has the correlative effect of bringing new ideas into the
public consciousness. After the publication of the patent, any person may
examine the invention and develop it into something further than what the
original patent holder may have envisioned. After the lapse of 20 years, the
invention becomes part of the public domain and is free for the public to use.
In addition, a patent holder of inventions relating to food
or medicine does not enjoy absolute monopoly over the patent. Both Republic Act
No. 165 and the Intellectual Property Code provide for compulsory licensing.
Compulsory licensing is defined in the Intellectual Property Code as the
"grant a license to exploit a patented invention, even without the
agreement of the patent owner."
Under Republic Act No. 165, a compulsory license may be
granted to any applicant three (3) years after the grant of a patent if the
invention relates to food or medicine necessary for public health or safety.
The patent holder's proprietary right over the patent only
lasts for three (3) years from the grant of the patent, after which any person
may be allowed to manufacture, use, or sell the invention subject to the
payment of royalties.
Public interest will be prejudiced if, despite petitioner's
inexcusable negligence, its Petition for Revival is granted. Even without a
pending patent application and the absence of any exception to extend the
period for revival, petitioner was already threatening to pursue legal action
against respondent Therapharma, Inc. if it continued to develop and market its
losartan product, Lifezar. Once petitioner is granted a patent for its losartan
products, Cozaar and Hyzaar, the loss of competition in the market for losartan
products may result in higher prices. For the protection of public interest,
Philippine Patent Application No. 35526 should be considered a forfeited patent
application.
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