Title
E.I. DUPONT DE NEMOURS AND CO. vs. FRANCISCO
Case
G.R. No. 174379
Decision Date
Aug 31, 2016
E.I. Dupont sought to revive an abandoned 1987 patent application for a hypertension drug, denied due to procedural lapses and negligence, impacting public interest and third-party rights.
patent application
losartan
negligence

Case Summary (G.R. No. 174379)

Factual Background

The patent application at issue claimed an invention for Angiotensin II Receptor Blocking Imidazole (losartan), a medication for hypertension and congestive heart failure. The application was prosecuted through a long‑standing resident agent, Atty. Nicanor D. Mapili, who handled many of petitioner’s Philippine filings from 1972 to 1996. The Bureau’s Chemical Examining Division assigned the application to an examiner June 7, 1988 and mailed an Office Action July 19, 1988. Petitioner did not respond within the prescribed period and the application was declared abandoned September 20, 1988. Petitioner later submitted a new Power of Attorney and, after receiving Paper No. 2 on January 30, 2002, filed a Petition for Revival and supporting documents in May 2002.

Administrative Proceedings and Denials

The Director of Patents denied the Petition for Revival on April 18, 2002, applying the doctrine that mistakes of counsel bind the client and concluding that the petition was filed beyond the reglementary period under the patent rules, particularly Rule 115. The Director‑General of the Intellectual Property Office, Director Emma C. Francisco, affirmed that denial in a Decision dated October 22, 2003. The administrative rulings rested on the fixed periods for prosecuting and reviving abandoned patent applications under the then‑applicable 1962 Revised Rules of Practice.

Court of Appeals Proceedings and Intervention by Therapharma, Inc.

Petitioner appealed administratively to the Court of Appeals and obtained an August 31, 2004 Decision granting revival. Therapharma, Inc. moved to intervene in the appellate proceeding, asserting a legal and economic interest as a local competitor marketing a losartan product called Lifezar and alleging reliance on the application’s abandonment. The Court of Appeals initially allowed the intervention by Resolution dated January 31, 2006, and subsequently reversed its grant of revival in an Amended Decision dated August 30, 2006 on grounds that revival would prejudice public interest and third‑party rights and that petitioner and its counsel had been inexcusably negligent.

The Petition to the Supreme Court and Issues Raised

Petitioner brought a petition for review under Rule 45, Rules of Court. The petition presented multiple issues: the petition’s procedural sufficiency under Rule 45 Section 4; the proper mode of review as between Rule 45 and Rule 65; whether questions of fact were raised; the propriety of the Court of Appeals’ allowance of Therapharma, Inc.’s intervention; whether the Court of Appeals erred in denying revival on grounds of inexcusable negligence and prejudice to public and third‑party interests; the applicability of Schuartz v. Court of Appeals on counsel’s negligence binding the client; and whether the invention had entered the public domain.

Procedural Sufficiency and Mode of Appeal

The Court examined petitioner’s compliance with Rule 45 Section 4 and the precedents establishing guideposts for relaxing attachment requirements. The Court found that petitioner attached the Court of Appeals’ decisions and resolutions and later supplemented the record with the petition filed before the Court of Appeals, correspondence, declarations, powers of attorney, Paper No. 2, the Petition for Revival, and administrative memoranda. Under the standards in Magsino v. De Ocampo and Galvez v. Court of Appeals, the Court held that petitioner substantially complied with Rule 45 and that dismissal was unwarranted. The Court further held that the proper mode of review of the Court of Appeals’ final disposition on the merits and its ruling on intervention was a petition for review under Rule 45, because the Court of Appeals had resolved both intervention and the substantive issue, and the questions presented included matters of law resolvable without re‑weighing evidence.

Intervention: Applicability of Rules and the Court of Appeals’ Discretion

The Court analyzed whether intervention barred by agency rules could be allowed on appeal. It held that any prohibition on intervention contained in administrative patent rules applies only to agency proceedings. Once the appeal lay before the Court of Appeals, the Rules of Court controlled. Under Rule 19, Rules of Court, a court may permit intervention where the intervenor shows a legal interest, where intervention will not unduly delay or prejudice the original parties, and where the intervenor’s rights cannot be fully protected in a separate proceeding. The Court found that Therapharma, Inc. demonstrated sufficient legal interest: it had registered its product with the Bureau of Food and Drugs, made market investments, conducted patent searches that revealed no pending patent covering losartan, and received threats of litigation from petitioner’s licensee. The Court therefore upheld the Court of Appeals’ grant of leave to intervene as a valid exercise of discretion.

Statutory and Regulatory Framework for Revival of Abandoned Applications

The Court set out the governing revival rules. Under the 1962 Revised Rules, Section 111 deems an application abandoned if the applicant fails to respond within four months from mailing of the last official notice, and Section 113 allows revival only within four months from the date of abandonment upon a showing of unavoidable delay and payment of fees. The Intellectual Property Code and subsequent implementing rules preserved similar strict time limits, and in some provisions shortened revival to three months. The Court emphasized that those time limits are unequivocal and that no exception in the rules authorizes a revival after a multi‑year lapse.

Application of the Revival Rules to the Facts

The Bureau’s records showed that the Office Action was mailed July 19, 1988 and that the application was deemed abandoned September 20, 1988; petitioner thus had until January 20, 1989 to seek revival under Section 113. Petitioner’s Petition for Revival was filed in May 2002, roughly thirteen years after abandonment. The Court held that the statutory and regulatory regime did not permit extension of the four‑month revival period to thirteen years. The Court therefore concluded that the petition for revival was untimely and that the application was properly considered forfeited.

Counsel’s Negligence and the Binding Effect on the Client

Independently of the strict time limits, the Court addressed petitioner’s contention that it should not be bound by its resident agent’s negligence because it was a foreign client without immediate supervision. The Court reaffirmed settled law that negligence of counsel binds the client to prevent uncertainty and to preserve orderly proceedings. The Court found that petitioner had been dilatory in supervising its agent, that it waited eight years before requesting a status update and four years after learning of its agent’s death before making a status inquiry, and that these failures manifested lack of ordinary diligence. The Court applied Schuartz v. Court of Appeals and other precedents to conclude that petitioner’s inaction constituted inexcusable negligence that precluded relief even if the revival period were somehow equitably extended.

Priority Rights and Public Domain Argument

The Court considered petitioner’s claim that its foreign priority filing precluded the invention from entering the public domain in the Philippines. The Court explained that a right of priority under the Paris Convention and Section 31 of the Intellectual Property Code allocates filing precedence among competing applicants but does not itself confer a patent or property rights prior to grant. The Court therefore held that priority has no bearing on a late petition for revival and does not prevent an application from being deemed forfeited when revival rules are not met.

Public Interest, Competition, and Patent Policy

The Court examined the public interest in access to medicines and the role of patents. It observed that patent law balances incentives for invention against the public’s access to disclosed technology and that publication and time limits serve that balance. The Court noted evidence that hypertension affects a large segment of the Philippine population and that competition in the

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