G.R. No. L-45101 - Maguan vs. Court of Appeals

Case Summary (G.R. No. L-45101)

Petitioner’s Claims

Maguan alleged that Luchan manufactured and sold powder puffs identical or substantially identical to those covered by her Utility Model Letters Patent Nos. UM-423 (Extension UM-109), UM-450 (Extension UM-110), and UM-1184. She filed an infringement suit in the Court of First Instance of Rizal, Pasig Branch, seeking damages, injunction and a preliminary injunction to restrain further infringement.

Respondent’s Defenses and Cancellation Petitions

Luchan contended her products differed from Maguan’s patented items and asserted that the patents were void for lack of novelty and improper inventorship. She filed three inter partes cancellation proceedings with the Philippine Patent Office challenging each utility model and its extension on grounds that the claimed designs and manufacturing methods were known or in public use prior to Maguan’s patent applications.

Procedural History

August 24, 1974: Maguan’s infringement complaint filed; trial court grants preliminary injunction on September 18, 1974.
September 11, 1975: Trial court denies Luchan’s motion for reconsideration.
September 29, 1975: Luchan petitions the Court of Appeals for certiorari to annul the injunction orders.
October 15, 1975: Court of Appeals issues provisional writ enjoining enforcement of the injunction.
February 16, 1976: Appellate decision dismisses certiorari petition and sets aside preliminary injunction.
July 6, 1976: On Luchan’s motion for reconsideration, Court of Appeals reverses itself, reinstates and makes permanent the preliminary injunction.
November 4, 1976: Court of Appeals denies reconsideration of its July resolution.
November 28, 1986: Supreme Court renders final judgment under the 1973 Constitution.

Applicable Law

1973 Philippine Constitution (in force at decision date).
Republic Act No. 165, as amended by R.A. 864 (Philippine Patent Law):
• Section 37 grants exclusive rights to patentees.
• Section 42 authorizes infringement suits and injunctive relief.
• Section 45 enumerates defenses, including lack of novelty or improper authorship.
• Section 46 empowers courts to invalidate patents and directs the Patent Office to cancel affected claims.
Rule 65, Revised Rules of Court (certiorari against grave abuse of discretion).

Issues Presented

Whether a trial court in an infringement action has jurisdiction to determine the validity of patents pending cancellation proceedings before the Patent Office.
Whether the trial court gravely abused its discretion in issuing a preliminary injunction without first assessing the fair question of invalidity.
Whether certiorari is an appropriate remedy to review the Court of Appeals’ resolutions.

Supreme Court’s Legal Analysis

Jurisdiction to Invalidate Patents
Precedent establishes that courts may examine invention, novelty, and prior use when enforcement is sought (Vargas v. F.M. Yaptico; Vargas v. Chua; Frank & Gohn v. Kosuyama). Sections 45 and 46 of R.A. 165 explicitly allow a court, during infringement proceedings, to decide on patent validity and direct cancellation of invalid claims.
Burden of Proof and Fair Question Doctrine
Presentation of a duly issued patent creates a prima facie presumption of validity; the patentee bears the burden of proof on infringement, while the defendant must introduce competent evidence to overcome the presumption. Luchan submitted 64 exhibits and five witness testimonies suggesting prior public use or publication, thereby raising a fair question of invalidity for lack of novelty under Section 9 of the Patent Law.
Preliminary Injunction Standards
Injunctive relief requires (a) a clear, enforceable right, and (b) a violation thereof. A preliminary injunction in patent infringement is unwarranted if validity is doubtful. Philippine a

Case Syllabus (G.R. No. L-45101)

Parties and Patent Titles

Petitioner: Rosario C. Maguan (formerly Rosario C. Tan), doing business as “SWAN MANUFACTURING.”
Respondent: Susana Luchan, doing business as “SUSANA LUCHAN POWDER PUFF MANUFACTURING,” and the Honorable Court of Appeals.
Patents held by petitioner:
- Utility Model No. UM-423, extended under Extension No. UM-109 (5-year term from October 6, 1971).
- Utility Model No. UM-450, extended under Extension No. UM-110 (5-year term from January 26, 1972).
- Utility Model No. UM-1184 (5-year term from April 5, 1974).

Pre-Suit Correspondence and Cancellation Petitions

July 10, 1974: Petitioner’s demand letter asserting respondent’s powder puffs infringe UM-109, UM-110, UM-1184; demand to cease or face judicial action.
Respondent’s reply: Claimed non-identity of products; challenged patent validity on grounds of non-patentable utility models and incorrect inventorship.
July 25, 1974: Respondent filed inter partes cancellation petitions at the Philippine Patent Office:
- Case No. 838: Extension No. UM-109.
- Case No. 839: No. UM-1184.
- Case No. 840: Extension No. UM-110.

Trial Court Proceedings

August 24, 1974: Petitioner filed Civil Case No. 19908 (CFI of Rizal, Pasig Branch) for infringement, damages, injunction.
Respondent’s answer: Asserted products not identical; affirmative defenses of patent invalidity due to lack of novelty and incorrect authorship.
September 18, 1974: Trial court granted preliminary injunction; writ issued enjoining respondent from manufacturing, selling, or using the patented puff designs.
Respondent’s motion for reconsideration: Argued pending Patent Office cancellation makes injunction improper.
September 11, 1975: Trial court denied reconsideration; maintained injunction.

Court of Appeals Proceedings

September 29, 1975: Respondent petitioned CA for certiorari to restrain enforcement of:
1. September 18, 1974 Order granting injunction.
2. September 18, 1974 Writ of Preliminary Injunction.
3. September 11, 1975 Order denying reconsideration.
October 15, 197