Aguas vs. De Leon

Conrado G. De Leon was the registered owner of Letters Patent No. 658, granted for a "new and useful improvement in the process of making mosaic pre-cast tiles." Domiciano A. Aguas was a competitor in the tile-making industry who had engaged F.H. Aquino & Sons, a mould engraver, to produce moulds for his tiles. F.H. Aquino & Sons had previously engraved moulds for De Leon and was alleged to have produced for Aguas moulds similar to those embodying De Leon's patented improvement.

On April 14, 1962, Conrado G. De Leon filed a complaint for infringement of patent in the Court of First Instance of Rizal at Quezon City against Domiciano A. Aguas and F.H. Aquino & Sons. De Leon alleged that he was the inventor of a "new and useful improvement in the process of making mosaic pre-cast tiles," that Letters Patent No. 658 had been lawfully granted to him, and that the defendants were making, using, and selling tiles and moulds that infringed his patent. He sought injunctive relief, actual, moral, and exemplary damages, and attorney's fees. A writ of preliminary injunction issued the same day.

Aguas answered on May 23, 1962, denying inventorship and asserting that the claimed process was not new or inventive because it had been used previously in the Philippines and abroad. He also asserted differences in composition and design and noted that third parties held certain design patents. Trial proceeded thereafter. F.H. Aquino & Sons, which had engraved moulds for both parties, was alleged to have produced moulds for Aguas similar to De Leon's.

The Court of First Instance rendered judgment on December 29, 1965, declaring Patent No. 658 valid and infringed. The trial court granted a perpetual injunction, ordered delivery of infringing items, and awarded actual damages of ₱10,020.99, moral damages of ₱50,000, exemplary damages of ₱5,000, attorney's fees of ₱5,000, plus costs. F.H. Aquino & Sons did not appeal; Aguas alone appealed to the Court of Appeals.

On August 5, 1969, the Court of Appeals — in a decision authored by Justice Jose M. Mendoza and concurred in by Justices Lucero and Perez — affirmed the trial court's judgment but reduced moral damages to ₱3,000.00. The Court of Appeals found that De Leon introduced an inventive improvement characterized by critical depth, lip width, easement, composition, and the ability to produce thin (1/8") yet durable sculptured tiles, and that Aguas had actual knowledge of these features and used moulds embodying them. Aguas sought review by the Supreme Court via petition for certiorari, contending chiefly that the patent was invalid.

• Lack of Novelty and Inventiveness: Petitioner argued that the claimed process was not new or inventive because it had been used previously in the Philippines and abroad.
• Denial of Inventorship: Petitioner denied that De Leon was the inventor of the patented improvement.
• Differences in Composition and Design: Petitioner asserted that his tiles and moulds differed in composition and design from those covered by Patent No. 658.
• Third-Party Design Patents: Petitioner noted that third parties held certain design patents, implying that De Leon's patent was not original.
• Invalidity of Patent: Petitioner contended chiefly that the patent was invalid, challenging the Court of Appeals' affirmance of its validity.

• Factual Findings: Whether the Supreme Court may overturn the Court of Appeals' factual findings in this patent and infringement case.
• Patent Validity: Whether Letters Patent No. 658 was a valid patent — i.e., whether it claimed a patentable improvement that was new, useful, and inventive under the patent law.
• Infringement: Whether petitioner Domiciano A. Aguas infringed Patent No. 658.
• Damages: Whether the awards of actual, moral, exemplary damages and attorney's fees were proper.