Creser Precision Systems, Inc. vs. Court of Appeals

The Court held that only a patentee or anyone possessing any right, title, or interest in and to the patented invention (i.e., successors-in-interest, assignees, or grantees) may file a civil action for infringement under Section 42 of the Patent Law. Because a person without a patent has no right of property over the invention upon which to base an infringement suit, the first and true inventor's remedy against a patentee is to file a petition for cancellation of the patent with the Director of Patents under Section 28, not an action for injunction or infringement.

Private respondent Floro International Corp. was granted Letters Patent No. UM-6938 for an aerial fuze by the Bureau of Patents, Trademarks and Technology Transfer on January 23, 1990. Petitioner Creser Precision Systems, Inc. claimed to have developed the aerial fuze as early as December 1981 under the AFP's Self-Reliance Defense Posture Program and began supplying it to the AFP in 1986. Upon discovering that petitioner was submitting samples of the fuze to the AFP and claiming it as its own, private respondent sent a warning letter threatening court action if the scheduled military testing proceeded.

• Patent Grant: Floro International Corp. (private respondent) was issued Letters Patent No. UM-6938 for an aerial fuze on January 23, 1990.
• Discovery of Infringement: In November 1993, Floro discovered that Creser Precision Systems, Inc. (petitioner) submitted samples of an identical aerial fuze to the AFP for testing, claiming it as its own and planning to manufacture it commercially.
• Demand Letter: On December 3, 1993, Floro sent a letter to Creser warning of potential court action if the military testing proceeded on December 7, 1993.
• Injunction Suit: On December 8, 1993, Creser filed a complaint for injunction and damages against Floro, alleging it was the first, true, and actual inventor of the fuze (developed in 1981) and that Floro's patent was identical except for miniscule cosmetic differences.
• RTC Ruling: The RTC issued a TRO on December 10, 1993, and a writ of preliminary injunction on December 29, 1993, enjoining Floro from manufacturing, marketing, and selling the aerial fuze. The RTC found that Creser developed the fuze in 1981 and Floro began manufacturing it only in 1987, concluding Creser had established its right to the injunction.

Petitioner maintained that it could file an action for infringement under Section 42 of the Patent Law (R.A. 165) not as a patentee but as an entity in possession of a right, title, or interest in the patented invention. Petitioner argued that while the absence of a patent might prevent a lawful infringement suit, it did not bar the first true and actual inventor from suing the patent holder for declaratory or injunctive relief, likening this to remedies recognized under American patent laws.

Respondent countered that petitioner had no cause of action for infringement because it lacked a patent for the aerial fuze. Respondent argued that the proper venue to question the validity of the patent was a petition for cancellation before the Office of the Director of Patents. Respondent further contended that the trial court gravely abused its discretion in granting the preliminary injunction, which disrupted the status quo, deprived the patent holder of its property rights, and caused irreparable damage.

• Procedural Issues: Whether the trial court acted with grave abuse of discretion in issuing the preliminary injunction and whether the proper venue for questioning the validity of a patent is the Office of the Director of Patents rather than the trial court via an injunction suit.
• Substantive Issues: Whether a person claiming to be the first and true inventor, but who lacks a patent, can file an action for infringement and injunction against a registered patentee under Section 42 of the Patent Law.

• Procedural: The Court found that the trial court acted with grave abuse of discretion in granting the preliminary injunction. The proper venue for the petitioner to challenge the validity of the respondent's patent was a petition for cancellation before the Director of Patents under Section 28 of the Patent Law, not an action for injunction before the RTC.
• Substantive: The Court ruled that only a patentee or successors-in-interest (assignees or licensees) may file an action for infringement under Section 42 of R.A. 165. The phrase "anyone possessing any right, title or interest in and to the patented invention" refers only to the patentee's successors-in-interest. Because there can be no infringement until a patent has been issued, a person without a patent has no right of property over the invention upon which to base a suit. The remedy of declaratory judgment or injunctive suit relied upon by the petitioner is not recognized in this jurisdiction for non-patent holders. The petitioner's exclusive remedy was to file a petition for cancellation of the patent under Section 28.

• Right to Sue for Infringement — Only a patentee or anyone possessing any right, title, or interest in and to the patented invention (successors-in-interest, assignees, or grantees) may bring a civil action for infringement. A person who has not been granted letters patent and has not acquired any right or title as assignee or licensee has no cause of action for infringement because the right to maintain such a suit depends on the existence of the patent.
• Presumption of Validity of Patent — The issuance of a patent by the Philippine Patent Office carries a presumption of validity and that the patentee is the legal and factual first and true inventor of the invention.

• "Under the aforequoted law, only the patentee or his successors-in-interest may file an action for infringement. The phrase 'anyone possessing any right, title or interest in and to the patented invention' upon which petitioner maintains its present suit, refers only to the patentee's successors-in-interest, assignees or grantees since actions for infringement of patent may be brought in the name of the person or persons interested, whether as patentee, assignees, or as grantees, of the exclusive right."
• "Moreover, there can be no infringement of a patent until a patent has been issued, since whatever right one has to the invention covered by the patent arises alone from the grant of patent."
• "Said person, however, is not left without any remedy. He can, under Section 28 of the aforementioned law, file a petition for cancellation of the patent within three (3) years from the publication of said patent with the Director of Patents and raise as ground therefor that the person to whom the patent was issued is not the true and actual inventor."

• Aguas vs. De Leon, 111 SCRA 238 — Cited as controlling authority for the proposition that the validity of a patent and questions over its inventiveness, novelty, and usefulness are matters better determined by the Philippine Patent Office, which carries a presumption of having correctly determined patentability.
• Moore vs. Marsh, 7 Wall 5125, 19 L.Ed.37e — Cited to support the rule that actions for infringement of patent may be brought in the name of the person or persons interested, whether as patentee, assignees, or as grantees.
• Anchor Hocking Glass Corp. vs White Cap., Co., D.C. Del., 47 F Supp. A451, 453 — Cited to support the principle that there can be no infringement of a patent until a patent has been issued.
• Peck vs Collins, 103 U.S. 660, 26 L. Ed, 512 — Cited to support that a person or entity who has not been granted letters patent and has not acquired any right or title thereto has no cause of action for infringement.
• Baller & Cie vs. O'Donnel 229, US 1, 57 L. Ed. 38 Set. 616 — Cited to establish that an inventor has no common-law right to a monopoly of his invention; a patent gives the inventor the right to exclude all others.

• Section 42, Republic Act No. 165 (The Patent Law) — Defines who may bring a civil action for infringement (any patentee, or anyone possessing any right, title or interest in and to the patented invention). The Court interpreted this to mean only the patentee or their successors-in-interest, assignees, or grantees.
• Section 28, Republic Act No. 165 (The Patent Law) — Provides the remedy for a person claiming to be the true inventor but lacking a patent: filing a petition for cancellation of the patent within three (3) years from publication with the Director of Patents.
• Section 10, Republic Act No. 165 (The Patent Law) — Enumerates the persons who may have an invention patented (first true and actual inventor, his heirs, legal representatives, or assignees). The Court clarified this section merely lists who may obtain a patent, not who may sue for infringement.

Regalado, Melo, Puno and Mendoza, JJ.