PHIL PHARMAWEALTH, INC. v. PFIZER, INC. and PFIZER (PHIL.), INC.

G.R. No. 167715, November 17, 2010

SUMMARY:
A complaint for patent infringement was filed against petitioner Phil Pharma-wealth, Inc.
by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with the Bureau of Legal Affairs of
the Intellectual Property Office (BLA-IPO). The Complaint alleged that Pfizer is the registered
owner of Philippine Letters Patent No. 21116 which was issued by this Honorable Office on July
16, 1987. The patent is valid until July 16, 2004. Petitioner filed a Motion to dismiss the case for
being moot and academic, contending that respondents' patent had already lapsed. In the same
manner, petitioner also moved for the reconsideration of the TRO issued by the CA on the same
basis that the patent right sought to be protected has been extinguished due to the lapse of the
patent license.

The Supreme Court held that under Section 37 of Republic Act No. 165, the exclusive right
of a patentee to make use and sell a patented product, article or process exists only during the
term of the patent. In the instant case, Philippine Letters Patent No. 21116, which was the basis
of respondents in filing their complaint with the BLA-IPO, was issued on July 16, 1987. This fact
was admitted by respondents themselves in their complaint. They also admitted that the validity
of the said patent is until July 16, 2004, which is in conformity with Section 21 of RA 165,
providing that the term of a patent shall be seventeen (17) years from the date of issuance
thereof. Section 4, Rule 129 of the Rules of Court provides that an admission, verbal or written,
made by a party in the course of the proceedings in the same case, does not require proof and
that the admission may be contradicted only by showing that it was made through palpable
mistake or that no such admission was made. In the present case, there is no dispute as to
respondents' admission that the term of their patent expired on July 16, 2004. Neither is there
evidence to show that their admission was made through palpable mistake. Hence, contrary to
the pronouncement of the CA, there is no longer any need to present evidence on the issue of
expiration of respondents' patent.

On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004,
respondents no longer possess the exclusive right to make, use and sell the articles or products
covered by Philippine Letters Patent No. 21116.

DOCTRINE: Sec. 37. Right of patentee. A patentee shall have the exclusive right to make, use
and sell the patented machine, article or product, and to use the patented process for
the purpose of industry or commerce, throughout the territory of the Philippines for the
term of the patent; and such making, using, or selling by any person without the
authorization of the patentee constitutes infringement of the patent. It is clear from the above-
quoted provision of law that the exclusive right of a patentee to make use and sell a patented
product, article or process exists only during the term of the patent.

FACTS:
The instant case arose from a complaint for patent infringement filed against petitioner
Phil Pharmawealth, Inc. by respondent companies, Pfizer, Inc. and Pfizer (Phil.), Inc., with the
Bureau of Legal Affairs of the Intellectual Property Office (BLA-IPO). The complaint alleged that
Pfizer is the registered owner of Philippine Letters Patent No. 21116 which was issued by this
Honorable Office on July 16, 1987. The patent is valid until July 16, 2004. The Patent No. 21116
thus covers ampicillin sodium/sulbactam sodium (hereafter “Sulbactam Ampicillin”).
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 PHIL PHARMAWEALTH, INC. v. PFIZER, INC. and PFIZER (PHIL.), INC.
G.R. No. 167715, November 17, 2010

Pfizer is marketing Sulbactam Ampicillin under the brand name “Unasyn.” Pfizer's
“Unasyn” products, which come in oral and IV formulas, are covered by Certificates of Product
Registration issued by the Bureau of Food and Drugs (“BFAD”) under the name of Pfizer. The
sole and exclusive distributor of “Unasyn” products in the Philippines is Zuellig Pharma
Corporation, pursuant to a Distribution Services Agreement it executed with Pfizer Phils.

Sometime in January and February 2003, Pfizer came to know Pharmawealth submitted
bids for the supply of Sulbactam Ampicillin to several hospitals without the
consent of complainants and in violation of the complainants' intellectual property rights.
Pfizer thus wrote to the above hospitals and demanded that the latter immediately cease and
desist from accepting bids for the supply of Sulbactam Ampicillin or awarding the same to
entities other than them. Pfizer also demanded that Pharmawealth to immediately withdraw its
bids to supply Sulbactam Ampicillin. Hospitals and Pharmawealth ignored the demand of Pfizer.

As registered owner of the Patent, Pfizer is entitled to protection under Section 76 of the
IP Code. Respondents prayed for permanent injunction, damages and the forfeiture and
impounding of the alleged infringing products. They also asked for the issuance of a temporary
restraining order and a preliminary injunction that would prevent herein Pharmawealth its
agents, representatives and assigns, from importing, distributing, selling or offering the subject
product for sale to any entity in the Philippines.

BLA-IPO issued a preliminary injunction which was effective for ninety days from
petitioner's receipt of the said Order. Prior to the expiration of the ninety-day period,
respondents filed a Motion for Extension of Writ of Preliminary Injunction which, however, was
denied by the BLA-IPO. Respondents then filed a special civil action for Certiorari with the CA
assailing the resolutions of the BLA-IPO.

PETITIONER’S ARGUMENT: Petitioner argues that respondents' exclusive right to monopolize

In the same manner, petitioner also moved for the reconsideration of the TRO issued by
the CA on the same basis that the patent right sought to be protected has been extinguished due
to the lapse of the patent license and on the ground that the CA has no jurisdiction to review the
order of the BLA-IPO as said jurisdiction is vested by law in the Office of the Director General of
the IPO.

RESPONDENT’S ARGUMENT: As registered owner of the Patent, Pfizer is entitled to protection

RTC RULING: RTC directed the issuance of a writ of preliminary injunction to prohibit petitioner
from importing, distributing or selling Sulbactam Ampicillin products to any entity in the
Philippines.

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 PHIL PHARMAWEALTH, INC. v. PFIZER, INC. and PFIZER (PHIL.), INC.
G.R. No. 167715, November 17, 2010

CA RULING: CA issued a TRO which prohibited petitioner from importing, distributing, selling
or offering for sale Sulbactam Ampicillin products to any hospital or to any other entity in the
Philippines, or from infringing Pfizer Inc.'s Philippine Patent No. 21116 and impounding all the
sales invoices and other documents evidencing sales by petitioner of Sulbactam Ampicillin
products.

Hence, the petition before the Supreme Court.

Issue related to the topic:

1. Whether or not an injunctive relief can be issued based on an action of patent

RULING: No.

RATIO:
Section 37 of Republic Act No. (RA) 165, which was the governing law at the
time of the issuance of respondents' patent, provides that patentee shall have the exclusive right
to make, use and sell the patented machine, article or product, and to use the patented process for
the purpose of industry or commerce, throughout the territory of the Philippines for the term of the
patent; and such making, using, or selling by any person without the authorization of the patentee
constitutes infringement of the patent.

It is clear from the above-quoted provision of law that the exclusive right of a patentee to
make use and sell a patented product, article or process exists only during the term of the patent.
In the instant case, Philippine Letters Patent No. 21116, which was the basis of respondents in
filing their complaint with the BLA-IPO, was issued on July 16, 1987. This fact was admitted by
respondents themselves in their complaint. They also admitted that the validity of the said
patent is until July 16, 2004, which is in conformity with Section 21 of RA 165, providing that
the term of a patent shall be seventeen (17) years from the date of issuance thereof. Section 4,
Rule 129 of the Rules of Court provides that an admission, verbal or written, made by a party in
the course of the proceedings in the same case, does not require proof and that the admission
may be contradicted only by showing that it was made through palpable mistake or that no such
admission was made. In the present case, there is no dispute as to respondents' admission that
the term of their patent expired on July 16, 2004. Neither is there evidence to show that their
admission was made through palpable mistake. Hence, contrary to the pronouncement of the
CA, there is no longer any need to present evidence on the issue of expiration of respondents'
patent.
On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004,
respondents no longer possess the exclusive right to make, use and sell the articles or products
covered by Philippine Letters Patent No. 21116.

Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of a
writ of preliminary injunction. Pertinent portions of Section 5, Rule 58 of the same Rules provide
that if the matter is of extreme urgency and the applicant will suffer grave injustice and
irreparable injury, a temporary restraining order may be issued ex parte.
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 PHIL PHARMAWEALTH, INC. v. PFIZER, INC. and PFIZER (PHIL.), INC.
G.R. No. 167715, November 17, 2010

From the foregoing, it can be inferred that two requisites must exist to warrant the
issuance of an injunctive relief, namely: (1) the existence of a clear and unmistakable right that
must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious
damage. In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution
approving the bond filed by respondents, the latter no longer had a right that must be protected,
considering that Philippine Letters Patent No. 21116 which was issued to them already expired
on July 16, 2004. Hence, the issuance by the CA of a temporary restraining order in favor of the
respondents is not proper.

2. What tribunal has jurisdiction to review the decisions of the Director of Legal
Affairs of the Intellectual Property Office in the given case?

RULING: Court of Appeals.

It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual
Property Code of the Philippines, which is the presently prevailing law, the Director General of
the IPO exercises exclusive appellate jurisdiction over all decisions rendered by the Director of
the BLA-IPO. However, what is being questioned before the CA is not a decision, but an
interlocutory order of the BLA-IPO denying respondents' motion to extend the life of the
preliminary injunction issued in their favor.

RA 8293 is silent with respect to any remedy available to litigants who intend to question
an interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and
Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property
Rights simply provides that interlocutory orders shall not be appealable. The said Rules and
Regulations do not prescribe a procedure within the administrative machinery to be followed in
assailing orders issued by the BLA-IPO pending final resolution of a case filed with them. Hence,
in the absence of such a remedy, the provisions of the Rules of Court shall apply in a suppletory
manner, as provided under Section 3, Rule 1 of the same Rules and Regulations. Hence, in the
present case, respondents correctly resorted to the filing of a special civil action
for Certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot appeal
therefrom and they have no other plain, speedy and adequate remedy in the ordinary course of
law. This is consistent with Sections 1 and 4, Rule 65 of the Rules of Court, as amended.

DISPOSITIVE PORTION: WHEREFORE, the petition is PARTLY GRANTED. The assailed