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Case Digest: Pharmawealth vs. Pfizer (Patent Infringement)
December 19, 2010

Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer (Phil.), Inc. G.R. No. 167715, 17 November 2010

by: Alpheus D. Macalalad

Facts: Pfizer is the registered owner of a patent pertaining to Sulbactam Ampicillin. It is marketed under the brand name “Unasyn.” Sometime in January and February 2003, Pfizer discovered that Pharmawealth submitted bids for the supply of Sulbactam Ampicillin to several hospitals without the Pfizer’s consent. Pfizer then demanded that the hospitals cease and desist from accepting such bids. Pfizer also demanded that Pharmawealth immediately withdraw its bids to supply Sulbactam Ampicillin. Pharmawealth and the hospitals ignored the demands. 

Pfizer then filed a complaint for patent infringement with a prayer for permanent injunction and forfeiture of the infringing products. A preliminary injunction effective for 90 days was granted by the IPO’s Bureau of Legal Affairs (IPO-BLA). Upon expiration, a motion for extension filed by Pfizer was denied. Pfizer filed a Special Civil Action for Certiorari in the Court of Appeals (CA) assailing the denial.

While the case was pending in the CA, Pfizer filed with the Regional Trial Court of Makati (RTC) a complaint for infringement and unfair competition, with a prayer for injunction. The RTC issued a temporary restraining order, and then a preliminary injunction.

Pharmawealth filed a motion to dismiss the case in the CA, on the ground of forum shopping. Nevertheless, the CA issued a temporary restraining order. Pharmawealth again filed a motion to dismiss, alleging that the patent, the main basis of the case, had already lapsed, thus making the case moot, and that the CA had no jurisdiction to review the order of the IPO-BLA because this was granted to the Director General. The CA denied all the motions. Pharmawealth filed a petition for review on Certiorari with the Supreme Court.

Issues:

a) Can an injunctive relief be issued based on an action of patent infringement when the patent allegedly infringed has already lapsed?
b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the Intellectual Property Office?
c) Is there forum shopping when a party files two actions with two seemingly different causes of action and yet pray for the same relief?

Held:

a) No. The provision of R.A. 165, from which the Pfizer’s patent was based, clearly states that "[the] 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."

Clearly, the patentee’s exclusive rights exist only during the term of the patent. Since the patent was registered on 16 July 1987, it expired, in accordance with the provisions of R.A. 165, after 17 years, or 16 July 2004. Thus, after 16 July 2004, Pfizer no longer possessed the exclusive right to make, use, and sell the products covered by their patent. The CA was wrong in issuing a temporary restraining order after the cut-off date.

b) According to IP Code, the Director General of the IPO exercises exclusive jurisdiction over decisions of the IPO-BLA. The question in the CA concerns an interlocutory order, and not a decision. Since the IP Code and the Rules and Regulations are bereft of any remedy regarding interlocutory orders of the IPO-BLA, the only remedy available to Pfizer is to apply the Rules and Regulations suppletorily. Under the Rules, a petition for certiorari to the CA is the proper remedy. This is consistent with the Rules of Court. Thus, the CA had jurisdiction.

c) Yes. Forum shopping is defined as the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another (and possibly favorable) opinion in another forum (other than by appeal or the special civil action of certiorari), or the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition.

The elements of forum shopping are: (a) identity of parties, or at least such parties that represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; (c) identity of the two preceding particulars, such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration. This instance meets these elements.

The parties are clearly identical. In both the complaints in the BLA-IPO and RTC, the rights allegedly violated and the acts allegedly violative of such rights are identical, regardless of whether the patents on which the complaints were based are different. In both cases, the ultimate objective of Pfizer was to ask for damages and to permanently prevent Pharmawealth from selling the contested products. Relevantly, the Supreme Court has decided that the filing of two actions with the same objective, as in this instance, constitutes forum shopping.

Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a decision in one case will necessarily amount to res judicata in the other action.


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