Parke Davis & Company v. Doctors' Pharmaceuticals
REITERATIONFacts
The Antecedents: Parke Davis & Company, a foreign corporation, owned Letters Patent No. 50 for the "Process for the Manufacturing of Antibiotics," specifically the chemical compound chloramphenicol. Doctors' Pharmaceuticals, Inc., a domestic corporation, requested a voluntary license to manufacture and sell its own brand of medicine containing chloramphenicol, citing provisions of Philippine law regarding patents in existence for over three years. Procedural History: When Parke Davis & Company was not inclined to grant a voluntary license, Doctors' Pharmaceuticals, Inc. filed a petition with the Director of Patents for a compulsory license. The grounds included that the invention relates to medicine necessary for public health, the patentee's unwillingness to grant a voluntary license, inadequate demand and unreasonable prices, and the invention not being worked in the Philippines on a commercial scale. The Director of Patents eventually granted the compulsory license. The Appeal: Parke Davis & Company appealed the decision of the Director of Patents, imputing eleven errors. The principal issue raised was whether the Director of Patents gravely abused his discretion in ordering the grant of a compulsory license under Section 34(d) of Republic Act No. 165, despite the patentee's objection.
Issue(s)
Whether the Director of Patents gravely abused his discretion in ordering the grant of a compulsory license to respondent Doctors' Pharmaceuticals, Inc. under Section 34(d) of Republic Act No. 165. Whether the ground relied upon by respondent was sufficiently proven. Whether respondent's intention to import the patented article, rather than work it, disqualifies it from obtaining a compulsory license. Whether petitioner's invention was being worked in the Philippines. Whether respondent was competent to work the patented invention. Whether the grant of the license is against public interest. Whether the Director of Patents erred in issuing an in personam order against petitioner. Whether the theory that a compulsory license may be granted to one who petitions for a license after three years from grant is erroneous. Whether the Director of Patents erred in not considering petitioner's defenses.
Ruling
The Supreme Court affirmed the decision of the Director of Patents, holding that the grant of a compulsory license to Doctors' Pharmaceuticals, Inc. was proper. The Court found no grave abuse of discretion on the part of the Director of Patents. The dispositive portion of the Director's decision ordered the patentee to grant a license and directed the parties to submit a licensing agreement within thirty days, or the Director would fix the terms.
Ratio Decidendi
On the principal issue of grave abuse of discretion in granting a compulsory license: The Court held that the Director of Patents did not gravely abuse his discretion. The relevant provisions of Republic Act No. 165, specifically Section 34(d), allow for the grant of a compulsory license for patented inventions relating to medicine at any time after three years from the grant of the patent. Since chloramphenicol is a medicine and the patent was granted in 1950, with the application filed in 1960, the three-year period had elapsed, fulfilling the temporal condition. The Court found that the conditions for granting the license had been met, and the Director's decision was supported by law and evidence. On the sufficiency of proof for the grounds relied upon: The Court clarified that respondent's primary reliance was on the fact that chloramphenicol is a medicine, which falls under Section 34(d) of Republic Act No. 165. It is not required that the invention be indispensable for public health or safety; being related to medicine is sufficient. The Court also noted evidence presented by Dr. Leon V. Picache and the inventor's specifications, as well as a Scientific Digest article, attesting to the efficacy of chloramphenicol in treating gastro-enteritis and its importance in controlling infant mortality, thus supporting its necessity for public health. On the intention to import versus working the patent: The Court ruled that Section 34 of Republic Act No. 165 does not require the petitioner of a license to work the patented invention if it relates to medicine. The definition of "worked" or "working" in the law does not apply to the circumstance mentioned in subsection (d). Furthermore, the respondent's intention was to use chloramphenicol in its own medicinal preparations, not to manufacture the raw substance itself, and it possessed adequate facilities and personnel for this purpose. On whether the invention was being worked in the Philippines: The Court found no merit in the claim that the invention was being worked. The provision permitting compulsory licenses is intended to prevent patent monopolies and ensure public access to needed articles, even if the patentee is working the invention. On the competence of the respondent to work the invention: The Court found that the respondent was competent, possessing adequate personnel, laboratories, machines, and facilities to test the quality of chloramphenicol for its medicinal preparations. On whether the grant of the license is against public interest: The Court acknowledged that the grant might disadvantage the patentee but stated that the law must be observed. The potential benefit to the public through increased supply and reduced prices of medicines containing chloramphenicol outweighed the patentee's concerns. The respondent's intention was not to compete directly in manufacturing chloramphenicol but to use it in its own products. On the Director of Patents issuing an in personam order: The Court found no error in the Director's order. While the order compels the patentee to grant a license, it was issued after due hearing and careful consideration of evidence, not automatically. The order of the Director granting a license, when final, operates as a deed granting a license. On the erroneous theory of compulsory license: The Court reiterated that any person may apply for a license under Section 34 after three years from the grant of the patent, provided one of the enumerated circumstances exists. The theory that such a license cannot be granted to one who petitions for it after three years is incorrect. On the Director of Patents not considering defenses: The Court found that the Director of Patents did consider the defenses, as evidenced by the detailed decision that weighed the evidence and arguments of both parties before reaching a conclusion.
Main Doctrine
The Court affirmed the Director of Patents' order granting a compulsory license for the manufacture of preparations containing chloramphenicol. It held that under Section 34(d) of Republic Act No. 165, a patent for a medicine can be subject to compulsory licensing after three years from its grant, irrespective of whether the patentee is working the invention, if the demand is not met adequately or if the invention relates to medicine necessary for public health. The 'working' requirement, as defined in the law, does not strictly apply to medicines, and the primary consideration is public access to essential drugs.