GR 27361; (May, 1981) (Digest)
G.R. No. L-27361. May 29, 1981.
PARKE, DAVIS & COMPANY, plaintiff-appellant, vs. DOCTORS’ PHARMACEUTICALS, INC. and V-LAB DRUGHOUSE CORPORATION, defendants-appellees.
FACTS
Parke, Davis & Company, a U.S. corporation and holder of Philippine Letters Patent No. 279 for “Chloramphenicol Palmitate,” filed a complaint for damages with preliminary injunction against Doctors’ Pharmaceuticals, Inc. and V-LAB Drughouse Corporation. The complaint alleged that defendants were infringing Claim 4 of the patent by manufacturing and distributing “Venimicetin Suspension,” which contained Chloramphenicol Palmitate, without plaintiff’s authorization. It further alleged unfair competition, claiming defendants falsely labeled their product as containing “Chloramphenicol” and deceptively advertised it as being under a compulsory license from Parke, Davis.
The defendants moved to dismiss the complaint, arguing it stated no cause of action because a compulsory license had been granted to them by the Philippine Patent Office. The Court of First Instance of Rizal granted the motion and dismissed the case.
ISSUE
Did the trial court err in dismissing the complaint for failure to state a cause of action?
RULING
Yes, the Supreme Court reversed the order of dismissal. In a motion to dismiss based on failure to state a cause of action, the hypothetical admission of truth extends only to the material allegations in the complaint. The complaint distinctly alleged that the patent in suit (No. 279) and the compound it covered (Chloramphenicol Palmitate) were entirely different from the patent (No. 50) and compound (Chloramphenicol) involved in the separate compulsory licensing proceedings. The lower court erred by not hypothetically accepting these specific allegations as true for the purpose of the motion.
Assuming the truth of these allegations, the complaint sufficiently stated a cause of action for patent infringement under Sections 37 and 42 of Republic Act No. 165 . If defendants were selling Chloramphenicol Palmitate without authorization from the patentee, such acts would constitute infringement. Furthermore, the allegations of false labeling and deceptive claims regarding a compulsory license, if true, would constitute unfair competition under Section 29 of Republic Act No. 166 . The validity of these claims and the factual question of whether the two chemical substances are indeed different are matters for trial, not for resolution at the motion to dismiss stage. Consequently, the complaint was reinstated for further proceedings.