Patent Revival and Due Diligence: The Consequences of Negligence in Intellectual Property Rights

The Supreme Court's 2016 decision in E.I. DuPont de Nemours and Co. v. Director Emma C. Francisco (G.R. No. 174379) provides a clear warning to patent applicants: the mistakes of a counsel bind the client, and the revival of an abandoned patent application can be denied when third-party rights and public interest are at stake. The case, which involved a losartan patent application that lay dormant for over a decade, underscores the critical importance of active prosecution and diligent monitoring of intellectual property rights.

The Facts of the Case

E.I. DuPont de Nemours and Company (DuPont) filed Philippine Patent Application No. 35526 on July 10, 1987, for Angiotensin II Receptor Blocking Imidazole, commonly known as losartan, a medication used to treat hypertension and congestive heart failure. The application was handled by Atty. Nicanor D. Mapili, a local resident agent who had managed DuPont's patent applications in the Philippines since 1972.

The application encountered problems early on. The first Office Action was mailed on July 19, 1988, but the application was declared abandoned as of September 20, 1988, for failure to respond within the prescribed period under Rule 112 of the 1962 Revised Rules of Practice. DuPont claimed it was unaware of the abandonment, noting that Atty. Mapili had died and had not informed the company.

It was only on December 19, 2000—more than 13 years after the original filing—that DuPont's new counsel requested an Office Action on the application. The Intellectual Property Office (IPO) responded in January 2002, informing DuPont that the application had been abandoned decades earlier. DuPont then filed a Petition for Revival, which was denied by the Director of Patents for having been filed out of time.

The Issue Before the Court

The central question was whether DuPont could revive its abandoned patent application despite the long delay, given that its former counsel's negligence caused the abandonment. The case also raised issues about whether Therapharma, Inc., a local competitor that had developed its own losartan product, could intervene in the proceedings.

The Ruling

The Supreme Court denied DuPont's petition, affirming the Court of Appeals' Amended Decision that rejected the revival of the patent application. The Court held that the negligence of DuPont's counsel bound the client, and that the revival would prejudice both third-party rights and public interest.

The Court emphasized that patent rights are not absolute. While a patent protects an inventor's rights after the invention is disclosed to the public, ideas not covered by a patent are free for the public to use and exploit. The procedural rules on patent applications exist to balance these competing interests, and failure to comply with these rules results in the failure to obtain a patent.

The Court also addressed the intervention issue, holding that the Rules of Court, not the 1962 Revised Rules of Practice, governed proceedings before the Court of Appeals. Therapharma, Inc. had a legal interest in the case, having invested over P20 million to develop its own losartan product and having conducted patent searches that revealed no existing patent application.

The Role of Public Interest

The Court gave significant weight to public interest considerations. Losartan treats hypertension, a chronic ailment afflicting an estimated 12.6 million Filipinos. The presence of competition in the market lowers the price of losartan products, making them more accessible to patients. Reviving DuPont's patent application would have prejudiced Therapharma's investments and potentially reduced competition in the pharmaceutical market.

Practical Takeaways

• Counsel's negligence binds the client. The mistakes of a patent agent or attorney—even gross negligence—are imputed to the applicant. Clients must actively monitor their counsel's handling of applications and ensure compliance with deadlines.

• Prosecute applications diligently. A patent application that sits idle for years risks abandonment. Applicants should track their applications and respond promptly to Office Actions to avoid losing rights.

• Revival is not automatic. Even if a petition for revival is filed, courts will consider the impact on third parties who relied on the abandonment and the public interest in maintaining competition, particularly for essential medicines.

• Confidentiality has limits. The Intellectual Property Code shifted from a first-to-invent to a first-to-file system, and patent applications are published after 18 months. Absolute secrecy is no longer the norm.

• Conduct due diligence before investing. Companies developing products should verify the status of competing patent applications. However, reliance on a patent search is not a complete defense if a competitor later asserts rights.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.