G.R. No. L-26803 - American Tobacco Co., et al. vs. Director of Patents, et al.

Manila

SECOND DIVISION

G.R. No. L-26803 October 14, 1975

AMERICAN TOBACCO COMPANY, CARNATION COMPANY, CURTISS CANDY COMPANY, CUDAHY PACKING CO., CLUETT, PEABODY & CO., INC., CANNONMILLS COMPANY, FORMICA CORPORATION, GENERALMOTORS CORPORATION, INTERNATIONAL LATEX CORPORATION, KAYSER-ROTH CORPORATION, M and R DIETETIC LABORATORIES, INC., OLIN MATHIESON, PARFUM CIRO, INC., PROCTER and GAMBLE COMPANY, PROCTER and GAMBLE PHILIPPINE MANUFACTURING CORPORATION, PARFUMS PORVIL DENTRIFICES DU DOCTEUR PIERRE REUNIS SOCIETE ANONYME, R.J. REYNOLDS TOBACCO COMPANY, SWIFT AND COMPANY, STERLING PRODUCTS INTERNATIONAL, THE CLOROX COMPANY, WARNER LAMBERT PHARMACEUTICALS COMPANY and ZENITH RADIO CORPORATION,petitioners,
vs.
THE DIRECTOR OF PATENTS, ATTYS. AMANDO L. MARQUEZ, TEOFILO P. VELASCO, RUSTICO A. CASIA and HECTOR D. BUENALUZ,respondents.

Lichauco, Picazo and Agcaoili for petitioners.

Office of the Solicitor General for respondents.

ANTONIO,J.:

In this petition formandamuswith preliminary injunction, petitioners challenge the validity of Rule 168 of the "Revised Rules of Practice before the Philippine Patent Office in Trademark Cases" as amended, authorizing the Director of Patents to designate any ranking official of said office to hear"inter partes"proceedings. Said Rule likewise provides that "all judgments determining the merits of the case shall be personally and directly prepared by the Director and signed by him." These proceedings refer to the hearing of opposition to the registration of a mark or trade name, interference proceeding instituted for the purpose of determining the question of priority of adoption and use of a trade-mark, trade name or service-mark, and cancellation of registration of a trade-mark or trade name pending at the Patent Office.

Petitioners are parties, respectively, in the following opposition, interference and cancellation proceedings in said Office:Inter PartesCases Nos. 157, 392, 896, 282, 247, 354, 246,332, 398, 325, 374, 175, 297, 256, 267, 111, 400, 324, 114, 159, 346, and 404.

Under the Trade-mark Law (Republic Act No. 166 ), the Director of Patents is vested with jurisdiction over the above-mentioned cases. Likewise, the Rules of Practice in Trade-mark Cases contains a similar provision, thus:

The Rules of Practice in Trade-mark Cases were drafted and promulgated by the Director of Patents and approved by the then Secretary of Agriculture and Commerce.1

Subsequently, the Director of Patents, with the approval of the Secretary of Agriculture and Commerce, amended the afore-quoted Rule 168 to read as follows:

In accordance with the amended Rule, the Director of Patents delegated the hearing of petitioners' cases to hearing officers, specifically, Attys. Amando Marquez, Teofilo Velasco, Rustico Casia and Hector Buenaluz, the other respondents herein.

Petitioners filed their objections to the authority of the hearing officers to hear their cases, alleging that the amendment of the Rule is illegal and void because under the law the Director must personally hear and decideinter partes cases.Said objections were overruled by the Director of Patents, hence, the present petition formandamus,to compel The Director of Patents to personally hear the cases of petitioners, in lieu of the hearing officers.

It would take an extremely narrow reading of the powers of the Director of Patents under the general law2and Republic Acts Nos. 1653and 1663*to sustain the contention of petitioners. Under section 3 of RA 165, the Director of Patents is "empowered to obtain the assistance of technical, scientific or other qualified officers or employees of other departments, bureaus, offices, agencies and instrumentalities of the Government, including corporations owned, controlled or operated by the Government, when deemed necessary in the consideration of any matter submitted to the Office relative to the enforcement of the provisions" of said Act. Section 78 of the same Act also empowers "the Director, subject to the approval of the Department Head," to "promulgate the necessary rules and regulations, not inconsistent with law, for the conduct of all business in the Patent Office." The aforecited statutory authority undoubtedly also applies to the administration and enforcement of the Trade-mark Law (Republic Act No. 166).

It has been held that power-conferred upon an administrative agency to which the administration of a statute is entrusted to issue such regulations and orders as may be deemed necessary or proper in order to carry out its purposes and provisions maybe an adequate source of authority to delegate a particular function, unless by express provisions of the Act or by implication it has been withheld.4There is no provision either in Republic Act No. 165 or 166 negativing the existence of such authority, so far as the designation of hearing examiners is concerned. Nor can the absence of such authority be fairly inferred from contemporaneous and consistent Executive interpretation of the Act.

The nature of the power and authority entrusted to The Director of Patents suggests that the aforecited laws (Republic Act No. 166, in relation to Republic Act No. 165) should be construed so as to give the aforesaid official the administrative flexibility necessary for the prompt and expeditious discharge of his duties in the administration of said laws.ℒαwρhi৷As such officer, he is required, among others, to determine the question of priority in patent interference proceedings,5decide applications for reinstatement of a lapsed patent,6cancellations of patents under Republic Act No. 165,7inter partesproceedings such as oppositions,8claims of interference,9cancellation cases under the Trade-mark Law10and other matters in connection with the enforcement of the aforesaid laws. It could hardly be expected, in view of the magnitude of his responsibility, to require him to hear personally each and every case pending in his Office. This would leave him little time to attend to his other duties.11For him to do so and at the same time attend personally to the discharge of every other duty or responsibility imposed upon his Office by law would not further the development of orderly and responsible administration. The reduction of existing delays in regulating agencies requires the elimination of needless work at top levels. Unnecessary and unimportant details often occupy far too much of the time and energy of the heads of these agencies and prevent full and expeditious consideration of the more important issues. the remedy is a far wider range of delegations to subordinate officers. This sub-delegation of power has been justified by "sound principles of organization" which demand that "those at the top be able to concentrate their attention upon the larger and more important questions of policy and practice, and their time be freed, so far as possible, from the consideration of the smaller and far less important matters of detail."12

Thus, it is well-settled that while the power to decide resides solely in the administrative agency vested by law, this does not preclude a delegation of the power to hold a hearing on the basis of which the decision of the administrative agency will be made.13

The rule that requires an administrative officer to exercise his own judgment and discretion does not preclude him from utilizing, as a matter of practical administrative procedure, the aid of subordinates to investigate and report to him the facts, on the basis of which the officer makes his decisions.ℒαwρhi৷14It is sufficient that the judgment and discretion finally exercised are those of the officer authorized by law. Neither does due process of law nor the requirements of fair hearing require that the actual taking of testimony be before the same officer who will make the decision in the case. As long as a party is not deprived of his right to present his own case and submit evidence in support thereof, and the decision is supported by the evidence in the record, there is no question that the requirements of due process and fair trial are fully met.15In short, there is no abnegation of responsibility on the part of the officer concerned as the actual decision remains with and is made by said officer.16It is, however, required that to "give the substance of a hearing, which is for the purpose of making determinations upon evidence the officer who makes the determinations must consider and appraise the evidence which justifies them."17

In the case at bar, while the hearing officer may make preliminary rulings on the myriad of questions raised at the hearings of these cases, the ultimate decision on the merits of all the issues and questions involved is left to the Director of Patents. Apart from the circumstance that the point involved is procedural and not jurisdictional, petitioners have not shown in what manner they have been prejudiced by the proceedings.

Moreover, as the Solicitor General Antonio P. Barredo, now a Member of this Court has correctly pointed out, the repeated appropriations by Congress for hearing officers of the Philippine Patent Office form 1963 to 196818not only confirms the departmental construction of the statute, but also constitutes a ratification of the act of the Director of Patents and the Department Head as agents of Congress in the administration of the law.19

WHEREFORE,the instant petition is hereby dismissed, with costs against petitioners.

Castro (Actg., C.J.), Muñoz Palma, Aquino and Martin, JJ., concur.

Barredo, J., took no part.

Footnotes