Ayalas told to pay P140M for copying ‘modular’ houses

BY RUBY ANNE M. RUBIO, Senior Reporter/BusinessWorld A Quezon City court has ordered Ayala Land, Inc.’s "affordable homes" subsidiary to pay nearly P140 million to the Filipino inventor of prefabricated houses, ruling that the Ayala unit had copied the "Vazbuilt" system of modular homes for mass housing projects in the provinces. Vazquez Building Systems Corp. President and CEO Edgardo C. Vazquez shows a model of his modular house during a press conference announcing his victory in an infringement case against real estate giant Ayala Land’s Avida Homes. — Jonathan Cellona In a seven-page decision last Dec. 18, Regional Trial Court Judge Reynaldo Daway said Avida Land, Inc. must pay Edgardo G. Vazquez and his company Vazquez Building Systems Corp. P90 million in "temperate" damages, P5 million in moral damages, P1 million in exemplary damages and P500,000 in attorney’s fees and litigation expenses for the infringement of the so-called modular housing system. The Ayalas and Mr. Vazquez had been business partners, with the latter getting P886.38 million in contracts to build modular houses for projects in Laguna and Batangas from 1992 to 1997. Back then, Avida Land was known as Laguna Properties Holdings, Inc. Court records showed that in July 1997, Mr. Vazquez discovered that Laguna Properties had copied his invention for additional housing projects in Sta. Isabel Village in Tayabas, Quezon and in San Francisco Village in Naga City. Later on, the Ayala unit used modular houses in Sto. Tomas, Batangas, the Sampaguita Village Housing project in Trece Martirez City, and a housing project in Cebu City. The modular houses involved columns with H-shaped sections and additional pairs of opposed side grooves to hold wall panels. This was patented by Mr. Vazquez in 1990. Mr. Vazquez called a press briefing to announce the court decision Tuesday, calling it his best Christmas gift after eight years of "suffering" since filing the case in Dec. 10, 1999. The Ayala unit had claimed it was not using the Vazquez system but the "Tex" system of Tex Holdings Plc. in the United Kingdom and the "Phenix 2000" system of Maison Individuelles S.A. in France. But the court said "the preponderance of evidence on the main issue is in favor of plaintiffs... Defendant’s acts constitute infringement of said patent invention." "The claim of defendant of differences or dissimilarities can hardly be noticed. Moreover, this court finds unmeritorious the claim of defendant that the patent invention is not novel. The assertion of Mr. Vazquez that his invention is new remains undisturbed," Mr. Daway said in his decision. The judge noted various citations earned by Mr. Vazquez, such as the Golden Medal Award as Outstanding Inventor from the Filipino Inventors’ Society in 1993 and the World Intellectual Property Office’s Gold Medal for being the Most Outstanding Inventor in 1995. BusinessWorld tried to reach officials of Avida Land but they were not available as of presstime. Mr. Vazquez told reporters he was open to working anew with the Ayalas. "Eight years is too long already. Malaking pahirap na iyan sa akin. In spite of that, magsama na tayo. Bawat isang Pilipino naghahangad ng isang kastilyo, pagtulungan natin. Let us build homes for Filipinos to make a good nation. Bayaran muna nila ang kanilang penalty, enter a joint venture with me or just pay royalties," he said. The court said Avida Land must pay temperate damages, or reasonable royalty with interest at the rate of 6% per annum reckoned from the date of filing of the case, until the amount is settled. "I was able to prove to the court, to Ayala that I am the inventor of Vazbuilt and I have the right to claim what is mine. The life of an inventor in the Philippines is very difficult. This is a victory of science and technology and Filipino inventors," Mr. Vazquez told reporters.