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Pearl & Dean (Phil.), Incorporated v.

Shoemart, Incorporated
G.R. No. 148222, August 15, 2003
Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as light
boxes. These units utilize specially printed posters sandwiched between plastic sheets and illuminated
with backlights. It was able to secure registration over these illuminated display units. The advertising light
boxes were marketed under the trademark Poster Ads.
In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the
light boxes in SM North Edsa. However, since SM North Edsa was under construction, SMI offered as
alternative SM Makati and Cubao. During the signing of the Contract, SMI only returned the Contract with
SM Makati. Manager of petitioner reminded SMI that their agreement includes SM Cubao. However, SMI
did not bother to reply. Instead, respondent informed petitioner that they are rescinding the contract for
SM Makati due to non-performance.
Two years later, SMI engaged the services of EYD Rainbow Advertising to make the light boxes.
These were delivered in a staggered basis and installed at SM Megamall and SM City. In 1989, petitioner
received reports that exact copy of its light boxes was installed by SMI. It further discovered that North
Edsa Marketing Inc. (NEMI), sister company of SMI, was set up primarily to sell advertising space in
lighted display units located in SMIs different branches. Petitioner sent letters to respondents asking
them to cease using the light boxes and the discontinued use of the trademark Poster Ads.
Claiming that SMI and NEMI failed to meet its demand, petitioner filed a case for infringement of
trademark and copy right, unfair competition and damages. SMI maintained that it independently
developed its poster panels using commonly known techniques and available technology without notice of
or reference to P&Ds copyright. In addition, it said that registration of Poster Ads obtained by petitioner
was only for stationeries such as letterheads, envelopes and the like. Poster Ads is a generic term which
cannot be appropriated as trademark, and, as such, registration of such mark is invalid. It also stressed
that P&D is not entitled to the reliefs sought because the advertising display units contained no copyright
notice as provided for by law.
RTC found SMI and NEMI jointly and severally liable for infringement of copyright and trademark.
CA reversed saying that it agreed with SMI that what was copyrighted was the technical drawings only
and not the light boxes. Light boxes cannot be considered as either prints, pictorial illustrations,
advertising copies, labels, tags or box wraps, to be properly classified as copyrightable class O work. In
addition, CA stressed that the protective mantle of the Trademark Law extends only to the goods used by
the first user as specified in its certificate of registration. The registration of the trademark Poster Ads
covers only stationeries such as letterheads, envelopes and calling cards and newsletter.
ISSUES: (1) If the engineering or technical drawings of an advertising display unit are granted copyright
protection is the light box depicted in such drawings ipso facto also protected by such copyright? (2)
Should the light box be registered separately? (3) Can the owner of the registered trademark legally
prevent others from using such mark if it is mere abbreviation of a term descriptive of his goods, services
or business?
Held:
1. No. Copyright is purely statutory. As such, the rights are limited to what the statute confers. It may
be obtained and enjoyed only with respect to the subjects and by the persons, and on the terms
and conditions specified in the statute. Accordingly, it can cover only the works falling within the
statutory enumeration or description. Petitioner secured copyright under classification class O
work. Thus, copyright protection extended only to the technical drawings and not to the light box
itself because the latter was not at all in the category of prints, pictorial illustrations, advertising
copies, labels, tags and box wraps.
What the law does not include, it excludes, and for the good reason: the light box was not
a literary or artistic piece which could be copyrighted under the copyright law. And no less clearly,
neither could the lack of statutory authority to make the light box copyrightable be remedied by
the simplistic act of entitling the copyright certificate issued by the National Library as Advertising
Display Units.

It must be noted that copyright is confined to literary and artistic works which are original
intellectual creations in the literary and artistic domain protected from the moment of their
creation.
2. Yes. Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights
which could have protected its invention, if in fact it really was. And because it had no patent,
petitioner could not legally prevent anyone from manufacturing or commercially using the
contraption. To be able to effectively and legally preclude others from copying and profiting from
the invention, a patent is a primordial requirement. No patent, no protection. The ultimate goal of
a patent system is to bring new designs and technologies into the public through disclosure.
Ideas, once, disclosed to the public without protection of a valid patent, are subject to
appropriation without significant restraint.
The Patent Law has a three-fold purpose: first, patent law seeks to foster and reward
invention; second, it promotes disclosures of inventions to stimulate further innovation and to
permit the public to practice the invention once the patent expires; third, the stringent
requirements for patent protection seek to ensure that ideas in the public domain remain there for
the free use of the public. It is only after an exhaustive examination by the patent office that
patent is issued. Therefore, not having gone through the arduous examination for patents,
petitioner cannot exclude other s from the manufacture, sale or commercial use of the light boxes
on the sole basis of its copyright certificate over the technical drawings.
3. Court agrees with CA that the certificate of registration issued by the Director of Patents can
confer the exclusive right to use its own symbol only to those goods specified in the certificate,
subject to any conditions and limitations specified in the certificate. One who has adopted and
used a trademark on his goods does not prevent the adoption and use of the same trademark by
others for products which are of a different description.
Assuming arguendo that Poster Ads could validly qualify as a trademark, the failure of
petitioner to secure a trademark registration for specific use on the light boxes meant that there
could not have been any trademark infringement since registration was an essential element
thereof.
There is no evidence that petitioners use of poster Ads was distinctive or well-known.
As noted by CA, petitioners expert witness himself had testified that Poster Ads was not too
generic a name. SO it was difficult to identify it with any company. This fact also prevented the
application of the doctrine of secondary meaning. Poster Ads was generic and incapable of
being used as a trademark because it was used in the field of poster advertising the very
business engaged in by petitioner. Secondary meaning means that a word or phrase originally
incapable of exclusive appropriation with reference to an article in the market might nevertheless
have been used for so long and so exclusively by one producer with reference to his article that ,
in the trade and to that branch of the purchasing public, the word or phrase has come to mean
that the article was his property.
PETITION WAS DENIED.

Pearl and Dean Inc. v Shoemart Inc. GR No. 148222,


August 15, 2003
Facts:
Plaintiff P and D is engaged in manufacturing advertising display units called as light boxes. These are
specialty printed posters with plastic sheets and illuminated back lights that are mainly used as stationeries.
They secure copyright registration over these advertising light boxes and marketed using the trademark poster
ads. They applied for the registration of trademark before the Bureau of Patents, Trademark and Technology

Transfer which was approved on September 12, 1988. P and Dnegotiated with the defendant Shoemart for the
lease and installation of the light boxes in SM City North Edsa but was given an alternative to have
them leased to SM Makati and SM Cubao while the said branch was under construction. Only the contract with
SM Makati was returned with signature. In 1986 the counsel of Shoemart informed P and D that it is rescinding
its contract for SM Makati due to non-performance of the terms thereof. Two years later, the Metro Industrial
Services, the same company contracted by the plaintiff to fabricate their display units offered to construct light
boxes for the Shoemart chain of stores wherein 10 light boxes were created for them. Upon the termination of
contract with Metro Industrial Service, SM hired EYD Rainbow Advertising Co. to make light boxes. When P
and D knew about the exact copies of its light boxes installed at SM City branches in 1989, it investigated and
found out that North Edsa Marketing Inc (NEMI), sister company of SM was primarily selling ad space
in lighted display units. P and D sent letter to both NEMI and SM enjoining them to cease from using the
subject light boxes and remove them from SM establishments. It also demanded to discontinue the use of its
trademark poster ads with compensatory damages of 20M. SM suspended the lease of light boxes in its
branches while NEMI took down its advertisement for posterads. Claiming both failed to meet its demand P and
D filed a case for infringement of trademark, copyright, unfair competition and damages.
SM denied the charges against it and noted that the registration of mark poster ads is limited to stationeries
like letterhead and envelope. It further stresses that it independently develop its own poster panels using
techniques and available technology without notice to P and D copyright. It further contends that poster ads is
a generic name that cannot be appropriated for a trademark and that P and Ds advertising display units
contained no copyright notice in violation of Section 27 of P.D. 49. NEMI likewise repleaded the averments of
SM and denied to have manufactured, installed or advertised the display units. The RTC decided in favor of P
and D but on appeal the Court of Appeals reversed its decision. In its judgment its stand is that the copyright of
the plaintiff is limited to its technical drawings only and not the light boxes itself. When a drawing is technical,
the copyright over the drawing does not extend to actual object. Thus the CA is constrained to adopt the view of
the respondents that the poster ads is a generic poster term ads and in the absence of convincing proof that
such wording acquired secondary meaning, the P and Ds exclusive right to use poster ads is limited to what
is written on its certificate of registration which is stationaries.
Issue:
Whether or not there is patent infringement
Ruling:
It held that the petitioner never secured patent for the light boxes. Without any acquired rights to protect its
invention it cannot legally prevent anyone from manufacturing the same. There can be no infringement of a
patent until a patent has been issued, since whatever right one has to the invention covered by the
patent arises alone from the grant of patent. Inventors have no common law right tomonopoly of his work. He
has the right to invent but once he voluntarily discloses it the world is free to copy and use it. A patent gives the
inventor the exclusive right to make, sell, use and exclude others from using his invention. Assuming the
petitioners ad units were patentable, he made them public by submitting its engineering drawings to the
National Library. To legally preclude others from copying and profiting from ones invention, patent is a primary
requirement. The ultimate goal of a patent system is to bring new designs and technologies into the public
domain through disclosure. Ideas, once disclosed to the public without the protection of a valid patent, are
subject to appropriation without significant restraint. Therefore, without any patent secured to protect ones
work, there is no protection against its use by the public. Petitioner mainly secured copyright in which its design
is classified as class O limited to box wraps, pictorial illustration, labels and tags. Thus its copyright is covered

only the works falling within this category. Moreover, the term poster ads is generic and incapable to be used
as trademark thus the respondents are not held guilty of the charges against them.

Facts:
Pearl and Dean is a corporation engaged in the manufacture of advertising display units simply referred to as
light boxes.Pearland Dean was able to secure a Certificate of Copyright Registration.Pearland Dean, received
reports that exact copies of its light boxes were installed at SM City and in the fastfood section of SM Cubao.
In the light of its discoveries,Pearland Dean sent a letter dated December 11, 1991 to both SMI enjoining it to
cease using the subject light boxes and to remove the same from SMIs establishments. It also demanded
the discontinued use of the trademark Poster Ads. SMI noted that the registration of the mark Poster Ads
was only for stationeries such as letterheads, envelopes, and the like. Besides, according to SMI, the word
Poster Ads is a generic term which cannot be appropriated as a trademark, and, as such, registration of
such mark is invalid.
Issue:
Whether or not there was copyright infringement.
Held:
The SC ruled in favor of the Shoemart Inc adopting the ruling of court of appeals and by coming up with its
own ruling. To wit:
The records show thatPearland Dean applied for the registration of the trademark Poster Ads with the
Bureau of Patents, Trademarks, and Technology Transfer. Said trademark was recorded in the Principal
Register covering the following products: stationeries such as letterheads, envelopes and calling cards and
newsletters.
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the
rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and conditions specified in the statute. Accordingly, it can cover
only the works falling within the statutory enumeration or description
With this as factual backdrop, we see no legal basis to the finding of liability on the part of the defendantsappellants for their use of the words Poster Ads, in the advertising display units in suit
The Court of Appeals held that the copyright was limited to the drawings alone and not to the light box
itself. We agree with the appellate court.
The Supreme Court also distinguished Trademark, Copyright and Patents:
Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with
one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods. In relation

thereto, a trade name means the name or designation identifying or distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their creation. Patentable
inventions, on the other hand, refer to any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially applicable.