PEARL AND DEAN INC. v. SHOEMART INC.

GR No. 148222; August 15, 2003

FACTS:
P & 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 & D negotiated 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 & D that it is rescinding its contract for SM Makati
due to non-performance of the terms thereof. P & D contested the unilateral
revocation of the contract.
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 & 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 & 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 poster ads. Claiming
both failed to meet its demand P & 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 & D copyright. It further contends that poster
ads is a generic name that cannot be appropriated for a trademark and that P &
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 & 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 & 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 an infringement of patents, copyrights, trademarks and
whether there is unfair competition.
HELD:

1. ON THE ISSUE OF COPYRIGHT INFRINGEMENT

P & D secured its copyright under the classification class "O" work. This being
so, petitioners 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." Stated otherwise, even as we find that P & D indeed owned a valid
copyright, the same could have referred only to the technical drawings within
the category of "pictorial illustrations." It could not have possibly stretched out
to include the underlying light box. The strict application 9 of the laws
enumeration in Section 2 prevents us from giving petitioner even a little
leeway, that is, even if its copyright certificate was entitled "Advertising
Display Units." 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.
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.
2. ON THE ISSUE OF PATENT INFRINGEMENT
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 to
monopoly 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.
3. ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark "Poster Ads" which
petitioners president said was a contraction of "poster advertising." P & D was
able to secure a trademark certificate for it, but one where the goods specified
were "stationeries such as letterheads, envelopes, calling cards and
newsletters." Petitioner admitted it did not commercially engage in or market
these goods. On the contrary, it dealt in electrically operated backlit
advertising units and the sale of advertising spaces thereon, which, however,
were not at all specified in the trademark certificate.
Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the
failure of P & D 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.
4. ON THE ISSUE OF UNFAIR COMPETITION
By the nature of things, there can be no unfair competition under the law on
copyrights although it is applicable to disputes over the use of trademarks.
Even a name or phrase incapable of appropriation as a trademark or
tradename may, by long and exclusive use by a business (such that the name
or phrase becomes associated with the business or product in the mind of the
purchasing public), be entitled to protection against unfair competition. In this

case, there was no evidence that P & Ds use of "Poster Ads" was distinctive or
well-known.