Title
Pearl and Dean vs. Shoemart
Case
G.R. No. 148222
Decision Date
Aug 15, 2003
Pearl Dean sued Shoemart and North Edsa for copyright, trademark infringement, and unfair competition over light box designs and "Poster Ads" trademark. Courts ruled no infringement, citing lack of patent, generic trademark, and no secondary meaning.

Case Summary (G.R. No. 148222)

Factual background and P D’s claims

P D manufactured illuminated advertising display units (“light boxes”) and obtained a copyright certificate in 1981 covering what was characterized as “Advertising Display Units” under class “O” (prints, pictorial illustrations, advertising copies, labels, tags and box wraps). P D later registered the mark “Poster Ads” in 1988, but the registration covered stationeries (letterheads, envelopes, calling cards, newsletters). Beginning in the mid‑1980s, P D negotiated with SMI for lease and installation of its light boxes in SM branches; only the SM Makati contract was signed, and SMI later purportedly rescinded for nonperformance. Sometime thereafter, companies (Metro Industrial, EYD Rainbow) manufactured for SMI light boxes that P D contended were exact copies of its units; NEMI acted as marketing arm selling advertising space on such illuminated units. P D demanded cessation, removal, discontinuance of the “Poster Ads” mark and payment of P20,000,000, and when respondents did not satisfy all demands it sued for copyright and trademark infringement, unfair competition and damages. SMI and NEMI denied liability, asserted independent development or generic character of the mark, and counterclaimed for cancellation of P D’s registrations and damages.

RTC disposition and remedies awarded

The RTC of Makati found SMI and NEMI jointly and severally liable for copyright infringement under Section 2 of P.D. No. 49 (as amended), trademark infringement under Section 22 of R.A. No. 166 (as amended), and penalized them under applicable provisions (Section 28 PD 49; Sections 23–24 RA 166). The trial court awarded actual damages (P16,600,000.00), moral damages (P1,000,000.00), exemplary damages (P1,000,000.00), attorney’s fees (P1,000,000.00) plus costs; it ordered delivery and impounding/destruction of infringing units and materials and permanently enjoined respondents from further infringing P D’s copyright and trademark. The trial court dismissed respondents’ counterclaims.

Court of Appeals reasoning and reversal

The Court of Appeals reversed. It held that (a) the copyright registered by P D related to technical drawings and not to the utilitarian light boxes themselves — applying the Baker v. Selden principle that copyright protects expression (descriptive drawings) but not the underlying art/manufacture, and citing related authorities to the effect that copyright of technical drawings does not extend to constructed objects; (b) P D’s trademark registration for “Poster Ads” was limited by Section 20 of the Trademark Law to the goods specified in the certificate (stationeries), and therefore could not support exclusive rights against respondents’ use of the same words in advertising display units; and (c) “Poster Ads” was a generic contraction of “poster advertising” lacking secondary meaning, which further precluded trademark protection against respondents. Because the appellate court found no copyright or trademark infringement, it vacated the monetary awards and dismissed the complaint and counterclaims.

Issues the Supreme Court identified for resolution

The Supreme Court framed the central legal questions as: (1) whether copyright protection granted to engineering/technical drawings of an advertising display unit extends ipso facto to the light box depicted; (2) whether the light box required separate protection by patent in addition to copyright of drawings; (3) whether the owner of a registered trademark may prevent others from using the mark when it is an abbreviation of a descriptive term; and (4) relatedly, whether unfair competition or other remedies were available under the circumstances.

Copyright analysis and holding

The Court affirmed the Court of Appeals: P D’s copyright certificate was issued under class “O” of P.D. No. 49 (prints, pictorial illustrations, advertising copies, labels, tags, box wraps), and the statutory scope of copyright is limited to the categories enumerated by the law. The copyright therefore covered the technical drawings (pictorial illustrations) but did not extend to the light box as a utilitarian object. The ruling emphasized the established distinction that copyright protects the expression (the drawings) and not the underlying idea, art or manufacture, and relied on Baker v. Selden and subsequent jurisprudence holding that copyright in technical drawings does not bar others from constructing the object depicted. The Court noted admissions in the record that the light box was an engineering/marketing invention rather than a literary or artistic work and rejected the notion that titling the registration “Advertising Display Units” could expand statutory protection beyond the classes authorized by law. Accordingly, reproducing or constructing light boxes similar to those depicted in P D’s drawings did not constitute copyright infringement absent an unauthorized copying of the drawings themselves.

Patent considerations and exclusivity

The Court explained that patent law and copyright law protect distinct interests. P D had not secured a patent for the light boxes, and absent a patent there was no patent infringement cause of action: exclusive patent rights arise only upon grant of a patent after substantive examination, and an inventor acquires no common‑law monopoly in the invention merely by disclosure. The Court reiterated the policy reasons for the patent regime — rigorous examination, limited duration (noted as 17 years in the authorities cited), and the public interest in keeping unpatented inventions free for public use — and observed the inequity that would result if an inventor could obtain de facto perpetual exclusivity over a utilitarian invention by means of a copyright registration that avoids the patent office’s scrutiny. Therefore, because P D never obtained a patent, it could not enjoin others from manufacturing or marketing the light boxes on the basis of patent rights.

Trademark analysis and holding

Regarding “Poster Ads,” the Court upheld the Court of Appeals’ analysis that P D’s trademark registration was limited by its certificate to specific goods (stationeries). Under Section 20 of the Trademark Law, registration gives prima facie validity and exclusive right only as to the goods specified; it cannot be stretched to cover unrelated goods not listed. The Court noted that P D had not registered “Poster Ads” for use on advertising display units; it

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