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PEARL DEAN v. SHOEMART

FACTS:

Pearl and Dean (P D) entered into a contract with Sunshine Media (SMI) for the lease and installation of light boxes in SMI's stores, specifically SM Makati. However, the contract for SM Cubao was not signed. SMI later rescinded the contract for SM Makati due to non-performance of the terms. Pearl and Dean protested and demanded the signing of the contract for SM Cubao.

Later on, SMI engaged Metro Industrial Services to fabricate light boxes for their stores. They terminated their contract with Metro Industrial and engaged the services of EYD Rainbow Advertising Corporation.

Pearl and Dean discovered identical copies of their light boxes in some of SMI's stores and one of NEMI's stores. They sent a letter to SMI and NEMI demanding that they cease using the light boxes and pay for damages. SMI suspended the leasing of some light boxes, and NEMI removed advertisements for "Poster Ads" from the lighted display units in SMI's stores.

As a result, Pearl and Dean filed a case against SMI and NEMI for infringement of trademark and copyright, unfair competition, and damages. The case was brought before the Regional Trial Court (RTC) of Makati City.

The RTC ruled in favor of Pearl and Dean and held SMI and NEMI jointly and severally liable for copyright infringement and trademark violation. The court ordered them to pay damages, deliver the infringing objects for impounding, and refrain from further infringement. However, the counterclaims of SMI and NEMI were dismissed.

SMI and NEMI appealed the decision to the Court of Appeals, which reversed the trial court's ruling. The Court of Appeals held that copyright protection only extends to the technical drawings and not to the light boxes themselves. It also ruled that SMI was not liable for copyright infringement.

In terms of trademark violation, the Court of Appeals referred to the Faberge case and concluded that the Trademark Law protects only the goods specified in the certificate of registration.

Pearl and Dean, dissatisfied with the decision of the Court of Appeals, filed a petition for review before the Supreme Court, seeking to reverse the appellate court's decision and uphold the ruling of the trial court.

ISSUES:

  1. If the engineering or technical drawings of an advertising display unit (light box) are granted copyright protection (copyright certificate of registration) by the National Library, is the light box depicted in such engineering drawings ipso facto also protected by such copyright?

  2. Should the light box be registered separately and protected by a patent issued by the Bureau of Patents Trademarks and Technology Transfer (now Intellectual Property Office) -- in addition to the copyright of the engineering drawings?

  3. Can the owner of a registered trademark legally prevent others from using such trademark if it is a mere abbreviation of a term descriptive of his goods, services or business?

RULING:

  1. No, the light box depicted in the engineering drawings is not ipso facto protected by the copyright of the engineering drawings. Copyright protection is limited to the engineering drawings and does not extend to the light box itself. Petitioner’s copyright application and certificate were classified under class "O" work, which only covers "prints, pictorial illustrations, advertising copies, labels, tags, and box wraps," and not the light box.

  2. Yes, the light box should be registered separately and protected by a patent to secure protection. Since the petitioner did not secure a patent for the light box, no patent rights were acquired, and thus, petitioner had no legal basis to prevent others from manufacturing or using the light box.

  3. No, the owner of a registered trademark cannot legally prevent others from using such trademark if it is merely an abbreviation of a term descriptive of his goods, services, or business and if the trademark registration does not cover the specific goods or services in question. In this case, "Poster Ads" was not registered for the specific use on the light boxes, and hence, there could be no trademark infringement.

PRINCIPLES:

  1. Copyright is a statutory right limited to the subjects specified by the statute and does not extend to ideas or inventions that are not literary or artistic works.

  2. A patent is required to legally protect an invention, and without it, others can legally manufacture or use the invention.

  3. Trademark protection is granted for the specific goods or services listed in the registration certificate, and a registrant of a trademark cannot rely on trademark protection for goods or services not specified therein.

  4. Unfair competition can occur even without trademark registration, but there must be distinctiveness or secondary meaning associated with the goods or services in the market.