PEARL & DEAN V.

SHOEMART

FACTS

Pearl and Dean is a corporation engaged in the manufacture of advertising display

units called light boxes (you see this in the malls and sometimes along the streets.
Theyre like small billboards lighted from the inside). They secured a Certificate of
Copyright Registration for the lightboxes, and where marketed to advertisers under
the trademark Poster Ads. The manufacture of the light boxes was contracted to
Metro Industrial Services. While Pearl and Dean secured copyright and trademark
registration, they never did so for patents.

Pearl and Dean was supposed to enter into a contract with SM for the installation of
these lightboxes at SM Makati and SM Cubao. However, the contract for SM Cubao
was not signed and returned, and while the contract for SM Makati was signed, SM
was later seeking its recission. 2 years later, Metro Industrial offered to construct
light boxes for SM. 10 light boxes were manufactured by Metro Industrial for SM. SM
then engaged the services of EYD Rainbox to construct more lightboxes.

Later on, North Edsa Marketing (NEMI), a sister company of SM, was set-up to
primarily sell advertising space in lightboxes located at different SM branches. Upon
filing of an infringement suit, the Court of Appeals eventually ruled that there was
neither any copyright nor trademark infringement.

Issue

Was there any copyright or trademark or patent infringement?

(The main doctrine of the case is on the differences between copyright, trademark,
and patents which I am sure you are very familiar with by now.)

Ruling:

None.

There could not have had been copyright infringement as a light box is not a proper
subject of copyright laws. It was neither a literary nor an artistic work, but an
engineering or marketing invention. Copyright is a statutory right, and thus,
protection may only be obtained for works enumerated by the law. At best, what
can be protected by copyright laws is the technical drawing of the light boxes, and
there would be infringement if SM had reprinted these technical drawings for sale to
the public without a license from Pearl and Dean. Only the expression of an
idea is protected by copyright, not the idea itself.

Neither was there patent infringement. Patent requires registration. 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. x x x (A)n inventor has no common law right to a monopoly of his invention.
He has the right to make use of and vend his invention, but if he voluntarily
discloses it, such as by offering it for sale, the world is free to copy and use it with
impunity. A patent, however, gives the inventor the right to exclude all others.
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.

As for trademark infringement, the court said, the certificate of registration issued
by the Director of Patents can confer (upon petitioner) 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 x x x. 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 (note:
technical infringement is stricter than unfair competition). 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. (note also the effect of well-known marks) 1

1
147.1. The owner of a registered mark shall have the exclusive right to prevent all third parties
not having the owners consent from using in the course of trade identical or similar signs or
containers for goods or services which are identical or similar to those in respect of which the
trademark is registered where such use would result in a likelihood of confusion. In case of the
use, of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed.

147.2. The exclusive right of the owner of a well-known mark defined in Subsection 123.1(e)
which is registered in the Philippines, shall extend to goods and services which are not similar to
those in respect of which the mark is registered: Provided, That use of that mark in relation to
those goods or services would indicate a connection between those goods or services and the
owner of the registered mark: Provided, further, That the interests of the owner of the registered
mark are likely to be damaged by such use. (n)