Pearl and Dean Inc. is a corporation engaged in the manufacture of advertising display units called light boxes.

In January 1981, Pearl and Dean was able to acquire copyrights over the designs of the display units.

In 1988, their trademark application for “Poster Ads” was approved; they used the same trademark to advertise their light boxes.

In 1985, Pearl and Dean negotiated with respondent Shoemart, Inc.(SMI) for the lease and installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under construction at that time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. Only the contract for SM Makati, however, was returned signed.

However, in 1986, SMI rescinded the contract for SM Makati due to non-performance of the terms thereof.Pearl and Dean negotiated with Shoemart Inc. (SM) so that the former may be contracted to install light boxes in the ad spaces of SM. Eventually, SM rejected Pearl and Dean’s proposal.

Two years later, Pear and Dean received report that light boxes exactly the same as theirs are being used by SM in their ad spaces. They demanded SM to stop using the light boxes and at the same time asked for damages amounting to P20 M. SM refused to pay damages though they struck down the light boxes.

Pearl and Dean filed a case for infringement of trademark and copyright, unfair competition and damages.

(SM argued that it did not infringe on Pearl and Dean’s trademark because Pearl and Dean’s trademark is only applicable to envelopes and stationeries and not to the type of ad spaces owned by SM. SM also averred that “Poster Ads” is a generic term hence it is not subject to trademark registration. SM also averred that the actual light boxes are not copyrightable. The RTC ruled in favor of Pearl and Dean. But the Court of Appeals ruled in favor of SM.)

ISSUE: Whether or not the Court of Appeals is correct.

HELD: Yes. The light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable; what was copyrighted were the technical drawings only, and not the light boxes themselves. In other cases, it was held that there is no copyright infringement when one who, without being authorized, uses a copyrighted architectural plan to construct a structure.  This is because the copyright does not extend to the structures themselves.

On the trademark infringement allegation, the words “Poster Ads” are a simple contraction of the generic term poster advertising.  In the absence of any convincing proof that “Poster Ads” has acquired a secondary

meaning in this jurisdiction, Pearl and Dean’s exclusive right to the use of “Poster Ads” is limited to what is written in its certificate of registration, namely, stationeries.

Pearl & Dean v. ShoemartGR 148222, 15 August 2003; Third division, Corona (J)

Facts: Pearl & Dean is a corporation engaged in the manufacture of advertising display units (Poster Ads) referred as light boxes.

It acquired a Certificate of Copyright Registration over the illuminated display units, and acquired trademark for “Poster Ads”.

Pearl & Dean negotiated with Shoemart for the lease andinstallation of the light boxes in Shoemart Malls.

After Pearl & Dean’s contract was rescinded, exact copies of its light boxes were installed in various SM malls (fabricated by Metro Industrial Services, and later EYD Rainbow Advertising Corp.) Pearl & Dean sent a letter to Shoemart and it sister company. North EDSA Marketing, to cease using the light boxes and to remove them from the malls, and demanded the discontinueduse of the trade mark “Poster Ads.” Unsatisfied with the compliance of its demands, Pearl & Dean sued.

The trial court ruled in favor of Pearl & Dean, while the appellate court reversed the decision of the trial court.

Issue: Whether pearl & Dean’s copyright registration for its light boxes and the trademark registration of“Poster Ads” preclude Shoemart and North Edsa Marketing from using the same.

Held:

No. Pearl & Dean secured its copyright under the classification class “o” work. This being so, its protection extended only to the technical drawings and not to the light box itself.

Pearl & Dean cannot exclude others from the manufacture, sale and/or commercial use over the light boxes on the sole basis of its copyright, certificate over the technical drawings. It cannot be the intention of the law that the right of exclusivity would be granted for a longer time (so years in copyright, and 17 years in patent) through the simplified procedure of copyright registration with the National Library, without the rigor of defending the patentability of its “invention” before the IPO and the public.

On the other hand, there has been no evidence that Pearl & Dean’s use of “Poster Ads” was distinctive orwell known. “Poster Ads” was too generic a name to identify it to a specific company or entity.

“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 by Pearl & Dean. Furthermore, Pearl & Dean’s exclusive right to the use of “Poster Ads” is limited to what is written in its certificate of registration.

Shoemart, et. al. cannot be held liable forthe infringement of the trademark.