Pearl & Dean (Phil), Inc. vs Shoemart, Inc.

409 SCRA 231 Mercantile Law Intellectual Property Law on Copyright Copyrightable Subject

FACTS:
Pearl & Dean (Phil), Inc. is a corporation engaged in the manufacture of advertising display units called light
boxes. In January 1981, Pearl & 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 & 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 & Deans proposal.

Two years later, Pearl & Dean received report that light boxes, exactly the same as theirs, were 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 removed the light boxes. Pearl
& Deaneventually sued SM. SM argued that it did not infringe on Pearl & Deans trademark because Pearl
& Deans 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 & 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 & Deans exclusive right to the use of Poster Ads is limited to what is
written in its certificate of registration, namely, stationeries.