409 SCRA 231 Mercantile Law Intellectual Property Law on Copyright Copyrightable

Subject
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 & Dean eventually 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,
stationaries.