Pearl and Dean Inc. (PDI) v. Shoemart Inc.

(SMI)

FACTS:
PDI is engaged in manufacturing advertising display units called as light boxes and PDI was able to secure
a Certificate of Copyright Registration. These are specialty printed posters with plastic sheets and
illuminated back lights that are mainly used as stationeries. subsequently, these light boxes were marketed
under the trademark “Poster Ads”.

PDI negotiated with SMI for the lease and installation of the light boxes in SM City North Edsa but was
given SM Makati and SM Cubao as alternatives since the chosen branch was still under construction. Only
the contract with SM Makati was returned with signature.

Eventually, SMI informed PDI that it was rescinding the contract for SM Makati due to non-performance of
the terms thereof. Years later after PDI’s contract was rescinded, exact copies of its light boxes were
installed in various SM malls, and was discovered that that SMI’s sister company North Edsa Marketing Inc.
(NEMI) sells advertising space in lighted display units located in SMI’s different branches. PDI sent a letter
to SMI and NEMI to cease the usage of light boxes, remove these from the mall sites, and discontinue the
usage of the trademark “Poster Ads”, as well as the payment of compensatory damages.

Unsatisfied with the compliance of its demands, PDI filed this instant case for infringement of trademark
and copyright, unfair competition and damages which was ruled by the trial court in their favor. On appeal,
however, CA reversed the RTC’s decision.

ISSUE:
Whether PDI’s copyright registration for its light boxes and the trademark registration of “Poster Ads”
preclude SMI and NEMI from using the same.

RULING:
NO, the court rules in the negative. CA correctly held that the copyright was limited to the drawings alone
and not to the light box itself. PDI secured its copyright under the classification class “O” work which
includes “Prints, pictorial, illustration, advertising copies”. As such, its protection extended only to the
technical drawings and not to the light box itself and even though petitioner’s copyright certificate was
entitled “Advertising Display Units”, its claim of copyright infringement cannot be sustained.

PDI cannot exclude others from the manufacture, sale or use of these light boxes on the sole basis of its
copyright, certificated over the technical drawings. As such, that the right of exclusivity be granted for a
longer time through the simplification of copyright registration with the National Library, cannot be the
intention of the law (without the rigor of defending the patentability of its “invention” before the IPO and
the public).