Peal and Dean (Phil.), Incorporated vs.

Shoemart, Incorporated
Facts
Pearl and Dean, a Philippine corporation who manufactures advertising display units secured a Certificate
of Copyright Registration to their invention of light boxes . Apparently recognizing the invention as
promising and saleable, manage to secure a contract with SMI to install light boxes for SM branches,
however, the latter rescinded the contract only to find out that SMI decided to manufacture through
another company which is actually a sister company of SMI. Several light boxes of similar description were
installed in some SM branches which prompted Pearl and Dean to pursue Copyright Infringement violations
against SMI. It also demanded SMI to discontinue from using their trade mark Poster Ads . SMI noted
that the registration of the mark Poster Ads was only for stationeries such as letterheads, envelopes, and
of similar nature. Furthermore, according to SMI, the word Poster Ads is a generic term which cannot be
appropriated as a trademark, and, as such, registration of such mark is invalid.
Issue:
Whether or not SMI violated the Copyright Infringement law.
Whether or not Poster Ads is a valid trademark.
Whether or not SMI committed unfair competition.
Held:
The court ruled that, Copyright, in the strict sense of the term, is purely a statutory right. Being a mere
statutory grant, the rights are limited to what the statute confers. It may be obtained and enjoyed only
with respect to the subjects and by the persons, and on terms and conditions specified in the statute.
Accordingly, it can cover only the works falling within the statutory enumeration or description
The coverage of the Certificate of Patent claimed by Pearl and Dean only pertains to the drawings only and
not the box itself as it is of generic shape.
As with regards to the Trademarks and patent, the court furthermore reiterated that, Trademark,
copyright and patents are different intellectual property rights that cannot be interchanged with one
another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods. In relation
thereto, a trade name means the name or designation identifying or distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their creation. Patentable
inventions, on the other hand, refer to any technical solution of a problem in any field of human activity
which is new, involves an inventive step and is industrially applicable.
Hence, the usage of the word Poster Ads to be used as trade name is so generic and does not fall on the
definition of the law as a trademark. The so called invention does not also fall as a creation of literary and
artistic domain from the time of their creation.
To determine whether SMI committed unfair competition, it was noted that unfair competition cannot be
committed in copyright issues. Usage of trademarks can be an avenue for unfair competition but it was
not proven that Poster Ads is known for it or associated with Pearl and Dean.
With the foregoing racionations of the court, the court denied the petition and affirmed the decision of the
CA.