G.R. No. 148222 ; August 15, 2003
PEARL & DEAN (PHIL.), INC., Petitioner, vs. SHOEMART, INC., and NORTH EDSA MARKETING, INC., Respondents.

FACTS

Petitioner Pearl & Dean (P&D) secured a copyright for its illuminated advertising display units (light boxes) and used the trademark “Poster Ads.” P&D negotiated with respondent Shoemart, Inc. (SMI) to install these units in SM branches. While a contract for SM Makati was signed, SMI later rescinded it. Subsequently, SMI engaged P&D’s former fabricator, Metro Industrial Services, and later EYD Rainbow Advertising, to produce similar light boxes for its malls. P&D discovered these units and, through its sister company NEMI, SMI was leasing ad space on them. P&D then sued SMI and NEMI for trademark and copyright infringement and unfair competition. The Regional Trial Court ruled in favor of P&D.

ISSUE

Whether SMI and NEMI are liable for copyright infringement, trademark infringement, and unfair competition.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ reversal of the RTC decision, absolving respondents of liability. On copyright, the Court ruled that P&D’s copyright certificate covered only the technical drawings of the light boxes, not the finished units themselves. The light boxes as utility objects were not protected artistic works. The manufacturing of the physical units based on the general idea or concept depicted in the drawings, which was not copied, did not constitute copyright infringement. On trademark, the mark “Poster Ads” was declared generic and descriptive of the very business of poster advertising. It was incapable of exclusive appropriation as a trademark as it served primarily to describe the service rather than identify its source. The Court noted that even P&D’s own expert witness admitted the term was “too generic” to be associated solely with P&D, preventing the application of the “secondary meaning” doctrine. Consequently, there was no trademark infringement or unfair competition to speak of.