Intellectual Property Law

Salao
THIRD DIVISION
[G.R. No. 148222. August 15, 2003.]
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner, v. SHOEMART,
INCORPORATED, and NORTH EDSA MARKETING,
INCORPORATED, Respondents.

Pearl and Dean agreed. On September 11, 1985, Pearl and Deans General
Manager, Rodolfo Vergara, submitted for signature the contacts covering
SM Cubao and SM Makati to SMIs Advertising Promotions and Publicity
Division Manager, Ramonlito Abano. Only the contract for SM Makati,
however, was returned signed. On October 4, 1985, Vergara wrote Abano
inquiring about the other contract and reminding him that their agreement for
installation of light boxes was not only for its SM Makati branch, but also for
SM Cubao. SMI did not bother to reply.

DECISION

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals 3 contained a summary
of this dispute:jgc:chanrobles.com.ph
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in
the manufacture of advertising display units simply referred to as light boxes.
These units utilize specially printed posters sandwiched between plastic
sheets and illuminated with back lights. Pearl and Dean was able to secure a
Certificate of Copyright Registration dated January 20, 1981 over these
illuminated display units. The advertising light boxes were marketed under
the trademark "Poster Ads." The application for registration of the trademark
was filed with the Bureau of Patents, Trademarks and Technology Transfer
on June 20, 1983, but was approved only on September 12, 1988, per
Registration No. 41165. From 1981 to about 1988, Pearl and Dean
employed the services of Metro Industrial Services to manufacture its
advertising displays.
Sometime in 1985, Pearl, and Dean negotiated with defendant-appellant
Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM
City North Edsa. Since SM City North Edsa was under construction at that
time, SMI offered as an alternative, SM Makati and SM Cubao, to which

Two years later, Metro Industrial Services, the company formerly contracted
by Pearl and Dean to fabricate its display units, offered to construct light
boxes for Shoemarts chain of stores. SMI approved the proposal and ten
(10) light boxes were subsequently fabricated by Metro Industrial for SMI.
After its contract with Metro Industrial was terminated, SMI engaged the
services of EYD Rainbow Advertising Corporation to make the light boxes.
Some 300 units were fabricated in 1991. These were delivered on a
staggered basis and installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its
light boxes were installed at SM City and in the fastfood section of SM
Cubao. Upon investigation, Pearl and Dean found out that aside from the
two (2) reported SM branches, light boxes similar to those it manufactures
were also installed in two (2) other SM stores. It further discovered that
defendant-appellant North Edsa Marketing Inc. (NEMI), through its
marketing arm, Prime Spots Marketing Services, was set up primarily to sell
advertising space in lighted display units located in SMIs different branches.
Pearl and Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December
11, 1991 to both SMI and NEMI enjoining them to cease using the subject
light boxes and to remove the same from SMIs establishments. It also
demanded the discontinued use of the trademark "Poster Ads," and the
payment to Pearl and Dean of compensatory damages in the amount of
Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two
hundred twenty-four (224) light boxes and NEMI took down its
advertisements for "Poster Ads" from the lighted display units in SMIs
stores. Claiming that both SMI and NEMI failed to meet all its demands,

In the instant petition for review on certiorari under Rule 45 of the Rules of
Court, petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001
decision 1 of the Court of Appeals reversing the October 31, 1996 decision 2
of the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516
which declared private respondents Shoemart Inc. (SMI) and North Edsa
Marketing Inc. (NEMI) liable for infringement of trademark and copyright, and
unfair competition.chanrob1es virtua1 1aw 1ibrary

Page

CORONA, J.:

Instead, in a letter dated January 14, 1986, SMIs house counsel informed
Pearl and Dean that it was rescinding the contract for SM Makati due to nonperformance of the terms thereof. In his reply dated February 17, 1986,
Vergara protested the unilateral action of SMI, saying it was without basis. In
the same letter, he pushed for the signing of the contract for SM Cubao.

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Salao
Pearl and Dean filed this instant case for infringement of trademark and
copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it
independently developed its poster panels using commonly known
techniques and available technology, without notice of or reference to Pearl
and Deans copyright. SMI noted that the registration of the mark "Poster
Ads" was only for stationeries such as letterheads, envelopes, and the like.
Besides, 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. It also stressed that Pearl and Dean is not entitled to the
reliefs prayed for in its complaint since its advertising display units contained
no copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that
Pearl and Dean had no cause of action against it and that the suit was
purely intended to malign SMIs good name. On this basis, SMI, aside from
praying for the dismissal of the case, also counterclaimed for moral, actual
and exemplary damages and for the cancellation of Pearl and Deans
Certification of Copyright Registration No. PD-R-2558 dated January 20,
1981 and Certificate of Trademark Registration No. 4165 dated September
12, 1988.
NEMI, for its part, denied having manufactured, installed or used any
advertising display units, nor having engaged in the business of advertising.
It repleaded SMIs averments, admissions and denials and prayed for similar
reliefs and counterclaims as SMI."cralaw virtua1aw library

of plaintiffs copyright
from 1991 to 1992
(b) moral damages P1,000.000.00
(c) exemplary damages P1,000,000.00
(d) attorneys fees P1,000,000.00
plus
(e) costs of suit;
(2) to deliver, under oath, for impounding in the National Library, all light
boxes of SMI which were fabricated by Metro Industrial Services and EYD
Rainbow Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the
trademark "Poster Ads", for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiffs light
boxes and its trademark "Poster Ads" .
Defendants counterclaims are hereby ordered dismissed for lack of merit.

The RTC of Makati City decided in favor of P & D:chanrob1es virtual 1aw
library
Wherefore, defendants SMI and NEMI are found jointly and severally liable
for infringement of copyright under Section 2 of PD 49, as amended, and
infringement of trademark under Section 22 of RA No. 166, as amended,
and are hereby penalized under Section 28 of PD 49, as amended, and
Sections 23 and 24 of RA 166, as amended. Accordingly, defendants are
hereby directed:chanrob1es virtual 1aw library
(1) to pay plaintiff the following damages:chanrob1es virtual 1aw library

SO ORDERED. 4
On appeal, however, the Court of Appeals reversed the trial
court:chanrob1es virtual 1aw library
Since 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 class "O"
work, we have to agree with SMI when it posited that what was copyrighted
were the technical drawings only, and not the light boxes themselves,
thus:chanrob1es virtual 1aw library

derived by defendants
as a result of infringement

42. When a drawing is technical and depicts a utilitarian object, a copyright

over the drawings like plaintiff-appellants will not extend to the actual object.
It has so been held under jurisprudence, of which the leading case is Baker
v. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a
copyright protection for a book entitled "Seldens Condensed Ledger or
Bookkeeping Simplified" which purported to explain a new system of

Page

representing profits

(a) actual damages P16,600,000.00,

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Salao

In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and
Scholtz Homes, Inc. v. Maddox, 379 F. 2d 84, 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.
In fine, we cannot find SMI liable for infringing Pearl and Deans copyright
over the technical drawings of the latters advertising display units.
x

The Supreme Court trenchantly held in Faberge, Incorporated v.

Intermediate Appellate Court that the protective mantle of the Trademark
Law extends only to the goods used by the first user as specified in the
certificate of registration, following the clear mandate conveyed by Section

SEC. 20. Certification of registration prima facie evidence of validity. A

certificate of registration of a mark or trade-name shall be prima facie
evidence of the validity of the registration, the registrants ownership of the
mark or trade-name, and of the registrants exclusive right to use the same
in connection with the goods, business or services specified in the
certificate, subject to any conditions and limitations stated therein."
(Emphasis supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the
registration of the trademark "Poster Ads" with the Bureau of Patents,
Trademarks, and Technology Transfer. Said trademark was recorded in the
Principal Register on September 12, 1988 under Registration No. 41165
covering the following products: stationeries such as letterheads, envelopes
and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability
on the part of the defendants-appellants for their use of the words "Poster
Ads", in the advertising display units in suit. Jurisprudence has interpreted
Section 20 of the Trademark Law as "an implicit permission to a
manufacturer to venture into the production of goods and allow that producer
to appropriate the brand name of the senior registrant on goods other than
those stated in the certificate of registration." The Supreme Court further
emphasized the restrictive meaning of Section 20 when it stated, through
Justice Conrado V. Sanchez, that:chanrob1es virtual 1aw library
Really, if the certificate of registration were to be deemed as including goods
not specified therein, then a situation may arise whereby an applicant may
be tempted to register a trademark on any and all goods which his mind may
conceive even if he had never intended to use the trademark for the said
goods. We believe that such omnibus registration is not contemplated by our
Trademark Law.
While we do not discount the striking similarity between Pearl and Deans
registered trademark and defendants-appellants "Poster Ads" design, as
well as the parallel use by which said words were used in the parties
respective advertising copies, we cannot find defendants-appellants liable
for infringement of trademark. "Poster Ads" was registered by Pearl and
Dean for specific use in its stationeries, in contrast to defendants-appellants
who used the same words in their advertising display units. Why Pearl and
Dean limited the use of its trademark to stationeries is simply beyond us.
But, having already done so, it must stand by the consequence of the
registration which it had caused.

The principle in Baker v. Selden was likewise applied in Muller v. Triborough

Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had
obtained a copyright over an unpublished drawing entitled "Bridge Approach
the drawing showed a novel bridge approach to unsnarl traffic
congestion." The defendant constructed a bridge approach which was
alleged to be an infringement of the new design illustrated in plaintiffs
drawings. In this case it was held that protection of the drawing does not
extend to the unauthorized duplication of the object drawn because
copyright extends only to the description or expression of the object and not
to the object itself. It does not prevent one from using the drawings to
construct the object portrayed in the drawing.

20 of Republic Act 166, as amended, otherwise known as the Trademark

Law, which reads:chanrob1es virtual 1aw library

Page

bookkeeping. Included as part of the book were blank forms and illustrations
consisting of ruled lines and headings, specially designed for use in
connection with the system explained in the work. These forms showed the
entire operation of a day or a week or a month on a single page, or on two
pages following each other. The defendant Baker then produced forms
which were similar to the forms illustrated in Seldens copyrighted books.
The Court held that exclusivity to the actual forms is not extended by a
copyright. The reason was that "to grant a monopoly in the underlying art
when no examination of its novelty has ever been made would be a surprise
and a fraud upon the public; that is the province of letters patent, not of
copyright." And that is precisely the point. No doubt aware that its alleged
original design would never pass the rigorous examination of a patent
application, plaintiff-appellant fought to foist a fraudulent monopoly on the
public by conveniently resorting to a copyright registration which merely
employs a recordal system without the benefit of an in-depth examination of
novelty.

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Salao
x

COSTS OF SUIT. 6
ISSUES

We are constrained to adopt the view of defendants-appellants that 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, we find that Pearl and
Deans exclusive right to the use of "Poster Ads" is limited to what is written
in its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the
trademark "Poster Ads" .
There being no finding of either copyright or trademark infringement on the
part of SMI and NEMI, the monetary award granted by the lower court to
Pearl and Dean has no leg to stand on.
x

In resolving this very interesting case, we are challenged once again to put
into proper perspective four main concerns of intellectual property law
patents, copyrights, trademarks and unfair competition arising from
infringement of any of the first three. We shall focus then on the following
issues:chanrob1es virtual 1aw library
(1) if the engineering or technical drawings of an advertising display unit
(light box) are granted copyright protection (copyright certificate of
registration) by the National Library, is the light box depicted in such
engineering drawings ipso facto also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent
issued by the Bureau of Patents Trademarks and Technology Transfer (now
Intellectual Property Office) in addition to the copyright of the engineering
drawings?

WHEREFORE, premises considered, the assailed decision is REVERSED

and SET ASIDE, and another is rendered DISMISSING the complaint and
counterclaims in the above-entitled case for lack of merit. 5

(3) can the owner of a registered trademark legally prevent others from using
such trademark if it is a mere abbreviation of a term descriptive of his goods,
services or business?

Dissatisfied with the above decision, petitioner P & D filed the instant petition
assigning the following errors for the Courts consideration:chanrob1es
virtual 1aw library

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE

AWARD OF THE TRIAL COURT, DESPITE THE LATTERS FINDING, NOT
DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS
GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING
CONTRACTS WITH PEARL & DEAN.

First, petitioners application for a copyright certificate as well as

Copyright Certificate No. PD-R2588 issued by the National Library on
January 20, 1981 clearly stated that it was for a class "O" work under
Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the
statute then prevailing. Said Section 2 expressly enumerated the works
subject to copyright:chanrob1es virtual 1aw library

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING

RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR
ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEYS FEES AND

SEC. 2. The rights granted by this Decree shall, from the moment of
creation, subsist with respect to any of the following works:chanrob1es
virtual 1aw library

B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO

INFRINGEMENT OF PEARL & DEANS TRADEMARK "POSTER ADS"
WAS COMMITTED BY RESPONDENTS SM AND NEMI;

Page

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO

COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS
SM AND NEMI;

Petitioner P & Ds complaint was that SMI infringed on its copyright over the
light boxes when SMI had the units manufactured by Metro and EYD
Rainbow Advertising for its own account. Obviously, petitioners position was
premised on its belief that its copyright over the engineering drawings
extended ipso facto to the light boxes depicted or illustrated in said
drawings. In ruling that there was no copyright infringement, the Court of
Appeals held that the copyright was limited to the drawings alone and not to
the light box itself. We agree with the appellate court.

Intellectual Property Law

Salao
x

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box
wraps;
x

Although petitioners copyright certificate was entitled "Advertising Display

Units" (which depicted the box-type electrical devices), its claim of copyright
infringement cannot be sustained.
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. 7 Accordingly,
it can cover only the works falling within the statutory enumeration or
description. 8
P & D secured its copyright under the classification class "O" work. This
being so, petitioners copyright protection extended only to the technical
drawings and not to the light box itself because the latter was not at all in the
category of "prints, pictorial illustrations, advertising copies, labels, tags and
box wraps." Stated otherwise, even as we find that P & D indeed owned a
valid copyright, the same could have referred only to the technical drawings
within the category of "pictorial illustrations." It could not have possibly
stretched out to include the underlying light box. The strict application 9 of
the laws enumeration in Section 2 prevents us from giving petitioner even a
little leeway, that is, even if its copyright certificate was entitled "Advertising
Display Units." What the law does not include, it excludes, and for the good
reason: the light box was not a literary or artistic piece which could be
copyrighted under the copyright law. And no less clearly, neither could the
lack of statutory authority to make the light box copyrightable be remedied
by the simplistic act of entitling the copyright certificate issued by the
National Library as "Advertising Display Units."cralaw virtua1aw library
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the
public without license from P & D, then no doubt they would have been guilty
of copyright infringement. But this was not the case. SMIs and NEMIs acts
complained of by P & D were to have units similar or identical to the light box
illustrated in the technical drawings manufactured by Metro and EYD
Rainbow Advertising, for leasing out to different advertisers. Was this an
infringement of petitioners copyright over the technical drawings? We do not
think so.

During the trial, the president of P & D himself admitted that the light box
was neither a literary nor an artistic work but an "engineering or marketing
invention." 10 Obviously, there appeared to be some confusion regarding
what ought or ought not to be the proper subjects of copyrights, patents and
trademarks. In the leading case of Kho v. Court of Appeals, 11 we ruled that
these three legal rights are completely distinct and separate from one
another, and the protection afforded by one cannot be used interchangeably
to cover items or works that exclusively pertain to the others:chanrob1es
virtual 1aw library
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.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial
use of the light boxes without license from petitioner, private respondents
cannot be held legally liable for infringement of P & Ds copyright over its
technical drawings of the said light boxes, should they be liable instead for
infringement of patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light
boxes. It therefore acquired no patent rights which could have protected its
invention, if in fact it really was. And because it had no patent, petitioner
could not legally prevent anyone from manufacturing or commercially using
the contraption. In Creser Precision Systems, Inc. v. Court of Appeals, 12 we
held that "there can be no infringement of a patent until a patent has been
issued, since whatever right one has to the invention covered by the patent
arises alone from the grant of patent. . . . (A)n inventor has no common law
right to a monopoly of his invention. He has the right to make use of and
vend his invention, but if he voluntarily discloses it, such as by offering it for
sale, the world is free to copy and use it with impunity. A patent, however,
gives the inventor the right to exclude all others. As a patentee, he has the
exclusive right of making, selling or using the invention. 13 On the
assumption that petitioners advertising units were patentable inventions,

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On one side of the coin is the public which will benefit from new ideas; on
the other are the inventors who must be protected. As held in Bauer & Cie v.
ODonnel, 16 "The act secured to the inventor the exclusive right to make
use, and vend the thing patented, and consequently to prevent others from
exercising like privileges without the consent of the patentee. It was passed
for the purpose of encouraging useful invention and promoting new and
useful inventions by the protection and stimulation given to inventive genius,
and was intended to secure to the public, after the lapse of the exclusive
privileges granted the benefit of such inventions and improvements."cralaw
virtua1aw library
The law attempts to strike an ideal balance between the two
interests:jgc:chanrobles.com.ph
"(The p)atent system thus embodies a carefully crafted bargain for
encouraging the creation and disclosure of new useful and non-obvious
advances in technology and design, in return for the exclusive right to
practice the invention for a number of years. The inventor may keep his
invention secret and reap its fruits indefinitely. In consideration of its
disclosure and the consequent benefit to the community, the patent is
granted. An exclusive enjoyment is guaranteed him for 17 years, but upon
the expiration of that period, the knowledge of the invention inures to the
people, who are thus enabled to practice it and profit by its use." 17
The patent law has a three-fold purpose: "first, patent law seeks to foster
and reward invention; second, it promotes disclosures of inventions to
stimulate further innovation and to permit the public to practice the invention
once the patent expires; third, the stringent requirements for patent
protection seek to ensure that ideas in the public domain remain there for
the free use of the public." 18
It is only after an exhaustive examination by the patent office that a patent is
issued. Such an in-depth investigation is required because "in rewarding a
useful invention, the rights and welfare of the community must be fairly dealt
with and effectively guarded. To that end, the prerequisites to obtaining a

There is no such scrutiny in the case of copyrights nor any notice published
before its grant to the effect that a person is claiming the creation of a work.
The law confers the copyright from the moment of creation 20 and the
copyright certificate is issued upon registration with the National Library of a
sworn ex-parte claim of creation.
Therefore, not having gone through the arduous examination for patents, the
petitioner cannot exclude others from the manufacture, sale or commercial
use of the light boxes on the sole basis of its copyright certificate over the
technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity
for the patent office (IPO) to scrutinize the light boxs eligibility as a
patentable invention. The irony here is that, had petitioner secured a patent
instead, its exclusivity would have been for 17 years only. But through the
simplified procedure of copyright-registration with the National Library
without undergoing the rigor of defending the patentability of its invention
before the IPO and the public the petitioner would be protected for 50
years. This situation could not have been the intention of the law.
In the oft-cited case of Baker v. Selden 21 , the United States Supreme
Court held that only the expression of an idea is protected by copyright, not
the idea itself. In that case, the plaintiff held the copyright of a book which
expounded on a new accounting system he had developed. The publication
illustrated blank forms of ledgers utilized in such a system. The defendant
reproduced forms similar to those illustrated in the plaintiffs copyrighted
book. The US Supreme Court ruled that:jgc:chanrobles.com.ph
"There is no doubt that a work on the subject of book-keeping, though only
explanatory of well known systems, may be the subject of a copyright; but,
then, it is claimed only as a book. . . . . But there is a clear distinction
between the books, as such, and the art, which it is, intended to illustrate.
The mere statement of the proposition is so evident that it requires hardly
any argument to support it. The same distinction may be predicated of every
other art as well as that of bookkeeping. A treatise on the composition and
use of medicines, be they old or new; on the construction and use of ploughs
or watches or churns; or on the mixture and application of colors for painting
or dyeing; or on the mode of drawing lines to produce the effect of
perspective, would be the subject of copyright; but no one would contend

To be able to effectively and legally preclude others from copying and

profiting from the invention, a patent is a primordial requirement. No patent,
no protection, The ultimate goal of a patent system is to bring new designs
and technologies into the public domain through disclosure. 14 Ideas, once
disclosed to the public without the protection of a valid patent, are subject to
appropriation without significant restraint. 15

patent are strictly observed and when a patent is issued, the limitations on
its exercise are equally strictly enforced. To begin with, a genuine invention
or discovery must be demonstrated lest in the constant demand for new
appliances, the heavy hand of tribute be laid on each slight technological
advance in art." 19

Page

petitioner revealed them fully to the public by submitting the engineering

drawings thereof to the National Library.

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that the copyright of the treatise would give the exclusive right to the art or
manufacture described therein. The copyright of the book, if not pirated from
other works, would be valid without regard to the novelty or want of novelty
of its subject matter. The novelty of the art or thing described or explained
has nothing to do with the validity of the copyright. To give to the author of
the book an exclusive property in the art described therein, when no
examination of its novelty has ever been officially made, would be a surprise
and a fraud upon the public. That is the province of letters patent, not of
copyright. The claim to an invention of discovery of an art or manufacture
must be subjected to the examination of the Patent Office before an
exclusive right therein can be obtained; and a patent from the government
can only secure it.

The plausibility of the claim put forward by the complainant in this case
arises from a confusion of ideas produced by the peculiar nature of the art
described in the books, which have been made the subject of copyright. In
describing the art, the illustrations and diagrams employed happened to
correspond more closely than usual with the actual work performed by the
operator who uses the art. . . . The description of the art in a book, though
entitled to the benefit of copyright, lays no foundation for an exclusive claim
to the art itself. The object of the one is explanation; the object of the other is
use. The former may be secured by copyright. The latter can only be
secured, if it can be secured at all, by letters patent." (Emphasis supplied)

The difference between the two things, letters patent and copyright, may be
illustrated by reference to the subjects just enumerated. Take the case of
medicines. Certain mixtures are found to be of great value in the healing art.
If the discoverer writes and publishes a book on the subject (as regular
physicians generally do), he gains no exclusive right to the manufacture and
sale of the medicine; he gives that to the public. If he desires to acquire such
exclusive right, he must obtain a patent for the mixture as a new art,
manufacture or composition of matter. He may copyright his book, if he
pleases; but that only secures to him the exclusive right of printing and
publishing his book. So of all other inventions or discoveries.

This issue concerns the use by respondents of the mark "Poster Ads" which
petitioners president said was a contraction of "poster advertising." P & D
was able to secure a trademark certificate for it, but one where the goods
specified were "stationeries such as letterheads, envelopes, calling cards
and newsletters." 22 Petitioner admitted it did not commercially engage in or
market these goods. On the contrary, it dealt in electrically operated backlit
advertising units and the sale of advertising spaces thereon, which,
however, were not at all specified in the trademark certificate.

Now, whilst no one has a right to print or publish his book, or any material
part thereof, as a book intended to convey instruction in the art, any person
may practice and use the art itself which he has described and illustrated
therein. The use of the art is a totally different thing from a publication of the
book explaining it. The copyright of a book on bookkeeping cannot secure
the exclusive right to make, sell and use account books prepared upon the
plan set forth in such book. Whether the art might or might not have been
patented, is a question, which is not before us. It was not patented, and is
open and free to the use of the public. And, of course, in using the art, the
ruled lines and headings of accounts must necessarily be used as incident to
it.

Assuming arguendo that "Poster Ads" could validly qualify as a trademark,

the failure of P & D to secure a trademark registration for specific use on the
light boxes meant that there could not have been any trademark
infringement since registration was an essential element thereof.
ON THE ISSUE OF UNFAIR COMPETITION
If at all, the cause of action should have been for unfair competition, a
situation which was possible even if P & D had no registration. 26 However,
while the petitioners complaint in the RTC also cited unfair competition, the
trial court did not find private respondents liable therefor. Petitioner did not
appeal this particular point; hence, it cannot now revive its claim of unfair

Under the circumstances, the Court of Appeals correctly cited Faberge Inc.
v. Intermediate Appellate Court, 23 where we, invoking Section 20 of the old
Trademark Law, ruled that "the certificate of registration issued by the
Director of Patents can confer (upon petitioner) the exclusive right to use its
own symbol only to those goods specified in the certificate, subject to any
conditions and limitations specified in the certificate . . . . One who has
adopted and used a trademark on his goods does not prevent the adoption
and use of the same trademark by others for products which are of a
different description." 24 Faberge, Inc. was correct and was in fact recently
reiterated in Canon Kabushiki Kaisha v. Court of Appeals.25cralaw:red

Page

The copyright of a book on perspective, no matter how many drawings and

illustrations it may contain, gives no exclusive right to the modes of drawing
described, though they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to
the public.

ON THE ISSUE OF TRADEMARK INFRINGEMENT

Intellectual Property Law

Salao
competition.
Puno, Panganiban, Sandoval-Gutierrez and Carpio-Morales, JJ., concur.
But even disregarding procedural issues, we nevertheless cannot hold
respondents guilty of unfair competition.
By the nature of things, there can be no unfair competition under the law on
copyrights although it is applicable to disputes over the use of trademarks.
Even a name or phrase incapable of appropriation as a trademark or
tradename may, by long and exclusive use by a business (such that the
name or phrase becomes associated with the business or product in the
mind of the purchasing public), be entitled to protection against unfair
competition. 27 In this case, there was no evidence that P & Ds use of
"Poster Ads" was distinctive or well-known. As noted by the Court of
Appeals, petitioners expert witnesses himself had testified that" Poster Ads
was too generic a name. So it was difficult to identify it with any company,
honestly speaking." 28 This crucial admission by its own expert witness that
"Poster Ads" could not be associated with P & D showed that, in the mind of
the public, the goods and services carrying the trademark "Poster Ads" could
not be distinguished from the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary
meaning. "Poster Ads" was generic and incapable of being used as a
trademark because it was used in the field of poster advertising, the very
business engaged in by petitioner. "Secondary meaning" means that a word
or phrase originally incapable of exclusive appropriation with reference to an
article in the market (because it is geographically or otherwise descriptive)
might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of
the purchasing public, the word or phrase has come to mean that the article
was his property. 29 The admission by petitioners own expert witness that
he himself could not associate "Poster Ads" with petitioner P & D because it
was "too generic" definitely precluded the application of this exception.
Having discussed the most important and critical issues, we see no need to
belabor the rest.
All told, the Court finds no reversible error committed by the Court of
Appeals when it reversed the Regional Trial Court of Makati City.chanrob1es
virtua1 1aw library

Page

WHEREFORE, the petition is hereby DENIED and the decision of the Court
of Appeals dated May 22, 2001 is AFFIRMED in toto.
SO ORDERED.

Intellectual Property Law

Salao

DECISION

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision 1 dated May

24, 1993 of the Court of Appeals setting aside and declaring as null and void
the Orders 2 dated February 10, 1992 and March 19, 1992 of the Regional
Trial Court, Branch 90, of Quezon City granting the issuance of a writ of
preliminary injunction.chanrob1es virtua1 1aw 1ibrary
The facts of the case are as follows:chanrob1es virtual 1aw library

After due hearing on the application for preliminary injunction, the trial court
granted the same in an Order dated February 10, 1992, the dispositive
portion of which reads:chanrob1es virtual 1aw library
ACCORDINGLY, the application of plaintiff Elidad C. Kho, doing business
under the style of KEC Cosmetic Laboratory, for preliminary injunction, is
hereby granted. Consequentially, plaintiff is required to file with the Court a
bond executed to defendants in the amount of five hundred thousand pesos
(P500,000.00) to the effect that plaintiff will pay to defendants all damages
which defendants may sustain by reason of the injunction if the Court should
finally decide that plaintiff is not entitled thereto.

On December 20, 1991, petitioner Elidad C. Kho filed a complaint for

injunction and damages with a prayer for the issuance of a writ of preliminary
injunction, docketed as Civil Case No. Q-91-10926, against the respondents
Summerville General Merchandising and Company (Summerville, for
brevity) and Ang Tiam Chay.

SO ORDERED. 3

The petitioners complaint alleges that petitioner, doing business under the
name and style of KEC Cosmetics Laboratory, is the registered owner of the
copyrights Chin Chun Su and Oval Facial Cream Container/Case, as shown
by Certificates of Copyright Registration No. 0-1358 and No. 0-3678; that
she also has patent rights on Chin Chun Su & Device and Chin Chun Su for
medicated cream after purchasing the same from Quintin Cheng, the
registered owner thereof in the Supplemental Register of the Philippine
Patent Office on February 7, 1980 under Registration Certificate No. 4529;
that respondent Summerville advertised and sold petitioners cream products
under the brand name Chin Chun Su, in similar containers that petitioner
uses, thereby misleading the public, and resulting in the decline in the
petitioners business sales and income; and, that the respondents should be
enjoined from allegedly infringing on the copyrights and patents of the
petitioner.

On April 24, 1992, the respondents filed a petition for certiorari with the
Court of Appeals, docketed as CA-G.R. SP No. 27803, praying for the
nullification of the said writ of preliminary injunction issued by the trial court.
After the respondents filed their reply and almost a month after petitioner
submitted her comment, or on August 14 1992, the latter moved to dismiss
the petition for violation of Supreme Court Circular No. 28-91, a circular
prohibiting forum shopping. According to the petitioner, the respondents did
not state the docket number of the civil case in the caption of their petition
and, more significantly, they did not include therein a certificate of non-forum
shopping. The respondents opposed the petition and submitted to the
appellate court a certificate of non-forum shopping for their petition.

The respondents, on the other hand, alleged as their defense that

Summerville is the exclusive and authorized importer, re-packer and
distributor of Chin Chun Su products manufactured by Shun Yi Factory of

The respondents moved for reconsideration but their motion for

reconsideration was denied by the trial court in an Order dated March 19,
1992. 4

On May 24, 1993, the appellate court rendered a Decision in CA-G.R. SP

No. 27803 ruling in favor of the respondents, the dispositive portion of which
reads:chanrob1es virtual 1aw library
WHEREFORE, the petition is hereby given due course and the orders of
respondent court dated February 10, 1992 and March 19, 1992 granting the

ELIDAD C. KHO, doing business under the name and style of KEC
COSMETICS LABORATORY,Petitioner, v. HON. COURT OF APPEALS,
SUMMERVILLE GENERAL MERCHANDISING and COMPANY, and ANG
TIAM CRAY, Respondents.

Taiwan; that the said Taiwanese manufacturing company authorized

Summerville to register its trade name Chin Chun Su Medicated Cream with
the Philippine Patent Office and other appropriate governmental agencies;
that KEC Cosmetics Laboratory of the petitioner obtained the copyrights
through misrepresentation and falsification; and, that the authority of Quintin
Cheng, assignee of the patent registration certificate, to distribute and
market Chin Chun Su products in the Philippines had already been
terminated by the said Taiwanese Manufacturing Company.

Page

[G.R. No. 115758. March 19, 2002.]

Intellectual Property Law

Salao

In granting the petition, the appellate court ruled that:chanrob1es virtual 1aw
library
The registration of the trademark or brandname "Chin Chun Su" by KEC with
the supplemental register of the Bureau of Patents, Trademarks and
Technology Transfer cannot be equated with registration in the principal
register, which is duly protected by the Trademark Law.
x

As ratiocinated in La Chemise Lacoste, S.S. v. Fernandez, 129 SCRA 373,

393:jgc:chanrobles.com.ph
"Registration in the Supplemental Register, therefore, serves as notice that
the registrant is using or has appropriated the trademark. By the very fact
that the trademark cannot as yet he on guard and there are certain defects,
some obstacles which the use must still overcome before he can claim legal
ownership of the mark or ask the courts to vindicate his claims of an
exclusive right to the use of the same. It would be deceptive for a party with
nothing more than a registration in the Supplemental Register to posture
before courts of justice as if the registration is in the Principal Register.
The reliance of the private respondent on the last sentence of the Patent
office action on application Serial No. 30954 that registrants is presumed to
be the owner of the mark until after the registration is declared cancelled is,
therefore, misplaced and grounded on shaky foundation. The supposed
presumption not only runs counter to the precept embodied in Rule 124 of
the Revised Rules of Practice before the Philippine Patent Office in
Trademark Cases but considering all the facts ventilated before us in the
four interrelated petitions involving the petitioner and the respondent, it is
devoid of factual basis. As even in cases where presumption and precept
may factually be reconciled, we have held that the presumption is rebuttable,
not conclusive, (People v. Lim Hoa, G.R. No. L-10612, May 30, 1958,
Unreported). One may be declared an unfair competitor even if his
competing trademark is registered (Parke, Davis & Co. v. Kiu Foo & Co., Et
Al., 60 Phil 928; La Yebana Co. v. chua Seco & Co., 14 Phil 534)." 6

In the meantime, the trial court went on to hear petitioners complaint for final
injunction and damages. On October 22, 1993, the trial court rendered a
Decision 7 barring the petitioner from using the trademark Chin Chun Su and
upholding the right of the respondents to use the same, but recognizing the
copyright of the petitioner over the oval shaped container of her beauty
cream. The trial court did not award damages and costs to any of the parties
but to their respective counsels were awarded Seventy-Five Thousand
Pesos (P75,000.00) each as attorneys fees. The petitioner duly appealed
the said decision to the Court of Appeals.
On June 3, 1994, the Court of Appeals promulgated a Resolution 8 denying
the petitioners motions for reconsideration and for contempt of court in CAG.R. SP No. 27803.
Hence, this petition anchored on the following assignment of
errors:chanrob1es virtual 1aw library
I

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO RULE ON PETITIONERS MOTION TO DISMISS.
II

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
REFUSING TO PROMPTLY RESOLVE PETITIONERS MOTION FOR
RECONSIDERATION.
III
IN DELAYING THE RESOLUTION OF PETITIONERS MOTION FOR
RECONSIDERATION, THE HONORABLE COURT OF APPEALS DENIED

10

10

SO ORDERED. 5

The petitioner filed a motion for reconsideration. This she followed with
several motions to declare respondents in contempt of court for publishing
advertisements notifying the public of the promulgation of the assailed
decision of the appellate court and stating that genuine Chin Chun Su
products could be obtained only from Summerville General Merchandising
and Co.

Page

writ of preliminary injunction and denying petitioners motion for

reconsideration are hereby set aside and declared null and void.
Respondent court is directed to forthwith proceed with the trial of Civil Case
No. Q-91-10926 and resolve the issue raised by the parties on the merits.

Intellectual Property Law

Salao

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO CITE THE PRIVATE RESPONDENTS IN CONTEMPT. 9
The petitioner faults the appellate court for not dismissing the petition on the
ground of violation of Supreme Court Circular No. 28-91. Also, the petitioner
contends that the appellate court violated Section 6, Rule 9 of the Revised
Internal Rules of the Court of Appeals when it failed to rule on her motion for
reconsideration within ninety (90) days from the time it is submitted for
resolution. The appellate court ruled only after the lapse of three hundred
fifty-four (354) days, or on June 3, 1994. In delaying the resolution thereof,
the appellate court denied the petitioners right to seek the timely appellate
relief. Finally, petitioner describes as arbitrary the denial of her motions for
contempt of court against the respondents.
We rule in favor of the respondents.
Pursuant to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one
of the grounds for the issuance of a writ of preliminary injunction is a proof
that the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act
or acts complained of, either for a limited period or perpetually. Thus, a
preliminary injunction order may be granted only when the application for the
issuance of the same shows facts entitling the applicant to the relief
demanded. 10 This is the reason why we have ruled that it must be shown
that the invasion of the right sought to be protected is material and
substantial, that the right of complainant is clear and unmistakable, and, that
there is an urgent and paramount necessity for the writ to prevent serious
damage. 11
In the case at bar, the petitioner applied for the issuance of a preliminary
injunctive order on the ground that she is entitled to the use of the trademark
on Chin Chun Su and its container based on her copyright and patent over
the same. We first find it appropriate to rule on whether the copyright and
patent over the name and container of a beauty cream product would entitle
the registrant to the use and ownership over the same to the exclusion of
others.
Trademark, copyright and patents are different intellectual property rights

Petitioner has no right to support her claim for the exclusive use of the
subject trade name and its container. The name and container of a beauty
cream product are proper subjects of a trademark inasmuch as the same
falls squarely within its definition. In order to be entitled to exclusively use
the same in the sale of the beauty cream product, the user must sufficiently
prove that she registered or used it before anybody else did. The petitioners
copyright and patent registration of the name and container would not
guarantee her the right to the exclusive use of the same for the reason that
they are not appropriate subjects of the said intellectual rights.
Consequently, a preliminary injunction order cannot be issued for the reason
that the petitioner has not proven that she has a clear right over the said
name and container to the exclusion of others, not having proven that she
has registered a trademark thereto or used the same before anyone did.
We cannot likewise overlook the decision of the trial court in the case for
final injunction and damages. The dispositive portion of said decision held
that the petitioner does not have trademark rights on the name and container
of the beauty cream product. The said decision on the merits of the trial
court rendered the issuance of the writ of a preliminary injunction moot and
academic notwithstanding the fact that the Same has been appealed in the
Court of Appeals. This is supported by our ruling in La Vista Association, Inc.
v. Court of Appeals 16 , to wit:chanrob1es virtual 1aw library
Considering the preliminary injunction is a provisional remedy which may be
granted at any time after the commencement of the action and before
judgment when it is established that the plaintiff is entitled to the relief
demanded and only when his complaint shows facts entitling such reliefs . . .
and it appearing that the trial court had already granted the issuance of a
final injunction in favor of petitioner in its decision rendered after trial on the
merits . . . the Court resolved to Dismiss the instant petition having been
rendered moot and academic. An injunction issued by the trial court after it
has already made a clear pronouncement as to the plaintiffs right thereto,
that is, after the same issue has been decided on the merits, the trial court
having appreciated the evidence presented, is proper, notwithstanding the

11

11

IV

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. 12 In relation thereto, a trade name means the name or designation
identifying or distinguishing an enterprise. 13 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. 14 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. 15

Page

PETITIONERS RIGHT TO SEEK TIMELY APPELLATE RELIEF AND

VIOLATED PETITIONERS RIGHT TO DUE PROCESS.

Intellectual Property Law

Salao
fact that the decision rendered is not yet final . . . Being an ancillary remedy,
the proceedings for preliminary injunction cannot stand separately or
proceed independently of the decision rendered on the merit of the main
case for injunction. The merit of the main case having been already
determined in favor of the applicant, the preliminary determination of its nonexistence ceases to have any force and effect. (Emphasis supplied)
La Vista categorically pronounced that the issuance of a final injunction
renders any question on the preliminary injunctive order moot and academic
despite the fact that the decision granting a final injunction is pending
appeal. Conversely, a decision denying the applicant-plaintiffs right to a final
injunction, although appealed, renders moot and academic any objection to
the prior dissolution of a writ of preliminary injunction.
The petitioner argues that the appellate court erred in not dismissing the
petition for certiorari for non-compliance with the rule on forum shopping. We
disagree. First, the petitioner improperly raised the technical objection of non
compliance with Supreme Court Circular No. 28-91 by filing a motion to
dismiss the petition for certiorari filed in the appellate court. This is prohibited
by Section 6, Rule 66 of the Revised Rules of Civil Procedure which
provides that" (I)n petitions for certiorari before the Supreme Court and the
Court of Appeals, the provisions of Section 2, Rule 56, shall be observed.
Before giving due course thereto, the court may require the respondents to
file their comment to, and not a motion to dismiss, the petition . . . (Emphasis
supplied)." Secondly, the issue was raised one month after petitioner had
filed her answer/comment and after private respondent had replied thereto.
Under Section 1, Rule 16 of the Revised Rules of Civil Procedure, a motion
to dismiss shall be filed within the time for but before filing the answer to the
complaint or pleading asserting a claim. She therefore could no longer
submit a motion to dismiss nor raise defenses and objections not included in
the answer/comment she had earlier tendered. Thirdly, substantial justice
and equity require this Court not to revive a dissolved writ of injunction in
favor of a party without any legal right thereto merely on a technical infirmity.
The granting of an injunctive writ based on a technical ground rather than
compliance with the requisites for the issuance of the same is contrary to the
primary objective of legal procedure which is to serve as a means to
dispense justice to the deserving party.

render such judgments ineffective or void. 17 With respect to the purported

damages she suffered due to the alleged delay in resolving her motion for
reconsideration, we find that the said issue has likewise been rendered moot
and academic by our ruling that she has no right over the trademark and,
consequently, to the issuance of a writ of preliminary injunction.
Finally, we rule that the Court of Appeals correctly denied the petitioners
several motions for contempt of court. There is nothing contemptuous about
the advertisements complained of which, as regards the proceedings in CAG.R. SP No. 27803 merely announced in plain and straightforward language
the promulgation of the assailed Decision of the appellate court. Moreover,
pursuant to Section 4 of Rule 39 of the Revised Rules of Civil Procedure, the
said decision nullifying the injunctive writ was immediately executory.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the
Court of Appeals dated May 24, 1993 and June 3, 1994, respectively, are
hereby AFFIRMED. With costs against the petitioner.chanrob1es virtua1
1aw 1ibrary
SO ORDERED.

Page

12

The petitioner likewise contends that the appellate court unduly delayed the
resolution of her motion for reconsideration. But we find that petitioner
contributed to this delay when she filed successive contentious motions in
the same proceeding, the last of which was on October 27, 1993,
necessitating counter-manifestations from private respondents with the last
one being filed on November 9, 1993. Nonetheless, it is well-settled that
non-observance of the period for deciding cases or their incidents does not

12