Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated G.R. No.

148222, August 15, 2003 Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as light boxes. These units utilize specially printed posters sandwiched between plastic sheets and illuminated with backlights. It was able to secure registration over these illuminated display units. The advertising light boxes were marketed under the trademark Poster Ads. In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM North Edsa. However, since SM North Edsa was under construction, SMI offered as alternative SM Makati and Cubao. During the signing of the Contract, SMI only returned the Contract with SM Makati. Manager of petitioner reminded SMI that their agreement includes SM Cubao. However, SMI did not bother to reply. Instead, respondent informed petitioner that they are rescinding the contract for SM Makati due to non-performance. Two years later, SMI engaged the services of EYD Rainbow Advertising to make the light boxes. These were delivered in a staggered basis and installed at SM Megamall and SM City. In 1989, petitioner received reports that exact copy of its light boxes was installed by SMI. It further discovered that North Edsa Marketing Inc. (NEMI), sister company of SMI, was set up primarily to sell advertising space in lighted display units located in SMIs different branches. Petitioner sent letters to respondents asking them to cease using the light boxes and the discontinued use of the trademark Poster Ads. Claiming that SMI and NEMI failed to meet its demand, petitioner filed a case for infringement of trademark and copy right, unfair competition and damages. SMI maintained that it independently developed its poster panels using commonly known techniques and available technology without notice of or reference to P&Ds copyright. In addition, it said that registration of Poster Ads obtained by petitioner was only for stationeries such as letterheads, envelopes and the like. Poster Ads is a generic term which cannot be appropriated as trademark, and, as such, registration of such mark is invalid. It also stressed that P&D is not entitled to the reliefs sought because the advertising display units contained no copyright notice as provided for by law. RTC found SMI and NEMI jointly and severally liable for infringement of copyright and trademark. CA reversed saying that it agreed with SMI that what was copyrighted was the technical drawings only and not the light boxes. Light boxes cannot be considered as either prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly classified as copyrightable class O work. In addition, CA stressed that the protective mantle of the Trademark Law extends only to the goods used by the first user as specified in its certificate of registration. The registration of the trademark Poster Ads covers only stationeries such as letterheads, envelopes and calling cards and newsletter. ISSUES: (1) If the engineering or technical drawings of an advertising display unit are granted copyright protection is the light box depicted in such drawings ipso facto also protected by such copyright? (2) Should the light box be registered separately? (3) Can the owner of the registered trademark legally prevent others from using such mark if it is mere abbreviation of a term descriptive of his goods, services or business?

Held:1.No. Copyright is purely statutory. As such, 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 the terms and conditions specified in the statute. Accordingly, it can cover only the works falling within the statutory enumeration or description. Petitioner secured copyright under classification class O work. Thus, 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. 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. It must be noted that 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. 2.Yes. 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. 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 through disclosure. Ideas, once, disclosed to the public without protection of a valid patent, are subject to appropriation without significant restraint. 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. It is only after an exhaustive examination by the patent office that patent is issued. Therefore, not having gone through the arduous examination for patents, petitioner cannot exclude other s from the manufacture, sale or commercial use of the light boxes on the sole basis of its copyright certificate over the technical drawings. 3.Court agrees with CA that the certificate of registration issued by the Director of Patents can confer 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. Assuming arguendo that Poster Ads could validly qualify as a trademark, the failure of petitioner 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.

There is no evidence that petitioners use of poster Ads was distinctive or well-known. As noted by CA, petitioners expert witness himself had testified that Poster Ads was not too generic a name. SO it was difficult to identify it with any company. 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 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. PETITION WAS DENIED.

Pedro Serrano Laktaw v. Mamerto Paglinawan, G.R. No. 11937, April 1, 1918, (44 Phil. 856-866) involve the reproduction of registered literary work entitled Diccionario Hispano-Tagalog which was copied in the book entitled Diccionariong Kastila-Tagalog, in violation to article 7 of the Intellectual Property Law of January 10, 1879. The Court rule that there was infringement and ordered the book to be pulled out of the market.

2.Habana v. Robles, G.R. No. 131522, July 1, 1999 (369 Phil 764-798) when filed at the trial court was pursuant to Presidential Decree No. 49 and in favor of the respondent. The Supreme Court decided the case based on Republic Act No. 8293 for notwithstanding the change of the law, the same principles of economic rights are found in sec. 177. This case clearly illustrates how the Supreme Court justices meticulously evaluate facts vis--vis the law at hand in coming out with a fair and just decision. The Supreme Court reversed the decisions of both courts. Pacita Habana and two others were the authors of College English for Today Series 1 and 2 (CET). While they were researchingfor books to assist them in updating their own book, they chanced upon the book of Felicidad Robles entitled Developing English Proficiency Books 1 and 2 (DEP). They discovered further that the book of Robles was strikingly similar to the contents, scheme ofpresentation, illustrations and illustrative examples of CET. They then sued Robles and her publisher (Goodwill Trading Co.) for infringement and/or unfair competition with damages. Robles, in her defense, alleged that her sources were from foreign books; that in their field similarity in styles cannot be avoided since they come from the same background and orientation. The trial court as well as the Court of Appeals ruled in favor of Robles. ISSUE: Whether or not the Court of Appeals is correct. HELD: No. A perusal of the records yields several pages of the book DEP that are similar if not identical with the text of CET. In several other pages the treatment and manner of presentation of the topics of DEP are similar if not a rehash of that contained in CET. The similarities in examples and material contents are so obviously present in this case. How can similar/identical examplesnot be considered as a

mark of copying? Robles act of lifting from the book of Habana et al substantial portions of discussions andexamples, and her failure to acknowledge the same in her book is an infringement of Habana et als copyrights. The Supreme Court also elucidated that in determining the question of infringement, the amount of matter copied from the copyrighted work is an important consideration. To constitute infringement, it is not necessary that the whole or even a large portion of the work shall have been copied. If so much is taken that the value of the original is sensibly diminished, or the labors of the original author are substantially and to an injurious extent appropriated by another, that is sufficient in point of law to constitute piracy. FRANCISCO G. JOAQUIN, JR., and BJ PRODUCTIONS, INC., petitioners, vs.HONORABLE FRANKLIN DRILON, GABRIEL ZOSA, WILLIAM ESPOSO, FELIPE MEDINA,JR., and CASEY FRANCISCO, respondents.

Pe tition e rs Claim: Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of Copyright No. M922,dated January 28, 1971, of R hoda and Me , a dating game show aired from 1970 to 1977 claimsthat there is an infringement on the copyright of the show "RHODA AND ME" both in contentand in the execution of the video presentation are established because respondent's "IT'S ADATE" is practically an exact copy of complainant's "RHODA AND ME" because of substantialsimilarities. As may [be] gleaned from the evidence on record, the substance of the televisionproductions complainant's "RHODA AND ME" and Zosa's "IT'S A DATE" is that two matchesare made between a male and a female, both single, and the two couples are treated to a nightor two of dining and/or dancing at the expense of the show. The major concepts of both showsis the same. Any difference appear mere variations of the minor concepts. R e spond e nts Claim: Both public and private respondents maintain that petitioners failed to establish the existence of probable cause due to their failure to present the copyrighted master videotape of R hoda and Me . They contend that petitioner BJPI's copyright covers only a specific episode of R hoda and Me and that the formats or concepts of dating game shows are not covered by copyrightprotection under P.D. No. 49. Issu e : Whether the format and mechanics of a TV show may be subject of a copyright. S.C.

R uling: To begin with the format of a show is not copyrightable. Section 2 of P.D. No. 49, otherwiseknown as the DECREE ON INTELLECTUAL PROPERTY, enumerates the classes of workentitled to copyright protection, does not include the format or mechanics of a television show.For this reason, the protection afforded by the law cannot be extended to cover them. Thecopyright does not extend to an idea, procedure, process, system, method of operation,concept, principle, or discovery, regardless of the form in which it is described, explained,illustrated, or embodied in such work

20TH CENTURY FOX FILM CORPORATION, petitioner, vs. COURT OF APPEALS,EDUARDO M. BARRETO, RAUL SAGULLO and FORTUNE LEDESMA, respondents. Petitioners claim: The petitioner maintains that the lower court issued the questioned search warrants after findingthe existence of a probable cause justifying their issuance. According to the petitioner, the lower court arrived at this conclusion on the basis of the depositions of applicant NBI's two witnesseswhich were taken through searching questions and answers by the lower court. Respondents claim: The respondent posits that the three questioned search warrants against the privaterespondents should be lifeted on the ground that it acted on the application for the issuance of the said search warrants and granted it on the misrepresentations of applicant NBI and itswitnesses that infringement of copyright or a piracy of a particular film have been committed.They also maintained that the presentation of the master tapes of the copyrighted films fromwhich the pirated films were allegedly copied, was necessary for the validity of search warrantsagainst those who have in their possession the pirated films. The petitioner's argument to theeffect that the presentation of the master tapes at the time of application may not be necessaryas these would be merely evidentiary in nature and not determinative of whether or not aprobable cause exists to justify the issuance of the search warrants is not meritorious. S.C.Ruling: The presentation of the master tapes of the copyrighted films from which the pirated films wereallegedly copied, was necessary for the validity of search warrants against those who have intheir possession the pirated films. The petitioner's argument to the effect that the presentation of the master tapes at the time of application may not be necessary as these would be merelyevidentiary in nature and not determinative of whether or not a probable cause exists to justifythe issuance of the search warrants is not meritorious. The court cannot presume that duplicateor copied tapes were necessarily reproduced from master tapes that it owns.The application for search warrants was directed against video tape outlets which allegedlywere engaged in the unauthorized sale and renting out of copyrighted films belonging to thepetitioner pursuant to P.D. 49. The essence of a copyright infringement is the

similarity or atleast substantial similarity of the purported pirated works to the copyrighted work. Hence, theapplicant must present to the court the copyrighted films to compare them with the purchasedevidence of the video tapes allegedly pirated to determine whether the latter is an unauthorizedreproduction of the former. This linkage of the copyrighted films to the pirated films must beestablished to satisfy the requirements of probable cause.

COLUMBIA PICTURES, INC., ORION PICTURES CORPORATION, PARAMOUNT PICTURES CORPORATION, TWENTIETH CENTURY FOX FILM CORPORATION, UNITED ARTISTS CORPORATION, UNIVERSAL CITY STUDIOS, INC., THE WALT DISNEY COMPANY, and WARNER BROTHERS, INC., petitioners, vs. COURT OF APPEALS,SUNSHINE HOME VIDEO, INC. and DANILO A. PELINDARIO, respondents. Petitioners claim: -Petitioners, thru counsel lodged a formal complaint with the National Bureau of Investigation for violation of PD No. 49, as amended, and sought its assistance in their anti-film piracy drive. Acting on such request, NBI Senior Agent Lauro C. Reyes applied for a search warrant with thecourt a quo against Sunshine seeking the seizure, among others, of pirated video tapes of copyrighted films all of which were enumerated in a list attached to the application; and,television sets, video cassettes and/or laser disc recordings equipment and other machines and

paraphernalia used or intended to be used in the unlawful exhibition, showing, reproduction,sale, lease or disposition of videograms tapes in the premises.-According to petitioners, after complying with what the law then required, the lower courtdetermined that there was probable cause for the issuance of a search warrant. It is further argued that any search warrant so issued in accordance with all applicable legal requirements isvalid, for the lower court could not possibly have been expected to apply, as the basis for afinding of probable cause for the issuance of a search warrant in copyright infringement casesinvolving videograms, a pronouncement which was not existent at the time of suchdetermination. R e spond e nts claim: Private respondents predictably argue in support of the ruling of the Court of Appeals sustainingthe quashal of the search warrant by the lower court on the strength of that 20 th Century Fox ruling which, they claim, goes into the very essence of probable cause. At the time of theissuance of the search warrant involved here, although the 20 th Century Fox case had not yetbeen decided, Section 2, Article III of the Constitution and Section 3, Rule 126 of the 1985Rules on Criminal Procedure embodied the prevailing and governing law on the matter. Theruling in 20 th Century Fox

was merely an application of the law on probable cause. Hence, theyposit that there was no law that was retrospectively applied, since the law had been there allalong. To refrain from applying the 20 th Century Fox ruling, which had supervened as a doctrinepromulgated at the time of the resolution of private respondents' motion for reconsiderationseeking the quashal of the search warrant for failure of the trial court to require presentation of the master tapes prior to the issuance of the search warrant, would have constituted graveabuse of discretion. S.C.Ruling: There is merit in petitioners' impassioned and well-founded argumentation. In fine, thesupposed pronunciamento in said case regarding the necessity for the presentation of themaster tapes of the copyrighted films for the validity of search warrants should at most beunderstood to merely serve as a guidepost in determining the existence of probable cause incopyright infringement cases where there is doubt as to the true nexus between the master tapeand the pirated copies . An objective and careful reading of the decision in said case could leadto no other conclusion than that said directive was hardly intended to be a sweeping andinflexible requirement in all or similar copyright infringement cases. Judicial dicta should alwaysbe construed within the factual matrix of their parturition, otherwise a careless interpretationthereof could unfairly fault the writer with the vice of overstatement and the reader with thefallacy of undue generalization.It is evidently incorrect to suggest, as the ruling in 20th Century Fox may appear to do, that incopyright infringement cases, the presentation of master tapes of the copyrighted films is alwaysnecessary to meet the requirement of probable cause and that, in the absence thereof, therecan be no finding of probable cause for the issuance of a search warrant..

In May 1993, Microsoft and Beltron Computer Philippines, Inc. entered into a Licensing Agreement. Under Section 2(a) of the Agreement Microsoft authorized Beltron, for a fee, to: 1. 2. Reproduce and install no more than one copy of Windows on each Customer System hard disk; Distribute directly or indirectly and license copies of Windows (reproduced as per Section 2 of the Agreement and/or acquired from an Authorized Replicator or Authorized Distributor. Their agreement allowed either party to terminate if one fails to comply with their respective obligations. Microsoft terminated the Agreement in June 1995 by reason of B eltrons non-payment of royalties. Later, Microsoft learned that Beltron was illegally copying and selling copies of Windows. Microsoft then sought the assistance of the National Bureau of Investigation. NBI agents made some purchase from Beltron where they acquired a computer unit pre-installed with Windows, 12 windows installer CDs packed as Microsoft products. The agents were not given the end-user license agreements, user manuals, and certificates of authenticity for the products purchased. They were given a receipt which has a header of T.M.T.C. (Phils) Inc. BELTRON COMPUTER. TMTC stands for Taiwan Machinery Display and Trade Center. A search warrant was subsequently issued where 2,831 CDs of Windows installers, among others, were seized. Based on the items seized from Beltron, Microsoft filed a case of copyright infringement against Beltron and TMTC as well as their officers (Hwang et al) before the Department of Justice (DOJ). Beltron, in its counter-affidavit, argued the following: 1. That Microsofts issue with Beltron was really just to have leverage in forcing Beltron to pay the unpaid royalties; and that Microsoft should have filed a collection suit.

2. That the computer unit allegedly purchased by the NBI agents from them cannot be decisively traced as coming from Beltron because the receipt issued to the agents did not list the computer unit as one of the items bought. 3. That the 12 installers purchased by the agents which are actually listed in the receipt were not manufactured by Beltron but rather they were genuine copies purchased by TMTC from an authorized Microsoft seller in Singapore. 4. That the 2,831 installers seized from them were not a property of Beltron but rather they were left to them by someone for safekeeping. The DOJ secretary agreed with Beltron and dismissed the case. The Secretary ruled that the issue of the authority of Beltron to copy and sell Microsoft products should first be resolved in a civil suit. Microsoft appealed the decision of the DOJ secretary before the Supreme Court. Meanwhile, Beltron filed a motion to quash the search warrant before the RTC that issued the same. The RTC partially granted the quashal. The Court of Appeals reversed the RTC. Hwang et al did not appeal the CA decision. ISSUE: Whether or not the DOJ Secretary is correct. HELD: No. Section 5 of Presidential Decree 49 enumerates the rights vested exclusively on the copyright owner. Contrary to the DOJs ruling, the gravamen of copyright infringement is not merely the unauthorized manufacturing of intellectual works but rather the unauthorized performance of any of the acts covered by Section 5. Hence, any person who performs any of the acts under Section 5 without obtaining the copyright owners prior consent renders himself civilly and criminally liable for copyright infringement. Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the doing by any person, without the consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright. Being the copyright and trademark owner of Microsoft software, Microsoft acted well within its rights in filing the complaint before DOJ on the incriminating evidence obtained from Beltron. Hence, it was highly irregular for the DOJ to hold that Microsoft sought the issuance of the search warrants and the filing of the complaint merely to pressure Beltron to pay its overdue royalties to Microsoft. There is no basis for the DOJ to rule that Microsoft must await a prior resolution from the proper court of whether or not the Agreement is still binding between the parties. Beltr on has not filed any suit to question Microsofts termination of the Agreement. Microsoft can neither be expected nor compelled to wait until Beltron decides to sue before Microsoft can seek remedies for violation of its intellectual property rights. Furthermore, the articles seized from Beltron are counterfeit per se because Microsoft does not (and could not have authorized anyone to) produce such CD installers The copying of the genuine Microsoft software to produce these fake CDs and their distribution are illegal even if the copier or distributor is a Microsoft licensee. As far as these installer CD-ROMs are concerned, the Agreement (and the alleged question on the validity of its termination) is immaterial to the determination of Beltrons liability

forcopyright infringement and unfair competition. Beltrons defense that the box of CD installers found in their possession was only left to them for safekeeping is not tenable.