Case Digest on Copyrights

PEARL & DEAN (PHIL.), INCORPORATED, petitioner, vs. SHOEMART, INCORPORATED, and NORTH
EDSA MARKETING, INCORPORATED, respondents.

FACTS:

Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising
display units simply referred to as light boxes. The petitioner was able to secure a Certificate of Copyright Registration
over these illuminated display units. The advertising light boxes were marketed under the trademark Poster Ads. 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 Pearl and Dean agreed.

Pearl and Deans General Manager, submitted for signature the contracts covering SM Cubao and SM Makati to
SMIs Advertising Promotions and Publicity Division Manager. Only the contract for SM Makati, however, was returned
signed.

SMIs house counsel informed Pearl and Dean that it was rescinding the contract for SM Makati due to non-
performance of the terms thereof. Pearl and Deans General Manager protested the unilateral action of SMI, saying it was
without basis. After its contract with Metro Industrial was terminated, SMI engaged the services of EYD Rainbow
Advertising Corporation to make the light boxes.

The 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. 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 sent a letter to both SMI and NEMI enjoining them to cease using the subject light boxes and to
remove the same from SMIs establishments. 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, Pearl and Dean filed this instant
case for infringement of trademark and copyright, unfair competition and damages.

ISSUES

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT INFRINGEMENT WAS
COMMITTED BY RESPONDENTS SM AND NEMI;
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;

RULING

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

In ruling that there was no copyright infringement, we agree with the appellate court. First, petitioners
application for a copyright certificate 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.

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.

ON THE ISSUE OF PATENT INFRINGEMENT

The petitioner is not correct 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. vs. Court of Appeals, 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.
MELBAROSE R. SASOT AND ALLANDALE R. SASOT, petitioners, vs. PEOPLE OF THE PHILIPPINES,
THE HONORABLE COURT OF OF APPEALS, and REBECCA G. SALVADOR, Presiding Judge,
RTC, Branch 1, Manila, respondents.

FACTS

The National Bureau of Investigation (NBI) conducted an investigation pursuant to a complaint by the NBA
Properties, Inc., against petitioners for possible violation of Article 189 of the Revised Penal Code on unfair competition
The names are used on hosiery, footwear, t-shirts, sweatshirts, tank tops, pajamas, sport shirts, and other garment
products, which are allegedly registered with the Bureau of Patents, Trademarks and Technology Transfer. The Report
further stated that during the investigation, it was discovered that petitioners are engaged in the manufacture, printing,
sale, and distribution of counterfeit NBA garment products. Hence, it recommended petitioners prosecution for unfair
competition under Article 189 of the Revised Penal Code.

Petitioners filed a special civil action for certiorari with the Court of Appeals (CA) docketed as CA-G.R. SP No. 52151
which was dismissed. According to the CA, the petition is not the proper remedy in assailing a denial of a motion to quash,
and that the grounds raised therein should be raised during the trial of the case on the merits.

The petitioner filed a petition for review on certiorari under Rule 45 of the Rules of Court.

ISSUES

1. WHETHER A FOREIGN CORPORATION NOT ENGAGED AND LICENSE (sic) TO DO BUSINESS IN THE
PHILIPPINES MAY MAINTAIN A CAUSE OF ACTION FOR UNFAIR COMPETITION.
2. WHETHER AN OFFICER OF A FOREIGN CORPORATION MAY ACT IN BEHALF OF A CORPORATION WITHOUT
AUTHORITY FROM ITS BOARD OF DIRECTORS.
3. WHETHER A FOREIGN CORPORATION NOT ENGAGED IN BUSINESS AND WHOSE EMBLEM IT SOUGHT TO
PROTECT IS NOT IN ACTUAL USE IS ENTITLED TO THE PROTECTION OF THE PHILIPPINE LAW.

RULING

The crime of Unfair Competition punishable under Article 189 of the Revised Penal Code is a public crime. It is
essentially an act against the State and it is the latter which principally stands as the injured party. The complainants
capacity to sue in such case becomes immaterial.

In La Chemise Lacoste, S.A. vs. Fernandez, a case akin to the present dispute, as it involved the crime of Unfair
Competition under Article 189 of the Revised Penal Code, and the quashal of search warrants issued against
manufacturers of garments bearing the same trademark as that of the petitioner, the Court succinctly ruled that:
More important is the nature of the case which led to this petition. What preceded this petition for certiorari was a letter-
complaint filed before the NBI charging Hemandas with a criminal offense, i.e., violation of Article 189 of the Revised
Penal Code. If prosecution follows after the completion of the preliminary investigation being conducted
by the Special Prosecutor the information shall be in the name of the People of the Philippines and no
longer the petitioner which is only an aggrieved party since a criminal offense is essentially an act against
the State. It is the latter which is principally the injured party although there is a private right violated.
Petitioner's capacity to sue would become, therefore, of not much significance in the main case. We
cannot allow a possible violator of our criminal statutes to escape prosecution upon a far-fetched contention that the
aggrieved party or victim of a crime has no standing to sue.

In upholding the right of the petitioner to maintain the present suit before our courts for unfair competition or
infringement of trademarks of a foreign corporation, we are moreover recognizing our duties and the rights of foreign
states under the Paris Convention for the Protection of Industrial Property to which the Philippines and France are
parties. We are simply interpreting and enforcing a solemn international commitment of the Philippines embodied in a
multilateral treaty to which we are a party and which we entered into because it is in our national interest to do so.

With regard to petitioners arguments that the NBA Properties, Inc., is not entitled to protection under Philippine
patent laws since it is not a registered patentee, that they have not committed acts amounting to unfair competition for the
reason that their designs are original and do not appear to be similar to complainants, and they do not use complainants
logo or design, the Court finds that these are matters of defense that are better ventilated and resolved during trial on the
merits of the case.

WHERFORE, the petition is DENIED for lack of merit. Let the records of this case be REMANDED to the
Regional Trial Court of Manila (Branch 24) where Criminal Case No. 98-166147 is presently assigned, for further
proceedings with reasonable dispatch.
SO ORDERED.
 ELIDAD C. KHO, doing business under the name and style of KEC COSMETICS LABORATORY,
petitioner, vs. HON. COURT OF APPEALS, SUMMERVILLE GENERAL MERCHANDISING and
COMPANY, and ANG TIAM CHAY, respondents.

FACTS

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, against the respondents Summerville General Merchandising and
Company (Summerville, for brevity) and Ang Tiam Chay.

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 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.

The respondents filed a petition for certiorari with the Court of Appeals, praying for the nullification of the said
writ of preliminary injunction issued by the trial court. The appellate court rendered a decision ruling in favor of the
respondents.

The Court of Appeals promulgated a Resolution denying the petitioners motions for reconsideration and for
contempt of court in CA-G.R. SP No. 27803.

ISSUE

WHETHER OR NOT 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

RULING

We rule in favor of the respondents.

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 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.

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.

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 CA-G.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.
SO ORDERED.
 LA CHEMISE LACOSTE, S. A., petitioner,
vs.
HON. OSCAR C. FERNANDEZ, Presiding Judge of Branch XLIX, Regional Trial Court, National Capital
Judicial Region, Manila and GOBINDRAM HEMANDAS, respondents.
G.R. No. L-65659 May 2l, 1984
GOBINDRAM HEMANDAS SUJANANI, petitioner,
vs.
HON. ROBERTO V. ONGPIN, in his capacity as Minister of Trade and Industry, and HON. CESAR SAN
DIEGO, in his capacity as Director of Patents, respondents.

FACTS

La chemise Lacoste is a French corporation and the actual owner of the trademarks Lacoste, Chemise
Lacoste, Crocodile Device and a composite mark consisting of the word Lacoste and a representation of a
crocodile/alligator, used on clothings and other goods sold in many parts of the world and which has been marketed in
the Philippines (notably by Rustans) since 1964. In 1975 and 1977, Hemandas Q. Co. was issued certificate of registration
for the trademark Chemise Lacoste and Q Crocodile Device both in the supplemental and Principal Registry. In 1980, La
Chemise Lacoste SA filed for the registration of the Crocodile device and Lacoste. Games and Garments (Gobindram
Hemandas, assignee of Hemandas Q.Co.) opposed the registration of Lacoste.

In 1983, La Chemise Lacoste filed with the NBI a letter-complaint alleging acts of unfair competition committed by
Hemandas and requesting the agencys assistance. A search warrant was issued by the trial court. Various goods and
articles were seized upon the execution of the warrants. Hemandas filed motion to quash the warrants, which the court
granted. The search warrants were recalled, and the goods ordered to be returned. La Chemise Lacoste filed a petition for
certiorari.

ISSUE

WHETHER OR NOT THE PETITIONER, A FOREIGN CORPORATION NOT DOING BUSINESS IN THE PHILIPPINES
HAS NO CAPACITY TO SUE BEFORE PHILIPPINE COURTS.

RULING

As early as 1927, this Court was, and it still is, of the view that a foreign corporation not doing business in the
Philippines needs no license to sue before Philippine courts for infringement of trademark and unfair competition. Thus,
in Western Equipment and Supply Co. v. Reyes (51 Phil. 115), this Court held that a foreign corporation which has never
done any business in the Philippines and which is unlicensed and unregistered to do business here, but is widely and
favorably known in the Philippines through the use therein of its products bearing its corporate and tradename, has a legal
right to maintain an action in the Philippines to restrain the residents and inhabitants thereof from organizing a
corporation therein bearing the same name as the foreign corporation, when it appears that they have personal knowledge
of the existence of such a foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is
to deal and trade in the same goods as those of the foreign corporation.

We further held: That company is not here seeking to enforce any legal or control rights arising from, or growing
out of, any business which it has transacted in the Philippine Islands. The sole purpose of the action: "'Is to protect its
reputation, its corporate name, its goodwill, whenever that reputation, corporate name or goodwill have, through the
natural development of its trade, established themselves. And it contends that its rights to the use of its corporate and
trade name: "'Is a property right, a right in rem, which it may assert and protect against all the world, in any of the courts
of the world even in jurisdictions where it does not transact business just the same as it may protect its tangible
property, real or personal, against trespass, or conversion. Citing Sec. 10, Nims on Unfair Competition and TradeMarks
and cases cited; secs. 21-22, Hopkins on TradeMarks, Trade Names and Unfair Competition and cases cited.' That point is
sustained by the authorities, and is well stated in Hanover Star Mining Co. v. Allen and Wheeler Co. (208 Fed., 513), in
which the syllabus says: "'Since it is the trade and not the mark that is to be protected, a trade-mark acknowledges no
territorial boundaries of municipalities or states or nations, but extends to every market where the trader's goods have
become known and identified by the use of the mark.'" Our recognizing the capacity of the petitioner to sue is not by any
means novel or precedent setting. Our jurisprudence is replete with cases illustrating instances when foreign corporations
not doing business in the Philippines may nonetheless sue in our courts.