Intellectual Property Cjdfjfdjases

8/13/2019 Intellectual Property Cjdfjfdjases

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Joaquin, Jr. vs. Drilon G.R. No. 108946, 302 SCRA 225 ,January 28, 1999 Posted by Alchemy Business Center and Marketing Consultancy at 10:16 PM Labels: 302 SCRA 225, G.R. No.108946, INTELLECTUAL PROPERTY CODE, January 28 1999, Joaquin, Jr. vs. Drilon

Joaquin, Jr. vs. Drilon G.R. No. 108946, 302 SCRA 225 , January 28, 1999

FRANCISCO G. JOAQUIN, JR., and BJ PRODUCTIONS, INC., petitioners, vs.

HONORABLE FRANKLIN DRILON, GABRIEL ZOSA, WILLIAM ESPOSO, FELIPE MEDINA, JR., and CASEY FRANCISCO, respondents.

MENDOZA, J.: This is a petition for certiorari. Petitioners seek to annul the resolution of the Department of Justice, dated August 12, 1992, in

Criminal Case No. Q-92-27854, entitled "Gabriel Zosa, et al. v. City Prosecutor of Quezon City and Francisco Joaquin, Jr.," and its

resolution, dated December 3, 1992, denying petitioner Joaquin's motion for reconsideration. Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of Copyright No. M922, dated January 28, 1971, of

Rhoda and Me, a dating game show aired from 1970 to 1977. On June 28, 1973, petitioner BJPI submitted to the National Library an addendum to its certificate of copyright specifying the

show's format and style of presentation. On July 14, 1991, while watching television, petitioner Francisco Joaquin, Jr., president of BJPI, saw on RPN Channel 9 an

episode of It's a Date, which was produced by IXL Productions, Inc. (IXL). On July 18, 1991, he wrote a letter to private

respondent Gabriel M. Zosa, president and general manager of IXL, informing Zosa that BJPI had a copyright to Rhoda and Me

and demanding that IXL discontinue airing It's a Date. In a letter, dated July 19, 1991, private respondent Zosa apologized to petitioner Joaquin and requested a meeting to discuss a

possible settlement. IXL, however, continued airing It's a Date, prompting petitioner Joaquin to send a second letter on July 25,

1991 in which he reiterated his demand and warned that, if IXL did not comply, he would endorse the matter to his attorneys

for proper legal action. Meanwhile, private respondent Zosa sought to register IXL's copyright to the first episode of It's a Date for which it was issued

by the National Library a certificate of copyright August 14, 1991. Upon complaint of petitioners, an information for violation of P.D. No. 49 was filed against private respondent Zosa together

with certain officers of RPN Channel 9, namely, William Esposo, Felipe Medina, and Casey Francisco, in the Regional Trial Court

of Quezon City where it was docketed as Criminal Case No. 92-27854 and assigned to Branch 104 thereof. However, private

respondent Zosa sought a review of the resolution of the Assistant City Prosecutor before the Department of Justice. On August 12, 1992, respondent Secretary of Justice Franklin M. Drilon reversed the Assistant City Prosecutor's findings and

directed him to move for the dismissal of the case against private respondents. 1 Petitioner Joaquin filed a motion for reconsideration, but his motion denied by respondent Secretary of Justice on December 3,

1992. Hence, this petition. Petitioners contend that: 1. The public respondent gravely abused his discretion amounting to lack of jurisdiction— when he invoked non-

presentation of the master tape as being fatal to the existence of probable cause to prove infringement, despite the fact that

private respondents never raised the same as a controverted issue.

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It is indeed true that the question whether the format or mechanics of petitioners television show is entitled to copyright

protection is a legal question for the court to make. This does not, however, preclude respondent Secretary of Justice from

making a preliminary determination of this question in resolving whether there is probable cause for filing the case in court. In

doing so in this case, he did not commit any grave error. Presentation of Master Tape Petitioners claim that respondent Secretary of Justice gravely abused his discretion in ruling that the master videotape should

have been predented in order to determine whether there was probable cause for copyright infringement. They contend that

20th Century Fox Film Corporation v. Court of Appeals, 4 on which respondent Secretary of Justice relied in reversing the

resolution of the investigating prosecutor, is inapplicable to the case at bar because in the present case, the parties presented

sufficient evidence which clearly establish "linkage between the copyright show "Rhoda and Me" and the infringing TV show

"It's a Date." 5 The case of 20th Century Fox Film Corporation involved raids conducted on various videotape outlets allegedlly selling or

renting out "pirated" videotapes. The trial court found that the affidavits of NBI agents, given in support of the application for

the search warrant, were insufficient without the master tape. Accordingly, the trial court lifted the search warrants it had

previously issued against the defendants. On petition for review, this Court sustained the action of the trial court and ruled: 6 The presentation of the master tapes of the copyrighted films from which the pirated films were allegedly copied, was

necessary for the validity of search warrants against those who have in their possession the pirated films. The petitioner'sargument to the effect that the presentation of the master tapes at the time of application may not be necessary as these

would be merely evidentiary in nature and not determinative of whether or not a probable cause exists to justify the issuance

of the search warrants is not meritorious. The court cannot presume that duplicate or copied tapes were necessarily

reproduced from master tapes that it owns. The application for search warrants was directed against video tape outlets which allegedly were engaged in the unauthorized

sale and renting out of copyrighted films belonging to the petitioner pursuant to P.D. 49. The essence of a copyright infringement is the similarity or at least substantial similarity of the purported pirated works to the

copyrighted work. Hence, the applicant must present to the court the copyrighted films to compare them with the purchased

evidence of the video tapes allegedly pirated to determine whether the latter is an unauthorized reproduction of the former.

This linkage of the copyrighted films to the pirated films must be established to satisfy the requirements of probable cause.

Mere allegations as to the existence of the copyrighted films cannot serve as basis for the issuance of a search warrant. This ruling was qualified in the later case of Columbia Pictures, Inc. v. Court of Appeals 7 in which it was held: In fine, the supposed pronunciamento in said case regarding the necessity for the presentation of the master tapes of the

copyrighted films for the validity of search warrants should at most be understood to merely serve as a guidepost in

determining the existence of probable cause in copyright infringement cases where there is doubt as to the true nexus between

the master tape and the printed copies. An objective and careful reading of the decision in said case could lead to no other

conclusion than that said directive was hardly intended to be a sweeping and inflexible requirement in all or similar copyright

infringement cases. . . 8 In the case at bar during the preliminary investigation, petitioners and private respondents presented written descriptions of

the formats of their respective televisions shows, on the basis of which the investigating prosecutor ruled: As may [be] gleaned from the evidence on record, the substance of the television productions complainant's "RHODA AND ME"

and Zosa's "IT'S A DATE" is that two matches are made between a male and a female, both single, and the two couples are

treated to a night or two of dining and/or dancing at the expense of the show. The major concepts of both shows is the same.

Any difference appear mere variations of the major concepts. That there is an infringement on the copyright of the show "RHODA AND ME" both in content and in the execution of the video

presentation are established because respondent's "IT'S A DATE" is practically an exact copy of complainant's "RHODA AND

ME" because of substantial similarities as follows, to wit: RHODA AND ME


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"IT'S A DATE" Set 1 Set 1 a. Unmarried participant of one gender (searcher) appears on one side of a divider, while three (3) unmarried participants of

the other gender are on the other side of the divider. This arrangement is done to ensure that the searcher does not see thesearchees. a. same b. Searcher asks a question to be answered by each of the searchees. The purpose is to determine who among the searchees is

the most compatible with the searcher. b. same c. Searcher speculates on the match to the searchee. c. same d. Selection is made by the use of compute (sic) methods, or by the way questions are answered, or similar methods. d. Selection is based on the answer of the Searchees. Set 2 Set 2 Same as above with the genders of the searcher and searchees interchanged. 9 same Petitioners assert that the format of Rhoda and Me is a product of ingenuity and skill and is thus entitled to copyright

protection. It is their position that the presentation of a point-by-point comparison of the formats of the two shows clearly

demonstrates the nexus between the shows and hence establishes the existence of probable cause for copyright infringement.

Such being the case, they did not have to produce the master tape. To begin with the format of a show is not copyrightable. Section 2 of P.D. No. 49, 10 otherwise known as the DECREE ON

INTELLECTUAL PROPERTY, enumerates the classes of work entitled to copyright protection, to wit: Sec. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of the following classes

of works: (A) Books, including composite and cyclopedic works, manuscripts, directories, and gazetteers: (B) Periodicals, including pamphlets and newspapers; (C) Lectures, sermons, addresses, dissertations prepared for oral delivery; (D) Letters; (E) Dramatic or dramatico-musical compositions; choreographic works and entertainments in dumb shows, the acting form

of which is fixed in writing or otherwise; (F) Musical compositions, with or without words; (G) Works of drawing, painting, architecture, sculpture, engraving, lithography, and other works of art; models or designs for

works of art;


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(H) Reproductions of a work of art; (I) Original ornamental designs or models for articles of manufacture, whether or not patentable, and other works of

applied art; (J) Maps, plans, sketches, and charts; (K) Drawings or plastic works of a scientific or technical character; (I) Photographic works and works produced by a process analogous to photography lantern slides; (M) Cinematographic works and works produced by a process analogous to cinematography or any process for making

audio-visual recordings; (N) Computer programs; (O) Prints, pictorial illustrations advertising copies, labels tags, and box wraps; (P) Dramatizations, translations, adaptations, abridgements, arrangements and other alterations of literary, musical or

artistic works or of works of the Philippine government as herein defined, which shall be protected as provided in Section 8 of

this Decree. (Q) Collections of literary, scholarly, or artistic works or of works referred to in Section 9 of this Decree which by reason of

the selection and arrangement of their contents constitute intellectual creations, the same to be protected as such in

accordance with Section 8 of this Decree. (R) Other literary, scholarly, scientific and artistic works. This provision is substantially the same as §172 of the INTELLECTUAL PROPERTY CODE OF PHILIPPINES (R.A. No. 8293). 11 The

format or mechanics of a television show is not included in the list of protected works in §2 of P.D. No. 49. For this reason, the

protection afforded by the law cannot be extended to cover them. Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted by the statute, and

not simply a pre-existing right regulated by the statute. Being a statutory grant, the rights are only such as the statute confers,

and may be obtained and enjoyed only with respect to the subjects and by the persons and on terms and conditions specified in

the statute. 12 Since . . . copyright in published works is purely a statutory creation, a copyright may be obtained only for a work falling within

the statutory enumeration or description. 13 Regardless of the historical viewpoint, it is authoritatively settled in the United States that there is no copyright except that

which is both created and secured by act of Congress . . . . . 14 P.D. No. 49, §2, in enumerating what are subject to copyright, refers to finished works and not to concepts. The copyright 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. 15 Thus, the new INTELLECTUAL PROPERTY CODE OF

THE PHILIPPINES provides: Sec. 175. Unprotected Subject Matter.

— Notwithstanding the provisions of Sections 172 and 173, no protection shall

extend, under this law, to any idea, procedure, system, method or operation, concept, principle, discovery or mere data as

such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other miscellaneous facts

having the character of mere items of press information; or any official text of a legislative, administrative or legal nature, as

well as any official translation thereof. What then is the subject matter of petitioners' copyright? This Court is of the opinion that petitioner BJPI's copyright covers

audio-visual recordings of each episode of Rhoda and Me, as falling within the class of works mentioned in P.D. 49, §2(M), to

wit:


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Cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual

recordings; The copyright does not extend to the general concept or format of its dating game show. Accordingly, by the very nature of the

subject of petitioner BJPI's copyright, the investigating prosecutor should have the opportunity to compare the videotapes of

the two shows. Mere description by words of the general format of the two dating game shows is insufficient; the presentation of the mastervideotape in evidence was indispensable to the determination of the existence of probable cause. As aptly observed by

respondent Secretary of Justice: A television show includes more than mere words can describe because it involves a whole spectrum of visuals and effects,

video and audio, such that no similarity or dissimilarity may be found by merely describing the general copyright/format of both

dating game shows. WHEREFORE, the petition is hereby DISMISSED SO ORDERED.

SECOND DIVISION

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

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 .

D E C I S I O N

DE LEON, JR., J .:

Before us is a petition for review on certiorari of the Decision[1] dated May 24, 1993 of theCourt of Appeals setting aside and declaring as null and void the Order s[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.

The facts of the case are as follows:

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 CivilCase No. Q-91-10926, against the respondents Summerville General Merchandising and

Company (Summerville, for brevity) and Ang Tiam Chay.

The petitioner‘s 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. 0-1358and No. 0-3678; that she also has patent rights on Chin Chun Su & Device and Chin Chun Su for

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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 petitioner‘scream 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 petitioner‘s business sales and

income; and, that the respondents should be enjoined from allegedly infringing on the copyrightsand patents of the petitioner.

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 Taiwan; that the said Taiwanese manufacturing companyauthorized 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, todistribute and market Chin Chun Su products in the Philippines had already been terminated by

the said Taiwanese Manufacturing Company.

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:

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.

SO ORDERED.[3]

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 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 thecivil 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 theappellate court a certificate of non-forum shopping for their petition.

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:

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WHEREFORE, the petition is hereby given due course and the orders of respondent

court dated February 10, 1992 and March 19, 1992 granting the 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.

SO ORDERED.[5]

In granting the petition, the appellate court ruled that:

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.

xxx xxx xxx

As ratiocinated in La Chemise Lacoste, S.S. vs. Fernandez, 129 SCRA 373, 393:

―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 be 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 theSupplemental 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]

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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.

In the meantime, the trial court went on to hear petitioner‘s complaint for final injunction

and damages. On October 22, 1993, the trial court rendered a Decision [7] barring the petitionerfrom using the trademark Chin Chun Su and upholding the right of the respondents to use thesame, 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 attorney‘sfees. 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 petitioner‘s

motions for reconsideration and for contempt of court in CA-G.R. SP No. 27803.

Hence, this petition anchored on the following assignment of errors:

I

RESPONDENT HONORABLE COURT OF APPEALS COMMITTED

GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF

JURISDICTION IN FAILING TO RULE ON PETITIONER‘S MOTION TO

DISMISS.

II



JURISDICTION IN REFUSING TO PROMPTLY RESOLVEPETITIONER‘S MOTION FOR RECONSIDERATION.

III

IN DELAYING THE RESOLUTION OF PETITIONER‘S MOTION FOR

RECONSIDERATION, THE HONORABLE COURT OF APPEALS

DENIED PETITIONER‘S RIGHT TO SEEK TIMELY APPELLATE

RELIEF AND VIOLATED PETITIONER‘S RIGHT TO DUE PROCESS.

IV



JURISDICTION IN FAILING TO CITE THE PRIVATE RESPONDENTS

IN CONTEMPT.[9]

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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 onthe 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, I nc. v. Court of Appeals [16]

, to wit:

Considering that 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 xxx 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 xxx 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 plaintiff’s right

thereto, that is, after the same issue has been decided on the merits, the trial courthaving appreciated the evidence presented, is proper, notwithstanding the fact that

the decision rendered is not yet final xxx. 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 non-existence ceases to have any force and effect. (italics

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- plaintiff‘s right

to a final injunction, although appealed, renders moot and academic any objection to the priordissolution 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 petitionerimproperly 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 provisionsof 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 xxx (italicssupplied)‖. 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 ofthe 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 theanswer/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

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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 thedeserving party.

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 filedsuccessive 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 render such judgments ineffective or void .[17] Withrespect 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 petitioner‘s several motions

for contempt of court. There is nothing contemptuous about the advertisements complained ofwhich, 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 ofAppeals dated May 24, 1993 and June 3, 1994, respectively, are hereby AFFIRMED. With costs

against the petitioner.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

SECOND DIVISION

[G.R. No. 161295. June 29, 2005]

JESSIE G. CHING, peti t ioner, vs . WILLIAM M. SALINAS, SR., WILLIAMM. SALINAS, JR., JOSEPHINE L. SALINAS, JENNIFER Y.

SALINAS, ALONTO SOLAIMAN SALLE, JOHN ERIC I. SALINAS,NOEL M. YABUT (Board of Directors and Officers of WILAWAREPRODUCT CORPORATION), respondents .

D E C I S I O N

CALLEJO, SR., J .:

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This petition for review on certiorari assails the Decision[1] andResolution[2] of the Court of Appeals (CA) in CA-G.R. SP No. 70411 affirmingthe January 3, 2002 and February 14, 2002 Orders[3] of the Regional TrialCourt (RTC) of Manila, Branch 1, which quashed and set aside SearchWarrant Nos. 01-2401 and 01-2402 granted in favor of petitioner Jessie G.

Ching.

Jessie G. Ching is the owner and general manager of JeshicrisManufacturing Co., the maker and manufacturer of a Utility Model, describedas “Leaf Spring Eye Bushing for Automobile” made up of plastic.

On September 4, 2001, Ching and Joseph Yu were issued by the NationalLibrary Certificates of Copyright Registration and Deposit of the said workdescribed therein as “Leaf Spring Eye Bushing for Automobile.”[4]

On September 20, 2001, Ching requested the National Bureau of

Investigation (NBI) for police/investigative assistance for the apprehensionand prosecution of illegal manufacturers, producers and/or distributors of theworks.[5]

After due investigation, the NBI filed applications for search warrants in theRTC of Manila against William Salinas, Sr. and the officers and members ofthe Board of Directors of Wilaware Product Corporation. It was alleged thatthe respondents therein reproduced and distributed the said models penalizedunder Sections 177.1 and 177.3 of Republic Act (R.A.) No. 8293. Theapplications sought the seizure of the following:

a.) Undetermined quantity of Leaf spring eye bushing for automobile that are madeup of plastic polypropylene;

b.) Undetermined quantity of Leaf spring eye bushing for automobile that are madeup of polyvinyl chloride plastic;

c.) Undetermined quantity of Vehicle bearing cushion that is made up of polyvinylchloride plastic;

d.) Undetermined quantity of Dies and jigs, patterns and flasks used in themanufacture/fabrication of items a to d;

e.) Evidences of sale which include delivery receipts, invoices and official receipts.[6]

The RTC granted the application and issued Search Warrant Nos. 01-2401 and 01-2402 for the seizure of the aforecited articles.[7] In the inventorysubmitted by the NBI agent, it appears that the following articles/items wereseized based on the search warrants:

Leaf Spring eye bushing

a) Plastic Polypropylene

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It is worthy to state that the works protected under the Law on Copyright are: literary

or artistic works (Sec. 172) and derivative works (Sec. 173). The Leaf Spring Eye

Bushing and Vehicle Bearing Cushion fall on neither classification. Accordingly, if,

in the first place, the item subject of the petition is not entitled to be protected by the

law on copyright, how can there be any violation?[14]

The petitioner‟s motion for reconsideration of the said decision sufferedthe same fate. The petitioner forthwith filed the present petition for reviewon certiorari , contending that the revocation of his copyright certificates shouldbe raised in a direct action and not in a search warrant proceeding.

The petitioner posits that even assuming ex argumenti that the trial courtmay resolve the validity of his copyright in a proceeding to quash a searchwarrant for allegedly infringing items, the RTC committed a grave abuse of itsdiscretion when it declared that his works are not copyrightable in the first

place. He claims that R.A. No. 8293, otherwise known as the IntellectualProperty Code of the Philippines, which took effect on January 1, 1998,provides in no uncertain terms that copyright protection automatically attachesto a work by the sole fact of its creation, irrespective of its mode or form ofexpression, as well as of its content, quality or purpose.[15] The law gives anon-inclusive definition of “work” as referring to original intellectual creations inthe literary and artistic domain protected from the moment of their creation;and includes original ornamental designs or models for articles ofmanufacture, whether or not registrable as an industrial design and otherworks of applied art under Section 172.1(h) of R.A. No. 8293.

As such, the petitioner insists, notwithstanding the classification of theworks as either literary and/or artistic, the said law, likewise, encompassesworks which may have a bearing on the utility aspect to which the petitioner‟sutility designs were classified. Moreover, according to the petitioner, what theCopyright Law protects is the author‟s intellectual creation, regardless ofwhether it is one with utilitarian functions or incorporated in a useful articleproduced on an industrial scale.

The petitioner also maintains that the law does not provide that theintended use or use in industry of an article eligible for patent bars or

invalidates its registration under the Law on Copyright. The test of protectionfor the aesthetic is not beauty and utility, but art for the copyright and inventionof original and ornamental design for design patents.[16] In like manner, thefact that his utility designs or models for articles of manufacture have beenexpressed in the field of automotive parts, or based on something already inthe public domain does not automatically remove them from the protection ofthe Law on Copyright.[17]

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The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293which gives the same presumption to an affidavit executed by an author whoclaims copyright ownership of his work.

The petitioner adds that a finding of probable cause to justify the issuance

of a search warrant means merely a reasonable suspicion of the commissionof the offense. It is not equivalent to absolute certainty or a finding of actualand positive cause.[18] He assists that the determination of probable causedoes not concern the issue of whether or not the alleged work iscopyrightable. He maintains that to justify a finding of probable cause in theissuance of a search warrant, it is enough that there exists a reasonablesuspicion of the commission of the offense.

The petitioner contends that he has in his favor the benefit of thepresumption that his copyright is valid; hence, the burden of overturning thispresumption is on the alleged infringers, the respondents herein. But thisburden cannot be carried in a hearing on a proceeding to quash the searchwarrants, as the issue therein is whether there was probable cause for theissuance of the search warrant. The petitioner concludes that the issue ofprobable cause should be resolved without invalidating his copyright.

In their comment on the petition, the respondents aver that the work of thepetitioner is essentially a technical solution to the problem of wear and tear inautomobiles, the substitution of materials, i.e., from rubber to plastic matter ofpolyvinyl chloride, an oil resistant soft texture plastic material strong enough toendure pressure brought about by the vibration of the counter bearing and

thus brings bushings. Such work, the respondents assert, is the subject ofcopyright under Section 172.1 of R.A. No. 8293. The respondents posit that atechnical solution in any field of human activity which is novel may be thesubject of a patent, and not of a copyright. They insist that the certificatesissued by the National Library are only certifications that, at a point in time, acertain work was deposited in the said office. Furthermore, the registration ofcopyrights does not provide for automatic protection. Citing Section 218.2(b)of R.A. No. 8293, the respondents aver that no copyright is said to exist if aparty categorically questions its existence and legality. Moreover, underSection 2, Rule 7 of the Implementing Rules of R.A. No. 8293, the registration

and deposit of work is not conclusive as to copyright outlay or the time ofcopyright or the right of the copyright owner. The respondents maintain that acopyright exists only when the work is covered by the protection of R.A. No.8293.

The petition has no merit.

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The RTC had jurisdiction to delve into and resolve the issue whether thepetitioner‟s utility models are copyrightable and, if so, whether he is the ownerof a copyright over the said models. It bears stressing that upon the filing ofthe application for search warrant, the RTC was duty-bound to determinewhether probable cause existed, in accordance with Section 4, Rule 126 of

the Rules of Criminal Procedure:

SEC. 4. Requisite for issuing search warrant . – A search warrant shall not issue but

upon probable cause in connection with one specific offense to be determined

personally by the judge after examination under oath or affirmation of the

complainant and the witnesses he may produce, and, particularly, describing the place

to be searched and the things to be seized.

In Solid Triangle Sales Corporation v. The Sheriff of RTC QC , Br.93,[19] the Court held that in the determination of probable cause, the court

must necessarily resolve whether or not an offense exists to justify theissuance of a search warrant or the quashal of one already issued by thecourt. Indeed, probable cause is deemed to exist only where facts andcircumstances exist which could lead a reasonably cautious and prudent manto believe that an offense has been committed or is being committed. Besides,in Section 3, Rule 126 of the Rules of Criminal Procedure, a search warrantmay be issued for the search and seizure of personal property (a) subject ofthe offense; (b) stolen or embezzled and other proceeds or fruits of theoffense; or (c) used or intended to be used as the means of committing anoffense.

The RTC is mandated under the Constitution and Rules of CriminalProcedure to determine probable cause. The court cannot abdicate itsconstitutional obligation by refusing to determine whether an offense has beencommitted.[20] The absence of probable cause will cause the outrightnullification of the search warrant.[21]

For the RTC to determine whether the crime for infringement under R.A.No. 8293 as alleged in an application is committed, the petitioner-applicantwas burdened to prove that (a) respondents Jessie Ching and Joseph Yuwere the owners of copyrighted material; and (b) the copyrighted material wasbeing copied and distributed by the respondents. Thus, the ownership of avalid copyright is essential.[22]

Ownership of copyrighted material is shown by proof of originality andcopyrightability. By originality is meant that the material was not copied, andevidences at least minimal creativity; that it was independently created by theauthor and that it possesses at least same minimal degree of

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creativity.[23] Copying is shown by proof of access to copyrighted material andsubstantial similarity between the two works.[24] The applicant must thusdemonstrate the existence and the validity of his copyright because in theabsence of copyright protection, even original creation may be freelycopied.[25]

By requesting the NBI to investigate and, if feasible, file an application fora search warrant for infringement under R.A. No. 8293 against therespondents, the petitioner thereby authorized the RTC (in resolving theapplication), to delve into and determine the validity of the copyright which heclaimed he had over the utility models. The petitioner cannot seek relief fromthe RTC based on his claim that he was the copyright owner over the utilitymodels and, at the same time, repudiate the court‟s jurisdiction to ascertainthe validity of his claim without running afoul to the doctrine of estoppel.

To discharge his burden, the applicant may present the certificate ofregistration covering the work or, in its absence, other evidence.[26] A copyrightcertificate provides prima facie evidence of originality which is one element ofcopyright validity. It constitutes prima facie evidence of both validity andownership[27] and the validity of the facts stated in the certificate.[28] Thepresumption of validity to a certificate of copyright registration merely ordersthe burden of proof. The applicant should not ordinarily be forced, in the firstinstance, to prove all the multiple facts that underline the validity of thecopyright unless the respondent, effectively challenging them, shifts theburden of doing so to the applicant.[29] Indeed, Section 218.2 of R.A. No. 8293

provides:

218.2. In an action under this Chapter:

(a) Copyright shall be presumed to subsist in the work or other subject matter to

which the action relates if the defendant does not put in issue the question whether

copyright subsists in the work or other subject matter; and

(b) Where the subsistence of the copyright is established, the plaintiff shall be

presumed to be the owner of the copyright if he claims to be the owner of the

copyright and the defendant does not put in issue the question of his ownership.

A certificate of registration creates no rebuttable presumption of copyrightvalidity where other evidence in the record casts doubt on the question. Insuch a case, validity will not be presumed.[30]

To discharge his burden of probable cause for the issuance of a searchwarrant for violation of R.A. No. 8293, the petitioner-applicant submitted to the

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As gleaned from the description of the models and their objectives, thesearticles are useful articles which are defined as one having an intrinsicutilitarian function that is not merely to portray the appearance of the article orto convey information. Indeed, while works of applied art, original intellectual,literary and artistic works are copyrightable, useful articles and works of

industrial design are not.[35] A useful article may be copyrightable only if andonly to the extent that such design incorporates pictorial, graphic, or sculpturalfeatures that can be identified separately from, and are capable of existingindependently of the utilitarian aspects of the article.

We agree with the contention of the petitioner (citing Section 171.10 ofR.A. No. 8293), that the author‟s intellectual creation, regardless of whether itis a creation with utilitarian functions or incorporated in a useful articleproduced on an industrial scale, is protected by copyright law. However, thelaw refers to a “work of applied art which is an artistic creation.” It bears

stressing that there is no copyright protection for works of applied art orindustrial design which have aesthetic or artistic features that cannot beidentified separately from the utilitarian aspects of the article.[36] Functionalcomponents of useful articles, no matter how artistically designed, havegenerally been denied copyright protection unless they are separable from theuseful article.[37]

In this case, the petitioner‟s models are not works of applied art, norartistic works. They are utility models, useful articles, albeit with no artisticdesign or value. Thus, the petitioner described the utility model as follows:

LEAF SPRING EYE BUSHING FOR AUTOMOBILE

Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile are

made of hard rubber. These rubber bushings after a time, upon subjecting them to so

much or intermittent pressure would eventually wore ( sic) out that would cause the

wobbling of the leaf spring.

The primary object of this utility model, therefore, is to provide a leaf-spring eye

bushing for automobile that is made up of plastic.

Another object of this utility model is to provide a leaf-spring eye bushing forautomobiles made of polyvinyl chloride, an oil resistant soft texture plastic or

polypropylene, a hard plastic, yet both causes cushion to the leaf spring, yet strong

enough to endure pressure brought about by the up and down movement of said leaf

spring.

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Yet, an object of this utility model is to provide a leaf-spring eye bushing for

automobiles that has a much longer life span than the rubber bushings.

Still an object of this utility model is to provide a leaf-spring eye bushing for

automobiles that has a very simple construction and can be made using simple and

ordinary molding equipment.

A further object of this utility model is to provide a leaf-spring eye bushing for

automobile that is supplied with a metal jacket to reinforce the plastic eye bushing

when in engaged with the steel material of the leaf spring.

These and other objects and advantages will come to view and be understood upon a

reading of the detailed description when taken in conjunction with the accompanying

drawings.

Figure 1 is an exploded perspective of a leaf-spring eye bushing according to the present utility model;

Figure 2 is a sectional view taken along line 2-2 of Fig. 1;

Figure 3 is a longitudinal sectional view of another embodiment of this utility model;

Figure 4 is a perspective view of a third embodiment; and

Figure 5 is a sectional view thereof.

Referring now to the several views of the drawings wherein like reference numerals

designated same parts throughout, there is shown a utility model for a leaf-spring eye

bushing for automobile generally designated as reference numeral 10.

Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11 having a

co-axial bore 12 centrally provided thereof.

As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a

perpendicular flange 13 on one of its ends and a cylindrical metal jacket 14

surrounding the peripheral walls 15 of said body 11. When said leaf-spring bushing10 is installed, the metal jacket 14 acts with the leaf-spring eye (not shown), which is

also made of steel or cast steel. In effect, the bushing 10 will not be directly in contact

with steel, but rather the metal jacket, making the life of the bushing 10 longer than

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In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl chloride,

an oil resistant soft texture plastic or a hard polypropylene plastic, both are capable to

endure the pressure applied thereto, and, in effect, would lengthen the life and

replacement therefor.

Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of said bushing10 is insertably provided with a steel tube 17 to reinforce the inner portion thereof.

This steel tube 17 accommodates or engages with the leaf-spring bolt (not shown)

connecting the leaf spring and the automobile‘s chassis.

Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10 is

elongated and cylindrical as to its construction. Said another embodiment is also

made of polypropylene or polyvinyl chloride plastic material. The steel tube 17 and

metal jacket 14 may also be applied to this embodiment as an option thereof .[38]

VEHICLE BEARING CUSHION

Known bearing cushions inserted to bearing housings for vehicle propeller shafts are

made of hard rubber. These rubber bushings after a time, upon subjecting them to so

much or intermittent pressure would eventually be worn out that would cause the

wobbling of the center bearing.

The primary object of this utility model therefore is to provide a vehicle-bearing

cushion that is made up of plastic.

Another object of this utility model is to provide a vehicle bearing cushion made of polyvinyl chloride, an oil resistant soft texture plastic material which causes cushion

to the propeller‘s center bearing, yet strong enough to endure pressure brought about

by the vibration of the center bearing.

Yet, an object of this utility model is to provide a vehicle-bearing cushion that has a

much longer life span than rubber bushings.

Still an object of this utility model is to provide a vehicle bearing cushion that has a

very simple construction and can be made using simple and ordinary molding

equipment.

These and other objects and advantages will come to view and be understood upon a

reading of the detailed description when taken in conjunction with the accompanying

drawings.

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Figure 1 is a perspective view of the present utility model for a vehicle-bearing

cushion; and

Figure 2 is a sectional view thereof.

Referring now to the several views of the drawing, wherein like reference numeraldesignate same parts throughout, there is shown a utility model for a vehicle-bearing

cushion generally designated as reference numeral 10.

Said bearing cushion 10 comprises of a generally semi-circular body 11, having

central hole 12 to house a conventional bearing (not shown). As shown in Figure 1,

said body 11 is provided with a plurality of ridges 13 which serves reinforcing means

thereof.

The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture oil and

chemical resistant plastic material which is strong, durable and capable of enduringsevere pressure from the center bearing brought about by the rotating movement of

the propeller shaft of the vehicle.[39]

A utility model is a technical solution to a problem in any field of humanactivity which is new and industrially applicable. It may be, or may relate to, aproduct, or process, or an improvement of any of the aforesaid.[40]Essentially,a utility model refers to an invention in the mechanical field. This is the reasonwhy its object is sometimes described as a device or useful object.[41] A utilitymodel varies from an invention, for which a patent for invention is, likewise,

available, on at least three aspects: first, the requisite of “inventive step”[42] ina patent for invention is not required; second, the maximum term of protectionis only seven years[43] compared to a patent which is twenty years,[44] bothreckoned from the date of the application; and third, the provisions on utilitymodel dispense with its substantive examination[45] and prefer for a lesscomplicated system.

Being plain automotive spare parts that must conform to the originalstructural design of the components they seek to replace, the Leaf Spring EyeBushing and Vehicle Bearing Cushion are not ornamental. They lack the

decorative quality or value that must characterize authentic works of appliedart. They are not even artistic creations with incidental utilitarian functions orworks incorporated in a useful article. In actuality, the personal propertiesdescribed in the search warrants are mechanical works, the principal functionof which is utility sans any aesthetic embellishment.

Neither are we to regard the Leaf Spring Eye Bushing and Vehicle BearingCushion as included in the catch-all phrase “other literary, scholarly, scientific

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The petitioner cannot find solace in the ruling of the United StatesSupreme Court in Mazer v. Stein[51] to buttress his petition. In that case, theartifacts involved in that case were statuettes of dancing male and femalefigures made of semi-vitreous china. The controversy therein centered on thefact that although copyrighted as “works of art,” the statuettes were intended

for use and used as bases for table lamps, with electric wiring, sockets andlampshades attached. The issue raised was whether the statuettes werecopyright protected in the United States, considering that the copyrightapplicant intended primarily to use them as lamp bases to be made and soldin quantity, and carried such intentions into effect. At that time, the CopyrightOffice interpreted the 1909 Copyright Act to cover works of artisticcraftsmanship insofar as their form, but not the utilitarian aspects, wereconcerned. After reviewing the history and intent of the US Congress on itscopyright legislation and the interpretation of the copyright office, the USSupreme Court declared that the statuettes were held copyrightable works ofart or models or designs for works of art. The High Court ruled that:

―Works of art (Class G) – (a) – In General . This class includes works of artistic

craftsmanship, in so far as their form but not their mechanical or utilitarian aspects are

concerned, such as artistic jewelry, enamels, glassware, and tapestries, as well as all

works belonging to the fine arts, such as paintings, drawings and sculpture. …‖

So we have a contemporaneous and long-continued construction of the statutes by the

agency charged to administer them that would allow the registration of such a

statuette as is in question here.[52]

The High Court went on to state that “[t]he dichotomy of protection for theaesthetic is not beauty and utility but art for the copyright and the invention oforiginal and ornamental design for design patents.” Significantly, thecopyright office promulgated a rule to implement Mazer to wit:

… [I]f ―the sole intrinsic function of an article is its utility, the fact that the work is

unique and attractively shaped will not qualify it as a work of art.‖

In this case, the bushing and cushion are not works of art. They are, as

the petitioner himself admitted, utility models which may be the subject of apatent.

IN LIGHT OF ALL THE FOREGOING, the instant petition is herebyDENIED for lack of merit. The assailed Decision and Resolution of the Courtof Appeals in CA-G.R. SP No. 70411 are AFFIRMED. Search Warrant Nos.

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01-2401 and 01-2402 issued on October 15, 2001 are ANNULLED AND SET ASIDE. Costs against the petitioner.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario,

JJ., concur .

THIRD DIVISION

[G.R. No. 148222. August 15, 2003]

PEARL & DEAN (PHIL.), INCORPORATED, peti t ioner , vs . SHOEMART,INCORPORATED, and NORTH EDSAMARKETING, INCORPORATED, respondents .

D E C I S I O N

CORONA, J .:

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 theCourt of Appeals reversing the October 31, 1996 decision[2] of the Regional Trial Court ofMakati, Branch 133, in Civil Case No. 92-516 which declared private respondentsShoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI) liable for infringement of

trademark and copyright, and unfair competition.

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals [3] contained a summary of thisdispute:

―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 illuminatedwith 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

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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 asan alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. On

September 11, 1985, Pearl and Dean‘s General Manager, Rodolfo Vergara, submitted

for signature the contracts covering SM Cubao and SM Makati to SMI‘s 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.

Instead, in a letter dated January 14, 1986, SMI‘s house counsel informed Pearl andDean that it was rescinding the contract for SM Makati due to non-performance 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.

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 Shoemart‘s

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 SMI‘s 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 SMI‘s establishments. It also demanded the discontinued use


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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 SMI‘s stores. Claiming that both SMI and NEMI failed tomeet all its demands, 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 Dean‘s 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 entitledto 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

SMI‘s 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 Dean‘s 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 SMI‘s

averments, admissions and denials and prayed for similar reliefs and counterclaims as

SMI.‖

The RTC of Makati City decided in favor of P & D:

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, asamended. Accordingly, defendants are hereby directed:

(1) to pay plaintiff the following damages:

(a) actual damages - P16,600,000.00,

representing profits


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derived by defendants

as a result of infringe-

ment of plaintiff‘s copyright

from 1991 to 1992

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00

(d) attorney‘s 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 andEYD 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 plaintiff‘s light

boxes and its trademark ―Poster Ads‖.

Defendants‘ counterclaims are hereby ordered dismissed for lack of merit.

SO ORDERED.[4]

On appeal, however, the Court of Appeals reversed the trial court:

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:

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

drawings like plaintiff-appellant‘s will not extend to the actual object. It has so been

held under jurisprudence, of which the leading case is Baker vs. Selden (101 U.S. 841

(1879). In that case, Selden had obtained a copyright protection for a book entitled

―Selden‘s Condensed Ledger or Bookkeeping Simplified‖ which purported to explain

a new system of bookkeeping. Included as part of the book were blank forms and

illustrations consisting of ruled lines and headings, specially designed for use in

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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 Selden‘s 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 bea 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.

The principle in Baker vs. Selden was likewise applied in Muller vs. 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 plaintiff‘s 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.

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 Dean‘s copyright over the

technical drawings of the latter‘s advertising display units.

xxx xxx xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs. 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 20 of Republic Act 166, as amended, otherwise

known as the Trademark Law, which reads:


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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 registrant‘s ownership of the mark or trade-name, and of the

registrant‘s 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.‖ (underscoring 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 theTrademark 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:

Really, if the certificate of registration were to be deemed as including goods not

specified therein, then a s

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