Case Digests and Doctrines for IP Law Introduction

1. PEARL & DEAN vs. SHOEMART, INC.

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

CORONA, J

(RTC- respondent shoemart liable for infringement)

(CA- decision was reversed means not liable)

(SC- certiorari)

FACTS: Pearl & Dean was able to acquire copyrights over the designs of the display units called “light boxes”. In 1988, their trademark application for “Poster Ads” was approved; they used the same trademark to advertise their light boxes.

In 1985, Pearl & Dean negotiated with Shoemart, Inc. (SM) (respondent) so that the former may be contracted to install light boxes in the ad spaces of SM. Eventually, SM rejected Pearl & Dean’s proposal.

Two years later, Pearl & Dean received a report that light boxes, exactly the same as theirs, were being used by SM in their ad spaces. They demanded SM to stop using the light boxes and at the same time asked for damages amounting to P20 M. SM refused to pay damages though they removed the light boxes.

1.) it did not infringe on Pearl & Dean’s trademark because Pearl & Dean’s trademark is only applicable to envelopes and stationeries and not to the type of ad spaces owned by SM.

2.) SM also averred that “Poster Ads” is a generic term hence it is not subject to trademark registration.

3.)  SM also averred that the actual light boxes are not copyrightable. The RTC ruled in favor of Pearl & Dean. But the Court of Appeals ruled in favor of SM.

ISSUE:

1.Whether or not SM Shoemart was liable for infringement.

No. The lightboxes 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; what was copyrighted were the technical drawings only, and not the lightboxes themselves. To be copyrightable there should be republication of the architectural plan.

In other cases, 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.

On the trademark infringement allegation, the words “Poster Ads” are a simple contraction of the generic term poster advertising.  In the absence of any convincing proof that “Poster Ads” has acquired a secondary meaning in this jurisdiction, Pearl & Dean’s exclusive right to the use of “Poster Ads” is limited to what is written in its certificate of registration, namely, stationeries.

Note:

  1. ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioners position was premised on its belief that its copyright over the engineering drawings extended ipso facto to the lightboxes depicted or illustrated in said drawings. In ruling that there was no copyright infringement, the Court of Appeals held that the copyright was limited to the drawings alone and not to the light box itself. We agree with the appellate court.

BASIS: First, petitioners application for a copyright certificate as well as 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.) Said Section 2 expressly enumerated the works subject to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of the following works:  (O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;

This being so, petitioners copyright protection extended only to the technical drawings and not to the light box itself because the latter was not at all in the category of prints, pictorial illustrations, advertising copies, labels, tags and box wraps.

Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the rights are limited to what the statute confers.

Accordingly, it can cover only the works falling within the statutory enumeration or description.[8] 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.

  1. ON THE ISSUE OF PATENT INFRINGEMENT– respondents not liable

Petitioner never secured a patent for the light boxes. 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.]

  1. ON THE ISSUE OF TRADEMARK INFRINGEMENT

P & D was able to secure a trademark certificate for “Poster Ads”, but one where the goods specified were stationeries such as letterheads, envelopes, calling cards and newsletters. On the contrary, it dealt in electrically operated backlit advertising units and the sale of advertising spaces thereon, which, however, were not at all specified in the trademark certificate.

“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.”

Even if given that it qualifies as trademark infringement, the P &D failed 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. (no registration for trademark, no right, Unlike in copyright where protection is automatic.)

  1. ON THE ISSUE OF UNFAIR COMPETITION

In this case, there was no evidence that P & Ds use of Poster Ads was distinctive or well-known. Poster Ads was too generic a name.

DOCTRINE OF SECONDARY MEANING – Secondary meaning means that a word or phrase originally incapable of exclusive appropriation with reference to an article in the market (because it is geographically or otherwise descriptive) might nevertheless have been used for so long and so exclusively by one producer with reference to his article that, in the trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his property.[29]

SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a mark or trade-name shall be prima facie evidence of the validity of the registration, the registrants ownership of the mark or trade-name, and of the registrants exclusive right to use the same in connection with the goods, business or services specified in the certificate, subject to any conditions and limitations stated therein. (underscoring supplied)

2. ELIDAD C. KHO, vs KEC COSMETICS LABORATORY,  [G.R. No. 115758. March 19, 2002]

DE LEON, JR., J.:

-action for injuction and damages

Elidad Kho is the owner of KEC Cosmetics Laboratory

–               was also the holder of copyrights over Chin Chun Su and its Oval Facial Cream Container/Case

–               bought the patent rights over the Chin Chun Su & Device and Chin Chun Su for medicated cream from one Quintin Cheng, who was the assignee of Shun Yi Factory – a Taiwanese factory actually manufacturing Chin Chun Su products.

Summerville in their-  defense alleged that they are the exclusive and authorized importer, re-packer and distributor of Chin Chun Su products;

–               that Shun Yi  (assignor of Quintin Cheng) even authorized Summerville to register its trade name Chin Chun Su Medicated Cream with the Philippine Patent Office; that Quintin Cheng, from whom Kho acquired her patent rights, had been terminated (her services) by Shun Yi. (g terminate na ni Shun Yi and ptent rights ni Quintin Cheng

(RTC-granted the issuance of writ of preliminary injunction)

(CA- reversed the decision)

 ISSUE: Whether or not Kho has the exclusive right to use the trade name and its container.

HELD: NO.  Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one another.

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.

The name and container of a beauty cream product are proper subjects of a trademark (not copyright-like what she registered for) 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.

WHEREFORE, the petition is DENIED

NOTES:

  1. Principal Registry
  2. Supplemental Registry
  3. Old Copyright Law. PD 49
  4. Trademark – RA 166

 

3. AIR PHILIPPINES CORP V PENNSWELL INC (December 13, 2007)

G.R. No. 172835/

CHICO-NAZARIO, J.:

-action for sum of money

The RTC demanded respondents to provide a detailed list of the product components but then considered respondents reason that info ask was privileged in nature as a trade secret. Alleging grave abuse of discretion on the part of the RTC, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of Court with the Court of Appeals, which denied the Petition and affirmed the Order dated 30 June 2004 of the RTC. Petitioners Motion for Reconsideration was denied. Unyielding, petitioner brought the instant Petition before SC.

  1. During the pendency of the trial, petitioner filed a Motion to Compel respondent to give a detailed list of the ingredients and chemical components of the following products. The RTC rendered an Order granting the petitioner’s motion.
  2. Respondent sought reconsideration of the foregoing Order, contending that it cannot be compelled to disclose the chemical components sought because the matter is confidential. It argued that what petitioner endeavored to inquire upon constituted a trade secret which respondent cannot be forced to divulge.
  3. The RTC gave credence to respondent’s reasoning, and reversed itself. Alleging grave abuse of discretion on the part of the RTC, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of Court with the Court of Appeals, which denied the Petition and affirmed the Order dated 30 June 2004 of the RTC. Petitioner’s Motion for Reconsideration was denied. Unyielding, petitioner brought the instant Petition before SC.

Issue:

W/N CA THE CHEMICAL COMPONENTS OR INGREDIENTS OF RESPONDENTS PRODUCTS ARE TRADE SECRETS OR INDUSTRIAL SECRETS THAT ARE NOT SUBJECT TO COMPULSORY DISCLOSURE

Held: Yes.

A trade secret is defined as a plan or process, tool, mechanism or compound known only to its owner and those of his employees to whom it is necessary to confide it. The definition also extends to a secret formula or process not patented, but known only to certain individuals using it in compounding some article of trade having a commercial value. American jurisprudence has utilized the following factors to determine if an information is a trade secret, to wit:

(1) the extent to which the information is known outside of the employer’s business;

(2) the extent to which the information is known by employees and others involved in the business;

(3) the extent of measures taken by the employer to guard the secrecy of the information;

(4) the value of the information to the employer and to competitors;

(5) the amount of effort or money expended by the company in developing the information; and

(6) the extent to which the information could be easily or readily obtained through an independent source.

Rule 27 sets an unequivocal proviso that the documents, papers, books, accounts, letters, photographs, objects or tangible things that may be produced and inspected should not be privileged. The documents must not be privileged against disclosure. On the ground of public policy, the rules providing for production and inspection of books and papers do not authorize the production or inspection of privileged matter; that is, books and papers which, because of their confidential and privileged character, could not be received in evidence. Such a condition is in addition to the requirements that the items be specifically described, and must constitute or contain evidence material to any matter involved in the action and which are in the party’s possession, custody or control.

In the case at bar, petitioner cannot rely on Section 77of Republic Act 7394, or the Consumer Act of the Philippines, in order to compel respondent to reveal the chemical components of its products.  While it is true that all consumer products domestically sold, whether manufactured locally or imported, shall indicate their general make or active ingredients in their respective labels of packaging, the law does not apply to respondent.  Respondent’s specialized lubricants — namely, Contact Grease, Connector Grease, Thixohtropic Grease, Di-Electric Strength Protective Coating, Dry Lubricant and Anti-Seize Compound — are not consumer products.

  • The Supreme Court has declared that trade secrets and banking transactions are among the recognized restrictions to the right of the people to information as embodied in the Constitution. SC said that the drafters of the Constitution also unequivocally affirmed that, aside from national security matters and intelligence information, trade or industrial secrets (pursuant to the Intellectual Property Code and other related laws) as well as banking transactions (pursuant to the Secrecy of Bank Deposits Act), are also exempted from compulsory disclosure.

The products are covered by the exception of trade secrets being divulged in compulsory disclosure.  The Court affirms the ruling of the Court of Appeals which upheld the finding of the RTC that there is a substantial basis for the respondent to seek the protection of the law for its proprietary rights over the detailed chemical composition of its products.

What is clear from the factual findings of the RTC and the Court of Appeals is that the chemical formulation of respondent’s products is not known to the general public and is unique only to it.  Both courts uniformly ruled that these ingredients are not within the knowledge of the public.  Since such factual findings are generally not reviewable by this Court, it is not duty-bound to analyze and weigh all over again the evidence already considered in the proceedings below.

The revelation of respondent’s trade secrets serves no better purpose to the disposition of the main case pending with the RTC, which is on the collection of a sum of money.  As can be gleaned from the facts, the petitioner received respondent’s goods in trade in the normal course of business.  To be sure, there are defenses under the laws of contracts and sales available to the petitioner.  On the other hand, the greater interest of justice ought to favor the respondent as the holder of trade secrets. Weighing the conflicting interests between the parties, SC rules in favor of the greater interest of the respondent.  Trade secrets should receive greater protection from discovery, because they derive economic value from being generally unknown and not readily ascertainable by the public.

  1. PEST MANAGEMENT ASSOCIATION OF THE PHILIPPINES (PMAP), represented byits President, MANUEL J. CHAVEZ, G.R. NO. 156041 February 21, 2007

Petitioner, vs. FERTILIZER AND PESTICIDE AUTHORITY (FPA), SECRETARY OF THEDEPARTMENT OF AGRICULTURE, FPA OFFICER- IN-CHARGE CESAR M. DRILON,AND FPA DEPUTY DIRECTOR DARIO C. SALUBARSE,

AUSTRIA-MARTINEZ, J.:

FACTS

The case commenced upon petitioner’s filing of a Petition For Declaratory Relief With Prayer For Issuance Of A Writ Of Preliminary Injunction And/Or TemporaryRestraining Order with the RTC.

Petitioner, a non-stock corporation duly organized and existing under the laws of the Philippines, is an association of pesticide handlers duly licensed by respondent Fertilizer and Pesticide Authority (FPA).

Petitioner questioned the validity of Section 3.12 of the 1987 Pesticide Regulatory Policies and Implementing Guidelines, which provides thus:

  • 12 Protection of Proprietary Data

Data submitted to support the first full or conditional registration of a pesticide active ingredient in the Philippines will be granted proprietary protection for a period of seven years from the date of such registration.

 

During this period subsequent registrants may rely on these data only with third party authorization or otherwise must submit their own data.

 

After this period, all data may be freely cited in support of registration by any applicant, provided convincing proof is submitted that the product being registered is identical or substantially similar to any current registered pesticide, or differs only in ways that would not significantly increase the risk of unreasonable adverse effects.

Pesticides granted provisional registration under P.D. 1144 will be considered first registered in 1977, the date of the Decree. Pesticide products in which data is still under protection shall be referred to as proprietary pesticides, and all others as commodity pesticides. Petitioner argued that the specific provision on the protection of the proprietary data in

Petitioner’s contention: FPA’s Pesticide Regulatory Policies and Implementing Guidelines is unlawful for going counter to the objectives of P.D. No. 1144; for exceeding the limits of delegated authority; and for encroaching on the exclusive jurisdiction of the Intellectual Property Office.

The RTC dismissed the petition for declaratory relief for lack of merit. The RTC held that “the FPA did not exceed the limits of its delegated authority in issuing the aforecited Section 3.12 of the Guidelines granting protection to proprietary data x x because the issuance of the aforecited Section was a valid exercise of its power to regulate, control and develop the pesticide industry under P.D. 1144” and the assailed provision does “not encroach on one of the functions of the Intellectual Property Office(IPO).”

Respondents, on the other hand, maintain that the provision on the protection of proprietary data in the FPA’s Pesticide Regulatory Policies and Implementing Guidelines is valid and legal as it does not violate the objectives of P.D. No. 1144; the proprietary data are a substantial asset that must be protected; the protection for a limited number of years does not constitute an unlawful restraint of free trade, and such provision does not encroach upon the jurisdiction of the Intellectual Property Office. Hence, this petition for review.

ISSUE

Did the FPA go beyond its delegated power and undermine the objectives of P.D. No.1144 by issuing regulations that provide for the protection of proprietary data?

RULING

  1. ON delegated power issue:

The petition is devoid of merit. The law is implemented by the assailed Pesticide Regulatory Policies and implementing Guidelines is P.D. No. 1144, entitled Creating the Fertilizer and PesticideAuthority and Abolishing the Fertilizer Industry Authority

As stated in the Preamble of said decree, “there is an urgent need to create a technically-oriented government authority equipped with the required expertise to regulate, control and develop both the fertilizer and the pesticide industries.” The decree further provided as follows:Section 6.

Powers and Functions

. The FPA shall have jurisdiction, overall existing handlers of pesticides, fertilizers and other agricultural chemical inputs. The FPA shall have the following powers and functions:

  1. Common to Fertilizers, Pesticides and other Agricultural Chemicals

x x x4. To promulgate rules and regulations for the registration and licensing of handlers of these products, collect fees pertaining thereto, as well as the renewal, suspension, revocation, or cancellation of such registration or licenses and such other rules and regulations as may be necessary to implement this Decree; x x xSection 7.

Power to Issue Rules and Regulations to Implement Decree.

The FPA is hereby authorized to issue or promulgate rules and regulations to implement and carry out the purposes and provisions of this Decree.

Under P.D. No. 1144, the FPA is given the broad power to issue rules and regulations to implement and carry out the purposes and provisions of said decree, i.e., to regulate, control and develop the pesticide industry. In furtherance of such ends, the FPA sees the protection of proprietary data as one way of fulfilling its mandate. In Republic v. Sandiganbayan , the Court emphasized that: x x x

[t]he interpretation of an administrative government agency, which is tasked to implement a statute is generally accorded great respect and ordinarily controls the construction of the courts.

The reason behind this rule was explained in Nestle Philippines, Inc. vs. Court of Appeals  in this wise: The rationale for this rule relates not only to the emergence of the multifarious needs of a modern or modernizing society and the establishment of diverse administrative.

Note: Verily, in this case, the Court acknowledges the experience and expertise of FPA officials who are best qualified to formulate ways and means of ensuring the quality and quantity of pesticides and handlers thereof that should enter the Philippine market, such as giving limited protection to proprietary data submitted by applicants for registration.

  1. Encroach IPO office issue:

There is no encroachment upon the powers of the IPO granted under R.A. No. 8293, otherwise known as the Intellectual Property Code of the Philippines. Section 5 thereof enumerates the functions of the IPO. Nowhere in said provision does it state nor can it be inferred that the law intended the IPO to have the exclusive authority to protect or promote intellectual property rights in the Philippines.

On the contrary, paragraph (g) of said Section even provides that the IPO shall [c]oordinate with other government agencies and the private sector efforts to formulate and implement plans and policies to strengthen the protection of intellectual property rights in the country. Clearly, R.A. No. 8293 recognizes that efforts to fully protect intellectual property rights cannot be undertaken by the IPO alone. Other agencies dealing with intellectual property rights are, therefore, not precluded from issuing policies, guidelines and regulations to give protection to such rights.

——END—-

 

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