Corporation Law Corporate Name PHILIPPINE EXPORTS v.

COURT OF APPEALS
FACTS:

JESETH

Philippine Exports, a foreign corporation (Netherlands) although not registered in the Philippines, is the registered owner of trademarks Philips & Philips Shield Emblem as issued in the Philippines. Philips Electrical, together with Philips Industrial are authorized users of the said trademarks. They all belong to the Philips group of companies. Respondent Standard Philips was was issued certificate of registration in 1982. In 1984, petitioners filed a complaint with SEC for the cancellation of the word Philips in respondents corporate name in view of prior registration. Respondent refused to amend its Articles of Incorporation. Petitioner then contended that the use of the word Philips by respondent amounts to an infringement and a clear violation of petitioners exclusive right to use the same. Petitioner even contended that both were in the same line of business. Respondent countered that: 1) Petitioner Philips Exports has no capacity to sue; 2) the use of corporate name is not similar; and 3) products are different. SEC Hearing Officer ruled in favour of respondent; it dismissed the petition for lack of merit and stated that there is no confusing similarity hence Sec 18 shall not apply. Also petitioners name contained at least 2 words different from that of respondents. MR was denied; SEC En Banc affirmed the dismissal; CA swept aside petitioners claim stating that Converse Rubber is not the same with the case at bar; in the former, there were identical business nature as compared to the present case where there is none.

ISSUE: Whether the names of the parties are identical and therefore violative of Sec 18 of the Corporation Code HELD: Corporate name is a property right, a right in rem which means it may be protected and asserted against the whole world. It is a property right and therefore it cannot be subject to appropriation by another corporation in the same field. Name is necessary to the corporations existence; it designates the corporation in the same manner as a name designates a person and the right to use such is much a part of the corporation franchise as any other privilege granted. Sec 18 provides that a corporation name cannot be registered if it is identical or deceptively or confusingly similar to an existing corporations. There are 2 requisites: 1) prior right over the use of such corporate name of the complaintant; 2) proposed name is identical or confusingly similar. Priority of Adoption the right to the exclusive use of a corporation name with freedom from infringement by similarity is determined through this; petitioner had prior adoption of the name Philips n 1956. Respondent came in 26 years later. The second requisite is also present in this case. The test to determine the existence of confusing similarity in corporate names is WHETHER THE SIMILARITY IS SUCH TO MISLEAD A PERSON USING ORDINARY CARE AND DISCRIMINATION. Even if the corporate names of the parties are not identical, it may nonetheless lead to confusion because of the dominant word Philips. Respondent contends, however, that there is no confusion as they do not engage in the same line of business.

Corporation Law Corporate Name

JESETH

There is no need to present proof of actual confusion. It is sufficient that it is most likely to occur. However, respondents primary purposes in its AI, it has been shown that there is nothing that could prevent it from dealing in the same line of business of the petitioner. (Electrical supplies.) There is an intention on the part of respondent to ride on the popularity and goodwill of petitioner throughout the world. As to the rule that at least 2 words should be different, it should be noted that although it is true that petitioners names have 2 different words from that of respondents that latters name nonetheless actually contains of a single word Standard different from that of petitioners. And therefore, it cannot be allowed. When respondent submitted its AI, it also filed an undertaking of its unwillingness to change its corporate name in case of an acquired prior right, as in this case but it did not.

Corporation Law Corporate Name LYCEUM OF THE PHILIPPINES v. COURT OF APPEALS

FACTS:

JESETH

Petitioner Lyceum is registered with the SEC in 1950. In 1984, it instituted proceedings before the SEC to compel private respondent to delete the word LYCEUM from their names and permanently enjoin them from using the word as part of their names. The case has its roots when Petitioner filed a proceeding before the SEC to require Lyceum of Baguio to change its name. The SEC ruled in favour of petitioner, finding that their names infringed petitioner because of the presence of a dominant word and that petitioner had prior right as it registered ahead of Lyceum of Baguio. Petitioner then wrote all educational institutions bearing the same word and advised them to discontinue such use; this recourse had failed; hence it instituted another proceeding before the SEC. SEC Hearing Officer ruled in favour of Lyceum, stating that it had exclusive right to use the word. The decision was based on the prior ruling. SEC En Banc reversed and set aside the decision; it stated that attaching the geographical names to the word Lyceum served sufficiently to distinguish the schools from one another. CA affirmed the decision of the SEC En Banc. MR was denied.

ISSUE: Whether petitioner has acquired secondary meaning to its name HELD: The reason behind the policy in Section 18 is to avoid fraud upon the public which would have the occasion to deal with the entity concerned the evasion of legal duties and obligations and the reduction of difficulties of administration and supervision over corporations. The corporation names of parties are not identical or confusingly similar. Although it is true that all the entities carry the world Lyceum, the confusion is nonetheless precluded by the appending of geographic names. Since Lyceum denotes a school/institution, it is not unnatural to use this word to designate an entity. Petitioner claims that the word however, has already acquired a secondary meaning in relation to it and therefore it has become appropriable by petitioner to the exclusion of others. DOCTRINE OF SECONDARY MEANING it is when a word/phrase which is originally incapable of exclusive appropriation with reference to an article on the market because geographically or otherwise descriptive might nevertheless been used for so long and so exclusively by a producer with reference to his article in that the word/phrase has come to mean that the article was his product. CA ruled that there is no secondary meaning as evidence did not prove that the business has continued for so long a time that it has become a consequence and acquired a good will of considerable value such that the articles have acquired a well-known reputation and confusion will result. Exclusive use was never established and furthermore, Lyceum Pangasinan was even using the word 17 years prior to the date appellant started using the same. If there was an institution which have acquired an exclusive right, it should have been the latter. Corporate names must be evaluated in their entirety.