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CASE DIGESTS
CONVERSE RUBBER v.
UNIVERSAL PRODUCTS
January 8, 1987
Fernan, J
Luciano, Noel Christian O.
Effect of Failure to Secure SEC License
SUMMARY: Universal Rubber Products, Inc. filed an application with
the Philippine Patent Office for registration of the trademark
UNI!R"#$ %ON!R"! #N& &!I%!' used on rubber shoes and
rubber slippers. %onverse Rubber %orporation filed its opposition to the
application, contending that the trademark sought to be registered is
confusingl( similar to the word %ON!R"!' which is part of
%onverse)s corporate name as to likel( deceive purchasers. %onverse is a
foreign corporation not licensed to do business in the Philippines. &irector
of Patents dismissed the opposition on the ground that, among others,
since %onverse is not licensed to do business here it had no name to
protect in the forum. "% reversed and held that %onverse can protect its
trade name even if it is not licensed to do business in the Philippines.
DOCTRINE: *as learned in PRI$+ #n e,ception to the licensing
re-uirement is an action to protect trademark, tradename, goodwill, patent,
or for unfair competition.
It is a corollar( logical deduction that while %onverse is NO/ licensed to
do business in the Philippines and is not actuall( doing business here, it
does not mean that its goos are not being sold here or that it has not earned
a reputation or goodwill as regards its products.
La Chemise Lacoste, SA . Fernan!e" 0 # foreign corporation which has
never done an( business in the Philippines and which is unlicensed and
unregistered to do business here, but is widel( and favorabl( known in the
Philippines through the use therein of its products bearing its corporate
and trade name, has a legal right to maintain an action in the Philippines to
restrain the residents and inhabitants thereof from organi1ing a
corporation therein bearing the same name as the foreign corporation
/he compan( is not seeking to enforce an( legal or control rights arising
from or growing out of an( business transacted within the Philippines. It
seeks to protect its reputation, its corporate name, its goodwill, whenever
that reputation, corporate name, or goodwill have, through the natural
development of its trade, established themselves. /his is a propert( right, a
right in recess which it ma( assert and protect against all the world, in an(
of the courts of the world
/his is also in consonance with the %onvention of the Union of Paris for
the Protection of Industrial Propert( to which the Philippines is a part(.
#rt. 2 0 # trade name *corporate name. shall be protected in all the
countries of the Union without the obligation of filing or registration,
whether or not it forms part of trade mark.
FACTS: Universal Rubber Products, Inc. filed an application with the
Philippine Patent Office for registration of the trademark UNI!R"#$
%ON!R"! #N& &!I%!' used on rubber shoes and rubber slippers.
%onverse Rubber %orporation filed its opposition to the application,
contending+
3. /rademark sought to be registered is confusingl( similar to the
word %ON!R"!' which is part of %onverse)s corporate name
as to likel( deceive purchasers
4. /he registration would cause great and irreparable in5ur( to the
business reputation and goodwill of %onverse, within the meaning
of R# 366, "ec. 2
It is admitted, via stipulation of facts, that %onverse is not licensed to do
business in the Philippines.
&uring trial, %onverse presented one witness, 7rs. Pac-uing
3. Pac-uing is a dul( licensed private merchant
4. Pac-uing testified that she knew %onverse)s rubber shoes came
from the U" because it sa(s there in the trademark %onverse
%huck /a(lor, made in U"#'
Universal presented one witness, the corporate secretar(
3. /he secretar( testified that Universal has been selling on wholesale
basis Universal %onverse' sandals since 3864
4. "he was unaware of the name %onverse' prior to her
corporation)s sale of Universal %onverse rubber shoes and rubber
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CASE DIGESTS
sandals
DIRECTOR OF PATENTS+ /he &irector dismissed the opposition of
%onverse and gave due course to Universal)s application. 9e held+
3. %onverse failed to present proof that the single word %onverse' in
its corporate name has become so identified with the corporation
that whenever used, it designates to the mind of the public that
particular corporation
4. !ntr( of %onverse)s goods in the Philippines were in ver(
insignificant -uantit( and without %onverse)s direct or indirect
hand in the transaction
:. %onverse)s proof of its corporate personalit( cannot establish the
use of the word %ON!R"! it an( sense, as it is shown and
admitted that it is NO/ &OIN; <U"IN!"" in the Philippines
a. <esides, it was also stipulated that %onverse uses the
trademark %9U%= /#>$OR' and #$$ "/#R' and
&!I%!'
?. /he record is wanting in proof to establish likelihood of confusion
as to cause probable damage to %onverse
/he &irector also dismissed the 7R of %onverse. /hus, this petition for
review.
ISSUE+ @ON Universal)s partial appropriation of %onverse)s corporate
name is such of character that it is calculated to deceive or confuse the
public to the in5ur( of %onverse.
HELD+ >!"A Its application should be denied.
I. &iscussion on /rade Names
#. /rade name is an( individual name or surname, firm name,
device or word used b( manufacturers, individuals, merchants,
and others to identif( their businesses, vocations, or
occupations
<. Ownership of trademark or trade name is a propert( right
which the owner is entitled to protect
3. #ppropriation b( another of the dominant part of
corporate name is an infringement
II. Universal had no right to appropriate %ON!R"! as its
trademark. Its application should be denied.
#. Brom a cursor( application of %onverse)s corporate name, it is
evident that %ON!R"! is the dominant word which
identifies %onverse from other corporations engaged in the
same business
<. Universal admitted %onverse)s e,istence since 38?6 as a dul(
organi1ed foreign corporation engaged in the manufacture of
rubber shoes
3. /his admission betra(s its knowledge of the reputation
and business of %onverse even before it applied for
registration of the trademark
4. %$!#R$>, Universal had no right to appropriate the
name %ON!R"! for use on its products which are
similar to those being produced b( %onverse
%. Universal)s witness had no idea wh( Universal chose
UNI!R"#$ %ON!R"!' as trademark and the record
discloses no reasonable e,planation for Universal)s use of the
word %ON!R"!
3. "uch une,plained word lends itself open to the suspicion
of fraudulent motive to trade upon %onverse)s reputation
&. /estimon( of %onverse)s witness, who is a legitimate trader,
as well as the invoices evidencing sales of %onverse)s
products in the Philippines, give credence to %onverse)s claim
that it has earned a business reputation and goodwill in this
countr(
3. /hus, the word %ON!R"! has grown to be identified
with %onverse)s products
4. Burthermore, said sales invoices provide the best proof
that there were actual sales of %onverse)s products in the
countr( and that there was actual use for a protracted
period of %onverse)s trademark or part thereof through
these sales
!. #nother factor wh( Universal)s applications should be denied
is the confusing similarit( between its trademark
UNI!R"#$ %ON!R"! #N& &!I%! and %onverse)s
corporate name andCor its trademarks %9U%= /#>$OR and
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CASE DIGESTS
#$$ "/#R &!I%!
3. /his could confuse the purchasing public to the pre5udice
of %onverse
4. Burthermore, there is a similarit( in the general
appearance of Universal)s trademark and that of
%onverse)s
a. /his would create a likelihood of confusion among
the purchasing public.
III. It is a corollar lo!ical "#"$ctio% t&at '&il# Co%v#rs# is NOT
lic#%s#" to "o ($si%#ss i% t&# P&ili))i%#s a%" is %ot act$all
"oi%! ($si%#ss &#r#* it "o#s %ot +#a% t&at its !oos ar# %ot (#i%!
sol" &#r# or t&at it &as %ot #ar%#" a r#)$tatio% or !oo"'ill as
r#!ar"s its )ro"$cts.
#. La Chemise Lacoste, SA . Fernan!e" 0 # foreign corporation
which has never done an( business in the Philippines and
which is unlicensed and unregistered to do business here, but
is widel( and favorabl( known in the Philippines through the
use therein of its products bearing its corporate and trade
name, has a legal right to maintain an action in the Philippines
to restrain the residents and inhabitants thereof from
organi1ing a corporation therein bearing the same name as the
foreign corporation
<. /he compan( is not seeking to enforce an( legal or control
rights arising from or growing out of an( business transacted
within the Philippines
3. It seeks to protect its reputation, its corporate name, its
goodwill, whenever that reputation, corporate name, or
goodwill have, through the natural development of its
trade, established themselves.
%. /his is a propert( right, a right in recess which it ma( assert
and protect against all the world, in an( of the courts of the
world
&. "ince it is the trade and not the mark that is to be protected, a
trademark acknowledges no territorial boundaries or states or
nations, but e,tends to ever( market where the trader)s goods
have become known and identified because of the mark.
!. /his is also in consonance with the %onvention of the Union
of Paris for the Protection of Industrial Propert( to which the
Philippines is a part(
3. #rt. 2 0 # trade name *corporate name. shall be protected
in all the countries of the Union without the obligation of
filing or registration, whether or not it forms part of trade
mark,
DISPOSITIVE+ &irector of Patents decision reversed and set aside.
#pplciation of Universal is denied.