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12. GSIS Family Bank - Thrift Bank vs.

BPI Family Bank AUTHOR: GOJAR


G.R. No. 175278, Sept. 23, 2015 Notes: [issue as to the corp. names]
TOPIC: Trademark  BPI Family Bank
 GSIS Family Bank

CASE LAW/ DOCTRINE: To fall w/n the prohibition of the law on the right to exclusive use of a corporate name, 2 requisites must be
proven: [w/c are present in this case]
1. That the complainant corporation acquired a prior right over the use of such corporate name; and
2. The proposed name is either
a. identical; or
b. deceptive or confusingly similar to that of any existing corporation or to any other name already protected by law; or
c. patently deceptive, confusing or contrary to existing law.
Emergency Recit: Respondent filed a petition to disallow petitioner from using the word “Family Bank” in its corporate name. SEC ruled in
favor of respondent and stated that it had the prior/preferential right to use the name “Family Bank” in the banking industry. SC affirmed
this and cited 2 requisites to be proven to fall w/n the prohibition of the law on the right to exclusive use of a corporate name [see doctrine].
Applying it in the case (1) Petitioner was incorporated only 17 yrs after respondent using its name ; (2) The words “Family Bank” are both
identical AND the overriding consideration in determining whether a person, using ordinary care & discrimination might be misled is the
circumstance that both of them are engaged in banking business.
FACTS:
1. Royal Savings Bank encountered liquidity problems so in 1984 it was placed under receivership & was closed. 2 mos. after it
reopened & was renamed Commsavings Bank Inc.
2. 1987- GSIS acquired petitioner, hence, it management & control was transferred to GSIS
3. DTI & BSP - approved the application to change its corporate name now to “GSIS, Family Bank, a Thrift Bank”.
 So petitioner operated under such business name pursuant to the DTI certificate of registration & Montary Board Circular
approval.
4. Respondent BPI Family Bank now assails this change in petitioner’s corporate name.
 BPI Family Bank was a product of merger b/w Family Bank & Trust Company (FBTC) and the Bank of the Philippine
Islands (BPI).
 1969 - the corporate name “Family First Savings Bank” was registered w/ SEC
 Since its incorporation, it has been commonly known as “Family Bank”.
 1985 - BPI acquired all the rights, properties, interest of Family Bank WHICH INCLUDED the right to use the names
such as “Family First Savings Bank”, “Family Bank” & “Family Bank and Trust Company”
 Hence, BPI Family Savings Bank was registered w/ SEC as a wholly-owned subsidiary of BPI.
 BPI Family Savings Bank then registered with the Bureau of Domestic Trade the trade or business name “BPI Family
Bank” and acquired a reputation and goodwill under the name.
5. SEC proceedings: [Respondent filed a petitioner w/ SEC Company Registration and Monitoring Department (SEC CRMD) ]
 To disallow or prevent the registration of the name “GSIS Family Bank” or any other corporate name with the words
“Family Bank” in it
 Claimed exclusive ownership to the name “Family Bank” since it acquired the name since its purchase & merger way back
1985
 Thru the years, it has been known as “BPI Family Bank” or “Family Bank” both locally and internationally. As such, it
has acquired a reputation and goodwill under the name, not only with clients here and abroad, but also with
correspondent and competitor banks, and the public in general.
6. SEC ruling: BPI Family Bank has a PRIOR/ preferential RIGHT to the use of the name Family Bank in the banking industry
 arising from its long & extensive nationwide use
 coupled w/ registration w/ the Intellectual Property Office (IPO) of the name “Family Bank" as its trade name
 applied the rule of “priority in registration” based on the legal maxim first in time, first in right
 there is confusing similarity b/w the corporate names although not identical, are indisputably similar, as to cause
confusion in the public mind, even with the exercise of reasonable care and observation, especially so since both
corporations are engaged in the banking business.
 So it ordered GSIS Family Bank to refrain from using the word “Family” as part of its name & make goods its commitment
to change its name by deleting / dropping the word w/n 30 days from actual receipt.
7. SEC En Bank affirmed SEC CRMD
8. CA: Affirmed. Further ruled that proof actual confusion need not be shown. It is enough that confusion is probably or likely to
occur.
ISSUES: Should GSIS Family Bank change its corporate name? YES. Sec. 18 of the Corp Code. - No corporate name may be allowed by the SEC if the
proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or
is patently deceptive, confusing or contrary to existing laws. When a change in the corporate name is approved, the Commission shall issue an amended
certificate of incorporation under the amended name.
RATIO: To fall w/n the prohibition of the law on the right to exclusive use of a corporate name, 2 requisites must be proven: [w/c are present
in this case]
1. That the complainant corporation acquired a prior right over the use of such corporate name; and
2. The proposed name is either
a. identical; or
b. deceptive or confusingly similar to that of any existing corporation or to any other name already protected by law; or
c. patently deceptive, confusing or contrary to existing law.
1st requisite of a PRIOR RIGHT/Priority of adoption rule.
 Here, respondent was incorporated in 1969 as Family Savings Bank then in 1985 as BPI Family Bank.
 While petitioner was incorporated as GSIS Family-Thrift Bank only in 2002 / 17 yrs after respondent started using its name.

2nd requisite, the proposed name is


(a) identical; or
(b) deceptive or confusingly similar to that of any existing corporation or to any other name already protected by law.

As to letter (a): The words “Family Bank” are both in their corporate names, hence, identical.
 Respondent can’t claim under Sec. 3 of the Revised Guidelines in the Approval of Corporate and Partnership Names wherein it
states that if there be identical, misleading or confusingly similar name to one already registered by another corporation or
partnership with the SEC, the proposed name must contain at least one distinctive word different from the name of the
company already registered.
o To show contrast w/ respondent’s corporate name, petitioner used the words GSIS & thrift. BUT these are not sufficiently
distinct from that of respondent’s corporate name
o GSIS = is merely an acronym of the proper name by which petitioner is identified
o Thrift = classification of the type of bank that petitioner is AND still not distinct since both of them are engaged in the
banking business.

As to letter (b): There is deceptive & confusing similarity b/w the 2 as found by SEC.
 Test is whether the similarity is such as to mislead a person using ordinary care and discrimination. And even without such
proof of actual confusion between the two corporate names, it suffices that confusion is probable or likely to occur.
 HERE, the only words that distinguish the 2 are the “BPI” “GSIS” & “Thrift”.
o The first 2 are merely acronyms of the proper names by w/c the two corp identify themselves
o While thrift only describes the classification of the bank.
 The overriding consideration in determining whether a person, using ordinary care & discrimination might be misled is the
circumstance that both of them are engaged in banking business.
 Respondent even alleged that when its clients saw the signage of petitioner “GSIS Family Bank”, their clients began asking
questions such as whether GSIS acquired Family Bank, whether there is a joint agreement b/w GSIS & Family Bank. Hence, it is not
a remote possibility that the public may entertain the idea that a relationship or arrangement indeed exists between BPI and GSIS
due to the use of the term “Family Bank” in their corporate names.

Petitioner can’t argue that the word “family” is a generic/descriptive name w/c can’t be appropriated by respondent but SC disagreed. Family as
used in respondent’s corporate name is NOT generic.
 Generic marks - commonly used as the name or description of a kind of goods, such as “Lite” for beer or “Chocolate Fudge” for
chocolate soda drink.
 Descriptive marks - convey the characteristics, function, qualities or ingredients of a product to one who has never seen it or does
not know it exists, such as “Arthriticare” for arthritis medication.
 Here, the word family can’t be separated from the word bank. Both parties refer to the phrase “Family Bank”. This phrase is
neither generic nor descriptive” but is merely suggestive & may properly regarded as arbitrary.
 Arbitrary marks - words or phrases used as a mark that appear to be random in the context of its use. Easy to remember due to
their arbitrariness. They are original & unexpected in relation to the products they endorse, thus, becoming themselves distinctive.
 Suggestive marks - are marks, which merely suggest some quality or ingredient of goods. The strength of this lies on how the
public perceives the word in relation to the product or service.
 Family - a group consisting of parents and children living together in a household / group of people related to one another by
blood or marriage
 Bank - a financial establishment that invests money deposited by customers, pays it out when requested, makes loans at interest,
and exchanges currency
o Hence, by definition, there can be no expected relation between the word “family” and the banking business of
respondent. Rather, the words suggest that respondent bank is where family savings should be deposited. And
“family bank” can’t be used to define an object.

As to petitioner’s argument that the opinion of BSP + DTI certificate of registration constitute authority for it to use “GSIS Family Bank” as
corporate name = untenable ; it is lodged w/ the SEC.
 The enforcement of the protection accorded by Section 18 of the Corporation Code to corporate names is lodged exclusively in the
SEC. SEC has absolute jurisdiction, supervision and control over all corporations
 SEC has the duty to prevent confusion in the use of corporate names not only for the protection of the corporations involved, but
also of the public.
 It has authority to de-register at all time corporate names which are likely to generate confusion
 In implementing Sec. 18 of Corp. Code, the guideline was issued wherein registrant coloration must submit a letter undertaking to
change its corporate name in the event that another person, firm or entity has acquired a prior right to use of said name or one
similar to it
SC also ruled that: Judicial notice may also be taken of the action of the IP in approving respondent’s registration of the trademark “BPI Family Bank” & its logo
on 2008. Because the certificate of registration of a mark shall be prima facie evidence of the validity of the registration, the registrant’s ownership
of the mark, and of the registrant’s exclusive right to use the same in connection with the goods or services and those that are related thereto
specified in the certificate

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