PHILIPS EXPORT B.V., et al. v. COURT same business.

The SEC Hearing Officer

OF APPEALS, et al. G.R. No. 96161, 21 ruled against the issuance of the writ as there
February 1992, SECOND DIVISION, is no confusing similarity between PEBV’s
(Melencio-Herrera, J.) DOCTRINE: A and Standard Philips' corporate names as
corporation has an exclusive right to the use those of the PEBV contain at least two
of its name, which may be protected by words different from that of the Standard
injunction upon a principle similar to that Philips. SEC en banc affirmed the dismissal.
upon which persons are protected in the use The CA dismissed PEBV’s petition ruling
of trademarks and tradenames. that Standard Philips' products consisting of
chain rollers, belts, bearings and cutting saw
FACTS: Philips Export B.V. (PEBV), a
are unrelated and non-competing with
foreign corporation organized under the laws
PEBV’s products i.e. electrical lamps.
of the Netherlands, although not engaged in
Hence, this petition.
business here, is the registered owner of the
trademarks PHILIPS and PHILIPS SHIELD ISSUE: Should Standard Philips change its
EMBLEM. Philips Electrical Lamps, Inc. corporate name given that PEBV acquired
(Philips Electrical, for brevity) and Philips exclusive right over the word “PHILIPS”,
Industrial Developments, Inc. (Philips hence, there is confusing similarity, if not
Industrial, for short), authorized users of the infringement, between the two corporate
trademarks PHILIPS and PHILIPS SHIELD names?
EMBLEM, were incorporated on 29 August
RULING: YES. As early as Western
1956 and 25 May 1956, respectively. All
Equipment and Supply Co. v. Reyes (1927),
such corporations belong to the PHILIPS
the Court declared that a corporation's right
Group of Companies. Standard Philips
to use its corporate and trade name is a
Corporation (Standard Philips), on the other
property right, a right in rem, which it may
hand, was issued a Certificate of
assert and protect against the world in the
Registration by SEC on 19 May 1982.
same manner as it may protect its tangible
PEBV filed a letter complaint with the SEC
property, real or personal, against trespass or
asking for the cancellation of the word
conversion. It is regarded, to a certain
"PHILIPS" from Standard Philips’ corporate
extent, as a property right and one which
name in view of the prior registration with
cannot be impaired or defeated by
the Bureau of Patents of the trademark
subsequent appropriation by another
"PHILIPS" and the logo "PHILIPS SHIELD
corporation in the same field. Sec. 18 of the
EMBLEM" in the name of PEBV and the
Corporation Code cannot be any clearer. To
previous registration of Philips Electrical
come within its scope, two requisites must
and Philips Industrial with the SEC.
be proven, namely: (1) that the complainant
Standard Philips refused to amend its
corporation acquired a prior right over the
Articles of Incorporation. PEBV filed with
use of such corporate name; and (2) the
the SECa Petition praying for the issuance of
proposed name is either: (a) identical; or (b)
a Writ of Preliminary Injunction claiming
deceptively or confusingly similar to that of
that the use of the word “PHILIPS” amounts
any existing corporation or to any other
to infringement and clear violation of
name already protected by law; or (c)
PEBV’s exclusive right to use the same
patently deceptive, confusing or contrary to
considering that both parties engage in the
existing law. The right to the exclusive use goodwill of said PEBV’s business
of a corporate name with freedom from throughout the world. The subsequent
infringement by similarity is determined by appropriator of the name or one confusingly
priority of adoption. In this regard, there is similar thereto usually seeks an unfair
no doubt with respect to PEBV’s prior advantage, a free ride of another's goodwill.
adoption of' the name ''PHILIPS" as part of PHILIPS is a trademark or trade name which
its corporate name. Philips Electrical and was registered as far back as 1922. PEBV,
Philips Industrial were incorporated on 29 therefore, have the exclusive right to its use
August 1956 and 25 May 1956, respectively, which must be free from any infringement
while Standard Philips was issued a by similarity. Such principle proceeds upon
Certificate of Registration on 12 April 1982, the theory that it is a fraud on the
26 years later. In determining the existence corporation which has acquired a right to
of confusing similarity in corporate names, that name and perhaps carried on its
the test is whether the similarity is such as to business thereunder, that another should
mislead a person, using ordinary care and attempt to use the same name, or the same
discrimination. In so doing, the Court must name with a slight variation in such a way as
look to the record as well as the names to induce persons to deal with it in the belief
themselves. While the corporate names of that they are dealing with the corporation
PEBV and Standard Philips are not identical, which has given a reputation to the name.
a reading of PEBV's corporate names Notably, too, Standard Philips’ name
inevitably leads one to conclude that actually contains only a single word, that is,
"PHILIPS" is, indeed, the dominant word in "STANDARD", different from that of
that all the companies affiliated or PEBV inasmuch as the inclusion of the term
associated with the principal corporation, "Corporation" or "Corp." merely serves the
PEBV, are known in the Philippines and Purpose of distinguishing the corporation
abroad as the PHILIPS Group of from partnerships and other business
Companies. Given Standard Philips’ primary organizations. The fact that there are other
purpose (i.e. …electrical wiring devices, companies engaged in other lines of
electrical component parts, and/or business using the word "PHILIPS" as part
complement…), nothing could prevent it of their corporate names is no defense and
from dealing in the same line of business of does not warrant the use by Standard Philips
electrical devices, products or supplies of such word which constitutes an essential
which fall under its primary purposes. feature of PEBV’s corporate name
Besides, there is showing that Standard previously adopted and registered andhaving
Philips not only manufactured and sold acquired the status of a well-known mark in
ballasts for fluorescent lamps with their the Philippines and internationally as well.
corporate name printed thereon but also WHEREFORE, the Decision of the Court of
advertised the same as, among others, Appeals dated 31 July 1990, and its
Standard Philips. Standard Philips’ choice of Resolution dated 20 November 1990, are
"PHILIPS" as part of its corporate name SET ASIDE and a new one entered
[STANDARD PHILIPS CORPORATION] ENJOINING private respondent from using
tends to show Standard Philips’ intention to "PHILIPS" as a feature of its corporate
ride on the popularity and established name, and ORDERING the Securities and
Exchange Commission to amend private deleting the word PHILIPS from the
respondent's Articles of Incorporation by corporate name of private respondent.
LYCEUM OF THE PHILIPPINES, INC., Eastern Mindanao, Inc., and Western
vs. COURT OF APPEALS, 219 SCRA Pangasinan Lyceum, Inc., also educational
610 (1993) LYCEUM OF THE institutions, to delete the word "Lyceum"
PHILIPPINES, INC., petitioner, vs. from their corporate names and to
COURT OF APPEALS permanently enjoin them from using
"Lyceum" as part of their respective names.
FACTS: LPI is an educational institution
The SEC hearing officer ruled in favor of
duly registered with SEC. When it first
LPI, relying upon the SEC’s ruling in the
registered with the SEC, it used the
LBI case and holding that the word
corporate name Lyceum of the Philippines,
"Lyceum" was capable of appropriation, LPI
Inc. and has used that name ever since. LPI
having acquired an enforceable exclusive
commenced in the SEC a proceeding against
right to the use of that word. On appeal, the
Lyceum of Baguio, Inc. to require it to
SEC En Banc reversed and set aside the
change its corporate name and to adopt
hearing officer’s decision, not considering
another name “not similar to or identical
the word "Lyceum" to have become so
with” that of LPI. Associate Commissioner
identified with LPI as to render use thereof
Julio Sulit held that the corporate name of
by other institutions as productive of
LPI and LBI were substantially identical
confusion about the identity of the schools
because of the presence of a "dominant"
concerned in the mind of the general public
word "Lyceum" the name of the
and holding that the attaching of
geographical location of the campus being
geographical names to the word "Lyceum"
the only word which distinguished one from
served sufficiently to distinguish the schools
the other. The SEC also noted that LPI had
from one another. The Court of Appeals
registered as a corporation ahead of LBI and
affirmed the SEC En Banc’s ruling. Hence,
ordered the latter to change its name to
this case.
another name "not similar or identical with"
the names of previously registered entities. ISSUES: (1) WON the word “Lyceum” can
LBI assailed the SEC’s order before the SC, be appropriated by LPI to the exclusion of
which denied the same. Armed with said SC others. –NO (2) WON the word “Lyceum”
resolution, LPI wrote to all the educational had acquired a secondary meaning in
institutions it could find using the word relation to LPI. –NO RULING: (1) The
"Lyceum" as part of their corporate name, Articles of Incorporation of a corporation
advising them to discontinue such use of must set out the name of the corporation.
"Lyceum". LPI claimed proprietary right Section 18 of the Corporation Code
over the word “Lyceum” and instituted establishes a restrictive rule insofar as
proceedings before the SEC to compel corporate names are concerned: "SECTION
Lyceum of Aparri, Lyceum of Cabagan, 18. Corporate name. — No corporate name
Lyceum of Camalanuigan, Inc., Lyceum of may be allowed by the Securities and
Lallo,Inc., Lyceum of Tuao, Inc., Buhi Exchange Commission if the proposed name
Lyceum, Central Lyceum of Catanduanes, is identical or deceptively or confusingly
Lyceum of Southern Philippines, Lyceum of similar to that of any existing corporation or
to any other name already protected by law other places, "Lyceum", or "Liceo", or
or is patently deceptive, confusing or "Lycee", denotes a secondary school or a
contrary to existing laws. When a change in college. It may be that the use of the word
the corporate name is approved, The "Lyceum" may not yet be as widespread as
Commission shall issue an amended the use of "university," but it is clear that a
certificate of incorporation under the not inconsiderable number of educational
amended name." The policy underlying the institutions have adopted "Lyceum" or
prohibition in Section 18 against the "Liceo" as part of their corporate names.
registration of a corporate name which is Since "Lyceum" or "Liceo" denotes a school
"identical or deceptively or confusingly or institution of learning, it is not unnatural
similar" to that of any existing corporation to use this word to designate an entity which
or which is "patently deceptive" or "patently is organized and operating as an educational
confusing" or "contrary to existing laws," is institution. (2) LPI claimed that the word
the avoidance of fraud upon the public "Lyceum" has acquired a secondary
which would have occasion to deal with the meaning in relation to it, hence, appropriable
entity concerned, the evasion of legal by it to the exclusion of other institutions.
obligations and duties, and the reduction of The doctrine of secondary meaning
difficulties of administration and supervision originated in the field of trademark law. Its
over corporations. The corporate names of application has been extended to corporate
LA, et. al. not is "identical with, or names, since the right to use a corporate
deceptively or confusingly similar" to that of name to the exclusion of others is based
LPI. The corporate names of LA, et. al. all upon the same principle which underlies the
carry the word "Lyceum", but confusion and right to use a particular trademark or trade
deception are effectively precluded by the name. In Philippine Nut Industry, Inc. v.
appending of geographic names to the word Standard Brands, Inc., the doctrine of
"Lyceum". Etymologically, the word secondary meaning was elaborated thus:"a
"Lyceum" is the Latin word for the Greek word or phrase originally incapable of
lykeion, which refers to a locality on the exclusive appropriation with reference to an
river Ilissius in ancient Athens "comprising article on the market because geographically
an enclosure dedicated to Apollo and or otherwise descriptive, might nevertheless
adorned with fountains and buildings erected have been used so long and so exclusively
by Pisistratus, Pericles and Lycurgus by one producer with reference to his article
frequented by the youth for exercise and by that, in that trade and to that branch of the
the philosopher Aristotle and his followers purchasing public, the word or phrase has
for teaching." In time, the word "Lyceum" come to mean that the article was his
became associated with schools and other product. "No evidence was ever presented in
institutions providing public lectures and the hearing before the Commission which
concerts and public discussions. Today, the sufficiently proved that the word 'Lyceum'
word "Lyceum" generally refers to a school has indeed acquired secondary meaning in
or an institution of learning. "Lyceum" is in favor of LPI. If there was any of this kind,
fact as generic in character as the word the same tend to prove only that LPI had
"university." In the name of LPI, "Lyceum" been using the disputed word for a long
appears to be a substitute for "university". In period of time. Nevertheless, LPI’s
exclusive use of the word “Lyceum” was using the same word all by itself to the
never established or proven, as in fact the exclusion of others. More so, there was no
WPLI was already using the word evidence presented to prove that confusion
“Lyceum” seventeen (17) years prior to the will surely arise if the same word were to be
date LPI started using the same word in its used by other educational institutions.
corporate name. Furthermore, educational
THUS: LPI is not entitled to a legally
institutions of the Roman Catholic Church
enforceable exclusive right to use the word
had been using the same or similar word
"Lyceum" in its corporate name and other
('Liceo deManila,' 'Liceo de Baleno', 'Liceo
institutions may use "Lyceum" as part of
de Masbate,' 'Liceo de Albay') long before
their corporate names. To determine whether
LPI started using the word 'Lyceum'. LPI
a given corporate name is "identical" or
also failed to prove that the word “Lyceum”
"confusingly or deceptively similar" with
has become so identified with its educational
another entity's corporate name, it is not
institution that confusion will surely arise in
enough to ascertain the presence of
the minds of the public if the same word
"Lyceum" or "Liceo" in both names. One
were to be used by other educational
must evaluate corporate names in their
institutions. While LPI may have proved that
entirety and when the name of petitioner is
it had been using the word “Lyceum” for a
juxtaposed with the names of LA, et.al., they
long period of time, this fact alone did not
are not reasonably regarded as "identical" or
amount to mean that the said word had
"confusingly or deceptively similar" with
acquired secondary meaning in its favor
each other
because LPI failed to prove that it had been
79, the Ellice Agro-Industrial Corporation