G.R. No.
96161 February 21, 1992
PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS INDUSTRIAL
DEVELOPMENT, INC.
vs.
COURT OF APPEALS, SECURITIES & EXCHANGE COMMISSION and STANDARD PHILIPS
CORPORATION
Petitioner Philips, a foreign corporation, although not engaged in business here, is the registered
owner of the trademarks PHILIPS and PHILIPS SHIELD EMBLEM, respectively issued by the
Philippine Patents Office and Philips Industrial Developments, Inc. authorized users of the
trademarks PHILIPS and PHILIPS SHIELD EMBLEM, All petitioner corporations belong to the
PHILIPS Group of Companies.
Respondent Standard Philips on the other hand, was issued a Certificate of Registration by
respondent Commission.
In 1984, Petitioners filed a letter complaint with SEC asking for the cancellation of the word
"PHILIPS" from Private Respondent's corporate name in view of the prior registration with the
Bureau of Patents of the trademark "PHILIPS" and the logo "PHILIPS SHIELD EMBLEM" in the
name of Petitioner, PEBV, and the previous registration of Petitioners Philips Electrical and Philips
Industrial with the SEC.
As a result of Private Respondent's refusal to amend its Articles of Incorporation, Petitioners filed
with the SEC, a Petition praying for the issuance of a Writ of Preliminary Injunction, alleging, among
others, that Private Respondent's use of the word PHILIPS amounts to an infringement and clear
violation of Petitioners' exclusive right to use the same considering that both parties engage in the
same business.
In its Answer, Respondent countered that Petitioner PEBV has no legal capacity to sue; that its use
of its corporate name is not at all similar to Petitioners' trademark PHILIPS when considered in its
entirety; and that its products consisting of chain rollers, belts, bearings and cutting saw are grossly
different from Petitioners' electrical products.
SEC en banc affirmed the dismissal declaring that the corporate names of Petitioners and Private
Respondent hardly breed confusion inasmuch as each contains at least two different words and,
therefore, rules out any possibility of confusing one for the other.
CA denied the appeal, hence this petition.
Issue: Whether or not the use of the word PHILIPS by the respondent, amounts to an infringement
and a violation of Petitioners' exclusive right to use the same considering that both parties engage in
the same business.
Ruling:
We find basis for petitioners' plea.
A name is peculiarly important as necessary to the very existence of a corporation. Its name is one
of its attributes, an element of its existence, and essential to its identity. The general rule as to
corporations is that each corporation must have a name by which it is to sue and be sued and do all
legal acts. The name of a corporation in this respect designates the corporation in the same manner
as the name of an individual designates the person ; and the right to use its corporate name is as
much a part of the corporate franchise as any other privilege granted.
The statutory prohibition cannot be any clearer. To come within its scope, two requisites must be
proven, namely:
(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) deceptively 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.
The right to the exclusive use of a corporate name with freedom from infringement by similarity is
determined by priority of adoption. In this regard, there is no doubt with respect to Petitioners' prior
adoption of' the name ''PHILIPS" as part of its corporate name. Petitioners Philips Electrical and
Philips Industrial were incorporated on 29 August 1956 and 25 May 1956, respectively, while
Respondent Standard Philips was issued a Certificate of Registration on 12 April 1982, twenty-six
(26) years later). Petitioner PEBV has also used the trademark "PHILIPS" on electrical lamps of all
types and their accessories since 30 September 1922.
The second requisite no less exists in this case. In determining the existence of confusing similarity
in corporate names, the test is whether the similarity is such as to mislead a person, using ordinary
care and discrimination. While the corporate names of Petitioners and Private Respondent are not
identical, a reading of Petitioner's corporate names, to wit: PHILIPS EXPORT B.V., PHILIPS
ELECTRICAL LAMPS, INC. and PHILIPS INDUSTRIAL DEVELOPMENT, INC., inevitably leads one
to conclude that "PHILIPS" is, indeed, the dominant word in that all the companies affiliated or
associated with the principal corporation, PEBV, are known in the Philippines and abroad as the
PHILIPS Group of Companies.
It is settled, however, that proof of actual confusion need not be shown. It suffices that confusion is
probably or likely to occur.
Given Respondent's primary purpose, nothing could prevent it from dealing in the same line of
business of electrical devices, products or supplies which fall under its primary purposes. Besides,
there is showing that Private Respondent not only manufactured and sold ballasts for fluorescent
lamps with their corporate name printed thereon but also advertised the same as, among others,
Standard Philips their choice of "PHILIPS" as part of its corporate name [STANDARD PHILIPS
CORPORATION] . . . tends to show said respondent's intention to ride on the popularity and
established goodwill of said petitioner's business throughout the world.
PHILIPS is a trademark or trade name which was registered as far back as 1922. Petitioners,
therefore, have the exclusive right to its use which must be free from any infringement by similarity.
A corporation has an exclusive right to the use of its name, which may be protected by injunction
upon a principle similar to that upon which persons are protected in the use of trademarks and
tradenames (18 C.J.S. 574). Such principle proceeds upon the theory that it is a fraud on the
corporation which has acquired a right to that name and perhaps carried on its business thereunder,
that another should attempt to use the same name, or the same name with a slight variation in such
a way as to induce persons to deal with it in the belief that they are dealing with the corporation
which has given a reputation to the name. Notably, too, Private Respondent's name actually
contains only a single word, that is, "STANDARD", different from that of Petitioners inasmuch as the
inclusion of the term "Corporation" or "Corp." merely serves the Purpose of distinguishing the
corporation from partnerships and other business organizations.
