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PHILIPS EXPORT B.V. v. CA

FACTS:

Petitioners, Philips Export B.V. (PEBV), Philips Electrical Lamps, Inc., and Philips Industrial Development, Inc., are corporations under the Philips Group of Companies. PEBV, a foreign corporation, is the registered owner of the trademarks "PHILIPS" and "PHILIPS SHIELD EMBLEM" under the Philippine Patent Office. On the other hand, respondent Standard Philips Corporation was issued a Certificate of Registration by the Securities and Exchange Commission (SEC). Petitioners filed a letter complaint with the SEC, seeking the cancellation of the word "PHILIPS" from respondent's corporate name. They argued that the use of the word "PHILIPS" by respondent infringes on their exclusive right to use the same trademark, as they engage in the same business. When respondent refused to amend its Articles of Incorporation, petitioners filed a petition for the issuance of a writ of preliminary injunction. The SEC, after conducting hearings, ruled against the issuance of the writ. The SEC Hearing Officer eventually dismissed the petition for lack of merit, stating that there is no confusing similarity between the corporate names of petitioners and respondents. The SEC en banc affirmed the dismissal, ruling that the corporate names of both parties do not breed confusion as they contain at least two different words. Petitioners' appeal to the Court of Appeals was also dismissed. Petitioners now seek the reversal of the appellate court's decision.

ISSUES:

  1. Whether Petitioners have the prior right to use the name "PHILIPS" as part of their corporate names.

  2. Whether the use of the name "STANDARD PHILIPS" by Respondent is confusingly similar to Petitioners' corporate names.

  3. Whether or not the use of the name "PHILIPS" by the respondent constitutes an infringement on the exclusive right of the petitioners to use the said trademark.

  4. Whether or not the inclusion of the word "CORPORATION" in the respondent's corporate name is sufficient to distinguish it from the petitioners.

  5. Whether or not the fact that other companies are using the word "PHILIPS" in their corporate names is a valid defense for the respondent.

RULING:

  1. Yes, Petitioners have the prior right to use the name "PHILIPS" as part of their corporate names. Petitioners were incorporated prior to Respondent and have been using the name "PHILIPS" in relation to their products since 1922.

  2. Yes, the use of the name "STANDARD PHILIPS" by Respondent is confusingly similar to Petitioners' corporate names. Although the names are not identical, the dominant word in Petitioners' corporate names is "PHILIPS," and they are known in the Philippines and abroad as the PHILIPS Group of Companies. Confusion is likely to occur because of the similarity in the names.

  3. The Supreme Court ruled in favor of the petitioners and ordered the respondent to cease using "PHILIPS" as a feature of its corporate name. The Court held that the use of the name "PHILIPS" by the respondent constitutes an infringement on the petitioners' exclusive right to use the said trademark. The inclusion of the word "CORPORATION" in the respondent's corporate name is not sufficient to distinguish it from the petitioners. The fact that other companies are using the word "PHILIPS" in their corporate names does not justify the respondent's use of the said name.

PRINCIPLES:

  • The right to the exclusive use of a corporate name with freedom from infringement by similarity is determined by priority of adoption.

  • 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.

  • Actual confusion need not be shown to prove likelihood of confusion. It is sufficient that confusion is probably or likely to occur.

  • If a company's primary purpose includes dealing in certain goods or products, it may engage in the same line of business as long as it falls under its primary purposes.

  • A corporation has an exclusive right to the use of its name, which may be protected by injunction similar to the protection of trademarks and trade names.

  • The use of a name similar to one adopted by another corporation, if misleading and likely to injure the prior corporation, may be prevented through a suit for injunction.

  • The inclusion of additional words in a corporate name does not necessarily distinguish it from another corporate name if the essential feature of the name is the same.

  • The fact that other companies are using a similar name does not excuse infringement of another corporation's exclusive right to use a trademark or trade name.