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DE LA SALLE MONTESSORI INTERNATIONAL OF MALOLOS v. DE LA SALLE BROTHERS

FACTS:

Petitioner De La Salle Montessori International of Malolos, Inc. filed a petition for review on certiorari to challenge the Decision of the Court of Appeals (CA) affirming the Decision of the Securities and Exchange Commission (SEC) En Banc which directed petitioner to change its corporate name. Petitioner reserved its corporate name with the SEC and obtained a certificate of incorporation. However, respondents, other institutions using the "La Salle" name, filed a petition with the SEC seeking to compel petitioner to change its name, claiming that it is misleading and confusingly similar to their names and violates the Corporation Code. The SEC Office of the General Counsel (OGC) directed petitioner to change its name, and this decision was affirmed by the SEC En Banc and the CA. Petitioner argues that the CA erred in not applying the ruling in Lyceum of the Philippines case, which it claims have the same facts and events as this case.

ISSUES:

  1. Whether the corporate name of petitioner, "De La Salle Montessori International of Malolos, Inc.," is confusingly similar to the corporate names of the respondents.

  2. Whether the use of the phrase "De La Salle" by the respondents is entitled to legal protection despite being similar to the petitioner's corporate name, and whether there is a likelihood of confusion between the parties.

  3. Whether or not the assailed Decision of the Court of Appeals (CA) should be affirmed.

RULING:

  1. Yes. The corporate name of petitioner is confusingly similar to the corporate names of the respondents. Therefore, it is in violation of Section 18 of the Corporation Code, which prohibits the registration of a corporate name that is identical or deceptively or confusingly similar to that of any existing corporation. The test is whether the similarity in corporate names is such as to mislead a person using ordinary care and discrimination. In this case, the use of the phrase "De La Salle" in petitioner's corporate name, coupled with the other words, can reasonably mislead a person into thinking that petitioner is affiliated with or a branch of the respondents.

  2. The use of the phrase "De La Salle" by the respondents is entitled to legal protection. It is considered suggestive and may properly be regarded as fanciful, arbitrary, and whimsical. Petitioner's use of the phrase "De La Salle" in its corporate name is similar to that of respondents, and confusion might arise. Proof of actual confusion is not necessary; it is enough that confusion is probable or likely to occur.

  3. The Supreme Court affirmed the assailed Decision of the CA.

PRINCIPLES:

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

  • The corporate name of a corporation should not be identical or deceptively or confusingly similar to the corporate name of any existing corporation to avoid fraud upon the public, evasion of legal obligations and duties, and reduction of difficulties of administration and supervision over corporations.

  • 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.

  • Generic terms or words that are descriptive of the basic nature of the goods or services provided are not legally protectable as part of a corporate name.

  • Generic terms, common phrases, or descriptive words are not legally protectable as trademarks.

  • Suggestive marks, which hint at the quality or nature of the product, can be distinctive and registrable.

  • In determining likelihood of confusion, the similarity of the marks and the nature of the business are considered.

  • The enforcement of the protection accorded to corporate names is under the jurisdiction of the Securities and Exchange Commission (SEC).

  • Findings of fact by quasi-judicial agencies, like the SEC, are generally respected and upheld by the courts if supported by substantial evidence.

No specific principles or legal doctrines were mentioned in the given text.