Philips Electronics, N.V. v. Philips Wire & Cable Co.

[SEC-SICD * CASE NO. 05-95-5057. November 23, 1998.] PHILIPS ELECTRONICS, N.V., PHILIPS ELECTRONICS & LIGHTING, INC., PHILIPS COMPONENT (PHILS.), INC. And PHILIPS INDUSTRIAL DEVELOPMENT, INC. , petitioners , vs . PHILIPS WIRE & CABLE CO. , respondent . D E C I S I O N This case is a petition instituted by PHILIP EXPORT N.V., a corporation organized and existing under the law of Netherlands, PHILIPS ELECTRONICS & LIGHTING INC., PHILIPS COMPONENTS (PHILIPPINES) INC., and PHILIPS INDUSTRIAL DEVELOPMENT, INC., which are Corporations organized and existing under the laws of the Philippines against PHILIPS WIRES AND CABLE COMPANY which is a domestic corporation, for the cancellation or removal of the word "PHILIPS" and the emblem logo or any trademark or name similar to the word mark "PHILIPS SHIELD EMBLEM" from its corporate name, stationaries, labels and letterheads. Petitioner PHILIPS ELECTRONICS, N.V. is the owner-assignee of the trademarks "PHILIPS" and "PHILIPS SHIELD EMBLEM" covered by certificates of Registration Nos. 5212,R-1651, 42271, 29134 and 1674 issued on April 26, 1956, September 9, 1976, December 12, 1988, April 13, 1981 and October 28, 1976, respectively, for goods under classes 7, 9, 10, 8 11, 14, 16 and 37, more specifically electrical lamps of all types including incandescent lamps, fluorescent lamps, discharge lamps, lamps for photographic purposes, photographic flash bulbs, electric lighting fittings, wires and cables and their accessories and parts, etc., and petitioner PHILIP ELECTRONICS & LIGHTING INC., is the license or user of said trademarks in the Philippines, while petitioners PHILIPS COMPONENTS (Philippines) Inc., and PHILIPS INDUSTRIAL DEVELOPMENT, INC. are also authorized user of the trade name "PHILIPS" as shown in the articles of incorporation, both said corporations together with PHILIPS EXPORT N.V. are related, belonging to the PHILIPS Group of Companies and are wholly owned subsidiaries of their Associated and holding company N.V. PHILIPS GLOEILAMPENFABRIEKEN, Netherlands; that petitioner and respondent are engaged in the same line of business which are the manufacture and sale of electrical products, more specifically shown in their articles of incorporation; that petitioner PHILIPS ELECTRONICS, N.V., is the exclusive, true and lawful owner of the trademarks "PHILIPS" and "PHILIPS SHIELD EMBLEM" by virtue of long and extensive use thereof by its predecessor in interest; N.V. PHILIPS GLOEILAMPENFABRIEKEN, PHILIPS EXPORT B.V., and petitioner PHILIPS ELECTRONICS & LIGHTING, INC., is the user or licensee of said trademarks and petitioners PHILIPS COMPONENTS (PHILIPPINES) INC., and PHILIPS INDUSTRIAL DEVELOPMENT, INC., are likewise duly authorized to use the name "PHILIPS" in the Philippines; that petitioners are registered corporation under the laws of the Philippines using the name "PHILIPS" since August 29, 1956 and May 25, 1956, respectively, long before the respondent partnership was registered with the Commission; that on July 30, 1987, long after the registration of petitioners PHILIPS ELECTRONIC & LIGHTING, INC., PHILIPS COMPONENTS (PHILIPPINES), INC., and PHILIPS INDUSTRIAL DEVELOPMENT, INC., as corporations using the name "PHILIPS" and PHILIPS SHIELD EMBLEM with the Bureau of Patents, Trademarks & Technology Transfer, respondent formally filed with the Commission for registration of the partnership name "PHILIPS WIRE & CABLE COMPANY", that respondent thru its duly authorized officer filed with the Commission an undertaking, to change Corporate name in the event another person, firm or entity has acquired a prior right to use the same name or one similar to it, that on July 15, 1994, a complaint was filed against respondent by petitioners before the Corporate and Legal Department of the Commission that the parties failed to reach any settlement; that respondent's adoption and registration of the partnership name "PHILIPS WIRE & CABLE COMPANY" is unlawful and patently operates to destroy petitioners' exclusive right to use and adoption as well as enjoyment of its goodwill contrary to the provisions of the trademark law R.A. 166, as amended, and Section 18 of the Corporation Code, that petitioners and respondent deal in the same class of goods and their business are in direct competition with one another; that the similarity of their goods will likely confuse, mislead or deceive an ordinary customer purchaser into believing that respondents' goods or products emanated from or are associated with or are manufactured by, or sold, or sponsored by the petitioners by reason of the use of the same to the serious and irreparable damage or injury to the petitioners who have the sole right to cash in to the goodwill and worldwide popularity of the name "PHILIPS"; that under the provisions of the Trademark Law RA 166, as amended, petitioners' right to the exclusive use of the trademarks "PHILIPS" and "PHILIPS SHIELD EMBLEM" has also become absolute and legally well settled that even the Commission is enjoined to protect thru cancellation of respondent's partnership name within the context of Section 18 of the Corporation Code and respondent's aforequoted written undertaking; that the Supreme Court in a recent decision entitled "PHILIPS EXPORT B.V., et al., vs. STANDARD PHILIPS CORPORATION has ordered and enjoined the Commission to cancel respondents Corporate name and delete the name "PHILIPS" from its Corporate name. Respondent in its answer denied all the material allegations in the petition, and alleged that PHILIPS, N.V. has no legal capacity to sue in the Philippines, that respondents' use of its corporate name is not at all similar to petitioner's trademark "PHILIPS" when considered in its entirety; that respondent's line of business is not the same is that of the petitioners; that the respondent is engaged in the manufacture and marketing of electrical wires and cable while petitioner's line include electrical products including electronic, mechanical and similar products particularly lighting products, radio receiving sets, television sets and communication equipment but not electrical wires and cables; that respondent and its predecessors-in-interest had formed a partnership and adopted and registered the firm name PHILIPS WIRE & CABLE COMPANY as early as 1970; that petitioners have long acknowledged respondent right to use said name by directly purchasing merchandise from respondent and as such had not in any manner prejudicial to the rights of petitioner. At the hearing for the issuance of the Writ of Preliminary Injunction, petitioners and respondent offered and submitted their documentary evidence in addition to the testimony of their witnesses. In an Order dated August 9, 1996, the Commission granted petitioners' application for a writ of preliminary injunction. However, on a petition for certiorari filed by respondent, the injunctive order was nullified and voided by the Commission En banc. After the case was remanded back to the Hearing Officer for hearing on the main case, parties waived their respective rights to adduce evidence on the main case and instead, unanimously opted to adopt and embrace all the testimonial and documentary evidence presented during the hearing on the application for preliminary injunction as their evidence in the main case. The issue to be resolved: 1) Whether or not the name of the respondent is identical or deceptively or confusingly similar with that of the petitioner. 2). Whether or not the respondent is entitled to the use of the word or name Philips despite the priority of use and registration of said name by petitioners before the Commission and the Bureau of Patents, Trademarks and Technology. 1. Is the name identical or confusingly similar? In the case at bar, we find that the corporate names of petitioner and the respondent are sufficiently identical or deceptively or confusingly similar. The probability of deception is aggravated by the fact that both corporations are engaged in similar line of business. Thus, it was held that the nature and business of the corporations involved are also important factors bearing on the likelihood of deception from the use of similar names (Fletcher Vol. 6).Besides, it was held unnecessarily to show that anyone had actually been misled by similarity in names, and that it was sufficient that the use of name was likely to produce deception (Churchill Downs Inc.,262 Ky 567 90 S.W. (2d) 1041 Fletcher Vol. 6) Moreover, there is not much distinction between the corporate names of the petitioners and respondent that will mislead the public into belief that the two corporations are one and the same. The lack or absence of proof of actual confusion need not be shown, but it is sufficient that confusion is probable or likely to occur. (Weiskitted & Son Co. Vs. Harry Weiskitted & Son Co. 167 md. 306, 173 Atl. 48 Fletcher Vol. 6). It appearing that the corporate names in question clearly resemble each other principally on the use of words "PHILIPS" deception or confusion therefore, is probable to occur. Respondent is mistaken to belong to the PHILIPS GROUP OF COMPANIES. Even a member of this PHILIPS' group had mistakenly bought or purchased some materials from respondent as shown by the invoice (Exhibit 2) 2. Is respondent entitled to the use of the PHILIPS name? Under the facts shown, the respondent is a late adopter of the name and could not be considered as a prior user. Granting that it has been allowed to use the name since 1970 or thereabouts such fact will not give it the right to continue using the same in violation of our laws on corporate name and trademarks. The Supreme Court in the case of PHILIPS EXPORT B.V. VS. STANDARD PHILIPS CORPORATION states, to wit: "What is lost sight of, however, is that PHILIPS is a trademark or tradename which was registered far back in 1922. Petitioners, therefore, have exclusive right to its use which must be free from any infringement by similarity. A corporation has an exclusive right to 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 trademark and tradenames (18C.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 on the name (6 Fletches (Perm Ed), pp. 39-40, citing Borden Ice Cream Co. V. Borden's Condensed Milk Co. 210 F510)." Even the Corporation Code of the Philippines, in Section 18, expressly provides that: "No Corporate name may be allowed by the Securities and Exchange Commission 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 law where a change in the corporate name is approved, the Commission shall issue an amended certificate of incorporation under the amended name." The right to the exclusive use of a corporate name with freedom from infringement by similarity is determined by priority of adoption. (I Thompson, p. 80 citing Munn. V. Americana Co.,82N.,Eq 63, 88 ( illegible portion in SEC files ) 30, San Francisco Oyster House V. Minich. 75 Wash. 274, 134 Pac. 921). 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 August 29, 1956 and May 25, 1956, respectively, while Respondent Philips Wire and Cables Co. was issued a Certificate of Registration only on January 19, 1970. From the evidence adduced it was established that petitioners were registered ahead of the respondent. Since incorporation gives protection to the name of the corporation, petitioner being the first registrant has priority of use and is, therefore, entitled to protection under the law. WHEREFORE, premises considered, respondent PHILIPS WIRES & CABLE COMPANY, is hereby ordered to change its corporate name to another name not similar to any name already used by a corporation, partnership or association registered with this Commission, by amending its articles of Incorporation in accordance with the Corporation Code of the Philippines and filing the same with this Commission, upon payment of the corresponding filing fee, within thirty (30) days from finality hereof. Let copy of this Decision be furnished the Corporate and Legal Department of this Commission for its reference. SO ORDERED. (SGD.) SIMEON P. BADILLO, JR. Hearing Officer