Star Packaging Corporation vs. Starpack Philippines Corporation

[SEC-SICD * CASE NO. 05-98-5963. April 12, 2000.] STAR PACKAGING CORPORATION , petitioner , vs . STARPACK PHILIPPINES CORPORATION , respondent . D E C I S I O N Petitioner filed this action to compel respondent to change its corporate name. The facts are undisputed. Petitioner is a domestic corporation incorporated on April 16, 1990. It was organized primarily to manufacture "packaging products, plastic goods basic plastic, plastic raw materials, plastic compound, derivatives, and other related chemical substances and goods of similar nature... (Petitioner's Articles of Incorporation, Article II). Respondent corporation is also a domestic corporation incorporated on November 23, 1989. It is engaged also in the manufacture of containers and packaging materials made from metal, glass, paper, rubber and plastics or other materials for liquid solid powder cream, loose pourables, and other substances, crowns, caps, corks, seals and closures of all kinds or containers . . ." (Respondent's Articles of Incorporation, Article II). As incorporated in 1989, respondent used the name Akerlund and Rausing Philippines, Inc. On December 29, 1993, its name was amended to AR Packaging Corporation, and on February 10, 1998, to its present name Starpack Philippines Corporation. From the testimony of petitioner's witness Richard Cheng, President and Chief Executive Officer, the packaging products petitioner corporation manufactures are rigid plastic containers such as polyethylene (PET) bottles or containers for mineral or bottled water, edible oil products, soy sauce and other condiment containers (TSN, Jan. 20, 1999 pp. 7, 9). On the other hand, respondent manufactures flexible packaging products using metal, glass, paper, rubber and plastics and other materials. The products of the petitioner and the respondent are not available in ordinary stores or outlets as they are being used, in the case of the petitioner, as bottles or containers for mineral water, edible oil, soy sauce and other condiments. (TSN, Jan. 20, 1999, p. 10) On the other hand, respondent's products are being used as flexible packaging for food, chemicals and pharmaceuticals products. They are being purchased in big volumes or in bulk. cCAIaD Among respondent's top twenty (20) clients are Nestle, Unilever, Unilab/Univet, GMC, BM Squibb, CMC/Manly, Coca-Cola, Wrigley, UFC, Lotte, Warner, Marigold, My San, EBCPI Genpacco, La Tondea, Columbus and Glaxo. (Exhibit "6") Petitioner questions respondent's corporate name allegedly on the ground that it violates Section 18 of the Corporation Code of the Philippines which 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 laws. . . " In determining whether the names are confusingly similar, the test is whether the similarity is such as to mislead a person of ordinary intelligence, and it is not sufficient that careless and indifferent readers would be confused as to the identity of the corporation. A person of ordinary caution and prudence when he deals with a corporation does not merely rely on its corporate name but exercises reasonable and careful scrutiny in finding the identity of the corporation with which he is dealing or intends to deal with (Metal Craft Co. vs. Metalcraft Heater Corp. 255 Michigan 642, 239 Nw 364 cited in 6 Fletcher Cyc. Corp. p. 131). We rule for the respondent for the following reasons: 1 The sound, appearance, form, spelling and pronunciation of the words used are different. The first word in Petitioner's name is "Star" while Respondent is "Starpack" The "Star" in Respondent's name is used as a prefix in the word "Starpack". On the other hand, the word "Star" in Petitioner's name forms a single word. The second word in petitioner's name is "Packaging" while that of respondent's is Philippines. 2 The word "Star" is generic and "Packaging" is descriptive and are incapable of exclusive appropriation. "Generic, geographical and descriptive words or term are usable, but ordinarily are not subject to appropriation so as to prevent their use in the names of companies subsequently formed."(6 Fletcher Cyc. Corp., pp. 12-13) Petitioner did not present any proof that under the doctrine of secondary meaning, such word or phrase has been associated with one's business in such a way and for such length of time that they are generally understood by the public as referring to one's business" (6 Fletcher Cyc. Corp. pp. 63-64) HITEaS 3 The primary business of the two corporations are not entirely the same. Although both corporations are in packaging business, petitioner manufactures rigid plastic containers or products using plastic raw materials. Respondent is engaged in producing flexible packaging products using metal, glass, paper, rubber, plastic, or other materials. 4 No confusion would exist in the minds of people dealing with the two corporations. The persons dealing with the petitioner and the respondent are mostly corporate entities which are being run and operated not by a single individual but generally by a group of persons identified as directors, officers and employees. The evidence presented by both the petitioner and the respondent show that before any customers of respondent or petitioner would buy any goods from them, representative of the respondent or the petitioner and the customers would meet to discuss the design, specifications of products, volume requirements, delivery requirements, prices, terms of payment and a host of other items. And it takes weeks before any transaction is consummated or finalized. Thus, the possibility of making wrong purchases of goods or supplies based on the perceived confusing names of the petitioner and the respondent is eliminated. The wide and significant differences in the nature and business, customers as well as the sound, spelling, form, style, meaning and presentation of the words of the corporate names of the petitioner and the respondent fail to support petitioner's contention that respondent's corporate name is similar to or identical with petitioner as to cause confusion in the minds of the public. caCEDA WHEREFORE, Let this case be as it is hereby ordered Dismissed. SO ORDERED. (SGD.) NATIVIDAD P. QUERIJERO Hearing Officer