WEBTV Networks, Inc. vs. WEBTV Philippines, Inc.

[SEC-SICD * CASE NO. 05-98-5983. April 8, 1999.] WEBTV NETWORKS INC. , petitioner , vs .WEBTV PHILIPPINES INC. (formerly WEB TV TRADING, INC.) , respondent . D E C I S I O N This is a petition requiring the respondent to change its corporate name by deleting the phrase "Web TV". caHASI The records of the herein case show that respondent failed to file answer. As a result thereof, respondent was declared in default in an Order dated August 11, 1998. The facts of the case as established by evidence are as follows: Petitioner Web TV Networks Inc. is a corporation organized under the laws of the state of California, U.S.A. founded in June 1995 with address at 305 Lytton Avenue, Palo Alto, California, 94301, U.S.A. Petitioner is not doing business in the Philippines and is suing to protect its intellectual property rights. It is represented in the Philippines by its counsel and attorney-in-fact Quisumbing Torres. (Exhs. "A","A-1","A-1-a","B" to "B- 3","G" and "II"). Respondent Web TV Trading, Inc. (Now Web TV Philippines, Inc.) on the other hand, is a stock corporation registered with this Commission on August 28, 1997 with principal office at No. 7 Alabama St.,New Manila, Quezon City. (Exhs. "E" to "E-B") It changed its name to "WebTV Philippines, Inc. on December 1, 1997 by amending its Articles of Incorporation. Petitioner had made a demand to the respondent for the latter to change its corporate name by dropping the phrase "Web TV" therefrom. (Exhs. "C" to "C-1","C-1-A" and "D"). The single issue in this case is whether petitioner has acquired a prior right to use the "WebTV" name to the exclusion of respondent. The provision of law that generally governs the adoption of corporate names is Section 18 of the Corporation Code (B.P. Blg. 68); which provides, to wit: "SECTION 18. Corporate name . No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical 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. When a change in the corporate name is approved, the Commission shall issue an amended certificate of incorporation under the amended name." Also, all proposed corporations, of which this Hearing Officer takes judicial notice of, are required by this Commission to file an "Undertaking to change name",which reads as follows: "That the corporation manifests its willingness to change its corporate name in the event another person, firm or entity has acquired a prior right to use the said firm name or one deceptively or confusingly similar to it". Jurisprudence in this regard is given in Philips Export BV vs. Court of Appeals, G.R. No. 96161, February 21, 1992, which gives the test, to wit: "In determining the existence of confusing similarity in corporate name, the test is whether the similarity is such as to mislead a person using ordinary care and discrimination. In so doing, the court must look to the records as well as the names themselves. ... Petitioner herein, as correctly pointed out in its Memorandum, is vested, by Section 160 of R.A. 8293 (Intellectual Property Code) and jurisprudence, with the capacity to sue in the Philippines. This Hearing Officer also takes judicial notice of the fact that the Philippines and the United States of America are signatories of the Paris Convention for the Protection of Industrial Property as revised at Lisbon in 1958, which provisions related hereto are cited by petitioner herein, viz: "ARTICLE I The countries to which the present Convention applies constitute themselves into a Union for the protection of industrial property. The protection of industrial property is concerned with patents, utility models, industrial designs, trademarks, service marks, tradenames, and indications of source of appellation of origin, and the repression of unfair competition. xxx xxx xxx" and, "ARTICLE 6bis The countries of the Union undertake, either administratively if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration and to prohibit the use of a trademark which constitutes a reproduction, imitation or translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well-known in that country as being already the mark of a person entitled to the benefits of the present Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith. xxx xxx xxx" and, "ARTICLE 8 A tradename shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of the trademark. xxx xxx xxx" and finally, "ARTICLE 10bis The countries of the Union are bound to assure to persons entitled to the benefits of the Union effective protection against unfair competition. Petitioner's witness, Mr. Steve Austin, testified extensively to the fact that petitioner had acquired more than sufficient goodwill and notoriety by the use of the name ;"Web TV." HSAcaE Documents (Exhs. "G","H","I" to "I-13","J to "J-19","K" to "K-1" and "L" to "L-11") presented and identified by the said witness attest to the abovestated fact and to the allegation of the long usage of petitioner of the said name. Thus, there is no question that petitioner already appropriated a legal right to the use of the. name "Web TV." There is no question, likewise, that respondent's name is confusingly or deceptively similar to petitioner's corporate name. Read side by side, the public would in general tend to be confused and deceived to the effect that petitioner and respondent are one common business interest, the latter being a local office/subsidiary of the former. Their dominant or distinctive terms being one and the same ("Web TV"),confusing similarity, without a doubt, should be the end and final result. WHEREFORE, premises considered, judgment is hereby rendered: 1) Directing respondent to amend its corporate name by deleting the words "Web TV" from its corporate name; 2) Ordering the said respondent to pay attorney's fees in the amount of not less than P50,000.00. As to, the claim for nominal damages, the claim therefor had not been substantiated by proof by herein petitioner. Let the Corporate and Legal Department be finished a copy of this Decision for their proper notice. No pronouncement as to cost. CSEHIa SO ORDERED. (SGD.) ROBERTO O. SENCIO, JR. Hearing Officer