Epe Technologies, Inc. v. Epe Technology Corp.

[SEC-SICD * CASE NO. 08-93-4536. March 13, 1995.] EPE TECHNOLOGIES, INCORPORATED , petitioner , vs . EPE TECHNOLOGY CORPORATION , respondent . O R D E R This resolves the Demurrer to Petitioner's Evidence as well as the Opposition filed in relation thereto. Respondent EPE Technology Corporation (EPETC for brevity) demurs to the evidence presented by the petitioner EPE Technologies, Inc. (EPETI) on the ground that the latter has not shown any factual or legal basis to justify the grant of the reliefs prayed for. In support of the foregoing claim, respondent puts forth the argument that petitioner failed to prove, through substantial evidence, the following issues: 1. Petitioner's legal capacity to sue; 2. Petitioner's legal right which the law protects; and, 3. Respondent's violation of the claimed legal right which the law protects. In relation to the first issue, respondent argues that petitioner has not established the jurisdiction allegation that it (petitioner) is "not doing business in the Philippines." Instead, respondent proffers the fact that petitioner has Inadvertently shown proof to the contrary, that is that petitioner is "doing business in the Philippines" albeit without a license. This, the respondent does not hesitate to add, disqualifies petitioner from filing suit in this jurisdiction. Respondent further cities that the petitioner's alleged exclusive representative and distributor, Paris Manila Technology Corporation (PAMATEC) participated in a bidding held by the Social Security System for and in behalf of EPETI, for the supply of Merlin Gerlin Uninterruptible Power Systems (UPS) and not petitioner EPETI's own units. Respondent states that such acts of appointing an exclusive distributor and participating in a government held bidding, constitute "doing business" without a license, barring petitioner from suing in this jurisdiction. Respondent also puts forward, the argument that petitioner's two witnesses, namely Ruben Estabillo and Huberto D' Aboville, were not able to establish the foregoing fact of "doing business", and that the documents presented to prove this jurisdictional fact were irrelevant and immaterial. Anent the second issue, respondent states in its Demurrer that petitioner has no goodwill to be protected locally, as no goodwill exists and none has been proven. Respondent debunks this allegation of goodwill in the petition by saying that the same is a self-serving opinion and conclusion on the petitioner's part. Respondent further adds that petitioner's claim of protection under the Paris Convention is for naught, invoking the ruling in Kabushi Kaisha Isetan vs. IAC, G.R. No. 75420, November 15, 1991. Insofar as the third issue is concerned, respondent professes that petitioner does not have any legal or enforceable rights to the name of EPE Technologies, Inc., as it its the respondent's rights by virtue of registration with this Commission, which is protected by law. In opposition to the foregoing, petitioner counters that the respondent's contentions are devoid of merit, stating that the laws applicable in the instant case are Sections 18 and 133 of the Corporation Code, the Paris Convention on Protection of Industrial Property, Section 3(d) of the Foreign Investments Act (R.A. 7042) and the Trademark Law (R.A. 166). Petitioner goes on to state that a tradename or corporate name, being a right in rem, must be afforded protection by courts all over the world against trespass or conversion. Moreover, the petitioner avers that its petition shows that EPETI was already incorporated as a juridical entity in the State of California, USA, and that respondent has personal knowledge of this fact, as well as a familiarity to the international reputation and products of the petitioner. The reason cited for the foregoing statement is that the incorporators and stockholders of respondent EPETC were previously employed as key officers of PAMATEC, which, as has been mentioned before is the exclusive distributor of EPETI's Merlin Gerin UPS units. Petitioner further adds that the respondent adopted the corporate name EPETC on September 16, 1991 or after being armed with the knowledge that PAMATEC represents EPETI here in the Philippines, which is confusingly similar or identical to the latter's tradename, resulting in unfair competition. Furthermore, petitioner avers that the respondent in fact has admitted the prior incorporation of the former in the latter's answer. Petitioner also refutes the claim that it is a foreign corporation doing business in the Philippines without a license, as PAMATEC is an appointed representative or distributor transacting business in its own name and for its own account. Petitioner moreover argues against the respondent's claim of non-applicability of the Paris Convention on the Protection of Industrial Property by citing the Le Chemise La Coste and Converse Rubber Corporation cases, which, petitioner maintains, has full application to the instant case. There is merit to the Demurrer. Taking thorough consideration of the respective arguments presented by both parties insofar as the incident of demurrer is concerned, this Hearing Officer upholds the position taken by the respondent herein. Petitioner has admitted that is a foreign corporation not doing business in the Philippines, and as such it has legal capacity to sue within us this jurisdiction. However, petitioner has not shown, either by testimonial or documentary evidence, any legal justification to maintain the instant suit in this jurisdiction for protection of its name against trespass or conversion. The petitioner failed to present proof that the name EPE Technologies Inc. is a registered tradename in the United States. Even if it were, the registration thereof in the U.S. does not automatically vest upon it ownership of the said tradename here in the Philippines, because the petitioner's name, too, is not a registered tradename in the Philippines. In the absence of such registration, a foreign trademark or tradename must be in actual use in commerce in this jurisdiction to be protected. As stated in Sterling Products International vs. Farbenfabriken Bayer Aktlengelischaft, G.R. No. L-19906, April 30, 1969 "actual use in commerce or business is a requisite to the acquisition of the right of ownership over a trademark." The petitioner having averred that it is not doing business in the Philippines, it therefore has no goodwill to protect locally. Thus, the Supreme Court, in the immediately aforecited case, said: "Adoption alone of trademark would not give exclusive right thereto. Such right grows out of their actual use. Adoption is not use. One may make advertisements, issue circulars, give out price lists on certain goods, but these alone would not give exclusive right to use. For trademark is a creation of use." (Supra) The Petitioner failed to prove that it has met the requisites on acquisition of trademark or tradename ownership in the Philippines. While it is true that EPE Technologies, Inc. is registered in the State of California, U.S.A., It fails, however, to prove registration and use in commerce of the same in the Philippines. To reiterate, the petitioner was not able to prove, by way of substantial evidence, that it has any local goodwill to protect. The petitioner's allegation that the use of the name EPE Technologies Incorporated "denote the high quality of its products and the reliability of the service it renders to its customers worldwide" has not been and cannot be proven to apply in the Philippines since the petitioner does not do business here. Since its name is not widely nor favorably known in the this jurisdiction, the petition must fail on this score. Anent the Paris Convention, the contention of petitioner that Articles 1, 6 bis, 8 and 10 bis thereof are applicable in the instant case hold no meritorious consideration whatsoever. It is true that the Paris Convention was revised by the Lisbon Act of 1958. However, the Lisbon Act was completely revised by the Stockholm Act on July 14, 1967 and that only Articles 13 to 30 of the Stockholm Act were ratified by the Philippine Government under the Instrument of Accession dated March 25, 1980. What this means is that assuming these treaty provisions are applicable and in force in the Philippines, they are not self-executing. It is clear that, apart from being required to conform to local laws, these provisions of the Paris Convention, to have legal standing and force and effect here, must meet the following conditions: a) The mark must be internationally known or well-known; b) The subject of the right must be a trademark, not a copyright or anything else. In United Feature Syndicate, Inc. vs. Munsingwear Creation Mfg., Co, (Inter Partes Case No. 1330, Bureau of Patents) the Director of Patents held as follows: "Indeed, the Philippines is signatory to this Treaty and hence, we must honor our obligation thereunder on matters concerning internationally known or well-known marks. However, this treaty provision clearly indicated the conditions which must exist before any trademark owner can claim and be afforded rights such as those petitioner herein seeks and whose conditions are: cdll a) the mark must be internationally known or well-known; b) the subject of the right must be a trademark, not a patent or copyright or anything else; c) the mark must be for use in similar kinds of goods; and d) the person claiming must be the owner of the mark. (The Paris Convention: Commentary on the Paris Convention; Articles by Dr. A. Bigsch, Director General of the World Intellectual Property Organization, Geneva, Switzerland, 1985) The above pronouncement of the Director of Patents was repeated in the case of Kabushi Isetan vs. IAC, G.R. No. 75420, November 15, 1991, which was cited by the respondent in its Demurrer. Applying the foregoing to the instant case, this Hearing Officer finds that there is no evidence on record that petitioner EPE Technologies, Inc. is well-known in the Philippines. In fact it admitted that it is not doing business in the Philippines, and as such it does not engage in promotional activities here to make its tradename well-known. The petitioner in the instant case also has no legal standing to bring suit before this Commission. Section 18 of the Corporation Code reads as follows: SECTION 18. Corporate Name . 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. (Emphasis supplied) The above provision is interpreted to mean that a corporate name, in order to be afforded protection in this jurisdiction from registration by another, must first be registered with this Commission or that it has already been in use in commerce and protected by law. Considering therefore, that petitioner's name is not well known and neither is the same registered with this Commission, there is no basis for protecting it against local competitors for it cannot be said to have established a business reputation or goodwill in this country. With the foregoing discussion, the rationale for the protection of petitioner's name does not exist. WHEREFORE, foregoing premises considered, let the instant petition be, as it is hereby DISMISSED. NO COSTS. SO ORDERED. (SGD.) EDUARDO P. BAROT Hearing Officer