Novo Pacific Corporation vs. Novo Oriental Corporation

[SEC-SICD * CASE NO. 08-98-6049. November 9, 1999.] NOVO PACIFIC CORPORATION , petitioner , vs . NOVO ORIENTAL CORPORATION , respondent . D E C I S I O N This is a petition filed by Novo Pacific Corporation to change the name of respondent Novo Oriental Corporation. It is undisputed that petitioner filed a copy of its Articles of Incorporation with this Commission under the name "Novo Pacific Corporation" on August 30, 1995. Two (2) days .thereafter, said Articles of Incorporation was approved and SEC reg. No. AS-095-008575 was issued. In April 1998, or almost three (3) years after petitioner's registration, respondent filed its Articles of Incorporation under the name "Novo Oriental Corporation." Based on these facts, petitioner now seeks to enjoin respondent from using the corporate name "Novo" and prays that this Commission order respondent to change its name. Invoking its prior right to the use of the word "Novo", petitioner alleged that respondent's corporate name is identical, or confusingly or deceptively similar to that of petitioner considering that the word. "Novo", as used by respondent, appears to be the more dominant and prominent word in its name and it has the same sound, spelling and impact on the public as that of petitioner. In support of its claim, petitioner cited that respondent's use of the word "Novo" has actually caused confusion and unfair competition because throughout its existence, it has been known and referred to by clients as simply "Novo". The fact that respondent is likewise engaged in the same line of business as that of petitioner and that the incorporators of respondent company are former employees of petitioner has resulted in serious damage to it. Respondent, on the other hand, contends that petitioner has no right to be protected and to seek the cancellation of the corporate name because "Novo Oriental" is not identical or deceptively or confusingly similar to "Novo Pacific. It alleges that "Novo", being a Latin word for "new" simply modifies the dominant word in its corporate name which is "Oriental" and cannot be claimed solely and exclusively by petitioner. Further, it insists that petitioner failed to outline the specific act or acts which purportedly violates its rights. During the hearing on the Preliminary Injunction, petitioner presented its Vice-President, Mr. Renato Ng (See, TSN, September 2, 1998), and several documents marked as Exhibits "A" to "F". These testimonial and documentary evidence were later adopted by petitioner as its evidence in the main case (See, Opposition to Admit Answer, dated October 7, 1998). Respondent, on the other hand, found no need to present any evidence and expressly waived its right to present such evidence (Respondent's Memorandum). After a careful and judicious consideration of the law and the evidence presented and the stipulations made by the parties, this Commission finds for the petitioner. The Guidelines in the Approval of Corporate and Partnership Names issued by this Commission on September 7, 1977, unequivocally provides that: "c. The name should not be similar to one already used by another corporation or partnership. If the proposed name contains a word similar to a word or already used as part of the firm name or style of a registered company, the proposed name must contain two other words different from the name of the company already registered." LLphil When respondent registered its Articles of Incorporation under the name "Novo Oriental Corporation" in April 1998, the name "Novo Pacific Corporation" was already registered by petitioner corporation. Considering that respondent's proposed name contained the word "novo", there must be two (2) other words in that name which must be different from the corporate name of petitioner. However, the only word appearing in the name of respondent is "Oriental" which differentiates it from petitioner's "Pacific". Respondent's name should not have been approve upon its application. Nevertheless, this Commission, in the aforecited Guidelines, reserved the right to require a corporation or partnership, to change its name, in case there will later on appear a person or company with a prior right to the use of the said or identical name. It is therefore, within the powers of this Commission to direct, as it hereby directs, respondent to change its corporate name as such name does not comply with the guidelines laid down by this Commission. This change in name is consistent with the undertaking submitted by respondent at the time of application. Furthermore, the fact that respondent is engaged in the same business and caters to the same market as petitioner and that its incorporators and officers are former employees of petitioner having direct contact with clients (TSN, pp. 12-13), there exist great possibilities that confusion may arise among the parties' respective clients and the public in general. It is of no moment that there is no actual damage or confusion, for it is sufficient that confusion is probable or likely to occur (Human Resources and Services, Inc. vs. C&A Human Resources and Services, Inc., SEC Case No. 3557, April 24, 1990). WHEREFORE, premises considered, the petition is hereby GRANTED and respondent is hereby enjoined from further using the corporate name "Novo Oriental Corporation" and directed to amend its Articles of Incorporation. DcAEIS SO ORDERED. (SGD.) JUANITO B. ALMOSA, JR. Hearing Officer