In The Matter of Lyceum of The Philippines, Inc. vs. Lyceum of Aparri, et al.

[SEC-SICD * CASE NO. 2579. November 21, 1988.] IN THE MATTER OF LYCEUM OF THE PHILIPPINES, INC. , petitioner , vs . LYCEUM OF APARRI, ET AL. , respondents . WESTERN PANGASINAN LYCEUM , cross-claimant , vs . LYCEUM OF APARRI, LYCEUM OF CABAGAN, LYCEUM OF CAMALANIUGAN, INC., LYCEUM OF LALLO, INC., LYCEUM OF TUAO, INC. , cross-respondents . D E C I S I O N This petition seeks to compel all of the respondents to change their corporate names in accordance with their respective undertakings and to permanently enjoin them from using the word "LYCEUM" in their corporate names. llcd Petitioner alleges, among others, that all the parties are corporations duly organized and existing under the laws of the Philippines; that the petitioner and the respondents are all educational institutions, registered with this Commission on the following dates and with Registration Numbers as follows: NAME Registration Date of No. Registration 1. Lyceum of the Philippines, Inc. 5475 September 21, 1950 2. Western Pangasinan Lyceum, Inc. 5554 October 27, 1950 3. Araullo Lyceum 5000 March 20, 1950 4. Lyceum of Southern Phils. 20132 January 30, 1962 5. Lyceum of Cabagan 21729 October 31, 1962 6. Lyceum of Malacanay 286341 February 4, 1966 7. Central Lyceum of Catanduanes 30663 October 17, 1966 8. Buhi Lyceum 34439 February 14, 1968 9. Lyceum of Marbel 35152 April 30, 1968 10. Lyceum of Eastern Mindanao, Inc. 42051 August 21, 1970 11. Lyceum of Tuao, Inc. 47097 March 28, 1972 12. Lyceum of Lallo, Inc. 47098 March 28, 1972 13. Lyceum of Aparri 47099 March 28, 1972 14. Lyceum of Camalaniugan 47100 March 28, 1972 that the following respondents were originally registered under other names but they subsequently adopted corporate names with the word "LYCEUM", to wit: llcd a) Respondent Araullo Lyceum was formerly registered as Araullo Law School, but later amended its corporate name to Araullo Lyceum on May, 1960; b) Respondent Lyceum of Eastern Mindanao, Inc. was formerly registered as Bato-Bato San Isidro Institute, Inc., but later amended its corporate name to Lyceum of Eastern Mindanao, Inc. on March 15, 1973; c) Respondent Lyceum of Southern Philippines, Inc. was formerly registered as Tacurong Academy, Inc., but later amended its corporate name to Lyceum of Southern Philippines, Inc., on November 27, 1975. that petitioner was founded in 1950 by the late Dr. Jose P. Laurel; that since its organization, petitioner has been continuously operating and maintaining an institution of learning and has, for this purpose, been using continuously and adversely for more than twenty (20) years ( sic ) its corporate name of "Lyceum of the Philippines" and its shorter but more popularly known name of "LYCEUM"; that due in part to its association with the illustrious name of its founder and to its prestigious faculty, as well as to its physical plant and other facilities, petitioner was able to build and acquire a fine reputation and goodwill throughout the Philippines as an institution of learning of high academic standing; that as such, the name "LYCEUM" has been associated and identified in the minds of the public with the institution of learning founded by the late Dr. Jose P. Laurel and operated and maintained by petitioner; that since the petitioner is expressly authorized by its Articles of Incorporation to establish branches "in any province, city or municipality of the Philippines", the use by the respondents of the name "LYCEUM" in the operation of their schools has seriously impaired and prejudiced the right of petitioner to establish its own branches or affiliates in the said municipalities/cities where respondents are respectively located; that on December 26, 1973, petitioner filed a complaint before this Commission against the Lyceum of Baguio, Inc., to enjoin its use of the word "LYCEUM" and to order it to change its corporate name in accordance with its written undertaking; that after due proceedings, this Commission promulgated its Order dated April 20, 1977 directing the Lyceum of Baguio, Inc., to change its corporate name, and to adopt another name which is not similar or identical to previously registered names used by other entities and accordingly to amend its articles of incorporation; that from said Order, the Lyceum of Baguio, Inc. appealed by certiorari to the Supreme Court but the latter denied the same for lack of merit; that the petitioner had sent letters to all the respondents demanding that they desist from using the name "LYCEUM"; that the respondents refused to heed the same, hence, this petition. llcd For its answer and cross-claim against its co-respondents, respondent cross-claimant Western Pangasinan Lyceum, Inc. (hereinafter referred to as cross-claimant) alleges, inter alia, that it was originally registered as a non-stock corporation on April 17, 1933 with this Commission (formerly Bureau of Commerce) with Registration Certificate No. 5804; that after its registration, cross-claimant has always used the name "Western Pangasinan Lyceum"; that it was to exist for a period. of fifty (50) years, that on October 27, 1950, cross-claimant was transformed or converted into a stock corporation and continued to use the name "Western Pangasinan Lyceum" but adding the word "Incorporated" therein; that cross-claimant has acquired vested property right to use its corporate name having been the first one to make use of the name "LYCEUM" by prior appropriation and continuous use of such name; that it is the use by the petitioner of the name "LYCEUM" that is confusing and misleading the public into believing that the petitioner is an affiliate of the cross-claimant; that by prior appropriation, continuous and adverse use by cross-claimant of the name "LYCEUM" for more than fifty (50) years, the said name has acquired a secondary meaning and has come to mean and particularly identify only the cross-claimant to the exclusion of the respondents; that the cross-claimant and the cross-respondents are all respondents in this case. In answer to the instant petition and the cross-claim, respondents Lyceum of Aparri, Lyceum of Cabagan, Lyceum of Camalaniugan, Inc., Lyceum of Lallo, Inc., and Lyceum of Tuao, Inc. (hereinafter referred to as Lyceum of Aparri, et al.) allege, among others, that the word "LYCEUM" is a generic word descriptive of an institution of learning, like "university", "college", "school" or "institute", hence, the cross-claimant cannot claim to have acquired an exclusive right to use the word in its corporate name; that the petitioner and the cross-claimant, in adopting the word "LYCEUM" for their respective corporate names notwithstanding the prior existence of the "Liceo de Manila", are estopped from claiming an exclusive right to said word; that it is the respondents Lyceum of Aparri et al. which can claim exclusive rights to the word "LYCEUM" within the Archdiocese of Tuguegarao; that the petitioner and cross-claimant are guilty of laches in asserting its alleged exclusive rights to the word "LYCEUM"; and, that cross-claimant's cause of action, if any, has prescribed. prLL As regards respondents Buhi Lyceum, Central Lyceum of Catanduanes, Lyceum of Eastern Mindanao, Inc. and Lyceum of Southern Philippines, they were all declared in default for their failure to file their respective answers despite receipt of summons. On the other hand, the petition against respondents Lyceum of Malacanay and Lyceum of Marbel were considered withdrawn or dismissed upon motion of the petitioner's counsel since the former were not served with summons. The petition against respondent Lyceum of Araullo was likewise dismissed when the latter, upon its motion, motu proprio changed its name to "Pamantasan ng Araullo". The issues posed in this case are: (1) Whether or not the word "LYCEUM" can be appropriated. (2) Assuming that the word "LYCEUM" can be appropriated, who has the proprietary right over the word "LYCEUM"? and, (3) Assuming that the word "LYCEUM" is capable of appropriation and that a prior registrant has acquired exclusive rights to that word, may that exclusive right be waived or lost through laches, or even estoppel or prescription of action? The petitioner and the cross-claimant are both agreed that the word "LYCEUM" has acquired a secondary meaning and is, therefore, capable of appropriation. Respondents Lyceum of Aparri et al., however, think otherwise. We agree with the petitioner and the cross-claimant that the word "LYCEUM" can be appropriated. As pointed out by the petitioner, the general rule with respect to such generic or geographical names and words is that a corporation cannot acquire such right in such names, words or terms as to have their use by others enjoined. (cf. 18 C.J.S. 173 (b) p. 578). This general rule, however, is not without exception. Thus, "names and words even of a generic or descriptive character may by prior combination and association with a particular enterprise acquire such a secondary meaning, as to render their subsequent use by others misleading and confusing, and the courts will in such case prevent their use at the instance of the corporation first appropriating them in its name". (cf. Fletcher, 2427, p. 68). Besides, this Commission need not belabor itself anymore on this issue considering that it has already ruled on said question in the case of Lyceum of the Philippines, Inc. vs. Lyceum of Baguio, Inc. ( SEC Case No. 1241 ) in this wise: "Further, respondent claims that the term "LYCEUM" is a generic word and cannot be subject of appropriation to the exclusion of others. Although admittedly the word "LYCEUM" may be considered a genetic or descriptive term or word, it would appear that this word is not commonly used so as to make the general rule applicable in the instant case. Even assuming that the doctrine is applicable, complainant's evidence would show that it has substantially established the right over such term "Lyceum" considering the length of over twenty years it has continuously used the same and the faith and goodwill it has developed through the distinct educational philosophy and high standards of instruction maintained thru the years and has become known and identified by the public under its name "Lyceum", thereby, acquiring for itself public acknowledgment, if not secondary meaning for its name, LYCEUM OF THE PHILIPPINES and the prominently dominant word in its name "LYCEUM." Anent the second issue, we find and so hold that the petitioner has the proprietary right over the word or name "LYCEUM". Under Section 11 of the Corporation Law and Section 19 of the Corporation Code of the Philippines, a corporation commences to have juridical personality and legal existence only from the moment the Commission issues in its favor a certificate of incorporation under its official seal. From the evidence on hand, it is clear that insofar as this Commission is concerned, the petitioner was registered ahead of all the respondents, including the cross-claimant. As culled from the records, the petitioner was incorporated on September 21, 1950 under the name of "Lyceum of the Philippines, Inc.". From that time up to the present, it has been continuously operating and maintaining an educational institution under its corporate name, which has been popularly known for short as "LYCEUM". On the other hand, the cross-claimant was registered before this Commission only on October 27, 1950. The other respondents were registered much later than the petitioner and the cross-claimant. The only basis for the cross-claimant's claim that it was registered ahead of the petitioner was its registration as a non-stock corporation with the Bureau of Commerce on April 17, 1933. In other words, the bone of contention of cross-claimant is that the "Western Pangasinan Lyceum" registered before the Bureau of Commerce on April 17, 1933 and the "Western Pangasinan Lyceum, Inc." registered before this Commission on October 27, 1950 refer to one and the same corporation. This contention, however, was negated by the following: prcd 1) Both corporations have different Registration Number; 2) Difference in the wordings used in stating the purposes for which the two corporations are formed; 3) The one registered with this Commission has incorporators while the one registered with the then Bureau of Commerce has none; 4) The number of directors in both corporations is different; and, 5) There is no showing that the one registered with this Commission is an amended articles of incorporation of the one registered with the then Bureau of Commerce. They appear to be both original articles of incorporation. Moreover, if we are to consider the two corporations as one, then the corporate existence of the cross-claimant would have expired on April 17, 1983, almost a year before the instant petition was filed. Furthermore, our records show that the cross-claimant has not reconstructed its records within two (2) years from October 17, 1946 pursuant to Republic Act No. 62 entitled, "An Act to Require the Presentation of Proof of Ownership of Securities and the Reconstruction of Corporate and Partnership Records, and for other purposes." Hence, it has lost all its rights, powers and privileges afforded by its past registration pursuant to Section 2 of said Republic Act No. 62 which reads: "Reconstruction of records of domestic corporations and registered partnership or other forms of associations. All registered domestic corporations, and registered partnership or other forms of association which lost their articles of incorporation and by-laws or articles of co-partnerships, either totally or partially, shall reconstruct the same or take steps towards such reconstructions within two years from the date of approval of this Act by following the procedure which the Securities and Exchange Commission may adopt by rules and regulations approved by the Secretary of Justice. Such corporations, associations, or partnerships as shall fail to reconstruct their records within the said period, or having taken steps to reconstruct such records within that period, shall fail to exert reasonable efforts to complete the reconstruction required, pursuant to the aforesaid rules and regulations, shall lose all rights, powers and privileges afforded by their past registration . (emphasis supplied) prLL Consequently, therefore, the cross-claimant has gone down to the level of a mere second registrant or user of the word "LYCEUM". Hence, it could no longer be allowed to use the same. Thus, it was held that: "A second comer into the field cannot employ a name so similar to an already established concern that deception of the public and diversion of the first appropriator's business will be the result, a change of name or the use of an explanatory phrase will be required". (Federal Securities Co. vs. Federal Securities Corporation, 66 A.L.R. 934). On the third issue, we hold that the petitioner's right over the word "LYCEUM" cannot be waived or lost through laches, estoppel or prescription. Section 9-A * of the Trademark Law (RA No. 166) does not apply to the instant case since it refers only to registration and protection of trademarks, tradenames and service marks with the Philippine Patent Office and the same does not cover registration of corporate or business names. Furthermore, neither does the Corporation Code of the Philippines nor the written undertaking of the respondents to change its corporate name indicate a time frame within which a late registrant has to change its corporate name should there be another corporation which has a better right to the use of the same. Likewise, the Commission believes that it will not be harsh on the part of the respondents and cross-claimant to change their respective names since they have submitted a written undertaking that they will change their names in the event that another person, firm or entity has acquired a prior right to the use of the same or one similar to it. WHEREFORE, this Hearing Officer finds and hereby rules that the corporate names of petitioner and that of the respondents and cross-claimant are confusingly similar and pursuant to their undertakings, respondents and cross-claimant are hereby ordered to amend their respective Articles of Incorporation by deleting the word "LYCEUM" in their corporate names and substituting another word in lieu thereof which is not similar to the name of any corporation or entity registered with this Commission, and file copies of said Amended Articles of Incorporation with this Commission together with the filing fee thereof within thirty (30) days from receipt of this Decision. The cross-claimant's counter-claim and cross-claim are hereby DISMISSED for failure to prove the same. Let copy of this Decision be furnished the Corporate and Legal Department for its information and appropriate action. No pronouncement as to costs. prcd SO ORDERED. (SGD.) ROLANDO C. MALABONGA Hearing Officer * Copied verbatim from documents obtained directly from the Securities and Exchange Commission .