Philips Export B.V., et al. vs. Standard Philips Corporation

[SEC-SICD * CASE NO. 2743. January 30, 1987.] PHILIPS EXPORT B.V.,ET AL. , petitioners , vs .STANDARD PHILIPS CORPORATION , respondent . D E C I S I O N This case is a petition instituted by petitioners, PHILIPS EXPORT B.V. a corporation organized and existing under the laws of Netherlands, PHILIPS ELECTRICAL LAMPS, INC.,and PHILIPS INDUSTRIAL DEVELOPMENT, INC.,which are corporations organized and existing under the laws of the Philippines against STANDARD PHILIPS CORPORATION which is a domestic corporation, for the cancellation or removal of the word "PHILIPS" and the emblem, logo or any trademark or name similar to the word mark "PHILIPS SHIELD EMBLEM" from its corporate name, stationeries, labels and letterheads. LLjur Petitioner Philips Export B.V. alleged that it is the registered owner-assignee of the trademark "PHILIPS" and "PHILIPS SHIELD EMBLEM" covered by Certificate of Registration Nos. 1651 and 1674 issued on September 9, 1976 and October 28, 1976, respectively, for goods under classes 8, 9, and 10 more specifically electrical lamps of all types, including incandescent lamps, fluorescent lamps, discharge lamps, lamps for photographic purposes, photographic flashbulbs, electric lighting fittings and their accessories and parts, etc.; and petitioner Philips Electrical Lamps, Inc., is the licensee or user of said trademark in the Philippines while petitioner Philips Industrial Development, Inc., is an authorized user of the tradename "PHILIPS" as shown in the articles of incorporation. Both said corporations together with Philips Export B.V. are related, belonging to the PHILIPS Group of Companies and are wholly owned subsidiaries of their associated and holding company N. V. Philips Gloeilampenfabrieken of Eindhoven, Netherlands; that petitioner and respondent are engaged in the same line of business which are the manufacture and sale of electrical products, more specifically shown in their respective articles of incorporation; that petitioner Philips Export B.V is the exclusive true and lawful owner of the trademarks "PHILIPS" and "PHILIPS SHIELD EMBLEM" by virtue of long extensive use thereof by its predecessor-in-interest N.V. PHILIPS GLOEILAMPENFABRIEKEN and petitioner Philips Electrical Lamps, Inc., is the user or licensee of said trademarks and petitioner Philips Industrial Development, Inc., is likewise duly authorized to use the name "PHILIP" in the Philippines. That both are registered corporations under the laws of the Philippines using the name "PHILIPS" since August 29, 1956 and May 25, 1956, respectively, long before the respondent corporation was registered with the Commission; that on April 19, 1982, long after the registration of said petitioners Philips Electrical Lamps, Inc., and Philips Industrial Development, Inc., as corporations using the name Philips and the registration of the trademark "PHILIPS" and "Philips Shield Emblem" with the Philippine Patent Office, respondent formally filed with this Commission for registration of the Corporate name "Standard Philips Corporation", that respondent thru its duly authorized officer filed with this Commission an undertaking to change corporate name in the event that another person, firm or entity has acquired a prior right to use the same name or one similar to it, that on September 7, 1984, a complaint was filed against respondent by petitioners before the Corporate and Legal Department of this Commission; that the parties failed to reach any settlement; that respondent's adoption and registration of the corporate name "Standard Philips Corporation" is unlawful and patently operates to destroy petitioner's exclusive right to its use and adoption as well as the enjoyment of its goodwill; contrary to the provision of the Trademark Law, R.A. 166, as amended and Section 18 of the Corporation Code; that petitioners and respondent deal in the same class of goods and their business are in direct competition with one another; that the similarity of their goods will likely confuse, mislead or deceive an ordinary customer or purchaser into believing that respondent's goods or products originated or emanated from, are associated with, or are manufactured by, or sold, or sponsored by the petitioners by reason of the use of the same to the serious and irreparable damage or injury to petitioners who have the sole right to cash in the goodwill and worldwide popularity of the name "PHILIPS"; that under the provisions of the Trademark Law, R.A. 166, as amended, petitioners' right to the exclusive use of the trademarks "Philips" and "Philips Shield Emblem" has so become absolute and legally well-settled that even this Commission is enjoined to protect thru cancellation of respondent's corporate name within the context of Section 18 of the Corporation Code and respondent's undertaking to change name; that to show clearly the fraudulent intent of respondent of riding on the popularity, and good name of petitioners, the respondent has not only appropriated the name Philips but also their logo or emblem in respondent's letterhead. Respondent in its answer denied the material allegations in the petition, and alleged that petitioner Philips B.V. has no legal capacity to sue in the Philippines; that respondent's use of its corporate name is not at all similar to petitioner's trademark "Philips" when considered in its entirety. Furthermore, one of the "(G)uidelines in the approval of Corporate and Partnership name" provides: 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 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 company already registered; that respondent's products consisting of chain rollers, belts, bearings and cutting saw are grossly different from petitioner's electrical products. Furthermore, respondent's products are unrelated and non-competing with petitioners' products; that the records of this Commission will show that there are other corporations using the word "Philips" like, among others, Philips Wire & Cables and petitioners. To respondent's knowledge, petitioners have not questioned the use of the word Philips by such other firms. Petitioners are, therefore, estopped from questioning respondent's use of the same word in its corporate name. Petitioners on the basis of the facts narrated in the petition claimed that they will suffer serious and irreparable injury during the pendency of the case and applied for the issuance of a writ of preliminary injunction. prLL In support thereof, the petitioners presented witness Mr. Ariston T. Mitra and the following documentary evidence consisting of among others: Sample of letterhead of Philips Electrical Lamps, Inc.,showing its corporate name and emblem; letterhead of Standard Philips Corporation also showing the name Philips; Certificate of Registration No. 1651 for trademark "PHILIPS";Certificate of Registration No. 1674 for the "PHILIPS SHIELD EMBLEM";Certificate of Registration of Philips Industrial Corporation, dated May 25, 1956 issued by the SEC, as well as Certificate of Registration of Philips Electrical Lamps Inc. on August 29, 1956, and proof of litigation expenses. The respondent interposed its opposition thereto, and presented as witness Mr. Filemon Tan as well as documentary evidence consisting, among others, the following: Representatives samples of new format of respondent's letterheads and labels. Certified copies of Trademark Application Serial No. 55690 with the Philippine Patent Office for the Trade mark "STANDARD PHILIPS & DEVICE";Trademark Application Serial No. 56288 for the trademark "STANDARD PHILIPS & GLOBE DEVICE; Letters from Iris Commercial, De Luxe Electrical and Hardware; pages 546 and 557 of PLDT directory. The parties were afforded ample opportunity to ventilate their respective positions on the injunctive relief prayed for. After a thorough evaluation of the parties' position on the incident, this Commission issued an Order on September 27, 1985, the dispositive portion of which states as follows: "After a thorough consideration of the testimonies and documentary evidence offered and presented by the parties, it appears that there exists no sufficient basis for the issuance of the injunctive relief prayed for." WHEREFORE, petitioners' application for the writ of preliminary injunction is hereby DENIED." During the hearing on the merits, the parties manifested that they will adopt the testimonial and documentary evidence they have presented during the hearing on the application for a writ of preliminary injunction. Moreover, the parties were allowed to mark some documentary evidence like proof of payment of additional litigation expenses on the part of the petitioners and allowances for publication of another trademark application for the respondent for the trademark "STANDARD PHILIPS & GLOVE DEVICE" (EXHS. "25," "25-A" and "25-A-1") Now comes the merit of the case where the petitioners are praying for the removal of the word "PHILIPS" and the emblem, logo or any trademark or name similar to the word mark "PHILIPS" and/or "PHILIPS SHIELD EMBLEM" from its corporate name, stationeries, labels, and letterheads. This Commission finds no legal nor factual basis to order the removal of the word "PHILIPS" from the corporate name of the respondent. Since this Commission found no sufficient ground for the issuance of the injunctive relief prayed for on the basis of the testimonial and documentary evidence presented, it cannot order the removal of the word "PHILIPS" on the basis of the same testimonial and documentary evidence presented during the hearing on the issuance of a writ of preliminary injunction which was adopted in toto during the trial on the merits without petitioners having raised or introduced new matters thereto. cdll Jurisprudence is replete with rulings to the effect that: "Courts of equity must assume that the public will use reasonable intelligence and discrimination with reference to the names of corporations with which they are dealing or intend to deal, the same as in cases of individuals bearing same or similar names"."Hygia Water Ice Co. vs. New York Hygeia Ice Co. 140 N.Y. 94, 35 N.E. 417, Fletcher Vol. 6) Besides, it is not sufficient that same person may possibly be misled, but the similarity must be such that any person with such reasonable care and observation as the public generally are capable of using and may be expected to exercise would likely mistake one for the other. (Lawyers Title Co. vs. Lawyers Title Corp. 71 App. D.C. 120, Fletcher Vol. 6). It must be emphasized that respondents' products are grossly different from that of petitioners. Further, the business or products of the parties are in the technical field and the customers are capable of close determination. "Thus it has been held that where the articles is of great value and the buyer is more interested in the personnel that in the nature of the institution and is brought in direct contact with the former ...the danger that lurks in similarity of names is diminished." (Federal Securities Co. vs. Federal Securities Corp. 129 Ore. 375, 276 Pc. 1100, 66 A.L.R. 934, Fletcher Vol. 6). While it is true that Section 18 of the Corporation Code 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, such provision of law, however, applies only if and when the corporate names in question are identical. In the case at bar, there is no confusing similarity between respondents and petitioners' trademarks or corporate names since the name of the petitioners contains at least two words different from that of the respondent. It is worth mentioning that the object of a corporate name is only to serve the purpose of identification and does not necessarily reflect the purpose of the corporation for which it was formed as a corporation may have several purposes different and distinct from that of its primary purpose. The test is that confusion must be such as would exist in the mind of person of ordinary intelligence and it is not sufficient that careless and indifferent readers of names would be confused as to identity of corporation. (Metal Craft Co. vs. Metalcraft Heater Corp. 255 Mich. 642, 239 N.W.,Fletcher Vol. 6).Thus, a person of ordinary caution and prudence when he deals with a corporation does not merely rely on its corporate name but exercise reasonable and careful scrutiny in finding the identity of the corporation with which he is dealing or intends to deal with. Deceit or confusion, therefore, is quite remote. Use of corporate name cannot be enjoined merely because it resembles in part the name of another corporation. (John Palmer Co. vs. Palmer-McLellan Shoe Pack Co.;37 D.L.R. (con) 201 Fletcher Vol. 6).As shown in respondents Exhibits "10" and "11" there are two (2) distinguishable elements which are different from that of petitioners and vice-versa. It has also been abundantly shown by respondent that petitioners have no monopoly or exclusive right to use the word "PHILIPS" as there are several companies listed on pages 546 and 557 of the Philippine Long Distance Telephone Directory using the name "PHILIPS" as part of their corporate names (Exhs. "16" and "17") who are also on the same line of business as that of petitioners. Therefore, we cannot overlook the fact that Exhibits "16","17" and "19-A" show that there are several firms using the name "PHILIPS". prLL WHEREFORE, viewed in the light of the foregoing, the petition should be, as it is hereby dismissed for lack of merit. Respondents counter-claim are likewise dismissed, no evidence having been presented to support the same. Without pronouncement as to cost. (SGD.) ENRIQUE L. FLORES, JR. Hearing Officer