In Re: Petition for Cancellation of the Word "Tamaraw"

[SEC-SICD * CASE NO. 3980. August 7, 1992.] IN RE: PETITION FOR CANCELLATION OF THE WORD "TAMARAW" OR TO CAUSE A CHANGE IN THE CORPORATE NAME OF K. H. TAMARAW MANUFACTURING INDUSTRIES, INC., TOYOTA MOTOR CORPORATION , petitioner , vs .K.H. TAMARAW MANUFACTURING INDUSTRIES, INC. , respondent . D E C I S I O N In a verified petition, petitioner Toyota Motor Corporation (TMC) sought for the cancellation of the word TAMARAW or to cause a change in the corporate name of K.H. Tamaraw Manufacturing Industries, Inc. (KHTMII for brevity). EcDTIH In said petition, Toyota Motor Corporation (TMC for short) a foreign corporation not doing business in the Philippines, duly organized and existing under the laws of Japan, averred that it is the registered owner of the trademark TAMARAW in the Philippines under Phil. Patent Office (now BPTTT) Certificate of Registration under class 12, motor vehicles; that on July 28, 1986, petitioner filed an affidavit of non-use for said trademark with a corresponding notice of acceptance being issued by the Patent Office; that on Dec. 18, 1989, KHTMII, in complete violation of petitioner's rights as prior users and/or registered owners of the word "TAMARAW" and with intent to deceive the public and the local and international business communities and to defraud petitioner, secured registration as a corporation with this Commission and in doing so illegally appropriated petitioner's trademark "TAMARAW" as part of its corporate name; that substantially included in its Articles of Incorporation as its principal purpose is the business purpose or line of business in which petitioner TMC is engaged in, to wit: "To engage in, operate, conduct and maintain the business of manufacturing, importing, exporting, buying, selling or otherwise dealing in, at wholesale and retail such goods as "CAR PARTS TO BE PRODUCED IN THE INDUSTRIAL ESTATE TO BE ESTABLISHED IN TRECE MARTIREZ CITY CAVITE, PHILS. and other PRODUCTS TO BE MANUFACTURED of goods of SIMILAR nature, and any and all equipment materials, supplies used or employed in or related to the manufacture of such finished products;" that petitioner and/or its subsidiaries/affiliates have purpose clauses similar to those of respondent, which fact entitles petitioner and/or its affiliates to use "TAMARAW" as tradename or trademark for goods similar to those of respondent, that petitioner in its letters dated Feb. 12, 1991 and March 7, 1991 demanded from respondent KHTMII to cease and desist from using the word "TAMARAW" not only as a tradename or trademark, but also as part of its corporate name, and to immediately delete "TAMARAW" from its corporate name, but the latter refused and still resolutely refuses to do so; that the unauthorized use by respondent of "TAMARAW" as part of its corporate name and its adamant refusal to desist from illegally using and appropriating the word "TAMARAW" as part of its corporate name clearly constitutes violation of law and of the Paris Convention and invasion of TMC's proprietary rights to the said mark which include the right to use the same to the exclusion of others. DEICaA Respondent traversed the material allegations of the petition and informed the Commission that the respondent's corporate name is K.L. Tamaraw Manufacturing Industries, Inc. By way of affirmative defenses, respondent alleged that assuming arguendo, that the petitioner is the legally recognized registrant of the trademark TAMARAW in describing its product, such use of the word TAMARAW is not all encompassing, neither should its use be to the exclusion of all others in view of the following legal considerations, inter alia: a) petitioner uses the word TAMARAW as a trademark in the manufacture, offering for sale and/or sale of a particular product, a motor vehicle, and not as a business name in pursuing a kind or type of a business activity; b) by petitioner's own admission that the trademark TAMARAW is not in use because of the cancellation of contracts with local distributors, the complete and irreversible stoppage of operation of the factory that used to manufacture the TAMARAW as an Asian utility vehicle, the ultimate foreclosure of Delta Motors Corporation's assets that were used in the manufacture of the vehicle TAMARAW, the grounds are set for the unstoppable cancellation of petitioner's registered trademark so as not to further prejudice the interests of Filipinos which have apparently been deprived of the use of the word TAMARAW in their own separate ventures; c) Republic Act 166, Section 38, defines a "trademark" as follows: "The term "trademark" includes any word, name, symbol, emblem, sign or device or a combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured, sold or dealt in by others.";that the alleged right of petitioner over its trademark is embraced explicitly and limited to the terms and elements of the afore-quoted definition. Upon the joining of the issues, the parties were required to file their pre-trial brief, incorporating therein what they perceived to be the issues of the case. Petitioner Toyota Motors Corporation presented as issues the following: 1. Whether or not petitioner TMC has the capacity to institute the instant action. 2. Whether or not petitioner is entitled to the exclusive use of the trademark "TAMARAW" by virtue of its registration of said mark with the BPTTT. 3. Whether or not the use and appropriation by respondent of the word "TAMARAW" as part of its corporate name will cause confusion, mistake and deception in the minds of the public as to the source or origin of the products dealt in by petitioner and respondent. During the preliminary conference, respondent's counsel manifested that there is no controversy as to the fact and that he is willing to submit the case based solely on the pleadings filed by the parties, averring that the principal issue dwells explicitly on the legal aspect of the case, principally on the applicability of the Trademark Law, Republic Act No. 166, as amended and consequently the Corporation Code of the Philippines, in so far as the corporate name of the respondent is concerned. There being no objection from the petitioner, the case was deemed submitted for resolution, hence this decision. The first question petitioner poses is whether or not it is entitled to the exclusive use of the trademark TAMARAW by virtue of its registration of the said word with the BPTTT. There is no cavil that petitioner is entitled to the exclusive use of the word TAMARAW as a trademark. This is expressly provided for by the provisions of the Trademark Law and Jurisprudence. what we have to determine, however, is the extent of such exclusivity. In the recent case of Philips export B.V. et al. vs. Court of Appeals et al., G.R. No. 96161, Feb. 21, 1992, the Supreme Court has stated that two(2) requisites must first be proven before a prohibition of a corporate name based on Section 18 of the Corporation Code is imposed. The court said: "The statutory prohibition cannot be any clearer. To come within its scope two requisites must first be proven namely: 1. that the complainant corporation acquired a prior right over the use of such CORPORATE NAME; and 2. the proposed name is either: 1. identical or 2. deceptively or confusingly similar to that or any existing corporation or to any other name already protected by law; or 3. patently deceptive, confusing or contrary to law. The right to the exclusive use of a CORPORATE NAME with freedom from infringement by SIMILARITY is determined by priority of adoption. (emphasis ours). Following the standard set by the Supreme Court, it would seem that the exclusivity sought by the petitioner is not obtaining in the case at bar. Clearly, the cited decision refers to the priority of adoption of a CORPORATE NAME. For the rule to apply therefore, the comparison must be made on the corporate names of the contending parties and no other. A cursory glance at the corporate name of the petitioner, juxtaposed with that of respondent's would show that TAMARAW, the word sought to be excluded from respondent's corporate name, does not appear anywhere as part of the corporate name of petitioner which is TOYOTA MOTORS CORPORATION. There is therefore no priority of adoption of the word TAMARAW as a corporate name. It is true that the word TAMARAW is a name protected by law but such protection is limited to its use as a TRADE MARK by petitioner and not as a trade name when not so used for there exists a difference between a trade mark and a trade name. It is basic that a trademark is used on goods to distinguish them from those manufactured or produced by others; whereas, a tradename is used to identify the business, vocation or profession of a person, to differentiate it from those of others. Petitioner, therefore, failed to qualify as to the first requisite of the two-pronged standard; and such failure is fatal for it has been held that "...one person cannot exclude another from using a particular trade name as his own trade name unless he has made actual prior use of such name as his own tradename. (Rodseth v. Northwestern Marble Workers, 129 Minn. 472, 152 N.W. 885, Ann. Cas. 1917 257 cited in 26 RCL 878).The rule is well settled that the right to the exclusive use of a corporate name with freedom from infringement by similarity is determined by priority of adoption. (I Thompson; p. 80 citing Minn. vs. Americana Co, 82 N. Eg. 63, 88 ATL 30; San Francisco Oyster House v. Michich. 75 Wash. 274; 134 Pac. 921). The second issue raised by petitioner is the question of whether or not the use and appropriation by respondent of the word "TAMARAW" as part of its corporate name will cause confusion, mistake and deception in the minds of the public as to the source or origin of the products dealt in by petitioner and respondent. Petitioner in its petition essays that petitioner and its subsidiaries/affiliates have purpose clauses similar to those of respondent, which fact entitles petitioner and/or its affiliates to use "TAMARAW" as tradename or trademark for goods similar to those of respondent, which will underscore a likelihood of confusion as to their origin, to petitioner's prejudice and that of the public; that the illegal use and appropriation of KHTMII of the word "TAMARAW" as part of its corporate name and the similarity of businesses and/or lines of business between petitioner and respondent among other circumstance, have caused and/or have continued to cause, and/or will cause and/or are likely: SCEHaD a. to cause confusion and mistake and to deceive purchasers in the public as to the source or origin of the products dealt in by petitioners and respondent; b. to induce persons to buy, use, recommend and refer to respondent's products as that of petitioners; c. to result in the passing-off by dealers of respondent's products as petitioner's products; d. to confuse and mislead the public and the business community that the business activities and/or the goods manufactured and sold by respondent are those of petitioner's; and/or that petitioner and respondent are affiliates or have business connections when they have none; e. to impair and prejudice the goodwill that should grow and ensure to the benefit of TMC acquired through the continuous use of motor vehicles and parts thereof bearing the trademark "TAMARAW"; f. to weaken or dilute the value of TMC's trademark to the latter's prejudice". This contention is not tenable. The public must be credited with some degree of intellect. We are exhorted that, "Courts of equity must assume that the public will use reasonable intelligence and discrimination with reference to the names of corporation 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 Hygiea Ice Co. 140 N.Y. 94, 35 N. E. 417, Fletcher Vol. 6) "The test is that confusion must be such as would exist in the mind of persons of ordinary intelligence and it is not sufficient that careless and indifferent readers of names would be confused as to the identity of the corporation. (Metal Craft Co. v. Metalcraft Heater Corp. 255 Mich. 642, 239 N.W.,Fletcher Vol. 6)."mere conjecture (or speculation) is not sufficient...whether the court will interfere in a particular case must depend upon circumstances; the identity or similarity of the names; the identity of the businesses of the respective corporations; how far the name is a true description of the kind and quality of the articles manufactured or the business carried on; the extent of the confusion which may be created or apprehended and other circumstances which might justly influence the judgment of the judge in granting or withholding the remedy" (7 R.C.L. p. 136, citing Chas. S. Higgins. Co. v. Higgins Soap Corp. 144 N. Y. 462, 39 N.E. 490, 43 A.S.R. 769, 27 L. R. A. 42.) Further, it is more in character with human nature that when people buy articles or goods of great value, such as those dealt in by petitioner and respondent, they exercise great care in choosing the product taking special interest in the maker and origin of the said articles. Thus, it has been held that where the article is of great value and the buyer is more interested in the personnel than 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 ALR 934, Fletcher Vol. 6). While there is indeed an apparent identity of businesses ,between the parties, there appears to be no similarity between the corporate names of petitioner and respondent that would cause such confusion and deception feared by petitioners that would thus merit an injunction of the use of the word TAMARAW by the respondent. Petitioner's name is TOYOTA MOTORS CORPORATION whereas the respondent answers to the name of K.L. Tamaraw Manufacturing Industries Inc. Undoubtedly, the former's name is patently dissimilar with the latter. There is even no single word that is common to both names. We cannot see how confusion can result in these circumstances. Thus, the second requisite required to be simultaneously proven, has been set by the Supreme Court, to wit: In determining the existence of confusing similarity in corporate names, 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 record as well as to the names themselves. (Ohio Nat. Life Ins. Co. vs. Ohio Life Ins. Co. 210 N.E. 2d 298) while the corporate names of Petitioner and Private Respondent are not identical, a reading of Petitioners' corporate names, to wit: Philips Export B.v. Philips Electrical Lamps, Inc. and Philips Industrial Development, Inc. inevitably leads one to conclude that "Philips" is indeed, the dominant word in that all the companies affiliated or assisted with the principal corporation. PEBV, are known in the Philippines and abroad as the Philips Group of Companies". Philips Export B.V. et al., vs. C.A., G.R. No. 96161, Feb. 21, 1992). It appears that the Principle of Dominancy, previously applied in the trademarks and tradenames is now being applied to corporate names as well. It is observed that in several decisions the said principle has been adopted and the same is being upheld, reinforced and further ventilated in the above-quoted decision. In Converse Rubber Corp. vs. Universal Converse Rubber Products, Inc. et al., G.R. No. L-27906, January 8, 1987, and Armco Steel Corp. vs. SEC, G.R. No. L-54580, December 29, 1987, the Supreme Court prohibited the use of a trademark as part of a corporate name when the said trademark constitutes a dominant part of petitioner's name and both petitioner and respondent are engaged in the same or similar business. Applying the test of Dominancy to the case at bar, impels us to the conclusion that petitioner is not entitled to the relief prayed for; hence the word TAMARAW cannot be stricken off the corporate name of the respondent. For as earlier observed, the word TAMARAW is not a dominant part of petitioner's name and does not even appear anywhere therein. LexLib Apropos petitioner's claim of apprehension and fear of possible confusion, mistake or deception, while appearing to be valid grounds to constitute a cause of action, under the set of facts given and in the light of the allegation set in the petitioner are, however, constitutive more of a case of an infringement of trademark over which this Commission has no jurisdiction. WHEREFORE, in view of the foregoing disquisitions, the petitioner is not entitled to the relief prayed for, and the instant petition is hereby DISMISSED. IT IS ORDERED. (SGD.) KIRTH S. BANSUELO-PAGKANLUNGAN Hearing Officer