11)

PHILIPS EXPORT B.V. V. COURT OF APPEALS

A corporations right to use its corporate and trade name is a property right, a right in rem,
which it may assert and protect against the whole world.
FACTS:
Philips Export B.V. (PEBV) filed with the SEC for the cancellation of the word Philips the
corporate name of Standard Philips Corporation in view of its prior registration with the
Bureau of Patents and the SEC. However, Standard Philips refused to amend its Articles of
Incorporation so PEBV filed with the SEC a petition for the issuance of a Writ of Preliminary
Injunction, however this was denied ruling that it can only be done when the corporate
names are identical and they have at least 2 words different. This was affirmed by the SEC
en banc and the Court of Appeals thus the case at bar.
ISSUE:
W/N Standard Philips can be enjoined from using Philips in its corporate name
RULING:
YES
A corporations right to use its corporate and trade name is a property right, a right in rem,
which it may assert and protect against the whole world. According to Sec. 18 of the
Corporation Code, no corporate name may be allowed if the proposed name is identical or
deceptively 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 law.
For the prohibition to apply, 2 requisites must be present:
(1)

The complainant corporation must have acquired a prior right over the use of such
corporate name and

(2)

The proposed name is either identical or deceptively or confusingly similar to that of

any existing corporation or to any other name already protected by law or patently
deceptive, confusing or contrary to existing law.

With regard to the 1st requisite, PEBV adopted the name Philips part of its name 26 years
before Standard Philips. As regards the 2nd, the test for the existence of confusing similarity
is whether the similarity is such as to mislead a person using ordinary care and
discrimination. Standard Philips only contains one word, Standard, different from that of
PEBV.
The 2 companies products are also the same, or cover the same line of products. Although
PEBV primarily deals with electrical products, it has also shipped to its subsidiaries machines
and parts which fall under the classification of chains, rollers, belts, bearings and cutting
saw, the goods which Standard Philips also produce. Also, among Standard Philips primary
purposes are to buy, sell trade x x x electrical wiring devices, electrical component,
electrical supplies.
Given these, there is nothing to prevent Standard Philips from dealing in the same line of
business of electrical devices. The use of Philips by Standard Philips tends to show its
intention to ride on the popularity and established goodwill of PEBV.