45.) Philip Morris, Inc. v. CA, 43 SCAD 400, 224 SCRA 576 [1993].

Facts:

This is a petition for review under Rule 45 of the Rules of Court, to seek the reversal
and setting aside of the following issuances of the Court of Appeals (CA).

Philip Morris, Inc. and two other petitioners are ascribing whimsical exercise of the
faculty conferred upon magistrates by Section 6, Rule 58 of the Revised Rules of Court
when respondent Court of Appeals lifted the writ of preliminary injunction it earlier had
issued against Fortune Tobacco Corporation, from manufacturing and selling MARK
cigarettes in the local market. Banking on the thesis that petitioners respective symbols
MARK VII, MARK TEN, and MARK, also for cigarettes, must be protected against
unauthorized appropriation.

All petitioners are not doing business in the Philippines but are suing on an isolated
transaction, They Invoked provisions of the Paris Convention for the Protection of
Industrial and Intellectual Property. As corporate nationals of member-countries of the
Paris Union, they can sue before Philippine courts for infringement of trademarks, or for
unfair competition, without need of obtaining registration or a license to do business in
the Philippines, and without necessity of actually doing business in the Philippines.

Philip Morris and its subsidiaries filed the complaint for infringement and damages
against Fortune Tobacco before the Pasig Regional Trial Court (RTC) for manufacturing
and selling cigarettes bearing the trademark Mark which is identical and confusingly
similar to Philip Morris trademarks. The said act was dismissed. Hence, this petition at
bar.

Issue/s:

Whether or not there has been an invasion of plaintiffs right of property to such
trademark or trade name.

Discussions:

Following universal acquiescence and comity, our municipal law on trademarks

regarding the requirement of actual use in the Philippines must subordinate an
international agreement inasmuch as the apparent clash is being decided by a
municipal tribunal. Withal, the fact that international law has been made part of the law
of the land does not by any means imply the primacy of international law over national
law in the municipal sphere. Under the doctrine of incorporation as applied in most
countries, rules of international law are given a standing equal, not superior, to national
legislative enactments

Ruling/s:
No. There is no proof that any of petitioners products which they seek to protect from
any adverse effect of the trademark applied for by defendant, is in actual use and
available for commercial purposes anywhere in the Philippines.

A fundamental principle of Philippine Trademark Law is that actual use in commerce in

the Philippines is a pre-requisite to the acquisition of ownership over a trademark or a
trade name.

In view of the explicit representation of petitioners in the complaint that they are not
engaged in business in the Philippines, it inevitably follows that no conceivable damage
can be suffered by them not to mention the foremost consideration heretofore discussed
on the absence of their right to be protected.

44.) Signetics Corp. v. CA Digest

Service of Summons on Foreign Corporations

Facts:

1. The petitioner, Signetics was organized under the laws of the United States of
America. Through Signetics Filipinas Corporation (SigFil), a wholly-owned subsidiary,
Signetics entered into lease contract over a piece of land with Fruehauf Electronics
Phils., Inc. (Freuhauf).

2. Freuhauf sued Signetics for damages, accounting or return of certain machinery,

equipment and accessories, as well as the transfer of title and surrender of possession
of the buildings, installations and improvements on the leased land, before the RTC of
Pasig (Civil Case No. 59264). Claiming that Signetics caused SigFil to insert in the
lease contract the words "machineries, equipment and accessories," the defendants
were able to withdraw these assets from the cost-free transfer provision of the contract.

3. Service of summons was made on Signetics through TEAM Pacific Corp. on the
basis of the allegation that Signetics is a "subsidiary of US PHILIPS CORPORATION,
and may be served summons at Philips Electrical Lamps, Inc., Las Pias, Metro Manila
and/or c/o Technology Electronics Assembly & Management (TEAM) Pacific
Corporation, Electronics Avenue, FTI Complex, Taguig, Metro Manila," service of
summons was made on Signetics through TEAM Pacific Corporation.

4. Petitioner filed a motion to dismiss the complaint on the ground of lack of jurisdiction
over its person. Invoking Section 14, Rule 14, of the Rules of Court and the rule laid
down in Pacific Micronisian Line, Inc., v. Del Rosario and Pelington to the effect that the
fact of doing business in the Philippines should first be established in order that
summons could be validly made and jurisdiction acquired by the court over a foreign
corporation.
5. The RTC denied the Motion to dismiss. While the CA affirmed RTC. Hence this
petition. The petitioner argues that what was effectively alleged in the complaint as an
activity of doing business was "the mere equity investment" of petitioner in SigFil, which
the petitioner insists, had theretofore been transferred to TEAM holdings, Ltd.

Issue: Whether or not the lower court, had correctly assumed jurisdiction over the
petitioner, a foreign corporation, on its claim in a motion to dismiss, that it had since
ceased to do business in the Philippines.

Held:

YES.

1. Signetics cannot, at least in this early stage, assail, on the one hand, the veracity and
correctness of the allegations in the complaint and proceed, on the other hand, to prove
its own, in order to hasten a peremptory escape. As explained by the Court in Pacific
Micronisian, summons may be served upon an agent of the defendant who may not
necessarily be its "resident agent designated in accordance with law." The term "agent",
in the context it is used in Section 14, refers to its general meaning, i.e., one who acts
on behalf of a principal.

The allegations in the complaint have thus been able to amply convey that not only is
TEAM Pacific the business conduit of the petitioner in the Philippines but that, also, by
the charge of fraud, is none other than the petitioner itself.

2. The rule is that, a foreign corporation, although not engaged in business in the
Philippines, may still look up to our courts for relief; reciprocally, such corporation may
likewise be "sued in Philippine courts for acts done against a person or persons in the
Philippines" (Facilities Management Corporation v. De la Osa), provided that, in the
latter case, it would not be impossible for court processes to reach the foreign
corporation, a matter that can later be consequential in the proper execution of
judgment. Hence, a State may not exercise jurisdiction in the absence of some good
basis (and not offensive to traditional notions of fair play and substantial justice) for
effectively exercising it, whether the proceedings are in rem, quasi in rem or in
personam.

43.) Atlantic Mutual Ins. Co. v. Cebu Stevedoring Co., Inc., 17 SCRA 1037 [1966]

Facts:
The appellants Atlantic Mutual Insurance Company and Continental Insurance
Company are both foreign corporations existing under the laws of the United States.
They sued Cebu Stevedoring Co., Inc., a domestic corporation, for recovery of a sum of
money because the defendant, a common carrier, undertook to carry a shipment failed
to comply with its obligation, as a carrier, to deliver the copra in good order.
Defendants Contention: moved to dismiss on the ground that plaintiffs had no legal
personality to appear the Ph courts and with no capacity to sue. It was based upon
failure of the complaint to allege compliance with section 69 of the Corporation Law.

Section 69 of Corporation law: Sec. 69. No foreign corporation or corporation

formed, organized, or existing under any laws other than those of the Ph shall be
permitted to transact business in the Ph or maintain by itself or assigned any suit for the
recovery of any debt, claim or demand, whatever, unless it shall have the license
prescribed in the section immediately preceeding.

Section 68 of the Corporation law is almost identical with the first part of Section
69 which requires a license before a foreign corporation may be permitted to transact
business in the Ph, but adds that such license may be obtained from the Director of
Commerce upon order of the Secretary of Commerce and Industry.

RTC Decision: dismissed complaint. The implication of the courts ruling is that without
such license a foreign corporation may not sue in our courts in view of section 69 of the
Corporation law. Hence the appeal.

ISSUE: W/N withpout such license a foreign corporation may not sue in our courts in
view of section 69 of the Corporation Law?

Held:
No, it may still sue. If a foreign corporation is not doing business here it is not barred
from seeking redress in our courts in proper cases, as when it sues on an isolated
transaction, even if it has not obtained a license pursuant to Section 69.

42.) Philips Export B.V. v. Court of Appeals, supra

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:
Whether or not 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.

41.) La Chemise Lacoste v. Fernandez, 129 SCRA 373 [1984]

Facts:
Petitioner La Chemise Lacoste is a foreign corporation and the actual owner of the
trademarks Lacoste, Chemise Lacoste, and Crocodile Device used on clothing and
other goods that are sold in many parts of the world. Herein respondent Hemadas &
Co., a domestic firm, applied and was granted registration of the mark Chemise
Lacoste and Crocodile Device for its garment products. Sometime later, petitioner
applied for the registration of its mark Crocodile Device and Lacoste but was opposed
by herein respondent. Later, petitioner filed a letter-complaint of unfair competition
before the NBI which led to the issuance of search warrants and the seizure of goods of
respondent Hemadas. Respondent moved to quash the warrants alleging that its
trademark was different from petitioners trademark. Respondent court ruled to set aside
the warrants and to return the seized goods.
Issue:
Whether or not petitioners trademark is a well-known mark protected under the Paris
Convention.
Ruling: YES.
In upholding the right of the petitioner to maintain the present suit before our courts for
unfair competition or infringement of trademarks of a foreign corporation, we are
moreover recognizing our duties and the rights of foreign states under the Paris
Convention for the Protection of Industrial Property to which the Philippines and France
are parties.
Pursuant to this obligation, the Ministry of Trade issued a memorandum addressed to
the Director of the Patents Office directing the latter to reject all pending applications for
Philippine registration of signature and other world famous trademarks by applicants
other than its original owners or users. The conflicting claims over internationally known
trademarks involve such name brands as Lacoste, et. al. It is further directed that, in
cases where warranted, Philippine registrants of such trademarks should be asked to
surrender their certificates of registration, if any, to avoid suits for damages and other
legal action by the trademarks foreign or local owners or original users.
The Intermediate Appellate Court, in the La Chemise Lacoste S.A. v. Sadhwani decision
which we cite with approval sustained the power of the Minister of Trade to issue the
implementing memorandum and declared La Chemise Lacoste S.A. the owner of the
disputed trademark, stating: In the case at bar, the Minister of Trade, as the competent
authority of the country of registration, has found that among other well-known
trademarks Lacoste is the subject of conflicting claims. For this reason, applications for
its registration must be rejected or refused, pursuant to the treaty obligation of the
Philippines.

40.) WESTERN EQUIPMENT AND SUPPLY CO v. FIDEL REYES

Facts:

On 4 May 1925, the Western Equipment and Supply Company, through its duly
authorized agent, Felix C. Reyes, applied to the Director of the Bureau of Commerce
and Industry for the issuance of a license to engage in business in the Philippine Islands
and on 20 May 1926, the Director issued in favor of Western Equipment a provisional
license for that purpose which was made permanent on 23 August 1926. On the other
hand, Western Electric Company, Inc., has never been licensed to engage in
business in the Philippine Islands, and has never engaged in business therein.
From and since the issuance of said provisional license of 20 May1926, to Western
Equipment, it has been and still is engaged in importing and selling in the Philippine
Islands electrical and telephone apparatus and supplies manufactured by Western
Electric (as well as those manufactured by other factories). Electrical and
telephone apparatus and supplies manufactured by Western Electric have been sold in
foreign and interstate commerce for the past 50 years, and have acquired high
trade reputation throughout the world. At the present time the greater part of all
telephone equipment used in Manila, and elsewhere in the Philippine Islands,
was manufactured by Western Electric, and sold by it for exportation to the Philippine
Islands. A Philippine Corporation known as the Electric Supply Company, Inc.
(where Henry Herman is its President and General Manager), has been importing
the manufactures into the Philippine Islands for the purpose of selling the same
therein, and that the defendant Henry Herman, is the President and General Manager of
said corporation.

The words Western Electric have been registered by Western Electric Company, Inc.,
as a trademark under the provisions of the Act of Congress of 20 February
1905, in the office of the Commissioner of Patents at Washington, District of
Columbia, and said trade-mark remains in force. On 15 October 1926, Henry Herman,
Peter OBrien, Manuel B. Diaz, Felipe Mapoy and Artemio Zamora signed and filed
articles of incorporation with Fidel A. Reyes, as Director of the Bureau of Commerce
and Industry, with the intention of organizing a domestic corporation under the
Philippine Corporation Law to be known as the Western Electric Company, Inc.,
for the purpose, among other things, of manufacturing, buying, selling and dealing
generally in electrical and telephone apparatus and supplies.

On 20 October 1926, W. Z. Smith was authorized by the Board of Directors of Western

Electric to take all necessary steps for the issuance of a license to said
company to engage in business in the Philippine Islands ,and to accept service of
summons and process in all legal proceedings against said company, and on 21
October 1926, Smith filed a written application for the issuance of such license with the
Director of the Bureau of Commerce and Industry, which application, however, has
not yet been acted upon.

On 18 October 1926, the Philippine Telephone and Telegraph Co., by its general
manager, Smith, lodged with the Director of the Bureau of Commerce and Industry its
protest against the registration of the proposed corporation by Henry Herman, Peter
OBrien, Manuel B. Diaz, Felipe Mapoy and Artemio Zamora, to be known as the
Western Electric Company, Inc., as a domestic corporation under the Philippine
Corporation Law.

On 23 October 1926, Western Equipment and Western Electric filed in the CFI
of Manila a complaint against Herman, et. al. They alleged that the purpose of the
latter in attempting to incorporate under the corporate name of Western Electric
Company, Inc., is to profit and trade upon Western Electrics business and reputation,
by misleading and deceiving the public into purchasing the goods manufactured
or sold by them as those of Western Electric, in violation of the provisions of Act
666 of the Philippine Commission, particularly section 4 thereof. The lower court
rendered judgment for Western Equipment and Western Electric as prayed for in
their complaint, and made the temporary injunction permanent, from which
Herman, et. al. appealed.

The Supreme Court affirmed the judgment of the lower court, with costs.
1.
Questions raised in the case Intellectual Property Law, 2004 ( 8)
1) Has a foreign corporation which has never done business in the Philippine Islands,
and which is
unlicensed and unregistered therein, any right to maintain an action to restrain residents
and inhabitants of the Philippine Islands from organizing a corporation therein
bearing the same name as such foreign corporation, when said residents and
inhabitants have knowledge of the
existence of such foreign corporation, having dealt with it, and sold its manufactures,
and when said foreign corporation is widely and favorably known in the Philippine
Islands through the use therein of its products bearing its corporate and trade name,
and when the purpose of the proposed domestic corporation is to deal in
precisely the same goods as those of the
foreign corporation?

2) Has an unregistered corporation which has not transacted business in the Philippine
Islands, but which has acquired a valuable goodwill and high reputation therein, through
the sale, by
importers, and the extensive use within the Islands of its products bearing either
its corporate name, or trade mark consisting of its corporate name, a legal right
to restrain an officer of the Government of the Philippine Islands, i. e., the
Director of Commerce and Industry, with knowledge of those facts, from issuing
a certificate of incorporation to residents of the Philippine Islands who attempt to
organize a corporation for the purpose of pirating the corporate name of such foreign
corporation, of engaging in the same business as such foreign corporation, and of
defrauding the public into thinking that its goods are those of such foreign
corporation, and of defrauding such foreign corporation and its local dealers of their
legitimate trade?

2.
Noncompliance of a foreign corporation
An affirmative defense when case involves legal or contract rise arising from business
transacted in the Philippines; Not applicable in present case In the case of Marshall
Wells Co. vs. Henry W. Elser & Co. (46 Phil., 70, 76), the court held that the
noncompliance of a foreign corporation with the statute may be pleaded as an
affirmative defense. Thereafter, it must appear from the evidence, first, that the plaintiff
is a foreign corporation, second, that it is doing business in the Philippines, and third,
that it has not obtained the proper license as provided by the statute. Herein,
however, Western Electric Company, Inc., which has never engaged in business in the
Philippine Islands, is not seeking to enforce any legal or contract rights arising from, or
growing out of, any business which it has transacted in the Philippine Islands.
3.
Sole purpose of present action

The sole purpose of the action is to protect its reputation, its corporate name, its
goodwill, whenever
that reputation, corporate name or goodwill have, through the natural development of its
trade, established themselves.

4.

Trademark acknowledges no territorial boundary but extends to every market where the
traders goods are known
A trade-mark acknowledges no territorial boundaries of municipalities or states or
nations, but
extends to every market where the traders goods have become known and identified by
the use of the mark. Rights to the use of its corporate and trade name is a property
right, a right in rem, which it may assert and protect against all the world, in any of
the courts of the world even in jurisdictions where it does not transact business
just the same as it may protect its tangible property, real or personal, against
trespass, or conversion.

5.
Requisite justifying injunction to restrain competition

In Walter E. Olsen & Co. vs. Lambert (42 Phil., 633, 640), it was said that in order that
competition
in business should be unfair in the sense necessary to justify the granting of an
injunction to restrain such competition it must appear that there has been, or is likely to
be, a diversion of trade from the business of the complainant to that of the wrongdoer,
as a consequence of the adoption by the latter of means or methods generally
recognized as unfair. In most, if not all, of the cases in which relief has hitherto
been granted against unfair competition the means and methods adopted by the
wrongdoer in order to divert the coveted trade from his rival have been such as were
calculated to deceive and mislead the public into thinking that the goods or business of
the wrongdoer are the goods or business of the rival. Diversion of trade is really
the fundamental.

As first enunciated in Marshall Wells Co. v. Elser & Co. "the object of the statute
(Secs. 68 and 69, Corporation Law) was not to prevent the foreign corporation from
performing single acts, but to prevent it from acquiring a domicile for the purpose of
business without taking the steps necessary to render it amenable to suit in the
local courts ... the implication of the law (being) that it was never the purpose of the
legislature to exclude a foreign corporation which happens to obtain an isolated
order for business from the Philippines, from securing redress in the Philippine Courts.
..." The principle has since then been applied in a number of other cases.

To recognize respondent as a juridical person, however, does not resolve the issue in
this case. It should be postulated at this point that respondent is not suing in our courts
"for the recovery of any debt, claim or demand," for which a license to transact
business in the Philippines is required by Section 69 of the Corporation Law,
subject only to the exception already noted. Respondent went to the Philippine Patent
Office on a petition for cancellation of a trademark registered by petitioner,
invoking Section 17(c) in relations to Section 4(d) of the Trademark Law. A more
or less analogous question arose in Western Equipment & Supply Co. v. Reyes , 51
Phil. 115. The syllabus of the report, which is a correct statement of the doctrine laid
down in the decision, reads as follows:
A foreign corporation which has never done ... business in the Philippine Islands and
which is unlicensed and unregistered to do business here, but is widely and
favorably known in the Islands through the use therein of its products bearing its
corporate and trade name has a legal right to maintain an action in the Islands

39.) Lyceum of the Philippines, Inc. v. Court of Appeals, 219 SCRA 610 [1993]

Petitioner is an educational institution duly registered with the SEC since 1950. Before
the case at bar, petitioner commenced a proceeding against Lyceum of Baguio with the
SEC to require it to change its corporate name and adopt a new one not similar or
identical to the petitioner. SEC granted noting that there was substantial similarity
because of the dominant word Lyceum. CA and SC affirmed. Petitioner filed similar
complaint against other schools and obtains a favorable decision from the hearing
officer. On appeal, SEC en banc reversed the decision and held that the word Lyceum
has not become so identified with the petitioner and that the use thereof will not cause
confusion to the general public.
ISSUES:
1. WON the corporate names of the private respondents are identical with or
deceptively similar to that of the petitioner.
2. WON the use by the petitioner of Lyceum in its corporate name has been for such
length of time and with such exclusivity as to have become associated or identified with
the petitioner institution in the mind of the general public (Doctrine of Secondary
meaning).
HELD:
NO, to both. True enough, the corporate names of the parties carry the word Lyceum
but confusion and deception are precluded by the appending of geographic names.
Lyceum generally refers to a school or an institution of learning and it is natural to use
this word to designate an entity which is organized and operating as an educational
institution.
Doctrine of Secondary meaning is a word of phrase originally incapable of exclusive
appropriation, might nevertheless have been used so long and so exclusively by one
producer with reference to his article that, in trade and to that branch of the purchasing
public, the word or phrase has come to mean that the article was his product.
Lyceum of the Philippines has not gained exclusive use of Lyceum by long
passage of time. The number alone of the private respondents suggests strongly
that the use of Lyceum has not been attended with the exclusivity essential for the
applicability of the doctrine. It may be noted that one of the respondents Western
Pangasinan Lyceum used such term 17 years before the petitioner registered with the
SEC. Moreover, there may be other schools using the name but not registered with the
SEC because they have not adopted the corporate form of organization.