“What’s in a name? That which we call a rose by any other name would smell as sweet.” said Juliet Capulet in Shakespeare’s classic Romeo and Juliet. Really, what’s in a name that is so important? In business, trade names or corporate names identify the establishment. A trade name is any individual name or surname, firm name, device or word used by manufacturers, industrialists, merchants and others to identify their businesses, vocations or occupations [Converse Rubber Corp. vs. Universal Rubber Products, G.R. No. L-27906, 08 January 1987]
A trade name identifies the company.
The importance of a trade name cannot be overemphasized. Since it pertains to the identity of a company, it is given protection by the law. A name is peculiarly important as necessary to the very existence of a corporation. Its name is one of its attributes, an element of its existence, and essential to its identity [Philips Export B.V. v. Court of Appeals, G.R. No. 961161, 21 February 1992]. Thus, a corporation’s right to use its corporate and trade name is a property right, a right in rem, which it may assert and protect against the world in the same manner as it may protect its tangible property, real or personal, against trespass or conversion [Western Equipment and Supply Co. v. Reyes, 51 Phil. 115 (1927)].
A trade name is different from a trademark.
It must be noted that a trade name is different from a trademark. Trade names are registered with the Department of Trade & Industry (DTI) for sole proprietorships or the Securities & Exchange Commission (SEC) for corporations. On the other hand, trademarks are registered with the Intellectual Property Office (IPO).
A trade name which has been used in trade and commerce is, in fact, entitled to protection, even without its registration; and a trade name may be used as a trademark and vice versa [Ruben E. Agpalo, The Law on Trademark, Infringement and Unfair Competition, p. 18 (2000)]. Section 165 of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines (“IP Code”), states that “notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties. In fact, the protection of trade names, despite the absence of registration, is further supported by international treaties to which the Philippines is a signatory. Parenthetically, Article 8 of the Convention of the Union of Paris for the Protection of Industrial Property, to which the Philippines became a party on 27 September 1965, provides that “a trade name shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trademark.”
The right to the exclusive use of a corporate name with freedom from infringement by similarity is determined by priority of adoption.
So, what happens to competing businesses with the same trade name? Who shall emerge victorious? The right to the exclusive use of a corporate name with freedom from infringement by similarity is determined by priority of adoption [De La Salle Montessori International of Malolos, Inc. vs. De La Salle Brothers, Inc., G.R. No. 205548, 07 February 2018]. Thus, the injured company may file a petition with the SEC to have the trade name of another cancelled. Section 17 of Republic Act No. 11232, otherwise known as the Revised Corporation Code, states that the SEC, upon determination that the corporate name is: (1) not distinguishable from a name already reserved or registered for the use of another corporation; (2) already protected by law; or (3) contrary to law, rules and regulations, may summarily order the corporation to immediately cease and desist from using such name and require the corporation to register a new one. The SEC shall also cause the removal of all visible signages, marks, advertisements, labels prints and other effects bearing such corporate name. Upon the approval of the new corporate name, the SEC shall issue a certificate of incorporation under the amended name. If the corporation fails to comply with the SEC’s order, it may hold the corporation and its responsible directors or officers in contempt and/or hold them administratively, civilly and/or criminally liable and/or revoke the registration of the corporation.
About Nicolas and De Vega Law Offices
If you need assistance in corporate law, commercial law, corporate or commercial litigation, or civil or other criminal law-related issues, we can help you. Nicolas and de Vega Law Offices is a full-service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com.