Converse Rubber Corporation v. Universal Rubber Products, Inc.
REITERATIONFacts
The Antecedents: Respondent Universal Rubber Products, Inc. filed an application with the Philippine Patent Office to register the trademark "UNIVERSAL CONVERSE AND DEVICE" for rubber shoes and slippers. Petitioner Converse Rubber Corporation opposed this application, alleging that the mark was confusingly similar to its corporate name "CONVERSE RUBBER CORPORATION" and its trademarks, likely to deceive purchasers and cause irreparable injury. Procedural History: The Director of Patents dismissed the opposition and granted the application, finding that petitioner failed to prove that the word "CONVERSE" in its corporate name had become so identified with the corporation in the public mind. The Director also noted the insignificant quantity of petitioner's goods entering the Philippines without its direct involvement and that petitioner was not licensed to do business in the country. Petitioner's motion for reconsideration was denied. The Petition: Petitioner filed an instant petition for review, seeking to set aside the decision of the Director of Patents.
Issue(s)
Whether the trademark "UNIVERSAL CONVERSE AND DEVICE" is confusingly similar to petitioner's corporate name "CONVERSE RUBBER CORPORATION" and/or its trademarks. Whether a foreign corporation not licensed to do business in the Philippines can protect its corporate name and goodwill in the country.
Ruling
The decision of the Director of Patents is set aside, and a new one is entered denying Respondent Universal Rubber Products, Inc.'s application for registration of the trademark "UNIVERSAL CONVERSE AND DEVICE."
Ratio Decidendi
On the confusing similarity between the trademark and corporate name: The Court found that the word "CONVERSE" is the dominant word in petitioner's corporate name, "CONVERSE RUBBER CORPORATION." Respondent's admission of petitioner's existence since 1946 and its engagement in manufacturing rubber shoes indicated knowledge of petitioner's reputation. The Court held that respondent had no right to appropriate this dominant word for its similar products, as appropriation of the dominant part of a corporate name constitutes infringement. The unexplained use of "CONVERSE" by respondent, given the wide choice of available words, suggested a fraudulent motive to trade upon petitioner's reputation. The Court emphasized that the test is not whether the mark would actually cause confusion, but whether it is likely to cause confusion or mistake on the part of the buying public. The similarity in the general appearance of the products and the appropriation of the word "CONVERSE" could lead the public to mistakenly believe that respondent's products originated from the same source as petitioner's, thus causing prejudice to petitioner's goodwill and reputation. On the right of a foreign corporation to protect its name and goodwill: The Court reiterated that a foreign corporation, even if not licensed to do business in the Philippines and not actually doing business therein, has a legal right to protect its reputation, corporate name, and goodwill. This right extends to restraining residents from organizing a corporation with a similar name if they have knowledge of the foreign corporation and intend to trade in the same goods. The Court cited international conventions and local statutes (RA No. 166, Sec. 37) which protect trade names without the obligation of filing or registration, emphasizing that a trademark acknowledges no territorial boundaries and extends to every market where the trader's goods are known. Therefore, the Director of Patents erred in concluding that petitioner had no name to protect in the forum simply because it was not licensed to do business in the Philippines.
Main Doctrine
A foreign corporation, even if not licensed to do business in the Philippines, has a legal right to protect its corporate name and goodwill from infringement by domestic entities, especially when its products are known and identified in the Philippine market.