INDUSTRIAL REF vs. REFRACTORIES

INDUSTRIAL REFRACTORIES CORPORATION OF THE PHILIPPINES vs.
COURT OF APPEALS,
SEC and REFRACTORIES CORPORATION OF THE PHILIPPINES (RCP)
GR No. 122174 3 October 2002
FACTS:
Refractories Corporation of the Philippines (RCP) is a corporation duly organized for the purpose of
engaging in the business of manufacturing, producing, selling, exporting and otherwise dealing in any and
all refractory bricks, its by-products and derivatives. It registered its corporate and business name with
the Bureau of Domestic Trade.
Industrial Refractories Corporation of the Philippines (IRCP), on the other hand, was incorporated
originally under the name “Synclaire Manufacturing Corporation”. It amended its Articles of
Incorporation to change its corporate name to “Industrial Refractories Corp. of the Philippines”. It is
engaged in the business of manufacturing all kinds of ceramics and other products, except paints and
zincs.
Both companies are the only local suppliers of monolithic gunning mix.
Discovering that IRCP was using such corporate name, RCP with the Securities and Exchange
Commission (SEC) a petition to compel petitioner to change its corporate name on the ground that
its corporate name is confusingly similar with that of IRCP’s such that the public may be confused or
deceived into believing that they are one and the same corporation.
SEC decided in favor of RCP and rendered judgment declaring IRCP’s corporate name ‘Industrial
Refractories Corporation of the Philippines’ as deceptively and confusingly similar to that of RCP’s
corporate name ‘Refractories Corporation of the Philippines’. Accordingly, IRCP is hereby directed to
amend its Articles of Incorporation by deleting the name ‘Refractories Corporation of the Philippines’ in its
corporate name within 30 days from the finality of this Decision. Likewise, IRCP is hereby ordered to pay
the RCP the sum of P50,000.00 as attorney’s fees.”
IRCP appealed to the SEC En Banc, arguing that it does not have any jurisdiction over the case, and
that RCP has no right to the exclusive use of its corporate name as it is composed of generic or
common words.
In its Decision, the SEC En Banc modified the appealed decision in that IRCP was ordered to delete or
drop from its corporate name only the word “Refractories”.
ISSUE:
(1) Whether or not the SEC has jurisdiction to hear and decide the case at bar. = YES
(2) Whether or not there is confusing similarity between the corporate names of the petitioner and the
defendant. = YES
(3) Whether or not the RCP is entitled to use the generic name “refractories”. = YES
RULING:
(1) The jurisdiction of the SEC is not merely confined to the adjudicative functions provided in
Section 5 of P.D. 902-A, as amended. By express mandate, it has absolute jurisdiction, supervision
and control over all corporations. It also exercises regulatory and administrative powers to implement
and enforce the Corporation Code, one of which is Section 18, which provides:
“SEC. 18. Corporate name. — No corporate name may be allowed by the Securities and Exchange
Commission if the proposed name is identical or deceptively or 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 laws. When a change in the corporate name is approved, the Commission shall issue an amended
certificate of incorporation under the amended name.”
It is the SEC’s duty to prevent confusion in the use of corporate names not only for the protection of the
corporations involved but more so for the protection of the public, and it has authority to de-register at all
times and under all circumstances corporate names which in its estimation are likely to generate
confusion. Clearly therefore, the present case falls within the ambit of the SEC’s regulatory powers.
(2) Yes, there is confusing or deceptive similarity between IRCP and RCP’s corporate names.
As held in Philips Export B.V. vs. Court of Appeals, to fall within the prohibition of the law, two requisites
must be proven, to wit:
(1) that the complainant corporation acquired a prior right over the use of such corporate
name; and
(2) the proposed name is either:
(a) identical, or
(b) deceptively or confusingly similar to that of any existing corporation or to any other
name already protected by law; or
(c) patently deceptive, confusing or contrary to existing law.
As regards the first requisite, it has been held that the right to the exclusive use of a corporate name
with freedom from infringement by similarity is determined by priority of adoption. In this case,
respondent RCP was incorporated on October 13, 1976 and since then has been using the corporate
name “Refractories Corp. of the Philippines”. Meanwhile, petitioner was incorporated on August 23, 1979
originally under the name “Synclaire Manufacturing Corporation”. It only started using the name
“Industrial Refractories Corp. of the Philippines” when it amended its Articles of Incorporation on August
23, 1985, or 9 years after RCP started using its name. Thus, being the prior registrant, RCP has acquired
the right to use the word “Refractories” as part of its corporate name.
Anent the second requisite, 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
and the Court must look to the record as well as the names themselves. Petitioner’s corporate name
is “Industrial Refractories Corp. of the Phils.”, while respondent’s is “Refractories Corp. of the Phils.”
Obviously, both names contain the identical words “Refractories”, “Corporation” and “Philippines”. The
only word that distinguishes petitioner from respondent RCP is the word “Industrial” which merely
identifies a corporation’s general field of activities or operations. It must be noted that both cater to the
same clientele, i.e.¸ the steel industry. And even without proof of actual confusion between the two
corporate names, it suffices that confusion is probable or likely to occur.
(3) While the word “refractories” is a generic term, its usage is not widespread and is limited merely to the
industry/trade in which it is used, and its continuous use by respondent RCP for a considerable period
has made the term so closely identified with it.

INDUSTRIAL REF vs. REFRACTORIES

Uploaded by

Copyright:

Available Formats

INDUSTRIAL REF vs. REFRACTORIES

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

INDUSTRIAL REF vs. REFRACTORIES

Uploaded by

Copyright:

Available Formats

INDUSTRIAL REFRACTORIES CORPORATION OF THE PHILIPPINES vs.

You might also like