SEC En Banc Case No. 09-15-388Phil. Federation of Gamefowl Breeders - PFGB, Inc. vs. Pambansang Federation ng Gamefowl Breeders (Digmaan), Inc. (Decision dtd 09 Jan 2024)

Securities and Exchange Commission COMMISSION EN BANC Republic of the Philippines Department of Finance

PHILIPPINE FEDERATION OF

INC. GAMEFOWL BREEDERS - PFGB, Petitioner-Appellant,

- versus - SEC En Banc Case No.09-15-388 Promulgated: 09 January 2024

PAMBANSANG FEDERATION NG GAMEFOWL BREEDERS (DIGMAAN), INC., Respondent -Appellee. X

DECISION

of the Office of the General Counsel (OGC) dated 11 August 2015 (the Memorandum dated 23 September 2015(the"Appeal"),which was filed FEDERATION OF GAMEFOWL BREEDERS-PFGB,INC.to assail the Order "Assailed Order"), the dispositive portion of which,reads on 24 September 2015 by Petitioner-AppellantPHILIPPINE Before the Commission En Banc is the Notice of Appeal with Appeal

shopping." DISMISSED without prejudice for violating the rule on forum "WHEREFORE, premises considered, , the instant Petition is

PARTIES

issued a Certificate of Registration with SEC Company Registration No. CN201109296 on 31 May 2011. (the Appellant") is a non-stock and non-profit corporation duly organized and existing under the laws of the Philippines, having been PHILIPPINE FEDERATION OF GAMEFOWLBREEDERS-PFGB,INC.

Philippines, having been issued a Certificate of Registration with SEC (DIGMAAN), INC. (the "Appellee") is a non-stock and non-profit corporation duly organized and existing under the laws of the PAMBANSANG FEDERATION NG GAMEFOWL BREEDERS

Pambansang Federation ng G Phil.Federation of Gamefowl Breeders-PFGB,Inc.vs SEC En Banc Case No.09-15-388 fowl Bree rs Page 2 of 11 DECISION

also the owner of the trademark PFGB-DIGMAAN,which was registered with the Intellectual Property Office (IPO) under Trademark Registration Company Registration No.CN201404231 on 4 March 2014.Appellee is No.9282 on 31 March 2016.

THE RELEVANT FACTS

labelled and used the word "DIGMAAN" for its national stag derby, which is conducted annually. Since its incorporation on 31 May 2011,the Appellant has allegedly

held where Mr. Wilson Ong (Mr. Ong) and Mr. Roderick D. Reyes (Mr Reyes) vied for the Presidency.Mr.Reyes won and was elected President. On 16 February 2014,an election of the officers of Appellant was

incorporated the Appellee corporation, which carried out similar activities as that of the Appellant using the word"DIGMAAN". Mr. Ong, along with the other members, thereafter formed and

application for registration of the mark"PFGB DIGMAAN",which he later Registration of Trademark which was executed and entered into on 9 July 2014, or after a few months after the incorporation of the Appellee on 04 March 2014. on assigned to Appellee through the Assignment of Application for On 27 February 2014,Mr.Ong personally filed with the IP0 an

for Change of Corporate Name (the "Petition") praying that a decision be Commission's Company Registration and Monitoring Department ("CRMD"),but was subsequently endorsed to the OGC on 2 July 2014 for proper disposition. made (a) declaring the Appellant to be the rightful owner of the word "DIGMAAN",(b) and directing Appellee to desist from using the word "DIGMAAN" for its events. The Petition was originally filed before the On 29 May 2014,the Appellant filed with the Commission a Petition

dismissal of the Petition on the ground that it is the IPO,and not the Commission, that has jurisdiction over the matter(s) raised therein i.e. In its Answer filed on 22 August 2014,Appellee moved for the

1 See Annex "1" of the Reply Memorandum.

Pambansang Federation ng Gamefowl Breeders (D Phil. Federation of Gamefowl Breeders - PFGB, Inc. vs. SEC En Banc Case No. 09-15-388 Page 3 of 11 DECISION Inc

confusion created by the use of an acronym. Appellee alleged that the matter is already pending with the IPO under IP0 Case No.10-2014- 00008.2

at the time the time of the filing of the instant Appeal, was still pending resolution with the IPO. that on 2 June 2014,the Appellant filed with the IP0a Petition for Quieting of Rights covering the namePFGB-DIGMAAN".An Order3 was issued by the IP0 on 30 September 2014, which dismissed the said petition. Appellant filed a Motion for Reconsideration on 21 October 2014 which, During the clarificatory hearing on 16 June 2015, it was revealed

thus rule on the issue of whether the Appellee's use of the acronym the Appellant's corporate name. the rule against forum shopping, after it instituted two (2) actions with the IPO and the Commission involving the issue on ownership over the use of the word"DIGMAAN".The OGC also agreed with Appellee that the Commission's jurisdiction is only limited to corporate names of entities and does not cover acronyms, tradenames, or trademarks4; and cannot "PFGB-DIGMAAN"is identical and deceptively or confusingly similar with dismissed the Petition on the basis of a finding that the Appellant violated On 11 August 2015,the OGC issued its Assailed Order which

or subsequent development which may assist in the speedy disposition of the case. directing the parties to inform the Commission of any supervening event On 19 November 2020, an Order was issued by the Commission

the Appellee, which have been properly filed in the records of SEC Case No. 07-14-437. the issuance by the Intellectual Property Office of a Certificate of Manifestation on 18 December 2020 where it stated that no material development has transpired between and among the parties except for Registration on 15 January 2015 for the tradename "PFGB Digmaan" to In compliance with the said Order, the Appellee filed its

4 Philippine Federation of Gamefowl Breeders-PFGB, Inc. v. Pambansang Federation ng Gamefowl Breeders (Digmaan), Inc.; SEC Case No. 07-14-437- Order of the Office of the General Counsel dated 2 Par. 10 of the Answer 3Order No.2014-4(D)-IPV No.10-2014-00008,September 30,2014 11 August 2015.

Pambansang Federation ng Gamefowl Breeders Digm Phil.Federation of Gamefowl Breeders-PFGB,Inc.vs SEC En Banc Case No.09-15-388 Page 4 of 11 DECISION anIn

ISSUES

(1 Whether the Commission has jurisdiction to determine if Appellant's corporate name is identical with or deceptively or confusingly similar to that of Appellee.

2 Whether the OGC was correct in dismissing the Petition for violating the rule against forum shopping.

RULING

pass upon the use by the respective corporate names. The Commission has jurisdiction over to take cognizance of, and Appellant and Appellee of their

however posits otherwise, arguing that the Commission has no similarity arising from the use of an acronym, and trade names or trademarks. the jurisdiction of the Commission in as much as it seeks the cancellation of the Certificate of Registration of Appellee on the ground that the latter's corporate name is similar to its corporate name.5 Appellee jurisdiction over the instant case which involves an issue of confusing In its Appeal, Appellant maintained that the instant case is within

centered on who owns and/or who has the better right to the use of the word"DIGMAAN,the fact that on their face,their corporate names are practically identical or confusingly similar, this Commission has jurisdiction to take cognizance of, and pass upon the instant case. We hold that while Appellant and Appellee's dispute appears to be

the corporate entity has an identity separate and distinct from its stockholders,and identifies the business(es) and the objectives which the corporate entity has set out to do and achieve,consistent with its purpose A corporate name is important because it informs the public that

5 Par. 1 (page 6) of the Appeal

Pambansang Federation ng Gamefowl Breeders (Digmaan),Ing Phil. Federation of Gamefowl Breeders - PFGB, Inc. vs. SEC En Banc Case No.09-15-388 Page 5 of 11 DECISION

clauses provided in the Articles of Incorporation. This principle was emphasized in Philips Export B.V.v. Court of Appeals6, thus:

vs. Federal Secur. Corp., 129 Or 375, 276 P 1100, 66 ALR 934; Paulino vs. Portuguese Beneficial Association, 18 RI 165, 26 A 36). "A name is peculiarly important as necessary to the very existence of a National Bank vs. Huntington Distilling Co,40 W Va 530,23 SE 792). Its name is one of its attributes, an element of its existence, and essential to its identity (6 Fletcher [Perm Ed], pp. 3-4). The general rule as to corporations is that each corporation must have name by which it is to sue and be sued and do all legal acts. The name of a corporation in this respect designates the corporation in the same manner as the name of an individual designates the person (Cincinnati Cooperage Co. vs. Bate, 96 Ky 356,26 SW 538; Newport Mechanics Mfg. Co. vs. Starbird, 10 NH 123); and the right to use its corporate name is as much a part of the corporate franchise as any other privilege granted (Federal Secur. Co. corporation (American Steel Foundries vs. Robertson, 269 US 372, 70 L ed 317,46 S Ct 160;Lauman vs.Lebanon Valley R.Co.,30 Pa 42;First

regarded as a property right.7 Given the foregoing, a corporate name has been consistently

mandated under the Corporation Code to protect the public from fraud actual or potential, caused by, or which may arise in relation to, or as a consequence of the use of corporate names. This mandate is embodied in Section 18 of the Corporation Code, thus: The use of corporate names is regulated by law.The Commission is

shall issue an amended certificate of incorporation under the amended name." (Emphasis supplied) 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 "Section 18. Corporate name. - No corporate name may be allowed

laid down the guidelines on the use of corporate names, and reiterated Commission issued Memorandum Circular No.21 s.2013 (MC 21) which the prohibition on the use of a corporate name that is identical to a name already registered with the Commission, to wit: In the implementation of Section 18 of the Corporation Code, the

Beneficial Industrial Loan Corporation et. al. vs. Kline et al.132 F.2d 520. BP Blg. No. 68 was the law in effect when the instant case was filed G.R.No. 96161, February 21, 1992

Pambansang Federation ng Gamefowl Breeders Digmaan,In Phil. Federation of Gamefowl Breeders - PFGB, Inc. vs. SEC En Banc Case No. 09-15-388 Page 6 of 11 DECISION

"3(a)The name shall not be identical, misleading or confusingly similar to a corporate or partnership name registered with the of sole proprietorships;" (Emphasis supplied) Commission, or with the Department of Trade and Industry, in the case

The policy underlying the prohibition in the afore-quoted provision against the use of names of existing corporations is the avoidance of fraud upon the public which would have occasion to deal with the entity concerned, the evasion of legal obligations and duties,and the reduction

names which violate the rights of others and mislead the public was of difficulties of administration and supervision over corporations.9 The proscription on the use of identical, or deceptively or confusingly similar emphasized and reiterated in Philips Export B.V.v.Court of Appealsio thus:

name identical with or similar to one already appropriated by a "A corporation acquires its name by choice and need not select a senior corporation while an individual's name is thrust upon him

308)."(Emphasis supplied) (See Standard Oil Co. of New Mexico, Inc.v.Standard Oil Co. of California,56 F 2d 973, 977).A corporation can no more use a corporate name in violation of the rights of others than an individual can use his name legally acquired so as to mislead the public and injure another (Armington vs. Palmer, 21 RI 109, 42 A

Section 18 of the Corporation Code, thus: both a recognition and affirmation of the Commission's power and authority to deregister and/or revoke any name that is found to violate In regulating the use of corporate name, we find in jurisprudence

"It is the SEC's duty to prevent confusion in the use of corporate

therefore, the present case falls within the ambit of the SEC's regulatory 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 powers."11 (Emphasis supplied) names not only for the protection of the corporations involved but

Inc. is deceptively or confusingly Appellee's Pambansang Federation ng Gamefowl Breeders (Digmaan), similar to Appellant's Philippine

3, 2002) 9 Lyceum of the Philippines, Inc. vs CA (G.R. No. 101897. March 5, 1993) 10 G.R. No. 96161, February 21, 1992 11 Industrial Refractories Corporation of the Philippines v. Court of Appeals (G.R.No. 122174, [October

Pambansang Federation ng Gamefowl Breeders (Digmaan), Inc Phil.Federation of Gamefowl Breeders PFGB, Inc. Vs. SEC En Banc Case No.09-15-388 Page 7 of 11 DECISION

PFGB, Inc. Federation of Gamefowl Breeders -

jurisprudential rule that for a corporate name to fall within the express Commission has consistently adhered to, and applied the established In implementing Section 18 of the Corporation Code, this

prohibition of the law,two (2) requisites must be proven to exist,to wit

"To come within its scope, two requisites must be proven, namely:

(1) (2 that the complainant corporation acquired a prior right over the use of such corporate name; and the proposed name is either:

(b) deceptively or confusingly similar to that of any existing (c) patently deceptive, confusing or contrary to existing law.12 (a) identical; or corporation or to any other name already protected by law; or (Emphasis supplied)

applied the priority of adoption rule which reckons the rightful over the use of a corporate name,the Supreme Court has consistently In relation to the first requisite i.e. the acquisition of a prior right

Phils.Inc.v.Filipino Indian Chamber of Commerce in the Philippines,Inc.13 entitlement of a corporation to the use of a corporate name from the date of registration, the same being the date when the said corporation begins using such approved corporate name. In Indian Chamber of Commerce

the Court ruled as follows:

"In Industrial Refractories Corporation of the Philippines v. Court of Appeals, the Court applied the priority of adoption rule to

the parties used their respective corporate names. It ruled that "Industrial Refractories Corporation of the Philippines" (IRCP), has acquired the right to use the word "Refractories"as part of its corporate that IRCP only started using its corporate name when it amended its Articles of Incorporation on August 23, 1985." determine prior right, taking into consideration the dates when "Refractories Corporation of the Philippines"(RCP), as opposed to name, being its prior registrant on October 13, 1976. The Court noted

incorporated on 31 May 2011,while the Appellee was incorporated only In the instant case, the records show that the Appellant was

13 G.R.No.184008,August 3,2016 12 Philips Export B.V.vs Court of Appeals (G.R.No. 96161, 21 February 1992)

Federation.ofGamefowlBreeders-PFGB.Inc Pambansang Federation ng Gamefowl Breeders (Digmaan),Inc SEC En Banc Case No.09-15-388 Page 8 of 11 DECISION

on 04 March 2014.Clearly,Appellant has,except for the wordDigmaan as will be discussed later, acquired prior right over its corporate name.

similar to that of a registered name or one that is protected by law,the test is whether the similarity is such as to mislead a person using ordinary care and discrimination.14 consistently ruled that in determining if a corporate name is confusingly As regards the second requisite, the Supreme Court has

Relative thereto,We find in GSIS Family Bank - Thrift Bank v. BPI

the Commission,including word(s) that forms part thereof,to wit: Family Banki5,the prevailing jurisprudential rule that the probability or the likelihood of confusion suffices to bar any corporation from using/adopting as its corporate name,one that is already registered with

between petitioner's proposed name and respondent's corporate name, as found by the SEC. In determining the existence of confusing "On the second point (b), there is a deceptive and confusing similarity similarity in corporate names, the test is whether the similarity is suchas to mislead a personusing ordinary care and

between the two corporate names, it suffices that confusion is probable or likely to occur." (Emphasis supplied) discrimination.And even without such proof of actual confusion

Moreover, it is equally established in jurisprudence that the probability or likelihood of confusion is higher if the party alleged to be by law, is engaged in the same or substantially similar business, thus: using a name of an existing corporation,or one that is already protected

of one corporation is the same or substantially the same as that of another corporation. "The likelihood of confusion is higher in cases where the business

similarity."16(Emphasis supplied) the business name with the DTI in 1995. Thus, respondent's use of its trade name from then on must be free from any infringement by "SAN FRANCISCO COFFEE & ROASTERY,INC."since the registration of Respondent has acquired an exclusive right to the use of the trade name

Appellee i.e. Pambansang Federation ng Gamefowl Breeders (Digmaan) Inc., will readily show and give the public the impression that it is practically similar to Appellant's Philippine Federation of Gamefowl Breeders -PFGB,Inc; and the similarity is likely to confuse the public In the instant case, a cursory look at the corporate name of

16 Coffee Partners,Inc.v.San Francisco Coffee &Roastery,Inc.G.R.No.169504,March 3,2010 14 Philips Export B.V. et al. v. Court of Appeals et al., G.R. No. 96161, 21 February 1992 1s G.R.No.175278,September 23,2015

Pambansang Federation ng Gamefowl Bree Phil.Federation of Gamefowl Breeders-PFGB,Inc.vs SEC En Banc Case No.09-15-388 Fe1igra Page 9 of 11 DECISION

who will have the occasion to deal with them because they are engaged in the same line of business.

of its regulatory authority to deregister and/or direct the change by Given the foregoing,We hold that the exercise by this Commission

Appellee of its corporate name,is in order.

"Digmaan" cannot be appropriated Appellee's registered trademark by Appellant.

corporate name of Appellee, We note that the same is covered by a trademark registration which was issued by the IPO in favor of Appellee In relation to the word"Digmaan"which appears to be a part of the

In this regard,it should be emphasized that corporate names or part thereof that are registered trademarks are protected under Section 18 of the Corporation Code, which classifies them as "other name already protected by law".

prohibits the use of a tradename or trademark as part of a corporate Relative thereto, Par. 5 of MC 21 series of 2013 specifically

name without the registered owner's consent, thus:

give its consent to such use." (Emphasis supplied) "A tradename or trademark registered with the Intellectual Property Office may be used as part of the corporate or partnership name of a party other than its owner if the latter

without the consent of the registered owner. registration of trademarks in the Philippines,and to implement the policy or part thereof if the owner of the registered trademark does not consent to,or approve of such use. This provision is intended to ensure the full under Section 18 of the Corporation Code. It is designed to encourage the that any registered trademark cannot be used as a corporate name the use of a trademark (registered with the IPOPHIL) as a corporate name protection accorded to trademark owners of their registered marks of giving premium to such registration with the assurance,among others, Stated otherwise, the afore-quoted provision of the rule prohibits

registered"DIGMAAN"trademark of Appellee pursuant to the provisions warrant the grant by this Commission of the same recognition and of the Intellectual Property Code of the Philippines(IP Code17justify and The recognition and protection accorded by the IPO to the

17 Republic Act No. 8293

hil Federation of Gamefowl Breeders-PFGB.Inc.vs

g Federauonng Ga SEC En Banc Case No. 09-15-388 Page 10 of 11 DECISION

protection to said registered trademark,not on the basis of the IP Code

Code which prohibits the use of "names already protected by law" as but pursuant to the express provision of Section 18 of the Corporation

corporate names or part thereof without the consent of the registered owner. Stated otherwise,the protection being accorded to Appellees in the instant case is based on the Commission's mandate under the Corporation Code (and independently of the IP Code which is administered by the IPO) to protect owners of trademarks registered with the IPO by ensuring that no person or entity will be allowed to use a registered trademark as a corporate name (or a part thereof) without the consent of the registered owner.

corporate name sans the consent of Appellee. part of the corporate name of Appellant,We hold that no violation of Section 18 of the Corporation Code was committed. It would have been different had Appellant used the trademark "DIGMAAN"as part of its In the instant case, considering that the word "DIGMAAN" is not

name, hence, the confusing similarity in corporate names which Section "DIGMAAN" which may be based on statutes, rules or regulations not administered by the Commission. of the word "DIGMAAN"in relation to their respective activities is,to the mind of the Commission,not within its jurisdiction. The reason for this is that only Appellee is using the word "DIGMAAN"as part of its corporate 18 of the Corporation Code seeks to prevent will not arise. Consequently, Commission is devoid of authority to rule on the use of the word given the inapplicability of Section 18 of the Corporation Code,the The foregoing notwithstanding, the issue on the use by the parties

already protected by law". In this regard, should the Appellant so desire to use the word"DIGMAAN"as part of its corporate name, it must secure first the written consent of the Appellee for the Commission to favorably act on the same. confusingly similar to that of Appellant's Philippine Federation of Gamefowl Breeders - PFGB, Inc., Appellee's right to use the word the trademark "DIGMAAN"as part of its new name will be sustained in the light of the fact that Section 18 of the Corporation Code protects"names Thus,while Appellee needs to change its corporate name for being

has already been addressed and determined, the Commission sees no rule on forum shopping, which the OGC used as basis in dismissing the need to pass upon the matter on the Appellant's alleged violation of the Finally, considering that the main issue presented in the Petition

Pambansang Federation ng Gamefowl Breeders (Digmaan), Inc. Phil. Federation of GamefowI Breeders - PFGB, Inc. vs. SEC En Banc Case No.09-15-388 Page 11of 11 DECISION

instant case, to promote public interest and assist the parties in obtaining case without prejudice. This is consistent with the principle of liberal construction of the Rules in administrative proceedings, such as the a just, prompt, expeditious, and inexpensive resolution and/or disposition of cases.18

of the General Counsel is hereby SET ASIDE. (Digmaan), Inc.is hereby DIRECTED to change its corporate name within thirty (30) days from receipt of this Decision.The Decision of the Office GRANTED.Appellee Pambansang Federation ng Gamefowl Breeders WHEREFORE,premises considered,the instant Appeal is hereby

SO ORDERED

Makati City, Philippines.

y EMILIO B.AQUINO

Chairpdrsor

JAVYPAULD.FRANCISCO Commissioner BVINLESTERK.LEE Commissioner

KARLOS.BELLO Comntissioner MCJILIBRYANT T.FERNANDEZ Commissioner

Is Rule I, Section 1-3 of the Rules