SEC En Banc Case No. 12-12-274 Asia-Pacific Eye Care Center, Inc., Appellant, versus Asia Pacific Eye Care Specialists, Inc., Appellee

Securities and Exchange Commission Republic of the Philippines Department of Finance

ASIA-PACIFIC EYE CARE CENTER, INC., Appellant,

- versus -

SEC En Banc Case No.12-12-274

INC ASIA PACIFIC EYE CARE SPECIALISTS,

Appellee.

DECISION

filed on 12 December 2012 by Asia Pacific Eye Care Center, Inc. (Appellant) against Asia Pacific Eye Care Specialists, Inc. (Appellee) assailing the Order Counsel (OGC). The pertinent portion of the disposition of the Assailed Order reads as follows: (Assailed Order) dated 21 November 2012 of the Office of the General Pending before the Commission En Banc is the Memorandum on Appeali

for the revocation of respondent's corporate charter. " GRANTED. Respondent-corporation ASIA-PACIFIC EYE CARE CENTER, INC. corporation ASIA PACIFIC EYE CARE SPECIALISTS,INC. [Appellee] within indirect contempt which will be punished accordingly, and may be a ground "WHEREFORE, premises considered, the instant petition is hereby [Appellant] is hereby DIRECTED TO CHANGE its corporate name to another not deceptively similar or identical to the same already used by Petitioner thirty (30) days from receipt of this Order. Failure to comply may constitute

to "diagnose and treat eye disease."2 Its principal office is located at Binan, Commission under SEC Registration No. CS200815609. Its primary purpose is Laguna.3 Appellant is a corporation duly registered on 03 October 2008 with the

3 Reply Memorandum dated 27 December 2012 and filed on 28 December 2012, par. 4 1 Memorandum on Appeal dated 1 2 December 2012 2 Assailed Order, p.

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Commission under SEC Registration No. CS200700273. Its primary purpose is to "be the global leader in comprehensive evidence-based eye care provided by specialized professionals with the support of state of the art medical information technology."4 Its principal office is located at East Avenue, Quezon City. 5 Appellee is a corporation duly registered on 19 January 2007 with the

Factual Antecedents

Appellee also received reports that some of its clients had been mistakenly referred to Appellant by the Philippine Charity Sweepstakes Office (PCSO).7 eye clinic, Appellant, is operating under a "confusingly similar name". 6 In June 2010, Appellee received reports and complaints that another

Appellant's corporate name is deceptively and confusingly similar to that of Appellant praying that an order be issued declaring, among others, said said Appellee's corporate name.: On 23 August 2011, Appellee filed a Petition with the OGC against

arrive at amicable settle but they were able to stipulate certain facts.10 January 2012 stating that both parties attended a preliminary conference on even date. However, during the preliminary conference, the parties failed to After an exchange of pleadings,9 the OGC issued an Order dated 27

that it noticed that the Order dated 27 January 2012 of the OGC failed to include certain factual points which were stipulated by both parties, as follows: (i) that the reported complaints of Appellee's clients, as alleged in the Petition, pertain of Remedios Barrantes and Pedro Pernada; and (ii) that the relation between doctor and patient involves a relationship of trust and confidence between them. Thus, Appellant prays that the OGC re-examine and In a Manifestation and Motion dated 16 February 2012, Appellant stated

5 Reply Memorandum dated 27 December 2012 and filed on 28 December 2012, par. 3. Reply Memorandum, Annex "2" (Petition dated 17 August 2011). 9 Answer with Counter-Claim dated 9 September 201ifiled by Appellant: Reply dated 24 September 201 filed 6 id., par. 6. 7 Assailed Order, p. I. Assailed Order, p. I. Io Memorandum on Appeal, Annex "D" (Order terminating the Preliminary Conference,dated 27 January 2012). by appellee; and Rejoinder dated 21 October 201 1 filed by Appellant

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if there are such stipulations.t1 verify the transcript of stenographic notes (TSN) to determine whether there are additional stipulations entered into by the parties, and to amend its order

Thus, Appellee prayed that the Manifestation and Motion be considered verbal complaints from its clients other than Remedios Barrantes and Pedro Pernada. Further, Appellee stated that there is no need to amend the Order dated 27 January 2012 since such manifestations are reflected in the TSN. moot.12 In response, Appellee stated in its Counter Manifestation that it received

reiterating its prayer that the OGC re-examine the TSN to determine whether there are additional stipulations entered into by the parties, and to amend the Order dated 27 January 2012 if there are additional stipulations.13 Thereafter, Appellant filed its Reply to the Counter Manifestation

that: On 21 November 2012, the OGC issued the Assailed Order which ruled

with the SEC on 19 January 2007, which is more than a year earlier than "As to the first requisite, there is substantial evidence to show that Pacific Eye Care" as part of its corporate name since its registration when respondent-corporation [Appellant] was registered on 03 October 2008. It must be borne in mind that the right to the exclusive use of a corporate name with freedom from infringement by similarity is determined by priority of adoption. For this reason, petitioner-corporation has acquired such right prior to that of respondent-corporation over the use of the words "Asia Pacific Eye Care" as part of its corporate name. petitioner-corporation [Appellee] has been using the words "Asia

X X X

A unique corporate name was formed when "Asia Pacific" is used alongside the other words in petitioner-corporation's name in the particular order or arrangement in which they appear. One would wonder why out of the many words and combinations thereof available to the public, respondent- corporation chose the same with only a slight modification. In Coffee

12 /d., Annex "F" (Counter Manifestation dated 1 March 2012, pars. 4 and 5) 13 /d., Annex. "G" (Reply to the Counter Manifestation dated 15 March 2012) I1 Id., Annex "E" (Manifestation and Motion dated 26 February 2012, pars. 2 and 3)

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infringement to avoid confusing or deceiving the public. Accordingly, insofar as matters related to eye care and eye treatment is concerned, the combination and arrangement of the words "Asia Pacific Eye Partners, Inc. vs. San Francisco Coffee & Roastery Inc., the Supreme Court acknowledged that geographic or generic words are not, per se, subject to trade name used in business is protected against infringement or matters related to the same business to avoid confusing or deceiving the public. Care" in petitioner-corporation's name is protected by law against exclusive appropriation, however, the combination of words comprising as a

As to the second requisite, it must be borne in mind that the test in themselves. determining the existence of confusing similarity in corporate names is whether the similarity is such as to mislead a person using ordinary care and discrimination. In so doing, we must look to the records as well as the names

In the instant case, both petitioner and respondent corporations are require eye care and eye treatment. The likelihood of confusion is higher in engaged in the similar business providing medical services in the field of Opthalmology and are dealing with the same clientele, i.e. those that cases where the business of one corporation is the same or substantially the same as that of another corporation. Hence, the public, particularly the Pcso, has been confused or misled into believing that both corporations are either the same or at the least associated with one another. But even without proof of actual confusion between the corporate names, it suffices that confusion is probably or likely to occur.

XX X

For these reasons, it would appear that the two corporate names are which was registered after the registration of petitioner-corporation should change its corporate name pursuant to its undertaking. A contrary existing and protected corporate name, to the detriment of the public." confusingly and deceptively similar such that respondent-corporation ruling would encourage other corporations to adopt verbatim and register an

corporate name, which is not deceptively similar or identical to the corporate name that is used by Appellee. Hence, OGC directed Appellant to change its corporate name to another

Aggrieved, Appellant filed the instant appeal.

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material to the resolution of the main issue; (ii) the OGC erred when it held OGC erred when it issued the Assailed Order without resolving the Manifestation and Motion since the issues posed therein are determinative and that the terms "Asia Pacific" and "Eye Care" are not a generic terms; (iii) the Memorandum Circular No. 05, series of 2008 (SEC MC 05-08) since it failed to the OGC erred when it held that the doctrine of secondary meaning cannot be invoked in this case; (v) the OGC erred when it relied on conjectures and surmises in support of its conclusion that "confusion is probably or likely to occur"; and (vi) the OGC erred when it denied Appellants' reliefs it prayed for. OGC erred when it disregarded the application of the provisions of SEC consider the distinctive word "Center" in the corporate name of Appellant; (iv) Appellant, in its Memorandum on Appeal, argues the following: (i) the

insists that the Order dated 27 January 2012 rendered the Manifestation and Memorandum14 arguing that the Appellant's corporate name is confusingly or deceptively similar to the corporate name of the former. Appellee further Motion as moot and academic. Thus, Appellee prays for the following: (i) the appeal be denied for lack of merit; (ii) Appellant be directed to change its corporate name; and (ii) should Appellant fail to comply with the foregoing, it be punished with indirect contempt and/or its corporate charter be revoked. In response, on 28 December 2012, Appellee filed its Reply

Memorandum]15 and reiterated its argument that the term "Asia Pacific" and Set aside, and that Appellee pay damages to the former. "Eye Care" are generic terms. Thus, it again prays that the Assailed Order be Thereafter, Appellant filed, on 21 January 2013, its Comment [to Reply

Issue

ruling that Appellant should change its corporate name since it is confusingly or deceptively similar to that of Appellee. The main issue to be resolved is whether or not the OGC is correct in

14 Dated 27 December 2012 15 Dated 14 January 2013.

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Ruling

already protected by law; or (c) patently deceptive, confusing or contrary to may be allowed by the 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. 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 existing law.16 Section 18 of the Corporation Code provides that no corporate name

In the adoption of a corporate name, SEC MC 05-0817 provides that:

registered name; "3. b) If the name applied for is similar to that of a registered corporation or partnership, the applicant shall add one or more distinctive words to the proposed name to remove the similarity or differentiate it from the

However, the addition of one or more distinctive words shall not be partnership gives its consent to the applied name;" directors or majority of the partners of the subject corporation or allowed if the registered name is coined or unique unless the board of

With respect to 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.18 We have consistently held that priority in the adoption and registration of a corporate name confers upon the registrant a vested right to the exclusive use thereof.19 Applying the foregoing principles, we now rule on the merits of the case.

16 Industrial Refactories Corporation of the Philippines v. Court of Appeals, et al. G.R. No. 122174. 3 October 1 Mechanical Handling Equipment Co. Inc. v. Mechanical Handling Engineer (Philippines), Inc., SEC-AC No. 452. 17 SEC MC No. 05-08 was in force at the time Appellant registered with the Commission on 3 October 2008. 18 2002, citing Philips Export B.V., et al. v. Court of Appeals. et al., G.R. No. 96161, 21 February 1992. 5 December 1994.

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its Appeal Memorandum, that findings of facts by the operating departments are generally not disturbed by the Commission En Banc.20 ahead of Appellant. Besides, Appellant did not assign as one of the errors this factual finding of the OGC. In fact, the Appellant is correct when it alleged, in right over the corporate name since it registered its name over one (1) year In the case at bar, we agree with the OGC that Appellee acquired a prior

is a generic term since it refers to a geographical location; on the other hand, similarity in the corporate names, the test is whether the similarity is such as to mislead a person using ordinary care and discrimination.21 In this case, corporate name are generic terms. As to "Asia Pacific", Appellant claims that it as to "Eye Care", Appellant also avers that it is a generic term since it refers to a medical service or treatment. Appellant argues that the words "Asia Pacific" and "Eye Care" in Appellee's As to the second element, in determining the existence of confusing

words are not, per se, subject to exclusive appropriation, however, the combination of words comprising as a trade name used in business is protected against infringement on matter related to the same business to avoid confusing or deceiving the public. Roastery Inc.,22 the Supreme Court acknowledged that geographic or generic We concur with OGC that in Coffee Partners, Inc. v. San Francisco Coffee &

description of a kind of goods, such as "Lite" for beer or "Chocolate Fudge" for characteristics, function, qualities or ingredients of a product to one who has never seen it or does not know it exists, such as "Arthriticare" for arthritis Thrift Bank v. BPI Family Bank23 elaborated on generic terms or marks. The Supreme Court ruled that generic marks are commonly used as the name or chocolate soda drink. Descriptive marks, on the other hand, convey the medication. Furthermore, the recent Supreme Court case entitled GSIS Family Bank --

used as a mark that appear to be random in the context of its use. They are The court further stated that arbitrary marks are "words or phrases

23 G.R. No. 175278, 23 September 2015. 21 Philips Export B.V. vs. Court of Appeals, 206 SCRA 457, [1992]. 22 G.R. No. 169504, 3 March 2010 20 Records, page 687.

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thus, becoming themselves distinctive." generally considered to be easily remembered because of their arbitrariness. They are original and unexpected in relation to the products they endorse,

suggestive24 and may properly be regarded as arbitrary and random in its descriptive term but rather a coined or fanciful phrase. When the words "Asial Pacific" and "Eye Care" are put together, there can be no expected relation between such words. Further, the term "Asia Pacific" combined with the term COINED PHRASE, neither being generic nor descriptive, which is merely context. Thus, the words "Asia Pacific" and "Eye Care" are not generic terms but coined or unique phrase since it is random in its context and arbitrary. "Eye Care" cannot be used to define a medical treatment or service; it is a Here, the phrase "Asia Pacific Eye Care" is not a generic nor a

considering that it is not part of a geographical area in the Philippines where random in its context. Clearly, the term "Asia Pacific" is not a generic term as However, such term is not descriptive of the business location of parties, any of the parties may set up their business. As earlier stated, the choice by Appellee in employing the term "Asia Pacific" with "Eye Care" is arbitrary and argued by Appellant. Next, Appellant argues that the term "Asia Pacific" is of widespread use.

SEC MC 05-08. However, the addition of.the word "Center" in its corporate name is not allowed under the Section 3 (b), SEC MC 05-08 since the as above stated. Further, the both parties employ the dominant words "Asia Pacific Eye Care" in their respective corporate names, which, as earlier stated, is arbitrary, unique and distinctive. Accordingly, the word "Center" in the former added the distinctive word "Center" in its corporate name, pursuant to Appellee's corporate name "Asia Pacific Eye Care" is a coined or unique name Appellant's corporate name is not sufficient to distinguish that from the said corporate name of the Appellee. Likewise, Appellant argues that the OGC failed to consider that the

24 In GS/S, the Court defined "Suggestive marks" as "marks which merely suggest some quality or ingredient of goods. xx The strength of the suggestive marks lies on how the public perceives the word in relation to the product or service.

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such as to bar others from the use of such words in its corporate name. However, as correctly pointed out by the OGC, the doctrine of secondary meaning does not apply in this case as it presupposes that, and applies only when, the term is originally generic. of secondary meaning25 cannot be invoked in this case. Appellant claims that Appellee failed to establish that it had used such words for so long a period Appellant also argues that the OGC erred when it held that the doctrine

is probably or likely to occur" is based on speculation or conjecture. However, as we have ruled in similar cases, 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 records as well as the names themselves.26 It is settled that proof of names, it suffices that confusion is probable or likely to occur. In the instant actual confusion need not be shown. It suffices that confusion is probably or likely to occur.27 This principle is further reiterated in the GSIS case28 wherein that even without such proof of actual confusion between the two corporate case, the likelihood of confusion will arise since Appellee and Appellant names are similar or are substantially the same which may lead the general public tol believe that the parties are the same or associated or affiliated Additionally, Appellant argues that the OGC's conclusion that "confusion

mistakenly referred the clients of Appellee to Appellant's eye care clinic. The misled into believing that that both corporations are either the same or least OGC further held that the public, particularly the PCSO, has been confused or associated with each other.29 In fact, there is already confusion as found by the OGC when the PCSO

trade" which creates a relationship of trust and confidence, as argued by It is of no moment that the practice of medicine is not a "business or

z5 Under the doctrine of secondary meaning. a word or phrase originally incapable of exclusive appropriation 29 Assailed'Order, pp. I and 5. 26 Note 16, Supra. 27 Note 21, Supra. 28 Note 23, Supra. with reference to an article in the market, because geographical or otherwise descriptive might nevertheless (Lyceum of the Philippines, Inc. v. Court of Appeals, et al., G.R. No. 101897, 5 March 1993). have been used so long and so exclusively by one producer with reference to this article that, in that trade and to that group of the purchasing public, the word or phrase has come to mean that the article was his produce

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misplaced since the public, particularly the PCSO, has been confused. Appellant. Appellant claims that a patient will not be confused since he will only seek treatment from his own doctor. However, the argument is

diseases; while it is engaged in in "Lasik Eye Treatment" and "laser eye of the Appellee. It claims that Appellee is engaged only in the diagnosis of eye surgery". However, both parties are still in engaged in the similar business of cause confusion and causes confusion to the public. providing medical services in the field of Opthalmology30, which is likely to Appellant further argues that it does not have the same business as that

Pernada was able to receive an eye treatment from Appellant which should have been rendered by Appellee. This indicates that the services rendered by the same line business. counsel admitted that the letter of PScO, which was presented by Pedro Pernada to said Appellant and referred to by that office.31 In which case, Mr. Appellant are the same as the Appellee considering that they are engaged in As a matter of fact, during the Preliminary Conference, the Appellant's

requested for an amendment of the preliminary conference Order dated 27 Assailed Order without resolving the Manifestation and Motion, which January 2012. Appellant requested, among .others, that the factual stipulations (i.e., the reported complaints of Appellee's clients, alleged in the Petition, pertain to that of Remedios Barrantes and Pedro Pernada; and the relation between doctor and patient involves a relationship of trust and confidence between them) be included. Appellant claims that the resolution of the said manifestation is necessary since it is determinative of the main issue. Lastly, Appellant argues that the OGC erred in "hastily" rendering the

corporate name should be changed. As above stated, the Commission holds that Appellant's corporate name must be changed since it is deceptively and confusingly similar to that of the Appellee based on the erroneous referral by However, the main issue to be resolved is whether the Appellant's

30 Branch of medical science dealing with the structure, functions, and diseases of the eye - https://wwwv.merriam-webster.com/dictionary/ophthalmology, last accessed 8 March 2017. 31 Records. p. 10.

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the PSCO. Even if the Commission considers such factual stipulations, both corporate names are still deceptively and confusingly similar considering that the public, particularly PSCO mistakenly referred the clients of Appellee to Appellant.

MODIFY its corporate name by excluding and/or dropping the words "ASIA also be a ground for the REVOCATION of Appellant's Certificate of Incorporation, is hereby affirmed. DENIED. The Office of the General Counsel's Order dated 12 November 2012 file a compliance report within the said 30-day period; and 3.) Failure to comply constitutes CONTEMPT which will be punished accordingly, and may directing Appellant ASIA PACIFIC EYE CARE CENTER, INC. to: 1.) CHANGE OR PACIFIC EYE CARE" therein, and amending its Articles of Incorporation; 2.) WHEREFORE, premises considered, the instant appeal is hereby

and Monitoring Department for proper notation and action. Let a copy of this Decision be furnished to the Company Registration

SO ORDERED.

Pasay City, 19 October 2017.

G TERESITA J. HERBOSA Chairperson

Oraita antu la ANTONIETA F. IBE Commissioner EPHYRO LUIS B. AMATONG Commissioner

Commissioner IAMES G TERBO EMI Commissidner AQUINO