Corporate Name

Section 17. Corporation Name. - No corporate name shall be allowed by the Commission if

it is not distinguishable from that already reserved or registered for the use if another
corporation, or if such name is already protected by law, rules and regulations.

A name is not distinguishable even if it contains one or more of the following:

(a) The word "corporation", "company", incorporated", "limited", "limited liability", or

an abbreviation ofone if such words; and

(b) Punctuations, articles, conjunctions, contractions, prepositions, abbreviations,

different tenses, spacing, or number of the same word or phrase.

The Commission 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 Commission 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 Commission shall issue a
certificate of incorporation under the amended name.

If the corporation fails to comply with the Commission's order, the Commission may hold the
corporation and its responsible directors or officers in contempt and/or hold them
administratively, civilly and/or criminally liable under this Code and other applicable laws
and/or revoke the registration of the corporation.

Comments:

1. Distinguishability of Corporate Name Test.

Section 17 of RCCP speaks of Distinguishability of Corporate Name Test. This

means that the SEC will not allow the use of a corporate name if it cannot be
distinguished from another corporate name that is: 1) already reserved for the use of
another corporation; or 2) registered for the use of another corporation; 3) or if such
name is already protected by law, rules and regulations; or 4) if such name is
contrary to law, rules and regulations.

If the Corporation finds that the use of such corporate name is not distinguishable
from another corporate name in a manner that falls in the abovementioned categories, it will:
1) summarily order the corporation to immediately cease and desist from using such name
and require the corporation to register a new one.; 2) cause the removal of all visible
signages, marks, advertisements, labels prints and other effects bearing such corporate
name.

If the corporation fails to comply with the Commission's order, the Commission may
hold the corporation and its responsible directors or officers in contempt and/or hold them
administratively, civilly and/or criminally liable under this Code and other applicable laws
and/or revoke the registration of the corporation.

It is the duty of the SEC 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. (Ang mga
Kaanib ng Dios vs Iglesia ng Dios kay Cristo Jesus G.R. No. 137592, 12 December 2001)
 2. The distinguishability standard is just a positive and clearer restatement of Section
18 of the Corporation Code (BP 68), which use the identical or deceptively or
confusingly similar standard test. Thus
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. (Emphasis supplied)

A shift from confusingly similar test (which is really confusing so to speak) to

distinguishability test will no doubt allow the full and seamless automation of name
registration in order to enhance the ease of doing business. For example, under the
old law, you cannot register “XYZ Dream Network” because of the previously
registered “XYZ Dream Hospital.” But, today such corporate name may be allowed
because the first name is distinguishable from the second in the sense that the
former is a network while the latter is a hospital (Aquino, Revised Corporation Code
of the Philippines: A Short Introduction p. 32).

3. Cases under Section 18 of the old Corporation Code

Lyceum of the Philippines vs CA

G.R. No. 101897, 05 March 1993

Petitioner, an educational institution duly registered with the SEC since

September 21, 1950, instituted proceedings before the SEC to compel the
private respondents Lyceum Of Aparri, Lyceum Of Cabagan, Lyceum Of
Camalaniugan, Inc., Lyceum Of Lallo, Inc., Lyceum Of Tuao, Inc., Buhi
Lyceum, Central Lyceum Of Catanduanes, Lyceum Of Southern Philippines,
Lyceum Of Eastern Mindanao, Inc. and Western Pangasinan Lyceum, Inc.
which are also educational institutions, to delete the word "Lyceum" from
their corporate names and permanently to enjoin them from using "Lyceum"
as part of their respective names.

Issue: Whether or not the petitioner is entitled to the sole use of the word
“Lyceum”

Held: No, the petitioner is not entitled. The word "Lyceum" generally refers to
a school or an institution of learning. "Lyceum" is generic in character as the
word "university." Thus, the private respondents are also entitled to the use
of the term.

ANG MGA KAANIB SA IGLESIA NG DIOS KAY KRISTO HESUS, H.S.K. SA

BANSANG PILIPINAS, INC., Petitioner, v. IGLESIA NG DIOS KAY CRISTO
JESUS, HALIGI AT SUHAY NG KATOTOHANAN, Respondent.

G. R. No. 137592 - December 12, 2001

Respondent Iglesia ng Dios Kay Cristo Jesus, Haligi at Suhay ng

Katotohanan 4 is a non-stock religious society or corporation registered in 1936. On
April 25, 1980, Eli Soriano, et al., caused the registration of petitioner
corporation, Ang Mga Kaanib sa Iglesia ng Dios Kay Kristo Hesus, H.S.K, sa Bansang
Pilipinas. The acronym "H.S.K." stands for Haligi at Saligan ng Katotohanan. The
respondent filed a petition before the Sec praying that the petitioner be directed to
change its corporate name to avoid confusion among their members as well as the
public. Petitioner claims that it complied with the aforecited SEC guideline by adding
not only two but eight words to their registered name, to wit: "Ang Mga Kaanib" and
"Sa Bansang Pilipinas, Inc.," which, petitioner argues, effectively distinguished it
from respondent corporation.
Issue: Whether or not the addition of the words “Ang mga Kaanib” and “Sa Bansang
Pilipinas, Inc” in petitioner’s name is sufficient to differentiate it from the name of the
respondent

Held: No. The additional words "Ang Mga Kaanib" and "Sa Bansang Pilipinas, Inc." in
petitioner's name are, as correctly observed by the SEC, merely descriptive of and
also referring to the members, or kaanib, of respondent who are likewise residing in
the Philippines. These words can hardly serve as an effective differentiating medium
necessary to avoid confusion or difficulty in distinguishing petitioner from
respondent. This is especially so, since both petitioner and respondent corporations
are using the same acronym H.S.K.;19 not to mention the fact that both are
espousing religious beliefs and operating in the same place. Parenthetically, it is well
to mention that the acronym H.S.K. used by petitioner stands for "Haligi at Saligan
ng Katotohanan."20

Then, too, the records reveal that in holding out their corporate name to the public,
petitioner highlights the dominant words "IGLESIA NG DIOS KAY KRISTO HESUS,
HALIGI AT SALIGAN NG KATOTOHANAN," which is strikingly similar to respondent's
corporate name, thus making it even more evident that the additional words "Ang
Mga Kaanib" and "Sa Bansang Pilipinas, Inc.", are merely descriptive of and
pertaining to the members of respondent corporation.

Significantly, the only difference between the corporate names of petitioner and
respondent are the words SALIGAN and SUHAY. These words are synonymous both
mean ground, foundation or support.

INDUSTRIAL REFRACTORIES CORPORATION OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION and
REFRACTORIES CORPORATION OF THE PHILIPPINES, respondents. G.R. No.
122174             October 3, 2002

Respondent Refractories Corporation of the Philippines (RCP) is a corporation duly

organized on October 13, 1976 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. Petitioner IRCP on the other hand,
was incorporated on August 23, 1979 originally under the name "Synclaire
Manufacturing Corporation". It amended its Articles of Incorporation on August 23,
1985 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 petitioner was using such corporate
name, respondent RCP filed on April 14, 1988 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 petitioner’s
such that the public may be confused or deceived into believing that they are one
and the same corporation.The SEC decided in favor of respondent RCP. Petitioner
appealed to the SEC En Banc, arguing that it does not have any jurisdiction over the
case, and that respondent RCP has no right to the exclusive use of its corporate
name as it is composed of generic or common words. The SEC En Banc modified the
appealed decision in that petitioner was ordered to delete or drop from its corporate
name only the word "Refractories". On appeal, the CA ruled that although the word
“refractories” is a generic name, still respondent RCP has prior right to use the word
"Refractories" as its corporate name.6 

Issue: Which between the petitioner and respondent has the right to use the term
“refractories”?

Held: The respondent. As held in Philips Export B.V. vs. Court of Appeals,28 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.29 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 nine (9) years after respondent RCP
started using its name. Thus, being the prior registrant, respondent 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.30 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. We need not linger on these two corporate names to conclude that they
are patently similar that even with reasonable care and observation, confusion might
arise.31 It must be noted that both cater to the same clientele, i.e.¸ the steel
industry. In fact, the SEC found that there were instances when different steel
companies were actually confused between the two, especially since they also have
similar product packaging.32 Such findings are accorded not only great respect but
even finality, and are binding upon this Court, unless it is shown that it had
arbitrarily disregarded or misapprehended evidence before it to such an extent as to
compel a contrary conclusion had such evidence been properly appreciated.  33 And
even without such proof of actual confusion between the two corporate names, it
suffices that confusion is probable or likely to occur.34