By Aziza Hannah Bacay on July 07, 2022

A NAME is an important part of a person’s existence. In fact, even juridical persons such as corporations, partnerships and sole proprietorships have the right to have their own distinct and unique names. This right to use a corporate and trade name is a property right, a right in rem, which may be asserted and be protected (Western Equipment and Supply Co. v Reyes, 51 Phil. 115 [1927]).

In Red Line Transportation Co. v Rural Transit Co. Ltd. (60 Phil. 549 [1934]), the Supreme Court held that the “name of a corporation is therefore essential to its existence. It cannot change its name except in the manner provided by statute.” The court explained that if a corporation is allowed to assume any name at its pleasure, such would result in confusion, open doors to fraudulent activities and make regulation and supervision more difficult.

Names may be registered in different ways. An individual who puts up a sole proprietorship should register his/her business name with the Department of Trade and Industry (DTI) in accordance with DTI Department Administrative Order 18-07, Series of 2018. A corporation should register its corporate name with the Securities and Exchange Commission (SEC), in accordance with SEC regulations, including SEC Memorandum Circular (MC) 13, Series of 2019.

A corporation may register a business or trade name with the SEC that is different from the registered corporate name. This is permissible pursuant to MC 13, subject to the requirement that the business/trade name must also be indicated in the corporation’s articles of incorporation. Further, a corporation may have more than one business/trade name. A business/trade name usually appears in the articles of incorporation together with the words “Doing business under the name and style.”

In SEC OGC Opinion 22-04 dated March 29, 2022, the SEC outlined some rules in the use of business/trade names.

First, a corporation may use its registered name in all regular and official transactions with both private and government entities without its trade name, since it remains the official name of the corporation (citing SEC OGC Opinion 11-39, Sept. 21, 2011).

Second, the business/trade name may be used independently without the registered corporate name in its activities or dealings, including labels, posters and contracts, among others. A corporation that uses its trade name/s in entering contracts is still bound to the same contract as if it used its registered name.

Lastly, the corporate name and the business/trade name may be used interchangeably in the conduct of the corporation’s business. The SEC, however, noted that there are still some instances where the corporation is mandated to use both, for example in compliance with reportorial requirements of agencies such as the SEC and the Bureau of Internal Revenue.

Republic Act (RA) 8293, as amended, otherwise known as the “Intellectual Property Code” (IP Code), defines trade names as the “name or designation identifying or distinguishing an enterprise.” It is notable that the IP Code provides guidelines for registration of “trademarks” but not “trade names” with the Intellectual Property Office (IPO).

Despite the lack of registration with the IPO, the trade name is protected against any unlawful act committed by a third party. Section 165.2(b) of the IP Code states that it is unlawful for any person to subsequently use a trade name, whether used as a trade name or a mark, or to use any similar trade name or mark likely to mislead the public.

Thus, in Coffee Partners Inc. v San Francisco Coffee and Roastery (GR 169504, March 3, 2010), the Supreme Court held that “a trade name need not be registered with the IPO before an infringement suit may be filed by its owner against the owner of an infringing trademark. All that is required is that the trade name is previously used in trade or commerce in the Philippines.” The Supreme Court explained that when RA 8293 amended RA 166, it dispensed with the requirement of registration of trade names with the IPO.

In any case, the use of business/trade name is also protected under Article 8 of the Paris Convention for the Protection of Industrial Property, which states that “[a] trade name shall be protected in all the countries of the Union without the obligation of filing or registration, whether or not it forms part of a trademark.” The Philippines signed the Paris Convention on Sept. 27, 1965.

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Aziza Hannah Bacay is an associate of Mata-Perez, Tamayo and Francisco (MTF Counsel).

https://www.manilatimes.net/2022/07/07/business/top-business/business-and-trade-names/1850033