Converse Rubber V. Universal Rubber 2v1b48

Converse Rubber Corporation v. Universal Rubber Products January 8, 1987 Fernan SUMMARY: Universal filed an application with the Philippine Patent Office for the registration of the trademark “Universal Converse and Device” for rubber shoes and rubber slippers. Converse Rubber Corporation, a US corporation not licensed to do business and not actually doing business in the Philippines, filed its opposition to the application for registration. At the trial, Converse presented Carmen Pacquing, a private merchant. She testified that she had been selling Converse rubber shoes in the local market since 1956, and that sales of Converse rubber shoes averaged 12 – 20 pairs a month. She also testified that in the invoices she would issue for sales of Converse’s rubber shoes, she would place “Converse Chuck Taylor,” “Converse All Star” or “All Star Converse Chuck Taylor.” The Director of Patents gave due course to Universal’s application. The SC set aside the Director of Patents and denied the application. DOCTRINE: A tradename is any individual name or surname, firm name, device, or word used by manufacturers, industrialists, merchants, and others to identify their businesses, vocations, or occupations. It refers to the business and its goodwill (A trademark refers to the goods itself). Ownership of a tradename is a property right which the owner is entitled to protect when there is damage to him from confusion of goods in the mind of the public. Tradenames of persons who are nationals of, domiciled, or have a bona fide or effective business or commercial establishment in any foreign country, which is a party to an international convention or treaty relating to marks or tradenames on the repression of unfair competition to which the Philippines may be a party, shall be protected without the obligation of filing or registration whether or not they form parts of marks. FACTS: x Universal Rubber Products filed an application with the Philippine Patent Office for the registration of the trademark “Universal Converse and Device” for rubber shoes and rubber slippers. x Converse Rubber Corporation filed its opposition to the application for registration. It averred that: o The trademark sought to be ed is confusingly similar to the word “Converse” which is part of its corporate name, as to likely deceive purchasers. Universal’s products may be mistaken by the unwary public to be manufactured by Converse. o The registration of the trademark in favor of Universal will cause great and irreparable injury to the business reputation and goodwill of Converse. x At the pre-trial, the parties agreed to the stipulation of the following facts: o Converse was duly organized under Massachusetts law and has been in existence since 1946. o Converse is not licensed to do business in the Philippines. o Converse manufactures rubber shoes and uses the trademarks “Chuck Taylor” and “All-Star” thereon. x At the trial, Converse presented Carmen Pacquing, a private merchant. She testified that: o She had been selling Converse rubber shoes in the local market since 1956, and that sales of Converse rubber shoes averaged 12 – 20 pairs a month purchased mostly by private school (Ateneo, La Salle, SAN Beda Beda) basketball players. o She knew Converse’s rubber shoes were from the US because the trademark says “Made in the USA” and is accompanied by a blue or red star. o In the invoices she would issue for sales of Converse’s rubber shoes, she would place “Converse Chuck Taylor,” “Converse All Star” or “All Star Converse Chuck Taylor.” x At the trial, Universal presented its corporate secretary (unnamed). She testified that: o Universal has been selling “Universal Converse” sandals and rubber shoes since 1962 and 1963, respectively. o She was unaware of the name “Converse” prior to her corporation’s sale of “Universal Converse” rubber shoes and sandals. x The Director of Patents gave due course to Universal’s application. Converse’s MR was also denied. o Converse failed to present proof that the word “Converse” has become so identified with it. o Converse only presented a single witness who has never even dealt with Converse. In fact, the entry of Converse’s goods in the Philippines was effected without its hand. o Converse’s proof of its corporate personality cannot establish use of the word “Converse,” as Converse is not even licenses to do business in the Philippines and does not do business on its own. o Besides, Converse uses the trademarks “Chuck Taylor” and “All-Star” on its rubber shoes, and not “Converse.” o No determination can be made as to whether the word “Converse” appears on Converse’s rubber shoes, as it never presented any label or specimen of its shoes.

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Hence, this petition.

ISSUE: WON Universal’s partial appropriation of Converse’s corporate name is of such a character that it is calculated to deceive or confuse the public, to the injury of Converse – Tradename Any individual name or surname, firm name, device, or word used by manufacturers, industrialists, merchants, and others to identify their businesses, vocations, or occupations Refers to the business and its goodwill (A trademark refers to the goods itself) Ownership of a tradename is a property right which the owner is entitled to protect when there is damage to him from confusion of goods in the mind of the public Case at bar A cursory appreciation of Converse’s corporate name, “Converse Rubber Corporation” will show that the word “Converse” is the dominant word which identifies it from other corporations engaged in similar business Universal itted in the stipulation of facts Converse’s existence since 1946. This ission betrays its knowledge of the reputation and business of Converse even before its application. o Therefore, Universal has no right to appropriate the word for use on its products which are similar to Converse’s. A corporation is entitled to the cancellation of a mark that is confusingly similar to its corporate name. Universal’s witness had no idea why the corporation “Universal Converse” as its trademark. Such unexplained use by Universal of the dominant word of Converse’s corporate name lends itself open to the suspicion of fraudulent motive. o When there is no reasonable explanation for the defendant’s choice of a mark, though the field for his selection was so broad, the inference is inevitable that it was chosen deliberately to deceive. The sales invoices submitted by the witness show that it is the word “Converse” that mainly identifies Converse’s products. (ex. Converse Chuck Taylor, Converse All Star, All Star Converse Chuck Taylor, etc.) o Thus, the word “Converse” has grown to be identified with Converse’s products. o The sales invoices provide the best proof that there were actual sales of Converse’s products in the country. o The most convincing proof of use of a mark in commerce is testimony of such witnesses as customers. The witness has testified as such customer. All brands of goods filter into the market, indiscriminately sold by merchants, not necessarily with the knowledge or consent of the manufacturer. o The actual sale of goods in the local market is what establishes trademark use, and thus serves as the basis for any action aimed at trademark pre-exemption. o It is a corollary logical deduction that while Converse is not licensed to do business in the country, and is not actually doing business here, it cannot earn a reputation or goodwill as regards its products. There is also confusing similarity between Universal’s and Converse’s trademarks, which could confuse the purchasing public to the prejudice of Converse. o The trademarks of both Universal and Converse are imprinted in a circular manner on the side of the shoes. o It is sufficient that the similarity between the two labels is such that there is a possibility or likelihood of the ordinary purchaser of the older brand to mistake the new brand for it. Assuming that the trademark sought to be ed is distinctively dissimilar from Converse’s, the likelihood of confusion still subsists on the origins of the goods. o By appropriating the word “Converse,” Universal’s products are likely to be mistaken as having been produced by Converse. o The risk of damage also includes confusion of reputation if the public could reasonably assume that the goods of the parties originates from the same source. Right of a foreign corporation not licensed to do business/ not actually doing business to maintain an action in the forum La Chemise Lacoste v. Fernandez: o A foreign corporation which has never done any business in the Philippines and which is unlicensed and uned to do business here, but is widely and favorably known through the use of its products bearing its corporate name and tradename, has a legal right to maintain an action to restrain residents and inhabitants from organizing a corporation bearing the same name when it appears that they have personal knowledge of the existence of such a foreign corporation, and it is apparent that the purpose of the proposed domestic corporation is to deal and trade the same goods as those of the foreign corporation. Paris Convention

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Art. 8: 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 the trademark.

RA 166 o Sec. 37: Tradenames of persons who are nationals of, domiciled, or have a bona fide or effective business or commercial establishment in any foreign country, which is a party to an international convention or treaty relating to marks or tradenames on the repression of unfair competition to which the Philippines may be a party, shall be protected without the obligation of filing or registration whether or not they form parts of marks.

DISPOSITIVE: Director of Patents set aside. Universal’s application is denied. alycat b2015