G.R. No.

41570           September 6, 1934

RED LINE TRANSPORTATION CO., petitioner-appellant, 

vs.
RURAL TRANSIT CO., LTD., respondent-appellee.

L. D. Lockwood for appellant.

Ohnick and Opisso for appellee.

BUTTE, J.:

This case is before us on a petition for review of an order of the Public Service Commission entered December 21, 1932, granting to the Rural Transit Company,
Ltd., a certificate of public convenience to operate a transportation service between Ilagan in the Province of Isabela and Tuguegarao in the Province of Cagayan,
and additional trips in its existing express service between Manila Tuguegarao.

On June 4, 1932, the Rural Transit Company, Ltd., a Philippine corporation, filed with the Public Company Service Commission an application in which it is stated
in substance that it is the holder of a certificate or public convenience to operate a passenger bus service between Manila and Tuguegarao; that it is the only operator
of direct service between said points and the present authorized schedule of only one trip daily is not sufficient; that it will be also to the public convenience to grant
the applicant a certificate for a new service between Tuguegarao and Ilagan.

On July 22, 1932, the appellant, Red Line Transportation Company, filed an opposition to the said application alleging in substance that as to the service between
Tuguegarao and Ilagan, the oppositor already holds a certificate of public convenience and is rendering adequate and satisfactory service; that the granting of the
application of the Rural Transit Company, Ltd., would not serve public convenience but would constitute a ruinous competition for the oppositor over said route.

After testimony was taken, the commission, on December 21, 1932, approved the application of the Rural Transit Company, Ltd., and ordered that the certificate of
public convenience applied for be "issued to the applicant Rural Transit Company, Ltd.," with the condition, among others, that "all the other terms and conditions
of the various certificates of public convenience of the herein applicant and herein incorporated are made a part hereof."

On January 14, 1933, the oppositor Red Line Transportation Company filed a motion for rehearing and reconsideration in which it called the commission's attention
to the fact that there was pending in the Court of First Instance of Manila case N. 42343, an application for the voluntary dissolution of the corporation, Rural
Transit Company, Ltd. Said motion for reconsideration was set down for hearing on March 24, 1933. On March 23, 1933, the Rural Transit Company, Ltd., the
applicant, filed a motion for postponement. This motion was verified by M. Olsen who swears "that he was the secretary of the Rural Transit Company, Ltd., in the
above entitled case." Upon the hearing of the motion for reconsideration, the commission admitted without objection the following documents filed in said case No.
42343 in the Court of First Instance of Manila for the dissolution of the Rural Transit Company, Ltd. the petition for dissolution dated July 6, 1932, the decision of
the said Court of First Instance of Manila, dated February 28, 1933, decreeing the dissolution of the Rural Transit Company, Ltd.

At the trial of this case before the Public Service Commission an issue was raised as to who was the real party in interest making the application, whether the Rural
Transit Company, Ltd., as appeared on the face of the application, or the Bachrach Motor Company, Inc., using name of the Rural Transit Company, Ltd., as a trade
name. The evidence given by the applicant's secretary, Olsen, is certainly very dubious and confusing, as may be seen from the following:

Q.            Will you please answer the question whether it is the Bachrach Motor Company operating under the trade name of the Rural Transit Company,
Limited, or whether it is the Rural Transit Company, Limited in its own name this application was filed?

A.            The Bachrach Motor Company is the principal stockholder.

Q.            Please answer the question.

ESPELETA.  Objecion porque la pregunta ya ha sido contestada.

JUEZ.  Puede contestar.

A.            I do not know what the legal construction or relationship existing between the two.

JUDGE.  I do not know what is in your mind by not telling the real applicant in this case?

A.            It is the Rural Transit Company, Ltd.

JUDGE.  As an entity by itself and not by the Bachrach Motor Company?

A.            I do not know. I have not given that phase of the matter much thought, as in previous occassion had not necessitated.

JUDGE.  In filing this application, you filed it for the operator on that line? Is it not!

A.            Yes, sir.

 JUDGE.  Who is that operator?

A.            The Rural Transit Company, Ltd.

JUDGE.  By itself, or as a commercial name of the Bachrach Motor Company?

A.            I cannot say.

ESPELETA.  The Rural Transit Company, Ltd., is a corporation duly established in accordance with the laws of the Philippine Islands.

JUDGE.  According to the records of this commission the Bachrach Motor Company is the owner of the certificates and the Rural Transit Company, Ltd.,
is operating without any certificate.

JUDGE.  If you filed this application for the Rural Transit Company, Ltd., and afterwards it is found out that the Rural Transit Company, Ltd., is not an
operator, everything will be turned down.

JUDGE.  My question was, when you filed this application you evidently made it for the operator?

A.            Yes, sir.

JUDGE.  Who was that operator you had in mind?

A.            According to the status of the ownership of the certificates of the former Rural Transit Company, the operator was the operator authorized in case
No. 23217 to whom all of the assets of the former Rural Transit Company were sold.

JUDGE.  Bachrach Motor Company?

A.            All actions have been prosecuted in the name of the Rural Transit Company, Ltd.

JUDGE.  You mean the Bachrach Motor Company, Inc., doing business under the name of the Rural Transit Company, Ltd.?

A.            Yes, sir.

LOCKWOOD.  I move that this case be dismissed, your Honor, on the ground that this application was made in the name of one party but the real owner is
another party.

ESPELETA.  We object to that petition.

JUDGE.  I will have that in mind when I decide the case. If I agree with you everything would be finished.

The Bachrach Motor Company, Inc., entered no appearance and ostensibly took no part in the hearing of the application of the Rural Transit Company, Ltd. It may
be a matter of some surprise that the commission did not on its own motion order the amendment of the application by substituting the Bachrach Motor Company,
Inc., as the applicant. However, the hearing proceeded on the application as filed and the decision of December 2, 1932, was rendered in favor of the Rural Transit
Company, Ltd., and the certificate ordered to be issued in its name, in the face of the evidence that the said corporation was not the real party in interest. In its said
decision, the commission undertook to meet the objection by referring to its resolution of November 26, 1932, entered in another case. This resolution in case No.
23217 concludes as follows:

Premises considered we hereby authorize the Bachrach Motor Co., Inc., to continue using the name of "Rural Transit Co., Ltd.," as its trade name in all
the applications, motions or other petitions to be filed in this commission in connection with said business and that this authority is given retroactive
effect as of the date, of filing of the application in this case, to wit, April 29, 1930.

We know of no law that empowers the Public Service Commission or any court in this jurisdiction to authorize one corporation to assume the name of another
corporation as a trade name. Both the Rural Transit Company, Ltd., and the Bachrach Motor Co., Inc., are Philippine corporations and the very law of their creation
and continued existence requires each to adopt and certify a distinctive name. The incorporators "constitute a body politic and corporate under the name stated in
the certificate." (Section 11, Act No. 1459, as amended.) A corporation has the power "of succession by its corporate name." (Section 13, ibid.) The name of a
corporation is therefore essential to its existence. It cannot change its name except in the manner provided by the statute. By that name alone is it authorized to
transact business. The law gives a corporation no express or implied authority to assume another name that is unappropriated: still less that of another corporation,
which is expressly set apart for it and protected by the law. If any corporation could assume at pleasure as an unregistered trade name the name of another
corporation, this practice would result in confusion and open the door to frauds and evasions and difficulties of administration and supervision. The policy of the
law expressed in our corporation statute and the Code of Commerce is clearly against such a practice. (Cf. Scarsdale Pub. Co. Colonial Press vs. Carter, 116 New
York Supplement, 731; Svenska Nat. F. i. C. vs. Swedish Nat. Assn., 205 Illinois [Appellate Courts], 428, 434.)

The order of the commission of November 26, 1932, authorizing the Bachrach Motor Co., Incorporated, to assume the name of the Rural Transit Co., Ltd. likewise
in corporated, as its trade name being void, and accepting the order of December 21, 1932, at its face as granting a certificate of public convenience to the applicant
Rural Transit Co., Ltd., the said order last mentioned is set aside and vacated on the ground that the Rural Transit Company, Ltd., is not the real party in interest and
its application was fictitious.

In view of the dissolution of the Rural Transit Company, Ltd. by judicial decree of February 28, 1933, we do not see how we can assess costs against said
respondent, Rural Transit Company, Ltd.
G.R. No. L-28351 July 28, 1977

UNIVERSAL MILLS CORPORATION, petitioner, 

vs.
UNIVERSAL TEXTILE MILLS, INC., respondent.

Emigdio G. Tanjuatco for petitioner.

Picazo, Santayana, Reyes, Tayao & Alfonso for respondent.

BARREDO, J.:

Appeal from the order of the Securities and Exchange Commission in S.E.C. Case No. 1079, entitled In the Matter of the Universal Textile Mills, Inc. vs. Universal
Mills Corporation, a petition to have appellant change its corporate name on the ground that such name is "confusingly and deceptively similar" to that of appellee,
which petition the Commission granted.

According to the order, "the Universal Textile Mills, Inc. was organ on December 29, 1953, as a textile manufacturing firm for which it was issued a certificate of
registration on January 8, 1954. The Universal Mills Corporation, on the other hand, was registered in this Commission on October 27, 1954, under its original
name, Universal Hosiery Mills Corporation, having as its primary purpose the "manufacture and production of hosieries and wearing apparel of all kinds." On May
24, 1963, it filed an amendment to its articles of incorporation changing its name to Universal Mills Corporation, its present name, for which this Commission
issued the certificate of approval on June 10, 1963.

The immediate cause of this present complaint, however, was the occurrence of a fire which gutted respondent's spinning mills in Pasig, Rizal. Petitioner alleged
that as a result of this fire and because of the similarity of respondent's name to that of herein complainant, the news items appearing in the various metropolitan
newspapers carrying reports on the fire created uncertainty and confusion among its bankers, friends, stockholders and customers prompting petitioner to make
announcements, clarifying the real Identity of the corporation whose property was burned. Petitioner presented documentary and testimonial evidence in support of
this allegation.

On the other hand, respondent's position is that the names of the two corporations are not similar and even if there be some similarity, it is not
confusing or deceptive; that the only reason that respondent changed its name was because it expanded its business to include the manufacture of
fabrics of all kinds; and that the word 'textile' in petitioner's name is dominant and prominent enough to distinguish the two. It further argues that
petitioner failed to present evidence of confusion or deception in the ordinary course of business; that the only supposed confusion proved by
complainant arose out of an extraordinary occurrence — a disastrous fire. (pp. 16-&17, Record.)

Upon these premises, the Commission held:

From the facts proved and the jurisprudence on the matter, it appears necessary under the circumstances to enjoin the respondent Universal Mills
Corporation from further using its present corporate name. Judging from what has already happened, confusion is not only apparent, but possible. It
does not matter that the instance of confusion between the two corporate names was occasioned only by a fire or an extraordinary occurrence. It is
precisely the duty of this Commission to prevent such confusion at all times and under all circumstances not only for the purpose of protecting the
corporations involved but more so for the protection of the public.

In today's modern business life where people go by tradenames and corporate images, the corporate name becomes the more important. This
Commission cannot close its eyes to the fact that usually it is the sound of all the other words composing the names of business corporations that sticks
to the mind of those who deal with them. The word "textile" in Universal Textile Mills, Inc.' can not possibly assure the exclusion of all other entities
with similar names from the mind of the public especially so, if the business they are engaged in are the same, like in the instant case.

This Commission further takes cognizance of the fact that when respondent filed the amendment changing its name to Universal Mills Corporation, it
correspondingly filed a written undertaking dated June 5, 1963 and signed by its President, Mr. Mariano Cokiat, promising to change its name in the
event that there is another person, firm or entity who has obtained a prior right to the use of such name or one similar to it. That promise is still binding
upon the corporation and its responsible officers. (pp. 17-18, Record.)

It is obvious that the matter at issue is within the competence of the Securities and Exchange Commission to resolve in the first instance in the exercise of the
jurisdiction it used to possess under Commonwealth Act 287 as amended by Republic Act 1055 to administer the application and enforcement of all laws affecting
domestic corporations and associations, reserving to the courts only conflicts of judicial nature, and, of course, the Supreme Court's authority to review the
Commissions actuations in appropriate instances involving possible denial of due process and grave abuse of discretion. Thus, in the case at bar, there being no
claim of denial of any constitutional right, all that We are called upon to determine is whether or not the order of the Commission enjoining petitioner to its
corporate name constitutes, in the light of the circumstances found by the Commission, a grave abuse of discretion.

We believe it is not. Indeed, it cannot be said that the impugned order is arbitrary and capricious. Clearly, it has rational basis. The corporate names in question are
not Identical, but they are indisputably so similar that even under the test of "reasonable care and observation as the public generally are capable of using and may
be expected to exercise" invoked by appellant, We are apprehensive confusion will usually arise, considering that under the second amendment of its articles of
incorporation on August 14, 1964, appellant included among its primary purposes the "manufacturing, dyeing, finishing and selling of fabrics of all kinds" in which
respondent had been engaged for more than a decade ahead of petitioner. Factually, the Commission found existence of such confusion, and there is evidence to
support its conclusion. Since respondent is not claiming damages in this proceeding, it is, of course, immaterial whether or not appellant has acted in good faith, but
We cannot perceive why of all names, it had to choose a name already being used by another firm engaged in practically the same business for more than a decade
enjoying well earned patronage and goodwill, when there are so many other appropriate names it could possibly adopt without arousing any suspicion as to its
motive and, more importantly, any degree of confusion in the mind of the public which could mislead even its own customers, existing or prospective. Premises
considered, there is no warrant for our interference.

As this is purely a case of injunction, and considering the time that has elapsed since the facts complained of took place, this decision should not be deemed as
foreclosing any further remedy which appellee may have for the protection of its interests.

WHEREFORE, with the reservation already mentioned, the appealed decision is affirmed. Costs against petitioners.
G.R. No. 101897. March 5, 1993.

LYCEUM OF THE PHILIPPINES, INC., petitioner, vs. COURT OF APPEALS, 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.,
respondents.

Quisumbing, Torres & Evangelista Law Offices and Ambrosio Padilla for petitioner.

Antonio M. Nuyles and Purungan, Chato, Chato, Tarriela & Tan Law Offices for respondents.

Froilan Siobal for Western Pangasinan Lyceum.

SYLLABUS

1. CORPORATION LAW; CORPORATE NAMES; REGISTRATION OF PROPOSED NAME WHICH IS IDENTICAL OR CONFUSINGLY SIMILAR TO
THAT OF ANY EXISTING CORPORATION, PROHIBITED; CONFUSION AND DECEPTION EFFECTIVELY PRECLUDED BY THE APPENDING OF
GEOGRAPHIC NAMES TO THE WORD "LYCEUM". — The Articles of Incorporation of a corporation must, among other things, set out the name of the
corporation. Section 18 of the Corporation Code establishes a restrictive rule insofar as corporate names are concerned: "Section 18. Corporate name. — No
corporate name may be allowed by the Securities an 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." The policy underlying the prohibition in Section
18 against the registration of a corporate name which is "identical or deceptively or confusingly similar" to that of any existing corporation or which is "patently
deceptive" or "patently confusing" or "contrary to existing laws," 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 of difficulties of administration and supervision over corporations. We do not consider that
the corporate names of private respondent institutions are "identical with, or deceptively or confusingly similar" to that of the petitioner institution. True enough, the
corporate names of private respondent entities all carry the word "Lyceum" but confusion and deception are effectively precluded by the appending of geographic
names to the word "Lyceum." Thus, we do not believe that the "Lyceum of Aparri" can be mistaken by the general public for the Lyceum of the Philippines, or that
the "Lyceum of Camalaniugan" would be confused with the Lyceum of the Philippines.

2. ID.; ID.; DOCTRINE OF SECONDARY MEANING; USE OF WORD "LYCEUM," NOT ATTENDED WITH EXCLUSIVITY. — It is claimed, however, by
petitioner that the word "Lyceum" has acquired a secondary meaning in relation to petitioner with the result that word, although originally a generic, has become
appropriable by petitioner to the exclusion of other institutions like private respondents herein. The doctrine of secondary meaning originated in the field of
trademark law. Its application has, however, been extended to corporate names sine the right to use a corporate name to the exclusion of others is based upon the
same principle which underlies the right to use a particular trademark or tradename. In Philippine Nut Industry, Inc. v. Standard Brands, Inc., the doctrine of
secondary meaning was elaborated in the following terms: " . . . a word or phrase originally incapable of exclusive appropriation with reference to an article on the
market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article
that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product." The question which arises,
therefore, is whether or not the use by petitioner of "Lyceum" in its corporate name has been for such length of time and with such exclusivity as to have become
associated or identified with the petitioner institution in the mind of the general public (or at least that portion of the general public which has to do with schools).
The Court of Appeals recognized this issue and answered it in the negative: "Under the doctrine of secondary meaning, a word or phrase originally incapable of
exclusive appropriation with reference to an article in the market, because geographical or otherwise descriptive might nevertheless 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 (Ana Ang vs. Toribio Teodoro, 74 Phil. 56). This circumstance has been referred to as the distinctiveness into which the name or phrase has
evolved through the substantial and exclusive use of the same for a considerable period of time. . . . No evidence was ever presented in the hearing before the
Commission which sufficiently proved that the word 'Lyceum' has indeed acquired secondary meaning in favor of the appellant. If there was any of this kind, the
same tend to prove only that the appellant had been using the disputed word for a long period of time. . . . In other words, while the appellant may have proved that
it had been using the word 'Lyceum' for a long period of time, this fact alone did not amount to mean that the said word had acquired secondary meaning in its favor
because the appellant failed to prove that it had been using the same word all by itself to the exclusion of others. More so, there was no evidence presented to prove
that confusion will surely arise if the same word were to be used by other educational institutions. Consequently, the allegations of the appellant in its first two
assigned errors must necessarily fail." We agree with the Court of Appeals. The number alone of the private respondents in the case at bar suggests strongly that
petitioner's use of the word "Lyceum" has not been attended with the exclusivity essential for applicability of the doctrine of secondary meaning. Petitioner's use of
the word "Lyceum" was not exclusive but was in truth shared with the Western Pangasinan Lyceum and a little later with other private respondent institutions
which registered with the SEC using "Lyceum" as part of their corporation names. There may well be other schools using Lyceum or Liceo in their names, but not
registered with the SEC because they have not adopted the corporate form of organization.

3. ID.; ID.; MUST BE EVALUATED IN THEIR ENTIRETY TO DETERMINE WHETHER THEY ARE CONFUSINGLY OR DECEPTIVELY SIMILAR TO
ANOTHER CORPORATE ENTITY'S NAME. — petitioner institution is not entitled to a legally enforceable exclusive right to use the word "Lyceum" in its
corporate name and that other institutions may use "Lyceum" as part of their corporate names. To determine whether a given corporate name is "identical" or
"confusingly or deceptively similar" with another entity's corporate name, it is not enough to ascertain the presence of "Lyceum" or "Liceo" in both names. One
must evaluate corporate names in their entirety and when the name of petitioner is juxtaposed with the names of private respondents, they are not reasonably
regarded as "identical" or "confusingly or deceptively similar" with each other.

DECISION

FELICIANO, J p:

Petitioner is an educational institution duly registered with the Securities and Exchange Commission ("SEC"). When it first registered with the SEC on 21
September 1950, it used the corporate name Lyceum of the Philippines, Inc. and has used that name ever since.
On 24 February 1984, petitioner instituted proceedings before the SEC to compel the private respondents, 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.

Some of the private respondents actively participated in the proceedings before the SEC. These are the following, the dates of their original SEC registration being
set out below opposite their respective names:

Western Pangasinan Lyceum — 27 October 1950

Lyceum of Cabagan — 31 October 1962

Lyceum of Lallo, Inc. — 26 March 1972

Lyceum of Aparri — 28 March 1972

Lyceum of Tuao, Inc. — 28 March 1972

Lyceum of Camalaniugan — 28 March 1972

The following private respondents were declared in default for failure to file an answer despite service of summons:

Buhi Lyceum;

Central Lyceum of Catanduanes;

Lyceum of Eastern Mindanao, Inc.; and

Lyceum of Southern Philippines

Petitioner's original complaint before the SEC had included three (3) other entities:

1. The Lyceum of Malacanay;

2. The Lyceum of Marbel; and

3. The Lyceum of Araullo

The complaint was later withdrawn insofar as concerned the Lyceum of Malacanay and the Lyceum of Marbel, for failure to serve summons upon these two (2)
entities. The case against the Liceum of Araullo was dismissed when that school motu proprio change its corporate name to "Pamantasan ng Araullo."

The background of the case at bar needs some recounting. Petitioner had sometime before commenced in the SEC a proceeding (SEC-Case No. 1241) against the
Lyceum of Baguio, Inc. to require it to change its corporate name and to adopt another name not "similar [to] or identical" with that of petitioner. In an Order dated
20 April 1977, Associate Commissioner Julio Sulit held that the corporate name of petitioner and that of the Lyceum of Baguio, Inc. were substantially identical
because of the presence of a "dominant" word, i.e., "Lyceum," the name of the geographical location of the campus being the only word which distinguished one
from the other corporate name. The SEC also noted that petitioner had registered as a corporation ahead of the Lyceum of Baguio, Inc. in point of time, 1 and
ordered the latter to change its name to another name "not similar or identical [with]" the names of previously registered entities.

The Lyceum of Baguio, Inc. assailed the Order of the SEC before the Supreme Court in a case docketed as G.R. No. L-46595. In a Minute Resolution dated 14
September 1977, the Court denied the Petition for Review for lack of merit. Entry of judgment in that case was made on 21 October 1977. 2

Armed with the Resolution of this Court in G.R. No. L-46595, petitioner then wrote all the educational institutions it could find using the word "Lyceum" as part of
their corporate name, and advised them to discontinue such use of "Lyceum." When, with the passage of time, it became clear that this recourse had failed,
petitioner instituted before the SEC SEC-Case No. 2579 to enforce what petitioner claims as its proprietary right to the word "Lyceum." The SEC hearing officer
rendered a decision sustaining petitioner's claim to an exclusive right to use the word "Lyceum." The hearing officer relied upon the SEC ruling in the Lyceum of
Baguio, Inc. case (SEC-Case No. 1241) and held that the word "Lyceum" was capable of appropriation and that petitioner had acquired an enforceable exclusive
right to the use of that word.

On appeal, however, by private respondents to the SEC En Banc, the decision of the hearing officer was reversed and set aside. The SEC En Banc did not consider
the word "Lyceum" to have become so identified with petitioner as to render use thereof by other institutions as productive of confusion about the identity of the
schools concerned in the mind of the general public. Unlike its hearing officer, the SEC En Banc held that the attaching of geographical names to the word
"Lyceum" served sufficiently to distinguish the schools from one another, especially in view of the fact that the campuses of petitioner and those of the private
respondents were physically quite remote from each other. 3

Petitioner then went on appeal to the Court of Appeals. In its Decision dated 28 June 1991, however, the Court of Appeals affirmed the questioned Orders of the
SEC En Banc. 4 Petitioner filed a motion for reconsideration, without success.
Before this Court, petitioner asserts that the Court of Appeals committed the following errors:

1. The Court of Appeals erred in holding that the Resolution of the Supreme Court in G.R. No. L-46595 did not constitute stare decisis as to apply to this case and
in not holding that said Resolution bound subsequent determinations on the right to exclusive use of the word Lyceum.

2. The Court of Appeals erred in holding that respondent Western Pangasinan Lyceum, Inc. was incorporated earlier than petitioner.

3. The Court of Appeals erred in holding that the word Lyceum has not acquired a secondary meaning in favor of petitioner.

4. The Court of Appeals erred in holding that Lyceum as a generic word cannot be appropriated by the petitioner to the exclusion of others. 5

We will consider all the foregoing ascribed errors, though not necessarily seriatim. We begin by noting that the Resolution of the Court in G.R. No. L-46595 does
not, of course, constitute res adjudicata in respect of the case at bar, since there is no identity of parties. Neither is stare decisis pertinent, if only because the SEC En
Banc itself has re-examined Associate Commissioner Sulit's ruling in the Lyceum of Baguio case. The Minute Resolution of the Court in G.R. No. L-46595 was not
a reasoned adoption of the Sulit ruling.

The Articles of Incorporation of a corporation must, among other things, set out the name of the corporation. 6 Section 18 of the Corporation Code establishes a
restrictive rule insofar as corporate names are concerned:

"SECTION 18. Corporate name. — No corporate name may be allowed by the Securities an 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)

The policy underlying the prohibition in Section 18 against the registration of a corporate name which is "identical or deceptively or confusingly similar" to that of
any existing corporation or which is "patently deceptive" or "patently confusing" or "contrary to existing laws," 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 of difficulties of administration and supervision
over corporations. 7

We do not consider that the corporate names of private respondent institutions are "identical with, or deceptively or confusingly similar" to that of the petitioner
institution. True enough, the corporate names of private respondent entities all carry the word "Lyceum" but confusion and deception are effectively precluded by
the appending of geographic names to the word "Lyceum." Thus, we do not believe that the "Lyceum of Aparri" can be mistaken by the general public for the
Lyceum of the Philippines, or that the "Lyceum of Camalaniugan" would be confused with the Lyceum of the Philippines.

Etymologically, the word "Lyceum" is the Latin word for the Greek lykeion which in turn referred to a locality on the river Ilissius in ancient Athens "comprising
an enclosure dedicated to Apollo and adorned with fountains and buildings erected by Pisistratus, Pericles and Lycurgus frequented by the youth for exercise and by
the philosopher Aristotle and his followers for teaching." 8 In time, the word "Lyceum" became associated with schools and other institutions providing public
lectures and concerts and public discussions. Thus today, the word "Lyceum" generally refers to a school or an institution of learning. While the Latin word
"lyceum" has been incorporated into the English language, the word is also found in Spanish (liceo) and in French (lycee). As the Court of Appeals noted in its
Decision, Roman Catholic schools frequently use the term; e.g., "Liceo de Manila," "Liceo de Baleno" (in Baleno, Masbate), "Liceo de Masbate," "Liceo de
Albay." 9 "Lyceum" is in fact as generic in character as the word "university." In the name of the petitioner, "Lyceum" appears to be a substitute for "university;" in
other places, however, "Lyceum," or "Liceo" or "Lycee" frequently denotes a secondary school or a college. It may be (though this is a question of fact which we
need not resolve) that the use of the word "Lyceum" may not yet be as widespread as the use of "university," but it is clear that a not inconsiderable number of
educational institutions have adopted "Lyceum" or "Liceo" as part of their corporate names. Since "Lyceum" or "Liceo" denotes a school or institution of learning,
it is not unnatural to use this word to designate an entity which is organized and operating as an educational institution.

It is claimed, however, by petitioner that the word "Lyceum" has acquired a secondary meaning in relation to petitioner with the result that that word, although
originally a generic, has become appropriable by petitioner to the exclusion of other institutions like private respondents herein.

The doctrine of secondary meaning originated in the field of trademark law. Its application has, however, been extended to corporate names sine the right to use a
corporate name to the exclusion of others is based upon the same principle which underlies the right to use a particular trademark or tradename. 10 In Philippine
Nut Industry, Inc. v. Standard Brands, Inc., 11 the doctrine of secondary meaning was elaborated in the following terms:

" . . . a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive,
might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing
public, the word or phrase has come to mean that the article was his product." 12

The question which arises, therefore, is whether or not the use by petitioner of "Lyceum" in its corporate name has been for such length of time and with such
exclusivity as to have become associated or identified with the petitioner institution in the mind of the general public (or at least that portion of the general public
which has to do with schools). The Court of Appeals recognized this issue and answered it in the negative:

"Under the doctrine of secondary meaning, a word or phrase originally incapable of exclusive appropriation with reference to an article in the market, because
geographical or otherwise descriptive might nevertheless 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 (Ana Ang vs. Toribio Teodoro, 74 Phil. 56). This
circumstance has been referred to as the distinctiveness into which the name or phrase has evolved through the substantial and exclusive use of the same for a
considerable period of time. Consequently, the same doctrine or principle cannot be made to apply where the evidence did not prove that the business (of the
plaintiff) has continued for so long a time that it has become of consequence and acquired a good will of considerable value such that its articles and produce have
acquired a well-known reputation, and confusion will result by the use of the disputed name (by the defendant) (Ang Si Heng vs. Wellington Department Store,
Inc., 92 Phil. 448).
With the foregoing as a yardstick, [we] believe the appellant failed to satisfy the aforementioned requisites. No evidence was ever presented in the hearing before
the Commission which sufficiently proved that the word 'Lyceum' has indeed acquired secondary meaning in favor of the appellant. If there was any of this kind,
the same tend to prove only that the appellant had been using the disputed word for a long period of time. Nevertheless, its (appellant) exclusive use of the word
(Lyceum) was never established or proven as in fact the evidence tend to convey that the cross-claimant was already using the word 'Lyceum' seventeen (17) years
prior to the date the appellant started using the same word in its corporate name. Furthermore, educational institutions of the Roman Catholic Church had been
using the same or similar word like 'Liceo de Manila,' 'Liceo de Baleno' (in Baleno, Masbate), 'Liceo de Masbate,' 'Liceo de Albay' long before appellant started
using the word 'Lyceum'. The appellant also failed to prove that the word 'Lyceum' has become so identified with its educational institution that confusion will
surely arise in the minds of the public if the same word were to be used by other educational institutions.

In other words, while the appellant may have proved that it had been using the word 'Lyceum' for a long period of time, this fact alone did not amount to mean that
the said word had acquired secondary meaning in its favor because the appellant failed to prove that it had been using the same word all by itself to the exclusion of
others. More so, there was no evidence presented to prove that confusion will surely arise if the same word were to be used by other educational institutions.
Consequently, the allegations of the appellant in its first two assigned errors must necessarily fail." 13 (Underscoring partly in the original and partly supplied)

We agree with the Court of Appeals. The number alone of the private respondents in the case at bar suggests strongly that petitioner's use of the word "Lyceum" has
not been attended with the exclusivity essential for applicability of the doctrine of secondary meaning. It may be noted also that at least one of the private
respondents, i.e., the Western Pangasinan Lyceum, Inc., used the term "Lyceum" seventeen (17) years before the petitioner registered its own corporate name with
the SEC and began using the word "Lyceum." It follows that if any institution had acquired an exclusive right to the word "Lyceum," that institution would have
been the Western Pangasinan Lyceum, Inc. rather than the petitioner institution.

In this connection, petitioner argues that because the Western Pangasinan Lyceum, Inc. failed to reconstruct its records before the SEC in accordance with the
provisions of R.A. No. 62, which records had been destroyed during World War II, Western Pangasinan Lyceum should be deemed to have lost all rights it may
have acquired by virtue of its past registration. It might be noted that the Western Pangasinan Lyceum, Inc. registered with the SEC soon after petitioner had filed
its own registration on 21 September 1950. Whether or not Western Pangasinan Lyceum, Inc. must be deemed to have lost its rights under its original 1933
registration, appears to us to be quite secondary in importance; we refer to this earlier registration simply to underscore the fact that petitioner's use of the word
"Lyceum" was neither the first use of that term in the Philippines nor an exclusive use thereof. Petitioner's use of the word "Lyceum" was not exclusive but was in
truth shared with the Western Pangasinan Lyceum and a little later with other private respondent institutions which registered with the SEC using "Lyceum" as part
of their corporation names. There may well be other schools using Lyceum or Liceo in their names, but not registered with the SEC because they have not adopted
the corporate form of organization.

We conclude and so hold that petitioner institution is not entitled to a legally enforceable exclusive right to use the word "Lyceum" in its corporate name and that
other institutions may use "Lyceum" as part of their corporate names. To determine whether a given corporate name is "identical" or "confusingly or deceptively
similar" with another entity's corporate name, it is not enough to ascertain the presence of "Lyceum" or "Liceo" in both names. One must evaluate corporate names
in their entirety and when the name of petitioner is juxtaposed with the names of private respondents, they are not reasonably regarded as "identical" or
"confusingly or deceptively similar" with each other.

WHEREFORE, the petitioner having failed to show any reversible error on the part of the public respondent Court of Appeals, the Petition for Review is DENIED
for lack of merit, and the Decision of the Court of Appeals dated 28 June 1991 is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.
G.R. No. 96161 February 21, 1992

PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioners, 
vs.
COURT OF APPEALS, SECURITIES & EXCHANGE COMMISSION and STANDARD PHILIPS CORPORATION, respondents.

Emeterio V. Soliven & Associates for petitioners.

Narciso A. Manantan for private respondent.

MELENCIO-HERRERA, J.:

Petitioners challenge the Decision of the Court of Appeals, dated 31 July 1990, in CA-GR Sp. No. 20067, upholding the Order of the Securities and Exchange
Commission, dated 2 January 1990, in SEC-AC No. 202, dismissing petitioners' prayer for the cancellation or removal of the word "PHILIPS" from private
respondent's corporate name.

Petitioner Philips Export B.V. (PEBV), a foreign corporation organized under the laws of the Netherlands, although not engaged in business here, is the registered
owner of the trademarks PHILIPS and PHILIPS SHIELD EMBLEM under Certificates of Registration Nos. R-1641 and R-1674, respectively issued by the
Philippine Patents Office (presently known as the Bureau of Patents, Trademarks and Technology Transfer). Petitioners Philips Electrical Lamps, Inc. (Philips
Electrical, for brevity) and Philips Industrial Developments, Inc. (Philips Industrial, for short), authorized users of the trademarks PHILIPS and PHILIPS SHIELD
EMBLEM, were incorporated on 29 August 1956 and 25 May 1956, respectively. All petitioner corporations belong to the PHILIPS Group of Companies.

Respondent Standard Philips Corporation (Standard Philips), on the other hand, was issued a Certificate of Registration by respondent Commission on 19 May
1982.

On 24 September 1984, Petitioners filed a letter complaint with the Securities & Exchange Commission (SEC) asking for the cancellation of the word "PHILIPS"
from Private Respondent's corporate name in view of the prior registration with the Bureau of Patents of the trademark "PHILIPS" and the logo "PHILIPS SHIELD
EMBLEM" in the name of Petitioner, PEBV, and the previous registration of Petitioners Philips Electrical and Philips Industrial with the SEC.

As a result of Private Respondent's refusal to amend its Articles of Incorporation, Petitioners filed with the SEC, on 6 February 1985, a Petition (SEC Case No.
2743) praying for the issuance of a Writ of Preliminary Injunction, alleging, among others, that Private Respondent's use of the word PHILIPS amounts to an
infringement and clear violation of Petitioners' exclusive right to use the same considering that both parties engage in the same business.

In its Answer, dated 7 March 1985, Private Respondent countered that Petitioner PEBV has no legal capacity to sue; that its use of its corporate name is not at all
similar to Petitioners' trademark PHILIPS when considered in its entirety; and that its products consisting of chain rollers, belts, bearings and cutting saw are
grossly different from Petitioners' electrical products.

After conducting hearings with respect to the prayer for Injunction; the SEC Hearing Officer, on 27 September 1985, ruled against the issuance of such Writ.

On 30 January 1987, the same Hearing Officer dismissed the Petition for lack of merit. In so ruling, the latter declared that inasmuch as the SEC found no sufficient
ground for the granting of injunctive relief on the basis of the testimonial and documentary evidence presented, it cannot order the removal or cancellation of the
word "PHILIPS" from Private Respondent's corporate name on the basis of the same evidence adopted in toto during trial on the merits. Besides, Section 18 of the
Corporation Code (infra) is applicable only when the corporate names in question are identical. Here, there is no confusing similarity between Petitioners' and
Private Respondent's corporate names as those of the Petitioners contain at least two words different from that of the Respondent. Petitioners' Motion for
Reconsideration was likewise denied on 17 June 1987.

On appeal, the SEC en banc affirmed the dismissal declaring that the corporate names of Petitioners and Private Respondent hardly breed confusion inasmuch as
each contains at least two different words and, therefore, rules out any possibility of confusing one for the other.

On 30 January 1990, Petitioners sought an extension of time to file a Petition for Review on Certiorari before this Court, which Petition was later referred to the
Court of Appeals in a Resolution dated 12 February 1990.

In deciding to dismiss the petition on 31 July 1990, the Court of

Appeals1 swept aside Petitioners' claim that following the ruling in Converse Rubber Corporation v. Universal Converse Rubber Products, Inc., et al, (G. R. No. L-
27906, January 8, 1987, 147 SCRA 154), the word PHILIPS cannot be used as part of Private Respondent's corporate name as the same constitutes a dominant part
of Petitioners' corporate names. In so holding, the Appellate Court observed that the Converse case is not four-square with the present case inasmuch as the
contending parties in Converse are engaged in a similar business, that is, the manufacture of rubber shoes. Upholding the SEC, the Appellate Court concluded that
"private respondents' products consisting of chain rollers, belts, bearings and cutting saw are unrelated and non-competing with petitioners' products i.e. electrical
lamps such that consumers would not in any probability mistake one as the source or origin of the product of the other."

The Appellate Court denied Petitioners' Motion for Reconsideration on 20 November 1990, hence, this Petition which was given due course on 22 April 1991, after
which the parties were required to submit their memoranda, the latest of which was received on 2 July 1991. In December 1991, the SEC was also required to
elevate its records for the perusal of this Court, the same not having been apparently before respondent Court of Appeals.

We find basis for petitioners' plea.

As early as Western Equipment and Supply Co. v. Reyes, 51 Phil. 115 (1927), the Court declared that a corporation's right to use its corporate and trade name is a
property right, a right in rem, which it may assert and protect against the world in the same manner as it may protect its tangible property, real or personal, against
trespass or conversion. It is regarded, to a certain extent, as a property right and one which cannot be impaired or defeated by subsequent appropriation by another
corporation in the same field (Red Line Transportation Co. vs. Rural Transit Co., September 8, 1934, 20 Phil 549).

A name is peculiarly important as necessary to the very existence of a 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 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 a 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. 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 corporation acquires its name by choice and need not select a name identical with or similar to one already appropriated by a senior corporation while an
individual's name is thrust upon him (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 308).

Our own Corporation Code, in its Section 18, expressly provides that:

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 law. Where a
change in a corporate name is approved, the commission shall issue an amended certificate of incorporation under the amended name. (Emphasis supplied)

The statutory prohibition cannot be any clearer. To come within its scope, two requisites must be proven, namely:

(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.

The right to the exclusive use of a corporate name with freedom from infringement by similarity is determined by priority of adoption (1 Thompson, p.
80 citing Munn v. Americana Co., 82 N. Eq. 63, 88 Atl. 30; San Francisco Oyster House v. Mihich, 75 Wash. 274, 134 Pac. 921). In this regard, there is no doubt
with respect to Petitioners' prior adoption of' the name ''PHILIPS" as part of its corporate name. Petitioners Philips Electrical and Philips Industrial were
incorporated on 29 August 1956 and 25 May 1956, respectively, while Respondent Standard Philips was issued a Certificate of Registration on 12 April 1982,
twenty-six (26) years later (Rollo, p. 16). Petitioner PEBV has also used the trademark "PHILIPS" on electrical lamps of all types and their accessories since 30
September 1922, as evidenced by Certificate of Registration No. 1651.

The second requisite no less exists in this case. 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. In so doing, the Court must look to the record as well as the names themselves (Ohio Nat. Life Ins. Co.
v. Ohio Life Ins. Co., 210 NE 2d 298). While the corporate names of Petitioners and Private Respondent are not identical, a reading of Petitioner's corporate names,
to wit: PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS INDUSTRIAL DEVELOPMENT, INC., inevitably leads one to conclude
that "PHILIPS" is, indeed, the dominant word in that all the companies affiliated or associated with the principal corporation, PEBV, are known in the Philippines
and abroad as the PHILIPS Group of Companies.

Respondents maintain, however, that Petitioners did not present an iota of proof of actual confusion or deception of the public much less a single purchaser of their
product who has been deceived or confused or showed any likelihood of confusion. It is settled, however, that proof of actual confusion need not be shown. It
suffices that confusion is probably or likely to occur (6 Fletcher [Perm Ed], pp. 107-108, enumerating a long line of cases).

It may be that Private Respondent's products also consist of chain rollers, belts, bearing and the like, while petitioners deal principally with electrical products. It is
significant to note, however, that even the Director of Patents had denied Private Respondent's application for registration of the trademarks "Standard Philips &
Device" for chain, rollers, belts, bearings and cutting saw. That office held that PEBV, "had shipped to its subsidiaries in the Philippines equipment, machines and
their parts which fall under international class where "chains, rollers, belts, bearings and cutting saw," the goods in connection with which Respondent is seeking to
register 'STANDARD PHILIPS' . . . also belong" ( Inter Partes Case No. 2010, June 17, 1988, SEC Rollo).

Furthermore, the records show that among Private Respondent's primary purposes in its Articles of Incorporation (Annex D, Petition p. 37, Rollo) are the following:

To buy, sell, barter, trade, manufacture, import, export, or otherwise acquire, dispose of, and deal in and deal with any kind  of goods, wares, and
merchandise such as but not limited to plastics, carbon products, office stationery and supplies, hardware parts, electrical wiring devices, electrical
component parts, and/or complement of industrial, agricultural or commercial machineries, constructive supplies, electrical supplies and other
merchandise which are or may become articles of commerce except food, drugs and cosmetics and to carry on such business as manufacturer, distributor,
dealer, indentor, factor, manufacturer's representative capacity for domestic or foreign companies. (emphasis ours)
For its part, Philips Electrical also includes, among its primary purposes, the following:

To develop manufacture and deal in electrical products, including electronic, mechanical and other similar products . . . (p. 30, Record of SEC Case No.
2743)

Given Private Respondent's aforesaid underlined primary purpose, nothing could prevent it from dealing in the same line of business of electrical devices, products
or supplies which fall under its primary purposes. Besides, there is showing that Private Respondent not only manufactured and sold ballasts for fluorescent lamps
with their corporate name printed thereon but also advertised the same as, among others, Standard Philips (TSN, before the SEC, pp. 14, 17, 25, 26, 37-42, June 14,
1985; pp. 16-19, July 25, 1985). As aptly pointed out by Petitioners, [p]rivate respondent's choice of "PHILIPS" as part of its corporate name [STANDARD
PHILIPS CORPORATION] . . . tends to show said respondent's intention to ride on the popularity and established goodwill of said petitioner's business throughout
the world" (Rollo, p. 137). The subsequent appropriator of the name or one confusingly similar thereto usually seeks an unfair advantage, a free ride of another's
goodwill (American Gold Star Mothers, Inc. v. National Gold Star Mothers, Inc., et al, 89 App DC 269, 191 F 2d 488).

In allowing Private Respondent the continued use of its corporate name, the SEC maintains that the corporate names of Petitioners PHILIPS ELECTRICAL
LAMPS. INC. and PHILIPS INDUSTRIAL DEVELOPMENT, INC. contain at least two words different from that of the corporate name of respondent
STANDARD PHILIPS CORPORATION, which words will readily identify Private Respondent from Petitioners and vice-versa.

True, under the Guidelines in the Approval of Corporate and Partnership Names formulated by the SEC, the proposed name "should not be similar to one already
used by another corporation or partnership. If the proposed name contains a word already used as part of the firm name or style of a registered company; the
proposed name must contain two other words different from the company already registered"  (Emphasis ours). It is then pointed out that Petitioners Philips
Electrical and Philips Industrial have two words different from that of Private Respondent's name.

What is lost sight of, however, is that PHILIPS is a trademark or trade name which was registered as far back as 1922. Petitioners, therefore, have the exclusive
right to its use which must be free from any infringement by similarity. A corporation has an exclusive right to the use of its name, which may be protected by
injunction upon a principle similar to that upon which persons are protected in the use of trademarks and tradenames (18 C.J.S. 574). Such principle proceeds upon
the theory that it is a fraud on the corporation which has acquired a right to that name and perhaps carried on its business thereunder, that another should attempt to
use the same name, or the same name with a slight variation in such a way as to induce persons to deal with it in the belief that they are dealing with the corporation
which has given a reputation to the name (6 Fletcher [Perm Ed], pp. 39-40, citing Borden Ice Cream Co. v. Borden's Condensed Milk Co., 210 F 510). Notably, too,
Private Respondent's name actually contains only a single word, that is, "STANDARD", different from that of Petitioners inasmuch as the inclusion of the term
"Corporation" or "Corp." merely serves the Purpose of distinguishing the corporation from partnerships and other business organizations.

The fact that there are other companies engaged in other lines of business using the word "PHILIPS" as part of their corporate names is no defense and does not
warrant the use by Private Respondent of such word which constitutes an essential feature of Petitioners' corporate name previously adopted and registered and-
having acquired the status of a well-known mark in the Philippines and internationally as well (Bureau of Patents Decision No. 88-35 [TM], June 17, 1988, SEC
Records).

In support of its application for the registration of its Articles of Incorporation with the SEC, Private Respondent had submitted an undertaking "manifesting its
willingness to change its corporate name in the event another person, firm or entity has acquired a prior right to the use of the said firm name or one deceptively or
confusingly similar to it." Private respondent must now be held to its undertaking.

As a general rule, parties organizing a corporation must choose a name at their peril; and the use of a name similar to one adopted by another corporation,
whether a business or a nonbusiness or non-profit organization if misleading and likely to injure it in the exercise in its corporate functions, regardless of intent,
may be prevented by the corporation having the prior right, by a suit for injunction against the new corporation to prevent the use of the name (American Gold
Star Mothers, Inc. v. National Gold Star Mothers, Inc., 89 App DC 269, 191 F 2d 488, 27 ALR 2d 948).

WHEREFORE, the Decision of the Court of Appeals dated 31 July 1990, and its Resolution dated 20 November 1990, are SET ASIDE and a new one entered
ENJOINING private respondent from using "PHILIPS" as a feature of its corporate name, and ORDERING the Securities and Exchange Commission to amend
private respondent's Articles of Incorporation by deleting the word PHILIPS from the corporate name of private respondent.

No costs.

SO ORDERED.
 [G.R. NO. 172835 : December 13, 2007]

AIR PHILIPPINES CORPORATION, Petitioner, v. PENNSWELL, INC. Respondent.

DECISION

CHICO-NAZARIO, J.:

Petitioner Air Philippines Corporation seeks, via the instant Petition for Review under Rule 45 of the Rules of Court, the
nullification of the 16 February 2006 Decision1 and the 25 May 2006 Resolution2 of the Court of Appeals in CA-G.R. SP No.
86329, which affirmed the Order3 dated 30 June 2004 of the Regional Trial Court (RTC), Makati City, Branch 64, in Civil
Case No. 00-561.

Petitioner Air Philippines Corporation is a domestic corporation engaged in the business of air transportation services. On
the other hand, respondent Pennswell, Inc. was organized to engage in the business of manufacturing and selling
industrial chemicals, solvents, and special lubricants.

On various dates, respondent delivered and sold to petitioner sundry goods in trade, covered by Sales Invoices No.
8846,4 9105,5 8962,6 and 8963,7 which correspond to Purchase Orders No. 6433, 6684, 6634 and 6633, respectively.
Under the contracts, petitioner's total outstanding obligation amounted to P449,864.98 with interest at 14% per annum
until the amount would be fully paid. For failure of the petitioner to comply with its obligation under said contracts,
respondent filed a Complaint8 for a Sum of Money on 28 April 2000 with the RTC.

In its Answer,9 petitioner contended that its refusal to pay was not without valid and justifiable reasons. In particular,
petitioner alleged that it was defrauded in the amount of P592,000.00 by respondent for its previous sale of four items,
covered by Purchase Order No. 6626. Said items were misrepresented by respondent as belonging to a new line, but were
in truth and in fact, identical with products petitioner had previously purchased from respondent. Petitioner asserted that
it was deceived by respondent which merely altered the names and labels of such goods. Petitioner specifically identified
the items in question, as follows:

Label/Description Item No. Amount P.O. Date

1. a. Anti-Friction Fluid MPL-800 153,941.40 5714 05/20/99

b. Excellent Rust Corrosion MPL-008 155,496.00 5888 06/20/99
(fake)

2. a. Contact Grease COG #2 115,236.00 5540 04/26/99

b. Connector Grease (fake) CG 230,519.52 6327 08/05/99

3. a. Trixohtropic Grease EPC 81,876.96 4582 01/29/99

b. Di-Electric Strength EPC#2 81,876.96 5446 04/21/99
Protective Coating (fake)

4. a. Dry Lubricant ASC-EP 87,346.52 5712 05/20/99

b. Anti-Seize Compound ASC-EP 124,108.10 4763 & 02/16/99 &
(fake) 2000 5890 06/24/99

According to petitioner, respondent's products, namely Excellent Rust Corrosion, Connector Grease, Electric Strength
Protective Coating, and Anti-Seize Compound, are identical with its Anti-Friction Fluid, Contact Grease, Thixohtropic
Grease, and Dry Lubricant, respectively. Petitioner asseverated that had respondent been forthright about the identical
character of the products, it would not have purchased the items complained of. Moreover, petitioner alleged that when
the purported fraud was discovered, a conference was held between petitioner and respondent on 13 January 2000,
whereby the parties agreed that respondent would return to petitioner the amount it previously paid. However, petitioner
was surprised when it received a letter from the respondent, demanding payment of the amount of P449,864.94, which
later became the subject of respondent's Complaint for Collection of a Sum of Money against petitioner.

During the pendency of the trial, petitioner filed a Motion to Compel10 respondent to give a detailed list of the ingredients
and chemical components of the following products, to wit: (a) Contact Grease and Connector Grease; (b) Thixohtropic
Grease and Di-Electric Strength Protective Coating; and (c) Dry Lubricant and Anti-Seize Compound.11 It appears that
petitioner had earlier requested the Philippine Institute of Pure and Applied Chemistry (PIPAC) for the latter to conduct a
comparison of respondent's goods.

On 15 March 2004, the RTC rendered an Order granting the petitioner's motion. It disposed, thus:

The Court directs [herein respondent] Pennswell, Inc. to give [herein petitioner] Air Philippines Corporation[,] a detailed
list of the ingredients or chemical components of the following chemical products:

A. Contact Grease to be compared with Connector Grease;

b. Thixohtropic Grease to be compared with Di-Electric Strength Protective Coating; and cralawlibrary

c. Dry Lubricant to be compared with Anti-Seize Compound[.]

[Respondent] Pennswell, Inc. is given fifteen (15) days from receipt of this Order to submit to [petitioner] Air Philippines
Corporation the chemical components of all the above-mentioned products for chemical comparison/analysis.12

Respondent sought reconsideration of the foregoing Order, contending that it cannot be compelled to disclose the
chemical components sought because the matter is confidential. It argued that what petitioner endeavored to inquire
upon constituted a trade secret which respondent cannot be forced to divulge. Respondent maintained that its products
are specialized lubricants, and if their components were revealed, its business competitors may easily imitate and market
the same types of products, in violation of its proprietary rights and to its serious damage and prejudice.

The RTC gave credence to respondent's reasoning, and reversed itself. It issued an Order dated 30 June 2004, finding
that the chemical components are respondent's trade secrets and are privileged in character. A priori, it rationalized:

The Supreme Court held in the case of Chavez v. Presidential Commission on Good Government, 299 SCRA 744, p. 764,
that "the drafters of the Constitution also unequivocally affirmed that aside from national security matters and intelligence
information, trade or industrial secrets (pursuant to the Intellectual Property Code and other related laws) as well as
banking transactions (pursuant to the Secrecy of Bank Deposit Act) are also exempted from compulsory disclosure."

Trade secrets may not be the subject of compulsory disclosure. By reason of [their] confidential and privileged character,
ingredients or chemical components of the products ordered by this Court to be disclosed constitute trade secrets lest
[herein respondent] would eventually be exposed to unwarranted business competition with others who may imitate and
market the same kinds of products in violation of [respondent's] proprietary rights. Being privileged, the detailed list of
ingredients or chemical components may not be the subject of mode of discovery under Rule 27, Section 1 of the Rules of
Court, which expressly makes privileged information an exception from its coverage.13

Alleging grave abuse of discretion on the part of the RTC, petitioner filed a Petition for Certiorari under Rule 65 of the
Rules of Court with the Court of Appeals, which denied the Petition and affirmed the Order dated 30 June 2004 of the
RTC.

The Court of Appeals ruled that to compel respondent to reveal in detail the list of ingredients of its lubricants is to
disregard respondent's rights over its trade secrets. It was categorical in declaring that the chemical formulation of
respondent's products and their ingredients are embraced within the meaning of "trade secrets." In disallowing the
disclosure, the Court of Appeals expounded, thus:

The Supreme Court in Garcia v. Board of Investments (177 SCRA 374 [1989]) held that trade secrets and confidential,
commercial and financial information are exempt from public scrutiny. This is reiterated in Chavez v. Presidential
Commission on Good Government (299 SCRA 744 [1998]) where the Supreme Court enumerated the kinds of information
and transactions that are recognized as restrictions on or privileges against compulsory disclosure. There, the Supreme
Court explicitly stated that:
"The drafters of the Constitution also unequivocally affirmed that, aside from national security matters and intelligence
information, trade or industrial secrets (pursuant to the Intellectual Property Code and other related laws) as well as
banking transactions (pursuant to the Secrecy of Bank Deposits Act) re also exempt from compulsory disclosure."

It is thus clear from the foregoing that a party cannot be compelled to produce, release or disclose documents, papers, or
any object which are considered trade secrets.

In the instant case, petitioner [Air Philippines Corporation] would have [respondent] Pennswell produce a detailed list of
ingredients or composition of the latter's lubricant products so that a chemical comparison and analysis thereof can be
obtained. On this note, We believe and so hold that the ingredients or composition of [respondent] Pennswell's lubricants
are trade secrets which it cannot be compelled to disclose.

[Respondent] Pennswell has a proprietary or economic right over the ingredients or components of its lubricant products.
The formulation thereof is not known to the general public and is peculiar only to [respondent] Pennswell. The legitimate
and economic interests of business enterprises in protecting their manufacturing and business secrets are well-recognized
in our system.

[Respondent] Pennswell has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information against the public. Otherwise, such information can be illegally and unfairly utilized
by business competitors who, through their access to [respondent] Pennswell's business secrets, may use the same for
their own private gain and to the irreparable prejudice of the latter.

xxx

In the case before Us, the alleged trade secrets have a factual basis, i.e., it comprises of the ingredients and formulation
of [respondent] Pennswell's lubricant products which are unknown to the public and peculiar only to Pennswell.

All told, We find no grave abuse of discretion amounting to lack or excess of jurisdiction on the part of public respondent
Judge in finding that the detailed list of ingredients or composition of the subject lubricant products which petitioner [Air
Philippines Corporation] seeks to be disclosed are trade secrets of [respondent] Pennswell; hence, privileged against
compulsory disclosure.14

Petitioner's Motion for Reconsideration was denied.

Unyielding, petitioner brought the instant Petition before us, on the sole issue of:

WHETHER THE COURT OF APPEALS RULED IN ACCORDANCE WITH PREVAILING LAWS AND JURISPRUDENCE WHEN IT
UPHELD THE RULING OF THE TRIAL COURT THAT THE CHEMICAL COMPONENTS OR INGREDIENTS OF RESPONDENT'S
PRODUCTS ARE TRADE SECRETS OR INDUSTRIAL SECRETS THAT ARE NOT SUBJECT TO COMPULSORY DISCLOSURE.15

Petitioner seeks to convince this Court that it has a right to obtain the chemical composition and ingredients of
respondent's products to conduct a comparative analysis of its products. Petitioner assails the conclusion reached by the
Court of Appeals that the matters are trade secrets which are protected by law and beyond public scrutiny. Relying on
Section 1, Rule 27 of the Rules of Court, petitioner argues that the use of modes of discovery operates with desirable
flexibility under the discretionary control of the trial court. Furthermore, petitioner posits that its request is not done in
bad faith or in any manner as to annoy, embarrass, or oppress respondent.

A trade secret is defined as a plan or process, tool, mechanism or compound known only to its owner and those of his
employees to whom it is necessary to confide it.16 The definition also extends to a secret formula or process not patented,
but known only to certain individuals using it in compounding some article of trade having a commercial value.17 A trade
secret may consist of any formula, pattern, device, or compilation of information that: (1) is used in one's business; and
(2) gives the employer an opportunity to obtain an advantage over competitors who do not possess the
information.18 Generally, a trade secret is a process or device intended for continuous use in the operation of the business,
for example, a machine or formula, but can be a price list or catalogue or specialized customer list.19 It is indubitable that
trade secrets constitute proprietary rights. The inventor, discoverer, or possessor of a trade secret or similar innovation
has rights therein which may be treated as property, and ordinarily an injunction will be granted to prevent the disclosure
of the trade secret by one who obtained the information "in confidence" or through a "confidential
relationship."20 American jurisprudence has utilized the following factors21 to determine if an information is a trade secret,
to wit:

(1) the extent to which the information is known outside of the employer's business;

(2) the extent to which the information is known by employees and others involved in the business;
(3) the extent of measures taken by the employer to guard the secrecy of the information;

(4) the value of the information to the employer and to competitors;

(5) the amount of effort or money expended by the company in developing the information; and cralawlibrary

(6) the extent to which the information could be easily or readily obtained through an independent source.22

In Cocoland Development Corporation v. National Labor Relations Commission,23 the issue was the legality of an
employee's termination on the ground of unauthorized disclosure of trade secrets. The Court laid down the rule that any
determination by management as to the confidential nature of technologies, processes, formulae or other so-called trade
secrets must have a substantial factual basis which can pass judicial scrutiny. The Court rejected the employer's naked
contention that its own determination as to what constitutes a trade secret should be binding and conclusive upon the
NLRC. As a caveat, the Court said that to rule otherwise would be to permit an employer to label almost anything a trade
secret, and thereby create a weapon with which he/it may arbitrarily dismiss an employee on the pretext that the latter
somehow disclosed a trade secret, even if in fact there be none at all to speak of.24 Hence, in Cocoland, the parameters in
the determination of trade secrets were set to be such substantial factual basis that can withstand judicial scrutiny.

The chemical composition, formulation, and ingredients of respondent's special lubricants are trade secrets within the
contemplation of the law. Respondent was established to engage in the business of general manufacturing and selling of,
and to deal in, distribute, sell or otherwise dispose of goods, wares, merchandise, products, including but not limited to
industrial chemicals, solvents, lubricants, acids, alkalies, salts, paints, oils, varnishes, colors, pigments and similar
preparations, among others. It is unmistakable to our minds that the manufacture and production of respondent's
products proceed from a formulation of a secret list of ingredients. In the creation of its lubricants, respondent expended
efforts, skills, research, and resources. What it had achieved by virtue of its investments may not be wrested from
respondent on the mere pretext that it is necessary for petitioner's defense against a collection for a sum of money. By
and large, the value of the information to respondent is crystal clear. The ingredients constitute the very fabric of
respondent's production and business. No doubt, the information is also valuable to respondent's competitors. To compel
its disclosure is to cripple respondent's business, and to place it at an undue disadvantage. If the chemical composition of
respondent's lubricants are opened to public scrutiny, it will stand to lose the backbone on which its business is founded.
This would result in nothing less than the probable demise of respondent's business. Respondent's proprietary interest
over the ingredients which it had developed and expended money and effort on is incontrovertible. Our conclusion is that
the detailed ingredients sought to be revealed have a commercial value to respondent. Not only do we acknowledge the
fact that the information grants it a competitive advantage; we also find that there is clearly a glaring intent on the part of
respondent to keep the information confidential and not available to the prying public.

We now take a look at Section 1, Rule 27 of the Rules of Court, which permits parties to inspect documents or things upon
a showing of good cause before the court in which an action is pending. Its entire provision reads:

SECTION 1. Motion for production or inspection order. - Upon motion of any party showing good cause therefore, the
court in which an action is pending may (a) order any party to produce and permit the inspection and copying or
photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, letters,
photographs, objects or tangible things, not privileged, which constitute or contain evidence material to any matter
involved in the action and which are in his possession, custody or control; or (b) order any party to permit entry upon
designated land or other property in his possession or control for the purpose of inspecting, measuring, surveying, or
photographing the property or any designated relevant object or operation thereon. The order shall specify the time, place
and manner of making the inspection and taking copies and photographs, and may prescribe such terms and conditions as
are just.

A more than cursory glance at the above text would show that the production or inspection of documents or things as a
mode of discovery sanctioned by the Rules of Court may be availed of by any party upon a showing of good cause
therefor before the court in which an action is pending. The court may order any party: a) to produce and permit the
inspection and copying or photographing of any designated documents, papers, books, accounts, letters, photographs,
objects or tangible things, which are not privileged;25 which constitute or contain evidence material to any matter involved
in the action; and which are in his possession, custody or control; or b) to permit entry upon designated land or other
property in his possession or control for the purpose of inspecting, measuring, surveying, or photographing the property
or any designated relevant object or operation thereon.

Rule 27 sets an unequivocal proviso that the documents, papers, books, accounts, letters, photographs, objects or
tangible things that may be produced and inspected should not be privileged.26 The documents must not be privileged
against disclosure.27 On the ground of public policy, the rules providing for production and inspection of books and papers
do not authorize the production or inspection of privileged matter; that is, books and papers which, because of their
confidential and privileged character, could not be received in evidence.28 Such a condition is in addition to the requisite
that the items be specifically described, and must constitute or contain evidence material to any matter involved in the
action and which are in the party's possession, custody or control.
Section 2429 of Rule 130 draws the types of disqualification by reason of privileged communication, to wit: (a)
communication between husband and wife; (b) communication between attorney and client; (c) communication between
physician and patient; (d) communication between priest and penitent; and (e) public officers and public interest. There
are, however, other privileged matters that are not mentioned by Rule 130. Among them are the following: (a) editors
may not be compelled to disclose the source of published news; (b) voters may not be compelled to disclose for whom
they voted; (c) trade secrets; (d) information contained in tax census returns; and (d) bank deposits.30

We, thus, rule against the petitioner. We affirm the ruling of the Court of Appeals which upheld the finding of the RTC that
there is substantial basis for respondent to seek protection of the law for its proprietary rights over the detailed chemical
composition of its products.

That trade secrets are of a privileged nature is beyond quibble. The protection that this jurisdiction affords to trade secrets
is evident in our laws. The Interim Rules of Procedure on Government Rehabilitation, effective 15 December 2000, which
applies to: (1) petitions for rehabilitation filed by corporations, partnerships, and associations pursuant to Presidential
Decree No. 902-A,31 as amended; and (2) cases for rehabilitation transferred from the Securities and Exchange
Commission to the RTCs pursuant to Republic Act No. 8799, otherwise known as The Securities Regulation Code,
expressly provides that the court may issue an order to protect trade secrets or other confidential research, development,
or commercial information belonging to the debtor.32 Moreover, the Securities Regulation Code is explicit that the
Securities and Exchange Commission is not required or authorized to require the revelation of trade secrets or processes
in anyapplication, report or document filed with the Commission.33 This confidentiality is made paramount as a limitation
to the right of any member of the general public, upon request, to have access to all information filed with the
Commission.34

Furthermore, the Revised Penal Code endows a cloak of protection to trade secrets under the following articles:

Art. 291. Revealing secrets with abuse of office. - The penalty of arresto mayor and a fine not exceeding 500 pesos shall
be imposed upon any manager, employee or servant who, in such capacity, shall learn the secrets of his principal or
master and shall reveal such secrets.

Art. 292. Revelation of industrial secrets. - The penalty of prision correccional in its minimum and medium periods and a
fine not exceeding 500 pesos shall be imposed upon the person in charge, employee or workman of any manufacturing or
industrial establishment who, to the prejudice of the owner thereof, shall reveal the secrets of the industry of 
the latter.

Similarly, Republic Act No. 8424, otherwise known as the National Internal Revenue Code of 1997, has a restrictive
provision on trade secrets, penalizing the revelation thereof by internal revenue officers or employees, to wit:

SECTION 278. Procuring Unlawful Divulgence of Trade Secrets. - Any person who causes or procures an officer or
employee of the Bureau of Internal Revenue to divulge any confidential information regarding the business, income or
inheritance of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties, and which it is
unlawful for him to reveal, and any person who publishes or prints in any manner whatever, not provided by law, any
income, profit, loss or expenditure appearing in any income tax return, shall be punished by a fine of not more than two
thousand pesos (P2,000), or suffer imprisonment of not less than six (6) months nor more than five (5) years, or both.

Republic Act No. 6969, or the Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990, enacted to
implement the policy of the state to regulate, restrict or prohibit the importation, manufacture, processing, sale,
distribution, use and disposal of chemical substances and mixtures that present unreasonable risk and/or injury to health
or the environment, also contains a provision that limits the right of the public to have access to records, reports
or information concerning chemical substances and mixtures including safety data submitted and data on
emission or discharge into the environment, if the matter is confidential such that it would divulge trade
secrets, production or sales figures; or methods, production or processes unique to such manufacturer,
processor or distributor; or would otherwise tend to affect adversely the competitive position of such
manufacturer, processor or distributor.35

Clearly, in accordance with our statutory laws, this Court has declared that intellectual and industrial property rights cases
are not simple property cases.36 Without limiting such industrial property rights to trademarks and trade names, this Court
has ruled that all agreements concerning intellectual property are intimately connected with economic development.37 The
protection of industrial property encourages investments in new ideas and inventions and stimulates creative efforts for
the satisfaction of human needs. It speeds up transfer of technology and industrialization, and thereby bring about social
and economic progress.38 Verily, the protection of industrial secrets is inextricably linked to the advancement of our
economy and fosters healthy competition in trade.

Jurisprudence has consistently acknowledged the private character of trade secrets. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ
There is a privilege not to disclose one's trade secrets.39 Foremost, this Court has declared that trade secrets and banking
transactions are among the recognized restrictions to the right of the people to information as embodied in the
Constitution.40 We said that the drafters of the Constitution also unequivocally affirmed that, aside from national security
matters and intelligence information, trade or industrial secrets (pursuant to the Intellectual Property Code and other
related laws) as well as banking transactions (pursuant to the Secrecy of Bank Deposits Act), are also exempted from
compulsory disclosure.41

Significantly, our cases on labor are replete with examples of a protectionist stance towards the trade secrets of
employers. For instance, this Court upheld the validity of the policy of a pharmaceutical company prohibiting its
employees from marrying employees of any competitor company, on the rationalization that the company has a right to
guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information
from competitors.42 Notably, it was in a labor-related case that this Court made a stark ruling on the proper determination
of trade secrets.

In the case at bar, petitioner cannot rely on Section 7743 of Republic Act 7394, or the Consumer Act of the Philippines, in
order to compel respondent to reveal the chemical components of its products. While it is true that all consumer products
domestically sold, whether manufactured locally or imported, shall indicate their general make or active ingredients in
their respective labels of packaging, the law does not apply to respondent. Respondent's specialized lubricants - - namely,
Contact Grease, Connector Grease, Thixohtropic Grease, Di-Electric Strength Protective Coating, Dry Lubricant and Anti-
Seize Compound - - are not consumer products. "Consumer products," as it is defined in Article 4(q),44 refers to goods,
services and credits, debts or obligations which are primarily for personal, family, household or agricultural purposes,
which shall include, but not be limited to, food, drugs, cosmetics, and devices. This is not the nature of respondent's
products. Its products are not intended for personal, family, household or agricultural purposes. Rather, they are for
industrial use, specifically for the use of aircraft propellers and engines.

Petitioner's argument that Republic Act No. 8203, or the Special Law on Counterfeit Drugs, requires the disclosure of the
active ingredients of a drug is also on faulty ground.45 Respondent's products are outside the scope of the cited law. They
do not come within the purview of a drug46 which, as defined therein, refers to any chemical compound or biological
substance, other than food, that is intended for use in the treatment, prevention or diagnosis of disease in man or
animals. Again, such are not the characteristics of respondent's products.

What is clear from the factual findings of the RTC and the Court of Appeals is that the chemical formulation of
respondent's products is not known to the general public and is unique only to it. Both courts uniformly ruled that these
ingredients are not within the knowledge of the public. Since such factual findings are generally not reviewable by this
Court, it is not duty-bound to analyze and weigh all over again the evidence already considered in the proceedings
below.47 We need not delve into the factual bases of such findings as questions of fact are beyond the pale of Rule 45 of
the Rules of Court. Factual findings of the trial court when affirmed by the Court of Appeals, are binding and conclusive on
the Supreme Court.48

We do not find merit or applicability in petitioner's invocation of Section 1249 of the Toxic Substances and Hazardous and
Nuclear Wastes Control Act of 1990, which grants the public access to records, reports or information concerning chemical
substances and mixtures, including safety data submitted, and data on emission or discharge into the environment. To
reiterate, Section 1250 of said Act deems as confidential matters, which may not be made public, those that would
divulge trade secrets, including production or sales figures or methods; production or processes unique to such
manufacturer, processor or distributor, or would otherwise tend to affect adversely the competitive position of such
manufacturer, processor or distributor. It is true that under the same Act, the Department of Environment and Natural
Resources may release information; however, the clear import of the law is that said authority is limited by the right to
confidentiality of the manufacturer, processor or distributor, which information may be released only to a medical
research or scientific institution where the information is needed for the purpose of medical diagnosis or treatment of a
person exposed to the chemical substance or mixture. The right to confidentiality is recognized by said Act as primordial.
Petitioner has not made the slightest attempt to show that these circumstances are availing in the case at bar.

Indeed, the privilege is not absolute; the trial court may compel disclosure where it is indispensable for doing justice.51 We
do not, however, find reason to except respondent's trade secrets from the application of the rule on privilege. The
revelation of respondent's trade secrets serves no better purpose to the disposition of the main case pending with the
RTC, which is on the collection of a sum of money. As can be gleaned from the facts, petitioner received respondent's
goods in trade in the normal course of business. To be sure, there are defenses under the laws of contracts and sales
available to petitioner. On the other hand, the greater interest of justice ought to favor respondent as the holder of trade
secrets. If we were to weigh the conflicting interests between the parties, we rule in favor of the greater interest of
respondent. Trade secrets should receive greater protection from discovery, because they derive economic value from
being generally unknown and not readily ascertainable by the public.52 To the mind of this Court, petitioner was not able
to show a compelling reason for us to lift the veil of confidentiality which shields respondent's trade secrets.

WHEREFORE, the Petition is DENIED. The Decision dated 16 February 2006, and the Resolution dated 25 May 2006, of
the Court of Appeals in CA-G.R. SP No. 86329 are AFFIRMED. No costs.
SO ORDERED.