SEC Cancels Third Party Company Names Using YAHOO and Variations Thereof

December 1, 2015

After a nearly 9-year effort, Yahoo! Inc. has finally prevailed in cancelling corporate names that use YAHOO! and variations thereof in a case filed with the Securities and Exchange Commission (“SEC” or “Commission”).

In February 2006, Yahoo! Inc. petitioned the SEC to cancel the corporate names of six (6) corporations on the ground that the unauthorized use of YAHOO or variations thereof, as corporate names, violated the trademark rights of Yahoo! Inc.  The petition claimed that Yahoo! Inc. was the first to use and adopt the YAHOO! name and that the unauthorized use thereof violated its right as owner of this trademark, which has already been declared as famous by the Department of Trade and Industry (“DTI”).

The Petition was directed against these corporations: Yahoo Food Industries Inc., Yahoo Computer Center Co., Yahoo Trading Co., Yahoo Transport Inc., Yaho Corporation and Yaho Sales International Corporation (collectively, the “Respondents”).

Initially, the SEC’s Office of the General Counsel (OGC) ruled against Yahoo! Inc. but on appeal to the SEC En Banc, that ruling was reversed.

In the decision of the SEC En Banc, the Commission initially cited Section 18 of the Corporation Code, which states that a corporate name is not allowed if it 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.  According to the SEC, to qualify under Section 18, the petitioner must prove that it acquired prior right over the use of such corporate name, and that the proposed name is either (i) identical, (ii) deceptively or confusingly similar to any existing corporation or to any other name already protected by law, or (iii) is patently deceptive, confusing or contrary to existing law.

The SEC ruled that Yahoo! Inc. has prior right to the name “YAHOO!” because the evidence showed that Yahoo! Inc. was incorporated in the United States in 1995, a date which precedes the dates of incorporation of all the Respondents except for Yaho Sales International Corporation (“YSIC”), which was incorporated in 1987.

The SEC likewise considered the dates of the filing of Yahoo, Inc.’s YAHOO! trademark applications with the Intellectual Property Office, citing Section 123.1(d) of the IP Code where a prior application bars a later filed application.  In this case, the filing dates of the YAHOO! applications precede the dates of incorporation of all Respondents except YSIC.  The SEC ruled that the date of filing of a trademark application is the controlling date in determining priority of adoption of trade names or trademarks.

The SEC further commented that even if Yahoo! Inc. filed its trademarks after Respondents’ dates of incorporation, that may not matter because here evidence of prior and continuous use in trade and commerce can prove ownership over a trade name or trademark.  In this case, Yahoo! Inc. claimed that it is the prior user of YAHOO! and, since Respondents failed to contest the appeal, they are deemed to have admitted Yahoo! Inc.’s claim of prior use.

The decision also discussed the application of Article 6bis of the Paris Convention, which provides protection to well-known marks against any reproduction, imitation or translation that would create confusion.  According to the SEC, this treaty obligation is already implemented through Sections 123(e) and (f) of the IP Code.  It then cited two Supreme Court cases, wherein it was held that marks identical or confusingly similar to well-known marks are prohibited from registration, even if those marks are used on entirely unrelated goods or services.

Yahoo! Inc. presented a copy of a decision of the Department of Trade & Industry (“DTI”) dated October 1, 2007 declaring YAHOO! as an internationally famous trademark. The SEC considered this evidence in ruling that the status of YAHOO! as an internationally well-known mark grants to it the protection of law against any infringement.  That protection extends even to unrelated goods and services.  It then concluded that YAHOO! is protected because the Respondents’ corporate names contain the dominant words “YAHOO!” and “YAHO!” and, that protection holds true regardless of whether Respondent corporations’ services are unrelated to those of Yahoo! Inc.

This case is noteworthy because it is one of the few times in which the SEC has not only used the Corporation Code, but also the IP Code to revoke or amend confusingly similar trade names.  The decision also follows the well-established precedent regarding the expanded protection given to internationally famous marks. This case provides owners of famous marks another avenue in which they could enforce their trademark rights.  However, given that this case took almost a decade to be decided, trademark owners may not find the SEC route as an efficient option for trademark enforcement.

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