4 Societe Des Produits Nestle V Dy

10/31/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 627

G.R. No. 172276. August 9, 2010.*
SOCIETE DES PRODUITS NESTLE, S.A., petitioner, vs.

MARTIN T. DY, JR., respondent.
Intellectual Property Code of the Philippines; Trademarks; Trademark

Infringement; The element of likelihood of confusion is the gravamen of
trademark infringement; Two types of confusion in trademark infringement:
confusion of goods and confusion of business; two types of confusion
distinguished.—Among the elements, the element of likelihood of confusion
is the gravamen of trademark infringement. There are two types of
confusion in trademark infringement: confusion of goods and confusion of
business. In Sterling Products International, Inc. v. Farbenfabriken Bayer
Aktiengesellschaft, 27 SCRA 1214 (1969), the Court distinguished the two
types of confusion: Callman notes two types of confusion. The first is the
confusion of goods “in which event the ordinarily prudent purchaser would
be induced to purchase one product in the belief that he was purchasing the
other.” In which case, “defendant’s goods are then bought as the plaintiff’s,
and the poorer quality of the former reflects adversely on the plaintiff’s
reputation.” The other is the confusion of business: “Here though the goods
of the parties are different, the defendant’s product is such as might
reasonably be assumed to originate with the plaintiff, and the public would
then be deceived either into that belief or into the belief that there is some
connection between the plaintiff and defendant which, in fact, does not
exist.”
_______________
* SECOND DIVISION.
224
224 SUPREME COURT REPORTS ANNOTATED

Societe Des Produits Nestle, S.A. vs. Dy, Jr.
http://www.central.com.ph/sfsreader/session/00000166ca1876abb2c766b1003600fb002c009e/t/?o=False 1/21
Same; Same; Same; Two Tests to Determine Likelihood of Confusion;

the Dominancy test and Holistic Test.—There are two tests to determine
likelihood of confusion: the dominancy test and holistic test. The dominancy
test focuses on the similarity of the main, prevalent or essential features of
the competing trademarks that might cause confusion. Infringement takes
place when the competing trademark contains the essential features of
another. Imitation or an effort to imitate is unnecessary. The question is
whether the use of the marks is likely to cause confusion or deceive
purchasers. The holistic test considers the entirety of the marks, including
labels and packaging, in determining confusing similarity. The focus is not
only on the predominant words but also on the other features appearing on
the labels.
Same; Same; Same; Dominancy test is applicable in the present case.
—In the light of the facts of the present case, the Court holds that the
dominancy test is applicable. In recent cases with similar factual milieus, the
Court has consistently applied the dominancy test. In Prosource
International, Inc., the Court applied the dominancy test in holding that
“PCO-GENOLS” is confusingly similar to “PYCNOGENOL.”
Same; Same; Same; Court finds that “ NANNY” is confusingly similar
to “ NAN.” —Applying the dominancy test in the present case, the Court
finds that “NANNY” is confusingly similar to “NAN.” “NAN” is the
prevalent feature of Nestle’s line of infant powdered milk products. It is
written in bold letters and used in all products. The line consists of PRE-
NAN, NAN-H.A., NAN-1, and NAN-2. Clearly, “NANNY” contains the
prevalent feature “NAN.” The first three letters of “NANNY” are exactly
the same as the letters of “NAN.” When “NAN” and “NANNY” are
pronounced, the aural effect is confusingly similar.
Same; Same; Same; In determining the issue of confusing similarity,
the Court takes into account the AURAL effect of the letters contained in the
marks.—In determining the issue of confusing similarity, the Court takes
into account the aural effect of the letters contained in the marks. In Marvex
Commercial Company, Inc. v. Petra Hawpia & Company, 18 SCRA 1178
(1966), the Court held: It is our considered view that the trademarks
“SALONPAS” and “LIONPAS” are confusingly similar in sound. Both
these words have
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VOL. 627, AUGUST 9, 2010 225

the same suffix, “PAS”, which is used to denote a plaster that adheres to the
body with curative powers. “PAS,” being merely descriptive, furnishes no
indication of the origin of the article and therefore is open for appropriation
by anyone (Ethepa vs. Director of Patents, L-20635, March 31, 1966) and
may properly become the subject of a trademark by combination with

another word or phrase.
Same; Same; Same; The scope of protection extends to protection from
infringers with related goods, and to market areas that are the normal
expansion of business of the registered trademark owners.—The scope of
protection afforded to registered trademark owners is not limited to
protection from infringers with identical goods. The scope of protection
extends to protection from infringers with related goods, and to market areas
that are the normal expansion of business of the registered trademark
owners.
Same; Same; Same; Factors in Determining whether Goods are
Related.—In Mighty Corporation v. E. & J. Gallo Winery, 434 SCRA 473
(2004), the Court held that, “Non-competing goods may be those which,
though they are not in actual competition, are so related to each other that it
can reasonably be assumed that they originate from one manufacturer, in
which case, confusion of business can arise out of the use of similar marks.”
In that case, the Court enumerated factors in determining whether goods are
related: (1) classification of the goods; (2) nature of the goods; (3)
descriptive properties, physical attributes or essential characteristics of the
goods, with reference to their form, composition, texture or quality; and (4)
style of distribution and marketing of the goods, including how the goods
are displayed and sold.
PETITION for review on certiorari of the decision and resolution of

the Court of Appeals.
The facts are stated in the opinion of the Court.
Sapalo, Velez, Bundang and Bulilan Law Offices for petitioner.
Frederick Bustamante for respondent.
226

CARPIO, J.:
The Case

This is a petition1 for review on certiorari under Rule 45 of the
Rules of Court. The petition challenges the 1 September 2005
Decision2 and 4 April 2006 Resolution3 of the Court of Appeals in
CA-G.R. CV No. 62730, finding respondent Martin T. Dy, Jr. (Dy,
Jr.) not liable for trademark infringement. The Court of Appeals
reversed the 18 September 1998 Decision4 of the Regional Trial
Court (RTC), Judicial Region 7, Branch 9, Cebu City, in Civil Case

No. CEB-19345.
The F acts

Petitioner Societe Des Produits Nestle, S.A. (Nestle) is a foreign
corporation organized under the laws of Switzerland. It
manufactures food products and beverages. As evidenced by
Certificate of Registration No. R-146215 issued on 7 April 1969 by
the then Bureau of Patents, Trademarks and Technology Transfer,
Nestle owns the “NAN” trademark for its line of infant powdered
milk products, consisting of PRE-NAN, NAN-H.A., NAN-1, and
NAN-2. NAN is classified under Class 6—“diatetic preparations for
infant feeding.”
Nestle distributes and sells its NAN milk products all over the
Philippines. It has been investing tremendous amounts of resources
to train its sales force and to promote the NAN milk products
through advertisements and press releases.
_______________
1 Rollo, pp. 9-40.

2 Id., at pp. 44-51. Penned by Associate Justice Ramon M. Bato, Jr., with
Associate Justices Arsenio J. Magpale and Pampio A. Abarintos, concurring.
3 Id., at pp. 53-54.
4 Id., at pp. 55-62. Penned by Judge Benigno G. Gaviola.
5 Id., at pp. 96-99.
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VOL. 627, AUGUST 9, 2010 227


Dy, Jr. owns 5M Enterprises. He imports Sunny Boy powdered
milk from Australia and repacks the powdered milk into three sizes
of plastic packs bearing the name “NANNY.” The packs weigh 80,
180 and 450 grams and are sold for P8.90, P17.50 and P39.90,
respectively. NANNY is also classified under Class 6—“full cream
milk for adults in [sic] all ages.” Dy, Jr. distributes and sells the
powdered milk in Dumaguete, Negros Oriental, Cagayan de Oro,
and parts of Mindanao.
In a letter dated 1 August 1985, Nestle requested Dy, Jr. to refrain
from using “NANNY” and to undertake that he would stop
infringing the “NAN” trademark. Dy, Jr. did not act on Nestle’s
request. On 1 March 1990, Nestle filed before the RTC, Judicial
Region 7, Branch 31, Dumaguete City, a complaint6 against Dy, Jr.

for infringement. Dy, Jr. filed a motion7 to dismiss alleging that the
complaint did not state a cause of action. In its 4 June 1990 order,8
the trial court dismissed the complaint. Nestle appealed the 4 June
1990 order to the Court of Appeals. In its 16 February 1993
Resolution, the Court of Appeals set aside the 4 June 1990 order and
remanded the case to the trial court for further proceedings.
Pursuant to Supreme Court Administrative Order No. 113-95,
Nestle filed with the trial court a motion9 to transfer the case to the
RTC, Judicial Region 7, Branch 9, Cebu City, which was designated
as a special court for intellectual property rights.
The RTC’s Ruling

In its 18 September 1998 Decision, the trial court found Dy, Jr.
liable for infringement. The trial court held:
_______________
6 Id., at pp. 63-65.

7 Id., at pp. 66-73.
8 Id., at pp. 74-78.
9 Id., at pp. 130-133.
228

“If determination of infringement shall only be limited on whether or not

the mark used would likely cause confusion or mistake in the minds of the
buying public or deceive customers, such in [sic] the most considered view
of this forum would be highly unlikely to happen in the instant case. This is
because upon comparison of the plaintiff’s NAN and defendant’s NANNY,
the following features would reveal the absence of any deceptive tendency
in defendant’s NANNY: (1) all NAN products are contained tin cans [sic],
while NANNY are contained in plastic packs; (2) the predominant colors
used in the labels of NAN products are blue and white, while the
predominant colors in the plastic packings of NANNY are blue and green;
(3) the labels of NAN products have at the bottom portion an elliptical
shaped figure containing inside it a drawing of nestling birds, which is
overlapped by the trade-name “Nestle”, while the plastic packs of NANNY
have a drawing of milking cows lazing on a vast green field, back-dropped
with snow covered mountains; (4) the word NAN are [sic] all in large,
formal and conservative-like block letters, while the word NANNY are [sic]
all in small and irregular style of letters with curved ends; and (5) all NAN
products are milk formulas intended for use of [sic] infants, while NANNY
is an instant full cream powdered milk intended for use of [sic] adults.
The foregoing has clearly shown that infringement in the instant case
cannot be proven with the use of the “test of dominancy” because the
deceptive tendency of the unregistered trademark NANNY is not apparent
from the essential features of the registered trademark NAN.
However, in Esso Standard Eastern, Inc. vs. Court of Appeals, et al., L-
29971, Aug. 31, 1982, the Supreme Court took the occasion of discussing
what is implied in the definition of “infringement” when it stated: “Implicit
in this definition is the concept that the goods must be so related that there is
likelihood either of confusion of goods or business. x x x But as to whether
trademark infringement exists depends for the most part upon whether or
not the goods are so related that the public may be, or is actually, deceived
and misled that they came from the same maker or manufacturer. For non-
competing goods may be those which, though they are not in actual
competition, are so related to each other that it might reasonably be assumed
that they originate from one manufacturer. Non-competing goods may also
be those which, being
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VOL. 627, AUGUST 9, 2010 229

entirely unrelated, could not reasonably be assumed to have a common

source. In the former case of related goods, confusion of business could
arise out of the use of similar marks; in the latter case of non-related goods,
it could not.”
Furthermore, in said case the Supreme Court as well discussed on when
goods may become so related for purposes of infringement when it stated:
“Goods are related when they belong to the same class or have same
descriptive properties; when they possess the same physical attributes or
essential characteristics with reference to their form, composition, texture or
quality. They may also be related because they serve the same purpose or
are sold in grocery stores. x x x
Considering that defendant’s NANNY belongs to the same class as that
of plaintiff’s NAN because both are food products, the defendant’s
unregistered trade mark NANNY should be held an infringement to
plaintiff’s registered trademark NAN because defendant’s use of NANNY
would imply that it came from the manufacturer of NAN. Furthermore,
since the word “nanny” means a “child’s nurse,” there might result the not
so remote probability that defendant’s NANNY may be confused with infant
formula NAN despite the aparent [sic] disparity between the features of the
two products.”10

Dy, Jr. appealed the 18 September 1998 Decision to the Court of
Appeals.
The Court of Appeals’ Ruling

In its 1 September 2005 Decision, the Court of Appeals reversed
the trial court’s 18 September 1998 Decision and found Dy, Jr. not
liable for infringement. The Court of Appeals held:
[T]he trial court appeared to have made a finding that there is no colorable
imitation of the registered mark “NAN” in Dy’s use of “NANNY” for his
own milk packs. Yet it did not stop there. It continued on applying the
“concept of related goods.”
_______________
10 Id., at pp. 60-61.
230

The Supreme Court utlilized the “concept of related goods” in the said
case of Esso Standard Easter, Inc. versus Court of Appeals, et al. wherein
two contending parties used the same trademark “ESSO” for two different
goods, i.e. petroleum products and cigarettes. It rules that there is
infringement of trademark involving two goods bearing the same mark or
label, even if the said goods are non-competing, if and only if they are so
related that the public may be, or is actually, deceived that they originate
from the one maker or manufacturer. Since petroleum products and
cigarettes, in kind and nature, flow through different trade channels, and
since the possibility of confusion is unlikely in the general appearances of
each mark as a whole, the Court held in this case that they cannot be so
related in the context of infringement.
In applying the concept of related goods in the present case, the trial
court haphazardly concluded that since plaintiff-appellee’s NAN and
defendant-appellant’s NANNY belong to the same class being food
products, the unregistered NANNY should be held an infringement of
Nestle’s NAN because “the use of NANNY would imply that it came from
the manufacturer of NAN.” Said court went on to elaborate further: “since
the word “NANNY” means a “child’s nurse,” there might result the not so
remote probability that defendant’s NANNY may be confused with infant
formula NAN despite the aparent (sic) disparity between the features of the
two products as discussed above.”
The trial court’s application of the doctrine laid down by the Supreme
Court in the Esso Standard case aforementioned and the cases cited therein
is quite misplaced. The goods of the two contending parties in those cases
bear similar marks or labels: “Esso” for petroleum products and cigarettes,
“Selecta” for biscuits and milk, “X-7” for soap and perfume, lipstick and
nail polish. In the instant case, two dissimilar marks are involved—plaintiff-
appellee’s “NAN” and defendant-appellant’s “NANNY.” Obviously, the
concept of related goods cannot be utilized in the instant case in the same
way that it was used in the Esso Standard case.
In the Esso Standard case, the Supreme Court even cautioned judges that
in resolving infringement or trademark cases in the Philippines, particularly
in ascertaining whether one trademark is confusingly similar to or is a
colorable imitation of another, precedent must be studied in the light of the
facts of the particular case. Each case must be decided on its own merits. In
the more
231
VOL. 627, AUGUST 9, 2010 231

recent case of Societe Des Produits Nestle S.A. Versus Court of Appeals, the
High Court further stressed that due to the peculiarity of the facts of each
infringement case, a judicial forum should not readily apply a certain test or
standard just because of seeming similarities. The entire panoply of
elements constituting the relevant factual landscape should be
comprehensively examined.
While it is true that both NAN and NANNY are milk products and that
the word “NAN” is contained in the word “NANNY,” there are more glaring
dissimilarities in the entirety of their trademarks as they appear in their
respective labels and also in relation to the goods to which they are attached.
The discerning eye of the observer must focus not only on the predominant
words but also on the other features appearing in both labels in order that he
may draw his conclusion whether one is confusingly similar to the other.
Even the trial court found these glaring dissimilarities as above-quoted. We
need not add more of these factual dissimilarities.
NAN products, which consist of Pre-NAN, NAN-H-A, NAN-1 and
NAN-2, are all infant preparations, while NANNY is a full cream milk for
adults in [sic] all ages. NAN milk products are sold in tin cans and hence,
far expensive than the full cream milk NANNY sold in three (3) plastic
packs containing 80, 180 and 450 grams and worth P8.90, P17.50 and
P39.90 per milk pack. The labels of NAN products are of the colors blue
and white and have at the bottom portion an elliptical shaped figure
containing inside it a drawing of nestling birds, which is overlapped by the
trade-name “Nestle.” On the other hand, the plastic packs NANNY have a
drawing of milking cows lazing on a vast green field, back-dropped with
snow-capped mountains and using the predominant colors of blue and
green. The word NAN are [sic] all in large, formal and conservative-like
block letters, while the word NANNY are [sic] all in small and irregular
style of letters with curved ends. With these material differences apparent in
the packaging of both milk products, NANNY full cream milk cannot
possibly be an infringement of NAN infant milk.
Moreover, NAN infant milk preparation is more expensive than NANNY

instant full cream milk. The cheaper price of NANNY would give, at the
very first instance, a considerable warning to the ordinary purchaser on
whether he is buying an infant milk or a full cream milk for adults. A
cursory examination of the packaging would confirm the striking differences
between the products in question.
232

In view of the foregoing, we find that the mark NANNY is not

confusingly similar to NAN. Dy therefore cannot be held liable for
infringement.”11

Nestle filed a motion12 for reconsideration. In its 4 April 2006
Resolution, the Court of Appeals denied the motion for lack of
merit. Hence, the present petition.
Issue

The issue is whether Dy, Jr. is liable for infringement.
The Court’s Ruling

The petition is meritorious.
Section 22 of Republic Act (R.A.) No. 166, as amended, states:
“Infringement, what constitutes.—Any person who shall use, without the

consent of the registrant, any reproduction, counterfeit, copy or colorable
imitation of any registered mark or trade-name in connection with the sale,
offering for sale, or advertising of any goods, business or services on or in
connection with which such use is likely to cause confusion or mistake or to
deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or reproduce, counterfeit, copy or
colorably imitate any such mark or trade-name and apply such reproduction,
counterfeit, copy, or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used upon or in
connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.”

Section 155 of R.A. No. 8293 states:
“Remedies; Infringement.—Any person who shall, without the consent

of the owner of the registered mark:
_______________
11 Id., at pp. 48-50.

12 Id., at pp. 227-291.
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VOL. 627, AUGUST 9, 2010 233

155.1. Use in commerce any reproduction, counterfeit, copy, or

colorable imitation of a registered mark or the same container or a dominant
feature thereof in connection with the sale, offering for sale, distribution,
advertising of any goods or services including other preparatory steps
necessary to carry out the sale of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to
deceive; or
155.2. Reproduce, counterfeit, copy or colorably imitate a registered
mark or a dominant feature thereof and apply such reproduction, counterfeit,
copy or colorable imitation to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of
goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be liable in a civil action
for infringement by the registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the moment any of the acts
stated in Subsection 155.1 or this subsection are committed regardless of
whether there is actual sale of goods or services using the infringing
material.”

In Prosource International, Inc. v. Horphag Research
Management SA,13 the Court laid down the elements of infringement
under R.A. Nos. 166 and 8293:
“In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-

A, 9-A, and 20 thereof, the following constitute the elements of trademark
infringement:
“(a) A trademark actually used in commerce in the Philippines
and registered in the principal register of the Philippine Patent
Office[;]
(b) [It] is used by another person in connection with the sale,
offering for sale, or advertising of any goods, business or services or
in connection with which such use is likely to cause confusion or
mistake or to deceive purchasers or others as to the source or origin

of such goods or services, or identity of such business; or such
trademark is reproduced, counterfeited, copied or colorably imitated
by another person and such
_______________
13 G.R. No. 180073, 25 November 2009, 605 SCRA 523.
234

reproduction, counterfeit, copy or colorable imitation is applied to

labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such
goods, business or services as to likely cause confusion or mistake or
to deceive purchasers[;]
(c) [T]he trademark is used for identical or similar goods[;] and
(d) [S]uch act is done without the consent of the trademark
registrant or assignee.”
On the other hand, the elements of infringement under R.A. No. 8293 are
as follows:
(1) The trademark being infringed is registered in the Intellectual
Property Office; however, in infringement of trade name, the same need not
be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied,
or colorably imitated by the infringer;
(3) The infringing mark or trade name is used in connection with the
sale, offering for sale, or advertising of any goods, business or services; or
the infringing mark or trade name is applied to labels, signs, prints,
packages, wrappers, receptacles or advertisements intended to be used upon
or in connection with such goods, business or services;
(4) The use or application of the infringing mark or trade name is
likely to cause confusion or mistake or to deceive purchasers or others as to
the goods or services themselves or as to the source or origin of such goods
or services or the idenity of such business; and
(5) It is without the consent of the trademark or trade name owner or
the assignee thereof.”14

Among the elements, the element of likelihood of confusion is
the gravamen of trademark infringement.15 There are two types of
confusion in trademark infringement: confusion of
_______________
14 Id., at pp. 529-530.

15 Id., at p. 531.
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VOL. 627, AUGUST 9, 2010 235

goods and confusion of business.16 In Sterling Products Inter-

national, Inc. v. Farbenfabriken Bayer Aktiengesellschaft,17 the
Court distinguished the two types of confusion:
Callman notes two types of confusion. The first is the confusion of

goods “in which event the ordinarily prudent purchaser would be
induced to purchase one product in the belief that he was purchasing
the other.” In which case, “defendant’s goods are then bought as the
plaintiff’s, and the poorer quality of the former reflects adversely on
the plaintiff’s reputation.” The other is the confusion of business:
“Here though the goods of the parties are different, the defendant’s
product is such as might reasonably be assumed to originate with the
plaintiff, and the public would then be deceived either into that belief
or into the belief that there is some connection between the plaintiff
and defendant which, in fact, does not exist.”18

There are two tests to determine likelihood of confusion: the
dominancy test and holistic test. The dominancy test focuses on the
similarity of the main, prevalent or essential features of the
competing trademarks that might cause confusion. Infringement
takes place when the competing trademark contains the essential
features of another. Imitation or an effort to imitate is unnecessary.
The question is whether the use of the marks is likely to cause
confusion or deceive purchasers.19
The holistic test considers the entirety of the marks, including
labels and packaging, in determining confusing similarity. The focus
is not only on the predominant words but also on the other features
appearing on the labels.20
_______________
16 McDonald’s Corporation v. L.C. Big Mak Burger, Inc., 480 Phil. 402, 428; 437
SCRA 10, 27 (2004).
17 137 Phil. 838; 27 SCRA 1214 (1969).
18 Id., at p. 852; p. 1227.
19 Prosource Internaitonal, Inc. v. Horphag Research Management SA, supra note
13 at p. 531.
20 Id., at pp. 531-532.
236


In cases involving trademark infringement, no set of rules can be
deduced. Each case must be decided on its own merits.
Jurisprudential precedents must be studied in the light of the facts of
each particular case. In McDonald’s Corporation v. MacJoy
Fastfood Corporation,21 the Court held:
“In trademark cases, particularly in ascertaining whether one trademark

is confusingly similar to another, no set rules can be deduced because each
case must be decided on its merits. In such cases, even more than in any
other litigation, precedent must be studied in the light of the facts of the
particular case. That is the reason why in trademark cases, jurisprudential
precedents should be applied only to a case if they are specifically in
point.”22

In the light of the facts of the present case, the Court holds that
the dominancy test is applicable. In recent cases with similar factual
milieus, the Court has consistently applied the dominancy test. In
Prosource International, Inc., the Court applied the dominancy test
in holding that “PCO-GENOLS” is confusingly similar to
“PYCNOGENOL.” The Court held:
“The trial and appellate courts applied the Dominancy Test in

determining whether there was a confusing similarity between the marks
PYCNOGENOL and PCO-GENOL. Applying the test, the trial court found,
and the CA affirmed, that:
“Both the word[s] PYCNOGENOL and PCO-GENOLS have the
same suffix “GENOL” which on evidence, appears to be merely
descriptive and furnish no indication of the origin of the article and
hence, open for trademark registration by the plaintiff through
combination with another word or phrase such as PYCNOGENOL,
Exhibits “A” to “A-3.” Furthermore, although the letters “Y”
between P and C, “N” between O and C and “S” after L are missing
in the [petitioner’s] mark PCO-GENOLS, nevertheless, when the two
words are pronounced, the sound effects are confusingly similar not
to mention that they are both described by their manufacturers as a
food supplement
_______________
21 G.R. No. 166115, 2 February 2007, 514 SCRA 95.

22 Id., at p. 107.
237
VOL. 627, AUGUST 9, 2010 237

and thus, identified as such by their public consumers. And although

there were dissimilarities in the trademark due to the type of letters
used as well as the size, color and design employed on their
individual packages/bottles, still the close relationship of the
competing product’s name is sounds as they were pronounced,
clearly indicates that purchasers could be misled into believing that
they are the same and/or originates from a common source and
manufacturer.”
We find no cogent reason to depart from such conclusion.
This is not the first time the Court takes into account the aural effects of
the words and letters contained in the marks in determining the issue of
confusing similarity. In Marvex Commercial Co., Inc. v. Petra Hawpia &
Co., et al., cited in McDonald’s Corporation v. L.C. Big Mak Burger, Inc.,
the Court held:
“The following random list of confusingly similar sounds in the
matter of trademarks, culled from Nims, Unfair Competition and
Trade Marks, 1947, Vol. 1, will reinforce our view that
“SALONPAS” and “LIONPAS” are confusingly similar in sound:
“Gold Dust” and “”Gold Drop”; “Jantzen” and “Jass-Sea”; “Silver
Flash” and Supper Flash”; “Cascarete” and “Celborite”; “Celluloid”
and “Cellonite”; “Chartreuse” and Charseurs”; “Cutex” and
“Cuticlean”; “Hebe” and “Meje”; “Kotex” and “Femetex”; “Zuso”
and Hoo Hoo.” Leon Amdur, in his book “Trade-Mark Law and
Practice,” pp. 419-421, cities [sic], as coming within the purview of
the idem sonans rule, “Yusea” and “U-C-A,” “Steinway Pianos” and
“Steinberg Pianos,” and “Seven-Up” and “Lemon-Up.” In Co Tiong
vs. Director of Patents, this Court unequivocally said that “Celdura”
and “Condura” are confusingly similar in sound; this Court held in
Sapolin Co. vs. Balmaceda, 67 Phil. 795 that the name “Lusolin” is
an infringement of the trademark “Sapolin,” as the sound of the two
names is almost the same.”23

In McDonald’s Corporation v. MacJoy Fastfood Corporation, the
Court applied the dominancy test in holding that “MACJOY” is
confusingly similar to “MCDONALD’S.” The Court held:
_______________
23 Supra note 13 at pp. 532-533.
238

“While we agree with the CA’s detailed enumeration of differences

between the two (2) competing trademarks herein involved, we believe that
the holistic test is not the one applicable in this case, the dominancy test
being the one more suitable. In recent cases with a similar factual milieu as
here, the Court has consistently used and applied the dominancy test in
determining confusing similarity or likelihood of confusion between
competing trademarks.
x x x x
Applying the dominancy test to the instant case, the Court finds that
herein petitioner’s “MCDONALD’S” and respondent’s “MACJOY” marks
are are (sic) confusingly similar with each other that an ordinary purchaser
can conclude an association or relation between the marks.
To begin with, both marks use the corporate “M” design logo and the
prefixes “Mc” and/or “Mac” as dominant features. x x x
For sure, it is the prefix “Mc,” and abbreviation of “Mac,” which visually
and aurally catches the attention of the consuming public. Verily, the word
“MACJOY” attracts attention the same way as did “McDonalds,”
“MacFries,” “McSpaghetti,” “McDo,” “Big Mac” and the rest of the
MCDONALD’S marks which all use the prefixes Mc and/or Mac.
Besides and most importantly, both trademarks are used in the sale of
fastfood products. Indisputably, the respondent’s trademark application for
the “MACJOY & DEVICE” trademark covers goods under Classes 29 and
30 of the International Classification of Goods, namely, fried chicken,
chicken barbeque, burgers, fries, spaghetti, etc. Likewise, the petitioner’s
trademark registration for the MCDONALD’S marks in the Philippines
covers goods which are similar if not identical to those covered by the
respondent’s application.”24

In McDonald’s Corporation v. L.C. Big Mak Burger, Inc., the
Court applied the dominancy test in holding that “BIG MAK” is
confusingly similar to “BIG MAC.” The Court held:
“This Court x x x has relied on the dominancy test rather than the holistic
test. The dominancy test considers the dominant features
_______________
24 Supra note 21 at pp. 107-109.
239
VOL. 627, AUGUST 9, 2010 239

in the competing marks in determining whether they are confusingly similar.

Under the dominancy test, courts give greater weight to the similarity of the
appearance of the product arising from the adoption of the dominant
features of the registered mark, disregarding minor differences. Courts will
consider more the aural and visual impressions created by the marks in the
public mind, giving little weight to factors like prices, quality, sales outlets
and market segments.
Thus, in the 1954 case of Co Tiong Sa v. Director of Patents, the Court
ruled:
x x x It has been consistently held that the question of
infringement of a trademark is to be determined by the test of
dominancy. Similarity in size, form and color, while relevant, is not
conclusive. If the competing trademark contains the main or essential
or dominant features of another, and confusion and deception is
likely to result, infringement takes place. Duplication or imitation is
not necessary; nor is it necessary that the infringing label should
suggest an effort to imitate. (G. Heilman Brewing Co. vs.
Independent Brewing Co., 191 F., 489, 495, citing Eagle White Lead
Co. vs. Pflugh (CC), 180 Fed. 579). The question at issue in cases of
infringement of trademarks is whether the use of the marks involved
would be likely to cause confusion or mistakes in the mind of the
public or deceive purchasers. (Auburn Rubber Corporation vs.
Honover Rubber Co., 107 F. 2d 588; x x x)
x x x x
The test of dominancy is now explicitly incorporated into law in Section
155.1 of the Intellectual Property Code which defines infringement as the
“colorable imitation of a registered mark x x x or a dominant feature
thereof.”
Applying the dominancy test, the Court finds that respondents’ use of the
“Big Mak” mark results in likelihood of confusion. First, “Big Mak” sounds
exactly the same as “Big Mac.” Second, the first word in “Big Mak” is
exactly the same as the first word in “Big Mac.” Third, the first two letters
in “Mak” are the same as the first two letters in “Mac.” Fourth, the last letter
“Mak” while a “k” sounds the same as “c” when the word “Mak” is
pronounced. Fifth, in Filipino,
240

the letter “k” replaces “c” in spelling, thus “Caloocan” is spelled

“Kalookan.”25

In Societe Des Produits Nestle, S.A v. Court of Appeals,26 the
Court applied the dominancy test in holding that “FLAVOR
MASTER” is confusingly similar to “MASTER ROAST” and
“MASTER BLEND.” The Court held:
While this Court agrees with the Court of Appeals’ detailed enumeration
of differences between the respective trademarks of the two coffee products,
this Court cannot agree that totality test is the one applicable in this case.
Rather, this Court believes that the dominancy test is more suitable to this
case in light of its peculiar factual milieu.
Moreover, the totality or holistic test is contrary to the elementary
postulate of the law on trademarks and unfair competition that confusing
similarity is to be determined on the basis of visual, aural, connotative
comparisons and overall impressions engendered by the marks in
controversy as they are encountered in the realities of the marketplace. The
totality or holistic test only relies on visual comparison between two
trademarks whereas the dominancy test relies not only on the visual but also
on the aural and connotative comparisons and overall impressions between
the two trademarks.
For this reason, this Court agrees with the BPTTT when it applied the
test of dominancy and held that:
From the evidence at hand, it is sufficiently established that the
word MASTER is the dominant feature of opposer’s mark. The word
MASTER is printed across the middle portion of the label in bold
letters almost twice the size of the printed word ROAST. Further, the
word MASTER has always been given emphasis in the TV and radio
commercials and other advertisements made in promoting the
product. x x x In due time, because of these advertising schemes the
mind of the buying public had come to learn to associate the word
MASTER with the opposer’s goods.
_______________
25 Supra note 16 at pp. 433-435; pp. 32-33.

26 408 Phil. 307; 356 SCRA 207 (2001).
241
VOL. 627, AUGUST 9, 2010 241

x x x. It is the observation of this Office that much of the

dominance which the word MASTER has acquired through
Opposer’s advertising schemes is carried over when the same is
incorporated into respondent-applicant’s trademark FLAVOR
MASTER. Thus, when one looks at the label bearing the trademark
FLAVOR MASTER (exh. 4) one’s attention is easily attracted to the
word MASTER, rather than to the dissimilarities that exist.
Therefore, the possibility of confusion as to the goods which bear the
competing marks or as to the origins thereof is not farfetched.”27

Applying the dominancy test in the present case, the Court finds
that “NANNY” is confusingly similar to “NAN.” “NAN” is the
prevalent feature of Nestle’s line of infant powdered milk products.
It is written in bold letters and used in all products. The line consists
of PRE-NAN, NAN-H.A., NAN-1, and NAN-2. Clearly, “NANNY”

contains the prevalent feature “NAN.” The first three letters of
“NANNY” are exactly the same as the letters of “NAN.” When
“NAN” and “NANNY” are pronounced, the aural effect is
confusingly similar.
In determining the issue of confusing similarity, the Court takes
into account the aural effect of the letters contained in the marks.28
In Marvex Commercial Company, Inc. v. Petra Hawpia &
Company,29 the Court held:
“It is our considered view that the trademarks “SALONPAS” and

“LIONPAS” are confusingly similar in sound.
Both these words have the same suffix, “PAS”, which is used to denote a
plaster that adheres to the body with curative powers. “PAS,” being merely
descriptive, furnishes no indication of the origin of the article and therefore
is open for appropriation by anyone (Ethepa vs. Director of Patents, L-
20635, March 31, 1966) and may
_______________
27 Id., at pp. 324-325; pp. 221-222.

28 Prosource International, Inc. v. Horphag Research Management SA, supra note
13 at p. 532; McDonald’s Corporation v. L.C. Mak Burger Inc., supra note 16 at p.
435; p. 33.
29 125 Phil. 295; 18 SCRA 1178 (1966).
242

properly become the subject of a trademark by combination with another

word or phrase.
x x x x
The following random list of confusingly similar sounds in the matter of
trademarks, culled from Nims, Unfair Competition and Trade Marks, 1947,
Vol. 1, will reinforce our view that “SALONPAS” and “LIONPAS” are
confusingly similar in sound: “Gold Dust” and “”Gold Drop”; “Jantzen” and
“Jass-Sea”; “Silver Flash” and Supper Flash”; “Cascarete” and “Celborite”;
“Celluloid” and “Cellonite”; “Chartreuse” and Charseurs”; “Cutex” and
“Cuticlean”; “Hebe” and “Meje”; “Kotex” and “Femetex”; “Zuso” and Hoo
Hoo.” Leon Amdur, in his book “Trade-Mark Law and Practice,” pp. 419-
421, cities [sic], as coming within the purview of the idem sonans rule,
“Yusea” and “U-C-A,” “Steinway Pianos” and “Steinberg Pianos,” and
“Seven-Up” and “Lemon-Up.” In Co Tiong vs. Director of Patents, this
Court unequivocally said that “Celdura” and “Condura” are confusingly
similar in sound; this Court held in Sapolin Co. vs. Balmaceda, 67 Phil. 795
that the name “Lusolin” is an infringement of the trademark “Sapolin,” as

the sound of the two names is almost the same.”30

The scope of protection afforded to registered trademark owners
is not limited to protection from infringers with identical goods. The
scope of protection extends to protection from infringers with
related goods, and to market areas that are the normal expansion of
business of the registered trademark owners. Section 138 of R.A.
No. 8293 states:
“Certificates of Registration.—A certificate of registration of a mark

shall be prima facie evidence of validity of the registration, the registrant’s
ownership of the mark, and of the registrant’s exclusive right to use the
same in connection with the goods or services and those that are related
thereto specified in the certificate.” (Emphasis supplied)
_______________
30 Id., at pp. 301-303; pp. 1182-1183.
243
VOL. 627, AUGUST 9, 2010 243


In Mighty Corporation v. E. & J. Gallo Winery,31 the Court held
that, “Non-competing goods may be those which, though they are
not in actual competition, are so related to each other that it can
reasonably be assumed that they originate from one manufacturer, in
which case, confusion of business can arise out of the use of similar
marks.”32 In that case, the Court enumerated factors in determining
whether goods are related: (1) classification of the goods; (2) nature
of the goods; (3) descriptive properties, physical attributes or
essential characteristics of the goods, with reference to their form,
composition, texture or quality; and (4) style of distribution and
marketing of the goods, including how the goods are displayed and
sold.33
NANNY and NAN have the same classification, descriptive
properties and physical attributes. Both are classified under Class 6,
both are milk products, and both are in powder form. Also,
NANNY and NAN are displayed in the same section of stores—the
milk section.
The Court agrees with the lower courts that there are differences
between NAN and NANNY: (1) NAN is intended for infants while
NANNY is intended for children past their infancy and for adults;
and (2) NAN is more expensive than NANNY. However, as the
registered owner of the “NAN” mark, Nestle should be free to use
its mark on similar products, in different segments of the market,

and at different price levels. In McDonald’s Corporation v. L.C. Big
Mak Burger, Inc., the Court held that the scope of protection
afforded to registered trademark owners extends to market areas that
are the normal expansion of business:
“x x x
_______________
31 478 Phil. 615; 434 SCRA 473 (2004).

32 Id., at p. 661; p. 509.
33 Id., at pp. 662-663; pp. 510-511.
244

Even respondent’s use of the “Big Mak” mark on non-hamburger food

products cannot excuse their infringement of petitioners’ registered mark,
otherwise registered marks will lose their protection under the law.
The registered trademark owner may use his mark on the same or
similar products, in different segments of the market, and at different
price levels depending on variations of the products for specific
segments of the market. The Court has recognized that the registered
trademark owner enjoys protection in product and market areas that
are the normal potential expansion of his business. Thus, the Court has
declared:
Modern law recognizes that the protection to which the owner of
a trademark is entitled is not limited to guarding his goods or
business from actual market competition with identical or similar
products of the parties, but extends to all cases in which the use by a
junior appropriator of a trade-mark or trade-name is likely to lead to
a confusion of source, as where prospective purchasers would be
misled into thinking that the complaining party has extended his
business into the field (see 148 ALR 56 et sq; 53 Am. Jur. 576) or is
in any way connected with the activities of the infringer; or when it
forestalls the normal potential expansion of his business (v. 148
ALR, 77, 84; 52 Am. Jur. 576, 577).”34 (Emphasis supplied)

WHEREFORE, we GRANT the petition. We SET ASIDE the 1
September 2005 Decision and 4 April 2006 Resolution of the Court
of Appeals in CA-G.R. CV No. 62730 and REINSTATE the 18
September 1998 Decision of the Regional Trial Court, Judicial
Region 7, Branch 9, Cebu City, in Civil Case No. CEB-19345.
SO ORDERED.
Nachura, Peralta, Abad and Mendoza, JJ., concur.
Petition granted, judgment and resolution set aside.
_______________
34 Supra note 16 at p. 432.

245
Note.—Court of Appeals incorrectly concluded that all actions

involving trademarks, including charges of unfair competition, are
under the exclusive jurisdiction of civil courts. (In–N–Out Burger,
Inc. vs. Sehwani, Incorporated, 575 SCRA 535 [2008])

——o0o——

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10/31/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 627

G.R. No. 172276. August 9, 2010.*

SOCIETE DES PRODUITS NESTLE, S.A., petitioner, vs.

Intellectual Property Code of the Philippines; Trademarks; Trademark

224 SUPREME COURT REPORTS ANNOTATED

Same; Same; Same; Two Tests to Determine Likelihood of Confusion;

VOL. 627, AUGUST 9, 2010 225

may properly become the subject of a trademark by combination with

PETITION for review on certiorari of the decision and resolution of

226 SUPREME COURT REPORTS ANNOTATED

Court (RTC), Judicial Region 7, Branch 9, Cebu City, in Civil Case

1 Rollo, pp. 9-40.

VOL. 627, AUGUST 9, 2010 227

Region 7, Branch 31, Dumaguete City, a complaint6 against Dy, Jr.

The RTC’s Ruling

6 Id., at pp. 63-65.

228 SUPREME COURT REPORTS ANNOTATED

“If determination of infringement shall only be limited on whether or not

VOL. 627, AUGUST 9, 2010 229

entirely unrelated, could not reasonably be assumed to have a common

The Court of Appeals’ Ruling

10 Id., at pp. 60-61.

230 SUPREME COURT REPORTS ANNOTATED

VOL. 627, AUGUST 9, 2010 231

Moreover, NAN infant milk preparation is more expensive than NANNY

232 SUPREME COURT REPORTS ANNOTATED

In view of the foregoing, we ﬁnd that the mark NANNY is not

The Court’s Ruling

“Infringement, what constitutes.—Any person who shall use, without the

Section 155 of R.A. No. 8293 states:

“Remedies; Infringement.—Any person who shall, without the consent

11 Id., at pp. 48-50.

VOL. 627, AUGUST 9, 2010 233

155.1. Use in commerce any reproduction, counterfeit, copy, or

“In accordance with Section 22 of R.A. No. 166, as well as Sections 2, 2-

mistake or to deceive purchasers or others as to the source or origin

13 G.R. No. 180073, 25 November 2009, 605 SCRA 523.

234 SUPREME COURT REPORTS ANNOTATED

reproduction, counterfeit, copy or colorable imitation is applied to

14 Id., at pp. 529-530.

VOL. 627, AUGUST 9, 2010 235

goods and confusion of business.16 In Sterling Products Inter-

Callman notes two types of confusion. The ﬁrst is the confusion of

236 SUPREME COURT REPORTS ANNOTATED

“In trademark cases, particularly in ascertaining whether one trademark

“The trial and appellate courts applied the Dominancy Test in

21 G.R. No. 166115, 2 February 2007, 514 SCRA 95.

VOL. 627, AUGUST 9, 2010 237

and thus, identiﬁed as such by their public consumers. And although

23 Supra note 13 at pp. 532-533.

238 SUPREME COURT REPORTS ANNOTATED

“While we agree with the CA’s detailed enumeration of differences

24 Supra note 21 at pp. 107-109.

VOL. 627, AUGUST 9, 2010 239

in the competing marks in determining whether they are confusingly similar.

240 SUPREME COURT REPORTS ANNOTATED

the letter “k” replaces “c” in spelling, thus “Caloocan” is spelled

25 Supra note 16 at pp. 433-435; pp. 32-33.

VOL. 627, AUGUST 9, 2010 241