Societe des Produits Nestle vs Martin Dy

FACTS: Petitioner is a foreign corporation organized under the laws of Switzerland and
manufactures food products and beverages. A Certificate of Registration was issued on April 7,
1969 by the BPTTT which as a result Nestle owns the NAN trademark for its line of infant
powdered milk (PRE-NAN, NAN-H.A., NAN-1, and NAN-2). It is classified under Class-6,
diactetic preparations for infant feeding. Nestle sells its NAN products throughout the
Philippines and invested substantial amount of resources for its marketing.
Respondent owns 5M Enterprises which imports Sunny Boy powdered milk from Australia, and
repacks the milk into plastic bags bearing the name NANNY, and is also classified as Class-6
full cream milk for adults. Respondent sells the milk in parts of Mindanao.
In 1985, petitioner requested respondent to refrain from using NANNY and to stop infringing the
NAN trademark. Respondent did not act which forced Nestle to file in March 1, 1990 in the RTC
of Dumaguete, a complaint against respondent. The case was transferred to the RTC of Cebu
(special court for intellectual property rights). The RTC held that respondent was guilty of
infringement. The trial court stated that if determination of infringement shall only be limited on
whether or not the mark used would likely cause confusion, it would highly unlikely to happen in
the instant case, as a comparison of the plaintiffs NAN and defendants NANNY products are
different. Thus the dominancy test cannot be used because the deceptive tendency of the mark
NANNY is not apparent from the essential features of the registered trademark NAN. The RTC
invoked however the case of Esso Standard Eastern vs. CA where the SC said that as to
whether trademark infringement exists depends upon 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, or from a common source. The trial court
justified that goods may become related for purposes of infringement 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 also be related because they serve the same purpose or are sold in grocery stores.
The RTC stated that considering that NANNY belongs to the same class as that of NAN
because both are food products, the defendants unregistered trade mark NANNY should be
held an infringement to plaintiffs registered trademark NAN because defendants use of NANNY
would
imply
that
it
came
from
the
manufacturer
of
NAN.
The Court of Appeals reversed the TCs decision and found respondent not liable for
infringement, stating that the TCs application of the doctrine laid down by the SC in the Esso
Standard case is misplaced as the goods of the two contending parties bear similar marks or
labels. In the instant case, two dissimilar marks are involved. The CA stated that 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. 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 colours 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, backdropped with snow-capped mountains and using the predominant colours of blue and green.
The word NAN are all in large, formal and conservative-like block letters, while the word NANNY
are 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.
ISSUE:

Whether

or

not

respondent

is

liable

for

infringement

HELD Yes. In Prosource International, Inc. vs. Horphag Research Management SA, the SC laid
down
the
elements
of
infringement
under
R.A.
No.
166,
and
8293:
For Section 22 of R.A. No. 166, the following constitute the elements of TM infringement:
A TM actually used in commerce and registered in the principal register of the PPO

Used by another person in connection with the sale of goods 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
TM

is

used

Such

act

is

The

elements

for

done
of

identical

without

the

infringement

or
consent

under

similar
of
R.A.

the

goods
TM

No.

registrant.

8293

are:

The TM infringed is registered in the IPO, in trade name, the same need not be registered
The TM or Trade name is not reproduced, counterfeited, copied, or colorably imitated by the
infringer
The infringing mark or trade name is used in connection with the sale, offering for sale, or
advertising of any goods; or the infringing mark or trade name is applied to labels, signs, prints,
intended to be used upon or in connection with such goods, business, or services;
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 identity of such business
Without

the

consent

of

the

trademark

or

trade

name

owner

or

assignee

Among the elements, the element of likelihood of confusion is the gravamen of trademark
infringement, and there are to types, confusion of goods which in the event the ordinarily
prudent purchaser would be induced to purchase one product in the belief that he was
purchasing the other. And the other is confusion of business which though the goods of the
parties are different, the defendants 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.
There are two tests to determine the likelihood of confusion: the dominancy test and holistic
test. In light of the facts of the present case, the Court holds that the dominancy test is
applicable.
The test of dominancy is in fact explicitly incorporated into law in Section 155.1 of the IPC which
defines infringement as the colourable imitation of a registered mark...or a dominant feature
thereof. While the SC agrees with the CAs enumeration of differences between the respective
trademarks, the SC does not agree that the holistic test is not the one applicable in the case as
it is contrary to the elementary postulate of the law on trademarks and unfair competition that
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 whereas the dominancy test relies also on the aural and connotative comparisons
and
overall
impressions
between
the
two
trademarks.
Applying such test in the present case the SC finds that NANNY is confusingly similar to NAN
as it is the prevalent feature of petitioners infant powdered milk (PRE-NAN, NAN-H.A.., NAN-1
and NAN-2). NANNY contains the prevalent feature NAN, and the first three letters of NANNY
are exactly the same as the letters of NAN. The aural effect is confusingly similar.
The decision of the RTC is reinstated.

Case Digest: McDonald's Corporation v. L.C. Big Mak Burger, Inc.

MCDONALD'S CORPORATION and MCGEORGE FOOD INDUSTRIES, INC., petitioners, vs.
L.C. BIG MAK BURGER, INC., FRANCIS B. DY, EDNA A. DY, RENE B. DY, WILLIAM B. DY,
JESUS AYCARDO, ARACELI AYCARDO, and GRACE HUERTO, respondents.
G.R.

No.

143993,

August

18,

2004.

CARPIO,

J.:

Petitioner McDonald's Corporation ("McDonald's") is a US corporation that operates a global

chain of fast-food restaurants, with Petitioner McGeorge Food Industries ("McGeorge"), as the
Philippine
franchisee.
McDonald's owns the "Big Mac" mark for its "double-decker hamburger sandwich." with the US
Trademark
Registry
on
16
October
1979.
Based on this Home Registration, McDonald's applied for the registration of the same mark in
the Principal Register of the then Philippine Bureau of Patents, Trademarks and Technology
("PBPTT") (now IPO). On 18 July 1985, the PBPTT allowed registration of the "Big Mac."
Respondent L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food
outlets and snack vans in Metro Manila and nearby provinces. Respondent corporation's menu
includes
hamburger
sandwiches
and
other
food
items.
On 21 October 1988, respondent corporation applied with the PBPTT for the registration of the
"Big Mak" mark for its hamburger sandwiches, which was opposed by McDonald's. McDonald's
also informed LC Big Mak chairman of its exclusive right to the "Big Mac" mark and requested
him to desist from using the "Big Mac" mark or any similar mark.
Having received no reply, petitioners sued L.C. Big Mak Burger, Inc. and its directors before
Makati RTC Branch 137 ("RTC"), for trademark infringement and unfair competition.
RTC rendered a Decision finding respondent corporation liable for trademark infringement and
unfair
competition.
CA
reversed
RTC's
decision
on
appeal.
1ST ISSUE:W/N respondent corporation is liable for trademark infringement and unfair
competition.
Ruling:
Yes
Section 22 of Republic Act No. 166, as amended, defines trademark infringement as follows:
Infringement, what constitutes. - Any person who [1] 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 [2] reproduce, counterfeit, copy, or colorably imitate any such mark or tradename 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.
To establish trademark infringement, the following elements must be shown: (1) the validity of
plaintiff's mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its
colorable imitation by the alleged infringer results in "likelihood of confusion." Of these, it is the
element of likelihood of confusion that is the gravamen of trademark infringement.
1st
A mark

element:
is

valid

if

it

is

distinctive

and

not

merely

generic

and

descriptive.

The "Big Mac" mark, which should be treated in its entirety and not dissected word for word, is
neither generic nor descriptive. Generic marks are commonly used as the name or description
of a kind of goods, such as "Lite" for beer. Descriptive marks, on the other hand, convey the
characteristics, functions, qualities or ingredients of a product to one who has never seen it or
does not know it exists, such as "Arthriticare" for arthritis medication. On the contrary, "Big Mac"

falls under the class of fanciful or arbitrary marks as it bears no logical relation to the actual
characteristics of the product it represents. As such, it is highly distinctive and thus valid.
2nd

element:

Petitioners have duly established McDonald's exclusive ownership of the "Big Mac" mark. Prior
valid registrants of the said mark had already assigned his rights to McDonald's.
3rd

element:

Section 22 covers two types of confusion arising from the use of similar or colorable imitation
marks, namely, confusion of goods (confusion in which the ordinarily prudent purchaser would
be induced to purchase one product in the belief that he was purchasing the other) and
confusion of business (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).
There is confusion of goods in this case since respondents used the "Big Mak" mark on the
same goods, i.e. hamburger sandwiches, that petitioners' "Big Mac" mark is used.
There is also confusion of business due to Respondents' use of the "Big Mak" mark in the sale
of hamburgers, the same business that petitioners are engaged in, also results in confusion of
business. 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 registered trademark owner enjoys protection
in product and market areas that are the normal potential expansion of his business.
Furthermore, In determining likelihood of confusion, the SC has relied on the dominancy test
(similarity of the prevalent features of the competing trademarks that might cause confusion)
over the holistic test (consideration of the entirety of the marks as applied to the products,
including
the
labels
and
packaging).
Applying the dominancy test, Respondents' use of the "Big Mak" mark results in likelihood of
confusion. Aurally the two marks are the same, with the first word of both marks phonetically the
same, and the second word of both marks also phonetically the same. Visually, the two marks
have both two words and six letters, with the first word of both marks having the same letters
and
the
second
word
having
the
same
first
two
letters.
Lastly, since Section 22 only requires the less stringent standard of "likelihood of confusion,"
Petitioners' failure to present proof of actual confusion does not negate their claim of trademark
infringement.
2ND

ISSUE:

W/N

Respondents

committed

Unfair

Competition

Ruling:
Yes.
Section 29 ("Section 29")73 of RA 166 defines unfair competition, thus:
Any person who will employ deception or any other means contrary to good faith by which he
shall pass off the goods manufactured by him or in which he deals, or his business, or services
for those of the one having established such goodwill, or who shall commit any acts calculated
to produce said result, shall be guilty of unfair competition, and shall be subject to an action
therefor.
The essential elements of an action for unfair competition are (1) confusing similarity in the
general appearance of the goods, and (2) intent to deceive the public and defraud a competitor.
In the case at bar, Respondents have applied on their plastic wrappers and bags almost the
same words that petitioners use on their styrofoam box. Further, Respondents' goods are
hamburgers which are also the goods of petitioners. Moreover, there is actually no notice to the
public that the "Big Mak" hamburgers are products of "L.C. Big Mak Burger, Inc." This clearly
shows respondents' intent to deceive the public.

n 1988, FredCo secured a registration for HARVARD JEANS USA or goods in Class 25. It
allegedly used the mark in the Philippines as early as 02 January 1982. On the other hand, in
1993 ,Harvard was issued registration for the trademark HARVARD VERITAS SHIELD
SYMBOL in Classes 16, 18, 21, 25 and 28.
Harvard filed an infringement action against Fredco. In turn, FredCo in turn filed a Cancellation
Action against Harvard that the date of actual use in the Philippines should prevail in
determining who has the better right to register the mark.
The Director General of the Intellectual Property of the Philippines found in the Universitys
favour. More than just using of the trademark in the Philippines, the applicant must own the
mark sought to be registered. The right to register the mark is based on ownership, and when
the applicant is not the owner, he has no right to register the mark.
The Court of Appeals upheld the Director Generals Decision. It cited a previous ruling which
stated that [o]ne who has imitated the trademark of another cannot bring an action for
infringement, particularly against the true owner of the mark, because he would be coming to
court with unclean hands.
At the final instance , the Philippine Supreme Court ruled that Fredcos registration should be
prohibited because both Trademarks Law and Intellectual Property Code prohibits the
registration of a mark which may disparage or falsely suggest a connection with persons, living
or dead, institutions, beliefsAlso, both the United States and the Philippines are signatories to
the Paris Convention which prohibit the registration of a mark already belonging to a person
entitled to the benefits of the Convention and used for identical or similar goods.
The Supreme Court declared Harvard an internationally well-known mark for the reason that it is
rated as one of the most famous marks in the world and registered in at least 50 countries. The
mark has been used and promoted extensively in numerous publications around the world, and
considerable goodwill has attached to it worldwide since the founding of Harvard University
more than 350 years ago. Being a well-known mark, Harvard was entitled to protection whether
or not it is registered in the Philippines, and the University could prevent its unauthorized use on
identical or similar goods. Fredco Manufacturing Corporation v President and Fellows of
Harvard College (Harvard University), G.R. No. 185917(01 June 2011).

EMERALD GARMENT MANUFACTURING CORPORATION vs. HON. COURT OF APPEALS,

BUREAU OF PATENTS, TRADEMARKS AND TECHNOLOGY TRANSFER and H.D. LEE
COMPANY, INC.
G.R. No. 100098, December 29, 1995
FACTS:
On 18 September 1981, private respondent H.D. Lee Co., Inc. filed with the Bureau of
Patents, Trademarks & Technology Transfer (BPTTT) a Petition for Cancellation of Registration
No. SR 5054 for the trademark "STYLISTIC MR. LEE" used on skirts, jeans, blouses, socks,
briefs, jackets, jogging suits, dresses, shorts, shirts and lingerie under Class 25, issued on 27
October 1980 in the name of petitioner Emerald Garment Manufacturing Corporation.
Private respondent averred that petitioner's trademark "so closely resembled its own
trademark, 'LEE' as previously registered and used in the Philippines cause confusion, mistake
and deception on the part of the purchasing public as to the origin of the goods.
On 19 July 1988, the Director of Patents rendered a decision granting private respondent's
petition for cancellation and opposition to registration. The Director of Patents, using the test of
dominancy, declared that petitioner's trademark was confusingly similar to private respondent's
mark because "it is the word 'Lee' which draws the attention of the buyer and leads him to
conclude that the goods originated from the same manufacturer. It is undeniably the dominant
feature of the mark.
ISSUE:
Whether or not a trademark causes confusion and is likely to deceive the public is a
question of fact which is to be resolved by applying the "test of dominancy", meaning, if the
competing trademark contains the main or essential or dominant features of another by reason
of which confusion and deception are likely to result.
HELD:
The word "LEE" is the most prominent and distinctive feature of the appellant's trademark
and all of the appellee's "LEE" trademarks. It is the mark which draws the attention of the buyer
and leads him to conclude that the goods originated from the same manufacturer. The alleged
difference is too insubstantial to be noticeable. The likelihood of confusion is further made more
probable by the fact that both parties are engaged in the same line of business.
Although the Court decided in favor of the respondent, the appellee has sufficiently
established its right to prior use and registration of the trademark "LEE" in the Philippines and is
thus entitled to protection from any infringement upon the same. The dissenting opinion of
Justice Padilla is more acceptable.

FRUIT OF THE LOOM V. CA

133 SCRA 405
FACTS:
1. Petitioner is a corporation duly organized and existing under the laws of the State of Rhode
Island, USA. It is the registrant of the trademark FRUIT OF THE LOOM in the Philippine Patent
Office and was issued two Certificates of Registration, one of which was in 1957 and the other
in 1958.
2. Private Respondent, a domestic corporation, is the registrant of the trademark FRUIT FOR
EVE in the Philippine Patent Office.
3. Both are involved in the merchandise of garments.
4. Petitioner filed a complaint for infringement of trademark and unfair competition against
private
respondent,
alleging
that:
a. The latters trademark is confusingly similar to the formers, both trademarks being used in
womens
panties
and
other
textile
products.
b. That the hang tags used by private respondent is a colorable imitation of those of the
petitioner.
5. Private respondent alleged that there was no confusing similarity between the trademarks.
6. At the pre-trial, the following admissions were made:
a. That the registered trademark Fruit for Eve bears the notice Reg. Phil. Pat. Off. while that of
Fruit
of
the
Loom
does
not.
b. That at the time of its registration, the plaintiff filed no opposition thereto.
7. The lower court rendered a decision in favor of the petitioner, permanently enjoining private
respondent from using the trademark Fruit for Eve.
8.

Both
parties
appealed
to
the
former
Court
of
Appeals:
a. Petitioner questioned the lower courts failure to award damages in its favor.
b. Private respondent sought the reversal of the lower courts decision.

9. The former Court of Appeals rendered a decision reversing the lower courts decision and
dismissing the petitioners complaint. The petitioners motion for reconsideration was denied.
HELD:
In cases involving infringement of trademark brought before this Court, it has been consistently
held that there is infringement of trademark when the use of the mark involved would be likely to
cause confusion or mistake in the mind of the public or to deceive purchasers as to the origin or
source of the commodity. 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 where one is confusingly similar to the other. The similarities of the
competing trademarks in this case are completely lost in the substantial differences in the
design and general appearance of their respective hang tags. We have examined the two
trademarks as they appear in the hang tags submitted by the parties and We are impressed
more by the dissimilarities than by the similarities appearing therein. We hold that the
trademarks Fruit of the Loom and Fruit for Eve do not resemble each other as to confuse or
deceive an ordinary purchaser. The ordinary purchaser must be thought of as having, and
credited with, at least a modicum of intelligence to be able to see the obvious differences
between the two trademarks in question.