SECOND DIVISION

[G.R. No. 172276. August 9, 2010.]

SOCIETE DES PRODUITS NESTLE, S.A. , petitioner, vs . MARTIN T. DY,

JR. , respondent.

DECISION

CARPIO , J : p

The Case
This is a petition 1 for review on certiorari under Rule 45 of the Rules of Court.
The petition challenges the 1 September 2005 Decision 2 and 4 April 2006 Resolution 3
of the Court of Appeals in CA-G.R. CV No. 62730, nding respondent Martin T. Dy, Jr.
(Dy, Jr.) not liable for trademark infringement. The Court of Appeals reversed the 18
September 1998 Decision 4 of the Regional Trial Court (RTC), Judicial Region 7, Branch
9, Cebu City, in Civil Case No. CEB-19345. TDcHCa

The Facts
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 Certi cate of Registration No. R-14621 5 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 classi ed 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.
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 is also classi ed 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 led before the RTC, Judicial
Region 7, Branch 31, Dumaguete City, a complaint 6 against Dy, Jr. for infringement. Dy,
Jr. led a motion 7 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 led with
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 the trial court a motion 9 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:
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 gure 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 eld, 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. DTaSIc

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 de nition of "infringement" when it stated: "Implicit in this de nition
is the concept that the goods must be so related that there is likelihood either of
confusion of goods or business. . . . 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 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. . . .

Considering that defendant's NANNY belongs to the same class as that of

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 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. 1 0

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 nding 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."

The Supreme Court utlilized the "concept of related goods" in the said case
o f 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." ASHECD

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
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 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 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 gure 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 eld, 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 rst
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 con rm the striking differences between the products in
question.
In view of the foregoing, we nd that the mark NANNY is not confusingly
similar to NAN. Dy therefore cannot be held liable for infringement. 1 1

Nestle led a motion 1 2 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:
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 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: ESHcTD

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
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
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 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 O ce; 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 identity of such business; and
(5) It is without the consent of the trademark or trade name
owner or the assignee thereof. 1 4

Among the elements, the element of likelihood of confusion is the gravamen of

trademark infringement. 1 5 There are two types of confusion in trademark infringement:
confusion of goods and confusion of business. 1 6 In Sterling Products International,
Inc. v. Farbenfabriken Bayer Aktiengesellschaft, 1 7 the Court distinguished the two
types of confusion:
Callman notes two types of confusion. The rst 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 re ects 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." 1 8 TAEcSC

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. 1 9
The holistic test considers the entirety of the marks, including labels and
packaging, in determining confusing similarity. The focus is not only on the
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 predominant words but also on the other features appearing on the labels. 2 0
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, 2 1 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. 2 2

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
su x "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 and thus, identi ed 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 rst 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,"
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 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." 2 3 DEICaA

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:
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.
xxx xxx xxx

Applying the dominancy test to the instant case, the Court nds that herein
petitioner's "MCDONALD'S" and respondent's "MACJOY" marks are 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. . . .
For sure, it is the pre x "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 Classi cation 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. 2 4

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 . . . has relied on the dominancy test rather than the holistic test.
The dominancy test considers the dominant features 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.

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 Thus, in the 1954 case of Co Tiong Sa v. Director of Patents , the Court
ruled:
. . . 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. P ugh (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 558; . . .)
xxx xxx xxx
The test of dominancy is now explicitly incorporated into law in Section
155.1 of the Intellectual Property Code which de nes infringement as the
"colorable imitation of a registered mark . . . or a dominant feature thereof."

Applying the dominancy test, the Court nds 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 rst word in "Big Mak" is exactly the same as
the rst word in "Big Mac." Third, the rst two letters in "Mak" are the same as the
rst 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, the letter "k" replaces
"c" in spelling, thus "Caloocan" is spelled "Kalookan." 2 5

In Societe Des Produits Nestle, S.A. v. Court of Appeals , 2 6 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 su ciently 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
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 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. . . .
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. TcSCEa

. . . . It is the observation of this O ce 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. 2 7

Applying the dominancy test in the present case, the Court nds 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 rst 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. 2 8 In Marvex Commercial Company,
Inc. v. Petra Hawpia & Company, 2 9 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 su x, "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.
xxx xxx xxx
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. 3 0

The scope of protection afforded to registered trademark owners is not limited

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 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:
Certi cates of Registration. — A certi cate 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 speci ed in the
certificate. (Emphasis supplied)

In Mighty Corporation v. E. & J. Gallo Winery , 3 1 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." 3 2 In that case, the Court enumerated factors in determining whether goods are
related: (1) classi cation 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. 3 3
NANNY and NAN have the same classi cation, descriptive properties and
physical attributes. Both are classi ed 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:
xxx xxx xxx

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. DASEac

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 speci c
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
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 complaining party has extended his business into the eld (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). 3 4 (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.

Footnotes
1.Rollo, pp. 9-40.

2.Id. at 44-51. Penned by Associate Justice Ramon M. Bato, Jr., with Associate Justices Arsenio
J. Magpale and Pampio A. Abarintos concurring.
3.Id. at 53-54.

4.Id. at 55-62. Penned by Judge Benigno G. Gaviola.

5.Id. at 96-99.
6.Id. at 63-65.

7.Id. at 66-73.
8.Id. at 74-78.

9.Id. at 130-133.

10.Id. at 60-61.
11.Id. at 48-50.

12.Id. at 277-291.

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

14.Id. at 529-530.

15.Id. at 531.
16.McDonald's Corporation v. L.C. Big Mak Burger, Inc., 480 Phil. 402, 428 (2004).

17.137 Phil. 838 (1969).

18.Id. at 852.
19.Prosource International, Inc. v. Horphag Research Management SA, supra note 13 at 531.

20.Id. at 531-532.
21.G.R. No. 166115, 2 February 2007, 514 SCRA 95.
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 22.Id. at 107.
23.Supra note 13 at 532-533.

24.Supra note 21 at 107-109.

25.Supra note 16 at 433-435.

26.408 Phil. 307 (2001).

27.Id. at 324-325.
28.Prosource International, Inc. v. Horphag Research Management SA, supra note 13 at 532;
McDonald's Corporation v. L.C. Big Mak Burger, Inc., supra note 16 at 435.
29.125 Phil. 295 (1966).
30.Id. at 301-303.

31.478 Phil. 615 (2204).

32.Id. at 661.
33.Id. at 662-663.

34.Supra note 16 at 432.

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