NESTLE VS DY
On August 9, 2010, the Supreme Court gave its decision in Societe des Produits Nestle v.
Martin T. DyJr, applying the domincance theory it has developed over a long line of cases
dealing with similar marks. In this case, there was a confusing similarity between Nestle’s
‘Nan’ trademark and DY’s ‘Nanny’ trademark. Nestle’s mark is the prevalent feature in the
names of its infant powdered-milk products: Pre-nan, Nan-H.A., Nan-1 and Nan-2. The mark
is entirely contained within DY’s Nanny mark. The High Court took notice of that and the
confusing similarities between aural effects of Nan and Nanny.
FACTS
On August 1, 1985, when Nestle asked DY to stop using its Nanny mark on “full cream milk
for adults of all ages” and to undertake to stop infringing Nestle’s Nan trademark, registered
with the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) for Class 6 goods,
specifically “dietetic preparations for infant feeding”.
As DY failed to comply, Nestle filed a complaint for the infringement of its Nan trademark.
The trial court found DY liable for infringement, holding that DY’s use of its Nanny mark
would imply that the goods came from the manufacture of Nan, as both goods are food
products belonging to the same class.
The Court of Appeals reversed the trial court’s decision, holding that while both Nan and
Nanny are milk products and the word Nan is contained in the word Nanny, there are
dissimilarities between the trademarks as a whole as they appear in their respective labels and
also in relation to the goods bearing them.
ISSUE: Whether or not respondent is liable for infringement
HELD:
YES. The Supreme Court set aside the appeals court decision and affirmed the trial court’s
finding that DY was liable for infringing Nestle’s Nan trademark. The court emphasized that
likelihood of confusion is the gravamen of trademark infringement and applied the dominancy
test to determine its existence. In this test, the court evaluates the similarity between the main,
prevalent or essential features of the competing trademarks that might cause confusion.
Infringement exists when the competing trademark contains the essential features of another.
This is in contrast to the holistic test, which considers the entirety of the marks, including
labels and packaging.
The court held:
“Applying the dominance test in the present case, the Court finds that ‘Nanny’ is confusingly
similar to ‘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 features of ‘Nan’. When ‘Nan’ and
‘Nanny’ are pronounced, the aural effect is confusingly similar.”
The court relied on its previous decisions in applying the dominance test, particularly in:
McDonald’s Corporation v. MacjoyFastfood Corporation, finding the ‘Macjoy’ mark
confusingly similar to the ‘McDonald’s’ mark, since both marks use the corporate ‘M’
design logo and the prefixes ‘Mc” and/or ‘Mac’ as dominant features
Societe Des Produits Nestle, SA v. Court of Appeals, finding the mark ‘Flavor Master’
confusingly similar with ‘Master Roast’ and ‘Master Blend’ for having the same
dominant feature.
The court also ruled that the scope of protection afforded to trademark owners is not limited to
protection from infringers with identical goods.
Nanny and Nan have the same classification, descriptive properties and physical attributes.
They are both powdered milk products under Class 6 and are both displayed in the milk
section of stores. There are indeed differences between Nan and Nanny: Nan is for infants,
while Nanny is for adults and children past infancy; and Nan is more expensive than Nanny.
Nonetheless, the court declared that Nestle must be free to use Nan on similar products, in
different segments of the market and at different price levels. The scope of protection of a
registered mark extends to market areas that are the normal expansion of business, in view of
the provision in the Trademark Law, that a certificate of registration of a mark is prima facie
evidence of the registrant’s exclusive right to use the mark in connection with the goods or
services, and those that are related thereto, specified in the certificate.
