INTPROP

Cepeda, Samantha Claire

Siajuat, Jericho
Villarama, Katrina Nestle v. CA & CFC, GR 112012
Yusi, Jonathan Vincent McDonalds v. Big Mak, GR
143993

Nestle v. CA & CFC, G.R. 112012, 04/04/02

1. Facts

Petitioners, Societes Des Produits Nestle, S.A. & Nestle Philippines, Inc.:
MASTER ROAST and MASTER BLEND Coffee & Coffee Extracts

Respondent, CFC Corporation: FLAVOR MASTER Instant Coffee

CFC Corporation applied for the registration of the trademark FLAVOR MASTER for instant coffee,
which was then published to BPTTTs official gazette. Societes Des Produits Nestle S.A. filed an unverified
Notice of Opposition, and Nestle Philippines, Inc. a verified one. They claim that CFCs product is
confusingly similar to its trademarks for coffee and coffee extracts - MASTER ROAST and MASTER
BLEND, and that the use of FLAVOR MASTER would likely cause confusion in the trade; or deceive
purchasers and would falsely suggest to the purchasing public a connection in the business of Nestle,
because of MASTER being dominant in all trademarks, and that FLAVOR MASTER might be mistaken as
a product of Nestle.

CFC argued that FLAVOR MASTER is not at all confusing with respect to MASTER ROAST and
MASTER BLEND. This is because the only thing similar between the trademarks is the word MASTER,
which cannot be exclusively appropriated because of its nature as a generic or descriptive name.
Subsequently, other than the word MASTER, the other words used are very far from each other - FLAVOR,
ROAST and BLEND. They also argue that when marks are viewed in their entirety, pictorial representations,
color schemes and letters considered, FLAVOR MASTER is clearly very different from that of Nestles.

The BPTTT denied CFCs application for registration, but was overturned by the Court of Appeals.

2. Issue/s

Whether the word MASTER is a generic or descriptive term incapable of appropriation

Whether FLAVOR MASTER is a colorable imitation of Nestles MASTER ROAST and MASTER
BLEND

3. Ruling

There are two tests in determining whether a mark is a colorable imitation of another - Dominancy
Test and Holistic Test. The Dominancy Test assesses the marks based on the prevalent features, while the
Holistic Test looks at the marks in their entirety. The Court of Appeals applied the holistic test in determining
the whether FLAVOR MASTER is a colorable imitation of MASTER ROAST and MASTER BLEND, stating
that the discerning eye of an observer must focus not only on the predominant words but also on the other
features appearing on both labels.

The Supreme Court, however, states that the dominancy test should have been used, considering
the situation from the standpoint of an ordinary purchaser who is undiscerningly rash in buying the more
common and less expensive household products like coffee. This means that they are less inclined to
examine specific details of similarities or dissimilarities between the competing products. For an
undiscerningly rash purchaser, it would be impossible to notice slight differences in color - as that of
FLAVOR MASTERs orange and mocha against Nestles red and brown.
INTPROP
Cepeda, Samantha Claire
Siajuat, Jericho
Villarama, Katrina Nestle v. CA & CFC, GR 112012
Yusi, Jonathan Vincent McDonalds v. Big Mak, GR
143993

Additionally, the use of the word MASTER is neither generic nor descriptive. Because of this, it
cannot be invalidated as a trademark. Generic terms constitute the common descriptive name of an article
or substances or comprise the genus of which the product is a species. Descriptive terms, on the other
hand, is that which conveys the characteristics, functions, qualities or ingredients of a product to someone
who does ot know what it is, taking away the consumers exercise of perception. The term MASTER is
none of those mentioned. It is rather a suggestive term brought about by the advertising scheme of Nestle,
eligible for legal protection. Because of Nestle products being endorsed by masters of selected industries -
like Ric. Puno Jr. and Robert Jaworski, the term MASTER has acquired a connotation to Nestles MASTER
ROAST and MASTER BLEND.

Therefore, CFCs use of MASTER in FLAVOR MASTER is likely to cause confusion or mistake or
even to deceive the ordinary purchasers. It is a colorable imitation of MASTER ROAST and MASTER
BLEND.

4. Analysis

When a trademark is applied for registration, it is published in the official gazette for the world to
see. Within 30 days from its publication, concerns may be raised with respect to the applied for trademark
being in conflict with that of an existing one. In our case, FLAVOR MASTER is found confusingly similar to
MASTER ROAST and MASTER BLEND by the owner of the latter. Thus, a Notice of Opposition was filed
against the former.

It was mentioned earlier that there are two tests to help determine whether a mark is a colorable
imitation of another - the dominancy test and the holistic test. The CA used in their decision the holistic test
and ruled against Nestle. They stated that the differences such as the color, font, style, placement of the
words, etc, are substantial enough that the purchaser cannot mistake one for the other, and that the only
similarity found between the marks is the word MASTER.

This was rebutted by the SC, stating that it is contrary from the standpoint of an ordinary purchaser
who is undiscerningly rash. An ordinary purchaser would not bother to compare colors, fonts, styles, and
word placements between to similar products. It would require so much more scrutiny to inspect very small
details for a good that is common and inexpensive. Rather, what would affect the decision to purchase more
is whats prevalently seen, what is familiar and what the purchaser thinks of upon sight. Contrary to the
holistic test which relies on visual comparison between trademarks, the dominancy test which relies not only
on visuals but also on the aural and connotative comparisons and overall impressions between trademarks
is more appropriate.

Similarities in the name, form, style, font, and other physical attributes are not the only factors that
can cause confusion. A word that can easily be connected by people to a certain product can cause as
much confusion as the others mentioned above.
INTPROP
Cepeda, Samantha Claire
Siajuat, Jericho
Villarama, Katrina Nestle v. CA & CFC, GR 112012
Yusi, Jonathan Vincent McDonalds v. Big Mak, GR
143993

McDonalds v. Big Mak, G.R. 143993, 08/18/04

1. Facts

Mcdonalds (petitioner) is a global chain fast-food restaurant and owns a family of marks including
Big Mac. They applied the same mark in the Principal register on the PBPTT (Philippine Bureau of Patents,
Trademark and Technology) now known as IPO (Intellectual Property Office). On July 18, 1985, PBPTT
allowed registration of the Big Mac. L.C. Big Mak Burger, Inc. (respondent) is a domestic operation. The
business has fast food outlets and snack vans in Metro Manila and nearby provinces. The corporations
menu includes hamburger sandwiches and other food items. On October 21 1988, respondent L.C. Big Mac
Inc. applied for the registration of the Big Mak with the PBPTT.

The registration of the Big Mak was opposed by petitioner Mcdonalds. Petitioner Mcdonalds
informed the chairman of Big Mak of their exclusive right to the Big Mac mark. Mcdonalds requested
respondent to abstain from using the Big Mac mark or any similar mark. After having no reply, petitioner
Mcdonalds filed a case against L.C. Big Mak Burger, Inc. and its directors at Makati RTC branch 137, for
trademark infringement and unfair competition. A decision was rendered by the RTC finding respondent Big
Mak liable for trademark infringement and unfair. However, CA reversed RTCs decision on appeal.

2. Issue/s

Whether or not respondent L.C. Big Mak, Inc. is liable for trademark infringement and unfair competition;
and whether or not there is colorable imitation resulting in likelihood of confusion;

3. Ruling

Sec. 22 of Republic Act No. 166, or sec. 155 of RA 8293, defines trademark infringement as follows:
Section 155. Remedies; Infringement. - Any person who shall, without the consent of the owner of the
registered mark:

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. (Sec. 22, R.A. No 166a)
INTPROP
Cepeda, Samantha Claire
Siajuat, Jericho
Villarama, Katrina Nestle v. CA & CFC, GR 112012
Yusi, Jonathan Vincent McDonalds v. Big Mak, GR
143993

168.2. Any person who shall 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.

Therefore, respondents L.C. Big Mak, Incorporations use of BIG MAK in their product and
business name is liable for trademark infringement and unfair competition. There is also colorable imitation
resulting in likelihood of confusion in petitioners use of the BIG MAK in their product.

4. Analysis

The mark Big Mac is valid since it is distinctive. The mark Big Mac from Mcdonalds falls under
the class of arbitrary marks as it carries no logical relation to the definite characteristics of the product it
represents. Furthermore, petitioners Mcdonalds duly formed their ownership of the mark Big Mac.

On whether the confusion of goods and confusion of business are applicable: Purchasers might be
induced to purchase a product believing that they are purchasing the other. In this case, there is confusion
of goods since respondents used the Big Mak mark on the same goods. Respondent Big Mak use of the
mark Big Mak in selling burgers, the same business that petitioners Mcdonalds are employed in, results in
confusion of business.The registered trademark, in different segments of the market and at a different price,
may use their mark on the or similar products. The registered trademark owner enjoys his protection in his
product and market areas that have normal potential in the expansion of his business.

The Court of Appeals relied on the Dominancy test. Respondents' use of the "Big Mak" mark results
in likelihood of confusion. According to the Court, 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.

Respondents inability to clarify adequately how and why they came to choose Big Mak for their
hamburger sandwiches expresses their intent to imitate petitioners Big Mac mark.

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.