SOCIETE DES PRODUITS NESTLE, S.A., Petitioner, vs. MARTIN T. DY, JR., Respondent. G.R. No.

172276 - August 8, 2010 - CARPIO, J.: Facts Martin Dy Jr., imports and repackages Sunny Powdered Milk from Australia and sells them under the name NANNY. NANNY retails primarily in parts of Visayas and Mindanao. Nestle, is a foreign corporation organized under the laws of Switzerland and owns the trademark NAN for its line of infant formula. Nestle allocates a substantial amount of resources for the production and promotion of the NAN product line. Nestle wrote a letter to Dy Jr. asking him to stop using the name NANNY, they allege that it infringes upon the trademark ownership of Nestle over the trademark NAN. He refused to recognize Nestles request and continued using the name NANNY. Nestle filed a case with the RTC of Dumaguete City. The case was dismissed and elevated to the CA, the appellate court remanded the case to the trial court fo adjudication. It was assigned to the RTC-Cebu Special Commercial Court. The Commercial Court found Dy Jr., liable for trademark infringement on the grounds that even though it is not apparent in the packaging of NANNY, the name itself relates to a childs nurse, which is closely related to the product line of NAN catering to infants. The case was then raised to the CA, which reversed the RTCs ruling. It stated that even though there is similarity in the products, the lower price range of NANNY cautions and reminds the purchaser that it is different from NAN, which is more expensive. This does not create confusion as to the consumers because the apparent difference in price shows that they are two different products.

Issue W/N the product name NANNY infringes upon the trademark of Nestles NAN. Held Yes, the decision of the RTC is reinstated. There is no question that the product will cause confusion within the consuming public. The primary test that should be used in determining trademark infringement in this case is the dominancy test. It is apparent that upon first glance or even at close inspection that there is confusing similarity between NAN and NANNY. This is sufficient to establish trademark infringement. The dominancy test states: -- xx -This Court x x x 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. -- xx -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. It is incorrect to consider the prices, which the CA utilized in its determination. It is enough that if both products were placed in front of the consumer, confusion will most likely arise. From this either similarities or differences in the logo or design are immaterial to the fact that co-relation and subsequently confusion, has been created in the minds of the consumer. -- xx -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.