Societe Des Produits Nestle, S.A. vs Court of Appeals

G.R. No. 112012 – 356 SCRA 207 – Mercantile Law – Intellectual Property Law – Law on Trademarks, Service Marks and Trade Names – Generic Term – Dominancy Test vs Holistic Test

In 1984, CFC Corporation filed with the Bureau of Patents, Trademarks, and Technology Transfers an application for the registration of its trademark “Flavor Master” – an instant coffee. Nestle opposed the application as it alleged that “Flavor Master” is confusingly similar to Nestle coffee products like Master Blend and Master Roast. Nestle alleged that in promoting their products, the word Master has been used so frequently so much so that when one hears the word Master it connotes to a Nestle product. They provided as examples the fact that they’ve been using Robert Jaworski and Atty. Ric Puno Jr. as their commercial advertisers; and that in those commercials Jaworski is a master of basketball and that Puno is a master of talk shows; that the brand of coffee equitable or fit to them is Master Blend and Master Roast. CFC Corporation on the other hand alleged that the word “Master” is a generic and a descriptive term, hence not subject to trademark. The Director of Patents ruled in favor of Nestle but the Court of Appeals, using the Holistic Test, reversed the said decision.

ISSUE: Whether or not the Court of Appeals is correct.

HELD: No. The proper test that should have been used is the Dominancy Test. The application of the totality or holistic test is improper since the ordinary purchaser would not be inclined to notice the specific features, similarities or dissimilarities, considering that the product is an inexpensive and common household item. The use of the word Master by Nestle in its products and commercials has made Nestle acquire a connotation that if it’s a Master product it is a Nestle product. As such, the use by CFC of the term “MASTER” in the trademark for its coffee product FLAVOR MASTER is likely to cause confusion or mistake or even to deceive the ordinary purchasers.

In addition, the word “MASTER” is neither a generic nor a descriptive term. As such, said term can not be invalidated as a trademark and, therefore, may be legally protected.

Generic terms are those which constitute “the common descriptive name of an article or substance,” or comprise the “genus of which the particular product is a species,” or are “commonly used as the name or description of a kind of goods,” or “imply reference to every member of a genus and the exclusion of individuating characters,” or “refer to the basic nature of the wares or services provided rather than to the more idiosyncratic characteristics of a particular product,” and are not legally protectable.

On the other hand, a term is descriptive and therefore invalid as a trademark if, as understood in its normal and natural sense, it “forthwith conveys the characteristics, functions, qualities or ingredients of a product to one who has never seen it and does not know what it is,” or “if it forthwith conveys an immediate idea of the ingredients, qualities or characteristics of the goods,” or if it clearly denotes what goods or services are provided in such a way that the consumer does not have to exercise powers of perception or imagination.

Rather, the term “MASTER” is a suggestive term brought about by the advertising scheme of Nestle. Suggestive terms are those which, in the phraseology of one court, require “imagination, thought and perception to reach a conclusion as to the nature of the goods.” Such terms, “which subtly connote something about the product,” are eligible for protection in the absence of secondary meaning. While suggestive marks are capable of shedding “some light” upon certain characteristics of the goods or services in dispute, they nevertheless involve “an element of incongruity,” “figurativeness,” or “imaginative effort on the part of the observer.”

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