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INTELLECTUAL PROPERTY PHILIPPINES

MARVEL CHARACTERS, INC., } Inter Partes Case No. 14-2007-00245 Opposer, } Opposition to:

} -versus- } Appln. Serial No. 4-2006-007714

} Date Filed 17 July 2006 INTERNATIONAL CONSUMER } Trademark "X-MEN & DEVICE" PRODUCTS LIMITED COMPANY, }

Respondent-Applicant, } x----------------------------------------------------x Decision No. 2009 - jff

DECISION

For decision is the Notice of Opposition filed by Marvel Character, Inc, (hereinafter referred to as opposer) , a company organized and existing under the laws of the United States of America, with address at 9242 Beverly Hills Boulevard, Suite 350, Beverly Hills, California, U.S.A. against Application Serial No. 4-2006-007714 for the mark X-MEN & DEVICE for goods covering Class 3 namely "shampoos, shower gels, hair conditioner, perfumes, deodorants for body care, skin care products, namely: facial cleanser, facial toner, facial moisturizer, skin toners, anti-wrinkle creams, anti­aging creams" in the name of International Consumer Products Limited Company (hereinafter referred to as respondent-applicant), with address at No. 30 Lam Son, 6 Ward, Binh Thanh District Hochiminh District Vietnam.

The grounds for opposition are as follows:

"1. Opposer is the true owner and rightful proprietor of the locally and internationally well-known, world-famous and established trademark "X-MEN" which are used on the various goods manufactured and sold by the Opposer under Classes 16, 25 and 28.

"2. Opposer has continuously used the "X-MEN" mark in the United States of America since the creation of the X-Men characters in~ August 1963. Opposer has used the "X-MEN" mark in the /.."A Philippines as early as 1993.r~

Republic of the Philippines INTELLECTUAL PROPERTY OFFICE

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"3. The Respondent-Applicant's appropriation and use of the trademark "X-MEN & DEVICE" infringes upon the Opposer's exclusive right to use the "X-MEN" mark which is protected under Section 147 and 16B of Republic Act No. B293, otherwise known as the Intellectual Property Code of the Philippines ("IP Code").

"4. Respondent-Applicant's application for the trademark "X-MEN & DEVICE", which was filed only on 17 July 2006, evidently much later than the 03 September 1993 filing date of Opposer's Registration Nos 6179B in Class 16, 61711 in Class 25, and 61919 in Class 2B for the mark "X-MEN", cannot be registered by virtue of Section 123.1 (d) of the IP Code.

"5. It is quite clear that the mark "X-MEN & DEVICE" subject of Respondent-Applicant's trademark application appropriates all the letters and essential elements of, and so resembles, Opposer's "X­MEN" mark as to likely cause confusion, mistake and deception on the part of the purchasing public by misleading them into purchasing Respondent-Applicant's goods thinking these to be Opposer's goods.

"6. Respondent-Applicant clearly intends to trade upon Opposer's goodwill. The use by Respondent-Applicant of the "X-MEN & DEVICE" trademark diminishes the distinctiveness and dilutes the goodwill of Opposer's "X-MEN" mark.

"7. Moreover, the use and adoption by Respondent-Applicant of the "X­MEN & DEVICE" trademark, which is confusingly similar to Opposer's "X-MEN" mark, constitutes an unlawful appropriation of a locally and internationally well-known and world-famous mark, in violation of Section 123.1 (e) and (f) of the IP Code, Article 6bis of the Paris Convention, and Article 16(2) and (3) of the TRIPS Agreement.

"B. Consequently, the registration of the trademark "X-MEN & DEVICE" in the name of the Respondent-Applicant will be contrary to and/or a violation of the provisions of the IP Code and international treaties. Thus, Respondent-Applicant's apPlicatio~.J should be rejected and not given due course. / I ;rl

Opposer presented the following evidence:

EXHIBIT DESCRIPTION

2

"A"

UB"

"e"

"0"

"E", "F", "G" "H", "I", "J"

UK", "L", "M"

UN", "0", "P" "Q"

uRn

"S", "T", "U"

"V","W","X","Y"

"Z", "AA"-"BB"

"CC", "DO"

"EE"

"FF"

"GG", "HH", 'II"

"JJ"

"KK'

"LL"

"MM"

Registration No. 61798 (Class 16)

Registration No. 61711 (Class 25)

Registration No. 61919 (Class 28)

List of registrations

US trademark registrations

Australian trademark registrations

United Kingdom trademark registrations

OHIM Registration

Hong Kong trademark registration

Foreign document with translation (trademark registration in Argentina)

Japanese document

Turkey Registration

Declaration by Carol Pinkus

Declaration of Tom Brevoort

Pictures with X-MEN

Sales Invoice of Rustan Commercial Corporation

Picture of video

Sales Invoice

Picture of Game boyt ~

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"NN" Sales Invoice

"00", "PP" Newspaper page of Philippine Daily Inquirer

"00", "RR" Advertisement of X-Men in newspaper

"SS", "TT", "UU" License Agreements of Marvel Enterprises, Inc. "VV" , "WW", "XX" "yy", "ZZ" , "AAA"

"BBB" Affidavit of Marilu Magsaysay Corpus

"GGG" Affidavit of Valencia Wong with Annexes "DOD" Declaration of Adam Wolff (Schedule A and,B

Report of revenues, G and 0- Box office receipts and Schedule E- reports,of DVD sales)

On January 28, 2008, Respondent-Applicant filed a VERIFIED ANSWER stating the following as its special/affirmative defenses:

"16. Opposer has no cause of action against the Respondent-Applicant and has no valid and justifiable legal ground to oppose the registration of Respondent-Applicant's trademark "X-MEN & DEVICE".

"17. Opposer's trademark cannot be and has not been declared by a competent authority of the Philippines to be "well-known" internationally and in the Philippines;

"18 . It is crystal clear that the institution of the present Verified Notice of Opposition is downright prematu re in the absence of an expressed acknowledgment from a competent Philippine government agency that Opposer's trademark has attained worldwide fame and recognition .

"19. It is also important to underscore that the trademarks of the herein parties are graphically, connotatively and phonetically different from each other. The trademark of the Opposer is merely a simple wordmark in block capitals while Respondent-Applicant's trademark is a combination of a distinctive X inside a circle device and a stylized word. The device in Respondent-Applicant's trademark is what differentiates and distinguishes it from the trademark of the Opposer;

"20. But even assuming for the sake of argument that the marks are identical, the goods on which the competing trademarks of the herein parties are used in the Philippines are different, non­competing, unrelated, are not complementary to each other and are not sold in the same consumer group;

"21. More importantly, the registration of the mark "X-MEN & DEVICE" in the name of the Respondent-Applicant will not likely mislead the buying public on the nature and origin of the goods because Opposer has not used the said mark in the Philippines for International Class 3 goods. Opposer's conspicuous absence in the Philippines cosmetics market precludes any claim of confusion to the consumer;

"22. The truth is, Respondent-Applicant has every right to the registration of the trademark "X-MEN & DEVICE" in the Philippines because of its being the first to file for the registration of the same in the Philippines for International Class 3 goods.

"23. The application for registration of the trademark "X-MEN & DEVICE" was allowed by the Bureau of Trademarks in accordance with the provisions of Republic Act No. 8293 and its implementing rules with Respondent-Applicant complying and completing all the pertinent requirements for registration and after the closest scrutiny and examination conducted by the Trademark Examiner and the Director of that Bureau;

"24. Respondent-Applicant adopted and started the use of the trademark "X-MEN & DEVICE" in good faith;

"25. Opposer is barred by equitable principles of acquiescence, estoppel and laches from opposing the registration of the trademark "X-MEN & DEVICE" of Respondent-Applicant.

In support of the Answer, respondent -applicant submitted the following evidence, to wit:

EXHIBIT DESCRIPTION

"1 u Affidavit of Chito B. Dimaculangan

Copy of Certificate of Registration (Vietnam)~

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"3" Copy of Certificate of Registration (Vietnam)

"4" Copy of Registration (Paris)

"5" Declaration of Ownership of Trademark (Embassy of Myanmar)

"6" Copy of Trademark Certificate from Kingdom of Cambodia

"7" Copy of Certificate of Registration (International Register under Madrid Agreement and Protocol)

"8" Copy of decision of Ir-..IPI dated 31 October 2006

"9" Copy of Decision of Trademark Register (Vietnam)

"10" Vietnamese Document Re: Dismissal of Request for Cancellation of the validity of trademark registration no. 63481

The preliminary conference was set on March 3, 2008 wherein the respondent­applicant failed to appear, hence, oppose was directed to file its position paper.

The main issue for consideration is whether respondent-applicant's X-MEN & device is confusingly similar to opposer's X-MEN mark. Corollary is whether opposer's X-MEI\J mark is well-known. At the outset, the Bureau shall resolve the issue posed by the opposer which is whether the respondent-applicant's Answer is unverified and deemed not filed.

Opposer discussed that the Answer filed did not contain a verification page. Instead it attached an affidavit executed by Atty. Dimaculangan, who alleged that he is respondent-applicant's Lawyer/Resident Agent in the Philippines. The Answer being unverified, it is opposer's submission that the Answer must be considered as not having been filed in accordance with the Office Order No. 79, Series of 2005 or the amended regulations which provide:

"Section 9. Petition or Opposition and Answer must be verified. - Subject to Rules 7 and 8 of these regulations, the petition or opposition and the answer must be verified . Otherwise, the same shall not be considered as having been filed. Xxx

Section 11. Effect of failure to file Answer. - In case the respondent fails ../Atwl to file an answer, or if the answer is filed out of time, the case shall b~1'" j

decided on the basis of the petition or opposition, the affidavits of the witnesses and the documentary evidence submitted by the petitioner or the opposer ."

A perusal of the Verified Answer filed by respondent-applicant show that it does not contain a verification page. Instead, it is signed by Chito B. Dimaculangan and notarized by Notary Public Sofronio Untalan Jr. Attached to the Answer as an Exhibit is a notarized affidavit also executed by Chito B. Dimaculangan wherein he states that he is the Trademark Lawyer/Resident Agent in the Philippines of International Consumer Products Limited Company. Further, records reveal that an authenticated and notarized special power of attorney executed by the Legal Manager of respondent-applicant authorizing Chito B. Dimaculangan to file a Verified Answer and appear and represent the company in the preliminary conference of the instant case.

The respondent-applicant in its rejoinder cites the case of Arambulo v. Perez, 78 Phil. 387 (1947) where the Court ruled:

'W here the complaint is signed by the attorney, the latter's oath couched in the usual form "Subscribed and sworn to before me on this 23rd day of June, 1945," is a substantial compliance with the rules"

The High Court in In-N-Out Burger, Inc. vs. Sehwani, Incorporated and/or Benita's [G.R. No. 179127. December 24, 2008.], held:

"Moreover, the Court deems it proper not to focus on the supposed technical infirmities of Atty. Baranda's Verification. It must be borne in mind that the purpose of requiring a verification is to secure an assurance that the allegations of the petition has been made in good faith; or are true and correct , not merely speculative. This requirement is simply a condition affecting the form of pleadings, and non-compliance therewith does not necessarily render it fatally defective. Indeed, verification is only a formal, not a jurisdictional requirement. In the interest of substantial justice, strict observance of procedural rules may be dispensed with for compelling reasons. The vital issues raised in the instant Petition on the jurisdiction of the IPO Director for Legal Affairs and the IPO Director General over trademark cases justify the liberal application of the rules, so that the Court may give the said Petition due course and resolve the same on the merits.

Further, in St. Michael School of Cavite, Inc. v. Spouses Crisanto S. Claveria and Gloria M. Claveria IG.R. No. 166301. February 29,2008.], the Supreme Court held: ~

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'We have held that the requirement regarding verification of a pleading is intended to assure that the pleading's allegations are accurate, filed in good faith, and not the product of the imagination or a matter of speculation. While courts and litigants alike are directed to abide strictly by the procedural rules, we have relaxed these rules on the basis of justifiable circumstances and substantial compliance."

The Bureau finds that the circumstances warrant the waiver of strict compliance to the rules in order that the ends of justice may be served and shall admit the answer filed.

Turning to the main issues, the marks of both parties are reproduced below as for comparison.

X-MEN Opposer's mark Respondent-Applicant's mark

The letters used in both marks are identical. Both adopt the letters X, a hyphen, and M,E and N. Inspite of the word component being identical, the font, style of lettering are not the same. Respondent-applicant adopts a stylized form of writing the word X-MEN. Moreover, respondent-applicant's mark is accompanied by a device consisting of a stylized letter X inside a circle device atop the word X-MEN.

In the Philippines, opposer has secured a registration for the mark X-MEN under Certificate of Registration No. 61798 (Exhibit "A") dated October 10, 1995 for goods under Class 16 namely: "publications, particularly comic books and magazines and stories in illustrated form"; Certificate of Registration No. 61711 (Exhibit "B") dated September 26, 1995 for goods under Class 25 namely: "clothing, namely, t-shirts and sweatshirts"; Certificate of Registration No. 61919 (Exhibit "C") dated November ~~~

1995 for goods under Class 28 namely: "Toys, games and playthings, namely: //~

action figures, and accessories, bendable figurines, toy vehicles, action playsets sold as a unit for creative play activities, toy environments for use with action figures, role playing games, model kits, electronic handheld games, cartridges and software for handheld game systems, video game cartridges and software programs for video games, computer game programs". Filewrapper shows that respondent-applicant's application of the X-MEN & DEVICE mark is for goods under Class 3, namely: "Shampoos, shower gels, hair conditioner, perfumes, deodorants for body care, skin care products, namely: facial cleanser, facial toner, facial moisturizer, skin toners, anti­wrinkle creams, anti-aging creams."

The IP Code provides that a certificate of registration is prima facie evidence that the registrant has the exclusive right to use the mark in respect of the goods and service that are related thereto specified in the certificate of registration. The law states:

"Sec. 138. Certificates of Registration. A certificate of registration of a mark shall be prima facie evidence of the validity of 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 related thereto as specified in the certificate."

Considering that opposer's mark X-MEN is registered for goods under Classes 16, 25 and 28 while respondent-applicant applied for the mark X-MEN & DEVICE for goods under Class 3, there can be no objection to the latter's use of the mark X-MEN considering that opposer did not secure any registration for class 3 in the Philippines. Neither can it be said that the goods of the parties are related.

In the case of Esso Standard Eastern v. CA (116 SCRA 336), the Supreme Court held:

"Goods are related when they belong to the same class or have the 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 xxx"

In Mighty Corporation and La Campana Fabrica de Tabaco, Inc., v. E. & J. Gallo Winery and the Andresons Group, Inc., G.R. No. 154342, July 14, 2004, the Court held:

"In resolving whether goods are related, several factors come into Plarr;:~I (a) the business (and its location) to which the goods belong (b) the class of product to which the goods belong

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(c) the product's quality, quantity, or size, including the nature of the, package, wrapper or container

(d) the nature and cost of the articles (e) the descriptive properties, physical attributes or essential

characteristics with reference to their form, composition, texture or quality

(f) the purpose of the goods (g) whether the article is bought for immediate consumption, 100 that

is, day-to-day household items (h) the fields of manufacture (i) the conditions under which the article is usually purchased and (i) the channels of trade through which the goods flow, how they are

distributed, marketed, displayed and sold.

Since the physical attributes of the goods of the parties are so diverse, there can be no likelihood of confusion by the contemporaneous use of the marks.The case of Faberge Incorporated v. Intermediate Apellate Court [G.R. No. 71189. November 4, 1992.] is elucidating:

"Having thus reviewed the laws applicable to the case before Us, it is not difficult to discern from the foregoing statutory enactments that private respondent may be permitted to register the trademark "BRUTE" for briefs produced by it notwithstanding petitioner's vehement protestations of unfair dealings in marketing its own set of items which are limited to: after­shave lotion, shaving cream, deodorant, talcum powder and toilet soap. In as much as petitioner has not ventured in the production of briefs, an item which is not listed in its certificate of registration, petitioner can not and should not be allowed to feign that private respondent had invaded petitioner's exclusive domain. xxx

It ineluctably follows that Section 20 is controlling and, therefore, private respondent can appropriate its symbol for the briefs it manufactures because as aptly remarked by Justice Sanchez in Sterling Products International Inc. vs. Farbenfabriken Bayer (27 SCRA 1214 [1969]): "Really, if the certificate of registration were to be deemed as including goods not specified therein, then a situation may arise whereby an applicant may be tempted to register a trademark on any and all goods which his mind may conceive even if he had never intended to use the trademark for the said goods. We believe that such omnibus registration is not contemplated by our Trademark Law." (1226).

The license agreement (Exhibit "AAA") presented by opposer where the chann~

or territory of distribution is the Philippines show that the licensed articles are "appar:JI1

and does not include goods equivalent to those used by respondent-applicant. Comic books, clothing, toys and playthings are non-competing and totally unrelated to shampoos, shower gels, hair conditioner, perfume and other goods under class 3. Their descriptive properties, physical attributes or essential characteristics like form, composition, texture and quality are not the same. They travel in different channels of trade. Toys and comic books are for children, hobbyists or followers of the X-MEN comic series or movies while shampoos, shower gels, perfumes etc. and skin care products serve different purposes. Witness, Adam Wolff (Exhibit "DOD") testified regarding the income from use of the X-MEN name in the Philippines for various goods and DVD sales and gross receipts from movies. Another witness, Valencia Wong in her affidavit (Exhibit "CCC") testified to the production, distribution and sale of clothing and garments using the X-MEN mark. Marilu Magsaysay Corpus in her affidavit (Exhibit "BBB") testified as the concluding licensing agreements with Jollibee Food Corporation for give-aways of cup holders with figures of X-MEN characters, Wolverine, l\Jightcrawler, Storm and Cyclops and use of X-MEN mark on tumblers and stationary. Opposer even presented newspaper articles published in the Philippines (Exhibits "00" "PP" and "00") to prove that X-MEN movie was promoted and shown in the Philippines. Inspite of this, nothing in particular points to the use of X-MEN for Class 3 goods in the Philippines. Indeed, since opposer registered X-MEN in 1996, it never applied for registration in Class 3.

The Supreme Court in a long line of cases have applied the basic tenet in trademark litigation that identical marks can be applied on goods which are unrelated and non-competing. In Philippine Refining Co., Inc. vs. Ng Sam and the Director of Patents (No. L-26676 July 30, 1982), the Supreme Court held:

"A rudimentary precept in trademark protection is that "the right to a trademark is a limited one, in the sense that others may use the same mark on unrelated goods. Thus, as pronounced by the United States Supreme Court in the case of American Foundries vs. Robertson, "the mere fact that one person has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others of on articles of a different description. Such restricted right over a trademark is likewise reflected in our Trademark Law. Under Section 4(d) of the law, registration of a trademark which so resembles another already registered or in use should be denied, where to allow such registration could likely result in confusion, mistake, deception to the consumers. Conversely, where no confusion is likely to arise, as in this case, registration of a similar or evel1l~ identical mark may be allowed. (Emphasis supplied) I ~I

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"

In Canon Kabushiki Kaisha v. Court of Appeals [G.R. No. 120900. July 20, 2000.], the High Court held:

"Ordinarily, the ownership of a trademark or tradename is a property right that the owner is entitled to protect as mandated by the Trademark Law. However, when a trademark is used by a party for a product in which the other party does not deal, the use of the same trademark on the latter's product cannot be validly objected to."

The same trademark concept is applied in the case of Esso Standard Eastern, Inc. vs. Court of Appeals and United Cigarette Corporation (G.R. No. L-29971. August 31, 1982), wherein the Supreme Court ruled that there is no infringement of the trademark "ESSO" owned and used by petitioner on petroleum products by respondent's use of the same "ESSO" mark on its cigarette goods. It held:

"the law defines infringement as the use without the consent of the trademark owner of any "reproduction, counterfeit, copy or colorable imitation of any registered mark or tradename in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which the use is likely to cause confusion, mistake or to deceive purchasers or others as to the source or origin of such good". Implicit in this definition is the concept that the goods must be so related that there is likelihood either of confusion of goods or business." (Emphasis supplied)

Finally, we cannot give credence to opposer's contention that the X-MEN mark is well known. Section 123 of the Intellectual Property Code of the Philippines (Republic Act No. 8293, hereafter "IP Code") also provides:

"Sec. 123. Registrability. - 123.1 A mark cannot be registered if it:

x x x

(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, as being already the mark of a person other than the applicant for registration, and used for identical or similar goods or services: Provided, that in determining whether a mark is well known, account shall be taken of the knowledge of the relevant sector of the public, rather than o~ the public at large, including knowledge in the Philippines ,. Io~

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which has been obtained as a result of the promotion of the mark; x x x"[Underscoring supplied.]

Also, Rule 102 of the Rules and Regulations on Trademarks contain the criteria to be taken into account in determining well-knowness of a trademark. Thus, Rule 102 provides:

"Rule 102. Criteria for determining whether a mark is well-known. In determining whether a mark is well-known, the following criteria or any combination thereof may be taken into account:

(a) the duration, extent and geographical area of any use of the mark, in particular, the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;

(b) the market share, in the Philippines and in other countries, of the goods and/or services to which the mark applies;

(c) the degree of the inherent or acquired distinction of the mark;

(d) the quality-image or reputation acquired by the mark;

(e) the extent to which the mark has been registered in the world;

(f) the exclusivity of registration attained by the mark in the world;

(g) the extent to which the mark has been used in the world;

(h) the exclusivity of use attained by the mark in the world;

(i) the commercial value attributed to the mark in the world;

U) the record of successful protection of the rights in the mark;

(k) the outcome of litigations dealing with the issue of~ whether the mark is a well-known mark"

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. . . \

Opposer submitted evidence of registrations in the United States of America (Exhibits "E" to "J") and registrations in other jurisdictions (Exhibit "K" to "DO"); it presented several licensing agreements for the use of the mark and several X-MEN characters (Exhibits "SS" to "AAA"). Although, this shows that the mark has been promoted and have gained goodwill, these and other evidence cannot sustain a finding that it is well known internationally. In the Philippines, evidence of promotion and advertising for its X-MEN film does not give it substantial recognition and fame for it to attain a well-known status. Respondent-applicant has also obtained registrations for its mark in Vietnam and several jurisdictions. (Exhibit "2" to "7") and have successfully defended the registration of its mark in cancellation/ opposition cases. (Exhibit "8" and "9").

WHEREFORE, premises considered the OPPOSITION filed by opposer, Marvel Characters, Inc., is, as it is hereby, DENIED. Accordingly, Application Serial No. 4­2006-007714 for the mark X-MEN & DEVICE covering goods under Class 3, namely ''''shampoos, shower gels, hair conditioner, perfumes, deodorants for body care, skin care products, namely: facial cleanser, facial toner, facial moisturizer, skin toners, anti­wrinkle creams, anti-aging creams" filed by respondent-applicant International Consumer products Limited Company,. is, as it is, hereby given DUE COURSE.

Let the filewrapper of "X-MEN & DEVICE", subject matter of this case together with a copy of this Decision be forwarded to the Bureau of Trademarks (BOT) for appropriate action.

SO ORDERED.

Makati City, 8 October 2009.

EST L ITA BELTRAN-ABELARD01 Direct r, Bureau of Legal Affairs ;r ~

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