INTELLECTUAL PROPERTYPHILIPPINES

-versus-

SOCIETE DES PRODUITSNESTLE S.A.

Opposer,

UNI-PRESIDENT ENTERPRISESCORPORATION

Respondent-Applicant.

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IPC Case No. 14-2007-001 20Case Filed : May 7,2007

Opposition to:

Trademark: NOODA CRUNCHApp . Serial No. : 4-2002-003241Filed : April 22, 2002Class: 30

Decision No. 2008 - ft

DECISION

This pertains to the opposition for the registration of the mark "NOODACRUNCH" bearing Application Serial No. 4-2002-003241 filed on April 22 , 2002 forgoods falling under Class 30 of the International Classification of goods, whichapplication was published for opposition on January 05, 2007.

' Opposer in the instant proceedings is SOCIETE DES PRODUITS NESTLE S.A.,a corporation organized and existing under the laws of Switzerland with businessaddress at Vevey, Switzerland. On the other hand , Respondent-Applicant is UN1­PRESIDENT ENTERPRISES CORPORATION, a corporation organized and existing inTaiwan with business address at 301 Chung Cheng Road , Van Harng, Yeong KangShih, Tainan Hsien. Taiwan.

Opposer filed its VERIFIED NOTICE OF OPPOSITION on May 07, 2007. Thegrounds for Opposition are as follows :

1. Opposer is the first to adopt, use and register worldwide including in thePhilippines, the "CRUNCH", "BUNCHA CRUNCH", "KOKO CRUNCH"and "NESTLE CRUNCH" trademarks and their derivatives (hereinafterreferred to as "CRUNCH" trademarks) for, among others, chocolate ,cocoa and preparations having a base of cocoa, chocolate products,confectionery, bakery products, pastry biscuits, cakes, cookies, wafers ,cereals and cereal preparations falling under International Class 30, andtherefore, enjo ys under Section 147 of Republic Act (R.A.) No. 8293 theright to exclude among others from registering or using identical orconfusingly similar marks such as Respondent-Applicant's trademark"NOODA CRUNCH" for goods falling under International Class 30.

2. There is a likelihood of confusion between Opposer's "CRUNCH"trademarks and Respondent-Applicant's trademark "NDDDA CRUNC~-:

Republic of the Philippines

INTELLECTUAL PROPERTY OFFICE351 Sen. Gil Puyat Ave., Makati City 1200 Philippines' www.ipophiI.gov.ph

Telephone: +632-7525450 to 65 • Facsimile: +632-8904862 • email: mail@ipophiI.gov.ph

because Respondent-Applicant's trademark "NOODA CRUNCH" soresembles Opposer's "CRUNCH" trademarks in terms of sound, sight andmeaning as to likely, when applied to or used in connection with the goodsof Respondent-Applicant, cause confusion, mistake and deception on thepart of the purchasing public as being a trademark owned by Opposer ,hence, Respondent-Applicant's "NOODA CRUNCH" trademark cannot beregistered in the Philippines pursuant to the express provision of Section147.2 of RA. 8293.

3. Opposer's "CRUNCH" trademarks for goods falling under InternationalClass 30 are well-known internationally and in the Philippines, taking intoaccount the knowledge of the relevant sector of the public, rather than thepublic at large, as being a trademark owned by Opposer.

4. Respondent-Applicant, in adopting "NOODA CRUNCH" for its goods, islikely to cause confusion, or to cause mistake, or to deceive as to theaffiliation, connection, or association with Opposer, or as to origin,sponsorship, or approval of its goods by Opposer, for which it is liable forfalse designation of origin, false description or representation underSection 169 of RA. 8293.

5. Respondent-Applicant's appropriation and use of the trademark "NOODACRUNCH" infringes upon Opposer's exclusive right to use as registeredowner of its "CRUNCH" trademarks, which is protected under RA. 8293particularly Section 147 thereof .

Opposer relied on the following facts to support its contentions:

1. Opposer is the owner of the "CRUNCH" trademarks and has adopted andused the "CRUNCH" trademarks all over the world. The "CRUNCH"trademarks are registered in the Philippines and in over 70 countriesworldwide long before the appropriation and filing of the application byRespondent-Applicant for the registration of "NOODA CRUNCH" in thePhilippines.

2. There is a likelihood of confusing similarity between Opposer's "CRUNCH"trademarks and Respondent-Applicant's "NOODA CRUNCH".Respondent-Applicant's trademark "NOODA CRUNCH" entirely containsOpposer's "CRUNCH" trademarks. The addition of the word "NOODA"does not avoid the probability of confusion among consumers since thedescriptive character of the "NOODA" portion merely connotes a variant ofOpposer's "CRUNCH" trademarks especially since the goods of Opposerand Respondent-Applicant fall under the same International Class 30 andare made available to the same consuming public and in the samechannels of distribution.

3. Opposer's trademark "CRUNCH" is internationally well-known for havingbeen used, promoted and advertised for a considerable duration oftim~and over wide geographical areas. Opposer's "CRUNCH" trademarks

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were first used in the United States of America in 1938 and in thePhilippines , chocolate bars bearing the "CRUNCH" trademarks was firstsold as early as the 1950s.

4. The use of Respondent-Applicant's trademark "NOODA CRUNCH" wouldindicate a connection with the goods and services covered in Opposer's"CRUNCH" marks, dilute the distinctiveness of Opposer's "CRUNCH"trademarks, and capitalize upon or ride on the valuable goodwill andpopularity of the "CRUNCH" trademarks which Opposer gained throughtremendous effort and expense, hence, the interests of Opposer are likelyto be damaged.

On September 28, 2007, Respondent-Applicant filed its VERIFIED ANSWERwherein it admitted Opposer's allegation of fact that "CRUNCH" trademarks areregistered in the Philippines and that it falls under International Class 30, but specificallydenied the rest of the material allegations in the VERIFIED NOTICE OF OPPOSITIONand put forth the following special and affirmative defenses:

1. Respondent-Applicant is one of the biggest food manufacturingconglomerates in Taiwan, and is one of the top ten players in the foodindustry in China and a majority of other countries in Asia. Respondent­Applicant is already possessed of tremendous goodwill in the food industryin the Philippines and in the region.

2. Respondent-Applicant was founded in Yeong Kang, Taiwan on July 01,1967. Since its inception, its business enterprise has been dedicated tofood manufacturing. Over the years, Respondent-Applicant has directlyand indirectly promoted the social and national prosperity of Taiwan.

3. Respondent-Applicant has over 100 subsidiaries and affiliates worldwideunder its seven (7) major divisions: 1) provisions group; 2) instant food; 3)health food; 4) beverage ; 5) bakery; 6) distribution; and 7) low temperaturefood.

4. In the Philippines, Respondent-Applicant fully owns the subsidiary Uni­President Corporation (formerly known as Uni-President FoodsCorporation), a corporation duly organized and existing under Philippinelaws (Philippine subsidiary). The Philippines subsidiary representsenormous financial capital investments poured into the Philippine foodindustry by Respondent-Applicant when it was organized initially with acapital infusion in the amount of approximately Six Hundred Million Pesos(P600,000,000.00).

5. Respondent-Applicant's Philippine subsidiary is a fully operational foodmanufacturing company currently employing approximately four hundredfifty (450) Filipinos. It is responsible for producing many quality 10ca1lY~

produced instant noodle and beverage products which are sold under the

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brands HO-MI INSTANT MAMI, HO-MI INSTANT PANCIT CANTON,NOODA CRUNCH, AND CHAI LI WON TEA.

6. NOODA CRUNCH products became very popular in the Philippines eversince it was introduced to the instant noodle-eating public in 2002. Thepopularity is due to the quality in taste and texture of the NOODACRUNCH noodles. This is not to mention that the product comes inattractive, colorful, and eye-catching packaging that clearly stands out inthe instant noodle market.

7. Simply on the merit of the product's quality and visually attractivepackaging, the NOODA CRUNCH product generated tremendous saleand goodwill.

8. To protect such goodwill, Respondent-Applicant filed with the Bureau ofTrademarks (BOT) an application for the mark NOODA CRUNCH in Class30 for instant paneit canton. The application was filed on April 22, 2002and covered by Application Serial No. 4-2002-003241 .

9. This move is imperative because the market is stocked with ready-to-eatproducts bearing the word CRUNCH as part of the trademarks for saidproducts but none refers to instant paneit canton .

10. These food products adopt as part of their trademarks the word CRUNCHsuch that various trademarks bearing the CRUNCH word belonging todifferent persons/entities are in co-existence in the Philippine trademarkoffice, such as: Boogyman Crunch and Design, Cap'n Crunch PeanutButter Crunch, Cap'n Crunch, Cardinal's Mocha Crunch, Cool Crunch , SeaCrunch, and Super Crunch Corn Chips.

11. From these wide pool of co-existing registered trademarks, Respondent­Applicant's NOODA CRUNCH will distinctively denote Respondent­Applicant's instant noodle product from the host of other food productsbearing the mark CRUNCH. In the context of co-existing CRUNCHtrademarks belonging to different owners, the instant application forNOODA CRUNCH is, thus, imperative.

12. Records of the BOT and those of trademark offices in other foreignjurisdictions refute Opposer's claim that it has exclusive claim ofownership over the CRUNCH word: Records of the United States PatentOffice (USPTO), for, example, show that the word CRUNCH also formspart of trademark registrations under Class 30 registered in the name ofentities other than Opposer such as: Kellogg's Crunch, Crumble Crunch,Chocolate Chip Crunch, Fitness Crunch, Heavenly Crunch, MooseCrunch, Carnival Crunch, Sassy Crunch, Crunch Patrol, Crazy crunch~

Sundae Crunch, and Star Crunch. , IWU

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13. In the Republic of China (Taiwan), CRUNCH also forms part of thetrademark registrations under Class 30 registered in the name of entitiesother than herein Opposer, some of which are: Crunch, Toffee Crunch,Quaker Crunch, and Cap'n Crunch.

14. A perusal of the documentary evidence submitted with the VERIFIEDNOTICE OF OPPOSITON shows an advertising material for NestleCRUNCH chocolates which acknowledged that the chocolate bars are"crunchy- a special combination of Nestle milk chocolate and crisped ricethat delivers a distinctive taste, texture, and sound." Opposer, therefore,confessed that CRUNCH is a description of the crunchy sound of itsproducts when chewed and, as such, it de-valuated its own mark as notsubject of exclusive appropriation for being descriptive. No wonderCRUNCH was allowed to be appropriated and used by others .

15. Opposer's "CRUNCH" trademarks and Respondent-Applicant's "NOODACRUNCH" trademark are not identical and/or confusingly similar and thegoods covered by the said trademarks are very different: Instant paneitnoodles for NOODA CRUNCH and chocolates for CRUNCH.

16. Applying the Dominancy Test as espoused by the case of Mcdonald'sCorporation and McGeorge Food Industries, Inc. v. L.C. Big MakBurger, Inc., et aI., G.R. No. 143993, Respondent-Applicant's applicationis not identical and/or confusingly similar to Opposer's CRUNCHtrademarks.

17. The Big Mak case requires that there should be a confusion of goods incase of competing goods while there should be a confusion of business incase of non-competing goods. In the instant case, NOODA CRUNCH ismade available to noodle-eating consumers which is not the sameconsuming public for Opposer's CRUNCH trademarks who are consumersof chocolates. Chocolates are not found in the same shelf as noodles inany supermarket. Moreover, opposer is not claiming that it will ventureinto paneit canton products. In other words, there can be no confusion asto goods and even as to origin.

18. Opposer would argue that both paneit canton and chocolates are thesame but this argument has been exploded by jurisprudence: Edible oiland soy sauce were declared different goods although both are fooditems for which reason, thus, the mark "Lotus" was appropriated by therespective manufacturers of said products without giving rise toconfusion; and butter and ham are food products but were declareddifferent and, thus, entitled to the common usage of the mark "Camia".

19. Further proving differences in goods would be the records of the BOTclearly showing that said Bureau has allowed registration of the wordCRUNCH as a trademark for other parties for their snacks, breakfast J/iV"..items, and ather ready-to-eat items. / I~

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20. A side-by-side comparison of the two trademarks and the appearance ofthe contending products using the CRUNCH marks clearly shows thatbased on the Dominancy Test, there can be no likelihood of confusion asto the goods and the source of the goods as the respective trademarksdiffer in terms of sound, sight, and meaning.

Respondent-Applicant'sTrademark as Used

Opposer's Trademark as Used

21 . The dominant feature of NOODA CRUNCH is the word NOODA asCRUNCH appears in a smaller font, and is located below NOODA. Thisdominant NOODA does not exist in Opposer's CRUNCH or otherCRUNCH trademarks. Increasing the differentiation is the fact that theCRUNCH in Opposer's mark is topped by the word "Nestle" which is notfound in NOODA CRUNCH. As to the appearance of the products inwhich the trademarks appear, there is no doubt that when NOODACRUNCH is used on the noodle product, the appearance of the productappears radically different from Opposer's chocolate CRUNCH .

22. Likelihood of confusion is in the context of a scheme of one party seekingto confuse the public in order to mistake its good as belonging to anotherwith established goodwill or reputation. But as shown above, respondent­applicant is itself a highly reputable food company which indicates that itdoes not need Opposer's alleged goodwill in order to be successful. It isalready successful.

23. In the Big Mak case, if the application of the test leads to the conclusionthat there is likelihood of confusion, the party adversely affected can stillclaim a final defense , which is that it adopted the similar mark due tohonest mistake or its adoption is fortuitous.

24. There is strong evidence in the instant case showing that the use of theword CRUNCH is readily an honest use. This is because CRUNCH hasbeen allowed co-registration or registration to several parties.

25. Clearly, use of the CRUNCH word is not an exclusive domain of Opposeras to justify it to complain of infringement or unfair competition. Othershave been issued registration of CRUNCH, according thus such adoptior ~

by another party is not a dishonest act for otherwise, these registrationswould not have been allowed.

26. Opposer's "CRUNCH" trademark can never qualify for protection underthe internationally well-known status provisions, Section 123.1 (e) and (f)of R.A. 8293 because:

a. "CRUNCH" is not a highly distinctive mark,b. Opposer does not have a substantially exclusive use of"CRUNCH" anywhere in the world including the Philippines, andc. "CRUNCH" is not well-known internationally and in thePhilippines.

27. Opposer does not enjoy a substantially exclusive use of the CRUNCHtrademark as demonstrated by the co-existence of registrations issued toCRUNCH trademarks in the name of numerous entities other thanOpposer.

28. Opposer's CRUNCH trademarks are not well-known: They have not beendeclared by a competent authority in the Philippines as well-knowninternationally and in the Philippines, they are not included in the list ofwell-known marks recognized in the Memorandum issued by then MinisterLuis Villafuerte issued on November 20, 1980, and they have not met theother criteria set out in Rule 102 of the Implementing Rules andRegulations/Rules and Regulations on Trademarks, Service Marks, TradeNames and Marked or Stamped Containers.

29. The VERIFIED NOTICE OF OPPOSITION is not properly verified, not indue form and violated Sections 134 of the Intellectual Property Code (IPC)as well as Section 5 of Office Order No. 79 ("Amendments to theRegulation on Inter Partes Proceedings"): The Verification andCertification of Non-Forum Shopping has been executed and signed byNeptali Bulilan, one of Opposer's lawyers, and there is no evidence thathe has personal knowledge of the facts or that he has access to authenticrecords.

30. The Special Power of Attorney (SPA) executed by Dennis Barotappointing Attys. Ignacio S. Sapalo, Augusto R. Bundang, Neptali Bulilan,and/or Sapalo Velez Bundang Bulilan Law Office is not properly legalizedand/or authenticated before the Philippine Embassy. Dennis Barot himselfhas not shown his authority to appoint said attorneys.

31. The copy of the SPA appointing Dennis Barot to be Opposer's attorney inthe Philippines is not the original copy and/or certified true copy thereofas required by Section 5 of Office Order No. 79.

During the Preliminary Conference, the parties were encouraged to discuss thepossibility of settling the case amicably. However, the parties could not agree on~~

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settlement for which reason the preliminary conference was declared officiallyterminated and thereby the Bureau of Legal Affairs (BLA) required them to submit theirrespective position papers, which only the Respondent-Applicant complied accordingly .

The main issue to be resolved in the instant case is:

WHETHER OR NOT OPPOSER HAS SUCCESSFULLYESTABLISHED THE EXISTENCE OF VALID GROUNDS TOSUSTAIN ITS OPPOSITION TO THE CHALLENGED TMREGISTRATION.

In trademark registration cases, certificate of registration is prima facie evidenceof the validity of registration, the registration and ownership of the mark and theexclusive right to use the same in connection with the goods or services and those thatare related thereto specified in the certificate. (Levi Strauss & Co. vs. ClintonApparelle, Inc., 470 SCRA 253-254)

Since both parties have accepted prior registration of Opposer's "CRUNCH"trademarks, the next issue to be resolved is whether Respondent-Applicant's "NOODACRUNCH" is identical and/or confusingly similar with Opposer's "CRUNCH" such thatallowance of its registration would cause damage to Opposer's interests .

In ascertaining whether one trademark is confusingly similar to or is colorableimitation of another, two kinds of test have been developed: The dominancy testapplied in Asia Brewery, Inc., vs. Court of Appeals, 224 SCRA 437; Co Tiong vs.Director of Patents, 95 Phil. 1; Lim Hoa vs. Director of Patents, 31 SCRA 544;Philippine Nut Industry, Inc., vs. Standards Brands, Inc., 65 SCRA 575; ConverseRubber Corp., vs. Universal Rubber Products, Inc., 147 SCRA 154; and the holistictest developed in Del Monte Corp., vs. Court of Appeals, 181 SCRA 410; MeadJohnson & Co., vs. N.V.J. Van Dorp, Ltd., 7 SCRA 771; Bristol Myers Co., vs.Director of Patents, 17 SCRA 128.

As its title implies, the test of dominancy focuses on the similarity of theprevalent, essential or dominant features of the competing trademarks which mightcause confusion or deception, giving little weight to prices, quality, sales outlets andmarket segments. On the other side of the spectrum, the holistic test mandates that theentirety of the mark in question must be considered in determining confusing similarity.

Opposer's Crunch marks are depicted as follows:

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CRUNCH

Exhibit "T"f ~

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Respondent-Applicant's NOODA CRUNCH, meanwhile , is depicted as follows:

NOODACRUNCH

Exhibit 21 Exhibit 22

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Taking into account both tests, this Bureau finds that Respondent-Applicant's"NOODA CRUNCH" is not identical and/or confusingly similar with Opposer's"CRUNCH". For one, the dominant feature of NOODA CRUNCH is the word NOODAbecause CRUNCH appears in smaller font and is located below NOODA. This dominantNOODA does not exist in Opposer's CRUNCH trademarks. Also, the CRUNCH inOpposer's mark is topped by the word "Nestle", which is not found in NOODA CRUNCH.Moreover, NOODA CRUNCH and the CRUNCH trademarks differ in color scheme,visual appearance, spelling, sound and meaning.

In addition, pancit canton vs. chocolates are neither similar nor related: Bycomposition/ingredients, pancit canton is different from chocolate. Moreover, NOODACRUNCH is made available to noodle-eating consumers, which is not the sameconsuming public for Opposer's CRUNCH products, who are consumers of chocolate.Important as well, chocolates are not found in the same shelf as noodles in anysupermarket. The cases of Acoje Mining Co., Inc. v. The Director of Patents, G.R.No. L-28744, April 29, 1971 and Philippine Refining Co., Inc. v. Ng Sam and TheDirector of Patents, G.R. No. L-26676 July 30, 1982 squarely apply in this case:Edible oil and soy sauce were declared different goods although both are food items forwhich reason, thus, the mark "Lotus" was appropriated by the respective manufacturersof said products without giving rise to confusion; and butter and ham are food productsbut were declared different and, thus, entitled to the common usage of the mark"Camia".

Simply put, pancit canton is not within the same market segment as chocolates,which therefore reinforces the conclusion that the contending goods are unrelated andnot similar. Finally, Opposer did not claim that it will venture into pancit canton products,hence, it cannot be claimed that Opposer's natural zone of potential expansion alsoincludes pancit canton. Thus, there can be no confusion as to goods, and even as toorigin.

Opposer would argue that both are under the same classification of food, andthus, there is similarity in goods. This argument is refuted by the ruling in Acoje Miningvs. Directors of Patents, supra, where edible oil and soy sauce were declared differentgoods, although both are food items, allowing the same mark, "Lotus", to be validlyappropriated by both manufacturers without giving rise to confusion; and the ruling inPhilippine Refining Co., Inc. v. Ng Sam and The Director of Patents, supra, wherethe same pronouncement was made as to the difference in the competing food products­butter and ham- though both are food items, allowing the mark, "Camia", to be used byboth manufacturers.

Right to trademark is a limited one, in the sense that others may use the samemark on unrelated goods. Thus, the United States Supreme Court pronounced in thecase of American Foundries vs. Robertson that "the mere fact that one person hasadopted and used a trademark on his good does not prevent the adoption and use of thesame trademark by others on articles of a different description." The right to trademarkis a limited one, in the sense that others may use the same mark on unrelated goods.

This Bureau also finds that "CRUNCH" is not the exclusive mark of Opposerbecause it has been recognized, here and abroad, as subject of ownership by differejn;tJ!

entities other than Opposer. In the Philippines alone, various trademarks bearing theword "CRUNCH" and falling under the same Class 30 which belong to different entitiesare registered in the IP Philippines. These include Cap'n Crunch, Cardinal's MochaCrunch, Cool Crunch , Sea Crunch and Super Crunch Corn Chips. Moreover, a perusalof the documentary evidence submitted with the VERIFIED NOTICE OF OPPOSITIONis an Annex "T" which is an advertising material for Nestle CRUNCH chocolates, which,wittingly or not, acknowledged that the chocolate bars are "crunchy - a specialcombination of Nestle milk chocolate and crisped rice that delivers a distinctive taste,texture and sound." Opposer, therefore, confessed that "CRUNCH" is a description ofthe crunchy sound of its products when chewed, and as such, it de-valuated its ownmark as not subject of exclusive appropriation for being descriptive. Section 123.1 ofthe Intellectual Property Code provides that "[a] mark cannot be registered if it. ..consistsexclusively of signs or indications that may serve in trade to designate the kind, quality,quantity, intended purpose, value, geographical origin, time or production of the goods orrendering the services, or other characteristic of the goods or services."(Underscoring supplied.) Hence, this basic requirement of distinctiveness, when unmet,prevents traders from exclusively appropriating words and phrases for general publicuse by registering them as trademarks for their goods.

Opposer likewise claims that its mark CRUNCH is internationally well known.

The applicable provision of law in the case at bench is Section 123.1 (f) ofRepublic Act No. 8293, otherwise known as the Intellectual Property Code of thePhilippines which provides:

123.1 (f). - A mark cannot be registered if it [is]:

x x x

(f) Is identical with, or confusingly similar to, or constitutesa translation of a mark considered well-known inaccordance with the preceding paragraph, which isregistered in the Philippines with respect to goods orservices which are not similar to those with respect towhich registration is applied for: Provided, That use ofthe mark in relation to those goods or services wouldindicate a connection between those goods orservices, and the owner of the registered mark:Provided further, That the interests of the owner of theregistered mark are likely to be damaged by such use;

x x

Opposer has not adduced facts and evidence sufficient and substantial to be thebasis to make such a declaration in the instant case pursuant to the criteria set out inRule 102 of the Implementing Rules and Regulations/Rules and Regulations onTrademarks, Service Marks, Trade Names and Marked or Stamped ContainerSr~

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Considering that "CRUNCH" trademarks are NOT: (1) exclusive to Opposer, (2)identical and/or confusingly similar with Respondent-Applicant's "NOODA CRUNCH";and (3) internationally well-known, this Bureau finds that Respondent-Applicant isentitled, in fine, to the registration of the mark "NOODA CRUNCH".

WHEREFORE, the VERIFIED NOTICE OF OPPOSITION is, as it is, herebyDENIED. Consequently, Application Serial No. 4-2002-003241 for the registration of themark "NOODA CRUNCH" on goods under Class 30, namely, instant pancit canton, filedon April 22, 2002 by Uni-President Enterprises Corporation is, as it is, hereby GIVENDUE COURSE.

Let the filewrapper of "NOODA CRUNCH" subject matter of this case togetherwith this decision be forwarded to the Bureau of Trademarks (BOT) for appropriateaction.

SO ORDERED .

Makati City, 23 April 2008.

ESTR ITA BELTRAN-ABELARDODirecto , Bureau of Legal Affairs ~

cathy/md

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