Case Study 23: A court case concerning well-known trademark “X-Men” between Marvel Characters Inc. and the Vietnamese applicant
A recent court case has attracted significant public attention in Vietnam: Marvel Characters Inc., USA v. the National Office of Intellectual Property over registration of the trademark “X-MEN & device” in the name of ICP, a Vietnamese company. Although it’s no surprise that the NOIP won against Marvel, this case may still be considered as important in the development of the IP protection system in Vietnam and showed the need for improving professional capabilities of Vietnamese judges in this new and specialized legal field.
The Plaintiff in the case is Marvel Characters Inc. (“Marvel”), a U.S. worldwide famous entertainment company, holder of copyright in and over a great number of famous works including “X-Men”, a work about a team of mutant superheroes, which has been familiar to and loved by the public all over the world. Marvel is also the proprietor of the trademark “X-MEN” that has been registered in many countries including Vietnam, where the mark is protected under the trademark registration certificate No. 11455 granted on April 07, 1994 by the NOIP for products in classes 09, 15, 22 and 28.
The Defendant is the NOIP, the government authority in charge of intellectual property which issued Decision No. A05811/QĐ-ĐK dated June 08, 2005 to grant a registration certificate for the trademark “X-MEN & device” in class 03 in the name of International Consumer Products Company (“ICP”). ICP is the party having related rights and interests in the lawsuit.
According to the case dossier, on June 27, 2003, ICP filed with the NOIP the trademark application No. 4-2003-05427. After examination, the NOIP granted a registration certificate for the trademark “X-MEN & device” with respect to “home-use chemical cosmetic products” in class 03 in the name of ICP.
On August 08, 2006, Marvel filed a request for cancellation of the above trademark registration in the name of ICP on the grounds that it did not meet the requirements for protection at the time of filing, specifically: (i) it was identical with the well-known mark “X-MEN” owned by Marvel (Article 6.1.e of Decree 63/CP); (ii) it was identical with the name and iconic image of X-MEN characters under copyright held by Marvel (Article 6.1.h of Decree 63/CP); and (iii) ICP took advantage of the reputation of the X-MEN mark and X-MEN characters owned by Marvel in advertisement and marketing to cause confusion and deceive customers (Article 6.2.d, Decree 63/CP).
However, Marvel’s request was refused by the NOIP under Decision No. 93/QĐ-SHTT dated January 22, 2008. In disagreement with the NOIP, Marvel filed an appeal against the NOIP’s Decision with the Ministry of Science and Technology (“MOST”) but it was also dismissed by the MOST under Decision No. 1428/QĐ-BKHCN dated July 11, 2008.
Marvel then decided to bring the NOIP to the court for its decision to register the trademark “X-MEN & device” in the name of ICP, and its complaint was accepted by Hanoi People’s Court under the docket number 08/2010/TLST-HC dated October 08, 2010.
On March 29, 2013, the Administrative Court under Hanoi People’s Court opened the first instance trial adjudicating the administrative lawsuit, with the presence of representatives of Marvel Characters Inc., the Plaintiff, of the NOIP, the Defendant, and of ICP, the party having related rights and interests.
After reviewing the parties’ arguments and evidences, the Trial Panel of the Administrative Court under Hanoi People’s Court has rendered the First Instance Verdict No. 03/2013/HCST dated March 29, 2013 dismissing Marvel’s complaint, declaring valid the registration certificate No. 63481 for the trademark “X-MEN & device” with respect to the goods in class 03 in the name of ICP. This judgment has not been appealed, and thus has become final and effective and enforceable.
Up to date, only a small number of IP related disputes has been brought to the Vietnamese court, as IPR holders are concerned about professional qualification and experience of judges, as well as the efficiency and transparency of the courts in dealing with IP matters. In such circumstances, any IP disputes brought to court would draw enormous attention of the public and media and often be welcome as positive signs of the improvement in capabilities and roles of the courts. Some positive people hope that judges may become “IP experts” if they have more such opportunities to work with professional attorneys, paving the way for the successful establishment of a first IP specialized court in Vietnam.
On the legal aspect, although the Court might have had sufficient basis for its decision to dismiss the Plaintiff’s complaint, regrettably, it has failed to expound cohesively such basis by directly and clearly responding to each of the legal grounds for trademark cancellation cited by the Plaintiff, giving impression of vague grounds for dismissal of the complaint. Nevertheless, the case has raised some interesting legal issues as follow:
1. Regarding the applicable laws:
The judgement has once more reaffirmed the principle according to which the legal provisions effective at the time the trademark application is filed shall be applicable to determine the validity of the eventual trademark registration, regardless whether they still exist or not at the time an invalidation action is filed. In this particular case, although Article 6.1.h of Decree 63/CP was abrogated by the 2005 IP Law , it is still applicable for determining the validity of the trademark “X-MEN & device” which had been filed in 2003.
2. Regarding the relation between copyright and trademark right:
Another interesting issue raised in this case is what signs can be deemed as identical (or not identical) with “a figure, character which is already under the copyright of another person” as provided for in Article 6.1.h of Decree 63/CP (which has been abrogated, but still applicable in this case).
Based on the above said Article 6.1.h, Marvel argued that the trademark “X-MEN & device” of ICP did not meet the requirements for protection as it was identical with name and character X-MEN under Marvel’s copyright. Nonetheless, the Trial Panel’s has found that “Marvel’s X-MEN includes a team of mutant superheroes, not a specific character and each of the person in the team has his/her own name, whereas ICP’s X-MEN shows the image of “A real man”. This statement of the Trial Panel might have implied that the trademark “X-MEN & device” of ICP is not considered as identical with the figure and character X-MEN under copyright of Marvel, because the latter indicates the image of “A real man” whereas the former is a group of characters with superhuman power. Regrettably, the court has not expressly confirmed the above, and neither answered directly to the question why the trademark “X-MEN & device” of ICP is not considered identical with the figure and character X-MEN under Marvel’s copyright.
It is also worth reminding that the NOIP did give a direct answer to this question. Accordingly, the trademark “X-MEN & device” of ICP was not considered identical or confusingly similar to the figure, character of Marvel’s X-MEN, since the mark consists of the word “X-MEN” in capitalized letters and a stylized “X” in a circle, whereas Marvel’s X-MEN are mutant individuals. Moreover, the NOIP also provided its further arguments by stating that “X-MEN & device” is a trademark, not a work, and therefore legal ground for infringement of the right to make derivative works shall not be applicable for assessment of its protectability as a trademark”.
Also of note, both the Court and the NOIP cited the opinion of the Copyright Office of Vietnam to affirm that “names of [fiction] characters are not protected”. Nonetheless, it is not clear whether this means that names of characters of a well-known work may be used as a trademark or otherwise as freely and unconditionally as any other signs. Perhaps this is one of the very important issues that enforcement bodies will have to clarify in the future.
3. Regarding the well-known mark issue:
Similarly, of note, the Court’s judgement did not give a direct and clear explaination why Marvel’s “X-MEN” is not a well-known mark. Findings of the Trial Panel might have implied that one of the reasons why the Court refused to recorgnise Marvel’s “X-MEN” trademark as well-known is because the evidences provided by Marvel “had not been determined/certified by a competent authority”. Regrettably, the Court has not pointed out which authority has the competence to determine/certify such evidences.
Similarty, it is also difficult to understand the Trial Panel’s finding that “At the time ICP filed its application for registration of the disputed mark, Marvel did not have products of the same kind, i.e. cosmetics”, moreover, “Marvel’s sales figures of goods bearing the mark “X-MEN” did not determine the part of sales of beauty care products (in class 03) and that of pharmaceutical products (in class 05)”. It is worth reminding that pursuant to Article 75.3 of the IP Law, sales figures are one of the criteria for determining whether a mark is well-known, but these “sales figures” are conventionally interpreted as turnover of the sale of all the goods/services bearing the mark regardless of class. In view of this, it is curious to think that according to the Court, in order for Marvel’s “X-MEN” to be considered well-known, it must be used for “products of the same kind” in class 03, and the sales figures must determine the portion of sale of “products of the same kind” i.e cosmetics.
It is worth reminding that the NOIP had previously provided a clearer analysis for its decision holding that Marvel’s “X-MEN” is not a well-known mark. Specifically, according to the NOIP, the evidences provided by Marvel did not demonstrate that “the Vietnamese customers really know about the trademark “X-MEN” of Marvel, as required by Article 4.20 of the IP Law. The Court regrettably did not exmine and provide its opinion on this aspect.
4. Regarding the unfair competition issue (Article 6.2.d):
It is noted that among the 3 legal grounds cited by Marvel in its request for cancellation of the ICP’s trademark, only this third ground of the alledged bad faith of ICP has received a direct response from the Court. Specifically, the Trial Panel has held that “there is no basis to determine that ICP was in bad faith and took advantage of the reputation of Marvel’s trademark “X-MEN”, because Marvel failed to provide evidences of advertising materials showing that ICP had used the images of the wolrdwide famous actor Brad Pitt and the icon associated with the word “Hollywood” to promote its products, as allegedly claimed. The Court did send 2 official letters to Ho Chi Minh City Department of Health as per Marvel’s request for collection of evidences, without obtaining any result. On the other hand, Marvel failed to provide evidences proving its rights over the images of the famous actor Brad Pitt as well as the icon associated with the word “Hollywood”.