TRADE MARKS ORDINANCE (Cap. 559) OPPOSITION TO TRADE MARK APPLICATION NO. 303659310AB MARK: CLASSES: 16, 18, 25 APPLICANT: KABUSHIKI KAISHA MIXI (MIXI, INC.) (now changed name to MIXI, INC.) OPPONENT: MONSTER ENERGY COMPANY STATEMENT OF REASONS FOR DECISION Background 1. On 14 January 2016, Kabushiki Kaisha Mixi (Mixi, Inc.) (the “applicant”) filed an application (the “subject application”) under the Trade Marks Ordinance, Cap. 559 (the “Ordinance”) for registration of the following mark:- (the “subject mark”). 2. Registration is sought in respect of various classes of goods. The subject application was subsequently divided into 303659310AA and 303659310AB. The present proceedings is only in relation to the latter which seeks to register the following goods (“subject goods”) in Classes 16, 18, 25:- Class 16 pastes and other adhesives for stationery or household purposes, printed lottery tickets [other than toys]; paper and cardboard; stationery; printed matter; paintings [pictures]; calligraphic works; photographs [printed]; photograph stands; cards; card files; trading cards; note books; file folders; mechanical pencils; ballpoint pens; stickers [stationery]; notepads; calenders; sacred lots [Omikuji]. 1 Class 18 handbag frames; purse frames; horseshoes; clothing for pets; straps for luggage; bags; pouches; portable vanity cases [not fitted]; umbrellas; tote bags; purses; credit card cases [wallets]. Class 25 tee-shirts; clothing; garters; sock suspenders; braces for clothing [suspenders]; waistbands; belts [clothing]; footwear [other than boots for sports]; masquerade costumes; clothing for sports; boots for sports; sleep masks. 3. Particulars of the subject application were published on 27 May 2016. Monster Energy Company (the “opponent”) filed a notice of opposition which includes a “Statement of Grounds of Opposition” (the “Grounds of Opposition”) on 17 August 2016. 4. The opposition hearing took place before me on 5 June 2019. Mr. Philips B.F. Wong of Counsel, instructed by Rebecca Lo & Co, represented the opponent. Mr. Ling Chun Wai, Counsel, instructed by Hogan Lovells, represented the applicant. Grounds of opposition 5. In the Grounds of Opposition, it is claimed that the opponent, a company organized and existing under the laws of Delaware, United States of America, is a well-known seller of a wide range of beverage products and the owner of a family of trade marks incorporating the word “MONSTER” including but not limited to “MONSTER”, “MONSTER ENERGY”, “M MONSTER ENERGY”, “M MONSTER ENERGY Device”, “ASSAULT M MONSTER ENERGY”, “ASSAULT M MONSTER ENERGY Device”, “J AVA M O N S T E R ”, “MONSTER REHAB”, “MONSTER PREDATOR”, “M MONSTER MYTANT”, “MONSTER ENERGY + JUICE KHAOS”, “M MONSTER M-80 ENERGY + JUICE Device”, “MONSTER KHAOS ENERGY + JUICE”, “J AVA M O N S T E R BIG BLACK”, “MONSTER M-80”, “MONSTER DETOX”, “MONSTER REHABITUATE”, “MONSTER UNLEADED”, “MONSTER ENERGY ULTRA RED”, “MONSTER RIPPER”, “X-PRESSO MONSTER”, and “JUICE MONSTER” (collectively the “Opponent’s 2 Marks”). Representations of the Opponent’s Marks (25 of them in total) are shown in Schedule A to the Grounds of Opposition. Some of these marks (14 of them in total) have been registered in Hong Kong (collectively the “Opponent’s HK Marks”). Representations of the Opponent’s HK Marks are shown in Schedule B to the Grounds of Opposition. 6. The opponent opposes registration of the subject mark under sections 11(4), 11(5) and 12 of the Ordinance. Counter-statement 7. The applicant filed a counter-statement on the specified Form T7 on 17 November 2016, attached to it is a statement entitled “Counter Statement” which denies all the grounds of opposition and identifies the co-existence of exemplary groups of trademark registrations in Hong Kong for marks containing the word “MONSTER” in respect of identical or similar goods. The opponent’s evidence 8. The opponent’s evidence comprises two statutory declarations of Rodney Cyril Sacks, the first one made on 20 April 2017 (“Sacks’ 1st Declaration”) was filed as evidence in support of opposition under Rule 18 of the Rules, the second one made on 19 April 2018 (“Sacks’ 2nd Declaration”) was filed as evidence in reply under Rule 20 of the Rules. Mr. Sacks is the Chairman and the Chief Executive Officer of Monster Beverage Corporation and its subsidiaries including the opponent which authorized him to make the statutory declarations on its behalf to oppose the subject application. The facts he deposed to in his statutory declarations are based on his own personal knowledge or from information derived by him from the opponent’s records. 3 9. According to Mr. Sacks, the opponent is in the business of designing, creating, developing, producing, marketing and selling energy drinks and other beverages such as natural sodas, fruit juices, iced teas etc. It is claimed that the opponent has been widely acknowledged as a leader in the beverages industry. A number of recognition and awards were received by the Opponent e.g. “Beverage Company of the Year” by The Beverage Forum in 2004 and 2006 and “Large Beverage Company of the Year” in 2009, Forbes’ “Top 200 Best Small Companies” in 2000, 2004, 2005, 2006 and 2007, Fortune Magazine’s “100 Fastest Growing Companies” in 2005, 2006, 2007 and 2008, and “One of the Most Innovative Companies” by Forbes in 2014, 2015 and 2016, etc.1 10. The opponent has sought registration of its trade marks which include “MONSTER”, “MONSTER ENERGY”, and the claw marks “ ” and “ ” in many countries and areas worldwide including Hong Kong. Exhibit “RCS-1” to Sacks’ 1st Declaration contains a list of registered and pending trade marks of the opponent in Hong Kong.2 11. It is claimed that the MONSTER ENERGY beverage line has been tremendously successful since its launch in the United States in April 2002, and MONSTER ENERGY drinks started selling outside of the United States in 2003. At the time of Sacks’ 1st Declaration in April 2017, MONSTER ENERGY drinks were available in approximately 120 nations and territories around the world, and worldwide retail sales exceeded 3 billion cans per year. Over the years, the opponent has expanded the range of beverage products sold under the MONSTER ENERGY marks. Apart from the traditional line of energy beverages, the opponent has other lines of energy drinks such as tea-based non-carbonated energy drinks, dairy-based coffee plus energy drinks, dairy-based protein energy shakes, etc. According to Sacks’ 1st Declaration, MONSTER ENERGY drinks were the best-selling energy drinks in the United States and the second best-selling worldwide by unit volume. Worldwide gross sales increased from US$1.95 billion in 2011 to US$3.11 billion in 2015.3 1 Sacks’ 1 st Declaration, para 4. 2 Paragraph 6 of Sacks’ 1st SD 3 Sacks’ 1 st Declaration, paras 8-12 & 17. 4 12. The opponent launched the MONSTER energy drinks in Hong Kong in April 2012. From April 2012 to December 2015, it had sold more than 2.9 million cans of MONSTER energy drinks in Hong Kong amounting to sales of approximately US$2.9 million. 4 Exhibit “RCS-2” is an undated photograph of a can of MONSTER energy drink which is claimed to have been distributed in Hong Kong. Exhibit “RCS-3” is copy of an invoice dated 17 September 2015 issued by Monster Energy Hong Kong with respect to a product with the description of “Monster Absolutely Zero”. 13. According to Mr. Sacks, in Hong Kong, the opponent’s MONSTER energy drinks have been sold in over 3,000 retail outlets, including retail stores, gas stations and other outlets such as drug stores and on premise. Specific trade outlets include 7-Eleven, Circle K and ParknShop stores.5 14. Mr. Sacks claims that the opponent’s marketing strategy is not conventional in that it does not use direct television or radio advertising to promote its marks. The majority of its marketing, advertising and promotional budget are spent on athlete endorsements and sponsoring athletic competitions and other events. In particular, its marketing focus includes international events, including events that are webcast on the Internet where its target market of young males spend a great deal of time. The advertising, marketing and promotions that it carries in relation to its marks are all about image, and the image of MONSTER energy drinks is “edgy and aggressive”. It is considered that the athletes and events that the opponent sponsors tend to be edgy and aggressive, or extreme, and that it is the indirect and non-traditional forms of advertising such as sponsorship and product placement which are instrumental in reaching the opponent’s target market.6 Exhibit “RCS-4” are some photographs of the opponent’s sponsored athletes bearing the Opponent’s Marks. Exhibit “RCS-5” are photographs showing the point of sale for MONSTER energy drinks sold in Hong Kong. 15. The opponent’s worldwide expenditure since 2002 in advertising, marketing and promoting its MONSTER energy drinks was over US$4.6 billion, and over US$2.04 million was spent between April 2012 and December 2015 in marketing and 4 Sacks’ 1 st Declaration, para.13. 5 Sacks’ 1 st Declaration, para.16. 6 Sacks’ 1 st Declaration, paras 20-24. 5 promotional activities in Hong Kong to promote MONSTER energy drinks.7 16. In Hong Kong, the opponent has participated in a number of events such as the 2012 Animation-Comic-Game entertainment and book fair. It is said that the Opponent’s kiosk at the event featured a tent branded with the MONSTER marks etc. It is also claimed that at the opponent’s official Hong Kong launch party held at Hyde Club on 23 August 2012, the MONSTER marks were prominently displayed throughout the event venue. The opponent also sponsored several action sports competitions in Hong Kong during 2012 including the Hong Kong X-Battle BMX contest, the MX Club Mountain Bike Festival, the DC Monster Energy APAC Skate Tour, and the Monster Energy HK Wakeboard Championship to promote its products and the MONSTER marks.8 No exhibit has been produced for the aforesaid events.