A local recording and music publishing company in the Philippines attempted to register “UNIVERSAL RECORDS and U Design” for cassette tapes, compact discs, laser discs, digital audiotapes in Class 9. Universal City Studios Inc. (“UCSI”) opposed the application claiming prior rights based on its earlier registration for UNIVERSAL for entertainment services in Class 41, films in Class 9, printed matters in Class 16, clothing in Class 25 and based on the international fame of its UNIVERSAL trademark. UCSI is part of the Universal group, the giant worldwide entertainment company whose businesses extend to movie, television, music, theme parks and a host of other entertainment products.

The applicant countered that its use of UNIVERSAL RECORDS on music albums will not create any confusion or deception among relevant consumers, arguing that its music albums are not related to UCSI’s motion pictures and films. UCSI pointed out, however, that music-making has been part of its long business history where its trademark UNIVERSAL has been consistently used until today and in tandem with its film production. UCSI maintained that music and film are closely related even while it presented proof to support its claim that its UNIVERSAL trademark is internationally famous and therefore enjoys expanded protection even for unrelated goods and services. UCSI also presented evidence showing that applicant was using UNIVERSAL RECORDS and U Design in bad faith.

Ruling to sustain the opposition, the Bureau of Legal Affairs (BLA) found the contending marks confusingly similar, citing the presence of the UNIVERSAL word which it described as a stand-out feature in both marks. The BLA held that UCSI is the first to use UNIVERSAL and that music is within the normal zone of expansion of its film business. The BLA recognized that UCSI did venture into the music business using UNIVERSAL in several countries around the world.

On appeal, the Office of the Director General (ODG) affirmed the BLA decision. It took a second look at the appearance of both marks and declared that given the presence of UNIVERSAL in both, applicant’s mark can likely be mistaken as nothing more than “a variation” of UCSI’s UNIVERSAL trademark, leading to the likelihood that applicant’s goods will be mistaken for UCSI products. It also ruled that both parties are in the same entertainment industry, “music for the Appellant and films for the Appellee.” In addition, there is relatedness of goods because music is within the normal zone of potential expansion of the business of UCSI. Finally, it declared UCSI as the true owner because of its evidence showing that it was the first to use the UNIVERSAL mark.

The doctrine of relatedness of goods played out prominently in the Director General’s decision, which can serve as one more clear precedent for the protection of trademark rights involving well-known marks.

Applicant appealed the matter to the Court of Appeals, where the case is still pending as of this writing.