The player is faced against Fox and Falco on the Lylat System: Venom stage, but Fox and Falco are both equiped with a Cloaking Device that never ends. As a result, this battle might be slightly difficult. Despite being invisible, Fox and Falco can still rack up damage percent (otherwise, this event match would most likely be much harder) Smash Attacks are a good way to defeat them fast. Since Fox and Falco sometimes fall of the edge and have a hard time on recovering, use edgeguarding techniques to your advantage. Clearing this event match does not unlock Falco if you do not have him already.
To make this event a bit easier, try an Invisible Melee against Fox and Falco on Venom. It's essentially the same thing, except the character you choose is not invisible in the event. The trick here is to break Fox and Falco apart because they're easier KO alone. To do this pick Dr. Mario and use Dr. tornado to break them, fight one, and repeat if they both attack.