Chanel, Inc.’s Successful Opposition Based On Dilution By Blurring

Chanel, Inc. (“Opposer” or “Chanel”) filed an Opposition proceeding against an individual applicant Jerzy Makarczyk (“Applicant”) who filed to register the mark CHANEL. The Applicant was interested in protecting the mark CHANEL for real estate development and construction of commercial, residential, and hotel properties in International Class 37. Chanel opposed the application on the grounds of dilution by blurring under §43(c) of the Trademark Act, 15 U.S.C. §1152(a), likelihood of confusion, and false suggestion of a connection under the Trademark Act. Opposer uses the CHANEL mark on a variety of  goods, including but not limited to apparel, jewelry, sunglasses, perfume, and cosmetics. And also for retail store services in the field of clothing and accessories. The Trademark Trial and Appeal Board (“TTAB” or “Board”) did not reach the issues of likelihood of confusion or false suggestion of a connection under the Trademark Act. See Chanel, Inc. v. Jerzy Makarczyk, Opposition No. 91208352 (May 27, 2014)[precedential].

The Trademark Act Sections 13 and 43(c) (15 U.S.C. §§ 1063 and 1125(c)) provide a cause of action for dilution. Dilution by blurring is an association arising from a similarity between a trademark or trade name and a famous mark that impairs the distinctiveness of the famous trademark. The Court of Appeals for the Federal Circuit set forth four elements a plaintiff must prove in order to succeed on this type of claim in a Board proceeding:

(1)   Plaintiff’s trademark must be “famous” and “distinctive”;

(2)   Defendant must be using a mark in commerce that allegedly is diluting the Plaintiff’s famous mark;

(3)   The Defendant’s use of the trademark must have begun after the Plaintiff’s mark became famous; and

(4)   The Defendant’s use is likely to cause dilution by blurring.

This standard was set forth in Coach Services, Inc. v. Triumph Learning LLC, 668 F.3d 1356, 101 USPQ2d 1713, 1723-1724 (Fed. Cir. 2012). To address the first element, the following factors must be reviewed: (1) the duration, extent, and reach of the brand’s advertising and publicity; (2) the amount, volume, and extent of sales or services;  and (3) the extent of actual recognition of the trademark (wide spread recognition by the general public is required). Proving the level of fame required for a dilution claim is a high standard and the opposer has the burden of proof. See our blog post entitled TTAB Precedent – How Fame Impacts A Likelihood Of Confusion Determination, to compare the requirements for a fame showing under different standards.  Another way to determine if a mark is “famous” for dilution purposes is to answer this question in the affirmative, if the general public encounters the trademark, will it associate the trademark with the mark’s owner?

In addition to being famous the mark must also be distinctive. This can be demonstrated through either inherent or acquired distinctiveness. The Board determined that the Opposer’s mark CHANEL was “famous” and “distinctive” and therefore the first prong of the test was satisfied. This conclusion was based on many factors, including extensive advertising of the brand on multiple platforms (print and social media), unsolicited media attention, extraordinarily high sales figures, and unaided consumer recognition. The Board stated that CHANEL has become a household name synonymous with high fashion for apparel, jewelry, and related products.

Chanel satisfied prong two by relying on the Applicant’s filing date as the date of constructive use. The third prong was also easily established because the majority of the evidence regarding the fame of the CHANEL trademark pre-dated the filing date (April 17, 2012) of the trademark application. The fourth prong is the one that requires the most analysis. The Board held that it was likely that use of the mark CHANEL by the Applicant would cause dilution by blurring of the Opposer’s CHANEL mark.

This determination was based on several points of evaluation, including the fact that the two marks were identical, Opposer’s CHANEL mark was distinctive, and that Chanel has engaged in substantially exclusive use of the trademark. In addition, three other factors were considered before finding that dilution by blurring would occur. The other factors include the high degree of consumer recognition enjoyed by Opposer’s mark CHANEL (proven through consumer surveys, unsolicited media coverage, and industry awards), the attempt by the Applicant to associate his real estate development services with the Opposer’s CHANEL brand by incorrectly stating in his marketing material that Chanel was a business client, and any actual association with the subject mark and the famous and distinctive mark. The first five factors favored finding dilution. The Opposer did not present evidence with regard to the sixth factor so it was considered neutral.

Lastly, the statute requires a showing of impairment or damage to the distinctiveness of the mark.  The supporting declarations pointed out that there is a history of luxury brands licensing their marks to hotels or even expanding their brands into fields related to real estate. Based on these statements the Board found that CHANEL’s distinctiveness was likely to be impaired. Since the Board sustained the opposition on the claim of dilution by blurring, it did not need to address the remaining claims. Whether an Opposer can prove that their trademark is famous is a fact sensitive inquiry. Different standards may apply depending on the nature of the claim. If you feel you have a claim against a trademark registrant, kindly contact our offices for a courtesy consultation with a trademark attorney.