Thursday, May 29, 2014

Precedential No. 23: CHANEL for Real Estate Services Dilutes Famous CHANEL Mark, Says TTAB

The Board sustained Chanel, Inc.'s opposition to registration of the mark CHANEL for "real estate development and construction of commercial, residential and hotel property," finding the mark likely to cause dilution-by-blurring of opposer's famous CHANEL mark. Applicant Jerzy Makarczyk, appearing pro se, agreed to proceed under the Board's Accelerated Case Resolution ("ACR") regime, following the "summary judgment model." [See TTABlog post here]. He neither filed a brief nor submitted any testimony or evidence. Chanel, Inc. v. Jerzy Makarczyk, 110 USPQ2d 2013 (TTAB 2014) [precedential].

Fame and Distinctiveness: Chanel established that it began using its mark in the United States in the 1930s. It submitted 15 registration for the CHANEL mark, for perfume and cosmetics, jewelry, clothing, handbags, sunglasses, watches, keychains, leather goods, and retail store services. Its annual sales figures are "extremely high," and advertising expenditures are in the tens of millions of dollars per annum. Chanel's website receives millions of visits per year, and celebrities from Marilyn Monroe to Brad Pitt have endorsed its products or have appeared in opposer's advertising.

The CHANEL mark has consistently been ranked as one of the most recognized and famous brands in the United States. Its products have won numerous industry awards. Survey evidence demonstrated that the mark is "extremely well known and enjoys an unusually high degree of unaided and aided recognition." Moreover, those surveys were commissioned prior to the commencement of this proceeding and were used in the ordinary course of business, making them even more probative.

Opposer’s consistent history of U.S. advertising on multiple platforms such as print and social media, its extremely high sales figures and its high degree of unsolicited media attention and unaided consumer recognition, support the finding that CHANEL enjoys widespread recognition among the general public and is a “household name” synonymous with high fashion and style for the products and services identified in its pleaded registrations, and is therefore famous for dilution purposes.

The Board also found that the CHANEL mark is distinctive. Although some of opposer's registrations were issued under Section 2(f), the record evidence established that the mark has acquired distinctiveness and therefore is "distinctive" within the meaning of Section 43(c).

Applicant's use: Because the opposed application was based on actual use, opposer was required to show that applicant's use of his mark was likely to cause dilution. Here, Chanel did not provide evidence that applicant was using his mark, but the Board ruled that in proving applicant's use, opposer may rely on either direct evidence or on "the application filing date as the date of constructive use." [I find the Board's discussion of the "use" issue to be muddled at best and confusing at worst - ed.].

When famous? A dilution claimant must also show that its mark became famous prior to applicant's first use date (here, his filing date of April 17, 2012). The Board found it well-established that the CHANEL mark became famous before that date.

Will blurring occur? Dilution-by-blurring occurs when "a substantial percentage of consumers, when seeing the junior party's use of a mark on its goods or services, are immediately reminded of the famous mark and associate the junior party's use with the owner of the famous mark." Moreover, that association must "impair" the distinctiveness of the famous mark.

The Board then considered the six non-exhaustive factors set forth in Section 43(c)(2)(B)(i)-(vi). It found the involved marks to be (not surprisingly) identical, opposer's mark CHANEL to be highly distinctive, opposer's use of its mark to be substantially exclusive, and consumer recognition of opposers' mark to be high. The Board further found that applicant intended to trade on the fame and goodwill of the CHANEL mark, as evidence by statements on his website. Finally, the Board found the sixth factor (any actual association) to be neutral.

As to the issue of impairment, the Board observed that, although opposer has no current involvement in real estate, many luxury brands have licensed use of their marks in connection with hotels, and other have found opportunities in related areas, like interior design services and bathroom fixtures. This evidence sufficed to show that opposer would likely suffer an impairment of the distinctiveness of its mark.

In sum, the Board found dilution-by-blurring likely and it sustained the opposition on that ground, declining to reach opposer's Section 2(a) and Section 2(d) claims.

Read comments and post your comment here.

TTABlog note:  The impairment discussion is a bit strange and/or strained, I think.

Text Copyright John L. Welch 2014.


At 6:53 AM, Anonymous Anonymous said...

Jerzy will just have to rest on his HERMES laurels, I guess.

At 10:34 AM, Anonymous Anonymous said...

yep, can't claim confusion because they don't sell in the same chanels of trade.

At 11:07 AM, Anonymous Anonymous said...

Hmmm, the Board said it would endeavor to issue a decision by December 17, 2013. They missed by only five months. BTW, since Jerzy declined to file a responsive brief on the motion for summary judgment, why didn't the Board just grant the motion as conceded?

At 7:21 AM, Blogger Unknown said...

While the real estate and perfume industries are significantly different,I do think that if I saw the use of the well reputed mark Chanel on a real estate ad, I would be slightly, perhaps subconsciously confused by it, and would suspect it to be Chanel the perfume branching out into new industries. So, I do think personally, that the mark would become diluted and blurred. This is one instance when the classic sword and shield approach to IP may make the most sense.

At 9:10 PM, Anonymous Anne Gilson LaLonde said...

John, I think you're right about the impairment discussion. The Board didn't need to mention that other luxury brands are in the hotel business. What happened to KODAK lipstick, the classic blurring example? It doesn't matter whether KODAK would enter the makeup business. Here, the harm is that the consumer won't associate CHANEL exclusively with the luxury goods provider, not that CHANEL won't be able to enter the hotel business. Blurring is confusing, but I think the Board didn't get that part right here.


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