Two years ago, Jerzy Makarczyk, a Canada-based real estate broker, filed to federally register a trademark for the word Chanel in the class of goods/services that extends to “real estate development and construction of commercial, residential and hotel property.” The U.S. Patent and Trademark Office (USPTO) found the mark to be eligible for registration and thus, published it for opposition, a standard part of the USPTO trademark registration procedure, which allows third parties to prevent a pending application for a mark from being granted registration if it believes its mark will be damaged by a resulting registration. Chanel opposed Makarczyk’s application, asserting that his use and registration of the mark would create a likelihood of trademark “dilution by blurring.” The Trademark Trial and Appeal Board agreed with Chanel and denied Makarczyk his registration.
In order to establish a claim of dilution, which Chanel ultimately did, the Paris-based design house had to meet several requirements. The USPTO required Chanel to establish that: 1) Its mark is famous and distinctive (put simply, it is widely recognized by the general consuming public as a designation of source of the goods or services of the mark’s owner, Chanel); 2) The party accused of dilution (Makarczyk, here) is using a mark in commerce that allegedly dilutes the owner’s famous mark, that its mark was famous prior to the allegedly infringing use or initial trademark filing, and that the marks (Chanel's and Makarczyk's) are sufficiently similar to each other for dilution to occur; and 3) The distinctiveness of the famous mark will be tarnished (cast in a negative light) or blurred by the accused’s mark.
A number of other factors are considered by the Trademark Trial and Appeal Board in determining whether registration of a mark, should be denied, in connection with an opposition. These include: The degree of similarity between the two marks as to appearance, sound, connotation and commercial impression; The degree of distinctiveness of the famous mark; The degree of recognition of the famous mark; and Whether the accused intended to create an association with the famous mark, among others. The latter is one that is particularly interesting for us in the case at hand, as while Chanel was successful in opposing the registration of Makarczyk's mark on the basis of dilution, Makarczyk has a few federally registered marks that are familiar. Most noteworthy: Hermes.
Makarczyk's registration of the Hermes trademark in the class of services that extends to "Commercial and residential real estate agency services" and the Playboy name for "Housing services, namely, development of real property, namely, repair, improvement, and new construction" arguably sheds light on his intentions for using the Chanel mark. One of the underlying goals of trademark law is to aid consumers in identifying and distinguishing the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services. Implicit in this is the aim of preventing confusion or manipulation of consumers by associating distinct attributes -- particularly, quality -- with a distinct brand. Hence, the connection that Makarczyk is banking on with the existing Hermes mark and the now rejected Chanel mark. He appears to be using two high fashion house names, both of which are internationally known for luxury, quality, and exclusivity, to elude to a sense of quality for his own brands. Thus, he is aiming to create an association between both Chanel and Hermes' famous trademarks and his own businesses.
While it is difficult to form a strong argument that anyone would be confused into believing Chanel had expanded into real estate services or is endorsing or connected to Makarczyk's "Chanel" real estate services in any way (the argument underlying a trademark infringement claim), the point here varies a bit, as we are dealing with trademark dilution and not classic trademark infringement. In fact, trademark dilution most frequently involves the unauthorized use of another's trademark on products/services that do not compete with, and have little connection with, those of the original trademark owner. Thus, a claim may be brought regardless of the presence or absence of competition between the owner of the famous mark and other parties or of likelihood of confusion. Hence: Fashion and real estate services.
According to the Trademark Trial and Appeal Board's decision on the matter, Chanel presented evidence demonstrating that Makarczyk intended to create an association with Chanel’s famous Chanel mark and that the distinctiveness of the Chanel mark is likely to be impaired by any use or registration of the Chanel mark by Makarczyk.
This is decision is significant as it demonstrates the power brands have, particularly if their marks are famous, to potentially monopolize upon the legal right to use their trademarks. Chanel, which has engaged in substantially exclusive use of its CHANEL mark, has been extremely diligent in policing the use of its trademark, expending substantial resources to prevent use by others. This includes “filing over one hundred (100) trademark infringement lawsuits and sen[ding] over one‐thousand (1,000) cease and desist letters, leading the New York Times in 2007 to identify opposer as one of the top ten filers of trademark suits," according to the Trademark Trial and Appeal Board's decision. (A few of those lawsuits include: one filed in 2011 in Las Vegas court against 399 websites that allegedly sold counterfeit items bearing the double "C" trademark and the May 2013 lawsuit that was filed on in Florida’s Southern District Court, in which the French design house’s complaint listed over 1000 web domains that were offering fake Chanel for sale).
Chanel's active monitoring of its trademarks also includes the letter that the Paris-based design house periodically ran on the back page of industry trade publication Womenswear Daily, beginning in 2010, asking editors (and others) to refrain from using the Chanel name to describe products that are not made by Chanel. I'll close with the text of that letter in its entirety …
A note of information and entreaty to fashion editors, advertisers, copywriters and other well-intentioned mis-users of our Chanel name:
Chanel was a designer, an extraordinary woman who made a timeless contribution to fashion. Chanel is a perfume. Chanel is modern elegance in couture, ready-to-wear, accessories, watches and fine jewelry. Chanel is our registered trademark for fragrance, cosmetics, clothing, accessories and other lovely things. Although our style is justly famous, a jacket is not ‘a Chanel jacket’ unless it is ours, and somebody else’s cardigans are not ‘Chanel for now.’ And even if we are flattered by such tributes to our fame as ‘Chanel-issime, Chanel-ed, Chanels, and Chanel-ized’, PLEASE DON’T. Our lawyers positively detest them. We take our trademark seriously.