Jerzy Makarczyk filed an application to register the mark CHANEL in connection with real estate development and commercial, residential, and hotel property construction services. Makarczyk has named luxury rental properties after brands such as Hermes, Dior, Givenchy, and Versace. 

Chanel, Inc. is the owner of the internationally recognized luxury brand CHANEL. In the United States, the mark has been used on products such as clothing, soap, perfume, watches, and handbags since the early 1930s. Chanel has not used or registered the mark in connection with real estate services.

Chanel opposed Makarczyk’s application on the grounds of likelihood of dilution by blurring, likelihood of confusion, and false suggestion of connection.  The TTAB found that the applicant’s proposed use of CHANEL would likely cause dilution by blurring of Chanel’s CHANEL trademark. The Board did not address Chanel’s other claims. 

To prevail on its dilution claim, Chanel had to prove that its mark is famous and distinctive. A famous mark is one that is a “household name,” i.e., when the general public sees the mark, it associates the term initially with the famous mark’s owner. A mark is distinctive when the public associates the term with the famous owner of the mark even when the term appears on goods and services not produced by the owner. 

The Board found that CHANEL is a famous mark based on Chanel’s evidence of its commercial success, extremely high sales of its goods, substantial advertising expenditures, social media campaigns, celebrity endorsements, survey evidence and rankings listing it as one of the most recognized designer brands. Even though CHANEL is not inherently distinctive (it derives from founder Coco Chanel’s name), the Board found that the evidence submitted by Chanel established the mark has acquired distinctiveness. 

Chanel was also required to show that Makarczyk’s use of the mark was likely to dilute the distinctiveness of Chanel’s mark. The Board found a likelihood of dilution based on several factors: the identical nature of the marks, the high degree of distinctiveness and fame of CHANEL among consumers, Chanel’s substantially exclusive use of CHANEL and high expenditure of resources to protect the mark, and Makarczyk’s intent to create an association with the mark owned by Chanel as evidenced by certain statements on his website. 

Finally, Chanel proved potential impairment of the distinctiveness of its mark. Chanel argued that use of CHANEL by Makarczyk in connection with luxury real estate services would devalue Chanel’s brand. Although, Chanel has no current involvement in the real estate or hotel industry, other luxury brands have expanded into industries such as hotels, interior design services and bathroom fixtures.  The Board found this was sufficient to show that Chanel would be likely to suffer impairment if Makarczyk used the term in connection with real estate services.

Chanel, Inc. v. Jerzy Makarczyk, Opposition No. 91208352 (TTAB May 27, 2014) [precedential].