19 Jul 2021

Thought Leadership: Chanel Loses Trademark Dispute against Huawei

Luxury fashion brand Chanel has lost a European dispute with the European General Court ruling the visual differences between the trademarks were significant.

The European General Court (EGC) recently ruled against Chanel and the EUIPO in an important case concerning a trademark application by electronics company Huawei. Huawei applied for registration of a mark featuring two interlocking semi-circles for computer hardware. However, Chanel opposed Huawei's trademark application with the EUIPO, arguing that the two vertical interlocking semi-circles were too similar to its well-known mark used on clothing, accessories, perfumes and make-up.  The fashion company claimed that, because of the similarity between the marks, there was a likelihood of confusion, and that the use of the mark that Huawei had applied for would be detrimental to the distinctive character and reputation of Chanel's own well-known mark.

The Opposition Division of the EUIPO rejected Chanel's opposition in its entirety, with the EUIPO's Board of Appeal also ruling against Chanel. Both stated that there was no similarity and that the public were not likely to confuse the two marks. Chanel challenged the ruling at the EGC, which again dismissed the appeal on April 21.

Chanel's argument that the two marks are visually similar, at least when Huawei's mark is rotated by 90 degrees, did not hold water with the EGC, which stated that marks should be compared in the form in which they have been registered or applied for, even if there is a chance that they will be rotated or seen the other way up by the public on products in the market. This led to the EGC's conclusion that “the marks at issue are visually different, despite the presence in each of them of two interlaced curves within a black circle, the latter being, moreover, a common geometric element".  Chanel's appeal was therefore dismissed in its entirety in what is a landmark decision on the use of potentially similar trademarks. Chanel can now appeal to the Court of Justice of the European Union if it wants to pursue the matter further.

A comparison with the EGC's judgment in the Volkswagen v EUIPO – Paalupaikka case (upheld by the Court of Justice on appeal) is also of interest in this context. This case bears a resemblance to this one since Volkswagen claimed that the new mark applied for was similar to its own registered trademark when rotated by 180°.  In the Chanel / EUIPO judgment the EGC referred to this ruling and stated: “it was only for the sake of completeness that it took account of the representation of the mark applied for positioned back-to-front on the goods that it covered". The EGC has now again confirmed its approach that comparison between signs can only be made on the basis of the shapes and/or orientations depicted in the signs as they are actually registered or applied for. Any consideration of any possible rotation is for completeness only and therefore should not be taken as the basis on which to make a comparison between signs.

This case once again demonstrates clearly that opposition proceedings need to focus exclusively on the mark as it is registered or the sign as applied for. Court proceedings can, of course, also consider the practical use of the marks but potential uses that may change the shape or orientation of registered marks are not currently effective grounds for a successful challenge. 

Authors: Lotte Rutgers (lotte.rutgers@leeway.nl)

Lotte Rutgers is a lawyer with the Amersterdam-based law firm Leeway.  More information about the firm is available at www.leeway.nl

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