COCO vs. INCOCO: Chanel wins in likelihood of confusion

In the trademark dispute COCO v INCOCO and the likelihood of confusion with Chanel’s own French trademarks COCO, Chanel won before the European Court. COCO also came up as the famous nickname of Ms Gabrielle Chanel, known as Coco Chanel.

Chanel filed opposition against trademark INCOCO

In January 2014, the intervener, Innovative Cosmetic Concepts LLC (USA), designated the European Union for its international registration of the word mark INCOCO (hereinafter the ‘international registration concerned’). That word mark INCOCO claimed protection for goods and services in Nice Classes 3, 35 and 44, primarily in the fields of cosmetics and beauty products.

In October 2014, applicant Chanel opposed this trade mark registration, relying on its own earlier national (French) trademarks Nos 1 438 544 and 1 571 046, each relating to the wordmark COCO. The French COCO marks claimed protection in Nice Classes 3, 35 and 42, essentially ‘soaps, perfumery, essential oils, hair lotions, toothpaste’, advertising and other.

The Opposition Division of EUIPO initially upheld the opposition, but by decision of 16 January 2020 (‘the contested decision’), the EUIPO Board of Appeal overturned the Opposition Division’s decision and rejected the Chanel opposition in its entirety.

Chanel appealed against this decision before the European Court (CJEU), which has now delivered its judgment.

Board of Appeal had rejected opposition

In particular, as regards the applicant Chanel’s argument that the term ‘Coco’ was understood in France as a nickname and, in particular, as the nickname of Ms Gabrielle Chanel, known as Coco Chanel, the Board of Appeal had found that the applicant had not produced any evidence of French consumers’ knowledge of the earlier mark and that, in almost all the documents produced by the applicant, the earlier sign was represented together with the term ‘Chanel’. On these grounds, the Board of Appeal refused to recognise the highly distinctive character of the second earlier mark, COCO, relied on by Chanel.

In conclusion, the Board of Appeal found that there was a below-average degree of similarity: significant visual differences, an average degree of phonetic similarity and that it was in principle not possible to compare INCOCO versus COCO in conceptual terms.

CJEU overturned the decision of the Board of Appeal

However, this was assessed differently by the CJEU today, the 16 June 2021; the CJEU overturned the decision of the Board of Appeal and upheld plaintiff Chanel. We briefly summarise the individual aspects; in the case of likelihood of confusion, it is always the comparison of the conflicting marks in terms of visual, phonetic and conceptual similarity.

Visual comparison of the signs

It is true that the EUIPO rightly points out that the word element “in” appears at the beginning of the contested international registration and has no equivalent in the earlier sign. However, the court emphasised that it was by no means the case that the beginning of a word mark was always decisive (please read in this context also: “First letter is not everything”)
And the fact that this “in” balances out the common word element “coco” to such an extent that the signs in dispute have only a below-average visual similarity, the EUIPO erred and wrongly decided, the CJEU ruled. Instead, the European Court upheld Chanel’s argument that it is precisely the doubling of “co co” that draws attention to this word element – common to the marks in dispute – COCO.

Phonetic comparison

The average degree of phonetic similarity found by the Board of Appeal was upheld by the CJEU, where Chanel unsuccessfully argued for a higher degree of similarity. It is true, the CJEU explained, that the additional syllable “In” has no equivalent in the earlier sign COCO and therefore constitutes a distinctive sign at the phonetic level. However, the structure, number of syllables and rhythm of the conflicting signs, taken as a whole, were not fundamentally different, but rather comparable, the CJEU explained, and this resulted in an average phonetic similarity.

Conceptual comparison

On the question of conceptual and conceptual similarity, which the EUIPO considered to be fundamentally not comparable, the CJEU finally came to the famous nickname “Coco”. The CJEU explained that, where there is a word element which is easily understood by the relevant public, they would in fact break down the word sign in question into two parts, one corresponding to what they understand as part of everyday speech and the other consisting of the rest of the sign in question.

The international registration at issue therefore constituted a new word in its entirety, but this did not prevent the relevant public from recognising an element with a clear connotation, the CJEU ruled. In those circumstances, there was therefore a low degree of conceptual similarity, without it being necessary to rule on any conceptual similarity of the conflicting signs in the context of the alleged reputation of the nickname ‘Coco’ for Ms Chanel by the relevant public.

Distinctiveness of the conflicting marks

Finally, the CJEU held that the Board of Appeal’s decision was flawed in its overall assessment of the existence of a likelihood of confusion (degree of visual similarity was underestimated; conceptual similarity was wrongly assessed; phonetic similarity and identity or similarity of the conflicting goods and services were found but not taken into account), so that the single plea was upheld. The CJEU overturned the Board of Appeal’s decision, emphasising that it was so flawed that the questions regarding the significance of the distinctive character of the conflicting marks need not be examined further. Moreover, all approved EU trade marks are in principle considered to have at least a low degree of distinctiveness.

The decision of the EUIPO Board of Appeal of 16 January 2020 (Case R 194/2019-1) was annulled in its entirety. Chanel won the allegation of likelihood of confusion against INCOCO relating to its own national marks COCO.

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