Chanel Against The World
Three weeks ago, a New York federal jury sided with Chanel in its case against second-hand retailer What Comes Around Goes Around. Following a two-week trial, the jury weighed in favor of Chanel in all four of its causes for action:
Trademark infringement, false association, and unfair competition based on WGACA’s use of Chanel marks and other brand indicia, as well as hashtags
Trademark infringement, false association, and unfair competition based on WGACA’s sale/offering for sale on non-genuine Chanel products
Trademark infringement based on WGACA’s sale/offering for sale of counterfeit goods.
False advertising.
According to The Fashion Law, the jury awarded $4 million in statutory damages to Chanel “for its claim for trademark infringement based on WGACA’s sale or offering for sale of Chanel-branded handbags bearing counterfeit trademarks.”
Having said that, let’s unpack what Chanel meant by trademark infringement and false advertising. According to Glossy, Chanel “has contested the idea that anyone other than Chanel can guarantee that a sold item is a real Chanel product.” Furthermore, Chanel also took issue with WGACA’s use of Coco Chanel quotes on social media, as well as with their using discount codes like COCO10 for 10% off, due to customers potentially and falsely perceiving these marketing tactics as confirmation of these two brands being affiliated with each other in an official capacity.
Understandably, the luxury reseller is disappointed by the verdict, and will most certainly appeal. In fact, WCAGA and Chanel have been legally embattled since 2018. Click here for a timeline of their legal battle,
So, what does this mean for consumers?
The Fashion Law points out that whilst a majority of the trial revolved around trademark infringement and alleged counterfeiting, the case in question in fact seeks to shape how much leeway brands have to dictate how their trademarks are used, and under which conditions their products are sold, particularly by third parties. Moving forward, resellers will have to be very careful about how they choose to market their products, including how they use a given brand’s trademarks and logos, lest they misrepresent their relationship with said brand. Resellers will also have to be mindful of the language they use to validate product authenticity, since it seems that “nominative fair use will not shield them from liability”.
Influencer Cassie Thorpe goes into a bit more detail on this case below, including WCAGA’s sale of Chanel-branded goods that were given to customers as gifts, and more interestingly, product serial numbers that were voided in Chanel’s database.
The verdict will also impact Chanel’s mediation case with The RealReal, a reseller that has also been taken to court by Chanel for allegedly selling counterfeit goods.
