Dive Brief:
- The jury in a years-old dispute between Chanel and luxury reseller What Goes Around Comes Around awarded the French house $4 million in damages and said WGACA acted with “reckless disregard” in its use of Chanel trademarks, according to court documents filed Tuesday.
- The jury agreed with Chanel on all of its claims against WGACA, including a claim that the reseller engaged in false advertising and unfair competition “by creating and using various hashtags containing” Chanel or Coco Chanel to advertise WGACA products on social media.
- WGACA CEO and co-founder Seth Weisser said the company was disappointed with the verdict but is exploring legal options and looking forward to post-verdict motions filed in court.
Dive Insight:
The case, which was initially filed in 2018, could have implications for how resellers can use a brand’s name in marketing. This will likely become more important as resale gains popularity in the fashion industry and luxury brands take legal action to curb counterfeit sales.
The complaint also dealt with the alleged sale of counterfeit products. Chanel accused WGACA of false advertising for selling counterfeit products while using the Chanel name and trademark in its marketing.
The two companies don’t have a formal relationship or affiliation, and Chanel accused WGACA of misleading customers into thinking such an arrangement exists, per court documents. WGACA sells Chanel-branded products obtained from third parties.
Chanel presented evidence to the court to establish that many of the products in question were counterfeit, including Chanel-branded handbags and other items that bore the company’s serial numbers but weren’t authorized for sale and didn’t pass Chanel’s quality control procedures.
Weisser said in an emailed statement that the legal case is not over.
“WGACA has always had a rigorous authentication process and has never in the history of the company sold a non-genuine or counterfeit product,” Weisser said. “Today’s verdict was not about not selling a counterfeit, it was about WGACA selling items which were voided in Chanel’s database. Without any access to this database the resale industry would not know the status of these serial numbers. We continue to stand by our 100% authenticity guarantee.”
A Chanel spokesperson didn’t immediately respond to Fashion Dive’s request for comment.
