What Comes Around…How Chanel’s Win May Help Brands Protect their Rights in the Resale Market

On February 6, 2024, Chanel emerged victorious in its trademark infringement and false advertising lawsuit against luxury reseller What Goes Around Comes Around (“WGACA”). A jury in the U.S. District Court for the Southern District of New York awarded Chanel a unanimous verdict on all counts of liability, plus $4 Million in statutory damages for willful trademark infringement in connection with the sale of counterfeit bags that were never authorized for sale by Chanel. The case will now proceed for Judge Louis Stanton to decide what equitable relief Chanel may be entitled to, including a potential injunction and disgorgement of WGACA’s profits.

In the world of luxury fashion, where the allure of exclusivity meets the burgeoning appeal of ​“vintage” products, this legal battle casts a spotlight on the dynamics between intellectual property rights and the thriving market for pre-owned goods.

Whether the media attention surrounding this decision will cause consumers to think twice about purchasing products from luxury resellers such as WGACA, The Real Real, and others, remains to be seen. Regardless, it should cause resellers to re-examine their marketing and sourcing decisions, and provide luxury brands with confidence that they have some recourse to protect their intellectual property in the resale market.

This advisory provides a brief summary of the lawsuit and tips for brand owners to protect their rights in the resale market.