A trademark case between Chanel and reseller What Goes Around Comes Around (WGACA) has ramped up in a battle that could change the fashion resale market.
Chanel is seeking almost $100M in disgorged profits that it claims were obtained illegally or unethically because the reseller used its trademarks in a way that confused consumers. Chanel is also accusing WGACA of damaging its reputation.
The fight kicked off in March 2018. At this time, Chanel accused WGACA of infringing on its trademarks, suggesting that there was a formal relationship between the two brands, selling counterfeit goods; selling Chanel good that were never meant to be made available for public consumption and abusing Chanel’s luxury reputation.
In February of this year, Chanel won round one of the bout when a judge ruled in its favour on all four counts: trademark infringement, false association, unfair competition claims and a false advertising claim. This saw it awarded $4 million, reports The Fashion Law.
After the verdict, a Chanel spokeswoman said in a statement shared by Vogue Business: “Chanel welcomes the ruling, which demonstrates Chanel’s unwavering commitment to protecting consumers and its brand against all false association, trademark infringement and counterfeiting, and false advertising. Such infringements hurt consumers and harm the Chanel goodwill and brand, because they are likely to confuse the public as to the nature of the Chanel-branded items they are purchasing.”
But Chanel is now seeking further compensation and is after some of the profits that it says WGACA made on Chanel-branded products. The Fashion Law explains that as well as the money, Chanel claims “…WGACA’s actions have misled consumers into believing they have an affiliation” and therefore is seeking “…an injunction to limit how WGACA can sell Chanel-branded goods in the future.”
WGACA has responded that Chanel’s demands are both “unwarranted” and “excessive.” It states that it “operates in a distinct market from Chanel, dealing exclusively in pre-owned items, which Chanel, itself, does not sell.”
Brands and resellers alike will be watching for the outcome of this long-running fight.
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