Dive Brief:
- Chanel is requesting a permanent injunction against luxury reseller What Goes Around Comes Around, which would bar the store from using the French house’s trademarks in marketing materials or taking any action that could confuse customers into thinking there’s an association between WGACA and Chanel, according to court documents filed last week.
- The injunction also requests that the Chanel trademarks aren’t used more than necessary, apart from identifying an item being offered for sale, and that WGACA include a disclaimer stating that Chanel didn’t authenticate the item or authorize its resale.
- The request follows a jury ruling last month that awarded Chanel $4 million in damages from WGACA and said the reseller acted with “reckless disregard” in its use of Chanel trademarks.
Dive Insight:
The fashion industry has been eyeing the case, which was initially filed in 2018, because of the potential impact it could have on luxury fashion resellers. The Chanel jury decision comes at a time when resale is gaining popularity, and luxury brands are cracking down on counterfeit sales.
“If granted, this injunction could spur… other brands to take a more assertive stance in safeguarding their brand integrity,” Elise Whang, a former FTC attorney and co-founder and CEO of luxury reseller LePrix, said in an email to Fashion Dive. “However, it also raises concerns about the potential for larger brands to use legal tactics to stifle smaller businesses… then the Court would have to consider anti-competitive behavior.”
Whang said that the ruling doesn’t hinder the resale industry’s operations, but could serve as a “cautionary tale” to understanding the importance of adhering to trademark laws.
“Resellers should ensure that their business practices leave no room for confusion regarding their affiliation with the original brand manufacturer,” Whang said.
WGACA declined to comment on the injunction request.
Following the February jury decision, WGACA CEO and co-founder Seth Weisser said the case wasn’t over and the company was exploring its legal options.
The initial complaint also focused on the alleged sale of counterfeit items using the Chanel name. The current injunction request includes language which would bar WGACA from selling Chanel-branded items that weren’t authorized for sale by Chanel. It also asks that the reseller refund and recall any items sold to consumers or wholesalers “since the commencement of this case.”
