Written By: Stephanie Williams (IP Lawyer) & Gabriella Fortugno (B.Eng., J.D.)
The trademark dispute between Chanel™ and luxury reseller WGACA has come to an end. The jury unanimously ruled in favor of Chanel™ on all four causes of action: trademark infringement, false association, unfair competition related to WGACA’s use of Chanel™ marks, hashtags, and sale of non-genuine and counterfeit Chanel™ products.
Chanel™ was awarded $4 million in statutory damages specifically for trademark infringement related to the sale of counterfeit Chanel™-branded handbags.
Chanel™, a global luxury titan, and WGACA will now proceed to the next phase in the case: appearing before a judge who will rule on awarding equitable remedies. Possible equitable remedies include disgorgement (giving profits from the sale of Chanel™ goods to Chanel™) and injunctive relief, in addition to the $4 million in statutory damages.
The implications of this verdict go beyond the penalty for selling non-genuine and counterfeit products. The luxury resale market will likely face increased scrutiny and stricter regulations and luxury brands may become more vigilant in monitoring the resale of their products and seeking legal recourse. This verdict also suggests that brands might have significant control over the resale of their products and that claiming fair use may not be sufficient to protect luxury resellers.
The trial’s outcome cautions luxury resellers to exercise a high degree of due diligence in their authentication process and marketing of previously loved goods, including use of brands’ names, logos, disclaimers, and the presentation of goods.
If you want to discuss trademarks in the fashion industry, or if you have any questions about potential trademark or other intellectual property violations in the luxury resale market, do not hesitate to contact one of our experts today!
