On February 6, the legal dispute between luxury brand Chanel and fashion boutique and online retailer What Goes Around Comes Around (WGACA) finally came to an end, with Chanel winning the case.
The court ruled in favor of Chanel on all four counts of the trademark infringement action: trademark infringement and unfair competition based on a false association; trademark infringement based on the sale of infringing Chanel branded products and use of various hashtags; sale of counterfeit Chanel branded products; and false advertising. It ordered WGACA to pay Chanel $4 million in statutory damages. Additional damages will be considered in briefs by both sides after trial.
In response to the verdict, a Chanel spokesperson stated Vogue Business as follows. “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 good will and brand, because they are likely to confuse the public as to the nature of the Chanel-branded items they are purchasing.”
WGACA is a resale platform for selling vintage and pre-owned luxury brands. Founded in 1993 by Syracuse University graduates Seth Weisser and Gerard Maione, the company has since established a pioneering presence in the vintage market with products curated through its unique aesthetic eye. The company now has two stores in New York City, including a flagship in Soho, and has strengthened its presence including Beverly Hills stores, top retailers around the world, and on its e-commerce site.
The conflict between WGACA, which handles such vintage goods, and Chanel over trademark infringement began as far back as 2018. For some time, Chanel has objected to Chanel products being resold by WGACA, stating that it cannot guarantee that products sold by anyone other than Chanel are authentic products.
In response, WGACA CEO Seth Weisser also clarified that there were several Chanel products sold at WGACA whose provenance had not been verified because they appeared to have been given to the owners by the brand rather than purchased. Weisser denied that there was anything wrong with this arrangement.
Weisser testified in court, “I believe if the consumer has the desire to buy something and we can buy it through legal acquisition, that we have the right to sell it.”
“WGACA has always had a rigorous authentication process and has never in the history of the company sold a non-genuine or counterfeit product,” he 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,” Weisser said.
WGACA’s use of quotes from Chanel founder Coco Chanel on social media and the use of discount codes such as COCO10 for 10% off were also apparently factors that led to the long-running conflict. Chanel claimed that these instances gave consumers the false impression that WGACA and Chanel were officially affiliated.
As prices of luxury brands have risen in recent years, consumers have become less resistant and more familiar with the idea of purchasing luxury goods on resale platforms that sell vintage and Pre-Owned items. In addition to WGACA, other resale platforms such as The RealReal, Vestiaire Collective, Rebag, and FASHIONPHILE, sell European and North American designer brands.
The problem may be that these resale platforms conduct their marketing and promotion with the mistaken belief that they can serve as an authority on the products they sell. Furthermore, in a time when there are many cleverly made imitations on the market, the biggest challenge facing third-party platforms is whether they can “reliably guarantee the authenticity of their products.”
Chanel also filed a lawsuit in 2018 against The Real Real over trademark infringement almost identical to WGACA, which is still ongoing.
To prevent such trademark infringement, some luxury brands, including Oscar de la Renta, have begun to set up their resale platforms to sell their products.