Chanel and What Goes Around Comes Around Hear Final Judgment for Infringement Case
More than a year after a jury ruled unanimously in favor of Chanel in its trademark infringement battle against What Goes Around Comes Around, a federal judge’s final judgment includes issuing such penalties as a permanent injunction against the resale platform from using Chanel trademarks and branding.
The decision by Judge Louis Stanton of the U.S. District Court for the Southern District of New York on Wednesday is a win for the luxury house, as it continues to try to tamp down on the distribution and marketing of products with the Chanel name, logo and other trademarks. It also bans sales of unauthorized or altered products, which are more commonly called “Frankenstein bags” that incorporate different elements from different resources. The reseller is now required to flag disclosures on Chanel-branded items, and it cannot claim authenticity for any Chanel products that it resells.
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Chanel first filed a lawsuit against the New York-based resale company in March 2018, alleging that there appeared to be an affiliation between the two fashion resources that did not exist and that Chanel had authenticated the pre-owned items sold at WGACA. The yearslong dispute finally went to trial in a New York federal court last year with both sides disputing trademark infringement, false advertising, an implication of an alliance that did not exist, claims of counterfeit goods and other issues.
A Chanel spokesperson said Monday that the company is pleased with the court’s final judgment, which confirms the jury’s decision from Feb. 6, 2024, in Chanel’s favor against WGACA.
“The jury found WGACA guilty of intentionally infringing on Chanel’s trademarks by selling infringing and counterfeit products and falsely associating and advertising themselves with Chanel. This judgment supports Chanel’s unwavering commitment to protecting its brand and consumers,” the spokesperson said. “The final judgment will prevent WGACA from selling infringing and counterfeit Chanel products, falsely linking themselves to Chanel and misleadingly advertising Chanel-branded items. Chanel expects WGACA to follow the judgment, take responsibility for identifying counterfeit Chanel products and ensure they aren’t sold to unsuspecting customers.”
Asked for comment Monday, What Goes Around Comes Around cofounder Seth Weisser said via text, “We are still in the process of litigating these issues. The judgment is just the first step in the process. We will avail ourselves of all remedies including appeals.”
The permanent injunction prohibits the reseller from doing anything that could mislead shoppers into thinking that it was affiliated with Chanel. That could include the misuse of Chanel’s trademarks like the two interlocking “Cs” in any in-store displays, promotional materials or advertising.
Last month’s final judgment included $4 million in statutory damages for selling counterfeit handbags, and disgorgement of $12,739 in profits from the sale of unauthorized Chanel-branded handbags and 779 counter-support items.
Weisser, who serves as chief executive officer and was in the courtroom daily during last winter’s weeks-long trial, said post-trial motions will be filed before the appeal process. He also said that What Goes Around Comes Around is still reselling Chanel items and will continue to do so. “The ruling did not impact our ability to resell,” he claimed.
During the trial, jurors were shown multiple examples of how old Chanel ads and runway shots were used by WGACA in its social media posts, as well as print ads with “Chanel” being the prominent name — even larger than What Goes Around Comes Around — as well as examples of how the resale company has featured Chanel’s interlocking “Cs.”
Another issue that was hashed over during last year’s trial involved WGACA’s use of Chanel display material and its purchase of 779 such items, including plastic trays and tissue boxes. During the trial, Chanel employees emphasized that those items are “props” and are never given away or sold, and that that constituted infringement. WGACA had provided an invoice listing those items from the Hong Kong vendor that they had been purchased from, and suggested that those items may have been passed along by Chanel or store employees.
During last year’s trial, Yale Galanter, an attorney for the reseller, suggested that the $17 billion luxury brand with “thousands” of stores didn’t like that WGACA, a three-store operation, was growing and wanted to make a statement by going after the reseller.
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