Chanel triumphant in counterfeit case against What Goes Around Comes Around

Parisian fashion house, Chanel, has been victorious in a court case which accused luxury reseller What Goes Around Comes Around (WGACA) of selling counterfeit products and false advertising.

Chanel first filed a lawsuit against the New York-based resale company in March 2018. The years-long dispute finally went to trial last month accusing WGACA of false advertising, an implication of an alliance that did not exist and selling counterfeit goods.

The two brands battled it out for weeks on end in a New York federal court. The result? On Tuesday, Chanel won with the jury voting unanimously on all four counts in favour of the luxury fashion house, according to WWD.

Jurors decided that $4 million should be awarded for statutory damages and non-statutory damages will be decided by Justice Louis Stanton after both sides submit briefs. Chanel is expected to file the first brief within 30 days.

The case could set a precedent for the blossoming resale market. It also brought to the surface other inconsistencies in resale, such as the lack of legal definitions for 'vintage' and 'counterfeit'.

Evidence included 51 handbags that carried serial numbers that had been voided by Chanel following the 2012 theft from the factory. There were also clashes over 779 nonfashion Chanel trinkets that WGACA sold that Chanel insisted were props that were never authorized to be sold.

Chanel published a statement that read: "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 Chanel's goodwill and brand because they are likely to confuse the public as to the nature of the Chanel-branded items they are purchasing.

"Secondhand platforms, when they operate with transparency about the Chanel-branded items they sell and cooperate with law enforcement and Chanel, can help in the fight against counterfeiting."

Chanel is a highly marketable and valuable brand, with a profit margin of around 35-40% for WGACA. Between 2016 and 2022, the reseller made approximately $90 million from selling Chanel second-hand goods.

What Goes Around Comes Around Co-founder, Seth Weisser, told WWD: "We are incredibly disappointed with today’s verdict. The case is not over. The court has yet to hear post-verdict motions. We will have further comment after the case is final. We will look forward to post-verdict motions, as we explore our legal options."

He added: "WGACA has always had a rigorous authentication process and has never in the history of the company sold a non-genuine or counterfeit product. 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."