Chanel has always been vigilant about protecting its enormously valuable trademarks and going after infringers, but its latest lawsuit, against a prominent vintage retailer, is unusual.
What Goes Around Comes Around, which operates stores in Manhattan, Los Angeles, Miami and the Hamptons, as well as an e-commerce site, sells a lot of secondhand Chanel. Since I can remember and to this day, it prides itself on having "the world's largest collection of vintage Chanel." But is that a crime?
As far as Chanel is concerned, it sure is. The luxury fashion house filed a lawsuit against WGACA in New York on Wednesday alleging counterfeiting and trademark infringement, false advertising, unfair competition and false endorsement. Among Chanel's claims are that WGACA is misleading its customers into believing it has an official relationship with Chanel. According to the filing, WGACA "has attempted to deceive consumers into falsely believing that Defendant WGACA has some kind of approval of or relationship or affiliation with Chanel or that Chanel has authenticated WGACA's goods in order to trade off of Chanel's brand and good will." The filing points out that WGACA "purports to sell genuine Chanel-branded point-of-sale items including, tissue box covers, trays, and mirrors, which are not authorized for sale to the public by Chanel," and that Chanel "has explicitly refused WGACA's requests to enter" into an official relationship or affiliation.
Other alleged offenses include using Chanel marketing materials, images of Chanel-brand products, Chanel advertisements and trademarks on social media, using the hashtag #WGACAChanel and guaranteeing authenticity on items that are not guaranteed by Chanel. Chanel also says it has learned that WGACA has sold counterfeit items, including a handbag and a fake Chanel-branded tissue box cover.
Chanel is seeking monetary damages and injunctive relief so that WGACA is prohibited from continuing the aforementioned actions.
"Chanel is using trademark law here because the fashion house thinks that what with all of the luxury branding that's being used by WGACA, there's going to be a likelihood of confusion for consumers," says Above the Law editor Staci Zaretsky. "There's no relationship to speak of between the two companies, so WGACA's continued use of Chanel branding is almost offensive — but not as offensive as treble damages will be," she adds, referring to a court's ability to triple the amount of the actual, compensatory damages. In other words, WGACA could be forced to cough up a lot of money.
As far as we know, this is the first lawsuit between a luxury brand and a secondhand retailer, aside from larger marketplaces like eBay and Alibaba that have been known to allow the selling and buying of fakes. Consumers have come out and accused The RealReal for selling inauthentic goods recently. But generally, luxury brands don't seem to acknowledged these retailers, with the recent exception of Stella McCartney, who partnered with The RealReal last year in an effort to encourage her customers to resell her goods as part of a commitment to a circular economy. Clearly, Chanel has a very different outlook on the whole thing, though it also has more valuable trademarks to protect.
UPDATE, March 15, 4:50 p.m.: A spokesperson for Chanel has provided Fashionista the following statement regarding the What Goes Around Comes Around suit:
"This complaint demonstrates Chanel's strong and unwavering commitment to protecting its brand reputation, and ensuring that consumers seeking to purchase Chanel products from unauthorized distribution channels will not be deceived or mislead by false marketing or advertising efforts which imply that anyone other than Chanel can guarantee the authenticity of Chanel products.
What Goes Around Comes Around is not an authorized distributor or retailer of Chanel products, and has gone out of its way to create the impression in the marketplace that they have an association with Chanel and can authenticate genuine Chanel merchandise. Chanel will not tolerate any parties who falsely imply a relationship or partnership with Chanel, as these deceptive practices are grossly misleading to customers, and damaging to Chanel's hard-earned brand reputation."
A rep for What Goes Around had this to say in response to the allegations:
"We assure you that nothing can be further from the truth. We believe the allegations are completely unfounded and we intend to vigorously defend ourselves."
UPDATE, March 19, 8:45 a.m.: Seth Weisser and Gerard Maione, co-founders of What Goes Around Comes Around, have "rejected" Chanel's lawsuit, according to WWD. In Chanel's lawsuit, the brand claimed it had recently discovered two instances of the retailer selling counterfeit goods; Weisser and Maione claim one instance is a listing on Amazon not controlled by them, and the other is an authentic Chanel product.
"We take meticulous care in sourcing our authentic offerings," the duo told WWD. "Our team has 25 years of training and knowledge in identifying genuine product and we offer only product that has been fully vetted by us."
Weisser and Maione also reject Chanel's claim that WGACA has "gone out of its way to create an association with Chanel."
"There is nothing ambiguous or confusing in our business model," they told WWD. "Chanel’s claims to the contrary only evidence a desire to control the aftermarket for their products."
Weisser and Maione intend to "vigorously defend this action and assert our rights against any interference with our successful business."