Chanel Seeks Permanent Injunction Against WGACA

The public legal dispute between luxury brand Chanel and luxury reseller What Goes Around Comes Around (WGACA) continues with Chanel seeking a permanent injunction that WGACA argues is too broad. As previously reported, a New York jury previously awarded Chanel a US$4 million verdict against WGACA for sales of counterfeit Chanel-branded products Chanel, Inc. v. What Goes Around Comes Around, LLC, et al., 1:18-cv-02253 (SDNY). 

Chanel now seeks a permanent injunction to bar WGACA from using Chanel trademarks to advertise Chanel branded products that have not been authorized for sale by Chanel and/or have been materially altered with specific requests to ensure the authenticity and accuracy of advertised vintage Chanel products. Specifically, Chanel seeks an injunction:

1. Prohibiting WGACA from advertising or selling any CHANEL branded items without permission from Chanel or evidence that the product was first sold by Chanel.
2. Enjoining WGACA from using the CHANEL marks, Chanel advertisements, “chanel” in discount codes, the CHANEL mark alone in advertisements, the likeness of “Coco” Chanel.
3. Requiring WGACA to post a photo of the hologram Chanel serial numbers for each CHANEL branded product it offers to sale.
4. Requiring a disclaimer that WGACA is not authorized to sell Chanel products and the items for sale have not been authenticated by Chanel.
5. Requiring that all non-genuine CHANEL products sold by WGACA, since the lawsuit began, be recalled and refunded.
6. Enjoining WGACA from certifying, guaranteeing, or making any representations regarding the genuineness of any CHANEL-branded items sold by WGACA.

WGACA argues that Chanel’s injunctive relief request is an improper anti-competitive goal to restrict sales in the secondary market, noting certain requests, such as obtaining original proof of purchase for each item, would chill the second-hand industry. It also argues Chanel acted with “unclean hands” and failed to provide evidence of irreparable harm. Given the continued rise in the resale market, and that some vintage luxury products increase in value over time, brands and resale businesses should keep a close eye on the scope of a final injunction.

By Susan Kayser and RiKaleigh Omosheyin