Following the unanimous decision last year finding the
luxury resale platform What Goes Around Comes Around (WGACA) liable
for trade mark infringement, false association, unfair competition
and false advertising, the U.S. District Court for the Southern
District of New York has awarded Chanel $4 million in statutory
damages.
The judge has also issued a permanent injunction ordering WGACA to refrain
from any conduct likely to mislead consumers into believing that
there is an affiliation or connection with Chanel. Prohibited
activities include, amongst others: any use of hashtags featuring
the word CHANEL, using photographs of Chanel runway or marketing
campaigns, use of the word CHANEL in discount codes, and using
props or display materials at events such as trays and tissue boxes
which bear the Chanel trade marks.
Going forward, WGACA must also include a disclaimer on all web
pages advertising Chanel-branded items, or on physical tags where
products are sold in brick-and-mortar stores, confirming that they
are not affiliated with Chanel and that they have not been
authorised by Chanel to sell such items.
The business must also refrain from selling any counterfeit
Chanel items or making any certification / guarantee statements as
to the authenticity of any Chanel-branded goods that they sell
going forward.
Alongside the $4million in statutory damages in respect of the
sale of counterfeit handbags, WGACA must also pay Chanel £12,739 in net profits from the sale of
51 counterfeit items identified during the proceedings.
It will be interesting to see whether this decision results in
further challenges being raised by brands against the practices of
resale businesses; not only in respect of the sale of counterfeits
but also wider activities such as marketing and advertising
featuring third party registered trade marks without
authorisation.
Marks & Clerk’s recent ebook features further discussion on the rise
of resale platforms in the fashion sector.
“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” (Chanel
spokesperson)
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