UPDATE: Jury Verdict for Chanel. Stolen Chanel Authenticity Cards Subject of Trial Testimony

Updated 2.6.24

The New York federal jury hearing the case reached its verdict today, deciding in favor of Chanel on all four claims and awarding the luxury brand $4 million in statutory damages. Chanel had alleged trademark infringement, false association, unfair competition, and false advertising. To (over) simplify, Chanel claimed WGACA was confusing potential customers into thinking it was affiliated with the French house and using its logos, trademarks, hashtags, marketing products, to create and bolster sales.

According to Vogue business, Chanel issued this statement following the verdict:

“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,” a Chanel spokeswoman said in a statement following the verdict. “Such infringements hurt consumers and harm the Chanel goodwill and brand, because they are likely to confuse the public as to the nature of the Chanel-branded items they are purchasing.”

WGACA’s 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.”

As for what happens now, Federal Judge Louis Stanton will decide on the non-statutory damages, after the parties have the opportunity to submit briefs.

The bigger question, of course, is what, if any effect the verdict with have on the booming resale market generally. Chanel does not seem to repudiate the secondary market entirely, stating:

“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,”

Stay tuned as we learn more.

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Well this testimony from the Chanel v WGACA trial caught our attention. As brief background, Chanel has sued reseller What Goes Around Comes Around (WGACA) for a variety of intellectual property and other unfair trade practice violations due to WGACA’s sale of Chanel branded products and use of Chanel branded logos. Chanel also claims that WGACA sold counterfeit items as Chanel. The trial began last week in federal court in NYC.

What caught our eye though were specifics about a 2012 middle of the night robbery at Italian factory that produces Chanel handbags. And no, bags weren’t stolen. Rather, according to Joseph Bravo, executive operations director for Chanel, 30,000 authenticity cards with serial numbers were taken. As Chanel aficionados know, those cards, and the numbers, are used to verify bags as real Chanel products. Chanel cancelled those serial numbers but the cards and items with those numbers were later discovered in a garage raid.

According to wwd.com, also presented at trial was a red bag, purporting to be a Chanel bag but of very poor quality, obviously not truly Chanel, that was in a WGACA dustbag. Where we are left hanging though, is whether this is one of the bags made using the cancelled serial numbers. If so, that could support Chanel’s claims of WGACA selling fakes and/or its need to protect its trademarks. Stay tuned…