Chanel's trademark case brings into question future of luxury re-sale

Chanel has emerged victorious in a lawsuit against luxury re-seller What Goes Around Comes Around (WGACA). The resolution follows six years since Chanel initiated the trademark case in a New York court back in 2018. The dispute revolved around WGACA's use of a hashtag combining both company names to promote its Chanel items, which Chanel argued amounted to unauthorised use and trademark infringement. Chanel asserted that this practice created confusion among consumers, potentially leading them to perceive an unauthorized affiliation with the renowned French luxury house.

On Tuesday, a jury ruled in favour of Chanel, awarding the luxury brand 4 million dollars in damages for unfair competition and false advertising.

While the court decision favours Chanel, the broader issue of luxury resale is brought into focus. The rapidly expanding category has witnessed the entry of new players, both online and offline. Fundamental questions arise concerning how re-sellers can accurately describe authentic pre-owned luxury items within legal boundaries and how they can conduct marketing and business operations without facing anti-trust issues or interference.

The authentication process stands as a critical factor for the success of luxury resellers. Striking a balance in communicating the authenticity of products in a compliant manner, without upsetting luxury brands, is pivotal. Chanel, known for its assertiveness in trademark infringement cases, demonstrated its resolve by engaging in a six-year trial to substantiate its claims.