Judge dismisses counterclaims by The RealReal against Chanel

Chanel has secured a partial win in a long-running legal dispute against The RealReal (TRR). A New York judge has moved to dismiss a number of the US resale platform’s counterclaims, narrowing the defense to more timely matters.

US district judge Vernon Broderick of the Southern District of New York granted a motion by Chanel to dismiss five counterclaims brought against it by TRR. The claims include allegations of antitrust violations under the Sherman Act and tortious interference.

TRR had accused the luxury house of using its market dominance to govern the secondary market by entering into exclusive agreements with retailers and publishers to shut out resellers.

Antitrust violations blocked

The court ruled, however, that the majority of these claims were time-barred. The alleged acts occurred in 2015 and 2016, placing them outside the three-to-four-year statute of limitations.

TRR argued that Chanel’s more recent actions, such as a 2019 incident where WWD allegedly blocked TRR’s advertisements due to a “huge partner”, constituted a “continuing violation”. Similarly, the platform accused Chanel of investing in and tolerating the resale of products on Farfetch while suing TRR for similar conduct. The judge found these claims lacked sufficient factual detail to prove an illegal conspiracy or market-wide harm.

Chanel filed its initial dispute against TRR back in November 2018, alleging that the platform was selling counterfeit handbags and using false advertising to suggest that Chanel authenticated TRR’s inventory.

Chanel argued that only the brand possesses the expertise and internal database required to verify its products. In 2021, TRR then filed counterclaims, alleging that Chanel was engaged in a “regional rebrand” designed to stifle competition and monopolise the market for its goods.

Chanel’s ‘unclean hands’ motion denied

While TRR’s counterclaims have been dismissed, the core of the case remains active, including the original claims regarding trademark counterfeiting and false advertising. Broderick further denied Chanel’s motion to strike TRR’s affirmative defense of “unclean hands”, meaning the platform can still argue that Chanel’s own alleged anticompetitive behaviour should prevent the luxury brand from winning its claims.

TRR has been granted until April 10 to seek formal leave to refile certain amended counterclaims related to the WWD and Farfetch allegations.