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What goes around cannot come back around

Back in 2018, French luxury fashion house, Chanel, issued proceedings against New York-based luxury resale company What Goes Around Comes Around (“WGACA”) alleging trade mark infringement, unfair competition, false advertising, and false association. Chanel claimed that WGACA are attempting to deceive consumers into believing that it is in some way affiliated with, or was authenticated by Chanel.

In response, WGACA claim that Chanel is simply trying to prevent the legitimate resale of its products, and that WGACA have only used the Chanel trade marks to identify those products that are available for resale, which it claimed amounts to fair use.

Now, almost 4 years on, the claim is finally due to be heard before the New York Federal Court. Chanel has called an expert in asset valuation and corporate damage calculation, to speak to the harm to the Chanel brand and the level of damage suffered arising from WGACA’s alleged actions. Chanel estimates the damage to be in the region of $23.2 million.

WGACA is expected to continue to argue its position and focus on the fact that Chanel’s profits have continued to grow despite the growth of the second-hand market in recent years.

This is a claim that may have significant ramifications for the future of the resale industry, should the judge rule in Chanel’s favour. There is no doubt that this will be of keen interest to those involved in the luxury fashion business and beyond. 

If you have any questions on the above, please do not hesitate to contact the team at McDaniels Law on 0191 281 4000 or legal@mcdanielslaw.com.

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