Less than a month since Chanel asked a New York federal court judge to block luxury resale site What Goes Around Comes Around (WGACA) from using the label’s trademarks or altered goods on its website, WGACA has asked that injunction be denied.
In a brief filed this week, WGACA asked the court dismiss Chanel’s bid for an injunction because it says the luxury brand has not been harmed by its resale of Chanel products. WGACA also said the decision to award Chanel $4 million in statutory damages was enough compensation without the addition of the injunction.
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The dispute stems from a suit filed by Chanel against WGACA in 2018, which alleged the retailer sold counterfeit bags and display-only items not meant for sale. The luxury brand also said WGACA implied affiliation with Chanel through marketing efforts, such as coupon codes and social media posts, when no such relationship existed.
A multi-week jury trial was held in New York federal court earlier this year, with a unanimous verdict coming down on Feb. 6 in favor of Chanel finding WGACA guilty of trademark infringement, false association and unfair competition. Evidence against WGACA included handbags with voided stolen Chanel serial numbers, point-of-sale items and altered or repaired Chanel products.
Following that decision, Chanel requested a permanent injunction that would prohibit WGACA from using Chanel logos or other marks for anything other than identifying authorized items for sale. The luxury maker requested that authorization come in the form of prominently posting photographic evidence of Chanel serial numbers of the items WGACA sells on its site, as well as posting an authorization disclaimer. Chanel also asked the court to order the reseller to recall any items sold to consumers or wholesalers since March 2018 that could be considered unauthorized or infringing on trademarks.
In its brief, WGACA said that evidence in that case actually shows the retailer did not act willfully to sell unauthorized items or engage in any other infringement. The resale site said it was unaware of the counterfeit nature of the Chanel bags in question, including those bearing serial numbers stolen from a supplier factory in Italy in 2012.
WGACA went on to say that it was also unaware of “Chanel’s prohibition of the sale or distribution of…point-of-sale items until this litigation.”