TFL PRO+ Exclusive: In a legal battle that has drawn the attention of luxury fashion and resale companies, alike, a New York federal court issued a sweeping opinion and order, resolving all outstanding post-trial motions in Chanel’s case against What Goes Around Comes Around. In its June 26 ruling, the court denied WGACA’s bid to overturn a $4 million jury verdict for willful trademark infringement and false advertising, upheld a permanent injunction restricting the use of Chanel branding by WGACA, and awarded Chanel over half a million dollars in litigation costs. The decision caps off a multi-year dispute that has come to symbolize the growing legal and commercial tensions between legacy luxury brands and the booming secondary market.
The Background in Brief: The case got its start in 2018 when Chanel filed suit against WGACA, alleging that the reseller sold non-genuine Chanel products and misled consumers into believing it was affiliated with Chanel through the use of its trademarks and branding. After years of litigation, a New York federal jury found that WGACA had willfully infringed Chanel’s trademarks by selling 13 handbags associated with stolen serial numbers from a Chanel-authorized manufacturer. The jury also sided with Chanel on claims of false advertising and unfair competition, awarding $4 million in statutory damages.
In February 26, the U.S. District Court for the Southern District of New York entered a final judgment formalizing the verdict, which included a permanent injunction prohibiting WGACA from using Chanel’s trademarks, imagery, or branding – such as logos, hashtags, and altered products bearing voided serial numbers – without authorization. Additionally, the sweeping injunction imposes strict advertising and authentication restrictions and requires clear disclaimers of non-affiliation and display of Chanel serial numbers (which has flowed over to WGACA’s sale of pre-owned products on Amazon). Still yet, the court required WGACA to pay $12,739 in disgorged profits.
A Headline-Making Case
In an opinion and order on June 26, as first reported by TFL, SDNY Judge Louis L. Stanton largely favors Chanel, rejecting WGACA’s attempts to overturn the jury’s February 2024 verdict and denying its motions for judgment as a matter of law or a new trial.
WGACA sought to reverse the jury verdict, arguing, among other things, that the jury’s finding of willful counterfeiting was unsupported by evidence. But the court was unpersuaded: “WGACA’s arguments … are mere speculation by its attorneys,” Judge Stanton wrote, citing the reseller’s failure to offer any witnesses or documentary evidence at trial to support its theory that the 13 of the bags that were found to be counterfeit are actually genuine despite bearing voided Chanel serial numbers.
Chanel’s expert testimony showed that the serial numbers in question had been voided before use and were associated with a notorious theft from one of its supplier factories in Italy. The jury also heard that counterfeiters had used stolen authenticity cards found in subsequent raids. Against this backdrop, the court found the verdict well-supported and declined to disturb the jury’s conclusions on the counterfeiting front.
While Chanel prevailed on nearly every substantive issue, Judge Stanton declined to grant its request for attorneys’ fees despite the jury’s ten findings of willfulness. “This is not an exceptional case,” the court ruled, stating that trademark infringement is “a familiar matter … and this dispute did not present particularly complex legal questions.”
The opinion emphasized that while WGACA’s conduct crossed the line, it did not rise to the level of flagrant abuse that would make the case stand out from others.
> “While there was sufficient evidence at trial for the jury to find willful infringement, this was not a case of flagrant violations. As this Court has repeatedly pointed out, it is in WGACA’s best interests to sell genuine CHANEL-branded goods. Though trial uncovered instances of willful infringement, those were a small percentage of WGACA’s overall sales of CHANEL-branded items … Chanel is right to point out that this case was not merely about isolated incidents of infringement, but also about WGACA’s false association and false advertising, which the jury also found to be willful. However, these actions are better deterred by the existing injunction than by an award of attorneys’ fees.”
Still, the court did award Chanel $560,978.97 in litigation costs.
WGACA also sought to reduce the $4 million statutory damages award, calling it excessive and unsupported. But the Court found the jury’s award – $2 million for each counterfeit mark – to be both statutorily permissible and clearly deliberated. “During deliberations, [the jury] specifically asked about the ‘willful infringement maximum,’ evincing a clear intent to award the maximum amount of damages allowed under the statute,” Stanton stated. “[T]he question is not what this court would award were it deciding the question itself; the question is whether the jury’s award is so excessive that the Court should intrude on its prerogative to set damages.”
Judge Stanton also upheld his earlier award of $12,739 in disgorged profits, explaining that while the broader harms were better addressed through injunctive relief, WGACA should not retain profits from sales of 51 handbags and 779 other Chanel-branded items that bore voided serial numbers and were unauthorized.
The Broader Message
Among other things, the decision underscores a potentially-growing-skepticism of so-called “authenticity” defenses that rest more on narrative than on evidence. WGACA, which has long marketed itself as a purveyor of genuine vintage fashion, asserted that the Chanel-branded goods it sold were authentic based on internal assessments and the general provenance of its inventory. But at trial, the reseller offered no witnesses or concrete documentation to support those claims, relying instead on attorney arguments, which the court pointedly noted “are decidedly not evidence.”
Chanel, by contrast, presented detailed testimony and internal records from its Orli tracking system to show that the products at issue were linked to voided serial numbers and had never passed Chanel’s quality control. The court’s rejection of WGACA’s speculative defense strategy sends a broader message to the resale industry: assertions of authenticity must be substantiated with verifiable, independent evidence – not simply branding rhetoric or consumer-facing reassurances.
In the wake of the ruling (and in particular, the language in the injunction), WGACA will need to change its approach to marketing and selling Chanel products – an adjustment that could have effects that ripple through the larger resale market. It may also need to rethink its authentication claims and protocols, broader advertising strategy, and public posture. Meanwhile, Chanel’s aggressive brand enforcement continues to shape how legacy houses interact with the resale ecosystem.
The case is Chanel, Inc. v. What Goes Around Comes Around, LLC, et al., 1:18-cv-02253 (SDNY).
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