As TFL was the first to report this week, Judge Louis Stanton of the U.S. District Court for the Southern District of New York issued a final judgment in the Chanel v. What Goes Around Comes Around case, complete with the much-anticipated permanent injunction. Among other things, the injunction essentially bars WGACA from using Chanel’s trademarks in any way other than what is “necessary to identify the particular [Chanel] item being offered for sale.”
Judge Victor Marrero’s judgment also bars WGACA from “using any of the CHANEL Marks or any marks confusingly similar thereto to advertise or promote WGACA’s products or business in a manner that is not nominative fair use and is likely to cause confusion as to any affiliation or sponsorship between Chanel and WGACA.” (Emphasis is mine.)
In light of additional restrictions, it appears that the court is taking a strict view of nominative fair use. In particular, the ruling suggests that using Chanel’s name in advertising, social media hashtags (e.g., #chanel), and even certain display methods (such as props resembling Chanel items) exceeds the bounds of fair use. So, I am guessing images like this on WGACA’s website will be gone …
This broad limitation will likely make it more difficult for resellers to market their products in ways that have become common across the industry.
The ruling also requires WGACA to include disclaimers and serial numbers in its product listings, placing additional compliance obligations on the company—obligations that will likely trickle down to other resellers as well. Additionally, the requirement for authentication records could pose challenges for players in the secondary market if they are selling an item without the original paperwork or serial number.
I am keeping this brief for now but will send more your way early next week.
Hype around AI in fashion seems to be at a fever pitch—from enlisting generative AI tools to create clothing designs to using AI-generated imagery and videos in ad campaigns. Some of the attention this week stems from a handful of images created by Paris-based creative Sybille de Saint Louvent, which provide a glimpse into how AI is reshaping marketing. In short, these visually compelling images make it clear that we are far removed from brands’ early, rudimentary attempts to use AI in campaigns.
At the same time, other creators have demonstrated how AI can be used to craft designs, with designer Gianfranco Esposito “transforming” a look from Gucci’s recent runway show into a version more aligned with the aesthetic of the brand’s former creative director, Alessandro Michele. According to Esposito, the result “stay[ed] true to the original design while reimagining it with a more vintage and romantic silhouette.”
The Gucci example is particularly interesting in light of the company’s current challenges. As CMO & Brand Consultant James Denman recently noted, Kering-owned Gucci is suffering from “a lack of clear design vision, the endless flitting between campaigns and narrative arcs, [and a] failed articulation of a POV about the brand,” among other issues.
Not only does this showcase how AI can play a powerful role in the fashion design process—offering fresh and creative concepts that can be further developed into full-fledged collections—but it also sheds light on broader questions about AI’s applicability in the fashion and luxury space.
McKinsey, for one, has projected that generative AI could “add $150 billion, conservatively, and up to $275 billion to the apparel, fashion, and luxury sectors’ operating profits” in the next three to five years. While it remains to be seen whether those numbers will materialize, what is clear is that AI is reshaping how brands and creatives bring ideas to life, amplify storytelling, and enhance efficiency—all while potentially reducing costs.
Zalando is challenging its designation as a Very Large Online Platform (“VLOP”) under the EU’s Digital Services Act(“DSA”), arguing that it should not be categorized alongside giants like Amazon, Alibaba, and Apple. The German e-commerce company initiated a legal challenge before the Court of Justice of the European Union in June 2023 in an attempt to sidestep its VLOP designation, which carries with it significant obligations for online platforms and search engines to manage “systemic” content-related risks.
> The DSA regulates providers of online “intermediary services,” such as cloud providers, online marketplaces, and app stores. The harmonized rules it introduces are broad and include provisions affecting illegal online content moderation, transparency requirements, user rights and protections, and provider liability.
Counsel for the parties appeared before the General Court in Luxembourg on Thursday, where Zalando argued that its business does not fit the DSA’s definition of an “intermediary” service. The crux of Zalando’s claim: it does not operate purely as a marketplace. Instead, its “hybrid business model” consists of both a retail business and a partner business. The former, which consists of Zalando’s own offerings and content, represents 61% of its business—thus, the company argues, it should fall outside the scope of the DSA.
Zalando’s case is significant, as it marks the first time a company is challenging its VLOP status in court.
>> Meanwhile, Trump recently took issue with the DSA, stating in a fact sheet on Feb. 21: “Regulations that dictate how American companies interact with consumers in the European Union, like the Digital Markets Act and the Digital Services Act, will face scrutiny from the Administration.”