"Luxury is the necessity that begins where necessity ends" -- Coco Chanel.

But what happens when luxury is borrowed, branded, and blurred in a world of second-hand clicks and Instagram claims?

In a time when every fashion relic can be resold with the swipe of a finger, the line between authentic admiration and unauthorized appropriation is getting finer, and brands like Chanel aren't having it. Known not only for its iconic tweed jackets and quilted bags but also for its fierce legal defense of intellectual property, Chanel has once again stepped into the courtroom, not the catwalk.

In the landmark case of Chanel v. What Goes Around Comes Around (WGACA), the fashion giant takes on a luxury reseller for allegedly trading more than just vintage bags, it traded on Chanel's name itself. With allegations ranging from trademark infringement to misleading marketing and false endorsements, this case is more than a legal dispute, it's a battle for brand purity in the era of digital dilution.

This article dives deep into the legal, ethical, and cultural layers of this courtroom clash, exploring how far a luxury label can, and should, go to protect its name, narrative, and niche in the booming resale market. And in doing so, it asks a bold question: In protecting a logo, is Chanel protecting the very soul of luxury?

Background Of The Case:
The long-standing legal dispute between French luxury fashion house Chanel and high-end vintage reseller What Goes Around Comes Around (WGACA) reached a critical point in 2024, following a federal jury verdict and a final court ruling that strongly favored Chanel. This high-profile lawsuit, initiated by Chanel in 2018, accused WGACA of trademark infringement, false advertising, unfair competition, and the sale of counterfeit goods.

The origins of the case date back even further, to 2015, when Chanel first sent a cease-and-desist letter to WGACA. Chanel alleged that the reseller was falsely suggesting an affiliation with the luxury brand through its marketing practices, including the use of Chanel trademarks, social media hashtags like #CHANEL, discount codes such as "COCO10", and quotations attributed to Coco Chanel. According to Chanel, WGACA failed to respond or take corrective action, prompting Chanel to initiate legal proceedings.

A major point of contention involved WGACA's authenticity claims. Chanel maintained that no third party could guarantee the authenticity of its products and argued that WGACA's self-authentication was misleading to consumers. Chanel's legal team presented survey evidence in court showing that 23% of over 200 respondents mistakenly believed WGACA was either affiliated with or authorized by Chanel, which reinforced their argument about consumer confusion.

In court, Chanel also presented further damning evidence:
At least 51 handbags sold by WGACA contained voided serial numbers, reportedly linked to a 2012 theft from a Chanel factory.

• WGACA allegedly sold more than 750 Chanel-branded items that were theatrical props and never intended for retail sale.
• WGACA used Chanel's marketing materials and props in its physical and online stores.

These activities, Chanel argued, not only misled consumers but also damaged its brand and reputation. Chanel sought not only damages but also an injunction to prevent further misuse of its trademarks.
 

2024 Jury Verdict and Injunction

In February 2024, a New York federal jury unanimously found in favor of Chanel on all counts, ruling that WGACA had:

• Engaged in false advertising
• Committed trademark infringement
• Sold counterfeit Chanel-branded goods
• Operated with "reckless disregard" for Chanel's intellectual property rights
   

The jury awarded Chanel USD 4 million in statutory damages, and additional post-verdict motions are still pending. Following the verdict, the presiding judge, Louis Stanton of the U.S. District Court for the Southern District of New York, issued a final judgment on February 26, 2024, which formalized the jury's findings and imposed a permanent injunction against WGACA.

Under the injunction, WGACA is:

• Prohibited from using Chanel's trademarks in a way that falsely implies an affiliation
• Barred from using Chanel-related hashtags, marketing props, or advertisements
• Not allowed to sell altered or unauthorized Chanel-branded items
• Required to include a disclaimer with Chanel products stating that WGACA is not affiliated with or authorized by Chanel
• Forbidden from making authentication claims unless it possesses independent records to support those claims

This ruling effectively places strict compliance obligations on WGACA and sends a broader message to the resale market about the limits of "nominative fair use". While reselling genuine goods is legal, the court clarified that it does not give resellers the right to use trademarks in a way that suggests endorsement or official affiliation with the brand.
 

Chanel's USD 6.7 Million Legal Fee Claim

Following the verdict and injunction, Chanel has now filed a motion seeking to recover USD 6.7 million in legal fees from WGACA. The fashion house argues that WGACA's willful misconduct, with 10 separate findings of intentional trademark violations, renders this case "exceptional" under both federal law and New York law.

Chanel cites:

• The Lanham Act 1946, which allows courts to award attorney's fees in "exceptional" cases of trademark infringement.
• The Supreme Court's 2014 ruling in Octane Fitness v. ICON Health and Fitness, which defines exceptional cases as those that "stand out" due to the weakness of a party's litigation position or the unreasonable manner in which the case was litigated.
• The 2021 Fifth Circuit ruling in Spectrum Association Management v. Lifetime HOA Management, where legal fees were awarded due to egregious conduct by the losing party.

Chanel argues that WGACA's failure to respond to the initial cease-and-desist letter in 2015, its reckless disregard for Chanel's trademarks, and potentially misleading litigation conduct throughout the case, all point to a clear entitlement to fee recovery.
 

Broader Implications

While the injunction is specific to WGACA, the ramifications extend beyond this case:

• Chanel now holds greater control over how its brand is marketed and sold in the secondary market.
• Other luxury brands may follow suit, taking a stricter stance on resellers and unauthorized use of their intellectual property.
• Resellers may face higher compliance costs, especially regarding authentication, marketing, and the use of brand names or logos.

This case could ultimately reshape how the luxury resale market operates, forcing resellers to rethink their branding strategies and authentication standards to avoid similar litigation.

Recent Developments in the Chanel v. What Goes Around Comes Around (WGACA) Case
In a significant ruling from 2025, the U.S. District Court for the Southern District of New York, led by Judge Louis Stanton, delivered a final judgment reinforcing the jury's 2024 verdict in the ongoing lawsuit between luxury brand Chanel and the luxury resale company, What Goes Around Comes Around (WGACA). The court found WGACA liable for willful trademark infringement, false association, unfair competition, and false advertising.

On February 26, 2025, the court awarded Chanel a substantial sum of $4 million in statutory damages, in addition to ordering the disgorgement of $12,739 in profits from the sale of counterfeit Chanel-branded handbags and other unauthorized items associated with the brand.

Furthermore, WGACA was subjected to a permanent injunction, prohibiting the company from using Chanel's trademarks-including its iconic CHANEL word mark, interlocking CC monogram, and stylized font-in any form of promotional material, advertising, or store displays. This ruling also restricts the company from using Chanel-related hashtags, such as #chanel, and any implication of affiliation with Chanel, including references to Gabrielle "Coco" Chanel's name or likeness.

In addition to these measures, WGACA is now barred from making any claims about the authenticity of Chanel products without proper authorization or independent verification. The court also mandated that WGACA clearly disclaim any unauthorized affiliation with the brand in its product listings, stating that the items are "Not affiliated with Chanel and have not been authorized by Chanel to sell this item".

Despite these rulings, WGACA has expressed its intention to appeal the decision. The company has argued that the court's judgment places an undue burden on its operations, particularly as it maintains a strict authentication process for the resale market. WGACA further contends that its role in the secondary market should not be equated with Chanel's, especially given that it does not have access to the brand's internal databases needed to verify the authenticity of Chanel's products.

The outcome of the appeal will be pivotal, not only for WGACA but also for the broader luxury resale market. It will likely set a precedent regarding the use of trademarks, authenticity claims, and the responsibilities of secondary-market resellers within the luxury fashion industry.

The official statement from Chanel regarding the lawsuit against What Goes Around Comes Around (WGACA):
"Chanel welcomes the ruling, which demonstrates Chanel's unwavering commitment to protecting consumers and its brand against all false association, trademark infringement and counterfeiting, and false advertising. Such infringements hurt consumers and harm the Chanel goodwill and brand because they are likely to confuse the public as to the nature of the Chanel-branded items they are purchasing."

Additionally, Chanel emphasized the role of transparent second-hand platforms in combating counterfeiting:
"Second-hand platforms, when they operate with transparency about the Chanel-branded items they sell and cooperate with law enforcement and Chanel, can help in the fight against counterfeiting."
These statements reflect Chanel's stance on protecting its brand integrity and ensuring consumers are not misled by unauthorized resellers.

Key Legal Issues:

1. Trademark Infringement: At the core of Chanel's lawsuit is the allegation that What Goes Around Comes Around (WGACA) engaged in unauthorized use of Chanel's registered trademarks in a manner that creates consumer confusion. Chanel contended that WGACA prominently displayed Chanel's logos, used branded signage in stores, and tagged Chanel in social media promotions, thereby implying a false association or sponsorship.
   
   Legally, this constitutes direct trademark infringement under Section 32 of the Lanham Act, which prohibits the unauthorized use of a registered mark in a way that is likely to cause confusion, mistake, or deception. Additionally, Chanel invoked Section 43(a), which protects unregistered marks and addresses false endorsement claims, even when the goods in question are genuine.
   
   A comparable provision under Indian law is Section 29 of the Trade Marks Act, 1999, which similarly defines infringement to include the use of identical or deceptively similar marks that are likely to cause confusion in the minds of consumers, especially if such use suggests an association with the registered trademark owner.
    
2. Trademark Dilution and False Endorsement: Beyond infringement, Chanel also accused WGACA of trademark dilution, a concept that protects famous marks from uses that blur their distinctiveness or tarnish their image, even without consumer confusion. This falls under Section 43(c) of the Lanham Act, which provides special protection for marks that have achieved a high level of recognition.
   
   Chanel argued that WGACA's marketing practices created the false impression of endorsement, even though the resold goods were genuine. For instance, using Chanel trademarks alongside promotional content and luxury branding strategies allegedly misled consumers into believing there was an ongoing business relationship or approval from Chanel, which did not exist.
   
   Indian law addresses a similar concern through Section 29(4) of the Trade Marks Act, which protects well-known trademarks from unfair advantage or harm to their distinctive character, even in cases where the infringing use is not for identical or similar goods.
    
3. First Sale Doctrine vs. Brand Control: WGACA's primary defence relied on the First Sale Doctrine, which permits the resale of genuine trademarked products without requiring the brand owner's consent, so long as the products remain unaltered and are not marketed in a misleading way. This principle has been pivotal in supporting secondary luxury markets and vintage resellers.

However, Chanel challenged the applicability of this doctrine by arguing that WGACA went beyond mere resale. Some Chanel items were allegedly altered, repackaged, or sold with non-original components, such as replacement holograms or third-party authentication cards. Furthermore, WGACA's promotional practices, including social media posts, in-store displays, and tagging Chanel, were designed to give consumers the false impression of endorsement or collaboration.

To support this argument, Chanel introduced survey evidence involving over 200 consumers, revealing that 23% of respondents mistakenly believed WGACA manufactured Chanel handbags. This finding underscored the likelihood of consumer confusion, weakening WGACA's reliance on the First Sale Doctrine and highlighting the brand's loss of control over the consumer's perception of authenticity and origin.

Indian trademark law, though not codifying the First Sale Doctrine per se, recognizes similar protections under the exhaustion principle in Section 30 of the Trade Marks Act, 1999. Yet, where resale is accompanied by misrepresentation, as was arguably the case here, it may constitute trademark infringement under Section 29 for causing confusion and diluting the brand's goodwill.

Trademark Protection In The Luxury World

1. The Pillars of Luxury: Exclusivity and Brand Identity.
   Luxury brands like Chanel thrive on the pillars of exclusivity, heritage, and meticulously crafted brand identities. Their value proposition extends beyond the physical product to encompass the brand's narrative, craftsmanship, and the aura of prestige. This intangible value is meticulously protected through robust intellectual property (IP) strategies, ensuring that the brand's image remains untainted and its products are perceived as symbols of luxury and authenticity.
   
   Chanel's commitment to maintaining its brand integrity is evident in its proactive legal stance against unauthorized use of its trademarks. The brand's legal team has consistently pursued actions against entities that threaten its brand image, emphasizing the importance of controlling how its trademarks are used in the marketplace.
    
2. Chanel's Aggressive IP Strategy: A Case Study.
   Chanel's litigation against What Goes Around Comes Around (WGACA) exemplifies its aggressive approach to IP protection. The brand accused WGACA of selling counterfeit Chanel products and using its trademarks in a manner that falsely suggested an affiliation between the two companies. The court ruled in favor of Chanel, awarding $4 million in statutory damages and imposing restrictions on WGACA's ability to market and sell Chanel-branded goods.
   
   This case underscores Chanel's unwavering commitment to safeguarding its brand against unauthorized use and potential dilution. By taking legal action, Chanel reinforces the message that it will not tolerate any infringement that could compromise its brand's exclusivity and reputation.
    
3. Parallel Legal Frameworks: U.S. and Indian Trademark Laws.
   Chanel's legal actions are grounded in the Lanham Act, specifically Sections 32 and 43(a), which address trademark infringement and false advertising. These provisions protect against unauthorized use of registered trademarks and misleading representations that could cause consumer confusion.
   
   In India, similar protections are afforded under the Trade Marks Act, 1999. Section 29 addresses infringement of registered trademarks, while Section 30 outlines the limits of trademark rights, including the doctrine of exhaustion. These legal frameworks collectively ensure that brands can protect their trademarks from unauthorized use and maintain their market position.
    
4. Broader Implications: The RealReal Case.
   Chanel's legal battle with the RealReal further illustrates its aggressive IP enforcement strategy. In this case, Chanel alleged that The RealReal sold counterfeit Chanel products and used its trademarks in a way that implied a false association. Although the court dismissed some of Chanel's claims, it allowed others to proceed, highlighting the complexities involved in enforcing trademark rights in the resale market.

These legal actions send a clear message to the resale industry: unauthorized use of luxury trademarks, even in the context of selling genuine products, can lead to significant legal consequences. Resellers must exercise caution and ensure that their marketing practices do not imply affiliations that do not exist.

Relevance To Indian Law

The Chanel v. WGACA case underscores the complexities of trademark enforcement in the luxury resale market. While the dispute unfolded in the United States, its implications resonate within the Indian legal framework, particularly under the Trade Marks Act, 1999.

1. Unauthorized Resale and Trademark Use: Section 29(4) of the Trade Marks Act, 1999, addresses situations where a registered trademark is used without authorization, even on genuine goods, if such use:
   • Is identical or similar to the registered trademark;
   • Is used for goods or services not similar to those for which the trademark is registered;
   • Takes unfair advantage of, or is detrimental to, the distinctive character or reputation of the registered trademark. (Legal School)
   This provision recognizes that unauthorized use of a well-known trademark can dilute its distinctiveness and harm its reputation, irrespective of the authenticity of the goods involved. (Indian Kanoon)
    
2. Misrepresentation and Passing Off: The concept of "passing off" in Indian law protects the goodwill of a brand from misrepresentation. Even if a reseller deals in genuine products, using branding elements in a way that suggests an affiliation or endorsement by the trademark owner can constitute passing off. This aligns with Chanel's argument against WGACA, where the use of Chanel's trademarks and marketing materials implied a false association.
    
3. Case Study: Christian Louboutin v. Nakul Bajaj (2018): In the landmark case of Christian Louboutin SAS v. Nakul Bajaj, the Delhi High Court addressed similar issues. The defendant operated a website that sold luxury products, including those of Christian Louboutin, using the brand's trademarks, images, and meta-tags without authorization. The court held that such use amounted to trademark infringement and passing off, emphasizing that unauthorized use of a brand's identity, even for genuine products, can mislead consumers and harm the brand's reputation. (SFLC India, Lawful Legal)
    
4. Digital Marketplaces and Brand Misuse: The misuse of trademarks on digital platforms, such as using brand names in hashtags or discount codes, raises concerns under Indian law. Such practices can create consumer confusion and imply false endorsements. The Chanel v. WGACA case highlights the need for clear guidelines and enforcement mechanisms to prevent trademark misuse in the digital marketplace.

Conclusion
In the world of luxury, a handbag is never just a handbag, it is heritage stitched in leather, identity cast in gold, and trust clasped with precision. The Chanel v. WGACA case, while seemingly about the resale of bags, is a landmark mosaic of modern law, where trademark enforcement meets the tides of e-commerce, influencer culture, and brand storytelling.

"Fashion is architecture: it is a matter of proportions," Coco Chanel once declared. So too is the law, balancing the proportions between innovation and integrity, commerce and control, resale and reputation. Chanel's legal strategy in this case was not about gatekeeping; it was about guardianship. A defence of its carefully cultivated mystique, a brand built not merely on products but on philosophy.

This case reminds us that in the digital bazaar of the 21st century, reputation is the true currency. And trademarks are the signature on the canvas, inviolable, personal, and powerfully symbolic. The misuse of such a mark is not merely a legal hiccup, but a misstep that echoes through consumer confidence and brand legacy.

The courtroom has become the new runway, where brands strut their legal acumen as fiercely as their designs. And Chanel, once again, led the way, not with sequins or silk, but with statutes and strategy. The ruling set a precedent not just in the resale of luxury goods, but in how we perceive authenticity, affiliation, and artistic identity in a world of infinite reproduction.

For India, this tale whispers timely warnings: in a digital economy where imitation thrives, the only antidote is sharp legislation and sharper enforcement. The Christian Louboutin v. Nakul Bajaj case showed we are listening, but we must now refine our steps on this legal catwalk.

As the world swipes, likes, and buys in an instant, trademark law must do more than chase, it must anticipate. Because in fashion, as in IP law, what comes around must not come around with confusion.

"A woman who doesn't wear perfume has no future," Chanel famously said. In the same spirit, a brand that doesn't protect its identity in the resale realm risks losing the scent of its legacy. This case is more than litigation; it is legislation in motion — couture sewn into code.

References:

• Chanel, Inc. v. WGACA, LLC, 1:18-cv-02253 at 32 (SDNY).
• Octane Fitness v. ICON Health and Fitness Inc. is: 572 U.S. 545 (2014).
• Christian Louboutin v. Nakul Bajaj AIRONLINE 2018 DEL 1962.
• https://www.yahoo.com/lifestyle/chanel-goes-around-comes-around-211919682.html?guccounter=1&guce_referrer=aHR0cHM6Ly9jaGF0Z3B0LmNvbS8&guce_referrer_sig=AQAAALtziR7K_RwTfINSIulUR0_P
• https://www.thefashionlaw.com/what-chanels-win-in-wgaca-case-means-for-the-resale-market/
• https://www.fashiondive.com/news/chanel-attroneys-fees-what-goes-around-comes-around/742946/
• https://iclg.com/news/22408-chanel-counterfeit-saga-continues-with-costs-lawsuit
• https://www.thefashionlaw.com/wgaca-seeks-new-trial-reduction-in-damages-award-in-chanel-case/

Written By: Adv.Safana Saleem, Kerala High Court.