Chanel v. WGACA Lawsuit: Resale, Rights & Repercussions

Bags are pretty simply looked at as an accessory or a utility item to complement an outfit- but the same can't be the formula we apply to the equation of owning a Chanel handbag- it's an heirloom, a status symbol, and increasingly, an asset class. 

To satiate the apparent curiosity of what the rising value looks like, we have the Classic Flap Bag, which has increased by over 275% in the past 15 years, going from somewhere around $2,850 in 2010 to almost $10,800 in 2025. While Chanel maintains that it is for the exclusivity and craftsmanship it offers, it is evident to the collectors that they see the value appreciation. 

This appreciation isn’t incidental. It takes up to five years of training to master the techniques which go into the bag's construction and more than 180 operations to bring the final silhouette to life. Every detail that goes into its making is deliberate- from the equestrian-inspired quilting to the garnet-hued lining- it's beautifully and artistically a nod to Gabrielle Chanel's childhood uniform, grounded on aesthetic philosophy. Hence, it would be an understatement to say that it's just another pricey accessory- an artefact of luxury- one that cannot be separated from the house's tightly guarded identity. With this background, we can now move to why Chanel took such a stern stance in its recent lawsuit against What Goes Around Comes Around (WGACA); Chanel alleges that thirteen of its handbags- linked to stolen serial numbers- were without any prior licensing or agreement were sold by WGACA, a New York-based luxury vintage reseller. The claims not only questioned authenticity but also targeted WGACA’s broader use of Chanel’s brand identity in its marketing- a matter that ultimately led to a significant ruling by the Southern District of New York.

The Chanel WGACA Lawsuit:

 What It Means for Resale

WGACA was founded in 1993 by Gerard Maione and Seth Weisser, and since then, it has long positioned itself as a premier curator of luxury vintage. With its boutiques stretching from SoHo to Beverly Hills and stocked with archival pieces from Hermès, Dior, Louis Vuitton, and, of course, Chanel, the company has grown a rapporteur and its very sense of pride in delivering a high-fashion experience grounded in the same art and science of luxury resale. 

This dispute in itself deserves its due recognition because here, Chanel's complaint isn't just accusing the retailer of selling materially altered goods and point-of-sale items which were never authorized for sale by Chanel in the first place, but also of using its name, branding, stylized font, and even Coco Chanel's image in a way that falsely implied endorsement. 

A federal jury in the Southern District of New York, on 6 February 2024, found WGACA and its affiliated entities liable for trademark infringement, false association, unfair competition and false advertising under the Lanham Act. The sweeping allegations brought forward invited a sweeping injunction from the court. 

In this blog, we will unravel the multiple layers of this high-stakes litigation- and also examine WGACA's latest filings and appeal, in which the reseller challenges the $4 million verdict as excessive and seeks a new trial, putting forth the argument that the jury's findings were unsupported, formally appealing to the Second Circuit, contesting both the judgement and Chanel's request for attorney's fees.

Allegations of False Endorsement and Trademark Infringement

The issue concerns the confrontation between brand control and the resale economy. Filed in the Southern District of New York, Chanel, synonymous with luxury, heritage, and exclusivity- initiated the litigation to challenge what can be characterised as an aggressive and unauthorised appropriation of its trademarks, reputation, and consumer trust by What Goes Around Comes Around (WGACA), a vintage luxury reseller. The constellation of serious allegations included trademark infringement, false endorsement, false advertising, unfair competition, and violations of federal and state deceptive trade practices statutes. These efforts were directed not just as mere formalities- they cut to the core of Chanel's efforts to maintain the integrity of its brand in a secondary market which appealingly thrives on association. 

The factual basis of Chanel’s case is formed by the discovery that WGACA had sold at least thirteen handbags that bore Chanel's serial numbers, which had been reported stolen from the Renato Corti factory on 29 November 2012. These used serial numbers had been voided by Chanel, rendering any goods bearing them inauthentic from the brand's perspective- even if they contained some original components. Furthermore, providing evidence of WGACA’s unauthorised conduct, Chanel went on to cite the sale of a counterfeit Chanel handbag and a fake CHANEL-branded tissue box cover, which were never made available for public sale. 

The allegations put forth by Chanel went beyond counterfeit claims, arguing that WGACA had deliberately crafted a marketing ecosystem for its benefit- across its website, physical stores, and social media- that falsely implied an established relationship or endorsement from Chanel. This included phrases like "our #WGACACHANEL," displays of Chanel advertising campaigns, props which mimicked Chanel's visual identity (like its iconic oversized perfume bottles), and the sale of Chanel point-of-sale items never intended for resale. 

By co-opting Chanel’s trademarks, stylised logos, and even Coco Chanel’s image, WGACA had, according to Chanel, eroded the sanctity of its brand identity.

Adding insult to injury, Chanel pointed out the additional damage caused by WGACA's "Letters of Authenticity," which point out the intention to mislead and falsely suggest that Chanel had verified the items' genuineness. Chanel sternly stated that it does not sell through resellers, does not authenticate inventory sold by third parties, and has repeatedly refused WGACA's requests to formalise a relationship.

Maintaining that it was merely acting as a participant in the secondary market, WGACA, for its part, argued that its use of the Chanel marks was of a nominative nature and that its customers were fully aware of the resale context. Nonetheless, the court and jury disagreed with the defence put forth by WGACA. On 6 February 2024, WGACA was found liable for trademark infringement, false association, unfair competition, and false advertising under the Lanham Act. Awarding statutory damages, the court issued a broad injunction restricting WGACA's future use of Chanel's marks and requiring prominent disclaimers concerning any Chanel-branded resale items. 

This case highlighted whether a reseller can benefit from the aura of a luxury brand while remaining legally detached from its ecosystem of meaning.

Court Ruling: $4 Million Verdict and Injunction

Under the Lanham Act, specifically under 15 U.S.C. § 1114, Chanel alleged that its federally registered trademark has been unauthorizedly used by WGACA, which includes- the CHANEL word mark and the iconic interlocking "CC" logo, which is quite likely to confuse consumers, further invoking § 1125(a), with the argument that WGACA has created a false impression of affiliation or endorsement through its marketing practices, with its in-store visuals, and website language. The concerns which were put forward by Chanel are not just limited to the goods being resold but also extend to how they were being presented- via hashtags like #WGACACHANEL, by displaying Chanel's runway imagery, and promotional events- which naturally would be perceived being derived from a legitimate authority, which was nonexistent. 

To bolster its claims Chanel highlighted WGACA's use of "Letters of Authenticity" by bringing it to the court's attention by raising the issue of false advertising under § 1125(a), in which Chanel claimed that the brand itself had verified the items for sale. Emphasising that Chanel does not authenticate items sold by third parties and has repeatedly declined the requests of WGACA to enter into any formal arrangement or authorisation. 

Whilst it was not pleaded as a standalone claim, the principle of trademark dilution was deeply embedded in Chanel's broader legal narrative.  With the continual and unauthorised use of its trademark, the brand argued that- with the infringing actions of WGACA- there lies a diminishing of the uniqueness and prestige of the Chanel mark. Even with the possibility that the consumers might not be out rightly deceived into believing the items were fake, the culmination effect of misappropriating Chanel's name in advertising and point-of-sale displays risked weakening the brand's distinctiveness over time.

Relying on New York General Business Law §§ 349 and 350, Chanel alleged that WGACA's marketing conduct - especially about altered Chanel goods, unauthorized point-of-sale items (such as tissue paper, garment bags, and ribbons), and ambiguous representations of its affiliation- misled consumers and violated the consumer protection laws- prohibiting deceptive business practices and false advertising. 

Chanel also sought equitable relief, i.e., seeking judicial measures which go beyond monetary compensation; this included a permanent injunction to prohibit WGACA from continuing the allegedly infringing conduct, a product recall to remove any items that falsely implied Chanel's authorization and association and the disgorgement of WGACA's profits, a legal mechanism which would require WGACA to return all the revenue gained from the unlawful use of Chanel’s intellectual property and brand signals.

A federal jury in the Southern District of New York on February 26, 2025 found  WGACA liable on all counts brought forward by Chanel. Holding WGACA responsible for willful trademark infringement, unfair competition, false association and false advertising under the Lanham Act, awarding Chanel $4 million in statutory damages.

Appeal in Motion: WGACA’s Fight Isn’t Over

The aftermath of the jury's decisive 26 February 2025 verdict in favour of Chanel, saw WGACA's prompt launch of a multi-faceted post-trial campaign aimed at taking strikes, dismantling the judgement, and reasserting the boundaries of the reselling business.  On 26 March 2025, WGACA  filed a Rule 50(b) motion for judgment as a matter of law, which means that they aim to argue that the judgement was unreasonable and could not have legally or logically reached that conclusion based on the evidence so presented, and thereby it misapplied key principles of trademark and consumer protection law. 

WGACA while maintaining that it sold genuine Chanel items- presented that the products were initially manufactured in Chanel-authorized facilities- and that their resale was protected under the first sale doctrine- a legal concept in the United States, limits the rights of an intellectual property owner to control resale of products embodying its intellectual property. . Arguing that the company's use of Chanel trademarks, including in product descriptions and ancillary packaging materials, was legally permissible normative fair use and did not imply false endorsement or affiliation. Through this, WGACA asserted that the goods in question were from Chanel-authorized production and that its use of the trademarks in descriptions and packaging was fair and normative use. It also highlighted its practice of issuing third-party "Letters of Authenticity", as well as visible disclaimers disavowing any official Chanel partnership. 

Furthermore, WGACA contested the $4 million in statutory damages, describing it as "grossly excessive" and incompatible with the constitutional due process standard, pointing out the absence of quantifiable harm to Chanel or direct evidence of consumer deception. The reseller also argued that Chanel's claims were speculative and aimed less at protecting consumers as they had boldly claimed than at restructuring legitimate resale activity. 

Escalating its efforts by filing a Notice of Appeal to the Second Circuit on 27 March 2025, it not only contested the jury's verdict and damages but also related rulings regarding injunctive relief and profit disgorgement. In its preparation for the appeal, WGACA requested the issuance of formal findings of fact and conclusions of law to aid in their appellate review.

Simultaneously, WGACA also opposed Chanel's request for attorney fees, which stands for the winning party asking the court to make the losing party pay for its legal expenses- and under the Lanham Act, attorney's fees can only be awarded in what the law calls "exceptional cases."  (in Octane Fitness v. ICON, 2014).  WGACA stated that the case was not  "exceptional" under the Lanham Act, citing the absence of intentional wrongdoing, genuine legal ambiguities, and the broader public interest in protecting the resale ecosystem from overreach by influential brand owners.

Industry Implications:

The Future of Resale and the Limits of Brand Control

This case is a bellwether for the evolving relationship of the fashion industry with the resale market. Platforms like What Goes Around Comes Around (WGACA), The RealReal, and Vestiaire Collective, the luxury resale boom has brought about a wave of cultural awakening. It would be an understatement to title them just as digital storefronts- they are fashion’s modern-day archivists, meticulously ‘curating’ Chanel flaps, Hermès Kellys, Cartier Love bracelets, and Van Cleef Alhambra pendants into glossy inventories that rival the boutiques of Rue Cambon or Avenue Montaigne. 

But it isn't all rainbows and sunshine, the long-drawn case of Chanel v WGACA has shown us that the secondhand renaissance may be elegantly dressed, but it's a walking tightrope between commerce and copyright. The truth remains fragile as ever, resale operates in a liminal space- where legitimacy and liability, exclusivity and accessibility, authenticity and ambiguity coexist in a precarious dance. WGACA’s post-trial motions are a push back to the phenomenon of legacy houses being allowed to control not only the authenticity of the goods, but also every possible way their brands are displayed, described, or even hashtagged, then resale doesn’t just become risky—it becomes radical. The uprising demand for vintage luxury can no longer be treated as a niche- it’s structural, generational, and deeply woven into the fabric of contemporary fashion.  Circular fashion is the market force backing it on a very conscientious level and with the prices in flagship stores rising and sustainability becoming the new badge of honour, shoppers are gravitating towards archival pieces.  

Legally speaking, the war between the two gladiators is far from over. WGACA’s motion for judgment as a matter of law and its formal appeal to the Second Circuit open the door for appellate review, which could affirm, reverse, or reshape key aspects of the trial court’s findings. The court will need to weigh whether the first sale doctrine was properly applied, whether the jury had enough evidence to support a finding of willful infringement, and whether resale platforms can lawfully use brand names for identification without triggering liability.

The Second Circuit’s decision may clarify the boundaries of the first sale doctrine in the digital era, determining how far nominative fair use can stretch in fashion marketing, and resolve whether luxury brands can control downstream narratives in an era of e-commerce. As the lines between fashion, law, and commerce blur even further, one thing remains crystal clear: the future of resale will not be written without due conflicts.

The world of businesses — whether OG brands or resale models — will stay abuzz. Revenues and profits will tell their own stories, and amidst all of this, we can count on conflicts to rise and chart their own course with emerging new issues. Until then, the fashion world watches — and waits.