Chanel Sues The RealReal

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Reposted from the Fashionlaw.com:

THE FASHION LAW EXCLUSIVE — Chanel is not a fan of luxury resale sites. Several months after filing suit against What Goes Around Comes Around, the Paris-based design house has named The RealReal in a trademark infringement and counterfeiting lawsuit, accusing the popular resale site of “selling counterfeit CHANEL handbags,” despite its claims that it “ensure[s] that every item on[its site] is 100% the real thing.”

According to the complaint it filed in a New York federal court on Wednesday, which closely mirrors the action it filed against What Goes Around Comes Around in March, Chanel alleges that The RealReal, “through its business advertising and marketing practices, has attempted to deceive consumers into falsely believing that The RealReal has some kind of approval from or an association or affiliation with Chanel or that all CHANEL-branded goods sold by The RealReal are authentic.”

The famed fashion brand goes on to claim that while “there is no nor has there ever been any approval by or association or affiliation between Chanel and The RealReal …. the RealReal understands that the value of its CHANEL-branded inventory and attraction for consumers is enhanced if consumers believe that Chanel has a business relationship or affiliation with The RealReal.”

This is particularly problematic, according to Chanel, as it “recently learned that The RealReal has sold “at least 7” counterfeit CHANEL handbags” that are “vastly inferior and materially different from genuine Chanel products.”

In addition to differences in quality, Chanel asserts that it “determined certain handbags”  – including a “Chanel Pink Patent Flap Bag; Chanel Purple Quilted Flap Bag; Chanel Black Hobo Bag;Chanel Classic Black Flap Bag; Chanel Black Flap with Handle Bag; Chanel Black Chevron Tote; and Chanel Naked Flap Bag” – to be counterfeits “because certain purported CHANEL serial numbers on the Cartes D’Authenticite do not correspond with the serial numbers designated for the particular style of handbag.”

Chanel goes on to take issue with The RealReal’s claims that it employs “so-called experts, [who] have been ‘trained’ to authenticate genuine Chanel-branded goods.” The brand asserts that in reality, “Such training and knowledge regarding authentication of genuine CHANEL-branded goods could only reside within Chanel. Only Chanel itself can know what is genuine Chanel.”

Despite having “sold at least seven counterfeit CHANEL handbags and being put on notice by counsel for Chanel of its sale of counterfeit CHANEL-branded products, The RealReal continues to represent to the consuming public that … it does not accept fake or counterfeit merchandise,” which Chanel states is “impliedly false.”

With the foregoing in mind, Chanel has set forth claims of trademark infringement and counterfeiting, false advertising, unfair competition, and a number of others claims, and is seeking monetary damages and injunctive relief, the latter of which would force The RealReal to immediately and permanently cease the sale of counterfeit goods.

Beyond that, Chanel wants the court to require The RealReal “to notify potential consumers that the purported authenticity of the products for sale by The RealReal is not verified or authenticated by Chanel and that Chanel does not guarantee items sold by The RealReal are genuine.” Such notice, per Chanel, “must be prominently displayed with large and legible text placed upon the materials, as well as in all of The RealReal’s advertising, marketing and promotional materials.”

While many luxury brands have begun to embrace  resale sites, such as The RealReal, Chanel, which does not offer any of its garments or handbags for sale online, has proven a marked outlier. Julie Wainwright, the founder of The RealReal, told TechCrunch last year that the company was “in talks with high-end brands like Louis Vuitton parent LVMH and Gucci owner Kering over potential partnerships.” However, she noted that at least one brand, whose name “begins with a C,” is particularly unhappy with its model and not looking to partner up any time soon.

A representative for The RealReal told TFL on Thursday, “The RealReal unequivocally rejects Chanel’s claims.  Chanel’s lawsuit is nothing more than a thinly-veiled effort to stop consumers from reselling their authentic used goods, and to prevent customers from buying those goods at discounted prices.  They are trying to stop the circular economy. The RealReal stands behind its authenticity guarantee and will continue to provide a safe and reliable platform for consumers to resell luxury items.”

* The case is Chanel, Inc., v. The RealReal, Inc., 1:18-cv-10626-VSB (SDNY).

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