Chanel, Inc. v. What Comes Around Goes Around LLC et al

Filing 276

OPINION & ORDER as to 219 Motion for Summary Judgment; as to 224 Motion for Summary Judgment; as to 225 Motion for Summary Judgment; as to 226 Motion for Partial Summary Judgment; as to 272 Motion for Oral Argument: WGACA's motion f or summary judgment dismissing Chanel's claims is DENIED, except as to Chanel's Fourth and Fifth Claims for Relief for respective violations of N.Y. GEN. BUS. LAW§ 349 (Deceptive Trade Practices) and§ 350 (False Advertising) forwh ich summary judgment is GRANTED and the claims are dismissed. Chanel's partial motion for summary judgment on liability on its First and Third Claims for, respectively, Trademark Infringement and False Association is DENIED except as to WGACA&# 039;s liability for sale of non-genuine CHANEL-branded point-of-sale items, of eleven non-genuine CHANEL-branded handbags with serial numbers that were stolen from the Renato Corti factory, and of one non-genuine and counterfeit handbag with the seri al number 17744200. As to those, judgment is granted to Chanel. All WGACA's affirmative defenses are dismissed, with thequestion of whether disgorgement of profits is an appropriate remedy being reserved for trial. (Signed by Judge Louis L. Stanton on 3/28/2022) (ml)

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Plaintiff,
- against 18 Civ. 2253

(LLS)

OPINION & ORDER
WGACA, LLC, WHAT COMES AROUND GOES
AROUND LLC d/b/a WHAT GOES AROUND
COMES AROUND, MHW PROPERTIES, INC.,
WGACA WEB, LLC, PINES VINTAGE,
INC., VINTAGE DESIGNS LTD., WCAGA
LA, LLC, and Individuals SETH
WEISSER and GERARD MAIONE,
Defendants.

- - -x
Plaintiff Chanel,

Inc.

("Chanel") brings this trademark

infringement and false association action against Defendant What
Goes Around Comes Around ("WGACA")

under the Lanham Act and laws

of New York. Chanel alleges that WGACA's advertising and resale
practices violate Chanel's trademarks and improperly trade off
Chanel's brand in order to create the false perception that
WGACA is affiliated with Chanel. As a result,

in its Second

Amended Complaint, Chanel asserts the following claims against
WGACA:
(2)

(1) Trademark Infringement under 15 U.S.C.

False Advertising under 15 U.S.C.

§

§§

1114(1);

1125 (a) (1) (B);

Association and Endorsement under 15 U.S.C.

§

(3)

False

1125(a) (1) (A); and

several related claims under New York General Business Law for

1

(4)

Deceptive and Unfair Trade Practices and (5)

False

Advertising.
Pending before the Court are the parties' cross-motions for
summary judgment. Chanel seeks partial summary judgment holding
WGACA liable for trademark infringement and false association
under the Lanham Act and dismissing WGACA's affirmative
defenses. Dkt. No. 226. WGACA cross-moves for summary judgment
dismissing all of Chanel's claims. WGACA argues, among other
things, that its use of Chanel's marks in advertising
constitutes nominative fair use and that even if its actions
infringe on Chanel's trademarks, Chanel cannot prove it was
injured. 0kt. No. 219.
For the following reasons, the Court grants in part WGACA's
cross-motion dismissing the New York Business Law claims, and
grants in part Chanel's motion, holding WGACA liable for
trademark infringement in WGACA's sales of point-of-sale items,
eleven non-Chanel handbags sold as having been authorized for
sale by the Renato Corti factory,

and one CHANEL-branded handbag

with a pirated serial number.
The rest of each party's remaining claims are denied.
BACKGROUND 1

The following facts, unless indicated otherwise, are
undisputed. The facts are taken from the parties' statements
pursuant to S.D.N.Y. Local Civil Rule 56.1 or drawn from
evidence as to which there is no non-conclusory contrary factual
1

2

Parties

The CHANEL brand was established in 1909 by Coco Chanel and
has grown to be an internationally recognized fashion house.
Dkt. No. 252

(Defendant's Rule 56.1 Response to Plaintiff's Rule

56.1 Statement ("Def. 56.1 Reply"))
famous,

~~

1-2.

Chanel owns eight

federally registered trademarks, including CHANEL and CC

(the "Chanel Marks"), as well as Coco Chanel's publicity rights.
Dkt. No. 252

(Def. 56.1 Reply)

~~

4-5. The Chanel Marks date

back to 1956 and cover leather goods and jewelry, among other
things. To this day, Chanel remains the exclusive designer and
manufacturer of luxury apparel,

leather goods, and other

accessories bearing the Chanel Marks. Id.

~

3. Chanel has never

sold any CHANEL-branded goods in the secondhand market.

Id.

~

61.
Chanel's products are manufactured in select authorized
factories in France, Italy, and Spain on a "to order" basis.
~~

2

Id.

16-17. Chanel provides its factories with only enough

supplies to make the specific number of Chanel products that
have been ordered. Id. The supplies provided include the
leather, rivets, buckles, zippers, and clasps, as well as a

proffer. Citations to the parties' respective Local Civil Rule
56.1 Statements incorporate by reference the parties' citations
to their underlying evidentiary submissions.
2 Factories do not always comply with Chanel's directives.
Chanel
has accused one of its factories, Bianchi & Nardi, of
manufacturing bags in excess of those allotted to it. Id. ~ 17.
3

CHANEL-branded label, sticker, and Authenticity Card that each
bear a unique Chanel Serial Number. Id.

~~

15, 20. Chanel does

not authorize factory overruns and its factories are not
authorized to purchase any extra components to enable them to
make more handbags than those specifically ordered by Chanel.
Id.

~

19.
Each unique Chanel Serial Number, and its corresponding

Authenticity Card and label, is allocated to a specific factory.
Id.

~

22. A Serial Number is only assigned to a CHANEL-branded

product once the product has been authorized for manufacture and
determined to meet Chanel's quality requirements. Id. Although
each of Chanel's authorized factories keep CHANEL-branded
labels, stickers, and Authenticity Cards in a secure locked
area, 30,000 Chanel labels, stickers, and Authenticity Cards
bearing unique Serial Numbers were stolen from the Renato Corti
factory in November 2012. Id.

22,

~~

41-43.

Since 1993, Chanel's internal inventory system (the "ORLI
System") has been used to track the allotment of the
Chanel Serial Numbers to Chanel factories and the assignment of
Chanel Serial Numbers to specific CHANEL-branded products after
the product has passed the factory's quality control process. 3

The first step of tracking the Chanel Serial Number is the
creation of the Chanel Serial Number which appears on labels,
stickers, and Authenticity Cards; this information is recorded
in the ORLI System. The second step of tracking the Chanel

3

4

Id.

~

29. Once a Serial Number is assigned to an item, the

item's type, color, characteristics, and location is entered
into the ORLI System. Id.

~

23. The System also tracks the

status of products as they progress through Chanel's
distribution system and the locations where the products are
ultimately sold by Chanel.

Id.

~~

23, 25.

stolen or missing from a Chanel factory,

If Serial Numbers are
like those taken from

the Renato Corti factory, Chanel will void them in the ORLI
System. Id.

~~

2 7, 3 2,

3 4 -3 5, 4 4 .

In the ORLI System, Chanel can query the Serial Number on a
product it allegedly produced to determine if it actually
manufactured,

inspected for quality control, approved, and sold

a product with that unique Serial Number.

Id.

~

26. If Chanel

did manufacture and sell a product bearing the queried Serial
Number, Chanel can then use the ORLI System to determine whether
the type, color, and characteristics of the alleged product
correspond with those of the genuine product Chanel manufactured
and sold under that Serial Number. Id.

Serial Number occurs when the Serial Number is allocated to a
specific Chanel authorized factory, which is also recorded in
the ORLI System. The third step of tracking occurs when the
Chanel Serial Number is linked to a specific CHANEL-branded
handbag or small leather goods item by the Chanel-authorized
factory, which takes place only after the product has been
inspected and passed Chanel's strict quality control standards
and been found to meet Chanel's specifications. Id. ~ 23.
5

WGACA is a retailer specializing in the sale of luxury
secondhand clothing, bags,

jewelry, and accessories.

Id. 1 59.

WGACA has sold, or offered for sale, secondhand CHANEL-branded
products via its website, www.whatgoesaroundnyc.com, in its
retail stores, at trunk shows or pop-up shops, and through
ecommerce platforms.

Id. 1 60. Chanel has never authorized

WGACA's secondhand sale of CHANEL-branded goods.

Id. 1 61. Nor

does WGACA purchase its inventory directly from Chanel or from
any Chanel retail boutique or Chanel authorized retailer.

Id. 1

64. Instead, WGACA purchases goods from individuals and
international whole-sellers, without asking for documentation of
how they obtained title to the goods.

Id. 11 103-04, 107.

WGACA, on its website, "guarantees the authenticity of all
products sold." Id. 1 113. To comply with its authenticity
guarantee, WGACA employs a team of in-house experts who
authenticate all goods before they are sold. Id. 1 67. It also
used to provide an authenticity letter signed by its Chief
Executive Officer, Seth Weisser, for every item authenticated
and sold. Id. 1 72.
However, WGACA does not disclose that these in-house
experts have never worked for or been trained by Chanel. Id. 1
68. WGACA does not keep written records of the authentication
process for the individual items, but it does maintain a
database of the fact that the authentication process was

6

~

conducted. Id.

71. It also, since 2017, stopped publicizing on

its website the Chanel Serial Number of goods it has available
for sale. Id.

~

116.

In April 2020, WGACA added the disclaimer: "WHAT GOES
AROUND COMES AROUND IS NOT AN AUTHORIZED RESELLER NOR AFFILIATED
WITH ANY [sic] THE BRANDS WE SELL." Id.

~

124.

WGACA also advertises its products using a combination of
its marks and the marks of all of the luxury fashion houses that
it sells. Id.

~

112. Without Chanel's authorization, WGACA used

Chanel marks and indicia, such as Chanel artwork and images of
Chanel runway shows, in advertisements and displays featured instore and on its webpages, social media, and direct-to-consumer
emails. Id.

~~

137-141, 143, 146, 148-149, 150-156. WGACA up

until 2017 also used the hashtag #WGACACHANEL in its social
media posts. Id.

~

142.
WGACA'S Contested Conduct

Chanel charges WGACA sold allegedly non-genuine, infringing
Chanel products, and improperly used Chanel marks in its
advertising and marketing.
Chanel's claims for trademark infringement and false
association are based on WGACA's sale of four categories of
allegedly infringing CHANEL-branded products:

(1) eleven non-

genuine and counterfeit CHANEL-branded handbags bearing Serial
Numbers that were assigned to and stolen from the Renato Corti

7

factory and which were subsequently voided in Chanel's ORLI
System;

4

(2) two non-genuine and counterfeit CHANEL-branded

handbags that have characteristics that do not match the ORLI
System's recorded characteristics for the bags associated with
those serial numbers;

(3)

fifty non-genuine CHANEL-branded

handbags that bear serial numbers which were voided in the ORLI
system during inventory audits at Chanel's factories; and (4)
779 non-genuine point-of-sale items bearing Chanel logos (i.e.,
counter-support items), which were never authorized for sale by
Chanel, sold by Chanel or a Chanel-authorized retailer, or
otherwise put into the stream of commerce by Chanel.

5

Id.

~~

74-

111.

4

One of the bags with a voided Serial Number from the Renato
Corti factory (No. 17688191) was advertised for sale on WGACA's
website in 2015 (when WGACA still listed the Chanel Serial
Number on its product listing page). Id. ~ 50-51. On June 26,
2015, Chanel wrote to put WGACA on notice that it was
advertising for sale a non-genuine CHANEL-branded handbag
bearing a Serial Number that was never authorized for use, and
informing WGACA that no genuine CHANEL-branded bag was ever
manufactured or sold by Chanel with that voided Serial Number.
Id. ~ 52. The bag was sold four weeks later. Id. ~ 54. WGACA
claims that the bag was genuine and that there was a "typo or
data entry error with regards how the serial number was listed
on our site" and that the bag's serial number was actually
17267828. Id. ~ 53. Chanel disputes WGACA's explanation arguing
that the bag with serial number 17267828 was previously sold by
WGACA on February 12, 2015. Id. ~ 54.
5 Point-of-sale items are "counter-support" items that Chanel
provides to its boutiques and to authorized retailers to enhance
the customer experience and support the sale of CHANEL-branded
products. Id. ~~ 97-98. Examples of point-of-sale items include
black acrylic (i.e., plastic) vanity trays, tissue box holders,
8

Chanel's claim for false advertising, false association,
and trademark infringement based on WGACA's advertising
practices is rooted in WGACA's: retail displays' prominent use
of the Chanel Marks, like a giant CHANEL No.5 perfume bottle or
CHANEL-branded cake, Id. 11 130-31; direct-to-consumer email
advertisements that prominently displayed the Chanel Marks,
frequently in WGACA's stylized font,

Id. 1 133, 135-136; use of

#WGACACHANEL in social media posts, Id. 1 142, 145, 147; and
non-product specific advertising, like ads for general WGACA
sales, with prominently featured CHANEL-branded items front and
center Id. 11 134-41, 144, 146, 149. Additionally, Chanel points
to WGACA's website which uses images of and quotations from Coco
Chanel (at times stylized in Chanel's font),

Id. 11 114, 115,

and includes statements like "Buy WGACA CHANEL- 100%
Authenticity Guaranteed." Id. 1 112.
Chanel alleges, and WGACA disp~tes, that WGACA's
advertising practices caused actual consumer confusion in the
marketplace. Chanel points to at least one Chanel customer
staying at the Plaza Hotel who saw a WGACA advertising display
and went to the nearby Chanel boutique and requested the
discount promised in WGACA's advertisement. Id. 11 161-162.
Chanel's customer service call center records have also captured

jewelry boxes, cotton ball holders, hand mirrors, and
wastebaskets. Id.
9

similar instances of confusion on the part of several callers
Id.

~

163.
Chanel has never had any affiliation with WGACA. When WGACA

offered to establish one by including "somewhere on our website
that we partner with Chanel to ensure authenticity of these
items, as value added for our customer," Chanel declined the
request and expressly warned WGACA not to create "any official
or unofficial connection, partnership or association" with
Chanel, and that "under no circumstances may you state that you
are partnered with or otherwise affiliated with Chanel or create
any false impression of such a relationship." Id.

~~

56 57.

Chanel's Claims

Chanel asserts claims for
false advertising, and (3)

(1) trademark infringement,

(2)

false association under the Lanham

Act and (4) deceptive business practices and (5)

false

advertising under New York General Business Law. Chanel moves
for summary judgment only on the trademark infringement and
false association claims.
WGACA cross-moves for summary judgment dismissing all
Chanel's claims, arguing that the lawsuit is an attempt, without
any factual grounding, to gain control of the secondary market
and foreclose the resale of its goods by a reseller who claims
no connection with the fashion house.
DISCUSSION

10

I.

Summary Judgment Standard

"The court shall grant summary judgment if the movant
shows," based upon the admissible evidence, "that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law."

Fed.R.Civ.P. 56(a);

see Celotex Corp. v. Catrett, 477 U.S. 317, 322

(1986).

A fact

is material if, based on the substantive law, it "might affect
the outcome of the suit under the governing law," and it is
genuinely in dispute "if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party." Anderson
v. Liberty Lobby,

Inc.,

477 U.S. 242, 248

JetBlue Airways Corp., 793 F.3d 269, 274

(1986); see Baez v.
(2d Cir. 2015 ("Where

the record taken as a whole could not lead a rational trier of
fact to find for the nonmoving party, there is no genuine issue
for trial.") .
The moving party bears the initial burden of demonstrating
the absence of a genuine issue of material fact. Celotex Corp.,
477 U.S. at 323. The non-moving party, in its attempt to defeat
the motion, "may not rest upon the mere allegations or denials
of his pleading but must set forth specific facts showing that
there is a genuine issue for trial." Anderson,

477 U.S. at 248;

see also Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010)
("conclusory allegations or denials cannot by themselves create

11

a genuine issue of material fact where none would otherwise
exist.").
District Courts are "not 'to weigh the evidence and
determine the truth of the matter but to determine whether there
is a genuine issue for trial.'" Cioffi v. Averill Park Cent.
Sch. Dist. Bd. of Ed.,

444 F.3d 158, 162

(2d Cir. 2006)

(citation omitted). The District Court "must construe all the
evidence in the light most favorable to the nonmoving party
and draw all inferences and resolve all ambiguities in that
party's favor" and against the motion. Cartier, Inc. v. Sardell
Jewelry,

Inc., 294 Fed. Appx.

615,

617

(2d Cir. 2008). In Lanham

Act cases, summary judgment is appropriate where the undisputed
evidence leads to only one conclusion, that consumer confusion
is likely. Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co.,
799 F.2d 867, 876 (2d Cir.1986)
II.

Lanham Act Claims

Chanel asserts against WGACA three Lanham Act claims for
alleged violations of§ 1114(1) (a) prohibiting trademark
infringement and§ 1125(a) (1) prohibiting false advertising and
false association. 15 U.S.C. §§ 1114, 1125. Despite differences
in the statutory language, the "same analysis applies" to claims
of trademark infringement and false association.~' Louis
Vuitton Malletier v. Dooney & Bourke, Inc., 454 F.3d 108, 115
(2d Cir. 2006); Virgin Enterprises Ltd. V. Nawab,

12

335 F.3d 141,

146 (2d Cir. 2003). As such, the Court addresses those claims
together before turning to review Chanel's claim for false
advertising.
A. Trademark Infringement(§ 1114(1) (a)) and False
Association and Endorsement (§ 1125(a) (1) (A)) Claims
Section 32(1) of the Lanham Act prohibits trademark

infringement and imposes liability on any person who, without
the consent of the registrant, uses in commerce any copy of a
registered mark in connection with the sale, offering for sale,
or advertising of any goods which such use is likely to cause
confusion. 15 U.S.C.

§

1114(1) (a).

Section 43(a) of the Lanham Act prohibits false
association, which arises when any person uses in commerce, in
connection with any goods,
any word, term, name, symbol, or device, or any
combination thereof, or any false designation of
origin, false or misleading description of fact, or
false or misleading representation of fact, which is
likely to cause confusion, or to cause mistake, or to
deceive as to the affiliation, connection, or
association of such person with another person, or as
to the origin, sponsorship, or approval of his or her
goods, services, or commercial activities by another
person ...
15 U.S.C. § 1125 (a) (1) (A).
To prevail on a claim of trademark infringement or false
association, "a plaintiff must show, first,
protection, and,

that its mark merits

second, that the defendant's use of a similar

13

mark is likely to cause consumer confusion." 6 E.g.,
Sys. Sec. Certification Consortium,
F.3O 153, 160

Inc. v.

Int'l Info.

Sec. Univ., LLC,

823

(2d Cir. 2016). Consumer confusion can arise "not

just as to source, but also as to sponsorship, affiliation or
connection." Int'l Info. Sys. Sec. Certification Consortium,
Inc.,

823 F.3d at 161; see Hormel Foods Corp. v.

Productions,

Inc.,

73 F.3d 497,

inquiry is whether there is a

502

Jim Henson

(2d Cir. 1996)

("The central

'likelihood of confusion,' a

'likelihood that an appreciable number of ordinarily prudent
purchasers are likely to be misled, or indeed simply confused,
as to the source of the goods in question,' or that there may be
confusion as to plaintiff's sponsorship or endorsement of the
junior mark."(citation omitted)); Dall. Cowboys Cheerleaders,
Inc. v.

Pussycat Cinema, Ltd.,

604 F.2d 200, 204-05

(2d Cir.

WGACA argues it is entitled to summary judgment dismissing
Chanel's false association claim because Chanel fails to prove
injury or presumed injury. That misstates the law. Claims for
false association arise under Section 1125 (a) ( 1) (A) and are
analyzed according to the standard applicable to a trademark
infringement claim under Section 1114(a). See, e.g., Arrow
Fastener Co., Inc. v. Stanley Works, 59 F.3d 384, 390 & n.4 (2d
Cir. 1995) (noting that the standard is the same for claims
under §1114 (1) (a) and §1125 (a) (1) (A); the only difference is the
former applies to registered marks and the latter unregistered)
In a trademark case, even if a plaintiff cannot point to lost
sales to prove injury, it may still be harmed by "a loss of
control ... over how the public perceives" its goods or
services. The Sports Authority, Inc. v. Prime Hosp. Corp., 89
F.3d 955, 964 (2d Cir. 1996). Accordingly, false association
claims under 15 U.S.C. §1125 (a) (1) (A) do not burden the
plaintiff with proving injury.
6

14

1979)

("In order to be confused, a consumer need not believe

that the owner of the mark actually produced the item and placed
it on the market. The public's belief that the mark's owner
sponsored or otherwise approved the use of the trademark
satisfies the confusion requirement.") ( citations omitted))
Chanel,

in its motion for partial summary judgment, asserts

two claims under

§

1114 (1) (a)

and

§

1125 (a) (1) (A):

(a) WGACA' s

use of Chanel's marks and other indicia of the House of Chanel
in its advertising channels and (b)
branded items

its sale of 842 CHANEL-

(779 point-of-sale items and 63 handbags)

infringes upon Chanel's trademarks and indicia and creates a
false association between Chanel and WGACA. As to each claim,
Chanel puts forward numerous different factual scenarios that
give an impression that WGACA is infringing on the Chanel brand.
WGACA, in its cross-motion for summary judgment, does not
challenge Chanel's recital directly, but in principle and at
large. It moves for summary judgment of dismissal arguing that
Chanel offers no evidence in support of many material facts,
that there is no showing Chanel suffered injury as a consequence
of false advertising or that the bags have non-genuine hardware;
and argues that Chanel's infringement claim is barred by laches.
As discussed below, WGACA's motion for dismissal of
Chanel's trademark infringement and false association claims is
denied. Chanel's motion for summary judgment holding WGACA

15

liable for infringement is granted in part for the point-of-sale
items, the 11 bags from the Renato Corti factory on the issue of
being non-genuine, and the bag bearing the serial number
17744200.
i.

WGACA's use of Chanel's marks and other indicia
of the House of Chanel in its advertising
channels
a. Applicable Law

To prevail in a trademark infringement or false association
action,

"the mere possibility of confusion is not enough.

[A] plaintiff must prove 'a probability of confusion ...
affecting numerous ordinary prudent purchasers.'"
v. Costco Wholesale Corp,

971 F.3d 74,

84

Tiffany & Co.

(2d Cir. 2020)

(citations omitted). To determine whether an alleged
infringement is likely to cause confusion, Courts in this
Circuit apply an eight-factor balancing test originally
developed in Polaroid Corp. v.
F.2d 492

(2d Cir.1961).

Polarad Electronics Corp., 287

In claims where there are not two

competing products, but rather the alleged infringer is using
"another's trademark to identify, not the defendant's goods or
services, but the plaintiff's goods or services," the classic
factors developed in Polaroid are adapted to include the
nominative fair use factors.

7

Int'l Info. Sys. Sec.

7

"The doctrine of nominative fair use allows a defendant to
use a plaintiff's trademark to identify the plaintiff's
16

Certification Consortium, Inc., 823 at 168

("When considering a

likelihood of confusion in nominative fair use cases, in
addition to discussing each of the Polaroid factors,
to consider" the nominative fair use factors)

courts are

(remanding for

reconsideration of both sets of factors when district court only
looked at nominative fair use of defendant's use in its
advertising of plaintiff's trademark).
The District Court thus applies the Polaroid factors:
(1) strength of the trademark; (2) similarity of the
marks; ( 3) proximity of the products and their
competitiveness with one another; (4) evidence that
the senior user may "bridge the gap" by developing a
product for sale in the market of the alleged
infringer's product; (5) evidence of actual consumer
confusion; (6) evidence that the imitative mark was
adopted in bad faith; ( 7) respective quality of the
products; and (8) sophistication of consumers in the
relevant market.
Int'l Info. Sys. Sec. Certification Consortium, Inc., 823
at 160, and the nominative fair use factors:
(1) whether the use of the plaintiff's mark is
necessary to describe both the plaintiff's
product or service and the defendant's product or
service, that is, whether the product or service
is not readily identifiable without use of the
mark; ( 2) whether the defendant uses only so much
of the plaintiff's mark as is necessary to
identify the product or service; and (3) whether
the defendant did anything that would, in
goods so long as there is no likelihood of confusion about
the source of the defendant's product or the mark-holder's
sponsorship or affiliation." Tiffany (NJ) Inc. v. eBay
Inc., 600 F.3d 93, 102 (2d Cir.2010).

17

Id.

conjunction with the mark, suggest sponsorship or
endorsement by the plaintiff holder, that is,
whether the defendant's conduct or language
reflects the true or accurate relationship
between plaintiff's and defendant's products or
services.
(establishing "nominative fair use factors").
District courts are to apply the Polaroid factors even

"where a factor is irrelevant to the facts at hand." Arrow
Fastener Co. v. Stanley Works,
1995)

59 F.3d 384, 400

(2d Cir.

("[I]t is incumbent upon the district judge to engage

in a deliberate review of each factor,

and, if a factor is

inapplicable to a case, to explain why."). The application
of these factors is not mechanical, "'but rather, focuses
on the ultimate question of whether, looking at the
products in their totality, consumers are likely to be
confused.'" Id.
295,

307

(quoting Kelly-Brown v. Winfrey,

717 F.3d

(2d Cir. 2013)). Importantly, "[n] o single factor

is dispositive, and cases may certainly arise where a
factor is irrelevant to the facts at hand. Id.

( quoting

Paddington Corp. v. Attiki Imps. & Distribs., Inc.,
F.2d 577, 584

996

(2d Cir.1993)).
b. Application of Facts

WGACA argues that "Chanel provides no evidence that the use
of its mark, use of a different or larger font in the WGACA
store and website was or is likely to cause consumer confusion."
0kt. WGACA Reply, pp.

6-7. Specifically, the parties dispute six

18

of the Polaroid factors, disagreeing as to the conclusiveness
of: the similarity of the marks; proximity of the products and
their competitiveness with one another; evidence of actual
consumer confusion; evidence that the imitative mark was adopted
in bad faith;

respective quality of the products; and

sophistication of consumers in the relevant market.
Because of the nature of the claim in which only one mark
is being used, the Court finds that the similarity of the marks
factor and the respective quality of the products factor are
inapplicable to this case. Chanel, Inc. v. RealReal,
F. Supp. 3d 422,
the marks .

438 n.16

(S.D.N.Y. 2020)

Inc.,

449

("the similarity of

. are not as relevant where, as here, the marks

used and goods sold by Defendant are indeed the same as the
Plaintiff's marks and good.")

(When "the marks used and goods

sold by Defendant are indeed the same as the Plaintiff's marks
and goods," the "respective quality of the products in question
are not as relevant.").
As to the first factor, the strength of the Chanel marks,
they agree that the marks are famous, which favors a finding of
consumer confusion. Dkt. No. 252

(Def. 56.1 Reply)

admits the Chanel brand is famous."); Chanel,
Inc.,

449 F. Supp. 3d 422, 438

relation to the first factor,

(S.D.N.Y. 2020)

~

2 ("WGACA

Inc. v. RealReal,
(finding,

in

that "Chanel's trademarks are

incredibly well-known, recognizable, and prevalent in the luxury

19

fashion market"); Virgin Enterprises Ltd. v. Nawab, 335 F.3d
141, 148

(2d Cir. 2003)

("Widespread consumer recognition of a

mark previously used in commerce increases the likelihood that
consumers will assume it identifies the previously familiar
user, and therefore increases the likelihood of consumer
confusion if the new user is in fact not related to the
first.").
They also agree that the fourth factor,

the likelihood that

the prior user will bridge the gap, is inapplicable. Chanel,
Inc. v. RealReal, Inc., 449 F. Supp. 3d 422,
2020)

438 n.16

(S.D.N.Y.

(" [Tl he evidence of bridging the gap . . are not as

relevant where, as here, the marks used and goods sold by
Defendant are indeed the same as the Plaintiff's marks and
good.") .
The Court addresses the four remaining Polaroid factors in
turn.
1. Proximity of the products and their
competitiveness with one another
When analyzing this factor, Courts look to "the nature of

the products themselves and the structure of the relevant
market." Vitarroz v. Borden, Inc.,
Cir.1981).

644 F.2d 960,

967

(2d

The CHANEL-branded products offered for sale by the

parties are nearly identical in nature but differ in a way (new
vs. second-hand)
No. 256

that may be deemed material to customers. Dkt.

(Pl. Rule 56.1 Response to Defendant's Rule 56.1

20

Statement ("Pl. 56.1 Reply"))

i

8. Therefore, the parties

dispute the extent to which their customer bases overlap as a
buyer of an expensive original may or may not also buy a cheaper
secondhand item. Dkt. No. 252
256 (Pl. 56.1 Reply)

(Def. 56.1 Reply)

i 62; Dkt. No.

i 8. The question of market proximity and

competitiveness of the products must be left to the jury.
2. Evidence of actual consumer confusion

"Evidence of actual confusion may consist of anecdotal or
survey evidence." Paco Sport, Ltd. v.
F. Supp. 2d 305, 319

(S.D.N.Y. 2000)

Paco Rabanne Parfums, 86
(citing Centaur

Communications, Ltd. v. A/S/M Communications, Inc.,

830 F.2d

1217, 1227 (2dCir. 1987).
Chanel offers a story of how a customer viewed a WGACA
advertisement featuring a CHANEL-branded handbag and believing
it to be a Chanel advertisement asked for the discount to be
applied at the Chanel boutique. Dkt. No. 252

(Def. 56.1 Reply)

i

162. It also offers multiple stories of Chanel customers
contacting Chanel customer service representatives with
inquiries about Chanel goods sold by WGACA.

Id. i 163. WGACA

argues these incidents are not the consequence of any confusion
as to affiliation (they are clearly known to be a Chanel product
sold second-hand) but simply over whether Chanel will honor the
second-hand discount. Id. i i 162-63.

21

In either event, it is for

the jury to assess the effect of these customer reactions as
reflecting the market perception of WGAA's advertisements.
Chanel also offers two surveys conducted by expert David
Franklyn that assess a potential Chanel purchaser's level of
confusion after reviewing WGACA's 2015 website.

Id.

~~

164-65.

WGACA, on the other hand, offers the report of its expert Dr.
Melissa Pittaoulis which calls into question the methodology,
survey design, and sample size of the Franklyn surveys. Id.

~

164. Again, credibility of experts is a matter best left in the
hands of the trier of fact and is inappropriate for resolution
on summary judgment.
3. Evidence that the imitative mark was
adopted in bad faith
"This factor looks to whether the defendant adopted its

mark with the intention of capitalizing on plaintiff's
reputation and goodwill and any confusion between his and the
senior user's product." Lang v. Ret. Living Publ'g Co.,
576, 583

(2d Cir. 1991)

949 F.2d

(quotation marks omitted).

It is undisputed that WGACA was aware that use of the
Chanel marks and indicia was "helpful" to driving its sales, in
part because an association with Chanel was a "value add." Dkt.
No. 252

(Def. 56.1 Reply)

~~

56, 158. "But that fact is not

dispositive because '[p]rior knowledge of a senior user's trade
mark does not necessarily give rise to an inference of bad
faith.'" Easy Spirit, LLC v. Skechers U.S.A.,

22

Inc.,

515 F. Supp.

3d 47, 74
Works,

(S.D.N.Y. 2021)

59 F.3d 384, 397

(citing Arrow Fastener Co. v. Stanley

(2d Cir. 1995)). The evidence is

inconclusive and "this issue,

like many intent issues, is best

left in the hands of the trier of fact," and cannot be decided
at this stage. The Sports Auth., Inc. v.
F.3d 955,

964

Prime Hosp. Corp., 89

(2d Cir. 1996).

4. Sophistication of consumers in the
relevant market
"Generally speaking, greater sophistication of consumers

reduces the likelihood of confusion." SLY Magazine, LLC v.
Weider Publications L.L.C., 529 F. Supp. 2d 425, 442
2007)

(S.D.N.Y.

(quotation marks omitted). Neither party has produced any

evidence directly related to the sophistication of WGACA's
buyers. Therefore, "a court is entitled to reach a conclusion
about consumer sophistication based solely on the nature of the
product or its price." Star Indus., Inc. v. Bacardi & Co.,
F.3d 373, 390

412

(2d Cir. 2005).

Based on the fact that Chanel and WGACA operate in high
end, luxury products, the sophistication of their customers is
inferred, which minimizes the likelihood of confusion. See LVL
XIII Brands, Inc. v. Louis Vuitton Malletier S.A., 209 F. Supp.
3 d 612 , 6 7 6 , n . 1 0 5 ( S . D. N . Y . 2 0 1 6 ) , a ff ' d sub n om . LVL XI I I
Brands, Inc. v. Louis Vuitton Malletier SA,

720 F. App'x 24

(2d

Cir. 2017); Chanel,

Inc. v. RealReal,

439

("[F]inally, the luxury fashion market is a

(S.D.N.Y. 2020)

23

Inc., 449 F. Supp. 3d 422,

relatively sophisticated market that involves "[c]elebrities,
stylists, and influencers [who] covet Chanel designs and
accessories," which "command top-dollar prices.") .
5. Nominative Fair Use Factors

The application of the Polaroid factors is not the end of
the analysis. When nominative use arises, as it does in this
case, courts must also take into consideration:

(1) whether the

use of the plaintiff's mark is necessary to describe the
defendant's product;

(2) whether the defendant uses only so much

of the plaintiff's mark as is necessary to identify the product
or service; and (3) whether the defendant did anything that
would, in conjunction with the mark, suggest sponsorship or
endorsement by the plaintiff. Int'l Info. Sys. Sec.
Certification Consortium, Inc. v. Sec. Univ., LLC, 823 F.3d 153,
168

(2d Cir. 2016).
First, neither party has presented evidence as to "whether

the use of the plaintiff's mark is necessary to describe both
the plaintiff's product or service and the defendant's product
or service, that is, whether the product or service is not
readily identifiable without use of the mark." Id. Even so,
courts in this district have found this factor "is satisfied"
when, like here, the "marks used and goods sold by Defendant are
indeed the same as the Plaintiff's marks and goods." Chanel,
Inc. v. RealReal,

Inc.,

449 F. Supp. 3d 422, 438 n.4

24

(S.D.N.Y.

2020). This factor thus cuts against a finding of consumer
confusion about the source of the product and facilitates
affiliation and endorsement.
Second, there are genuine issues of material fact as to
whether WGACA has used more of Chanel's marks and indicia than
is necessary to identify its products. In evaluating this
factor,

courts are to consider "whether the alleged infringer

'step[ped] over the line into a likelihood of confusion by using
the senior user's mark too prominently or too often, in terms of
size, emphasis, or repetition.'" Int'l Info Sys., 823 F.3d at
168
LLC,

(citations omitted); see PACCAR Inc. v. TeleScan Techs.,
319 F.3d 243, 256

(6th Cir. 2003)

("Using [the plaintiff's]

trademarks in its domain names, repeating the marks in the main
titles of the web sites and in the wallpaper underlying the web
sites, and mimicking the distinctive fonts of the marks go
beyond using the marks

'as is reasonably necessary to identify'

[the plaintiff's] trucks, parts, and dealers."), abrogated on
other grounds by KP Permanent Make-Up, Inc. v. Lasting
Impression I,

Inc.,

543 U.S. 111 (2004).

WGACA argues that it uses Chanel's marks and indicia to
identify the manufacturer of the products it sells, in the same
way it does for all of the luxury brands it sells. 0kt. No. 222
(Weisser Dec.) 1 3.

In support of its claim, WGACA offers into

evidence a printout of the products on its website, which shows

25

the Chanel branded products featured in the same way as other
luxury goods, like Louis Vuitton. Id., Ex. B. WGACA additionally
analogizes this case to that of Chanel, Inc. v. RealReal,

Inc.,

in which the Court found The RealReal did not step over the line
when "The RealReal's website includes a

'Chanel' page briefly

describing Chanel and advertising products with the Chanel
Trademarks" but also included "brand-specific pages for nine
other luxury fashion brands." 449 F. Supp. 3d 422,

439

(S.D.N.Y.

2020). Crucially though, unlike in this case, The RealReal court
relied upon the fact that "Chanel has identified no facts
suggesting that The RealReal displays CHANEL-branded goods 'more
prominently than other luxury-brand goods,'

. or that The

RealReal uses Chanel marks in any other capacity than to
identify Chanel products as Chanel." RealReal, Inc., 449 F.
Supp. 3d at 439.
In this case, Chanel has evidence on each of those factors.
For example, WGACA's welcome email to customers and Facebook
cover photo features the Chanel marks. 0kt. No. 252
Reply)

~

(Def. 56.1

134. Its social media uses #WGACACHANEL and also

features Chanel marks and indicia. Id.
As do its retail displays,

Id.

~~

~~

142-43, 145, 147-48.

130-32, and its direct-to-

consumer advertisements, one of which featured the Chanel mark
more prominently than WGACA's and in the WGACA stylized font,
Id.

~

136. WGACA also used Chanel marks and indicia in general

26

advertisements for WGACA,
upcoming sales, Id.

~~

Id.

~~

135, 138, 140, and to advertise

137, 139, despite not advertising any

specific Chanel product.
WGACA disputes Chanel's characterization that its use of
the Chanel marks is either more prominent than that of any other
brand or done independent of any specific Chanel product. Id.

~

135. There is a genuine issue whether WGACA's use of the Chanel
marks exceeds what is necessary to identify Chanel products.
Third, a fact finder could conclude that WGACA does "in
conjunction with the mark,

suggest sponsorship or endorsement"

by Chanel and has obscured the "true or accurate relationship
between" the parties. Int'l Info. Sys. Sec. Certification
Consortium,

Inc., 823 F.3d at 168. In analyzing this factor,

courts "must consider confusion regarding affiliation,
sponsorship, or endorsement by the mark holder." Id. at 169.
Chanel offers as evidence of endorsement: a consumer survey
conducted by Chanel's survey expert, David Franklyn, which found
consumers perceived WGACA to be affiliated with Chanel based on
how WGACA listed Chanel products on its website [CUF

~

164];

WGACA's claim on its website and in advertisements of "WGACA
CHANEL- 100% Authenticity Guaranteed" and its inclusion of a
letter or card of authenticity with its products.

[Id.

~~

112-

15, 73-73]; WGACA holds yearly "Coco Chanel birthday Sale" [CUF
~~

137-139]; WGACA frequently utilizes pictures or purported

27

quotes of Coco Chanel on social media and on its website

(COF

~~

137-139).
WGACA claims that its ads do not create an affiliation
between itself and Chanel because it uses the same type of ads
for other luxury brands. WGACA offers no evidence of such ads.
"conclusory allegations or denials cannot by themselves create a
genuine issue of material fact where none would otherwise
exist." Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010).
WGACA instead points to TheRealReal, where the Court found
TheRealReal's actions did not create an affiliation with Chanel
because its website disclosed that ""Brands identified on the
Site are not involved in the authentication of the products
being sold, and none of the brands sold assumes any
responsibility for any products purchased from or through the
website," and that "Brands sold on the Site are not partnered or
affiliated with TheRealReal in any manner." Chanel,
RealReal,

Inc.,

449 F. Supp. 3d 422, 432

Inc. v.

(S.D.N.Y. 2020). But

WGACA's website had no similar disclosure until April 2020,
after this lawsuit was brought. 0kt. No. 252
~~

123-25.

(Def. 56.1 Reply)

This factor thus favors a finding of consumer

confusion.
Although the likelihood of confusion is a question of law
to be determined by the court, Tiffany & Co. v. Costco Wholesale
Corp., 971 F.3d 74, 85

(2d Cir. 2020), the fact that genuine

28

issues of material facts are presented by the proximity of the
marks, evidence of actual consumer confusion, bad faith,

and

whether WGACA uses only so much of Chanel's mark as is necessary
to identify its' products requires denial of both parties'
motions for summary judgement on claims of

§§

1114 (1) (a)

and

1225 (a) (1) (A).
ii.

WGACA's sale of 842 CHANEL-branded items
a. Applicable Law

Generally, the Lanham Act does not impose liability for
"the sale of genuine goods bearing a true mark even though the
sale is not authorized by the mark owner" because such a sale
does not inherently create consumer confusion or deceive the
public. Polymer Tech. Corp. v. Mimran,

975 F.2d 58,

61

(2d Cir.

1992). As long as the product is genuine, the mark holder has no
right to control subsequent, unauthorized resales. Bel Canto
Design, Ltd. v. MSS Hifi,

Inc., 837 F. Supp. 2d 208, 222

(S.D.N.Y. 2011).
The same cannot be said if the sale is of non-genuine
goods. Even though a seller may not be "involved in the
manufacture nor the affixing of the trademark to the" contested
products, the sale of non-genuine goods creates consumer
confusion and is "sufficient 'use'" to establish liability under
§

1114 (1) (a)

and

§

1125 (a) (1) (A) without resorting to

application of the Polaroid factors. El Greco Leather Prod. Co.

29

v. Shoe World, Inc., 806 F.2d 392, 396 (2d Cir. 1986)

("Since we

conclude that the shoes were not genuine CANDIE'S shoes, it is
plain that appellant has made out a violation of§ 32(1) of the
Lanham Act.").
Goods are not genuine if they do not conform to the
trademark holder's quality control standards, even if they were
manufactured by the mark holder. El Greco Leather Prod. Co., 806
F.2d at 395

("The mere act of ordering a product to be labeled

with a trademark does not deprive its holder of the right to
control the product and the trademark."). "For this purpose the
actual quality of the goods is irrelevant; it is the control of
quality that a trademark holder is entitled to maintain." Id.;
see also Polymer Tech. Corp., 37 F.3d at 78.

Failure to conform

with quality control standards can be established by a lack of
evidence, or a showing that plaintiff never generated a record
of conformity as it usually does in the course of business. See
El Greco Leather Prod. Co., 806 F.2d at 395-96. In El Greco
Leather Products, the Second Circuit held that shoes branded
with plaintiff's trademark were non-genuine, even though they
were made according to the terms of plaintiff's manufacturing
agreement, because the shoes did not have a certificate of
inspection, which "in this case were an integral part of
appellant's effort at quality control." Id.

30

Nor are goods genuine "If the trademark owner did not
approve the original sale." Ryan v. Volpone Stamp Co., 107 F.
Supp. 2d 369, 382

(S.D.N.Y. 2000); Liz Claiborne, Inc. v.

Mademoiselle Knitwear,
1997)

Inc., 979 F. Supp. 224, 230

(S.D.N.Y.

("'Trademarked goods produced by a manufacturer under

contract with the trademark owner are not genuine goods until
their sale under the mark is authorized by the trademark owner.
Thus, if the trademark owner rejects the goods, the manufacturer
may not use the mark in reselling the goods to others.'"
(quoting Restatement
C

(Third) of Unfair Competition§ 24, comment

(1995)) .

"

. or if they differ materially from the product

authorized by the trademark holder for sale." Zino Davidoff SA
v. CVS Corp., 571 F.3d 238, 243
Appalachian Artworks,

(2d Cir. 2009)

(citing Original

Inc. v. Granada Elecs., Inc., 816 F.2d 68,

73 (2d Cir. 1987)).
Chanel claims that WGACA sold four different categories of
non-genuine goods:

(1)

items with serial numbers that were

voided in Chanel's internal records;
(3)

(2) point-of-sale items;

items with voided serial numbers from Chanel's Renato Corti

factory;

(4)

items with pirated serial numbers. Chanel moves for

summary judgment holding WGACA liable on all accounts, while
WGACA's cross-motion only moves for dismissal on the first and
third factual scenarios.

31

b. Application of facts
1. Inventory Voided Serial Numbers

Chanel asserts that fifty of the bags sold by WGACA are
non-genuine because the serial numners on those bags were not
verified by Chanel's internal record system, ORLI, which
chronicles every phase in the production cycle. Chanel argues
that these serial numbers went missing before being assigned to
a bag and, as a result, the ORLI system has no notation that
bags with those serial numbers ever passed through the quality
control procedure and were authorized for sale. As a result,
CHANEL-branded handbags with these serial numbers have not been
proven to be genuine.
However, the evidence tells competing stories of how Chanel
conducts its quality control procedures and thus the question of
whether the bags were actually subjected to them is best left
for the jury. To show the bags never passed through quality
control procedures, Chanel points to its internal inventory
system, which has no record that bags with these serial numbers
were sent to Chanel distribution centers for inspection. Dkt.
No. 252

(Def. 56.1 Reply)

~~

23, 25, 29, 93

(stating that all

fifty bags should have been delivered to a Chanel distribution
center for inspection but there is no notation of that in the
ORLI system). It also offers the testimony of Mr. Girardi, the
Managing Director of Chanel's Renato Corti, who said that the

32

Renato Corti factory scanned the merchandise produced there to
upload the bag's identifying information to Chanel in real time.
Id.

~

23; Dkt. No. 239, Ex. R ("Girardi Depo.")

at 53:21-55:1.

WGACA argues that not all of Chanel's bags are sent to
Chanel distribution centers for inspection and consequently not
all bags will be marked in Chanel's records as having gone
through the quality control procedures. It points to
contradictory testimony of Chanel employees regarding how
quality control information is recorded in Chanel's internal
records. Specifically, it contrasts the testimony of Ms. Bleys,
Senior Counsel, Brand Protection for Chanel, who said the
quality control information is loaded into the internal database
after an inspection is done at a Chanel distribution center,
Dkt. No. 126 ("Bleys Deel.") at 2-3; Dkt. No. 221, Ex. B ("Bleys
Depo.") at 47:16-48:14, with that of Mr. Bravo, Director of
Operations of Chanel Coordination SAS, which asserts Chanel
factories perform the quality control inspection, Dkt. No. 230
("Bravo Dec.")

~

15, and Mr. Girardi, Managing Director of a

factory inspecting bags, corroborated Mr. Bravo's testimony and
stated he was unfamiliar with Chanel's internal record system,
Dkt. No. 221, Ex. J

("Girardi Depo.") at 26:17-28:21, 32:14-

33:23; Dkt. No. 250, Ex. J

("Girardi Depo.")

at 62:1-63:2.

Clearly, the question of where these bags were inspected and

33

whether the inspection would have been recorded in Chanel's
database is disputed and unripe for summary judgment.
Whether Chanel authorized the initial sale of the bags is
also in dispute. Chanel once again points to its internal system
which does not have a record of the bags being authorized for
sale. Dkt. No. 252

(Def. 56.1 Reply)

~~

95-96. But the present

record describing Chanel's internal system is fissured and needs
to be smoothed out by the fact finder. Chanel itself offers
contradicting explanations of how its internal system would
record the authorization for sale of a bag that went directly
from the factory quality control processes and into the market
rather than first passing through a distribution center. WGACA
also calls into question the reliability of Chanel's record
system. Dkt. No. 269

("Def. Opp. to Part. Sumrn. Judg.)

at 23-24

("Despite these yearly reviews and despite the six month normal
turnaround for the manufacture of a bag (Bravo Depo., 2/11/2021,
p. 134, DKT No. 221-7), a number of allotted serial numbers
going back to the early 1990's were never entered into the ORLI
system as having gone through the QC review, but were not
identified as "missing" until, in some cases, nearly 20 years
later.").
"It is only when the witnesses are present and subject to
cross-examination that their credibility and the weight to be
given their testimony can be appraised." Poller v. Columbia

34

Broad. Sys., Inc., 368 U.S. 464,

473

(1962). Whether Chanel

initially sold the bags will turn on the credibility of
witnesses and reliability of the evidence; summary judgment is
therefore precluded.
In relation to only this clai~, WGACA also raises many
affirmative defenses, laches, lack of remedy/ mootness, waiver,
and estoppel, all of which lack merit. First, "[l]aches is not a
defense to an action filed within the applicable statute of
limitations." United States v. Mac~, 295 U.S. 480,

489 (1935)

Further, on the merits, the defense of laches does not apply
because Chanel did not inexcusably delay taking action. It did
not have actual knowledge of the alleged infringement, the sale
of the bags, until litigation had already commenced in this
matter. Excelled Sheepskin & Leather Coat Corp. v. Oregon
Brewing Co., 897 F.3d 413,

419 (2d Cir. 2018)

("The laches clock

begins to run when the trademark owner 'knew or should have
known, not simply that [the infringer] was using the potentially
offending mark, but that [it] had a provable infringement claim
against [the infringer.]'"); Dkt. No. 271

("Pl. Reply in Support

of Motion for Part. Summ. Judg.") at 15 ("Given that WGACA did
not sell any of the handbags bearing the Inventory Voided Serial
Numbers until March 10, 2014 and Chanel did not know that WGACA
sold the fifty infringing handbags until May 8, 2020, there was
no unreasonable delay."). "Although the defense of laches

35

generally includes proof of actual knowledge by the party
claimed to be barred, this is not an inflexible rule; a
plaintiff may be barred when the defendant's conduct has been
open and no adequate justification for ignorance is offered."
Chandon Champagne Corp. v. San Mar~no Wine Corp., 335 F.2d 531,
535

(2d Cir. 1964)

(citation omitted). However, WGACA's conduct

was not open-it stopped listing serial numbers on its website in
2016. 0kt. No. 252

(Def. 56.1 Reply)

'lT'lT 73-75,

116, 142, 144-

145, 147, 159. Therefore, Chanel's infringement claim as to the
fifty bags is not barred by laches.
Second, Chanel's claim is not moot for lack of an available
appropriate remedy. Chanel is seeking disgorgement of profits
and an injunction, each of which is an equitable remedy. A
plaintiff asserting a Lanham Act claim and seeking a profit
award does not need to prove that the defendant's violation was
willful. Romag Fasteners, Inc v. Fossil,
1497

(2020)

Inc., 140 S. Ct. 1492,

("we do not doubt that a trademark defendant's

mental state is a highly important consideration in determining
whether an award of profits is appropriate. But acknowledging
that much is a far cry from insisting on the inflexible
precondition to recovery Fossil advances."). Rather, the
egregiousness of defendant's infringement is but one factor
amongst the other principles of equity which a court must
consider when determining whether plaintiff may obtain profits.

36

Id. at 1496; Experience Hendrix, L.L.C. v. Pitsicalis, No. 17
CIV 1927, 2020 WL 3564485, at *5 (S.D.N.Y. July 1, 2020), report
and recommendation adopted sub nom. Experience Hendrix, LLC v.
Hendrix, No. 17 CIV 1927, 2020 WL 4261818

(S.D.N.Y. July 24,

2020). Here, there are issues of fact as to WGACA's mens rea and
whether it acted in reckless disregard, in willful blindness, or
was simply unaware its sale was an infringement. For example,
whether WGACA had evidence of, or whether it was feasible for
WGACA to obtain evidence of, the ownership history of the fifty
bags. It may have been reasonable for it to assume the bags'
marketability. Disgorgement of profits is thus an available
remedy the appropriateness of which is unripe for resolution at
the summary judgment stage.
Injunctive relief may also be available to Chanel. WGACA
argues that it is impossible to craft an injunction that
complies with Federal Rule of Civil Procedure Rule 65(d). But
many options are available, including requiring WGACA to
publicize the serial numbers on the products it sells. Cf. Fendi
Adele S.R.L. v.
(S.D.N.Y. 2010)

Filene's Basement, 696 F. Supp. 2d 368, 391-92
("Plaintiffs are entitled to a permanent

injunction prohibiting Filene's from purchasing, offering for
sale, or selling any item bearing the word "Fendi" or any of the
Fendi Marks without Plaintiff Fendi S.r.l. 's written permission
because, among other reasons,

Plaintiffs have succeeded on the

37

merits of their trademark counterfeiting and false designation
of origin claims against Filene's.").
Finally, WGACA cannot hide behind the shield of waiver or
estoppel. 8 WGACA claims that Chanel has waived its ability to
bring an infringement claim as to the fifty bags, and further is
estopped from asserting that claim, because Chanel was publicly
silent and did not disclose to WGACA that serial numbers were
stolen in 2012 from the Renato Corti factory. However, estoppel
based upon the silence of a party "may be asserted only where
the party had a legal duty to disclose the information
purportedly concealed," which Chanel did not. See Babbit v.
Vebeliunas, 332 F.3d 85, 93-94

(2d Cir. 2003)

("Vanda

Vebeliunas' silence cannot give rise to equitable estoppel
because she had no duty or opportunity to speak."). Similarly, a
party only waives a right when it has "the knowledge of the
existence of a right and an intention to relinquish it." Voest-

8

In its Answer, WGACA also asserts the affirmative defenses of
Acquiescence, Consent, and Failure to Mitigate but it does not
address them in its motion for summary judgment or in its
opposition to partial summary judgment. Accordingly, the Court
finds WGACA has abandoned those defenses. Jackson v. Fed.
Express, 766 F.3d 189, 198 (2d Cir. 2014) ("{I]n the case of a
counseled party, a court may, when appropriate, infer from a
party's partial opposition that relevant claims or defenses that
are not defended have been abandoned."); Maxim Grp. LLC v. Life
Partners Holdings, Inc., 690 F. Supp. 2d 293, 310 (S.D.N.Y.
2010) (where defendant failed to brief affirmative defenses in
opposition to plaintiff's summary judgment motion, affirmative
defenses deemed abandoned).

38

Alpine Int'l Corp. v. Chase Manhattan Bank, N.A., 707 F.2d 680,
685

(2d Cir. 1983).
On the conflicting factual record, it cannot be determined

as a matter of law whether the fifty bags were non-genuine
because they allegedly never passed through Chanel's quality
procedures and were not authorized for sale. The issues must be
tried, and Chanel's and WGACA's motions are both accordingly
denied.
2. Point-of-sale items

WGACA argues that the point-of-sale items bearing the
Chanel logo are genuine because they were authorized for
manufacture and meet the standards that Chanel set up for those
items. "The question of whether a good is genuine, however,
presupposes the initial sale was acthorized," which Chanel
asserts it was not.
Knitwear,

Inc.,

Liz Claiborne, Inc. v. Mademoiselle

979 F. Supp. 224, 230

(S.D.N.Y. 1997). Chanel

claims that the point-of-sale items were never authorized for
sale but were instead loaned to retailers as counter decor.
WGACA offers no evidence that Chanel authorized the initial
sale of these goods. It instead hypothesizes a dispute with
suppositions. 0kt. No. 249 ("Def. Opp. to Pl. Motion for Part.
Summ. Judg.") at 14

("It is unknown how WGACA's supplier

obtained those products. Presumably, the supplier purchased the
goods from Chanel's manufacturer (or from various authorized

39

retailers or others who obtained them from various sources).").
It points to Chanel's failure to offer into evidence contracts
that say the manufacturers of the goods are not permitted to
sell or give them away. Id. Speculations and attacks on the
quality of evidence are insufficient to defeat a motion for
summary judgment. Hicks v. Baines, 593 F.3d 159, 166 (2d Cir.
2010)

("[A] party may not rely on mere speculation or conjecture

as to the true nature of the facts to overcome a motion for
summary judgment."); cf. Gottlieb v. Cnty. Of Orange, 84 F.3d
511, 518

(2d Cir. 1996)

("He cannot defeat the motion by relying

on the allegations in his pleading, or on conclusory statements,
or on mere assertions that affidavits supporting the motion are
not credible.") .
Chanel provides as evidence the Declaration of Laura
Moffatt to support its claim that the items were never sold by
Chanel. Moffatt says that "At all times, Chanel retains title to
the Point-of-Sale Items, and boutiques and retailers are not
permitted to sell or give them away to third parties." Dkt. No.
237

("Moffatt Deel.")

~

14. Further, Chanel's retailer

agreements, as well as its internal boutique policy, also
demonstrate that Chanel's Point-of-Sale items are not products
or for sale. See, e.g., Dkt. No. 239, Ex. 109

~

5.4

("the

Retailer accepts that display materials are not for resale but

40

remain CHANEL's property .

."); Ex. 110 (same); Exhibit 110a

(same); Exhibit 110d (same)
Therefore, as Chanel has established that it did not
authorize the initial sale of these goods, they "cannot be
considered genuine as a ~atter of law and infringement is
established." Ryan, 107 F. Supp. 2d at 382-83.
Chanel's motion for partial summary judgment of
infringement is thus granted as to this claim. As discussed
above, disgorgement of profits and injunction are available
remedies, the applicability of which is premature to resolve at
this stage.
3. Voided Serial Numbers from Renato Corti

Chanel alleges two separate grounds to hold WGACA liable
for trademark infringement for selling or offering to sell
eleven bags with serial numbers that were stolen from Chanel's
Renato Corti factory. Chanel asserts the bags were either (1)
not genuine because they were not put through Chanel's quality
control processes and not authorized for initial sale by Chanel
and (2)

"counterfeit" because the bags were not made by Chanel's

authorized factories.

9

Genuine issues of material fact remain

unresolved only as to the latter claim.

It is important to observe that there is a special definition
of "counterfeit" which applies to trademark and copyright law. A
counterfeit is a copy which is so close that it is difficult to
tell from an original. Thus, a shoe which is made in the
9

41

First, Chanel argues that these eleven bags are non-genuine
because they are branded with serial numbers that were stolen
from the Renato Corti factory before being assigned to any bag.
In support, it offers declarations and testimony of its
employees. Dkt. No. 252
No. 229

(Def. 56.1 Reply)

("Girardi Deel.")

of the Corti factory,

~~

6, 8-9

~

44; See also Dkt.

( (Mr. Girardi, the manager

confirmed that no handbags bearing the

Voided Corti Serial Numbers were ever manufactured,

inspected,

or approved by Renato Corti). The parties do not dispute that in
response to the theft, Chanel voided the serial numbers in the
ORLI system. Dkt. No. 252

(Def. 56.1 Reply)

~

49. The ORLI

system has no record of bags with these serial numbers passing
through the quality control procedures and being authorized for
sale.
WGACA does not put forward any evidence that creates a
genuine dispute as to whether bags with these serial numbers
went through Chanel's quality control procedures or were ever
initially sold by Chanel. In fact, WGACA's motion for summary
judgment is silent as to liability on these grounds.
Accordingly, Chanel's motion for summary judgment is granted on

manufacturer's factory, and meets it specifications, but is
unauthorized for sale, is an infringement, but not a
counterfeit. The distinction is important because the penalties
for counterfeiting are far more severe than those for
infringement.
42

the narrow grounds that WGACA infringed Chanel's marks by
selling eleven non-genuine bags.
Second, Chanel asserts a claim of counterfeiting under§
1114 (1) (a). Second-hand retailers, like WGACA, can be held
liable for trademark infringement based on their sale of
counterfeit goods because such sales constitute improper use of
marks. See Chanel,
441

(S.D.N.Y. 2020)

Inc. v. RealReal, Inc., 449 F. Supp. 3d 422,
("Thus,

'[e]ven though [The RealReal]

[is]

involved neither in the manufacture nor the affixing of
[Chanel's] trademark to [any counterfeits], its sale of the
[counterfeits]

[is]

sufficient 'use' for it to be liable for the

results of such infringement.'" (citation omitted)

(alterations

in the original)).
"Where counterfeit marks are involved,

it is not necessary

to perform the step-by-step examination of each Polaroid factor
because counterfeit marks are inherently confusing." Spin Master
Ltd. v. Alan Yuan's Store, 325 F. Supp. 3d 413, 421
2018)

(S.D.N.Y.

(quoting Fendi Adele S.R.L. v. Filene's Basement,

696 F. Supp. 2d 368, 383

Inc.,

(S.D.N.Y. 2010), aff'd in part and

vacated in part, 507 Fed. Appx. 26, 32

(2d Cir. 2013)

(affirming

judgment but vacating district court's determination of damages
award)); ~ ' C=Holdings B.V. v. Asiarim Corp.,
223, 241

992 F. Supp. 2d

(S.D.N.Y. 2013); Colgate-Palmolive Co. v. J.M.D. All-

Star Import and Export Inc.,

486 F. Supp. 2d 286, 289

43

(S.D.N.Y.

2007); Lorillard Tobacco Co. v. Jamelis Grocery, Inc., 378 F.
Supp. 2d 448, 455

(S.D.N.Y. 2005). Rather, to find a likelihood

of confusion, a court need only deLermine that the items are
counterfeit and defendant sold or offered those items for sale.
See, e.g., Fendi Adele S.R.L.,

696 F. Supp. 2d at 383. It is

undisputed that WGACA offered the eleven bags with voided Renato
Corti serial numbers for sale. 0kt. No. 252

(Def. 56.1 Reply)

~~

74-76.
Chanel establishes a prima facie case that the bags are
counterfeit. As this Court has previously told the parties, "The
definition of counterfeit is a copy, not an original." 0kt. No.
146. Evidence that there are discrepancies between a company's
internal product-identification information and the actual
characteristics of the contested goods is sufficient to
establish a prima facie case that the goods were not
manufactured by the trademark holder and thus are counterfeit.
See Fendi Adele S.R.L. v. Burlington Coat Factory Warehouse
Corp.,

689 F. Supp. 2d 585, 597

reconsideration (Mar. 23, 2010)

(S.D.N.Y. 2010), amended on
(numerous deviations, including

improper coding, inferior materials, and improper hardware,
between genuine Fendi products and the contested goods is prima
facie evidence there are counterfeit products); Gucci Am.,

Inc.

v. Exclusive Imports Int'l, No. 99 CIV. 11490, 2007 WL 840128,
at *5

(S.D.N.Y. Mar. 19, 2007), vacated on other grounds, No.

44

CIV. A.

99-11490, 2007 WL 2892668

(S.D.N.Y. Oct. 2, 2007)

("Because Gucci records identifying information about each
genuine watch that it produces and sells, these discrepancies
are very strong indicators that the watches are counterfeit.")
Chanel's proffered evidence is of this very nature.

Its

internal product information shows no bags with these serial
numbers were ever produced. 0kt. No. 252

(Def. 56.1 Reply)

~~

74-75. Therefore, there will always be a discrepancy between the
internal system and the characteristics of any tangible bag.
Additionally,

for two of the bags, Chanel offers the declaration

of Joseph Bravo, which says that the shape of the label and
stitching of the leather on both bags, as well as the zipper
pull on one bag, did not conform to Chanel's standards. Id.

~~

77-78.
WGACA does not dispute that the serial numbers were stolen 10
but argues that the bags could have stolen serial numbers and
still have been made in Chanel factories.

It proffers evidence

that one of Chanel's employees, who reviewed the two bags to

WGACA does dispute one of the bags' association with a Corti
Serial Number. It instead offers photographic evidence that the
bag has a different serial number and argues that the connection
with the Corti serial number was the result of a data entry.
Chanel disputes that the bag could be associated with this
corrected number and offers evidence from WGACA's website that a
different bag associated with the corrected serial number was
sold months previously.
This is a matter of genuine fact to be
resolved be a jury.
10

45

determine their authenticity, could not specifically identify
any issues, even declaring that the bag's zipper "looks like the
type we use." 0kt. No. 221, Ex. D ("Hahn Depo.")

at 15:10-15:21.

Additionally, WGACA points to the fact that the hardware on the
bags has not been deemed to be inauthentic, which is significant
because, in the words of Chanel's outside counsel, "in the vast
majority" of counterfeiting cases, "we can tell that they are
counterfeits because the metal bits are not original." 0kt. No.
221, Ex.

I

("Pier Luigi Roncaglia Depo.", Ex.

I at 100:2-101:18.

Based on the evidence offered by the parties, a reasonable
jury could find either way as to whether the bags were
manufactured by Chanel
elsewhere

(thus genuine and not counterfeit) or

(and thus infringing counterfeits). Accordingly, both

parties' motions are denied as to counterfeiting.
4. Items with pirated serial numbers

Finally, Chanel asserts that two handbags sold by WGACA
were non-genuine and counterfeit because, according to Chanel's
records, the characteristics of bags with those serial numbers
were different from the characteristics of the bags WGACA sold.
For the bag bearing Serial Nurrber 10218184, there is a
genuine dispute as to when the bag was manufactured and thus
whether it is non-genuine and counterfeit. Chanel submits
evidence from the ORLI System and its other records that show
that the bag was sold for the first time by Chanel in 2005 and

46

thus could not have been repaired in 2004, as WGACA claims. 0kt.
No. 252

(Def. 56.1 Reply)

~

82-84. Whereas, WGACA offers

testimony of Ms. Li, its authenticator in Japan, that the bag
came with a "repair sticker" and had a serial number with "a
typo mistake of that one digit," which disguised the fact that
the bag was manufactured in the 1990s. 0kt. No. 250, Ex. G at
158, 162.
As for the bag bearing the serial number 17744200, it is
undisputed that the bag sold by WGACA was a "Chanel Clear Vinyl
Boy 9" whereas the ORLI system listed it as a Chanel red leather
sac bowling (bowling bag). 0kt. No. 252

(Def. 56.1 Reply)

~

82-

85-86. A bag is non-genuine when, 2s here, its characteristics
"differ materially from the product authorized by the trademark
holder for sale." Zino Davidoff SA v. CVS Corp.,
243

571 F.3d 238,

(2d Cir. 2009). Chanel's motion for partial summary judgment

on its claim of trademark infringement is accordingly granted
with respect to Serial Number 17744200 but denied with respect
to Number 10218184.
B. Trademark Counterfeiting (§ 1114(1) (b))

In its Reply Memorandum of Law in Support of its Motion for
Partial Summary Judgment, Chanel for the first time clarifies
that it seeks summary judgement on "trademark counterfeiting
under §1114 (1) (b), §1116 (d) and §1117 (b)- (e) based on the sale
of 13 counterfeit CHANEL-branded handbags." Dkt. No. 271

47

(Pl.

Reply in Support of Summ. Judg.) at 1 n.1. In its Second Amended
Complaint, Chanel's first claim for relief had only generally
asserted trademark infringement under 15 U.S.C. §1114(1)
Section 1114 (1) (b) of the Lanham Act imposes civil
liability on any person who, without authorization,
reproduce[s], counterfeit[s], cop[ies], or colorably
imitate[s] a registered mark and appl[ies] such
reproduction, counterfeit, copy, or colorable
imitation to labels, signs, prints, packages,
wrappers, receptacles, or advertisements intended to
be used in commerce upon or in connection with the
sale, offering for sale, distribution, or advertising
of goods or services on or in connection with which
such use is likely to cause confusion, or to cause
mistake, or to deceive.
15 U.S.C. § 1114(1) (b).
WGACA, relying on the testimony of its CEO, Seth Weisser,
claims that it "purchases the luxury bags it re-sells from a
variety of sources." 0kt. No. 256

(Pl. 56.1 Reply)

~

3. Chanel

disputes this testimony on the basis that "WGACA has not
produced documentation of the purchase of the CHANEL-branded
products and items by WGACA." Id. P.owever, Chanel produces no
direct evidence contradicting that testimony, and fails to
create a genuine dispute about whether WGACA itself produced the
bags.

Lacking such evidence, there is no genuine issue of

material fact suggesting trademark counterfeiting under section
32 (1) (b). Chanel,
435 n.13

Inc. v. RealReal,

(S.D.N.Y. 2020)

Inc.,

449 F. Supp. 3d 422,

("[B]ecause Plaintiff does not allege

that Defendant itself actually produced the counterfeit goods at

48

issue-indeed, the First Amended Complaint specifically alleges
that Defendant offers goods for sale that it obtains from third
parties,

(FAC SI 36)-Plaintiff cannot sustain a trademark

counterfeiting claim under section 32 ( l) (b) . ") .
Accordingly, because Chanel's cause of action cites 15
U.S.C. § 1114(1)

generally, the Court dismisses these claims of

counterfeiting but allows them to proceed on claims of
infringement under section 1114 (1) (a).
C. False Advertising (§ 1125(a) (1) (B))

Claim

WGACA moves for summary judgment dismissing Chanel's claim
for false advertising for failing to adequately allege injury.
i.
Applicable Law
The Lanham Act prohibits any person from using in commerce,

in connection with any goods,
any word, term, name, symbol, or device, or any
combination thereof, or any false designation of
origin, false or misleading description of fact, or
false or misleading representation of fact, which ...
in commercial advertising or promotion, misrepresents
the nature, characteristics, qualities, or geographic
origin of his or her or another person's goods,
services, or commercial activities ....
15 U.S.C.

§

1125 (a) (1) (B). "Tc prevail on a Lanham Act

false advertising claim, a plaintiff must establish that the
challenged message is
(2) material,

(1)

either literally or impliedly false,

(3) placed in interstate commerce, and

(4)

the

cause of actual or likely injury to the plaintiff." Church &

49

Dwight Co. v. SPD Swiss Precision Diagnostics, GmBH, 843 F.3d
48,

65

(2d Cir. 2016).

If the claim is one of "'comparative false advertising,'"
in other words it is based on a "'misleading comparison to a
specific competing product,'" then injury will be presumed.
Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247, 259
2014)

(quoting McNeilab,

F. 2d 34, 38

(2d Cir.

Inc. v. American Home Prods. Corp., 848

( 2d Cir. 198 8)) . The Second Circuit has extended the

presumption of injury to apply to cases in which the consumers
can "undoubtedly understand [the] derogatory statement,

. as

referring to [the plaintiff]," even though the advertising does
not identify plaintiff by name, because the market consisted of
only two players.
F.3d 144, 162

Time Warner Cable,

Inc. v. DIRECTV,

Inc., 497

(2d Cir. 2007). Thus the presumption applies when

"a plaintiff has met its burden of proving deliberate deception
in the context of a two-player market." Merck Eprova AG v.
Gnosis S.p.A., 760 F.3d 247, 260-61

(2d Cir. 2014). The

presumption does not apply when "a misleading advertisement does
not make comparative claims about a direct competitor." 11

Chanel urges extending the presumption of injury and applying
it to this case because WGACA explicitly used the Chanel marks
in its false advertisements and the parties have overlapping
consumer bases. Unlike in Merk and Time Warner, the market here
consists of more than two players. Other resellers could be
injured because they are placed at a competitive disadvantage by
the allegedly false advertising. See Merck Eprova AG, 760 F.3d
at 259 ("In the first type of case (i.e., non-comparative

11

50

Dependable Sales & Serv.,
368, 374
Inc.,

(S.D.N. Y.

32 F.3d 690,

Inc. v. TrueCar,

Inc.,

394 F. Supp. 3d

2019); Ortho Pharm. Corp. v. Cosprophar,
696

(2d Cir.1994)

("our circuit has expressly

disfavored presumptions of harm in cases where the products are
not obviously in competition or where the defendant's
advertisements make no direct reference to any competitor's
products.") .
If a claim is based on "'misleading, non-comparative
commercials which touted the benefits of the products advertised
but made no direct reference to any competitor's product,'"
McNeilab,

Inc.,

848 F.2d at 38, then "some indication of actual

injury and causation would be necessary in order to ensure that a
plaintiff's injury is not speculative," Merck Eprova AG,
at 259. As to the injury required,

760 F.3d

a plaintiff must incur an

injury to a commercial interest in reputation or sales which is
proximately caused by the violations of the statute. Lexmark
International,

Inc. v. Static Control Components,

118, 131-132, 134

(2014)

Inc.,

572 U.S.

(Plaintiff "ordinarily must show

economic or reputational injury flowing directly from the
deception wrought by the defendant's advertising; and that that

advertising), the injury 'accrues equally to all competitors;
none is more likely to suffer from the offending broadcasts than
any other.' In those types of cases, 'some indication of actual
injury and causation' would be necessary in order to ensure that
a plaintiff's injury is not speculative." (citation omitted)).

51

occurs when deception of consumers causes them to withhold trade
from the plaintiff.").
ii.

Application of Facts

As it is undisputed that Chanel and WGACA are not direct
competitors, the presumption of injury will not apply. Dkt. No.
252

(Def. 56.1 Reply)

~

62. WGACA thus argues that summary

judgement is appropriate because Chanel's evidence of injury-the
testimony of expert witness Dr. Andreas, who concedes that he
made no effort to calculate any injury or losses to Chanel, but
only calculated WGACA's profits- is insufficient.
WGACA's characterization of the record is incomplete.
Chanel has created a genuine issue of material fact as to
whether it suffered reputational injury due to WGACA's false
advertisement of counterfeit, infringing, and repaired CHANELbranded products as genuine and unaltered and its false
advertisement of CHANEL-branded point of sale items as genuine
products originally made and sold by Chanel. Dkt. No. 252
56.1 Reply)

~

(Def.

156. It offers the testimony of Joyce Green,

Chanel's General Manager of Fashion, who stated WGACA's false
advertisements cause reputational harm to Chanel due to the risk
that a consumer buys a CHANEL-branded item from WGACA and "has
an experience ... with a quality of product that is not up to the
standard of Chanel," which damages what that customer (who could

52

be a current or potential future C~anel customer) thinks of
Chanel and its products. Dkt. No. 256

(Pl. 56.1 Reply)

~

9.

Which witness to believe is appropriately left for the jury
to decide. Accordingly, WGACA's motion for summary judgment
dismissing the false advertising claim is denied.
iii. State Law Claims

Chanel's final two claims are for deceptive business
practices under Section 349 of the New York General Business Law
("NYGBL") and false advertising under Section 350 of the NYGBL.
The statutes' standard for recovery is the same. Moreover,
the elements for alleging deceptive business practices and false
advertising under the General Business Law are similar to Lanham
Act claims, except that the state statute's threshold for
liability "is actually higher, as there must be 'specific and
substantial injury to the public interest over and above the
ordinary trademark infringement.'" Weight Watchers Int'l, Inc.
v. Noom,

Inc.,

403 F. Supp. 3d 361, 381 (S.D.N.Y. 2019); Chanel,

Inc. v. RealReal,

Inc., 449 F. Supp. 3d 422, 446 (S.D.N.Y.

2020); RCA Trademark Mgmt. S.A.S. v. VOXX Int'l Corp., No. 14 CV
6294, 2015 WL 5008762, at *4
Gucci America,
269, 273

(S.D.N.Y. Aug. 24, 2015)

(quoting

Inc. v. Duty Free Apparel, Ltd., 277 F. Supp. 2d

(S.D.N.Y. 2003); Nat'l Distillers Prods. Co., LLC v.

Refreshment Brands, Inc., 198 F. Supp. 2d 474,

486-87

(S.D.N.Y.

2002). Substantial injury to the public includes dangers to

53

public health and safety.
WL 5008762, at *4

See RCA Trademark Mgmt. S.A.S., 2015

("Courts have generally held that the type of

injury needed to sustain a trademark violation under these
provisions is limited to one that would trigger Federal Trade
Commission intervention under 15 U.S.C. § 45,

such as potential

danger to the public health or safety.").
Chanel has not demonstrated that this dispute involves
injury to the public interest over and above ordinary trademark
infringement. Here,
Chanel,

the public at large is not affected. See

Inc. v. RealReal,

(S.D.N.Y.

2020)

Inc.,

449 F. Supp.

3d 422,

448

("This is especially true given that The

RealReal participates in the luxury fashion market, where
products that

'command top-dollar prices' are produced in

'limited number'

and are not generally accessible to the public

at large."). Chanel has offered no evidence of injury beyond
that suffered by Chanel and a select group of individuals who
end up purchasing a counterfeit product. Evidence of that nature
is commensurate with that offered in ordinary trademark
infringement cases.
Accordingly, WGACA's motion in granted dismissing the state
law claims.

CONCLUSION
WGACA's motion for summary judgment dismissing Chanel's
claims is DENIED, except as to Chanel's Fourth and Fifth Claims

54

for Relief for respective violations of N.Y. GEN. BUS. LAW§ 349
(Deceptive Trade Practices)

and§ 350

(False Advertising)

for

which summary judgment is GRANTED and the claims are dismissed.
Chanel's partial motion for summary judgment on liability
on its First and Third Claims for,

respectively, Trademark

Infringement and False Association is DENIED except as to
WGACA's liability for sale of non-genuine CHANEL-branded pointof-sale items, of eleven non-genuine CHANEL-branded handbags
with serial numbers that were stolen from the Renato Corti
factory,

and of one non-genuine and counterfeit handbag with the

serial number 17744200. As to those,

judgment is granted to

Chanel.
All WGACA's affirmative defenses are dismissed, with the
question of whether disgorgement of profits is an appropriate
remedy being reserved for trial.
The Clerk is directed to close out 0kt. Nos. 219, 224, 225,
and 22 6.
So Ordered.
Dated:

New York, New York
March
2022

___a_l_,

1.~u 1... sf.J-,,,..

LOUIS L. STANTON
U.S.D.J.

55