The Legal Couture and Unique Design of IP Law in Counterfeit Battles: A Chanel Case-Study

​By Hannah Steinberg

In our materialistic yet increasingly individualized society, fashion is a large form of expression and aspect of life. Even more so, fashion is a symbol of status. Luxury brands have their origins in European craftsmanship, with houses like Hermès (1837) and Louis Vuitton (1854) beginning as specialized artisans before evolving into global icons of wealth and exclusivity. Over the 20th and 21st centuries, luxury expanded beyond fashion into automobiles, jewelry, and experiences, driven by heritage, celebrity influence, and strategic marketing. The increasing role of the media has further persuaded many into aspiring to own designer items, whether it be for the monetary or fashionable personal statement it provides. Luxury items are known for being exclusive and one of a kind. 

​In recent years, however, these items have been becoming increasingly duped, an issue for the brands and designers whose designs are being taken most commonly without the necessary rights. Nonetheless, as someone who is easily inspired by the art around me, I wonder how the distinction is made between inspiration and copying? Furthermore, is there such a thing as stolen unique ideas if a similar design is just something that is simply arrived at through a similar creative thought process?

Notably, Chanel has aimed to answer these questions through a strict anti-counterfeiting stance that guards against any remotely similar designs, ruling out the possibility of inspiration or a similar idea. Although the Organization for Economic Cooperation and Development projects 461 billion dollars worth of counterfeit and pirated goods to be traded worldwide, Chanel is one of the distinct brands that are famously overprotective of their designs and products, engaging in legal action in response to any slight upset. In recent years, the brand has aggressively defended its rights by successfully blocking a European trademark featuring horizontal interlocking "S" shapes due to its similarity to Chanel’s iconic interlocking "C" log or suing companies like Amazon. 

This lawsuit began in 2017 when Chanel demanded 2 million dollars from each seller on Amazon who was selling fake copies of Chanel items with the Chanel logo, something that would amass a total of $30 million dollars. Most sellers attempted to deny their actions and avoid litigation, however Chanel utilized private investigators to order from these counterfeit sellers and reveal the items they were selling. That same year, the judge reached a decision, ruling in favour of Chanel and against around 30 sellers, each seller having to pay $100,000, amassing $3 million for Chanel. This outcome was received well by Chanel and used as their warning for other sellers who would attempt to “harm their rights and image,” pledging to pursue legal action in similar cases and persuading marketplace operators to take preventative measures themselves. Nonetheless, this ruling was particularly effective as Amazon removed the infringing products, disabled the sellers, and transferred their funds to Chanel. Obtaining legal rights to a specific product is essential and selling counterfeit greatly differs from being inspired by a design. In these cases, it is not just a mere creative coincidence, but rather an attack against the brand’s identity and success, thus this case was essential in further establishing a precedent to prevent this [1].

​Similarly, Chanel more recently won a landmark case against the luxury reseller, What Goes Around Comes Around (WGACA), in the case Chanel, Inc. v. What Goes Around Comes Around, LLC, et al., 1:18-cv-02253 (SDNY). In 2018, Chanel had accused WGACA of selling counterfeit bags and non-genuine Chanel products that also included items that were not offered for sale by Chanel, such as items that were display-only and unsellable. Thus, Chanel argued that WGACA was not able to guarantee the authenticity of products sold as many were not real and thus the company was lying to consumers. The company also advertised false associations with Chanel through the use of hashtags, discount codes, and quotes from the Chanel founder on social media, all creating a false pretense about a linkage of the two to consumers. 

WGACA was found guilty in trial and subject to $4 million in statutory damages due to being liable for trademark infringement, the unauthorized use of a trademark that leads to consumer confusion about the source of goods or services which violates the exclusive rights of the trademark owner, potentially leading to economic or identity harm. The jury also found WGACA guilty of false association, unfair competition, false advertising claims, as well as acting intentionally, recklessly, and blindly [2].

This was a landmark and essential ruling for luxury brands and fashion trademarks in general. In the world of copyright law, luxury resellers are legally able to resell pre-owned genuine products without soliciting brand permission from the brand owners as this falls under the first-sale doctrine. This doctrine permits those who make legal copies of a copyrighted work to do what they please with it, including reselling, lending, or discarding the copy, without obtaining the copyright holder’s permission [3]. This doctrine is the cornerstone of many cases concerning trademarks yet Chanel’s suit showed how resellers still risk liability if they chose to sell non-genuine or counterfeit products or repurpose the brand’s marketing or words to market deception, both of which harm the brand and do not reflect the legal copying of a copyrighted work as it lacks the proper authentication processes. 

Furthermore, this case exposed the harm consumers endure when deceived by counterfeit sellers such as WGACA as they are tricked into believing that they are buying a genuine item, something that fosters a poor retail experience for them and relationship with Chanel and luxury brands overall. While some may argue that counterfeit products ensure fashion accessibility, luxury brands and products are made to be something to work towards and an exclusive item to have, especially as there are many products with similar styles for a smaller price. Combating counterfeit sellers is the only way to ensure that luxury brands' initial role and status in the fashion industry will be preserved, especially in respecting the designers’ intent.
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Chanel’s legal history and actions is not aggressively excessive or stifles creativity, but rather a necessary reality that instead promotes it. Designs are a fashion brand’s identity, thus, ensuring their necessary copyright protection prevents identity theft and promotes a world of fashion where labels have the recognition they deserve, and exquisite designs get their deserved credit, fostering a creative world where new designs grow. Nonetheless, as the fashion industry evolves with emerging technologies such as blockchain authentication, AI-generated designs, and digital fashion, the legal landscape must also adapt. While strong intellectual property protections are necessary to prevent brand dilution and consumer deception, it is equally important to strike a balance that does not stifle creative inspiration or harm legitimate resale markets. Moving forward, fashion houses, lawmakers, and consumers must navigate these complexities to preserve both innovation and authenticity in an increasingly digital and globalized industry.


The opinions and views expressed in this publication are the opinions of the designated authors and do not reflect the opinions or views of the Penn Undergraduate Law Journal, our staff, or our clients.

[1] Fashion Law Journal. 2024. “Chanel v Amazon - Fashion Law Journal.” Fashion Law Journal. July 30, 2024. https://fashionlawjournal.com/chanel-v-amazon/.
[2] Kayser, Susan, and Terrance Roberts. 2024. “Victory for Chanel in Luxury Reseller Trial – Fashion Law Watch.” Fashionlawwatch.com. K&L Gates LLP. February 9, 2024. https://www.fashionlawwatch.com/2024/02/09/victory-for-chanel-in-luxury-reseller-trial/.
[3] “1854. Copyright Infringement -- First Sale Doctrine.” 2015. Justice.gov. February 20, 2015. https://www.justice.gov/archives/jm/criminal-resource-manual-1854-copyright-infringement-first-sale-doctrine.

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