Chanel is seeking $6.7 million in attorneys’ fees and costs from What Goes Around Comes Around (“WGACA”) following its successful case against the reseller. In a new motion filed with the U.S. District Court for the Southern District of New York Chanel argues that it is entitled to recoup the costs it paid to its counsel following a resounding victory in the trademark infringement case, in which a New York federal jury unanimously found WGACA liable for willfully infringing Chanel’s trademarks, selling counterfeit goods, and engaging in false advertising. The $6.7 million sum, if awarded by the court, would come in addition to the $4 million that the jury awarded to Chanel – and that the court subsequently ordered WGACA to pay.
In its March 12, 2025 memorandum of law, Chanel asserts that it is entitled to recover legal fees under the Lanham Act, which allows for such awards in “exceptional cases” of trademark infringement. The luxury brand argues that the case at hand rises to the level of exceptional thanks to its overarching success in both making its case and defeating WGACA’s defenses, and WGACA’s “unreasonable” conduct throughout the nearly seven-year litigation.
> The Substantive Proceedings: Throughout the case, Chanel maintains that it “prevail[ed] at nearly every stage” of the “protracted litigation,” as it was “awarded both preliminary and permanent injunctive relief, successfully defended multiple motions to dismiss, obtained summary judgment in [its] favor as to 3 claims, and obtained a jury verdict in [its] favor as to all other claims.” And beyond that, a unanimous jury “found that WGACA acted willfully in violating the Lanham Act, making ten separate findings of willfulness and granting Chanel a complete victory on all of its Lanham Act claims” (emphasis courtesy of Chanel).
At the Phase II bench trial, Chanel prevailed and was awarded both injunctive relief and disgorgement of WGACA’s profits from its sale of infringing CHANEL-branded products.
Accordingly, Chanel claims that its “substantive position has been strong through the entire course of this litigation, as borne out by the findings of the Court and, ultimately, the jury, which weighs in favor of finding this to be an “exceptional” case warranting an award of fees.”
> WGACA’s Behavior: In addition to prevailing on the substance of the case, Chanel argues that WGACA engaged in “unreasonable litigation of this matter and various litigation misconduct,” which further weighs in favor of finding this case “exceptional” and awarding fees. According to Chanel, WGACA maintained false defenses throughout the case, including denying the sale of counterfeit goods, offering shifting explanations about a known counterfeit handbag, and asserting that Chanel’s lawsuit was merely a pretext to stifle resale competition. Chanel argues that these positions were knowingly baseless and contradicted by WGACA’s own records and testimony.
At the same time, Chanel claims that WGACA continued to engage in infringement during the course of the case, including by “selling three more counterfeit CHANEL-branded handbags during the pendency of this litigation even though Chanel had already disclosed information to WGACA that put it on notice that those handbags were counterfeit” and “selling infringing CHANEL-branded point-of-sale items after WGACA was served with the complaint in this matter.”
Still yet, Chanel claims that WGACA allowed a “partner” organization to continue to infringe its trademark and create false association even after the jury verdict. “Months after the jury verdict,” Chanel says that it discovered that “a boutique on cruise ships was advertising, in conjunction with WGACA, ‘CHANEL LUXURY VINTAGE,’ blatantly infringing Chanel trademarks by using signage which mimicked Chanel branding.”
With the foregoing “combination of factors” in mind, Chanel argues that the court should find that the case is “exceptional” and fees, which cover work performed by a select group of attorneys and staff whose time was directly related to prevailing issues in the case, are warranted. Under both Section 1117(a) and Section 1117(b) of the Lanham Act, Chanel argues that an award of fees is not only justified but mandatory, given the jury’s willfulness findings and the case’s involvement with counterfeit goods. The brand is seeking full reimbursement, including out-of-pocket expenses, as a deterrent against similar infringement in the resale market.
The case is Chanel, Inc. v. What Goes Around Comes Around, LLC, et al., 1:18-cv-02253 (SDNY).
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