Back in March 2018, Chanel accused luxury reseller What Goes Around Comes Around (WGACA) of attempting to deceive its consumers into falsely believing that it has some kind of affiliation with Chanel or that Chanel has authenticated its goods for it to trade off Chanel's brand and goodwill, and improperly using Chanel's trademark in ad campaigns and social media marketing. 

Newly released expert testimonies shed light on what may be expected at trial, set for this autumn. 

Likelihood of confusion

David Franklyn, a trademark law professor in the US, designed and carried out two surveys to test the extent to which WGACA's presentation of Chanel-branded items create a likelihood of confusion for consumers causing them to believe that that those items are connected with WGACA.  

Feedback from the surveys show a significant percentage of consumers incorrectly perceive WGACA to be an authorised reseller of Chanel, or believe it to be an affiliate, partner or collaborator of Chanel. As a result, Franklyn will testify that WGACA's presentation of Chanel products both online and in physical stores have created the impression that it has a relationship with Chanel which has in turn given consumers a false impression of Chanel-branded products sold by WGACA. 

English law of passing off

Although this case is a US one, similar English legal provisions of passing off would apply if the case were to be brought in the UK. Passing off involves a three-part test:

1. a goodwill or reputation is attached to the goods
2. a misrepresentation by the defendant to the public leading or likely to lead them to believe that the goods offered by the defendant are goods of the claimant and 
3. damage to the claimant, by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods is the same source of those offered by the claimant

Chanel, being a luxury brand, clearly has a substantial goodwill and reputation, satisfying the first limb. Chanel would then have to prove that, on the balance of probabilities, a proportion of the public would be confused or deceived as a result of the defendant's misrepresentation, including as to the nature of the marketplace and circumstances in which the goods were sold. This is when the aforementioned surveys could be provided as evidence, although UK courts and the Intellectual Property Office are far more wary of survey evidence than in the US. Nevertheless, in such cases courts may find that the defendant should make it crystal clear that it is not associated with the claimant. Finally, Andrew Safir is to offer an expert opinion at trial that Chanel is due $23.2m of damages as a result of WGACA's acts of trademark infringements, false association and false advertising, satisfying the third and final limb. 

WGACA has argued that it should be shielded from liability as Chanel's lawsuit is an impermissible attempt to bar the legitimate resale of Chanel products, and that WGACA uses Chanel's trademarks to identify the products i.e. being "nominative fair use". 

While the expert testimonies seem to show a strong case for Chanel, it will be interesting to see how WGACA argues its defence at trial.