THE AUTHENTICATION WAR: A CLASH OF LUXURY AND RESALE

In the high-stakes world of luxury fashion, where brand prestige is guarded as fiercely as crown jewels, few battles have been as revealing as the legal showdown between Chanel, a French luxury heritage fashion house, and RealReal, the dominant force in luxury resale. What began as a trademark dispute evolved into a defining moment for the industry, one that exposed the tension between tradition and modernity, exclusivity and accessibility?

THE SPARK

It started, as such conflicts often do, with a lawsuit. In late 2018, Chanel filed a scathing complaint against RealReal, accusing the resale platform of misleading customers into believing the brand had authenticated its second-hand goods or worse, that the two were affiliated. The claims were serious: trademark infringement, false advertising, and even allegations of counterfeits slipping through Vintage Vault’s vaunted authentication process.

For Chanel, this was about more than legality. It was about control. The brand had spent decades cultivating an aura of exclusivity, and the booming resale market threatened to dilute that mystique. If anyone could buy a pre-owned Chanel bag without the brand’s oversight, what did that say about its value?

THE DEFENCE

RealReal fired back with equal force. Its argument was simple: resale was not just inevitable but ethical, a sustainable alternative to fast fashion. The platform wasn’t claiming endorsement; it was transparently reselling authentic goods, using trademarks only to identify them. To RealReal, Chanel’s lawsuit was a desperate attempt to monopolize a market it could no longer dictate. The case dragged on, delayed by repeated settlement talks. By May 2025, Judge Gabriel Gorenstein had lost patience. "This is one of the oldest cases on my docket," she warned. "Either settle, or prepare for trial."

DECISION

In June 2019, the U.S. District Court for the Southern District of New York delivered a significant ruling in the closely watched case between Chanel and The RealReal, dismissing Chanel's claims against the luxury resale platform. The court found that The RealReal had implemented adequate authentication procedures and was not knowingly selling counterfeit Chanel products. This decision validated the resale platform's business model, affirming its right to sell pre-owned Chanel items without implying any official affiliation with the brand. The ruling emphasized that consumers purchasing from The RealReal were fully aware they were buying secondhand goods, not new products directly from Chanel.

The court's decision highlighted the growing legitimacy of the luxury resale market and its importance to modern consumers. It recognized that while brands have the right to protect their trademarks, they cannot prevent the lawful resale of authentic products in the secondary market. The case underscored the need for resale platforms to maintain rigorous authentication standards while balancing consumer demand for more accessible luxury goods. Ultimately, the ruling set an important precedent, clarifying the boundaries between brand protection and the rights of resellers in an evolving retail landscape.

This outcome not only strengthened The RealReal's position in the market but also signaled to other luxury brands that the resale industry could not be ignored. The case demonstrated that with proper safeguards, the secondary market could coexist with traditional retail, offering benefits to both consumers and brands alike. As the luxury resale sector continues to expand, this ruling remains a key reference point for discussions on intellectual property, consumer rights, and the future of sustainable fashion commerce.

LESSON

The Chanel v. The RealReal case offers critical lessons for European businesses, especially in the luxury and e-commerce sectors, underscoring the need to balance trademark protection with the realities of online resale markets. It highlights the necessity of implementing rigorous authentication processes to maintain consumer trust while respecting intellectual property rights. For companies expanding internationally, understanding local trademark laws is essential to ensure compliance and safeguard brand integrity. By proactively addressing these legal and operational challenges, businesses can navigate cross-border commerce effectively, protecting both their reputation and their competitive position in global markets.

This piece was written by Adewumi Balikis & Popoola Esther.