Mon Dieu: Chanel Accused of Counterfeiting

France is known for its fashion. Perhaps more importantly within the fashion world, Franceis known as being one of the last remaining champions of the petites mains: highly skilled tailors and seamstresses that are the “behind the scenes” technicians to Europe’s most notorious haute couture fashion houses. In a surprising David v. Goliath decision, France demonstrated its support to the petites mains.

 

World Tricot was a knitwear supplier to Chanel. In 2009, World Tricot commenced an action against Chanel after it discovered a Chanel-branded cardigan for sale bearing a striking resemblance to knitwear created by World Tricot.  Claiming ownership rights over the knitwear design, World Tricot sought damages for counterfeiting and wrongful termination of a business relationship.  Chanel vehemently denied these allegations and counterclaimed that World Tricot was publicly disparaging Chanel’s reputation and goodwill.  Moreover, Chanel stated that they had never been accused of stealing the designs of a supplier in any of their 400+ supplier arrangements.

 

At the trial level, Chanel was successful.  However, World Tricot stood its ground by appealing the decision, which ultimately resulted in Chanel paying €200,000 in damages for counterfeiting.  In today’s economy where manufacturing is globally outsourced and the domestic small shop is coming under increasing pressure, this decision is likely welcomed by France’s domestic manufacturers.  The decision is definitely a boost for the small business in the fashion industry.  There is no word yet on whether Chanel will appeal this decision to the French Supreme Court.

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