Chanel V Crepslocker's Potential Impact On British Trademark Case-law

• Published date: 06 July 2021
• Subject Matter: Intellectual Property, Trademark
• Law Firm: MPR Partners
• Author: Flavia Stefura

Last year, Chanel's worldwide brand was valued at $13.7 billion, an increase of more than $2 billion on the previous year and three times what it was worth in 2017, according to Statista. It is therefore no surprise that the company is extremely vigilant in pursuing infringement of its trademark, which serves to undermine its brand. Indeed, Chanel is notorious for its ef‌forts in defending it against misuse and infringement.

Alongside various ongoing legal battles with retailers who sell allegedly counterfeit Chanel goods, the company has also begun a legal action in London against an online retailer (Kensulate Corporation Ltd, which owns the Crepslocker online store) that sells authentic Chanel goods.

Chanel v Crepslocker: the arguments

The France-based fashion house accuses Crepslocker of infringing the Chanel trademark by tarnishing its positioning as a luxury fashion brand. Its principal arguments against Crepslocker fall under four main headings:

• Using the Chanel trademark to describe the goods that it sells in the product captions, both in its online store and in a store on eBay.

• As of January 2021, the UK's Supreme Court is no longer bound by decisions of the CJEU. Flavia

• Selling the 'Chanel' branded goods alongside goods from other (inferior) brands which do not share the same hallmark of luxury. The Crepslocker website hosts pages dedicated to various brands, where branded products are sold. There used to be a dedicated page for Chanel products, which is now disabled.
• Of‌fering the trademarked goods online, which is not allowed under Chanel's policies. The of‌f‌icial Chanel website makes it clear that there are no authorised online sellers of Chanel leather goods, fashion items and watches. The only exceptions are fragrance, beauty and eyewear products.
• Not Of‌fering the luxury experience to customers. Chanel claims that in a test purchase, the item arrived in a crumpled condition and not in the original packaging.

In its defence, Crepslocker invokes the exhaustion of Chanel's rights to the sold products. Under the trademark exhaustion rule, after the f‌irst sale of a trademarked product by the trademark holder, or with their consent, the holder can no longer control the subsequent sale(s) of the product. The exception is that the trademark owner can oppose subsequent sales for legitimate reasons, especially when the condition of the products has been materially changed or impaired.

Crepslocker further argues that the distinction which...