--- title: "Chanel v. WGACA: The Bags Passed Inspection, the Serial Numbers Did Not" description: The Second Circuit upheld Chanel's $4M win against WGACA. The bags looked right; Chanel's serial-number records proved they were never made. image: https://eonpass.com/hubfs/blog-images/21-image-Nov-10-2026-02-05-27-1817-PM.jpg --- [![logo-std@4x-100](https://eonpass.com/hs-fs/hubfs/logo-std@4x-100.jpg?width=170&height=49&name=logo-std@4x-100.jpg)](https://eonpass.com) - [Home](https://eonpass.com) - [About](https://eonpass.com/about) - [Blog](https://eonpass.com/blog) - [Industries](https://eonpass.com/industries) - [Automotive](https://eonpass.com/industries/automotive) - [Heritage Sportswear](https://eonpass.com/industries/sportswear) - [Leisure Footwear](https://eonpass.com/industries/footwear) - [Pharmaceuticals](https://eonpass.com/industries/pharma) [Get Started](https://eonpass.com/get-started) # Chanel v. WGACA: The Bags Passed Inspection, the Serial Numbers Did Not The Second Circuit upheld Chanel's $4M win against WGACA. The bags looked right; Chanel's serial-number records proved they were never made. [Thomas Rossi](https://eonpass.com/blog/author/thomas-rossi) Nov 10, 2026 --- **TL;DR** - On 3 November the Second Circuit upheld Chanel's $4 million counterfeiting judgment against reseller What Goes Around Comes Around (WGACA), the statutory maximum of $2 million per mark for willful counterfeiting. - The bags were hard to fault by eye. They were counterfeit because they carried serial numbers from 30,000 authenticity cards and labels stolen from Chanel's Renato Corti factory in 2012, a range Chanel voided in its ORLI records before any bag was linked to it. - The court agreed that a bag made in an authorized factory but never approved for sale is infringing, not counterfeit. WGACA could not show where its bags came from, so the argument failed. - The injunction requires WGACA to publish each Chanel item's serial number on the listing and bars authenticity guarantees without WGACA's own authentication records. --- On 3 November the US Court of Appeals for the Second Circuit upheld Chanel's $4 million counterfeiting judgment against What Goes Around Comes Around (WGACA), the luxury resale retailer. According to The Fashion Law, which first reported the summary order, the panel rejected WGACA's challenges to the jury instructions and to the size of the award, and left the permanent injunction in place. It vacated a separate award of about $561,000 in litigation costs and sent that issue back to the district court. The order is nonprecedential. The $4 million is the statutory maximum for willful counterfeiting: $2 million for the CC logo and $2 million for the Chanel name. The profits the district court ordered WGACA to give up came to $12,739. WGACA argued that the award was out of proportion to those profits, and the panel answered that statutory damages under the Lanham Act need not track a defendant's profits or a brand's proven losses. For anyone who works on authenticity, the more useful part of the case is how the bags were shown to be fake. The bags themselves were not what proved it. ## Thirty thousand numbers that were never assigned According to the district court's 2022 summary judgment opinion, Chanel gives each authorized factory only enough material for the products it has ordered, including labels, stickers and authenticity cards that each carry a unique serial number. A serial number is linked to a product only after the product has been authorized for manufacture and has passed quality control. Since 1993 Chanel has recorded each step in an internal system called ORLI: the creation of the number, its allocation to a factory, its link to a specific bag, and the bag's movement through distribution to the store where Chanel sells it. On 29 November 2012, 30,000 labels, stickers and authenticity cards were stolen from the Renato Corti factory, one of Chanel's authorized factories in Italy. Chanel voided the whole range, serial numbers 17686401 to 17716400, in ORLI. According to the court's 2025 post-trial opinion, the stolen cards later turned up in counterfeiting raids. WGACA sold bags bearing numbers from that range. The counterfeiting verdict concerned 13 of those bags and one brown pouch. ## What inspection could and could not show WGACA's website guaranteed "the authenticity of all products sold," and in-house authenticators checked every item before sale. The 2022 opinion notes that those authenticators had never worked for or been trained by Chanel, and that WGACA kept no written record of how individual items were authenticated, only a database entry saying the check had been done. Physical inspection did not settle the case for either side. A Chanel employee who reviewed two of the Corti bags could not identify any specific issue, and said of one zipper that it "looks like the type we use." The hardware on the bags had not been shown to be fake. WGACA leaned on that because Chanel's outside counsel, Pier Luigi Roncaglia, had said in a deposition that in "the vast majority" of counterfeiting cases "we can tell that they are counterfeits because the metal bits are not original." At trial Chanel answered with witness testimony that some counterfeits, which it called "Frankenstein bags," contain genuine hardware. What decided the question was the record. In 2022 Judge Louis L. Stanton wrote that Chanel's internal product information showed no bags with these serial numbers were ever produced, so "there will always be a discrepancy between the internal system and the characteristics of any tangible bag." However good a bag with one of those numbers looked, it contradicted a record that said no such bag existed. The pouch failed in a similar way. Chanel's witnesses described its serial number, 10218184, as one of the most pirated Chanel numbers. ORLI showed that the genuine 10218184 was a different style of bag, made in 2005. The pouch came with a Chanel repair certificate for a repair in 2004, before the genuine bag was sold, and Chanel had no repair record for that number. ## Where a bag was made changes what it is WGACA's main argument on appeal was about the law. The Lanham Act's definition of a counterfeit mark excludes goods made by a manufacturer that was authorized, at the time, to use the mark on that type of product. WGACA argued that the Corti bags might have been made inside the Corti factory, without Chanel's approval for sale, and that the jury should have been told about the exclusion. The Second Circuit accepted the principle. According to The Fashion Law, the panel acknowledged that goods made by an authorized manufacturer but not approved for sale can infringe without bearing counterfeit marks. Judge Stanton had drawn the same line in a 2022 footnote: "a shoe which is made in the manufacturer's factory, and meets it\[s\] specifications, but is unauthorized for sale, is an infringement, but not a counterfeit. The distinction is important because the penalties for counterfeiting are far more severe than those for infringement." The panel still upheld the verdict. It found that the instructions, read together with the judge's explanations at trial, conveyed the standard, and noted that WGACA had been free to argue its factory theory to the jury. The distinction matters to Chanel in practice. The 2022 opinion records that factories do not always follow Chanel's directives, and that Chanel has accused another of its factories, Bianchi & Nardi, of making bags beyond the number allotted to it. A bag made in excess at an authorized factory can be physically identical to a genuine one. Whether it is legally a counterfeit or an infringing product, and so whether statutory damages for counterfeiting are available at all, depends on where it was made and on whose orders. Examining the bag cannot answer that. A record of its origin can, and on WGACA's side there was none. The 2022 opinion says WGACA bought from individuals and international wholesalers "without asking for documentation of how they obtained title to the goods." WGACA called no witnesses at trial, and the post-trial opinion describes its factory theory as "mere speculation by its attorneys." Chanel, for its part, could show that the numbers were voided before any bag was linked to them. ## Where Chanel's record was weaker Chanel's records did not carry every point. A second group of 50 bags bore serial numbers that Chanel had voided during inventory audits at its factories, not after a known theft. Chanel argued that ORLI had no record of those bags passing quality control or being authorized for sale. In 2022 the court declined to decide that on the papers. Chanel's own witnesses had given conflicting accounts of where quality control gets recorded, and the judge called the record describing the system "fissured." WGACA pointed out that some numbers allotted as far back as the early 1990s had never been entered as having passed quality control, and in some cases were not identified as missing until nearly 20 years later. The jury went on to find that the bags with voided numbers were not authorized for sale, and the $12,739 disgorgement covers 51 handbags bearing voided serial numbers plus 779 counter-support items, such as branded trays and tissue box holders that Chanel supplies to its boutiques and authorized retailers. Still, the contrast is worth noticing. A block of numbers voided immediately after a known theft gave Chanel evidence that a court could decide on before trial. Numbers that had drifted out of the system over two decades gave the defence something to argue about. ## What made it willful The court acknowledged that a reseller's position is difficult. In the 2025 post-trial opinion Judge Stanton wrote that "lack of access to the Orli system makes it more difficult to recognize counterfeits." A reseller can see the card and the label. It cannot see the brand's ledger. The willfulness finding rested on what WGACA did when Chanel shared parts of that ledger. On 26 June 2015 Chanel wrote to WGACA that a bag listed on its website, serial number 17688191, carried a number that had never been authorized for use. The bag was sold four weeks later, and WGACA said its listing had contained a typo. According to The Fashion Law, the Second Circuit also cited evidence that WGACA kept selling several bags during the litigation after Chanel had told it their serial numbers were voided. WGACA put those sales down to staffing problems during the pandemic. The jury heard, too, about gaps in WGACA's authentication and recordkeeping. During deliberations it asked the court about the "willful infringement maximum," and then awarded it. The panel also upheld the trial court's exclusion of evidence about Chanel's alleged wish to undermine the secondhand market. It found Chanel's motives immaterial to whether the marks had been infringed. ## A remedy written in records The injunction, which WGACA did not challenge on appeal, is the most practical part of the case. Besides barring sales of bags with numbers in the stolen Corti range, it requires WGACA to display, on every online product page for a Chanel item, the item's serial number as it appears on the authenticity card or label, next to a disclaimer that WGACA is not affiliated with Chanel and has not been authorized by Chanel to sell the item. It also bars WGACA from guaranteeing the genuineness of any Chanel item "for which WGACA has no records of its own authentication to support its authentication claims." The 2022 opinion noted that WGACA had stopped publishing serial numbers on its website some years earlier. The injunction reverses that. Every Chanel listing now carries a number that can be checked against the brand's records, and every authenticity claim needs a record of its own behind it. ## Beyond luxury resale The same pattern runs through most counterfeiting disputes. People examine the object, but the outcome turns on a record of what happened to that object, or to the number on it, before anyone looked at it. Our piece on [counterfeit Ozempic sold under one serial number](https://eonpass.com/blog/counterfeit-ozempic-one-serial-number) came at it from the other side: every carton looked fine, and the problem only showed when cartons were compared. Eonpass is built to put those records side by side, the way we put [customs notifications and online listings on one graph](https://eonpass.com/blog/customs-notifications-online-listings-one-graph), so that a serial number, shipment or seller turning up in the wrong place can be checked against where it was supposed to be. Records only help if they were written when events happened. Chanel's 2012 theft entry was clear enough to decide part of the case before trial. The older gaps WGACA found in ORLI were argued over in front of a jury. If a reseller listed one of your products tomorrow with its serial number on the page, could your team tell from your own records whether that number was ever attached to a finished product, and where that product was last recorded? ## References - The Fashion Law, [Chanel's $4M Counterfeiting Win Against WGACA Upheld on Appeal](https://www.thefashionlaw.com/chanels-4-million-counterfeiting-win-against-wgaca-upheld-on-appeal/), 4 November 2026 (report of the Second Circuit summary order of 3 November 2026, No. 25-722) - The Fashion Law, [The Questions Chanel, WGACA's $4M Counterfeiting Clash Raises on Appeal](https://www.thefashionlaw.com/?p=109295), September 2026 - *Chanel, Inc. v. WGACA, LLC*, No. 18 Civ. 2253 (LLS) (S.D.N.Y.), [Opinion & Order on summary judgment](https://storage.courtlistener.com/recap/gov.uscourts.nysd.490152/gov.uscourts.nysd.490152.276.0.pdf), 28 March 2022 (PDF) - *Chanel, Inc. v. WGACA, LLC*, No. 18 Civ. 2253 (LLS) (S.D.N.Y.), [Final Judgment and permanent injunction](https://storage.courtlistener.com/recap/gov.uscourts.nysd.490152/gov.uscourts.nysd.490152.505.0.pdf), 26 February 2025 (PDF) - *Chanel, Inc. v. WGACA, LLC*, No. 18 Civ. 2253 (LLS) (S.D.N.Y.), [Opinion & Order on post-trial motions](https://storage.courtlistener.com/recap/gov.uscourts.nysd.490152/gov.uscourts.nysd.490152.537.0.pdf), 26 June 2025 (PDF) *Image: a Chanel 2.55 flap bag. Photo by Liu Wen Cheng, [CC BY-SA 2.0](https://creativecommons.org/licenses/by-sa/2.0), via [Wikimedia Commons](https://commons.wikimedia.org/wiki/File:Chanel_2.55.jpg), cropped. The bag pictured is not one of the items in the case.* ## Source - [*The Fashion Law*: Chanel's $4M Counterfeiting Win Against WGACA Upheld on Appeal](https://www.thefashionlaw.com/chanels-4-million-counterfeiting-win-against-wgaca-upheld-on-appeal/) ## Similar posts ### Get notified on new anti-counterfeiting insights Be the first to know about new anti-counterfeiting, supply chain security and brand protection insights to build or refine your anti-counterfeiting function with the tools and knowledge of today’s industry.   **EonPass Inc. | [![icons8-linkedin-30](https://eonpass.com/hs-fs/hubfs/icons8-linkedin-30.png?width=20&height=20&name=icons8-linkedin-30.png)](https://www.linkedin.com/company/eonpass) |** 400 Hamilton Ave, Palo Alto, CA 94301 | © 2026 EonPass All rights reserved | [Privacy Policy](https://46322274.hs-sites.com/privacy) [Powered by Atlas - a B2B SaaS HubSpot theme](https://www.kalungi.com/atlas-hubspot-theme-for-b2b-saas-software) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Thomas Rossi", "url" : "https://eonpass.com/blog/author/thomas-rossi" }, "dateModified" : "2026-11-10T14:07:21.429Z", "datePublished" : "2026-11-10T14:07:21.000Z", "headline" : "Chanel v. 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