By  on January 12, 2006

PARIS — Chanel, a staunch defender of its look and its trademarks, was in the defendant's stand at French commercial court Wednesday, accused of counterfeiting by one of its suppliers.

World Tricot, which has manufactured high-end knits for Chanel for seven years, also accused the luxury giant of "abusive termination of [ongoing] contractual relations." It is asking for 2 million euros, or $2.4 million at current exchange, for breach of contract and 3.3 million euros, or $3.9 million, for counterfeiting.

Chanel denied all charges.

World Tricot, based in Lure, France, told the court that Chanel produced a sample of a vest it had proposed to the house last year, only to have it rejected.

Yet, after nearly four hours of testimony, Jean-Pierre Lucquin, the commercial court's presiding judge, proposed the case be tried in front of a mediator, an infrequent out-of-court procedure for complex cases.

"Considering the importance of the indirect consequences for the profession, we propose that the parties settle their dispute through mediation," said Lucquin, who struggled to compare the unusual pieces of evidence, including a white crochet fabric sample and a white crochet Chanel vest purchased at retail — both with floral and shell patterns. The exhibits were submitted by World Tricot.

Both parties must agree to the mediation before Jan. 20 or revert to the judicial procedure, which will lead to the case being tried again. "The court strongly suggested that both parties agree to the mediation; however, there is no obligation to accept," noted Chanel attorney Gérard Delile.

The attorney for World Tricot, Solange Doumic, welcomed the court's proposal. "We are happy with the proposition, but it must happen very fast or else World Tricot will not survive," she said, characterizing the dent in orders from Chanel as disastrous for the firm.

Carmen Colle, president of World Tricot, said she spotted what the company alleged to be Chanel's take on the World Tricot sample in a Chanel boutique window in Tokyo in March.

Chanel's Delile countered that the sample was created under the direction and instructions of Chanel's design studio and the French fashion house, and in turn is suing World Tricot for some 500,000 euros, or $600,000, for moral prejudice and tarnishing the company's image.Delile told the court that World Tricot is suing Chanel for its own commercial benefit, adding the publicity from the trial was a means to publicize World Tricot's own label, Angèle Baptiste. Delile also urged the judges to consider the impact a court decision would have on some 300 other Chanel suppliers.

World Tricot is a private company supplying knitwear to names such as Dior, Christian Lacroix, Jean Paul Gaultier, Givenchy and Kenzo. World Tricot has worked with Chanel since 1998.

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