Several weeks ago, a New York City-based souvenir and apparel firm City Merchandise filed a complaint alleging claims of copyright infringement against the American subsidiary of French luxury fashion house Balenciaga in the Southern District of New York. This case is unique. Typically copyright infringement claims made by a high-end fashion designer against a competitor offering cheap knockoff products, but here the allegedly infringing products are sold for thousands of dollars more than the original articles marketed by the plaintiff, thereby making them luxury knockoffs.
The products at issue in this case include tote bags and purses marketed by Balenciaga and bear striking similarities to products which are sold by City Merchandise. Each of the products bears the name “New York City” in a stylized script format against a pink sky background which is accented with clouds. As well, the products all depict the New York City skyline including such famous structures as the Statue of Liberty, the Empire State Building and the Freedom Tower.
The City Merchandise products, which were first sold in late 2014/early 2015, were designed to be high-quality, affordable souvenirs which retailed for anywhere between $5.99 and $19.99 per item. City Merchandise applied for a copyright registration for its New York pink collage with purple letters and the effective date for the copyright covering that design is February 8th, 2018.
Plaintiff City Merchandise alleges that Balenciaga began selling its infringing products well after the original articles were first sold to the public. Unlike the cheaper souvenir products marketed by City Merchandise, Balenciaga’s products retail within a price range of $500 up to $2,300 per item. These products are sold at Balenciaga’s own flagship boutique stores in New York and Paris as well as a collection of upscale retailers including Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue and Barney’s.
As City Merchandise notes it its complaint, this is not the first time Balenciaga has been publicly called out for copying the designs of cheaper brands and selling knockoff products at a premium. A Daily Mail article published in April 2017 detailed a leather tote bag sold by Balenciaga for $2,145 which closely resembled a plastic tote bag sold by IKEA for 99 cents each. City Merchandise also cites a June 2017 article published by Hollywood Reporter which discussed allegations made by rapper and music producer Swiss Beatz who accused Balenciaga of infringing the logo of the Ruff Ryders record label by printing the logo on T-shirts sold by the French fashion firm. City Merchandise further cites a comment made publicly by Demna Gvasalia, creative director of Balenciaga, in which he said his designs are based upon existing garments.
According to Biana Borukhovich, founder of The Law Office of Biana Borukhovich, PLLC, and a lawyer practicing fashion and intellectual property law, it’s tough to tell how City Merchandise’s infringement claims will fare at this early stage of the game. “It’s hard to know how the courts will go about this,” she said. “One judge might say that this is complete infringement while another could say that, if anything, Balenciaga’s products are adding value to City Merchandise’s products. Usually the bigger issue at play is that one brand claims that the allegedly infringing product is diminishing the value of the original brand. Here. if anything, it’s almost raising the price.” She added that, in her experience, it’s very uncommon for a high-end brand to steal artwork or designs from cheaper products.
City Merchandise’s copyright claims could also be complicated by the fact that the artwork incorporates buildings which themselves have their own copyright protections. “You cannot put a picture of the Freedom Tower on any T-shirt or bag to sell, a designer actually needs a license from the Freedom Tower to do so,” Borukhovich said. “There are several buildings within New York City that are protected by copyrights. With a lot of these cases, it’s not so black and white.”