French and Faux? Balenciaga or JFK Souvenir Shop?

You may have heard of high and low fashion styling, where we are urged to wear our diamond tiara with a Zara top.  This story is a twist on the theme, as Balenciaga offers you a way to spend some serious money on a leather bag somewhat similar to plastic bags sold in New York City souvenir shops and airport stores. Copyright infringement suit ensued. The case is City Merchandise, Inc., v. Balenciaga America, Inc., 1:18-cv-06748 (SDNY).

City Merchandise, a New York City company designing souvenirs goods had created a plastic bag featuring the New York skyline over a pink sky, and the words NEW YORK CITY towering above the image. This how Plaintiff’s attorney describes it in the complaint, in legal yet poetic prose:

“Design encompasses a collage of portions of recognized NYC landmarks prominently featured in the forefront with several other buildings interspersed therein. The Design also features an airbrushed hot pink sky, accented with clouds. In addition, large, purple, fanciful cursive letters, unevenly bordered in white, float above the skyline. The letters opulently glisten and fittingly read, "New York City".”

Source: Balenciaga

The design was used by Plaintiff on several models, a tote, a coin purse, which Plaintiff started selling in late 2014, early 2015. This season, Balenciaga sold a bag and a hoodie, featuring a New York skyline over a pink sky, and the words NEW YORK CITY in a font in large cursive letters. City Merchandise deemed these goods to be infringing and filed a copyright infringement suit in the Southern District of New York against Balenciaga. 

Is it copyright infringement?

City Merchandise’s design is registered with the Copyright Office. It is certainly original enough to be protected by copyright (remember, one only needs a “modicum” of originality for a work to be protected by copyright).

Featuring landmark buildings on a design, such as the Empire State Building, the Flatiron Building and the Freedom Tower, along with the Statue of Liberty (technically in New Jersey harbor, but still a New York symbol) is not original per se, but the way the buildings are placed, the use of a bright pink sky, the fanciful font used for NEW YORK CITY, all make the design original enough to be protected by copyright.

Balenciaga’s design features the same buildings, but shown from different angles, and arranged in a somewhat different way: for instance, the Statue of Liberty is at the left in Balenciaga’s design, whereas it is featured at the right of Plaintiff’s design.

Plaintiffs claim that the “total concept and feel” between its original design and Balenciaga’s are identical. Courts in the Second Circuit apply an "ordinary observer test to determine if two works are substantially similar, but apply a “more discerning test” if works have both protectible and unprotectible elements or if, as in our case, copying is not exact. Judges then mustn’t dissect the works into separate components and compare only copyrightable or similar elements, but must instead compare the allegedly infringing design’s “total concept and overall feel'” with that of the original design.

Could Balenciaga assert fair use as a defense? Interestingly, the fourth fair use factor, the effect on the market, would likely be in Defendant’s favor, as using the protected design on goods sold in the luxury category would indeed have effect on the market, but a positive one (I will look for the original bag next time I am at JFK!).

The economic purpose of copyright

You may remember Balenciaga offering for sale its own version of the blue Ikea bag, and Ikea’s humorous response. One of Plaintiff’s exhibits, an article about this episode explains that Balenciaga also reproduced in leather a colorful Thai laundry bag originally made out of plastic. 

Plaintiff’s bags retail from $19.99 to $5.99, while buying Balenciaga’s versions will set you backfrom $500 to $2,000. Does Plaintiff lose its economic incentive to create a design if a third party use it to make a more expensive version? Copyright law does not care about the price of the object, and a Van Gogh is protected as well as a pattern used for airplane interiors.

Balenciaga saved costs by not having to create the design. It probably did not copy the design to save money, to “free ride”, but more likely to comment on “what makes fashion fashion”: is it the design, or is fashion and style in the eye of the beholder?  After all, Balenciaga head designer is Demna Gvasalia, who became famous thanks to his Vetement brand, which once famously sold once a DHL tee-shirt.

Balenciaga seems to use now tourist goods to comment on fashion: it currently sells a Paris sweatshirt, resembling those found at Parisian tourist shops and showed in its Fall 2018 a model wearing a World Food Program sweat shirt and fanny pack. Reverse snobbism?  Copyright infringement? Or both?