City Merch Says Balenciaga Likely to Export, Sell “Infringing” Bags Outside of the U.S. to Avoid Liability

The lawsuit between Balenciaga and City Merchandise over their lookalike bags is heating up. Days after Balenciaga responded to the copyright infringement suit filed against it this summer, denying that it has run afoul of federal copyright law by way of its kitschy New York cityscape bags, New York-based souvenir wholesaler City Merch has amended its complaint and is seeking to immediately prevent Balenciaga America, Inc. from exporting and/or selling the allegedly infringing products outside of the U.S. and an order from the court enabling it to seize any of the infringing merchandise that is still located in the U.S.

As City Merch’s attorney Edward Toptani set forth in declaration filed last week, despite Balenciaga America’s counsel’s initial willingness to “open a dialogue to discuss the case, including the possibility of an early settlement,” the American arm of the Paris-based brand has since refused multiple requests that it provide “sufficient and verifiable information” about its “sales and inventory” of the allegedly infringing bags.

According to Toptani’s filing, “The scant information that has been provided to me about Balenciaga America’s infringing conduct has only served to raise reasonable doubts in my mind about the company’s motives, especially in light of other impressionable actions taken by opposing counsel, some of which strongly suggest that Balenciaga America is seeking to delay this matter.”

In particular, Toptani alleges that he “recently became concerned” that Balenciaga America will engage in “the illegal sale of [the] infringing products outside of the U.S.,” where, as Toptani says he was “informed by opposing counsel, Balenciaga America would not be liable to City Merchandise for such infringing sales because U.S. copyright law would not apply.”

Now, not only does City Merch have “reasons to doubt the motives and probity of Balenciaga America,” the company “faces an imminent risk that Balenciaga America will … transfer its inventory of [the allegedly infringing bags] that is currently in the United States – and subject to U.S. copyright law – to different offshore locations.”

As a result, Toptani asserts that there is a bona fide need for the court to issue an injunction and seizure order to prevent Balenciaga from “taking any steps to offer [the bags] for sale outside of the United States, offering for sale outside the United States … and/or distributing, transferring, exporting or otherwise diverting outside of the United States any of Defendant’s merchandise situated in the United States that bears any design that is substantially similar to City Merchandise’s copyrighted design.”

Reps for Balenciaga did not respond to a request for comment.

* The case is City Merchandise, Inc., v. Balenciaga America, Inc., 1:18-cv-06748-JSR (SDNY).