Image: Balenciaga

THE FASHION LAW EXCLUSIVE — Balenciaga is no longer being sued for allegedly copying the kitschy New York bag it showed for Resort 2018. You may recall that the Demna Gvasalia-helmed brand was slaughtered in a strongly worded complaint this summer when New York-based City Merchandise, Inc. accused it of running afoul of federal copyright law by “willfully, intentionally, and purposefully” ripping off one of its souvenir bags and selling a “virtually indistinguishable” version for  $2,000, as well as various pricey garments and other accessories.

City Merchandise – which describes itself as “one of the country’s largest souvenir wholesalers” – called out creative director Demna Gvasalia in its complaint, asserting that he “has been repeatedly publicly scorned in fashion magazines and by online fashion observers for its willingness to copy the work of others.” City Merch specifically cited Balenciaga’s “copy” of the Ikea classic blue tote bag and the brand’s unauthorized adoption of the Ruff Ryder’s logo as examples.

Balenciaga responded to the suit last month by alleging that City Merch actually lacks valid copyright protection for its New York City landscape design and therefore, has no basis to sue in the first place. In particular, Balenciaga asserts that City Merch’s “copyright is invalid and/or unenforceable,” and its claim of copyright infringement “is barred to the extent that it claims rights to elements of works that are scènes à faire, are otherwise not original, or are otherwise not protectable by the copyright asserted in the Complaint.”

Fast forward to December and the parties have managed to settle the case out of court. While the terms of the parties’ settlement are confidential and the case is being dismissed with prejudice (meaning that City Merch cannot filed another lawsuit against Balenciaga on the same grounds at a later date), the court held early this month that the case’s dismissal comes with “leave to any party to move within 30 days from the date hereof to reopen the case and proceed to trial if the settlement is not fully effectuated.”

Paris-based Balenciaga is not off the hook entirely. It is still in the midst of the trademark infringement case that CAR-FRESHNER Corporation filed against it in October for copying its iconic tree designs for some $275 keychains. That case is still underway in federal court in New York.