Zara and its parent company Inditex are accusing a “socially responsible” Los Angeles-based fashion brand of engaging in a “serial” scheme of copyright infringement, false advertising, unfair competition, and deceptive trade acts in order to mislead consumers about the source and nature of their apparel and accessories. According to the complaint that they filed in a federal court in New York on January 4, Zara and Inditex allege that Thilikó, LLC and its owner Queenie Williams (collectively, the “defendants”) have built a business by passing off Zara’s fast fashion wares as their own, including by acquiring Zara garments, removing the Zara tags and replacing them with ones that bear the Thilikó name, and passing those goods off as its own – complete with “exorbitant mark-ups.”
Setting the stage in the newly filed complaint, Zara and Inditex assert that to “capitalize on Zara’s intellectual property,” Thilikó has marketed “misbranded and mislabeled [Zara] products” – from women’s suit trousers to slip dresses – to the “unsuspecting public” as “original Thilikó products.” Specifically, Zara and Inditex claim that Thilikó’s “advertising, marketing, and product labels have conveyed that the misbranded [Zara] products are designed, created, and/or manufactured by Thilikó.” In addition to misleading consumers as to the original source of the garments at play, the two-year-old brand – which sells apparel and accessories products by way of its own e-commerce site and via other retailers, such as Wolf & Badger – also allegedly aims to “dupe the public” by offering up those misbranded products “at exorbitant prices far beyond those consumers would pay for them at Zara.”
Thilikó’s “massive scam” does not stop there: Zara and Inditex allege that in addition to marketing the misbranded Zara products as being designed and manufactured by Thilikó, the defendants have “systematically” taken the copyrighted photographs that appear on Zara’s website and “misused” them to advertise and sell the “misbranded products.” Inditex asserts that while it is the rightful owner of the images that appear on Zara’s site, including but not limited to the 32 images that it and Zara have identified to date as being infringed by the defendants, Thilikó routinely “misrepresents Inditex’s copyrighted photographs as [its own] ‘proprietary property.”
In addition to infringing the copyrighted photos, Zara – which has somewhat ironically made its name as one of the biggest players in retail by quickly translating other brands’ high-end designs into mass-market wares (a fact that likely will not be lost on consumers/social media commentators) – and Inditex also claim that Thilikó has violated the terms of Zara’s e-commerce site, which prohibit the use, reproduction, modification, etc. of any materials from the site without their authorization.
Beyond that, Thilikó is engaging in additional false advertising by holding itself out “as an independent fashion brand and the creator and craftsman-like maker of the fashion designs in its collections,” according to Zara and Inditex. In particular, the company “lures consumers by emphasizing its social responsibility and commitment to thoughtfully designed and sustainably manufactured apparel.” (Greenwashing, anyone?)
Despite Thilikó representing itself as “a socially ‘responsible’ fashion brand” that focuses on “craftsmanship, detail, and fabric,’” a closer look reveals that “nothing could be further from the truth,” the plaintiffs contend, claiming that Thilikó’s “false and misleading statements concern matters of primary and material importance to consumers: the source, manufacturer, and designer of the product and the social responsibility of the seller.”
With the foregoing in mind, Zara and Inditex set out claims of copyright infringement, false advertising, unfair competition, unfair and deceptive trade practices under New York state law, and offenses against trademarks under New York Art & Cultural Affairs Law, the latter of which stems from the defendants’ alleged practice of “knowingly sell[ing], offer[ing] to sell, and hav[ing] in their possession with the intent to dispose articles of merchandise with a label falsely indicating the persons manufacturing and/or producing the article.” Zara and its owner further assert that the defendants’ conduct “is ongoing and undoubtedly encompasses additional acts of copyright infringement, unfair competition, passing off, false advertising, and unfair and deceptive trade practices that have not been uncovered to date.”
As a result of such alleged wrongdoing, Zara and Inditex allege that they have “suffered substantial monetary damages, as well as irreparable and unquantifiable harm to Zara’s reputation and goodwill,” and thus, are seeking monetary damages and injunctive relief to bar Thilikó from infringing the plaintiffs’ copyrighted photos, “offering, advertising, or promoting any product or service making false or misleading representations or descriptions of fact, in any medium, regarding ZARA products,” etc.
And one final note … Even though Zara and Inditex asserting that Thilikó acquires its wares from them and removes Zara-branded tags, it also does not seem impossible that the defendants could be acquiring these wares from third-party manufacturers that are copying Zara wares and/or quietly getting them from Zara’s network of supplier factories. Discovery will tell.
The case is Industria de Diseo Textil, S.A. et al v. Thilik, LLC et al, 1:23-cv-00047 (SDNY).