Hermès Handbags at Center of another Lawsuit this time Against Christie’s.

 Breach of confidence; Breach of Trade Secrets & Unfair Competition.

Yet another interesting case involving the Hermès Birkin bag this past week, this time involving two prominent auction houses and Matt Rubinger; the famed Hermès Birkin bag whisper and judge of authenticity of luxury bags, who on Friday was accused of breach of his contract and trade secrets.

Matthew Rubinger

Matthew Rubinger, 26, has left Heritage Auctioneers & Galleries for another more famous auction house, Christie’s International. Rubinger  was set to join Christie’s in August from Heritage Auctions, where he was to be based in Hong Kong, and be responsible for developing the auction house’s luxury handbag business across multiple platforms, including traditional auctions, private sales and e-commerce, but now he at the centre of a heated lawsuit for breach of trade secrets and unfair competition.

Rubinger graduated from Vanderbilt University in 2010 with a BA in European History. He spent his high school and college years buying and selling luxury handbags out of his bedroom and educated himself about luxury merchandise, he soon became a confident judge of authenticity, creating a niche for himself learning to authenticate designer handbags. At a time when counterfeit designer handbags have been rampant. By the time he finished college, he was one of the best in the field, and at 25, he was recognised for his expertise and was hired to launch and head the luxury accessories division of Heritage Auctions.

This Friday, Heritage Auctioneers & Galleries filed a lawsuit in New York state court in Manhattan claiming that three employees, (including Mr. Rubinger) all of whom worked in its recently established luxury accessories department, shared the company's trade secrets with Christie's, which it said had "struggled" to expand its handbag business into a larger luxury accessories division.

Christie's Inc is now being sued for more than $40 million by Heritage Auctioneers & Galleries that says the prominent auction house stole its employees from its highly successful luxury goods division and has “attempted to seize for itself a windfall of millions of dollars in ill-gotten gains through…acts of unfair competition and unethical business practices,"

In the suit, Heritage said that in 2010 it hired recent college graduate Matthew Rubinger to spearhead a new department that specialised in high-end fashion accessories, such as designer handbags. The company invested heavily in his identity, promoting Rubinger as "a star" in the industry, provided him with training and introduction to sources in Hong Kong and Japan, and granted him access to its long-term business plans for expansion and branding.

Rubinger was paid $340,000 in salary and bonuses last year, according to the suit, and was poised to earn even more this year. But last month, Heritage said that Rubinger secretly accepted a job from Christie's in Hong Kong rolling out a luxury accessories department for the auction giant.  

The Goss-IPgirl notes, that second-hand Birkin’s that sell at auction are even more of a big thing these days, especially when the waiting list for a Birkin bag is around 3 years! And at auction, bags have fetched up to $203,150. So from a commercial perspective this is big business for any auction house considering tapping into this kind of market. Also, Rubinger was under contract until the end of this year, so the Goss-IP imagines that there would have at least been something in his contract (a clause) preventing him from doing business with or leaving the company for another competitor? And like the Manhattan Supreme Court; the Goss-IPgirl wonders how Christie's newly hired execs would be able to "perform their duties ... without using Heritage's confidential information?"

A spokeswoman for Christie’s has said that “the complaint is without merit…and they are prepared to vigorously defend these claims and also Christie’s decision to expand [their] existing handbag department.”  Undoubtedly, it will be interesting to see how this case unfolds. Heritage is seeking $40 million+ in damages and lost profits, and all of Christie's profits from its luxury accessories division through the end of 2016.

The case is Heritage Auctioneers & Galleries v. Christie's Inc, New York State Supreme Court, New York County, No. 651806-2014. 

Hermès makers of the most expensive bag in the world, is suing Birkin Bag imitators for Trademark & Trade dress infringement.

Hermès French luxury goods manufacturer is suing Birkin Bag Imitators for trademark and trade dress infringement, unfair competition and dilution by tarnishment. The case Hermès International v. Emperia, Inc. et al., 14-CV-03522 (C.D. Cal. 2014), was filed on the 7^th may against Emperia, Inc., Anne-Sophie, Inc. and Top’s Handbag, Inc. for selling infringing knockoffs of the iconic Hermès Birkin bag to online retailers Charming Charlie and JustFab.

The Hermès Birkin bag, has been described as one of the most famous handbags in the world and in 2012, Hermès unveiled four new diamond-studded Birkin handbags, 2 years in the making, designed by Pierre Hardy, each worth around $1.9 Million. The Birkin handbag, has evolved into a stylish symbol of wealth over the years. While a brand-new Birkin is priced by the French fashion house at around $8,000, some models are so expensive there is a waiting list. Some bags even come with feet, like this bag that sold at auction for $125,000, with the most expensive, the Hermès Diamond with Gold Birkin bag selling at auction for $203,150, last year.

Renowned and respected British fashion commentator Colin McDowell in an article over at the Business of Fashion, late last year commented that “astronomically priced products are emblematic of exactly what’s wrong with the fashion business.” While, the Goss-IPgirl is reserved to agree, whatever happened to what Tom Ford found – “and we found after much research that, actually not much research, quite simple research, that the counterfeit customer was not our customer.” In other words, that luxury fashion brands are not that concerned in going after fast fashion counterfeit retailers?

The Defendants accused handbags seen below sell at wholesale prices of between $15.00 and $20.00, and Hermès argue that by their actions the Defendants have sought to take unfair advantage of the fame and reputation of the Birkin Bag, by leading people to believe that Plaintiff has engaged in the licensing of the design of its handbag in connection with inexpensive goods, so as to tarnish Plaintiff’s reputation for quality and commercial integrity.

Despite the high price of the Birkin Bag, Hermès argue that it is generally recognised by consumers due to considerable coverage by the press and its inclusion in story lines of television shows, such as Sex and the City. It is argued by the French manufacturer, that because of the enormous sales, extensive advertising and media coverage, the Birkin Bag’s has become so distinctive its shape has acquired secondary meaning and developed into a famous trademark.

It is argued by the French brand, that the design configuration of the Birkin Bag has become so well-recognised that the U.S. Patent and Trademark Office has determined that it acquired sufficient distinctiveness to merit a registration.

The shape of the bag is a registered trademark here.

According to the complaint, Emperia, began taking orders from the online retailer Just Fabulous, Inc. (“JustFab”), which does business as JustFab.com, for a handbag which closely imitated the  design of the Hermès Birkin Bag, shipping over 3000 units of this knockoff Birkin Bag to JustFab. Despite allegedly receiving cease and desist letters, and actual knowledge of the rights of Hermès in the Birkin Bag trademark the Defendants continued to expand and sell additional knockoff designs.  

The Goss-IPgirl finds this yet another fascinating case for the world of IP and Fashion.  Hermès is seeking injunctive relief, damages, statutory treble damages, costs, and accounting of profits.

More on this case soon…