Pros and Conduit

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After the September 11 terrorist attacks, New York designer Tobias Wong created a small souvenir called “nyc story matchbook.” Starting with a handout from Florent, a restaurant in New York’s downtown Meatpacking district, Wong sculpted the matches to reflect the pre-9/11 skyline, tearing off the heads of all but two. At first Wong sold the matchbooks on the street with his then collaborator, an artist known as Trade Marc. Later, he made them in limited editions available in galleries for the purely symbolic price of $911.

That’s why Wong was surprised to find similar matchbooks on sale last year in New York design stores for a mere $25. They were called “new york city story matchbooks by tobias wong for Conduit,” referring to the Conduit Group, a company formed several years ago by architect Ray Koh to promote and market innovative design. The problem was that Wong never gave Koh permission to produce the matchbooks.

Wong isn’t the only designer who has complaints about Koh. In a lawsuit filed in April in New York State Supreme Court, he and two other New York–based designers—Andrew Coates and Carlos Salgado—are accusing Koh of illegally appropriating and marketing several of their designs. Moreover, the suit alleges that Koh has withheld royalty payments and has not properly accounted for sales. “He is selling the items and making money and something needs to be done,” charges Quinn Heraty, the lawyer representing the three plaintiffs, who are claiming compensatory and other damages of not less than $390,000, with the final amount to be determined at trial.

In response, Koh wrote in an email that he wants to resolve the issues outlined in the suit, including any payment disputes, and he is “looking forward to an amicable outcome.” He did not respond to specific allegations of nonpayment of royalties, but said he is “personally overseeing this gets handled properly.” As for illegally appropriating the plaintiffs’ designs, Koh wrote: “Why would we do that?”

When Koh created Conduit in 2004, many designers cheered. At the time he touted the company as a think tank and incubator of untested ideas, stating in an article in I.D. (May 2004, “Changing Channels,” p. 30) that Conduit would erase the traditional boundaries between client, designer, curator, and manufacturer. For the most part, he was true to his word: Conduit’s website successfully sold dozens of objects, many of them culled during open competitions and subsequently exhibited in galleries. Koh supplied products to retailers like Moss and the shop at the Cooper-Hewitt, National Design Museum, where, for the time being at least, they’re still for sale.

The lawsuit, however, portrays Koh as a usurper rather than a savior of designers. It charges that Koh contracted with Wong to produce eight designs—including his Ballistic Rose Brooch and Mirror Puzzle, each selling for around $200—for which Wong was supposed to receive royalties ranging from 5 to 50 percent. But after a few checks for $300 each came through for 2004 and the first half of 2005, with no customary indication of how many units were actually sold, at what price, and where, Wong stopped hearing from Koh, although the designs were for sale at MoMA and the Cooper-Hewitt. He says he never received another penny from Koh.

But the lawsuit is not only about money. Wong feels duped by Koh into believing that Conduit would help young designers like him. “It started off as a good thing for everyone,” he says. “Ray seemed to be treating everyone fairly. He said he was a small guy, too, and was interested in good craftsmanship and quality control.” Now, Wong says, “What Koh is doing is shameless.”

To be sure, such disputes in the design business are nothing new; in an industry loaded with small companies and freelance designers, personal relationships drive many deals, leaving room for agreements to go awry. What’s more, the road from studio to store can be bumpy, as designers, manufacturers, and promoters haggle over production and prices. Although Conduit’s alleged behavior is extreme, it’s also a lesson that for the inexperienced, the opportunity to be recognized and to realize sales can cloud business sense.

The allegations in the lawsuit, if true, add up to a consistent pattern of misappropriation. For designer Andrew Coates, the dispute concerns two objects: his I Love New York Snowglobe, in which a plastic deli bag floats, and his cork Log Pile coasters that look like the cross-sections of a tree trunk. In June 2004, Koh contracted with Coates to manufacture and sell both designs, and they appeared at the MoMA Design Store, at Brooklyn’s The Future Perfect, and at the Tokyo retailer Beams, among others. In May 2005, Coates received a royalty check for $424.60, purportedly for all royalties due for 2004, and then two more checks totaling $900, the suit says. However, as in Wong’s case, there was no information regarding total sales, which violates standard practice.

Then in March 2006, Koh wrote to Coates saying he was about to close a deal with Target for up to 5,500 snow globes, for which Koh claimed to have sent Coates a check for $2,500. The check never arrived, Coates says in the suit, and no replacement was sent. In May 2006, Koh told Coates the Target order had a ship date of August 2006 and that Coates would receive a royalty payment 30 days later. It never came. Coates says that since then, Koh has “evaded questions and then did not respond” to numerous phone calls and email messages.

Salgado’s complaint involves a version of his cast aluminum Bookends, which resemble a six-pack of beer. In July 2004 Koh made a prototype of the object, according to the suit, but when Salgado saw it he noticed black lines on the piece and objected to its production. Koh promised to remove the lines and also told Salgado that it would be too expensive to have the designer’s name and logo on the product, the suit says.

There was never a written agreement between the two to go ahead with production. So Salgado was stunned to see the bookends on sale in several stores for $125 each—with the Conduit Group name engraved on the bottom instead of Salgado’s. In May 2005 Salgado asked Koh about royalties and received a check for $117, but no statement indicating the number of units sold or the price. A year later, Salgado noticed that the piece was resurfacing in stores and contacted Koh about royalties. Koh never responded, the suit alleges.

Koh does have his supporters. Constantin Boym, who works in the same downtown New York building where Conduit has its office and whose items are for sale on the Conduit website, says he started working with Koh because Koh “had a vision of a design company as a holistic enterprise, to make objects with a cultural mission.” Regarding the allegations mentioned in the suit, Boym says that nonpayment of royalties and other grievances is nothing new, unfortunately, especially in Europe—whether it involves a small outfit like Conduit or a larger company. “It is unethical, annoying, frustrating, depressing, and a scourge of our profession,” Boym says, “but to present Conduit as the only black sheep is unfair.” He adds that he has been paid for his Conduit work. In his own defense, Koh wrote in the email that he was the first to support the work of these designers and “for years the brand promoted each and every one of them.”

The retailers that have done business with Conduit are not mentioned in the suit, but they have taken a stand. Gregory Krum, director of retail at the Cooper-Hewitt, said the museum store will sell out existing stock by the designers in question and will
not reorder until the situation is resolved. Franklin Getchell, president of Moss, said policing agreements between designers and manufacturers for every single product the store sells just isn’t feasible. But he added the store would react on a case-by-case basis. “If we felt there was a legitimate complaint, we’d stop selling the item,” Getchell says.

A few days before the suit was filed, Heraty advised Koh of the pending action against him and demanded that he stop the manufacture, distribution, and “exploitation” of the plaintiffs’ designs. The notice demanded that the plaintiffs’ names be removed from the Conduit website; on April 4, the Conduit website was no longer accessible, though a new site has appeared saying it will be back online this summer.

Looking back, Salgado says he thought Koh was genuinely committed to being a positive force in the design community. “It seemed amazing, the environment he was creating for young designers,” Salgado recalls. But the experience of working with Koh became an “extreme example” of bad business practices, he says. Koh, Salgado adds, “needs to be made accountable.”

Ernest Beck is a writer based in New York City. His work has appeared in The New York Times, SmallBiz, and Travel+Leisure Family.