The federal lawsuit, filed last week in St. Louis, accuses The South Butt, started in 2007 by Jimmy Winkelmann, now 18, of "piracy" for selling T-shirts, fleeces and shorts with a logo similar to The North Face insignia, the St. Louis Post-Dispatch reported Tuesday.
Winkelmann said he created The South Butt to satirize The North Face logo, which was seen as a status symbol at his high school.
"While defendants may try to legitimize their piracy under the banner of parody, their own conduct belies that claim," The North Face said in the lawsuit.
The company said Winkelmann offered to sell The South Butt to The North Face for $1 million, but took the offer off the table when the company became profitable.
Al Watkins, the St. Louis lawyer representing The South Butt, said his client does not deny the offer to sell. However, he said he is confident the lawsuit will fail.
"We embrace the litigation," he said.