Technically, it is likely covered by copyright law. There is no longer a requirement for registration generally unless the owner/artist decides to sue. You should discuss this with an IP attorney to sort through what are likely many more details.
This is not to be construed as legal advice, and I am not your attorney, A conflict check and engagement letter would necessarily be required before any retention or attorney/client privilege exists.
Q: "Is graffiti placed on buildings in public areas protected under copyright laws?"
R: Yes. Copyright attaches to designs painted on buildings ["graffiti"] even if the artist does not own the building or even if he did not have permission to paint his design on the building. You may not lawfully photograph those designs and then display them on tee shirts for sale.
The above is general information ONLY and is not legal advice, does not form an attorney-client relationship, and should NOT be relied upon to take or refrain from taking any action. I am not your attorney. You should seek the advice of competent counsel before taking any action related to your inquiry.
It certainly would be protected. Remember, "graffiti" is a conclusion and a label. Even if the actual work was done illegally the copyright laws still apply to it as a creative work.
To offer an analogy, it is like asking whether copyright law applies to all of my paintings because the paints and brushes I used were stolen. It simply would not matter regards to intellectual property even though I could get in trouble for the theft.
I would suggest you discuss your plans in more detail with a lawyer in private before you jump in. Most of us here, including myself, offer a free phone consult.
The law firm of Natoli-Lapin, LLC (Home of Lantern Legal Services) offers our flat-rate legal services in the areas of business law and intellectual property to entrepreneurs, small-to-medium size businesses, independent inventors and artists across the nation and abroad. Feel free to call for a free phone consultation; your inquiries are always welcome: CONTACT: 866-871-8655 Support@LanternLegal.com DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.
It may be copyright infringement to copy. An interesting question is who is the owner of the copyright? If the t-shirts go huge you will probably find out. Otherwise, the owner of the copyright will probably want to keep quiet, unless he or shee had permission. If you know who it is just get a license.
This is not legal advice. Even if it were, fee legal advice is worth what you pay for it. The facts of every case are different and should be addressed by a competent attorney who has all of the facts.