Hermes, the luxury fashion business, has won its case against Mason Rothschild, the digital artist behind the MetaBirkin NFTs. Hermes International SA convinced a federal jury in Manhattan that Rothschild’s MetaBirkin NFTs violated the luxury company’s “Birkin” trademark rights.
Hermes win sets legal precedents for NFTs
Hermès sued Rothschild in January 2022 after the Los Angeles-based artist launched MetaBirkins, an NFT line based on the brand’s iconic Birkin purse. The fashion giant stated in the complaint that Rothschild was “stealing the goodwill in Hermès’ famed intellectual property to construct and sell his own range of items,” which could lead to customer confusion.
The jury awarded Hermes $133,000 in damages on February 8. It further stated that Rothschild’s NFTs were not protected speech under the First Amendment.
Rothschild claimed throughout the trial that his NFTs were works of art protected by the First Amendment. The MetaBirkin project, according to his lawyer, was an “artistic experiment” investigating how society values status symbols.
The jury ruled, however, that non-fungible tokens are more closely connected to consumer goods that are protected by severe trademark regulations that discourage imitators from profiting from popular brands.
The Hermes v. Rothschild case creates an important precedent for makers of non-fungible tokens as well as the framework for intellectual property (IP) law pertaining to digital art.
In the future, digital artists such as Rothschild will have to be more cautious when building NFTs resembling other trademarks to prevent similar lawsuits.
Rothschild’s MetaBirkins consist of one hundred computerized replicas of Hermes’ renowned Birkin bags. The NFTs have the same appearance as their physical counterparts, but their digital counterparts are covered in bright, cartoonish fur.
Rothschild first presented the series as a digital homage to Hermes bags but later clarified on his website that the NFTs were not affiliated with the luxury company.
MetaBirkins accused of NFT infringement
Rothschild maintained that his effort was merely an art that offered a broader commentary on the fashion industry and that the First Amendment protected his artistic speech.
The trial for the Hermès vs. Metabirkins lawsuit began on January 30 after a year-long battle over trademark infringement charges.
Rogers v. Grimaldi standard, often known as the Rogers test, which assesses the balance between artistic expression and trademark infringement, was heavily relied upon during the trial.
Throughout the trial, Hermès and Rothschild presented trademark law and non-financial transfers (NFTs) experts who testified on consumer confusion and brand dilution.
Monday, during final arguments, Hermès’ attorney Oren Warshavsky repeated that Rothschild’s MetaBirkin NFTs not only misled consumers into assuming the two businesses were affiliated but that the usage of the Birkin moniker in the NFT series harmed Hermès’ brand.
The luxury brand, which is notoriously protective of its Birkin brand, felt that the disclaimer was insufficient, so it sent a cease-and-desist letter to the artist.
Rothschild appeared unwilling to comply with the conditions in Hermes’ letter, so on January 14, 2022, the business filed a precedent-setting lawsuit against the NFT artist in a New York federal court.
Hermes accused Rothschild, among other violations of New York General Company Law, of trademark infringement, injury to business reputation, and trademark dilution.
Hermes also sought monetary damages, including any profits made by Rothschild from the sale of MetaBirkin NFTs. In addition, the premium brand sought an injunction prohibiting the designer of MetaBirkin from using any Hermes trademarks in the future.
Rothschild first sold the NFTs for approximately $450 each, but their resale value skyrocketed to tens of thousands. During the trial, a blockchain specialist testified that Rothschild created approximately 55,2 Ethereum tokens, valued at around $87,700 today.
The possible future ripple effects of the case outcome
Alfred Steiner, an intellectual property attorney and artist asserts that the loss of Rothschild may have a chilling effect on NFT artists who want to use trademarks in their projects.
New York attorney Emily Poler, who specializes in technology and intellectual property, remarked that the case is fact-specific and that “there is still opportunity for artwork to be protected under the First Amendment.”
Experts in the law have closely followed the case, which could affect pending and future NFT cases that examine the frequently hazy distinction between works of art and consumer goods. Physical Birkin bags range in price from $12,000 to close to $200,000, with Balenciaga and Nike Inc. declaring expansion ambitions into NFTs and the metaverse.