On February 8, 2023, a U.S. jury returned a verdict in favor of luxury brand Hermes International SA in its lawsuit against artist Mason Rothschild for the issue and sale of "MetaBirkins" non-fungible tokens (NFTs).
The facts
In 2021 Mason Rothschild issued and marketed a series of 100 NFTs entitled "MetaBirkins" linked to digital images of Hermès "Birkin" bags in a variety of colors and covered with faux fur.
In January 2022, Hermès filed a lawsuit in the Southern District Court of New York on the following grounds:
- Infringement of the "BIRKIN" word marks as well as unlawful reproduction of the bag design,
- Dilution of the BIRKIN brand, damaging the reputation associated with it,
- "Cybersquatting" the domain name "metabirkins.com" infringing the "BIRKIN" trademark
- Unfair and parasitic competition.
The artist countered that his "artistic" creations fell under the protection of the First Amendment of the American Constitution, namely the freedom of expression.
In Judge Rakoff's opinion, The First Amendment in the trademark context "protects an individual's right to speak out against a mark holder, but it does not permit an individual to suggest that the mark holder is the one speaking," thus summarizing the main issue of the case.
The Jury had to decide whether Mason Rothschild's actions misled the public about the origin of the NFTs by creating an unauthorized association with Hermes or whether they should be considered as the result of artistic work covered by freedom of expression, in light of the different circumstances and evidence presented in the case.
Mason Rothschild held liable!
The American artist was finally not only held liable for the different charges without him being able to invoke the protection of the First Amendment, but he was also ordered to pay 133,000 dollars in damages to Hermès.
Why is this an important case?
The verdict in Hermes vs. Rothschild was hotly awaited because it is one of the first trademark infringement cases in the NFT world.
This decision, which is still subject to an appeal, may serve to guide the way companies and creators define their creative projects and strategies in the virtual world, in relation to the intellectual property rights intended to fully apply to the latest technological advances of Web3.
Other similar cases are pending in U.S. courts (including Nike v StockX" and "Yuga Labs v Ryder Ripps") and will help refine this judicial approach.
