27/02/2023
Luxury fashion house Hermès has succeeded in its US court action against artist Mason Rothschild establishing that his use of MetaBirkin in relation to digital depictions of Birkin handbags infringed the fashion house’s trade mark rights.
Mr Rothschild created 100 NFTs depicting digital faux fur covered Birkin handbags and marketed these under the name MetaBirkin. This was lucrative business, with Mr Rothschild reportedly having sold the NFTs for more than $1m. NFTs are unique tokens, found on blockchain networks, which are associated with a particular digital or physical asset.
Various complex questions arose when dealing with this NFT-related trade mark case – one of the first of its kind.
Mr Rothschild argued that his First Amendment right gave him the right to artistic expression, and thereby the right to sell art that depicted Birkin bags under the MetaBirkin name. The jury, however, were not convinced, and found that where use of a third party trade mark “explicitly misleads as to the source or the content of the work” then the defence of artistic expression does not apply. Mr Rothschild’s NFTs were considered to be more akin to consumer products subject to trade mark law than to purely artistic works. Thus, amongst the issues to be considered was whether Mr Rothschild was riding on the coattails of Hermès’ reputation and utilising the Birkin trade mark for his own economic gain.
Mr Rothschild’s activities were found to have infringed Hermès’ rights in the Birkin trade mark. He was ordered to pay Hermès $110,000 for trade mark infringement and $23,000 for cybersquatting. Key to these findings was Mr Rothschild’s conduct through use of the MetaBirkin name to advertise the NFTs and use of the domain name metabirkins.com through which to market the NFTs.
This decision, however, passed no explicit judgement on NFTs themselves and whether the marketing of the NFTs in question under a name other than MetaBirkin would violate Hermès’ intellectual property rights.
Therefore, whilst this decision has not offered explicit clarity on the relationship between NFTs and trade mark law, it has proven that intellectual property laws can extend to the virtual world – NFT-developers should be cautious about how these are marketed.
Despite Hermès’ win, this decision should prompt brand owners to ensure their protection for NFTs and Metaverse-related goods is secure. Hermès’ has taken this step (applying to protect the BIRKIN mark for NFTs and related goods and services), but it did not do so until after initiating its court action against Mr Rothschild.
The fast moving area of NFTs and their interplay with intellectual property rights will undoubtedly give rise to further interesting cases in the future. Watch this [virtual] space.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
