<\/p>\n
On January 14, 2022, French fashion house Herm\u00e8s International sued artist Mason Rothschild for trademark infringement following the release of MetaBirkins<\/a> \u2014 a collection of 100 NFT Birkin bags covered in faux fur in a range of colors and designs. <\/p>\n Actual Herm\u00e8s Birkin bags are notoriously expensive and difficult to get, making them a top choice for society\u2019s elite. To purchase one of these coveted bags, you must develop a relationship with a sales representative, establish a purchasing history, and demonstrate your appreciation and knowledge of the brand over time. Considering this laundry list of requirements, it\u2019s no surprise that the luxury brand focused on exclusivity does everything it can to weed out replicas \u2014 even NFT versions. <\/p>\n The trial, set to begin on January 30, 2023, in the Southern District of New York, brings new issues to the legal landscape that force the intersection of intellectual property law, constitutional law, technology, and fashion.<\/p>\n In its 47-page complaint<\/a>, Herm\u00e8s argues that Rothschild\u2019s MetaBirkins NFTs infringe upon the luxury brand\u2019s Birkin mark, which dates back to 1984. Due to the immense strength its Birkin mark has, Herm\u00e8s believes that Rothschild\u2019s NFT collection is \u201clikely to cause consumer confusion and mistake in the minds of the public,\u201d as outlined under the Lanham Act<\/a>. This federal statute governs trademarks, service marks, and unfair competition.<\/p>\n Further, Herm\u00e8s asserts that Rothschild not only didn\u2019t have permission to use its Birkin mark but has also visibly profited from the unauthorized use of the trademark through the sale and resale of the NFTs.<\/p>\n At the heart of Rothschild\u2019s argument is the idea that he should be allowed to \u201ccreate art based on [his] interpretations of the world around [him].\u201d Rothschild has asserted a \u201cfair use\u201d defense under the First Amendment, explicitly referencing Andy Warhol\u2019s Campbell Soup Cans <\/em>series as justification for why he should be able to continue marketing and promoting his MetaBirkins NFT collection.<\/p>\n While Warhol\u2019s art appeared identical to the well-known Campbell soup grocery items, the artist\u2019s personal touch and expression were visible through slight variations in lettering and symbols. Rothschild argues that what he\u2019s done with MetaBirkins is no different than Warhol\u2019s 32-work campaign \u2014 he is merely selling the \u201cexpression\u201d of the Birkin rather than trying to pass the artwork off as affiliated with the real thing. <\/p>\n Speaking to Rothschild\u2019s arguments, Herm\u00e8s says that Rothschild is simply \u201cseeking to make his fortune by swapping out Herm\u00e8s\u2019 \u2018real life\u2019 protections for \u201cvirtual rights,\u201d choosing to capitalize on an already successful brand in order to generate profits for himself.<\/p>\n Crucial to understanding this case and others that will inevitably follow is the Second Circuit\u2019s 1989 case of Rogers v. Grimaldi<\/a>, <\/em>which set forth the test of when an artistic work is alleged to have infringed a Lanham Act-protected right.\u00a0Ultimately, the Rogers <\/em>test acts to protect any possible First Amendment interests and is still used as the leading standard for trademark infringement today.<\/p>\n Under Rogers, <\/em>the use of a trademark in an artistic work is actionable only if the mark:<\/p>\n Speaking to the second element of \u201cexplicitly misleading,\u201d the Ninth Circuit has held that \u201cthe use of a mark alone may explicitly mislead consumers about a product\u2019s source if consumers would ordinarily identify the source by the mark itself.\u201d<\/p>\n This was further explained in Gordon v. Drape Creative, Inc.<\/a><\/em>, whereby the jury found that the defendant \u201csimply used Gordon\u2019s mark with minimal artistic expression of their own, and used it in the same way that Gordon was using it.\u201d<\/p>\n On May 6, 2022, U.S. District Judge Jed Rakoff rejected a Motion to Dismiss<\/a> filed in March by Rothschild, allowing Herm\u00e8s\u2019 lawsuit to move forward.<\/p>\n In addition to First Amendment interests, another crucial element to Rothschild\u2019s argument in the 33-page Motion is the \u201cartistic expression\u201d element of Rogers, <\/em>explaining that MetaBirkins NFTs are artworks that provide commentary \u201con the animal cruelty inherent in Herm\u00e8s\u2019 manufacture of its ultra-expensive leather handbags.\u201d Specifically, he says that the MetaBirkins NFTs \u201care not handbags\u201d and \u201ccarry nothing but meaning.\u201d For this reason, Rothschild says his NFT collection is protected under the First Amendment and would fail under the Rogers <\/em>test.<\/p>\n As an artist, Rothschild says that artists are \u201cgenerally free to choose the topics they address\u201d and to \u201cdepict objects that exist in the world as they see them.\u201d The MetaBirkins NFTs, according to Rothschild, depict \u201cfurry Birkin bags, reflecting his comment on the fashion industry\u2019s animal cruelty and the movement to find leather alternatives.\u201d<\/p>\n In the Motion, Rothschild references two examples, beginning with the Second Circuit\u2019s \u201cGinger and Fred\u201d analysis<\/a> and explaining why Andy Warhol\u2019s Campbell\u2019s Soup Cans are synonymous with what he\u2019s doing with his NFT collection \u2014 as MetaBirkins are \u201cnot commercializable assets.\u201d<\/p>\n Next, Rothschild argued that his use is \u201cnot explicitly misleading,\u201d as also required under Rogers<\/em>.\u00a0Specifically, the defendant argues that explicit misleadingness cannot be established by the use of the Birkin mark alone, as it would, according to the Brown<\/em><\/a> court, render Rogers<\/em> a nullity.\u00a0<\/p>\n While some might take the MetaBirkins name to implicitly suggest that Hermes had \u201cendorsed the work or had a role in producing it,\u201d the Lanham Act cannot be applied when there is a \u201cmixture of meanings.\u201d\u00a0In other words, the \u201cexplicit misleadingness\u201d element is not the same as \u201cgeneral confusion.\u201d<\/p>\n Rothschild\u2019s third argument revolves around the use of NFTs as a form of authentication, which does not preclude First Amendment protections.\u00a0In the Motion, Rothschild emphasizes his use of NFTs as a \u201cnew technological mechanism\u201d to authenticate his arm, which does not detract from his First Amendment protections. He says that \u201cNFTs are simply a code that points to a digital asset\u201d and nothing more.\u00a0<\/p>\n Throughout the Motion, he references several cases where courts in the Second Circuit, among others, not only applied Rogers but only applied it in instances where the defendant was \u201cselling the work\u201d \u2014 rather than the creative expression. It has been established that speech that is not \u201cpurely commercial\u201d \u2014 or if it does something more than propose a commercial transaction- is entitled to full First Amendment protection.<\/p>\n While other cases, such as Nike\/StockX<\/a> and Miramax\/Quentin Tarantino<\/a>, are also in active litigation, Herm\u00e8s\u2019 lawsuit against Rothschild will undoubtedly set the stage for how intellectual property is applied to the world of digital assets and NFTs. As more luxury brands enter into the metaverse and launch their respective NFT projects, courts will be required to weigh in on the confines and parameters of what it means to introduce originality while balancing artistic expression and the right to create.\u00a0<\/p>\n While Herm\u00e8s currently doesn\u2019t operate in the metaverse (although the brand is curious<\/a>), it will be interesting to see how the outcome of this case shapes the overall brand\u2019s perspective on how the world is evolving and changing around it.<\/p>\n For more information on Herm\u00e8s\u2019 lawsuit, you can track the case at Hermes International v. Rothschild, U.S. District Court for the Southern District of New York, No. 1:22-cv-00384<\/em><\/p>\n Andrew Rossow is an attorney and journalist who focuses on fintech and intellectual property law.<\/em><\/p>\n<\/p><\/div>\nBalancing \u201cartistic expression\u201d with real-world art<\/strong><\/strong><\/h2>\n
Getting to know the landmark \u2018Rogers\u2019 test (1989)<\/strong><\/h2>\n
\n
\n
Rothschilds\u2019 motion to dismiss the case is denied<\/strong><\/h2>\n
Setting the stage for how IP law is applied to NFTs<\/strong><\/h2>\n