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In 2023, new rules and regulations are entering the NFT space at an unprecedented pace. The collapse of FTX kicked Web3 regulation into overdrive<\/a>, and prominent NFT projects are being investigated for fraud<\/a>. Yet, perhaps the best evidence of this turning of the tide is the recent resolution of Herm\u00e8s v. Rothschild trademark lawsuit<\/a>.<\/p>\n Last year, Herm\u00e8s International sued artist Mason Rothschild for trademark infringement following the release of\u00a0MetaBirkins<\/a>\u00a0\u2014 a collection of 100 NFT Birkin bags covered in faux fur in a range of colors and designs. On February 8, 2023, Herm\u00e8s won the lawsuit. A jury found that Rothschild\u2019s collection of NFT purses bore such a striking resemblance to Herm\u00e8s Birkin bags that it was \u201clikely to cause consumer confusion and mistake in the minds of the public.\u201d Herm\u00e8s ultimately won the lawsuit after only six days of proceedings in a Manhattan courtroom.<\/p>\n While many expected a ruling stating that the sale of the NFTs violated Herm\u00e8s\u2019 rights to the \u201cBirkin\u201d trademark, the finding that Rothschild\u2019s NFTs aren\u2019t<\/em> protected speech under the First Amendment understandably stirred up a bit of conversation throughout Web3. The situation \u2014 and what it means for the future of Web3 \u2014 is best distilled through the reactions of the lawyers and attorneys with an understanding of the case. <\/p>\n In a statement sent to nft now, Jonathan Harris, a lawyer for Rothschild, implied that the lawsuit would be a blow to independent artists everywhere and a boon for big brands. Specifically, he stated that the decision marked a \u201cgood day for luxury brands\u201d and a \u201cbad day for artists.\u201d Another of Rothschild\u2019s attorneys, Rhett Millsaps, issued a similar statement to nft now. \u201cGreat day for big brands. Terrible day for artists and the First Amendment,\u201d he said. <\/p>\n Speaking to the\u00a0Financial Times<\/em><\/a>,<\/em>\u00a0Ga\u00ebtan Cordier, partner at Eversheds Sutherland in Paris, said it was an \u201cimportant decision\u201d and a reminder that a lack of regulation does not mean people are free to do as they please with no ramifications. Ultimately, she argued that it sends a \u201cmessage to NFT developers, reminding them that in the absence of specific regulations, intellectual property standards that apply in the physical world as well as on the internet remain applicable to NFTs.\u201d<\/p>\n Meanwhile, Megan Noh, an art lawyer unaffiliated with the case, went on the record arguing that the closing of the case will likely open the floodgates and lead to a host of new brands entering Web3. \u201cSome brand owners have likely been waiting for better guideposts before jumping into Web3 and enforcing their marks in that space,\u201d\u00a0she said to the\u00a0New York Times<\/em><\/a>. Noh went on to add that this verdict would finally provide brands with some needed guidance, \u201cspecifically in the context of digital artworks and collectibles, about the line between works of artistic expression and commercial goods.\u201d<\/p>\n In a previous article by nft now<\/a>, Andrew Rossow, an attorney who focuses on fintech and intellectual property law, noted that the case will ultimately determine how future Web3 cases are decided. \u201cHerm\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,\u201d he wrote. <\/p>\n However, statements made by David Leichtman, Managing Partner at Leichtman Law, indicate that the case may not have as wide of an impact as many believe. Speaking on\u00a0CoinDesk TV<\/em><\/a>, Leichtman noted that the case wasn\u2019t really about what qualifies as art or even Rothschild\u2019s use of the Birkin brand in his work. Rather, he noted that the case was specifically about whether Rothschild intended<\/em> to mislead consumers into thinking that MetaBirkin NFTs were associated with Herm\u00e8s. \u201cThe question is, were [consumers] really going to be confused by the MetaBirkins, whether or not the relevant consuming audience for Herm\u00e8s products would be confused by the defendant\u2019s works,\u201d he said. <\/p>\n Rebecca Tushnet, a Harvard Law School professor who helped prepare Rothschild\u2019s defense, seemingly reinforced Leichtman\u2019s understanding of the case being more about intent than freedom of speech and the First Amendment. In a statement, she noted that \u201cyou can\u2019t hold someone liable for infringement unless their work is artistically irrelevant or explicitly misleading.\u201d<\/p>\n Who is right? It\u2019s difficult to say at this point. But one thing, at least, is certain. This case will set the tone for future proceedings on how intellectual property law is applied in Web3. And in light of the derivative and copycat NFT collections that are frequently launched in response to notable brands (like Porsche<\/a>) entering the space, Web3 creators should think carefully before launching \u2014 or buying \u2014 new NFTs. <\/p>\n<\/p><\/div>\nWhat lawyers and attorneys have to say <\/h2>\n
The takeaways<\/h2>\n