On January 14, 2022, the French fashion house Hermès International sued artist Mason Rothschild for trademark infringement following the release of MetaBirkins — a collection of 100 faux leather-covered Birkin NFT bags in a variety of colors and patterns.
Actual Hermès Birkin bags are notoriously expensive and hard to come by, making them the best choice for society’s elite. To purchase one of these coveted bags, you must develop a relationship with a sales representative, establish a history of purchases, and demonstrate your appreciation and awareness of the brand over time. Given this long list of requirements, it’s no surprise that the exclusivity-focused luxury brand goes to great lengths to eliminate replicas, even NFT versions.
The trial, set to begin on January 30, 2023 in the Southern District of New York, brings new issues to the legal landscape forcing the intersection of copyright law, constitutional law, technology, and fashion.
Balancing “artistic expression” with real world art
In its 47 page complaintHermès argues that the Rothschild NFT MetaBirkins infringe the luxury brand’s Birkin trademark, which dates back to 1984. Due to the immense strength of its Birkin brand, Hermès believes that the Rothschild NFT collection “is likely to cause confusion and error in the consumers’ minds. the public”, as described in the lanham law. This federal statute governs trademarks, service marks, and unfair competition.
Furthermore, Hermès claims that Rothschild not only did not have permission to use its Birkin brand, but has also visibly profited from the unauthorized use of the brand through the sale and resale of the NFTs.
At the heart of Rothschild’s argument is the idea that he should be allowed to “create art based on [his] interpretations of the world around us [him].” Rothschild has asserted a “fair use” defense under the First Amendment, explicitly referring to Andy Warhol campbell’s soup cans series as justification for why you should be able to continue to market and promote your MetaBirkins NFT collection.
While Warhol’s art appeared identical to familiar Campbell’s Soup supermarket items, the artist’s personal touch and expression was visible through slight variations in lettering and symbols. Rothschild argues that what he’s done with MetaBirkins is not unlike Warhol’s 32-work campaign: he’s simply selling the Birkin “expression” rather than trying to pass off the artwork as affiliated with the real thing.
Speaking of Rothschild’s arguments, Hermès says that Rothschild is simply “seeking to make his fortune by trading Hermès’ ‘real life’ protections for ‘virtual rights’, choosing to capitalize on an already successful brand to generate profit for himself.
Knowing the historic test of ‘Rogers’ (1989)
Crucial to understanding this case and others that will inevitably follow is the 1989 Second Circuit case of Rogers vs. Grimaldi, which establishes the proof of when a work of art is alleged to have infringed a right protected by the Lanham Act. Ultimately, the rogers proof acts to protect any potential First Amendment interests and is still used as the primary standard for trademark infringement today.
Under rogers, the use of a mark in an artistic work is only actionable if the mark:
- It has no “artistic relevance” to the underlying work; either
- Explicitly mislead as to the source or content of the work
Speaking of the second element of “explicit deception,” the Ninth Circuit has held that “the use of a mark alone may explicitly mislead consumers about the source of a product if consumers would normally identify the source from the mark itself.”
This was explained in more detail in Gordon v. Drape Creative, Inc.so the jury found that the defendant “merely used Gordon’s mark with minimal artistic expression of his own, and used it in the same manner that Gordon was using it.”
Rothschilds’ motion to dismiss case denied
On May 6, 2022, US District Judge Jed Rakoff denied a motion to dismiss filed in March by Rothschild, allowing the Hermès lawsuit to go forward.
In addition to First Amendment concerns, another crucial element of Rothschild’s argument in the 33-page Motion is the “artistic expression” element of rogers, explaining that the NFT MetaBirkins are works of art providing commentary “on the animal cruelty inherent in Hermès’ manufacturing of its ultra-expensive leather bags.” Specifically, he says that the NFT MetaBirkins are “not bags” and “have nothing but meaning.” For this reason, Rothschild says his NFT collection is protected by the First Amendment and would fail under the rogers Test.
As an artist, Rothschild says that artists are “generally free to choose the subjects they approach” and to “represent the objects that exist in the world as they see them.” The NFT MetaBirkins, according to Rothschild, represent “furry Birkin bags, reflecting his commentary on the fashion industry’s animal cruelty and the movement to find leather alternatives.”
In the Movement, Rothschild refers to two examples, beginning with the Analysis of “Ginger and Fred” from the Second Circuit and explain why Andy Warhol’s Campbell’s Soup cans are synonymous with what he’s doing with his NFT collection, as the MetaBirkins are “non-marketable assets.”
Rothschild went on to argue that its use “is not explicitly misleading,” as also required by the rogers. Specifically, Respondent argues that explicit deception cannot be established solely through the use of the Birkin trademark, as it would, under the Brown cut, render rogers a nullity
While some might take the name MetaBirkins to implicitly suggest that Hermes had “endorsed the work or had a role in its production”, the Lanham Law cannot be applied where there is a “mixture of meanings”. In other words, the element of “explicit deception” is not the same as “general confusion.”
Rothschild’s third argument revolves around the use of NFTs as a form of authentication, which does not preclude First Amendment protections. In the motion, Rothschild emphasizes his use of NFTs as a “new technological mechanism” to authenticate his hand, which does not detract from First Amendment protections. He says that “NFTs are simply a code that points to a digital asset” and nothing more.
Throughout the motion, he references several cases where Second Circuit courts, among others, not only applied Rogers, but only applied it in cases where the defendant was “selling the work,” rather than of creative expression. It has been established that speech that is not “purely business”—or does more than propose a business transaction—qualifies for full First Amendment protection.
Setting the stage for the application of IP law to NFTs
While other cases, such as Nike/StockX and Miramax/Quentin Tarantino, are also in active litigation, the Hermès v. Rothschild lawsuit will undoubtedly set the stage for how intellectual property applies to the world of digital assets and NFTs. As more luxury brands enter the metaverse and launch their respective NFT projects, courts will be required to assess the limits and parameters of what it means to introduce originality while balancing artistic expression and the right to create.
While Hermès does not currently operate in the metaverse (although the mark is curious), it will be interesting to see how the outcome of this case shapes the brand’s overall perspective on how the world around it evolves and changes.
To learn more about the Hermès lawsuit, you can follow the case at Hermes International v. Rothschild, US District Court for the Southern District of New York, No. 1:22-cv-00384
Andrew Rossow is a lawyer and journalist specializing in financial technology and intellectual property law.
